PROJECT REPORT ON
“MARKETING STRATEGIES OF ITC LIMITED”
“Submitted in the Partial Fulfillment for the Requirement of
Bachelor`s of Business Administration”
(BBA)
Submitted to:
Submitted by :
Prof. Prashant Dwivedi
Student Name: Nimit
Chopra
Course: BBA
Dr. Virendra Swarup Institute Of Computer
Studies, Saket Nagar, Kanpur.
1
ACKNOWLEDGEMENT
It is in particular that I am acknowledging my sincere feeling towards my mentor,
Prof. Prashant Dwivedi who graciously gave me their time and expertise.
They have provided me with the valuable guidance, sustained efforts and friendly
approach. It would have been difficult to achieve the results in such a short span of
time without their help.
I deem it my duty to record my gratitude towards the project supervisor who devoted
his precious time to interact, guide and gave me the right approach to accomplish the
task and also helped me to enhance my knowledge and understanding of the project.
[Nimit Chopra]
2
TABLE OF CONTENT
S. No.
Topic
No.
1
Executive Summary
2
Introduction to the Industry
3
Introduction to the Company
4
Literature Review
5
Research Methodology
6
Data Analysis
7
Marketing Strategies Of ITC Limited
8
Recommendations
9
Conclusion
10
Bibliography
3
EXECUTIVE SUMMARY
This project titled “Marketing Strategies of ITC Limited”. The researcher has
talked about the products and services offered by the company and the satisfaction
of customers with them.
This project gives a brief introduction to the ITC Ltd. also discuss the rapidly
growing personal care sector in India, and various other points of importance. In the
introduction to the company, the vision, mission, corporate governance of the
company is discussed along with recent developments as well as its importance in
India.
This project titled “Marketing Strategies of ITC Limited” had detailed study. The
first chapter I have given in this project is Introduction to the industry in which I
have included on personal care industry, global market and the future of the personal
care industry.
The second chapter includes the Introduction about the company. I have given brief
of the ITC Limited vision, mission, corporate governance and all about ITC Limited.
The third chapter of this project includes the Research Methodology in which I have
covered the objective of the project, Scope of the study, significance of the study,
and limitation of the project which i have faced.
In the fourth chapter I have included the major fact and findings of the project i.e.
marketing strategies adopted by ITC Limited. Major products of the ITC, product
profile and descriptions which ITC limited deals.
Lastly the recommendation and conclusion describe the researcher‟s personal
conclusions of the research.
4
INTRODUCTION TO THE INDUSTRY
Personal care products are generally used for personal health and hygiene. It
includes products like body talc, body scrub, tooth paste, tooth brush, tongue
cleaner, tooth powder, bathing salts, bathing gel, essential oils, moisturizer, skin
creams, face wash, hair oil, hair shampoo, hair conditioner, soap, nail and cuticle
care products. The personal care product market was a success on all counts in 20052006 with good performances from each of the Big 5 markets. In recent years,
consumer health awareness has slowly been increasing and this has led people trying
to take better care of themselves.
The major demand is for the products that are of basic need for the consumers like
soap, shampoo, hair oil etc. The personal care products industry consists of four
major sub-sectors manufacturing a range of products. These sub-sectors and their
products are highlighted below:
Face Care Products- Face is the reflection of an
individual‟s physical appearance. Generally, the
beauty of a person is described by the look of one‟s
face. Thus, to enhance the beauty of the face people
use face care products whose market is growing at
double digits. The industry manufactures products like
astringent, face cream, face scrub, face toner,
moisturizer, cleanser, etc. Some of these products are
used for clarification and purification of the facial skin from dust and harmful rays
of the sun while others are used for toning.
Hand and Foot Care Products- As the name suggest these products are used to
enhance the beauty of hands and feet. The hand and foot care product market
segment, grew 5.9% in 2005 to a total of 338.2 million dollars, and included many
successful product introductions. These included herbal and organic products, as
well as products for youthful skin. Men are also starting to take better care of
themselves, resulting in growth in the men‟s foot care products market segment.
5
Hand and foot care products can be broadly categorised into cuticle care products,
foot scrub, hand and foot cream, nail care products etc. The diagram below shows
the various market segments:
Global Market (segment) share in %
Hair Care Products- Hair care was the largest market segment, both in 2004 and in
2005 with sales reaching 350 million dollars. The price war has had its impact on the
shampoo and styling categories. Sales in hair coloring products has stabilized while
hair conditioners and hair repair products, showed significant growth. Consumers
are willing to buy special, more costly, products because these products are used for
many purposes like hair cleansing, hair conditioning and hair coloring. Some
important hair care products are mentioned below:

Hair Shampoo

Hair Conditioner

Hair Oil

Hair Styling Gel

Hair Glaze

Hair Spray

Hair Colors
6
Cosmetics- The global cosmetics market continues to
benefit from a combination of strong macroeconomic
trends creating opportunities for new product niches.
The strongest growth in the global cosmetics market
in 2005 was derived from developing regions such as
Eastern Europe and Latin America and key markets in
Asia-Pacific, with expansion linked to large
populations, rising disposable incomes, modernising retail and distribution networks
and increased industry awareness amongst consumers. Cosmetics are items to
enhance or protect the appearance or odor of the human body. The products included
in this category are:

Eye makeup products

Face makeup products

Lip makeup products
Personal Care industry witnessed 23 per cent rise in TV advertising during 2007
compared to 2006 in India.
7
Personal Hygiene' segment garnered a high share of 43 per cent of overall Personal
Care industry advertising on TV during 2007 in India.
Share of categories of Personal Care Industry in India.
8
Future Prospects
The future for the personal care products industry is very prosperous, which can be
analyzed by the rising growth trends of the industry. But there are many concerns
related to the chemicals and toxins used as ingredients for making personal care
products. These substances can affect our health and the environment also. They are
absorbed through our skin and can enter our bloodstream thereby affecting our
kidney and liver, and thus can have very harmful effects on our bodies and when
these products are washed off from the body, they are released in to the
environment.
9
INTRODUCTION TO THE COMPANY
ITC is one of India's foremost private sector companies with
a market capitalisation of nearly US $ 18 billion and a
turnover of over US $ 5.1 Billion. ITC is rated among the
World's Best Big Companies, Asia's 'Fab 50' and the
World's Most Reputable Companies by Forbes magazine, among India's Most
Respected Companies by BusinessWorld and among India's Most Valuable
Companies by Business Today. ITC ranks among India's `10 Most Valuable
(Company) Brands', in a study conducted by Brand Finance and published by the
Economic Times. ITC also ranks among Asia's 50 best performing companies
compiled by Business Week.
ITC has a diversified presence in Cigarettes, Hotels, Paperboards & Specialty
Papers, Packaging, Agri-Business, Packaged Foods & Confectionery, Information
Technology, Branded Apparel, Personal Care, Stationery, Safety Matches and other
FMCG products. While ITC is an outstanding market leader in its traditional
businesses of Cigarettes, Hotels, Paperboards, Packaging and Agri-Exports, it is
rapidly gaining market share even in its nascent businesses of Packaged Foods &
Confectionery, Branded Apparel, Personal Care and Stationery.
As one of India's most valuable and respected corporations, ITC is widely perceived
to be dedicatedly nation-oriented. Chairman Y C Deveshwar calls this source of
inspiration "a commitment beyond the market". In his own words: "ITC believes
that its aspiration to create enduring value for the nation provides the motive force to
sustain growing shareholder value. ITC practices this philosophy by not only driving
each of its businesses towards international competitiveness but by also consciously
contributing to enhancing the competitiveness of the larger value chain of which it is
a part."
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. Over time, the
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strategic forays into new businesses are expected to garner a significant share of
these emerging high-growth markets in India.
ITC's Agri-Business is one of India's largest exporters of agricultural products. ITC
is one of the country's biggest foreign exchange earners (US $ 3.2 billion in the last
decade). The Company's 'e-Choupal' initiative is enabling Indian agriculture
significantly enhance its competitiveness by empowering Indian farmers through the
power of the Internet. This transformational strategy, which has already become the
subject matter of a case study at Harvard Business School, is expected to
progressively create for ITC a huge rural distribution infrastructure, significantly
enhancing the Company's marketing reach.
ITC's wholly owned Information Technology subsidiary, ITC Infotech India
Limited, is aggressively pursuing emerging opportunities in providing end-to-end IT
solutions, including e-enabled services and business process outsourcing.
ITC's production facilities and hotels have won numerous national and international
awards for quality, productivity, safety and environment management systems. ITC
was the first company in India to voluntarily seek a corporate governance rating.
ITC employs over 24,000 people at more than 60 locations across India. The
Company continuously endeavors to enhance its wealth generating capabilities in a
globalising environment to consistently reward more than 3,75,000 shareholders,
fulfill the aspirations of its stakeholders and meet societal expectations. This overarching vision of the company is expressively captured in its corporate positioning
statement: "Enduring Value. For the nation. For the Shareholder."
VISION OF THE COMPANY
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 OF THE COMPANY
To enhance the wealth generating capability of the enterprise in a globalising
environment, delivering superior and sustainable stakeholder value.
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ITC’s CORE VALUES
ITC's Core Values are aimed at developing a customer-focused, high-performance
organisation which creates value for all its stakeholders:
Trusteeship
As professional managers, we are conscious that ITC has been given to us in "trust"
by all their stakeholders. ITC actualise stakeholder value and interest on a long-term
sustainable basis.
Customer Focus
ITC is always customer focused and will deliver what the customer needs in terms
of value, quality and satisfaction.
Respect For People
ITC is result oriented, setting high performance standards as individuals and teams.
ITC simultaneously respect and value people and uphold humanness and human
dignity. ITC acknowledge every individual brings different perspectives and
capabilities to the team and that a strong team is founded on a variety of
perspectives. ITC want individuals to dream, value differences, create and
experiment in pursuit of opportunities and achieve leadership through teamwork.
Excellence
ITC do what is right, do it well and win. ITC will strive for excellence in whatever
they do.
Innovation
ITC will constantly pursue newer and better processes, products, services and
management practices.
Nation Orientation
ITC is aware of their responsibility to generate economic value for the Nation. In
pursuit of their goals, ITC will make no compromise in complying with applicable
laws and regulations at all levels.
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CORPORATE GOVERNANCE
Preamble
Over the years, ITC has evolved from a single product company to a multi-business
corporation. Its businesses are spread over a wide spectrum, ranging from cigarettes
and tobacco to hotels, packaging, paper and paperboards and international
commodities trading. Each of these businesses is vastly different from the others in
its type, the state of its evolution and the basic nature of its activity, all of which
influence the choice of the form of governance. The challenge of governance for
ITC therefore lies in fashioning a model that addresses the uniqueness of each of its
businesses and yet strengthens the unity of purpose of the Company as a whole.
Since the commencement of the liberalisation process, India's economic scenario has
begun to alter radically. Globalisation will not only significantly heighten business
risks, but will also compel Indian companies to adopt international norms of
transparency and good governance. Equally, in the resultant competitive context,
freedom of executive management and its ability to respond to the dynamics of a
fast changing business environment will be the new success factors. ITC's
governance policy recognises the challenge of this new business reality in India.
Definition and Purpose
ITC defines Corporate Governance as a systemic process by which companies are
directed and controlled to enhance their wealth generating capacity. Since large
corporations employ vast quantum of societal resources, we believe that the
governance process should ensure that these companies are managed in a manner
that meets stakeholders aspirations and societal expectations.
Core Principles
ITC's Corporate Governance initiative is based on two core principles. These are:
i.
Management must have the executive freedom to drive the enterprise
forward without undue restraints; and
ii.
This freedom of management should be exercised within a framework of
effective accountability.
13
ITC believes that any meaningful policy on Corporate Governance must provide
empowerment to the executive management of the Company, and simultaneously
create a mechanism of checks and balances which ensures that the decision making
powers vested in the executive management is not only not misused, but is used with
care and responsibility to meet stakeholder aspirations and societal expectations.
Cornerstones
From the above definition and core principles of Corporate Governance emerge the
cornerstones of ITC's governance philosophy, namely trusteeship, transparency,
empowerment and accountability, control and ethical corporate citizenship. ITC
believes that the practice of each of these leads to the creation of the right corporate
culture in which the company is managed in a manner that fulfíls the purpose of
Corporate Governance.
Trusteeship
ITC believes that large corporations like itself have both a social and economic
purpose. They represent a coalition of interests, namely those of the shareholders,
other providers of capital, business associates and employees. This belief therefore
casts a responsibility of trusteeship on the Company's Board of Directors. They are
to act as trustees to protect and enhance shareholder value, as well as to ensure that
the Company fulfils its obligations and responsibilities to its other stakeholders.
Inherent in the concept of trusteeship is the responsibility to ensure equity, namely,
that the rights of all shareholders, large or small, are protected.
Transparency
ITC believes that transparency means explaining Company's policies and actions to
those to whom it has responsibilities. Therefore transparency must lead to maximum
appropriate disclosures without jeopardising the Company's strategic interests.
Internally, transparency means openness in Company's relationship with its
employees, as well as the conduct of its business in a manner that will bear scrutiny.
We believe transparency enhances accountability.
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Empowerment and Accountability
Empowerment is an essential concomitant of ITC's first core principle of governance
that management must have the freedom to drive the enterprise forward. ITC
believes that empowerment is a process of actualising the potential of its employees.
Empowerment unleashes creativity and innovation throughout the organisation by
truly vesting decision-making powers at the most appropriate levels in the
organisational hierarchy.
ITC believes that the Board of Directors are accountable to the shareholders, and the
management is accountable to the Board of Directors. We believe that
empowerment, combined with accountability, provides an impetus to performance
and improves effectiveness, thereby enhancing shareholder value.
Control
ITC believes that control is a necessary concomitant of its second core principle of
governance that the freedom of management should be exercised within a
framework of appropriate checks and balances. Control should prevent misuse of
power, facilitate timely management response to change, and ensure that business
risks are pre-emptively and effectively managed.
Ethical Corporate Citizenship
ITC believes that corporations like itself have a responsibility to set exemplary
standards of ethical behaviour, both internally within the organisation, as well as in
their external relationships. We believe that unethical behaviour corrupts
organisational culture and undermines stakeholder value.
THE ITC CODE OF CONDUCT
Applicable to all directors, senior management and employees of the Company
Preamble
ITC‟s Code of Conduct was circulated to the employees more than five years back
and is posted on the Company‟s corporate website. This Code has now been redrafted for better presentation. This Code is derived from three interlinked
15
fundamental principles, viz. good corporate governance, good corporate citizenship
and exemplary personal conduct.
Philosophy
ITC is a professionally managed organisation and the core value underlying our
corporate philosophy is "trusteeship". We believe this organisation has been handed
to us by the various stakeholders in "trust" and we as professionals are the "trustees"
of these stakeholders. It is therefore our responsibility to ensure that the organisation
is managed in a manner that protects and furthers the interests of our stakeholders.
We recognise society as an important stakeholder in this enterprise and therefore it is
part of our responsibility to practise good corporate citizenship.
It is also our belief that in order to serve the interests of our stakeholders in
perpetuity, we must build ITC into an institution whose dynamism and vitality are
anchored in its core values.
Corporate Governance Policy
The Corporate Governance Policy is the apex level instrument guiding conduct of
the affairs of the Company and clearly delineates the roles, responsibilities and
authorities of the key entities in the governance structure of the Company. This
Code forms an integral part of the Company‟s Governance Policy. The directors,
senior management and employees must adhere to the Corporate Governance Policy
of the Company.
Good Corporate Citizenship
In the conduct of the Company‟s business, the practice of good corporate citizenship
is a prerequisite and embraces the following:
Dealing with People in the Organisation
In dealing with each other, directors, senior management and employees shall
uphold the values which are at the core of our HR Philosophy - trust, teamwork,
mutuality and collaboration, meritocracy, objectivity, self respect and human
dignity. Indeed, these values form the basis of our HR management systems and
processes. In selection and recruitment, while meritocracy will be a prime criterion,
16
managers will scrupulously consider all factors that go towards securing the interests
of the Company. ITC will focus on meritocracy, equity and upholding of Company
values in all people processes including performance management systems,
appraisals, remuneration and rewards.
A Gender Friendly Workplace
As a good corporate citizen, ITC is committed to a gender friendly workplace. It
seeks to enhance equal opportunities for men and women, prevent/stop/redress
sexual harassment at the workplace and institute good employment practices.
Sexual harassment includes unwelcome sexually determined behaviour such as:
unwelcome physical contact; a demand or request for sexual favours; sexually
coloured remarks; showing pornography and any other unwelcome physical, verbal
or non-verbal conduct of a sexual nature.
ITC maintains an open door for reportees; encourages employees to report any
harassment concerns and is responsive to employee complaints about harassment or
other unwelcome and offensive conduct. A committee has been constituted to
enquire into complaints and to recommend appropriate action, wherever required.
ITC demands, demonstrates and promotes professional behaviour and respectful
treatment of all employees.
Relationships with Suppliers and Customers
All directors, senior management and employees shall ensure that in their dealings
with suppliers and customers, the Company‟s interests are never compromised.
Accepting gifts and presents of more than a nominal value, gratuity payments and
other payments from suppliers or customers will be viewed as serious breach of
discipline as this could lead to compromising the Company‟s interests.
Legal Compliance
It is the Company‟s policy to comply fully with all applicable laws and regulations.
Ensuring legal and regulatory compliance is the responsibility of the Chief
Executives of the Businesses and the Divisional Management Committees. The
Company cannot accept practices which are unlawful or may be damaging to its
17
reputation. Divisional Management Committees must satisfy themselves that sound
and adequate arrangements exist to ensure that they comply with the legal and
regulatory requirements impacting each business and identify and respond to
developments in the regulatory environment in which they operate. In the event the
implication of any law is not clear, the Company‟s Legal Department shall be
consulted for advice.
Health and Safety
The Company attaches great importance to a healthy and safe work environment.
ITC is committed to provide good physical working conditions and encourages high
standards of hygiene and housekeeping. Particular attention should be paid to
training of employees to increase safety awareness and adoption of safe working
methods, particularly designed to prevent serious or fatal accidents.
Environment Policies
The Company believes that commitment to sustainable development is a key
component of responsible corporate citizenship and therefore deserves to be
accorded the highest priority. Accordingly, the Company is committed to Best
Practices in environmental matters arising out of its business activities and expects
each business to fully demonstrate this commitment.
In addition to complying with applicable laws and regulations, Businesses must
establish procedures for assessing the environmental effects of their present and
future activities. They should adopt Best Practices in their environmental policies
and procedures.
Personal Conduct
All directors, senior management and employees have the obligation to conduct
themselves in an honest and ethical manner and act in the best interest of the
Company at all times. They are expected to demonstrate exemplary personal
conduct through adherence to the following:
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Avoidance of Conflict of Interest
All directors, senior management and employees must avoid situations in which
their personal interest could conflict with the interest of the Company. This is an
area in which it is impossible to provide comprehensive guidance but the guiding
principle is that conflict, if any, or potential conflict must be disclosed to higher
management for guidance and action as appropriate.
Transparency and Auditability
All directors, senior management and employees shall ensure that their actions in the
conduct of business are totally transparent except where the needs of business
security dictate otherwise. Such transparency shall be brought about through
appropriate policies, systems and processes, including as appropriate, segregation of
duties, tiered approval mechanism and involvement of more than one manager in
key decisions and maintaining supporting records. It shall be necessary to
voluntarily ensure that areas of operation are open to audit and the conduct of
activities is totally auditable.
Protection of Confidential Information
No director, senior management and employee shall disclose or use any confidential
information gained in the course of employment/ association with the Company for
personal gain or for the advantage of any other person. No information either
formally or informally shall be provided to the press, other publicity media or any
other external agency except within approved policies.
Company Facilities
No director, senior management and employee shall misuse Company facilities. In
the use of Company facilities, care shall be exercised to ensure that costs are
reasonable and there is no wastage.
Leading by Example
The organisation‟s directors and senior management set the professional tone for the
Company. Through both their words and their actions, the organisation‟s leadership
conveys what is acceptable and unacceptable behaviour. ITC‟s directors, senior
19
management and employees must constantly reinforce through their actions and
behaviour that ITC‟s stated beliefs of responsible corporate citizenship are rooted in
individual conviction and personal integrity.
Waivers
Any waiver of any provision of this Code of Conduct for a director, senior
management or employee must be placed for approval before the Company‟s Board
of Directors/ Corporate Management Committee, as appropriate.
Non Adherence
Any instance of non-adherence to the Code of Conduct / any other observed
unethical behaviour on the part of those covered under this Code should be brought
to the attention of the immediate reporting authority, who shall in turn report the
same to the Head of Corporate Human Resources.


Senior management for the purpose of this Code would mean the following:
-
Managers at Grade „A‟ & its equivalent, and above
-
Divisional & SBU Chief Executives
-
Corporate HODs
This Code of Conduct, as adopted by the Board of Directors of the Company
on 26th March, 2005, was amended on 29th March, 2006.
20
Literature Review
● ITC will continue to deliver robust growth despite inflation
concerns: Puri
Diversified conglomerate ITC Limited on Wednesday said that the
company will continue to deliver robust growth
despite key concerns such as inflation.
Speaking at the company's AGM virtually, CMD
of ITC Sanjiv Puri said that in the FMCG
space, the firm has nurtured 25 brands and the
newer ones will garner an annual consumer
spend of Rs 24,000 crore.
The company will also fortify and scale up new
mega brands while investing in categories of
the future, he said.
"Today, it is immensely encouraging that your
company's newer FMCG Businesses have garnered an annual
consumer spend of Rs 24,000 crore. The carefully selected portfolio,
with substantial headroom to grow, is estimated to have a total
addressable market potential of Rs 5,00,000 crore by 2030, which is
amongst the highest in the Indian FMCG space," he said.
ITC launched 110 products during the year, Puri said adding that the
company's future-ready and purpose-driven businesses and brands are
well poised to seize the opportunities and make a meaningful
contribution to the national priorities.
ITC eyes margin expansion of 100
bps a year (TheHindu.com)
Diversified conglomerate ITC Ltd. is eying a margin expansion of 100 basis points
(bps) a year, its chairman Sanjiv Puri said at a virtual press conference.
“There was short-term
stress,” Mr. Puri said.
“Last year, the margin
expansion was 10 bps.
Due to the extraordinary
situation,
we
could
marginally expand. But
our target is to achieve
100 bps a year,” he said
while
answering
a
question.
He said the EBITDA was
about 9% and it would
take a year to be in double digits.
“There are signs of moderation, but the situation is dynamic. One has to monitor it,”
he said about the current market situation.
Stating that the sharp depreciation of the Indian rupee had positively impacted the
company as it was a net exporter, Mr. Puri said the company would boost exports of
agricultural products in coming years. Last year, it had achieved export revenue of
₹10,000 crore including agri-exports and efforts are on to increase it.
ITC said it would leverage on its recently unveiled super app ITC MAARS to enhance
India’s share of agri- products exports in the global market.
“Agriculture is the lifeline of the economy but its contribution to the GDP is much
smaller. Our [India’s] share in global trade is about 3%. From [food product]
production perspective, we can grow vertically,” Mr. Puri said.
He said to boost production of India’s agricultural products as well to enable farmers
enhance their income, he company has come out with super app ITCMAARS that will
be a catalyst for change.
“The newly launched superapp ITCMAARS is designed to provide maximum support
to marginal farmers at their doorsteps, to give them the benefits of the best in
technology and access to markets,” he said.
“For me, ITC MAARS will be a
success when it makes a
meaningful
contribution
to
multiplying farmer incomes and
making India’s agricultural value
chains competitive,” he added.
to be brought together to bring
scale. There is need for quality and
sustainability,” he said, adding that
the company was leveraging on
ITCMAARS to achieve the desired
objective.
The super app now covers seven states and over 200 Farmers Producer
Organisations (FPOs). In the future ITC plans to cover 4,000 FPOs having membership
of 10 million farmers.
“That is the way to empower farmers. ITCMAARS can play a transformative role. It’s
about people, planet and profit covering together,” he added.
Available to farmers free of cost it provides the whole ecosystem for them to scale
up with profit.
ITC, which is a major buyer of agricultural products to fuel its FMCG business, is also
going to be a beneficiary by having assured supplies.
Mr. Puri said that a move to hive off the hospitality business was on the cards and
the company had decided to exit the lifestyle business operated under the Wills
brand. The inventory is being exhausted, he added.
 ITC's strategy reset to focus on disruptive
business models
( Source - MoneyControl.com )
The strategy reset covers multiple sectors the company operates in
including—agriculture, consumer goods, paper and packaging as well as
hospitality
New Delhi:
Cigarettes-tohotels
conglomerate IT
C Ltd has
undertaken an
“extensive
strategy reset"
that will power
the company’s
next phase of
growth as it taps
into newer
opportunities
across
businesses with a
strong focus on
digital and
sustainability,
chairman Sanjiv Puri said at the company’s 110th AGM on Wednesday.
The strategy reset covers multiple sectors in which the company
operates including—agriculture, consumer goods, paper and packaging
as well as hospitality.
The company has already been stepping up investments in increasing
digital capabilities across businesses. For instance, a smart ecosystem
with an Integrated Real-Time Operations Platform continues to be
deployed across the organisation, enabling next-generation supply
chains and smart manufacturing with digitally enabled factories, it said.
The strategy reset covers multiple sectors in which the company
operates including—agriculture, consumer goods, paper and packaging
as well as hospitality.
The company has already been stepping up investments in increasing
digital capabilities across businesses. For instance, a smart ecosystem
with an Integrated Real-Time Operations Platform continues to be
deployed across the organisation, enabling next-generation supply
chains and smart manufacturing with digitally enabled factories, it said.
‘FutureTech’ enterprise by investing in digital technologies, creating
innovative business models and tapping newer opportunities.
Puri said the company is also proactively exploring “value accretive
inorganic opportunities" as it plans to expand the scope of its fastmoving consumer goods business that has grown to over ₹22,000 crore
in annual consumer spends and reaches 150 million households.
“As part of the next horizon vision, ITC is proactively exploring inorganic
opportunities. This was manifest in the earlier acquisition of Savlon and
Nimyle brands, and more recently of Sunrise Foods Pvt Ltd," Puri said.
ITC will continue to evaluate such value accretive inorganic
opportunities as an additional pillar of growth, he added.
ITC continues to be bullish about the Indian consumer space. As a result,
the company’s FMCG portfolio has been “revitalised" to make it futureready, address emerging trends and develop categories of the future, he
It has also put in place a new strategy of organisation within its foods
division—that sells brands such as Aashirvaad, Sunfeast, Bingo chips
among others. As part of the change “empowered and integrated
teams" have been formed to focus on specific product markets.
ITC set ambitious targets to turn its FMCG brands into Rs1 lakh crore
business
over the
span of
this
decade. It
has a
portfolio
of 25
consumer
-centric
brands in
India. The
company
competes
with
Hindusta
n
Unilever
Ltd,
which
sells
brands such as Kissan jams, Brooke Bond Taj Mahal tea and Horlicks
health food drinks.
Citing its acquisition of brands such as Savlon and Nimyle, a neem-based
natural floor cleaner, ITC said the brands have grown 13x and 4x,
respectively, since their acquisition. Last fiscal, Savlon witnessed
heightened demand and reached nearly ₹1,200 crore in annual
consumer spends, the company said in its FY21 annual report.
Aashirvaad offers a larger play in staples and also addresses value-added
adjacencies such as organic atta and pulses, gluten-free and sugar
release control atta as well as vermicelli and instant meals, Puri said.
In FY20, Aashirvaad reported nearly ₹6,000 crore in consumer spends;
while ITC's biscuit brand Sunfeast recorded consumer spends of
over ₹4,000 crore.
ITC will continue to drive “sustained investments" into its mega brands.
RESEARCH METHODOLOGY
RESEARCH OBJECTIVE
·
TO UNDERSTABD ORAL CARE MARKET
·
TO UNDERSTAND THE SIZE OF THE MARKET
·
TO UNDERSTAND BUSINESS STRATEGY OF COLGATE
·
TO UNDERSTAND HOW COLGATE BUILD ITS POSITION AS A
LEADER IN FMCG SECTOR
·
TO UNDERSTAND WHAT COLGATE IS ALL ABOUT
·
TO UNDERSTAND RELATIONSHIP OF COLGATE WITH ITS
STAKEHOLDERS
·
TO UNDERSTAND WORK CULTURE OF COLGATE
·
TO UNDERSTAND FINANCIAL STRENGTH OF COLGATE
RESEARCH DESIGN
Descriptive research – Descriptive research aims to accurately and systematically
describe a population, situation or phenomenon. It can answer what, where, when and
how questions, but not why questions. A descriptive research design can use a wide
variety of research methods to investigate one or more variables. Unlike in
experimental research, the researcher does not control or manipulate any of the
variables, but only observes and measures variabls. The descriptive research method
primarily focuses on describing the nature of a demographic segment, without
focusing on “why” a particular phenomenon occurs. In other words, it “describes” the
subject of the research, without covering “why” it happens. For example, an apparel
brand that wants to understand the fashion purchasing trends among New York buyers
will conduct a demographic survey of this region, gather population data and then
conduct descriptive research on this demographic segment. The study will then
uncover details on “what is the purchasing pattern of New York buyers,” but not cover
any investigative information about “why” the patterns exits. Because for the apparel
brand trying to break into this market, understanding the nature of their market is the
study’s objective. Why descriptive research? • It is an appropriate choice as the
research aim is to identify characteristics, frequencies, trends, and categories. • It is
useful as not much is known yet about the topic or problem. Before you can research
why something happens, you need to understand how, when and where it happens
TYPE OF DATA
21
Secondary data – Secondary research or desk research is a research method that
involves using already existing data. Existing data is summarized and collated to
increase the overall effectiveness of research. Secondary research includes research
material published in research reports and similar documents. These documents can be
made available by public libraries, websites, data obtained from already filled in
surveys etc. Some government and non-government agencies also store data, that can
be used for research purposes and can be retrieved from them. Secondary research is
much more cost-effective than primary research, as it makes use of already existing
data, unlike primary research where data is collected first hand by organizations or
businesses or they can employ a third party to collect data on their behalf.
DATA COLLECTION
Data collection is defined as the procedure of collecting, measuring and analyzing
accurate insights for research using standard validated techniques. A researcher can
evaluate their hypothesis on the basis of collected data. In most cases, data collection
is the primary and most important step for research, irrespective of the field of
research. The approach of data collection is different for different fields of study,
depending on the required information. The most critical objective of data collection is
ensuring that information-rich and reliable data is collected for statistical analysis so
that data-driven decisions can be made for research Methods of data collection
• Data available on the internet: One of the most popular ways of collecting secondary
data is using the internet. Data is readily available on the internet and can be
downloaded at a click is used in the report
• Government and nongovernment agencies: Data for secondary research has been
collected from some government and non-government agencies.
• Public libraries: Public libraries are another good source to search for data for this
research. Public libraries have copies of important research that were conducted earlier.
They are a storehouse of important information and documents from which
information can be extracted.The services provided in these public libraries vary from
one library to another. More often, libraries have a huge collection of government
publications with market statistics, large collection of business directories and
nenewsletter
• Educational Institutions: Importance of collecting data from educational institutions
for secondary research is often overlooked. However, more research is conducted in
colleges and universities than any other business sector. The data that is collected by
universities is mainly for primary research. However, businesses or organizations can
approach educational institutions and request for data from them.
• Commercial information sources: Local newspapers, journals, magazines, radio and
TV stations are a great source to obtain data for secondary research. These commercial
information sources have first-hand information on economic developments, political
agenda, market research, demographic segmentation and similar subjects.
SCOPE OF THE STUDY
The study will be limited to ITC personal care product, marketing strategy and also
22
consumer survey about the personal care products. The survey was limited to the
geographical area of New Delhi. The sample size was limited to 50 respondents.
SIGNIFICANCE OF THE STUDY
(i) Significance of the Industry:
The study can benchmark the factors behind the success of ITC Limited in the
Indian FMCG market. This will help them achieve sales volume and higher market
share in the Indian personal care products.
(ii) Significance of the Researcher:
I have gained lot of experience while doing this project. The project had helped me
to study the marketing strategies of the ITC Limited and to interact with the
Managers and Executive of the ITC Limited. To interact with the customers of the
different religions while filling questionnaire for my study. This will help me in my
future career.
LIMITATION OF THE STUDY:

The sample size was limited to 50 customers

The survey was limited to South Delhi.

Biased opinions of the customers are limiting factors for the research.
23
Data analysis
 Balance Sheet Comparison ( Year 2021 v/s 2020 )
ITC
------------------- in Rs. Cr. -----------------Mar '21
Mar '20
Consolidated Yearly Results
Net Sales/Income from
operations
Other Operating Income
Total Income From
Operations
Consumption of Raw
Materials
Purchase of Traded
Goods
Increase/Decrease in
Stocks
Power & Fuel
Employees Cost
Depreciation
Excise Duty
Admin. And Selling
Expenses
R & D Expenses
Provisions And
Contingencies
Exp. Capitalised
Other Expenses
P/L Before Other Inc.,
Int., Excpt. Items & Tax
Other Income
P/L Before Int., Excpt.
Items & Tax
Interest
P/L Before Exceptional
Items & Tax
Exceptional Items
P/L Before Tax
Tax
P/L After Tax from
Ordinary Activities
Prior Year Adjustments
Extra Ordinary Items
Net Profit/(Loss) For the
Period
Minority Interest
Share Of P/L Of
Associates
Net P/L After M.I &
48,952.81
48,979.08
319.97
424.97
49,272.78
49,404.05
13,939.84
13,810.70
6,836.87
4,237.90
-645.27
-703.13
-4,463.33
1,645.59
--
-4,295.79
1,644.91
--
--
--
--
--
--
--
-7,675.31
-8,502.63
15,357.11
17,615.25
2,632.56
2,597.89
17,989.67
20,213.14
44.58
54.68
17,945.09
20,158.46
-17,945.09
4,555.29
-132.11
20,026.35
4,441.79
13,389.80
15,584.56
---
---
13,389.80
15,584.56
-221.69
-286.55
-6.92
8.22
13,161.19
15,306.23
24
Associates
Equity Share Capital
Reserves Excluding
Revaluation Reserves
Equity Dividend Rate
(%)
1,230.88
1,229.22
57,409.94
62,021.86
--
--
Basic EPS
Diluted EPS
10.70
10.70
12.47
12.45
Basic EPS
Diluted EPS
10.70
10.70
12.47
12.45
No Of Shares (Crores)
Share Holding (%)
---
---
--
--
--
--
--
--
--
--
--
--
--
--
|202103
|202003
- Number of shares
(Crores)
- Per. of shares (as a %
of the total sh. of prom.
and promoter group)
- Per. of shares (as a %
of the total Share Cap.
of the company)
- Number of shares
(Crores)
- Per. of shares (as a %
of the total sh. of prom.
and promoter group)
- Per. of shares (as a %
of the total Share Cap.
of the company)
Notes
 P/L Statement Comparison ( 2021 v/s 2020 )
ITC
Consolidated Profit & Loss
------------------- in Rs. Cr. --------account
---------Mar 21
Mar 20
12 mths
Revenue From Operations
52,835.15
[Gross]
Less: Excise/Sevice
3,882.34
Tax/Other Levies
12 mths
50,968.50
1,989.42
25
Revenue From Operations
48,952.81
[Net]
Other Operating Revenues
319.97
Total Operating Revenues 49,272.78
48,979.08
424.97
49,404.05
Other Income
2,632.56
2,597.89
Total Revenue
51,905.34
52,001.94
Cost Of Materials
Consumed
13,939.84
13,810.70
Purchase Of Stock-In Trade
6,836.87
4,237.90
Changes In Inventories Of
FG,WIP And Stock-In Trade
-645.27
-703.13
Employee Benefit Expenses
4,463.33
4,295.79
Finance Costs
44.58
54.68
Depreciation And
Amortisation Expenses
1,645.59
1,644.91
Other Expenses
7,675.31
8,502.63
Total Expenses
33,960.25
31,843.48
Profit/Loss Before
Exceptional,
ExtraOrdinary Items And
Tax
17,945.09
20,158.46
Exceptional Items
0.00
-132.11
Profit/Loss Before Tax
17,945.09
20,026.35
Current Tax
4,463.74
4,846.15
Deferred Tax
91.55
-404.36
Total Tax Expenses
4,555.29
4,441.79
13,389.80
15,584.56
13,389.80
15,584.56
13,389.80
15,584.56
-221.69
-286.55
-6.92
8.22
13,161.19
15,306.23
Basic EPS (Rs.)
11.00
12.00
Diluted EPS (Rs.)
11.00
12.00
Equity Share Dividend
6,152.68
7,048.71
Tax On Dividend
0.00
1,407.44
Profit/Loss After Tax And
Before ExtraOrdinary
Items
Profit/Loss From
Continuing Operations
Profit/Loss For The
Period
Minority Interest
Share Of Profit/Loss Of
Associates
Consolidated Profit/Loss
After MI And Associates
26
MARKETING STRATEGIES OF ITC LIMITED
Founded in 1910 as Imperial Tobacco Company of India the company initially dealt in tobacco
products for decades before diversifying into non-tobacco products in the 1970s.
ITC since then has emerged as a multi-business conglomerate having business in various
industries such as Hotels, Lifestyle Retail stores, ready to eat sector, confectionary sector,
Paperboards segment, body care products etc.
Marketing Strategy of ITC - 1
Table of Contents
Segmentation, targeting, positioning in the Marketing strategy of ITCITC as a brand caters to the needs of a diverse range of consumer segments which is done by
segmenting the population based on similar sorts of characteristics.
ITC uses a mix of geographic demographic and psychographic segmentation variables such as
profession, income class, gender, age, region, behavior etc.
ITC uses selective and differentiated targeting strategy is used by the company for offerings of the
different group of companies.
Marketing mix – Here is the Marketing Mix of ITC.
SWOT analysis – Here is the SWOT Analysis of ITC.
Marketing Strategy of ITC - 2
Mission- “To enhance the wealth generating capability of the enterprise in a globalizing
environment, delivering superior and sustainable stakeholder value”
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”
Tagline- “Enduring Value”
Competitive advantage in the Marketing strategy of ITC–
1) Big Conglomerate:
Over the years ITC has become a large conglomerate offering the diverse range of products and
services ranging from Agri-Products to food products in FMCG Segment to IT Solutions.
Experience in such a diverse array of products and services has helped the company to emerge as a
prominent player in the market especially in FMCG- Cigarettes, Hotels and Paperboards &
Packaging sectors.
2) Vast experience:
With 108 years of experience in Indian, Market ITC has developed a robust distribution
framework which is parallel to none of its competitors present. This has helped the company to
understand the need and wants of the consumers making it financially strong and competitively
ahead of its peers.
3) The X-Factor:
27
ITC’s E-Chaupal initiative aimed at making internet available to Indian farmers has touched the
lives of millions of farmers and their families in the rural part of the country thus increasing brand
presence through this social initiative and in turn leveraging some Brand essence points to the firm.
BCG Matrix in the Marketing strategy of ITC –
Marketing Strategy of ITC - 3
ITC’s business segments are FMCG- Cigarettes, FMCG- Foods, ITC Infotech, Agri-Business,
Hotels, Paperboards & Packaging, Branded Apparels, Packaged Foods.
Out of this FMCG- Cigarettes is its cash cow while Agri-Business, Hotels, Paperboards &
Packaging comes in star segment for ITC.
FMCG- Foods still appears to be a question mark for the firm and Branded apparels and Packaged
foods are categorized as dogs for the firm.
Distribution strategy in the Marketing strategy of ITC –
Marketing Strategy of ITC - 4
The company operates with its own sales channel, products are made available to the wholesale
dealers through Carried & Forward Agents (CFA’s) which is then forwarded to the Retailers in
towns directly or through Small Wholesale Dealers to reach the consumers in the remotest of
locations of the country.
Brand equity in the Marketing strategy of ITC –
ITC has been ranked 772 on Forbes magazine list of top 2000 companies globally. The brand has
been valued at $51.5 billion as of June 2018.
ITC also features at 239ranksk in worlds best employers list of Forbes Magazine and Asia’s 50
biggest performing companies list compiled by Business Week.
Market analysis in the Marketing strategy of ITC –
Under the GST regime with additional cess being charged over the GST of 28% on cigarettes and
tobacco-related products, ITC has estimated an incremental tax burden of over
Facts and findings
Marketing has been defined in various ways, but it can be defined as:
A social and managerial process by which individuals
and
groups
obtain
what they need and want through Creating, Offering, Exchanging Products
of value with others. There are certain elements on which marketing and this
particular definition of marketing rests. They are linked to each other and they
are complimentary one giving rise to the other. Their relationship is shown in
a diagrammatic form below.
28
Needs, wants and demands
Products (Goods, service and ideas)
Value, cost and satisfaction
Exchange and Transaction
Relationships and networks
Markets
Marketers
and prospects
Marketing is indeed an ancient art; it has been practiced in one form or the
other. Marketing is considered to be most important of all management
functions in any business. The basic task of marketing is the delivery of a
total offer to the consumer in such a manner that:a) The other fulfills the needs of the consumer.
b) The terms and attributes of the offer are acceptable.
c) All the organizational goals, including profits, are achieved in theprocess.
Firstly, place, it chooses the product that would meet the identified needs of
the chosen
consumer/consumer
group.
Secondly,
it
performs
distribution functions like transportation, warehousing, channel
various
management,
etc. so that the product can conveniently reach the consumer. Thirdly, the firm
carries out a number of promotion measures like personal selling, advertising
and sales promotional programmes with a view to communicating with the
consumer and promoting the product. Lastly, the firm uses the pricing
mechanism to achieve
the consummation of
the marketing process, striking
the level of price that is acceptable to the firm as wall as to the consumer. All
activities and programmes which a business firm designs and carries out in its
effort towards winning customers, relate to one or the other of the four
elements -product, distribution, pricing and promotion. These four elements
constitute the Marketing Mix of the firm.
29
MARKETING MIX VARIABLES/FOUR Ps OF MARKETING & THEIR
SUB-ELEMENTS
Product Variables

Product mix and product line

Design, quality, features, models, style, appearance, size, and warranty of
products

Packaging, type, materials, size, appearance and label

Branding and trade mark

Merchandising

Service, pre-sale and after-sale

New products
Place Variables

Channels of distribution, types of intermediaries, channel design, location
of outlets, channel remuneration and dealer-principal relations

Physical distribution, transportation, warehousing, inventory levels, order
processing, etc.
Price Variables

Pricing policies, levels of prices, levels of margins, discounts and rebates

Terms of delivery, payment terms, credit terms and instilment facilities

Resale price maintenance
Promotion Variables

Personal selling: objectives, level of effort, quality of sales force, costlevel,
level of motivation

Advertising: media mix, budgets, allocations and programmes

Sales promotional efforts, display, contests, trade promotions

Publicity and public relations
31
Assembling and managing the marketing mix is the main part of the
marketing task.
SOME OTHER VARIABLES OF MARKETING
Customer Variables

Number of customers

Location of the customers

Purchasing power of the customers .Buying behaviour

Habits of purchase

Personality traits and attitudes

Lifestyles and needs

Brand awareness and brand loyalty
Competition Variables

Structure of the industry

Nature and intensity of the competition, Buyer's market or the Seller's
market? Or moderately competitive?

Number of competitors, their size, capacity and territory of operation.

Products and services offered by the competitors.

Competitor's sales level in each market segment/product

Competitor's strengths and weaknesses -in products, costs, logistics,channel,
sales force, promotion and marketing organization

Competition from substitute products
Trade Variables

Structure of the trade

Type of intermediaries, their number and strength

Trade practices
32

Services provided by the trade

Motives and attitudes of the intermediaries

Extent of sophistication of the trade
Environment Variables

Level of technology

Government regulation on products, prices, distribution. Etc

Controls on trade practices

Economic conditions in the country

Geography and climate

Culture and traditions

Law and politics

Attitudes of the public and the media
33
INTERRELATIONSIP BETWEEN MARKETING MIX AND
ENVIRONMENTAL VARIABLES
Since the marketing process is essentially an interaction
between
the
marketing mix and the environment I assembling and managing the marketing
mix becomes the crux of the marketing task. In fact many marketing scholars
and marketing practitioners view marketing as synonymous with
the
assembling and operating of the marketing mix. Assembling the marketing
mix elements into a winning marketing programme is however, not an easy
job. It involves many crucial decisions relating to each of the elements
product, price, channel and promotion. Decisions are also required on the
interrelationships of the elements.
Product
A product is not a mere non-living object; it is not a mere assemblage of
matter -physical and chemical. Utility alone is not the function of a product. A
product means something more than a physical commodity. People associate
meanings with products; they derive satisfaction from the non-utility aspects
of the products as well. Products have an identity or a personality of their
own. The utility aspect of the product is but one component of the product
personality.
Theodore Levitt puts it succinctly when he says: “Products are almost always
combinations of the tangible and intangible... to the buyer, a product is a
complex cluster of value satisfactions. The generic thing by itself is not the
product; it is merely... the minimum that is necessary at the outset to give the
producer a chance to play the game. It is the playing that gets the results. A
customer attaches value to a product in proportion to its perceived ability to
help solve his problems or meet his needs. All else is derivative...The product
is the total package of benefits the customer receives when he buys it...The
customer never just buys the generic product...He buys something that
transcends and what that something is, helps determines from whom he'll buy,
what he'll pay.”
34
Product definition concerns the various properties, which are designed into
the manufacturer's product line and the assortment of models and items, i.e.,
the product mix, which makes up his total product offering. The conditions
and circumstances, which need to be considered in formulating this definition,
can be divided into those, which influence the development of new products,
those, which relate to the product mix, and those, which stem from the
attributes of the company itself.
New-product
development
involves
several
stages,
beginning
with
the
generation of new-product ideas and their appraisal to eliminate those
unworthy
of
further
consideration.
Products,
which
warrant
additional
investigations are identified and technical work is begun on them along with,
appropriate economic and market research. During this stage the physical
properties of the new product are determined, small quantities are produced in
the laboratory or pilot plant, preliminary investigation of patent rights is
begun,
and initial estimates
of production
costs are
expectations are fulfilled, development of the product
made.
proceeds
If
initial
through
process research, prototype testing, and commercialisation.
The major determinants of the product mix are technology, competition,
operating capacity, and market factors.
Accelerating
technology
is
undoubtedly the basic force affecting the product mix of the individual
company, with competitive pressures
running
a
close
second.
In
some
companies, under-utilised capacity is an -important influence along with such
market factors as shits in the product mix of customers, changes in the
availability and / or cost of materials, new developments in
manufacturing
processes, changes in the level of business activity, and government controls.
The type and variety of products, which are appropriate for a company, are
also a function of the firm's inherent strengths and weaknesses. Those
attributes of accompany with the most direct bearing on product definition are
the strength of its marketing performance, the extent of its production
capacity, the quality of its R&D effort, and the abilities of its executive group.
35
The amount of financial slack available may also be an important influence on
product definition.
Price
Price is the exchange value of a product. Pricing is undoubtedly one of the
most important decision areas of marketing. Price and sales volume together
decide the revenue of any business. As the sales volume in itself is dependent
on price, pricing really becomes the key to the revenue of the business.
Pricing is crucial to profits as well. Pricing becomes a vital decision area on
account of certain other factors besides its crucial role in bringing revenues
and profits to the business.
Price is not only the factor influencing the demand for industrial goods and
the patronage of industrial buyers; it is an indispensable part of the marketing
strategy. A price that is too high invites both competition and buyer
resistance. While a price that is too low may well competition, it will also
deflate profits and may incur losses.
In many instance the prices of industrial goods fall into patterns that are fairly
uniform throughout an industry. Nevertheless, a marketer mist decide whether
or not to follow industry patterns, and if not, how much to deviate from them.
These decisions must be made against a background of environmental forces
including competition, changing costs and shifting patterns of demand.
To price the equipment the industrial marketer must know the type of
competition in his industry, the nature of his costs, and the way in which the
demand for his product behaves.
The typical industrial market is composed of a small group of l arge firms, a
more numerous group of medium-sized firms, and often a group of very small
companies, which sell mainly on the basis of price. The first two groups are
likely to subscribe to the philosophy of responsible competition. However, the
nature and intensity of competition tends to change with the changes in the
lifecycle of products. These conditions often give rise to a
phenomenon
known as price leadership.
36
The nature and pricing implications of costs tend to change with
different
time periods production cycle, equipment use cycle or product life cycle.
Different types of costs-controllable or non-controllable, incremental or sunk,
overhead or direct, separable, and joint -exercise different influences on
pricing.
The derived nature of demand for industrial goods affects its behaviour in
response to price change. While it is theoretically possible to
stimulate
demand for industrial products by lowering their price, increased sales will
result only to the extent that prices of related consumer goods can be reduced
sufficiently to stimulate their sales.
Place
Distribution channels playa vital role in the successful marketing of most of
the products. The distribution channel is an extension of the manufacturer into
the markets he plans to supply. The manner in which products and services
are made available through it is a function of its structure as well as the
relationship, which prevails among its different
elements
or intermediaries.
The basic choice is whether this structure will be composed of captive
(owned) or independent units.
Since a distribution channel exists for the purpose of moving merchandise and
making services available, channel strategy also involves planning of a
logistical nature. How efficiently the channel structure functions as
the
delivery system depends in large part on the quality of logistical planning and
its execution.
Distributors are the most numerous and the most important group of
middlemen handling industrial goods. Industrial users find it desirable to buy
from the distributor because he usually can give quick delivery, his use saves
paper work in buying, he can sometimes offers low prices, adjustments are
easier to negotiate, he may enable the buyer to save freight costs, and he is a
good source of trade information. The patronage of the distributor thus comes
mainly from (1) the firm too small to buy direct, (2) the large firms for
37
emergency needs and items bought in small amounts, or as means of reducing
inventory.
Manufacturer's
and sales agents are useful outlets to producers of a single
item or a narrow line of articles, to the manufacturer with limited finances,
and to all kinds of manufacturers in areas where demand is thin or trade
contracts are lacking. Advantages in using agents are that their costs are often
relatively low and the producer incurs no costs unless sales are made, they
offer contracts to a firm entering a new market, and their sales service is more
specialised and intense than that of the distributor. But the manufacturer who
markets through agents loses control over his marketing operations, lacks
flexibility in bidding, incurs excessive costs when
volume is large,
loses
speed of delivery, quality of technical service, and selling drive in comparison
with his own sales force. Brokers and commission merchants are
useful
mainly in special situations.
Manufacturer's branch houses are of two types those that carry stocks and
those that do not. Through the branch house, the manufacturer gets better
sales service, more adequate and representative stocks, and
control
of
technical and maintenance service. But branch houses are often so costly as to
be prohibitive.
Promotion
The crucial event in the marketing process is the sale. Within the context of
the corporate mission, every component of the marketing strategy is intended
to bring it about. But 1t must be brought about in a way, which assures
customer satisfaction. This places a special burden on advertising, personal
selling, sales promotion, and to a lesser extent, public relations, which are the
principal avenues through which direct contact with the customer is made.
Each has a unique contribution to make both in generating sales and in
sustaining customer patronage.
The task of the industrial advertiser is complicated by the multiple buying
influence characteristics of many industrial firms, the derived nature
of
demand for industrial goods, and the fact that many materials, parts, and
38
components lose their identity in the end product. These conditions influence
the role of advertising in the firm's promotional strategy, which in turn has a
bearing on the purposes which advertising will be called upon to serve. While
these purposes vary with the firm and the market situation, several are fairly
common. They are to inform, to identify the customers, to win recognition, to
support salesman, to motivate distributors, and to stimulate demand.
The most commonly used media for disseminating advertising messages and
the sales appeal which they contain are trade journals and
catalogues,
followed by direct mail, exhibits, general publications, and distributor aids.
The choice of media is determined by the need to reach the proper personnel
in the customer's organization with the proper frequency with proper overall
impression.
The chief limiting factor underlying factor underlying the advertising effort is
the amount of budgetary support management decides to give it. Sometimes
this is determined through the application of a fixed percentage to either last
year's sales or anticipated sales.
Publicity is commonly regarded as a form of advertising, although it performs
a slightly different function and is not paid by the sponsor. The most effective
way to create publicity is to generate newsworthy situations and events.
Advertising agencies are probably used less by industrial than by consumer
goods marketers to assist in their advertising and publicity. However, this
appears to be changing as: the number of agencies specialising in industrial
accounts increases and the number, which offers promotional services on a jobshop basis, continues to grow.
In selling products, the promotion mix mostly consists of Direct Selling and
advertising. Being high value items and complex in function, personal contact
with the customer is essential to convince him of the product's quality and
capability.
It is not so, however, with consumer products. In spite of this many consumer
product companies use Direct Selling in concert with advertising, to get
consumers to try their brand and switch over to it. But direct selling cannot
39
substitute for advertising; it can only be used tactically to intensify the
marketing effort, mainly because it is expensive.
MARKETING COMMUNICATIONS
FMCG - Cigarettes business has an internal code for advertising/ promotions,
which is reviewed every year, and whenever any new law/rules are introduced. The
internal code is more stringent than other codes. It not only comprehensively covers
all aspects of other codes but also encompasses areas not covered by them. The
requirements under Advertising Standards Council of India (ASCI) code of conduct,
which is now the Government of India's Governing code, are applied across the
business.
All laws related to the product category such as The Cigarettes (Regulation of
Production, Supply and Distribution) Act, 1975, The Cigarettes and Other Tobacco
Products (Prohibition of Advertisement and Regulation of Trade and Commerce,
Production, Supply and Distribution) Act, 2003, The Cable Television Networks
(Regulation) Act, 1995, and The Cinematography Act, 1952, which have provisions
for regulations of advertising/promotions in India are strictly followed.
Any State Government laws on advertising/promotion for ITC's products are
completely adhered to. There is on-going review of these codes to ensure
compliance.
The FMCG Cigarettes business sells a legal product, which is not banned in any
market where it sells. Tobacco products are often a subject of public debate.
Stringent quality standards/systems are established to respond to queries/ concerns
and are known to all stakeholders.
The Foods business voluntarily follows the ASCI (Advertising Standards Council
of India) Code for all Marketing Communication.
Every time a new Marketing Communication is created, it is checked for compliance
with the ASCI Code. In addition, a monthly compliance validation is done by
respective managers.
The Foods business does not sell any product which is 'banned in certain markets' or
is 'the subject of stakeholder questions or public debate'.
40
In the Paperboards & Specialty Papers, Packaging & Printing and Greeting,
Gifting and Stationery businesses, all codes/ standards relating to Standard
Weights & Measures Rules are followed. These requirements are reviewed on a
monthly basis for compliance. None of the products from these businesses is 'banned
in certain markets' or subject of stakeholder concern or public debate.
In the Hotels business, marketing communication is governed by self-regulation
and guided by Indian Society of Advertisers (ISA) Rules and guidelines.
It is reviewed quarterly to ensure compliance with relevant rules and internal
guidelines.
The Hotels business does not sell any product banned in the market nor is the subject
of stakeholder questions or public debate.
Agri-business has not advertised its product and services in a major way and no
voluntary code is therefore required to be followed. Communications and
promotions done so far have been in accordance with the law of the land and have
been duly approved by the Legal Department of the Company.
The business is in the process of establishing a voluntary code, as it has recently
initiated advertising its retail business.
The Leaf Tobacco business provides Corporate Advertisements (e.g. 'With best
compliments from ITC Ltd'. etc.) to souvenirs published by certain organisations.
This is in accordance with the provisions of Cigarettes and Other Tobacco Products
Act (Prohibition of Advertising and Regulation of Trade and
Commerce,
Production, Supply and Distribution) Act, 2003. However, the business does
advertise its Organic Agri-inputs. The business also publishes Corporate
Advertisements (stating that ITC-ILTD is India's leading tobacco exporter and
providing contact details) in reputed International Tobacco Journals.
No product advertisement relating to tobacco is published by the business. The
business also maintains a website, 'itc-iltd.com', which provides the details of
Tobaccos grown in different regions of India. All the advertisements published in
various fora are reviewed by the Divisional Management Committee (DMC) every
41
month. Any material change in the contents of the website are also approved by the
DMC.
Lifestyle Retailing business follows the Voluntary Code on Advertising and
Promotion.
The code ensures that the advertisements are not deliberately misleading in terms of
claim and representation, and are not offensive to generally accepted standards of
public decency (nothing vulgar, indecent or repulsive). Glorification of acts of sex
and violence is avoided. References to religion in general and specific religions are
also avoided. It is ensured that advertisements maintain fairness to competition and
the contests and promotions are as per the laws of the land. The terms and conditions
of promotions are vetted by the Legal Department. There is no deriding of race,
caste and community in advertisements or promotion. Packaging of the product is in
accordance with Packaging and Weights & Measures Acts.
Compliance is ensured through on-going review. Each campaign/promotion is vetted
for compliance before release.
The Lifestyle Retailing business does not sell any product that is banned in certain
markets or subject of stakeholder questions or public debate.
Compliance
All the businesses/Divisions of ITC have well-established systems, procedures and
review mechanisms to identify and comply with the laws and regulations concerning
products and services. ITC continued to comply with all applicable statutes.
ITC PERSONAL CARE PRODUCT RANGE
ITC recently entered the Personal Care Products market, which is currently the fief
of Fast Moving Consumer Goods (FMCG) majors Hindustan Lever and Procter &
Gamble.
There is a certain degree of exhaustion in the sector, which has created a window of
opportunity for a new player with the right business plan. Established players in the
FMCG segment have been indulging in a bloody war over pricing, with undercutting
and discounts being the order of the day.
42
The size of the Personal Care Product market is about Rs 15,000 crore (Rs 150
billion), with soaps and shampoos alone accounting for Rs 7,000 crore (Rs 70
billion).
In the last three years the segment is estimated to be growing at 8-9 per cent, which
is considered to be among the highest in the Rs 45,000 crore (Rs 450 billion) FMCG
market.
ITC already sells a wide range of products in the FMCG segment but none in
Personal Care. The company's FMCG range now has more than 45 food products,
covering staples, ready-to-cook pastes, confectionery, snacks and biscuits and readyto-eat meals. ITC emerged as the most profitable FMCG company in the second
quarter in the current financial year.
ITC launched an exclusive line of prestige fine fragrances under the Essenza Di
Wills brand in mid 2005. The Essenza Di Wills range of perfumes reinforces ITC‟s
tradition of bringing world-class products to Indian consumers to enrich the quality
of their lives.
Essenza Di Wills embodies a fine balance between the classic and
the
contemporary. The brand personifies exclusivity, innate style, sophistication and
magnetism.
The Essenza Di Wills line has been developed with the assistance of French
perfumery experts to give it the mystique and premium luxury quality that go with
the best of international brands.
Inizio, the signature range under Essenza Di Wills
captures the very essence of attraction between a
man and a woman with its two distinct lines - Inizio
Femme (for women) and Inizio Homme (for men).
The women's fine fragrance revolves around 'Floral
Fruity Musky' notes while the men's fine fragrance
is centered on 'Oriental Woody Fruity' notes. The bath and body care products
share the same olfactory signature of the fine fragrances, to offer a harmonized
grooming experience.
43
The latest addition to the Essenza Di Wills portfolio is the Aqua range
for men (Aqua Homme) that offers a distinctive and fresh aquatic
fragrance. The Aqua range includes an After-Shave Lotion, a
Deodorant, a Hair & Body Shampoo and a Bathing Bar.
Essenza Di Wills has significantly enhanced its brand salience in the lifestyle space
by being the associate sponsors of the Wills Lifestyle India Fashion Week, the
country's most premier fashion event that brings together the leading designers of
the country.
The Essenza Di Wills fashion line, specially designed for the brand by one of
India‟s leading designers, Varun Bahl, received high appreciation at the SpringSummer show in September 2007. Essenza Di Wills is available at Wills Lifestyle
stores, select John Players stores and select premium outlets.
This comprehensive grooming regimen of 16 products includes in the women's
range, Eau De Parfum, Eau De Toilette, Deodorant, Shower Gel, Shampoo, Bathing
Bar, Body Lotion, Cleansing Milk, Toner and Nourishing Cream while the men's
range comprises Eau De Toilette, After Shave Lotion and Balm, Deodorant, All
Over Shampoo and Bathing Bar. The bath and body care products share the same
olfactory signature of the men and women's fine fragrances, to offer you a
harmonised fragrance experience.
A renowned European Design Firm has designed the packaging for the Inizio line.
The fine fragrances are presented in an elegant three-piece box. The gold and
maroon in the packaging for the women's range, complement each other invoking an
aura that is intriguing and timeless. The interplay between black and bronze in the
packaging for the men's range exudes eternal masculine charm. The clean-cut design
and shape of the bottles expresses the fine harmony of the classic and the
contemporary, a style reminiscent of European signature fragrance lines.
This range has been created by a dedicated team within ITC working with
International designers and fragrance houses, over the past three years and has
undergone extensive product testing in India as well as in Europe, to ensure that the
Indian consumer has a memorable product experience.
44
In September 2007, ITC launched Fiama Di Wills, a
premium range of personal care products comprising
shampoos, conditioner, shower gels and soap. This
premium range is a unique blend of nature and science that
promises gentle effective care. It is an outcome of 4 years of extensive research and
development by experts at ITC R&D Centre. The packaging for all Fiama Di Wills
products has been developed by a leading European design firm and the fragrances
have been developed by an international fragrance house in France.
Fiama Di Wills Shampoos developed in collaboration with Cosmetech Labs Inc.,
USA, offers a range of four variants. Each of these is designed to deliver a specific
hair benefit to the consumer :

Everyday Mild (with extracts of Thyme & Juniper) is a gentle caring
shampoo suitable for daily use.

Aqua Balance (with extracts of
Magnolia
Blossoms
Watercress)
is
a
&
gentle
moisturizing shampoo ideal for
dry, dull hair.

Volume Boost (with extracts of
Rosemary & Sage) is a gentle volumizing shampoo ideal for thin, limp hair.

Silky Strong (with oils of Macadamia Nut and Babassu) helps make hair
smooth, silky and strong and is ideal for weak, damaged hair.
Each of these shampoos can be complemented with
Fiama Di Wills Polishing Drops conditioner. This
gentle conditioner enriched with Avocado Oil and
Burdock extract promises to make hair shiny, soft and
smooth. It also gives the additional benefits of UV
protection as it contains Sunflower Seed extract, which
45
is a natural UV absorber.
The Fiama Di Wills product line also consists of a 3-variant range of transparent
shower gels which are unique as they come with suspended beads:

Mild Dew (enriched with soft beads, peach and avocado extracts) is for soft,
moisturized skin.

Clear Springs (enriched with
jojoba beads, sea weed and
lemongrass extracts) is for
clear healthy skin.

Exotic Dream (enriched with
glitter beads, bearberry leaves
and black currant extracts) is
for stimulating freshness.
The Fiama Di Wills range of soaps has been
launched under the sub - brand SkinSense. The
first variant to be introduced in this range is Soft
Green. This is a gentle caring soap, which helps
enhance retention of skin proteins making skin
look beautiful and youthful.
Between February and June 2008, ITC expanded its personal care portfolio with the
launch of Vivel Di Wills and Vivel brands. Vivel Di Wills, a range of soaps, and
Vivel, a range of soaps and shampoos, cater to the specific needs of a wide range of
consumers.
Backed by consumer insights, these ranges offer the unique value proposition of
providing the multiple benefits of Nourishment, Protection and Hydration in every
single product. Thus providing, the ever-discerning consumer, complete care.
The Vivel Di Wills range is available in two variants. Its unique carton pack has
been developed by ITC's design team to provide a novel consumer experience.
46
Vivel Di Wills Sheer Radiance is enriched with Olive
Oil, to provide skin lustre to make it radiant.
Vivel Di Wills Sheer Crème is enriched with Shea
Butter, to moisturize skin to make it soft and supple.
The Vivel range of soaps is available in four variants:Vivel Young Glow is enriched with Vitamin E and Fruit Infusions which help in
providing youthful glow to the skin.
Vivel Satin Soft is enriched with Vitamin E and Aloe Vera which help the skin feel
beautifully soft.
Vivel Sandal Sparkle is enriched with Sandalwood
Oil and Active Clay which helps in providing clear
skin.
Vivel Ayurveda Essence is enriched with multiple Ayurvedic Ingredients which
help protect skin from germs and harsh environment, keeping it healthy and
beautiful.
The Vivel range of shampoos is available in three variants:
Vivel Shine & Glow is suitable for
dull to normal hair and is enriched with
Green Tea Extract and Conditioners. It adds
shine to hair.

to
Vivel Soft & Fresh is suitable for dry
normal
hair
and
contains
Extra
Conditioners and Soya Protein. It makes hair
soft and fragrant.

Vivel Volume & Bounce is suitable for oily to normal hair and contains
Jojoba Oil and Conditioners. It adds volume and bounce to hair.
Vivel shampoos in line with its aspiration to offer world class products to the Indian
consumer. Vivel shampoos will be available in three variants - Shine & Glow, Soft
& Fresh and Volume & Bounce - customized to meet specific consumer needs.
47
Vivel shampoos are conveniently packaged in 200ml and 100 ml bottles and will
also be available in sachets. The extension of the Vivel brand into the shampoo
category follows the successful launch of Vivel soaps in February this year.
Vivel shampoos, enriched with a unique Actipro-K
complex, provide the Power of 3 benefits - Nourishment,
Protection and Hydration. Backed by consumer insight,
this novel value proposition is a result of 4 years of
extensive research and product development at the ITC
R&D Centre. The convergence of these benefits provides the ever discerning
consumer wholesome care for her hair and makes her look beautiful. This belief is
encapsulated in the Vivel tag line, “Khoobsurti bas mein, Duniya kadmon mein‟.
The exquisite fragrances for Vivel products have been developed by leading
international fragrance houses. The soft vignette design and the unique braid design
behind the brand logo are a reflection of the brand philosophy of delivering multiple,
relevant and powerful benefits in each product.
The three Vivel shampoo variants offer clearly differentiated benefits to the
consumer:

Vivel Shine & Glow is suitable for dull to normal hair and is enriched with
Green Tea Extract and Conditioners. It adds shine to hair.

Vivel Soft & Fresh is suitable for dry to normal hair and contains Extra
Conditioners and Soya Protein. It makes hair feel soft and fragrant.

Vivel Volume & Bounce is suitable for oily to normal hair and contains
Jojoba Oil and Conditioners. It adds volume and bounce to hair.
The 200 ml and 100 ml bottles and 8 ml sachets are priced at Rs. 89, Rs. 49 and Rs.
2, respectively.
Apart from Vivel and Vivel Di Wills, ITC‟s personal care portfolio
comprises Essenza Di Wills, Fiama Di Wills and Superia brands.
In the popular segment, ITC has launched a range of soaps and shampoos under the
brand name Superia.
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Superia Soaps enriched with natural ingredients give radiant
glowing skin. Superia Soaps are available in four variants :
1. Fragrant Flower: with the fragrance of Rose &
Lavender Oil
2. Soft Sandal: with the fragrance of Sandal & Almond Oil
3. Natural Glow: with Neem & Coconut Oils
4. Healthy Glow: with Orange Oil
Superia shampoos with triple conditioners and natural
ingredients bring a natural shine to hair. Superia shampoos are
available in two variants:
1. Shiny Black with Triple Conditioners and the natural
goodness of Hibiscus & Brahmi extracts.
2. Vibrant Green with Triple Conditioners and the natural goodness of Amla
& Arnica extracts.
Superia soaps & shampoos are an outcome of 3 years of extensive product
development by ITC scientists at the ITC Research and Development Centre.
Consumer Insights based on detailed understanding of the modern Indian consumer
led to the development of these products and brand experience. The delightful
fragrances for the various products have been developed with leading international
fragrance houses. The aesthetics and packaging for the products have been
developed with leading designers and have been researched amongst hundreds of
consumers .
Superia soaps will be available in sizes ranging from 50g to 125g, and the shampoos
in 125 ml and 55 ml.
49
RECOMMENDATIONS
On the basis of above findings, a few recommendations can be put forward:
1. It is necessary to have a high level of advertisement during the phase when a
consumer actually purchases a personal care product. For instance during the last
week of the month, just before purchase of monthly quota of their personal care
products in most houses. Such a pulsed advertisement would be sufficient.
2. In order to attract a consumer through advertisements, it is benefits that have to
be highlighted in the advertisements. This is necessary because consumers do
not go through an extensive evaluation process for personal care products.
3. Any promotional scheme is to be displayed at the point of purchase prominently
rather than through advertisements.
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CONCLUSION
In today‟s dynamic and competitive business environment, marketers should
understand the changing perceptions and needs of consumers. These perceptions
keep on changing with time. As the competition is so tough that marketers keeps on
increasing customer expectations by providing them better quality products. Once
consumer experience a particular set of level, he/she dose not want to move below
that level.
The personal care product market has low involvement purchase decision. The
consumers are not brand loyal. They keep on changing their brands frequently. So it
is important for a marketer to keep his product alive in the market, otherwise the
company will be kicked out of the market. We can take the example of the Camay,
which could not catch the market pulse, and today it is out of the market.
The following attributes are essential for the personal product segment:

Fragrance and freshness are two most important attributes for the soap. So the
manufactures should lay their main emphasis on these two attributes. Some soap
is not doing well because they don‟t possess these qualities in their soaps. We
can take the example of Denim, which is unsuccessful soap, as it does not fulfill
these two essentialities.

Price is another important attribute as the market looks for the value for money.
People are price conscious. Not much people go for the premium range.

The consumers also consider foam and deodorant. Consumers have a psychology
towards foam. The foam gives a feeling of cleaning the body well. Lot of people
doesn‟t like lifebuoy, because it doesn‟t generate foam. Now a day‟s people are
also looking for deodorant in the soap. The flow of lot of deodorant sprays has
also encouraged the peoples to look for deodorant in the soaps.
Apart from these attributes we find that promotional schemes are very important in
catching the attention of consumers. That is why we are seeing that lots of
51
companies are coming with new promotional schemes. In survey also lot of people
have said that promotional schemes tends to fluctuate from one brand to other brand.
It has been revealed during the survey that advertisement plays an important role in
positioning of personal care products. It helps in creating brand awareness among
the consumers. This is advertisement, which makes consumers aware of free offers
and discounted price.
52
BIBLIOGRAPHY
Books
-
Marketing Management, Philips Kotler, The Millennium Edition, Prentice Hall
of India Private Limited, New Delhi.
-
Sales and Distribution Management, T.K. Panda, Sunil Sahadev, Oxford
University Press, New Delhi, 2005.
Magazines
-
India Today
-
The Week
-
Business Today
Newspapers
-
Economics Times
-
Times of India
-
Financial Express
Websites
-
www.google.com
-
www.itcportal.com
-
www.fashionproducts.com/personal-care-overview.html
-
www.indiantelevision.com
-
www.moneycontrol.com
-
www.thehindu.com
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