Agricultural Value Added Services(Agri VAS): Market Entry ToolkitAuthors: Amol Jadhav, Natalia Pshenichnayaand Fiona Smith...
Contents3—4 	    Introduction5—9	     Chapter 1 Market Opportunity10—16	   Chapter 2 Market Assessment and User Needs17—21...
GSMA — mAgri Programme                                                                                                    ...
GSMA — mAgri Programme                                                                                                    ...
GSMA — mAgri Programme                                                                                   5Market Entry Too...
GSMA — mAgri Programme                                                                                          Chapter 1 ...
GSMA — mAgri Programme                                                                                       Chapter 1    ...
GSMA — mAgri Programme                                                                                        Chapter 1   ...
GSMA — mAgri Programme                                                                                                    ...
GSMA — mAgri Programme                                                                                                    ...
GSMA — mAgri Programme                                                                   Chapter 2                        ...
GSMA — mAgri Programme                                                                                Chapter 2           ...
GSMA — mAgri Programme                                                                 Chapter 2                          ...
GSMA — mAgri Programme                                                                           Chapter 2                ...
GSMA — mAgri Programme                                                                 Chapter 2                          ...
GSMA — mAgri Programme                                                                           Chapter 2                ...
GSMA — mAgri Programme                                                                                               17Mar...
GSMA — mAgri Programme                                                                                                    ...
GSMA — mAgri Programme                                                                Chapter 3                           ...
GSMA mAgri: Agricultural Value Added Services (Agri VAS): Market Entry Toolkit
GSMA mAgri: Agricultural Value Added Services (Agri VAS): Market Entry Toolkit
GSMA mAgri: Agricultural Value Added Services (Agri VAS): Market Entry Toolkit
GSMA mAgri: Agricultural Value Added Services (Agri VAS): Market Entry Toolkit
GSMA mAgri: Agricultural Value Added Services (Agri VAS): Market Entry Toolkit
GSMA mAgri: Agricultural Value Added Services (Agri VAS): Market Entry Toolkit
GSMA mAgri: Agricultural Value Added Services (Agri VAS): Market Entry Toolkit
GSMA mAgri: Agricultural Value Added Services (Agri VAS): Market Entry Toolkit
GSMA mAgri: Agricultural Value Added Services (Agri VAS): Market Entry Toolkit
GSMA mAgri: Agricultural Value Added Services (Agri VAS): Market Entry Toolkit
GSMA mAgri: Agricultural Value Added Services (Agri VAS): Market Entry Toolkit
GSMA mAgri: Agricultural Value Added Services (Agri VAS): Market Entry Toolkit
GSMA mAgri: Agricultural Value Added Services (Agri VAS): Market Entry Toolkit
GSMA mAgri: Agricultural Value Added Services (Agri VAS): Market Entry Toolkit
GSMA mAgri: Agricultural Value Added Services (Agri VAS): Market Entry Toolkit
GSMA mAgri: Agricultural Value Added Services (Agri VAS): Market Entry Toolkit
GSMA mAgri: Agricultural Value Added Services (Agri VAS): Market Entry Toolkit
GSMA mAgri: Agricultural Value Added Services (Agri VAS): Market Entry Toolkit
GSMA mAgri: Agricultural Value Added Services (Agri VAS): Market Entry Toolkit
GSMA mAgri: Agricultural Value Added Services (Agri VAS): Market Entry Toolkit
GSMA mAgri: Agricultural Value Added Services (Agri VAS): Market Entry Toolkit
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GSMA mAgri: Agricultural Value Added Services (Agri VAS): Market Entry Toolkit

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This document explores the opportunities for Agricultural VAS* and covers emerging best practice on marketing, service design and business modelling. It is primarily addressed to Mobile Network Operators (MNOs), other service providers, and agricultural organisations who are looking to partner and launch Agri VAS.

[*Agricultural Value Added Services (Agri VAS) form part of the Rural VAS portfolio for mobile network operators and VAS providers.]

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GSMA mAgri: Agricultural Value Added Services (Agri VAS): Market Entry Toolkit

  1. 1. Agricultural Value Added Services(Agri VAS): Market Entry ToolkitAuthors: Amol Jadhav, Natalia Pshenichnayaand Fiona Smith, GSMA mAgri Programme.
  2. 2. Contents3—4 Introduction5—9 Chapter 1 Market Opportunity10—16 Chapter 2 Market Assessment and User Needs17—21 Chapter 3 Marketing22—30 Chapter 4 Service Design31—38 Chapter 5 Commercial Model and Business Case for Agri VAS39 Glossary
  3. 3. GSMA — mAgri Programme 3Market Entry Toolkit - Agri VAS Introduction The furious growth of mobile in developing countries, and rural regions in particular, presents a landmark opportunity to deliver critical, information-based agricultural services to rural poor smallholder farmers. There are over 2.3 billion people living in poverty and the majority earn their primary livelihood from small farms in developing countries. The yields of these farmers, especially those in sub-Saharan Africa, typically represent a fifth of those in the developed world. There is a raft of reasons for this, one of which is a lack of access to relevant and actionable agricultural information. Yet this problem is eminently superable. The right information, absorbed and applied correctly, can double or triple productivity in many of these households. Mobile is the leapfrog technology that allows us to complement existing extension efforts by stepping up and meeting this information need. About the Authors This document was written by members of the GSMA mAgri Programme. The GSM Association represents the interests of mobile operators worldwide and within this, the GSMA Development Fund works to identify opportunities in emerging markets for social, economic and environmental impact through mobile services. In partnership with USAID and the Bill and Melinda Gates Foundation (BMGF) the GSMA has recently launched the mFarmer Initiative to support mobile operators and agricultural partners in Sub-Saharan Africa and India in creating commercially viable and scalable mobile information services to benefit over 2 million smallholder farmers. For more information on the initiative and challenge fund please contact mfarmer@gsm.org
  4. 4. GSMA — mAgri Programme 4Market Entry Toolkit - Agri VAS There are no hard and fast rules to follow Mobile Network Operators (MNOs) and when building an Agricultural Value Added Agriculture Organisation Partnerships: Service (Agri VAS).1 This document does MNOs face the task of growing average not provide a blueprint, nor act as a guarantor revenue per user (ARPU) and market share of success. Those Agri VAS deployments in rural areas. In a congested marketplace, that have achieved success have often done they seek to find ways to differentiate within so through clever adaptation to their a commoditised industry. Agricultural environment. Replicating them elsewhere extension organisations face the challenge of would be to remove a crucial piece of the servicing geographically dispersed farmers jigsaw. However, from the GSMA mAgri while lacking scalable service infrastructure. Programme’s involvement in Agri VAS deployments in Asia and Africa, and from The challenges, therefore, that MNOs and market research on best practice amongst agricultural extension organisations face are existing service providers, it is possible to complimentary in nature. Agricultural discern similarities in the challenges faced, and organisations can help MNOs differentiate by responses to those challenges, from which we targeting rural farmers with their services, can learn. This document represents augmenting their relevance, attraction and current best practice in dealing with them and quality. MNOs can help agricultural is primarily addressed to Mobile Network organisations rapidly scale services and reach Operators (MNOs), other service providers, distant farmers via their network and and agricultural organisations who are looking distribution infrastructure. This forms the to partner and launch Agri VAS. basics of a partnership model for Agri VAS. A significant trend is the complimentary The purpose of this document is to help key benefits emerging from partnership models. players recognise, understand - and act upon Due to the scalability and reach of mobile - the opportunities in the mobile agriculture networks, partnership models are emerging sector. We begin by defining the sheer size of between mobile operators and agriculture this market. organisations in developing mobile solutions for agriculture. Fiona Smith | Director, GSMA Development Fund mAgri Programme.Agricultural Value Added Services form part of the rural VAS portfoliofor mobile network operators and VAS providers. A Value AddedService is a non-core service of a mobile operator. The term can beused to refer to all services beyond standard voice-calls. VAS aresupplied either in-house by the MNO themselves, or by a third partyVAS provider.
  5. 5. GSMA — mAgri Programme 5Market Entry Toolkit - Agri VAS Chapter 1 Market Opportunity Agricultural Value Added Services (Agri VAS) present a considerable business opportunity due to the enormous potential user base in developing countries. The farming sector in these countries often suffers from chronically low productivity. Lack of information acts upon productivity and income levels like a glass ceiling. However, with increasing teledensity in the developing world, the mobile channel is uniquely positioned to address the information needs of farmers – an intervention that can help increase their income and yield. By delivering relevant, actionable content, providers of mobile services for agriculture can offer a valuable and sustainable product. In order to appreciate fully the business opportunity for Agri VAS, it’s important to identify certain key variables in the market place – typically mobile penetration levels, user base and agricultural productivity trends.
  6. 6. GSMA — mAgri Programme Chapter 1 6Market Entry Toolkit - Agri VAS Market Opportunity The Potential User Base for Agri VAS It’s important to understand the sheer size India work in agriculture – this forms 52% of the agricultural sector in the target markets of India’s work force. In Sub-Saharan Africa, (Figure 1.1). In developing countries the the agricultural sector is the largest employer majority of the labour force works in the too. In many of the African countries, over 80% agricultural sector. This population of the work force is employed here – and a constitutes the potential user base for significant proportion of these are women. Agri VAS. Almost 250 million people in Figure 1.1: Agricultural Sector Size 15% 32% 24% 49% 51% 44% 85% 32% 68% GDP – Ethiopia Labour Force – Ethiopia Agriculture Industry Agricultural Labour Force GDP – Ghana Labour Force – Ghana Other Industries Other Labour Force Agriculture Industry Other Labour Force GDP (Purchasing Power Parity): Labour Force in Agriculture: Other Industries Female Agricultural Workers $85.71 Billion 33.96 Million Workers GDP (Purchasing Power Parity): Male Agricultural Workers $39.64 Billion Labour Force in Agriculture: 6.13 Million Workers 18% 23% 11% 25% 48% 52% 64% 82% 77% GDP – India Labour Force – India GDP – Kenya Labour Force – Kenya Agriculture Industry Agricultural Labour Force Agriculture Industry Other Labour Force Other Industries Other Labour Force Other Industries Female Agricultural Workers GDP (Purchasing Power Parity): Labour Force in Agriculture: GDP (Purchasing Power Parity): Male Agricultural Workers $4.20 Trillion 237.88 Million Workers $66.22 Billion Labour Force in Agriculture: 14.03 Million Workers Source: The World Bank and CIA The World Factbook
  7. 7. GSMA — mAgri Programme Chapter 1 7Market Entry Toolkit - Agri VAS Market Opportunity 31% 10% 20% 37% 34% 43% 56% 63% 37% 69% GDP – Malawi Labour Force – Malawi GDP – Mali Labour Force – Mali Agriculture Industry Other Labour Force Agriculture Industry Other Labour Force Other Industries Female Agricultural Workers Other Industries Female Agricultural Workers GDP (Purchasing Power Parity): Male Agricultural Workers GDP (Purchasing Power Parity): Male Agricultural Workers $13.05 Billion $16.24 Billion Labour Force in Agriculture: Labour Force in Agriculture: 5.68 Million Workers 3.02 Million Workers 31% 33% 19% 22% 30% 42% 39% 69% 67% 48% GDP – Mozambique Labour Force – Mozambique GDP – Nigeria Labour Force – Nigeria Agriculture Industry Other Labour Force Agriculture Industry Other Labour Force Other Industries Female Agricultural Workers Other Industries Female Agricultural Workers GDP (Purchasing Power Parity): Male Agricultural Workers GDP (Purchasing Power Parity): Male Agricultural Workers $21.87 Billion $374.34 Billion Labour Force in Agriculture: Labour Force in Agriculture: 8.91 Million Workers 34.98 Million Workers Source: The World Bank and CIA The World Factbook
  8. 8. GSMA — mAgri Programme Chapter 1 8Market Entry Toolkit - Agri VAS Market Opportunity 29% 10% 34% 20% 27% 24% 63% 66% 56% 71% GDP – Rwanda Labour Force – Rwanda GDP – Tanzania Labour Force – Tanzania Agriculture Industry Other Labour Force Agriculture Industry Other Labour Force Other Industries Female Agricultural Workers Other Industries Female Agricultural Workers GDP (Purchasing Power Parity): Male Agricultural Workers GDP (Purchasing Power Parity): Male Agricultural Workers $12.27 Billion $62.23 Billion Labour Force in Agriculture: Labour Force in Agriculture: 4.47 Million Workers 17.11 Million Workers 22% 25% 18% 16% 15% 27% 55% 69% 75% 78% GDP – Uganda Labour Force – Uganda GDP – Zambia Labour Force – Zambia Agriculture Industry Other Labour Force Agriculture Industry Other Labour Force Other Industries Female Agricultural Workers Other Industries Female Agricultural Workers GDP (Purchasing Power Parity): Male Agricultural Workers GDP (Purchasing Power Parity): Male Agricultural Workers $42.21 Billion $20.04 Billion Labour Force in Agriculture: Labour Force in Agriculture: 11.59 Million Workers 4.09 Million Workers Source: The World Bank and CIA The World Factbook The Growth of Mobile However, despite the enormous number of Access to mobile phones is growing people working in agriculture, productivity dramatically in developing countries, especially from this sector is disproportionally low. It is in rural areas. Since most urban areas are not unusual for outputs to be two thirds lower approaching or have surpassed 100% than those in developed economies. Often, teledensity, it is the remote rural regions that the figures are lower even than this. A raft represent the largest untapped market of of sub-Saharan countries regularly produces potential users. Mobile network operators yields that are 80% smaller than those in are addressing this and rural penetration rates the USA and UK (Figure 1.2). Given that are climbing very quickly. Estimates of total agriculture accounts for around 30% of a subscriptions in the developing world now typical sub-Saharan countries’ GDP, the scope exceed 4 billion and with shared access almost for exponential GDP growth due to optimised every poor person on the planet can tap the farming practices is significant. benefits of these networks. In Ghana, for instance, the overall mobile penetration reached2 GSMA Wireless International 78% by the third quarter of 2011.2
  9. 9. GSMA — mAgri Programme Chapter 1 9Market Entry Toolkit - Agri VAS Market Opportunity Figure 1.2: Cereal Productivity Gap 7,500 7,000 6,500 6,000 Cereal Yeald (kg per Hectare of Harvested Land) 5,500 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 Ethiopia Ghana India Kenya Malawi Mali Mozambique Nigeria Rwanda Tanzania Uganda Zambia UK USA China Data Source: World Bank Figure 1.3: Market Potential for Agri VAS. Rwanda Uganda 100% Mozambique Tanzania Ethiopia Proportion of Workforce in Agriculture 80% Nigeria Malawi Zambia Mali 60% Kenya Ghana 40% l tia ten r Po VAS 20% he gri Hig for A Bubble Size = Farming Population 0% 0% 5% 10% 15% 20% 25% 30% 35% Rural Mobile Penetration Source: The World Bank and CIA The World Factbook Indeed, in the race to gain market share among reliable agricultural information for agrarian rural subscribers, the pricing wars have largely workers. Analysis can be conducted to been played out and operators are increasingly understand the potential market size for an turning to other, more innovative ways to Agri VAS. In figure 1.3, the size of the bubble differentiate themselves from their competitors. depicts the farming population plotted against Agri VAS presents a compelling opportunity the percentile proportion of workforce in to meet this need. agriculture (Y axis) and the rural mobile penetration (X axis). The ubiquity of mobile phones means that they are ideally placed to act as information channels for farmers. Mobile services, in many instances, are the first and only source of
  10. 10. GSMA — mAgri Programme 10Market Entry Toolkit - Agri VAS Chapter 2 Market Assessment and User Needs The framework below outlines the components to consider when designing an Agri VAS, from understanding the customer at the outset (Ch. 2), marketing the service (Ch. 3), service design (Ch. 4) and finally, the underlying business model (Ch. 5). Market Assessment User Needs Socio-Cultural- Agricultural Economic Factors Cycle Marketing Understanding Reaching the the Customer Customer Hi... Service Design Designing for Formats Content Customer Needs and Channels Process Commercial Model $ Business Case Revenue Streams CAPEX/OPEX
  11. 11. GSMA — mAgri Programme Chapter 2 11Market Entry Toolkit - Agri VAS Market Assessments and User Needs Consumer Market Segments At the design stage of any new product Market segmentation is vital to understand the or service, it is critical to understand the various categories of consumers in the target user’s needs and to identify the unique market, and ensuring the product or service is demographics that exist within the target relevant to them. For rural smallholder farmers, market. This is especially crucial for Agri it may be most useful to focus segmentation on VAS as base of pyramid users tend not to agro-ecological zones, crop, language, gender, be surveyed extensively. The danger posed and attitude (especially proclivity to change). by a lack of understanding of the target market is significant and can make or break a 1. Language/Culture deployment, leading to products and services The boundaries of a language and a region’s that serve no immediate user requirement; geo-political boundaries are often one and a solution in search of a problem. We advise the same. However, this is not the case prospective service providers to focus their everywhere and care must be taken to efforts on the following key activities. identify the language(s) spoken in a market segment during the service’s design phase. Consumer Market Segments Segmentation 1. The service must be delivered in the local of the market is a crucial keystone of product language and provide information relevant to design. Each demarcation may well have that geography’s agro-climatic characteristics, unique problems and needs. Identifying which determine the crops that can be grown these is a logical first step. there. Cultures in different geographies may 2. Market Research Once segmentation has well focus on specific types of crop or have occurred, methodical market research and developed specialised methods of cultivating analysis need to be conducted for each. them. Knowing these local traditions is a 3. Agriculture Cycle Consideration should be prerequisite for making information services given to the fact that a farmer’s activities are pertinent and actionable. almost entirely governed by the overarching super-structure of the agricultural cycle. 2. Agro-ecological Zone At different points in this cycle (planning, In larger territories, a market segment may planting, growing, harvesting or selling) straddle more than one agro-ecological zone. the farmer will have a uniquely different set These zones present a unique set of challenges of information needs. The Agri VAS must to a farmer and it is not uncommon for a maize fulfil these. cultivation technique to work well in one zone and fail in another. Even if the market segment inhabits a single zone, care must be taken to ensure that the service designers are aware of the information needs specific to that zone. This will be of particular importance where content generation is concerned.
  12. 12. GSMA — mAgri Programme Chapter 2 12Market Entry Toolkit - Agri VAS Market Assessments and User Needs 3. Gender assistance of others. Adopts new techniques To promote equal access and utility to both after others have proved they work. genders, it is important to understand the 3. Independents Generally savvy, open to new perceptions of gender and the role that they information but not particularly engaged play in agricultural activities. It is a fact that the with farming. Will follow best practice greater proportion of agricultural labour falls to but would never try new methods by women, and yet, women tend to earn less than themselves. their male counterparts and, generally, have 4. rustrated Escapist Trying to make the best F less control over the business decisions taken fist of farming but would change jobs if the on the farm. This divide remains significant 3, opportunity arose. although indications in Bangladesh suggest4 5. Traditionalist Enjoys farming but does not it is closing there, at least, as populations seek out new methods and is resistant to of male migrant workers move around the change. country leaving womenfolk at the helm of the agrarian businesses. The same phenomenon 6. Trapped Does not enjoy farming and sees no occurs when male workers decamp to urban future it. Hopes children do not have to farm areas in search of jobs. as a career. Gender and cultural sensitivities should be For example, by identifying attitudinal borne in mind during the design, content segments, marketing agents can target initial generation and marketing phases of a product messages on ‘Competent Optimists’ with launch. Grameen Foundation found, through the aim of getting them to influence the their Community Knowledge Worker (CKW) ‘Contented Dependents’ and ‘Independents’. Initiative in Uganda, that female farmers were Agents can avoid wasting time and resources much more receptive to receiving assistance targeting ‘Traditionalists’ or the ‘Trapped’ from female CKWs. This new information was until the service reaches critical mass, and the obviously extremely valuable to them in their new technique(s) attain orthodoxy. As usage efforts to make the CKW programme equally matures across each segment, marketing accessible and useful to both genders. messages can be adapted, and made more efficient. Though attitudinal segmentation – 4. Attitudinal Factors by nature – is a complex task, the following steps seem to represent a logical approach: Psychological or attitudinal segmentation deals with identifying groups of farmers who share 1. Scope Survey a sample population to identify similar attitudes towards farming and external psychological/attitudinal segment members. interventions. Understanding and identifying 2. Segment Segment identifiers can be attitudinal segments can provide powerful uncovered by finding common traits/ insights into how marketing messages should characteristics (Contented Optimists, be customised to maximise impact. or, from a marketing perspective ‘early adopters’, tend to focus on cash crops while A recent study 5 by TNS Research International Traditionalists focus on staple crops). in Tanzania shed valuable light upon the make- 3. Assign These identifiers can then be used up of that country’s agrarian market as well as more broadly and applied to segment the offering useful attitudinal demarcations entire population (ie. we can assume that within it. those who focus on cash crops can be grouped as early adopters while staple Their findings suggest six broad distinctions crop farmers are Traditionalists). within the mind-sets of farmers, ranging from 4. Correlate Map these findings against ‘Competent Optimists’, to, at the opposite end other indicators such as region or district. of the scale, those who are ‘Trapped’ in farming For instance, the TNS RI study discovered and wish to leave. that 47% of farmers in the Iringa region of Tanzania were Competent Optimists We summarise their categorisations below, , (suggesting a high uptake of a new product however it must be noted that these segments or idea) whereas in Singida only 7% were are not wholly distinct from one another and Competent Optimists and 34% were there will be some overlap: Traditionalists (suggesting a correspondingly3 Food and Agriculture Organisation of 1. Competent Optimists Seeks information low uptake). By cross-referencing the the UN http://www.fao.org/sd/fsdirect/ and networks well with others. Enjoys segments in this way, a valuable picture fbdirect/FSP001.htm4 Innovations in Rural Extension: Case farming, is open to new techniques and begins to emerge which will inform Studies in Bangladesh, CABI Publishing, quick to try them out. decisions about which areas to focus on April 20055 Listening to the Farmer Voice: 2. Contented Dependents Has a very positive when promoting the service to ensure Overlaying macro-segmentation with attitude towards farming but needs the maximum uptake. micro-level data on farmer needs and attitudes. – TNS Research International, March 2011.
  13. 13. GSMA — mAgri Programme Chapter 2 13Market Entry Toolkit - Agri VAS Market Assessments and User Needs Market Research when designing and marketing new services. Once the market has been segmented using Radio programmes, newspapers, oral tradition, the parameters outlined above, systematic extension workers and word of mouth are research must be conducted in order to some of the typical information vehicles for understand the users’ activities and needs. remote, rural farmers. When conducting the research, care should be taken to cross-tag each data set according Usage Case If the farming community knows to the attitudinal segments identified during and trusts particular radio programmes, the initial segmentation process. it makes sense to partner with the radio show producers and leverage them as a Our research and findings suggest focusing delivery channel for Agri VAS. Furthermore, on the following key components:6 complementing existing communications channels with up-to-date agricultural 1. Crop Types and Varieties information is an efficient way to fill the knowledge gap. This partnership can also play Understanding the agriculture focus and crop a role in marketing the Agri VAS and earning varieties grown (along with their associated the faith and loyalty of the target market. seasons) will help determine which information services to provide. 4. Finances Usage Case It may be useful first to select Many rural smallholder farmers are both poor crops that the project team has the most data and caught up in the poverty cycle. Thus, and experience working with. Then, from they may have an ultra-low (or non-existent) these crops, further prioritise based on willingness to pay for Agri VAS. Efforts their prevalence within the target market. should be made to investigate their income Alternatively, start with a select few crops sources and spending behaviours. A lot more and develop deeply impactful, successful work needs to be carried out to understand information services on those crops before the farmers’ ability or willingness to pay for growing the service portfolio by introducing particular products and services. However, additional crops as time and expertise allow. limited-scope market surveys that we have seen suggest that farmers are willing to pay for 2. Farming Techniques information they deem to be relevant, helpful and actionable, for example agri-specific, Specific farming techniques vary by farming localised weather forecasts that could impact culture, crop type and agro-ecological zone. growth or yield during the farming cycle. It is important to understand farming communities’ existing in order to identify Usage Case In the likely event that some target areas for improvement. farmers (poor rural smallholders) will be unwilling and unable to pay for an Agri VAS, Usage Case If a community already benefits it will be incumbent on the service provider from a specialised, unique method of pest to secure revenue from other sources, namely control that is proven and effective, advising other actors in the agricultural value chain them on alternative pesticides available on who benefit from farmers having access to the the market may not be seen as useful. In this Agri VAS. These alternative revenue streams case, it may be preferable to work with local can come from MFIs and insurers who wish organisations to learn their methods and to penetrate and transact business in the rural incorporate them in the content management markets, contract farming companies who system for Agri VAS. The storehouse of global want to increase the reach and quality of their agricultural knowledge is still growing and a extension services, as well as input suppliers/ successful Agri VAS will seek to broaden its dealers. Further details on these B2B revenue own knowledge as well as disseminate it. models can be found in Chapter 5. These new learnings can then be shared with other farming communities who face similar pest problems.6 Although this documentfocuses mainly on crop farming, 3. Existing Information Sourcesit is important to conduct market There is usually a complex web of informationresearch on other agriculturalpractices including livestock, service providers available to farmers althoughfisheries and agro-forestry. the degree to which farmers have access to this information will vary. Understanding whatMore detailed information on sources of information your target farmers arefarming practices, agriculture currently using and forming partnerships withextension and the agriculturelife cycle is available at http:// other information service providers can helpwww.g-fras.org/en/ or http://www.meas-extension.org/home/
  14. 14. GSMA — mAgri Programme Chapter 2 14 Market Entry Toolkit - Agri VAS Market Assessments and User Needs Packaging, Harvesting Storing Transport 5. Gender Any Agri VAS targeting rural smallholder Growing Crop Selling Planting farmers in less developed countries must be Planning and Growing proactive in catering to the female populations. Indeed, due to the inescapable fact that the majority of farm work is undertaken by women and that women are slowly assuming more Before the farmers begin to plant crops, they control over farming decisions, understanding Market must first decide which crops to grow in this Information their cultural environment and information cycle. In order to make this decision, a farmer Planting Planning and Access needs is crucial. must consider a range of factors including the demand and market price of specific crops, Successful Agri VAS must: the cost of that crops‘ inputs, seasonal weather expectations and other crops to be grown on ■■ arry out marketing/sales campaigns C the same plot. specifically targeting women. Inputs ■■ D esign aspects of the service specifically Packaging, Access to finance can also play a vital role Harvesting Storing for the agriculture roles and functions most Transport in crop planning. Farmers caught up in the women typically play. poverty cycle lack proper resources to invest ■■ E nsure face-to-face interaction with women in quality inputs, thereby affecting long-term (by outreach workers, distributors or field Farming planning and reducing yields, productivity agents) is conducted sensitively and in Advisory and ultimately income. This cascades into next accordance with local custom. Growing year’s crop planning and continues the cycle. Selling Women do the majority of food production, processing and preparation in developing nations. Although women produce 60-80% Financial Services of the food in the developing world, they earn Crop Planning Planting Planting Harvesting 22% less than their male counterparts, have Planning and Growing and Selling less access to resources and receive only 5% of extension services.7 These facts highlight a clear failure in the market to provide Agri VAS where they are needed most. Once the land has been prepared and inputs Market Weather sourced, the farmer plants his/her seeds or Information seedlings and begins monitoring and caring for The Agricultural and Access Cycle the crop. If plants encounter any disease or pest The need for agricultural and marketing infestation the farmer must quickly diagnose information amongst rural and farmer the problem and implement an appropriate communities is part of a broader need for solution before the crop is lost. At this stage, diverse information including health, natural assistance with pest or phytopathology issues is Inputs resource management, and community services required, along with an understanding of which information as off-farm income activities are pesticide to use and how and where to go about often integrated with farm production. sourcing them. The information needs of farmers are diverse due to the fact that mono-cropping is Farming uncommon amongst smallholders. In order to Advisory make best use of their resources available and Crop Planting Harvesting minimize risk, farmers tend to diversify by Planning and Growing and Selling planting multiple crops and keeping livestock. Farmers’ needs are governed by their progress Financial When crops are ready for harvesting, farmersMarket through the agricultural cycle and change Services decide where, with whom and how to sellInformation over the course of the year. It’s important to their crops. In order to reach a successful sale,and Access understand that the cycle is dependent upon the farmer will require access to accurate, local growing seasons and will therefore vary up-to-date market prices to make the best from region to region. Consequently, although decision possible for the business. Issues of the focus areas we suggest below are broadly transportation may also arise which a well- typical, their implementation period may well Weather designed Agri VAS should bear in mind.Inputs vary by agro-ecology zone. Information about storage procedures and costing are also in demand. 7 Food and Agriculture Organisation of the UN http://www.fao.org/sd/fsdirect/ fbdirect/FSP001.htmFarmingAdvisory
  15. 15. GSMA — mAgri Programme Chapter 2 15Market Entry Toolkit - Agri VAS Market Assessments and User Needs Information Needs During the Agricultural Cycle The following chart lists examples of possible information topics farmers may need at each stage of the crop agriculture cycle. Packaging, Harvesting Storing Transport Growing Selling Planting Planning Crop Planting Harvesting Planning and Growing and Selling Market Information and Access
  16. 16. GSMA — mAgri Programme Chapter 2 16Market Entry Toolkit - Agri VAS Market Assessments and User Needs Planning Planting and Growing Harvesting, Post Harvesting and Selling - Accurate and competitive - Expected crop demand. market pricing. Market - Potential price fluctuations. - Potential price fluctuations. Information - Cost and availability of - Cost and availability and Access transport of inputs. of transport to market. - Market contacts. - Marketing, sales or negotiation tips. - Seeds/fertiliser availability, - Pesticides. - Availability, cost and location prices and location. of storage services. Inputs - Instruction for self-storage. - Crop and seed selection. - Techniques to protect - What is the best time and - Land preparation. against and prevent method of harvesting. Farming disease and pest infestation. Advisory - Diagnose and treat disease and pest infestation. - Loans and insurance - Loan availability - Savings account rates availability, rates and rates for and availability. Financial and contacts. non-farming activities. Services - Long term - Short-term weather - Weather forecast and weather forecast. forecast. For example, implication for storage. Weather - Implication of local to know when to plant. agro-environment. Collecting the Data Typical methods for developing this Collecting this information can be quite market intelligence include surveying challenging and at times (depending on your sample populations in the field, organising level of resources) impractical. Working with focus groups and desk-bound research agriculture organisations or NGOs who already of the demographic. have data in these areas or have the capacity to conduct extensive field research and sampling can help to expedite this process.
  17. 17. GSMA — mAgri Programme 17Market Entry Toolkit - Agri VAS Chapter 3 Marketing Customer Socio-Cultural- Agricultural Economic Factors Cycle Marketing Understanding Reaching the the Customer Customer Service Design Designing for Formats Content Customer Needs and Channels Process Business $ Model Revenue Streams CAPEX/OPEX
  18. 18. GSMA — mAgri Programme Chapter 3 18Market Entry Toolkit - Agri VAS Marketing When introducing new products and services, ■■ Q ualitative research (backed up by the role of marketing is twofold and serves to: quantitative data) should provide the basis 1. Understand the consumer and their for customer segmentation; information changing information needs (continuously needs mapping, language preference, level incorporating new insight into the of technical capability, channels, formats marketing strategy and service design). and frequency of information delivery. 2. Drive consumer demand through advertising, ■■ W hat are the on-going methods of sales and optimised distribution. collecting the information on customer needs? How will the customer feedback This section briefly reviews consumer needs be incorporated to make sure that changing and then examines the marketing process in information needs are reflected within more depth. the service design? Understanding the Customer Reaching the Customer A thorough understanding of the consumer’s The Customer Journey unmet needs and requirements is critical to The complexity of the adoption process designing relevant products and services. (along with the requisite tools and methods of facilitation) can be mapped out with the Some things to consider before embarking help of a customer journey framework. Based on designing the service and marketing on findings from GSMA experience with campaigns include: Agri VAS deployments in Kenya and India, ■■ A re there potential partner organisations and from research conducted on current best with on-the ground expertise that can practice in mobile for agriculture space, this provide insights into customer behaviour framework provides a simplified tool for and help to shape the marketing strategy? structuring a marketing strategy for Agri VAS: The Customer Journey Aware Understand Try Regular Use Low Media Consumption. Communicate: Modify Consumer Engage Users. Challenge ■ ■ ■ ■ ■ Illiteracy, Language etc. ‘What’, ‘How’, ‘Why’ Behaviour. ■ Personalise Service. ■ Low Distribution Reach. of Agricultural VAS. ■ Gain Trust. ■ Address Broader Needs. ■ Existing Brand Equity. ■ Simple Procedures. ■ Cost of Trial. ■ User Profiling. Focus ■ Local Media. ■ Face-to-Face. ■ Accessibility. ■ Service Rendering. ■ Local Events/Meets. ■ Align Incentives to ■ Comparative Benefits. ■ Complimentary Needs. ■ Agricultural Cycle. Communication. ■ Innovation Access. Above-the-Line Below-the-line Experiential Experiential Direct ■ Posters. ■ Partner Agents. ■ Discounted Trials. ■ Free (push) Information Messages. Marketing Tactics ■ Radio TV Spots. ■ Canopy Events. ■ Agricultural Cycle ■ Interactivity. ■ Mobile Van Promos. ■ Experts. Based Trials. ■ Feedback Drives. ■ Village Events. ■ Peers/Family. ■ Agricultural Events. Leverage Partner Networks Align Planning and Execution with Agricultural Cycle Following the steps of the customer from “unawareness” to “regular use” helps identify and understand bottlenecks within the adoption process. Each bottleneck needs to be addressed with relevant marketing activities designed to bring the customer to the next stage. Examples of poster campaigns by M-Kilimo (Kenya) and IKSL (India)
  19. 19. GSMA — mAgri Programme Chapter 3 19Market Entry Toolkit - Agri VAS Marketing A. Awareness phase the product and influence adjacent segments, Any proposed Agri VAS is likely to constitute gaining crucial market penetration. For the a new concept to target consumers. Therefore, service’s value proposition to be clearly expect initial awareness of the brand or value communicated, it is vital to have field agents proposition to be extremely low. Further who can demonstrate the product in action. complicating the awareness stage are the low These are (relatively) more costly as they rely levels of media consumption and literacy upon face-to-face interaction and therefore rates in rural areas, making print advertising require a trained sales force of mobile field ineffective or redundant. staff. However, they have proved to be much more effective at successfully explaining the Things to consider in the awareness product to new customers and demonstrating phase include: its value than traditional channels. ■■ D oes the service have a strong, relevant, It may be useful to explore partnerships with memorable brand that is sensitive to the existing networks of field extension workers. local culture and aesthetics of the target An agricultural organisation, network of market? We know of at least one Agri cooperatives or an NGO may have existing VAS whose visual marketing had to be channels of communication to farming ‘translated’ from developed world-designed communities which already benefit from high collateral into something more adapted levels of access and trust with the audience for the visual traditions of its target and can be leveraged for such campaigns. audience after an initial rejection of its A more thorough understanding of a product’s advertising campaign. workings and value will also prevent customer ■■ L everaging the existing brand of the churn and in this sense, experiential activity is MNO or agricultural partner organisations good not only for customer acquisition but also in rural areas may allow the service to for repeated usage. build awareness and establish credibility in a swift, cost-efficient way, providing the MNO’s brand is well-received in that community. ■■ H ow will the brand be visible to consumers? For regions with low literacy levels, these advertising messages need to be intuitively understood and should not be dependent purely upon text. Rather, image-based marketing channels should focus on trying to capture the value proposition of the product in simple, visual terms using people who are representative of the target market. ■■ R adio normally has the highest penetration rate among available media channels. Explore the possibility of collaborating with existing agriculture-related radio programmes to reduce the cost of airtime and optimise efficacy. B. Understand Phase Moving customers from awareness of the service to understanding the value proposition Canopy marketing activity undertaken by IKSL field agent to local farmers. of the service is a complicated process and one best served, we find, by using experiential marketing techniques. Attitudinal segmentation suggests that only a minority of any given market have a proclivity to take up new techniques and ideas. These people then become powerful exponents of

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