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ITC- Distribution Channel
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  • 1. ITC~Touching your life. everyday 
    A study on the Channel Distribution
    By:
    Radhika Gupta- 91041
    ShiviAggarwal – 91051
    Madhusudan partani- 91029
  • 2. What is ITC
    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 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
    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
  • 3. The Product-Mix
    FMCG
    Cigarettes
    Foods
    Lifestyle retailing
    Personal Care
    Stationery
    Safety Matches
    Agarbatti
    Hotels
    Agri-business
    Paperboard and Packaging
    Information Technology
  • 4. Overview
  • 5. The Composition
    Manufacturing Unit
    Separate for each product line
    Contract Manufacturing
    Backward Integration
    E-Chaupal
    Storage Hubs
    Stores all the products
  • 6. Cont…
    Distributors
    Exclusive based on population
    Needs to stock all FMCG products( Except Stationery)
    Wholesalers
    Retailers
    Paanwalas
    Deepest penetration possible
  • 7. Suitability
    Perishable
    Short Span
    Customers prefer fresh products
    Lot Size
    Smaller Lot sizes
    Convenience
    Waiting Time
    Product Assortment
  • 8. ChannelObjectives
    Consumer Behavior
    Quality Conscious
    Convenience goods, Needs Intensive distribution
    Demands variety
    Very less waiting time
    Company Objectives
    Reach masses
    Rural penetration
    Diversification
    Competitive advantage
    Alternatives
    Sell ready to eat products through sweet shops like bikanerwala
    Showrooms for High-End products
    E-Chaupal
  • 9. Features
    Selection
    Distributor is selected based on
    Infrastructures, Delivery Van, Computer, Warehouse, Sales Force
    Population based ( 1 Distributor per 20-25 thousand)
    Control
    Uses Coercive power
    To deal in Cigarettes, it is must to deal in Other goods
    Terms and Conditions
    Price, Selling Condition, Godown Condition etc…
  • 10. Functions
    Manpower
    Promotion
    Credit
    Infrastructure
    Stocking
  • 11. Benefits
    No Benefits 
    Higher margins
    No Credit- Only Cash Payments
    No Freebies, Paid Vacations Gifts etc..
    Very rarely Cash gifts (linked with performance)
  • 12. Others
    Order
    Distributors- Weekly
    Retailers- Twice a week
    Paanwalas- daily
    Online order is placed by distributor
    The periodical order from wholeseller , retailer, paanwalas is collected by staff of distributor.
    Payment
    Mostly on Cash-Basis; sometimes post dated cheques
    Very rarely Credit is allowed on cigarettes
  • 13. Cont…
    Transportation
    Uses delivery van, Rickshaw, Cycles, Autos
    Conflicts
    No Conflicts
    Some tiffs raise between distributor and retailer due to under supply from distributor
    Problems
  • 14. Analysis
    ITC has the most popular brands of cigarettes in India.
    The sale takes place from the largest of retailers like Big Bazaar, Spencers to the smallest of paanwalas at every nook and corner in India.
    Thus ITC has deeply penetrated the Indian cigarette market.
    With an already established distribution channel for cigarettes, ITC is also selling safety matches, which is complementary to both the cigarettes and agarbattis.
    The retailers and paanwalas are also ready to stock ITC’s candies, potato chips and finger snacks because of the higher margin as compared to Frito lays, which is its biggest rival in potato chips and finger snacks segment.
  • 15. Analysis
    By entering into the branded Indian biscuit industry there was a business synergy.
    ITC was already value-adding to wheat with its branded atta presence. By entering the biscuits segment, it improved its bottom-line further.
    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 says the brand is now available in nearly 1.8 million outlets.
    Sunfeast captured around 7% in mere 3 years since its launch in 2003
  • 16. THANK YOU