IBA Seminar on

Banking in the Hinterland

PRODUCT DEVELOPMENT
FOR
RURAL MARKETS

S. P. GARG
Dy.Gen Manager
Bank of Baroda
14th Feb’07
 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
 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
 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
 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
 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
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.
 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
 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.
 To SUM UP

DEVELOP “SMART” MODEL

HAVE “ART”
TO BE IN “MART”
&
BECOME “ SMART”