INDIAN TABACO COMPANY(ITC)

By,

MARUTHUPANDIAN B.E., M.B.A.

Intro of ITC… 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.

Chairman- Y C Deveshwar.

Organizational Structure

FMCG

ITC

HOTELS

Paperboards & Specialty Papers

PACKAGING

AGRI BUSINESS

INFORMATION TECHNOLOGY

FMCG

Foods  Lifestyle Retailing

Cigarettes & Cigars

Personal Care

Education and Stationery

Safety Matches

 Agarbattis

FOODS

PACKAGED FOODS

SUNFEAST BISCUITS

SUNFEAST PASTA

SUNFEAST YIPPEE!

Intro about sunfeast….

Launched in July, 2003 with the quote “Spread the Smile"

Growth rate of 53%.

ITC Eyes Turnover of over 10,00,00 crore.(by economic

times 27 jul-2013)

Saturated biscuits in market.

Wide categorization.

SUNFEAST BISCUITS

Market value of biscuits

Sunfeast23%

Parle Products18%

Britannia19%

Oreo6%

other local products34%

Market value of biscuits

Sunfeast Parle Products Britannia Oreo other local products

Words from chief executive of ITC…

ITC Foods, which makes Sunfeast biscuits and Bingo chips, expects increased distribution in rural areas and new product launches in biscuits and snacks to help it grow sales by 28-30% this year, chief executive Chitaranjan Dar said in an interview.

“We’re going to make products available in small towns and rural areas, which were earlier confined only to cities. For example, if we had 1,000 stocking points in a region, we’ll now have 3,000 stocking points,” Dar said.

“We’re appointing new wholesalers, stockists. Our strategy is to intensely market our products in rural areas.”

Cont…

ITC Foods gets about 30-35% of its business from the villages. Dar said that number would increase to 35-40% in two years.

“It’s not that growth in urban is saturated,” he said. “It’s just that the opportunity in rural areas is immense and

consumers there are premiumizing (trading up).” Increasing distribution in rural areas is important for ITC

Foods, which likely accounted for over 11% of ITC’s sales last year, to keep up its strong growth rate as Parle and Good Day maker Britannia are aggressively promoting their brands.

CONT…..

ITC is India’s third-largest biscuits maker after Parle and Britannia.

“It’s extremely important for them to expand distribution in rural areas. Until now, the focus was to scale up the business in urban India, build up the brands and achieve break-even,” said Anand Mour, analyst at ICICI Securities, a brokerage.

“Now that they’ve achieved break-even or are close to it, they need to be competitive enough in terms of availability and distribution in rural areas where they lag most FMCG (fast-moving consumer goods) companies.

To get growth across markets, they need to be in rural areas in a big way.”

Rural marketing Environment in sunfeast

WHY RURAL MARKET????? Rural india accounts for over 75% of india`s population. Strength of market. Size of market. Incomes in rural India have improved dramatically. The rural markets are growing at about two time faster

pace than urban markets. Rural India accounts for 60% of the total national demand.

Consumer behavior of sunfeast.. Mostly rural consumers wont accept the change once they

like it. Its is less price starting from 3rs to 30rs. Mostly they believe in WOM(word of mouth). Brand loyalty more in rural market. People also appreciated it because of availability of large

variety. Attractive wrappers for biscuits. Good quality with large quantity.

Research for sunfeast

Carried a market research before entering Found lacunas that can filled Consumers vying for new taste. They provide some samples and taking feedbacks. They use secondary data from parle and Britannia.

Marketing strategies

ITC relies on three core competencies. 1. The depth of distribution 2. Its brand building capabilities. 3. The ability of Quality outsourcing.

Sunfeast has been a success because of these three competencies of ITC.

Innovation. Distribution. Promotion. Pricing.

Distribution strategy

Cont… ITC uses FIFO method to reduce the wastage of goods

due to expiry.

They also keep the good on constant move from low sales area to high sales area.

The company collects all the expired goods four times a year, and destroys them.

Retailers must return expired or damaged products within six months after the date of expire.

Adjustment for them is done in three months time.

Cont…

ITC provides their retailers with racks, hangers, etc to display the products.

The benefits received by the retailers depend upon their sales volume and also the location of their shops.

ITC has hired IMRB to do the market research.

Communication strategy.

3 Rs Ad. 5 Rs Ad. 10 Rs Ad. 10 Rs Ad. 10 Rs Ad. 25 Rs Ad. 30 Rs Ad. 60 Rs Ad.

Future of sunfeast.

Introducing new varieties. Less profit margin. Achieve a more market share value. Continue in no.1 position in biscuit brands. Entering into dairy products.

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Quires?

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By, MARUTHU PANDIAN