Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Sales Management : Channel Sales


Published on

Published in: Education
  • Be the first to comment

Sales Management : Channel Sales

  1. 1. “ Enhance the channel profitability through effective use of commercial techniques- Use of internet in sales management as an engine of alternate channel of distribution with a case study on how it helps”
  2. 2. A means of distributing products to the marketplace, either directly to the end customer, or indirectly through intermediaries such as retailers or dealers and distributors
  3. 3.  All our FMCG / White goods and many other products reach our retailers effectively through channels only. Channels involved in this process are :  Manufacturer  National Distributor  Regional Distributor  Stockist  Retail showrooms / Shops  Consumers
  4. 4. Internet will extend electronic marketplace and make it electronic ultimate go between, the universal middleman….. Bill gates
  5. 5.  Background of Internet : ◦ Started in 1970’s ◦ Exponential growth from 1990 till date ◦ Strong penetration in the most urban population and limited penetration in rural population. World Region User Penetration % Users Growth 2000 – 2008 Asia 17.2 % 469.0 % Africa 5.6 % 1100.0% Europe 48.5 % 271.2 % North America 73.1 % 128.3 % Latin America 28.6 % 820.7 % Australia 59.9 % 170.2 % Source :
  6. 6.  Internet is one of the greatest revolution of our times and has created a social change  Internet has also changed the way we conduct business  Internet over the period of time has become the successful sales channel to sell products, services and solutions across geographies breaking the traditional limitations.
  7. 7. How it all started ? ◦ ITC group of companies has an yearly turnover of US $ 2 billion and its activities span tobacco, cigarettes, paper & packaging, hotels and agri exports among others. ◦ ITC’s International Business Division (IBD) which is into export of agri products like Soybean, Coffee, Prawns among others. ◦ The IBD division was facing numerous challenges in procurement of agricultural products due to unique Indian agricultural environment characterized by fragmented farms, weak infrastructure and involvement of numerous intermediaries. ◦ ITC initiated a project in 2000 to re-engineer its procurement process with the help of internet platform for procurement turned out to be the much celebrated E-Choupal initiative
  8. 8.  The farmer sells his produce to a small trader in his locality called “Kaccha adat”  The small trader sells it to larger trader called “Pakka adat”  The Pakka adat takes the products to the local mandi and then sells it to mandi traders.  The mandi traders operate through brokers to negotiate sales to big companies like ITC.  This long supply chain results in high procurement costs for companies and lost profit opportunities for farmers due to numerous intermediaries and lack of transparency .  This long supply chain consumes lot of time and resulting in deterioration of quality of products when it finally reaches companies.
  9. 9.  Farmers doesn’t have any control over the process  Lack of transparency  Numerous Intermediaries like traders, agents and mandis  Farmers were not getting a fair deal  Inaccurate weighing  Lot of wastage of products while transportation and unloading  Enough room for malpractices by intermediaries
  10. 10.  Choupal means village gathering place in Hindi .  E-Choupal means a choupal equipped with a computer and internet / VSAT connectivity.  E-choupal acts as a platform for the farmers and it empowers them with all information, products and services to improve farm productivity, negotiate better prices and cut transaction costs.  Farmers can access latest local and global information on weather, scientific farm practices as well as market prices at the village itself through the internet portal in regional languages.  Choupal also facilitates supply of high quality farm inputs as well as purchase farmers commodities at their door step.
  11. 11.  A literate individual / farmer called as “Sanchalak” is elected from among the farmers to run the E-choupal.  Sanchalak’s the lead farmer acts as the interface between the computer and the farmer.  ITC accumulates information regarding weather, modern farming practices and market prices from sources like meteorological department, Agri - universities and local mandi’s (regional market) and upload it into the web portal.  Besides web there are also  All information is customized according to local farmers requirements and provided into the local language through computer set up by ITC in Sanchalak’s house. Sanchalak access this information and facilitates its dissemination to farmers.
  12. 12.  This single point of communication serves an average of more than 500 farmers within a radius of 5 km.  Each e-Chaupal comes with an expenditure of nearly Rs.1.5 lakh with a maintenance cost of somewhere between Rs 5,000 and Rs 10,000 annually.  However, the host farmer- sanchalak incurs some operating expense and gets substantial benefits from all e-Choupal transactions.  From an IT perspective, the solution is one of the landmarks in the rural segment.  The Web-driven project offers scalability and effectiveness of communication mechanism, as well as real-time information and facilitates collaboration between various parties for the spectrum of farmer needs.  The allocation of technology requirements in the project include: VSAT - 52 percent PC - 28 percent Power - 11 percent Printer - 5 percent Technical support - 4 percent. * VSAT : Short for very small aperture terminal, an earthbound station used in satellite communications of data, voice and video signals, excluding broadcast television
  13. 13.  Equipped with better knowledge and information from the E-choupal portal the farmers are better positioned to command fair prices and take decisions on their own with much clarity.  The farmer carries his product sample to the local e-choupal and get a spot quote for his product from the Sanchalak.  If the farmer accepts the quote then he can transport the produce to the ITC collection center which has a direct unloading facility to avoid spilling and wastages and weighbridge for precise weighing  The payment is made in 2 hours and the transportation cost is also reimbursed to the farmers  If the farmer is located in remote area he has the option of selling the produce to sanchalak or the local collection center.
  14. 14.  E-Choupal facilitates the farmers to order and buy farm input products like seeds, fertilizers online  Sanchalak also helps the farmers in placing purchase orders for products like seeds, pesticides and places the orders directly in the internet and thus facilitate supply of high quality farm inputs.  By this the farmers can order and get quality products locally and at a reasonable price.  Sensing a large business opportunity of marketing a range of products to a large rural population many firms have started showing interest in selling through E-Choupal  Recently ITC has partnered with an insurance company to market its insurance products to the farmers on a pilot basis.
  15. 15.  E-Choupal has revolutionized the way the farmers buy and sell their produce in the market  Farmers can decide where to sell their produce and know the market demands thereby enabling them to command better prices  Reduced the transaction costs considerably for the farmers in terms of loading, unloading, transportation etc …  Farmers save on travel time, costs and less wastages  Buying online gives them variety of options and assured quality  Empowerment is the single largest benefit to the farmers
  16. 16.  Tremendous value created to the ITC brand and made a CSR initiative which is much celebrated in the Indian and international arena. It received several accolades and awards for its CSR initiative thereby creating a huge visibility to ITC.  To be specific in terms of benefits to the ITC – IBD business unit is ◦ Successful elimination of numerous intermediaries . ◦ Considerable savings in Commissions paid to intermediaries in the mandi system. ◦ Assured supply of products with good quality. ◦ Created a proven internet channel platform for marketing and selling its other products and its partners products to farmers and can gain substantial financial benefits. ◦ Sourced $15 million worth of products through E-Choupal. ◦ In absolute numbers for example ITC saves Rs.270 per metric ton on soy purchase.
  17. 17.  Information technology has played a major role in making this project a reality since Internet and Web based Technology forms the backbone for this initiative.  Initiated with a Dial-up infrastructure and later moved into a sophisticated VSAT facility for better Internet bandwidth.  To overcome the power problems in rural areas Solar panels were established to generate power and operate the computer  is the website developed and accessed by the farmers to avail the services.
  18. 18.  Largest initiative among all internet interventions in rural India.  An E-Choupal serves an average of 500 farmers in 10 surrounding villages within about 5 km.  6500 E-Choupal’s reaching out to serve 4 Million rural farmers.  Spread over 10 states of India (Madhya Pradesh, Haryana, Uttarakhand, Karnataka, Andhra Pradesh, Uttar Pradesh, Maharashtra, Rajasthan, Kerala and Tamil Nadu)  Performing transactions in products like soybean, coffee, wheat, rice, pulses, shrimp and growing !!!
  19. 19.  All the major players in the process Farmers, Intermediaries, and the company is tightly coupled in this initiative  Farmers are the major beneficiaries of this initiative  The project help in creation of local leadership by appointing Sanchalak’s who become the interface between the farmers and the company. They also act as the advisor to the local farmers  Sanchalak’s also earn a 0.5 % commission per ton of product sourced thereby improving their financial status also.  The Intermediaries called as “Samayojaks” are not removed from the system. They help ITC in setting up the E-choupals by conducting surveys and identifying the best “Sanchalak's”. They earn 1% commission for enabling transportation of goods and collect local price data and maintain them.
  20. 20.  E-Choupal has opened a window of the world to the rural community which was deprived of the facilities and resources from their urban counterparts.  Coupled with higher incomes and changes in farmers attitudes had caused several shifts in the social fabric of village life.  Children use the computers for school work. For eg. In a place called Khasrod 2000 local students use the computer to print their grade sheet there by saving them days of waiting and travel time.  Villagers access global resources to learn about agriculture in other parts of the world and are trying to take action to follow the best practices.  Youngsters use the computer to research on higher studies, colleges, latest movies, mobile phone models and cricket news
  21. 21.  ITC Plans to invest $200 million  ITC has planned to scale up this model to cover 15 states benefiting 1 Lakh villages in 7 years time  Plans to diversify into other products like Horticulture, Rice and Cotton  Plans to market and distribute other firms services related to Micro credit, Insurance, Health care and Education to provide more services to the rural population.
  22. 22.  Thank You