The product category of the project is ‘Wheat Atta’. The project defines the various segmentation variables, identifies the target market, and the positioning of the product. The project analyses the existing micro and the macro environment, SWAT and market for the product category. Further the project analyses the various marketing elements: product, place, packaging, pricing and promotion strategies for the product.

1. International Management Institute, Delhi
Company: ITC Ltd.
Product Category: Wheat Atta
Group - 7
Tarun Shukla
Ratan Kumar

2. STORY BOARD
• STP
Environmental • Marketing Environment Trends
• Competitor Analysis
Analysis • Strength And Weakness(Internal Analysis)
• Market Analysis
Strategy • Marketing Situation
• Goals And Objectives
Formulation • Marketing Strategies
• Product Management
• Packaging
Marketing Elements • Pricing
• Placement
• Promotion
Evaluation And • Financial Analysis
Control • Impact On The Profit

3. THE COMPANY
FIRM
• Firm- ITC Ltd
• Organization structure - Product Based
PRODUCT
• Product Category- Wheat Atta
• Brand - Aashirvaad
• Product type – Convenience Consumer Product
 Vision: Sustain ITC's position as one of India's most valuable corporations
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 globalize environment, delivering superior and sustainable stakeholder
value.

4. STP POSITIONING
Aashirvaad Select - 100% MP Sharbati Atta
Segmentation Variable for Wheat Atta: Among the urban Indian homemakers, Aashirvaad is
a brand of wheat atta that give you finest quality
 Density – Geographic and authentic taste of wheat flour because it is
 Income – Demographic made from the choicest MP Sharbati wheat grains
 Occupation – Demographic which are heavy on the palm, golden amber in
colour and hard in bite.
Target Market
Aashirvaad Whole Wheat Atta - 0% maida and 100%
Demographic Geograp Demographic Atta
Group (Income) hic Group Among the Indian homemakers, Aashirvaad is a
Group (Occupation) brand of wheat atta that provides you a superior
(Density quality and authentic wheat flour for soft and fluffy
) rotis because it is made from the choicest wheat
grains sourced directly from the knowledgeable
Global Indians Urban Homemakers farmers through e- choupal initiative of ITC.
(High Income
Group)
Strivers (Upper Aashirvaad Atta with Multigrains
Among the affluent Indian homemakers, Aashirvaad
Middle Income
is a brand of improved wheat atta that provides
Group) nourishment for people of all ages by strengthening
Seekers (Middle immunity and body strength because it is an
Income Group) integrated mix of six different grains – wheat, soya,
channa, oat, maize & psyllium husk.

5. Marketing Environment
Micro Environment(2012-13)
1.2
1
Aashirvaad
Atta
Brand Preference
0.8
Shaktibhog
0.6
Pillsbury
0.4
0.2
0
0 0.2 0.4 0.6 0.8 1
Brand Awareness

6. Micro Environment(2012-13)
The Company Trends Opportunities
Finance Investors confidence in company Expand production
performance Raise loans from financial
 The company moving towards zero institutions easily
debt
 Sales have been growing steadily
 The manufacturing expenses have
grown, profitability has not reduced.
Research &  Pressure mounting to push for scale Sharply differentiated products
Development  Key decisions area include of branded atta will be launched.
 Which variant atta to promote Focus on Value addition and
 How to position the product promotion of existing premium
 The pack sizes brands.
 Innovative packing.
Suppliers  Active participation of farmers in ‘e-  Rolling out e-Choupals V3.0 in
choupal’ progress
Sense of ownership among farmers New anchor businesses might
Small farmers are being treated as be discovered
knowledge partners  Creation of more value for self,
for the farmer and the network
partners

7. Trends Opportunities
Competitors  Competitors compete on Using strong supplier networks
price, quality and hold of  Economies of Scale is possible
market
 Private labels pose a threat
to established brands
 Margin offered by local
brands is much higher
Customer Consumer markets  If ITC pushes to scale in the product category the
 Looks for high quality (South input cost will reduce
India) or for brand name  They can price their products competitively by
 ‘e-Choupal’ helps buy high passing some of the benefits of the reduced cost to
quality wheat directly from the the final consumers
farmers
Reseller market  High volume of sale with respect to other brands
 Happy selling ITC brand  Economies of scale is possible
 High volume of sale with
respect to other brands Threat:
 Retailers more inclined  Local wheat atta brands like Rajdhani ,
keeping stock of local brand Krishnabhog, etc are offering a margin of 15%~20%
as compared to margin offered by ITC of 7%.

8. Macro Environment(2012-13)
Trends Opportunity
DEMOGRAPHIC Growing Middle Class Target this segment of market
Larger numbers of “Educated Youth” will be
joining the work force
Changing Family System and Lifestyle changes  Women and young family members
 Nuclear families becoming a Trend of present involved in the decision making.
ECONOMIC Inflation Vs Production of wheat Bumper wheat production this year
ENVIRONMENT  Food inflation would go down in the month of Good possibility of similar Trends in
Jan-2012 2012-13
 Wheat prices to remain constant or decrease
FDI in Retail (If it Becomes a Reality in 2012)  Indian retail industry still at a nascent
 51% FDI in multi-brand retail stage
Limit for single brand raised to 100% from 51%  Increase volume of sales - wider
Indian economy faces supply-side constraints distribution channels.
Lack of investments in logistics of retail chains
POLITICAL AND Government reaction Negotiate with the government on the
SOCIAL  e-Choupal’s—commodity sourcing directly tax front and bring down the input cost.
ENVIRONMENT from farmers might be objected
 Higher tax burden on mill atta relative to
chakki atta.

9. SWOT ANALYSIS
STRENGTH WEAKNESS
-Strong wheat procurement network - E-choupals. -Promotion not convincing enough to overcome
-Largest market share in Branded atta market reluctance to try out new variants
-Perceived quality is high - Not yet reached the break-even point. Rely on the
revenues generated by the cigarette business.
- Strong distribution channel
-Variant of wheat atta present
('select', 'multigrain', 'whole wheat')
- Strong Cash Flows generated
Aashirvaad Atta
OPPORTUNITY THREATS
-Economies of scale not yet reached. Increasing the - Threat in case of government clamping down on
production will lead to decrease in cost and companies trading with farmers directly in purview of
competitive pricing or higher margins to retailers rising food inflation
- Growing working population, thereby opportubity - Allowing FDI in retail -more private
to tap this market
-Higher margin offered by local brand. No. increasing
-Increase in family income level - opportunity of
promoting premium variant -Low price points offered by local brands
- Slow down in economy

10. Market Analysis – Estimation for 2012-13
Volume
Estimated Branded Atta 5585450 MT
Market (2011-12)
Expected Branded Atta 6707818.25 MT
market (2012-13)
Region wise consumption of Branded atta: Market Share:
Market
16
Aashirvaad
8
ShaktiBhog
PillsBury
56
20 Others
(Source: Changing face of processed food industry in India - Rajat K Baisya)

11. GOALS AND OBJECTIVES FOR 2012-13
 Increasing the market share to 60% from the current 56% in
the branded atta market which is at present 10% of the
total atta market size by end of financial year 2012-13.
 Push for scale, i.e. reduction in cost per unit resulting from
increased production.
 Increasing the combined reach of ‘e-choupal’ and ‘Choupal
Pradarshan Khet’ to 10 million farmers by 2013.
 Increasing the brand visibility and customer perceived
value of variants such as ‘Aashirvaad atta with Multigrains’
and ‘Aashirvaad select atta’

12. MARKETING SITUATION (2012-13)
S.No. Opportunity Challenge
1 Market Size Increase – Marketing Environment •Increase the market share to 60% from
described previously current 56%
•This is important in order to achieve our
objective set for 2012-13.
• strengthen the current distribution channel
2 Being considered as a responsible company brand • convince the consumers that even we are
to attract the socially conscious consumers. into the tobacco product business we are a
socially responsible corporate
•think about the people at the bottom of
pyramid through our various rural initiatives.
3 To cater to the segment of customers who have hi- •Keeping our stocks available at all time will
lifestyle and prefer to do their purchasing in be our prime motive
modern retail outlets like Big Bazaar, More, Reliance •sales from such retail outlet have been
Fresh, etc traditionally less.
4 Launch sale of Aashirvaad atta through online portal. •Time frame of delivery will pose huge
Delivery will be made through existing network. problem especially in the few initial years.
5 To concentrate on niche variant like atta with •The sale of this variant of atta has been
Multigrains-variant of atta uses psychological pricing traditionally low.
•Promotion strategy adopted since now has
not reaped much benefit.

13. Marketing Elements
Product Management (1/3)
• Customer’s buying behaviour : Convenience product
• Level of involvement : Low-involvement
• Core Product : Atta which is pure and provides more nutrition and taste.
• Augmented Product : Easy Availability and brand assurance of ITC Ltd.
FEATURES Vs BENEFITS
Features Benefits
Good quality atta for cooking Healthy and more nutritious
supplement to the private labelled atta
or that being sold lose in the market.
Produced using a high quality process Is hygienically superior to all other
(washed grains and clean grinding brands present in the market
mills)

14. Product Management (2/3)
• Product-mix/Product Portfolio
• FMCG, Paperboards and packaging, Agri-
Product Mix Width business, Hotels, Information Technology.
• Come under the FMCG category
Cigarettes, cigars, Foods, Lifestyle Retailing, Personal Care
Product Mix Length Products, Education and Stationery, Safety
Matches, Agarbattis.
• Categorized under the Foods division of FMCG products.
Product Mix Depth The Product Mix Depth is : Aashirvaad whole wheat atta,
Aashirvaad select atta, Aashirvaad atta with Multigrains
• SKU’s available
Brand SKUs
Aashirvaad whole wheat atta 500 gms (only in selected markets), 1 kg,
2 kg, 5kg, 10kg
Aashirvaad select atta 1 kgs , 5 kgs
Aashirvaad atta with Multigrains 5 kgs , 10 kgs

15. Product Management (3/3)
• Company-market fit :
• positioned as a respected
brand
• other products of ITC are
catering to the upper-middle
segments.
• Product-market fit
Introduce a new quality
product that improves upon
Company-product fit :
the benefits:
1. ITC has an existing robust procurement and
– Baker’s flour should be distribution system (e-choupal procurement system)
introduced for a better which enables them to procure good quality wheat
nourishment and delight grains.
experience with the bakery 2. The technology to produce these two products is
products. Adding calcium similar to the technology we already possess
and folate (Vit B9) to the
atta and milling hard wheat Proposed SKU for Baker’s flour :
would help achieve that. As institutional and business buyers prefer to buy in
bulk and large quantities, the proposed SKU size is
40 Kg pack

16. Packaging
• Aims to delight the consumer through
superior and innovative packaging.
• At present packing is PET Poly, with the
design showcasing the farming process
undertaken in the rural heartland of India
in the form of a Madhubani painting.
• PET based materials are very expensive
and non recyclable and cause pollution.
• Jute based packaging materials with
protective plastic inside for the new
proposed SKU size (for trial) - eco-friendly
and recyclable.
• Existing SKUs, a provision will be made so
that it can also be used as a carry bags –
Adding a carry handle
• Adding Sealed Zip for customer
Aashirvaad Atta Bag with Handle
convenience

17. Place Management (1/2)
• ITC has a well placed distribution system which can be used for baker’s
flour as well.
Distribution Models
Model 1 : For large cities, Metros or geographical area with large demand
Manufacture C&F Wholesalers Retailer Customer
Analysis: Sales are high. Profit margin offered to retailers is low
Model 2: Cities
Manufacturer C&F Retailer Customer
Analysis: As compared to model1, the distribution area is small, so that the C&F follows
strategy of minimizing the distribution chain and hence the profits distribution among various
components. They prefer ignoring wholesalers and transferring the whole profits to retailers.
In return they expect a larger sale of their product by the retailers.

18. Place Management (2/2)
Model 3: For Small towns
Manufacture C&F Semi Customer
Wholesaler
Retailer
Analysis : This model is being followed in places where transportation system is not good or the wholesaler’s distribution coverage area is
large .One of the retailer keeps stock and distributes to other retailers in the local area at a lower margin.
Proposed Distribution System for Business Users
Manufacturer Agent/Broker Wholesaler Consumer
Online Mode
Analysis: The Bakers Flour can be distributed to the business users or institutional users through Agents/Brokers or the User can place his order
company’s website

19. Pricing Strategy (1/2)
For Leadership Markets
• Currently(56%) - Branded (Aashirvaad is a market leader in the product category ).
atta segment.
1. Should retain its present pricing strategy.
• Company follows Going 2. Company can use psychological pricing(multi-grain-
rate pricing - variant Atta) in niche segment (high profit margin).
• Special provision for low
and middle income
For Growth Markets (Aashirvaad is struggling to
groups. increase its market share because of high competition
• Competitive Pricing w.r.t. from national and local brands) :
players like Pillsbury, 1. Going rate pricing strategy will be effective.
Shaktibhog, etc. 2. Propose to decrease the price by 5% in the
mid-pack size (major chunk).Go for scale
production to reduce per unit variable cost.

20. Pricing Strategy (2/2)
• Direct one-to-one relationship between price, value and quality-Going rate pricing.
• Follows the competitor’s price to offer superior product and thus offer higher
customer perceived value.
• Higher Quality ------ High Price
• Same Price -------- High Customer perceived value.
 Convenience Pack (1kg and 2Kg Pack)
Convenience Pack (1kg
 Mid Pack (5Kg, 10Kg) and 2Kg Pack)
Mid Pack (5Kg, pack.
 highest selling10Kg)
 highest selling pack.
 Price can be decreased by 5% in 2012(to increase the sale of atta and increase the
Price can be decreased by 5% in 2012(to increase sale of Atta and increase
market capture in growth markets for this pack atta, price can be decreased by 5%
the market capture in growth markets)
in 2012
Industrial Pack (20Kg)
 Industrial Pack people who have large consumption of Atta on a daily basis.
bought by (20Kg)
 bought by people who have large consumption of purchase daily basis. MRP.
They can be offered 2~2.5% discount on large atta on a beside the
 They can be offered 2~2.5% discount on large purchase beside the MRP.

21. Promotion Strategy
SALES PROMOTION
ADVERTISEMENTS Objective: Promotion initiatives to increase the brand visibility
• Aggressive advertisements in and win customer preference
television targeting Indian Methods:
housewife. 1. Free 1 kg packs of Aashirvaad can be in regions where the
penetration of branded atta is low.
• Exclusive Aashirvaad stores . 2. Free packs of Aashirvaad salt to be bundled with Aashirvaad
• Tie-up with the Government 1 kg atta packs.
to sell Aashirvaad atta at 3. The Company can collaborate with all the fast food retail
military canteens at a chains, restaurants A discount coupon for those fast food
subsidized rate. chains can be given along with Aashirvaad atta packs.
4. Free samples through distribution at posh public areas such
• Informative advertising will as Malls and Multiplexes.
be used for our new variant 5. Contest for house wives (Chatur -Grihini)
we are launching.
Newspapers would be the
most effective media
targeting Industrial Buyers.
• Using scientific evidence as
our message execution style.
• Magazine Ads.
• Persuasive advertising

22. Website ( )
THE GOOD SUGGESTIONS FOR IMPROVEMENT
• Emphasis on the Use latest html coding and flash codec – for improved
traditional way in which look & Feel.
Aashirvaad atta is The health benefits should be highlighted.
prepared-purity and Should be publicized as a source for good recipes, so
authenticity. that brand equity and loyalty gets built.
• Includes BMI Separate pages for all the different variants of atta.
calculator, recipes and
meal planner. Model for online buying portal
THE BAD
• Old fashioned.
• Links to Bharatnatyam and
Rangoli-irrelevant to the
target viewers of
Aashirvaad atta’s online
website.
• Information is cluttered-
makes it uninteresting and
inadequate.

23. IMPACT ON PROFIT
Cost Implication
(In Rs. Cr)
Variable Increase In
Strategy Fixed Cost Cost/annum sales/annum
Launch of new
Product 10 2 8.64
Online selling 1 0.2 1.8
Packaging
Changes 0.5 negligible 0.9
Promotion
Budget - 26.66 80
Set Up Of New e-
choupal 216 2 486

24. BIBLIOGRAPHY
1. http://www.forbes.com/2010/06/30/forbes-india-yogesh-chander-
deveshwar-itc- tobacco_4.html
2. http://www.itcportal.com/ruraldevp_philosophy/echoupal.htm
3. http://articles.economictimes.indiatimes.com/2011-04-
12/news/29409932_1_punjab-mandis-quintal-bumper-wheat-crop
4. http://articles.economictimes.indiatimes.com/2011-11-
30/news/30458687_1_retail-chains-foreign-retailers-retail-fdi
5. www.mckinsey.com/mgi/reports/pdfs/india/Wheatmilling.pdf
6. www.itcportal.com/
7. www.shaktibhog.tradeindia.com/
8. Changing face of processed food industry in India - Rajat K Baisya
9. http://www.aashirvaad.com/products/
10. http://www.manildra.com.au/
11. http://www.itcabd.com/
12. Indian Journal of Marketing May 2011