Tata's Rural Venture

8/10/2019 Tata's Rural Venture

1/208

Presentation

OnTATA RURAL VENTUREs

1


2/208

The Tata Group


3/208

3

Tata's Cyrus Mistry pushes common rural biz

platform to drive group synergies


4/208

Tata Sons, holding company for the Tata group, is

working on building a centralised rural business

platform that could be leveraged for the entire

groups benefit, instead of each company looking at

it separately.

The group is now working on leveraging these

individual strengths, using the available data and

best practices in its ecosystem, for better use. This

will be further bolstered with collaborated efforts inmarketing to get the best results.

4


5/208

When Ratan Tata (now chairman emeritus) hadbecome chairman in the early 1990s, he had faced

the problem of group companies not talking to eachother. After he eased out powerful chieftains likeRussi Mody, Ajit Kerkar and Darbari Seth, a group

identity was forged. But collaboration still did nothappen.

Then he established Tata Group Innovation Forum,which set up InnoClusters, or groups of companies

that could work together in different areas.Cyrus Mistry, the present chairman, is taking thislegacy forward by pushing the culture of

collaboration in the group. 5


6/208

According to a study by global consultancy firm

Accenture released last year(2013), since 2000, per-

capita gross domestic product has grown faster in rural

areas at compound annual rate of 6.2 per cent,

compared with 4.7 per cent in urban centres as the

rural income is growing and consumers are buyingdiscretionary goods and lifestyle products, such as

mobile phones, television sets and two wheelers.

Between 2009 and 2012, spending in rural Indiareached $69 billion, significantly higher than the $55

billion spent by the urban population.

This has made companies, such as the Tata group ones,

rush to tap this market. 6


7/208

We are looking at rural finances as our key growth

strategy. So, we have created a separate business

vertical for that, said Praveen Kadle, managing director

& chief executive officer at non-banking financial

company Tata Capital.

Cyrus Mistrysinvestment plan, named vision 2025, laysfocus on four clusters consumer & retail, defence &

aerospace, financial service and retail & infrastructure.

Barring defence & aerospace, the other three verticalshave potential to grow in rural markets.

This initiative is expected to be driven by the newly

created group executive committee (GEC), which works

under the aegis of the Tata Sons board. 7


8/208

TATAs Reaching out to Rural India

8

TATAs Reaching out to Rural India


9/208

Content

9


10/208

Tata Chemicals Limited Overview

Founded in 1939 in CoastalGujarat

Leading manufacturer of

inorganic chemicals in India

Operates Fertilizer plant atBabrala (UP) and Phosphate

plant at Haldia (WB)

Their BusinessesChemicals

Food Additives

Fertilizers

10


11/208

TATA KISAN SANSAR

11


12/208

Tata Kisan Sansar (TKS): Evolving ToCustomer Needs

Objectives

Help Farmers Create Value

Improve Relationship with Farmers

Strengthen the Tata Brand in rural areas

Create a new distribution channel foragriculture inputs

12


13/208

Tata Kisan Sansar The Concept

An approachable & reliable business partner of the

farmer

Offering end-to-end farm management solutions

Providing reliable and top quality agri inputs

13


14/208

TATA KISAN SANSAR

Tata Chemicals launches Tata Kisan Sansar on October 26,

2004

Tata Chemicals Limitedhad first started with the objectiveof providing agri inputs to the farmers through the Tata

Kisan Kendras (exclusive franchised retail outlets of Tata)

but realizing the need of the hour, moved its proposition

from one-stop agri input shop to one-stop farmers

solution shopwith a clear objective of empowering the

farmers.

14
http://www.tatatkk.com/index.asphttp://www.tatatkk.com/index.asp


15/208

Tata Kisan Sansar

The Tata Kisan Kendras were therefore re-launched asTata Kisan Sansar (TKS-Tata Farmers World)-a ruralagri-retail outlet offering entire range of agri servicesincluding quality agri input products.

Thereafter, the focus has been to de-link thebusinessdependence for the franchisee as well as theorganization from the traditional fertilizer business andprovide value added products as well as innovative

services to the farmers. brand ambassadors of Tata Kisan Sansar enjoy a host of

benefits for a nominal cost of Rs.115 per annum

15


16/208

TATA Kisan Kendra

Accessto the latest ICT tools,

knowledge above modern farming

technologies and information from

the agri-database created by

agronomists.

Managing the existing knowledge

base of the rural masses and updating

it.Integratingthe knowledge and

techniques of the modern farming

and local knowledge for enhancing

the productivity of the rural farmers.

Evaluates the performance of the

farmers .

Creatinga conducive environment to

harmonize the research and

development, making the rural

masses aware of the new tools and

techniques.

Tata Kisan

Kendra

Access

Manage

IntegrateEvaluate

Create


17/208

TATA Solutions through GIS

This operation involves combing satellite maps, census data, socio-economicand other data collected within the geographic information systems (GIS).

GIS are computerised systems that record, store, analyse and produce mapsand geographic products based on information obtained from differentsources.

The Tata Group's precision-farming concept uses GIS to manage and analysedata collected which includes census data, revenue data, socio-economicsurveys, satellite imagery, soil-mapping data and market studies.

TKS combines collected data with the spatial data generated by the GIS facilityand correlated with socio-economic information such as the name of theowner of a plot of land etc.

When the data-building exercise for the precision-farming project iscompleted, it will reduce the complex task of selecting, mapping and testingland holdings in the command area of the TKS to a few clicks of the mouse.

The initial screen of the GIS Software shows the view of the entire state whereuser gets the choice of selecting the location he wants to select from the state.


18/208

Geographic Information

System

1

5 6

2

34


19/208

Benefits to the farmers from TKS

Benefitsto the

farmers

Accessibilityto the latest

technologicalknowhow

Easy leasingof the farmequipments

Easyavailability of

credit

Increasedcompetition withinfarmers helps in

improving theproductivity

Betterprices forthe finalproduct

Access to the latestknowledge and

innovation

Knowledgesharing

Availabilityof crop

insurance


20/208

Services & Functions


21/208

Agri Inputs

Fertilizer : Urea, DAP, MOP, NPK etc

Specialty Fertilizers : Zinc Sulphate, Micro Nutrients,

Calcium Nitrate, Organics, Water Soluble Fertilizers

Seeds : Field Crops, Vegetable Crops

Pesticides : Entire range

Cattle Feed : Two Grades

Farm Tools : Manual Implements, Sprayers, Roofing

Sheets, Solar energy devices

21


22/208

Agri Services

Soil Testing

Advisory Services

Contract FarmingOwn Seed Production

Application Services

Farmer Engagement Programs

22


23/208

Relationship building:

Farmer membership (individual & group)

Accident insurance to members

Farmer meets

Crop seminars

23


24/208

Spanning three highly productive agricultural

states, Punjab, Uttar Pradesh and Haryana,TKS will provide solutions to over 14,000

villages in Northern India in its first phase.

24


25/208

Journey of Tata Kisan Sansar

Phase 1:Tata Kisan Kendra as a retailer of Agri-inputs

Phase 2:Repositioning of Tata Kisan Kendra to Tata KisanSansar thereby considering TKS as a seed to produce

business.

Phase 3:TKS as a solutions provider that helps farmerenhance his productivity and an agent that changes the

face of Indian farming.

25


26/208

The TKS Structure: A Hub & Spoke Model

The Hub

40 Tata Krishi Vikas

Centres

Business Manager

Agri-Development Off

Soil Scientist

The Spoke

800 Franchisee TKSs110 Agronomists

Reaches more than 25 Lakh

farmers

27,200 villages covered 26

T t Ki S S i Off d (1)


27/208

Tata Kisan Sansar Services Offered (1)

The Hub

Resource Centrecomputerized & a databaseof farmers being built up

Research & Demo Farms Storage facilities

Soil and water testing facilities

Information source and training centre Recreational amenities

27


28/208

TKS Training for farmers

28

T t Ki S S i Off d (2)


29/208

Tata Kisan Sansar Services Offered (2)

The Spokes

Quality Agri-Inputs (fertilizers, seeds, pesticides,

herbicides and micronutrients)

Farm Equipment leasing

Farm Advisory Serviceslatest info on weather,

market pricing & crop production

Contract Farming Farmer Credit Financing

Produce Buyback

29


30/208

30

I d t t th ti iti f TKS hi h


31/208

In order to support the activities of TKS, which

are basically franchisee outlets, the supply

chain model that evolved is a hub and spoke

model.

The hub acts as the Resource Center to cater

to the needs of the TKS in its vicinity. Each Resource Center supports primarily 17-18

TKS franchisee outlets in a radius of 50-60 km,

where each TKS caters to 30-40 villagescovering approximately 9 million acres overall.

.

31


32/208

The hubs were named as Tata Krishi Vikas Kendras, the

word Vikas being synonymous with value added activitiesconducted like organization of farmer meets, repository of

related agriculture knowledge, soil, water and plant testing

laboratory, demonstration farms and also a distribution

center

Presently, there are 32 hubs, which cater to 650 Tata Kisan

Sansars, covering around 22,000 villagesreaching out to

approx. 3.5 million farmers. The Tata Kisan Sansars arespread across 68 districts in the North Zone and 20 districts

in the East Zone spanning 4 and 3 states respectively. The

turnover of TKS was Rs. 493 crores in 2008-09.

32


33/208

33

Farming Family Tata Kisan Parivar (TKP)


34/208

Farming Family Tata Kisan Parivar (TKP)

Farmers can either Avail of TKS services by becoming a member of the Tata Kisan Parivar; or

Choose to pay selectively for services

TKPrelationship building initiative

Members of TKP Given training in the latest farming techniques

Offered services at a discount

Taken for educational trips to agricultural unversities

Get family insurance coverage

Kisan Sahyog Parivarfarmers encouraged to form SHGs that provide a platformfor facilitation of credit as well as learning and sharing between them

34

R l ti hi M t T t


35/208

Relationship ManagementTata

Kisan Parivar

The farmer relationship initiative is being led throughTata Kisan Sansar Parivar membership, a paid valueadded service, where in key farmers/opinion leadersare enrolled for the membership through invitation.

Tata Kisan Sansar Parivar members are providedcustomized training and accidental insurance for themember and his family.

The Tata Kisan Sansar Parivar membership stands at

40,000 plus as on March Tata Kisan Sansaris an agrisolutions provider in a market used to agri inputretailers. Essential to agri solutions are services thatcomplement our tested product range which driveagricultural productivity.

35


36/208

Tata Kisan Sansarprovides a range of innovative

and unique services to farmers through a dedicated

team of Krishi Preraks and Agronomists on the field,

giving them that extra edge over traditional farming

practices

36


37/208

37


38/208

TKS Offerings

The TKS services can be divided into three broad

categories:

Basic services

Output based services

Premium services

38
http://www.tatatkk.com/services.asphttp://www.tatatkk.com/services.asphttp://www.tatatkk.com/services.asphttp://www.tatatkk.com/services.asphttp://www.tatatkk.com/services.asphttp://www.tatatkk.com/services.asp


39/208

BASIC SERVICES

Soil Testing

For Macro and Micro Nutrients in the soil, helping

the farmer make an informed decision about whatnutrients to apply in his field.

39


40/208

Cont.

Agri advisory and Complaint Management

On field addressal of various problems faced in crop

cultivation make life convenient for the farmer.Proper and timely advice leads to lesser errors and

increased profitability for the farming community.

40


41/208

Cont.......

Bringing the latest knowledge to farmers on variousaspects of agriculture helps to update the existingformidable knowledge base of the farming populace,equipping them for tomorrows challenges. This

knowledge covers farm related issues like integratedpest management and integrated nutrientmanagement and is imparted through -

Farmer Meetings at village level

Crop Seminars at central locations

Educational Trips to plants, Agri University fairs etc.

Crop specific mobile programs41


42/208

OUTPUT BASED SERVICES

Contract Farming

Intensive market led cultivation is done through Tata

Kisan Sansar franchisees in select catchment areasthrough the contract farming method. This ensures an

assured market and completes the 360 degree

approach of the TKS philosophyaddressing both

input requirements and output management through

this one stop agri solutions shop.

42


43/208

Cont.

Own Seed Production

Aimed at the improving the availability of quality

seed in the market as well as fulfilling a gap in theretailing of seeds, TKS does own seed production

for select seeds like Wheat, Paddy etc

43


44/208

PREMIUM SERVICES

Foliar Application ServicesAn innovative service exclusively available through Tata Kisan Sansar

where controlled and supervised application of a unique blend of

products, which have been tested for their complementary effects on

farm yield, is done through TKS agronomists.

This ensures a bumper yield while maintaining the soil health of the

farmers field and which is customized according to crop .

Addressing areas of crop nutrition as well as crop protection, this

service is an example of departure from traditional practices that Tata

Kisan Sansar is driving, combining accelerated growth with

unprecedented convenience.

44


45/208

Cont

Farmer Engagement ProgramAnother exclusive and unique initiative by Tata KisanSansar which provides a complete real time analysis of

the entire farming practices with customizedinterventions for select members, with a tracking ofincremental benefits over successive seasons. Thisintensive association with the farmer throughout thecrop cycle is symbolic of the dedication and focus of the

Tata Kisan Sansar team to deliver the best solutions inagri space.

45


46/208

D A B : Diagnose - Analyse - Benefit

For the farmer of today, speed of solution is

becoming increasingly important. Catering to this

segment, this service is aimed at providing quick

effective solutions for various crop production issues

which goes into a compendium of knowledge for

future use with increased efficiency.

46


47/208

47

TCS - mKRISHI


48/208

Despite the penetration of mobiles phones in rural

areas, the potential to leverage it for crucial

information dispersal and provision of valuable servicesremain largely unexplored.

This has been due to various constraints includingdiversity in language and the inability to localize and

personalize services in order to address individualneeds.

Understanding these intricacies,

TCSmKRISHI platform uses mobile technology tocater to the absolute needs of the rural sector.

It offers personalized advisory services in voice andvisual using communication devices like mobile phones.

48


49/208

mKRISHIserves to achieve the following:

Reach farmers individually to understand theirneeds

Enable farmers to receive important informationabout pesticides, fertilizers and soil and water

conservation Provide critical micro-climate, weather information

in order to plan farming operations

Facilitate better production and cultivationpractices

Improve access to markets, refining the associatedeconomy

49


50/208

mKRISHI provides farmers with the benefits of

Information and Communications Technology (ICT).

It is an award-winning, patent-pending innovativeplatform that delivers services to rural communities.

It connects farmers with a variety of stakeholderspackaging multiple services through communicationdevices like mobile phones.

It can alsointegrate wireless sensors and scripttechnology with communication devices to provide an

enhanced solution. mKRISHI ensures significant business benefits to the

stakeholders by enabling them to reach the farmersdirectly.

50


51/208

Empowering The Rural Community

Apart from the technologicalinnovation, mKRISHI has enabled the possibility

for information exchange between various

stakeholders of the rural economy.

Many agri-input companies, rural banks, insurance

companies, governments and agricultural

universities find it convenient and economical to

reach a group of or individual farmers using

TCSmKRISHIplatform.

51


52/208

Solutions We Offer

TCSmKRISHIplatform can be used as a tool byany organization, including corporate houses and

enterprises, that want to focus on the rural sector

to perform transactions, capture field information,

and process and research that specific critical

information.

The platform can be customized according to the

needs of each customer.

52


53/208

mKRISHI Lite

mKRISHILite is an Interactive Voice Response (IVR)- based system offered as an entry-level service tofarmer in addition to an experts web-consoleinterface.

Farmers dial a common number (called the IVRservice number).

They follow the directives to perform their

transactions or reach out for solutions / advisories. The availability of information in farmers regional

languages enables better engagement andconvenience.

53


54/208

With TCSmKRISHIplatforms web-consoles,experts analyze every farmers query and providetheir responses with directives and solutions.

The status of the response to each query is

communicated to the farmers via electronicmessages as and when the queries get read.

Upon the availability of an experts solution,

farmers pull the experts advice via the platform. Farmers are also provided with other alerts like

weather forecasts, market prices, best practices,etc. in either English or their local languages.

54


55/208

mKRISHI Regular

mKRISHIRegular constitutes a mobile applicationon the farmers handsets pushing information

through the interface between the mobile

application and an experts web-console.

The entire application is customized and

personalized according to the farmers regional

language to aid convenience in communication.

55


56/208

Other features in mKRISHIRegular include the following: Information push messages sent / received through a

separate inbox in the application

Advice aggregation to track and analyze the historical data of

advices Image capture feature to report abnormalities or raise

requests

An Abnormality Image Gallery catalogue to check for crop

healthmKRISHI Regular also enables enterprises to gather criticalfield information through a customized mobile application withinstantaneous information capture and parallel information

processing for immediate operations planning. 56


57/208

mKRISHI Plus

mKRISHIPlus includes critical weather informationdissemination using Automatic Weather Station (AWS)

in addition to the mKRISHI Regular offerings.

AWS enables pushing JIT location-specific personalized

weather information to the farmers, including

important weather parameters like rainfall,

temperature, humidity, etc. at regular intervals.

Weather being a crucial element for every farmingpractice and operation, providing this information is

vital.

57

f


58/208

Business Benefits

TCSmKRISHIplatform integrates multipletechnologies to empower farmers with vital

information based on specific needs like weather,

fertilizer and pest control.

It allows them to check for information in their local

languages with image and voice through mobile

phones and provides the relevant information.

The convergence of these critical technologies with

specificpersonalization and scalability benefits both

customers and farmers.58

f b f l d h f ll


59/208

Specific benefits include the following

Technology Convergence Mobile-to-web console

Automatic Weather Station (AWS) and sensors

integration Complex parametric device integration

Research content integrations and linkages

Enterprise back-end integration

Geographical Information System (GIS)

Local language renderers59

f b f l d h f ll


60/208

Specific benefits include the following

Personalization Farmer-specific information dissemination

Location-specific information dissemination

Process-specific service customization

Enterprise-specific service packaging

Ease of scalability

Designed specifically to enable large-scale

operations

60


61/208

61


62/208

Pain Point

62

As per World Gold Council estimates, about 60% of the gold in India is

bought in small towns and villages.

Today, goldsmiths and jewellers are cheating gold buyers in a big way

by adulterating the yellow metal with iridium and ruthenium.

Seeing a business opportunity to help gold buyers get pure

gold, GoldPlus from Tata is now hard-selling its jewellery in small

towns across India.

In an effort top compete with local jewellers in rural areas and small

towns, the brand has launched big campaign in rural areas of India

where sale of gold is very high.


63/208

Marketing

63

GoldPlus decided to create a promo which would attract attention. Itcreated a 24.5 kilogram gold bangle that gave it an entry into the

Limca Book of Records and took the bangle on a roadshow of 17

towns. Consumers were asked to parcipate in a guess the weight of

the bangle contest.

The company also offered a photo opportunity to visitors, with

options to mail their photographs to five of their acquaintances.

Other innovative promotions include new store openings being

preceded by distribution of gold paper slips to potential customers in

a 3-5 kilometer radius of the store.


64/208

Tata tea Gaon Chalo

Aim:To grow Tata Tea brand value share

Market share of Tata Tea Brand moves from 9.7% to10.9%

Tata Tea ranked the second most trusted beveragebrand in Brand Equity Survey Brand volume growth by 22% over previous year lead

by Complete restage of Tata Tea premium

New price point packs

Future Strategy:Continued innovation & growth of TataTea to enhance value

64


65/208

65


66/208

Performance against Strategy

Aim :Increasing the Rate of Innovation

Tetley brand restaged; Introduction of Tetley

flavoured tea bags

New Kanan Devan strong launched in Kerala,

market share jumps from 21% to 25.6%

Future Strategy: New initiatives & projects will

fuel growth

66



67/208


0.1

0.6

0.9

1.2

1.5

1.9 2

Oct'03 Dec'03 Mar'04 June'04 Sept'04 Dec'04 Apr'05

Future Strategy:New initiatives & projects will fuel growth

Source : All India, AC Nielsen Retail

Audit , April 2005

Growth in market share

Aim : Innovating growth Tata Tea Gold

67



68/208

Aim :Systemic address of consumer insightNew brand communication launched for Chakra Gold

supported by outdoor visibility campaign for

strengthening brand postioning

New Agni price point packs 11% growth over PY

Agni migration strategy initiated

Future Strategy:Continuous consumer understandingdriven business plans


68



69/208

Aim: Address distribution penetration

Specific sales initiatives to improve rural access

Increased focus on key accounts

Gemini a brand which has >50% market share in

Andhra Pradesh saw a 5% volume growth

Future Strategy : Enhance distribution opportunities


69

New Launches/Re launches


70/208

/

70


71/208

Tata AIG Life Insurance

Tata-AIG Life Insurance Company is a joint venturebetween the Tata Group (74% equity stake) and

American International Group Inc. (AIG) (26% equity

stake).

The company offers a broad range of life insurance

products to individuals and groups.

The products offered to individuals are variations of

term life with or without a savings element, e.g.,

endowment policies and money back policies.

71


72/208

Tata-AIG Life has been in operation since April 2001

(incorporated on Aug 23, 2000).

While the company itself is relatively new, the Tata

group is widely known in Indian households.

Insuring the bottom of the pyramid

72


73/208

Tata AIG Life Insurance

Tata-AIG entered into microinsurance as a condition

for acquiring a license to sell insurance in India

Tata-AIGs rural and social team is in the process of

developing and establishing in distribution network.

Consequently, the current figures on number of

clients served.

73


74/208

The costs of servicing need to be read with caution.

Tata-AIG has sold 34 100 term and endowment life

policies from March 2002 to June 2005, of which

more than half were sold to women.

These products have thus far generated a premium

income of $122 000.

The total cost of establishing the channel to date is

$234 000.1

74


75/208

A business opportunity rather than an obligation

The structure of the insurance industry leans

towards the urban scenario in terms of products,

delivery, people processes and service.

Insurance is sold, not purchased

75

The company started in Andhra Pradesh, where Tata


76/208

AIG was doing a project with the Department for

International Development (DFID), an arm of the

British Ministry of Finance that gives funds on amatching funds basis for financially deepening

activities in rural areas.

Tata AIG and DFID contributed towards a corpuswhich was used to develop the idea of utilising

grassroots level community workers to develop

infrastructure and collaterals that would promoteand service micro insurance to landless daily-waged

adults in the state.

76


77/208

Traditionally agents sell insurance to earn a

livelihood. They usually earn a 40-per cent

commission on the first year's premium and 6 to 10

per cent in subsequent years

Agents are enthusiastic about doing sales, they arenot happy giving service, especially if the amount is

small.

77


78/208

In rural areas, the lack of infrastructure makes

servicing by the agent that much more imperative

but because insurance services in rural areas are

not differentiated from urban, the agents areunable to service them and the credibility of

insurance takes a beating."

78

Rural Market into three distinct segments


79/208

Rural Market into three distinct segments

79

Target segment

(70% of rural

India)

Shopper at the bottom of the pyramid


80/208

Shopper at the bottom of the pyramid

Rural India contributes to 72% of the populationand the countrys GDP

63% of Indias population will continue to live in the

rural areas even in 2025 according to a McKinseyreport

Rural areas are growing at a robust rate of 25%

While the per capita income is lower than urbanareas, the customer base is thrice that of urban

areas

80


81/208

The FMCG sector in rural areas is expected to grow

by 40% as against 25% in urban areas in the coming

quarters.

Shampoos have reached < 40% of rural households

as compared to > 70% of urban households.

Refrigerators have penetrated into < 5% of ruralhouseholds as compared to over 35% of urban.

These numbers and more have been telling the

story of many marketing opportunities at thebottom of the pyramid.

81


82/208

Rural retail formats are characterized by small

retailers, small town markets, Haats (periodic daily

or weekly markets), Mandis (agri markets), Melas

(exhibitions) and mobile traders.

There are also some large format retail stores likethe DSCL Haryali stores, M & M Shubh Labh stores,

TATA/Rallis Kisan Kendras and Escorts rural stores

etc.

82


83/208

TATA AIG is targeted to find a way of addressing the

last segment.

It would help to fulfil obligation as well as generate

incremental new business."

The challenge was to create a channel which could

handle micro insurancenot the usual agentsbut

organisations and people who would be interested

in selling insurance to the poor and be content toservice the market with small earnings.

83


84/208

Tata AIG decided to position insurance as a

supplementary livelihood activity, and talk to

community-based women.

"In rural areas it's very difficult for women to find a

source of income, so TATA AIG encourage women tobecome our micro insurance agents, and by

creating relevant products and processes build

capacities in them to sell insurance.

84

Tata AIG encouraged the women to formt hi i f fi d ll d th CRIG


85/208

partnerships in groups of five and called them CRIGs

(Rural Community Insurance Groups).

They travel around in branded vans owned by TataAIG, which also double as collection and policy

servicing units. Over four three-day capacity

building modules, women learn soft skills, developinsurance skills and learn data management

through computers. About 150 women are now

earning Rs 700 ($15) a month. Some have graduated to selling regular products to

the rural middle class, and earn as much as Rs 2,000

($43).85


86/208

The model has been replicated in other parts of the

country with some changes.

It's not been easy in states like UP and Rajasthan,

where the men don't allow womenfolk to go out of

the house for work.

Here, the company approached NGO field workersand volunteers.

Today, of the 460 rural agents selling micro

insurance, 60 per cent are women.

A woman agent is typically a cluster leader or an

office bearer of a rural self-help group (SHG).86


87/208

Making a difference One of the big challenges that

the company faced was training the women.

The Insurance Act requires that every person who

sells insurance has to be trained for 100 hours at

designated training centres, all of which are inurban areas.

It was a problem to get women to stay in a city for

so many days.

87


88/208

Tata AIG has shared its learnings, both in India and

abroad, and now a new micro insurance regulation

allows micro insurance agents with only 25 hours of

training in the village.

The company is confident that this will help rampup its woman force rapidly.

88

TATA AIG operate in 10 states (Andhra Pradesh


89/208

TATA AIG operate in 10 states (Andhra Pradesh,

Kerala, Tamil Nadu, Karnataka, Maharashtra,

Gujarat, Jharkhand, West Bengal, UP and Rajasthan)and have more than 50,000 policy holders;

Out of which close to 85 per cent would belong to

the third category (the bottom of the pyramid), forour policy holder survey shows that it is the very

first time that they have bought an insurance policy

and it is our women agents who have reached out

to them.

89

Th h d l d f ill l i d


90/208

The company has developed no-frills, low-priced

personal products, for rural markets, that focus on

savings.

A premium of Rs 150 ($3) to Rs 300 ($9) offers

coverage of between Rs 15,000 ($320) to Rs 20,000

($430). Many NGOs, cooperatives/womenfederations and other such rural organisations

including MFIs are partnering with Tata-AIG in

mentoring and monitoring the programme at thegrassroot level.

90


91/208

With new micro insurance regulations that allow

level commission (companies can now pay 20 per

cent commission through the product's tenure,

giving micro agents a more regular income), TataAIG has developed a new set of productsvariants

of earlier productsand is awaiting regulatory

clearances for them.

91


92/208

Tata AIG has also evolved its processes to deal with

rural realitiesilliteracy, a cash economy, lack of

birth certificates or proof of age.

The company has settled many claims, ensuring

that the money is given to the beneficiary vide anNGO, so that the proceeds are used well.

Tata AIG is expanding its reach and is planning

micro insurance-based offices across the country.

92


93/208

TATA AIG have consciously decided to target the

'bottom of the pyramid';

They move up only after gaining a foothold.

They are looking at rural markets more holistically,

as selling only to the very poor is not sustainable for

the company in the long run.

93


94/208

Last year, the company grew 80 per cent in terms of

both policies and premiums.

They have covered over 18,000 rural individual

policy holders with micro insurance in the first six

months of this year and hope to end the year withover 35,000 policies contributing close to Rs 75 lakh

($161,400) in first premium terms.

94


95/208

TATA AIG has already make it clear that this is

business, not corporate social responsibility (CSR):

"We have invested money, are working on making it

a sustainable business by creating value for our

customers through a choice of products, and wantto generate long-term profits,".

"The biggest thing about development is having

choices.

95


96/208

We are educating people about insurance and

about the product choices they haveoffering

them relevant services at their doorstep, including

frequent collection of premiums.

In trying to create value for the rural customer, alivelihood for the agent and a business for itself,

Tata AIG is also changing the face of rural India.

96


97/208

Rural areas are all locations outside of officially

classified urban areas. Life insurers must sell 7% of

total policies by number (not value) in the first year,

with increasing amounts of up to 16% in Year 5.

With general insurance, 2% of gross premiumincome must come from rural areas in the first year,

3% in Year 2, and 5% thereafter.

97

Based in Andhra Pradesh, it is primarily a savingsand credit association with an added insurance


98/208

and credit association with an added insurance

feature.

The co-operatives 8,100 members pay an annualinsurance premium of Rs 100 ($2.20) and receive

insurance cover for life and assets.

Their life cover is Rs 15,000 ($333) in the event of anatural death and double that in the event of an

accidental death.

The funds premium pool is held and operated bymembers of the cooperative.

98


99/208

Rural India comprises of over 650 000 villages with

over half of them having a population of less than500.

Even the state relies on NGOs to provide services to

remote and poorly connected locations.

Tata-AIG took a different approach by having a

department focused solely on microinsurance, so a

single team managed the entire process.

99

DIFFERENT SCHEMES OF TATA AIG


100/208

DIFFERENT SCHEMES OF TATA AIG

Tata AIG Life Navkalyan Yojana

Tata AIG Life Ayushman Yojana

Tata AIG Life Sampoorn Bima Yojana

Tata AIG Life Sumangal Bima Yojana

100

Tata AIG Life Navkalyan Yojana
http://www.tata-aig-life.com/MicroInsurance/NavkalyanYojana/solutionNavkalyanYojana.htmhttp://www.tata-aig-life.com/MicroInsurance/AyushmanYojana/solutionAyushmanYojana.htmhttp://www.tata-aig-life.com/MicroInsurance/SampoornBimaYojana/solutionSampoornBimaYojana.htmhttp://www.tata-aig-life.com/MicroInsurance/SumangalBimaYojana/solutionSumangalBimaYojana.htmhttp://www.tata-aig-life.com/MicroInsurance/SumangalBimaYojana/solutionSumangalBimaYojana.htmhttp://www.tata-aig-life.com/MicroInsurance/SumangalBimaYojana/solutionSumangalBimaYojana.htmhttp://www.tata-aig-life.com/MicroInsurance/SumangalBimaYojana/solutionSumangalBimaYojana.htmhttp://www.tata-aig-life.com/MicroInsurance/SumangalBimaYojana/solutionSumangalBimaYojana.htmhttp://www.tata-aig-life.com/MicroInsurance/SumangalBimaYojana/solutionSumangalBimaYojana.htmhttp://www.tata-aig-life.com/MicroInsurance/SumangalBimaYojana/solutionSumangalBimaYojana.htmhttp://www.tata-aig-life.com/MicroInsurance/SampoornBimaYojana/solutionSampoornBimaYojana.htmhttp://www.tata-aig-life.com/MicroInsurance/SampoornBimaYojana/solutionSampoornBimaYojana.htmhttp://www.tata-aig-life.com/MicroInsurance/SampoornBimaYojana/solutionSampoornBimaYojana.htmhttp://www.tata-aig-life.com/MicroInsurance/SampoornBimaYojana/solutionSampoornBimaYojana.htmhttp://www.tata-aig-life.com/MicroInsurance/SampoornBimaYojana/solutionSampoornBimaYojana.htmhttp://www.tata-aig-life.com/MicroInsurance/SampoornBimaYojana/solutionSampoornBimaYojana.htmhttp://www.tata-aig-life.com/MicroInsurance/AyushmanYojana/solutionAyushmanYojana.htmhttp://www.tata-aig-life.com/MicroInsurance/AyushmanYojana/solutionAyushmanYojana.htmhttp://www.tata-aig-life.com/MicroInsurance/AyushmanYojana/solutionAyushmanYojana.htmhttp://www.tata-aig-life.com/MicroInsurance/AyushmanYojana/solutionAyushmanYojana.htmhttp://www.tata-aig-life.com/MicroInsurance/NavkalyanYojana/solutionNavkalyanYojana.htmhttp://www.tata-aig-life.com/MicroInsurance/NavkalyanYojana/solutionNavkalyanYojana.htmhttp://www.tata-aig-life.com/MicroInsurance/NavkalyanYojana/solutionNavkalyanYojana.htmhttp://www.tata-aig-life.com/MicroInsurance/NavkalyanYojana/solutionNavkalyanYojana.htmhttp://www.tata-aig-life.com/MicroInsurance/NavkalyanYojana/solutionNavkalyanYojana.htmhttp://www.tata-aig-life.com/MicroInsurance/NavkalyanYojana/solutionNavkalyanYojana.htmhttp://www.tata-aig-life.com/MicroInsurance/NavkalyanYojana/solutionNavkalyanYojana.htmhttp://www.tata-aig-life.com/MicroInsurance/NavkalyanYojana/solutionNavkalyanYojana.htmhttp://www.tata-aig-life.com/MicroInsurance/NavkalyanYojana/solutionNavkalyanYojana.htm


101/208

A regular premium payment, low cost term plan

for the rural adults who seek life insurance

protection without any maturity benefit.

101

http://www.tata-aig-life.com/MicroInsurance/NavkalyanYojana/solutionNavkalyanYojana.htmhttp://www.tata-aig-life.com/MicroInsurance/NavkalyanYojana/solutionNavkalyanYojana.htmhttp://www.tata-aig-life.com/MicroInsurance/NavkalyanYojana/solutionNavkalyanYojana.htmhttp://www.tata-aig-life.com/MicroInsurance/NavkalyanYojana/solutionNavkalyanYojana.htmhttp://www.tata-aig-life.com/MicroInsurance/AyushmanYojana/solutionAyushmanYojana.htmhttp://www.tata-aig-life.com/MicroInsurance/AyushmanYojana/solutionAyushmanYojana.htmhttp://www.tata-aig-life.com/MicroInsurance/AyushmanYojana/solutionAyushmanYojana.htmhttp://www.tata-aig-life.com/MicroInsurance/AyushmanYojana/solutionAyushmanYojana.htmhttp://www.tata-aig-life.com/MicroInsurance/AyushmanYojana/solutionAyushmanYojana.htm


102/208


A single premium plan where the policyholder pays the

premium at the beginning of the policy term.

This is especially useful for those rural people who have aseasonal income.

102

Tata AIG Life Sampoorn Bima Yojana
http://www.tata-aig-life.com/MicroInsurance/AyushmanYojana/solutionAyushmanYojana.htmhttp://www.tata-aig-life.com/MicroInsurance/AyushmanYojana/solutionAyushmanYojana.htmhttp://www.tata-aig-life.com/MicroInsurance/AyushmanYojana/solutionAyushmanYojana.htmhttp://www.tata-aig-life.com/MicroInsurance/AyushmanYojana/solutionAyushmanYojana.htmhttp://www.tata-aig-life.com/MicroInsurance/AyushmanYojana/solutionAyushmanYojana.htmhttp://www.tata-aig-life.com/MicroInsurance/SampoornBimaYojana/solutionSampoornBimaYojana.htmhttp://www.tata-aig-life.com/MicroInsurance/SampoornBimaYojana/solutionSampoornBimaYojana.htmhttp://www.tata-aig-life.com/MicroInsurance/SampoornBimaYojana/solutionSampoornBimaYojana.htmhttp://www.tata-aig-life.com/MicroInsurance/SampoornBimaYojana/solutionSampoornBimaYojana.htmhttp://www.tata-aig-life.com/MicroInsurance/SampoornBimaYojana/solutionSampoornBimaYojana.htmhttp://www.tata-aig-life.com/MicroInsurance/SampoornBimaYojana/solutionSampoornBimaYojana.htmhttp://www.tata-aig-life.com/MicroInsurance/SampoornBimaYojana/solutionSampoornBimaYojana.htm


103/208

A low cost insurance plan where the policyholder receives all

the premiums paid during the policy term upon survival until

the term of the policy.

Premiums are payable for only 10 years, while the coverage

is up to 15 years.103

Tata AIG Life Sumangal Bima Yojana
http://www.tata-aig-life.com/MicroInsurance/SumangalBimaYojana/solutionSumangalBimaYojana.htmhttp://www.tata-aig-life.com/MicroInsurance/SumangalBimaYojana/solutionSumangalBimaYojana.htmhttp://www.tata-aig-life.com/MicroInsurance/SumangalBimaYojana/solutionSumangalBimaYojana.htmhttp://www.tata-aig-life.com/MicroInsurance/SumangalBimaYojana/solutionSumangalBimaYojana.htmhttp://www.tata-aig-life.com/MicroInsurance/SumangalBimaYojana/solutionSumangalBimaYojana.htmhttp://www.tata-aig-life.com/MicroInsurance/SumangalBimaYojana/solutionSumangalBimaYojana.htmhttp://www.tata-aig-life.com/MicroInsurance/SumangalBimaYojana/solutionSumangalBimaYojana.htm


104/208

To encourage regular long term savings from those who preferto set aside some money and get periodic returns, whileenjoying the benefits of insurance protection. We introduce"Tata AIG Life Sumangal Bima Yojana, a limited premium paymoney back plan.

In this plan you have to pay premium for 10 years and you getinsurance protection for 15 years. Enjoy total guaranteedreturns of 120% of the *total policy premium at specifiedintervals during term of the policy.

104

SUMMARY OF MARKETING MIX


105/208

SUMMARY OF MARKETING MIX

Product-Price: Special for the bottom of pyramid.

No-frills, low-priced personal products, for rural markets, thatfocus on savings.

A premium of Rs 150 ($3) to Rs 300 ($9) offers coverage ofbetween Rs 15,000 ($320) to Rs 20,000 ($430)

Place

Rural community insurance groups(a group of 5 women)

Travel in branded vans of Tata AIG increasing sales..

Promotion

Projection of Insurance as a supplementary livelihood activity

105

Titan Sonata


106/208

Titan Sonata

Sonata, a division of Titan Industries launchedin 1997, targets the mass market in watches.

Priced between Rs 395 ($8) and Rs 1250 ($27),

Sonata is the largest selling watch brand in thecountry, with volumes of over 4 million units

annually.

106


107/208

Currently 80 per cent of Sonata sales come from

urban areas where consumer awareness for thebrand and its distribution is strong. Last year, the

division made a concentrated effort to focus on the

rural sector. "Our focus comes from a combinationof two factors:providing quality products to the

lower income market,

"The rural market exists, but it is dominated by theunorganised sector.

107


108/208

80 per cent of rural Indians did not wear a watch.

The reasons ranged from functional to socio-cultural. The need to know time accurately is low;

the sunrise (and sunset) is their timekeeper, as is

their body clock. The ringing of the school bell, thearrival or passing of a train or bus also indicates the

time. Most houses have a wall clock.

108


109/208

Villagers buy a watch that is usually economic (about

Rs 150 or $3), non-branded and thereforeunreliable. However, they expect the watch to last

at least two years. Rural folk are very price

consciousand must have a very good reason forspending a large amount like Rs 500 ($10). At that

price, they expect a watch that can be passed down

to the next generation.

109

While watches are seen as a fashionableindulgence, on the other hand, they connote


110/208

g , , ysuccess and command respect for the owner.

Wearing a watch gives a subtle message that onehas achieved something in life; 'aapki shaan

badhata hai' (it increases social status). A gold

plated watch with a gold bracelet conveys this best.

But, as rural India progresses, farmers no longer

want their children to follow in their footsteps. They

want them to become doctors or engineers. Rural

women, especially, want their children to have a

better future.

110

Project Swades


111/208

Project Swades

Sonata launched project Swades, aimed atchanging people's mindsets and making them

aware of the value of time. Titan Sonata used

these learnings to project a watch assomething that will help people progress, The

message communicated to people that a

Sonata watch from Tata is reliable, of good

quality, affordable and can be instrumental to

their success.

111


112/208

Pilot projects were started in rural Uttar Pradesh and

Tamil Nadu, to test the market. Gaily decorated

mobile vans travelled around villages to generate

interest. Sonata watches were also displayed atlocal melas(fairs) and haats (markets).

112

Target customers-20 to 35 year age group, aboutthe kind of products they want, and also trying out


113/208

different price points. So if customers want a watchat Rs 250 ($5), sonata have to see how they candeliver the product in that price.

In rural areas where Sonata does not have a strongdistribution network, there is need for setting up a

parallel distribution system that can provide accessto interior areas at a low cost.

Project Swades is a pilot project and the team is stillgathering information. They hope to have adeliverable business model soon. "The biggestadvantage is that India is progressing and rural Indiaseems to be clear on what it wants.

113


114/208

Sonata is talking to banks for micro financing, so

that more people can afford to buy watches.Another interesting option for organising financing

is the post office where many people have savings

accounts. Sonata is also looking at trainingyoungsters to market and service the watches. This

will provide the much-needed employment in rural

areas

114


115/208

Sonata is looking very seriously at driving down

product costs in tune with Mr Tata's dream ofoffering a low-cost watch (priced at around Rs 100

or $2), without compromising on quality. "Our

efforts are fairly encouraging; on paper Rs 175($3.5) seems possible today and we are working

with our vendors to reach the target.

115

Khet-Se Agriproduce India


116/208

g p

Khet-Se Agriproduce India, a 50:50 JV of TataChemicals (TCL) and Total Produce, Ireland,

launched its operations with its first state-of-the-art

procurement and distribution facility for fresh fruitsand vegetables at Malerkotla, Punjab. Khet-Se is a

B2B cash and carry business for fresh fruit and

vegetables sourcing, packaging and distribution

across India.

116

Contd..


117/208

This distribution centre has the facility of sorting,

grading and packing of all fresh produce; fourripening chambers of 10mt capacity each (to ripenfruits like banana) and four cold storages of 25mteach.

Tata Chemicals has strong links with Indian farmerswith its sales of fertilisers, chemicals and othergrower requirements through its network of Tata

Kisan Sansar distribution centres throughout India. This will help Khet-Se have a big advantage in

sourcing high quality fresh produce.117

Khet-Se aims to bridge the gap between producer


118/208

Khet Se aims to bridge the gap between producer

and end consumer which will significantly increase

efficiencies, improve shelf-life and reduce productloss in the supply chain. For this, it has already

partnered with farmers to develop their skills to

raise the quality of Indian farm produce throughtraining on good agricultural practices

Khet-Se plans to partner with small retailers and

help them in developing competencies to managetheir business more effectively

118

straightline.in


119/208

straightline.in

Tata-SAIL joint venture to help rural Bengal shoponline2007

119

Concept


120/208

p

Straightline.in, the e-shop of Mjunction Services, aTata Steel-SAIL joint venture, is set to offer rural

people in West Bengal opportunities to buy an array

of products online directly from manufacturers.

120

Purpose


121/208

p

To provide the facility, straightline.in has forged apartnership with Gramin Sanchar Society,

commonly known as Grasso.

The purpose behind the partnership is to takeadvantage of services of Grassos more than 200

community information and service centres (CISC),

which being spread across the state, are already

offering rural people a host of e-services including

rural telephony, mobile banking and information on

Agriculture.121

Benefits


122/208

As these CISCs have direct access to people in thoseareas, these centres have been chosen by the e-

shop as an ideal platform to reach out to people

and draw them into e-commerce. The people will get various products directly from

manufacturers at competitive prices and with

assured delivery of the ordered products.

122

Benefits (cont.)


123/208

The e-retailing will kick off with products likeconstruction materials such as TMT bars,manufactured by SAIL and Ramswarup Industries,pipes by Tata Pipes, cement by Lafarge, paints by

Berger Paints and storage and PVC tanks producedby Patton Tanks.

Farm inputs like seeds, fertilisers, pesticides and

agricultural implements have been lined up as thenext products for e-transaction. These are to befollowed by electronic appliances, fabricationproducts and consumer goods.

123

TATA BP Solar


124/208

TATA BP Solar Making the sun rise

Tata BP Solar has been

at the forefront of solar

energy field since 1991.

124


125/208

Over 70 per cent of India's population lives in the

rural areas, but 70 per cent of electricity generatedis used in urban areas," says AK Vora, Managing

Director of Tata BP Solar. "Even in the future, rural

areas will continue to get an unequal share ofpower, because urban needs will keep on

increasing.

125

The power of the sun


126/208

p

Tata BP Solar is playing a key role in helpingbridge the urban-rural energy divide.

In India, energy planners think of powerrequirements only in terms of large MWs. But,

says Vora, in villages you need small amounts ofpower; for homes and businesses such as shopsand flour mills.

Solar power can provide energy security and,therefore developmental opportunities to 700million rural Indians.

126

TATA BP SOLAR


127/208

127

Cont..


128/208

"Solar power is clean, eco-friendly and the mosteasy-to-set-up source of power. You don't needlarge transmission towers, lengthy cabling andheavy switchgear. You can light an entire village in

less than a week," says K Subramanya, COO, TataBP Solar.

The needs of the rural people are simple: fuel forcooking, water for drinking, light for studying,and television and telephone for entertainmentand connectivity.

128

Cont.


129/208

Tata BP Solar has a slew of products such as solar homelighting systems, solar lanterns, solar cookers and solarhot water systems, the innovation is in the packagedsolutions that they have designed for specific segmentsin rural India:

Sunbank, a customised package for rural banks that arebeing computerised, consists of a power pack alongwith solar modules, batteries and controllers, andprovides power for three to six hours a day. Thecompany is looking at powering ATMs next.

Suraksha, a solar-powered communication system,helps police stations function effectively.

129

India has tens of thousands of primary healthcentres, but most of them have very little or nopower and vaccines need to be refrigerated at


130/208

power, and vaccines need to be refrigerated attemperatures lower than 6C. The health centre

package, Arogya, includes a solar powered vaccinerefrigerator manufactured indigenously by thecompany and approved by the World Health

Organisation (WHO). In Madhya Pradesh, the Rajya Siksha Abhiyan has

given computers to over 3,000 rural schools, butrealised that there is no power to operate them.

Tata BP Solar is proposing to put together a schoolpackage called Tejas, which powers computers, TVs,lights and fans. Specific packages for e-governance

and panchayats are now being developed130

The government is driving banking, farming,


131/208

education and health activities in rural areas, and

Tata BP Solar is ensuring that these initiatives bearfruit through the use of solar energy.

"Each of our package solutions addresses the

government's agenda in different areas," saysSubramanya. "We are also understanding the real

needs of villagers and developing products

depending on the budget, playability and productuse."

131


132/208

One work-in-progress product is a low-cost solar

lantern.

The present lantern, a bestseller, is priced at Rs

4,000 ($80), too expensive for the rural segment.

The company's R&D department is relooking at theproduct to bring the price down to Rs 1,250 ($27).

132


133/208

They are also developing a rural solar water heater,

smaller in size (40 to 50 litres) and cheaper than thecurrent range, sold primarily in urban areas for

between Rs 18,000 ($387) to Rs 45,000 ($969),

depending on the size. The target is to take it to the market by the end of

this year at a cost less than Rs 4,000 ($80).

133

Arunodaya


134/208

Arunodaya, the company is trying to make banksaware of the positive cost-benefit ratio of solar

products, and banks have started giving loans.

Arunodaya'sobjective is not to market solarproducts but to spread awareness about solar

energyand its applications through seminars and

workshops.

134

"The customers are a by-product ofArunodaya'sactivities," says Vora, who points out that Tata BP

S l h ibili d
http://www.tata.com/article.aspx?artid=CKYBvK7gSDY=http://www.tata.com/article.aspx?artid=CKYBvK7gSDY=


135/208

Solar has a greater responsibility towards

promoting solar energy and developingapplications, as it is the leader in this field in India.

Tata BP Solar products have transformed lives in the

villages of Punjab, Uttar Pradesh, Haryana, Keralaand Tamil Nadu. It has done pioneering work in

Rajasthan, Assam, Orissa, West Bengal, Bihar,

Chattisgarh, Jammu and Kashmir, and north east

India.

The idea is to make the sun shine on rural India, to

brighten its future.135

Lighting up Ladakh


136/208

136

Most Ladakhis lived a harsh life without electricity,


137/208

till Tata BP Solar and the Ladakh Renewable Energy

Development Agency (LREDA) joined hands to lightup their world.

In a short time-frame, Tata BP Solar installed 8,700

solar home lighting systems and delivered 6,000solar lanterns to 80 remote villages and hamlets

situated at altitudes between 2,600 m (8,500 ft)

and 5,000 m (16,500 ft) above sea-level, over rough

terrain in bone-chilling weather.

137

Half the villages were accessible only on foot; some


138/208

were a three-day trek from the nearest motorable

road.

On June 4, 2002, the first of 118 trucks loaded with

solar products set off from the company'ssophisticated manufacturing facility in Bangalore to

Ladakh, over 3,000 km away, a journey that took

two whole weeks.

138


139/208

Just four months later, 14,000 homes in dozens of

villages in Ladakh were illuminated each night by agolden glow. Thirty-six teams of local people were

trained to install the products and educate the

people. "Our team has done amazing work in thatdifficult terrain.

139

Today, the company has a regional office in Leh


140/208

the highest solar service centre in Indiaan on-site

project management team and more than 70locally-trained technicians.

A grateful Buddhist monk at Strongday Gompa in

Zanskar summed up his feelings, "Solar light is likegiving eyes to a blind man."

140


141/208

141

NEED OF SUNBANK


142/208

142


143/208

143


144/208

144


145/208

145

THEY BANK ON SUNBANK


146/208

146


147/208

147

TATA SPECIFICATION


148/208

148


149/208

149


150/208

150


151/208

151


152/208

152


153/208

153


154/208

154


155/208

155


156/208

156

SOLAR POWER PACKS


157/208

157


158/208

158


159/208

159

Tata Rallis


160/208

Rallis India is one of Indias leading agrochemicals

companies.

It has more than 150 years of experience inservicing rural markets and a comprehensive

portfolio of pesticides, herbicides, fungicides and

plant nutrients for Indian farmers

160


161/208

The company has factories in five locations in Indiaand a network of 1,500 distributors that reach more

than 40,000 retail counters.

It has the largest agrochemicals capacity in thecountry (10,000 tonnes per annum of technical

grade pesticides and 30,000 tonne litres per annum

of formulations).

161

Rallis: Strengths today


162/208

Number 2 in domestic CP business

Widest reach in domestic market place

Strong Brand equity and large product portfolio Desired co-marketing partner for RBCs

Quality manufacturer of Pesticides

162

Known as Tata (Rallis) in rural India.

Brands carry Tata name


163/208

y

163

Areas of business


164/208

The domestic formulation business caters to thecrop protection and yield enhancement needs of

the Indian farmers through a wide portfolio of

products, including insecticides, fungicides,

herbicides, plant-growth nutrients and seeds.

The domestic institutional business caters to the

bulk and technical requirements of institutional

customers.

164


165/208

The international business handles exports ofpesticides to all parts of the world. The export

basket includes technical-grade pesticides, branded

formulations and contract-manufactured products.

165


166/208

Tata Rallis have had their first encounter with a conceptthat is set to change their entire business contract farming.

Farmers now have only to get to one of four Rallis Kisan

Kendras (RKKs) and fulfil their entire spectrum of needs, be

they agricultural products like pesticides and insecticides,credit, an assured buyer, or even expert advice.

166


167/208

The RKKs are at the four locations at which thecompany has set up the contract farming projects:

at the pilot project in Hoshangabad, at Bangalore

for fruits, at Nashik for vegetables, and at Panipatfor Basmati rice

167


168/208

The company has come together with creditprovider ICICI and buyers of agricultural produce

like HLL and Food World to provide a one-stop shop

of all solutions for farmers.

168

Rallis originally a pure agri inputs company has


169/208

Rallis, originally a pure agri-inputs company, has

covered many milestones to unshackle the farmerwith its contract farming initiatives. Because of its

strong background and history in the rural sector,

Rallis is in a good position to execute the contract-farming model.

169

The changes


170/208

Gaining the farmers confidence was the key to thesuccess of Rallis's model.

The idea was to entrench in the farmers minds that

this was not another purely academic experiment.Rather, it was crucial to make them see that the

experiments success would mean their success as

well. "We didnt want to be remembered as fly-by-

night operators," asserts Mr Oberoi.

170

Although the company has extensive reach in the


171/208

Although the company has extensive reach in the

agricultural world, its expertise is restricted toseeds, fertilisers and good research practices.

To overcome the lack of expertise in its non-core

businesses, the company decided to partner withexisting service providers and to extend the

network to the farm. The partner, in turn, stood to

benefit from the Rallis-Tata association and gaininroads into the rural segment.

171

To provide easier finances and lend easy credit to


172/208

To provide easier finances and lend easy credit to

the farmers, ICICI was roped in. For ICICI, the modelexpectedly provided a platform to reach out to a

larger rural audience.

To ensure produce offtake, Rallis tied up with HLL.The latter was looking for standardised good quality

wheat for its processed atta.

172

When this partnership took its wares to the farmersof Hoshangabad, where the first experiment was

carried out, there was cause for great satisfaction.


173/208

With the increase in available funds, farm creditwent up. Offtake was assured as was the quality of

the produce and the farmer saw better returns for

himself.

The project was aimed at giving true value to all

participants of the initiative. "The idea was to take

to the farmer any person who could give the best

credit along with the best market experiencethrough a Kendra.

173

The road ahead


174/208

Rallis is now on the verge of commercialising itssuccessful model. After a few loose ends are tied up,though.

One of the problems with the current system is that the

farmers are not being charged for most of the facilitiesprovided by the partners. In a commercial set-up, thefarmers would require to pay, either on an annual basisor by offering allied facilities like soil testing at a

nominal fee. "There is no such thing as a free lunchNot only is the method of levying the charge yet to bedecided, the willingness of the farmer to be a part ofsuch a deal also remains untested.

174

Rallis is aspiring to add further value to the model


175/208

Rallis is aspiring to add further value to the model

by ensuring good irrigation and continuous watersupply through extensive drip irrigation and

watershed management projects. The company is

already working on certain joint ventures to thisend.

175

RALLIS INDIA LIMITED A TATA ENTERPRISE

T t i i t th t id

RALLIS INDIA LIMITED A TATA ENTERPRISE


176/208

Tata companies coming together to provide more

than just agricultural facilities to rural India. Forinstance, to ensure that farmers are not exploitedand are able to comprehend what is communicated,

it is important to educate them. Teaching the farmer to use computers and access

mails may be an area where companies couldextend their capabilities. The conglomerate does

not rule out using its telephony, Internet, steel,software, education and other in-house companiesto better rural conditions. Effectively, the farmer isall set to gain. 176

Tata Motors


177/208

Tata Motors Ace Tata Motors Nano

177

Tata Motors Ace


178/208

India's plans to link villages with towns andtowns with cities across the country, through

world-class highways and all-weather roads, is

going to dramatically change lifestyles, both in

terms of transportation of goods as well as

people. Tata Motors, India's leading auto

manufacturer, is gearing itself to address and

accelerate this transformation.

178

Cont..


179/208

Tata Motors commercial vehicles are knownfor their reliability and durability.

Seven out of every 10 trucks on Indian roads

proudly carry the Tata logo. But the smallest vehicle it made was a four-

tonner, which was too big to be economically

deployed in large numbers in small towns.

179

Tata Motors had consciously decided to focus on


180/208

Tata Motors had consciously decided to focus on

being a customer-centric company rather than aproduct-centric one, developing products that fit

customer requirements rather than making

customers adjust their requirements to suit existingvehicles.

180


181/208

Changing customer attitudes are driving the markettoday. Issues like reliability and low maintenance

costs are now basic requirements, not product

differentiators. The key to success is how well youlearn the differentiators,"

181

Who is the customer?


182/208

acquisition-price-sensitive customer

return-on-investment customer

looking-for-a-balancecustomer

only-performance

customer

who is looking only at

price, not performance

who is willing to pay a price

for better value

who weighs both price andperformance.

who is willing to pay a higher

price for it

182

Therural customer is not too aware of features andbenefits,

And is found more at the lowest end of the pyramid,


183/208

while the educated urban customer lies at the second

level.

In both urban and rural India, there will be customers in

all the four segments, in varying percentages. "The

challenge, as competition increases, is to bring outproducts that provide the benefits of one segment at

the price point of the lower segment,".

The company targeted customers, largely from semi-urban and rural areas, who fell into the two bottom

layersof the pyramid, which cover 85 per cent of the

market. 183

What does Customers want?


184/208

Through its interaction with customers, the

company learnt that the five essential

attributesthey look for in a small commercial

vehicle are lower operating costs (as

compared to a three-wheeler), reliability,

durability, safety and comfort, andmost

important of alla viable businessproposition.

184

Dealing an Ace


185/208

The company realised that the entry level forthe semi-urban and rural market was a

product between a three-wheeler and a pick-

up truck, at a price-sensitive level. It put

together a team to develop such a vehicle,

and it came up with an Ace.

185

A sturdy vehicle that can carry loads up to 1.5

tonnes over distances up to 300 km, the Ace is a


186/208

four-wheeler at a price slightly higher than a three-wheeler, but offering greater stability, safety and

comfort. More important, the operating cost was

extended to a product lifecycle cost, which covered

purchase cost, operating cost and resale price. "It

has the lowest product lifecycle cost; that is our

USP.It is essentially a last-mile load carrying vehicle,

useful in congested cities as well.

186

Tata Motors took the Ace on road shows through


187/208

Tata Motors took the Ace on road shows through

villages and demonstrated the features andbenefits.Customers were encouraged to test drive

the vehicle,The brand communication for the Ace

was 'All the goodness of the Tata Truck now in amini size'thereby the descriptor of the category

as a mini-truck. Using the metaphor of an elephant

(a mother elephant representing the Tata truck),

the Ace was simply called the baby elephant.

187

Finessing the finance


188/208

The low-price-high-performance Ace has cast itsspell on auto financers in urban areas, who nowoffer five-year financing for the vehicle (three-wheelers get only two/three-year financing), so

that customers pay a monthly instalmentapproximately the same as that for a three-wheeler. "The instalment payment has gonedown and income has increased, boosting net

earnings. The customer is happy and our saleshave jumped. It's a win-win situation.

188

The Ace has been so successful that the company is


189/208

p y

struggling to meet demand. Today, the Ace isavailable in only nine states, and Tata Motors is

enhancing its capacity before launching the vehicle

in more states. The wheel of fortune rolls swiftlythrough semi-urban and rural India, as Tata Motors

changes people's lives for the better.

189

Tata Motors Nano


190/208

In rural India, transportation facilities are stillin their nascent stage and Nano will serve a

great purpose there

- Tata Motors Chairman Ratan Tata

190

Tata Motors Nano

Tata Motors has decided to focus on semi urban and rural markets to sell


191/208

Tata Motors has decided to focus on semi urban and rural markets to sellthe peoples car apart from the middle class in the urban areas.

Distribution: Tata Motors is implemenng a hub- and-spoke model forNanos distribution, which would mean that it would involve increasingdealership points as well as adding sales and customer touch points.

The proposed rural marketing would be a network

that is as near the customer as possible. Tata envisions providing the tools for local

mechanics to assemble the car in existing autoshops or even in new garages created to cater toremote rural customers.

191

Tata Teleservices


192/208

In India's metros, state capitals and small towns,telephones have morphed into cell phones. From thehigh-powered executive in his tinted-glass Mercedes tothe vegetable seller down the road, people everywhereare chatting, getting information and doing business on

the cell phones. But it's a different story in India's villages, where many

are yet to see a telephone. Communication is still aproblem, and most villages are yet to savour thebenefits of Alexandra Graham Bell's remarkable

invention. Of the 70 per cent of our population thatlives in rural India, only 1.5 to 2 per cent are connectedthrough a telephone.

192

Cont ..


193/208

In 2002, in an effort to increase rural tele-density, the government set up a universalservice obligation (USO) fund. Telecomoperators had to give a certain percentage of

their gross revenues to this fund. It alsomandated thatevery telecom operator mustprovide telephone services in rural areas eachyear, up to a certain percentage of theirannual business turnover, which would besubsidised from the USO fund.

193

Tata Teleservices Ltd (TTSL), which started

operations in 1996 in Andhra Pradesh, is a major


194/208

telecom player in India. Over the years, it hasexpanded its network and today covers 2,500 towns

in 20 circles. It is the market leader in the fixed

wireless telephony market, with a customer base of

over 2.8 million. TTSL has bid successfully to provide

telephone services in 242 SDCAs (short distance

charging areas). It sees rural telephony not just as a

service to India's villagers, but also as a greatbusiness opportunity.

194

Darryl Green, CEO of Tata Teleservices, expands on

the company's philosophy, "There is a huge amount


195/208

of satisfaction in working in the rural areas. In urbanareas, the telephone has become an integral part of

life. But in rural areas, people have to travel long

distances on foot or a bicycle to find out good or

bad news from family and friends. For them to be

able to pick up a phone and get that news in a

second, makes this business that much more

meaningful."

195

Challenges


196/208

Villages cannot be accessed easily owing totheir remote location; setting up a network isfraught with difficulties

The investment required is high and the

returns are very low, as many villagers cannotafford the cost of telephone services.

It's also difficult to get people to work in

these areas; they are remote and lackamenities.

196

Cont

Electricity is one of the primary requirements for


197/208

Electricity is one of the primary requirements for

telecom services, but many villages do not have

electricity.

Diesel generators are expensive and can work only

as a stopgap measure.

The government is supposed to help telecom

companies get electricity, but the companies have

to do most of the work and also bear the cost

To communicate the benefits of the product to the

people, as many of them are illiterate.197

The cost of the service has been adapted for the


198/208

rural customer. In the pre-paid scheme, thecompany retains ownership of the phone, so there

is no deposit to be paid, just an activation fee which

ranges from Rs 600 ($13) to Rs 800 ($17). If thecustomer wants to stop subscribing to the service,

the company takes back the phone. TTSL is trying to

develop lower cost phone models to attract more

customers.

198

Another key learning has been in setting up adistribution network. The company has set up athree-tier networkwith a main distributorwholooks after a large area, generally an SDCA, and has


199/208

g , g y ,

feeders (on his pay roll) which feed into 'runners'people appointed and trained by TTSLwho visitvillages on a bicycle or a two-wheelerat definedtimes on defined days of the week, selling rechargevouchers and servicing equipment; each runnercovers between 200 to 300 customers. Thecompany has also joined hands with Tata Chemicals'

Tata Kisan Sansar network, disseminatinginformation through these centres and using themas local distributors.

199

Tata Teleservices has invested Rs 240 crore ($51


200/208

million) in rural telephony in these 242 SDCAs,covering Rajasthan, Bihar, UP East, UP West,

Maharashtra, Andhra Pradesh, Karnataka, Punjab

and Haryana. It will reach out to more than6,00,000 subscribers by end March 2007. It hopes

to get more subscribers and induce existing

customers to move up to value-added products and

services.

200

Other Collaborative Initiatives


201/208

TATA-AGRICO TIE Ups WITH HARIYALI KISAAN BAZAAR

WITH ITC

WITH GODREJ AGROVET LIMITED (AADHAR)

201

Tata Sky


202/208

202

FEATURES TO ATTRACT RURALCUSTOMER

Jingle: Isko Laga Dala to Life Jinga Lala appealing to the


203/208

Jingle: Isko Laga Dala to Life Jinga Lala, appealing to the

rural mass. Inclusion of Radio Reception and Development of Visual

Radio service.

Combined Product with Television - Rural Areas , especiallyand Niche Segment Targeting if Combined with LCDs.

Variety in Movie Listing with Bollywood and RegionalChannels. Regional Disparity: Provide free regional packs inlocal areas to

ensure switch from Cable TV to

DTH service, i.e. provide free south Jumbo pack forcustomers in all Southern States.

203

AAMIR: THE BRAND AMBASSADOR


204/208

Tata's Rural Venture

Documents

Transcript of Tata's Rural Venture