Transcript
An itc [Type text]
May and June, 2010
A project report on
COMPETITION PAID PRACTICES WITH REFERENCE
ITC
TO THE LOYALTY OUTLETS VIJETA STORE
,PERFECT STORE, INDIA OUTLET ,STAR AND ITC PERSONAL CARE PRODUCTS PERFORMANCE AT THESE OUTLET .
Submitted to: Mr. Aarvind Upadhyay Area Manager ITC Limited (Kanpur)
OUTLET
Submitted by: Kaushik banerjee PGDM Sem -2 IPM (Meerut)
INSTITUTE OF PRODUCTIVITY & MANAGEMENT {MEERUT}
Content Chapter 1 •
Acknowledgement.
•
Preface.
•
Introduction: FMCG and product characteristics.
•
Industry segment.
•
Project description.
Chapter 2 •
Company profile.
•
History, Evolution and overview.
•
ITC Mission, Vision and core values.
•
Business portfolio.
•
Marketing & Pricing strategy.
•
ITC working structure.
•
Working of a branch.
•
GR1, 2, 3 & 4.
•
Distribution channel.
•
Market share of all FMCG by ITC .
Chapter 3 •
Major players.
•
Competitor’s analysis.
•
Project objective.
•
Methodology.
•
Brand wise categorization.
Chapter 4 •
Data sheet.
•
Data analysis.
Chapter 5 •
Finding and evaluation.
•
SWOT analysis.
•
BCG matrix.
Chapter 6 •
Suggestions and recommendations.
•
Learning from the project.
•
Limitations and bibliography.
ACKNOWLEDGEMENT
Before starting a reach out to the innards of the project work, as a part of my Appreciativeness-interlaid, I would like to highlight the names of certain people, who not only lent a helping hand in attaining a plurality of practical exposure, but bailed me out of hardship as and when I encountered it. I would like to thank Mr. Aarvind upadhyay area manager (Kanpur) ITC Limited, Limited, Lucknow Lucknow for explaining me each and every aspect of Marketing Research in a lucid and practical way and for giving me the opportunity to work on this project. I am also thankful to Mr.Amit srivastava and Mr. Shrijeet paul area executive (Kanpur) ITC Lucknow and to Mr. Kunal sahu for making me aware regarding the field and helping me to complete this summer training project. I fell highly delighted in mentioning the name of my friends and last but not not the the leas leastt than thanki king ng to my pare parent nts s for for prov provid idin ing g me the the en enti tire re emotio emotional nal and-mor and-moral al backup backup withou withoutt suppor supportt and encour encourage agemen mentt of them this project would have not been completed. I hope that the project would be a great event to boost the hierarchy of my academic career.
PREFACE
Research is the feedback, which any organization sought for the purpose of effective policy making. It is the systematic problem Analysis, model building and fact finding for the purpose of important decision -making and control in the marketing of all goods and services. Every research is aimed to achieve certain solution to research problems .If there is no problem then, the meaning of the research becomes vague. The research problem that I was supposed to deal with was, bran brand d wise wise comp compar ariso ison n of pers person onal al care care prod product ucts s and and thei theirr loyal loyalty ty schemes given by the companies in Kanpur market. The study was done on the basis of parameter parameter like price paid for annual the display, service, service, and promotional schemes etc. The different comparative companies of person personal al care care product products s were were Hindus Hindustan tan unileve unilever, r, P&G, P&G, Marico Marico,, Dabur Dabur .The sample unit was the retailer of Kanpur. With a well define research problem, a study was started two ascertain the the variat variatio ions ns and and cond condit ition ions s of the the ex exis isti ting ng sale sales s of pers person onal al care care products. The overall objective of the study was to analyze the annual display outlets of the company and judge is it a wrong or a write outlet for display.
Introduction –FMCG The fast moving consumer goods (FMCG) sector is the fourth largest sector in the economy with a total market size in excess of Rs 60,000 crore. crore. This This indust industry ry essent essentiall ially y compri comprises ses of consume consumerr non durabl durable e products (CND) and caters to the everyday needs of the people.
Exports India is one of the world’s largest producer for a FMCG products but its FMCG FMCG ex expo port rts s are are langu languis ishi hing ng at arou around nd 1,000 1,000 cror crore e only only.. Ther There e is noteworthy potential for increasing exports but there are certain factors inhibiting inhibiting this, Small-scale Small-scale sector reservations reservations bound ability ability to invest in expe ex pert rtise ise and and quali quality ty up grad gradat atio ion n to achie achieve ve econ econom omie ies s of scal scale. e. Moreover lower volume of higher value added products reduce scope for export to developing countries.
Product characteristics Product ducts s
belonging ing
characteristics:
to
FMCG
sect secto or
generally lly
have
following
They are generally used once in a month.
They are used directly by end users.
They are non durable.
They are sold in packaged form.
They are branded.
Industry Segment The main segments of FMCG sectors are:
Personal care: Oral care; Skin care; Personal wash (Soaps); Cosmetics and Toiletries; Deodorants; Perfumes; Paper products (Tissues, diapers and sanitary); Shoe care. Major companies active in this segment are Hindustan unilever, Godrej soaps, Colgate-Palmolive, Marico, Dabur, Proctor and gamble.
P e r s o
n a l C a r e
( I n d i a n v i e w ) P e
r s o n a l c a r e c a t e g o r y i n I n d i
a i s v a l u e d a t R s 5 4 . 6 b i l l i o
n . A n a v e r a g e I n d i a n s p e n d s 8
% o f h i s i n c o m e o n p e r s o n a l c
a r e p r o d u c t s . P e r s o n a l c a r e
m a i n l y c o n s i s t s o f H a i r C a r e
, S k i n C a r e , O r a l C a r e , P e r s o
n a l W a s h ( S o a p s ) , C o s m e t i c a
n d T o i l e t r i e s , F e m i n i n e H y g i
e n e . T i l l 2 0 0 2 2 0 0 3 , P e r s o n a
l c a r e p r o d u c t s , e x c e p t t h o s
e i n o r a l c a r e c a t e g o r y , w e r e
r e g a r d e d a s l u x u r y i t e m s , a n
d a t t r a c t e d a h i g h e x c i s e d u t
y o f 1 2 0 % . B u t t h e t a x a t i o n r
e f o r m s i n I n d i a a f t e r 1 9 9 1 h a
v e l o w e r e d t h e e x c i s e d u t y r a
t e s t h a t m a k e t h e s e p r o d u c t s
m o r e a f f o r d a b l e . I t i s d i v i d
e d i n t o t w o s e g m e n t s : •
Th
•
Th
The premium segment caters mainly to urban high class and upper middle class, and is more brand conscious and less price sensitive. The popular segment caters to mass segments in urban and rural markets; prices here are around 40% of the premium segment prices.
Growth With the increase in rural income and improvement in distribution network (i.e. road development development projects), projects), the penetration penetration levels levels are set to increase. Since the consumption level in urban areas is already high in most of the categories, the growth can come only from deeper penetration and higher cons consum umpt ptio ion n in rura rurall area areas. s. In the the ye year ar 20 2005 05-06 -06,, the the sect sector or witn witnes esse sed d growth because of the increase in consumer demand from urban and rural areas. In addition to demand, prices also went up. Also, with the increase in disposable income, some consumers have moved up in the value chain. The growth for FMCG products in February 2006 was the highest in 5 years, on YoY (year over year) basis.
Prospects The proportion of the consuming class to total households will touch 46% by FY07 FY07 from from 17 17.4 .4% % in FY95 FY95,, esti estima mate ted d by Nati Nation onal al Coun Counci cill for for Ap Appl plie ied d Econom Economic ic Resear Research ch (NCAER (NCAER). ). As the native native compan companies ies are expand expanding ing in international market, the MNC subsidiaries are looking for greater leverage of the parent strengths. Also, big MNCs cannot afford to avoid India because of its potential market
Personal Care Sector in (India) Increase in per capita income and heightened awareness of personal appearances; have fuelled the demand for personal care products in India and today this sector has emerged as one of the fastest growing markets in the country. Keeping this in mind, we have released an industry Profile on Personal Care Sector in India. This well researched document is presented in a series of 105 slides in PDF format, with data tables, and graphs. This profile has been prepared through extensive secondary and internet research.
This profile will help in providing basic information about the industry to foreign companies planning to enter the Indian market or existing companies (foreign / Indian) expand their business in India, companies planning to set up manufacturing units and companies strategising to increase their market share, etc. The profile will also be of value to consultants, analysts, market research organizations and corporate advisors.
Profile on Personal Care Sector in India helps to gain an insight into the evolution of the industry and competitive dynamics prevalent in the market. It discusses the recent developments in the industry and analyzes the key trends and issues.
Personal care (Global view) The personal care industry had an excellent growth rate in all the major markets of the world in 2005-2006. Since the past few years, people have become more conscious about their appearance and look, leading to a huge demand for these products in the whole world. New products are launched by the leading brands to attract consumers. The trends in all the leading leading personal care markets show that this industry industry is showing a massive potential for growth. The women’s beauty industry is growing at rate of approximately USD 202.254 billion every year where as the global market for cosmetics alone USD 30.33 billion. The global personal care products industry is growing at a very rapid pace; some of the factors responsible are: •
Rise in consumer spending power,
•
Increased demand due to people consciousness,
•
Key demographic factors,
•
Entry of herbal and organic products,
•
Lifestyle and climactic changes, and
•
Massive advertising and promotiom strategy
FutureProspects 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 ingred ingredien ients ts for making making person personal al care care product products. s. These These substa substance nces s 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.
Many Many compan companies ies are address addressing ing these these proble problems ms and are shifti shifting ng their their focus to the natural and organic products. These products are beneficial to our health as well as environment, because very less quantity of synthetic compounds and toxic elements are used in these products. In most of the coun countr trie ies s the the dema demand nd for for orga organi nic c prod produc ucts ts has has been been risin rising g stea steadi dily. ly. According to a study conducted by the Natural Personal Care Consumers: Unlocking Future Potential, the organic products market in UK alone will rise from USD 18.19 million in 2007 to USD 24.26 million in the year 2011. Organic and natural personal care products industry has profited much from the growing consumer awareness and their changing lifestyles. These developments have also helped in introduction of a lot of organic products in the market. Despite many sectors showing signs of maturation in the the ke key, y, deve develo lope ped d mark market ets, s, inno innova vati tion on rema remain ins s high high and and whil while e econom economic ic prospe prosperit rity y contin continues ues many consume consumers rs are proving proving willin willing g to make the trade up, signaling a positive future for value sales.
Household care: Fabric wash (Laundry soaps and synthetic detergents);household cleaners ( dish/ut dish/utens ensils ils cleane cleaners, rs, floor floor cleane cleaners, rs, toilet toilet cleane cleaners, rs, air freshe freshener ners, s, insecticides and mosquito repellants, metal polishes and furniture polish). Major companies active in this segment include Hindustan uni lever, Nirma and Reckitt & Colman.
Project Description
There is a strong MNC presence in the Indian FMCG market. The fast moving consumer goods (FMCG) sector is the fourth largest sector in the economy with a total market size in excess of Rs 60,000 crore. This industry essentially comprises of consumer non durable products (CND) and caters to the everyday needs of the populace. The project will study competition paid practices with reference to the loyalty outlets Vijeta store, Perfect store, India outlet and Star outlet and an ITC PCP performance at these outlets. The project duration duration is of 8 weeks from 20th April to 20th June. The whole Kanpur area and all the three WD points (B.R Sons, STC and Shree Traders) areas have been visited for study.
A deta detaile iled d stud study y and and rese resear arch ch work work will will be done done by colle collect ctin ing g and and analyzing the primary data obtained from PAMS division from various retail amass.
Company Profile
ITC is one of India's foremost private sector companies with a market capitalisation of over US $ 22 billion and a turnover of over US $ 5 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 amon among g Asia Asia's 's 50 best best perf perfor ormi ming ng compa compani nies es comp compile iled d by Busin Busines ess s Week. ITC has a divers diversifi ified ed presen presence ce in Cigaret Cigarettes tes,, Hotels Hotels,, Paperbo Paperboard ards s & Speci pecial alty ty
Pape Paperrs,
Pack Packa aging ging,,
Agri Ag ri-B -Bus usin ine ess, ss,
Pack Packag age ed
Food oods
&
Confectionery, Information Technology, Branded Apparel, Personal Care, Stationery, Safety Matches and other FMCG products. While ITC is an outsta outstandin nding g market market leader leader in its tradit tradition ional al busine businesse sses s of Cigare Cigarette ttes, s, Hotels, Paperboards, Packaging and Agri-Exports, it is rapidly gaining mark market et shar share e ev even en in its its nasce nascent nt busi busine nesse sses s of Pack Package aged d Food Foods s & 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 value.. ITC ITC prac practi tice ces s this this phil philos osop ophy hy by not not only only drivi driving ng each each of its 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 creati creating ng multip multiple le driver drivers s of growth growth anchor anchored ed on its time-t time-test ested ed core core
competencie competencies: s: unmatched unmatched distribution distribution reach, superior superior brand-buildin brand-building g capabili capabilitie ties, s, effect effective ive supply supply chain chain managem management ent and acknow acknowled ledged ged service service skills in hoteli hotelieri ering. ng. Over Over time, time, the strategi strategic c forays forays into into new businesses are expected to garner a significant share of these emerging high-growth markets in India. ITC's ITC's Agr Agri-B i-Busi usines ness s is one of India' India's s largest largest export exporters ers of agricu agricultu ltural ral products. ITC is one of the country's biggest foreign exchange earners (US (US $ 3.2 3.2 bill billio ion n in the the last last deca decade de). ). The The Comp Compan any' y's s 'e-C 'e-Cho houp upal al'' init initia iati tive ve
is
enab en abli ling ng
Indi Indian an
agri agricu cult ltur ure e
sign signif ific ican antl tly y
enha en hanc nce e
its its
competitiveness by empowering Indian farmers through the power of the Internet. This transformational strategy, which has already become the the subj subjec ectt matt matter er of a case case stud study y at Harv Harvar ard d Busi Busine ness ss Scho School ol,, is expe ex pect cted ed to prog progre ressi ssive vely ly crea create te for for ITC ITC a hu huge ge rura rurall dist distri ribu buti tion on infrastructure, significantly enhancing the Company's marketing reach. ITC's ITC's wholly wholly owned owned Inform Informati ation on Techno Technolog logy y subsid subsidiar iary, y, ITC Infote Infotech ch India Ltd, provides IT services and solutions to leading global customers. ITC ITC Infot Infotec ech h has has carv carved ed a nich niche e for for itse itself lf by addr addres essi sing ng cust custom omer er challenges through innovative IT solutions. ITC's production facilities and hotels have won numerous national and international awards for quality, productivity, safety and environment management management systems. ITC was the first company in India to voluntarily voluntarily seek a corporate governance rating. ITC employs over 26,000 people at more than 60 locations across India. The Company continuously endeavors to enhance its wealth generating capabili capabilitie ties s in a global globalisin ising g env enviro ironme nment nt to consist consistent ently ly reward reward more more than 3,42,000 shareholders, fulfill the aspirations of its stakeholders and
meet societal expectations. This over-arching vision of the company is expressively captured in its corporate positioning statement: "Enduring Value. For the nation. For the Shareholder."
History Evolution and Overview ITC was incorp incorpora orated ted on August August 24, 191 1910 0 under under the name Imperia Imperiall Toba Tobacc cco o Comp Compan any y of Indi India a Limi Limite ted. d. As the the Comp Compan any' y's s owne owners rshi hip p progressively Indianised, the name of the Company was changed from Imperia Imperiall Tobacco Tobacco Compan Company y of India India Lim Limited ited to India India Tobacc Tobacco o Company Limited in 1970 and then to I.T.C. Limited in 1974. 1974. In recognition of the Company's 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 Company's name were removed effective September 18, 2001. The Company now stands rechristened 'ITC 'ITC Limited' Limited'. The Company’s beginnings were humble. A leased office on Radha Bazar Lane, Kolkata, was the centre of the Company's existence. The Company celebrated its 16th 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. This decision of the Company was historic in more ways than one. It was to mark the beginning of a long and eventful journey into India's future. The Company's headquarter building, 'Virginia House', which came up on that plot of land two years late later, r, woul would d go on to beco become me one one of Kolk Kolkat ata' a's s most most ve vene nera rate ted d landmarks. Though the first six decades of the Company's existence were primarily devoted to the growth and consolidation of the Cigarettes and Leaf Tobacco busin busines esse ses, s, the the Se Seve vent nties ies witn witnes esse sed d the the begi beginn nning ings s of a corporate transformation that would usher in momentous changes in the life of the Company. Packag agin ing g & Print Printin ing g Busi Busine ness ss was set up in 1925 as a ITC's Pack strategic backward integration for ITC's Cigarettes business. It is today India's 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 Hotel Chola'. The objective of ITC's entry into the hotels business was rooted in the concept of creating value for the nation. ITC chose the hotels business for its potential to earn high levels of foreign exchange, create tour tourism ism infra infrast stru ruct ctur ure e and and gene genera rate te larg large e scale scale direc directt and and indir indirec ectt
employment. Since then ITC's Hotels business has grown to occupy a position of leadership, with over 100 owned and managed properties spread across India. In 19 1979 79,, ITC ITC en ente tere red d the the Paperboards business by prom promot otin ing g ITC ITC Bhadrachalam Paperboards Limited, which today has become the market leade leaderr in India India.. Bhad Bhadra rach chala alam m Pape Paperb rboa oard rds s amal amalga gama mate ted d with with the the Comp Compan any y effe effect ctiv ive e Marc March h 13 13,, 20 2002 02 and and beca became me a Divi Divisi sion on of the the Company, Company, Bhadrachala Bhadrachalam m Paperboards Paperboards Division. In November November 2002, this division merged with the Company's Tribeni Tissues Division to form the Paperboards & Specialty Papers Division. ITC's paperboards' technology, productivity, quality and manufacturing processes are comparable to the best in the world. It has also made an immense contribution to the development of Sarapaka, an economically backward area in the state of Andhra Andhra Prades Pradesh. h. It is direct directly ly involv involved ed in educat education ion,, env enviro ironme nmenta ntall prot protec ecti tion on and and comm commun unit ity y deve develo lopme pment nt.. In 20 2004 04,, ITC ITC acqu acquir ired ed the the paperboard manufacturing facility of BILT Industrial Packaging Co. Ltd (BIPCO), near Coimbatore, Tamil Nadu. The Kovai Unit allows ITC to improve customer service with reduced lead time and a wider product range. In 1985, ITC set up Surya Tobacco Co. in Nepal as an Indo-Nepal and British British joint venture. venture. Since inception, inception, its shares have been held by ITC, Brit British ish Am Amer erica ican n Toba Tobacc cco o and and vari variou ous s inde indepe pend nden entt shar shareh ehol olde ders rs in Nepa Nepal. l. In Au Augu gust st 20 2002 02,, Su Sury rya a Tobac Tobacco co beca became me a subs subsid idiar iary y of ITC ITC Limited
and
its
name
was
changed
to Sury Surya a
Nepa Nepall
Priv rivate ate
Limited (Surya Nepal). In 19 1990 90,, ITC ITC acqu acquir ired ed Trib Triben enii Tiss Tissue ues s Limi Limite ted, d, a Sp Spec ecia ialt lty y pape paperr manufacturing company and a major supplier of tissue paper to the
cigarette industry. The merged entity was named the Tribeni Tissues Division (TTD). To harness strategic and operational synergies, TTD was merged
with
the
Bhadr dra acha chalam
Pape aperboards
Divis vision ion
to
form
the Paperboards & Specialty Papers Division in November 2002. Also Also in 19 1990 90,, leve levera ragi ging ng its its agri agri-s -sou ourc rcin ing g comp compet eten ency, cy, ITC ITC set set up Agri Busi Busine ness ss Divi Divisi sion on for the Agri for
expo ex port rt of agri agri-c -com ommo modi diti ties es..
The The
Division is today one of India's largest exporters. ITC's unique and now wide widely ly ackno acknowl wled edge ged d e-Ch e-Chou oupal pal initi initiat ativ ive e began began in 20 2000 00 with with soya soya farmers in Madhya Pradesh. Now it extends to 10 states covering over 4 million farmers. ITC's first rural mall, christened 'Choupal Saagar' was inaugurated in August 2004 at Sehore. On the rural retail front, 24 'Cho 'Choup upal al Saag Saagar ars' s' are are now now oper operat aton onal al in the the 3 stat states es of Madh Madhya ya Pradesh, Maharashtra and Uttar Pradesh. 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 “Paperkraft” was launched in 20 2002 02.. To augm augmen entt its its offe offeri ring ng and and to reac reach h a wide widerr stu student dent popu popula lati tion on,, the the popu popula larr rang range e of note notebo book oks s was was laun launch ched ed un unde derr brand “Classmate”in “Classmate”in 2003. “Classmate” over the years has grown to become India’s India’s larges largestt notebo notebook ok brand brandan and d has has also also incr increa ease sed d its its portfolio to occupy a greater share of the school bag. Years 2007- 2009 saw the launch of Children Books, Slam Books, Geometry Boxes, Pens and Pencils under the “Classmate” brand. In 2008, ITC repositioned the busine business ss as the Educat Education ion and Statio Stationer nery y Produc Products ts Busine Business ss and India's 's firs firstt envi enviro ronm nmen entt frie friend ndly ly prem premiu ium m busi busine ness ss launched India paper un unde derr the the “Paperkraft” Bran Brand. d. “Pap “Paper erkr kraf aft” t” offe offers rs a dive divers rse e portfolio in the premium executive stationery and office consumables
segment. Paperkraft entered new categories in the office consumable segm segmen entt with with the the laun launch ch of Textl Textlin iner ers, s, Perm Permane anent nt Ink Ink Mark Marker ers s and White Board Markers in 2009. ITC ITC als also en enttere ered the Life Lifest styl yle e Retail tailin ing g bus busine iness with ith the Wills Sport range of international quality relaxed wear for men and women in 2000. The Wills Lifestyle chain of exclusive stores later expanded its range to include Wills Classic formal wear (2002) and Wills Clublife evenin evening g wear wear (200 (2003) 3).. ITC ITC also also init initia iate ted d a fora foray y into into the the popu popula larr segment with its men's wear brand, John Players, Players, in 2002. In 2006, Wills Lifestyle became title partner of the country's most premier fashion eve vent nt - Will Wills s Lifes Lifesty tyle le Indi India a Fash Fashio ion n Week Week - that has gaine ined reco recogn gnit itio ion n from from buye buyers rs and and reta retail iler ers s as the the sing single le larg larges estt B-2-B -2-B platform for the Fashion Design industry. To mark the occasion, ITC launche launched d a special special 'Celeb 'Celebrat ration ion Ser Series ies', ', taking taking the eve event nt forwar forward d to consumers. In 2000, ITC spun off its information technology business into a wholly owned owned subsidiary, subsidiary,ITC ITC Infotech India Limited, to more aggressively pursue emerging opportunities in this area. Today ITC Infotech is one of India’s fastest growing global IT and IT-enabled services companies and has established itself as a key player in offshore outsourcing, providing outsourced outsourced IT solutions solutions and services services to leading leading global customers customers across key focus verticals - Manufacturing, BFSI (Banking, Financial Services & Insurance), CPG&R (Consumer Packaged Goods & Retail), THT (Travel, Hospitality and Transportation) and Media & Entertainment. ITC' ITC's s fora foray y into into the the Food Foods s busi busine ness ss is an outs outsta tand ndin ing g ex exam ampl ple e of succes successful sfully ly blendin blending g multipl multiple e intern internal al compet competenc encies ies to create create a new driver of business growth. It began in August 2001 with the introduction
of 'Ki of 'Kitch tchens ens of India' India' ready-to-eat Indian gourmet dishes. In 2002, ITC entered the confectionery and staples segments with the launch of the
brands mint-oand mint-oand Candyman confectionery
and Aashirvaad atta (wheat (wheat flour) flour).. 200 2003 3 witnes witnessed sed the introd introduct uction ion of Sunfeast of Sunfeast as the the Comp Compan any y en ente tere red d the the bisc biscui uits ts segm segmen ent. t. ITC' ITC's s entered entered the fast growing branded snacks category category with Bingo! in 2007. In eight years, the Foods business has grown to a significant size with over 200 differentiated products under six distinctive brands, with an enviable distribution reach, a rapidly growing market share and a solid market standing. In
2002,
ITC's
philosophy
of
contributing
to
enhancing
the
competitiveness of the entire value chain found yet another expression in the Safety Safety Matche Matches s init initiat iative ive.. ITC ITC now now mark market ets s popu popular lar safe safety ty matc matche hes s bran brands ds like like iKno iKno,, Mang Mangal alde deep ep,, Aim, Aim, Aim Aim Mega Mega and Aim Metro. ITC's foray into the marketing of Agarbattis of Agarbattis (incense sticks) in 2003 marked marked the manife manifesta statio tion n of its partne partnersh rship ip with with the cottag cottage e sector sector.. ITC's popular agarbattis brands include Spriha and Mangaldeep across a range of fragrances like Rose, Jasmine, Bouquet, Sandalwood, Madhur, Sambrani and Nagchampa. ITC introduced Essenza Di Wills, Wills, an exclusive range of fine fragrances and
bath & body care products
for men and
women
in July
2005. Inizio, the signature range under Essenza Di Wills provides a compre comprehen hensive sive groomi grooming ng regime regimen n with with distin distinct ct lines lines for men (Inizio Homme) Homme) and women (Inizio (Inizio Femme). Femme). Continuing with its tradition of brin bringi ging ng worl world d clas class s prod produc ucts ts to Indi Indian an cons consum umer ers s the the Comp Compan any y launched 'Fiama 'Fiama Di Wills', Wills', a premium range of Shampoos, Shower Gels
and Soaps in September, October and December 2007 respectively. The Company also launched the 'Superia 'Superia'' range of Soaps and Shampoos in the mass-market mass-market segment segment at select markets markets in October 2007 and Vivel De Will Wills s & Vivel & Vivel range of soaps in Febr bru uary and Vivel rang range e of shampoos in June 2008.
Mission, Vision and Core Values
Business Portfolio
Marketing and Pricing Strategy
ITC Working Structure
ITC Working Of a Branch
BRANCH MANAGER
ASSI AS SITA TANT NT MANA MANAGE GER R
ASSI AS SITA TANT NT MANA MANAGE GER R
ASSITANT MANAGER {GR2} PAMS
{GR1/3}
{GR4} FOOD/BINGO
CIGRATTE
AREA AREA MANAGE MANAGER R AREA MANAGER
AREA AREA MANAGE MANAGER R
AREA EXICUTIVE/
AREA EXICUTIVE
/
AREA EXICUTIVE/ SALES TRANIEE
SALES TRANIEE
SALES TRANIEE
GR 1, 2, 3 and 4.
GR 1 / GR 3
GR 2
GR 4
Food and Bingo
PAMS
Cigarettes
Biscuits
Shampoos
Cigerattes
Confectioneries
Toilet soap
Match box[
Pasta
Shower gel
-
Salt
Agarbatti
-
Snacks
Dhoops
-
Masalas
-
-
Candy
-
-
B i ng o
-
-
Atta
-
-
Distribution Channel
(SUPPLY CHAIN)
FACTORY/HUB K0
K2
Wholesale service provider (wsp) K1 K3
wholesale dealer(wd) K4
Wholesalers’ (wd)
Retail
Stockiest (sip)
K0 - factory to market. K1 – factory to wd. K2 – factory to wsp. K3 – wsp to wd. K4 – wd to market. Market Share of all FMCG
•
Now ITC do not produce greeting cards.
Major Players
Among the major players Hindustan unilever has the strong presence in the food, personal care and the household care (detergents) sectors; ITC is the market leader in cigarettes; c igarettes; Nirma has a strong presence in the detergent market; Nestle and Britannia are active in the food sector and Colgate has a strong presence in the oral care sector.
Competitor’s analysis
Vijeta outlet: These outlets are mainly the whole sale outlets the term Vijeta is defined by Hindustan unilever as a part of their loyalty scheme. There are three main categories in this segment: 1) Silver. 2) Gold. 3) Platinum. *Servicing norms – daily. Selection criteria 1) Silver is selected on a minimum sale of Rs 75,000 per month. 2) Gold is selected on a sale of Rs 75,000 plus per month. 3) Platinum is selected on a minimum sale of Rs 1,50,000 per month. Location of main vijeta stores in Kanpur. 1) Gp lane. 2) Masale wali gali. 3) Nayaganj. 4) Visati bazaar. *There are 112 vijeta stores in Kanpur.
Super value stores: These are the major retail outlets of Hindustan unilever these retail outlets contribute a major part in sales of Hindustan
unilever. HUL earlier used to pay 3.5% for the display but these days they pay a fixed rent on their display and the rent is calculated on average basis and sales at these outlets. *Servicing norms – 2 days in a week 1 day dets and 1 day cosmetics. Profit margin – Dets (Soaps and detergents) - 8%. Cosmetics (Shampoo, oral , skin and hair) – 10%. Selection criteria 1) On sales of Rs 80,000 to 1,00,000. 2) Location of the store. 3) On footfall. Location of main super value stores in Kanpur 1) Rakesh Lalbangla. 2) Hazari Naveen market. 3) Kholi Naveen market. 4) Bhatia Shastri nagar. 5) Ramesh Kumar Aryaganj. *There were earlier 160 svs but now there are ar e only 5 stores.
Perfect stores: This is a new concept brought in by Hindustan unilever here they are changing their old super value store to a newly called concept Perfect store. Project ‘perfect stores’ is the world’s biggest consumer connects initiative in Unilever family to raise falling market share of the Indian arm. These ``perfect stores’’ are standardized ones with set plans for fixtures and products p roducts and display. HUL’s experience shows a neat segmented arranging of similar products helps boost sales 30% of a store since 70% of purchase decisions are made on the spot. Three basic fundamentals of ‘Perfect Store’ 1) Visibility. 2) Assortment. 3) Cleanliness.
Selection criteria 1) On sales of Rs 80,000 to 1,00,000. 2) Location of the store. 3) On footfall.
*There are 160 perfect stores in Kanpur.
India outlet: These are the major retail outlets of Procter and Gamble and these outlets contribute the major part of sales of the company. These outlets are the class A outlet of the company earlier these outlets were called Platinum outlets. outlets. There are three main categories in this segment: 1) Mass. 2) Open trade (OT). 3) Wholesale. Selection criteria 1) Mass on sale of Rs 1,00,000. 2) Open trade (OT) on sale of Rs 5,000 to 7,000. 3) Wholesale on sale of Rs 1,00,000 to 1,50,000. Star store: These outlets are basically the mom and pop stores rural stores. These outlets are generally located in rural areas and the Procter and Gamble tries to focus their rural areas from here. Selection criteria 1) Location of the store. 2) On footfall.
Objective of the Project
All companies are having their own planning pl anning and business strategies but the company who is having the best, b est, is the most successful company among its competitors. So the company can easily easil y get success among its competitors by applying best effective marketing strategies. The main objective of the study is:
Competition paid practices with reference to the loyalty outlets Vijeta store, Perfect store, India outlet and Star outlet.
To know the impact of retail visibility on customers ultimate purchase intention.
Understanding about the function of merchandising system, visual merchandising and display.
To find out the problems faced by different (wd) points in selecting right annual display points.
An ITC PCP performance at these outlets.
Methodology A research design is the arrangement of condition for collection and analysis of data in a manner that aims to combine relevance to the research purpose with economy in procedure. A good design is often characterized by adjectives like flexible, appropriate, efficient, and economical and so on. The design appropriate for this research is DISCRIPTIVE RESEARCH WITH A HELP OF A SCHEDULE. SCHEDULE. Descriptive research includes surveys, fact-findings enquiries of different kinds. The major purpose of this research is description of the state of affairs, as it exists at present. The main character of this method is that the researcher has no control over the variables
CLASSIFICATION OF DATA:
I have classified the data into two specific types:
Primary source:
1. Inte Interv rvie iew. w. 2. Filling Filling up of of sched schedule ule.. 3. Obse Observ rvat atio ion. n. 4. Verbal communication.
Secondary source:
1. Inte Intern rnet et.. 2. Maga Magazi zine nes. s.
Sample size: The sample size for retailers is 200.
Period of study: The study is carried out for a period of 60 days. It commenced on 20th April 2010 and completed on 20th June 2010.
Field area: This research study work was carried out in Kanpur Uttar Pradesh.
Focused brand:
Fiama di wills.
Vivel di wills.
Vivel.
Superia.
Brand wise categorization
Shampoos
Premium segment. Fiama di Wills (shampoo).
Variants Every day mild. Aqua balance. Volume boost. Silky strong. Shine in style.
Mid segment. Vivel di wills (shampoo)
`
Variants Soft and fresh.
Shine and glow. Volume and bounce.
Popular segment. Superia (shampoo)
Variants Shiny black. Vibrant green. Maxi protect.
Shower gels Fiama di wills (shower gel)
Variants Mild dew. Exotic dream. Clear spring.
Soaps Premium segment.
Fiama di Wills (soaps)
Variants Mild dew. Clear spring.
Upper mid segment. Vivel di wills (soaps)
Variants Sheer radiance. Sheer cream.
Mid segment. Vivel (soaps)
Variants Young glow. Sandal sparkle. Auerveda essence. Satin soft.
Popular segment.
Superia (soaps)
Variants Healthy glow. Fragrant flower. Natural glow. Lemon fresh. Soft sandal.
Data Sheet
Data Analysis Annual display outlets
1) From all 91 annual display outlets we have only 11 low profile outlets which can be changed or mended. a) Omkar genral store. b) Mittal genral strore. c) Maa pitambar genral store. d) Deepu sales. e) Sudhir store. f) Virendra genral store. g) Gupta fancy. h) Sewa prov store. i) Bhatia prov store. j) Kishan lal prov store. k) Priya medical. 2) We have an average height of 4.487 feet of our display windows from the floor. 3) An average length and breadth of 2.7, 2.6 inches. 4) We are paying an average av erage of Rs 665.87 to all these outlets. 5) Competition is having an average of 4 windows for pams at these outlets. 6) Competition is having an average space of 4.87sqft area for display at these outlets.
7) Competition is paying an average sum of Rs 1786.669 to these outlets.
Vijeta stores. 1) Availability superia toilet soap in 112 Vijeta stores 633 CFC. 2) Availability superia shampoo 515 CFCin 112 Vijeta stores. 3) Availability Vivel toilet soap in 112 Vijeta stores is 193 CFC. 4) Availability of competition is 859 CFC in 112 Vijeta stores.
Finding and Evaluation
1) Payment scheme for the annual display outlets is not so attractive to the retailers in comparison to other major FMCG companies. 2) No clear communication, retailers are not aware of the extra 4% discount given to them for the display. 3) Displays not at hot spots. 4) No proper tracking on merchandising. 5) It was found that the low profile p rofile respondents wants fixed gift as a part of promotional schemes and high profile respondents want scratch cards, this motivates them more to sell s ell any product.
6) Rate cutting being also a factor for low sales at different areas of Kanpur. 7) Communication gap between company and sales man. Ie: Hindustan unilever directly reaches there salesman and educates them about new offers and schemes but ITC does not do so. ITC only reaches to (wd) and tells them about schemes and offers and (wd) manipulates the information and then informs the salesman. 8) All display windows of Hindustan unilever in Kanpur are cancelled now due to their structural change only windows at cosmetic c osmetic stores are running.
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 company's original business was traded in tobacco. ITC stands for Imperial Tobacco Company of India Limited. It is interesting that a business that is now so involved in branding continues to use its original name, despite the negative connection of tobacco with poor health and premature death. To fund its cash guzzling FMCG start-up, the company is still dependant upon its tobacco revenues. Cigarettes account for 47 per cent of the company's turnover, and that in itself is responsible for 80% of its profits. So there is an argument that ITC's 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 hold 70% of the tobacco market.
Opportunities Core brands such as Aashirvaad, Mint-o, 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 emerging sectors 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 m any other parts of the world. It is also an ambitious project that has a goal of reaching 10 million farmers in 100,000 villages. ITC leverages e-Choupal in a novel way. The company researched the tastes of consumers in the North, West and East Eas t 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 Deveshwar's strategic vision is to turn his Indian conglomerate into the country's premier FMCG business.
Per capita consumption of personal care products in India is the lowest in the world offering an opportunity for ITC's 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 exciting opportunity for themselves to find new market segments for their own offerings. ITC's opportunities are likely to be opportunities for other companies c ompanies as well. Therefore the dynamic of competition will alter in the mediumterm. Then ITC will need to decide whether being a diversified conglomerate is the most competitive strategic formation for a secure future.
BCG Matrix for ITC LTD
Suggestions
The company can introduce power points on the basis of these three factors availability, cleanliness, visibility and sales . The company should give them some gifts g ifts on collection of these points or these points can also be redeemed by the retailers on time to time basis.
The company is right now offering 4% extra on windows to the retailers instead of giving this offer the company should offer the retailer a discount of 4%+2%+1% (cash discount). Ie: 1000 *4%=40 40*2%=.8 And 1% cash discount can be given if the payment is delivered within 12 days of purchase.
The company should introduce targets for the retailers and they can be paid accordingly.
The company can try to introduce SMS greeting system sys tem to make the retailers aware about different schemes and offers and they can also send them greetings on different di fferent occasions and festivals.
Learning from the project
1. All theories theories and and concepts concepts as studied studied till now now got a practical practical application. 2. To get the best best response response the bar tenders tenders retailers retailers and the the sales person should be visited at the time which best suit them. 3. Never ever ever we should should over-sale over-sale and under under deliver. deliver. This This is the worst thing for a company because customer loses trust in the company if he do not get what has been promised. 4. It helped helped me by polishing polishing my communicat communication ion skills skills and taught taught me how to deal in the market. 5. As I was floated floated for the the first time time in the the market, market, it shifted shifted with tremendous confidence inside me. 6. It did to same same extent extent help in developi developing ng a better better understandin understanding g different marketing forgone. 7. It brings brings with in a sense sense of responsi responsibility bility and and passion to to work for for the organization. 8. I had an opportunity opportunity to meet meet professiona professionals ls placed very very well in the industry.
Limitations
Although every effort is made to make the report as accurate and appropriate but yet it has some limitation because situation and environment are not in control. The limitation of my study is:
The study is concentrated in Kanpur city only so the findings are
generalization for Kanpur only.
The study may be infested by the exaggeration of some respondents.
It is possible that some potential source might have remained entrapped.
This study is limited to time, and is based on a study for 60day.
Sometimes some consumers were busy in personal life so could not able to give time for interview and hence some of the datas may not be exact.
Someone told me I have no time.
Bibliography BOOKS:
Marketing Management- Kotler Philip
Marketing Research -Boyd
Research Methodology - C.R. Kothari
MAGAZINE:
Business today
WEBSITES:
www.google.com
www.itcportal.com
