A talk on Cigarette with special reference to Wills Cigarette in Indian Context

THE INDUSTRY IN SPECIFIC

The cigarette industry is one of the oldest industries in India. It is highly labor intensive & provides livelihood to about 5

million people directly and indirectly. Cigarette is an item falling under the First Schedule to the

Industries (Development & Regulation) Act, 1951 and requires an industrial license.

India is the second largest producer of tobacco in the world. It exports a good amount of cigarette in various countries, which

generates a handsome amount of revenue for the company.Major markets for cigarettes are UAE and USA,

Romania, Saudi Arabia and Iraq where the demand for generic low cost cigarettes is growing.

Cigarettes: Growth potential Cigarettes account for only 15% of tobacco consumed in India

unlike world pattern of 85% due to prolonged punitive taxation

Cigarettes (15% of tobacco consumption) contribute nearly

85% of Revenue to the Exchequer from tobacco sector

Of the 58% of adult Indian males who consume tobacco, barely

15% can afford cigarettes

Biri : Cigarettes ratio = 10 : 1

Annual per capita adult cigarette consumption in India is appx.

one tenth world average : 85

Future growth depends on relative rates of growth of per capita

income and moderation in taxes

15 % cigarettes

LIST OF MAJOR PLAYERS IN INDIAN CIGRATTE INDUSTRYITC LimitedG.T.C. Industries Ltd.

Godfrey Phillips (India) Ltd.

V.S.T. Industries Ltd.

ITC 72 %

GPI 12%

GTC 8%

History of W.D. & H.O. Wills

1786- Founded as Wills, Watkins & Co. by Henry Overton Wills and Watkins. Open first shop in Bristol.

1789- Named Wills & Co. after Watkins pulled out.

1826- Son of Mr. Wills took over the company .1830- Name of the Company Changed to W.D. &

H.O. Co.BRISTOL- First Brand(From 1871-1974)Castles/ Gold Flake: 1778Woodbine: 1788Embassy: 1914 again relaunched in 1962

History of W.D. & H.O. Wills Continues….

1901- Imperial Tobacco Company was formed by merging W.D & H.O. Co. with 7 other British Tobacco Companies.

1910-Impeial Tobacco Co. of India Formed.1970- India Tobacco Company Limited is formed

( To give the company an Indian flavor )1974- The name Changed to I.T.C Limited2001- On 18th Sep, the name was changed to ITC

Limited. (As the company started diversifying its business and was trying to come out of the shell as of a Tobacco Company only…..

ITC ONE OF INDIA’S MOST VALUABLE

CORPORATIONSOne of India’s premier private limited groups with over 99 years. Large & established Distribution Networks.Annually turnover of the co. is RS 2888 Crore  It is one of the eight Indian companies to feature in Forbes A-list in 2004. It has more then 21,000 employees at more then 60 location across India with 4,86,000 shareholders.Ranks No. 4 among Indian listed Private Sector Companies by market cap. (@ April 09)

Rated as- one of India’s Most Respected Companies (IMRB-Business world Survey 2006)

ITC HISTORY OF THE COMPANYOn 24th Aug. 1910 the company was incorporated as a private

company under the name, Imperial Tobacco Co. of India ltd.On 27th Oct. 1954 the company was converted into a public

limited company. The name of the company was changed from the Imperial

Tobacco co. of India ltd., to India Tobacco co. ltd. In May 1970.

On Oct. 1972 company entered into Hotel business.On 2000 company has launched a project “ e- choupal” in

Bhopal to Web-enable farmers to make a beginning in Agriculture e-trade.

During the same year ITC has launched Wills sport, a full range of internationally styled premium wear for Men & Women.

MARKETING STRATEGYThey have a DIFFERANTIAL MARKETING

STRATEGY type.o Cigarette companies manipulate menthol levels

to lure young smokerso Major brands and their advertising campaignsAlways use their existing channels.Utilizing nominal resources related with the

brand Brand Ambassador are selected according to the

brands and mostly are YOUTH ICONSThey emphasize on going with the FLOW and

making their Followers .

FMCG- CIGARETTES

CIGARETTE PRODUCTS Super Premium Products Insignia ITC Insignia. 97 mm.Cost: Rs 130 for 20 ‘‘Where quality touches infinity’’, ‘‘redefine

perfection’’ Advertised in Higher SES area

555ITC 555 premium filter: regular 84 mm.Cost: Rs 100 for 20Advertised in Higher SES

India KingITC India King. 84 mm.Cost: Rs 100 for 20“Rule your World”Advertised in Higher SES area

Wills Silk Cut(king size) ITC Wills Silk Cut Filter: 84 mm. Cost: Rs 88 for 20 ‘‘A blend so right a filter so fine’’ Advertised in Higher SES

Premium Products Wills Classic/Mild/Regular/Menthol /

Ultra Mild ITC Wills Classic/Mild Filter: King 84 mm. Cost: Rs 94 for 20 ‘‘Discover a passion’’ Advertised in Higher SES

Wills Navy Cut(Filter Tipped) ITC Wills Navy Cut Filter: ,74 mm. Cost: Rs 68 for 20 ‘‘Made for each other’’ Advertised in Higher SES

Wills Navy Cut(Duotec)ITC Wills Navy Cut Filter: ,84 mm. Cost Rs 80 for 20Advertised in Higher SES

Navy Cut(Regular Size)ITC Wills Navy Cut Filter: ,69 mm.Cost Rs 48 for 20 Advertised in Higher and Lower SES.

Gold Flake(Premium) ITC Gold Flake Premium: Regular 69 mm. Cost: Rs 58 for 20 ‘‘It’s Honeydew Smooth’’, Smooth, exquisite, timeless. But then, all art is’’ Advertised in Higher and lower SES

Gold Flake King/Lights/Ultra Light Filter

ITC Gold Flake King/Light: Regular 84 mm. Cost: Rs 88 for 20“Now in a Bevelled Edge pack” Advertised in Higher and lower SES

benson & hedges(light & hard)o B & H under ITC Regular Size 84mm.o Cost : Rs 100 for 20o Advertised in Higher and Lower SES

Marlboro (light & hard)o Phillip Morris under ITC Regular Size 84 mm.o Cost : Rs 100 for 20o Advertised in Higher and Lower SES

Bingo ProductsWills Flakeo ITC Wills Flake Filter Regular Size 69mm.o Cost : Rs 58 for 20o Advertised in Higher and Lower SES

Bristolo ITC Bristol Regular Size 69 mm.o Cost : Rs 32 for 20o ‘‘Rise to the taste’’o Advertised in Higher and Lower SES

Cigarette Brands available in India:

ITC Limited:

ITC Insignia/555/India King/Wills Silk Cut/Wills Classic/Wills Navy Cut/ITC Gold Flake/Benson & Hedges/Malboro/Will Flake/Bristol

Godfrey Philips India Ltd.

Four Square/Steller/Red & White/I-Gen/Jaisalmer /North Pole/Cavanders/Tipper

Cigarette Brands available in India:

Golden Tobacco Ltd.

Panama/Chancellor/Golden/Golden’s Gold Flake/Taj Chap/Style mini Kings/Steel/June/Just Black/Lips

Vazir Sultan Tobacco Industries Ltd.

Charms/Charminar

SWOT Analysis StrengthBiggest and the

largest player in the Indian tobacco market with a market share of 80%.

Its Gold Flake tobacco brand is the largest FMCG brand in India - and this single brand alone holds 70% of the tobacco market.

WeaknessIt still has to

consolidate its foot in the cigar market largely dominated by Godfrey Philips.

SWOT Analysis OpportunitiesITC is moving into

new and emerging markets like developing countries of Eastern Europe, Africa etc.

ThreatsThe obvious threat is

from competition, both domestic and international.

Health hazardIncreasing tax in

CigarettesGovt. Litigations

Smoking kills you………….