TABLE OF CONTENTS
1. 2. 3. 4. 5. 6. 7. 8.
ITC- As a group Farmers conditions in India ITC- E chopal Farmers under ITC E- chopal Effect of itc E-chopal Slen model STP Marketing Mix
THE ITC GROUP The ITC group is one of India's foremost private-sector companies, with a market ca pitalization of approximately $4 billion and annual revenues of$2 billion. ITC has a diversified presence in tobacco, hotels, paperboards, specialty papers, packaging, agri-business, branded apparel, packaged foods, and other fast-moving consumer goods (FMCG) products. Spurred by India's need to generate foreign exchange, ITC's international business division was created in 1990 as an agri-trading company with the goal to "offer the world the best of India's produce." Today, that division is a $150 million company that trades in commodities such as feed ingredients, food grains, coffee, black pepper, edible nuts, marine products, and processed fruits. When ITC entered this industry, produce was bought and crushed by small-scale crushers who were also traders. ITC began with buying and exporting DOC (de-oiled cake, as that from soya). In a year, it realized it needed a greater presence in the chain to better understand product dynamics. ITC then began renting processing-plant time and buying soya from mandis.
The Indian Farmer Introduction:
India is an agricultural country. Seventy percent of the Indian people are farmers. They are the backbone of the nation. They produce the food-crops and the oil-seeds. They produce the commercial crops. They produce some raw materials for our industries. Hence, they are the life -blood of our nation.
Their daily life:
The Indian farmer is busy day and night. He works in sun and shower. He ploughs the land. He sows the seeds. He keeps watch over the crops at night. He guards the crops against the stray cattle. He guards the harvest against the thieves. He reaps the crops and carries them home. Bullocks are the precious possession of the Indian farmer. He takes care of his bullocks. His wife and children help him in his work.
Their financial condition:
The Indian farmer is poor. His poverty is well-known to the entire world. He cannot get two full meals a day. He wears a piece of coarse cloth. He cannot give education to his children. He cannot give fine dress to his sons and daughters. He cannot give ornaments to his wife. The farmer's wife has to manage with a few pieces of cloth. She also works at home and in the field. She cleans the cowshed. She gathers cowdung and pats it into pancakes. She drives them in sun and piles them up; because she will use them as fuel during the wet monsoon months. The Indian farmer is harassed by the village touts. He is harassed by the money-lenders and the tax collectors. Hence, he cannot enjoy his own yield.
The Indian farmer does not possess a suitable residence. He has no good house to live in. He lives i a straw-thatched cottage. His room is very small and dark.
Itc e-Choupal:The e-Choupal experience highlights that ITC platforms can provide rural connectivity and ecommerce support. These platforms have enormous potential provided they are conceptualized for the specific needs of the community and business. Some of the elements that helped the eChoupal to work successfully are discussed below: Comprehensive knowledge of rural markets: Rural markets are both economic and social networks and there is a strong connection between the operation of social and economic transactions. Understanding the operations is vital before the systems are conceptualized. Use of local population, as much as possible helped the network to get the acceptance closely. Designing a Win-Win transaction model: The success of e-Choupal comes from the condition in which both the farmer and the processor share the benefits coming out of the elimination of middle men and hence due to timely information availability. Leveraging the logistics channels: The existing logistics of the rural markets a re leveraged but they are not able to exploit the information asymmetry (unlike that in a con ventional market). In that sense e-choupal uses the local institutions but eliminates the information asymmetry that they used previously.
Selection of Sanchalak: Both the selection of Sanchalak and the acceptance of Sanchalak by the community are very critical for the success of e-Cho upal. ITC used a trial and error method for developing the procedure for selecting Sanchalaks. In the platform terminology Sanchalak is the interface for maintaining the platform. For the farmer the Sa nchalak is the e-Choupal. Training and sensitizing him for the crucial role has been the main reason for the acceptance of the Sanchalak by the farmers. Sanchalak, thus, acts as the coordinator of the knowledge community, and a representative of farming community. Evolving an appropriate user interface: The Technology interface used in rural areas has to be very simple. Interface has to be tried for rural settings and onl y after its validation it has to be used. Firstly, one has to understand the user pattern and secondly, it has to be tried, tested and validated. For example, farmers do not understand the concept of insurance. e-Choupal evolved a simple interfacing arrangement that a farmer can understand. Bottom-up model for entrepreneurship: e-Choupal encourages enormous amount of creativity at the local level along with local entrepreneurship stimulation. The farmer and Sanchalak are free to use the e-choupal and develop new uses. e-Choupal unleashes the creative spirit in the rural India.
Farmers under e-Choupal 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 hubs and agro-extension services, ITC is transforming the way farmers do business, and the way rural markets work. Today 4 million farmers use e-Choupal to advantage – bargaining as virtual buyers’ cooperatives, adopting best practices, matching up to food safety norms. Being linked to futures markets is helping small farmers to better manage risk. e-Choupal ha s been specially cited in the
Government of India’s Economic Survey of 2006-07, for its transformational impact on rural
lives. The network of 6,500 e-Choupal centers spread across 40,000 villages has emerged as the gateway of an expanding spectrum of commodities leaving farms – wheat, rice, pulses, soya, maize, spices, coffee, and aqua-products. The reverse flow carries FMCG, durables, automotives and banking services back to villages. e-Choupal
Now
States covered
10
Villages covered
40,000
No. of e-Choupals
6,500
Farmers e-empowered
4 million
e-Choupal leverages the Internet to empower small and marginal farmers – who constitute a majority of the 75% of the population below the poverty line.
Population and Agricultural Workers
(In Millions)
Year
Total
Average
Rural
Population
Annual
Population
Agricultural Cultivators
Workers
Exponential
Agricultural
Growth Rate
Laborers
Total
(%) 1951
1961
1971
1981
1991
2001
2011*
361.1
439.2
548.2
683.3
846.4
1028.7
1210.2
1.25
1.96
2.20
2.22
2.16
1.97
1.64
298.6
69.9
27.3
(82.7)
(71.9)
(28.1)
360.3
99.6
31.5
(82.0)
(76.0)
(24.0)
439.0
78.2
47.5
(80.1)
(62.2)
(37.8)
523.9
92.5
55.5
(76.7)
(62.5)
(37.5)
628.9
110.7
74.6
(74.3)
(59.7)
(40.3)
742.6
127.3
106.8
(72.2)
(54.4)
(45.6)
833.1
na
na
(68.8)
97.2
131.1
125.7
148.0
185.3
234.1
Na
Percentage of Population Below Poverty Line (Combined Rural and Urban) No.
States/UTs
1973-74
1977-78
1983-84
1987-88
1993-94
1999-
2004-
2004-
2000
05
05
1
Andhra Pradesh
48.86
39.31
28.91
25.86
22.19
15.77
15.8
11.1
2
Arunachal Pradesh
51.93
58.32
40.88
36.22
39.35
33.47
17.6
13.4
3
Assam
51.21
57.15
40.47
36.21
40.86
36.09
19.7
15.0
4
Bihar
61.91
61.55
62.22
52.13
54.96
42.60
41.4
32.5
5
Chhattisgarh
40.9
32.0
6
Goa
44.26
37.23
18.90
24.52
14.92
4.40
13.8
12.0
7
Gujarat
48.15
41.23
32.79
31.54
24.21
14.07
16.8
12.5
8
Haryana
35.36
29.55
21.37
16.64
25.05
8.74
14.0
9.9
9
Himachal Pradesh
26.39
32.45
16.40
15.45
28.44
7.63
10.0
6.7
10
Jammu & Kashmir
40.83
38.97
24.24
23.82
25.17
3.48
5.4
4.2
11
Jharkhand
40.3
34.8
12
Karnataka
54.47
48.78
38.24
37.53
33.16
20.04
25.0
17.4
13
Kerala
59.79
52.22
40.42
31.79
25.43
12.72
15.0
11.4
14
Madhya Pradesh
61.78
61.78
49.78
43.07
42.52
37.43
38.3
32.4
15
Maharashtra
53.24
55.88
43.44
40.41
36.86
25.02
30.7
25.2
16
Manipur
49.96
53.72
37.02
31.35
33.78
28.54
17.3
13.2
17
Meghalaya
50.20
55.19
38.81
33.92
37.92
33.87
18.5
14.1
18
Mizoram
50.32
54.38
36.00
27.52
25.66
19.47
12.6
9.5
19
Nagaland
50.81
56.04
39.25
34.43
37.92
32.67
19.0
14.5
20
Orissa
66.18
70.07
65.29
55.58
48.56
47.15
46.4
39.9
21
Punjab
28.15
19.27
16.18
13.20
11.77
6.16
8.4
5.2
22
Rajasthan
46.14
37.42
34.46
35.15
27.41
15.28
22.1
17.5
23
Sikkim
50.86
55.89
39.71
36.06
41.43
36.55
20.1
15.2
24
Tamil Nadu
54.94
54.79
51.66
43.39
35.03
21.12
22.5
17.8
25
Tripura
51.00
56.88
40.03
35.23
39.01
34.44
18.9
14.4
26
Uttar Pradesh
57.07
49.05
47.07
41.46
40.85
31.15
32.8
25.5
27
Uttarakhand
39.6
31.8
28
West Bengal
63.43
60.52
54.85
44.72
35.66
27.02
24.7
20.6
29
A&N Islands
55.56
55.42
52.13
43.89
34.47
20.99
22.6
17.6
30
Chandigarh
27.96
27.32
23.79
14.67
11.35
5.75
7.1
3.8
31
Dadra & Nagar
46.55
37.20
15.67
67.11
50.84
17.14
33.2
30.6
Haveli
32
Damn & Diu
15.80
4.44
10.5
8.0
33
Delhi
49.61
33.23
26.22
12.41
14.69
8.23
14.7
10.2
34
Lakshadweep
59.68
52.79
42.36
34.95
25.04
15.60
16.0
12.3
35
Pondicherry
53.82
53.25
50.06
41.46
37.40
21.67
22.4
18.2
All-India
54.88
51.32
44.48
38.86
35.97
26.10
27.5
21.8
Problems Before eChoupal was introduced:
Traditionally, these commodities were procured in ―mandis‖ (major agricultural marketing
centers in rural areas of India), where the middlema n used to make most of the profit. These middlemen used unscientific and sometimes outright unfair means to jud ge the quality of the product to set the price. Difference in price for good quality and inferior quality was less, and hence there was no incentive for the farmers to invest and produce good quality output. With eChoupal, the farmers have a choice and the exploitative power of the middleman is neutralized.
Facilities by itc e-chaupal ITC platform that facilitates flow of information and knowledge, and suppo rts market transactions on line. * It transmits Information (weather, prices, news), * It transfers Knowledge (farm management, risk management) * It facilitates sales of Farm Inputs (screened for quality) and * It offers the choice of an alternative Output-marketing channel (convenience, lower transaction costs) to the farmer right at his doorstep * It is an interlocking network of partnerships (ITC + Met Dept + Universities + Input COs + Sanyojaks, the erstwhile Commission Agents) bringing the best-inclass in information, knowledge and inputs. e-Choupal is, thus, distributed transaction platform that brings together sellers, buyers along with information and service providers. e-choupal is a model with a number of non-conventional characteristics namely:
* customer centric * capable of being used for many commodities and multiple transactions * easily scalable once it is verified * uses local talent and local people and develops local leaders * can be extended to local as well as global procurers * stimulates local entrepreneurs to extend their innovativeness * uses all the existing institutions and legal frameworks and * many others can join the market as transaction time is low.
EFFECTS OF E-CHOUPAL
ITC Limited has now established computers and Internet access in rural areas across several agricultural regions of the country, where the farmers can directly negotiate the sale of their produce with ITC Limited. The PCs and Internet access at these centres enable the farmers to obtain information on mandi prices, good farming practices and place orders for agricultural inputs like seeds and fertilizers. This helps farmers in improving the quality of produce, and also helps in realizing a better price. Each ITC Limited kiosk having an access to Internet is run by a sanchalak — a trained farmer. The computer housed in the sanchalak’s house is linked to the Internet via phone lines or by a VSAT connection and serves an average of 600 farmers in the surrounding ten villages within about a 5 km radius. The sanchalak bears some operating cost but in return earns service fee for the e-transactions done through his e-Choupal. The warehouse hub is managed by the same traditional middle-men, now called samyojaks, but with no exploitative power due to the reorganised role. Indeed these middlemen make up for the lack of infrastructure and fulfill critical jobs like cash disbursement, quantity aggregation and transportation. Due to the eChoupal services, farmers have seen a rise in their income levels because of 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 kn owledge is offered to the farmers despite heterogeneous cultures, climates and scales of production. Farmers can get real-time information despite their physical distance f rom the ―mandis‖. The system saves procurement costs for ITC Limited. The model is quite different from the other mod els, as the farmers do not pay for the information and knowledge they get from e-Choupals. The principle of the e-Choupals is to
inform, empower and compete. At the same time ITC Limited also has extracted value in four steps to make the model sustainable and scaleable: 1. elimination of non-value added activities 2. differentiated product through identity preserved supply chains 3. value added products traceable to farm practices 4. e-market place for spot transactions and support services to futures exch ange One of the factors leading to e- Choupal’s success is ITC’s managerial expertise in executing complex projects and managing costs. ITC Limited adopted a flexible project management approach called ―roll out, fix it, and scale up‖ to deal with uncertainties in a pioneering model.
There are 6,500 eChoupals today. ITC Limited plans to scale up to 20,000 eChoupals by 2012 covering 100,000 villages in 15 states, servicing 15 million farmers. SLEN MODEL FOR ITC:-
INVESTMENTS:I.
HUMAN CAPITAL:Human capital is the stock of competencies, knowledge, social and personality
attributes, including creativity, embodied in the ability to perform labor so as to
produce economic value. In case of itc e – chaupal the human capital includes the skills that the itc company representatives (the very first human capital is who generated this great idea, who all design the software application, who installed the setup and server in different villages, who all setup infrastructure, who all educate farmers and convinc e to use portal, who all update the data on the portal correctly and all those who all are shares the valuable information with the farmers.)
II.
SOCIAL CAPITAL:In sociology, social capital is the expected collective or economic benefits derived from the preferential treatment and cooperation between individua ls and groups. In the sense of itc e-chaupal social capital includes educating t he farmers about using technology or making them more IT friendly more it make them aware of various agricultural practices or more productive way to do farming so they can produce more and more they also convey them about the weather forecast, most important they convey the farmers about the current rates of agricultural products and marketing conditions thereb y ensuring that farmers will get to know reasonable rates for their products without giving an y commission to middle man in revert they are earning more and more faith of farmers and also the fair mode of trading with farmers for essential goods.
III.
FINANCIAL CAPITAL:Financial capital can refer to money used by entrepreneurs and businesses to buy what they need to make their products or provide their services or to that sector o f the economy based on its operation, i.e. retail, corporate, investment banking, etc. As itc e-chaupal is an idea of a itc company that is why ITC act as its parent company and all the investment done by it only ,on all the expenditures.
IV.
ECOLOGICAL CAPITAL:Natural capital is the extension of the economic notion of capital (manufactured means of production) to goods and services relating to the natural environment. Natural capital is thus the stock of natural ecosystems that yields a flow of valuable ecosystem goods or
services into the future. In the case of ITC e-chaupal ecological or natural capital is trading of all the agricultural products from the farmers and market.
NETWORK:-
INVESTORS ENTERPRINAURE FARMERS COMMUNITIES
SUSTAINABLE OUTCOMES:-
PROFIT AND RELIABLE RETURN ON INVESTMENT:As ITC is one of the major players in FMCG sector in the country so the y need agricultural products as the basic ingredients of their final products so for that they need to trade with farmers very frequently, buy helping the farmers through ITC E- chaupal they will win the loyalty of the customers and instead of buying at higher rate through middle men they can directly purchase the product at lesser price from the farmers directly which will really help them in reducing the cost of final products and able to generate more profit.
LOCAL ECONOMIC DEVELOPMENT AND TRADE:ITC E-chaupal plays a vital role in economic development and trade by educating the farmers about the current market price so farmers can sell it at right price or according to the market price. It also provides a fair platform for trading which is a great move to boost the economical development at bottom of pyramid.
ENHANCE QUALTY OF LIFE:-
By a fair mode of trading farmers are able to generate more and more profit which somewhere and somehow helping in enhancing the quality of life of farmers. Not only because of fair trading ITC E- chaupal helps them to learn how to increase productivity or how to get more yield which insure that they will sustain better life.
INDIVIDUAL QUALITY AND SELF RELIANCE:-
ITC e-chaupal some where promises the farmers and society for their further upliftment and also boost the economic development by the means of fair trading and providing the valuable information regarding the agricultural practices more over they also tried to make farmers more IT friendly, in holistic it promises the sustainable view of future.
STP(SEGMENT TARGETING AND POSITIONING)
SEGMENTATION:- it is the process of dividing a heterogeneous market, in to several sub-
markets or segments, each of which tends to be homogeneous in all significant aspects. The decision is based on the premise, the different preferences. STP for ITC-E Chaupal can b done on following basis:1. GEOGRAPHIC
Under geographic the very first segmentation is done on the basis of region as ITC echaupal majorly looks for the regions of north India d middle, north east India where the most of the Indian farmers lives and further on the basis of village size. 2. DEMOGRAPHIC Under demographic the segmentation is done on the basis of occupation they segmented those whose occupation is farming or deals in agriculture products or also those who go to mandis for day to day trading for selling agricultural products and buying seeds. 3. BEHAVIOURAL Under this category further segmentation is done on the basis of benefits sought, means those who look for value for money, convenience, quality, services etc. ITC e- choupal carries really value for these kinds of people.
TARGETING:-Once segmentation is done, the marketer needs to evaluate each segment to
decide which segments to target. Targeting involves evaluating various segments and selecting how many and which ones to target. The three aspects of targeting is evaluation, selection and coverage:-
in the process of targeting company should b clear with segment opportunity with reference to their short term and long term objectives and also the same time company should also examine its resources and capability of servicing rural market. In case of ITC E-choupal they targeted their segmented market after the complete evaluation of each segments and also their capabilities and resources. That is why they have taken calculated risk by conducting small pilot projects which provide an opportunity to evaluate the target segment behavior towards the services being offered and now those pilots have been transformed into mega rural marketing model.
POSITIONING:-Positioning is the act of designing the company’s offering the image so that it
occupies a distinctive place in the mind of target segment. Companies have to plan positions that give their products the necessary advantage in the target market. Positioning serves as a platform for the brand to reach the target.
Before ITC introduced us to e-Choupal, we were restricted to selling our produce in the local mandi. We had to go through middlemen and prices were low. ITC trained me to manage the Internet kiosk and I became the e-Choupal Sanchalak in my village. T oday ABHISHEK JAIN
we are a community of e-farmers with access to daily prices of a variety of crops in India and abroad – this
Soya Farmer
helps us to get the best price. We can also find out
& e-Choupal Sanchalak
about many other important things – weather forecasts,
Dahod Village,
the latest farming techniques, crop insurance, etc. e-
Raisen District,
Choupal has not only changed the quality of our lives,
Madhya Pradesh
but our entire outlook.
so above mentioned lines clears everything about the positioning of ITC-E chopal in the minds of farmer, how much they trust and believe on the this.
Marketing mix:7 P’s of Service Marketing The purpose for segmenting a market is to allow your marketing/sales program to focus on the subset of prospects that are "most likely" to purchase you’re offering. If it is done properly this
will help us to ensure the highest return for the marketing/sales expenditures incurred. The 7P’s of Marketing are:1). Product 2). Price 3). Place 4). Promotion
Product Product is something which exist in physical form but in our project we don’t have physical product but its service that we render to farmers. Product is ITC e-chaopal it’s a portal which provides the platform to the farmers which provides information regarding the better yield, weather forecast and the current market scenario and the trading rates which empowers the farmers in terms of making them self dependent by eradicating middle men.
Price
Price is like something which very sensitive thing in rural market for using portal they don’t charge anything because some where the company will going to benefit for that
even they also reimburse the transportation price till ITC hub
Place Place is actually the location where your product has to be placed in front of the customer i.e. what location you have chosen for the product to the customer. As ITC idea to make ITC Echopal available in the radius of 5 km of all the villages those all are agriculture sensitive.
Promotion ITC-E chopal more based on mouth to mouth and convincing face to face promotion,as
ITC E- chopal teams visited town to town for its promotion.
CONCLUSION:
The e-Choupal has applied information and Communication technology to the advantage of India’s small, marginal and resource-poor farmers who have hitherto operated and transacted in
unorganized markets. Distance, social discrimination and formal regulations often keep small and marginal and resource-poor farmers out of the market. The e-Choupal scheme initiates a reversal in this trend and empowers the farmers by proving reliable information and access to markets where they can get competitive prices for their produce. Besides, e-Choupal has favorably impacted the supply-chain activities related to a griculture. Produce quality and volumes have risen. Prices of farm inputs have declined and quality of input has risen. Prices of farm output have risen. Small and poor farmers have been the principle beneficiaries. Their cost of transactions has declined. Their incomes have risen. What is more significant is that, the small marginal and resource-poor farmers have typically derived these in their locales. e-Choupal ensures world class quality in delivering all these goods and services through several products/ services specific partnership with the larders in the respective fields in additions to ITC’s own
expertise. While the farmers benefit through enhanced farm productivity and higher farm gate price, ITC benefits from the lower net cost of procurement [despite offering better prices to the farmers] having eliminated costs in the supply chain that do not add value.
