Conquer yourself

E-Choupal Visit Report

Submitted To: Submitted By Prof. Arpit Loya Akansha Anchliya

M.B.A.IISem 2009-11

Date of Submission6th sept. 2010

Contents

1. Introduction of E-choupal2. Background3. Objectives and Goals of e-choupal4. The Value Chain5. Observation6. Marketing

4 P’s of Marketing Product Place Price Promotion

7. Conclusion

Introduction

ITC’s e-choupal has reached out to over four million farmers growing a range of crops such as soybean, coffee, wheat, rice and pulses in over 40,000 villages through 6,500 kiosks across 10 state including Madhya Pradesh, Uttar Pradesh, Rajasthan, Maharashtra, Karnataka, Andhra Pradesh and Tamil Nadu. The reverse flow carries FMCG, durables, automotives and banking services back to villages. By 2010, e-choupal network plans to cover over 1,00,000 villages, representing one sixth of rural India, and create more than 10 million e-farmers. ITC’s strategic intent is to develop e-choupal as a significant two-way multidimensional delivery channel, efficiently carrying goods and services out of and into rural India. By progressively linking the digital infrastructure to a physical network of rural business hub and agro-extension services, ITC is transforming the way farmer do business, and the way rural market work.

Background

The Gyandoot intranet community network was conceptualized on 1 January 2000, and installed and made operational within less than two months in the tribal dominated, poverty-stricken Dhar district in the Central Indian state of Madhya Pradesh. Gyandoot in Hindi means "purveyor of knowledge". The four pillars on which the Gyandoot community network was established were People, Content, Services and Server.

Objectives and Goals To create a cost-effective, replicable, economically self-reliant and financially

viable model for taking the benefits of IT to the rural masses. To provide self-employment through entrepreneurship to local rural youth. To improve the quality, speed and sensitivity of the state delivery apparatus

towards the needs of local citizen-customers. To search for the potential of rural markets in the digital domain. To ensure equal access to emerging technologies for marginalized segments of the

society. To improve the quality, speed and sensitivity of the state delivery apparatus

towards the needs of local citizen-customers. To analyze the processes and modalities involved in the socio-cultural

environment while taking technology to the deprived communities.

The Value Chain - Farm to Factory Gate

Observations It was carrying multiple brands and most of ITC brands such as John Players were

displayed prominently. Mall was good standard considering it was targeting rural populace. It was

spacious and all kind of stuff groceries to apparel was available. Customers would not buy inferior quality. Rural & small town customers are

getting aspirational and dumping of inferior quality will not fetch buyers. There was no promotion in the city. Since the mall was very close to city, some

amount of promotion would have helped increased footfalls. Not sure about that local needs have been actively studied or researched or it was

just a mechanism to sell what the retailer has without concern for local needs and aspirations.

All banners are written in Hindi language for easily understandable by the rural area peoples

The mall was not crowded but customers were coming on a regular basis.

Marketing

Distribution of FMCG product in the rural market through the e-choupal network gained traction with the addition of personal care products to the portfolio. These products have been well received by the rural community. Customers should buy a product or services if he/she needs it or it is satisfies his/her need. There has a value for money for the customer and for the targeted customer. If value is being delivered to wrong target segment then the target segment needs to be approached or enticed to the shop at e-choupals. Also, value-add for customer can be in the form of lower prices, good quality and convenience for shopper. For small buys visiting sagar choupal is not possible because of large distance from villages and small towns. Also, large buying happens only seasonally and hence, demands for goods and service needs to be generated throughout the year.

4 P’s of Marketing Mix

.Products Choupal sagar is seen as place for farmers but 50% of income generation happens in non farming sector and hence, products and services need to designed and promoted for farm as well as non-farm population. Hence, apart from designing services such as soil testing, crop advisory, other services to tap non farmers and sold to nearby cities. The would lead to enhanced incomes for farmers and stronger, non seasonal and year round relationship with customers ultimately leading to regular, frequent and high value buying.

Place The retail outlet should be accessible to customer when and where they need it. In current format it is impossible for customer to come from interior areas, tehsils etc. Also, major issue is connectivity. Villagers from rural areas and towns don’t have proper road connectivity. Also, it needs to be accessible to customers when they visit city. If it is too far from bus stand or railway station, then customers will not be aware about it and also will not come into consideration set of customers. The sample case of Choupal Sagar at DHAR is not near to railway station or bus stand. Neither the buses carrying passengers to the city of DHAR pass through that route.ITC needs to plan the layout and location very strategically to attract right customer and in right numbers.

Price The consumers are value conscious, unless quality and quantity are adjusted to suit price sensitivity of customers, selling to customers is not possible. Also, Choupal Sagar should look at option of providing credit in offseason for easing the price sensitivity. Unless, it brings variety and volume into business and efficiency in supply chain, it cannot demand price cuts from manufacturers other than ITC. ITC should work on the practice of EDLP(Everyday low pricing) and guarantees the lower prices than the existing markets. Unless consumers see the benefit Vis a Vis existing markets, real consumer pull will not be possible.

Promotion

Currently, there is no clearly orchestrated promotional plan visible on ground. The products and services need to be adequately promoted and communicated in rural masses to ensure the consumer pull for all their needs

Process Internal background processes are very important for success of any retail and distribution format. The processes behind running for the retail such as Billing. Customer service, stock replenishment, product display, customer feedback are integral to reducing costs and customer orientation. Low cost of operation rather low costs in every sphere of retailing- merchandising, managing supplies are essential parameters for achieving breakeven and long term sustainability.

Conclusion The introduction of e-Choupal services, farmers have seen a rise in their income levels because of a rise in yields, improvement in quality of output, and a fall in transaction costs. Even small farmers have gained from the initiative. Customized and relevant knowledge is offered to the farmers despite heterogeneous cultures, climates and scales of production. Farmers can get real-time information despite their physical distance from the mandis. The system saves procurement costs for ITC Limited. The farmers do not pay for the information and knowledge they get from e-Chou pals; the principle is to inform, empower and compete. At the same time ITC Limited has obtained benefits from the programme:

Elimination of non value added activities. Differentiated product through identity preserved supply chains. Value added products traceable to farm practices. E-market place for spot transactions and support services to futures exchange.