What is ITC
ITC is one of India's foremost private sector companies
with a market capitalization 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, AgriBusiness, 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
Paperboard and Packaging
Unit Separate for each product line
Stores all the products
Exclusive based on population
Needs to stock all FMCG products( Except
Deepest penetration possible
Customers prefer fresh products
Smaller Lot sizes
Convenience goods, Needs Intensive distribution
Very less waiting time
Sell ready to eat products through sweet shops like bikanerwala
Showrooms for High-End products
Distributor is selected based on
Infrastructures, Delivery Van, Computer,
Warehouse, Sales Force
Population based ( 1 Distributor per 20-25 thousand)
Uses Coercive power
To deal in Cigarettes, it is must to deal in Other
Terms and Conditions
Price, Selling Condition, Godown Condition etc…
No Credit- Only Cash Payments
No Freebies, Paid Vacations Gifts etc..
Very rarely Cash gifts (linked with
Retailers- Twice a week
Online order is placed by distributor
The periodical order from wholesaler , retailer,
Paanwalas is collected by staff of distributor.
Mostly on Cash-Basis; sometimes post dated
Very rarely Credit is allowed on cigarettes
Uses delivery van, Rickshaw, Cycles,
Some tiffs raise between distributor and
retailer due to under supply from
ITC has the most popular brands of cigarettes in India.
The sale takes place from the largest of retailers like Big
Bazaar, Spencer's to the smallest of Paanwalas at every
nook and corner in India.
Thus ITC has deeply penetrated the Indian cigarette
With an already established distribution channel for
cigarettes, ITC is also selling safety matches, which is
complementary to both the cigarettes and Agarbatti. T
he 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.
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 Sun feast.
The company says the brand is now available in
nearly 1.8 million outlets.
Sun feast captured around 7% in mere 3 years since
its launch in 2003