Marketing in ITC

7/29/2019 Marketing in ITC

1/44

Marketing strategies of ITC Ltd

1

INTRODUCTION OF MARKETING

Marketing is the link between a societys material requirements and its

economic patterns of response. Marketing satisfies these needs and wants

through exchange processes and building long term relationships. The process

of communicating the value of a product or service through positioning to

customers. Marketing can be looked at as an organizational function and a set of

processes for creating, delivering and communicating value to customers, and

managing customer relationships in ways that benefit the organization and its

shareholders. Marketing is the science of choosing target markets through

market analysis and market segmentation, as well as understanding consumer

buying behavior and providing superior customer value.

There are five competing concepts under which organizations can choose to

operate their business; the production concept, the product concept, the sellingconcept, the marketing concept, and the holistic marketing concept. The four


2/44


2

components of holistic marketing are relationship marketing, internal

marketing, integrated marketing, and socially responsive marketing. The set of

engagements necessary for successful marketing management includes,

capturing marketing insights, connecting with customers, building strong

brands, shaping the market offerings, delivering and communicating value,

creating long-term growth, and developing marketing strategies and plans

Services marketing relates to the marketing of services, as opposed to

tangible products. A service (as opposed to a good) is typically defined as

follows: The use of it is inseparable from its purchase (i.e., a service is used and

consumed simultaneously).It does not possess material form, and thus cannot be

touched, seen, heard, tasted, or smelled. The use of a service is inherently

subjective, meaning that several persons experiencing a service would eachexperience it uniquely. For example, a train ride can be deemed a service. If one

buys a train ticket, the use of the train is typically experienced concurrently with

the purchase of the ticket. Although the train is a physical object, one is not

paying for the permanent ownership of the tangible components of the train.

Services (compared with goods) can also be viewed as a spectrum. Not all

products are either pure goods or pure services. An example would be a

restaurant, where a waiters service is intangible, but the food is tangible.

There are several definitions have been proposed for the term marketing.

Each tends to emphasize different issues. Memorizing a definition is unlikely to

be useful; ultimately, it makes more sense to thinking of ways to benefit from

creating customer value in the most effective way, subject to ethical and other

constraints that one may have. The 2006 and 2007 definitions offered by the

American Marketing Association are relatively similar, with the 2007 appearing

a bit more concise. Note that the definitions make several points:

Delivering customer value. The central idea behind marketing is the idea thata firm or other entity will create something of value to one or more customers

who, in turn, are willing to pay enough (or contribute other forms of value) to

make the venture worthwhile considering opportunity costs. Value can be

created in a number of different ways. Some firms manufacture basic products

(e.g., bricks) but provide relatively little value above that. Other firms make

products whose tangible value is supplemented by services (e.g., a computer

manufacturer provides a computer loaded with software and provides a

warranty, technical support, and software updates). It is not necessary for a firmto physically handle a product to add valuee.g., online airline reservation


3/44


3

systems add value by compiling information about available flight connections

and fares, allowing the customer to buy a ticket, forwarding billing information

to the airline, and forwarding reservation information to the customer.

It should be noted that value must be examined from the point of view of thecustomer. Some customer segments value certain product attributes more than

others. A very expensive productrelative to others in the categorymay, in

fact, represent great value to a particular customer segment because the benefits

received are seen as even greater than the sacrifice made (usually in terms of

money). Some segments have very unique and specific desires, and may value

whatto some individualsmay seem a lower quality itemvery highly.

Some forms of customer value. The marketing process involves ways that

value can be created for the customer. Form utility involves the idea that the

product is made available to the consumer in some form that is more useful than

any commodities that are used to create it. A customer buys a chair, for

example, rather than the wood and other components used to create the chair.

Thus, the customer benefits from the specialization that allows the manufacturer

to more efficiently create a chair than the customer could do himself or herself.

Place utility refers to the idea that a product made available to the customer at a

preferred location is worth more than one at the place of manufacture. It is

much more convenient for the customer to be able to buy food items in a

supermarket in his or her neighborhood than it is to pick up these from the

farmer. Time utility involves the idea of having the product made available

when needed by the customer. The customer may buy a turkey a few days

before Thanksgiving without having to plan to have it available. Intermediaries

take care of the logistics to have the turkeyswhich are easily perishable and

bulky to store in a freezeravailable when customers demand them. Possession

utility involves the idea that the consumer can go to one store and obtain a large

assortment of goods from different manufacturers during one shopping

occasion. Supermarkets combine food and other household items from a

number of different suppliers in one place. Certain superstores such as the

European hypermarkets and the Wal-Mart super centers combine even more

items into one setting.

The marketing vs. the selling concept. Two approaches to marketing exist.

The traditional selling concept emphasizes selling existing products. The

philosophy here is that if a product is not selling, more aggressive measuresmust be taken to sell ite.g., cutting price, advertising more, or hiring more


4/44


4

aggressive (and obnoxious) sales-people. When the railroads started to lose

business due to the advent of more effective trucks that could deliver goods

right to the customers door, the railroads cut prices instead of recognizing that

the customers ultimately wanted transportation of goods, not necessarily

railroad transportation.

MEANING OF MARKETING

Marketing is the set of human activities directed at facilitating and

consummating exchanges.

- Phil li p Kotler (Marketing M anagement)Marketing is not only much broader than selling; it is not a specialized

activity at all . I t encompasses the enti re business. I t is the whole business

seen from the point of view of the final result, that is, from the customers

point of view. Concern and responsibi l ity for marketing must therefore

permeate all areas of the enterprise.

Peter Dr ucker

Marketing is the process of communicating the value of a product or service to

customers. Marketing can sometimes be interpreted as the art of selling

products, but selling is only a small fraction of marketing.

Marketing satisfy these needs and wants through exchange processes and

building long term relationships. The process of communicating the value of a

product or service through positioning to customers. Marketing can be looked atas an organizational function and a set of processes for creating, delivering and

communicating value to customers, and managing customer relationships in

ways that benefit the organization and its shareholders. Marketing is the science

of choosing target markets through market analysis and market segmentation, as

well as understanding consumer buying behaviour and providing superior

customer value.

Marketing is any contact that your business has with anyone who isnt a part of

your business. Marketing is also the truth made fascinating. Marketing is the art

of getting people to change their minds. Marketing is an opportunity for you to

earn profits with your business, a chance to cooperate with other businesses inyour community or your industry and a process of building lasting relationships.


5/44


5

There are five competing concepts under which organizations can choose to

operate their business; the production concept, the product concept, the selling

concept, the marketing concept, and the holistic marketing concept.

Marketing is based on thinking about the business in terms of customer needs

and their satisfaction. Marketing differs from selling because (in the words ofHarvard Business Schools retired professor of marketing Theodore C. Levitt)

Selling concerns itself with the tricks and techniques of getting people to

exchange their cash for your product. It is not concerned with the values that theexchange is all about. And it does not, as marketing invariable does, view the

entire business process as consisting of a tightly integrated effort to discover,

create, arouse and satisfy customer needs. In other words, marketing has less to

do with getting customers to pay for your product as it does developing a

demand for that product and fulfilling the customers needs.

Marketing is the management process responsible for identifying, anticipatingand satisfying customer requirements profitably. Marketing is the process of

anticipating, managing, and satisfying the demand for products, services, and

ideas.

MARKETING MIX

A mixture of several ideas and plans followed by a marketing

representative to promote a particular product or brand is called marketing mix.

Several concepts and ideas combined together to formulate final strategieshelpful in making a brand popular amongst the masses form marketing mix.

The marketing mix is a business tool used in marketing. The marketing

mix is often crucial when determining a product or brands offering, and is oftensynonymous with the four Ps: price, product, promotion, and place; in service


6/44


6

marketing, however, the four Ps have been expanded to the seven Ps or eight Psto address the different nature of services.

Elements of Marketing Mix

The elements of marketing mix are often called the four Ps of marketing.

1. PRODUCTA product is seen as an item that satisfies what a consumer needs or wants. It is

a tangible good or an intangible service. Intangible products are service based

like the tourism industry, the hotel industry and the financial industry. Tangible

products are those that have an independent physical existence. Typical

examples of mass-produced, tangible objects are the motor car and the

disposable razor. A less obvious but ubiquitous mass produced service is acomputer operating system.

Every product is subject to a life-cycle including a growth phase followed by a

maturity phase and finally an eventual period of decline as sales falls. Marketers

must do careful research on how long the life cycle of the product they are

marketing is likely to be and focus their attention on different challenges thatarise as the product moves through each stage.

The marketer must also consider the product mix. Marketers can expand the

current product mix by increasing a certain product lines depth or by increasing

the number of product lines. Marketers should consider how to position theproduct, how to exploit the brand, how to exploit the companys resources and

how to configure the product mix so that each product complements the other.The marketer must also consider product development strategies.

2. PRICEThe price is the amount a customer pays for the product. The price is veryimportant as it determines the companys profit and hence, survival. Adjusting

the price has a profound impact on the marketing strategy, and depending on the

price elasticity of the product, often it will affect the demand and sales as well.

The marketer should set a price that complements the other elements of themarketing mix.

When setting a price, the marketer must be aware of the customer perceived

value for the product. Three basic pricing strategies are: market skimming

pricing, market penetration pricing and neutral pricing. The reference value


7/44


7

(where the consumer refers to the prices of competing products) and the

differential value (the consumers view of this products attributes versus theattributes of other products) must be taken into account.

3.

Place

The price is the amount a customer pays for the product. The price is veryimportant as it determines the companys profit and hence, survival. Adjusting

the price has a profound impact on the marketing strategy, and depending on the

price elasticity of the product, often it will affect the demand and sales as well.

The marketer should set a price that complements the other elements of themarketing mix.

When setting a price, the marketer must be aware of the customer perceived

value for the product. Three basic pricing strategies are: market skimmingpricing, market penetration pricing and neutral pricing. The reference value(where the consumer refers to the prices of competing products) and the

differential value (the consumers view of this products attributes versus theattributes of other products) must be taken into account.

4. PromotionPromotion represents all of the methods of communication that a marketer may

use to provide information to different parties about the product. Promotioncomprises elements such as: advertising, public relations, personal selling andsales promotion.

Advertising covers any communication that is paid for, from cinema

commercials, radio and Internet advertisements through print media and

billboards. Public relations is where the communication is not directly paid for

and includes press releases, sponsorship deals, exhibitions, conferences,seminars or trade fairs and events. Word-of-mouth is any apparently informal

communication about the product by ordinary individuals, satisfied customers

or people specifically engaged to create word of mouth momentum. Sales staffoften plays an important role in word of mouth and public relations (see

product above).

Promotion can be through any of the following ways:

- AdvertisingPrint media, Television, radio are effective ways to entice customers and make

them aware of the brands existence. Billboards, hoardings, banners installedintelligently at strategic locations like heavy traffic areas, crossings, railway


8/44


8

stations, bus stands attract the passing individuals towards a particular brand.Taglines also increase the recall value of the brand amongst the customers.

- Word of mouthOne satisfied customer brings ten more customers along with him whereas one

dis-satisfied customer takes away ten more customers. Thats the importance of

word of mouth. Positive word of mouth goes a long way in promoting brandsamongst the customers


9/44


9

Mission, vision and value

MISSION

Our mission is to help our clients maximize the enormous marketing potential

of the search engines to fulfil their short term and long term dreams.

The mission typically describes what the organization does to achieve its vision.

Because the vision is often expressed as a dream or ideal, the mission helps

clarify the practical aspects of what the organization will actually do. Most

missions emphasize action, using such words as: support, involve, assist,contribute, provide, promote, etc. eg. United Way of Toronto mission: To

meet urgent human needs and improve social conditions by mobilizing the

communitys volunteer and financial resources in a common cause of caring.

The organizations mission must be compatible with its legal purposes and must

meet the requirements for notforprofit and (if applicable) charitable status. A

good mission statement is concise and precise. It should identify the

organizations key stakeholders and set out how the organization will serve

them.eg. CNIB (Canadian National Institute for the Blind) mission: To


10/44


10

enhance independence for people with vision loss and to be the leader in

promoting vision health

VISIONINNOVATION is important in the SEO industry and innovative thinking gets

measurable results for our clients.

RELIABILITY creates trust, the key to a strong business relationship. Step

Forth meets its target deadlines and maintains a consistent record of positive

client outcomes.

RESPONSIVENESS is another pillar in our vision of good business. This

means being available, considerate and flexible enough to meet our clients

search marketing needs. We take the challenge of meeting or exceeding our

customers expectations very seriously.

Since inception, over the last nine years, we have worked hard to build an

honest, ethical and responsible company. It is in our character to keep our

commitments and to work as hard for our clients as we have for ourselves.

A part of our commitment to innovation includes the continued education of our

staff through the upgrading of skills and keeping current on the latest industry

nether vision sets out what the organization wants to accomplish, and shouldinspire members, staff and supporters

how things would be different as a result of the organizations activities eg.Canadian Cancer Society: Creating a world where no Canadian fears cancer

how the organization wants to be seen by others eg. Canadian Institute ofChartered Accountants: We are Canadas most valued, internationally

recognized profession of leaders in senior management, advisory, financial,

tax and assurance roles

Good visions are aspirational. Some are hardtoreach ideals while others are

more modest or describe objectives that are achievable in the near future. In

either case, the vision helps establish the unique contribution that the

organization makes to society.

From a practical perspective a vision can be a quick, memorable way to

describe the organizations reason for being. This can be valuable in times of

crisis when it helps to remember what is really important. The vision and


11/44


11

mission are often published in the organizations annual reports, brochures and

fundraising materials.ws and techniques.

Operating Values

Ethics: Above all else, Step Forth will provide only legal and ethical services.

Relationships: Foster long-lasting, strong, caring relationships with our clients

and employees based on honesty and integrity.

Success: Provide an intentional environment for the fulfilment of personal and

company-wide objectives and goals while enjoying life.

Learning: We challenge ourselves regularly by learning new and improved

methods of managing our business and maintaining our cutting edge searchengine optimization services.

Shared values influence everything an organization does, as well as its

relationships with stakeholdersand its reputation. Values may be expressed as

beliefs, guidelines or rules, and may be set out in a codeof conduct.

A statement of values can provide guidance when tough decisions must be

made, for example in allocating scarce resources, or when presented with a

donation from a group which may be in compatible with the organizations

mission. The values, mission and vision are key elements of a notfor

profit

organizations strategic planning process, and will guide the development and

delivery of program services and activities.

SEGMENTATION, POSITIONING AND TARGET


12/44


12

MARKET SEGMENTATION

Market segmentation pertains to the division of a market of consumers into

persons with similar needs and wants. For instance, Kelloggs

cereals, Frosties are marketed to children. Cornflakes are marketed to adults.Both goods denote two products which are marketed to two distinct groups of

persons, both with similar needs, traits, and wants. In another example, Sun

Microsystems can use market segmentation to classify its clients according to

their promptness to adopt new products.

Market segmentation allows for a better allocation of a firms finite

resources. A firm only possesses a certain amount of resources. Accordingly, it

must make choices (and incur the related costs) in servicing specific groups of

consumers. In this way, the diversified tastes of contemporary Western
http://en.wikipedia.org/wiki/Kellogs#Cerealhttp://en.wikipedia.org/wiki/Kellogs#Cerealhttp://en.wikipedia.org/wiki/Kellogs#Cerealhttp://en.wikipedia.org/wiki/Kellogs#Cerealhttp://en.wikipedia.org/wiki/Frosted_Flakeshttp://en.wikipedia.org/wiki/Frosted_Flakeshttp://en.wikipedia.org/wiki/Kellogs#Cerealhttp://en.wikipedia.org/wiki/Kellogs#Cereal


13/44


13

consumers can be served better. With growing diversity in the tastes of modern

consumers, firms are taking note of the benefit of servicing a multiplicity of

new markets.

Market segmentation can be defined in terms of the STP acronym,meaning Segment, Target and Position.

MARKET

POSITIONING

In marketing, positioning is the process by which marketers try to create an

image or identity in the minds of their target market for its product, brand, or

organization.

Re-positioning involves changing the identity of a product, relative to the

identity of competing products.

De-positioning involves attempting to change the identity of competing

products, relative to the identity of your own product.

The original work on positioning was consumer marketing oriented, and was

not as much focused on the question relative to competitive products as much as

it was focused on cutting through the ambient noise and establishing a

moment of real contact with the intended recipient. As the process of creating

an image for a product in the minds of target customers. Any offer has to have

particular characteristics that set it apart from competition in the eyes of the

customers.

Since positioning is based on customers perceptions, it is only partly within the

control of marketers. External developments could change the way customers

think about a product. This can be so diverse things like for instance changes in

price or characteristics of competing products and substitutes, tests by

independent magazines and institutions, new legal requirements, or changes in

customers preferences.
http://en.wikipedia.org/wiki/Marketinghttp://en.wikipedia.org/wiki/Product_(business)http://en.wikipedia.org/wiki/Brandhttp://en.wikipedia.org/wiki/Brandhttp://en.wikipedia.org/wiki/Product_(business)http://en.wikipedia.org/wiki/Marketing


14/44


14

TARGET MARKET

A target market is a group of customers that the business has decided to aim

its marketing efforts and ultimately its merchandise towards.[1]A well-defined

target market is the first element to a marketing strategy. The target market and

the marketing mix variables

ofproduct, place(distribution), promotion and price are the four elements of

a marketing mix strategy that determine the success of a product in the

marketplace.
http://en.wikipedia.org/wiki/Businesshttp://en.wikipedia.org/wiki/Marketinghttp://en.wikipedia.org/wiki/Good_(economics)http://en.wikipedia.org/wiki/Target_market#cite_note-0http://en.wikipedia.org/wiki/Target_market#cite_note-0http://en.wikipedia.org/wiki/Target_market#cite_note-0http://en.wikipedia.org/wiki/Marketing_strategyhttp://en.wikipedia.org/wiki/Product_(business)http://en.wikipedia.org/wiki/Location_(geography)http://en.wikipedia.org/wiki/Distribution_(business)http://en.wikipedia.org/wiki/Promotion_(marketing)http://en.wikipedia.org/wiki/Pricehttp://en.wikipedia.org/wiki/Marketing_mixhttp://en.wikipedia.org/wiki/Marketing_mixhttp://en.wikipedia.org/wiki/Pricehttp://en.wikipedia.org/wiki/Promotion_(marketing)http://en.wikipedia.org/wiki/Distribution_(business)http://en.wikipedia.org/wiki/Location_(geography)http://en.wikipedia.org/wiki/Product_(business)http://en.wikipedia.org/wiki/Marketing_strategyhttp://en.wikipedia.org/wiki/Target_market#cite_note-0http://en.wikipedia.org/wiki/Good_(economics)http://en.wikipedia.org/wiki/Marketinghttp://en.wikipedia.org/wiki/Business


15/44


15

MARKETING ENVIRONMENT

The market environment is a marketing term and refers to factors and forces

that affect a firms ability to build and maintain successful relationships with

customers. Three levels of the environment are: Micro (internal) environment -

forces within the company that affect its ability to serve its customers. Meso

environmentthe industry in which a company operates and the industrys

market(s). Macro (national) environment - larger societal forces that affect the

microenvironment.

Marketing Environment Micro

The micro marketing environment consists of certain forces that are part of an

organisations marketing process, but remain external to the organisation. Thismicro marketing environment that surrounds organisations can be complex by

nature, however the company has an element of control over how it operates

within this environment. Marketing helps you to manage and make sense of this

complexity. The illustration above summarises the order of the immediate

external marketing environment that businesses operate in.

Current and Potential Customers

Your customers are vital to the growth and sustainability of your company.

In order to grow you must locate customers, understand their needs and thensatisfy those needs both efficiently and profitably.


16/44


16

Competitors

Your competitors however have the same remit as you when it comes to

sourcing and satisfying the needs of the customer. They will make it difficult

to liaise with customer groups, as by definition they are largely pursuing thesame sets of customers as you. As a marketer, you must therefore not onlymonitor what competitors are doing in the external marketing environment

today, but to also anticipate their likely response to your campaigns and to

predict what they will do tomorrow.

Intermediaries (Distributors/Wholesalers/Retailers)

Your business may require a network of wholesalers, distributors and/or

retailer. These intermediaries provide an invaluable service in getting your

products to the customer. You must therefore think carefully about how best

to distribute your goods and build relationships. This area can be fierce in

competition as not everyone can get access to the channels of distribution

that they want.

Suppliers

One other important area to consider in the external marketing environment

is your suppliers. A key supplier can be an important part of your business

and may even attribute to your competitive advantage. Losing important

suppliers can interrupt production flow or your competitive edge and prevent

you from getting your product to your customers. Choice of suppliers,negotiation of terms and relationship building all become important tasks of

the marketer.

The wider marketing environment, discussed in a separate knowledge sheet,

covers all other influences that might provide opportunities or threats to theorganisation. These include technological development, legal constraints, the

economic environment and sociocultural changes.

This brief overview of the world in which companies operate in demonstrates

that there are many relationships that matter. These need to be managed if

the company is to conduct its business successfully. The main responsibilityfor managing these relationships lies within the marketing department.

Marketing Environment Macro

The Micro environment discussed above is controllable but the Macro

environment is uncontrollable.


17/44


17

Demographic environment: - it includes the life style, income,

qualification, age, marital status, sex, family structure etc. so the marketer

must have the knowledge about it. Like teenage market, kids market.

Economic environment: - it means the purchasing power of the consumerthe marketer must have the knowledge about the inflation, changing

consumer pattern, real income, low saving etc.

Natural environment: - the marketer must have the knowledge about

natural resources, their shortage if any, government policies etc.

Technological environment:-it is the technology which is changing the

life of the people. So the marketer must keep an eye on the changing

technology.

Political environment: - political stability is very important for the growth

of any economy it include the law, government agencies etc. marketing

decisions are affected by the political environment.

Legal environment: - the marketer must function as per the legal

formalities and should not work against them.

Cultural environment: - it include the values, beliefs, perceptions of the

consumer which also affect the marketing environment. So the marketer

must have the knowledge about it.

So the marketer cannot always control the environment but whenever possible

they can take proactive approach to the marketing environment.

MARKETING RESEARCH

Marketing research involves conducting research to support marketing

activities, and the statistical interpretation of data into information. This

information is then used by managers to plan marketing activities, gauge the

nature of a firms marketing environment and attain information from suppliers.

Marketing researchers use statistical methods such as quantitative

research, qualitative research, tests, Chi, linear
http://en.wikipedia.org/wiki/Quantitative_researchhttp://en.wikipedia.org/wiki/Quantitative_researchhttp://en.wikipedia.org/wiki/Qualitative_researchhttp://en.wikipedia.org/wiki/Linear_regressionhttp://en.wikipedia.org/wiki/Linear_regressionhttp://en.wikipedia.org/wiki/Qualitative_researchhttp://en.wikipedia.org/wiki/Quantitative_researchhttp://en.wikipedia.org/wiki/Quantitative_research


18/44


18

regression, correlations, frequency distributions, poisson distributions, binomial

distributions, etc. to interpret their findings and convert data into information.

The marketing research process spans a number of stages, including the

definition of a problem, development of a research plan, collection and

interpretation of data and disseminating information formally in the form of a

report. The task of marketing research is to provide management with relevant,

accurate, reliable, valid, and current information.

A distinction should be made between marketing research and market research.

Market research pertains to research in a given market. As an example, a firm

may conduct research in a target market, after selecting a suitable market

segment. In contrast, marketing research relates to all research conducted within

marketing. Thus, market research is a subset of marketing research.

TYPES OF MARKET RESEARCH

Market research, as a sub-set aspect of marketing activities, can be divided into

the following parts:

Primary research (also known as field research), which involves theconduction and compilation of research for a specific purpose.

Secondary research (also referred to as desk research), initially conductedfor one purpose, but often used to support another purpose or end goal.

By these definitions, an example of primary research would be market research

conducted into health foods, which is usedsolely to ascertain the needs/wants of

the target market for health foods. Secondary research in this case would be

research pertaining to health foods, but used by a firm wishing to develop an

unrelated product.

Primary research is often expensive to prepare, collect and interpret from data to

information. Nevertheless, while secondary research is relatively inexpensive, itoften can become outdated and outmoded, given that it is used for a purpose

other than the one for which it was intended. Primary research can also be

broken down into quantitative research and qualitative research, which, as the

terms suggest, pertain to numerical and non-numerical research methods and

techniques, respectively. The appropriateness of each mode of research depends

on whether data can be quantified (quantitative research), or whether subjective,

non-numeric or abstract concepts are required to be studied (qualitative

research).
http://en.wikipedia.org/wiki/Linear_regressionhttp://en.wikipedia.org/wiki/Correlation_and_dependencehttp://en.wikipedia.org/wiki/Frequency_distributionhttp://en.wikipedia.org/wiki/Poisson_distributionhttp://en.wikipedia.org/wiki/Binomial_distributionhttp://en.wikipedia.org/wiki/Binomial_distributionhttp://en.wikipedia.org/wiki/Marketing_researchhttp://en.wikipedia.org/wiki/Market_researchhttp://en.wikipedia.org/wiki/Market_researchhttp://en.wikipedia.org/wiki/Marketing_researchhttp://en.wikipedia.org/wiki/Binomial_distributionhttp://en.wikipedia.org/wiki/Binomial_distributionhttp://en.wikipedia.org/wiki/Poisson_distributionhttp://en.wikipedia.org/wiki/Frequency_distributionhttp://en.wikipedia.org/wiki/Correlation_and_dependencehttp://en.wikipedia.org/wiki/Linear_regression


19/44


19

There also exist additional modes of marketing research, which are:

Exploratory research, pertaining to research that investigates anassumption.

Descriptive research, which, as the term suggests, describes what is.

Predictive research, meaning research conducted to predict a futureoccurrence.

Conclusive research, for the purpose of deriving a conclusion via aresearch process.

SWOT ANALYSIS

SWOT analysis (alternately SWOT Matrix) is a strategic planning method used

to evaluate the Strengths, Weaknesses/Limitations, Opportunities, and Threats

involved in a project or in a business venture. It involves specifying the

objective of the business venture or project and identifying the internal and

external factors that are favourable and unfavourable to achieve that objective.

The technique is credited to Albert Humphrey, who led a convention at the

Stanford Research Institute (now SRI International) in the 1960s and 1970s

using data from Fortune 500 companies.

Setting the objective should be done after the SWOT analysis has been

performed. This would allow achievable goals or objectives to be set for the

organization.

Strengths: characteristics of the business, or project team that give it anadvantage over others

Weaknesses (or Limitations): are characteristics that place the team at adisadvantage relative to others

Opportunities: external chances to improve performance (e.g. makegreater profits) in the environment

Threats: external elements in the environment that could cause trouble forthe business or project

Identification of SWOTs is essential because subsequent steps in the

process of planning for achievement of the selected objective may be derivedfrom the SWOTs.
http://en.wikipedia.org/wiki/Strategic_planninghttp://en.wikipedia.org/wiki/Projecthttp://en.wikipedia.org/wiki/Businesshttp://en.wikipedia.org/wiki/Albert_S._Humphreyhttp://en.wikipedia.org/wiki/SRI_Internationalhttp://en.wikipedia.org/wiki/Fortune_500http://en.wikipedia.org/wiki/Fortune_500http://en.wikipedia.org/wiki/SRI_Internationalhttp://en.wikipedia.org/wiki/Albert_S._Humphreyhttp://en.wikipedia.org/wiki/Businesshttp://en.wikipedia.org/wiki/Projecthttp://en.wikipedia.org/wiki/Strategic_planning


20/44


20

First, the decision makers have to determine whether the objective is

attainable, given the SWOTs. If the objective is NOT attainable a different

objective must be selected and the process repeated.

Users of SWOT analysis need to ask and answer questions that generatemeaningful information for each category (strengths, weaknesses,

opportunities, and threats) in order to maximize the benefits of this

evaluation and find their competitive advantage.

MARKETING STRATEGY OF ITC


21/44


21

History about ITC Ltd

ITC was incorporated on August 24, 1910 under the name Imperial Tobacco

Company of India Limited. As the Companys ownership progressively

Indianite, the name of the Company was changed from Imperial Tobacco

Company of India Limited to India Tobacco Company Limited in 1970 and then

to I.T.C. Limited in 1974. In recognition of the Companys multi-business

portfolio encompassing a wide range of businesses - Cigarettes & Tobacco,

Hotels, Information Technology, Packaging, Paperboards & Specialty Papers,

Agri-business, Foods, Lifestyle Retailing, Education & Stationery and Personal

Care - the full stops in the Companys name were removed effective September 18,2001.

The Company now stands rechristened ITC Limited.ITCs Packaging &

Printing Business was set up in 1925 as a strategic backward integration for

ITCs Cigarettes business. It is today Indias most sophisticated packaging

house. In 1975 the Company launched its Hotels business with the acquisition

of a hotel in Chennai which was rechristened ITC-Welcomgroup HotelChola.

The objective of ITCs entry into the hotels business was rooted in the concept of

creating value for the nation. In 1979, ITC entered the Paperboards business by

promoting ITC Bhadrachalam Paperboards Limited, which today has become


22/44


22

the market leader in India. In 1985, ITC set up Surya Tobacco Co. in Nepal as

an Indo-Nepal and British joint venture. In 1990, ITC acquired Tribeni Tissues

Limited, a Specialty paper manufacturing company and a major supplier of

tissue paper to the cigarette industry. The merged entity was named the Tribeni

Tissues Division (TTD). Also in 1990, leveraging its agri-sourcing competency, ITC set

up the Agri Business Division for export of agri-commodities. The Division is

today one of Indias largest exporters. In 2000, ITC forayed into the Greeting,

Gifting and Stationery products business with the launch of Expressions range

of greeting cards. A line of premium range of notebooks under brand

Paper raft was launched in2002. To augment its offering and to reach a wider

student population, the popular range of notebooks was launched under brand

Classmate in 2003.In 2008, ITC repositioned the business as the Educationand Stationery Products Business and launched Indias first environment

friendlypremium business paper under the Paper raft Brand. ITC also entered

the Lifestyle Retailing business with the Wills Sport range of international

quality relaxed wear for men and women in 2000.In 2000, ITC spun off its

information technology business into a wholly owned subsidiary, ITC InfoTech

India Limited, to more aggressively pursue emerging opportunities in this area.

ITCs foray into the Foods business is an outstanding example of successfully

blending multiple internal competencies to create a new driver of businessgrowth. It began in August 2001 with the introduction ofKitchens of India

ready-to-eat Indian gourmet dishes. In 2002, ITC entered the confectionery and

staples segments with the launch of the brands mint-o and Candy man confectionery

and Aashirvaad attar (wheat flour). 2003 witnessed the introduction of Sun feast

as the Company entered the biscuits segment. ITCs entered the fast growing

branded snacks category with Bingo! in 2007. In 2002, ITCs philosophy of

contributing to enhancing the competitiveness of the entire value chain found

yet another expression in the Safety Matchesinitiative. ITCs foray into themarketing of Agarbattis (incense sticks) in 2003marked the manifestation of

its partnership with the cottage sector.ITC introduced Essenza Di Wills, an

exclusive range of fine fragrances and bath & body care products for men and

women in July 2005.


23/44


23

List of products & brands


24/44


24

In FMCG, ITC has a strong presence in:

Cigarettes: W. D. & H. O. Wills, Gold Flake Kings, Gold FlakePremium, Navy Cut, Insignia, India Kings, Classic (Verve, Menthol,

Menthol Rush, Regular, Citric Twist, Mild & Ultra Mild), 555, Benson &

Hedges, Silk Cut, Scissors, Capstan, Berkeley, Bristol, Lucky

Strike, Players and Flake.

Foods: (Kitchens ofIndia; Aashirvaad,Minto,Sunfeast,Candyman,Bingo,Yippee, Sun feast

Pastabrands in Ready to Eat, Staples, Biscuits, Confectionery, Noodles

and Snack Foods); Apparel: (Wills Lifestyle and John Playersbrands); Personal care: ( Fiama di Wills; Vivel; Essenza di Wills; Superia; Vivel

di Willsbrands of products in perfumes, hair care and skincare)

Stationery: (Classmate and Paper Kraftbrands) Safety Matches and Agarbattis: [Ship (through ownership

ofWIMCO); iKno; Mangaldeep; Aim brands]

Other businesses include:

Hotels: ITCs hotels (under brands including WelcomHotel) have evolvedinto being Indias second largest hotel chain with over 80 hotels

throughout the country. ITC is also the exclusive franchise in India of two

brands owned by Sheraton International Inc. - The Luxury Collection

and Sheraton which ITC uses in association with its own brands in the

luxury 5 star segment. Brands in the hospitality sector owned and

operated by its subsidiaries include Fortune and WelcomeHeritage brands.

Paperboard, Specialty Paper, Graphic and other Paper; Packaging and Printing for diverse international and Indian clientele. InfoTech (through its fully owned subsidiary ITC InfoTech India Limited

which is a SEI CMM Level 5 company)
http://en.wikipedia.org/wiki/Tobacco_industryhttp://en.wikipedia.org/wiki/W._D._%26_H._O._Willshttp://en.wikipedia.org/w/index.php?title=Gold_Flake_Kings&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Gold_Flake_Premium&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Gold_Flake_Premium&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Navy_Cut&action=edit&redlink=1http://en.wikipedia.org/wiki/555_cigaretteshttp://en.wikipedia.org/wiki/Benson_%26_Hedgeshttp://en.wikipedia.org/wiki/Benson_%26_Hedgeshttp://en.wikipedia.org/wiki/Silk_Cuthttp://en.wikipedia.org/wiki/Capstan_(cigarette)http://en.wikipedia.org/w/index.php?title=Kitchens_of_India&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Kitchens_of_India&action=edit&redlink=1http://en.wikipedia.org/wiki/Aashirvaadhttp://en.wikipedia.org/w/index.php?title=Sunfeast_Pasta&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Sunfeast_Pasta&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Wills_Lifestyle&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=John_Players&action=edit&redlink=1http://en.wikipedia.org/wiki/Fiama_Di_Willshttp://en.wikipedia.org/w/index.php?title=Essenza_di_Wills&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Vivel_di_Wills&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Vivel_di_Wills&action=edit&redlink=1http://en.wikipedia.org/wiki/Classmate_Stationeryhttp://en.wikipedia.org/w/index.php?title=PaperKraft&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=WIMCO&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=IKno&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Mangaldeep&action=edit&redlink=1http://en.wikipedia.org/wiki/Hospitality_industryhttp://en.wikipedia.org/wiki/WelcomHeritage_Hotelshttp://en.wikipedia.org/w/index.php?title=Sheraton_International&action=edit&redlink=1http://en.wikipedia.org/wiki/Sheraton_Hotels_and_Resortshttp://en.wikipedia.org/wiki/Fortunehttp://en.wikipedia.org/wiki/ITC_Infotechhttp://en.wikipedia.org/wiki/ITC_Infotechhttp://en.wikipedia.org/wiki/Fortunehttp://en.wikipedia.org/wiki/Sheraton_Hotels_and_Resortshttp://en.wikipedia.org/w/index.php?title=Sheraton_International&action=edit&redlink=1http://en.wikipedia.org/wiki/WelcomHeritage_Hotelshttp://en.wikipedia.org/wiki/Hospitality_industryhttp://en.wikipedia.org/w/index.php?title=Mangaldeep&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=IKno&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=WIMCO&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=PaperKraft&action=edit&redlink=1http://en.wikipedia.org/wiki/Classmate_Stationeryhttp://en.wikipedia.org/w/index.php?title=Vivel_di_Wills&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Vivel_di_Wills&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Essenza_di_Wills&action=edit&redlink=1http://en.wikipedia.org/wiki/Fiama_Di_Willshttp://en.wikipedia.org/w/index.php?title=John_Players&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Wills_Lifestyle&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Sunfeast_Pasta&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Sunfeast_Pasta&action=edit&redlink=1http://en.wikipedia.org/wiki/Aashirvaadhttp://en.wikipedia.org/w/index.php?title=Kitchens_of_India&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Kitchens_of_India&action=edit&redlink=1http://en.wikipedia.org/wiki/Capstan_(cigarette)http://en.wikipedia.org/wiki/Silk_Cuthttp://en.wikipedia.org/wiki/Benson_%26_Hedgeshttp://en.wikipedia.org/wiki/Benson_%26_Hedgeshttp://en.wikipedia.org/wiki/555_cigaretteshttp://en.wikipedia.org/w/index.php?title=Navy_Cut&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Gold_Flake_Premium&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Gold_Flake_Premium&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Gold_Flake_Kings&action=edit&redlink=1http://en.wikipedia.org/wiki/W._D._%26_H._O._Willshttp://en.wikipedia.org/wiki/Tobacco_industry


25/44


25

Objective

The primary objective of this study is to systematically explore the determinants

responsible for the competitive advantage of ITC Limited and how ITC

developed new product lines in its foods business drawing on its competenciesin brand-building, R&D, packaging, and distribution. However, market analysts

were not sure whether ITC would achieve success in all the food categories that

it had entered.

Why people are buying the products. What all the things which influences them to buy To understand how

ITC has diversified themselves to a multi-product corporation from a singleproduct company


26/44


26

Profile ITC LTD

FMCG

Cigarettes

ITC is the market leader in cigarettes in India. With its wide range of invaluablebrands, it has a leadership position in every segment of the market. Its

highly popular portfolio of brands includes

Insignia, India Kings, Classic, Gold Flake, Silk Cut, Navy Cut, Scissors,

Capstan, Berkeley, Bristol and Flake.

The Company has been able to build on its leadership position because of its

single-minded focus on value creation for the consumer through significant

investments in product design, innovation, manufacturing technology, quality,

marketing and distribution. All initiatives are therefore worked upon with

HotelsAgri

Business

Fmcg infoTech

ITC Ltd


27/44


27

the intent to fortify market standing in the long term. This in turns aids in

designing products which are contemporary and relevant to the changing

attitudes and evolving socio economic profile of the country. This strategic

focus on the consumer has paid ITC handsome dividends.

Foods

ITC made its entry into the branded & packaged Foods business in August 2001

with the launch of the Kitchens of India brand. A more broad-based entry has

been made since June 2002 with brand launches in the Confectionery, Staples

and Snack Foods segments. The Foods business is today represented in 4

categories in the market. These are:

Ready to Eat Foods Staples Confectionery Snack Foods

In order to assure consumers of the highest standards of food safety and

hygiene, ITC is engaged in assisting outsourced manufacturers in implementing

world-class hygiene standards through HACCP certification. The unwavering

commitment to internationally benchmarked quality standards enabled ITC to

rapidly gain market standing in all its 6 brands:* Kitchens of India

Aashirvaad Sun feast Mint-o Candy man Bingo!

Lifestyle Retailing

ITCs Lifestyle Retailing Business Division has established a nationwide

retailing presence through its Wills Lifestyle chain of exclusive specialty stores.Wills Lifestyle, the fashion destination, offers a tempting choice of Wills


28/44


28

Classic work wear, Wills Sport relaxed wear, Wills Club life evening wear,

fashion accessories and Essenza Di Willsan exclusive range of fine

fragrances and bath & body care products and Fiama Di Wills - arrange of

premium shampoos and shower gels. Wills Lifestyle has also introduced Wills

Signature designer wear, designed by the leading designers of the country.

Wills Classic work wear was launched in November 2002, providing the

premium consumer a distinct product offering and a unique brand

positioning.ITC forayed into the youth fashion segment with the launch of John

Players in December 2002 and John Players is committed to be the No. 1 fashion

brand for the youth.

Education & Stationary products

ITC made its entry into the stationery business in 2002 with its premium rangeof notebooks, followed in the year 2003 with the more popular range to

augment its offering. ITCs stationery Brands are marketed as Classmate and

Paper raft, with Classmate addressing the needs of school goers and Paper raft

targeted towards college students and executives.

Agarbattis

As part of ITCs business strategy of creating multiple drivers of growth in the

FMCG sector, the Company commenced marketing Agarbattis (incense sticks)sourced from small-scale and cottage units in 2003.

Hotels

ITC entered the hotels business in 1975 with the acquisition of a hotel in

Chennai, which was then rechristened ITC Chola. Since then the ITC-Welcome

group brand has become synonymous with Indian hospitality. With over 90

hotels in 77 destinations.

Packaging

ITCs Packaging & Printing Business is the countrys largest convertor of

paperboard into packaging. It converts over 50,000 tonnes of paper and

paperboard per annum into variety of value-added packaging solutions for the

food & beverage, personal products, cigarette, liquor, cellular phone and IT

packaging industries. It has also entered the Flexibles and Corrugated Cartons

business.


29/44


29

Agri Business

E-Choupal

The unique e-Choupal model creates a significant two-way multi-dimensional

channel which can efficiently carry products and services into and out of ruralIndia, while recovering the associated costs through agri-sourcing led

efficiencies. This initiative now comprises about 6500 installations covering

nearly 40,000 villages and serving over 4million farmers.

Leaf Tobacco

ITC is the largest buyer, processor and exporter of leaf tobaccos in India -

creating global benchmark as the single largest integrated source of quality

tobaccos. Serving customers in 50 countries across more than 70 destinations,

ITC co-creates and delivers value at every stage of the leaf tobacco value chain.

Information Technology

ITC InfoTech offers IT services and solutions across five key industry verticals:

Banking, Financial Services & Insurance (BFSI), Consumer Packaged Goods

(CPG) & Retail, Manufacturing & Engineering Services, Travel, Hospitality &

Transportation and Media& Entertainment.ITC InfoTech, a global IT servicescompany, is today one of Indias fastest growing IT services and solutions

providers.


30/44


30

ITCs Core Values

ITCs 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 our stakeholders. We will actualise stakeholder

value and interest on a long term sustainable basis. Customer Focus: We are

always customer focused and will deliver what the customer needs in terms of

value, quality and satisfaction. Respect For People: We are result oriented,

setting high performance standards for ourselves as individuals and teams. We

will simultaneously respect and value people and uphold humanness and human

dignity. We acknowledge that every individual brings different perspectives andcapabilities to the team and that a strong team is founded on a variety

of perspectives.

We want individuals to dream, value differences, create and experimenting

pursuit of opportunities and achieve leadership through teamwork. Excellence:

We do what is right, do it well and win. We will strive for excellence in

whatever we do. Innovation: We will constantly pursue newer and better


31/44


31

processes, products, services and management practices. Nation Orientation:

We are aware of our responsibility to generate economic value for the Nation.

In pursuit of our goals, we will make no compromise in complying with

applicable laws and regulations at all levels.

BCG Matrix

BCG Matrix a.k.a. Growth-Share Matrix, Boston Box, BostonMatrix , Boston Consulting Group analysis.

Created by Bruce Henderson for the Boston Consulting Group in 1970tohelp corporations with analyzing their business units or product lines.

This helps the company allocate resources and is used as an analyticaltool in brand marketing, product management, strategic management,

and por t

Folio analysis.


32/44


32

Initiatives taken- Lets put India first

ITC is committed to a national agenda of raising agricultural productivity and

making the rural economy more socially inclusive. ITC believes that the

urgency and scale of these tasks make market linked solutions and innovations

more effective and sustainable than capital intensive approaches.

Social & farm Forestry

ITC has helped to bring nearly 13,000 hectares of wasteland under social

forestrybenefiting more than 16,000 poor households in 466 villages.ITCs

social forestry programme simultaneously addresses the livelihood problems

of marginal farmers and the ecological imperative of regenerating biomass and

nurturing depleted soils.


33/44


33

Watershed Development

ITCs watershed initiatives have led to an improvement in soil and moisture

regimesthere is more land under irrigation, water tables have risen and

farmers can harvest more than one crop, making it possible to live off the landround the year.

Agricultural Development

ITC offers facilitation to farmers to form agri-business societies, pool

knowledge and resources, improve productivity and quality, and reach out

beyond local markets to sell at better margins.

Women Empowerment

The confidence and skills generated among women by forming credit groups

and managing businesses become assets to their communities.

Livestock Development

The milk marketing co-operatives represent exemplary change in rural

enterprise, away from dependence on agriculture and local markets.

Primary Education

School going becomes an empowering process for the child and the community.

The awareness of entitlements like education and health grows, along with a

sense of the communitys responsibility.

Research & Development

ITC is committed to delivering world-class products and services. This requires

a clear focus on continuously striving to create a higher value to customers by

achieving excellence in all Companys operations. Business excellence calls for

a passionate focus on technology, products, services, processes and an operating

environment firmly anchored to an impregnable foundation of Quality.


34/44


34

ITC firmly believes that quality is not a specifically assignable task. It needs to

be firmly rooted and institutionalized in the culture and value system of the

Company. ITC nurtures a culture of striving for continuous improvement in

quality, be it in products, services, systems or performance. The Company iscommitted to the establishment of systems and processes to promoteorganisational creativity and innovation.

ITCs development of its Integrated Quality Management System (IQMS) is

based on its strong foundation of implementing ISO 9001:2000, ISO 14001,

OHSAS 18001, SA 8000, HACCP (for Foods) and IQRS(performance rating

and benchmarking of the quality management system). Likewise, ITCs

strategic initiatives for developing its people have been based on participativemanagement concepts like QC (Quality Control), TQM (Total Quality

Management), KSS (Kaizen Suggestion Scheme), 5S, Six Sigma.

All ITC manufacturing units have ISO quality certification. Almost all contract

manufacturing units in the Foods Business and all large hotels have food safety

and quality systems certified by accredited third party in accordance with

Hazard Analysis Critical Control Points (HACCP) standards. Additionally, the

quality of all FMCG products of the Company is regularly monitored through

Product Quality Rating System (PQRS). The Leaf Tobacco and Printing &Packaging businesses have achieved world-class ratings in the International

Quality Rating System (IQRS) for business excellence in which key processes


35/44


35

are rated against international benchmarks and certified by accredited thirdparty independent assurance providers.

ITCs Research & Development Centres

At ITCs Research & Development Centres at Bengaluru, Bhadrachalam and

Rajahmundry, the Company has assembled a pool of world-class scientistsfocused on providing the requisite R&D support to its established and new

businesses enabling the Company to consistently attain internationallybenchmarked quality standards and constantly offer product innovations.

ITC R&D Centre at Bengaluru provides systemized service to the entire range

of ITCs businesses through Product Technology Cells, Common Service

Modules, Advanced Research Initiatives and networking with national andinternational R&D centres.

Product Technology Cells (PTCs) are product-specific. Each PTC caters to the

needs of the businesses through Market Intelligence, Product Testing & PQRS

services, Prototyping services through advanced pilot plants, flavour and

fragrance development services, periodic audit of factory quality systems andProduct Knowledge and Training Workshops.


36/44


36

PTCs assist businesses through sensory evaluations by highly trained and

specialised panelists. Common service modules like Packaging and AdvancedAnalytical labs offer their services across all businesses.

ITC R&D Centres are manned by highly qualified and trained scientists

specialised in their fields. The labs and pilot plants have ultra modern, state-of-the-art testing and prototyping facilities. The laboratory at Bengaluru has

obtained accreditation from NABL (National Accreditation Board for Testing &

Calibration of Laboratories) for ISO 17025 for key testing protocols.

ITC Corporate R&D located in Bengaluru undertakes research programs for

multiple ITC businesses built on a common set of core competencies. The initial

sets of core competency areas identified are: Plant Breeding and Genetics,Agronomy, Microbiology, Molecular Biology, Silviculture, Cell Biology,

Proteomics, Genomics, Biochemistry and Ingredient Sciences. The facility aimsto create Centres of Excellence in these areas.


37/44


37

ITCs R&D programme at Bhadrachalam is the core of the Companys fibre

strategy for its Paperboards and Specialty Papers business. This state-of-the-artresearch centre is consistently striving to improve the productivity of several

tree species, in order to give attractive land-use alternatives to traditional

farmers and wasteland owners. So far, more than100 high-yielding, fast-growing and disease resistant Bhadrachalam clones have been produced on a

commercial scale, including 23 site-specific clones adapted to problematic soils.The productivity of these saplings is 6-9 times that of normal seedlings.


38/44


38

ITCs comprehensive R&D facilities at Rajahmundry in Andhra Pradesh cover

all aspects of tobacco crop cultivation. In collaboration with the Central

Tobacco Research Institute and the Tobacco Board, ITC pioneered FCVtobacco cultivation in India and introduced the Burley and HDBRG varieties.

ITCs continued focus on crop development has resulted in new varieties of

seeds and hybrids in Andhra Pradesh and Karnataka, which have significantly

improved farm yields and helped fulfill the demands of a dynamic globalmarket.

The Companys R&D team collaborates with other centres of excellence, andleverages expertise from several leading institutes including the University of

Agricultural Science, Bengaluru; Indian Institute of Science, Bengaluru;

CSIOR, Australia and CSIR, South Africa.

Catering to the need of ITCs Lifestyle Business is a contemporary

master Design Facility at Gurgaon. It offers R&D facilities that have enabled

the Company to offer internationally benchmarked fashion collection everyseason.

INTRODUCTION ABOUT FOCUS ON MARKETINGSTRATEGY OF

ITC IN FMCG INDUSTRY

What is fmcg?

Fast Moving Consumer Goods (FMCG)or Consumer Packaged

Goods (CPG)are products that are sold quickly and at relatively low cost.

Examples include non-durable goods such as soft drinks, toiletries, and groceryitems. Though the absolute profit made on FMCG products is relatively small,

they generally sell in large quantities, so the cumulative profit on such products

can be substantial. ITC Limited, Procter & Gamble and Unileverare the three

biggest consumer goods company that operate across the globe.
http://en.wikipedia.org/wiki/Low_costhttp://en.wikipedia.org/wiki/Soft_drinkhttp://en.wikipedia.org/wiki/Toiletrieshttp://en.wikipedia.org/wiki/ITC_Limitedhttp://en.wikipedia.org/wiki/Procter_%26_Gamblehttp://en.wikipedia.org/wiki/Unileverhttp://en.wikipedia.org/wiki/Unileverhttp://en.wikipedia.org/wiki/Procter_%26_Gamblehttp://en.wikipedia.org/wiki/ITC_Limitedhttp://en.wikipedia.org/wiki/Toiletrieshttp://en.wikipedia.org/wiki/Soft_drinkhttp://en.wikipedia.org/wiki/Low_cost


39/44


39

I NTRODUCTION on FMCG INDUSTRY

It is ITCs strategic intent to secure long-term growth by synergising and

blending the diverse pool of competencies residing in its various businesses to

exploit emerging opportunities in the FMCG sector.

The Companys institutional strengthsdeep understanding of the Indian

consumer, strong trademarks, deep and wide distribution network, agri-sourcing

skills, packaging know-how and cuisine expertisecontinue to be effectively

leveraged to rapidly grow the new FMCG businesses.

Over the last few years, ITC has rapidly scaled up presence in its newer FMCG

businesses comprising Branded Packaged Foods, Lifestyle Retailing, Education

and Stationery products, Personal Care products, Safety Matches and Incense

Sticks (Agarnbatti) with Segment Revenues growing at an impressivecompound annual growth rate of 38% during the last 5 years.

The Companys unwavering focus on quality, innovation and differentiation

backed by deep consumer insights, world-class R&D and an efficient and

responsive supply chain will further strengthen its leadership position in the

Indian FMCG industry.

MARKETING MIX OF ITC IN FMCG INDUSTRY

ITC pricing

The pricing of the ITC food division depends upon the Customers demand

schedule, the cost function and the competitors price. The pricing of the

company is such that it caters to the need of all income groups of people butspecial provision has been kept for Low and middle income group, and their

pricing are competitive with respect to other players like Britannia, Parle and

Brisk farm. The company follows the Going rate pricing that is the price of the

product depends upon the competitors price. The firm chooses pricing more or

less the same as Market leader.

ITC Promotional


40/44


40

A particular budget is allocated for the promotion of the products, the local

promotion scheme is decided by the Area Sales Manager, it give its suggestion

to the District office and that is forwarded to the Head Quarter in Kolkata. In

another promotional scheme for Biscuits a particular number of cases is given

freely to the distributors according to the amount of sale they make, this was a

Drop down promotion i.e. of the number of free cases that a particular distributor

gets, off them a certain part is reserved for the retailers and customer if they buy

a certain level of biscuit quantity.

ITC Distribution

Buoyed by a strong distribution network ITC is likely to retain its market share

in the cigarettes business; the ban on advertisements is likely to work in favourof ITC thanks to the recall factor. The companys reliable distribution network

also ensures superior inventory turnover than its peers.

Challenges

CompetitivecontextCompetition including international majors becoming more

activeDomestic illegal volumes still very strong. Along with smuggled

contraband, emerges as substantive segment Regulatory & Taxation PictorialGraphic warnings in place w.e.f. June 09. VAT hikes in Maharashtra, Delhi, and

Rajasthan & Pondicherry- threatening the concept of the Indian Common Market.

Cost table increasing with increase in leaf costs. Future Growth & Value

Capture: Strategic Rationale: Blend multiple competencies residing within the

ITC Group to create new avenues of growth Best fit between internal

capabilities and emerging market opportunities

Each segment enhances the depth and width of ITCs FMCG distribution

capability Business model retains critical elements of value chains within ITCwith other elements outsourced.


41/44


41

SWOT Analysis

Strengths

ITC leveraged it traditional businesses to develop new brands for new segments.

For example, ITC used its experience of transporting and distributing tobacco

products to remote and distant parts of India to the advantage of its FMCG products. ITC

master chefs from its hotel chain are often asked to develop new food concepts

for its FMCG business.ITC is a diversified company trading in a number of

business sectors including cigarettes, hotels, paper, agriculture, packaged foods

and confectionary, branded apparel, personal care, greetings cards, Information

Technology, safety matches, incense sticks and stationery.

Weaknesses

The companys original business was traded in tobacco.ITC stands for Imperial

Tobacco Company of India Limited. It is interesting that a business that is nowso involved in branding continues to use its original name, despite the negative


42/44


42

connection of tobacco with poor health and premature death. To fund its cash

guzzling FMCG start-up, the company is still dependent upon its tobacco

revenues. Cigarettes account for 47 per cent of the companys turnover, and that

in itself is responsible for 80% of its profits. So there is an argument that ITCs

move into FMCG (Fast-moving Consumer Goods) is being subsidised by its

tobacco operations. Its Gold Flake tobacco brand is the largest FMCG brand in

India - and this single brand alone holds 70% of the tobacco market.

Opportunities

Core brands such as Aashirvaad, Mint-o, and Bingo! And Sun Feast (and

others) can be developed using strategies of market development, product

development and marketing penetration.ITC is moving into new and emergingsectors including Information Technology, supporting business solutions. E-

Choupal is a community of practice that links rural Indian farmers using the

Internet. This is an original and well thought of initiative that could be used in

other sectors in many other parts of the world. It is also an ambitious project

that has a goal of reaching 10 million farmers in 100,000 villages.

Take a look at e-Choupal herehttp://www.itcportal.com/agri_exports/e-

choupal_new.htmITC leverages e-Choupal in a novel way. The company

researched the tastes of consumers in the North, West and East of India of Atta(a popular type of wheat flour), then used the network to source and create the

raw materials from farmers and then blend them for consumers under

purposeful brand names such as Aashirvaad Select in the Northern market,

Aashirvaad MP Chakki in the Western market and Aashirvaad in the Eastern

market. This concept is tremendously difficult for competitors to emulate.

Chairman Yogi Deveshwars strategic vision is to turn his Indian conglomerate

into the countrys premier FMCG business. Per capita consumption of personal

care products in India is the lowest in the world offering an opportunity forITCs soaps, shampoos and fragrances under their Wills brand.

Threats

The obvious threat is from competition, both domestic and international. The

laws of economics dictate that if competitors see that there is a solid profit to be

made in an emerging consumer society that ultimately new products and

services will be made available. Western companies will see India as an


43/44


43

exciting opportunity for themselves to find new market segments for their own

offerings.

ITCs opportunities are likely to be opportunities for other companies as well.

Therefore the dynamic of competition will alter in the medium-term. Then ITCwill need to decide

whether being a diversified conglomerate is the most competitive strategic

formation for a securefuture.TC was incorporated on August 24, 1910 under the name of

Imperial Tobacco Company of India Limited. Its beginnings were humble.

A leased office on Radha Bazar Lane, Kolkata, was the centre of the Companys

existence. The Company celebrated its 16 th birthday on August 24, 1926, by

purchasing the plot of land situated at 37,Chowringhee, (now renamed J.L.

Nehru Road) Kolkata, for the sum of Rs 310,000.

Scope of ITC ltd

The term FMCGs refers to those retail goods that are generally replaced or fully

used up over a short period of days, weeks, or months, and within one year.

This contrasts with durable goods ormajor appliances such as kitchenappliances, which are generally replaced over a period of several years.

FMCG have a short shelf life, either as a result of high consumer demand or

because the product deteriorates rapidly. Some FMCGssuch as meat, fruits

and vegetables, dairy products and baked goodsare highly perishable. Othergoods such as alcohol, toiletries, pre-packaged foods, soft drinks and cleaning

products have high turnover rates.

The following are the main characteristics of FMCGs:
http://en.wikipedia.org/wiki/Durable_goodhttp://en.wikipedia.org/wiki/Major_appliancehttp://en.wikipedia.org/wiki/Major_appliancehttp://en.wikipedia.org/wiki/Durable_good


44/44


From the consumers perspective: Frequent purchase Low involvement (little or no effort to choose the itemproducts

with strong brand loyalty are exceptions to this rule) Low price

From the marketers angle: High volumes Low contribution margins Extensive distribution networks High stock turnover
http://en.wikipedia.org/wiki/Contribution_marginhttp://en.wikipedia.org/wiki/Distribution_(business)http://en.wikipedia.org/wiki/Stock_turnoverhttp://en.wikipedia.org/wiki/Stock_turnoverhttp://en.wikipedia.org/wiki/Distribution_(business)http://en.wikipedia.org/wiki/Contribution_margin

Marketing in ITC

Documents

Transcript of Marketing in ITC