IBA Seminar on Banking in the Hinterland

1. IBA Seminar onBanking in the Hinterland PRODUCT DEVELOPMENT FOR RURAL MARKETS S. P. GARG Dy.Gen Manager Bank of Baroda 14th Feb’07

2. RURAL CHALLENGES: • India Growth Story & Eleventh Five Year Plan: Special Focus on Agriculture & Rural Segment To achieve 9 % growth projections, 4 % Farm growth is a must for self sufficiency, food security and for 2nd Green Revolution • “Deficit Areas” for development of Rural Economy 1.   Investment and Credit Deficit 2.   Infrastructure Deficit 3.   Market Economy Deficit 4.  Knowledge Deficit • With new emerging areas Rural Business : sustainable and profitable business proposition

3. RURAL MARKET SCENARIO APPROACHES TOWARDS RURAL MARKET • Geographical Coverage • Production and Potential Based • Income Generation and Consumer spending Rural Markets ( 20,000 to 50,000 population) Tier2 and Tier3 cities contribute about 40-45% of FMCG and consumer durable items. • Pyramid Approach for future Development (BOP-Model) • Product Specific Target Segmentation

4. RURAL MARKET SEGMENTATION • Rural Banking, Rural Credit, Rural Insurance • Rural Marketing: Agri Inputs, FMCGProducts • Rural Education, Extension, Research for Capacity & Capability Building &Employment • Rural Investment & Infrastructure Development • Rural Synergy with Corporates for value Chain based marketing, and Linkages. • Rural to Global(Rural Exports) • Rural NGOs, Rural BPOs and Other Segments

5. RURAL BRAND: AMBASSADORS & INSTITUTIONS • Mahatma Gandhi: Sarvodaya & Antoydaya • Dr. M.S. Swaminathan: Green Revolution • V. Kurian: White Revolution • Ela Bhatt: Women Empowerment • NABARD: Farmers Club • SBI: ADB Model • BoB: GVK Model • ITC: e-Chaupal • ICICI: Business Facilitator/Correspondent • IIMA & IRMA: Rural Management

6. RURAL BUSINESS MODEL RURAL R:Retail Business for Rural Community As (Consumer & Producer) U: Urban Facilities(PURA), Investment, Infrastucture R: Animal Hubandry & Allied Activities A: Agri-Production(Field Crops, Plantation ) L: Linkages & Synergy SEGMENT DIFFERENTIATION APPROACH R1: High Net Worth & High Investment R2: Mid Segment R3: Entry Level Segment & Cluster Based

7. New Avenues for Rural Business: Special Focus • Horticulture, Plantation, Vegetable Growing, Floriculture,Aromatic and Medicinal Plants, Bio-Diesel Plants etc. for high Investment Opportunities • Post Harvest and Food Processing & Logistics Services • Seed Multiplication & Processing • Diversified Activities: Animal Husbandry, Dairy Farming, Sericulture, Aqua-Culture & Others. • Irrigation Projects & Wasteland Developments. • Agro-Forestry Products • Tie-Up Arrangements with Business Houses, Agri- Marketing Institutions, Industry Level Organizations with Supply Chain Management Module • Rural Tourism & Other emerging areas.

8. CHALLENGES FOR PRODUCT DEVELOPMENT • Need for aggressive strategies for Breakthrough Business (BB) instead of Business As Usual (BAU) approach. • Change of Mindset & Commitment for Rural Business as profitable & sustainable Business Model • Strong committed Organization Structure • Focus on People, Products & Process • Passion for Innovations & Initiatives • Dynamic comprehensive Approach for Synergy and Partnership Models

9. CHALLENGES FOR PRODUCT DEVELOPMENT(Contd.) • Product Differentiation with Great Values • Regular review of Existing Products & Services • Effective Implementation Strategy & Strong delivery Channels. • Constant Clear cut communications with defined target groups (internal & external) • IT-enabled strong MIS and CRM AND ULTIMATELY 3600 Marketing Approach for Product Development & Successful Implementation.

10. To SUM UP DEVELOP “SMART” MODEL HAVE “ART” TO BE IN “MART” & BECOME “ SMART” THANK YOU