Itc- All about it

8/10/2019 Itc- All about it

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Marketing Management Assignment

ITC (CIGARETTES & CIGARS)

Submitted To, Submitted By,


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INTRODUCTION

ITC is one of India's foremost private sector companies with a market capitalisation of US $

45 billion and a turnover of US $ 7 billion. ITC is rated among the World's Best Big

Companies, Asia's 'Fab 50' and the World's Most Reputable Companies by Forbes magazine

and among India's Most Valuable Companies by Business Today. ITC ranks among India's '10

Most Valuable (Company) Brands', in a study conducted by Brand Finance and published by

the Economic Times. ITC also ranks among Asia's 50 best performing companies compiled by

Business Week.

Multiple Drivers of Growth

ITCs aspiration to create enduring value for the nation andits stakeholders is manifest in its

robust portfolio of traditional and greenfield businesses encompassing Fast Moving

Consumer Goods (FMCG), Hotels, Paperboards & Specialty Papers, Packaging, Agri-Business,

and Information Technology. This diversified presence in the businesses of tomorrow is

powered by a strategy to pursue multiple drivers of growth based on its proven

competencies, enterprise strengths and strong synergies between its businesses.

The competitiveness of ITCs diverse businesses rest on the strong foundations of

institutional strengths derived from its deep consumer insights, cutting-edge Research &

Development, differentiated product development capacity, brand-building capability,

world-class manufacturing infrastructure, extensive rural linkages, efficient trade marketing

and distribution network and dedicated human resources. ITCs ability to leverage internal

synergies residing across its diverse businesses lends a unique source of competitive

advantage to its products and services.

Within a relatively short span of time, ITC has established vital brands like Aashirvaad,

Sunfeast, Dark Fantasy, Delishus, Bingo!, Yippee!, Candyman, mint-o, Kitchens of India in the

Branded Foods space; Essenza Di Wills, Fiama Di Wills, Vivel, Vivel Cell Renew, Engage and

Superia in the Personal Care products segment; Classmate and Paperkraft in Education &Stationery products; Wills Lifestyle and John Players in the Lifestyle Apparel

business; Mangaldeep in Agarbattis and Aim in the Safety Matches segment. This growth

has been rated by a Nielsen Report to be the fastest among the consumer goods companies

operating in India.

Creating Enduring Value

Today ITC is the country's leading FMCG marketer, the clear market leader in the Indian

Paperboard and Packaging industry, a globally acknowledged pioneer in farmer

empowerment through its wide-reaching Agri Business, the second largest Hotel Chain in


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India and a trailblazer in 'green hoteliering'. ITC Infotech, a wholly-owned subsidiary, is one

of India's fast-growing IT companies in the mid-tier segment. This portfolio of rapidly

growing businesses considerably enhances ITC's capacity to generate growing value for the

Indian economy.

ITC's Agri-Business is one of India's largest exporters of agricultural products. The ITC

Groups contribution to foreign exchange earnings over the last ten years amounted to

nearly US$ 6.0 billion, of which agri exports constituted 57%. The Company's 'e-Choupal'

initiative has enabled Indian agriculture significantly enhance its competitiveness by

empowering Indian farmers through the power of the Internet. This transformational

strategy has already become the subject matter of a case study at Harvard Business School

apart from receiving widespread global acclaim.

As one of India's most valuable and respected corporations, ITC is widely perceived to be

dedicatedly nation-oriented. Chairman Y C Deveshwar calls this source of inspiration "a

commitment beyond the market". In his own words: "ITC believes that its aspiration to

create enduring value for the nation provides the motive force to sustain growing

shareholder value. ITC practices this philosophy by not only driving each of its businesses

towards international competitiveness but by also consciously contributing to enhancing the

competitiveness of the larger value chain of which it is a part." ITC group directly employs

more than 31,000 people and the Company's Businesses and their value-chains generate

around 6 million sustainable livelihoods many of whom live at the margin in rural India.

Global Exemplar in Sustainability

Acknowledged as a global exemplar in sustainability, ITC is the only enterprise in the world,

of comparable dimensions to be carbon-positive, water-positive, and solid waste recycling

positive. A testimony to its commitment to a low carbon growth path - over 41 % of the

total energy requirements of ITC is met from renewable sources. All ITC's premium luxury

hotels are LEED (Leadership in Energy and Environmental Design) Platinum certified making

it the "greenest luxury hotel chain" in the world. ITC's Paperboards and Paper business is an

icon of environmental stewardship.

ITC's production facilities and hotels have won numerous national and international awards

for quality, productivity, safety and environment management systems. ITC was the first

company in India to voluntarily seek a corporate governance rating.

The Company continuously endeavours to enhance its wealth generating capabilities in a

globalising environment to consistently reward more than 4,70,000 shareholders, fulfill the

aspirations of its stakeholders and meet societal expectations.


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History and Evolution

ITC was incorporated on August 24, 1910 under the name Imperial Tobacco Company of

India Limited. As the Company's ownership progressively Indianised, the name of the

Company was changed from Imperial Tobacco Company of India Limited to India Tobacco

Company Limited in 1970 and then to I.T.C. Limited in 1974. In recognition of the Company's

multi-business portfolio encompassing a wide range of businesses - Fast Moving Consumer

Goods comprising Foods, Personal Care, Cigarettes and Cigars, Branded Apparel, Education

and Stationery Products, Incense Sticks and Safety Matches, Hotels, Paperboards & Specialty

Papers, Packaging, Agri-Business and Information Technology - the full stops in the

Company's name were removed effective September 18, 2001. The Company now stands

rechristened'ITC Limited,'where ITC is todayno longer an acronym or an initialised form.

A Modest Beginning

The Company's beginnings were humble. A leased office on Radha Bazar Lane, Kolkata, was

the centre of the Company's existence. The Company celebrated its 16th birthday on August

24, 1926, by purchasing the plot of land situated at 37, Chowringhee, (now renamed J.L.

Nehru Road) Kolkata, for the sum of Rs 310,000. This decision of the Company was historic

in more ways than one. It was to mark the beginning of a long and eventful journey into

India's future. The Company's headquarter building, 'Virginia House', which came up on that

plot of land two years later, would go on to become one of Kolkata's most venerated

landmarks.

1925: Packaging and Printing: Backward Integration

Though the first six decades of the Company's existence were primarily devoted to the

growth and consolidation of the Cigarettes and Leaf Tobacco businesses, ITC's Packaging &

Printing Business was set up in 1925 as a strategic backward integration for ITC's Cigarettes

business. It is today India's most sophisticated packaging house.

1975: Entry into the Hospitality Sector - A 'Welcom' Move

The Seventies witnessed the beginnings of a corporate transformation that would usher in

momentous changes in the life of the Company. In 1975, the Company launched its Hotels

business with the acquisition of a hotel in Chennai which was rechristened 'ITC-

Welcomgroup Hotel Chola' (now renamed My Fortune, Chennai). The objective of ITC's

entry into the hotels business was rooted in the concept of creating value for the nation. ITC

chose the Hotels business for its potential to earn high levels of foreign exchange, create

tourism infrastructure and generate large scale direct and indirect employment. Since then

ITC's Hotels business has grown to occupy a position of leadership, with over 100 owned

and managed properties spread across India under four brands namely, ITC Hotels - LuxuryCollection, WelcomHotels, Fortune Hotels and WelcomHeritage.
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ITC Hotels recently took its first step toward international expansion with an upcoming

super premium luxury hotel in Colombo, Sri Lanka. In addition, ITC Hotels also recently tied

up with RP Group Hotels & Resorts to manage 5 hotels in Dubai and India under ITC Hotels'

5-star 'WelcomHotel' brand and the mid-market to upscale 'Fortune' brand.

1979: Paperboards & Specialty Papers - Development of a Backward Area

In 1979, ITC entered the Paperboards business by promoting ITC Bhadrachalam Paperboards

Limited. Bhadrachalam Paperboards amalgamated with the Company effective March 13,

2002 and became a Division of the Company, Bhadrachalam Paperboards Division. In

November 2002, this division merged with the Company's Tribeni Tissues Division to form

the Paperboards & Specialty Papers Division. ITC's paperboards' technology, productivity,

quality and manufacturing processes are comparable to the best in the world. It has also

made an immense contribution to the development of Sarapaka, an economically backward

area in the state of Andhra Pradesh. It is directly involved in education, environmental

protection and community development. In 2004, ITC acquired the paperboard

manufacturing facility of BILT Industrial Packaging Co. Ltd (BIPCO), near Coimbatore, Tamil

Nadu. The Kovai Unit allows ITC to improve customer service with reduced lead time and a

wider product range.

1985: Nepal Subsidiary - First Steps beyond National Borders

In 1985, ITC set up Surya Tobacco Co. in Nepal as an Indo-Nepal and British joint venture. In

August 2002, Surya Tobacco became a subsidiary of ITC Limited and its name was changed

to Surya Nepal Private Limited (Surya Nepal). In 2004, the company diversified into

manufacturing and exports of garments.

1990: Paperboards & Specialty Papers - Consolidation and Expansion

In 1990, ITC acquired Tribeni Tissues Limited, a Specialty paper manufacturing company and

a major supplier of tissue paper to the cigarette industry. The merged entity was named the

Tribeni Tissues Division (TTD). To harness strategic and operational synergies, TTD was

merged with the Bhadrachalam Paperboards Division to form thePaperboards & Specialty

Papers Division in November 2002.

1990: Agri Business - Strengthening Farmer Linkages

Also in 1990, leveraging its agri-sourcing competency, ITC set up the Agri Business

Division for export of agri-commodities. The Division is today one of India's largest

exporters. ITC's unique and now widely acknowledged e-Choupal initiative began in 2000

with soya farmers in Madhya Pradesh. Now it extends to 10 states covering over 4 million

farmers. Also, through the 'Choupal Pradarshan Khet' initiative, the agri services vertical has

been focusing on improving productivity of crops while deepening the relationship with the

farming community.


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2002: Education & Stationery Products - Offering the Greenest products

ITC launched line of premium range of notebooks under brand Paperkraft in 2002. To

augment its offering and to reach a wider student population, the Classmate range of

notebooks was launched in 2003. Classmate over the years has grown to become India's

largest notebook brand and has also increased its portfolio to occupy a greater share of the

school bag. Years 2007- 2009 saw the launch of Practical Books, Drawing Books, Geometry

Boxes, Pens and Pencils under the 'Classmate' brand. In 2008, ITC positioned the business as

the Education and Stationery Products Business and launched India's first environment

friendly premium business paper under the 'Paperkraft' Brand. 'Paperkraft' offers a diverse

portfolio in the premium executive stationery and office consumables segment. In

2010, Colour Crew was launched as a new brand of art stationery.

2000: Lifestyle Retailing - Premium Offerings

ITC also entered the Lifestyle Retailing business with the Wills Sport range of international

quality relaxed wear for men and women in 2000. The Wills Lifestyle chain of exclusive

stores later expanded its range to include Wills Classic formal wear (2002) and Wills Clublife

evening wear (2003). ITC also initiated a foray into the popular segment with its men's wear

brand, John Players, in 2002. In 2006, Wills Lifestyle became title partner of the country's

most premier fashion event - Wills Lifestyle India Fashion Week - that has gained

recognition from buyers and retailers as the single largest B-2-B platform for the Fashion

Design industry. To mark the occasion, ITC launched a special 'Wills Signature', taking the

event forward to consumers.

2000: Information Technology - Business Friendly Solutions

In 2000, ITC spun off its information technology business into a wholly owned subsidiary, ITC

Infotech India Limited, to more aggressively pursue emerging opportunities in this area.

Today ITC Infotech is one of India's fastest growing global IT and IT-enabled services

companies and has established itself as a key player in offshore outsourcing, providing

outsourced IT solutions and services to leading global customers across key focus verticals -

Banking Financial Services & Insurance (BFSI), Consumer Packaged Goods (CPG), Retail,

Manufacturing, Engineering Services, Media & Entertainment, Travel, Hospitality, Life

Sciences and Transportation & Logistics.

2001: Branded Packaged Foods - Delighting Millions of Households

ITC's foray into the Foods business is an outstanding example of successfully blending

multiple internal competencies to create a new driver of business growth. It began in August

2001 with the introduction of 'Kitchens of India' ready-to-eat Indian gourmet dishes. In

2002, ITC entered the confectionery and staples segments with the launch of the

brands mint-o and Candyman confectionery and Aashirvaad atta (wheat flour). 2003witnessed the introduction of Sunfeast as the Company entered the biscuits segment. ITC


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entered the fast growing branded snacks category with Bingo! in 2007. In 2010, ITC

launched Sunfeast Yippee! to enter the Indian instant noodles market. In just over a decade,

the Foods business has grown to a significant size under seven distinctive brands, with an

enviable distribution reach, a rapidly growing market share and a solid market standing.

2002: Agarbattis & Safety Matches - Supporting the Small and Cottage Sector

In 2002, ITC's philosophy of contributing to enhancing the competitiveness of the entire

value chain found yet another expression in the Safety Matches initiative. ITC now markets

popular safety matches brands like iKno,Mangaldeep and Aim.

ITC's foray into the marketing of Agarbattis (incense sticks) in 2003 marked the

manifestation of its partnership with the cottage sector. Mangaldeep is a highly established

national brand and is available across a range of fragrances like Rose, Jasmine, Bouquet,

Sandalwood and 'Fragrance of Temple'.

2005: Personal Care Products - Expert Solutions for Discerning Consumers

ITC entered the Personal Care Business in 2005. In eight years, the Personal Care portfolio

has grown under'Essenza Di Wills', 'Fiama Di Wills', 'Vivel' and 'Superia' brands which have

received encouraging consumer response and have been progressively extended nationally.

In May 2013, the business expanded its product portfolio with the launch of Engage - one of

India's first range of 'couple deodorants'

2010: Expanding the Tobacco Portfolio

In 2010, ITC launched its handrolled cigar, Armenteros, in the Indian market. Armenteros

cigars are available exclusively at tobacco selling outlets in select hotels, fine dining

restaurants and exclusive clubs.


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BUSINESSES


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FMCG


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CIGARETTES & CIGARS

ITC is the market leader in cigarettes in India. With its wide range of invaluable brands, ITC

has a leadership position in every segment of the market. ITC's highly popular portfolio of

brands includes Insignia, India Kings, Lucky Strike, Classic, Gold Flake, Navy Cut, Players,

Scissors, Capstan, Berkeley, Bristol, Flake, Silk Cut, Duke & Royal.

The Company has been able to consolidate its leadership position with single minded focus

on continuous value creation for consumers through significant investments in creating &

bringing to market innovative product designs, maintaining consistent & superior quality,

state-of-the-art manufacturing technology, & superior marketing and distribution. With

consumers & consumer insights driving strategy, ITC has been able to fortify market

standing in the long-term, by developing & delivering contemporary offers relevant to the

changing attitudes & aspirations of the constantly evolving consumer.

ITC's pursuit of international competitiveness is reflected in its initiatives in overseas

markets. In the extremely competitive US market, ITC offers high-quality, value-priced

cigarettes and Roll-your-own solutions. In West Asia, ITC has become a key player in the GCC

markets through its export operations.

ITC's cigarettes are manufactured in state-of-the-art factories at Bengaluru, Munger,

Saharanpur, Kolkata and Pune, with cutting-edge technology & excellent work practices

benchmarked to the best globally. An efficient supply-chain & distribution network reaches

India's popular brands across the length & breadth of the country.


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MARKETING STRATEGY

POSTER ADVERTISMENT

Tobacco advertising is readily visible and utilises billboards, bus stops, print, and point of

sale. The prominent advertising themes are aspirational, associating cigarette brands with

success, wealth, achievement, bravery, and western lifestyles. Women are featured in

cigarette advertisements and may be targeted indirectly using images of style, culture,

elegance, and via light brand extensions. Youth are potentially exposed to substantial

amounts of cigarette advertising at point of purchase. For example, cigarettes and cigarette

advertisements are placed in close proximity to candies and snacks. Many of these

strategies can facilitate attempts to circumvent the advertising ban.

The Gold Flake advertising campaign uses images associated with the arts, such as a violin or

a saxophone, with a gold and red colour scheme layout . The Wills campaign includes many

brand extensions. The super premium brand Wills Insignias advertisement features an open

pack of cigarettes on a navy blue background with the byline where quality touches

infinity. In the premium segment, Wills Classic and Wills Milds were advertised on

storefront signs illustrating horses and the byline discover a passion. Wills Navy Cut

advertising campaign portrays a man and a woman together under the slogan made foreach other. Wills Silk Cut, a cut so right, a blend so fine, advertising campaign features an

open pack of cigarettes on a sky blue background

WOMEN IN ADVERTISEMENT

The Gold Flake campaign employs images that create an association with the arts such as a

paintbrush, a violin, a saxophone, and a red scarf, and a slogan smooth, exquisite, timeless

but then all art is. These images create an aura of elegance, culture, and style

associations that are used to allure women to cigarette smoking.9ITC has also launched a

light version of its Gold Flake brand..
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TARGETING MINORS

target children and adolescents indirectly since sale of tobacco products to minors became

illegal in May 2003. Marketing to minors occurs at many levels. Point of sale marketing is

probably the most prominent strategy in India, where retail outlets for tobacco range from

the street side peddler to convenience stores to specialty stores. The street side peddlers

abound in India; they usually sell all forms of tobacco products, in addition to confectionary

goods, fast food, drinks, etc. Thus their customers are of all ages and both sexes. Frequently,

the tobacco products are placed next to candies. Posters advertising cigarettes are displayed

prominently at low heights. Both tobacco product and promotion placement at these retail

outlets are easily accessible to minors


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MARKETING MIX (4 PS)

PRODUCT

Product is anything which is offered to market for attention, acquisition and consumption

that will satisfy the needs and wants of customers.

LEVELS OF PRODUCT

Product package: Product refers to anything that marketer offers to customer which will

result in to satisfaction of need or want of pre determine target segment.

1) CORE BENEFIT: The fundamental level is core benefit. The service or benefit that

customer is really buying is known as core benefit. Customer prefer cigarette for referesh

ment, its core benefit given to customer

Itcwills menthol rush. It provides centre fresh gel flavour into the filter of menthol rush.

2) BASIC PRODUCT : The marketer must turn the core benefit into basic produc t withoutbasic product marketer can not provide the core benefit to customer.


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3) EXPECTED PRODUCT: It combination of attribute and features that customer normally

expected while consuming product..

4) AUGMENTED PRODUCT: Its that exceeds customer expectation .customer enjoy the

services. Customer enjoy the cigar ; and provide highest level of satisfaction and prove more

beyond customer Expectation. Raw tobacco, cigarette, Gutkha, bidi.

5) POTENTIAL PRODUCT: Products, which does not existence in the market but expected in

future . Add Something new ,innovative in tobacco industry which is not available but

provide in future.

CLASSIFICATION OF PRODUCTS

1) Consumer Goods

The goods which is purchased by final consumer for personal consumption.

Types of consumer goods

A. Convenience goods

B. Shopping goods

C. Specialty goods

D. Unsought goods

PRICE

Price is monetary value of product that consumer need to pay on purchase of product.

1). List Price:- Here need to prepare the sales price to different distributors and customers

of different types of tobacco likes bidi, cigar, cigarette, gutkha. We select price by various

method of pricing.

2).Discounts:- If customers make payment in cash is a liable for certain discount. At hot rate

discount should provide on purchase of product. Here need to keep certain factors in mind

while providing discount


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a). Type of purchase,

b). Quality of product,

c). Quantity purchase by the customer.

3). Payment period:- If a purchase made on credit base in how much time period customer

should liable to pay amount. Generally it should be short term like 10 days, 15 days, 1

month.

4). Credit term:- If a customer purchase product on credit, he should require to follow

certain terms and condition.

Price List Of ITC Ltd.


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PLACEPlace (or placement) decisions are those associated with channels of distribution that serve

as the means for getting the product to the target customers. The distribution system

performs transactional, logistical, and facilitating functions. Distribution decisions include

market coverage, channel member selection, logistics, and levels of service. Place is about

getting the products to the customer. Some examples of distribution decisions include

distribution channels, market coverage (inclusive, selective, or exclusive distribution),

specific channel members, inventory management, warehousing, distribution centers, order

processing and transportation.

Meaning

Place includes all industry activities involved in making the product available to target

consumers. It includes: channels of distribution, the extent of market coverage, managing

discrepancies of quantity and assortment, retail locations, and the management of

inventory, transportation, and logistics. Ultimately, Place is involved in making the product

convenient for the target customers to purchase.


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Coverage

Distribution channels can be defined by the number of levels involved. Each layer of

marketing intermediaries, or "middlemen," that performs some work in bringing the

product and its ownership closer to the final buyer is a channel level. Because the producer

and the final consumer both perform some work, they are part of every channel. We use the

number of middlemen to indicate the length of a channel, as depicted below:

Channel 1 called a direct marketing channel, has no middlemen. It consists of a industry

selling directly to customers. For example, Lands' End sells direct through mail order, by

telephone, and via the Internet.

Channel 2 called indirect marketing channels. It contains one intermediary level which, in

consumer markets, is typically a retailer. For example, the makers of televisions, cameras,

tires, furniture, and many other products sell their goods directly to large retailers such as

Wal-Mart and Sears, which then sell the goods to final consumers.


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PROMOTION

The tobacco industry engages in a comprehensive marketing strategy to create the

impression that tobacco use is widespread and acceptable. These strategies include direct

advertising (ads on TV or in magazines and at point of sale) and indirect advertising such as

sponsorship of sports and concerts, product placement, and brand stretching. In India,

despite an advertising ban having passed in 2003, cigarette companies in particular

consistently exploite loopholes in the law and relaxed enforcement to market their products

and attract new users. Examples include:

In 2010, Godfrey Phillips India broke into the Indian chewing industry with the launch of

Pan Vilas, a premium pan masala brand, and planned to invest Rs 1 billion ($US 22 million)

over three years on marketing the product. Nita Kapoor, vice president of marketing and

corporate affairs said in reference to promoting Pan Vilas that the company would pushthis product aggressively to penetrate deeper in the market.71 Considering recent declines

in cigarettes sales, the successful marketing of a pan masala brand will allow Godfrey

Phillips easier access to the smokeless tobacco market. The company plans to launch a zarda

product by the end of 2011.

The ITCgroup uses two of its popular cigarette brands, Wills and John Player, as the brand

name of lifestyle retailing stores that sell clothing. The Wills Lifestyle brand is a well-

established brand and also sponsors Indias annual Fashion Week73, stretching the

cigarette brand name so that it is associated with the glamour of fashion and not just thedeadly tobacco product.

In 2009, 700 buses in Mumbai carried pan masala advertisements. While advertising non -

tobacco pan masala products is not illegal in India, their presence on buses is considered

surrogate advertisement for tobacco products because the same brand name and packaging

exists for both pan masala and chewing tobacco products.

What Is Surrogate Advertising?

Surrogate advertising is advertising which embeds a brand or product message inside an

advertisement which is ostensibly for another brand or product. For example, a cigarette

company might issue public service announcements relating to a topic such as lung cancer,

using the company's logo or distinctive brand colors in the ads so that people are exposed to

the company's branding without seeing an explicit ad for the company's product. The

company would justify the advertisement by claiming that it's an example of social

responsibility.


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Sales Promotion

In this kind of advertisement they attract the man by showing the effect of the real man

personality.

in this kind of advertisement they show s the power of the man who smoke the cigarettewho is really feels like real man Sales promotion consists of a diverse collection of incentive

tools, mostly, short term designed to stimulate quicker of greater purchase of particular or

service by consumers or a trade.

Advertising and personal selling often work closely with another promotion tools, Sales

promotion consists of short terms incentive to encourage the purchase or sale of a product

credit services, where as advertising and personal selling offer reason to buy a product or

service. The sales promotion invites and rewired quick response Advert ising says Buy our

product but sales promotion says By it. now. It effects is for a short term only and dose

not builds a long- term brand preferences. Sales promotion is a short-term objective, which

is used to increase the sales.

Sales promotion made by the tobacco is the discount given on the purchase of its tobaccos.

Example: - turkiesh blend using sales promotion tools as a gift to consumer and give one

whole package with lighter and Cadbury chocolate and also give lottery coupon and winner

gets prize in sales promotion.


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Advertising

Advertising includes any information or persuasive message carried by a non- personal

medium and paid for by a sponsor above product is in the same way identified in the

message.

Traditional mass media television and magazines are most commonly used. it saves as a

substitute for a sales person talking to an individual prospect.

In this kind of advertisement they shows love for each othere but reason for love is cigarette

so ,they use the indirect advertisement for the promotion of tobacco.

Like we can see the pan masala advertisement on television but they mostly sells there

gutka brand by showing the pan masala breand.


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STP

SEGMENTATION

Market segmentation is the act of sub dividing a market into distinct sets of customers who

merit attention. Targeting these customers for marketing by evaluating, selecting and

concentrating becomes a corollary to segmentation. Market segmentation assumedimportance in the context of intense competition market is bombarded with. A market

consists of buyers, and buyer differs in one or more ways. They may differ by their wants,

resources, locations, products requirements. These variables have to be considered in the

process of segmentation.

There is different level of market segmentation. They are mass marketing; segment

marketing and micro marketing markets can be segmented on the geographical basis,

demographical basis, psychological basis, behavioral basis and loyalty status.

1).Geographical segmentation

Geographic segmentation means dividing the market in to different segments based on the

geographic variables such as Nations, States, Cities, towns If we talk about tobacco.

Products, they have the products we can categorized these products in to the Geographic

Segmentation.
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2). Psychographic segmentation

Psychographic segmentation divides buyers into groups based on social class, lifestyle or

personality characteristics.

It divides buyers into different groups base on social class, lifestyle, or personalitycharacteristics

Example: - life style: - wills Insigna for royal class people.

Example: - Personality: - Marlboro- it is for rugged personality.

3). Demographic segmentation

Demographic segmentation consists of dividing the market into groups based on variables

such as Age, Gender, Life Cycle, Income, Occupation, Education, Religion, and Nationality...

Demographic segmentation means divide market into groups based on variable such as age,

gender, life cycle, income, occupation, education, region, generation and nationality.

Example: - gender(women) Pine, miss cigarette which is targeted to female.

Income

Income is very useful in demographic segmentation. We use this variable for its product and

sale different price packages, for e.g. .its come out with tobacco products which affordable

so the poor consumer can buy a tobacco.

Example:- Bristol(ITC) for lower class Gold flake, wills(ITC) for middle class Jesalmer(g.p) for

higher class

4).Behavioural segmentation

Behavioural segmentation divides buyers into groups based on their knowledge, attitudes,

uses or responses to a product.

Behavioural Segmentation divides buyers into groups based on their knowledge, attitudes,uses or responses to a product. Many Marketers believe that behaviour variables are the

best starting point for building Market segments.


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TARGETING

(1) Single Segment Concentration:- Single segment concentration means company is

targeting only one segment.

(2) Selective Specialization:- Selective specialization means company is targeting all three

market and each market they have targeted one segment.

(3) Product Specialization:- Product specialization means company is targeting only one

mallet & producing all the product for that market.

Example: - ITC. It only produce the cigarette and Kothari brothers only focus on Gutkha.

(4) Market Specialization:- Market specialization means company is targeting one market

and producing all the product for that market

POSITIONING

Positioning is the act of designing companies offering & image to occupier the distinctive

place in the mind of target segment.

Cigarette,s/tobacco Positioning Strategy

tobacco is worlds No.2 industry because It has a good area for production in india of, &

Product Differentiation :- in tobacco many company producing different product. for benefit

of different taste of consumer here .

ex;-gold flake come out with the taste of honey and other hand four square come out with

extra strong tobacco taste which create different brand position in mind of consumer.

Image Differentiation:- Here company create distinctive image in mind of consumer .so theycan easily devlope brand image better way in mind of customer .

ex- ITC come out with their premium brand like a wills insigne for executive class people ofr

create good image different in compare to its competitor.

Channel Differentiation:- how company easily reach to its customer to compare its

competitors. company benefit where less channel in distribution .so .they reduce the cost of

commission and brokerage .

People Differentiation:- The person who are promoting the tobacco product must be skillfulland aggressive in nature. They must be given specific training so that they can easily


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different than other competitors. The person who involve in the activity are very well

trained, responsive in nature, Knowledgeable, courtesy.

Ex: ITC have their owned representative which are promoting the product and give to

information to dealer how to promote their brand so they can create different than

competitors.


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CONJOINT ANALYSIS

Conjoint analysis is a statistical technique used inmarket research to determine how people

value different features that make up an individual product or service.

The objective of conjoint analysis is to determine what combination of a limited number of

attributes is most influential on respondent choice or decision making. A controlled set of

potential products or services is shown to respondents and by analyzing how they make

preferences between these products, the implicit valuation of the individual elements

making up the product or service can be determined. These implicit valuations (utilities or

part-worths) can be used to create market models that estimate market share, revenue and

even profitability of new designs.

Conjoint originated inmathematical psychology and was developed by marketing professorPaul Green at the Wharton School of the University of Pennsylvania and Data Chan. Other

prominent conjoint analysis pioneers include professorV. Seenu Srinivasanof Stanford

University who developed a linear programming (LINMAP) procedure for rank ordered data

as well as a self-explicated approach, Richard Johnson (founder ofSawtooth Software)who

developed the Adaptive Conjoint Analysis technique in the 1980s and Jordan Louviere

(University of Iowa) who invented and developed Choice-based approaches to conjoint

analysis and related techniques such asMaxDiff.

Today it is used in many of the social sciences and applied sciences

includingmarketing,product management,andoperations research.It is used frequently in

testing customer acceptance ofnew product designs, in assessing the appeal

ofadvertisements and inservice design.It has been used inproduct positioning,but there

are some who raise problems with this application of conjoint analysis (see disadvantages).

Conjoint analysis techniques may also be referred to as multiattribute compositional

modelling, discrete choice modelling, or stated preference research, and is part of a broader

set of trade-off analysis tools used for systematic analysis of decisions. These tools include

Brand-Price Trade-Off,Simalto, and mathematical approaches such asAHP, evolutionary

algorithms orRule Developing Experimentation.

Information collection

Data for conjoint analysis are most commonly gathered through a market research survey,

although conjoint analysis can also be applied to a carefully designedconfigurator or data

from an appropriately designtest market experiment. Market research rules of thumb apply

with regard to statistical sample size and accuracy when designing conjoint analysisinterviews.
http://en.wikipedia.org/wiki/Market_researchhttp://en.wikipedia.org/wiki/Mathematical_psychologyhttp://en.wikipedia.org/wiki/V_Srinivasanhttp://en.wikipedia.org/wiki/V_Srinivasanhttp://en.wikipedia.org/wiki/V_Srinivasanhttp://en.wikipedia.org/wiki/Sawtooth_Softwarehttp://en.wikipedia.org/wiki/MaxDiffhttp://en.wikipedia.org/wiki/Marketinghttp://en.wikipedia.org/wiki/Product_managementhttp://en.wikipedia.org/wiki/Operations_researchhttp://en.wikipedia.org/wiki/New_product_developmenthttp://en.wikipedia.org/wiki/Advertisinghttp://en.wikipedia.org/wiki/Service_designhttp://en.wikipedia.org/wiki/Positioning_(marketing)http://en.wikipedia.org/w/index.php?title=Simalto&action=edit&redlink=1http://en.wikipedia.org/wiki/Analytic_hierarchy_processhttp://en.wikipedia.org/wiki/Evolutionary_algorithmshttp://en.wikipedia.org/wiki/Evolutionary_algorithmshttp://en.wikipedia.org/wiki/Rule_Developing_Experimentationhttp://en.wikipedia.org/wiki/Configuratorhttp://en.wikipedia.org/wiki/Test_markethttp://en.wikipedia.org/wiki/Test_markethttp://en.wikipedia.org/wiki/Configuratorhttp://en.wikipedia.org/wiki/Rule_Developing_Experimentationhttp://en.wikipedia.org/wiki/Evolutionary_algorithmshttp://en.wikipedia.org/wiki/Evolutionary_algorithmshttp://en.wikipedia.org/wiki/Evolutionary_algorithmshttp://en.wikipedia.org/wiki/Analytic_hierarchy_processhttp://en.wikipedia.org/w/index.php?title=Simalto&action=edit&redlink=1http://en.wikipedia.org/wiki/Positioning_(marketing)http://en.wikipedia.org/wiki/Service_designhttp://en.wikipedia.org/wiki/Advertisinghttp://en.wikipedia.org/wiki/New_product_developmenthttp://en.wikipedia.org/wiki/Operations_researchhttp://en.wikipedia.org/wiki/Product_managementhttp://en.wikipedia.org/wiki/Marketinghttp://en.wikipedia.org/wiki/MaxDiffhttp://en.wikipedia.org/wiki/Sawtooth_Softwarehttp://en.wikipedia.org/wiki/V_Srinivasanhttp://en.wikipedia.org/wiki/Mathematical_psychologyhttp://en.wikipedia.org/wiki/Market_research


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The length of the research questionnaire depends on the number of attributes to be

assessed and the method of conjoint analysis in use. A typical Adaptive Conjoint

questionnaire with 20-25 attributes may take more than 30 minutes to complete. Choice

based conjoint, by using a smaller profile set distributed across the sample as a whole may

be completed in less than 15 minutes. Choice exercises may be displayed as a store fronttype layout or in some other simulated shopping environment.

Analysis

Depending on the type of model, different econometric and statistical methods can be used

to estimate utility functions. These utility functions indicate the perceived value of the

feature and how sensitive consumer perceptions and preferences are to changes in product

features. The actual estimation procedure will depend on the design of the task and profiles

for respondents, in the type of specification, and the scale of measure for preferences (it

can be ratio, ranking, choice) which can have a limited range or not. For rated full profile

tasks,linear regression may be appropriate, for choice based tasks,maximum likelihood

estimation, usually withlogistic regression are typically used. The original methods were

monotonic analysis of variance or linear programming techniques, but contemporary

marketing research practice has shifted towards choice-based models using multinomial

logit, mixed versions of this model, and other refinements. Bayesians estimators are also

very popular. Hierarchical Bayesian procedures are nowadays relatively popular as well.
http://en.wikipedia.org/wiki/Linear_regressionhttp://en.wikipedia.org/wiki/Maximum_likelihood_estimationhttp://en.wikipedia.org/wiki/Maximum_likelihood_estimationhttp://en.wikipedia.org/wiki/Logistic_regressionhttp://en.wikipedia.org/wiki/Logistic_regressionhttp://en.wikipedia.org/wiki/Maximum_likelihood_estimationhttp://en.wikipedia.org/wiki/Maximum_likelihood_estimationhttp://en.wikipedia.org/wiki/Maximum_likelihood_estimationhttp://en.wikipedia.org/wiki/Linear_regression

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