The document provides information on the tobacco industry in India. It discusses that tobacco is prepared from cured tobacco plant leaves and is used in smoke and smokeless products. It also outlines the oldest and youngest companies in the industry, their factory locations, competitors, employment details, exports, contribution to national income, government policies, pricing techniques, product life cycle, and market structure of the industry.

1. Tobacco Industry:
-Lokesh Yechuru
-Maithili Pavatekar
-Makkena Venkateswara Rao
-Manish Chinthawar
-Mrugal Nikhar
-Naina Puri
-Navaneet Patwa
-Nikhil Parasarampuria

2. Tobacco: It is a product prepared from the leaves of the tobacco plant by
curing them. The plant is a part of Genus Nicotiana and of the Solanaceae
family.
Uses: Tobacco is used in Smoke and Smokeless products.
• Smoke Products: Cigarettes, Cigars, Hookah.
• Smokeless Products: Gutka, Chewing Tobacco.
Introduction:

3. Substitutes and Raw Materials:
Substitutes:
a)Mint Snuff,
b)Nicotine Gums,
c)Flavored Lettuce
d)Flower petals.
Raw Materials:
a)Tobacco leaves,
b) Paper and Wrappers,
c) Cotton,
d) Starch,
e)Nicotine Powder.

4. Oldest and Youngest companies
in Industry:
1) The oldest company in the Industry is – I.T.C Ltd.
•Estd. In 1910.
•I.T.C is the present Industry leader in India.
2) The youngest company in the Industry is –
Godfreyphillips.
•Estd. In 1936.

5. Factory Locations and Outlets:
1. Andhra Pradesh(Guntur, Chirala),
2. Tamil Nadu(Chennai, Coimbatore),
3. Karnataka(Bangalore, Mysore),
4. West Bengal(Kolkata, Hubli),
5. Maharashtra(Pune, Mumbai),
6. Madhya Pradesh( Ratlam),
7. Rajasthan(Jodhpur),
8. Haryana(Panchkula),
9. Himachal Pradesh( Solan).

6. Factory Outlets and Distribution
Network:

7. Competitors of ITC:
1. Golden Tobacco Ltd.
2. Godfrey Phillips India Ltd.
3. VST Industries Ltd.
4. RTCL Ltd.
5. Hindustan Unilever Ltd.
6. Marico.

8. Employment:
• Tobacco is labor-intensive and accounts for about 5 percent of
industrial jobs in the country
•The average annual worker’s wages in the tobacco
sector is about Rs 17,900, which is among the lowest
in any industrial sector.
•“Yes, tobacco is a large employer, but it also comes at
a health cost ”

9. Exports of Tobacco:
• India is the second largest exporter of FCV Tobacco in the world.
• Indian Tobacco is exported to around 100 countries.
• India exports unmanufactured Tobacco primarily to Western
Europe, South & Southeast Asia, East Europe and Africa.
• The data for the period 2014-15 suggests that India has exported
around US $ 64.38 million worth of Tobacco till December 2014.

11. Contribution to National Income:
•Tobacco contributes US$ 2.9 billion to the National
economy.
•And US$ 728.9 million by way of foreign exchange
every year.

12. Product differentiation:

13. Advertising:
• Tobacco advertising has a relatively weak “share of voice”
in the marketing environment and is a weak force in
affecting smoking behaviour.
• Tobacco advertising and promotion do not create new
smokers, expand markets, or increase total tobacco
consumption.
• The Tobacco industry does not target, study, or track youth
smoking.
• Tobacco advertising and promotion do not cause smoking
initiation by youth.

14. Government Policies:
• Under the Prevention of Food Adulteration Act (PFA)
(Amendment) 1990, statutory warnings regarding harmful
health effects were made mandatory for pan masala and
chewing tobacco.
• In 1992, under the Drugs and Cosmetics Act 1940
(Amendment), use of tobacco in all dental products
was banned.
• The Cable Television Networks (Amendment) Act 2000
prohibited tobacco advertising in state controlled electronic
media and publications including cable television.
• Rules came into effect from 2nd October, 2008. The ban on
smoking in public places, which included work places also,
was a remarkable achievement in terms of political will and
national commitment.

15. Government Policies(Cont.)
• Impact of GST in Tobacco Industry.

16. Pricing Techniques:
• The markets for tobacco products have become
increasingly concentrated and globalized as a result of
privatization of government run tobacco monopolies,
reduced barriers to trade in tobacco and tobacco products.
• Tobacco product markets that have large numbers of
producers producing slightly differentiated products will see
a relatively high degree of price competition.
• At the other extreme, markets that are entirely or nearly
monopolized by a single, profit maximizing firm will see
prices well above costs and relatively little price
competition.

17. Product life cycle

18. Market Structure:
Oligopoly:
• Characterized by few
firms similar/identical
products there are barriers
to entry and exit.
• MR=MC
To maximize industry
profit, the firm in oligopoly
must agree on a monopoly
price and agree to maintain
it by limiting production
and allocating market
shares.
Monopoly:
• Characterized by single
seller, no closed
substitute, there are
barriers to entry
• Market structure of ITC
Ltd. is monopoly in India
and as a market share of
almost 84% and the other
firms have a miniscule
share of 16% combined.

19. Market Structure & Cost
Structure:

20. Old New
Technology