1

CHAPTER 1

INTRODUCTION TO PUMP INDUSTRY

This chapter emphasizes the importance of conducting analysis on

marketing strategies to build competitive advantages with special reference to
Coimbatore based organised pump industry. The organised pump sectors are
more environmental friendly and consume less power. Hence this chapter
highlights the major brands, challenges faced by the pump marketers. The
present research motivation, research questions, research objectives and
limitation of the study is also presented.

1.1 INTRODUCTION TO COIMBATORE BASED PUMP

INDUSTRY

A pump is a device that moves water or fluids by mechanical

action. Most pumping applications use centrifugal pump, which converts the
input power to lift the water or liquid. The pump has got various parts such as
pump casing, impeller and sleeve connected with motor shaft. When fluid
enters the pump through the eye of the impeller which rotates at high speed,
the fluid is accelerated radially outward from the pump casing. As in this
connection the pump manufacturing industries got a great potential to reduce
energy consumption, this could bring not only, business opportunities, new
challenges but also a great help to the electricity board and for the society as a
whole. Since the potential for electric current savings are huge in energy
efficiency pumpsets. Realizing the opportunity to manufacture and market the
energy efficient pumpsets, Coimbatore has got a major role.
 2

Coimbatore is one of the most important commercial and business

hub in the state of Tamil Nadu. It is also known as the maximum revenue
yielding district in the state ahead of other cities, thus it is considered as the
fastest-growing second-tier metro cities in India. According to Food and
Agriculture Organization (FAO) of United Nations corporate document
repository report 2012, Coimbatore is also known as Manchester of South
India and the economy of Coimbatore is greatly influenced by many
industries like textile, pumps, hosiery, Information Technology, poultry, etc.
and thus Coimbatore is ranked 15th in the list of most competitive cities.

Today the capability of pump manufactures in Coimbatore City

has extended beyond India‘s shores to many countries worldwide. The Indian
market for pump is estimated at Rs.70, 000 million, with an expected annual
growth rate around 18 to 20 percent over the coming years addressed by
Chaitanya Koranne, Chief Executive Officer, International Division CRI
Pump during the press meet in 2012. These pumps are the first of its kind
among the organized pumps sectors from Coimbatore city, as their motto is to
provide better value for money through manufacturing and marketing of
energy efficient pumps, after sales service support and strong support of
dealer network management. The organised industry is facing a stiff
competition from unorganised sector, who are also known as assemblers of
pump set from local market. In this scenario it is challenging job to those
organised sector to manufacture and market energy efficient pump sets to
meet the market demand and to maintain better quality on competitive price
front.

According to Coimbatore Special Economic Zone, CSR Report

2012, Coimbatore is also known as Pump City in South India. It has large
number of pump manufactures who contributes to the green revolution that
 3

reinvented India‘s of prosperity. The City has large number of small, medium
and large scale pump manufactures. In fact the first motor manufactured in
India, came out from an engineering shop in Coimbatore. Today, the pump
and motor manufacturing sector is positioned at the verge top among the
largest engineering activities in Coimbatore city. The pump manufacturing
industry in Coimbatore holds a major portion of the total Indian market share
(Milton Snodgrass and Wallace 1970).Over the years, the city is well known
for its energy efficient pumps, technical superiority of the spare parts. It has
helped the pump sector to cater both domestic and global demands. The motor
and pump (organized sector) from Coimbatore supplies over 60 percent of
India‘s requirements having 3.45 million population (Government of India
census report 2011).

The Southern India Engineering Manufacturers' Association

(SIEMA) established in 1952 has around 215 members, most of them
manufacture motors and pumps of various types (Industrial profile of
Coimbatore District 2012-13 MSME Development Institute). Also it is
noteworthy that the organised sector pumps manufactured in this city are
according to the specifications of the Bureau of Indian Standards (BIS). In the
top list of organised pump sector to name a few Texmo, Aquatex, Suguna,
CRI, Kirloskar, Mahindra, Deccan, etc., have their manufacturing base in
Coimbatore city.

1.1.1 Growth of Indian Agriculture Sector and Support by

Tamilnadu Government

India has always been a predominantly agrarian country.

Agriculture Accounts for about 1/5th of the national income. It is the most
important resources of support for the growth of Gross Domestic Product
(GDP). Agriculture has always been India‘s most important economic sector.
 4

In the mid of 1990‘s, agriculture provided approximately one third of GDP

and employed roughly two third of the population. Since independence, the
share of agriculture in GDP has declined in comparison to the growth of the
other service sectors. However, agriculture still continues to provide the
volume of goods required by the non-agricultural sector as well as abundant
raw materials (Sneha Sharma 2012).

The growth of the pump sector in South India during the last
decade has been exceptional. Therefore, this research has been carried out to
analyse the marketing strategic factors that contributes to the growth in
agriculture segment pumps. In this study, Coimbatore based pump industry,
organised sector has been considered, since organised sectors are more
environmental friendly, consume less power, hence it is known as energy
efficient pump sets. These pump sets are operating with three phase electric
supply mostly used for agricultural applications .These pump sets are easy to
install, lightweight, ruggedly built, high discharge-less running time, elegant
appearance to match the efficient performance and designed for trouble free
operation (Season and crop report of Tamilnadu, Department of Economics
and Statistics 2012). They are of monoblock construction with a common
shaft for the motor and pump with high efficiency which reduces the power
consumption charges. Numerous applications of these pumps taken for this
study includes, agricultural water supply, irrigation, sprinkler system,
gardening, boosting line pressure, shallow wells, fountains, cascades, and
other related agricultural water supply.

Report by Food and Agriculture Organization of the United

Nations (FAOUN 2010) says: India is the world's largest base for agriculture
thus placing India in the second largest producer of wheat and rice, world's
third largest producer of several dry fruits, agriculture based textile raw
 5

materials, coconut, sugarcane and numerous vegetables. Coimbatore pump

industry has carved a niche in the agriculture segment due to the huge demand
for water pumping, where the borehole submersible pump sets, open-well
submersible pump sets and end suction pump sets contribute a lot.

According to the 60th round of National Sample Survey, 56 percent

of agricultural households, had land holdings between 0.4 and one hector
land. It was also reported that the average income from agriculture is well
below the non- agriculture average. For many years it has been argued that
farmers are under-privileged, suffering from lower average returns than are
enjoyed by non-farm families. The per capita income of land owning
cultivators is almost half of the non-agricultural average. Considering the
support requirements to the farmers, Tamilnadu Government has provided
free electric power supply and subsidies for farm equipment.

Furthermore, the direct share of agriculture and allied sector total

export is around 18 percent according to Bombay Stock Exchange (BSE).
When the indirect share of agriculture products in total exports is taken into
account, the percentage is much higher. In this scenario agricultural
production in India depends on millions of small farmers. It is their hard work
and efficiency which ultimately raise agriculture output. Owing to insufficient
funds, many of them are unable to use improved seeds and manures or to
introduce new techniques. Some of them can‘t even keep wells in good
condition according to First Five Year Plan says Abridged (2012).

In view of above, both Reserve Bank of India (RBI) and National

Bank for Agriculture and Rural Development (NABARD) have taken several
initiatives along with Tamilnadu government for subsidies to the farmers such
as free electric power supply. Thus Tamilnadu government has taken various
steps, initiatives and care towards the growth of agriculture products and also
 6

granted free electric power supply to agricultural usage pump sets to the
farmers for pumping of water to supply the crops.

1.1.2 Importance of Energy Efficient Pumps

In one of the research report by The Energy and Resources

Institute (TERI 2012) has suggested to the pump manufactures that this is the
order of the day to manufacture and market highly energy efficient pumpsets,
in order to save electric power consumption. The research report recommends
for providing incentives for adoption of energy efficient pump-sets. In an
interactive seminar on promoting energy efficient pump sets in Coimbatore,
on the day17thApril2012, The Energy and Resources Institute (TERI 2012)
addressed the need for creating continuous awareness on promoting energy
efficient pumps.

In continuation, the majority of the major organised sector brands

of the pumps set manufactures, came out with the special name plates
embossed with the energy efficient star marks on the pump sets. The
following Figure 1.1 shows the energy efficient marks being fixed on the
branded pumpsets.

Figure 1.1 Energy efficiency marks on pumps

 7

1.1.3 Corporate Social Responsibility (CSR) and Awareness

Program on Marketing of Energy Efficient Pumps

There is immense corporate social responsibility obligation lying

with every manufacturer and marketer of pumps, to create impact in the
minds of the consumer pertaining to save energy. There is also a need for best
quality manufacturer award, to those who promote International Standard
marked for energy efficient pumps with star ratings, so as to distinguish
themselves from the marketer of organised sector from those of others. In
support to CSR, many well-known branded companies, came forward to
conduct continuous awareness program to the end users to distinguish
themselvesfrom unorganised sector, as well as to support the government, on
energy efficient front. In this context, awareness seminars on energy
efficiency marketing programs, were conducted by the organised sector pump
dealers at various locations.

Table 1.1 Pump types and their applications

Pump Types
Open well submersible pump Applications

Agriculture
Irrigation
Water supply from open well
to field
Sprinkler irrigation

Bore well submersible pumps

Water supply from deep bore
hole to field
Sprinkler
Drip irrigation
Farm house
Nurseries
Gardening
Booster system
 8

End suction pumps

Agricultural clear water
handling
Gardening
Farm irrigation

Heavy duty end suction pumps

Irrigation
Sprinkler

Motor coupled end suction pumps

Irrigation
Sprinkler
Water supply
Coupled with motor

Agriculture end suction pumps

Direct drive or pulley drive

Irrigation
sprinkler
 9

There are several types of pump sets being used for agricultural
water pumping system namely: sprinkler system, drip irrigation, deep bore
well pumping, open well pumping, nurseries, gardening, farm house pumping
etc. The major types of pumps and their specific applications are listed in the
following Table 1.1.

1.2 RATIONALE FOR THE STUDY

It is imperative for a researcher to explain the importance of the

research which is being conducted by providing valid arguments. The
rationale for this study are very specific and ideally, relate to the contribution
in elimination of gaps identified in the literature survey.

1.2.1 Research Gaps

Based on in-depth study on wide range of literatures with respect

to marketing strategies for competitive advantage for sustainable growth, the
following are the main gaps identified:

Lack of available empirical research on marketing strategy for

competitive advantages with reference to pump industry and only
few studies have been done in India.

Lack of accessible realistic reports with respect to market

information on firm‘s performance related to pump sector.

Shortage of empirical research with regard to the relative

importance of the marketing strategy variables.

Insufficient research on the effects of pump marketers demographic

characteristics and marketing strategy for competitive advantage
variables.
 10

1.3 PROBLEM STATEMENT AND RESEARCH MOTIVATION

Considering the subsidy by Tamil Nadu Government for

agricultural equipment‘s and also the frequent shortages in electricity supply,
pump manufacturers are expected to produce and market more efficient pump
sets than the earlier generation pump sets . The Central and State
Governments have been lending a supporting role particularly marketing of
energy-efficient pump sets.

Keeping the demand management in mind, this research has been

carried out to analyse the significant impact of marketing strategies to build
competitive advantages and thus this research would help the marketers and
pump dealer‘s to better appreciate and recognize the influencing factors for
the growth of agricultural pump-set market. Hence, there is a need to find
answer to the following questions.

1.4 PURPOSES OF THE STUDY

The overall purpose of this study is to examine the effect of

marketing strategies to build competitive advantage in pump industry by
addressing the following research questions:

1.4.1 Research Questions

Based on the gap identified from the literature review and also
keeping the aim of the research in mind the following research questions were
raised. This research questions has given further lead to the researcher in
formulation of present research objectives.

1. Whether the demographic profile and perception of people differ

among marketers of various profiles?
 11

2. What factors are significant in determining the marketing

strategy?

3. What is the effect of differentiation strategy on sales

performance?

4. What is effect of marketing strategy on sales performance for

competitive advantages?

5. What is the impact of market penetration strategy,

differentiation strategy and focus strategy for competitive
advantage?

1.5 AIM OF THIS RESEARCH

This research involves activities related to an investigation aimed

at the findings and interpretation of facts, revision of accepted theories or
laws in the light of new facts, or practical application of such new or revised
theories or laws.

The aim of the research is to analyse the marketing strategies to

build competitive advantage with special reference to Coimbatore based
(organised sector) pump industry. The research design and the methodology
adopted to meet the various objectives of the study are explained in the
subsequent chapters.

1.6 RESEARCH OBJECTIVES

Keeping the above research questions in mind, researcher has

formulated the following research objective:

• To understand the organised pump sector marketer‘s profile in

Coimbatore based pump industry.
 12

• To study the relationship between focus strategy and market

penetration strategy with respect to pump market.

• To examine the relationship between differentiation strategy and

market penetration strategy.

• To investigate the relationship between the sales service support

strategy and market penetration strategy.

• To analyse the relationship on market penetration strategy for

competitive advantage.

• To suggest suitable model for sustainable growth in a

competitive environment.

1.7 SCOPE OF THE STUDY

The study examines the relationship between differentiation

strategy, focus strategy, sales service support strategy, market penetration
strategy and competitive advantage. The findings of this study will be limited
to organized pump sectors with respect to agricultural pump set manufactures
in Coimbatore city and marketed in the districts such as Coimbatore,
Tiruppur, Erode, Salem and Namakal.

1.8 LIMITATIONS

This study focused on organised pumps sector.

This study limited to agricultural pump-sets manufactures based
at Coimbatore.
This study limited to demographic area as highlighted.
There may be other variables related to marketing strategy
which were not included in this study.
 13

1.9 ASSUMPTIONS

Assumption is the starting point of any research, this research

concerns about the access to participants with honest response through survey
instrument with an assumption, that participants would answer the survey
questions in an honest and candid manner.

1.9.1 Need and Significance of the Study

This study promotes its investigating using Structural Equation

Modelling (SEM) approach to examine the significant impact on
marketing strategies for competitive advantages in the targeted
market of agricultural pump sets.
It is well perceived fact that the outcome of this study has
present an effective model to the pump set marketers for market
sustainability.

1.10 IMPLICATIONS OF THE STUDY

An implications of research will certainly review the conclusions

drawn based on the output of the research. Also this would help the markets,
society and concerned organisations to create well-informed decisions about
future area of implications. In this research the implication with respect to
government, pump manufactures, markets and dealers are well addressed in
the following chapter, based on the suggestions, recommendations and
feedback received from the respondents.

1.10.1 Period of the Study

The study was undertaken between year 2012 to 2015 which

consists of literature review, collection of primary data, secondary data, pilot
 14

study and development of survey and actual survey, data analysis and
interpretation.

1.11 CHAPTERS ORGANAIZATION

This research study is divided into the following five chapters,

each representing the distinct characteristics and provides fundamental,
analytical and vibrant information that are essential, to the theme of this
study.

Chapter 1. Introduction about pump industry, growth of Indian

pumps industry were addressed. The importance of energy efficient
Coimbatore based organised pump industry and support by Government for
agricultural sector were emphasized. The significance of the study and
objectives of the research were discussed.

Chapter 2. In this chapter, literature review, basic definitions and

summary of literature survey were discussed .

Chapter 3. Research methodology, research design with conceptual

frame work, research instruments, data collections, statistical tools used and
hypothesis were discussed.

Chapter 4. Results and discussions, analysis and interpretation

precedes the analysis of marketing strategies to build competitive advantages
in pump industry and scholarly views are expressed in substantiation with
interpretation.

Chapter 5. Findings includes scholarly views expressed in

substantiation with interpretations, suggestions, conclusions, summary and
implications were discussed.