Mahindra War Room 2010

Farm Equipment Sector

SIBM, Pune
Dhansoo Dhurandhar
AGENDA
Strategy
Implementation
Financials
Trends
Market Analysis
Future Projects
Synergies


Mahindra & Mahindra
Worlds 3
rd
largest tractor manufacturer.
Indias No 1 tractor company with 42% market share of
the worlds largest market
Global presence with understanding of local needs
Massive growth potential and ambition


Humble landless farmer
Trying to repay generational debt
Adept at driving and working with tractors
Well known in his village for his skills


Bhola Ram
This is their story
M&M Farm Equipment Sector
What Does It Want
FES to achieve revenues of INR 20,000 Crore
by 2014
(Mahindra+Swaraj+International+Powerol)
FES to counter threats from multi-nationals
Grow from 42% to 51% domestic market share
Transform into a complete agri-solutions
provider
Bhola Ram ki
A humble farmer who belongs to a family of
tillers
His land is mortgaged since generations and he is
trying to pay off his debt
He is a skilled tractor operator and his labour is
sought by many in his village
Many seek his advice in buying tractors and also
come to him for minor repairs
He dreams of one day redeeming his debt and
owning a tractor

And then one day

POSTER+
Project BlitzKrieg
What Is it?
Hitherto unseen grass roots marketing
initiative
Targeting 100 regions with high growth
potential
Appointing KOLs Sarpanch, Ex-ADOs and
local Prized Farmer
Information -> Activation -> BIG DAY ->
Reinforcement
The Tractor Market
Drivers
Monsoon
Access to institutional credit
Minimum Support Price for
crops
Irrigational facilities
Versatility of uses
Access to information
Challenges
Regional entrenchment of
certain brands
Entry of multi-national
players
Working capital cycle for
channel partners
Rural CRM

Little Known Facts
Caste considerations in a particular region affect
what products a community buys.
Many a times, the owner and the driver of the
tractor are not the same. The driver plays a role
in the purchase decision.
Locally, a broker is employed by dealers to coax
potential buyers into selecting a particular brand.
Perceptions usually trump reality when it comes
to tractor performance and durability.
The way we do it
A nation-wide campaign to bring M&M to the forefront
Jo dikhta hai, Woh bikta hai
Increase visibility
Strengthen Brand Equity
Make the Tractors available right there
A competition to be held in 100 regions
Held a month before Harvest Season
Inform through KOLs
Mela for the family
Chance to win a TRACTOR
All communication in Local Language
Post-Event Reinforcement
Technical know-how for Dealer
Longer credit cycle
Institutional credit partners
Systems to expedite purchase process
Lodging and Boarding for customers
Mahindra Vs Swaraj
Mahindra and Swaraj both enjoy strong brand
loyalty.
The brands should be kept separate and
individual identities should be propagated.
Integration on back-end activities
R&D
Vendor Selection
Channel partners
For this project, 20 out of 100 regions would
focus on areas where Swaraj is dominant and the
activation would promote Swaraj tractors.

One Hundred Regions of Growth
Region would be cluster of 20 50 villages
Identification is key
Data Sources - Dealers, Industry reports, Government sources
Criterion
Market penetration of tractors: x tractors/1000 Ha
Share of M&M
Govt. policies in the pipeline like MSP, subsidies, power tariffs, rural employment schemes etc.
Credit availability for farmers
Current and Future availability of irrigation
Size of Land Holdings
Weather patterns over past 5 years and future predictions
Income increase in past 5 years
500 high growth regions identified based on above criteria
Selection of 100 regions
Proximity to M&M dealership
Maximizing impact
Co-operation of KOLs
Nation-wide coverage




Key Opinion Leaders
Rural demand is channelized though KOLs
They act as counsels; influence purchase decisions
M&M will leverage their power through this project
3 KOLs identified
Sarpanch
Ex-Agricultural Development Officer
Inaami Kisaan
A 4
th
KOL would be created through our competition

Here we go
Day 1: Reaching Out
Hold a Choupal gathering headed by KOLs & Local Dealer
Launch of the Rural Activation Program
Sarpanch to set the agenda
Video Changing Face of Agriculture
Ex ADO How to implement the new technology?
Prized Farmer Video A Tour of <NAME>s Farm
Dealer Declaration of Maati Ke Laal competition
Test of Tractor Skills
Winner to gets a brand new Tractor
Opportunity to win farm equipments as well
Held as part of a Mela having foodstalls, puppet shows, amusement rides, etc.
Free Checkup, Tuning and Cleaning for Tractors
To be held after TWO WEEKS
End with Folk Theater Showcase M&M brand
Use of Real Tractors
Focus on Social Issues
Create AWE among the villagers







Bhola ki
Bhola had saved enough to pay off his debt and
was soon going to get his land back
He attended the gathering held in his village
It was an enriching experience & the prospect of
a Mela excited him
But, what really caught his eye was the Maati Ke
Laal competition
A road to his dreams seemed laid out to him
He vowed to walk this path and win the ultimate
prize
Day 2: Setting the Stage
Bedeck the Villages
Posters
Wall Art
Festoons
Announce
Catchy Couplets & Folk Songs
Mobile Vans with Loudspeakers
Promote
Mahindra branded T-shirts & Caps
Mahindra Branded Vinyl stickers for Tractors
Registration
Centre at Dealership & Main Village
Criterion Test Drive at time of registration for competition
Mahindra Scale Model Tractors for registered participants




Bhola ka
Bhola goes to the dealership where he is apprised with
information about the tractor, its capabilities and the
rules of the competition
He clears the test drive & registers for the competition.
He takes home a scale model for his son Bablu
Bhola to Bablu, Beta, dekh main kya laya hoon.
Bablu, Bapu, yeh tractor toh chhota hai, humare khet
mein kaise chalega?
Bhola, Beta, main tujhe vachan deta hoon ki tera baap
tere liye asli tractor bhi jeet layega.
As Bhola sleeps that night, his promise keeps ringing in
his mind, affirming his resolve to win
Day 11: Competition Prelims
A vacant plot of land (20-50 Acres) will be hired for the
competition where all the events will be held.
10 refurbished Mahindra tractors will be used for the
competition. Tractors will be selected according to the
regional requirements
Stage I - Obstacle Course
Designed according to the challenges faced in the region to
showcase Mahindras Prowess
All Participants will be timed and 100 will be shortlisted on
this basis
This Stage will last for 2 days

Day 13: Competition heats up
The top 100 participants from Stage I will be
called for Stage II
Stage II : Bear the Burden
Showcases the Load Carrying Capacity of the Tractor
Participants have to carry three fully loaded trolleys
across a predesigned route.
Involves the skill of attaching and releasing the trolleys
and maneuvering with a load
Timed Event.
Top 10 participants selected for the BIG Day
The Stage will last for two days

Bhola ka
Bhola comes home to his family filled with pride. He has
cleared both the prelim rounds for the competition.
The last few days were tough but he was up to the
challenge.
On the eve of the big day his village is bedecked like a
bride; the excitement is palpable.
His family will be going to the Mela tomorrow to partake in
the festivities and cheer for him.
He says to his wife, Lajjo, kal ghar mein lakshmi aane wali
hai. Mere saath tractor ki sawari karegi?
She says, Ghoomne to main zaroor jaaungi; mujhe pura
vishwas hai.
Bhola, Mujhe Bhi.


Day 15: The BIG Day
Mahindra and Mahindra

The fair will be held in the main village of the region.
All services will be made available for free; this would be a surprise for the village
folk
Major Attractions
Free Food stalls
Free rides
Puppet shows
Magic Shows
Local craftsmen would also be allowed to setup shop.
A huge stall would be created to showcase Mahindra Farm equipments, Powerol
sets, seeds etc.
Free checkup and cleaning for tractors. For further service they would be referred
to the local dealership.
The KOLs would be present and act as agents for M&M.
The local dealer would play a key role in developing interest and forging relations
with customers

Bhola ki
Bhola reaches the competition venue earlier than all other participants.
He sees that the organizers are putting final touches to the venue.
A brand new gleaming Mahindra tractor is put on a stage in the middle of the field.
The competition begins with the 10 finalists ready on 10 tractors.
Each of them has been assigned a section of the field with multiple tasks to perform.
They have to plough, sow seeds, haul a hay stack, attach-release multiple equipments and then
race to the finish line.
Bhola falls behind initially because his plough gets stuck in the mud while ploughing but he
recovers due to Mahindras heavy duty lift.
He races through the other tasks and is neck and neck with two other drivers.
The final race tests the limit of these tractors; they can run fast as well.
Bhola edges out the other drivers by a couple of yards.
He falls to mother earth in exhaustion, his family runs out to hug him.
As he sits on his tractor an announcer proclaims him as the Maati ka Laal. The same words are
emblazoned on the tractor.
He rides home with his family into the setting sun.
He came. He saw. He conquered.
This is just the beginning
Dealership Reinforcement
The dealer acts as the primary POC for our customers
Training for Sales People
Customer handling
Key technical areas
Act as counsels for repair and service
Reduce dealer burden
Longer credit cycle
Lesser inventory
Offer loans for infrastructure upgrades
Showcase and sell Farm Implements & Powerol sets as well
Consumer Benefits
Complete purchase solution - selection -> paperwork -> registration -> drivers license ->
institutional credit -> EMI collection -> seasonal loan restructuring -> post-purchase service
Lodging and Boarding at service center
Partner with new Financial service companies entering rural markets for cross-
promotional benefits




Bhola the Brand Ambassador
Bhola now possesses a model Mahindra tractor, which is
the responsibility of M&M to maintain and repair.
He is very well-known in the region. He has become an
opinion leader through his skill and perseverance.
Bhola now goes to initiatives and camps organized by M&M
in his region. He helps people understand the capabilities of
the tractors and make an informed choice.
He also at times acts as an interface between the prospect
and the dealer. His word holds weight.
He safeguards and propagates brand Mahindra in his
region.
He is the 4
th
Key Opinion Leader. He is the Maati Ka Laal.
Project BlitzKrieg Budget
Pre-Project Planning
Rs.
Lacs
Rs.
Lacs Activation Programme (per event) Rs. Lacs
Post-Project
Reinforcement Rs.Lacs
Salary for Data
Analyst (3 months) 2.50 Wages Training 50.00
Total 5 Data Analysts 12.50 Per Man-Day Rs 350 Dealer Initiatives 100.00
CMIE Databases 500 Man-Days per Event 1.75 Service Camps 50.00
Indian Harvest 0.65 Allowances To Employees
Prowess 2.30 Daily per Manager Rs 1000
State Analysis Service 1.50
Total 5 Managers for 20 Days per
event 1.00
4.45
Transportation
(Equipment+Materials+People+DG Sets) 5.00
Specialized Industry
Reports 2.50
Promotion (Posters+Wall
Art+Mobile Vans) 2.00
Other Data Sources 2.50
Mela Expenses
(Equipment+Catering+Shows) 3.00
Other Resources 5.00 Prizes 5.00
Other Expenses 2.00
Total 26.95 Total 19.75 Total 200.00
Total for 100 regions Rs. 19.75 Crore
Total Budget Rs. 22.02 Crore
Future Investments
0
5
10
15
20
25
30
35
Year 1 Year 2 Year 3 Year 4 Year 5
Project BlitzKrieg Budget (Rs. Cr)
22.02
32.23
Reaping the Benefits
Project BlitzKrieg Projections
Regions Covered 100
Villages per region 40
Assuming sale of 1.6 (Activation Factor) additional M&M tractor per village
Total Additional Sale in
Year-1 6400
Total Sales Value (Rs.
Crores) 224
Extension of Activation Programme over 5 years
- Linear Increase in Activation Factor
- Diminishing Factors for Previous Activations
Previous Activation Factor Current Activation Factor Units Sales (Rs. Crore)
Year 1 0 1.6 6400 224
Year 2 0.8 2 11200 392
Year 3 1.4 2.4 15200 532
Year 4 1.9 2.8 18800 658
Year 5 2.3 3.2 22000 770
Total 73600 2576
0
200
400
600
800
1000
Year 1 Year 2 Year 3 Year 4 Year 5
Sales Increase (Rs. Crore)
0
5000
10000
15000
20000
25000
Year 1 Year 2 Year 3 Year 4 Year 5
Units Sold
Industry Trends
0
50000
100000
150000
200000
250000
300000
350000
400000
450000
500000
2006 2007 2008 2009 2010
Tractor Industry Sales Volume
69788
202134
105821
62487
Below 30 HP
31-40 HP
41-50 HP
51 HP & Above
Tractor Sales by Horse Power
The Competition
0
10000
20000
30000
40000
50000
60000
2006 2007 2008 2009 2010
TAFE Sales Volume
11.86% CAGR
0
10000
20000
30000
40000
50000
60000
2006 2007 2008 2009 2010
Escorts Sales Volume
8.28% CAGR
0
5000
10000
15000
20000
25000
30000
35000
40000
2006 2007 2008 2009 2010
Intl. Tractors Sales Volume
2.95% CAGR
0
5000
10000
15000
20000
25000
30000
35000
2006 2007 2008 2009 2010
John Deere Sales Volume
Mahindras FES Growth Story
0
20000
40000
60000
80000
100000
120000
140000
160000
180000
200000
2006 2007 2008 2009 2010
M & M Tractor Sales Volume
0
1000
2000
3000
4000
5000
6000
7000
2006 2007 2008 2009 2010
M&M Tractor Sales (Rs. Crores)
0
100
200
300
400
500
600
700
2006 2007 2008 2009 2010
Powerol Sets (Rs. Crore)
16.75

451.78

0
10
20
30
40
50
60
70
80
2006 2007 2008 2009 2010
Agricultural Implements (Rs. Crore)
69.34
7

The Story Continues
0
50000
100000
150000
200000
250000
300000
350000
400000
2011 2012 2013 2014 2015
6400
11200
15200

18800

22000


Project BlitzKrieg: Sales Volume Projections
Future Projects
In regions where Tractor market is saturated we would
push through other agricultural products like seeds,
implements, harvester combines etc.
Future activations to focus more on farm implements
and Powerol sets.
Land lease schemes would be taken up where local
farmers would work with Mahindra products and
showcase the increase in productivity. They would also
act as research centres for our seeds business.
Empowering a Kisaan is of utmost importance. Key
innovations in rural credit would need to be
introduced.

Synergies
Mahindra Shubhlabh
Mahindra Farm Implements
Mahindra Powerol
Mahindra Automotive
Mahindra 2-Wheelers
Mahindra Finance
Thank You