1. Re-constructing The Elements Of The Process – How Did IDE Do It In India International Development Enterprises (India)

2. Background  Started in 1991  Set up as a representative office in 1991 of IDE- Canada, headquartered in USA  Registered in India in 2001 under section 25 of Indian Companies Act

3. Key Technologies  Treadle Pump (1991)  Drip irrigation (1995)

4. Concept of Product Life Cycle  Different stages of a product – introductory, growth, maturity, decline  Shape of a PLC

5. Phases TP: Introductory1991-1995 Growth1996-1999 Maturity2000 onwards

6.  R&D – Product identification, design, development, testing, refining  Supply chain management – identification, appointment, training, relationship mgmt  Sales – primary (to supply chain) and secondary (to farmer/end user), after sales service  Promotion – elements, mix/strategy Key intervention areas for IDEI

7. Treadle pump Introductory phase 1991 – 1995  A period of slow sales growth as the product is introduced in the market. Profits are non existent in this stage because of the heavy expenses on product introduction.

8. ► Bamboo pump – popular as low in price-where bamboo and mechanics were available ► Concrete pump most stable but heavy ► In areas where there was surface sources – supply chain innovated and provided a stand with metal pump Modified pump for differing contexts Product adaptation ► Product was rejected  Length of cylinder  priming Brought pump from Bangladesh Product identification Outcomes IDEI’s Role – Activities Intervention

9. ► Private supply chain set up in all regions ► Subsidy pushed price of pump higher ► Initiated process of setting up supply chain in all states ► In one region had to work with gover- nment subsidy Supply chain ► Product was virtually given away free ► Cost recovery as low as 10% ► Promoted through a local NGO PromotionOutcomes IDEI’s role – Activities Intervent - ion

10. Marketing strategies adopted in introductory stage ► IDE knew it had a killer product  offering clearly differentiated  met specific needs of customers  low priced  easily available  a quick payback  high return on investment  self selected the poor

11. ► Rapid penetration strategy – launched at a low price (relative to existing options) with high expenditure on promotion.  market was large  price sensitive  unaware of product  manufacturing costs would fall with scale of production. Marketing strategies adopted in introductory stage …

12. Key learnings in introduction stage  Understand local context and needs and adapt product to needs and requirements of the area ► Important to maintain control over the process to avoid dilution

13. Key learnings in introduction stage… ► Need to quickly work through market forces (private sector) ► Withdrawal from a potential area due to dilution of approach not a choice – as high incidence of poverty ► If subsidy is inevitable maintain control over the product and process

14. ► 200% growth in sales ► Appointment of distributors and dealers ► IDEI as a direct player – both as distributor and as selling directly to farmers ► Credit was extended to supply chain and farmers Supply chain creation Outcomes IDEI’s Role – Activities Intervention Growth phase 1996 -1999 A period of rapid market acceptance and expansion

15. ► Installation, maintenance and repair was not a problem ► But spares were sometimes not available ► Village mechanics were trained After sales service ► Very high growth in sales ► Growth in sales was directly proportional to the no. of sales staff ► IDEI staff closely assisted the supply chain in collection of money, order - processing and delivery Supply chain management Outcomes IDEI’s Role – Activities Intervention

16. ► Very high growth in sales ► Enhanced brand image ► Unique positioning in several areas – “vegetable pump”. ► Detailed promotion strategy drawn up ► All promotion expenses borne by IDEI ► Aggressive promotion by IDEI staff PromotionOutcomes IDEI’s Role – Activities Intervent -ion

17. ► Good quality pump sold to farmers at a reasonable price ► Good brand image and high brand recall ► Manufacturers unable to conform to the quality standards were restricted from entering the market – limited competition ► Highly centralized QC ► Tight control on quality of product Quality control (QC)Outcomes IDEI’s Role – Activities Intervention

18. Marketing strategies adopted in growth stage ► Maintained quality ► Price was kept at same level ► Promotion was maintained at high levels – maybe even increased ► High service levels ► Expanded distribution coverage

19. Key learnings in growth stage  Important to put in place an after sales service strategy from the very beginning  A limited positioning could restrict the market  High quality, affordability and high visibility were key to high brand image  Direct service provision may be necessary when the market is weak/ not there  Necessary to quickly move into facilitation  Danger of very high growth rates delaying facilitation role

20. Key learnings in growth stage…  Facilitation in markets is critical  IDEI realized the need to hand over the physical and financial transactions to channel partners - reduce dependence on IDEI staff for sales  Gradual handing over of the demand creation function to the market players must be done as early in the project as possible

21. Key learnings in growth stage…  Build some marketing costs into price of product  Easier to hand over marketing function  Pricing also allows room for competition  Make room for competition  IDEI = max 25% market share

22. Maturity phase – 1999 onwards A period of a slow down in sales growth because the product has achieved acceptance by most early adopters ► Insecurity amongst staff ► Staff turnover increased ► Sales did not fall ► Review of field operations ► Revised staffing structure put in place ► Redundancies reduced Organisational rightsizing Outcomes IDEI’s Role – Activities Intervention

23. ► Manufacturers could maintain a good level of quality. Involvement in product increased ► Quality systems were reassessed with IDEI staff having a minimal role ► Co-branding Quality control ► “sustainability” = “withdrawal” ? ► 1999 – 2001 was declared as the sustainability phase for TP Sustainability of operations Outcomes IDEI’s Role – Activities Intervention

24. ► Sharp drop in sales in Orissa initially ► Sales in other states stable ► STP received a very positive response from the market ► Policy changes (reduction in subsidy) in Orissa led to private sector supply chain being revived ► Introduction of new pump (STP) Supply chain management Outcomes IDEI’s Role – Activities Intervention

25. ► Price – Quality combination pumps  towards local fabrication ► Quality checks reviewed ► Product quality reviewed ► Pricing reviewed Product variants ► Static promotion largely managed by supply chain ► Greater involvement of supply chain in dynamic promotion and marketing ► Gradual handing over of promotion to supply chain Promot - ion Outcomes IDEI’s Role – Activities Intervent- ion

26. Outcomes IDEI’s Role – Activities Intervent- ion ► Fresh insights on smallholder incomes ► External studies were sponsored Impact assessment

27. Marketing strategies adopted in maturity stage ► Shift in role. Reduced interference in market forces with a focus on sustainability ► Product variants, price-quality combination to bring in next level of price sensitive customers

28. Key learnings in maturity stage  A large sales force is difficult to sustain after the growth phase - In maturity phase, reduction in staff need not reduce sales  Important to clearly lay out your strategy leaving no scope for ambiguity and misinterpretation  A continuous dialogue with donors, partners, staff essential.

29. Key learnings in maturity stage…  Quality must always be looked at in the context of affordability, willingness and ability to pay  IDEI could have launched price-quality variants earlier, possibly in growth stage  An external impact assessment study led to not just looking at impacts of our work but also opened the way for future program design

30. From supply chain to value chain (from 2001  ) ► External study highlighted differences in income impact ► Further studies provided factors affecting differences in incomes ► Indepth field studies by IDEI staff ► Donor apprehensions on limited supply chains focus ► Shift in thinking within IDEI – from supply chain to value chains

31. Shifts in IDEI’s role Shifting to supply chain with periodic quality checks by IDEI Highly controlled and centralized Quality control Gradual handing over to supply chain By IDEI staff directly Promotion Facilitates co- ordination and linkages between supply chain members Direct involvement in order processing, monetary transactions Supply chain management NowBefore

32.  Organize training programs using local resource persons from village, researchers, govt officials, etc. Some staff interacted locally Agronomic advice  Train input suppliers  Understand local require- ments and facilitate adequate and appropriate stocking Nil Quality input supply  Facilitate supply chain and new alternative channels to stock spares Trained mechanics Extra spares with product After sales service NowBefore

33.  Assist in selection of crop to be grown/ diversification  Facilitate training on cost benefit analysis, production techniques, best practices Nil Crop selection  Facilitate the setting up of agri- service centres, use existing ICT services available  Train farmers on how to use information for better returns Nil Information and market access NowBefore

34. Key challenges for IDEI ► Change in orientation ► Facilitation role ► Working through others ► Skills and capacities ► Mindsets and attitudes