Published on December 17, 2009
Case study on agriculture marketing : Case study on agriculture marketing To: Prof. S. KULKARNI By: PRANJALI GHANEKAR D-10 Agricultural marketing : Agricultural marketing Agriculture, in the broadest sense means activities aimed at the use of natural resources for human welfare. marketing is a series of activities involved in moving the goods from the point of production to the point of consumption. The agricultural marketing system is a link between the farm and the non-farm sectors. The National Commission on Agriculture, defined agricultural marketing as a process which starts with a decision to produce a saleable farm commodity and it involves all aspects of market structure of system, both functional and institutional, based on technical and economic considerations and includes pre and post- harvest operations, assembling, grading, storage, transportation and distribution. The objectives of an efficient marketing system : The objectives of an efficient marketing system To enable the primary producers to get the best possible returns. To provide facilities for lifting all produce, the farmers are willing, to sell at an incentive price. To reduce the price difference between the primary producer and ultimate consumer. To make available all products of farm origin to consumers at reasonable price without impairing on the quality of the produce. Common defects agricultural marketing in India : Common defects agricultural marketing in India Lack of organization Forced sales Presence of middlemen Numerous market charges Market malpractices Lack of standard weights and measures Inadequate storage No standardization of price and quality Lack of marketing finance Want of proper market information ITC :An Overview : ITC :An Overview Incorporated on August 24, 1910 under the name of 'Imperial Tobacco Company Company rechristened 'ITC Limited‘ in 1974 One of the 8 Indian Companies to feature in ‘Forbes A-list’ for 2004 Only Indian FMCG Company to feature in Forbes 2000 List Among top in : Sustained value creation Operating profits Cash Profits Ranks No. 4 among Indian listed Private Sector Companies by market cap. (@ April 09) No. 1 in FMCG Sector Rated as one of India’s Most Respected Companies (IMRB-Business world Survey 2006) Diversified conglomerate with interests ranging from Tobacco to Hospitality ITC’s Agri Commodity Divison : ITC’s Agri Commodity Divison Farm linkages in 14 states covering Soya, Wheat, Marine products, Coffee etc. Focus on value added agri commodities Unique CRM program in commodity exports Leveraging IT for the transformational ‘e-Choupal’ initiative Rural India’s largest Internet-based intervention Over 40,000 villages linked through 6500 e-Choupals servicing over 4 million farmers Distinctive sourcing capability for ITC’s Foods business Overview of an Indian farmers : Overview of an Indian farmers Caught in a vicious cycle of under development ITC e-Choupal : ITC e-Choupal first e-Choupal -3rd Oct.1999 Target Area so far 40,000 villages, 6500 stores (kiosks), 14 states Wholly owned by ITC Why it become a success ? Only initiative to attempt to combine Services and an Effective Business Model successfully Designed to address the issues such as: Fragmented farms Weak institutions Involvement of intermediaries Information Asymmetry What’s in it for ITC : What’s in it for ITC • Better supply chain for ITC’s Food & Agri-Businesses – Costs, Quality, Traceability • Access to the Rural Markets – Through a Virtuous Cycle created by “Larger Incomes”, and founded on “Trust” that is built • New ITES Business Opportunities – Health, Education, Entertainment, e-Governance • Shareholder Value through Serving Society – Also, the infrastructure serves as a reliable delivery mechanism for resource development initiatives (e.g. water management) •Rural market research e-Choupal services : e-Choupal services Relevant & Real-time Information Customised Knowledge Supply Chain for Farm Inputs Direct Marketing Channel for Farm Produce Marketing Services Governance services Health with Private Health Service Providers Choupal Sagar services ITC’s Supply chain of Soya bean before e- Choupal Initiative : ITC’s Supply chain of Soya bean before e- Choupal Initiative : ITC’s Supply chain of Soya bean after e-Choupal Initiative Supply chain post re-engineering A win-win Deal : A win-win Deal Transaction cost in Mandi Chain (before e-Choupal) : Transaction cost in Mandi Chain (before e-Choupal) Transaction cost in Mandi Chain (after e-Choupal) : Transaction cost in Mandi Chain (after e-Choupal) Synergies for ITC : Synergies for ITC Generation of Goodwill & positive public opinion Better supply chain for ITC’s Food & Agri Businesses Costs, Quality, Traceability Access to the Underserved Rural Markets Through a Virtuous Cycle created by “Larger Incomes”, and founded on “Trust” that is built New ITES Business Opportunities Health, Education, Entertainment, eGovernance Synergy Redefined :The Future : Synergy Redefined :The Future F A R M E R S M A R K E T S Cigarette Trade Marketing capability Branded Foods Expanded FMCG distribution capability e-choupal rural two-way fulfillment capability VPN providing SCM, ERP & CRM capability Lifestyle retailing Education Stationery Matches & Agarbattis Other e-Choupal Initiative : Other e-Choupal Initiative Companies using e-Choupal network : Companies using e-Choupal network Stake holder Analysis : Stake holder Analysis Efficiencies in e-Choupal network : Efficiencies in e-Choupal network Last mile low cost solution Full Service approach Demand aggregation Third party seller Extensive use of technology Access to information about customers Pull based strategy : Other companies Repayment of loan with interest Produce procurement Extension service Loan for pass through to farmers Comparison with Haryali Kisan Bazar Future of e-Choupal : Future of e-Choupal Slide 27: NEW BUSINESSES: 1) Rural jobs and employability 2) Personalised agri services. MORE INTERACTION: Through Choupal Sagars and Haats and via mobile phones NEW TECHNOLOGY: Use of especially enabled mobile phones, analytics, new partner ITC e-Choupal Footprint : ITC e-Choupal Footprint Thank you. : Thank you.