Conquer yourself

E-Choupal Visit Report

Submitted To: Submitted By

Prof. Arpit Loya Akansha Anchliya
M.B.A.IISem
2009-11
Date of Submission
6th sept. 2010
Contents

1. Introduction of E-choupal
2. Background
3. Objectives and Goals of e-choupal
4. The Value Chain
5. Observation
6. 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.