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1. Organizational Profile

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

nearly US $ 19 billion and a turnover of over US $ 5 billion.* ITC is rated among the

World's Best Big Companies, Asia's 'Fab 50' and the World's Most Reputable Companies

by Forbes magazine, among India's Most Respected Companies by BusinessWorld and

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

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

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

compiled by Business Week.

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.

While ITC is an outstanding market leader in its traditional businesses of Cigarettes,Hotels, Paperboards, Packaging and Agri-Exports, it is rapidly gaining market share even

in its nascent businesses of Packaged Foods & Confectionery, Branded Apparel, Personal

Care and Stationery.

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

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

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

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

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

towards international competitiveness but by also consciously contributing to enhancingthe competitiveness of the larger value chain of which it is a part."

ITC's diversified status originates from its corporate strategy aimed at creating multiple

drivers of growth anchored on its time-tested core competencies: unmatched distribution

reach, superior brand-building capabilities, effective supply chain management and

acknowledged service skills in hoteliering. Over time, the strategic forays into new

businesses are expected to garner a significant share of these emerging high-growth

markets in India.

ITC employs over 26,000 people at more than 60 locations across India. The Companycontinuously endeavours to enhance its wealth generating capabilities in a globalising

environment to consistently reward more than 3,41,000 shareholders, fulfil the aspirations

of its stakeholders and meet societal expectations. This over-arching vision of the

company is expressively captured in its corporate positioning statement: "Enduring Value.

For the nation. For the Shareholder." (The ITC Profile 2009)


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2. History and Evolution

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

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

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

Tobacco Company Limited in 1970 and then to I.T.C. Limited in 1974. In recognition of

the Company's multi-business portfolio encompassing a wide range of businesses -

Cigarettes & Tobacco, Hotels, Information Technology, Packaging, Paperboards &

Specialty Papers, Agri-business, Foods, Lifestyle Retailing, Education & Stationery and

Personal Care - the full stops in the Company's name were removed effective September

18, 2001. The Company now stands rechristened 'ITC Limited'.

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'. 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.

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

Paperboards Limited, which today has become the market leader in India. 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 protectionand community development. In 2004, ITC acquired the paperboard manufacturing facility


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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. Since inception, its shares have been held by ITC, British American Tobacco and

various independent shareholders in Nepal. In August 2002, Surya Tobacco became a

subsidiary of ITC Limited and its name was changed to Surya Nepal Private Limited

(Surya Nepal).

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.

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. ITC's first rural mall, christened 'Choupal Saagar' was inaugurated in August

2004 at Sehore. On the rural retail front, 24 'Choupal Saagars' are now operational in the 3

states of Madhya Pradesh, Maharashtra and Uttar Pradesh.

In 2000, ITC forayed into the Greeting, Gifting and Stationery products business with the

launch of Expressions range of greeting cards. A line of premium range of notebooks

under brand Paperkraft was launched in 2002. To augment its offering and to reach a

wider student population, the popular range of notebooks was launched under brand

Classmatein 2003. Classmate over the years has grown to become Indias largest

notebook brandand has also increased its portfolio to occupy a greater share of the school

bag. Years 2007- 2009 saw the launch of Children Books, Slam Books, Geometry Boxes,

Pens and Pencils under the Classmate brand. In 2008, ITC repositioned 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.Paperkraft entered new categories in the office consumable segment with the launch of

Textliners, Permanent Ink Markers and White Board Markers in 2009.

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


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platform for the Fashion Design industry. To mark the occasion, ITC launched a special

'Celebration Series', taking the event forward to consumers. In 2007, the Company

introduced 'Miss Players'- a fashion brand in the popular segment for the young woman.

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

ITC InfoTech India Limited, to more aggressively pursue emerging opportunities in this

area. Today ITC InfoTech is one of Indias 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 - Manufacturing, BFSI (Banking, Financial Services & Insurance), CPG&R

(Consumer Packaged Goods & Retail), THT (Travel, Hospitality and Transportation) and

Media & Entertainment.

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 Candy man confectionery and Aashirvaad atta (wheat flour). 2003

witnessed the introduction of Sunfeast as the Company entered the biscuits segment. ITC's

entered the fast growing branded snacks category with Bingo! In 2007. In just seven years,

the Foods business has grown to a significant size with over 200 differentiated products

under six 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 entirevalue chain found yet another expression in the Safety Matches initiative. ITC now

markets popular safety matches brands like iKno, Mangaldeep, Aim, Aim Mega and Aim

Metro.

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

manifestation of its partnership with the cottage sector. ITC's popular agarbattis brands

include Spriha and Mangaldeep across a range of fragrances like Rose, Jasmine, Bouquet,

Sandalwood, Madhur, Sambrani and Nagchampa.

ITC introduced Essenza Di Wills, an exclusive range of fine fragrances and bath & bodycare products for men and women in July 2005. Inizio, the signature range under Essenza

Di Wills provides a comprehensive grooming regimen with distinct lines for men (Inizio

Homme) and women (Inizio Femme). Continuing with its tradition of bringing world class

products to Indian consumers the Company launched 'Fiama Di Wills', a premium range of

Shampoos, Shower Gels and Soaps in September, October and December 2007

respectively. The Company also launched the 'Superia' range of Soaps and Shampoos in

the mass-market segment at select markets in October 2007 and Vivel De Wills & Vivel

range of soaps in February and Vivel range of shampoos in June 2008. (History and

Evolution n.d)


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3. Product Profile

ITC: Touching Your Lives Everyday

FMCG Hotels

Paperboards,

Speciality

Paper,

Packaging

Agri

Business

Information

Technology


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3.1Personal Care Products

In line with ITC's aspiration to be India's premier FMCG Company, recognised for its

world-class quality and enduring consumer trust, ITC forayed into the Personal Care

business in July 2005. In the short period since its entry, ITC has already launched an

array of brands, each of which offers a unique and superior value proposition to discerning

consumers. Anchored on extensive consumer research and product development, ITC's

personal care portfolio brings world-class products with clearly differentiated benefits to

quality-seeking consumers.

ITC's Personal Care portfolio under the 'Essenza Di Wills', 'Fiama Di Wills', 'Vivel Di

Wills' 'Vivel UltraPro', '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 platform for its Research and Development and Product Development teams

to develop superior, differentiated products that meet the consumer's stated and innate

needs. The product formulations use internationally recognised safe ingredients, subjected

to the highest standards of safety and performance. (Personal Care n.d)


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3.1.1 Vivel

Between February and June 2008, ITC expanded its personal care portfolio with the

launch of Vivel Di Wills and Vivel brands. Vivel Di Wills, a range of soaps, and Vivel, a

range of soaps and shampoos, cater to the specific needs of a wide range of consumers.

Vivel Di Wills and Vivel are high quality ranges of soaps and shampoos for the upper-mid

and mid-market consumer segments. All products offer a unique value proposition of

bringing together ingredients that provide the benefit of Nourishment, Protection and

Moisturisation through one product, hence providing the ever

discerning consumer complete care, which makes her beautiful

and confident.

The Vivel Di Wills range of Soaps is available in two variants.

Vivel Di Wills Sheer Radiance is enriched with Olive Oil, toprovide skin lustre to make it radiant.

Vivel Di Wills Sheer Crme is enriched with Shea Butter, to moisturize skin to make it

soft and supple.

The Vivel range of soaps is available in five variants:-

Vivel Young Glow is enriched with Vitamin E and Fruit Infusions which help in

providing youthful glow to the skin.

Vivel Satin Soft is enriched with Vitamin E and Aloe Vera which help the skin feelbeautifully soft.

Vivel Sandal Sparkle is enriched with Sandalwood Oil

and Active Clay which helps in providing clear skin.

Vivel Ayurveda Essence is enriched with multiple

Ayurvedic Ingredients which help protect skin from

germs and harsh environment, keeping it healthy and

beautiful.

Vivel Silk Spring is enriched with Green Apple

extracts and Olive oil which help in making skin

smooth.


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The Vivel range of shampoos is available in three variants:-

Vivel Shine & Glow is suitable for dull to normal

hair and is enriched with Green Tea Extract and

Conditioners. It adds shine to hair.

Vivel Soft & Fresh is suitable for dry to normal

hair and contains Extra Conditioners and Soya

Protein. It makes hair soft and fragrant.

Vivel Volume & Bounce is suitable for oily to

normal hair and contains Jojoba Oil and Conditioners. It adds volume and bounce to

hair.

The product portfolio was further enhanced with the launch of Ultrapro anti-dandruff

shampoo under the umbrella brand Vivel in December 2008. Ultrapro promises to fightdandruff twice as effectively while also providing care for hair through the plus benefits of

Nourishment and Moisturisation. (Vivel Portfolio n.d)

3.1.2. Fiama Di Wills

In September 2007, ITC launched Fiama Di Wills, a premium range of personal care

products comprising shampoos, conditioner, shower gels and bathing bar. The Fiama Di

Wills range combines the goodness of nature and science,

providing gentle and effective care. The Fiama Di Wills product

portfolio has been developed by scientists at the ITC R&D Centre,

leveraging the expertise of International product formulation

specialists. The fragrances, aesthetics and packaging have been

developed in collaboration with European specialists.

Fiama Di Willss products are targeted at the young, modern, aware customers who are

confident of themselves and seek indulgences that make them feel alive and beautiful. The

range combines exotic naturals like Sage, Watercress, Magnolia blossoms and the best of

contemporary science like Hydro Restorative System and Cuticle Restore Technology tomake the consumer feel beautiful, today, tomorrow.

Fiama Di Wills Shampoos developed in collaboration with Cosmetech Labs Inc., USA,

offer a range of five variants. Each of these is designed to deliver a specific hair benefit to

the consumer :

Everyday Mild (with extracts of Thyme & Juniper) is a gentle caring shampoo suitable

for regular use.

Aqua Balance (with extracts of Magnolia Blossoms & Watercress) is a gentle

moisturizing shampoo ideal for dry, dull hair.


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Volume Boost (with extracts of Rosemary &

Sage) is a gentle volumizing shampoo ideal

for thin, limp hair.

Silky Strong (with oils of Macadamia Nut

and Babassu) helps make hair smooth, silky

and strong and is ideal for weak, damaged

hair.

Shine in Style (with extracts of Chamomile

and Green Tea) makes hair shiny and manageable, easy to style and is ideal for dull to

normal hair.

Each of these shampoos can be complemented with Fiama Di Wills Polishing Drops

conditioner. This gentle conditioner enriched with Avocado Oil and Burdock extract

promises to make hair shiny, soft and smooth. It also gives the additional benefits of UV

protection as it contains Sunflower Seed extract, which is a natural UV absorber.

The Fiama Di Wills product line also consists of a 3-variant range of transparent shower

gels which are unique as they come with suspended beads:

Mild Dew (contains soft beads, extracts of peach and avocado) is for soft, moisturized

skin.

Clear Springs (contains jojoba beads, extracts of sea weed and lemongrass) is for clear,

healthy, smoother skin.

Exotic Dream (contains glitter beads, extracts of bearberry leaves and black currant) is

for stimulating freshness.

The Fiama Di Wills range of bathing bars has been launched under the sub - brand Skin

Sense. The first variant to be introduced in this range is Soft Green. This is a gentle caring

bathing bar, that helps enhance retention of skin proteins giving 6 pro cares. Protein keeps

skin moisturised, supple, youthful, even toned, radiant and smooth.

Fiama Di Wills recently launched a range of transparent gel bathing bars. A first of its

kind, a transparent liquid gel has been solidified into a bathing bar so that consumers get a

superior bathing experience. The shower gel in a bathing bar format which has been

crafted through a unique and patented freezing technology. Backed by deep consumer

insights, this proprietary gel bathing bar is a result of years of extensive research and

development by the scientists at the ITC R&D Centre.

Uniquely crafted, these Gel Bathing Bars are shaped like dew drops, have a transparent

look, rich creamy lather, and a great long-lasting fragrance. These bathing bars are

dermatologic ally tested and proven mild and contain the goodness of natural exotic

extracts like Peaches, Avocadoes, Sea Weed and lemongrass. Launched in two variantsthat offer specific different skin benefits, are:


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Mild Dew - Contains extracts of peach and avocado which moisturise the skin

Clear Springs - Contains extracts of lemongrass & sea weed which gives Clear skin

The Fiama Di Wills transparent Gel Bathing Bars are available at an attractive price of Rs.

25 for 110 grams. This differentiated range of bathing bars offers the consumer adelightful bathing experience.

Fiama Di Wills has expanded its range of personal care products by introducing Aqua

Pulse shower gel, exclusively for men. The shower gel contains extracts of exotic naturals

like sea minerals and blue lotus. This blue transparent shower gel refreshes and keeps skin

healthy. (Fiama Di Wills n.d)

3.1.3. Essenza Di Wills

ITC launched an exclusive line of prestige fine fragrances under the Essenza Di

Wills brand in mid 2005. Essenza Di Wills is an exclusive range of fine fragrances and

bath & body care products for women and men.

Inizio - the signature range from Essenza Di Wills,

provides a comprehensive grooming regimen with

distinct lines for women (Inizio Femme) and men

(Inizio Homme). The rich and sensual international

fragrances of Essenza Di Wills are all-day offeringscreated by leading French fragrance houses. The range

includes a host of bath & body care products that share

the same olfactory signature to offer a harmonised fragrance experience.

Aqua - The Essenza Di Wills portfolio was enhanced with the Aqua range for men

(Aqua Homme) offering a distinctive and fresh aquatic fragrance. It embodies the

essence of stylish and confident man. The fragrance note revolves around "Citrus

Aromatic Musky". The alliance of bergamot

mandarin &Italian lemon which stimulates and

re-energizes the mind. The top notes are blendedwith a spicy aromatic heart which burst with the

energy of French rosemary, Clary sage & Tonka

beans arousing vigour & pure masculinity. This

is further enhanced with musky end notes which

reveal the warmth of amber and vanilla creating

a discreet refinement that can never go out of

style. The Aqua range includes Eau De Toilette,

Hair & Body Shampoo, Deodorant Spray, After Shave Lotion and a Bathing Bar.


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Mikkel - The latest addition to the Essenza Di

Wills portfolio is the enigmatic 'Mikkel' that embodies a

fine balance between Mystery and Elegance. The

fragrance is specially suited for evening wear. The

sharp Lavender and Bergamot top notes blendsophistication with a hint of mystery. At the heart,

sensual Neroli and serene Orange Blossom dance to an

effortless tune of elegance. The rich and passionate

undertones of Vanilla delicately bring out the aroma of

Amber, creating an unmistakable aura. Mikkel Homme Eau De Toilette and After

Shave Lotions are available exclusively at Wills Lifestyle stores. (Essenza

Di Wills n.d)

3.1.4. Superia

The Superia range of soaps and shampoos has been launched to cater to the large popular

market in the personal care category. The products under the Superia brand are made from

scientifically developed formulations enriched with natural ingredients that have

traditionally been known to be good for the skin and hair. The range offers consumers

access to some of the best-in-class products in vibrant attractive packaging.

Superia Soaps are available in four variants:

Fragrant Flower: with the fragrance of Rose & Lavender Oil

Soft Sandal: with the fragrance of Sandal & Almond Oil

Natural Glow: with Neem & Coconut Oils

Healthy Glow: with Orange Oil

Superia shampoos with triple conditioners and natural ingredients

bring a natural shine to hair. Superia shampoos are available in two

variants:

Shiny Black with Triple Conditioners and the natural goodness of

Hibiscus & Brahmi extracts.

Vibrant Green with Triple Conditioners and the natural goodness of

Amla & Arnica extracts.

Another addition to the Superia shampoo portfolio, Superia Maxi Protect Active Health

shampoo contains Dandruff Fighter along with Vitamins & Soya Protein. It fights multiple

types of dandruff causing germs and leaves hair & scalp feeling clean & healthy.

(Superia n.d)


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4. Competitior Profile

Nirma is one of the most recognizable Indian brands. Its story is a classic example of the

success of Indian entrepreneurship in the face of stiff competition. Nirma took on the

might of giant multinationals and wrote a new chapter in the Indian corporate history.

Starting as a one-man operation in 1969, today, Nirma has about 14, 000 employee-base

and annual turnover of more than Rs. 25, 00 crores.

Founder of Nirma is Dr. Karsanbhai Patel, son of a small-time farmer and a qualified

Science graduate. In 1969, the year he founded Nirma, Karsanbhai Patel was working as

junior chemist in Government laboratory. In the night Karsanbhai used to make detergent

in the 100 Sq. Ft. back yard of his home, using bare hands and bucket. In 1960s and 1970s,

the domestic detergent market had only premium segment, with very few players and was

dominated by MNCs. After making the detergent Karsanbhai used to pack it in polythene

bag and sold it door-to-door. He priced the detergent at Rs. 3 per kg, when the available

cheapest brand in the market was Rs. 13 per kg. In a short span of time, with indigenous

process, packaging and low-profiled marketing, Nirma created an entirely new market

segment in domestic marketplace and quickly emerged as dominant market player. Nirma

rewrote the marking rules and its success story became one of the widely discussed case

studies in the B-schools across the world.

In the 1980s Nirma catapulted Surf, which was a well-established detergent product by

Hindustan Lever, and occupied the top slot in the detergent products segment-a slot it has

made its own. In 1990, Nirma entered the toilet soap market and today it is the second

largest toilet soap brand in India. Today, Nirma has one of the largest volume sales with a

single brand name in the world.

Products of Nirma:

Consumer Products

Soaps: Nirma Bath Soap, Nirma Beauty Soap, Nirma Lime Fresh Soap, Nima Rose,

Nima Sandal

Detergent: Nirma Washing Powder, Nirma Detergent Cake, Super Nirma Washing

Powder, Super Nirma Detergent Cake, Nirma Popular Detergent Powder, Nirma

Popular Detergent Cake

Salt: Nirma Shudh

Scouring Products: Nirma Clean Dish Wash Bar, Nima Bartan Bar


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Industrial Products:

LAB (Linear Alkyl Benzene)

AOS (Alfa Olefin Sulfonate)

Sulfuric Acid

Glycerin

Soda Ash

Pure salt

Vacuum Evaporated Iodized Salt

SSP ( Single Super Phosphate )

Sodium Silicate

(Nirma Ltd. 2007)


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4.1.Competitor Analysis

BASIS ITC Ltd. NIRMA Ltd.

LOGO

TAG LINE Beautiful You Today

Tomorrow,

Your Essence Your Soul,

Khoobsurti Bas MeinDuniya Kadmon Mein,

Aise Chamak K Duniya

Bole Pehle Aap.

Better Products Better

Value Better Living.

PRODUCTS Essensa Di Wills, Fiama

Di Wills, Vivel Di Wills.

Soaps, Detergents, Clean

Dish Wash Bar, Bartan Bar.

SEGMENTATION It uses clear segmentation

across its five product

lines.

Majorly it id diversified into

two product lines.

GROUP SYNERGY It has leveraged itsproducts like Hotels,

Foods, Apparels, etc.

It has leveraged its productslike soaps, detergents,

sulphuric acids, glycerin,

etc.

COMMUNICATION

STRATEGY

This brand sport Western

names, and different

communication.

Generally it communicates

with localizes language.

BRAND EXTENSIONS It has a selective extension

where essenza is an

exception.

Extension was basically

found in Premium Segment.

GROWTH RATE 16-18% 11.5-12%


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5. Management

5.1.Organizational Chart

Flowing from the concept and principles ofCorporate Governance adopted by the

Company, leadership within ITC is exercised at three levels.

Businesses include:

FMCG, Hotels, Paperboards,

Speciality Papers, Packaging,

Agri Business and Information

Technology

Divisional/Strategic Business Unit

(SBU) Management Committees,

each headed by a Divisional/SBU

Chief Executive

Corporate Management Committee

Investor

Services

Committee

Corporate Functions include:

Planning and treasury, Accounting,Taxation, Risk Management, Legal,

Secretarial, EHS, Human Resources,

Corporate Communications,

Corporate Affairs, Internal Audit,

Research and Development and

Information Technology

Audit

CommitteeCompensation

Committee

Sustainability

Committee

Nominations

Committee

Board of Directors

Divisional/Strategic Business Unit

(SBU) Management Committees,

each headed by a Divisional/SBU

Chief Executive

Corporate Functions,

each headed by a HOD

Businesses include:

FMCG, Hotels, Paperboards,Speciality Papers, Packaging,

Agri Business and Information

Technology
http://www.itcportal.com/our_values/corp_governance.htmlhttp://www.itcportal.com/our_values/corp_governance.html


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5.2.Corporate Strategies

ITC is a board-managed professional company, committed to creating enduring value for

the shareholder and for the nation. It has a rich organisational 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.

ITCs 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 capabilities residing in ITC are various businesses.

Create distributed leadership within the organisation by nurturing talented and focused

top management teams for each of the businesses.

Continuously strengthen and refine Corporate Governance processes and systems to

catalyse the entrepreneurial energies of management by striking the golden balance

between executive freedom and the need for effective control and accountability. (The

ITC Way n.d)

5.3.Contribution to Triple Bottom Line

5.3.1. Economic

A growing portfolio encompassing FMCG, Paperkraft and Packaging, Agri and Food

Business, Hotels and Information Technology.

A turnover of over US $ 5 billion and a market capitalisation of over US $ 16 billion.

Total Shareholder Returns, measured in terms of increase in market capitalisation and

dividends, grew at a compound fate of over 24% per annum over the last five years.


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The new FMCG businesses support the competitiveness, technology upgradation and

market reach of over 170 Small and Medium Enterprises (SMEs).

5.3.2. Environmental

ITC has been Carbon Positive four years in a row (sequestering/storing twice theamount of CO2 that the company emits).

Water Positive seven years in a row (creating two times more Rainwater Harvesting

potential than ITCs net consumption).

Solid Waste Recycling Positive (Reusing/Recycling more solid waste than generated).

All Environment, Health and Safety Management Systems in ITC conform to

international standards.

5.3.3. Social

ITCs businesses generate livelihoods for over 5 million people.

ITCs globally recognised e-Choupal initiative is the worlds largest rural digital

infrastructure benefiting over 4 million farmers.

ITCs Social and Farm Forestry initiative has greened nearly 96,000 hectares, creating

an estimated 43 million person-days of employment among the disadvantaged.

ITCs Watershed Development initiative brings precious water to over 46,000 hectares

of dry lands and moisture-stressed areas.

ITCs Sustainable Community Development initiative include womens

empowerment, supplementary education and integrated animal husbandry

programmers. (ITC Limited Sustainability Report 2009)


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5.4.Human Resource

5.4.1. Staffing Process

Recruitment

Selecting from among the Applicants

Placement and Orientation

Training and Development

Performance Appraisal

Promotion and Career Planning

Compensation


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Recruitment Process

Ensures that provided candidates, are most suitable for your specific requirements. Our

trained consultants pre-screen and pre-select applicants before submitting their details -

for we want to assure accurate matching between our company and any prospective

employee.

Collection of Curriculum Vitae from applicants interested in one or more of our offers.

Every Curriculum Vita is written in the ITC format, which allows for easy comparison

of each candidate's details.

Performing the first telephone interview in order to make preliminary assessments of

the overall competency of a candidate, especially in regards to their level of English.

All documents are then collected and reference checks are performed including

employment history, criminal background and health checks.

If the panel is fully satisfied with the results and feel confident that the candidate is

suitable for your specific requirements, then the second interview is odne and later

sends the application to the potential employer who then obviously makes the final

decision.

The final interview is then conducted at Krakow, head office.

Also, arranging travel for any prospective employee to ensure the final step runs

smoothly.

Selection Process

The selection process is objective and robust.ITC soaps selects talent for the Technical

function from the 5 IITs (Chennai, Delhi, Kanpur, Kharagpur, Powai) and some of the

NITs. Engineers from disciplines such as Mechanical, Electrical and Electronics,

Production Engineering, Chemical and Civil are considered for placement. The process

starts in August each year with a campus visit and a pre-placement presentation. This

provides an opportunity for young aspirants to learn more about the Company, its

achievements, its strategies and the kind of careers they can look forward to.

A range of selection tools are used. These include assessment centres, group tasks and

in-depth personal interviews.

Candidates found suitable for employment are immediately given offers to join ITC in

July of the following year. After a comprehensive induction programme, they are

assigned to various businesses of the Company.

ITC also selects first-year students for Summer Internships


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A team of ITC managers visits campuses once again between December and March for

final placement. The process consists of group discussions and personal interviews

preceded by psychometric tests and assessment centres. Employment offers are made to

selected candidates immediately. On joining ITC in July, candidates undergo an induction

programme before being assigned to one of the Company's businesses.

Employment offers are made to selected candidates immediately. On joining ITC in July,

candidates participate in an induction programme. Thereafter they are assigned to

responsibilities in Trading, Sourcing and Logistics in the Agri Business Division.

ITC believes in taking out the best out of the pool of application received during

recruitment process. It believes in infusion of new blood in their organisation.

Training and Development

Training has become most crucial aspect in ITC SOAPS because of chanding standards of

technology and its services. Training courses are sometimes offered for 6 months with

internship so it invites freshers which are motive of ITC SOAPS. Training is given by

practical demos with latest and modern machines and equipments and is conducted

professionally.

Compensation Policy

ITC believes that managerial remuneration is an important instrument in attracting and

retaining talent and a key component of the performance management system. Three

features of ITC's remuneration strategy are:

Remuneration must leverage performance and therefore the need for a strong linkage

between remuneration and performance when considering annual remuneration reviews as

well as when periodically adjusting remuneration for market.

Remuneration must be market-led. For this purpose remuneration is reviewed on an on-

going basis in relation to identified benchmark companies to ensure that remuneration

practices are in sync with the competitive situation.

Remuneration must take into account "affordability" and the Company's capacity to pay

and hence cannot be divorced from business realities.

Remuneration distribution of 2008-2009

Minimum wages are paid to employer as per rate in state decided by state government

according to the turnover. Last year salary of person was between Rs. 10,000 12,000 per

month.


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Sales incentives are based on targets at the store. However employees are encouraged to

concentrate on producing goods to standards lay down by company. As employees are

encouraged to give more output in order to get more incentives with their salaries.

Incentives like bonus, free education for children for 1 year, travelling expenses, flat, etc

are given.

Medical reimbursement of Rs. 9000 for a period of 3 years.

Rs. 10,000 reimbursement on all the ITC Products in 1 year.

Note: Importance on health standards of safety as required under law factory at 1948 and

is strictly maintained by ITC soaps.

(Careers with ITC n.d)

Pension Obligation

Employees Retirement Benefit Schemes funded through duly constituted and improved

independent trusts.

Provident Fund and Family Pension contributes in respect of unionized staff, as required

by the statutes, deposited with the government.

There are different pension plans and obligations and these plans cover over 18,000

employees. These plans are fully funded in accordance with annual actuarial valuation.The expected rate of return on plan assets is based on the current portfolio of assets,

investment strategy and market scenario. In order to protect the capital and optimize

returns within acceptable risk parameters, the plan assets are well diversified. The funds

are consistently sustained to meet requisite superannuation commitments.


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5.4.2.Code of Conduct

Following code of conduct is applicable and followed by all directors, senior management

and employees of the Company.

Preamble

ITCs Code of Conduct was circulated to the employees more than five years back and is

posted on the Companys corporate website. This Code has now been re-drafted for better

presentation. This Code is derived from three interlinked fundamental principles, viz. good

corporate governance, good corporate citizenship and exemplary personal conduct.

Philosophy

ITC is a professionally managed organisation and the core value underlying our corporatephilosophy is "trusteeship". organisation has been handed by the various stakeholders in

"trust" and we as professionals are the "trustees" of these stakeholders. It is therefore our

responsibility to ensure that the organisation is managed in a manner that protects and

furthers the interests of our stakeholders. We recognise society as an important stakeholder

in this enterprise and therefore it is part of our responsibility to practise good corporate

citizenship. It is also our belief that in order to serve the interests of our stakeholders in

perpetuity, we must build ITC into an institution whose dynamism and vitality are

anchored in its core values.

Corporate Governance Policy

The Corporate Governance Policy is the apex level instrument guiding conduct of the

affairs of the Company and clearly delineates the roles, responsibilities and authorities of

the key entities in the governance structure of the Company. This Code forms an integral

part of the Companys Governance Policy. The directors, senior management and

employees must adhere to the Corporate Governance Policy of the Company.

Good Corporate Citizenship

A Gender Friendly Workplace

As a good corporate citizen, ITC is committed to a gender friendly workplace. It seeks to

enhance equal opportunities for men and women. Sexual harassment includes unwelcome

sexually determined behaviour such as: unwelcome physical contact; a demand or request

for sexual favours; sexually coloured remarks; showing pornography and any other

unwelcome physical, verbal or non-verbal conduct of a sexual nature.

ITC maintains an open door for repartees; encourages employees to report any harassment

concerns and is responsive to employee complaints about harassment or other unwelcome


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and offensive conduct.ITC demands, demonstrates and promotes professional behaviour

and respectful treatment of all employees.

Legal Compliance

It is the Companys policy to comply fully with all applicable laws and regulations. The

Company cannot accept practices which are unlawful or may be damaging to its

reputation. Divisional Management Committees must satisfy themselves that sound and

adequate arrangements exist to ensure that they comply with the legal and regulatory

requirements impacting each business and identify and respond to developments in the

regulatory environment in which they operate.

Health and Safety

The Company attaches great importance to a healthy and safe work environment. ITC iscommitted to provide good physical working conditions and encourages high standards of

hygiene and housekeeping. Particular attention should be paid to training of employees to

increase safety awareness and adoption of safe working methods, particularly designed to

prevent serious or fatal accidents.

Environment Policies

The Company believes that commitment to sustainable development is a key component

of responsible corporate citizenship and therefore deserves to be accorded the highest

priority. Accordingly, the Company is committed to Best Practices in environmentalmatters arising out of its business activities and expects each business to fully demonstrate

this commitment.

Personal Conduct

Avoidance of Conflict of Interest

All directors, senior management and employees must avoid situations in which their

personal interest could conflict with the interest of the Company. This is an area in which

it is impossible to provide comprehensive guidance but the guiding principle is that

conflict, if any, or potential conflict must be disclosed to higher management for guidance

and action as appropriate.

Transparency and Audit ability

All directors, senior management and employees shall ensure that their actions in the

conduct of business are totally transparent except where the needs of business security

dictate otherwise. Such transparency shall be brought about through appropriate policies,

systems and processes, including as appropriate, segregation of duties, tiered approvalmechanism and involvement of more than one manager in key decisions and maintaining


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supporting records. It shall be necessary to voluntarily ensure that areas of operation are

open to audit and the conduct of activities is totally auditable.

Protection of Confidential Information

No director, senior management and employee shall disclose or use any confidential

information gained in the course of employment/ association with the Company for

personal gain or for the advantage of any other person. No information either formally or

informally shall be provided to the press, other publicity media or any other external

agency except within approved policies.

Company Facilities

No director, senior management and employee shall misuse Company facilities. In the use

of Company facilities, care shall be exercised to ensure that costs are reasonable and thereis no wastage.

Non Adherence

Any instance of non-adherence to the Code of Conduct / any other observed unethical

behaviour on the part of those covered under this Code should be brought to the attention

of the immediate reporting authority, who shall in turn report the same to the Head of

Corporate Human Resources. (Code of Conduct)


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5.4.3. Core Values

ITC's Core Values are aimed at developing a customer-focused, high-performance

organisation 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 actualise 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 theteam and that a strong team is founded on a variety of perspectives. (Our Core Values n.d)


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5.4.4. Policy on Human Rights

ITC believes that all its employees must live with social and economic dignity and

freedom, regardless of nationality, gender, race, economic status or religion. In the

management of its businesses and operations therefore, ITC ensures that it upholds the

spirit of human rights as enshrined in existing international standards such as the Universal

Declaration and the Fundamental Human Rights Conventions of the ILO.

Policy

ITC upholds international human rights standards, does not condone human rights abuses,

and creates and nurtures a working environment where human rights are respected without

prejudice.

Implementation

The Corporate Human Resources function of ITC is responsible for the Human Rights

Policy design, implementation and updation.

The policy is implemented at all locations of ITC through a set of separate policies and

procedures covering each of the main constituents of human rights applicable at the

workplaces.

Monitoring & Audit

The assessment procedures for different constituents of this policy are defined against each

specific policy. (Policy on Human Rights n.d)


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5.4.5. Safety at Work

All units in ITC have established

EHS management systems with

designated responsibilities,

competent resources, best-in-class

infrastructure, state-of-the-art fire

detection & protection systems and

the latest electrical equipment, etc. to

achieve benchmarked performance in

safety.

Employee involvement through

participation in suggestions schemes,

holding EHS events and EHSTraining have helped develop and maintain a safety culture across the organisation.

Our units also engage in proactive risk assessment techniques to identify potential hazards

and implement risk control measures to eliminate/reduce risks.

Corporate EHS experts review new projects/expansion plans and conduct comprehensive

audits before commissioning projects to ensure compliance.

Although the Indian Factories Act/Rules, which is aligned with the requirements of ILO, is

comprehensive and encompasses all requirements for a safe and healthy work

environment, we collaborated with National Safety Council of India to develop our own

Corporate EHS Guidelines, which are far more stringent than the Indian legislation and

include international standards and best practices.

A comprehensive incidents/accidents reporting system has been established at every unit.

All accidents and incidents are thoroughly investigated to identify the root cause and

initiate corrective and preventive measures.

The findings and recommendations are discussed at the safety committee meetings andcirculated to all Departments for implementation.

In 2008-09, our focus on providing a safe work environment yielded positive results with

lost time accidents reduced by 25%, injury rate by a third, lost day rate by 11.4%.

Effective implementation of excellent safety standards resulted in zero fatality in 2008-09.


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(Occupational Health and Safety 2009)


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5.4.6. Quality Policy

ITC is committed to delivering world-class products and services. This requires a clear

focus on continuously striving to create a higher value to customers by achieving

excellence in all Company's operations. Business excellence calls for a passionate focus on

technology, products, services, processes and an operating environment firmly anchored to

an impregnable foundation of Quality.

ITC firmly believes that quality is not a specifically

assignable task. It needs to be firmly rooted and

institutionalized in the culture and value system of

the Company. ITC nurtures a culture of striving for

continuous improvement in quality, be it in products,

services, systems or performance. The Company is

committed to the establishment of systems andprocesses to promote organizational creativity and

innovation.

ITC's development of its Integrated Quality Management System (IQMS) is based on its

strong foundation of implementing ISO 9001:2000, ISO 14001, OHSAS 18001, SA 8000,

HACCP (for Foods) and IQRS (performance rating and benchmarking of the quality

management system). Likewise, ITC's strategic initiatives for developing its people have

been based on participative management concepts like QC (Quality Control), TQM (Total

Quality Management), KSS (Kaizen Suggestion Scheme), 5S, Six Sigma.

All ITC manufacturing units have ISO quality certification. Almost all contract

manufacturing units in the Foods Business and all large hotels have food safety and quality

systems certified by accredited 'third party' in accordance with 'Hazard Analysis Critical

Control Points' (HACCP) standards. Additionally, the quality of all FMCG products of the

Company is regularly monitored through 'Product Quality Rating System' (PQRS). The

Leaf Tobacco and Printing & Packaging businesses have achieved world-class ratings in

the 'International Quality Rating System' (IQRS) for business excellence in which key

processes are rated against international benchmarks and certified by accredited 'third

party' independent assurance providers. (Research and Development n.d)


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6. Marketing Environment

Marketing is a process whereby people exchange goods and services for money or for

something of value to them.

Phillip Kotler has defined marketing as a social process by which individual groups

obtain what they need and want through creating offerings and freely exchanging products

and services of value with others.

Thus, marketing is a social process where in people interact with others, in order to

convince them to act in a particular way, say to purchase a product or a service, rather than

forcing them to do so.

TargetConsumers

Product

Place Price

Promotion

Competitors

IntermediariesDemographicEconomic

TechnologicalNatural

PoliticalLegal

SocialCultural

Logistics

Bruce C. Bailey 1998


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6.1.Macroenvironment Analysis

This includes all factors that can influence and organization, but that are out of their direct

control. A company does not generally influence any laws (although it is accepted that

they could lobby or be part of a trade organization). It is continuously changing, and the

company needs to be flexible to adapt. There may be aggressive competition and rivalry in

a market. Globalization means that there is always the threat of substitute products and

new entrants. The wider environment is also ever changing, and the marketer needs to

compensate for changes in culture, politics, economics and technology.

6.1.1. Demographics of India

The two aggregate demand growth drivers, namely investment and private

consumption have moderated in India.

The sectors growth drivers, i.e. manufacturing, agriculture, construction and

communication have all experienced reduced growth rates.

The Foreign Institutional adversely affected the Indian equity and foreign exchange

markets in the wake of withdrawal Investors (FIIs), triggered by their need for liquidity

support in other markets.

The money, debt, and credit markets too were impacted. Thus, while the Indian

Banking sector remained largely unscathed by the global financial crisis, it could not

escape a liquidity crisis, in turn affecting investment and consumption in the realeconomy.

The government had no option but to introduce stimulus packages estimated at 2.9% of

the GDP.

Combined with the loan waivers and the hikes granted by the Sixth Pay Commission,

the pump priming of the economy has worsened the fiscal deficit.

The Reserve Bank of India on its part attempted to inject liquidity through a series of

policy interventions.

Unfortunately, despite enhanced liquidity, credit flow to kick-start the economy

remains inadequate since the banking system continues to be risk averse in this weak

economic environment.

The RBI seems to be determined to not allow the increasing levels of Government

borrowing to diminish the availability of credit for the private sector.

Simultaneously, it is persuading the banking sector to pay heed to policy signals and

reduce their lending rates to stimulate investments.


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The latest World Economic Outlook brought out by the IMF expects global output to

register downfall of 1.3% in 2009, its first fall in 60 years.

Real GDP growth in advanced economies is likely to be a negative 4%.

In emerging and developing economies, growth is likely to be sluggish at 1.6%, downfrom the 7-8% witnessed from 2004 onwards. World trade is expected to shrink by as

much as 11%.

Economic Environment

Marketers need to consider the state of a trading economy in the short and long-terms.

This is especially true when planning for international marketing. India has been one of the

best performers in the world economy in recent years, but rapidly rising inflation and the

complexities of running the worlds biggest democracy are proving challenging.

Indias economy has been one of the stars of global economics in recent years, growing

9.2% in 2007 and 9.6% in 2006. Growth had been supported by markets reforms, huge

inflows of FDI, rising foreign exchange reserves, both an IT and real estate boom, and a

flourishing capital market.

Political and Legal Environment

The political arena has a huge influence upon the regulation of businesses, and thespending power of consumers and other businesses. Political observers increasingly see

the Indian polity as the problem. When populist political appeals stir the passions of the

masses, government institutions appear less capable than ever before of accommodating

conflicts in a society mobilized along competing ethnic and religious lines

Budget impact: Among the FMCG stocks Marico and ITC are the biggest gainers.

Marico has added 7.3% to Rs. 77. ITC has surged 7% to Rs. 212, after no change in

excise cuts on cigarettes

Due to Govt. new conditions ITC Maurya winning the 'Best eco-friendly hotel Special Prize' award by the Ministry of Tourism, Government of India.

Social and Cultural Environment

The social and cultural influences on business vary from country to country. It is very

important that such factors are considered Envisioning a larger societal purpose has always

been a hallmark of ITC. Following are the factor, which should be kept in mind while

doing business in India:


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India, being a multi-cultural and multi-religious society, celebrates holidays and

festivals of various religions

India is one of the most religiously diverse nations in the world, with some of the most

deeply religious societies and cultures. Religion still plays a central and definitive role

in the life of most of its people.

The demographics of India is remarkably diverse. India's population of approximately

1.17 billion people (estimate for July, 2009) consists of approximately one-sixth of the

world's population

India is a young country with an average age between 23-24 years.

As a corporate citizen with enduring relationships in rural India, ITC has a history of

collaboration with communities and government institutions to enhance farm productivity

and the rural resource base. ITCs commitments in agricultural R&D and knowledgesharing have spanned vital aspects of competitiveness efficient farm practices, soil and

water management.

Technological Environment

Technology is vital for competitive advantage, and is a major driver of globalization.

Technology in India accounts for a substantial part of the country's GDP and export

earnings while providing employment to a significant number of its tertiary sector

workforce. Technically proficient immigrants from India sought jobs in the western worldfrom the 1950s onwards as India's education system produced more engineers than its

industry could absorb. Indias growing stature in the information age enabled it to form

close ties with both the United States of America and the European Union

IT plays a very critical role in driving the ITC business strategies.

IT is an enabler of the business process to ensure business growth through efficient

management of operations in the value chain.

IT creates new business process or restructure the current business process to enhance

customer service availability, efficient manufacturing / supply chain operations, etc.


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6.1.2.Demographics of the company

The year under review marked the first full year of the Companys presence in the

Personal Care space. The business continued to roll out its product portfolio comprising

Soaps, Shampoos, Shower Gels, etc. under the Fiama Di Wills, Vivel Di Wills, Vivel

and Superia brands across the country.

The launch of the Vivel Ultra Pro Shampoo in the anti -dandruff segment has augmented

the Vivel portfolio and widened the hair benefits offered to consumers. Consumer

acceptance of the Companys products, as reflected in market research studies, has been

gratifying.

The Personal Care industry continues to grow at around 12% per annum, and stands at

around Rs.23000 crores.

In the face of a global recession, it is commendable that the domestic industry has been

able to post this growth. The intervention by the Government, by way of lower taxes, easier credit and

interventions in the rural sector have helped protect demand.

Prices of commodities such as palm oil and surfactants which had spurted to all time

highs in the early part of the year, declined during the latter half of the year, helping

the industry to improve its profitability.

The general consensus is that the price outlook for commodities will remain fairly

subdued for the rest of 2009. As a result, there would be more opportunities to offer

better value to consumers through promotional and other initiatives.

The business added manufacturing capacity at its owned tax-exempt unit at Haridwarand is in the process of undertaking further expansion in line with expected market

requirements. These investments will provide advantages of superior quality,

flexibility, responsiveness, and intellectual property protection.

Investments continue to be made to build a strong portfolio of products and brands and

to expand the consumer base. This includes creation of world-class products through

well-defined research and development activities at the Companys dedicated R&D

Centre, and increased engagement with consumers through efficient deployment of

media, direct contact, and promotional activities across traditional as well as

contemporary consumer connect avenues.


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6.2. Microenvironment Analysis

This environment influences the organization directly. It includes suppliers that deal

directly or indirectly, consumers and customers, and other local stakeholders. Micro tends

to suggest small, but this can be misleading. In this context, micro describes the

relationship between firms and the driving forces that control this relationship. It is a local

relationship, and the firm may exercise a degree of influence.

Suppliers

Raw materials, intermediates and the final product sourcing/distribution in widespread

across the country. Few items have more than 1 supplier for the raw material e.g. filter

rods can be sourced from Mumbai, Bangalore or Devas in MP. Huge supply-demand

network for cigarette business, which must operate in the cost optimal way to maximize

the profits. Few segments are particular to factories e.g. King size.

Consumers

Organizations survive on the basis of meeting the needs, wants and providing benefits for

their customers. Failure to do so will result in a failed business strategy. Its businesses and

brands are focused almost entirely on the Indian markets, and despite being most well

known for its tobacco brands such as Gold Flake, the business is now diversifying into

new FMCG (Fast Moving Consumer Goods) brands in a number of market sectors.

Competitors

Top competitors of ITC Limited

Hindustan Unilever

Reliance Industries

Tata Group

Nirma Ltd.

Hindustan Unilever being the foremost competitor, followed by Nirma Ltd., Reliance

Industries, and Tata Group. ITC beats it competitors as it follows a particular set of brand

strategies which directly convince the customers to buy its products and services.

Stakeholders

As organization requires greater inward investment for growth they face increasing

pressure to move from private ownership to public. However this movement unleashes the

forces of shareholder pressure on the strategy of organizations. Satisfying shareholder

needs may result in a change in tactics employed by an organization. The Company sees

no conflict between the twin goals of shareholder value enhancement and societal value

creation. The challenge lies in fashioning a corporate strategy that enables realization of

these goals in a mutually reinforcing and synergistic manner. 244,65,39,845 Ordinary

Shares of the Company, representing 64.79% of the Company's paid up capital, as on 11th

September 2009 are in dematerialized form. The paid-up share capital of the Company is


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Rs. 377, 62, 86,590 (Rs.377.63 crores) divided into 377, 62, 86,590 Ordinary Shares of the

face value of Re 1/- each.


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6.3. Internal Environment

All factors that are internal to the organization are known as the 'internal environment'.

They are generally audited by applying the 'Five Ms, which are Men, Money, Machinery,

Materials, and Markets. The internal environment is as important for managing change as

the external. As marketers we call the process of managing internal change 'internal

marketing.'

Men

ITC employs over 25,000 people at more than 60 locations across India. The Company

continuously endeavors to enhance its wealth generating capabilities in a globalizing

environment to consistently reward more than 3, 53,000 shareholders, fulfill the

aspirations of its stakeholders, and meet societal expectations.

Money

ITC is one of India's foremost private sector companies with a market capitalization of

nearly US $ 14 billion and a turnover of over US $ 5 billion. ITC is one of the country's

biggest foreign exchange earners (US $ 3.2 billion in the last decade).

Machinery

ITC is using excellent machinery so that they can match with demand of the market. Their

most of the facilities are fully automated.

Materials

ITC is using quality raw material so that they can give world-class quality product to their

customers. They are very selective while selecting supplier for them.

Markets

Its businesses and brands are focused almost entirely on the Indian markets. Despite being

well known for its tobacco brands such as Gold Flake, the business is now diversifying

into new FMCG (Fast Moving Consumer Goods) brands in a number of market sectors -

including cigarettes, hotels, paper, agriculture, packaged foods and confectionary, branded

apparel, personal care, greetings cards, Information Technology, safety matches, incense

sticks and stationery.


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6.4. Segmenting, Targeting and Positioning

6.4.1. Segmenting

Segmentation refers to the division of market based on similar preferences and the taste of

the people. Talking about the soap industry in India, the demand is based upon

homogeneous preferences among the people stating the urge of consuming basic needs by

the way of living. Keeping these factors in mind, the marketers have segmented the

market on the demographic bases with three main factors i.e. gender, Income and the age

of the consumers.

To target different Income groups in the market, the Companys uses three different

segment markets which are:

Super premium: It covers the upper segment of the market that have high income

level and more brand conscious while selecting the product from the market and

who are not concern about the price of the product. The consumers targeted at thislevel are entrepreneurs, IT professionals, Doctors, Lawyers, top level executives

and other people at high post in government jobs.

Premium: The next level of segmentation done by the marketer is premium level,

where Middle level people are targeted who is concern about both the factors i.e.

Brand as well as Price of the different brands of soaps. In early stage of time, this

segmentation was given more attention in terms of Promotion and Brand awareness

due to high consumption of products of personal care at this level as compare to

other but with changing period of time, the concern for super premium has also

drawn equal attention. Bingo: The lowest level for segmentation defined by the marketers in industry of

personal care products where people with low income level are targeted. As people

here are more concern about the price of the product rather than the quality or the

brand, the companies are rarely concern about their brand awareness and

promotional activities.

Second bases of segmentation is done on the Geographical factors mainly targeting

three areas i.e.

Urban areas like metropolitans cities Delhi, Bangalore, Mumbai,Ludhiana and

Kolkata etc

Sub-urban areas like Nagpur, Indore, and Allahabad

Rural areas consist of all villages and other backward areas

Precisely,

Premium class - Essenza di wills

Upper middle class - Fiama di wills

Middle class - Vivel

Lower class - Superia


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6.4.2.Targeting

Depending on the available resources, experience and competency of the marketer and

time available the marketer will decide which market to target. In this stage the marketing

manager evaluates different market opportunities and decides how many and which one to

target. This is called as target marketing.

The marketing manager of ITC looks at five factors for evaluating each segment .They

are-

Segment size

Segment worthiness

Segment measurability

Segment attractiveness

Segment accessibility

Niche Marketing

A distinct set of needs

A premium can be charged

Not likely to attract competition

Gains certain economies through specialization

Sufficient size, profit and growth potential

Local Marketing

In this the marketing mix is altered to suit the local conditions.EG. Giving a higher/ lower

discount than whats prevailing in the rest of the markets or implementing a different

promotion scheme

Main Target

ITC mainly target at super premium, premium and bingo sectors of the economy and

looking at geographical area it covers

Urban areas like metropolitans cities Delhi, Bangalore, Mumbai, Ludhiana and

Kolkata etc

Sub-urban areas like Nagpur, Indore, and Allahabad

Rural areas consist of all villages and other backward areas


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ESSENZA DI WILLS

FIAMA DI WILLS


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VIVEL

SUPERIA


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64.3. Positioning

It is the act of designing the companys offering and image to occupy a distinctive place in

target markets mind.The marketing manager needs to decide which segment to enter and

how to target that segment with a product offer through selection of market segment and

target marketing strategy. The challenge is to decide what position the company wants its

products to occupy in the selected segment. Today ITC has good position in market and

has uplifted its value in front of consumers. There are some of the qualities of a successful

position. In context with Nirma-

Relevance

Distinctiveness

Coherence

Commitment

Durability

Clarity

Courage.

Today ITC has gained 1st position in the market today according to Business Times.


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6.5. Marketing Mix

Marketing comprises of 4Ps which are also called the elements of marketing and

therefore, referred to as the Marketing mix.

Product

Price

Place

Promotion

Marketing

Mix


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6.5.1. Product

Essenze Di Wills

Essenza Di Wills launches Mikkel A Mens Prestige Fragrance. The flagship brand in

Consumer Care & Lighting stable and the 2nd largest brand of soap in India in the popularsegment of the category. The brand enjoys two decades of trust since its launch in 1986

and has grown to be counted amongst the top brands in the Country in an intensively

competitive market.

Fiama Di Wills

The popular and much-loved brand of ITC Products has been a favorite of people for many

years. All different soaps, shampoo and shower gels in its range are having feel-fresh

fragrance and high TFM index. Its range covers an economic Lime-fresh. For decades,

Fiama Di wills -Original is one of the best soaps made in India. It had a simple red-coverwhich attracts none! But was still able to sustain itself in the market. The eye-catching and

vibrant packaging symbolizes a sense of adventure, zest and action. The new range will be

available across the country at modern retail and other outlets and will be supported by

high-impact advertising on television, print, out-door, on-line and radio.

Vivel

The Vivel Di Wills range is available in two variants. Its unique carton pack has been

developed by ITC's design team to provide a novel consumer experience.

Superia

In the popular segment, ITC has launched a range of soaps and shampoos under the brand

name Superia. Superia Soaps enriched with natural ingredients give radiant glowing skin.


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Benefits of different products offered to consumers:

SHAMPOOS: For Shiny Hair

Shiny Black with Triple Conditioners and the natural goodness of Hibiscus & Brahmi

extracts

Vibrant Green with Triple Conditioners and the natural goodness of Amla & Arnica

extracts

SOAPS: For Glowing Skin

Fragrant Flower with the fragrance of Rose & Lavender Oil

Soft Sandal with the fragrance of Sandal & Almond Oil

Natural Glow with Neem & Coconut Oils

Healthy Glow with Orange Oil

SHOWER GELS

Mild Dew - Contains extracts of peach and avocado which moisturize the skin

Clear Springs - Contains extracts of lemongrass & sea weed which gives Clear skin

ITC Soaps

Superia, Vivel,Fiama di wills,Esence di wills

Shampoo, Showergel, Body foam,

Aqua, Conditioners

SHAMPOOS: ForShiny Hair.Shower gelsfor healthy skin.Soaps

for glowing skin.


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Eau De Perfume Shampoo Soaps Soaps

Eau De Toilette Conditioner Shampoo Shampoo

Shower Gel Shower gel Triple conditioner

Shampoo Bathing bars

Bathing Bar

Body Lotion

Cleansing Milk

Toner

Nourishing Cream

Deodorant

Essenza Di Wills

Products

Women

Fiama Di Wills Vivel SuperiaEssenza Di

Wills


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Fiama di wills

Shampoos

Everyday Mild (with extracts of Thyme & Juniper) is a gentle caring shampoo suitable

for regular use.

Aqua Balance (with extracts of Magnolia Blossoms & Watercress) is a gentle

moisturizing shampoo ideal for dry, dull hair.

Volume Boost (with extracts of Rosemary & Sage) is a gentle volumizing shampoo

ideal for thin, limp hair.

Silky Strong (with oils of Macadamia Nut and Babassu) helps make hair smooth, silky,

and strong and is ideal for weak, damaged hair.

Superia

Soaps

Fragrant Flower: with the fragrance of Rose & Lavender Oil

Soft Sandal: with the fragrance of Sandal & Almond Oil

Natural Glow: with Neem & Coconut Oils

Healthy Glow: with Orange Oil

Shampoos

Shiny Black with Triple Conditioners and the natural goodness of Hibiscus & Brahmi

extracts.

Vibrant Green with Triple Conditioners and the natural goodness of Amla & Arnica

extracts.

Another addition to the Superia shampoo portfolio, Superia Maxi Protect Active Health

shampoo contains Dandruff Fighter along with Vitamins & Soya Protein. It fights multiple

types of dandruff causing germs and leaves hair & scalp feeling clean & healthy.


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Eau De Toilette Soaps

After Shave Lotion Shampoos

Bathing Bar

Deodorant

Body foam

Aqua fragrances

Products

Men

Essenza Di Wills Vivel


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Essenza Di Wills

The range combines exotic naturals like Sage, Watercress, Magnolia blossoms

Vivel

Soaps

Vivel Young Glow is enriched with Vitamin E and Fruit Infusions which help in

providing youthful glow to the skin.

Vivel Satin Soft is enriched with Vitamin E and Aloe Vera which help the skin feel

beautifully soft.

Vivel Sandal Sparkle is enriched with Sandalwood Oil and Active Clay which helps in

providing clear skin.

Vivel Ayurveda Essence is enriched with multiple Ayurvedic Ingredients which help

protect skin from germs and harsh environment, keeping it healthy and beautiful. Vivel Silk Spring is enriched with Green Apple extracts and Olive oil which help in

making skin smooth.

Vivel Di Wills Sheer Radiance is enriched with Olive Oil, to provide skin lustre to

make it radiant.

Vivel Di Wills Sheer Crme is enriched with Shea Butter, to moisturize skin to make

it soft and supple..

Shampoos

Vivel Shine & Glow is suitable for dull to normal hair and is enriched with Green Tea

Extract and Conditioners. It adds shine to hair.

Vivel Soft & Fresh is suitable for dry to normal hair and contains Extra Conditioners

and Soya Protein. It makes hair soft and fragrant.

Vivel Volume & Bounce is suitable for oily to normal hair and contains Jojoba Oil and

Conditioners. It adds volume and bounce to hair.

The product portfolio was further enhanced with the launch of Ultrapro anti-dandruff

shampoo under the umbrella brand Vivel in December 2008. Ultrapro promises to fight

dandruff twice as effectively while also providing care for hair through the plus benefits ofNourishment and Moisturization.


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6.5.2. Place

ITC caters all sorts of segments but its basic aim is to cater the lowest level for

segmentation which has been named as bingo segment people. Smartly concentrate its

production in tax free zones in Jammu & Kashmir, Himachal Pradesh and Uttranchal. It

produces nearly 70 per cent of its products in these areas. They give us a 10 per cent

gross saving, which is an important factor in the high-volume, low-margin FMCG

business, is as popular among the Saudis and Egyptians as it is among NRIs living there.

Super premium: It covers the upper segment of the market that have high income level and

more brand conscious while selecting the product from the market and who are not

concern about the price of the product. The consumers targeted at this level are

entrepreneurs, IT professionals, Doctors, Lawyers, top level executives and other people at

high post in government jobs.

Premium: The next level of segmentation done by the marketer is premium level, where

Middle level people are targeted who is concern about both the factors i.e. Brand as well as

Price of the different brands of soaps. In early stage of time, this segmentation was given

more attention in terms of Promotion and Brand awareness due to high consumption of

products of personal care at this level as compare to other but with changing period of

time, the concern for super premium has also drawn equal attention.

Bingo: The lowest level for segmentation defined by the marketers in industry of personal

care products where people with low income level are targeted. As people here are more

concern about the price of the product rather than the quality or the brand, the companies

are rarely concern about their brand awareness and

promotional activities.

Second basis of segmentation are done on the Geographical factors mainly targeting three

areas i.e.

Urban areas like metropolitans cities Delhi, Bangalore, Mumbai, Ludhiana and

Kolkata etc

Sub-urban areas like Nagpur, Indore, and Allahabad Rural areas consist of all villages and other backward areas

ITC Products of personal care have 35 exclusive outlets and we will be expanding it to 70

outlets in the region outlets in Delhi, Chennai, Ahmadabad, Jaipur, Mumbai, Chandigarh

and Saharanpur at present. Spread over 5 acres of land at Sehore in Madhya Pradesh.


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ITC Welcome Group

Hotels

Wills Lifestyle

Stores

Big Bazaar Retail Outlets

Wills Lifestyle Spencers hyper Reliance Fresh Department

Stores

Big Bazaar LM 365 John players

Showrooms

Reliance Fresh Big Apple

ITC hotels Wal-Mart

Essenza Di

Wills

Fiama Di

Wills SuperiaVivel

Cater To

Super

premium

segment with

the upper

elite class

Premium

segment with

the mid and

upper

middle-class

Specifically to

upper middle

class

consumers

Bingo segment

i.e. lower

income and

rural segments

Available In


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Essenza Di Wills is available at selected Wills Lifestyle showrooms in Ahemdabad,

Jammu, Bangalore, Kerala, Kolkata, Lucknow, Ludhiana, Baroda, Pune, Chandigarh,

Dehradun, Delhi, Goa, Gurgaon, Hyderabad, Jaipur, Kanpur, Lucknow.


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6.5.3. Price

The pricing of ITC soaps caters all sorts of income groups of people but special provision

has been kept for low and middle group people and pricing is competitive for other market

players. The company faces going rate pricing that is prices of products like Fiama Di

Wills depends on competitors product like lux. The firm chooses pricing more or less the

same as market leader.

Current industry consumer spend estimated

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