1ITC LIMITED

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IN THE NEXT ONE HOUR……

Introduction & History…. Marketing Channels….

...Distribution Network

…Product Decision

…BCG Matrix ITC Foods: TASTING SUCCESS ? ….

…Ready-To-Eat

…Confectionery

…Staples

…Biscuits

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SWOT Analysis….Group Analysis….

…Learning Points

…Future Prospects

…HighlightsReferences….

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ITCONE OF INDIA’S MOST VALUABLE CORPORATION

One of India’s premier private limited groups with over 97 years

of experience

Large and established Distribution Network

Having market capitalization of US $ 15 billion

Annually turnover of the company is US $ 4.75 billion

It is one of the 8 Indian Companies to feature in ‘Forbes A-list’ for 2004

Rated as: The Forbes Global 2000 rankings for

2006 at position 1171.

Third in pre-tax profit among India's private sector corporations.

No. 1 in FMCG Sector by IMRB-Business world Survey 2006.

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HISTORY OF THE COMPANY….

24th August 1910

• Company was incorporated as a Private Company under the name, Imperial Tobacco Co. of India Ltd.

27th October 1954 • The Company was converted into a

Public Limited Company.

May 1970

• The name of the Company was changed from the Imperial Tobacco Co. of India Ltd., to India Tobacco Co. Ltd

October 1975• Company entered into hotel

business.

2000

• Company has launched a project "e-Choupal" in Bhopal to Web-enable farmers to make a beginning in agricultural e-trade.

• launched Wills Sport, a full range of internationally styled premium wear for men and women.

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Accolades & Awards….

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ACHIEVMENTS….

2006

• Stockholm Challenge Award

2005

• Golden Peacock Award

2004

• World Business Award

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Product….

1 • Goods

2 • Services

3 • Ideas

What is a Product?Solutions a marketer provides to its target market

Types of Product

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Categories of consumer product…..

Shopping Products

Specialty Products

Emergency Products

Unsought Products

Convenience Products

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The BCG Matrix for ITC..

StarsHotels

Paperboard/Packaging

Agri- business

?FMCG-Others

CowsFMCG-

Cigarettes

Dogs

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Product Decisions….. A Product is designed to provide the core benefits

sought by the target market

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The marketer offers the benefits through a combination of factors that make up the actual product Four key factors together help shape the actual product 

• Product-featurtes

• Branding

• Labeling

• Packaging

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Distribution Channel… Trade channel covers the distance between the

producer and the consumer ITC Foods utilizes distribution network efficiently Distributes products to more than a million outlets

across the country Distribution centers located in the major states e- choupals - distribution channel where the farmers

are linked to the company It even uses the services of Panwalaas for distributing

its brands

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Distribution philosophy- that of channel-tailored

Supervision process is to avoid overstocking and stock outs

Frequency of distribution to retail outlets

Help retailers manage their stock better

company can manage working capital better

ERP based logistics link- Distributers-Warehouses-Marketing branches to its head offices and factories

Developed a companywide hybrid network called Project Infoben

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ITC GROUP OVERVIEW

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ITC - Business Portfolio

HOTELS & I.T.

FMCG & CIGRATES

Agri Business PAPERBOARD & PACKAGING

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The ITC Group...Enduring Values

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The ITC Group...Enduring Values

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Ready-To-Eat…..

2001• Launched the koI brand under sub-

brands- bukhara, dum pukht and dakshin

2003• Gharana• Started website www.kitchenofindia.com• Brand sweets• Starting exporting its brand product

2004 • Launched conserves and cooking pastes•Won the National Excellence Award and was conferred the title “King of Ready-To-Eat Products”.

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2005 •Entered the branded spices market

2006 •Entered the instant mix segment •Planned to introduce 10 more varieties

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Ready-to-eat…MTRRava idly mixKhara Bhaath Mix

Satnam Overseas LimitedKohinoor

Priya FoodsPickels Instant mixes

Competitors

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Confectionery….

2002 • Mint-O

2003 • Candyman

2004 • Minto-O-Fresh

2005 • Coffitino

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Confectionery….Perfetti Van MelleAlpenliebeCenter Shock

ParleMelodyMango Bite

Competitors

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Biscuits….2003 •Entered with the brand SUNFEAST

•3 varieties Glucose, Marie and Cream

2004 •Launching of Sunfeast Milky Magic•Also launched Sunfeast Strawberry Cream, Sunfeast Pineapple Cream and Sunfeast Coconut

2005 •Launching of Sunfeast Golden Bakes•Launching of Sunfeast Pista

2006 •Tied up with House of spices to launch Sunfeast across US

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BRANDING STRATEGIES….

Brand AmbassadorsSharukh KhanSachin Tendulkar

Sunfeast Hara Banao Campaign

The Sunfeast Open 2005

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Market Share in 2004-05ITC3%

Parle46%

Britannia38%

Surya7%

Anmol4%

Priya2%

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Market Share in 2005-06ITC6%

Parle46%Britannia

36%

Surya6%

Anmol4%

Priya2%

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STAPLES…

2002 •Entered the staples market with wheat flour under the ashirwad brand•GOI proposed to remove restrictions

2003 •ITC extended the ashirwad brand to edible salts

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Positioning •Health and Hygiene•Value for money

SuccessFactors

•An effective distribution network•Quality of the product

Competitive Advantage

•Cost advantage owing to e-choupal•Printing and packaging business

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E-CHOUPAL….

Initiated in 2000 to establish a strong agricultural product supply chain

• Helped farmers to become “MARKET ORIENTED”

In 2004 ITC opened “CHAUPAL SAGAR”, a village shopping complex

• In early 2006 ITC e-choupal covered 7 states

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E - Choupal

STRENGTHS….

Channels of

marketing and

product decision

Experience

Innovation

Diversification in product

line

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Segmentation at a later stage

Unrelated diversificati

on

Negative perception

with the name ITC

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WEAKNESSES…

OPPORTUNITIES….

Going global

Reaching complete

India

Giving tough

competition

Expanding into

segments

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THREATS….

Competitors

Increase in taxes

Health hazards

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Financial Aspects..

Business/ Year Growth %

Value (Rs in Crore)2005 2004

FMCG-Cigarettes

8.4 10002.5 9230.2

FMCG-Others 85.2 563.3 304.1

Hotels 124.1 577.2 257.5

Agribusiness 4.2 1780.0 1708.7

Paper & pkg. 24.9 1565.3 1253.2

Net revenue 12.9 13349.5 11815.0

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LEARNING POINTS…..

Well Managed Distribution Network…

Diversified Presence in Business…

Pre-Launch Research…

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Continued….

Strong Promotional Strategy..

Product Offering….

E-Choupal….

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Market position…

Outstanding market leader • Cigarettes, Hotels, Paperboards, Packaging

and Agri-Exports.

Gaining market share • Nascent businesses of Packaged Foods &

Confectionery, Branded Apparel and Greeting Cards.

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FUTURE PROSPECTS…

Next “Sunrise Industry” in

India”….

Large Scale Farming….

Government’s assistance for

“Food Parks”….

Newer Product Categories….

Expansion in Rural

Market…..

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HIGHLIGHTS……

Economic Performance... India's largest FMCG Company Fastest growing Foods business 2nd largest exporter of agri commodities Accounts for 2% of country's agri-exports Gross Income of Rs 16,511 crores (US $ 3.5 billion) Market capitalisation of Rs 73,207 crores (US $ 16

billion) Foreign exchange earnings of US $ 2.5 billion (1997-

2006)

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Continued….

Social Performance….Empowering over 3.5 million farmers through

nearly 6,000 e-Choupals covering 36000 villages… (As at November 2006: 6,500 e-Choupals covering 38000

villages)

37,000 children covered under rural education….

(As at November 2006: 60,000 children)2154 women entrepreneurs created…..

(As at November 2006: 4,867 women entrepreneurs)

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Continued….

Environmental Performance…Getting closer to zero solid waste discharge…

(through reduction, reuse and 100% recycling)Water positive: four years in a row…..

(Creating Rainwater Harvesting potential greater than net consumption)

ITC turns Carbon positive…….

(storing more CO2 than it emits)

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REFERENCES…..

• www.itcportal.com• www.kitchensofindia.com• www.business-today.com• www.timesofindia.com• www.ficci.com• Marketing Management-Philip Kotler

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Group 5….

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QUERIES….?