ITC MARKETING STRATEGIES AND THERE POSITIONING

1. By:
MANISH
POOJA
NEHA
NINAD
GIRISH
…ENDURING
VALUES

2. Chairperson : Y C Deveshwar
Directors : S S H Rehman, Nakul Anand,
A Singh, PV Dhobale,
K Vaidyanath, K N Grant,
A Baijal, B Vijayaraghavan
J P Daly, H G Powell,
P B Ramanujan, B Sen,
R S Tarneja,
CEO, Yogesh Chander Deveshwar

3. HISTORY
 ITC was incorporated on August 24, 1910 under the name Imperial Tobacco
Company of India Limited.
 Name changed from Imperial to Indian tobacco comapany in the year 1970 then to
ITC limited in the year 1974.
 One of the 8 Indian Companies to feature in ‘Forbes A-list’ for 2004
 Only Indian FMCG Company to feature in Forbes 2000 List
 Among top in :
 Sustained value creation (BT-Stern Stewart survey)
 Operating profits
 Cash Profits
 Ranks No. 4 among Indian listed Private Sector Companies by market cap. (@
April 09)
 No. 1 in FMCG Sector
 Rated as one of India’s Most Respected Companies (IMRB-Businessworld Survey
2006)
 Diversified conglomerate with interests ranging from Tobacco to Hospitality

4. INDIAN TOBACCO COMPANY
 24 Aug1910 – ITC incorporated under the name of 'Imperial Tobacco
Company of India Limited'.
 1925– ITC’s Packaging & Printing Business Division was set up as a
strategic backward integration for ITC’s Cigarettes business.
 1974 – The Company's ownership progressively Indianised, and the
name of the Company was changed to ITC Limited (Indian tobacco
company).
 1975 – The Co. launched its HOTEL BUSINESS which was named
‘ITC-Welcomgroup Hotel Chola’.
 1979 – ITC entered the Paperboards Business by promoting. ITC
Bhadrachalam Paperboards Limited, which today has become the
market leader in India.

6. CIGARETTES
6
 Market leader in India.
 Highly portfolio of brands includes Insignia, India kings,
Classic, Gold Flake, Silk Cut, Navy Cut, Scissors,
Capstan, Berkeley, Bristol and Flake.

7. WHY HOTELS AND
TOURISM?????
ITC. Touching your life. Everyday

8. BRAND CATEGORY POSITIONING
ITC HOTEL LUXURY
COLLECTION
MANSION OF
LUXURY
WELCOME
HOTEL
SHERATON
UPPER UP
SCALE
PASSION FOR
QUALITY
FORTUNE
HOTEL
UPSCALE -
MIDSCALE
PROMISE OF
TRUE VALUE
WELCOME
HERITAGE
HERITAGE UNIQUE
EXPERIENCES

9. WHY FMCG?????
 Entering the foods business was itself a strategic
decision for ITC.
 ITC‟s core business, tobacco, was under pressure
owing to several factors like government bans on
advertising and on smoking in public places.
 Hikes in the excise duty for cigarettes, and anti
tobacco campaigns, ITC planned to deploy its surplus in
the packaged food business where it saw huge business
potential.

10. FMCG PRODUCTS

11. 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
5545
7012
Rs. crs
Rapid share of FMCG business
20
563
1013
1704
2511
3014
3642
4482

12. MARKETING STRATEGIES
 DISTRIBUTION NETWORK
• Huge distribution network due to its
tobacco business.
• Today, ITC‟s Bingo and Sunfeast are available at
nearly 1.8 million outlets whereas Parle is available
at only 1.5 million outlets.

13. Market differentiation
 In Biscuits also, ITC launched differentiated products in
each and every segment. For e.g. it introduced an Orange
Marie, a butterscotch cream biscuit, chilli flakes in a biscuit
and even honey flavor under the Sunfeast brand.
 In March 2005, ITC Foods launched Sunfeast Pasta, a
whole wheat based product targeted at children. It was
expected to compete with products like Nestle‟s Maggie
noodles. With this strategy ITC built for itself new markets.

14. Cost control strategy
 ITC realized that they have to offer products at a
price which is either equal or less than what the
competitors are offering.
 ITC‟s printing and packaging business provided
high-quality, cost-effective, and innovative
packaging.
 ITC also enjoyed cost advantages over its
competitors owing to its electronic procurement
system called e-Choupal.

15. Diversification of products
 Bingo, ITC has come up with 21 flavors in comparison to its competitor „Lays‟
of „Frito Lay‟ which has only 4 major flavors.
Extensive advertising
 They hired the best professionals and the best ambassadors in the
country to make their products famous.
 The tagline "Jab Laila ko karna tha impress to majnu ne khayi mint o
fresh" has stood the test of times and is still widely known and remembered.
 10 to 15 spots per channel per day on youth channels such as MTV and
Star World, mass Hindi channels like Zee and Star TV, and news 19
channels. It also had around 20 spots on a variety of radio channels and
advertised in most leading national dailies.
 Top-30 cities, over 1,000 outdoor hoardings advertised the product.
 ITC spent close to Rs 100 crore on marketing.

16. Regular introduction of new products
 ITC has been expanding its distribution network aggressively
and also their product range.
 In biscuits and wafers range, it is launching new products or
flavors week after week.
Innovation
 ITC was innovative in identifying the market or niche for
all its products.

17. AGRO BASED INDUSTRY

18. o Basic components of ITC are from the
agricultural sector.
o Cost reduction strategy.
o Direct raw material without involvement of
third party.
o Direct touch with farmers.

20. ITC e-Choupal
 Started in the year 2000
 Target Area so far 38,000 villages, 6500 kiosks, 9 states
 Wholly owned by ITC
Why it become a success ?
 Only initiative to attempt to combine Services and an
Effective Business Model successfully
Designed to address the issues such as:
1. Fragmented farms
2. Weak institutions
3. Involvement of intermediaries
4. Information Asymmetry

21. A win-win Deal
Farmers gain
• Better information
Content
• Better info timing
• Less transportation
Cost
• Transaction duration
• Weighing accuracy
• Professionalism
ITC gains
• Disintermediation
savings
• Freight costs
• Quality control
• Risk management

22. Transaction cost in Mandi Chain (before e-Choupal)

23. Transaction cost in Mandi Chain (after e-Choupal)

24. SWOT ANALYSIS
Strength
•Cigarette market is 22,000 cr and
ITC has lion’s share in it
•Strong brand recognition and
product portfolio
•Distribution network
•Management
Weakness
•Dependence on tobacco revenues
• Negative Connection of Tobacco
Opportunity
•Consumption Of personal care
products
•Rural Market
•E-Choupal
• Filter cigarette segment of less than
60mm size
Threat
•Competition both Domestic &
International
•Increasing Tax on cigarettes
•Excise duty on unfiltered cigarettes
less than 60mm in length was
increased 387% last year
•Hike was 142% for those between
61mm and 70mm long.
•Regulatory restrictions on cigarettes
•Ban on smoking

25. ITC. Touching your life. Everyday

26. SOMETIMES, NOT TAKING
RISK IS THE BIGGEST RISK
… YC
Deveshwar… Y C Deveshwar

27. THANK YOU

28. ITC. Touching your life. Everyday