“DISTRIBUTION CHANNEL OF
INDIAN FARMER’S FERTILIZER COOPERATIVE LTD(IFFCO)
PHULPUR,UTTAR PRADESH”
SUBMITTED BY :
RISHABH MISHRA
PRN NO: 0729007618
OF
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CHAPTER - 1
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The project report on the “Distribution Channel of IFFCO,Phulpur” 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 company’s 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, Phulpur .
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.
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 company’s product is very high.
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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.
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CHAPTER - 2
OBJECTIVE OF STUDY
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“A Study of distribution channels of Indian Farmer Fertilizer Cooperative Ltd.
(IFFCO), Phulpur, Uttar Pradesh.”
(2.2)Scope:
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 :
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CHAPTER - 3
7
MISSION
APPROACH
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“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 IFFCO’S Bye-laws”.
COMMITMENT
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“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”.
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producer and marketer of Chemical Fertilisers by expansion of IFFCO’s existing
units, setting up joint venture companies overseas and diversification into new
sectors.
andSynergisticAcquisitions.
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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.
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 Phulpur in the state of Uttar Pradesh in 1981. The ammonia - urea unit at Aonla
was commissioned in 1988.
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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, Phulpur 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.
(3.3)IFFCO PHULPUR
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IFFCO Phulpur 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
Phulpur consists of two plants. Old plant is known as Phulpur-I while new plant is
known as Phulpur-II. Construction cost of Phulpur-I & Phulpur –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 Phulpur-I and Phulpur-II plants are 1670 MT
and 2620 MT respectively. Capacity for Ammonia production capacity of Phulpur-I
and Phulpur-II are 977 MT and 1520 MT respectively. Consultant for Ammonia plant
and Urea plant of Phulpur-I are M/s Pullman Kellogg, USA and M/s Snam Progetti,
Italy respectively and for Ammonia plant and Urea plant of Phulpur-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 Phulpur-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 Phulpur-II.
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.
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IFFCO Phulpur 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 Phulpur 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.
IFFCO Phulpur 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 PHULPUR – I
Conceived in 1974, the Fertilizer Complex located 34 km. away from Allahabad at
Phulpur, has been built at a cost of Rs.205 cores. IFFCO Phulpur 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
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
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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
IFFCO PHULPUR - 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 Phulpur 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
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December 22, 1997. The total cost for the entire expansion project was Rs.1190
corers.
PRODUCTION CAPACITY:
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
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4. IFFCO Phulpur 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.
8. IFFCO Phulpur 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.
10. IFFCO Phulpur 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 EM’s 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.
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12. IFFCO Phulpur unit was awarded ISO – 9001 certificate from British
Standards Institution – UK in July 12, 2000.
N : Rs. 23.07
P : Rs. 26.27
K : Rs. 24.48
S : Rs. 1 .76
(3.6)Marketing Division
Marketing Central
Office
There are 5 Zonal Offices, 20 State Curve Area Office, 63 Area Offices.
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District/Block level PACS Farmers Farmers
Mktg. Societies
PACS Farmers
Farmers
DISTRIBUTION CHANNELS
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6. Industries Corporation etc.
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(3.8)DISTRIBUTION & WAREHOUSHING
Executive : 450
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Non-executive : 1150
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CHAPTER - 4
REVIEW OF LITERATURE
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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.
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 people’s activities with channel partners and the
marketing managers efforts to better reach and serve end-users. The distribution
channels management programmers’ builds a logical framework uniting
marketing and sales efforts in a collaborative learning environment.
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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.
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CHAPTER - 5
RESEARCH METHODOLOGY
Research Methodology
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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.
(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
The secondary data was collected by the researcher with the help of various
publications and internet, listited in the bibliography.
Primary Data:
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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.
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CHAPTER - 6
DATA ANALYSIS
Table No. 6.1- To determines the type of fertilizer presently used by the farmers.
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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.
Data Interpretation
The above data clearly indicates that chemical fertilizers are most widely used and
preferred fertilizer among the respondents.
Table No. 6.2- The following table indicates the presence of category of fertilizer
prominently used by the farmers in the fields are.
DAP 40
NPK 30
Figure 6.2 – Chart showing response of farmers who used different category of
fertilizer.
Data Interpretation
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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.
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.
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.
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.
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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.
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.
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 Percentag
Respondents e
Dealers 160 80%
Cooperative 40 20%
Societies
Total 200 100%
Figure 6.5 – Pie chart showing the role of dealers in IFFCO fertilizer
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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 can’t be
possible due to cooperative laws.
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.
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.
Table No. 6.7- The above Table shows that awareness program from the above 45
Farmers (Who attended awareness program) are as following.
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Good 10
Satisfactory 5
Poor 30
Figure 6.7 - Pie chart showing the response of farmers after the awarness program.
Data Interpretation:
The above data reveal that the awareness program has not been up to the
expectations.
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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
consumer’s requirement.
ROLE OF DEALERS
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.
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Percentage showing various factors dealers looks for while taking up
dealership of company :
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.
CHAPTER - 7
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FINDINGS
Findings
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.
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.
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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.
9. Under the NCDC scheme it’s 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.
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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).
17. Road and Rail are the main mode of transportation of company’s product. It
was found that company’s transportation facility are best because 90% are by
train and 10% by road so his transportation cost is very cheap, fast and safe.
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”.
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CHAPTER - 8
LIMITATIONS
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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 :
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.
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CHAPTER - 9
RECOMMENDATIONS
&
SUGGESTIONS
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RECOMMENDATION & SUGGESTIONS:
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.
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.
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7. To promote research and training on the application of present management
system, technology and global experience for cooperative development.
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APPENDIX
Dear Respondent,
Rishabh Mishra.
Name: ………………………………………………………………
Age: ………………………………………………………………
Address: ………………………………………………………………
Signature: ………………………………………………………………
2. There are some fertilizers companies name select one which you know very
well?
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(a).IFFCO (b).National Fertilizers
(c).KRIBHCO (d).IFFCO
5. Which company fertilizer (Urea) you find good in quality and easily soluble in
water?
(c). There is proposal of Insurance with the fertilizers. (d).All of above are truth.
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9. In IFFCO fertilizer which type of changes do you like?
(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.
(c). IFFCO provide farmers training, Insurance, Timely availability and many more.
13. Finally amongst all of Fertilizers Company at which position would you like to
place IFFCO?
Name: …………………………………………………………………
Age: ………………………………………………………………….
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Designation: …………………………………………………………………...
Address: ……………………………………………………………………
Signature: …………………………………………………………………….
(Hindi) (English)
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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.
(a).By calculating real input (labour, raw material) and Sale output (profit)
(a). They are running very smoothly. (b). All most societies are dead in their
locality
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9. Is cooperative society commencing any type of training program for farmers?
(c). Private companies has no quality and popularity hence we have monopoly in
market.
11. In the peak season how can you satisfy the farmers?
(a). State level sales advertisement through print and electronic media.
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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.
(a). There are need to change the Cooperative channel so that fast delivery may
applicable.
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 .
Bibliography
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3. Allahabad Distt. Fertilizer Sales Report Book from Project Manager
Agricultural Services.
9. IFFCO Booklet.
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