Appreciating the imperative of intermediaries in the Indian context, ‘eChoupal’ leverages Information Technology to virtually cluster all the value chain participants, delivering the same benefits as vertical integration does in mature agricultural economies like the USA. Analysis of ITC e-choupal initiative and development of a complete sales management plan for Garagebutler.

1. Sales and Distribution Management
Assignment
Sairam Iyer G08034 GMP XLRI 1/16/2009

2. Sales and Distribution Management
their local language on the weather &
Sales and market prices, disseminate knowledge on
scientific farm practices & risk
Distribution management, facilitate the sale of farm
inputs (now with embedded knowledge)
Management and purchase farm produce from the
farmers’ doorsteps (decision making is
Assignment
now information-based).
Real-time information and customized
ITC e-Choupal knowledge provided by ‘e-Choupal’
enhance the ability of farmers to take
Expanding the Horizon decisions and align their farm output
with market demand and secure quality
& productivity. The aggregation of the
Appreciating the imperative of
demand for farm inputs from individual
intermediaries in the Indian context,
farmers gives them access to high quality
‘eChoupal’ leverages Information
inputs from established and reputed
Technology to virtually cluster all the
manufacturers at fair prices. As a direct
value chain participants, delivering the
marketing channel, virtually linked to the
same benefits as vertical integration does
‘mandi’ system for price discovery, ‘e-
in mature agricultural economies like the
Choupal’ eliminates wasteful
USA.
intermediation and multiple handling.
Thereby it significantly reduces
‘e-Choupal’ makes use of the physical
transaction costs.
transmission capabilities of current
intermediaries – aggregation, logistics,
‘e-Choupal’ ensures world-class quality in
counter-party risk and bridge financing –
delivering all these goods & services
while disintermediating them from the
through several product / service specific
chain of information flow and market
partnerships with the leaders in the
signals.
respective fields, in addition to ITC’s
own expertise.
With a judicious blend of click & mortar
capabilities, village internet kiosks
While the farmers benefit through
managed by farmers – called sanchalaks –
enhanced farm productivity and higher
themselves, enable the agricultural
farm gate prices, ITC benefits from the
community access ready information in
lower net cost of procurement (despite
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3. Sales and Distribution Management
offering better prices to the farmer) Critical Evaluation of e-choupal’s success
having eliminated costs in the supply
chain that do not add value.
Targeting Bottom of the pyramid
Current Status and Execution plans
ITC’s e- choupal initiative is a perfect
example of the bottom of the pyramid
Launched in June 2000, 'e-Choupal', has targeting at work in rural India. Realizing
already become the largest initiative this potential pretty early, ITC has had
among all Internet-based interventions in the first mover advantage along with the
rural India. 'e-Choupal' services today project Shakti of HLL.
reach out to more than 4 million farmers
growing a range of crops - soyabean,
coffee, wheat, rice, pulses, shrimp - in
over 40,000 villages through 6450 kiosks
across 8 states (Madhya Pradesh,
Karnataka, Andhra Pradesh, Uttar
Pradesh, Maharashtra, Rajasthan,
Uttaranchal & Tamil Nadu
The problems encountered while setting
As C.K.Prahald puts it, there is a fortune
up and managing these ‘e-Choupals’ are
at the bottom of the pyramid and that
primarily of infrastructural inadequacies,
there are tremendous benefits to multi-
including power supply, telecom
national companies who choose to serve
connectivity and bandwidth, apart from
these markets in ways responsive to
the challenge of imparting skills to the
their needs. ITC e-choupal stopped
first time internet users in remote and
thinking of the poor as victims and
inaccessible areas of rural India.
instead started seeing them as resilient
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4. Sales and Distribution Management
and creative entrepreneurs as well as the mandi system. Farmers have more
choices to sell their produce, and they
value-demanding consumers.
can exercise the same, empowered by
the information available on the e-
Choupal portal. This has helped improve
From efficient Supply Chain to
their bargaining power even when they
Universal Platform
sell to other channels. The best farming
practices knowledge disseminated
through e-Choupal, together with access
e-Choupal was conceived as a more
to scientists' panel set up by ITC, the
efficient supply chain to source
crop yields are increasing too. On the
agricultural commodities for ITC’s
whole, farmers estimate their
export business. Through these e-
incremental incomes due to e-Choupal
Choupals, individual farmers have been
anywhere between 20 and 50%
able to check the market trading price of
their produce and sell it directly to ITC.
Both the individual farmers and ITC have
Partnerships and organizational
increased their revenues, because the
support
layers of ineffiency no longer have a role
in the transaction between seller and
buyer. Efficiency was achieved through
In e-Choupal, partnerships with the
direct interface with the farmer and by
Public Research System to access the
leveraging the capabilities of traditional
agricultural knowledge generated by
intermediaries. ITC soon realised that
them and with the Public Weather
the same infrastructure can connect
Monitoring System to access the weather
villages efficiently with rest of the world,
information have played a major role in
into or out of villages. Now e-Choupal is
disseminating useful and real time
a universal platform for rural India.
information to the farmers.
In addition to the partnerships, support
of both central government and all the
Bargaining and Economic State governments, where it is operating,
empowerment has been critical. As e-Choupal model
itself is collaborative by design, support
of all partner companies contributed
When the farmers sell to ITC, their substantially to the success of e-
transaction costs are much lower than Choupal.
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5. Sales and Distribution Management
Summary
Corporate Strategic Alignment
The success factors discussed in the
ITC's corporate philosophy to create
above report have been depicted as a
shareholder value through serving
model below. The confluence of all these
society helps make a strategic choice like
factors has made an impact to the script
e-Choupal which have prolonged period
of the ITC e-choupal success story
of investment with an equally long
gestation.
Targeting BOP Partnerships Empowerment
Strategic
Efficient SCM
alignment
ITC's deep insights into agricultural value
chains and socio-cultural dynamics of rural
India helped design this innovative
business model. Then, the ITC businesses
such as foods and agri exports offered
anchor support through large volume off-
take of farm produce from e-Choupal.
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6. Sales and Distribution Management
Customer-oriented selling
Sales Management
Plan Prospecting
Prospecting would play the most
GarageButler
important role as the product is a new
product. Creating awareness and a buzz
about the product would be vital for its
Customer and Market analysis forecasts
success. Since the product is associated
with safety, and a credence attribute, the
threat of security lapses would need to
Since the product is a completely new
be highlighted. A few ways to accomplish
product, and the initial stages of the PLC,
this would be by:
establishing exact requirements in the
market would be tough. Certainly the
figures relating to existing garages and Collaborating with high-end car
•
especially those fitted with automatic dealers and displaying their
door openers can be evaluated. Based on products.
them a rough estimate can be established
Collaborating with real estate
•
about the size of the market. Another
developers and housing societies.
vital aspect is the customer segment
which may ideally form the biggest pie of
House to house campaigns
•
the market is certainly the affluent
conducted by the sales force to
families. Since, traditionally Indian’s do
educate about the safety aspects.
not have a garage space built especially
for parking. In fact in Delhi which is Demonstrations in major
•
chock a block of 4 wheelers; most of the automotive kiosks at roadshows.
cars are parked in front of their
respective owner’s houses, on the These steps along with information
roads!!! dissemination via the print and electronic
media will not only help in establishing
demand but also help the product in
getting into the consideration set of the
customers.
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7. Sales and Distribution Management
Promoting Channel willingness/incentives
Making the information available to the As in the plan there is heavy reliance on
consumers would also influence the channel partners in educating the
decision making process. Some of the customers about the safety aspects and
methods from prospecting can be technical aspects of the product, a
channel incentive scheme will be
replicated to share the information.
required.
Channel design
Advertising
Channel design decision needs to be
made keeping in mind the target segment
and the goals of the channel partners.
Deciding on the number of channels and
Selling
number of levels should be based on the
strategy
initial rough estimated forecast.
Sales force Channel
management management
Distribution Channels
Garagebutler would need a network of
company showrooms and channel
Place utility
partners in the form of auto dealers in
the best market places.
There is a certain place utility aspect
which the customer will be keen on
The product can also be sold through
obtaining. If the decision to obtain a
channels such as:
automatic garage door closer can be
clubbed while buying a luxury/premium
Electrical shops
•
car, the sale process can be closed with
minimum difficulty. Auto component dealerships
•
Home décor outlets
•
Hardware outlets
•
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8. Sales and Distribution Management
Apart from these there also needs to be Garagebutler in the initial phase needs to
a door to door selling in place, in posh leverage its channel partners and the
localities of the towns. Garagebutler also sales-force to start creating a mindspace
needs to leverage the internet and launch by entering the consideration set and
a jazzy website, which delivers all later trust.
information about the product and also
displays testimonials from satisfied
customers. Customers should be able to
buy the product online from their portal.
Search Experience Credence
N.A N.A Trust/loyalty
Appraisal of channel members
The channel members would be
N.A N.A N.A
appraised on the following parameters:
Sales performance
•
Information Salesforce
Demos
dissemination create trust
Servicing
•
Financial discipline
•
Inventory maintenance
•
Selling capabilities
•
Support to the company
•
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