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Itc service mrkting Itc service mrkting Presentation Transcript

  • ITC – CREATING ENDURING VALUE
  • ITC LTD PROFILE  History And Evolution of ITC Ltd  ITC was incorporated on August 24, 1910 under the name Imperial Tobacco Company of India Limited  The Company was changed from Imperial Tobacco Company of India Limited to India Tobacco Company Limited in 1970 and then to I.T.C. Limited in 1974  In recognition of the Company's multi-business portfolio encompassing a wide range of businesses - Fast Moving Consumer Goods, Hotels, Paperboards & Specialty Papers, Packaging, Agri-Business and Information Technology  ITC's Packaging & Printing Business was set up in 1925  In 1975, the Company launched its Hotels business with the acquisition of a hotel in Chennai which was rechristened 'ITC-Welcomgroup Hotel Chola' (now renamed My Fortune, Chennai).
  •  In 1979, ITC entered the Paperboards business by promoting ITC Bhadrachalam Paperboards Limited  In 1990, leveraging its agri-sourcing competency, ITC set up the Agri Business Division for export of agri-commodities  ITC also entered the Lifestyle Retailing business with the Wills Sport range of international quality relaxed wear for men and women in 2000  ITC launched line of premium range of notebooks under brand Paperkraft in 2002  In 2002, ITC also entered the confectionery and staples segments with the launch of the brands mint-o and Candyman confectionery and Aashirvaad atta (wheat flour)  In 2003, ITC witnessed the introduction of Sunfeast as the Company entered the biscuits segment  ITC entered the fast growing branded snacks category with Bingo! in 2007  In 2010, ITC launched Sunfeast Yippee! to enter the Indian instant noodles market
  • VISION Sustain ITC's position as one of India's most valuable corporation through world class performance, creating growing value for the Indian economy and the Company’s stakeholders MISSION To enhance the wealth generating capability of the enterprise in a globalizing environment, delivering superior and sustainable stakeholder value CORE VALUES ITC's Core Values are aimed at developing a customer-focused, high-performance organization which creates values for all its stakeholders
  • BUSINESS PORTFOLIO --- ITC LTD ITC FMCG HOTELS AGRI BUSINESS,LEAF TOBACCO , AGRI COMMODITIES PAPER BOARD, PAPER BOARD AND PACKAGING CIGARETTE PERSONAL CARE PACKEGED FOOD PRODUCTS
  • PRODUCT MIX OF ITC LTD (FMCG Sector)
  • TRIPLE BOTTOM LINE PERFORMANCE – (Turnover and profits as on 17TH July 2012 )  Gross Income for the year grew by 14.9% to over Rs. 36,000 crores. Profit before tax increased by 22.4% to over Rs. 8,800 crores while Net Profits grew by 23.6% to over Rs. 6,100 crores.  The non-cigarette segment net revenue growing 12-fold from about Rs. 1,360 crores in 1996 to Rs. 16,150 crores today.  As a result, 57% of net segment revenue of your Company is now from businesses other than cigarettes  Your Company is today acknowledged as one of India's most valuable corporations. Market capitalisation, which stood at Rs. 5,570 crores in 1996, has multiplied over 35 times to touch Rs. 2 lakh crores.  ITC's traditional businesses have touched a turnover of over Rs. 5,500 crores in a relatively short span of time.  The topline from this segment is expected to triple over the next 5 to 7 years to a level of Rs. 15,000 crores,
  • HOW HAS THE FINANCIAL PERFORMANCE OF ITC LTD BEEN ?
  • ACHIEVEMENTS • ITC is the first Indian company and the second in the world to win the prestigious Development Gateway Award • ITC is the first Corporate to receive the Annual FICCI Outstanding Vision Corporate Triple Impact Award in 2007 • ITC was conferred the World Business and Development Award 2012 at the historic Rio+20 United Nations Summit which concluded recently • ITC has won the Golden Peacock Awards for 'Corporate Social Responsibility (Asia)' in 2007 • The Business Today Award for the Best Managed Company in recognition of its outstanding initiatives in the consumer products segment. • The only Indian FMCG company to have featured in the Forbes 2000 list.
  • SWOT ANALYSIS Strength  Strong Financial Performance  Products Portfolio  Distribution Network  Environmental Friendly  Research & Development  Socially Responsibility  Brand Equity Weakness  Dependency on the tobacco business  Not present in many important sectors  Local Company Opportunities  Leveraging its brand equity  Right size at the right time  The unique reach and distribution network of E- choupal:  Synergies across businesses and leveraging domain expertise for growth in other sectors Threats  Competition  Pressure groups and Government Policy  General threats
  • SUNFEAST- AN OVER VIEW  Sun"mascot - The brand ambassador reinforcing the positioning of the brand with an essence “Spread theSmile”  "Sunfeast" - The umbrella brand name introduced in the Glucose, Marie and Cream segments  “Sunfeast” - To be launched nationally in phases in over one million retail outlets across the country.“  “Sunfeast" range of biscuits is competitively priced and would include two new product innovations - Orange flavored Marie and Butterscotch flavored Cream biscuits  Product innovation
  • SUNFEAST RANGE OF BISCUITS CONTD…
  • PRICING STRATEGY OF ITC LTD (FOOD DIVISION) • The pricing of the ITC food division depends upon the Customers’ demand schedule, the cost function and the competitors’ price. • The pricing of the company is such that it caters to the need of all income groups of people but special provision has been kept for Low and middle income group, and their pricing are competitive with respect to other players like Britannia, Parle and Briskfarm. • The company follows the Going rate pricing that is the price of the product depends upon the competitors price. The firm chooses pricing more or less the same as Market leader.
  • PRICING STRATEGY FOR SUNFEAST  Sunfeast look at a two prolonged strategy:-  High margin (High margins in cream variants)  High volumes  (High volumes from the Marie and Glucose segments)  Examples sunfeast glucose (200 gm): 20/- sunfeast marie light (130gm : 10/- Sunfeast dream cream (82): 10/-
  • DISTRIBUTION OF FOODS PRODUCTS
  • DISTRIBUTION NETWORK FOR SUNFEAST  The company used its existing network of convenience stores: the company’s name for the hole-in-the-wall pan-beedi shops for Sunfeast.  The company also looked at grocery stores and other retail formats.  The company says the brand is now available in nearly 1.8 million outlets. 14 manufacturing units  The company has extended its manufacturing capacity by setting up three new biscuit plants in UP and West Bengal to focus on supply chain management strategy to enhance product freshness, market servicing and margins
  •  Sunfeast school programme: cover 1000 schools across country, to familiarize children with sunfeast brand name and sunfeast mascot  Brand ambassador: shahrukh khan & surya (south actor)  Official sponsor of WTA tennis championship-sunfeast open  Launch of Sachin’s Fit Kit, the first product co-created with brand ambassador  Other activities:- On buses, print media , hoardings, TV and radio advertisements PROMOTIONAL STRATEGY
  • INDIAN BISCUIT INDUSTRY • Indian Biscuits Industry came into limelight after 20th century when the urbanized society called for ready made food products at a tenable cost. • It is assumed as sick-man's diet in earlier days . • Bread and biscuits is the two major product of the bakery industry and covers around 80% of the total bakery market, out of which • Industry size is about 14500 crore • biscuit covers up to 70% of the total production • The organized and unorganized sector of the biscuit • industry is in the proportion of 65% : 35%
  • INDUSTRY CONSISTS OF Major Players Minor Players Emerging Players Foreign Niche Players United Biscuits(Bitain) Danone (French food giant) Nubisco Unibic (tied up with Food Bazaar launched Tasty Treat Parle Britannia ITC Surya Biscuits Pvt Ltd priyaGold Anmol Kraft’s Cadbury Oreo PepsiCo : "protein- rich “ Aliva launched 2009
  • BRITANIA INDUSTRIES LIMITED PARLE PRODUCTS PVT LIMITED SURYA FOOD AND AGRO LIMITED MAJOR COMPETITORS Established in 1896 90% of Britannia’s annual revenue of Rs2,200 crore comes from biscuits KEY PRODUCTS: TIGER, GOODDAY, BORBON, 50-50, MARIE GOLD, TIME PASS Established in 1929 the largest selling brand of biscuits in the world 70% market share in India in the glucose biscuit category KEY PRODUCTS: Parle-G, Hide and Seek, Krack Jack, Monaco, Parle Marie, Milk Shakti, Parle 20-20. Incorporated 1992Manufacturing and selling of biscuit under brand “ PRIYAGOLD” in octoer1993. Key products: Classic Cream, Butter Bite, Bourbon, Marie Lite, Magic Gold, CNC , Sanack, zig zag,
  • STRATEGIC COMPARISON
  • • Biscuit Industry Market (in crore) • PER CAPITA CONSUMPTION IN KG AS PER FEDERATION OF BISCUIT MANUFACTURERS’ OF INDIA (FBMI) 0 1 2 3 4 5 6 7 8 9 10 India USA UK Japan China 2.1 10 10 7.5 1.9 0 2000 4000 6000 8000 10000 12000 14000 16000 2004-06 2007-08 2008-09 2009-10 2010-11 4000 6800 9830 11206 14500
  • • Annual growth rate of biscuit industry • Annual production (in lakh metric tonnes) INDIAN BISCUIT MANUFACTURERS’ ASSOCIATION (IBMA) 0% 2% 4% 6% 8% 10% 12% 14% 16% 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 14% 13% 15% 10% 14% 15% 0 2 4 6 8 10 12 14 16 18 20 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 11 12.54 14.29 16.14 17.44 16.57 18.25 19.6
  • BCG MATRIX: OBJECTIVES • BCG matrix is a tool to determine the future strategic plan for each SBU • SBU can be a company division, a product line or even individual brands • Companies have multiple products and businesses under their umbrella • While preparing the marketing strategy companies need to decide about adding new products or identify products should no longer be retained. • So the first step is to identify the various Strategic Business Units (SBUs) in a company portfolio.
  • BCG Market share/Market Growth Matrix STARS generate considerable income Strategy: Invest more fund for future growth Question mark Have potential to become stars or cash cows Strategy: Either invest more fund for growth or disinvesting Cash flow Generate strong cash flow Strategy: milk profits to finance growth of Stars or Question marks Dog Generate little profits Strategy: Consider withdrawing INDUSTRYGROWTHRATE RELATIVE MARKET SHARE HIGHLOW LOWHIGH
  • ITC BCG MATRIX STARS HIGH MARKET SHARE & HIGH MARKET GROWTH Hotels, packaging & Paper boards, e-choupal CASH COWS HIGH MARKET SHARE & LOW MARKET GROWTH FMCG-Cigarette DOGS LOW MARKET SHARE & LOW MARKET GROWTH ITC infotech QUESTION MARKS LOW MARKET SHARE & HIGH MARKET GROWTH FMCG others HIGH GROWTH LOW GROWTH HIGH MARKET SHARE LOW MARKET SHARE
  • SUN FEAST BCG MATRIX STARS HIGH MARKET SHARE & HIGH MARKET GROWTH Sunfeast Dark Fantasy Choco Fills and Sun feast snack-foods-Bingo CASH COWS HIGH MARKET SHARE & LOW MARKET GROWTH Milky Magic ,Marie Light Original and orange, Sunfeast ‘Dual’ Dream Cream DOGS LOW MARKET SHARE & LOW MARKET GROWTH Sun feast Fit-Kit QUESTION MARKS LOW MARKET SHARE & HIGH MARKET GROWTH HIGH GROWTH LOW GROWTH HIGH MARKET SHARE LOW MARKET SHARE
  • PORTER’S FIVE FORCES
  • PORTER’S FIVE FORCES ANALYSIS Major players dominate the Indian Market. High competition to capture maximum market share Unorganized sector cannot compete with major players in the case of Advertising THREATS OF NEW ENTRANTS Low entry barriers because of Heavy competition from major players BUYERS BARGAINING POWER High because of, Availability of many biscuits from low, moderate prices Availability of biscuits from non organized sector Brand Loyalty makes buyers more powerful in the case of new entries THREAT OF SUBSTITUTES High Growing packaged industry and bread industry Traditional Indian homemade snacks THREAT FROM SUPPLIERS In the case of major players bargaining power of suppliers is very low as they dictate the prices. The ingredients are basic commodities such as wheat , sugar etc.
  • Bakery Items, Fast foods, Ready-to-eat Britannia, Parle Oreo, PepsiCo Inflation in sugar & wheat prices Premium products are increasing in market PORTER’S FIVE FORCES SUN FEAST
  • STP OF SUNFEAST Biscuit Segmenting Targeting Positioning Age Sunfeast orange Marie Sunfeast marielight Sunfeast orange cream Sunfeast Butterscotch Cream Sunfeast bourbon cream A very differentiate offering Children between the age group 4-14 yr Children between the age group 4-14 yr Children between the age group 4-14 yr Children between the age group 4-14 yrs Housewives Children between the age group 4-14 yrs Smooth and yummy Cream Smooth and yummy Cream Smooth and yummy cream Natural goodness of wheat Tight and CrispyIncome Education Demographic Geographic Sunfeast glucose biscuit Lifestyle
  • PRODUCT FOCUS  high quality  great tasting biscuits  With Different Segments  Brand Essence "Spread the Smile"
  • DIVERSIFICATION Indian rural and agri. market is 70% to other resources in India ,but only 30 % of GDP is from agriculture sector . ITC realized it that their cigarette business has a limit future which they wont be able to tap profit and their expansion plans. So diversification was needed in any case, to build a foothold in Indian market. FMCG being the fourth largest sector in the field which is expanding at a very fast pace and it has huge potential , along with the benefit that it can be accrued by organizing the existing fragmented market accrued by market leading to concept of ‘one stop shop’. Further India being one of the largest economies with the benefit of its vast market ,it attracted ITC to the expand its operation in various areas of hospitality, FMCG ,Greeting cards Branded Apparels etc.
  • PRICING STRATEGY Essentially, Parle plays a high volume, low margin game. But Sunfeast look at a two-pronged strategy, High margins in cream variants and volumes from the Marie and Glucose segments. For instance, cream biscuits from both Sunfeast cost Rs10 for 100 grams.  Parle, however, only charges Rs 5 for its cream variants. Except for Hide & Seek, all of Parle 'products lie in the price range between Rs 4 and Rs 6for 100 gram packs. There is Two method of Pricing 1. Low Margin 2. Two-Pronged Strategy
  • In August 2003, a month after Sunfeast launch, the company undertook a major sampling exercise to promote the product. For two years then, the brand did all the usual rounds -- riding behind buses, blocking television spots, booking that corner space in your favorite newspaper and soon. BRAND PRAMOTION The company says the brand is now available in nearly 1.8million outlets, Well differentiated advertisements, some which showed a complete cream world with cream rivers, cream mountains and cream trees, were targeted at kids watching cartoon channels. In April 2005, Sunfeast launched its major campaign. It signed on Hindi film actor, Shahrukh Khan as its brand ambassador
  • SUGGESTIONS AND RECOMMENDATION • Sun feast has to give attention towards Advertisement. • Sun feast has to maintain its status by providing more and more facilities. • Sun feast has to develop more variety of biscuit so that the customer could not return in case of lack of choice. • The company should also give emphasis on other gift scheme
  • DIMPLE J1 Batch IIPM