PGDM (2021-2023)

Paper Code: C-210

Modern Retail Management (MRM)
Online Mid Term Examination; Term-II
Full Marks: 20; Time: 90 minutes

(Instructions: Answer all the questions. Numbers in the right hand margin indicate marks.

1. Read the following case and answer the questions given below: (10)

Through its e-Choupal initiatives, ITC had aimed to confer the power of expert knowledge on even the
smallest individual farmer in the year 2000. e-Choupal delivers real-time information and customised
knowledge to improve the farmer's decision-making ability, thereby better aligning farm output to
market demands; securing better quality, productivity and improved price discovery. The model helps
aggregate demand in the nature of a virtual producers' co-operative, in the process facilitating access
to higher quality farm inputs at lower costs for the farmer. The e-Choupal initiative also creates a
direct marketing channel, eliminating wasteful intermediation and multiple handling, thus reducing
transaction costs and making logistics efficient.

But four years after it was kicked off, ITC's e-choupal model, which raised visions of transforming
Indian agriculture, had run into strong opposition. Traders in 220 galla mandis (grain auction centres)
in Madhya Pradesh downed their shutters for a day to protest against the "unjust choupal system",
which allowed large companies like ITC to bypass mandis and buy from farmers.

But a group of soya farmers in the state who are part of the choupal system have taken up cudgels
on behalf of ITC and threatened to reveal the "real truth" to the chief minister and mandi
commissioner and at a press conference in the same week. According to an official in ITC Choupal,
"Obviously the traders will protest. They cannot make the same kind of money now... [But] we are
happy to see an end of an unjust mandi system that exploited farmers."

Sources say the battle had been brewing since the e-choupal began proliferating rapidly across MP.
Today, in some mandis, a quarter of soya now goes through e-choupals, of which there are 1,750 in
9,000 villages reaching 1.5 million farmers. ITC had placed Net-enabled PCs in homes of farmers in
the rural hinterland. This allowed them to find prices of soya prevailing at local mandis and in
international markets, as well as what ITC was ready to pay at its local buying centres. So the farmer
did not have to travel to the mandi to find the price. He also had options: sell to ITC or at the mandi,
or defer the sale.

Word got around that ITC's prices tended to be above mandi prices. "If mandi prices dropped, we
realised the ITC prices did not drop as fast," says a lead farmer in Pipalrawa. For traders, the
transparency made speculation difficult. Also, unlike at mandis, at the ITC buying centres the weights
were right, the sale quick and the payment in cash.

From the outset ITC had taken care to co-opt traders and give them new roles. They were paid a
commission for arranging volumes and offering storage and logistics support. Their help was sought
in appointing sanchalaks. Though 85 traders became samyojaks in MP, some of the big ones didn't.
Now, four years later, they are realising the power of transparency and choice, the hard way.

a) Do you think this initiative by ITC should create any tussle between the farmers and traders of MP?
Explain.

b) What is your opinion regarding ITC e- choupal being a trend setter in the agro- retailing of India?

Answer any two of the following questions: (2 x 5)

2. What is Retail Life Cycle? Considering organized Indian ice cream market at Rs 400 crores and
promising growth, suggest to Baskin Robbins which is interested to hit the malls.

3. What are the different options available for private labels in retail branding? What are the advantages
to manufacturers like Raymonds selling their products through their own stores?

4. What are the different steps in choosing a store location? Explain Huff’s model of trading area
analysis in terms of store locations.

Wish you good luck