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Itc e Chaupal
Itc e Chaupal
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
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.
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 are leveraged but they are not able to exploit the information asymmetry (unlike that in a conventional 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-Choupal. 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 Sanchalak 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 only 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.
Government of Indias 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.
(In Millions)
Year
Total Population
1951
361.1
1.25
298.6 (82.7)
69.9 (71.9) 99.6 (76.0) 78.2 (62.2) 92.5 (62.5) 110.7 (59.7) 127.3 (54.4) na
27.3 (28.1) 31.5 (24.0) 47.5 (37.8) 55.5 (37.5) 74.6 (40.3) 106.8 (45.6) na
97.2
1961
439.2
1.96
360.3 (82.0)
131.1
1971
548.2
2.20
439.0 (80.1)
125.7
1981
683.3
2.22
523.9 (76.7)
148.0
1991
846.4
2.16
628.9 (74.3)
185.3
2001
1028.7
1.97
742.6 (72.2)
234.1
2011* 1210.2
1.64
833.1 (68.8)
Na
32 33 34 35
Damn & Diu Delhi Lakshadweep Pondicherry All-India 49.61 59.68 53.82 54.88 33.23 52.79 53.25 51.32 26.22 42.36 50.06 44.48 12.41 34.95 41.46 38.86
Traditionally, these commodities were procured in mandis (major agricultural marketing centers in rural areas of India), where the middleman used to make most of the profit. These middlemen used unscientific and sometimes outright unfair means to judge 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.
* 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 sanchalaks 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 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 model is quite different from the other models, 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 exchange One of the factors leading to e-Choupals success is ITCs 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 convince 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 individuals and groups. In the sense of itc e-chaupal social capital includes educating the 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 thereby ensuring that farmers will get to know reasonable rates for their products without giving any 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 of 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.
SUSTAINABLE OUTCOMES:PROFIT AND RELIABLE RETURN ON INVESTMENT:As ITC is one of the major players in FMCG sector in the country so they 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.
SEGMENTATION:- it is the process of dividing a heterogeneous market, in to several submarkets 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 companys 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. Today ABHISHEK JAIN Soya Farmer & e-Choupal Sanchalak Dahod Village, Raisen District, Madhya Pradesh we are a community of e-farmers with access to daily prices of a variety of crops in India and abroad this helps us to get the best price. We can also find out about many other important things weather forecasts, the latest farming techniques, crop insurance, etc. eChoupal has not only changed the quality of our lives, 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.
Product
Product is something which exist in physical form but in our project we dont have physical product but its service that we render to farmers. Product is ITC e-chaopal its 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 dont 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
CONCLUSION: The e-Choupal has applied information and Communication technology to the advantage of Indias 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 agriculture. 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 ITCs 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.