neev
TRANSCRIPT
Commercial Vehicles Business Unit
Rural Marketing InitiativeA Pioneering Focused initiative by a CV OEM(Initiation : April 2010 under my leadership as Business Head ILSCVs)Today one of the important institutionalised pillars for sales volumes
Ace MagicZip IrisXenon Xenon Crew cab
Rural Income Projection
2009-10 2015-16 2020-21
House holds 169 mn 178 mn 186 mn
Rural Income* $ 572 bn $ 1.07 trn $ 1.80 trn
*at current exchange rate, DES estimate
Rural India has 70% of India’s 1.15bn population, with exploding disposable income and consumption aspiration
1970s 1980s 1993-94 2007-2008 2015-2016
7466
58
4032
2634
42
6068
Farm Non-FarmRural Income (Farm / Non Farm %)
Source: NCAER/Rajesh Shukla
Governments commitment for Rural
Rs1.76 trillion Bharat Nirman Rural Infrastructure Program.Rs 300 bn wage payment under MNREGAAll habitation with population above 1000 will be connected by roads under PMGSY and MMGSY’sRs 706 bn loan wavier..
Consumption Expenditure ( Bn USD)
1987-88 1993-94 2004-05 2009-10 2011-12
Rural 21.3 42.1 97.9 171.8 241.9
Urban 11.1 24.3 73.5 139.9 197.2
Source: NSS 66th , 69th Round
Rural Income growth 3 times in a decade
> 5 Lac2-5 Lac1-2 Lac50K-1Lac25 - 50K15 - 25K10 - 15K5 - 10K< 5K
2632381451026837414149
238
71
3514
102157
3S 1S
3
Tata Motors’ network presence is predominantly ‘urban’, making it difficult to effectively tap rural markets, critical for the SCV segment.
Number of outlets Vs population*
24% of TML Outlets are in Rural locations (sub 50,000 population)
* Based on 2001 census
CVBU has defined Rural as all habitations with population less than 50K, where the primary channel does not have direct or indirect reach
75% of population 25% of Population55% of Consumption 45% of Consumption
Rural Urban
Hence, we started exploring options to expand our rural reach…
Two options for entering rural markets
Growing organically by setting up new sales outlets in rural areas – traditional way
Growing inorganically through strategic partnerships with existing rural players thereby outsourcing demand capturing/generation.
…this was the genesis for Project NEEV
OR
Rural journey has been through 3 broad phases
Jul 10 - Mar ‘11 Apr’11 – May’12
Scale-up – Mah, MP, Raj, Bihar
Jun’12 Onwards
Strategy buildup and Pilots Phase
Scale-up in 3 large states (UP,AP,TN)
Why Rural? Rural Strategy for CVBU? Material and incremental? Sustainable and Profitable
Sold 5800 vehicles Sold 23000 vehicles
17 districts in 3 states with varied socio economic conditions
RecruitReviewFeedback Train
DRM
Neev Presence (6 States , 238 districts, 1798 tehsils, 1.5 lakh villages) (underserved habitations below 50K populations)
Neev SE
Followup leadLead feedback
Retail
500 Rural Outlets 4000 Tata Gram Mitras
Capture LeadEvaluate lead followup
1 per district
2 to 3 per district
60000 leads per month
Report to allCRM uploadCreate Opty
TBSS
TML Dealer
Neev Operating Model
Call Center
Graphical representation of Neev Infra architecture
Rural KSK Locations
TGM presence
Dealer current Sales focus/ Retails
7
Neev creates an indirect presence in the geographies of passive presence, through a variable cost model
Apr2012
May2012
June2012
July2012
Aug2012
Sept2012
Oct2012
Nov2012
Dec2012
Jan2013
Feb2013
Mar2013
3 4 3 5 3 11 14 18 21 17 16 24
Neev Initiation
Active presence
Passive presence
Organisations Explored
500 Outlets
2000 TGMs
Activities
Tata Group companies Explored
Finance Partners
Partner Organisations
Infrastructure Presence
State Dists Total Taluks
Taluk Rural TSM TGM Rural
outlet NDRM NSE RBC
AP 21 1118 515 2 422 42 17 12 7UP 68 293 209 4 545 138 63 74 17Bih 35 533 389 2 585 83 34 19 9Raj 33 241 169 3 563 72 32 27 10MP 47 316 239 3 742 79 45 31 11Mah 34 355 277 5 770 90 35 39 11Total 238 2856 1798 19 3627 504 226 202 65
TGM – Tata Gram Mitra – Generate leads (10 to 15 TGM per dist)TKM – Tata Kisan Mitra, Manage rural outlets . (2 to 3 TKM per district)NDRM - Neev District Retail Manager. 1 per district, manages rural infra of the district .Neev SE – Rural sales executive to convert leads generated by TGMRBC – Rural Business Coordinator – 1 per dealer.
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2%
4%
10% 10% 10% 11%
19%21% 21%Key highlights
• Generate approx 60000 leads every month.• Sold more than 35000+ vehicles till date.• Neev presence only in 63% of geographies.
Volume Performance
States Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1AP 215 319 712 729 573 682 1147 1132 543TN 27 235 308 236 239 UP 69 372 1210 1452 1202 1597 2290 1818 1227Bih 265 1494 1448 1099Raj 140 1088 1140 741MP 256 1994 1896 1072Mah 192 1668 1434 1048Total 311 926 2230 2417 2014 3132 9681 8868 5730
Contribution 2% 4% 10% 10% 9% 11% 19% 21% 21%
2011-12 2012-13
Contribution to Sale
Proposed States for Wave - 3 expansion
Wave 1 Wave 2 Wave 3 Wave 4
Volumes 5800 23000 35000 48000TGM Nos 1000 3800 4800 6000Outlets 350 500 700 1000
This channel continues to drive volume through “Inclusive” growth with tremendous social impact at the ground level
“I worked as a tractor agent earning 5000 in 2-3 months. After joining this prog I earn a salary and an average incentive of 5000.. This is like a dream come true for me – Anil Mishra, TKM - Satna
“I am buying this vehicle for my son who has completed his matric and is unemployed currently.” – Magic IRIS Customer, Mahakali Motors, Purnia, Bihar,
“I have a strong belief in the TATA brand. When they approached me, I was convinced. This vehicle will supplement the income from my existing business” – Magic Customer, Mahakali Motors, Purnia, Bihar,
“I am a teacher in school and used to earn Rs. 2000-3000. Neev has helped me to earn better than my regular profession and I would like to continue my work as a TGM” - Rajmal Darji , TGM, Chittaurgarh
We have given employment opportunity to more than 40000 rural folks till date
The social aspect of Rural allows multiple stakeholders to unlock significant value via Project
NEEV
Channel partners4000 Active members
CustomersMore than 22K retails
Project NEEV has been recognized in various forums
Winners in Tata Innovista 2012 – Mumbai Region
“Innovators Trophy” in Innovision Wave 3.0 - 2012
Winners in Tata Innovista 2011 – Mumbai Region
Best Long Term Rural Communication for more than two years
Awards on “INNOVATION”
Awards on Excellence in Rural Marketing
Best CSR by a BrandCreative Awards, - Innovative Communication Tool
Mission Mangalam – An Initiative by Government of Gujarat
The objective is to Empower the Poor by Organizing them into Self Help Groups
Formation of SHG will ensure that all the poverty eradication and social welfare
programs would reach out to the entire cross-section of people within the BPL and
marginal APL category
Empowering poor women by forming Sakhi Mandals
Gujarat Livelihood Promotion Company Limited (GLPC) was formed in April 2010 to
implement Mission Mangalam
During Vibrant Gujarat Global Investor's Summit – 2011, 32 companies and 25
institutions have signed MoUs with GLPC
GLPC Signed MOU with Tata Motors on 13th Jan 2011 regarding strengthening the
rural transportation system engaging SHGs.
Background
Thank You