Presentation

On
TATA RURAL VENTUREs

Content

Tata Chemicals Limited Overview

Founded in 1939 in Coastal
Gujarat
Leading manufacturer of
inorganic chemicals in India
Operates Fertilizer plant at
Babrala (UP) and Phosphate
plant at Haldia (WB)

Their Businesses
Chemicals
Food Additives
Fertilizers
3

TATA KISAN SANSAR

Tata Kisan Sansar (TKS): Evolving To

Customer Needs

Objectives
Help Farmers Create Value
Improve Relationship with Farmers
Strengthen the Tata Brand in rural areas
Create a new distribution channel for
agriculture inputs

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
6

TATA KISAN SANSAR

Tata Chemicals launches Tata Kisan Sansar October 26,
2004
Tata Chemicals Limited had first started with the objective
of 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 shop with a clear objective of empowering the
farmers.
7

Tata Kisan Sansar

The Tata Kisan Kendras were therefore re-launched as
Tata Kisan Sansar (TKS-Tata Farmers World)-a rural
agri-retail outlet offering entire range of agri services
including quality agri input products.
Thereafter, the focus has been to de-link the business
dependence for the franchisee as well as the
organization from the traditional fertilizer business and
provide 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
8

Cont..
These benefits include:
Free Soil Testing
Accidental Insurance of up to Rs. 1 Lakh
Educational trips organized by TCL to various information platforms
like plant visits, demo farm visits etc.
Free Subscription to the TKS quarterly magazine the TKS Patrika
Annual TKS diary
Exclusive Membership Card
Exposure to various flora for disseminating and gathering information
like crop seminars, Kisan Melas, Agri Exhibitions etc.

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
10

Agri Services
Soil Testing
Advisory Services
Contract Farming
Own Seed Production
Application Services
Farmer Engagement Programs

11

Relationship building:
Farmer membership (individual & group)
Accident insurance to members
Farmer meets
Crop seminars

12

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.

13

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 Kisan
Sansar thereby considering TKS as a seed to produce
business.
Phase 3: TKS as a solutions provider that helps farmer
enhance his productivity and an agent that changes the
face of Indian farming.
14

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 TKSs
110 Agronomists
Reaches more than 25 Lakh
farmers
27,200 villages covered 15

Tata Kisan Sansar Services Offered (1)

The Hub
Resource Centre computerized & a database
of farmers being built up
Research & Demo Farms
Storage facilities
Soil and water testing facilities
Information source and training centre
Recreational amenities
16

TKS Training for farmers

17

Tata Kisan Sansar Services Offered (2)

The Spokes
Quality Agri-Inputs (fertilizers, seeds, pesticides,
herbicides and micronutrients)
Farm Equipment leasing
Farm Advisory Services latest info on weather,
market pricing & crop production
Contract Farming
Farmer Credit Financing
Produce Buyback
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19

 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 villages
covering approximately 9 million acres overall.

20

 The hubs were named as Tata Krishi Vikas Kendras, the

word Vikas being synonymous with value added activities
conducted 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 villages reaching out to
approx. 3.5 million farmers. The Tata Kisan Sansars are
spread 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.
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22

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

TKP relationship 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 Parivar farmers encouraged to form SHGs that provide a platform
for facilitation of credit as well as learning and sharing between them
23

Relationship Management Tata

Kisan Parivar

The farmer relationship initiative is being led through

Tata Kisan Sansar Parivar membership, a paid value
added service, where in key farmers/opinion leaders
are enrolled for the membership through invitation.
Tata Kisan Sansar Parivar members are provided
customized training and accidental insurance for the
member and his family.
The Tata Kisan Sansar Parivar membership stands at
40,000 plus as on March Tata Kisan Sansar is an agri
solutions provider in a market used to agri input
retailers. Essential to agri solutions are services that
complement our tested product range which drive
agricultural productivity.
24

 Tata Kisan Sansar provides 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

25

26

TKS Offerings
The TKS services can be divided into three broad
categories:
Basic services
Output based services
Premium services

27

BASIC SERVICES
Soil Testing
For Macro and Micro Nutrients in the soil, helping
the farmer make an informed decision about what
nutrients to apply in his field.

28

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.

29

Cont.......
Bringing the latest knowledge to farmers on various
aspects of agriculture helps to update the existing
formidable knowledge base of the farming populace,
equipping them for tomorrows challenges. This
knowledge covers farm related issues like integrated
pest management and integrated nutrient
management 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 programs
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OUTPUT BASED SERVICES

Contract Farming
Intensive market led cultivation is done through Tata
Kisan Sansar franchisees in select catchment areas
through the contract farming method. This ensures an
assured market and completes the 360 degree
approach of the TKS philosophy addressing both
input requirements and output management through
this one stop agri solutions shop.
31

Cont.
Own Seed Production
Aimed at the improving the availability of quality
seed in the market as well as fulfilling a gap in the
retailing of seeds, TKS does own seed production
for select seeds like Wheat, Paddy etc

32

PREMIUM SERVICES
Foliar Application Services
An 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.

33

Cont
Farmer Engagement Program
Another exclusive and unique initiative by Tata Kisan
Sansar which provides a complete real time analysis of
the entire farming practices with customized
interventions for select members, with a tracking of
incremental benefits over successive seasons. This
intensive association with the farmer throughout the
crop cycle is symbolic of the dedication and focus of the
Tata Kisan Sansar team to deliver the best solutions in
agri space.

34

 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.

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36

Pain Point

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, G
oldPlus 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.
37

Marketing

GoldPlus decided to create a promo which would attract attention. It

created 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 participate 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.

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Tata tea Gaon Chalo

Aim: To grow Tata Tea brand value share

Market share of Tata Tea Brand moves from 9.7% to

10.9%
Tata Tea ranked the second most trusted beverage
brand 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 Tata

Tea to enhance value
39

40

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

41

Performance against Strategy

Aim : Innovating growth Tata Tea Gold
1.9

Growth in market share

1.5
1.2
0.9
0.6

0.1
Oct'03

Dec'03

Mar'04

June'04

Sept'04

Dec'04

Apr'05

Source : All India, AC Nielsen Retail

Audit , April 2005

Future Strategy: New initiatives & projects will fuel growth

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Performance against Strategy

Aim : Systemic address of consumer insight
New 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 understanding
driven business plans
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Performance against Strategy

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

44

New Launches/Re launches

45

Tata AIG Life Insurance

Tata-AIG Life Insurance Company is a joint venture
between 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.
46

 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

47

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.

48

 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

49

 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

50

 The company started in Andhra Pradesh, where Tata

AIG was doing a project with the Department for
International Development (DFID), an arm of the
British Ministry of Finance that gives funds on a
matching funds basis for financially deepening
activities in rural areas.
Tata AIG and DFID contributed towards a corpus
which was used to develop the idea of utilising
grassroots level community workers to develop
infrastructure and collaterals that would promote
and service micro insurance to landless daily-waged
adults in the state.
51

 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 are
not happy giving service, especially if the amount is
small.

52

 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 are
unable to service them and the credibility of
insurance takes a beating."

53

Rural Market into three distinct segments

Target segment
(70% of rural
India)
54

Shopper at the bottom of the pyramid

Rural India contributes to 72% of the population
and the countrys GDP
63% of Indias population will continue to live in the
rural areas even in 2025 according to a McKinsey
report
Rural areas are growing at a robust rate of 25%
While the per capita income is lower than urban
areas, the customer base is thrice that of urban
areas
55

 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 rural
households as compared to over 35% of urban.
These numbers and more have been telling the
story of many marketing opportunities at the
bottom of the pyramid.
56

 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 like
the DSCL Haryali stores, M & M Shubh Labh stores,
TATA/Rallis Kisan Kendras and Escorts rural stores
etc.

57

 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 insurance not the usual agents but
organisations and people who would be interested
in selling insurance to the poor and be content to
service the market with small earnings.
58

 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 to
become our micro insurance agents, and by
creating relevant products and processes build
capacities in them to sell insurance.

59

 Tata AIG encouraged the women to form

partnerships in groups of five and called them CRIGs
(Rural Community Insurance Groups).
They travel around in branded vans owned by Tata
AIG, which also double as collection and policy
servicing units. Over four three-day capacity
building modules, women learn soft skills, develop
insurance 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).
60

 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 workers
and 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).
61

 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 in
urban areas.
It was a problem to get women to stay in a city for
so many days.

62

 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 ramp
up its woman force rapidly.

63

 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), for
our 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.

64

 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/women
federations and other such rural organisations
including MFIs are partnering with Tata-AIG in
mentoring and monitoring the programme at the
grassroot level.
65

 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), Tata
AIG has developed a new set of products variants
of earlier products and is awaiting regulatory
clearances for them.

66

 Tata AIG has also evolved its processes to deal with

rural realities illiteracy, 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 an
NGO, so that the proceeds are used well.
Tata AIG is expanding its reach and is planning
micro insurance-based offices across the country.

67

 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.

68

 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 with
over 35,000 policies contributing close to Rs 75 lakh
($161,400) in first premium terms.

69

 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 want
to generate long-term profits,".
"The biggest thing about development is having
choices.

70

 We are educating people about insurance and

about the product choices they have offering
them relevant services at their doorstep, including
frequent collection of premiums.
In trying to create value for the rural customer, a
livelihood for the agent and a business for itself,
Tata AIG is also changing the face of rural India.

71

 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 premium
income must come from rural areas in the first year,
3% in Year 2, and 5% thereafter.

72

 Based in Andhra Pradesh, it is primarily a savings

and credit association with an added insurance
feature.
The co-operatives 8,100 members pay an annual
insurance 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 a
natural death and double that in the event of an
accidental death.
The funds premium pool is held and operated by
members of the cooperative.
73

 Rural India comprises of over 650 000 villages with

over half of them having a population of less than
500.
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.

74

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

75

Tata AIG Life Navkalyan Yojana

A regular premium payment, low cost term plan

for the rural adults who seek life insurance
protection without any maturity benefit.
76

Tata AIG Life Ayushman Yojana

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 a
seasonal income.
77

Tata AIG Life Sampoorn Bima Yojana

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.
78

Tata AIG Life Sumangal Bima Yojana

To encourage regular long term savings from those who prefer

to set aside some money and get periodic returns, while
enjoying the benefits of insurance protection. We introduce
"Tata AIG Life Sumangal Bima Yojana, a limited premium pay
money back plan.
In this plan you have to pay premium for 10 years and you get
insurance protection for 15 years. Enjoy total guaranteed
returns of 120% of the *total policy premium at specified
intervals during term of the policy.
79

SUMMARY OF MARKETING MIX

Product-Price:
Special for the bottom of pyramid.
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)
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
80

Titan Sonata
Sonata, a division of Titan Industries launched
in 1997, targets the mass market in watches.
Priced between Rs 395 ($8) and Rs 1250 ($27),
Sonata is the largest selling watch brand in the
country, with volumes of over 4 million units
annually.

81

 Currently 80 per cent of Sonata sales come from

urban areas where consumer awareness for the
brand and its distribution is strong. Last year, the
division made a concentrated effort to focus on the
rural sector. "Our focus comes from a combination
of two factors: providing quality products to the
lower income market,
"The rural market exists, but it is dominated by the
unorganised sector.
82

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

The reasons ranged from functional to sociocultural. 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, the
arrival or passing of a train or bus also indicates the
time. Most houses have a wall clock.

83

Villagers buy a watch that is usually economic (about

Rs 150 or $3), non-branded and therefore
unreliable. However, they expect the watch to last
at least two years. Rural folk are very price
conscious and must have a very good reason for
spending a large amount like Rs 500 ($10). At that
price, they expect a watch that can be passed down
to the next generation.

84

 While watches are seen as a fashionable

indulgence, on the other hand, they connote
success and command respect for the owner.
Wearing a watch gives a subtle message that one
has 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.
85

Project Swades
Sonata launched project Swades, aimed at
changing people's mindsets and making them
aware of the value of time. Titan Sonata used
these learnings to project a watch as
something 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.
86

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 at
local melas (fairs) and haats (markets).

87

 Target customers-20 to 35 year age group, about

the kind of products they want, and also trying out
different price points. So if customers want a watch
at Rs 250 ($5), sonata have to see how they can
deliver the product in that price.
In rural areas where Sonata does not have a strong
distribution network, there is need for setting up a
parallel distribution system that can provide access
to interior areas at a low cost.
Project Swades is a pilot project and the team is still
gathering information. They hope to have a
deliverable business model soon. "The biggest
advantage is that India is progressing and rural India
seems to be clear on what it wants.
88

 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 training
youngsters to market and service the watches. This
will provide the much-needed employment in rural
areas

89

 Sonata is looking very seriously at driving down

product costs in tune with Mr Tata's dream of
offering 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.

90

Khet-Se Agriproduce India

Khet-Se Agriproduce India, a 50:50 JV of Tata
Chemicals (TCL) and Total Produce, Ireland,
launched its operations with its first state-of-the-art
procurement and distribution facility for fresh fruits
and vegetables at Malerkotla, Punjab. Khet-Se is a
B2B cash and carry business for fresh fruit and
vegetables sourcing, packaging and distribution
across India.

91

Contd..
This distribution centre has the facility of sorting,
grading and packing of all fresh produce; four
ripening chambers of 10mt capacity each (to ripen
fruits like banana) and four cold storages of 25mt
each.
Tata Chemicals has strong links with Indian farmers
with its sales of fertilisers, chemicals and other
grower 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.
92

 Khet-Se aims to bridge the gap between producer

and end consumer which will significantly increase
efficiencies, improve shelf-life and reduce product
loss in the supply chain. For this, it has already
partnered with farmers to develop their skills to
raise the quality of Indian farm produce through
training on good agricultural practices
Khet-Se plans to partner with small retailers and
help them in developing competencies to manage
their business more effectively
93

straightline.in
Tata-SAIL joint venture to help rural Bengal shop
online 2007

94

Concept
Straightline.in, the e-shop of Mjunction Services, a
Tata Steel-SAIL joint venture, is set to offer rural
people in West Bengal opportunities to buy an array
of products online directly from manufacturers.

95

Purpose
To provide the facility, straightline.in has forged a
partnership with Gramin Sanchar Society,
commonly known as Grasso.
The purpose behind the partnership is to take
advantage 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.
96

Benefits
As these CISCs have direct access to people in those
areas, these centres have been chosen by the eshop 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.

97

Benefits (cont.)
The e-retailing will kick off with products like
construction 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 produced
by Patton Tanks.
Farm inputs like seeds, fertilisers, pesticides and
agricultural implements have been lined up as the
next products for e-transaction. These are to be
followed by electronic appliances, fabrication
products and consumer goods.
98

TATA BP Solar
Making the sun rise
Tata BP Solar has been
at the forefront of solar
energy field since 1991.

99

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

rural areas, but 70 per cent of electricity generated
is 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 of
power, because urban needs will keep on
increasing.

100

The power of the sun

Tata BP Solar is playing a key role in helping
bridge the urban-rural energy divide.
In India, energy planners think of power
requirements only in terms of large MWs. But,
says Vora, in villages you need small amounts of
power; for homes and businesses such as shops
and flour mills.
Solar power can provide energy security and,
therefore developmental opportunities to 700
million rural Indians.
101

TATA BP SOLAR

102

Cont..
"Solar power is clean, eco-friendly and the most
easy-to-set-up source of power. You don't need
large transmission towers, lengthy cabling and
heavy switchgear. You can light an entire village in
less than a week," says K Subramanya, COO, Tata
BP Solar.
The needs of the rural people are simple: fuel for
cooking, water for drinking, light for studying,
and television and telephone for entertainment
and connectivity.
103

Cont.
Tata BP Solar has a slew of products such as solar home
lighting systems, solar lanterns, solar cookers and solar
hot water systems, the innovation is in the packaged
solutions that they have designed for specific segments
in rural India:
Sunbank, a customised package for rural banks that are
being computerised, consists of a power pack along
with solar modules, batteries and controllers, and
provides power for three to six hours a day. The
company is looking at powering ATMs next.
Suraksha, a solar-powered communication system,
helps police stations function effectively.
104

 India has tens of thousands of primary health

centres, but most of them have very little or no
power, and vaccines need to be refrigerated at
temperatures lower than 6C. The health centre
package, Arogya, includes a solar powered vaccine
refrigerator manufactured indigenously by the
company and approved by the World Health
Organisation (WHO).
In Madhya Pradesh, the Rajya Siksha Abhiyan has
given computers to over 3,000 rural schools, but
realised that there is no power to operate them.
Tata BP Solar is proposing to put together a school
package called Tejas, which powers computers, TVs,
lights and fans. Specific packages for e-governance
and panchayats are now being developed.
105

 The government is driving banking, farming,

education and health activities in rural areas, and
Tata BP Solar is ensuring that these initiatives bear
fruit through the use of solar energy.
"Each of our package solutions addresses the
government's agenda in different areas," says
Subramanya. "We are also understanding the real
needs of villagers and developing products
depending on the budget, playability and product
use."
106

 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 the
product to bring the price down to Rs 1,250 ($27).

107

 They are also developing a rural solar water heater,

smaller in size (40 to 50 litres) and cheaper than the
current 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).

108

Arunodaya
Arunodaya, the company is trying to make banks
aware of the positive cost-benefit ratio of solar
products, and banks have started giving loans.
Arunodaya's objective is not to market solar
products but to spread awareness about solar
energy and its applications through seminars and
workshops.

109

 "The customers are a by-product of Arunodaya's

activities," says Vora, who points out that Tata BP
Solar has a greater responsibility towards
promoting solar energy and developing
applications, 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, Kerala
and 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.
110

Lighting up Ladakh

111

 Most Ladakhis lived a harsh life without electricity,

till Tata BP Solar and the Ladakh Renewable Energy
Development Agency (LREDA) joined hands to light
up their world.
In a short time-frame, Tata BP Solar installed 8,700
solar home lighting systems and delivered 6,000
solar 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.
112

 Half the villages were accessible only on foot; some

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's
sophisticated manufacturing facility in Bangalore to
Ladakh, over 3,000 km away, a journey that took
two whole weeks.

113

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

villages in Ladakh were illuminated each night by a
golden glow. Thirty-six teams of local people were
trained to install the products and educate the
people. "Our team has done amazing work in that
difficult terrain.

114

 Today, the company has a regional office in Leh

the highest solar service centre in India an on-site
project management team and more than 70
locally-trained technicians.
A grateful Buddhist monk at Strongday Gompa in
Zanskar summed up his feelings, "Solar light is like
giving eyes to a blind man."

115

116

NEED OF SUNBANK

117

118

119

120

THEY BANK ON SUNBANK

121

122

TATA SPECIFICATION

123

124

125

126

127

128

129

130

131

SOLAR POWER PACKS

132

133

134

Tata Rallis
Rallis India is one of Indias leading agrochemicals
companies.
It has more than 150 years of experience in
servicing rural markets and a comprehensive
portfolio of pesticides, herbicides, fungicides and
plant nutrients for Indian farmers

135

 The company has factories in five locations in India

and a network of 1,500 distributors that reach more
than 40,000 retail counters.
It has the largest agrochemicals capacity in the
country (10,000 tonnes per annum of technical
grade pesticides and 30,000 tonne litres per annum
of formulations).

136

Rallis: Strengths today

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

137

Known as Tata (Rallis) in rural India.

Brands carry Tata name

138

Areas of business
The domestic formulation business caters to the
crop 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.
139

 The international business handles exports of

pesticides to all parts of the world. The export
basket includes technical-grade pesticides, branded
formulations and contract-manufactured products.

140

 Tata Rallis have had their first encounter with a concept

that 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.

141

 The RKKs are at the four locations at which the

company has set up the contract farming projects:
at the pilot project in Hoshangabad, at Bangalore
for fruits, at Nashik for vegetables, and at Panipat
for Basmati rice

142

 The company has come together with credit

provider ICICI and buyers of agricultural produce
like HLL and Food World to provide a one-stop shop
of all solutions for farmers.

143

 Rallis, originally a pure agri-inputs company, has

covered many milestones to unshackle the farmer
with its contract farming initiatives. Because of its
strong background and history in the rural sector,
Rallis is in a good position to execute the contractfarming model.

144

The changes
Gaining the farmers confidence was the key to the
success 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-bynight operators," asserts Mr Oberoi.
145

 Although the company has extensive reach in the

agricultural world, its expertise is restricted to
seeds, fertilisers and good research practices.
To overcome the lack of expertise in its non-core
businesses, the company decided to partner with
existing service providers and to extend the
network to the farm. The partner, in turn, stood to
benefit from the Rallis-Tata association and gain
inroads into the rural segment.
146

 To provide easier finances and lend easy credit to

the farmers, ICICI was roped in. For ICICI, the model
expectedly 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.

147

 When this partnership took its wares to the farmers

of Hoshangabad, where the first experiment was
carried out, there was cause for great satisfaction.
With the increase in available funds, farm credit
went 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 experience
through a Kendra.
148

The road ahead

Rallis is now on the verge of commercialising its
successful 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 facilities
provided by the partners. In a commercial set-up, the
farmers would require to pay, either on an annual basis
or by offering allied facilities like soil testing at a
nominal fee. "There is no such thing as a free lunch
Not only is the method of levying the charge yet to be
decided, the willingness of the farmer to be a part of
such a deal also remains untested.
149

 Rallis is aspiring to add further value to the model

by ensuring good irrigation and continuous water
supply through extensive drip irrigation and
watershed management projects. The company is
already working on certain joint ventures to this
end.

150

RALLIS INDIA LIMITED

RALLIS INDIA LIMITED

A TATA ENTERPRISE
A TATA ENTERPRISE

Tata companies coming together to provide more

than just agricultural facilities to rural India. For
instance, to ensure that farmers are not exploited
and 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 could
extend their capabilities. The conglomerate does
not rule out using its telephony, Internet, steel,
software, education and other in-house companies
to better rural conditions. Effectively, the farmer is
all set to gain.
151

Tata Motors
Tata Motors Ace
Tata Motors Nano

152

Tata Motors Ace

India's plans to link villages with towns and
towns 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.
153

Cont..
Tata Motors commercial vehicles are known
for 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 fourtonner, which was too big to be economically
deployed in large numbers in small towns.

154

 Tata Motors had consciously decided to focus on

being a customer-centric company rather than a
product-centric one, developing products that fit
customer requirements rather than making
customers adjust their requirements to suit existing
vehicles.

155

 Changing customer attitudes are driving the market

today. Issues like reliability and low maintenance
costs are now basic requirements, not product
differentiators. The key to success is how well you
learn the differentiators,"

156

Who is the customer?

only-performance
customer

looking-for-a-balance
customer

return-on-investment customer

acquisition-price-sensitive customer

who is willing to pay a higher

price for it

who weighs both price and

performance.

who is willing to pay a price

for better value
who is looking only at
price, not performance
157

 The rural customer is not too aware of features and

benefits,
And is found more at the lowest end of the pyramid,
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 out
products that provide the benefits of one segment at
the price point of the lower segment,".
The company targeted customers, largely from semiurban and rural areas, who fell into the two bottom
layers of the pyramid, which cover 85 per cent of the
market.
158

What does Customers want?

Through its interaction with customers, the
company learnt that the five essential
attributes they look for in a small commercial
vehicle are lower operating costs (as
compared to a three-wheeler), reliability,
durability, safety and comfort, and most
important of all a viable business
proposition.
159

Dealing an Ace
The company realised that the entry level for
the semi-urban and rural market was a
product between a three-wheeler and a pickup truck, at a price-sensitive level. It put
together a team to develop such a vehicle,
and it came up with an Ace.

160

 A sturdy vehicle that can carry loads up to 1.5

tonnes over distances up to 300 km, the Ace is a
four-wheeler at a price slightly higher than a threewheeler, 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.
161

 Tata Motors took the Ace on road shows through

villages and demonstrated the features and
benefits. Customers were encouraged to test drive
the vehicle,The brand communication for the Ace
was 'All the goodness of the Tata Truck now in a
mini 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.
162

Finessing the finance

The low-price-high-performance Ace has cast its
spell on auto financers in urban areas, who now
offer five-year financing for the vehicle (threewheelers get only two/three-year financing), so
that customers pay a monthly instalment
approximately the same as that for a threewheeler. "The instalment payment has gone
down and income has increased, boosting net
earnings. The customer is happy and our sales
have jumped. It's a win-win situation.
163

 The Ace has been so successful that the company is

struggling to meet demand. Today, the Ace is
available in only nine states, and Tata Motors is
enhancing its capacity before launching the vehicle
in more states. The wheel of fortune rolls swiftly
through semi-urban and rural India, as Tata Motors
changes people's lives for the better.

164

Tata Motors Nano

In rural India, transportation facilities are still
in their nascent stage and Nano will serve a
great purpose there
- Tata Motors Chairman Ratan Tata

165

Tata Motors Nano

Tata Motors has decided to focus on semi urban and rural markets to sell
the peoples car apart from the middle class in the urban areas.
Distribution: Tata Motors is implementing a hub- and-spoke model for
Nanos distribution, which would mean that it would involve increasing
dealership 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 auto
shops or even in new garages created to cater to
remote rural customers.
166

Tata Teleservices
In India's metros, state capitals and small towns,
telephones have morphed into cell phones. From the
high-powered executive in his tinted-glass Mercedes to
the vegetable seller down the road, people everywhere
are 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 a
problem, and most villages are yet to savour the
benefits of Alexandra Graham Bell's remarkable
invention. Of the 70 per cent of our population that
lives in rural India, only 1.5 to 2 per cent are connected
through a telephone.
167

Cont ..
In 2002, in an effort to increase rural teledensity, the government set up a universal
service obligation (USO) fund. Telecom
operators had to give a certain percentage of
their gross revenues to this fund. It also
mandated that every telecom operator must
provide telephone services in rural areas each
year, up to a certain percentage of their
annual business turnover, which would be
subsidised from the USO fund.
168

 Tata Teleservices Ltd (TTSL), which started

operations in 1996 in Andhra Pradesh, is a major
telecom player in India. Over the years, it has
expanded 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 great
business opportunity.
169

 Darryl Green, CEO of Tata Teleservices, expands on

the company's philosophy, "There is a huge amount
of satisfaction in working in the rural areas. In urban
areas, 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."
170

Challenges
Villages cannot be accessed easily owing to
their remote location; setting up a network is
fraught with difficulties
The investment required is high and the
returns are very low, as many villagers cannot
afford the cost of telephone services.
It's also difficult to get people to work in
these areas; they are remote and lack
amenities.
171

Cont
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.
172

 The cost of the service has been adapted for the

rural customer. In the pre-paid scheme, the
company 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 the
customer 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.
173

 Another key learning has been in setting up a

distribution network. The company has set up a
three-tier network with a main distributor who
looks after a large area, generally an SDCA, and has
feeders (on his pay roll) which feed into 'runners'
people appointed and trained by TTSL who visit
villages on a bicycle or a two-wheeler at defined
times on defined days of the week, selling recharge
vouchers and servicing equipment; each runner
covers between 200 to 300 customers. The
company has also joined hands with Tata Chemicals'
Tata Kisan Sansar network, disseminating
information through these centres and using them
as local distributors.
174

 Tata Teleservices has invested Rs 240 crore ($51

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 than
6,00,000 subscribers by end March 2007. It hopes
to get more subscribers and induce existing
customers to move up to value-added products and
services.
175

Other Collaborative Initiatives

TATA-AGRICO TIE Ups
WITH HARIYALI KISAAN BAZAAR
WITH ITC
WITH GODREJ AGROVET LIMITED (AADHAR)

176

Tata Sky

177

FEATURES TO ATTRACT RURAL

CUSTOMER
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 , especially
and Niche Segment Targeting if Combined with LCDs.
Variety in Movie Listing with Bollywood and Regional
Channels. Regional Disparity: Provide free regional packs in
local areas to
ensure switch from Cable TV to
DTH service, i.e. provide free south Jumbo pack for
customers in all Southern States.
178

AAMIR: THE BRAND AMBASSADOR

179

DIFFERENTIAL PACKAGE FOR RURAL

AREAS
Price: Tata Sky has offered competitive pricing
but has been on the higher end and its due to
promotional campaigns it has added in
incentives leading to increase in customer
base.
In search of newer audiences in rural area and
smaller towns, DTH operator Tata Sky is
introducing a new Rs 99 package Super Hit
Pack.
180

TIE-UPS
Rural penetration through ITC E-Choupal and
Godrej Aadhar.
Also for its distribution, TATA Sky has a tie up
with ITC International Business Division.

181

References

www.tatatkk.com
www.tatachemicals.com/farm_centre/overview.htm
www.tataaig.com
www.tataaig-life.com
www.rallis.co.in/aboutus/tatavalues.asp
www.tatamotors.com
www.tatabpsolar.com
www.tataindicom.com
www.infibeam.com/Watches/Titan.xht
www.tatatea.com
www.businessline.com
www.economicstimes.com
www.businessstandard.com

182

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