ITC Marketing Strategys


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ITC Marketing Strategys

  2. 2. 1910 -On 24th August the Company was incorporated as a Private Limited Company under the name, Imperial Tobacco Co. of India Ltd. 1970- The name of the Company 1953-The was changedCompleme ntary COMPA from the ImperialLithographi NY’S Tobacco Co. c printingbusiness of HISTORY of India Ltd., to India Printers Tobacco Co.(India) Ltd. Ltd., in May. 1954- The Company was converted into a Public Limited Company on 27th October.
  3. 3. 1990 - Refined mustard oil under the brand name "REAL GOLD" was introduced in the market.1994-ITC classic finance launched mutual funds ITC COMPA 2001- ITC started Classic NY’S Diversification.Finance had set up a HISTORY Company to enable operation in real estate. 2003-ITC unveils new brand of agarbattis.
  4. 4. 2004-ITC unveils Sunfeast biscuits in Chennai, readymeal 2005-ITC Aashirwad brand.unveils new `5-in-1 agarbattis-ITC unveils 2010- ITC`Expressions has forayed Regalia COMPA into the Rs. -ITC e- 1,700-croreChoupal gets NY’S fairnessDevelopment HISTORY cream Gateway market. Award-ITC unveils Candyman Cofitino 2009- ITC launches Vivel Ultra Pro anti-dandruff shampoo in Kolkata. - ITC’s unique Social Forestry project bags Carbon Credits for poor tribals.
  5. 5. Vision :Values : �Sustain ITC’s position asITC is a demand-driven one of the India’s mostorganization responsive to valuable corporations throughnational development the world class performance,objectives and programmes. creating growing value for theIt endeavours to deliver Indian economy and therelevant and cost-effective companies� stakeholders.�services for sustainabledevelopment ends. Its staff iscommitted to providing Mission:information and adviceaccording to criteria implicit To enhance the wealthin the United Nations generating capability of theCharter: the highest enterprise with the globalizingstandards of efficiency, environment, deliveringcompetence, integrity and superior and sustainableneutrality. stakeholder value.
  6. 6. ITC - Business Portfolio ITCFMCG: Agri Business PaperboardsCigarettes Hotels Leaf Tobacco Paper &Other FMCG Agri Packaging Commodities
  7. 7. Competition Competitors Of ITC Godfrey Philips Golden Tobacco. RTCL Ltd. VTC Industrial Ltd. Kothari Products. Marico Hindusthan Uniliver Ltd.
  8. 8. Sustain multiple drivers of growth, matching internalcapabilities with emerging market opportunitiesPursue World class competitiveness in all businesses andacross the entire value chainBest-in-class in terms of: Internal Vitality Market Standing ProfitabilityStrategy of Organization and Governance processesgeared to manage multiple businessesBlend core competencies and leverage ITC umbrellastrengths to create new avenues of growth
  9. 9. FMCG - Cigarettes
  10. 10. Cigarettes: Growth potentialCigarettes account for only 14% of tobacco consumed in Indiaunlike world pattern of 85% due to prolonged punitive taxation Cigarettes (14% of tobacco consumption) contribute nearly 85% of Revenue to the Exchequer from tobacco sectorOf the 58% of adult Indian males who consume tobacco, barely15% can afford cigarettesBiri : Cigarettes ratio = 10 : 1Annual per capita adult cigarette consumption in India is onetenth world average : 117Future growth depends on relative rates of growth of per capitaincome and moderation in taxes
  11. 11. Hotels & Tourism
  12. 12. ITC’s hotel business One of three chains in India  Strategy to establish presence in key business locations to complete the chain achieved in end 2004 Revenue leadership in most locations Leverage unique service proposition and international alliance with Sheraton Large tax advantages on investments on ITC Balance Sheet Attractive medium / long term prospects
  13. 13. Amalgamation Board meeting on 25th August 2004 approved scheme of amalgamation for merger of ITC Hotels and Ansal Hotels with ITC Merger ratios:  3 shares of ITC for 25 shares of ITC Hotels  1 share of ITC for every 150 shares of Ansal Hotels Merger effective from 1st April 2004 Post-Merger, ITC’s hotel business :  Leading hotel chain in terms of pre-tax profits  Highest EBITDA margin
  14. 14. Paperboards, Paper & Packaging
  15. 15. ITC’s Paperboards Business Market leader in growth segment - value added coated boards Internationally competitive quality and cost Social farm forestry in mill command area to improve access to cost effective fiber & to attain self- sufficiency Biotech research based high yielding Clones – effectiveness tested in about 30,000 hectares Pulping capacity enhanced by 100,000 MT to strengthen competitiveness
  16. 16. ITC’s Paper & Packaging businesses Capacity expansion in recycled segment Acquisition of Kovai Unit in March 2004: +65000 TPA Another 75000 TPA commissioned in Jan. ‘05 ITC’s packaging SBU -India’s largest converter of paperboards into high quality printed packaging Leading supplier to Indian FMCG segment
  17. 17. Indian paperboards market Annual paperboards demand - 0.90 million tonnes Fragmented capacity & obsolete technology Indian paperboards market growing at 6 - 7% p.a. Value Added Coated board - the fastest growing segment (20% p.a.) in India driven by the growing sophistication of the consumer
  18. 18. Agri Businesses - Leaf Tobacco- Agri Commodities
  19. 19. ITC’s Agri Commodity Exports Farm linkages in 14 states covering Soya, Wheat, Rice, Marine products, Edible nuts, Coffee Unique CRM programme in commodity exports Leveraging IT for the transformational ‘e- Choupal’ initiative  Rural India’s largest Internet-based intervention  Over 30000 villages linked through 5200 e-Choupals servicing over 3 million farmers  First rural mall christened ‘Choupal Sagar’ opened at Sehore,M.P Distinctive sourcing capability for ITC’s Foods business
  20. 20. e-Choupal - Recognition World Business Award – ICC-UNDP Enterprise Business Transformation Award -Wharton Infosys Harvard Business School – case study Showcased at ICT4D, Geneva – UN
  21. 21. Other FMCG Products
  22. 22. FMCG Business Initiatives Branded Packaged Foods Leverages: Unique Agri sourcing skills ITC Welcomgroup’s specialist cuisine & bakery knowledge FMCG distribution synergies ITC Group R&D Centre, Bangalore 4 chosen categories: Staples Aashirvaad Atta & Salt Snack Foods Sunfeast Biscuits, Pasta Confectionery Candyman, mint-o Ready to Eat Kitchens of India, Aashirvaad Ready Meals
  23. 23. FORWARD BACKWARD INTEGRATION INTEGRATIONITC’s Packaging & printingbusiness Division, was set up ITC LTD, the tobacco cumin 1925 as a strategic hotels major which has beenbackward integration for fast transforming itself into aITC’s Cigarettes business. It is FMCG company, targetstoday India’s most sophisti- INTEGRA students by customizingcated packaging house. TION notebooks for schools underState-of-the-art technol-ogy, ‘classmate’ brand name andworld-class quality and a this is a part of he companieshighly skilled and dedicated diversification plans to forayteam have combined to into the other sectors.position ITC as the first-choice supplier of high valueadded packaging.
  24. 24. A push strategy involves ‘ pushing’ the product through distribution channels to the final customers. ITC adopted this strategy to increase its sell and awareness & to gainfavoritism from the kirana owners. In anticipation of the mystery shoppers, the Kirana owners kept offering ITC cigarettes to all the customers first and only upon request & insistence they sold the requested brand. ITC did thisby putting up posters in the Kiranas & used the concept of mystery shopping in case of tobacco industry. And hence they requested the shop owners to offer ITC cigarettes first to every customer & if he sold A particular target he will be qualified to enter a lucky draw and hence bumper prize. PUSH STRATEGY(PRPMOTIONAL STRATEGY)
  25. 25. PULL STRATEGY ( PROMOTIONAL STRATEGY) The pull strategy is where the producer directs its marketing activities(primarily advertising & consumer promotion) towards final consumer to induce they to buy the product. Under this strategy the consumer demand’ pulls’ the product through the channels. The sunfeast ready to eat pasta has established its presence with 6% in volumes of the branded noodles market. This was achieved by excessiveadvertising which pulls the product through the distribution channels. The strategy adopted is to spend more money on consumer advertising designed to build brand awareness so that shoppers will ask for the product.
  26. 26. FIRST MOVER LATE MOVERSThe first company to Late movers are those who aremanufacture and sell a new able to imitate the technologicalproduct or service is called advance of others, keep riskFirst or Prime mover. down by waiting until the newITC-Welcome Group market is established and takepioneered a holistic concept advantage of the first moversof ‘branded accommodation’ inclination to ignore the hospitality industry it ITC entered the biscuit businesswas the first to launch the very late when to measurepowerful idea of a ‘ Hotel players like Britannia & Parlewithin a Hotel’ by were busy biting of chunks ofsegmenting and branding the the national market amonghotel services. It was also the themselves. ITC dug into marketfirst to brand its cuisine. research. Findings revealed that the category had gaps and hence ITC launched sunfeast with 6 ranges.
  27. 27. Growth strategyMergers & Amalgamation: ITC has decided to consolidate its hotels business and has accordingly proposed toamalgamate its wholly owned ITC Hotels Ltd. And others hotels subsidiaries with the maincompany. ITC has already merged Bhadrachalam Paperboard Ltd with the main company toposition itself as a leader in the paperboard market.Strategic Alliance: ITC has made a significant move in its greeting card business by entering into a strategicalliance with Maple Leaf. Hence Maple Leaf make exclusive pp-up Cards for ITC and henceITC re-launched under Expressions Brand name.Joint Venture: In 1985, ITC set up Suriya Tobacco Co. in Nepal as an Indo-Nepal and British jointventure.Acquisition: In 1990. ITC acquired Tribeni Tissue ltd.. TTD was merged with Bhadrachalam Paperboard Ltd to the Paperboards & specialtypaper division in Nov 2002.
  28. 28. Growth30.00% 27%25.00% 21.52% 20.05%20.00% 16.29% 15.93%15.00% Growth10.00%5.00%0.00% PaperBoards&Packg FMCG(Others) Agribusiness Hotel FMG(Cigarettes) Revenue structure 18% 50% Paper Board Pckg 21% FMCG(others) Agribusiness 25% Hotels FMCG(Cigarettes) 4%
  29. 29. Segment wise GrowthNet revenue from FMCG as on whole increased by 17.72 % to Rs3,605.72 crore from Rs 3063.02 crore of which Cigarettes net revenuewas up by 15.93% to Rs 2550.11 crore from Rs 2199.69 crore in 2011.Net revenue from Hotels segment improved by20.05% to Rs 208.94crore from Rs 174.04 crore in 2011.Agri Business net revenue showed increment of 21.52% to Rs1249.62 crore from Rs 1028.28 crore in 2011 .Revenue from the Paperboard, paper & packaging segmentincreased by 16.29% to Rs 919.29 crore from Rs 790.38 crore in 2011.