1. INNOVATION
(Automated Urea Vending Machine)
Our categoryfacessome typical challenges whichare asfollows:
Deliveryof productatthe doorstepisabsent.
Researchesshowthatdeliveryof goodsfromCompanytofarm isa latentdemandof the consumers.
Satisfactionwithcurrentpacksize isfine,however,some smallerpackswouldbe welcome. Itcan
alsoencourage trials.
Nonavailabilityof productat the rightplace inthe righttime isa major reasonforbrand shift.
These problemsif addressed carefully cancreate asubstantial differentiationandthe brandmay
come out as a clear winner.
The big idea
AutomatedUreaVending Machines(AUVM)
Objective
- Brand penetration
- Creatingconsumerpreference through24x7availability
- Exploitingfull salespotential of anarea by lockingthe
consumersintheirrespectiveactivity space.
- Increasedbrandvisibility
Creatingbrand differentiation by
- Consumer’saccesstourea24x7
- Reduced travellingand carryingcostfor consumers, thussavings
-Flexibilityof quantity accordingtoonesrequirement
- Urea available alwaysatrightprice.
Format
Anyvillage inourcommandarea withhighureademandisa potential areaforthese AUVMs.
Areasto be selectedonthe basisof farmingpopulation,irrigatedarea,fertiliserconsumptionetc.
Villages whichare a little awayfromthe agri businesshubs canalsobe consideredforthese AUVMs.
Each AUVM ideallyshouldhave ancatchmentarea 5-7 km radius.
Onlyconsumersof thatcatchmentarea will be able toaccess the machine throughtheiraccesscards
Carry bags (withzipper) of differentsizes(5kg,20 kg, 50 kg) will be available atthe AUVMsfor
carryingthe vendedurea.

2. The machineswill be generatingautomatedrefill requisitionstothe control hubonce the refill
quantitycomesbelowacertainlevel. Onreceiptof the requisitionfromamachine,the control
stationplacesa refill ordertothe stockhubsand the machine istoppedupimmediately.
Illustration:
Preferable locationfor the AUVMs:
- Nearto the post office
- Nearto the petrol pumps
- Nearto the SBI branch
These placesshouldbe preferable sitesforthe AUVMsas these have distinctadvantageslike
motor able roadaccess,highvisibilityandfootfall.
Note:
Today almostall the manufacturersorservice providersare providingvending/dispensingsolutions
to bringinconsumerconvenience.Thisisapenetrationstrategythatthese brandsare adopting.
Today we can experience vendinginalmostall the categoriesstartingfromFMCGto service
providerslike the banks. The vendingsolutionsprovidedbythe companiesdoesnotnecessarily
bringin profitbutithelpsincreatinga loyal customerbase.The perfectexample isthatof the
Banks.Today one opens anaccount in a banklookingatthe ATMnetworkthatone is providing.

3. Mother Dairyis anotherbrandwhichhas successfullypenetratedall overthe countrythroughtheir
milkvendingmachines.
Anotherprobable reasonforthe brandstogo the vendingway istoeliminate the humanfactorfrom
the sellingprocess.A vendingsolutioncanreduce the corruption andmanhour cost drastically
whichultimatelyaddsupto the profitmargin.
Japanhas 1 vendingmachine per23 people andthese vendingmachinesvends outalmost
everythingunderthe Sunfromdrinks,snacks,cigarettestoi-pod,under-wearsandlobsters.
Theyevenhave huge vendingmachineswhichcandispense rice in10 kg and 5 kg packs.
http://www.youtube.com/watch?v=Qk3f3XuSwdg
Some facts:
Cost of kg of Urea per50 kg (to the farmers) - Rs.300/-
Average consumptionbyanaverage farmer - 6 bags(300 kgs)
Average expenditure byanaverage farmer - Rs. 1800/-
Assumingapopulationof 200 farmers
in a particularcatchment,the total consumption
will be of (ie 200 farmers consuming300 kgs each) - 60 tonnes
Benefitto company:
Cost savingstocompanyincase ureais sold
throughvendingmachines
- Trade commission - 12000
- Packagingcost - 18000
Therefore,total costsavingpervendingmachine
witha capacity of 60 tonnes - 30000/-
Cost implicationsperAUVM:
Total Refillingcost(60 tonnes) - Rs. 6000/-
Maintenance cost(@Rs.500 perdays) - Rs. 15000/-
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AssumingfreightchargesasRs.60/- per tonne andhandlingchargesasRs 40/- pertonne.
Therefore, savings per machine per month - Rs. 9000/-

4. Short term strategy
As a short-termstrategywe shouldinstall theseAUVM’sinselectedareasonexperimental basis.
Initiallythe AUVMswill be designedtodispense 5kg,20 kgand 50 kgs ureabags.
Mid Term strategy
As a mid- termstrategywe shouldlookatdispensingloose ureaaccordingtothe requirementof the
consumersthroughthese AUVMs.
In thisphase the AUVMs can alsobe designedtodispensemultipleagri –inputsalongwithureasuch
as DAP etc.
The cost saved on packagingwill be passedontothe consumers.
Pitchingpoints to farmers:
- Time saving(perfarmer) perseason - 4 hrs
- Convenience of quantity
- Easy availability
- Cheaperprice
- Eliminationof storage hassle
- Corruptionlesspurchase cycle ie ureaatmarketprice,always
Pitchingpoints to the govt:
The followingpointswillhelpusstrengtheningourpositionwhilelobbyingwiththe govttoget the
necessaryclearances
By installingthese machines:
- 800 man hours can be savedperseason permachine.
- Farmerswill have accesstounadulteratedurea,anytime of the day
- Farmerswill be able tobuyurea inmarketprice withoutpayinganypremium
evenduringpeakseasons
- Urea at the right price,always.
- Urea available atcheaperprice (insecondphase).