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Abhishek bansal report
1. Introduction
About ITC
ITC Ltd. is a board-managed professional company, committed to creating enduring value
for the shareholder and for the nation. It has a rich organizational culture rooted in its core
values of respect for people and belief in empowerment. Its philosophy of all-round value
creation is backed by strong corporate governance policies and systems.
ITC’s corporate strategies are:
Create multiple drivers of growth by developing a portfolio of world class businesses
that best matches organizational capability with opportunities in domestic and export
markets.
Continue to focus on the chosen portfolio of FMCG, Hotels, Paper, Paperboards &
Packaging, Agri Business and Information Technology.
Benchmark the health of each business comprehensively across the criteria of Market
Standing, Profitability and Internal Vitality.
Ensure that each of its businesses is world class and internationally competitive.
Enhance the competitive power of the portfolio through synergies derived by
blending the diverse skills and a capability residing in ITC‟s various businesses.
Create distributed leadership within the organization by nurturing talented and
focused top management teams for each of the businesses.
Continuously strengthen and refine Corporate Governance processes and systems to
catalyze the entrepreneurial energies of management by striking the golden balance
between executive freedom and the need for effective control and accountability.
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2. History of ITC Ltd.
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'.
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.
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, the Seventies
witnessed the beginnings of a corporate transformation that would usher in momentous
changes in the life of the Company.
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.
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,
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3. 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 - Luxury Collection, WelcomHotels, Fortune Hotels and
WelcomHeritage.
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.
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.
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 the Paperboards & Specialty
Papers Division in November 2002.
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4. 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 relationship with the
farming community.
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.
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.
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.
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5. 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.
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). 2003 witnessed the introduction
of Sunfeast as the Company entered the biscuits segment. ITC 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.
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, Madhur, Sambrani and Nagchampa.
ITC entered the Personal Care Business in 2005. In seven 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 are also being progressively extended
nationally.
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6. 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.
Bombay Stock Exchange
ITC Ltd listed no. in Bombay Stock Exchange is BSE: 500875
Vision of ITC Ltd.
Sustain ITC's position as one of India's most valuable corporations through world class
performance, creating growing value for the Indian economy and the Company‟s
stakeholders.
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7. Mission of ITC Ltd.
To enhance the wealth generating capability of the enterprise in a globalizing environment,
delivering superior and sustainable stakeholder value.
Core Value
ITC's Core Values are aimed at developing a customer-focused, high-performance
organization which creates value for all its stakeholders:
Trusteeship
As professional managers, we are conscious that ITC has been given to us in "trust" by all
our stakeholders. We will actualize stakeholder value and interest on a long term sustainable
basis.
Customer Focus
We are always customer focused and will deliver what the customer needs in terms of value,
quality and satisfaction.
Respect For People
We are result oriented, setting high performance standards for ourselves as individuals and
teams. We will simultaneously respect and value people and uphold humanness and human
dignity. We acknowledge that every individual brings different perspectives and capabilities
to the team and that a strong team is founded on a variety of perspectives.We want
individuals to dream, value differences, create and experiment in pursuit of opportunities and
achieve leadership through teamwork.
Excellence
We do what is right, do it well and win. We will strive for excellence in whatever we do.
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8. Innovation
We will constantly pursue newer and better processes, products, services and management
practices.
Nation Orientation
We are aware of our responsibility to generate economic value for the Nation. In pursuit of
our goals, we will make no compromise in complying with applicable laws and regulations at
all levels.
ITC Corporate Social Responsibility
It is ITC's policy:
1. To pursue a corporate strategy that enables realization of the twin goals of
shareholder value enhancement and societal value creation in a mutually reinforcing
and synergistic manner.
2. To align and integrate Social Investments / CSR programmes with the business value
chains of your Company and make them outcome oriented. To support creation of on
and off-farm sustainable livelihood sources thereby empowering stakeholder
communities to conserve and manage their resources.
3. To implement Social Investments / CSR programmes primarily in the economic
vicinity of your Company‟s operations with a view to ensuring the long term
sustainability of such interventions.
4. To contribute to sustainable development in areas of strategic interest through
initiatives designed in a manner that addresses the challenges faced by the Indian
society especially in rural India.
5. To collaborate with communities and institutions to contribute to the national mission
of eradicating poverty and hunger, especially in rural areas, through agricultural
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9. research and knowledge sharing, superior farm and agri-extension practices, soil and
moisture conservation and watershed management, conservation and development of
forest resources, empowering women economically, supplementing primary
education and participating in rural capacity building programmes and such other
initiatives.
6. To align your Company‟s operations with the national objective of inclusive growth
and employment generation by leveraging your Company‟s diversified portfolio,
manufacturing bases, supply chains and distribution channels, to infuse an appropriate
mix of capital and technology to further social business initiatives such as e-Choupal,
animal husbandry, agarbatti rolling etc. and support organisations / institutions
engaged in building linkages with local, regional and urban communities and
markets.
7. To sustain and continuously improve standards of Environment, Health and Safety
through the collective endeavor of your Company and its employees at all levels
towards attaining world class standards and support other programmes and initiatives,
internal or external, for the prevention of illness and combating of diseases as may be
considered appropriate from time to time.
8. To encourage the development of human capital of the Nation by expanding human
capabilities through skills development, vocational training etc. and by promoting
excellence in identified cultural fields.
Awards
The Padma Bhushan, one of the highest civilian awards in the country by the Government of
India in recognition of his distinguished service of a high order to the Nation, in 2011.
2012 Business Leader of the Year Award conferred by the All India Management
Association (AIMA), India's apex body of professional management.
2010 The U.S.-India Business Council (USIBC) Award for Global Leadership.
2007 SAM/SPG Sustainability Leadership Award conferred at the International
Sustainability Leadership Symposium, Zurich.
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10. 2006 Business Person of the Year from UK Trade & Investment, the UK Government
organization that supports overseas businesses in that country.
2006 Inducted into the 'Hall of Pride' by the 93rd Indian Science Congress.
2005 Honored with the Teacher's Lifetime Achievement Award.
2001 Manager Entrepreneur of the Year from Ernst & Young. Retail Visionary of the Year
from Images, India's only fashion and retail trade magazine.
1998 Honorary Fellowship from the All India Management Association 1996 Distinguished
Alumni Award from IIT, Delhi.
1994 Marketing Man of the Year from A&M, the leading marketing magazine.
1986 Meridian Hotelier of the Year.
Working Area of ITC Ltd.
An inspiring Vision. A challenging corporate strategy. World-class execution. Unmatched
investments in technology, brands, people. These expressions best define ITC Limited. The
result: market capitalization of US$ 33 billion and turnover of over US$ 7 billion. ITC today
is a leading FMCG marketer in India, the second largest Hotel chain, the clear market leader
in the Indian Paperboard and Packaging industry and the country's foremost Agri-business
player. Additionally, its wholly owned subsidiary is one of India's fastest growing
Information Technology companies in the mid-tier segment.
As each of ITC's businesses is vastly different from the other in its type, the state of its
evolution and the basic nature of its activity, the challenge of governance for ITC therefore
lies in fashioning a model that addresses the uniqueness of each of its businesses and yet
strengthens the unity of purpose of the Company as a whole.
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11. ITC's diversification is powered by a robust corporate strategy designed to unleash multiple
drivers of growth. Its time tested core competencies, namely unmatched distribution reach,
superior brand building, effective supply chain management and acknowledged skills in
hoteliering have provided ITC the springboard to create new epicenters of growth. Inspired
by the overarching vision of making a contribution to the national goals of sustainable
development and inclusive growth, ITC has innovatively crafted unique business models that
synergies long-term shareholder value creation with enhancing societal capital.
In FMCG
(1) Cigarettes and 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, Hero & Royal. The Company has been able to consolidate its leadership position with
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12. 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.
(2) Foods:- ITC made its entry into the branded & packaged Foods business in August 2001
with the launch of the Kitchens of India brand. A more broad-based entry has been made
since June 2002 with brand launches in the Confectionery, Staples and Snack Foods
segments.
(3) Lifestyle retailing:- ITC's Lifestyle Retailing Business Division has established a
nationwide retailing presence through its Wills Lifestyle chain of exclusive specialty stores.
Wills Lifestyle, the fashion destination, offers a tempting choice of Wills Classic work wear,
Wills Sport relaxed wear, Wills Clublife evening wear, fashion accessories and Essenza Di
Wills - an exclusive range of fine fragrances and bath & body care products and Fiama Di
Wills - a range of premium shampoos and shower gels. Wills Lifestyle has also introduced
Wills Signature designer wear, designed by the leading designers of the country. With a
distinctive presence across segments at the premium end, ITC has also established John
Players as a brand that offers a complete fashion wardrobe to the male youth of today. With
its brands, ITC is committed to build a dominant presence in the apparel market through a
robust portfolio of offerings.
(4) Personal Care: - ITC's Personal Care portfolio under the 'Essenza Di Wills', 'Fiama Di
Wills', 'Vivel Ultra Pro', 'Vivel' and 'Superia' brands has received encouraging consumer
response and is being progressively extended nationally. ITC's state-of-the-art manufacturing
facility meets stringent requirements of hygiene and benchmarked manufacturing practices.
Contemporary technology and the latest manufacturing processes have combined to produce
distinctly superior products which rank high on quality and consumer appeal. Extensive
insights gained by ITC through its numerous consumer engagements have provided the
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13. platform for its R&D and Product Development teams to develop superior, differentiated
products that meet the consumer's stated and innate needs. The product formulations use
internationally recognized safe ingredients, subjected to the highest standards of safety and
performance.
(5) Education & Stationery:- ITC made its entry to the education and stationery business
with its Paperkraft brand in the premium segment in 2002; and later expanded into the
popular segment with its Classmate brand in 2003. By 2007, Classmate became the largest
Notebook brand in the country. Together, Classmate and Paperkraft offer a range of products
in the Education & Stationery space to the discerning consumer, providing unrivalled value
in terms of product & price. Classmate and Paperkraft have become a natural extension of the
consumer. Meticulous understanding of consumer needs helped creating a relevant and
comprehensive portfolio satisfying the needs of different sets of consumers.
(6) Safety Matches: - ITC's range of Safety matches includes popular brands like Aim, Aim
Special, Aim Premium and i Kno. With differentiated product features and innovative value
additions, these brands effectively address the needs of different consumer segments. ITC
also exports regular and premium safety matches brands to markets such as Middle East,
Africa and the USA. The successful acquisition of Wimco Ltd., a subsidiary of ITC has
consolidated the market standing of the Company's Matches business through synergy
benefits derived through combined portfolio of offerings, improved servicing of proximal
markets and freight optimization. Through its participation, ITC aims to enhance the
competitiveness of the small and medium scale sectors through its complementary R&D
based product development and marketing strengths, especially the breadth and depth of the
Company's trade marketing and distribution.
(7) Agarbattis :- ITC's business strategy of creating multiple drivers of growth in the FMCG
sector, the Company commenced marketing Agarbattis (Incense Sticks) sourced from small-
scale and cottage units in 2003. This Business leverages the core strengths of ITC in nation-
wide distribution and marketing, brand building, supply chain management, manufacture of
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14. high quality paperboards and the creation of innovative packaging solutions to offer Indian
consumers high quality Agarbattis. With its participation in the business, ITC aims to
enhance the competitiveness of the small and medium scale sectors through its
complementary R&D based product development and strengths in trade marketing and
distribution.
Other Business of ITC Ltd.
Hotels:-
ITC Hotels, India's premier chain of luxury hotels was launched on October 18, 1975, with
the opening of its first hotel - Chola Sheraton (now rechristened as My Fortune) in Chennai.
Since then the ITC Hotels brand has become synonymous with Indian hospitality. With over
100 hotels in more than 90 destinations, ITC Hotels has set new standards of excellence in
the hotel industry in Accommodation, Cuisine, Environment and Guest Safety.
A leader in the premium hospitality segment, ITC Hotels have had the privilege of hosting
world leaders, Heads of State and discerning guests from across the world and within.
As one of India's most dynamic hospitality chains, ITC Hotels has set standards for
excellence in the hotel industry by pioneering the concept of branded accommodation. The
chain has developed three brands of accommodation ITC One', 'Towers' and the 'Executive
Club' to differentiate between the needs of various travelers and provide high levels of
service. First to introduce branded cuisine, its restaurants Bukhara, Dakshin and DumPukht
are renowned for their delicious and authentic Indian cuisines from the different regions of
India. ITC Hotels also showcases international cuisine in its specialty restaurants West View
and Pan Asian.
Paperboard and specialty papers:-
ITC's Paperboards and Specialty Papers Division is India's largest, technologically advanced
and most eco-friendly, paper and paperboards business. The business caters to a wide
spectrum of packaging, graphic, communication, writing, printing and specialty paper
requirements through its four world-class manufacturing units, 7sales offices and a network
of more than 50 dealers in India, along with an international trade network of 18 distributors /
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15. agents and 4 finishing operations close to the market for providing faster service to the
customers. Having pioneered many specialty applications, ITC's Paperboards and Specialty
Papers business enjoys market leadership in the value-added paperboards segment, and also
has a significant share of the Indian fine papers market. It is the largest exporter of coated
boards from India.
Packaging:-
ITC's Packaging & Printing Business is the largest value added converter of paperboard
packaging in South Asia. It converts over 70,000 tonnes of paper, paperboard and laminates
per annum into a variety of value-added packaging solutions for the food & beverage,
personal products, cigarette, liquor and consumer goods industries. The Division, which was
set up in 1925 as a strategic backward integration for ITC's Cigarettes business, is today
India's most sophisticated packaging house. State-of-the-art technology, world-class quality
and a highly skilled and dedicated team have combined to position ITC as the first-choice
supplier of high value added packaging. The Division supplies value-added packaging to
ITC's various FMCG businesses. Its client list includes several well-known national and
international companies like Nokia, Colgate Palmolive, Pernod Ricard, Diageo, British
American Tobacco, Philip Morris International, Agio Cigars, UB Group, Tata Tetley, Tata
Tea, Reckitt Benckiser, Radico Khaitan, Akbar Brothers, Surya Nepal, VST Industries, etc.
Information Technology:-
Formed in 2000, ITC Infotech has today carved a niche for itself in the arena of global IT
services and solutions. The company has established technology Centers of Excellence (CoE)
to deepen capabilities and incubate cutting-edge technical competencies. A robust
outsourcing model, comprehensive suite of differentiated solutions & services and focus on
excellence in execution has provided the company a leadership position in chosen domains.
ITC Infotech‟s customer centric go-to-market approach is organized by industry verticals.
The company services industries including, Banking Financial Services & Insurance (BFSI),
Consumer Packaged Goods (CPG), Retail, Manufacturing, Engineering Services, Media &
Entertainment, Travel, Hospitality, Life Sciences and Transportation & Logistics.
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16. Agriculture sector
ITC's unique strength in this business is the extensive backward linkages it has
established with the farmers. This networking with the farming community has enabled
ITC to build a highly cost effective procurement system. ITC has made significant
investments in web-enabling the Indian farmer. Christened 'e-Choupal', ITC's web plan for
the farmer centers around providing internet kiosks in villages.
Farmer use this technology infrastructure to access on- line information from ITC‟s farmer
friendly website. Data access by the farmers related to the weather, crop condition, best
practices in farming, ruling international prices and a host of other relevant information.
ITC‟s International Business Division, one of India‟s largest exporters of agricultural
commodities, has conceived e-Choupal as a more efficient supply chain aimed
at delivering value to its customers around the world on a sustainable basis.
ITC’s E- choupal
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17. The e-Choupal model has been specifically designed to tackle the challenges posed by the
unique features of Indian agriculture, characterized by fragmented farms, weak
infrastructure and the involvement of numerous intermediaries, among others.
„e-Choupal‟ also unshackles the potential of Indian farmer who has been trapped in a
Further, a growth in rural incomes will also unleash the latent demand for industrial
goods so necessary for the continued growth of the Indian economy goods . This will
create another virtuous cycle propelling the economy into a higher growth trajectory my.
This will create another virtuous cycle propelling the economy into a higher growth
trajectory.
Create multiple drivers of growth by developing a portfolio of world class businesses
that best matches organizational capability with opportunities in domestic and
export markets.
vicious cycle of low risk taking ability > low investment > low productivity > weak
market orientation > low value addition > low margin > low risk taking ability. This made
him and Indian agribusiness sector globally uncompetitive, despite rich & abundant
natural resources.
Group Companies
Subsidiaries
ITC Infotech Landbase
Srinivasa Resorts Ltd. Wimco Limited
Fortune Parks hotel Ltd. King Maker Marketing Inc, USA
Bay Islands Hotels Ltd. Technico Pty Limited., Australia
Gold Flake Corporation Ltd Russell Credit Limited
Surya Nepal Private Limited
Joint Ventures
Maharaja Heritage Resorts Ltd.
ITC Filtrona
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18. Associate companies
Gujarat Hotels Ltd
International Travel House
Forbes Ranking
ITC features on the Forbes Global 2000 rankings for 2007 at position 1256.
ITC is the only Indian FMCG company that features on the Forbes Global 2000 rankings for
2009 at position 987.
ITC also featured on the Forbes World‟s most reputable Companies List at position 95.
SWOT ANALYSIS
STRENGTHS:
1. ITC is one of India's foremost private sector companies.
2. ITC leveraged it traditional businesses to develop new brands for new segments. . For
example, ITC used its experience of transporting and distributing tobacco products to
remote and distant parts of India to the advantage of its FMCG products. ITC master chefs
from its hotel chain are often asked to develop new food concepts for its FMCG business.
3. ITC ranks among India's top 10 Most Valuable (Company) Brands.
4. It has market capitalization of nearly Rs.198427.86 Crore.
5. ITC has a diversified presence in Cigarettes, Hotels, Paperboards & Specialty Papers,
Packaging, Agri-Business, Packaged Foods & Confectionery, Information Technology,
Branded Apparel, Personal Care, Stationery, Safety Matches and other FMCG products.
6. ITC's Agri-Business is one of India's largest exporters of agricultural products.
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19. 7. ITC is a diversified company trading in a number of business sectors including
cigarettes, hotels, paper, agriculture, packaged foods and confectionary, branded apparel,
personal care, greetings cards, Information Technology, safety matches, incense sticks
and stationery.
WEAKNESSES:
1. The company‟s original business was traded in tobacco. ITC stands for Imperial
Tobacco Company of India Limited. It is interesting that a business that is now so
involved in branding continues to use its original name, despite the negative connection of
tobacco with poor health and premature death.
2. To fund its cash guzzling FMCG start-up, the company is still dependent upon its tobacco
revenues. Cigarettes account for 47 per cent of the company's turnover, and that in itself is
responsible for 80% of its profits. So there is an argument that ITC's move into FMCG (Fast
Moving Consumer Goods) is being subsidized by its tobacco operations. Its Gold Flake
tobacco brand is the largest FMCG brand in India - and this single brand alone holds 70% of
the tobacco market.
OPPORTUNITIES:
1. Core brands such as Aashirvaad, Mint-o, and Bingo! And Sun Feast (and others) can be
developed using strategies of market development, product development and marketing
penetration.
2. ITC is moving into new and emerging sectors including Information Technology,
supporting business solutions.
3.E- Choupal is a community of practice that links rural Indian farmers using the Internet.
This is an original and well thought of initiative that could be used in other sectors in many
other parts of the world. It is also an ambitious project that has a goal of reaching 10 million
farmers in 100000 villages.
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20. 4. The company researched the tastes of consumers in the North, West and East of India of
atta (a popular type of wheat flour), then used the network to source and create the raw
materials from farmers and then blend them for consumers under purposeful brand names
such as Aashirvaad Select in the Northern market, Aashirvaad MP Chakki in the Western
market and Aashirvaad in the Eastern market. This concept is tremendously difficult for
competitors to emulate.
5. Chairman Yogi Deveshwar's strategic vision is to turn his Indian conglomerate into the
country's premier FMCG business. Per capita consumption of personal products in India is
the lowest in the world offering an opportunity for ITC‟s soaps, shampoos and fragrances
under their Wills brand.
THREATS:
1. The obvious threat is from competition, both domestic and international.
2. ITC‟s opportunities are likely to be opportunities for other companies as well. Therefore
the dynamic of competition will alter in the medium-term. Then ITC will need to decide
whether being a diversified conglomerate is the most competitive strategic formation for a
secure future.
3. The laws of economics dictate that if competitors see that there is a solid profit to be made
in an emerging consumer society that ultimately new products and services will be made
available. Western companies will see India as an exciting opportunity for
themselves to find new market segments for their own offerings.
4. Duplicate items are available in abundance at much lesser rates. This affects the
company financially and adversely affects its goodwill.
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21. Sources of Finance
--------------- in Rs. Cr. -----------
ITC Ltd
-
Mar '12 Mar '11 Mar '10
12 mths 12 mths 12 mths
Sources Of Funds
Total Share Capital 781.84 773.81 381.82
Equity Share Capital 781.84 773.81 381.82
Share Application Money 0.00 0.00 0.00
Preference Share Capital 0.00 0.00 0.00
Reserves 17,957.00 15,126.12 13,628.17
Revaluation Reserves 53.05 53.34 54.39
Networth 18,791.89 15,953.27 14,064.38
Secured Loans 1.77 1.94 0.00
Unsecured Loans 77.32 97.26 107.71
Total Debt 79.09 99.20 107.71
Total Liabilities 18,870.98 16,052.47 14,172.09
Financial statement Analysis
Mar
Mar '11 Mar '10 Mar '09
'12
Profitability Ratios
Operating Profit Margin(%) 35.55 34.08 33.02 32.84
Profit Before Interest And Tax
31.99 30.05 28.97 28.37
Margin(%)
Gross Profit Margin(%) 32.77 30.97 29.74 29.17
Cash Profit Margin(%) 26.10 25.17 23.98 24.22
Adjusted Cash Margin(%) 26.10 25.17 23.98 24.22
21
22. Net Profit Margin(%) 23.97 22.91 21.30 21.18
Adjusted Net Profit Margin(%) 23.97 22.91 21.30 21.18
Return On Capital Employed(%) 46.95 44.94 42.64 34.60
Return On Net Worth(%) 32.88 31.36 28.98 23.85
Adjusted Return on Net Worth(%) 32.07 30.34 28.29 23.26
Return on Assets Excluding
23.97 20.55 36.69 36.24
Revaluations
Return on Assets Including
24.04 20.62 36.84 36.39
Revaluations
Return on Long Term Funds(%) 46.95 44.95 42.64 34.75
Liquidity And Solvency Ratios
Current Ratio 1.08 1.08 0.92 1.42
Quick Ratio 0.51 0.50 0.39 0.61
Debt Equity Ratio -- 0.01 0.01 0.01
Long Term Debt Equity Ratio -- 0.01 0.01 0.01
Leverage ratios
Long term debt / Equity - 0.01 0.01 0.01
Total debt/equity - 0.01 0.01 0.01
Owners fund as % of total source 99.57 99.37 99.23 98.71
Fixed assets turnover ratio 1.81 1.69 1.58 1.44
22
24. The major Competitors of ITC Ltd. Products
1) Godfrey Philips India Ltd.
Godfrey Phillips is the second largest player in the Indian cigarette industry with an annual
turnover of Rs11bn. Incorporated in 1936; the company‟s operations primarily span the
entire northern and western part of the country. The company established its own
manufacturing facilities in 1944. Godfrey Phillips has two major stakeholders, the K.K. Modi
Group and Philip Morris, and has over 15,000 shareholders. Headquartered in Delhi, Godfrey
Phillips today boasts of two manufacturing facilities - located in Ghaziabad (near Delhi) and
in Andheri (Mumbai), a state of the art R&D centre in Mumbai and a tobacco-buying unit in
Guntur (Andhra Pradesh). The Company today manufactures some of the most popular
cigarette brands in the country like Red and White, Four Square, Jaisalmer, Cavenders,
Tipper and Prince.
2) Vazir Sultan Tobacco Company (VST)
VST Industries Ltd. is a public conglomerate company headquartered in Hyderabad, India.
The company manufactures and distributes cigarettes. Its Market Capitalization is 844.49,
The company has its registered office in Hyderabad. It started off as the formerly Vazir
Sultan Tobacco Company, commonly known as VST and shares collaboration with British
American Tobacco group of the United Kingdom It is fully independent and registered as
VST Industries Ltd in the year 1983
Vazir Sultan Tobacco was started by Mr. Late Vazir Sultan in 1916. He passed away in 1923.
During the rule of Mir Osman Ali Khan in Hyderabad State the Vazir Sultan Tobacco
Company Limited was incorporated on 10 November 1930, under the Hyderabad Companies
Act No.IV of 1320 Fasli and now governed under the Indian Companies Act 1956. The name
of the Company was subsequently changed to VST Industries Limited on 30 April 1983. The
VST has its registered office at Azamabad, Hyderabad, India.
Vazir Sultan Tobacco Company is more commonly known as VST. The company
manufactures and distributes cigarettes under the brands names of Charms, Charminar, Gold
Etc. The company is headquartered in Hyderabad, India. It is 3rd largest cigarette
manufacturing company in India.
24
25. 3) Golden Tobacco Ltd (GTC Industries)
Golden Tobacco Ltd (Formerly GTC Industries Ltd) is one of the leading cigarettes producer
in India. It was established in 1930, and is wholly indigenous cigarette manufacturing
company of its kind, in the country. It captured substantial domestic market shares & also
carved a niche of brilliance in the highly competitive international markets, on the strength of
its high quality products, variants and services. GTC offers you an exceptional variety of
cigarettes in Virginia and American blends, which meet world class standards of quality &
consistency. GTC has a Government of India approved Research & Development (R &D )
Centre, which continuously strive to innovate as also in improving the quality of products.
4) NTC (New Tobacco Company)
The Company was incorporated on November 15, 1991 as R.D.BUILDERS &
DEVELOPERS LIMITED and it received certificate for Commencement of Business on
December 18, 1991. 1st name was changed to RDB Industries limited on 1st August, 1994.
The Company was incorporated with the main object of real estate development. The
Company took over business of the firm M/s. R.D.BUILDERS as a going concern with effect
from the close of 3Oth April, 1992. The Company has constructed various buildings in and
around Calcutta.
In April, 1994, the Company had taken over the assets of New Tobacco Company on lease in
terms of the Hon‟ble Calcutta High Court order dated 23rd February, 1994. The Company
has started commercial production on May 31st, 1994 at Agarpara, West Bengal factory and
launched brands of Cigarettes namely REGENT, NUMBER TEN FILTER, NUMBER TEN
VIRGINIA, COOL, PRINCE HENRY (Pipe Tobacco), and REGENT MINI KINGS.
25
26. BUSINESS
4 players - ITC, Godfrey Phillips, VST (also a BAT affiliate) and GTC dominate the Indian
cigarette industry. These four companies together control almost 99% of the market. The
cigarette industry faces competition mainly from the unorganized sector 'bidi' manufacturers,
who are protected from high duties due to small-scale industry status. Affected by steep duty
hikes, the industry has been facing stagnant volume growth in the last 2-3 years. Cigarette
sales dropped by 4% in volume terms in FY00. The 2000-01 budgets also hiked excise on all
types of cigarettes by 5%.
Based on the contribution from various products, ITC‟s business can be divided into three
main divisions, namely cigarettes, tobacco and agri-products. ITC‟s mainstay of earnings is
cigarettes (63%) and tobacco (3%). Agri-products business contributes 5% of the total
Rs80bn revenues, while other businesses of hotels, paper and packaging collectively
contribute the balance 5%.
26
27. Project
Market research for the newly launched cigarette brand HERO
Introduction about cigarette
Cigarette is a product which is harmful for health, in spite of this feeble; its sales are
increasing globally. The product has been ban from advertisement and promotional activities.
It is a challenge for the companies to sale this product and build its brand. The Cigarette
Industry is one of the oldest industries in India. India is the second largest producer of
tobacco in the world after China. It produced 572 million kilograms of tobacco in 2002-2003.
Approximately 5.5 trillion cigarettes are produced globally each year by the tobacco industry,
smoked by over 1.1 billion people, which is more than 1/6 of the world's total population.ITC
is the market leader in cigarettes in India. It's highly popular portfolio of brands includes
Insignia, India Kings, Classic, Gold Flake, Navy Cut capstan etc. Gold Flake is the top brand
of cigarettes in India. It was launched by ITC in the seventies. It is a well-positioned brand in
India and is the market leader in its segment. Major amount of the revenue of ITC are earned
through the sales of cigarettes. The company today is facing competition from International
players. Today the cigarette industry of India is booming in the market. The sales
of cigarettes are increasing day-by-day. In future the company may face many challenges
from competitors and government, but it is very difficult to change the aspirations of the
consumers. Due to this the company is benefited. It has been predicted by the company the
sale of Gold Flake will grow at the rate of 8% annually.
27
28. Hierarchy
ITC a world leading electric company works as a team as a team system. Hierarchy of this
organization is as follows:-
Chairman (Y.C. Deveshwar)
Boards of director
Unit Head (Managing Director)
Functional Heads (General Manager)
District Manager National Sales Manager Regional Sales Manager
Branch Head (Branch Manager)
Assistant Managers
Area Managers
Area Executives
Sales Trainee
Workers
Point sales Representatives
Supervisors Salesman
28
29. Research Work Location
Ambala
Ambala is a city and a municipal corporation in Ambala district in the state of Haryana,
India, located on the border of the states of Haryana and Punjab in India. Politically; Ambala
has two sub-areas: Ambala Cantt and Ambala City, approximately 3 kilometers apart from
each other. It has a large Indian Army and Indian Air Force presence within the confines of
its cantonment area. Ambala separates Ganges river network from Indus river network and
surrounded by two rivers Ghaggar & Tangri from North & South side. Due to its
geographical location, the Ambala district plays an important role in local tourism.
The Ambala Cantonment was established in 1843 after the British abandoned its cantonment
at Saphera, following the malaria epidemic of 1841–42. The cantonment houses the „2
Corps‟ one of the three Strike Corps of the Indian Army.
Ambala was given the status of a district in 1847, formed by the merging the jagir estates of
hitherto independent chieftains whose territories had lapsed or had been confiscated by the
British Indian Government. In its 160 years of existence as a district, Ambala has witnessed
many changes in its boundaries. Its boundaries previously extended across tehsils of Ambala,
Saphera, Jagadhri, Pipli, Kharar, Mohali, Ropar and Nalagarh. Kalka-cum-Kurari State,
Pinjore, Manimajra, Kasauli & Sanawar were also merged into the district at different points
of time.
Ambala Air Force Base is one of the oldest and largest airbases that were inherited from the
British by the IAF. It was from this airbase that Spitfires and Harvards flown by Instructors
of the Advanced Flying Training School took part in the 1947-48 Kashmir Operations.
Subsequently, Ambala was the front line airfield for many years. It was home to various
aircraft that were inducted into the Indian Air Force. Vampires, Ouragans, Hunters, etc. all
flew from this base. The airbase was briefly attacked in 1965 by Pakistan Air Force's B-57
bombers. Today, the Airbase houses the „7 Wing‟ with squadrons of Jaguars and MiG-21
29
30. Bison‟s. In November 1949 Mahatma Gandhi's assassin, Nathuram Godse was hanged at
Ambala Jail along with Narayan Apte, a co-conspirator.
As of 2011 India census, Ambala had a population of 11, 36,784, consisting of 6, 40,044
males and 5, 32,740 females. Ambala has an average literacy rate of 82.9% with 88.5% of
males and 76.6% of females literate. 11% of the population is under 6 years of age.
Ambala is known as city of scientific instruments. It is a major scientific products market and
is a hub for products like glass apparatus, microscopes, laboratory equipments etc. Ambala
constitutes nearly 34% of the total production of scientific instruments produced in India.
Ambala is also famous for its clothes market, which draws shoppers from surrounding areas.
The market possesses a wide range of custom-made clothes for men and women.
Ambala has number of colleges, medical college. Ambala had very few colleges during
British India period. After the partition of India in 1947 Punjab University, Lahore (now in
Pakistan) one of the most prominent university of North India of that time was newly
established in Chandigarh, India under the same name Punjab University, Chandigarh. All
the colleges in the region were affiliated to Punjab University until the in the year 1956 when
the Kurukshetra University was formed.
30
31. Information on all Cigarette Brands Of ITC Ltd
Sr. No. Brand name MRP No. Of Sticks Size Category
1 Insignia 160 20 97mm SKSFT
2 India Kings 140 20 84mm KSFT
3 Classic 116 20 84mm KSFT
4 B&H 120 20 84mm KSFT
5 Gold Flake King 116 20 84mm KSFT
6 Navy Cut 49 10 74mm LONGS
7 Gold Flake 45 10 69mm RSFT
8 Flake 28 10 69mm RSFT
9 Capstun 28 10 69mm RSFT
10 Hero 28 10 69mm RSFT
SKSFT:-Super King Size Filter Tip
KSFT: - King Size Filter Tip
RSFT: - Regular Size Filter Tip
31
32. Review of Literature
As there are various researches done before on the different cigarettes brands of ITC Ltd and
that were also lead to a great effect on the market and on its customers out of them some are
below:-
(1) In 1997 Y.C. Deveshwar, Chairman ITC Ltd. says in annual general meeting that 26
million people are dependent for their livelihood on the tobacco industry. This
indicates a million small and marginal tobacco farmers, 5 million farm labor and 1.5
million retailers, not to mention a vast ancillary sector in goods and services and
several million homes are part of ITC family. This indicates farmers/ farm labor,
small retailers, over 2 lakh shareholders and depositors, nearly 15 million consumer
and large numbers employed either directly or indirectly the vast network of ancillary
services.
(2) In 2002 Baxi Sachin says that in a press report that the golf flake cigarette brand
provide the highest sale of Rs.3700 crore including the excise and comes at the top of
the list of largest brands by sales and at No.2 its sister brand Wills (including Classic)
provides the half of the sale of the gold flake of Rs 1800 crores.
(3) In 2007 ITC Ltd try to increase its sales by 52.3 % by involving in the non-tobacco by
introducing the new form of its classic brand cigarette in the form of classic rock,
jazz, or Blues which provides the customers a musical attraction and providing them
to choose from the musical packs and it was a great marketing plan and the new
packing were in the form of holographic board printing.
(4) In 2008 shah Anand, analyzed conclude that ITC Ltd launches new cigarette brand
Wills Navy Cut regular size, Filler cigarettes, priced at Rs 24 a pack of 10 sticks in
selected markets in North and West India.
(5) Health Warning on pack of cigarette was incorporated from 1975.
(6) Railway Banned cigarette and biddi in 1999
(7) Banned on Television advertisement on 2000.
(8) Prohibit cigarette smoking at public place by Supreme Court in 2000.
32
33. Need, Scope & Objective
Need
ITC Ltd recently launched the new brand Hero in the market. After this launched there is a
sudden need to study the response from customer, retailer, and vendor. Also the response of
the cigarette in the market.
And also the check whether the product is selling in the competition market by its own name
or by the pressure of other competitors.
Is the new product launch gives any competition to competitors this price segment.
Is this cigarette is fulfilling the expectation of the customers or not.
Scope
The scope of study is limited to the Ambala City. The study was conducted in May, June &
July 2012.
Objective
Primary Objective
1) To study the test market regarding the launch of HERO Pack in Ambala.
2) To suggest to expand customer base.
Secondary objective
1) To study the review of the customer regarding the launch of HERO
2) To study the impact of sales of HERO in retail.
3) To know about the performance of HERO.
4) To study the feedback of different Customer.
5) To know about different schemes.
6) To know about the strategies of our competitors.
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34. RESEARCH METHODOLOGY
“All progress for born of inquiry. Doubt is often better than over confidence for it leads to
inquiry and inquiry leads invention”.
Research has its significance in solving various operational and planning problems of
business and industry. Operational Research and Market research along with Motivational
Research are considered crucial and their results exist in more that one way in taking
business decisions.
Market Research is the investigation of the structure and development of market for the
purpose of formulating efficient policies for the purchasing, production and sales.
Operational research refers to the application of mathematical, logical and analytical
techniques to the solution of business problems for cost minimization or maximization for
the profit, which can be termed as optimization problems.
Motivational Research of defining why people behave as they do is mainly concerned with
the determination of motivations underlying their consumer behavior. As these are of great
help to people in business and industry who are responsible for taking business decisions.
The present study, which attempts to know about the awareness and performance of HERO
by ITC Ltd, plays a very crucial role. For a good research and for proper and authentic results
research methodology plays a crucial role.
Research Methodology is a way to systematically solve the research problem, which is a
science of studying how research is done scientifically. Thus research methodology
encompasses the research methods or techniques research results are capable at being
evaluated either by the researcher himself or by others.
The project also covers Descriptive Research which includes surveys and fact findings from
various inquiries.
34
35. The relationship between the customers and the market players must be established and
explored to make the marketing effort fruitful and profitable. Thus, it is reflected in the above
wording that the present study shall be useful in meeting and exploring the proposed
objectives. Therefore to make the present study meaningful the data shall be collected from
various sources such as questionnaire, journals, newspapers and Internet etc. that will serve
as the base for the primary and secondary data and for interacting with the respective users of
the Cigarette.
Research design
In the present study the exploratory-cum-descriptive research design will be followed which
help in exploring the answers to the specified objectives of the present study.
A research design is an arrangement of condition for collection and analysis of data in a
manner that aims to combine relevance to research purpose with economy in procedure.
In fact the research design is the conceptual structure with in which the research is
conducted. Research design is needed because it facilitates the smooth sailing of the various
research operations. Thereby making research as efficient as possible yielding maximal
information with minimal expenditure of efforts, time and money.
Research Design, in fact, has a great bearing on the reliability of the results arrived at and as
such constitutes the firm foundation of the entire evidence of the research work. In the other
words we can say that research design is advance planning of research.
A good research design should be flexible, appropriate, and efficient and so on. It should try
to minimize biases and maximize reliability of the data collected and analyzed is considered
a good design.
The design must give the smallest experimental error and it should yield maximum
information. The present study is an attempt of descriptive in nature, which defines method
to measure and find a method of measuring it along with a clear-cut definition of population.
35
36. Hence it is an Endeavour to obtain complete and accurate information and it is a rigid
specially paying attention on these points:
Objectives of the study
Designing the methods of data collection
Selecting the sample
Collecting the data
Processing the data
Reporting the findings
36
37. STEPS OF METHODOLOGY
Collection of Data
Organization of Data
Presentation of Data
Analysis of Data
Interpretation of Data
RESEARCH INSTRUMENTS
The proposed study is based on both primary and secondary data. For the primary data the
customers has been contacted with the questionnaire designed to gather the data relevant with
objective of the study. Data is collected through newspapers, magazines, journals, published
reports of the industry players and the internet.
SAMPLING
Sampling may be defined as the selection of some part of an aggregate or totality on the basic
of which a judgment or inference about the aggregate and totality is made. Sampling is used
in practice for various reasons. All items in any field of inquiry constitute a universe or
population complete enumeration of all items in the population is known as census inquiry. It
can be presumed that in such an inquiry, when all items are covered, element of chance is left
and highest accuracy is obtain. But in practice this may be not true. Even the slightest
37
38. element of bias in such an inquiry will get larger and as the numbers of observations
increased more over there is no way checking the element of bias or it extend except through
a survey or used sample checks besides this type of inquiry involves a great deal of time,
money and energy. Therefore when the field of inquiry is large this method becomes difficult
to adopt because of the resources involve. On the other hand the sample survey has the
followings advantages:-
Sampling can save time and money: A sample study is usually a less expensive than a
census study and produces results at a relatively a faster speed.
. Sampling may enable more accurate measurement for trained and experienced
investigator generally conducts a sample study.
. Sampling remains the only way when population contains infinitely may member.
. Sampling remains the only choice when a test involves the destruction of the item
under study.
. Sampling usually enables to estimate the sampling errors and thus assists in obtaining
information concerning same characteristics of the population.
SAMPLING UNIT: - Every researcher has to take a decision regarding a sample unit before
selecting sample. Sampling unit may be a geographical one such as district, state and village
etc or a social unit such as family, club, school, etc or it may be an individual.
In my study the sampling units are individuals who are the users of the Cigarette.
SAMPLE SIZE: - Size of samples refers to the numbers of items to be selected from the
universe to constitute a sample. This is a major problem before every researcher. The size of
sample should neither be excessively large, nor too small. It should be optimum. An
optimum sample is one, which fulfills the requirements of efficiency representatives,
reliability and flexibility. While deciding the size of sample researcher must determine the
38
39. desired precision as also an expectable confidence liable for the estimate, the size of
population variance needs to be consider as in case of large variance usually a bigger sample
is needed. The size of population must be kept in view for this also limits the sample size. As
such budgetary constraints must invariable to taken into consideration when researcher
decide the sample size 20 respondents looking at the above consideration. In this case,
stratified random sampling was done.
SAMPLING PLAN
For the purpose of gathering the primary data the respondents numbering not more than 20
shall be contacted with the help of a questionnaire. The sampling has been random and
discrete.
AREA FOR SAMPLING
The areas, which has been considered for the purpose of present study is Ambala District
where the HERO has been launched. Equal number of respondents is contacted for the
purpose of uniformity in results without a place for biasness in area or location.
DATA COLLECTION
The task of data collection begins after the research program has been defined and research
design plan checked out. The data collection is and important part of the research.
DATA COLLECTION METHOD
In the data collection method different methods are adopted for primary data collection and
secondary data collection.
Primary Data Collection: - Primary data collection, which is collected through observation
or direct communication with the respondent in one form or another. These are several
methods for primary data collection.
39
40. Observation Method
Interview Method
Through Questionnaire
But as the time was limited I used the Questionnaire method for data collection
Secondary Data: - Secondary data is also collected by me various documents of the
company from the Internet.
DATA COLLECTION INSTRUMENTS
The data collection instruments used in the study are following: -
QUESTIONNAIRE: - This method of data collection is quiet popular, particularly in care of
inquiries. As we know Questionnaire should be comparatively short and simple in the size of
the questionnaire should be kept to minimum questions should proceed in logical sequence
moving from easy to more difficult. Hence questionnaire made by me is structured.
Structured questionnaire is that in which these are define concrete and predetermine
questions. The questions were presented with exactly with same wording and in the same
order to all respondents. Structured questionnaire are simple to administer and relatively
inexpensive to analyze. The provision of alternatives replies at times helps to understand the
meaning of question clearly but such questionnaire have limitations too for instance, wide
range of data and that too in respondents own words can‟t be obtained with structured
questionnaire.
The sequence is the next important aspect in order to make the effective questionnaire to
ensure quality. A researcher should pay attention to the questions sequence in preparing the
questionnaire. A proper sequence of questions reduces considerably the chances of individual
questions being misunderstood. The following type of question should be avoided.
Questions that put too much strain on the memory or intellectual of the respondent.
Questions of a personal characters
40
41. Questions related to personal wealth
Question sequence must be clear and smoothly moving, meaning thereby that the relation of
one question to another question should be reading apparent to the respondent.
Concerning the form of questions we can talk about two principles forms:
Multiple Choice Questions
Open Ended Questions
Multiple choice or close questions have been the advantages of easy handling, simple to
answer quick and relatively inexpensive to analyze. They are most amendable to a statistical
analysis some time the open questions are difficult to analyze but as they provide large
information so close ended and multiple choice questions are chosen by me in my study.
Methodology
The project was carried under the guidance of Area executive Mr. Bhupesh Chabra and
Supervisor named Gaurav and Anusheel who introduced with all the activities carried out at
the distributor centre. The Primary Data Collection Method Survey was carries out in which
consumers were asked to give their responses in the questionnaire. To find out the
performance of the newly launched brand, survey was carried out. Questionnaire were
prepared for the consumers. Based on their response the reasons for low sale were found out
and recommendations were made. Since it was impossible to interview each and every
person, a sample size of 20 was chosen i.e. 20 consumers were interviewed. The consumers
interviewed were basically middle class or low class people
41
42. Details of Actual work Undertaken
Brand Name HERO
Plan For launch a new product in Ambala of ITC
How many DS in a WD point?
How many routes
How many outlet in a route
What is a frequency served by the DS in a week
What us placement norms in an outlet.
*Some short forms used in ITC
1) WD:- Wholesale Distributor
2) DS:- Distributor salesman
3) CDM:- Convince Delivery Model
4) Non-CDM:- Non Convince Delivery Model
5) Van-DS:- Van Distributor Sales man
According to Study 3 Principles of ITC Ltd
Availability:- According to my research the ultimate objective of ITC Ltd is that their
product is available with every store either that product is selling or not. Availability
plays important role for organization. When your product is available in the market
customer will demand for that product
Visibility:- As per my research there is guideline for every DS that they have make thir
product visible in the shop of retailer . As their basic strategy according to Hindi saying
“Jo Deekhta hai who Beekta hai”.
Freshness: - As per my study ITC insures that products are made available to the
consumer in the desire Form and Freshness. Stock Rotation of cigarettes is important. It
is done by the Convenience DS to minimize D&D. Stock Rotation Outlets need to be
listed with the WD so as to streamline the activity.
42
43. In case of D&D stocks, stocks need to be taken back & replaced immediately with fresh
stocks.
o The Stock Rotation norm for Cigarettes is M-2
o The Freshness norm for Cigarettes is M-3
WD Selling and Supervision Infrastructure
o Convenience Dealer Salesmen (DS)
o Convenience Team Leader (TL) (erstwhile Supervisor)
Role of Convenience DS:
o Convenience DS is an independent salesman working on a margin basis
o Ensure Distribution Objectives on availability, visibility & freshness are met in the
right outlets
o Adhere to frequency of service as per norms
o Leverage trade relationship for “sell in” of other FMCG categories
Examine assistance to the WD for specific Convenience DS basis subsistence levels after
factoring in DS income from selling cigarettes & other FMCG categories.
Role of Convenience Team Leader:
o Responsible for a team of Convenience DS and manages cigarette & other FMCG in
Convenience outlets
o No. of Convenience Team Leaders are based on the frequency of Trade Marketing
and Distribution calls
Call Type Outlet Type Frequency
Trade Marketing Volume class 1, & 2 Once in a week
Trade Marketing Volume Class 3 Once in 2 weeks
43
44. Distribution call All outlets on serviced routes Once a month
- Trade Marketing Calls are made in Markets > 20K
- Distribution Calls are made in all markets and the Team Leader accompanies the
Convenience / Cigarette Van DS
o Accountable for the Distribution objectives of availability, visibility & freshness
o Responsible for allocation & utilization of merchandising materials
o Adhere to filling in Customer Call Cards (CCC) & compile the same for Availability
Tracker
o Responsible for the updating of the WD Visibility Input Tracker
o Regularly prospect for new potential outlets to grow business
o Training and development of the DS team
CONVENIENCE DELIVERY MODEL (CDM)
o The carrying capacity of a Convenience DS can be enhanced through a delivery
vehicle ACROSS MARKETS if the route potential is high
OTHER FMCG SALES BILLING:
o All other FMCG Convenience Sales to be SUMMARY BILLED category wise by
Convenience DS in the Customer Information System (CIS)
o Convenience DS who use delivery vehicle to be flagged off as CDM in CIS
o Other FMCG Convenience Sales Report from CIS to be split by
- Convenience CDM DS sales by categories
- Balance Convenience DS sale by categories
Classification of DS Various types of DS activities: -
1) CDM
2) Non-CDM
44
45. 3) VAN-DS
4) Rural Moped DS/ Vistar DS
CDM-DS: - Convenience Delivery Model. Under this model DS take ready stock with him
either in mechanized or non mechanized model (puller card, auto rickshaw). Monthly sale of
this model must be more than 10,000. Cover town area.
Non-CDM-DS: - Non Convenience Delivery Model. Under this Model DS has been
provided with an instrument under which they just go to the various retailers and take their
order. And they are not carrying any mechanized model (auto rickshaw or Puller card). It
doesn‟t mean that they are not selling any product. Cover Town area.
VAN-DS: - Under this type of Model there has been assign a three wheeler or any small
vehicle. Under this it takes all type of products such as NTD (Non tobacco Division) and
with CFP (Cigarette focused Product) with him. And this model visit rural area where the
small need has been fulfilled. This DS cover maximum no of Wholesalers and also cover
enroots retailers to get Maximum sale.
Rural Moped DS / Vistar DS: - Under this model DS cover rural area or village area on
moped or motor cycle. Where is has been assigned with various activities such as point of
sale.
* ITS necessary that all DS Must carry– NTD Categories with cigarette in convenience
channel.
** NTD:- except Cigarette all other category –NTD.(NON TOBACCO DIVISION) like-
biscuit, soap, shampoo, aggarbattie, match box, bingo, noodles, confectionery.
In Ambala No of DS
7 DS: - Town DS
3 DS: - CDM
4 DS: -NON CDM
4 DS: -Rural MOPED Or Vistar DS.
Margin
There is a margin of 0.8% on sales to DS.
The WD owner Margin is 1.45%
45
46. Spot Test
It is the best way of terminology used by ITC Ltd. Under which they send their Supervisor on
a retail outlet. Where supervisor have to note down all the cigarettes that is selling in that
shop either that is one single cigarette or a box. Either that is of our competitor or ours.
Supervisor note down all the data under the prescribed format and with that they came to
know about which brand is performing well in terms of quantity and in terms of total output.
This method is effective in determining for policy formation about that cigarette.
Taxing Policy
To reduce the demand for tobacco, excise tax increases and the resulting higher prices are a
proven effective measure that governments can adopt as part of an overall strategy of tobacco
control. The higher excises will induce some smokers to quit; reduce consumption by
continuing smokers; prevent others from starting; and reduce the number of ex-smokers who
resume. Empirical studies have found that a 10 percent cigarette price increase will reduce
consumption by 4 percent in high-income countries and 8 percent in low- and middle-income
countries, as people with lower incomes are more responsive to price increases (World Bank,
1999). Though consumption is reduced, government revenue increases.
So cigarette is highly taxed in India. The current rate is differentiated on the basis of the size
of the cigarette.
46
48. Classification of Brands according to the segments
Segment Brand Name Price Per stick
Luxuary Insignia Rs.8.00
Segment India King Rs.7.00
Benson & Hedges Rs.6.00
Middle Classic(all varient) Rs.6.00
Level Gold Flake Kings Rs.6.00
Segment Navy Cut Rs.5.00
Gold Flake Rs.4.50
Economic Flake Excel Rs.3.00
Segment Capstun Rs.3.00
Hero Rs.3.00
Target segment for Hero:
The target consumers for HERO Rsft are the people lying in the lower income group roughly
around 1 to 3 lack per annum. Ambala has got a good number of smokers and majority of
population comes under lower income level.
1. The city is surrounded by a large number of villages and rural areas.
2. There are an ample number of workers engaged in the small scale business.
3. The city enjoys a large crowd coming from villages (be it, for shopping for their small
business at their homes or be it selling their crops) and getting back by night.
4. Even the small shopkeepers and businessmen likes to stick to the price range of 1-3 Rs.
Per stick.
5. Majority of students in degree colleges are from the rural areas in and around the city.
They prefer to stick to the low cost cigarette segment.
6. People are less heath conscious and hence don‟t prefer the cigarettes having large filters
and more refined tobacco cigarettes i.e. cigarettes from KSFT segment
Performance of ITC products:
Ambala is surrounded by a large number of villages. And it also attracts the benefit of
cantonment area under which the sales of every segment is partial.
KSFT:
48
49. The sales figure of luxury brands like insignia, India kings and Benson & Hedges
comparative low then medium level but sales can‟t be ignored.
LSFT :
Medium Level
Classic, gold flake (LSFT) and Navy Cut‟s performance is good in comparison with KSFT.
RSFT :-
In the lower cost segment Gold Flake (RSFT) and Capstan are performing excellent, But on
the flipside the performance of HERO is quiet poor as customer is not demanding this
cigarette.
.
Margin Table
DS Rate Retail Rate No. of Price for Margin Profit % Profit Per
Brand Name Per M per M MRP Sticks Consumer for DS of retalr pack
Insignia 6895 6950 160 20 8 55 15% 21
India King 6027 6075 140 20 7 48 15.23% 18.5
B&H 5208 5250 120 20 6 42 14.29% 15
Classic 5208 5250 116 20 6 42 10.48% 11
Gold Flake Kings 5208 5250 116 20 6 42 10.48% 11
Navy Cut 4415 4450 49 10 5 35 10.11% 4.5
Gold Flake 4127 4160 45 10 4.5 33 8.17% 3.4
Flake Excel 2580 2600 28 10 3 20 8% 2
Capstun 2570 2590 28 10 3 20 8.11% 2.1
Hero 2520 2540 28 10 3 20 10.24% 2.6
*All figures are in Rupees
Competitors in RSFT segment:
Four Square
Red and white
Cavenders
Charms
Number 10
49
50. Competitors Price Analysis
Brand Campany MRP No. of Sticks
Red & White GPI 35 10
Four Square GPI 35 10
Cavender GPI 35 10
Four Square Special GPI 37 10
Marlboro GPI 116 20
Four Square kings GPI 45 10
Red & White Kings GPI 45 10
Crown GPI 28 10
Number 10 NTC 20 10
Charms VST 25 10
Chancellor GTC 15 10 .
*MRP is in Rupees.
Frequency of Coverage for Retailing Outlets:-
POP-GROUP For Retailing
Markets > 10K Thrice a week
Markets >2K up to 10K Twice a week
Markets <2K ( Kerala & AP) Once a week
*The above figure is the sales of a retail counter (market)
**And the above norms are minimum.
Outlet Coverage Norms: - What type of outlet ITC cover
POP-GROUP Outlet Norms for Retailing
Markets > 20K Outlets accounting for 80% Industry Volume or 10 packs per
day, whichever is higher will be directly serviced.
* With the proviso, there will be no reduction in the existing
outlet coverage
Markets < 20K Maximize coverage
50
51. Categorizing of outlets
Volume Class Packs Per Day Sale
1 > 150
2 81 – 150
3 51 – 80
4 31 – 50
5 11 – 30
6 =< 10
*
Plannogramming of FOD’s
On the shelf
Top to Bottom Highest Price Point to Lowest
Left to Right ( North, South Regular to Lights
& East) 20s to 10s pack
Lights to Regular
Left to Right ( West) 20s to 10s pack
51
53. Interpretation and analysis
Data Analysis
Data analysis is a technique of examining raw data with a purpose of drawing conclusion
from that information. It focuses solely on data to find conclusion.
Data Interpretation
Data interpretation is extracted of maximum information from a given set of information.
The data can be represented either in the form of tables, pie charts, or line graphs or a
combination of all these.
The data has been processed and analysed by tabulation interpretation so that findings can be
communicated and can easily understood. The findings are presented in the best possible
way. Tables and graphs has been used for illusions of findings of the research.
53
54. Question 1: Do You Know about the ITC Limited?
Yes 18
No 02
Awareness
Yes No
10%
90%
Interpretation:- By analyzing the data it was found that 90% people knows about ITC
limited and 10% doesn‟t know about it.
54
55. 2. Which brand you prefer?
ITC 13
VST 1
GPI 5
Others 1
Preference
ITC VST GPI Others
5%
25%
5% 65%
Interpretation: - Out of the survey done I came to know that preference of ITC is 65% then
comes the GPI whose preference is 25% and then VST preference is5% and others is 5%.
55
56. 3. Do you know about recent launch of ITC HERO?
Yes 15
No 5
Knowledge about Brand
No
25%
Yes
75%
Interpretation: - according to the survey done I came to conclusion that 75% people knows
about the new launch of ITC Ltd new launch Hero and 25% doesn‟t know about it.
56
57. 4. Have you tried this Cigarette?
Yes 10
No 10
Customer who tried this cigarette
Yes No
50%
50%
Interpretation: - According to survey the no of respondents those who tried this cigarette is
same. 50% tried it and same haven‟t tried it.
57
58. 5. How is the Taste?
Best 1
Average 5
Not so Good 5
Irritating 9
Taste
Best Average Not so Good Irritating
5%
25%
45%
25%
Interpretation: - as per survey conducted 5% respondent like this cigarette 25% rated it as
Average, 25% rated it as not so good and 45% respondents says it as irritating.
58
59. 6. Would you like to buy this cigarette in Future?
Yes 5
No 12
May Be 3
Future prospects
Yes No May Be
15%
25%
60%
Interpretation: - according to Survey conducted persons who said they will buy this
cigarette in future is 15% and those who are not sure said 25% but those who said no is 60%
which is quite high.
59
60. 7. From where you came to know about this cigarette?
World of mouth 1
Banners 8
Vendors 10
Others 1
Knowledge
World of mouth Banners Vendors Others
5% 5%
40%
50%
Interpretation: - People came to know about this brand mostly from vendors that is 50%
and then from the advertising campaign such as banner that is 40% world of mouth is 5% and
others is also 5%.
60
61. 8. What is the best part of this cigarette?
Price 6
Taste 4
Brand Name 4
Others 6
Best Part
Price Taste Brand Name Others
30% 30%
20% 20%
Interpretation: - As per survey 30% people thinks that best part is price and others, but 20%
people thinks that taste and Brand name is the best part of this cigarette.
61
62. 9. Please rate ITC-Hero Product on the following parameters?
Very Good good Average Below Poor
Average
Quality 1 3 5 5 6
Packaging 5 9 5 1 -
Price - 4 5 6 5
Availability 5 5 7 3 -
Awareness - - 10 5 5
about the
Product
Taste 1 2 5 2 10
Rating of Hero as Per Following Parameters
Very Good good Average Below Average Poor
10 10
9
7
6 6
5 5 5 5 5 5 5 5 5 5 5
4
3 3
2 2
1 1 1
0 0 0 0 0
Quality Packaging Price Availability Awareness Taste
about the
Product
Interpretation: - The above figure shows the rating of ITC Hero on the basis of Quality,
packaging, price, availability and taste. And according to their rating the result comes.
62
64. Findings of the study
By analyzing the data it was found that majority of respondents are not aware about
the ITC- HERO.
As on analyzing the data it was found that people don‟t even want to use taste this
cigarette
After analyzing the study as ITC is fallowing good promotional scheme for retailers
to sell the product but consumer is not willing to purchase this cigarette.
After analyzing the above figures and tables it was found that majority of the
respondents are providing the negative feedback regarding the new Brand launch by
ITC-Hero.
After analyzing the data I came to know that People do not like the taste of the
HERO.
People are not aware about the hero and even they are do not want to try this
cigarette.
People who are using upper segment of the cigarette don‟t want to switch to lower
segment.
According to study it was found that customer is not demanding this cigarette; it sells
just because of the pressure of vendor.
According to study this segment is usually less health consciousness probably stick to
low priced sticks. Not ready to experiment until and unless pushed retailers or
tempted with a scheme Taste and price are the two topmost criterions.
According to study people are not eager to try new brands.
64
66. Conclusion
After analyzing and interpretation of the data it was found that the new launch of ITC Ltd
Hero doesn‟t put any great impact on the sales of the retailer and it doesn‟t attract new
customers from the market.
As in the market there is already cigarettes of ITC Limited of this price Segment as Flake
excel is already selling in the market at the price tag of Rs. 28 for 10 sticks. Also there is
Capstun which is also there for the same price segment and they target the same categories.
This brand was launched to target the customer of lower segment who are consuming GPI
brand. As GPI recently launch Crown which is priced at Rs. 24 for 10 sticks.
Usually less health conscious people stick to low price sticks. People are not ready to
experiment until and unless pushed by the retailers or tempted with a scheme Taste and price
are the two topmost criterions.
66
70. Questionnaire
1. Do You Know about the ITC Limited?
a. Yes b. No
2. Which brand you Prefer?
a. ITC c. VST
b. GPI d. Other please Specify………..
3. Do You know about the recent launch of the Cigarette by ITC (HERO)?
a. Yes b. No
4. Have You tried this Cigarette?
a. Yes b. No
5. How is the taste?
a. Best c. Avg.
b. Not So good d. Irritating
6. Would you like to buy this cigarette in Future?
a. Yes b. No c. May Be
7. From where you come to know about this cigarette?
a. World of Mouth c. Vendor
b. Banners d. Others (Please Specify……….)
70
71. 8. What is the Best part of this cigarette?
a. Price c. Brand name
b. Taste d. Others (please specify……..)
9. Please rate ITC- HERO Brand product on the following parameters: -
Very good Good Average Below Poor
Average
I) Quality
II) Packaging
IV) Price
V) Availability in
Retail store
VI) Awareness about the
Product
VII) Taste
Name:-
Gender:-
Occupation:-
71
