This slide will set the platform for the presentation. Here we will explain why mini tillers are required for farming in the current context. These are some of the current rural dynamics that galvanize people’s interest in mini tillers. Out migration or the growing tendency of people venturing out to urban cities and foreign land for employment as has resulted in acute shortage of farm hands to do the farming work. This has led to the changing role of women in agriculture. Women are socially prohibited from driving an oxen or any other mechanized equipment like 4WT or 2WT. However, using a mini tiller is appropriate for them and it is also socially acceptable. There is also a constant decline in oxen population due to rising upkeep cost related to rearing them throughout the year whereas they are useful only for a limited time during the farming season. This decline in population of oxen has also resulted in long waiting list for ploughing services during farming season. The cost of hiring farm workers and oxen has also increased significantly. This all has led to delays incurred in planting which translates to lower land productivity. These factors are subsequently eating into profitability of farms. According to our research smallholders are increasingly interested in mechanized alternatives to traditional methods. Mini tillers, therefore, are the preferred alternative to solve all these problems.
This research finding corroborates our understanding regarding the unavailability of oxen and the hiring of such services becoming expensive. This slide also highlights the fact that using oxen for ploughing is become tougher by the season as it is getting more expensive. more importantly the availability is scarce during a short farming season. This is leading to either land being left fallow or late farming which leads to less productivity and lower profitability. This once again highlights the need to implement mini tillers as an alternative to minimizing cost and increasing productivity and eventually increasing profitability.
Although mechanized alternatives are common in the plains, these products (4WT/2WT) are unsuited to the small size, disparate pockets and topographical differences of land in the mid-hills. More reasons highlighting suitability of mini tillers for farming in the hills.
Productive and arable land in the mid hills both during the rainy and dry season is not being utilized to it’s full potential and reasons given for that again show that there is severe lack of farm hands and unavailability of oxen or the traditional method of preparing land. Mini tillers as a product therefore have a real opportunity to alter the way in which farming is undertaken in the mid-hills: they can increase land use and where appropriate, open-up land in off-peak seasons for commercial farming.
This slide will show the background and status of mechanization and focuses on mini tillers in various hilly districts.
The availability of arable land and the amount of mechanization that has happened so far is very less. This proves that there is ample space to introduce mechanization in mid hills. The number of districts with presence of mini tillers is very less and there are still various untouched districts to venture out to for increasing the sale of mini tillers. This also shows there is ample space to increase sales and there is also a good potential for exponential growth.
The growth is not exponential despite the data that we got from our research which indicated that 80% farmers who use a mini tiller recommended it to other fellow farmers and more than 50% of those farmers recommended it to more than 10 people. Undoubtedly farmer interest is high, opportunities are tangible but the growth rate in sales is perhaps lower than is to be expected given this favorable context. In our next slide, we will move on and show you the current growth and market performance of mini tillers year on year. It shows that there is growth, yes, but is slow.
Sales figure for the year 2010 to 2015. As we mentioned earlier sales are rising. Year on year, importers are reporting more pieces being sold. However, it is a linear increase and not an exponential one as it should be. Given the word-of-mouth recommendations, as explained in the previous slide, the fact that there has not been an explosion in sales growth is unusual.
Let’s take some time to discuss this scenario explained so far. We have seen that all the factors points towards an exponential growth in sales of mini-tillers in the mid hills. This hasn’t happed though. Why do you think this is happening? Let’s discuss about it for around 15-20 minutes.
Today I would like to share our analyses of why the growth rate in sales is perhaps lower than is to be expected given this favorable context. Slower than expected sales perhaps points to two things: There is disproportionate influence of the minority when equipment is relatively expensive. There are myths that prevail – weak consumer understanding and sophistication. So too may the “negative” word-of-mouth of previous users (now non users) make a difference. Sales have been driven by those in more commercial areas, those with greater means and the more entrepreneurial, i.e., the less risk averse have driven early growth! It is fair to predict that sales will begin to plateau unless attention is paid to reducing the risk of purchase to the more risk averse consumer.
Therefore, I believe that current strategies and practices need to change. Importers will not be able to rely on the same strategies for selling to the more risk averse customer. I believe that minor changes, relatively zero to low-cost, can have a big influence on propensity to buy. Other more substantial improvements can cover their own costs over time, whilst driving even greater sales growth. If changes in current strategies and practices are made we believe sales will grow from the current linear to an exponential one. These sales growth figures for next year and a year after that are at the minimum level. I believe actual sales could be much more than this.
Importers and dealers must change what they do pre- and post-sale and improvements at the point of sale also needs to be made. In pre-sale, information and marketing must alter consumer perception – dispel myths, showcase opportunities for service provision. At the point of sale, improvements are needed in the way information is provided to the buyers regarding basic user operation and maintenance training. Similarly, in Post-sale too, improvements are required and this could be in the areas of providing service guarantees and reliable and affordable repair and maintenance. We shall now discuss each of these stages in more detail one by one.
To analyze pre-sale activities, we have to understand what the potential customers think about mini tillers. For that we conducted a survey where we asked 100 non-users from various hilly districts lots of questions about what their perception regarding mini tillers is. These are some of the major findings that I would like to share with you all today. 23% think it can’t be used in wet and muddy soil 42% think that a mini tiller is not any quicker at ploughing than traditional methods or are ‘unsure’ 76% think that a mini tiller is more expensive to hire than oxen-driver 34% believe mini tillers plough less deeply than traditional method.
Our survey/research also included current mini tiller users. We also asked them various questions regarding mini tillers in order to understand the reality. The results that we got from the actual users was completely different from what the non users thought. Hence we can clearly see that there is big gap between the knowledge regarding mini tillers among the users and non users. This shows that there is a lot of negative perception regarding mini tillers among the non users. There is a wide difference between the actual and what is perceived. Therefore effort needs to be made to correct this to ensure better sales and wider access of mini tillers.
Therefore our analysis regarding Pre-sales is that there is a big difference between the views of the non users and the actual users. Hence substantial improvements must be made to change these negative perceptions. Some of the activities which can help in as follows: Information and marketing must alter consumer perception. It must dispel myths and showcase opportunities for service provision. Targeting could focus on those receiving remittances or those who are able to borrow from a savings group (cooperative, women’s group, etc.) and repay. Both are low-cost tweaks.
Let’s now analyze the point of sale part. For this I would like to share a case study of a Farmer/Service provider from a hilly district. His name is Bishal Pokharel. Mr. Bishal Pokharel, a youth with great enthusiasm residing in Parbat saw the opportunity of making some good money by becoming a service provider for tilling farmlands of farmers who didn’t have means to do it on their own. He heard about mini tillers and knew that this was the future. So he sold the oxen that he had and along with two other friends bought a mini tiller from the nearest dealer and started the business with great zeal. They were rewarded handsomely for the effort that they put in and soon money started flowing in. Seeing this Bishal got more excited and started using the machine day in and day out. He earned a total of Rs. 70,000 in the first season where he used the machine for a total of 16-17 days. He thought his days of becoming a rich farmer was not far. With this kind of money he could make from the machine, he was definitely going to work harder next season. However, his dream was shattered a few days into the next farming season. His machine couldn’t cope up with the pressure and gave up on him. Bishal was dejected but still had hopes because he was sure that it could be repaired in no time. He went to the dealer and got the repair person to look at his mini tiller. Bishal got the news that he so didn’t want to hear. His machine needed a part that was hard to get and would never fully recover to perform well. Besides this bad news, Bishal got another shock when the repair person asked him for a hefty fee for the checkup and diagnosis of the problem. His mini tiller never recuperated after this and he had no other choice but to abandon it for good. Bishal analysed the whole situation and tried to get answers. He finally realized the problem. He had tried to make as much money from the machine as possible but forgot to realize that machines also need rest and needs to be well maintained for a long life. He knew it was his mistake but he is unhappy with the dealer too. He was new to the machine and didn’t know the technicalities of it. He had just learnt how to operate it. Nobody told him about the regular servicing and no one warned him about using the machine excessively at one go. Too bad for Bishal, who had to learn it the hard way. He lost his machine and also his oxen. Bishal is just one example. There must be many others like him who have gone through this situation. I would like to ask a question here. Shouldn’t it be the responsibility of the dealer who sells the machine to tell the buyers regarding the best way to operate the machine so that it remains functioning for a long time. Studies done in marketing show that one satisfied customer will tell 2-3 people about his experience but an unhappy and dissatisfied customer will share their lament with 8-10 people and some will push that number to 20. However, an unhappy customer will become a loyal consumer if you fix his complaint and do it quickly. Therefore changes need to be made in the point of sale activities to make sure such problems don’t arise at all. So now let’s move on to see some changes that can be made in this step of the process.
These simple changes once again can go a long way to keep the assets in smooth running and support a service provision business model. This is more of a time investment than a cost investment (i.e., reallocation of effort). Sales/marketing officers can undertake this and their ‘hard sell’ efforts reduced in intensity elsewhere if the information given is more powerful and convincing. Simple financing arrangements through local dealerships can go a long way to convert the interested majority to purchase if they are of less financial means.
Now let’s move on to the third step in the process which is the Post-sales. This step is also very important and our research and analysis show that significant changes and improvements are required in this step too in order to boost sales. However, please bear in mind that these changes/improvement are relatively low cost. This number is the number of hours that a mini tiller is used on an average per day during the season. But our survey also showed a few users who are using mini tillers in excess of 7 to 8 hours a day continuously. Do you think it is good if a mini tiller is used so much? Why are they using it for such long hours? Is there lack of knowledge and information.
We also asked users about the servicing frequency that is undertaken to keep mini tillers well maintained. There are people who service mini tillers within a right time frame but what is startling is that there are people who don’t do that until it is very late and in cases where it is too late to save the mini tillers. What is the standard for servicing and mobil change? After how many hours of operation should one service their mini tillers? Let’s also look at some other post sales difficulties being faced by mini tiller customers to understand this situation better.
These are some of the responses that we got from our perception survey which shows that there is significant room for improvement 80% of the farmers stopped using a mini tiller because there were no repair and maintenance service available. Repair person charges exorbitant service fee. Fee is more expensive than that for repairing a motor bike or a big tractor. 13.8% of the farmers who are using a mini tiller are not satisfied with technical know-how among the local mechanics. Spare part availability is another area that needs significant improvement. Most dealers do not keep adequate stock of spare parts. Even essential and frequently needed spare parts aren’t available in some cases. Do we see a lack of providing information to the users which is leading to break down of mini tillers and to unhappy customers who are going on and lamenting about it to many other potential customers? Whatever the case maybe, we as sellers have to make sure that such vital information regarding repair and maintenance is provided to each and every customer. This will lead to less breakdowns and less unhappy customers. Therefore it will go a long way in helping to dispel the myths about mini tillers. Now let’s look at some ways we can improve this situation.
Since repair and maintenance is rated so highly when it comes to making a decision about buying a mini tiller, there is no choice but to offer a reliable repair and maintenance service. Availability of spare parts isn’t a choice either. Every dealer has to keep a stock of all the essential spare parts available. There are various other strategies and changes required in this and we shall share this with you in days to come.
As agencies trusted by the farming community, it is important to develop collaborative relationships with District Agriculture Development Offices to support/accelerate private sector expansion.
We’d like to name a handful of suggested alternative roles for public bodies – particularly locally – that should accelerate sales.
I would like to wrap up today’s presentation with a summary of some important points shared ealier.
We will be holding another similar even in the near future which will include other important stakeholders of this mini tiller market like Government Agencies. You will receive a call regarding that soon. Thank you very much for your time today.
CAPITALISING ON OPPORTUNITIES
TO INCREASE MINI TILLER SALES
IN THE MID-HILLS
• DECLINING OXEN POPULATION
• LONG ‘WAITING LISTS’ FOR PLOUGHING SERVICES DURING
• CHANGING ROLE OF WOMEN IN AGRICULTURE
Hiring an oxen and driver
Finding a pair of oxen and
driver when you want them
THE OPPORTUNITY: MINI TILLERS ARE WELL-SUITED TO THE
TOPOGRAPHICAL CONDITION OF THE HILLS
• SMALL LAND HOLDING
• PRECARIOUS TERRACES
• SLOPED LANDHOLDINGS
• EASE OF OPERABILITY
• % OF FARMERS NOT USING THEIR LAND FULLY DURING
• DRY SEASON – 65%
• RAINY SEASON – 20%
• REASONS GIVEN
• DRY SEASON: IRRIGATION PROBLEM – 95%; LACK OF FARM
HANDS – 30%; UNAVAILABILITY OF OXEN – 6%
• RAINY SEASON: LACK OF FARM HANDS – 60%; UNAVAILABILITY
OF OXEN – 35%; IRRIGATION PROBLEM – 42%
2010 2011 2012 2013 2014 2015
Current and Projected Sales under current
WHY HAVE SALES BEEN SLOWER THAN
RESEARCH SHOWS THAT INTEREST HAS BEEN
VERY HIGH BUT IT HASN’T CONVERTED INTO
• PREVAILING MYTHS CIRCULATING AMONG NON-USERS
• UN-RELIABLE – 34%
• CAN’T PLOUGH THROUGH STUBBORN PLANT ROOTS – 63%
• PLOUGHS LESS QUICKLY THAN OXEN – 29%
• NEGATIVE COMMENTS FROM USERS WHO HAVE STOPPED
• 90% - DIFFICULT TO USE/HANDLE
• 80% - REPAIR AND MAINTENANCE SERVICE UNAVAILABLE
• CURRENT SALES DRIVEN BY COMMERCIAL POCKET FARMERS
• 73% - SELF FINANCED
• 27% - FROM LOANS OR BORROWINGS
…COMPARED TO VIEWS OF ACTUAL
• 92% SAY IT IS LESS EXPENSIVE
• 95% SAY IT IS MUCH MORE EFFICIENT
• 94% ARE SATISFIED COMPARED TO PREVIOUS MEANS OF PREPARING LAND
N = 100
• INFORMATION AND MARKETING MUST ALTER CONSUMER
• DISPEL MYTHS
• SHOWCASE OPPORTUNITIES FOR SERVICE PROVISION
• INFORM BUYERS THAT THEY CAN EASILY RENT IT TO FELLOW FARMERS ONCE
THEY ARE DONE WITH TILLING THEIR LAND
• POSSIBLE TARGET CUSTOMERS
• REMITTANCE RECEIVERS
• MEMBERS OF SAVINGS GROUPS
Mr. Bishal Pokharel,
• BASIC USER AND MAINTENANCE TRAINING
• INFORMATION ABOUT AVAILABLE ATTACHMENTS FOR DIFFERENT SOIL
• PROVIDE SMALL GO-BAG WITH COMMONLY REQUIRED SPARES AND OILS
• INFORMATION FOR REGULAR MAINTENANCE
• EG. MINI TILLER SHOULD BE GIVEN A REST AFTER SO MANY HOURS OF USE. MOBIL
NEEDS TO BE CHANGED AFTER USING FOR SO MANY HOURS. MINI TILLER CONSUMES
SO MUCH FUEL IN AN HOUR IN AVERAGE.
• STOCKING OF ADEQUATE FUEL DURING FARMING SEASON
• FINANCING ARRANGEMENT FOR PEOPLE WHO MIGHT NEED IT
• DEPOSIT CERTAIN AMOUNT AND REST CAN BE PAID IN INSTALLMENTS
• PAYMENT IN INSTALLMENTS AND OWNERSHIP TRANSFER AFTER FULL PAYMENT IS
<25 25 to 40 40 to 55 55 to 70 Only when it
POST SALES DIFFICULTIES
• REPAIR AND MAINTENANCE
• 80% OF THOSE WHO STOPPED USING MINI-TILLERS, DID SO DUE TO UNAVAILABILITY
OF REPAIR AND MAINTENANCE SERVICES
• HIGH COST FOR SERVICING
• 13.8% ARE NOT SATISFIED WITH TECHNICAL KNOW-HOW AMONG THE LOCAL
• 48.3% ARE NOT SATISFIED WITH SPARE PART AVAILABILITY
• MOST OF THEM LEARNT ABOUT REPAIR AND MAINTENANCE ON THEIR OWN.
• WHEN ASKED WHAT FACTORS ARE MOST IMPORTANT WHEN IT COMES TO BUYING
A MINI TILLER – MOST COMMON FACTORS ARE RELATING TO AFTER SALES
• RELIABLE REPAIR AND MAINTENANCE SERVICE
• AVAILABILITY OF SPARE PARTS
WHAT IS THE POTENTIAL FOR UNLOCKING
GREATER SALES GROWTH THROUGH SMALL
CHANGES IN PRE-/SALES/AFTER-SALES
STRATEGIES (AND PRACTICE)?
RELATIONS WITH KEY PUBLIC SECTOR
• DEVELOP COLLABORATIVE RELATIONSHIPS WITH DADO
• PUBLIC SECTOR HAVE EFFECTIVELY BOUGHT A SMALL NUMBER OF MINI TILLERS FROM
IMPORTERS AND SOLD THEM AT A SUBSIDIZED RATE TO FARMER GROUPS AND
• NUMBER OF THE RECIPIENTS OF MINI-TILLERS FROM GOVT SUBSIDY SCHEMES HAVE
HAD PROBLEMS WITH THEIR PRODUCT WHICH MAY BE CORRELATED TO THE
NEGATIVE WORD-OF-MOUNT EFFECT.
• OTHER AREAS OF COLLABORATION TO
• SHARING OF FARMER/WOMEN/SAVINGS GROUP CONTACT INFORMATION SO
MARKETING OFFICERS CAN GET STRAIGHT TO THOSE FARMERS WHO MAY HAVE
POOLED SAVINGS AND A STRONGER NEED TO ACCESS ALTERNATIVES TO
TRADITIONAL PLOUGHING METHODS.
• MYTH-BUSTING CONSUMER EDUCATION
• SPONSORED DEMONSTRATION EVENTS THROUGH DADO IN COLLABORATION WITH
DEALERSHIPS – WILL SAVE ON MULTIPLE JOURNEYS TO THE FARM SITES BY MARKETING
• BUILDING MORE SOPHISTICATED CONSUMERS ABLE TO DEMAND GOOD AFTER SALES
SERVICES FROM COMPANIES AND ASK THE RIGHT QUESTIONS OF DEALERSHIPS BEFORE
HOW COULD IMPORTERS WORK TOGETHER
WITH THE PUBLIC SECTOR? WHAT NEW ROLES
MIGHT THE PUBLIC SECTOR PLAY TO
SUPPORT YOUR COMPANIES?
on care and
PLAN FOR THE SECOND EVENT
• TO GO INTO MORE DETAIL ON SOME OF THE MORE SIGNIFICANT
RECOMMENDATIONS ANNOUNCED TODAY
• TO SHARE A HELPFUL ‘SELF-ASSESSMENT FRAMEWORK’ THAT WILL SUPPORT
IMPORTERS AND DEALERSHIPS TO ASSESS THE STATE OF THEIR PRE-, SALES,
AND POST-SALES STRATEGIES.
• TO FACILITATE A DISCUSSION WITH PUBLIC SECTOR REPRESENTATIVES ON
‘COMPLEMENTARY ROLES FOR GOVERNMENT IN EXPANDING MINI-TILLER