COMPANY NAME:

Z ARAI T ARAQIATI BANK L TD . (ZTBL)

COMPANY LOGO:

CORPORATE VISION:
Dedicated to serve the needs of the farming community, by delivering
financial products and technical services on a competitive and sustainable
basis, in a convenient, efficient and professional manner, leading to success of
the Bank and the farmers.

CORPORATE MISSION:
To play effective role in the promotion of economic growth, by enhancing the
availability of credit to the agriculture sector, through reliable access to
sustainable financing, special lending programs, technical assistance, and
other products & services, and to promote career development opportunities
for increasing professionalism and technical proficiencies of employees.

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COMPANY HISTORY:
Zarai Taraqiati Bank Limited (ZTBL) erstwhile Agricultural Development Bank
of Pakistan (ADBP) is the premier financial institution geared towards the
development of agriculture sector through provision of financial services and
technical know how. The restructuring of former ADBP is being carried out
with the aim to uplift the agriculture and rural sector by raising farm
productivity, streamlining the institutional credit and increasing income
generating capacity of the farming community. ZTBL was incorporated as a
Public Limited Company on 14th December, 2002 through repeal of ADB
Ordinance of 1961.

The new corporate structure redefines the bank's status as a public

limited company registered under companies Ordinance'1984 with an
independent Board of Directors which aims at ensuring good governance,
autonomy, delivering high quality.

ZTBL is a key Rural Finance Institution(RFI) of Pakistan providing

affordable, rural and agriculture financial/non-financial services to the rural
Pakistan , comprising 68 % of the total population. The Bank through a
country-wide network of 341 branches is serving around half a million clients
annually and over one million accumulated account holders with the average
loan size of around Rs.89,000 serving 65%, 31% & 4 % of subsistence,
economic and large growers respectively.

GOALS:
• To be self efficient in commercial banking.

• To reach & serve every farmer of Pakistan.

REASON FOR SELECTING ZTBL:

We have selected this organization because it is the only bank in Pakistan that
deals with Agriculture sector and secondly we have reference in this
organization.

That’s why we chose ZTBL for our project.

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COMPANY HEIRARCHY

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SWOT ANALYSIS

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STRENGTHS:
• Leaders in Agriculture lending

• Specializes in dealing with illiterate customers (Farmers).

• Reaches doorsteps of every customer through Mobile Credit Officers

(MCOs) to get needed information about them.

WEAKNESS:
• Bounded by State Bank of Pakistan

• Low Funds

• Lack of advanced Information system to manage their information

(data).

OPPORTUNITY:
• ZTBL has no competitors.

• President of Pakistan Asif Ali Zardari is taking keen interest in the

development of ZTBL and wants to make it as a leading bank of the
world which could serve the farmers and help achieve self-sufficiency in
food production for the country's socio economic prosperity. President
Zardari during his recent visit to China held useful discussions with
officials of Chinese agriculture sector regarding sharing technologies
with ZTBL for boosting agriculture sector in Pakistan.

• Large market

THREATS:
• Political instability.

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• Natural disaster( It has effects on recovery of ZTBL)

MARKET PLAN

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 PROBLEM:
Launch of new deposit accounts “Zarai Bachat Account” & “Business Deposit
Account”.

SITUATION ANALYSIS:
ZTBL as the only agriculture lending bank in Pakistan working under state
bank of Pakistan is achieving its disbursement targets efficiently. ZTBL is
doing lots of efforts to reach every farmer of Pakistan so that it can help them
financially and provide them advanced agricultural equipments.

During the year 2007, the bank continued to play a significant role in financing
farm investments to modernize agriculture, increase productivity and raise
farm incomes. The Back accorded highest priority to fulfill the demand of
small farmers with land holding under 25 acres. ZTBL alone serves about half
a million farmers annually and has a share of around 30% of the total
institutional agricultural credit.

The Bank operates through a network of 25 Zonal Offices and 342 Branches
and a team of 1269 Mobile Credit Officers (MCOs) in the field. Since inception
upto 31.12.2007, the Bank has disbursed loan amounting to Rs.482.372
million. The Bank so far has financed 488,630 tractors and 144,013 tube wells
besides being the major source of financing for farm inputs including seeds,
fertilizers, pesticides and insecticides. Priority was also accorded to the
provision of more credit for livestock, fairy farming, poultry farming,
aquaculture and financing of oil seed crops.

The Bank continued to channelize its credit flow through several financial
schemes and delivery mechanisms such as Revolving Finance Scheme, Sada
Bahar Scheme, One Window Operation, etc under the Supervised Agricultural
Credit System. The credit advanced for various purposes was instrumental in
enabling the farmer to raise farm production, increase yield, boost income and
expand capacity.

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Choose the Value Provide the Value Communicate the
Value
Cusomer Market Value service Pricing Sourcing Distribution Sales
Sales Advertis_
Segmen_ Selection positio_ depart_ making servicing force
promotion ing
tation focus ning ment

VALUE DELIVERY PROCESS:

ZTBL follows “value creation and delivery sequence” in choosing, providing

and communicating superior value to its customers, which include following
steps:

TARGET MARKET:

ZTBL concentrates on achieving superior performance in an important

customer benefit area valued by a large part of the market by using “Focus
market strategy”. ZTBL mainly focus on farmers.

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CONSUMER MARKET SEGMENTATION

Demographic Segmentation
Gender: There is no gender difference of customers.

Age & Lifecycle Stage: ZTBL provide loans to those farmers above 18 years of
age.

Social Class: ZTBL mainly target is farmers however it also offers services for
other groups like businessmen and for general people. Such as It offers “Zarai
Bachat Account” to farmers and “Business Development Account” to
businessmen.

Geographic Segmentation
ZTBL has lot of Branches in every province to provide services to their
customers. ZTBL head office is in Islamabad. All over the Pakistan it has 25
zones and under each zone there are 6-12 branches.

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Behavioral Segmentation
As ZTBL focuses on farmers which are mostly illiterate so it provides them
services by which they can easily understand their benefits. For example,
“Zarai Bachat Account”, this account is named in Urdu language so that
farmers can easily understand.

COMPETITOR ANALYSIS:
There is no main competitor of ZTBL because there is not any agriculture
lending bank in Pakistan. All the banks in Pakistan are commercial, only some
portion of their company is busy in agriculture lending because that is made
mandatory for them by State Bank of Pakistan while ZTBL’s main work is
agriculture lending.

CORE COMPETENCY:
ZTBL has trained its Mobile Credit Officers (MCOs) to reach doorsteps of
formers to get necessary information and tell them that how ZTBL can help
them in their agriculture.

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 PRODUCT PLAN

PRODUCTS
To strengthen the Bank’s operational viability to accelerate the pace of the
business of the banks on commercial line, the banks management has taken
two major initiatives to introduce diversified schemes. Two deposits products
are:

 Zarai Bachat Account

 Business Development Account

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ZARAI BACHAT ACCOUNT:
Reasons:
ZTBL offered these accounts because it is moving toward commercial banking,
and this account is offered to attract maximum number of depositors that will
help ZTBL to become a commercial bank. More the depositors faster it will
move towards commercial banking sector.

Scope:
This account is for general public. This Zarai Bachat Account starts from the
minimum amount of Rs.10,000. Rates on PLS term deposits for 3 months, 6
months and 12 months periods are 1.45 percent, 1.75 percent and 2 percent
respectively. Returns announced for zarai bachat accounts with deposit less
than Rs 100,000 is 1.50 percent per annum, for deposit between Rs 100,000
and Rs 200,000 is 2.0 percent, from Rs 200,000 thousand to Rs 300,000
thousand return is 2.50 per annum, for deposit between Rs 300,000 thousand
to Rs 400,00 thousand return is 3.00 percent, for deposit between Rs 400,000
thousand to Rs 500,000 thousand is 3.5 percent per annum and return for Rs
500,000 thousand and above is 4.00 percent per annum. The bank increases
interest amount monthly to the accounts of its customers.

BUSINESS DEVELOPMENT ACCOUNT:

Reasons:
The bank has offered these deposit schemes to individuals, sole proprietors,
partnership firms and limited companies. Main reason for launching Business
Deposit Account is to help businessmen. It also helps bank to be commercial.

Scope:
It is a profit barring account. The schemes provide that ZTBL depositors
maintaining a minimum balance/ investment of Rs 200,000/-for a period of at
least six (6) months shall be eligible to get agriculture loan from ZTBL without
any loan appraisal fee, provided otherwise eligible. The minimum initial

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deposit of Rs 20,000/- and same, as minimum daily balance will be required to
be eligible for a profit upto 4% per annum. The profit will be paid quarterly on
daily product basis. The facility under ZBA provides free banking services for
the entire quarter, two free pay orders/ DDs per month upto the amount of
average daily balance of the month, free cheque books for its depositors, if a
depositor maintains a monthly average balance of Rs 200,000/- or above. It
is actually saving account but it also provides current account facilities.

ZTBL management has issued instructions to its braches for more active and
sustained participation towards these deposit mobilization schemes to ensure
bank's commercial and financial viability. This will not increase its spread but
also enable the bank to channelize more funds for new initiatives in the
agricultural uplift.

PRICES

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PRICE FORMULATION
While setting the price of its products, ZTBL follows following six steps:

1) Selecting the pricing objective

ZTBL is moving towards commercial sector so it sets the price to get the
maximum market share because this is market-penetrating pricing. ZTBL
believes that a higher sales volume will lead economies of scale and higher
long-run profit. ZTBL tries to set prices as low as possible to get maximum
market share and it is appropriate because;

• The market is highly price sensitive, so a low price stimulates market

growth
• Production and distribution costs fall with accumulated production
experience
• A low price discourages competition.

2) Determining Demand
The demand for the commercial banking services is elastic in nature. All the
commercial banking services are highly price sensitive. There is a huge
number of customers for the banks which indicate the high demand of its
services but there is also a large number of competitors; both of these facts
together make the products highly price sensitive. So ZTBL keeps its prices
low to attract maximum customers.

3) Estimating Costs
ZTBL used Target Costing method to estimate its cost of its products. It used
market research to establish product’s desired function & the price at which
the product will sell, given its appeal and competitors’ prices. The objective is
to bring the final cost projections into the target cost range.

4) Analyzing Competitor’s Costs, Prices and

Offers
As we know that ZTBL has no competitors but new services lunched by ZTBL
is commercial in nature because it is moving toward commercial banking
sector. In commercial sector there are lot of competitors in market like HBL,
Allied Bank of Pakistan, etc. ZTBL set the prices for its services within the
possible range by considering and determining market demand, the cost

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incurred by the company and through analyzing nearest competitors’ costs,
prices and possible price reactions.

5) Selecting the Pricing Method

ZTBL has adopted Target-Return pricing for its products. It determines the
price that would yield its target rate of return on investment (ROI). This
method is used in order to make a fair return on investment.

ZTBL has invested 40,000,000 in the busines and wants to set a price to
earn a 0.67 percent ROI.

The target-return price is given by the following formula:

Target-return price = unit cost + desired return ×invested

capital

Unit sales

= 19,500 + 0.67 × 40,000,000

55,000

= 19,500 + 500 = 20,000

ZTBL will realize this 0.67 percent ROI provided its costs and estimated sales
turn out to be accurate, But if sales do not reach 55,000 units. ZTBL can
prepare a break-even chart to learn what would happen at other sales levels.
Fixed costs are 10,450 regardless of sales volume. Variable costs rise with
volume. Total costs equal the sum of fixed costs and variable costs. The total
revenue curve starts at zero and rises with each unit sold.

The total revenue and total cost curves cross at 1550 units. This is the
break-even volume. It can be verified by the following formula:

Break-even volume = fixed cost

(price – variable cost)

= 11,500,000 = 1550

20,000 – 9,050

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 Total
revenue
Target
Profit

Break-even
} Total cost

point Fixed cost

Dollars

Sales volume in units

6) Selecting the Final Price

• The price is consistent with company pricing policies.

• Prices are kept low because their target customers are needy farmers
of Pakistan.

• ZTBL also consider the instructions of State Bank of Pakistan before

setting up the prices.

PLACE:
ZTBL has lot of Branches in every province to provide services to their
customers. ZTBL head office is in Islamabad. All over the Pakistan it has 25
zones and under each zone there are 6-12 branches.

While selecting the location ZTBL considers the following factors:

• Site should located near potential customers

• Location should be convenient and accessable.

• Location should be safe and secure.

• The business climate of that area should also be consider.

• Room for further expansion should be consider.

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PROMOTION:
• For promotion ZTBL used following techniques:

• Advertizing through broachers and ads on radio.

• Sales promotion(deposit products)

• Personal sellings (MCOs)

• Public relations

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 SALES

SALES:
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 The gap between demand and supply of agriculture credit in the
Pakistan has widened to 53% as the demand has been recorded at Rs.533
billion as against the institutional credit target at just Rs. 250 billion during
2009. The credit plan of ZTBL for 2009 aims at providing Rs.75 billion
agricultural credit with rivival of micro credit, credit to women, accelerated
force to develop dairy sector, provision of loans for Benazir Tractor Scheme
and Green Tractor Scheme, acquirement of IT infra structure, encouraging
solar, wind energy, increased lending water conservation, promotion of flower
cultivation, collaboration with foreign lenders for increased availability of
finance and development of model villages by lending and technological
support.

SALES METHADOLOGY:
• ZTBL uses various sales methods, which includes business-to-customers
(B2C) and business-to-business (B2B) sellings.

• The bank has offered business development account to individuals, sole

proprietors, partnership firms and limited companies.

• For example, ZTBL is lending loans to fertilizer businessmen to help

them to improve their businesses.

FEEDBACK OF CUSTOMERS:
ZTBL as a only agricultural lending bank in Pakistan wants to give best service
to its customers so it regularly get feedback from its customers. ZTBL gets
feedback from its customers in different ways, but the most commonly uses is
through MCOs. In every branch of ZTBL, it has developed a specific counter for
its customers where customers can put their suggestions and complaints.

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REVIEW:
ZTBL leads in Agriculture lending and it specializes in dealing with illiterate
customers (Farmers). It has no competitors. It is doing lots of efforts to reach
every farmer of Pakistan so that it can help them financially and provide them
advanced agricultural equipments. ZTBL alone serves about half a million
farmers annually and has a share of around 30% of the total institutional
agricultural credit and now it is moving towards commercial banking. ZTBL is
moving towards commercial sector so it sets the price to get the maximum
market share because this is market-penetrating pricing. ZTBL believes that a
higher sales volume will lead economies of scale and higher long-run profit.
ZTBL set the prices for its services within the possible range by considering
and determining market demand, the cost incurred by the company and
through analyzing nearest competitors’ costs, prices and possible price
reactions.

All over the Pakistan it has 25 zones and under each zone there are 6-12
branches.
ZTBL has lot of Branches in every province to provide services to their
customers. ZTBL advertes through broachers and ads on radio and sales
promotion(deposit products). The credit plan of ZTBL for 2009 aims at
providing Rs.75 billion agricultural credit. ZTBL uses various sales methods,
which includes business-to-customers (B2C) and business-to-business (B2B)
sellings.The bank has offered business development account to individuals,
sole proprietors, partnership firms and limited companie

LESSON LEARNED:
The lesson which we have learned during and after this project is consisting of
following points:

• We have learned how to work in a group in an organized way.

• We have learned how to arrange organizational visits by
maintaining professionalism.
• We learned how to attend formal meetings with market
professionals and also how to interview such highly trained
marketers.

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