comparative research on market size of cigarette brand of it
TRANSCRIPT
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
REASEARCH REPORT ON
“Comparative Research on Market Size of Cigarette Brand of ITC Ltd.”
Master of Business Administration
2009-11
SUBMITTED TO: SUBMITTED BY:G.B.T.U. Gopal JiaswalLucknow Roll no. 0928570006
MBA (4th Sem.)
INSTITUTE OF TECHNOLOGY AND MANAGEMENT PANCHLI, MEERUT
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
ACKNOWLEDGEMENT
Before, I get into thick of things, I would like to add a few heartfelt words for all
those people who were part of this report in numerous ways, and gave their unending
support throughout. I wish to express my thanks and gratitude to all those who have
provided the valuable support, insight and encouragement during my research at ITC Ltd.
In the process of completing this project Comparative research on Cigarette brands. I
have received cooperation from many quarters.
I express my sincere gratitude and indebtness to Mr. Krishna Awtar Pandey, my
research guide for his inspiring guidance, cooperation and for giving me an opportunity
to enhance my skill in the field of my project in carrying out my research successfully. I
am thankful for his guidance, patience and consummate support. He came to my help
when it counted and I extend my heartiest thanks to him form enlightening my path.
Moreover, I would also like to acknowledge my profound sense of gratitude and
indebtness for Mrs. Sachi Rana (H.O.D. MBA Deptt.) for her cooperation, guidance,
support and precious suggestions that motivated me in completing this project.
I would like to extend my heartily gratitude to Mr.Deepak Gupta (Faculty,
MBA) for his contribution, generous help, personal support and his valuable suggestions,
guidance and personal attention, which enabled me to complete my research.
I wish to express grateful feelings and thanks to all the faculties of MBA
department, who helped me in various ways in the research completion and for their
valuable suggestions. I am thankful for their generous help, personal support and their
valuable suggestions during the course of MBA.
I express my thanks to my friends who helped me during my research. I don’t
have enough words to express my love and thanks to my loving and caring guardians,
especially for their endless love and care. It was their constant encouragement and their
trust in me that has helped me at every crucial stage of development.
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
I also feel grateful and elated in expressing my indebtedness to all those who have
directly or indirectly helped me in accomplishing this research work.
I wish to express grateful feelings and thanks to ITC Ltd for giving me such a great
opportunity to complete my research.
Gopal Jaiswal
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
STUDENT DECLARATION
I, GOPAL JAISWAL under signed hereby declare that the project report on
“Comparative Research on Market Size of Cigarette Brand of ITC Ltd”. complied and
submitted under the guidance of Mr. Deepak Gupta , Faculty of Management, ITM,
Meerut is my original work. The empirical finding in this reports are based on the
annual reports of the company. While preparing this report, I have not copied material
from any report.
GOPAL JAISWAL
Roll No. – 0928570006
M.B.A.III Sem.
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
PREFACE
The changing marketing scenario emerging by virtue of liberalization in last one
decade has introduced a vast variety of new concepts. Behavioral analysis gives much
information at a single time.
In the changed business scenario, where organizations are required to compete
globally, benchmarks have also become global, organization survival and excellence
requires not only meeting the targets, but also setting up of global standards. In the
present scenario, to achieve world-class excellence or even surpass them depends upon
the efficiency-marketing scenario of the company, which is the most important for any
organization.
The quest of productivity, quality and speed has spawned a remarkable number of
management tools and techniques. Total quality management, bench marking, and Time
based competition. Out servicing partnering, reengineer, change management of feeling
the gap between the originations and the consumer, on the bases of market research are
conducted by the big organizations.
Now it is a world of “world of cut throat competition”. The concept of
marketing has been changed completely; customer has become aware in the every field in
the current time, today’s market is customer oriented. The prime motive of the company
should be customer delight and hence to survive and achieve organizational goals.
Cigarette is one of the tobacco products. ‘Cigarette’ itself has a niche in the
market. Tobacco products are excisable item, which is controlled by the Government.
The Government earns much money from tobacco product due to much excise duty on
tobacco product. The tobacco companies work under the rule and regulations of the
Government. It is very necessary and compulsory for manufacturers of tobacco to take
license from the Government.
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
This research report has been divided in to various parts. First part gives an
introduction about the project. Second part contains profile of the company and its financial
overview. Third part is objective and scope of study. Fourth part is all about research
methodology. Finally data interpretation and analysis of data, on the basis of analysis some
recommendations and conclusions are given.
In the end I would like the evaluators and readers to do a comprehensive study of my
project and express their views and recommend valuable suggestions that would greatly
enhance our knowledge of the subject.
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
CONTENTS
1 ACKNOWLEDGEMENT
2 EXECUTIVESUMMARY
3 OBJECTIVE OF THE PROJECT
4 INTRODUCTION
5 COMPANY PROFILE
6 SWOT ANALYSES
7 RESEARCH METHDOLOGY
8 DATA ANALYSIS & INTERORETATION
9 CONCLUSIONS
10 LIMITATIONS
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
11 RECOMMENDATIONS
12 BIBLIOGRAPHIES
13 QUESTIONNAIRES
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
EXECUTIVE SUMMARY
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
EXECUTIVE SUMMARY
The aim and objective of this research is to measure the brand image during the product
purchase.
ITC has a large customer base providing three types of cigarettes.
My area of research is SHARANPUR and adjoining places. I have chosen this topic
(project) because fulfilling brand images needs of the people is a major task, slight
improvement of which will lead to an increased customer base and higher customer
retention ratio which will lead to an increased customer base and higher customer
retention ratio which will lead to an increase in company’s sales and an enhanced brand
image.
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
OBJECTIVE OF THE RESEARCH
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
Research Objective
Primary Objective
1. To find out “brand image of ITC Ltd. in area of Sharanpur”
2. Find out whether there is an image mismatch between the FMCG brand and customer.
Secondary Objectives:-
1-To find out how to improve the brand image
2-Which is higher selling brand in deferent area
3-Which brand ensure proper availability of CIGGRETE? 4- How much ITC Product contributed in every outlet?
5- To find out Brand Promotional activity in the Market.
6- To create the ways to promote ITC as BRAND.
7- To determine the demand of the Cement.
8- To design marketing Strategy
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
The research conducted thus emphasized in fulfilling following
objectives:
FROM THE ORGANIZATION POINT OF VIEW
Organization would be coming to know about the dealers attitude and their
Complaints by this they can take corrective measures to rectify the complaints.
Organization can also find its market share
MY POINT OF VIEWS:-
I while undergoing my training got familiar with the organization “ITC Ltd.”
Cigarettes” and came to know about the working of the organization as well as the
services, policies etc. of the organization.
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
INTRODUCTION
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
INTRODUCTION
Marketing Research is a vehicle through we can obtain information about present
and potential customer’s behavior, their reaction and prospective about marketing.
Learning more about the consumer and marketing is the heart of marketing research. The
objective of this study is to know about the consumer’s perception & preference towards
cigarette of ITC Ltd.
‘Cigarette’ itself has a niche in the market The Tobacco industry is developing
with speed of app. 15%. The ITC enjoys a good position in the Cigarette Market by
launching - Checkers, Hi-Val, Royal Classic and Gold Crest - in the extremely
competitive US market. The coming up of Multinational in the field has made it tough
for the company to capture the same market share as it was enjoying few decades ago.
Since thirty years put now seeing the current requirements the company decided to
change its old pattern and planned to walk with the Traits. This study contains the about
the reaction of consumers towards the Cigarette. The target consumers are there figured
and the area for research is also sound and through it.
Tobacco consumption is growing at a rate of 2-3% per annum. India is the third
largest producer and eighth largest exporter of tobacco and tobacco product in the world.
The largest selling cigarette in India is of ITC Ltd according to experts ITC commands a
72% market share in the country and hence it is a market leader in the segment. . This
report is aiming to find out the market size of cigarette of ITC Ltd. This project is also
directed to find out the contribution share of the various brands of ITC Ltd and the taste
and preferences of cigarette consumers.
The population survey was conducted in pre-allocated areas. Total number of
respondents is 500, in which only 33% said that they smoke. Out of them 43% said that
they consume cigarette. 70.42 % cigarette consumers consume ITC cigarette in the
specified area. Quality of the product and Packaging is good but customers think that the
price of the product is average. Availability of the ITC cigarette is good in the retail
stores. Awareness about the brand is also found to be satisfactory. Most of the consumers
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
of ITC cigarette are found to be satisfied with the product. We find that the cigarette
brand of ITC limited has a very good position in the market among the customers.
Majority of consumers go for the taste of cigarette and brand name. While some of the
consumers of cigarette emphasize on the price.
ITC is enjoying the market leadership in the industry not because of its products
but another reason is that it is the first entrant in the Indian cigarette market. Most of the
cigarette brands of ITC are doing well while a few are not in a good position. ITC should
offer some offers and discounts to the customers and retailers.
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
THE TOBACCO INDUSTRY IN INDIA
4 players - ITC, Godfrey Phillips, VST and GTC, dominate the cigarette industry
in India. These four companies together control almost 99% of the market. The cigarette
industry faces competition mainly from the unorganized sector 'BIDI' manufacturers, who
are protected from high duties due to small-scale industry status. Affected by steep duty
hikes, the industry has been facing stagnant volume growth in the last 2-3 years.
Based on the contribution from various products, ITC’s business can be divided
into three main divisions, namely cigarettes, tobacco and agri-products. ITC’s mainstay
of earnings is cigarettes (87%) and tobacco (3%). Agri-products business contributes 5%
of the total revenues, while other businesses of hotels, paper and packaging collectively
contribute the balance 5%.
Tobacco today is one of the largest contributors to Indian excise collections.
Despite that the industry has been getting step-motherly treatment by the central
government. The industry has been facing regular increase in excise duty on cigarettes in
every budget for past so many years. The cigarette industry in particular has been
suffering both at the hands of central government as well as state governments.
Industry background:
India is the third largest producer and eighth largest exporter of tobacco and
tobacco product in the world. While India's share in the world's area under tobacco crop
has risen from 9% to 11% in the last 3 decades, its share in production has inched up
from 8% to 9% in tobacco industry. Asia and America, together account for 75% of
world's production of tobacco. China, USA and India are the three leading tobacco-
producing nations in the world. Andhra Pradesh, Gujarat and Karnataka account for the
major portion (80%) of raw tobacco production in India. These states produce FCV
tobacco, bidi tobacco, natu tobacco, cigar tobacco, cheroot tobacco and snuff tobacco.
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
Other states which manufacture tobaccos are Maharashtra, Orissa, Tamil Nadu, West
Bengal, UP and Bihar.
Tobacco is consumed in two ways, either by smoking or chewing. While smoking
the following tobacco products are consumed: Cigarette, Cigar, Bidi (Hand rolled leaf
wrapped country cigarettes) and to chew the products are: Raw tobacco, Supari (Areca
nut), Gutkha, Pan Parag etc.. Due to diverse climatic conditions every type of tobacco is
grown in India. Almost 90% of area is accounted for by Nicotine tobacem. and 10% by
Nicotina Restica. Only one third of the tobacco output in the country is Flue cured
Virginia (FCV) variety, suitable for cigarette manufacturing. As per World Health
Organization (WHO), reported the prevalence tobacco habits in India to be, Bidis (34%),
Cigarettes (31%), Chewing tobacco (19%), Hookah (9%), Cigars-cheroots (5%), and
Snuff(2%).
There are seven major categories of tobacco, Viz. Flue cured Virginia tobacco
(FCV), Burley, Oriental, Bark flue cured, Sun cured, Light flue cured cigar and Dark flue
cured. Flue cured Virginia tobacco is mainly used for manufacture of cigarettes. Light air
cured tobacco is used in the manufacture of bidis. Unmanufactured tobacco is also
consumed in India, for chewing purpose.
Chewing tobacco has been a tradition in India for centuries. Of the total amount
of tobacco produced in the country, around 48% is in the form of chewing tobacco, 38%
as bidis, and only 14% as cigarettes. Thus, bidis, snuff and chewing tobacco (such as
gutka, khaini and zarda) form the bulk (86%) of India's total tobacco production. In the
rest of the world, production of cigarettes is 90% of total production of tobacco related
products.
The per capita consumption of cigarettes in India is merely a tenth of the world
average. This unique tobacco consumption pattern is a combination of tradition and more
importantly the tax imposed on cigarettes over the last 2 decades. Cigarette smokers pay
almost 85% of the total tax revenues generated from tobacco.
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
India is a major grower and exporter of tobacco in the world. Presently India is
among top three producers of tobacco in the world. Despite lower proportion of total
produce being exported Indian exports it figure among top 10 exporters of the product in
the world. In addition to being the largest contributor to government coffers, the industry
also provides employment to more than 26mn people in the country both directly and
indirectly. The Indian tobacco is largely used for making beedis and chewing products
like khaini etc. Tobacco is a very peculiar crop, it is grown in rain starved areas on soils
which are otherwise not suitable for any other crop. Thus it makes use of the least
resources available to it, to give a produce which provides so much to government coffers
in terms of excise, exports as well as employment that today the per acre earning of
Farmers from a special type of tobacco are much higher than any other crop grown in the
country.
India is the second largest producer of tobacco in the world after China. It
produced 572 m kgs of tobacco in FY03. However, India holds a meager 0.7% share of
the US$ 30 bn global trade in tobacco, with cigarettes accounting for 85% of the
country's total tobacco exports. Despite being the second largest producer, India is only
the ninth largest exporter of tobacco and tobacco products in the world. Out of the total
tobacco produced in India, only one-third is flue-cured tobacco suitable for cigarette
manufacturing. There are various types of tobacco grown in the country but most of the
exports of tobacco by our county is of Flue Cured Virginia (FCV) type. The Indian
tobacco exported, is mostly used as filler in the international cigarettes. Infect like any
other agri-product, the characteristics of tobacco, its taste, its aroma and other properties
largely depend on the soil or area in which it is grown. Moreover cigarette smokers are
very particular about the taste, the aroma of their cigarette brand. So it becomes
extremely necessary to maintain the blend of tobacco used for cigarette manufacturing to
give the same quality product to consumers. This is to maintain the consistency of taste of
a brand.
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
Woes of the tobacco industry:
If we take a glance at the current situation of the tobacco industry we will find
that the situation is just like that of a farmer killing the hen that laid golden eggs. Today
the government is milching the industry, especially the cigarette industry, to such an
extent that the industry would very soon die an unnatural death. Infact the indications
from trend of consumption and excise collection just corroborate these fears.
Presently tobacco industry's contribution to excise has increased from mere 7.2%
in 1987-88 to 12% in 2000-01. This is in contrast with the international scenario where
the cigarette contribution to total tobacco consumption has increased. Besides this,
already the cigarette industry is gasping for breath due to imposition of luxury tax or
entry tax by various states ranging from 1.5% to 10%.
The legislation dates back to 1975 when the Tobacco Board Act was introduced
to develop the tobacco industry, which facilitated regulation of production and curing of
tobacco, fixed minimum prices and provided subsides to tobacco growers. Again in 1975,
Cigarettes Act of 1975 was passed. It was India's first national level anti- tobacco
legislation and prescribed all packages to carry the warning "Cigarette smoking is
injurious to health". Prevention and Control of Pollution Act was introduced in 1988,
which included smoking in the definition of air pollution. The Motor Vehicles Act of
1988 made it illegal to smoke or spit in a public vehicle.
The Cable Television Networks Amendment Act of 2000 prohibited the
transmission of tobacco commercials on cable television across the country. In February
2001, Indian Prime Minister Vajpayee's union cabinet introduced Cigarettes and other
Tobacco Products Bill. This was a multifaceted anti-tobacco legislation to replace the
Cigarettes Act of 1975. According to this bill, smoking in public places would be
outlawed, sale of tobacco to people under 18 years of age would be prohibited, tobacco
packages required to have warnings and it also prohibited tobacco companies from
advertising and sponsoring sports and cultural events. This bill covers most tobacco
products like cigarettes, cigars, bidis, cheroots, pipe tobacco, hookah tobacco, chewing
tobacco, panmasala and gutkha. A first time offender will result in a fine of rupees 200
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
and a second time offender will result in a fine of rupees 1,00,000 and imprisonment for
up to three years. Delhi was the first to impose a ban on smoking in public. In 1996,
Delhi Prohibition of Smoking and Non- Smokers Health Protection Act was passed. This
act prohibited sale of cigarettes 100 meters from the school building and to minors. The
offender was fined a sum of rupees 100. But it was difficult to enforce this act and had
little real impact, the key problem being lack of manpower to enforce the law. In 1999,
Kerala High Court came out with a judgment prohibiting smoking in public places,
including parks and highways and Goa banned smoking in public places through anti-
tobacco legislation. For the past three years, Tamil Nadu and Andhra Pradesh have
banned the marketing and sales of gutkha.
In such a scenario of rising taxes and decreasing consumption, any further
imposition of levies or taxes on the cigarette industry seems unjustified. So I think that
the government should give a glance to these aspects and should try to see the situation
from cigarette industry's point of view before finalizing any proposal.
Annual Per Capita Adult Cigarette Consumption
0
500
1000
1500
2000
2500
3000Japan
US
UK
China
Nepal
Pakistan
B'desh
India
Source: Tobacco Institute of India
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
PRESENT SCENARIO
Cigarette manufacturers are planning to raise the rates because of the high taxes
and recently VAT in many states and the price of a few cigarette brands have been raised
already. A pack of the premium brand Classic was re-priced at Rs 88 from Rs 80 earlier
while a pack of the mid-market Gold Flake brand was now priced at Rs 40 against Rs 38
earlier. The economy brand Silk Cut had also been revised upwards marginally from Rs
20 now, retailers added.
Tobacco industry in India, boasts of a growth of 25 percent per year. The cigarette
market in the country is estimated at 2 million sticks including made in Goa, a quantum
jump from six lakh sticks in 1997. Cigarette is the largest segment of the tobacco industry
in the country. India today is the largest consumer of cigarette overtaking USA two years
ago.
The cigarette market is witnessing flurry of launches from the MNC’s by having
their collaborations done with the India partners. These collaborations done by then are
in two ways either shares of profits or technical partnership. The largest selling cigarette
in India is of ITC Ltd. It Commands a 72% market share in the country.
Prevention against the diseases that come with tobacco usage is based primarily
on public and individual education to drop the habit or preferably not to begin in the first
place. Some of the steps to be taken as suggested are
Providing effective protection from involuntary exposure to tobacco smoke
Providing effective program of health promotion and health education
Effective smoking cessation program
Prominent health warnings on tobacco product packing
Progressive elimination of tobacco advertising
Financial measures to discourage tobacco consumption
Preventing children from becoming addicted to tobacco
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
Tobacco consumption is growing at a rate of 2-3% per annum. Since there is good
growth in the cigarette industry but there are many restrictions and hurdles created in this
industry by the government. So the companies need to move forward with care. Firms
should also focus on the risk distribution against the core competency.
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
COMPANY PROFILE
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
ITC Ltd. An Overview
THE COMPANY PROFILE
ITC is one of India's foremost private sector companies with a market
capitalisation of nearly US $ 18 billion and a turnover of over US $ 5.1 Billion. ITC is
rated among the World's Best Big Companies, Asia's 'Fab 50' and the World's Most
Reputable Companies by Forbes magazine, among India's Most Respected Companies by
Business World and among India's Most Valuable Companies by Business Today. ITC
also ranks among India's top 10 `Most Valuable (Company) Brands', in a study conducted
by Brand Finance and published by the Economic Times. ITC has a diversified presence
in Cigarettes, Hotels, Paperboards & Specialty Papers, Packaging, Agri-Business,
Branded Apparel, Packaged Foods & Confectionery, Greeting Cards and other FMCG
products. While ITC is an outstanding market leader in its traditional businesses of
Cigarettes, Hotels, Paperboards, Packaging and Agri-Exports, it is rapidly gaining market
share even in its nascent businesses of Packaged Foods & Confectionery, Branded
Apparel, Personal Care and Stationery.
The ITC LtdType Public (BSE:ITC)
Founded August 24, 1910Radha Bazar Lane, Kolkata, India
Headquarters Virginia House, Kolkata, India
Key people Y C Deveshwar, ChairmanK Vaidyanath, Director, Partho Chatterjee, CFO
Industry Tobacco, Foods, Hotels, Stationery, Greeting Cards
Products Cigarettes, Packaged Food, Hotels, Apparel
Revenue $ 5.1 billion USD
Employees Over 29000
Website www.itcportal.com
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
As one of India's most valuable and respected corporations, ITC is widely
perceived to be dedicatedly nation-oriented. Chairman Y C Deveshwar calls this source
of inspiration "a commitment beyond the market". In his own words: "ITC believes that
its aspiration to create enduring value for the nation provides the motive force to sustain
growing shareholder value. ITC practises this philosophy by not only driving each of its
businesses towards international competitiveness but by also consciously contributing to
enhancing the competitiveness of the larger value chain of which it is a part."
ITC's diversified status originates from its corporate strategy aimed at creating multiple
drivers of growth anchored on its time-tested core competencies: unmatched distribution
reach, superior brand-building capabilities, effective supply chain management and
acknowledged service skills in hoteliering. Over time, the strategic forays into new
Businesses are expected to garner a significant share of these emerging high-growth
markets in India.
ITC's Agri-Business is one of India's largest exporters of agricultural products.
ITC is one of the country's biggest foreign exchange earners (US $ 3.2 billion in the last
decade). The Company's 'e-Choupal' initiative is enabling Indian agriculture significantly
enhance its competitiveness by empowering Indian farmers through the power of the
Internet. This transformational strategy, which has already become the subject matter of a
case study at Harvard Business School, is expected to progressively create for ITC a huge
rural distribution infrastructure, significantly enhancing the Company's marketing reach.
ITC's wholly owned Information Technology subsidiary, ITC Infotech India Limited, is
aggressively pursuing emerging opportunities in providing end-to-end IT solutions,
including e-enabled services and business process outsourcing. ITC's production facilities
and hotels have won numerous national and international awards for quality,
productivity, safety and environment management systems. ITC was the first company in
India to be rated for Corporate Governance by ICRA, an associate of Moody's Investors
Service, which accorded it the second highest rating, signifying "a high level of assurance
on the quality of corporate governance."
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
ITC employs over 29,000 people at more than 60 locations across India. Ranked
among India's most valuable companies by the 'Business Today' magazine, The Company
continuously endeavors to enhance its wealth generating capabilities in a globalising
environment to consistently reward more than 3,83,000 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."
Over-arching vision of the company is expressively captured in its corporate
positioning statement: "Enduring Value. For the nation. For the Shareholder."
THE ITC VISION
THE ITC MISSION
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
Key points
Strong volume growth in the core cigarette business in Q1FY2005—11% year-
on-year, among the highest in the previous ten quarters. This is the third consecutive year
of no excise duty increase and the second year of no price hike in cigarettes, leaving
scope for the company to hike cigarette prices and boost its profits further.
Diversification is paying off with non-cigarette businesses like hotels, paper and
agri-products turning around.
ITC's core business of cigarettes, we believe, will continue to grow at 4% in
FY2008 in volume terms. Besides, it has made an entry into bakery and other fast moving
consumer goods (FMCG) product lines (such as soaps, detergents and food products),
which will benefit from its strengths in distribution. Meanwhile almost all of ITC's earlier
diversifications are paying off—the hotels, paper and the agri-product ventures are likely
to return the cost of capital invested in the next couple of years. Its capital expenditure
needs are limited and litigation risks have all but disappeared. Hence we expect higher
dividend payouts. We recommend buying this Apple Green stock.
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
Increase in other expenditure mainly coming from increased advertisement spends
before the "Cigarettes and Other Tobacco Products (Prohibition of Advertisement and
Regulation of Trade and Commerce, Production, Supply and Distribution) Act, 2003"
ITC has diversified presence in
Cigarettes : W. D. & H. O. Wills, Insignia, India Kings, Classic, Gold Flake, Navy
Cut, Scissors, Capstan, Berkeley, Bristol and Flake
Hotels : ITC Welcomgroup chain of Hotels
Paperboards & Specialty Papers : ITC Bhadrachalam Paperboards Limited"ITC
Tribeni Tissues Division" Now there are four units under one name --> Paper
Boards and Specialty Papers Division, Unit - Bhadrachalam, Tribeni, Bollarum
and Kovai.
Agricultural Industry : Agri-Business, Leaf Tobacco, Gold Ribbon, Blue Ribbon,
Aqua Kings, Aqua Bay, Aqua Feast and Peninsular
Packaged Foods & Confectionery: Kitchens of India, Aashirvaad, Sunfeast, Mint-
O, Candyman, Bingo Snacks
Branded Apparel : Wills Lifestyle, John Players, Miss Players
Personal Care : Essenza Di Wills, Fiama Di Wills, Superia, Vivel Di Wills, Vivel
Greeting Card : Expressions
Information Technology : ITC Infotech
Safety Matches : iKno, Mangal Deep(Discontinued), VaxLit(Discontinued),
Delite(Discontinued) and Aim Brands acquired from Wimco (Swedish Matches)
Incense Sticks : Mangaldeep, Spriha
Stationery : Classmate, Paperkraft, Saathi
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
Products of ITC Ltd.
History of ITC Ltd
ITC 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 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 later, would go
on to become one of Kolkata's most venerated landmarks. The Company's ownership
progressively Indianised, and the name of the Company was changed to I.T.C. Limited in
1974. In recognition of the Company's multi-business portfolio encompassing a wide
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
range of businesses - Cigarettes & Tobacco, Hotels, Information Technology, Packaging,
Paperboards & Specialty Papers, Agri-Exports, Foods, Lifestyle Retailing and Greeting
Gifting & Stationery - the full stops in the Company's name were removed effective
September 18, 2001. The Company now stands rechristened 'ITC Limited'.
Though the first six decades of the Company's existence were primarily devoted
to the growth and consolidation of the Cigarettes and Leaf Tobacco businesses, the
Seventies witnessed the beginnings of a corporate transformation that would usher in
momentous changes in the life of the Company.
ITC's Packaging & Printing Business was set up in 1925 as a 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.
In 1979, ITC entered the Paperboards business by promoting ITC Bhadrachalam
Paperboards Limited, which today has become the market leader in India. 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 India's largest exporters.
In 2000, ITC launched a line of high quality greeting cards under the brand name
'Expressions'. In 2002, the product range was enlarged with the introduction of Gift
wrappers, Autograph books and Slam books. In 2003, the company rolled out
'Classmate', a range of notebooks in the school stationery segment.
ITC also entered the Lifestyle Retailing business with the Wills Sport range of
international quality relaxed wears 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 evening wear (2003). ITC also initiated a foray into the
popular segment with its men's wear brand, John Players, in 2002. In 2006, Wills
Lifestyle became title partner of the country's most premier fashion event - Wills
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
Lifestyle India Fashion Week. In 2007, the Company introduced 'Miss Players'- a
fashion brand in the popular segment for the young woman.
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. 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 IT solutions and services to leading global customers.
ITC's foray into the Foods business is an outstanding example of successfully
blending multiple internal competencies to create a new driver of business growth. It
began in August 2001 with the introduction of 'Kitchens 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 Candyman confectionery and Aashirvaad atta (wheat
flour). 2003 witnessed the introduction of Sunfeast as the Company entered the biscuits
segment. ITC's entered the fast growing branded snacks category with Bingo! in 2007.
In 2002, ITC's philosophy of contributing to enhancing the competitiveness of the
entire value chain found yet another expression in the Safety Matches initiative. ITC now
markets popular safety matches brands like iKno, Mangaldeep, Aim, Aim Mega and Aim
Metro. ITC's foray into the marketing of Agarbattis (incense sticks) in 2003 marked 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. Inizio, the signature range under
Essenza Di Wills provides a comprehensive grooming regimen with distinct lines for men
(Inizio Homme) and women (Inizio Femme). Continuing with its tradition of bringing
world class products to Indian consumers the Company launched 'Fiama Di Wills', a
premium range of Shampoos, Shower Gels and Soaps in September, October and
December 2007 respectively. The Company also launched the 'Superia' range of Soaps
and Shampoos in the mass-market segment at select markets in October 2007 and Vivel
De Wills & Vivel range of soaps in February and Vivel range of shampoos in June 2008.
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
The Core CompetencyITC is the market leader in cigarettes in India. With its wide range of invaluable
brands, 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. ITC's leadership is founded on its
core strategy of continuously enhancing product values through significant investments
in product design, manufacturing technology, quality, marketing and distribution. In just
the last 5 years, ITC has made capital investments of over Rs. 7 billion in its cigarettes
business. In ITC, one of the pioneers of market research in India, the consumer is still the
King. The Company continuously endeavors to provide its consumers products that are
benchmarked to international quality. This strategic focus on the consumer has paid ITC
handsome dividends. The most important of these is its enriched product mix, unmatched
by competition. ITC's share of filter cigarettes in the country is more than 70%.
In pursuit of international competitiveness, ITC has launched four brands -
Checkers, Hi-Val, Royale Classic and Gold Crest - in the extremely competitive US
market. Recently ITC has launched Royale Classic, Gold Cut and Scissors Filter Kings
cigarettes in the Middle East. The response to these brands has been encouraging. ITC's
cigarettes are produced in its state-of-the-art factories at Bangalore, Munger, Saharanpur
and Kolkata. These factories are known for their high levels of productivity and very
contemporary work environment.
ITC's FMCG businesses have one of the largest retail networks in the country,
consisting of over 2 million retailers. Its reach covers a wide range of the retail spectrum,
from premium outlets in the metros to small shops in the interiors of rural India.
All initiatives are therefore worked upon with 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.
ITC's Cigarettes business has won numerous awards for its quality, environmental
management systems and product excellence.
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
Plant locationITC's cigarettes are produced in its state-of-the-art factories at-
Bangalore,
Monger,
Saharanpur
Kolkata
SISTER CONCERN COMPANIES
ITC Bhadrachalam Paperboards Ltd (56.00%)
BFIL Finance Ltd (99.99%)
BFIL Securities Ltd (99.98%)
MRR Trading & Investment Ltd (99.98%)
ITC Hotels Ltd (71.23%)
Srinivasa Resort Ltd (68%)
Bay Island Hotels Ltd (100%)
Greenace Holding Ltd (100%)
Fortune Park Hotel Ltd (99.99%)
Russell Credit Ltd (100%)
ITC Infotech Ltd (100%)
All India Tobacco Company Ltd (100%)
Elan Enterprises Ltd (100%)
ITC Global Holdings Pvt Ltd (100%)
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
COMPETITIONToday’s world is the world of Competition. In every field there is competition,
the success of any company or product is also largely depends upon competition. At
present scenario customer became aware about the market, he has full knowledge of the
market.
Competition provides a good quality of product to the customers. If a company
wants to survive itself he will have to face through-cut competition. In liquor industry
there is also competition. The increasing awareness and exposure to wines among
consumers and the removal of quantitative restrictions in 2001 has been a big boost to the
wine industry. It saw the emergence of new companies like GODFREY PHILLIPS
INDIA LIMITED, set up recently by two non-resident Indians (NRIs) from USA. The
consumption of liquor is growing at 20 per cent per annum. ‘CIGARETTE’
consumption in the country is slated to treble in the next ten years with the segment for
strong beer segment registering high growth. It boasts of a growth of 25 per cent per year.
The increasing awareness and exposure to wines among consumers and the removal of
quantitative restrictions in 2001 has been a big boost to the wine industry.
Pie chart showing the cigarette market shares in India among big players
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
Cigarette Brands
Name of the Product Company
01. India King Indian Tobacco Company02.Classic Indian Tobacco Company03.Gold Flakes Indian Tobacco Company04.Gold Flakes King Indian Tobacco Company05.Filter Indian Tobacco Company06.Wills Indian Tobacco Company07.Wills Light Indian Tobacco Company08.Wills King Indian Tobacco Company09.Wills Filter Indian Tobacco Company10.Wills Flakes Indian Tobacco Company11.Scissors Indian Tobacco Company12.Tiger Indian Tobacco Company13.Charms Filter King Wazir Sultan Tobacco14.Charms Wazir Sultan Tobacco15.Charminar Wazir Sultan Tobacco16.Charminar Special Wazir Sultan Tobacco17.Cavenders Godfrey Phillips India Ltd.18.Cavenders Filter Godfrey Phillips India Ltd.19.Cavenders Leaf Godfrey Phillips India Ltd.20.Uttam Brooke Bond India Ltd.21.Cavenders Magnum Godfrey Phillips India Ltd.22.Four Square King Godfrey Phillips India Ltd.23.Four Square Filter Godfrey Phillips India Ltd.24.Four Square Special Filter Godfrey Phillips India Ltd.25.Chesterfield Godfrey Phillips India Ltd.
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
The major Competitors of ITC Ltd. Products
1) Godfrey Philips India Ltd.
Godfrey Phillips is the second largest player in the Indian cigarette industry with an
annual turnover of Rs11bn. Incorporated in 1936; the company’s operations primarily
span the entire northern and western part of the country. The company established its
own manufacturing facilities in 1944. Godfrey Phillips has two major stakeholders, the
K.K. Modi Group and Philip Morris, and has over 15,000 shareholders. Headquartered in
Delhi, Godfrey Phillips today boasts of two manufacturing facilities - located in
Ghaziabad (near Delhi) and in Andheri (Mumbai), a state of the art R&D centre in
Mumbai and a tobacco-buying unit in Guntur (Andhra Pradesh). The Company today
manufactures some of the most popular cigarette brands in the country like Red and
White, Four Square, Jaisalmer, Cavenders, Tipper and Prince.
2) Gallaher Asia Limited
The Company's roots date back to 1857 when Tom Gallaher started a business
making Irish roll tobacco in Londonderry, Northern Ireland. In 1900, Queen Victoria
awarded Gallaher a Royal Warrant, and in 1928 it became a public company for the first
time. The first major acquisition took place in 1936 with Senior Service, then J.R.
Freeman in 1947. Benson & Hedges was acquired in 1955, and Gallaher launched Silk
Cut in 1963. The biggest change in the Company's history thus far happened in 1968
when American Tobacco Co. acquired Gallaher. American Tobacco Co. changed its
name in 1969 to American Brands, Inc. After Gallaher became a wholly owned
subsidiary of American Brands, Inc., it had several other diversified interests such as an
optical company (Dollond & Aitchison) a kitchenware company (Prestige) and a whisky
manufacturer (Whyte & Mackay). However, these were gradually disposed of, and
Gallaher, under the ownership of American Brands, Inc., refocused as a 100% tobacco
company in January 1996.
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
Gallaher demerged from American Brands in May 1997 and for the first time;
Gallaher's Group Plc shares were listed on both the London Stock Exchange and its
ADRs on the New York Stock Exchange. American Brands, Inc. also took the step of
changing its name, and is now known as Fortune Brands, Inc.
Since 1997, the Group has been transformed from a predominantly British and
Irish company into a leading international tobacco group, assisted by the acquisitions of
Liggett-Ducat and Austria Tabak. It is truly an international tobacco manufacturing and
wholesale company now, employing over 11,000 people, with manufacturing plants in
the UK, Russia, Kazakhstan, Austria, Sweden, Poland, Romania and Ukraine. Today,
Gallaher is the fifth largest international tobacco company in the world – and the fourth
biggest in Europe (based on billions of cigarettes sold each year)
BUSINESS
4 players - ITC, Godfrey Phillips, VST (also a BAT affiliate) and GTC dominate
the Indian cigarette industry. These four companies together control almost 99% of the
market. The cigarette industry faces competition mainly from the unorganized sector
'bidi' manufacturers, who are protected from high duties due to small-scale industry
status. Affected by steep duty hikes, the industry has been facing stagnant volume growth
in the last 2-3 years. Cigarette sales dropped by 4% in volume terms in FY00. The 2000-
01 budget also hiked excise on all types of cigarettes by 5%.
Based on the contribution form various products, ITC’s business can be divided
into three main divisions, namely cigarettes, tobacco and agri-products. ITC’s mainstay
of earnings is cigarettes (63%) and tobacco (3%). Agri-products business contributes 5%
of the total Rs80bn revenues, while other businesses of hotels, paper and packaging
collectively contribute the balance 5%.
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
Cigarettes/ Tobacco:
ITC has a broad-based presence in all the segments of the cigarette market.
Scissors is the brand leader in volumes and Wills Gold Flake family is the single largest
consumer product trademark in India. Of the total produce more than 70% is in the filter
cigarette category while rest is in non-filter category. The company has also shifted 45%
of its cigarette sales in form of hinged lid packaging. During FY00 the company extended
its Gold Flake brand to other tastes and flavours. Two of its brands namely, Checkers and
Hi-Val sell more than 100mn sticks per month in USA. Cigarette volumes declined by
2.4% yoy in FY00. Average per unit realizations however improved during the year by
9% yoy to Rs1049 per 1000 sticks.
Tobacco:
ITC’s India Leaf Tobacco Division (ILTD) procures tobacco directly from
farmers and also through auctions/ traders. ILTD works with the Tobacco Board to help
farmers in developmental activities. ILTD also supplies tobacco to an associate company
VST and other cigarette companies, besides exporting. ITC is one of the leading
exporters of leaf tobacco. Exports are mainly to Latin America, South East Asia, and
Western Europe and also to CIS markets. The division's performance has got affected due
to oversupply situation in the global market. Moreover unauthorized production of
tobacco has also increased leading to excess availability. Tobacco board has recently
declared a crop holiday in the state for tobacco. The Andhra Pradesh plant of the
company at Chirala was awarded Golden Peacock award for environmental management
during FY00. The plant has also been awarded social accountability Standard
certification from Bureau Veritas Quality International. The company produced 24,026
tons of unmanufactured tobacco during FY00. It contributed 3% of the total revenue
during the year.
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
Hotels: ITC Limited entered the hotels business in 1975 with the acquisition of a hotel in
Chennai, which was Hotel Chola. Since then the ITC-Welcomgroup brand has become
synonymous with Indian hospitality. Today amongst India's finest and fastest growing
hotel chains, it consists of over 90 hotels across 77 destinations in India. These include
super deluxe and five star hotels, heritage palaces, havelis and resorts and full service
budget hotels. The 442-room ITC Maurya at New Delhi is not only amongst the leading
business hotel in the country, but is in a class by itself. Bukhara at ITC Maurya in New
Delhi has been declared the Best Indian Restaurant in the world by 'The Restaurant
Magazine', UK. It has also been voted the Best Restaurant in Asia and was the only
Indian restaurant to feature in the list of 50 Best Restaurants in the World from 2002 to
2007. The 386-room ITC Maratha, opened in February 2001, is perceived as amongst the
leading and the finest properties in Mumbai, designed in a grandiose classic style, the
hotel pays tribute to Mumbai's colonial roots and the spirit of the Great Marathas.
ITC has been investing very heavily in its hospitality business. During FY00 the
company acquired land from its subsidiary, ITC hotels and started construction of Super
Deluxe hotel. The construction work is till in progress. The company's Maurya Sheraton
hotel has received ISO14001 certification during the year.
INFORMATION TECHNOLOGY
ITC Infotech, a global IT services company, is today one of India’s fastest
growing IT services and solutions providers. Based out of a picturesque 35-acres campus
in the heart of Bangluru city, ITC Infotech, through wholly owned subsidiaries in the UK
and US, provides outsourced IT services and solutions to leading global customers. 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 conforms to the highest standards in international process
quality, with ISO 27001, ISO 9001, SEI CMM Level 5 and BS 7799 accreditations.
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
These reflect the company’s ongoing enterprise-wide focus to ensure that every
engagement, program and project delivers international quality consistently.
Industry Recognition
Premier analyst and market research agencies have recognized ITC Infotech’s
position as the preferred IT partner. It has been:
Featured amongst Top 100 Global Outsourcing Companies in the Leaders
category - International Association of Outsourcing Professionals
Ranked amongst Top 10 Specialty Application Development Providers - Global
Services, CMP Media.
Named amongst major Indian global service providers for PLM implementation
and engineering services - ARC Advisory
Listed as a leading Player in CRM & CPG Space – Forrester
Mentioned amongst Top Offshore SAP Service Providers – Forrester
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 packaged foods business is an ideal avenue to leverage ITC's proven
strengths in the areas of hospitality and branded cuisine, contemporary packaging and
sourcing of agricultural commodities.
All products of ITC's Foods business available in the market today have been
crafted based on consumer insights developed through extensive market research. Apart
from the current portfolio of products, several new and innovative products are under
development in ITC's state-of-the-art Product Development facility located at Bengaluru.
The Foods business is today represented in 4 categories in the market. These are:
Ready To Eat Foods
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
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
Sunfeast
Mint-o
Candyman
Bingo!
Lifestyle Retailing
ITC’s Lifestyle Retailing Business Division has established a nationwide retailing
presence through its Wills Lifestyle chain of exclusive specialty stores. Wills Lifestyle, as
a fashion destination, offers a tempting choice of Wills Classic work wear, Wills Sport
relaxed wear, Wills Clublife evening wear & fashion accessories, Essenza Di Wills – an
exclusive range of fine fragrances and bath & body care products for men and women
and Fiama Di Wills – a range of premium shampoos and shower gels. Wills Lifestyle has
also introduced Wills Signature designer wear, created by the leading fashion designers
of the country. With a distinctive presence across segments at the premium end, ITC has
also established John Players as a brand that offers a complete fashion wardrobe to the
youth of today. The launch of Miss Players with its range of trendy fashion wear for
young women has been a successful addition to the youthful offering. With its brands,
ITC is committed to build a dominant presence in the apparel market through a robust
portfolio of offerings.
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
Wills Lifestyle has been established as a chain of exclusive specialty stores
providing the Indian consumer a truly 'International Shopping Experience' through world-
class ambience, customer facilitation and clearly differentiated product presentation.
Wills Lifestyle complements the range of premium apparel with a tempting choice of
fashion accessories.
Wills Sport, fashionable relaxed wear for men and women.
Wills Classic work wear is positioned as the brand for new age leaders, who are
changing the rules of business and encouraging a dynamic culture of enterprise,
innovation and teamwork.
ITC forayed into the youth fashion segment with the launch of John Players in
December 2002 and is committed to be the No. 1 fashion brand for the youth. John
Players offers complete and vibrant wardrobes of Casual wear, Party wear, Work wears,
Denims, Outer wear and Suits & Jackets, incorporating the most contemporary trends, an
exciting mix of colors, playful styling, trendy textures and comfortable fits.
The launch of Miss Players has added to ITC’s youthful portfolio. The range which spans
trendy tops, funky denims, smart trousers and stylish dresses along with a whole range of
cool fashion accessories has been designed keeping in mind the tastes of the young Indian
woman.
Education and stationary products
ITC made its entry into the stationery business in 2002 with its premium range of
notebooks, followed in the year 2003 with the more popular range to augment its
offering.
ITC's stationary Brands are marketed as "Classmate" and "Paperkraft", with
Classmate addressing the needs of school goers and Paperkraft targeted towards college
students and executives. The Paperkraft range consists of premium stationery with a
wide variety for executives to choose from. The assortment consists of notepads & multi
subject notebooks in hard, soft covers & multiple binding formats including spirals, wiros
etc.
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
Classmate - India's largest National brand, reaching 50,000 outlets across the
country, has over 300 variants in its range which comprises notebooks, long books,
practical books, drawing books, scrap books, reminder pads etc. A recent addition to the
Classmate portfolio has been the Classmate Fun N Learn range of children books
targeting pre school learners.
The Business has launched Geometry Boxes for school students branded as
‘Classmate Invento’. The Mathematical Instruments Box comprises world-class
precision compass, high quality plastic instruments coupled with interesting trivia and
useful information.
ITC also markets a range of Greeting Cards and Gifting products under the Brand
"Expressions". The gifting portfolio includes autograph books, slam books, party
invitations, letter pads, gift-wraps, pop up books & mini books. In recognition of its
quality products & processes, the business has been awarded with ISO 9001:2000
Safety matches
ITC’s range of Safety matches include popular brands like i Kno, Mangaldeep,
Aim, Aim Mega and Aim Metro. With differentiated product features and innovative
value additions, these brands effectively address the needs of different consumer
segments. The Aim brand is the largest selling brand of Safety Matches in India. ITC also
exports regular and premium safety matches brands to markets such as Middle East,
Africa and the USA. The successful acquisition of Wimco Ltd. by Russell Credit Ltd.
Agarbattis (incense sticks)
The Company commenced marketing Agarbattis (incense sticks) sourced from
small-scale and cottage units in 2003. This business leverages the core strengths of ITC
in nation-wide distribution and marketing, brand building, supply chain management,
manufacture of high quality paperboards and the creation of innovative packaging
solutions to offer Indian consumers high quality Agarbattis. Mangaldeep Agarbattis are
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
available in a wide range of fragrances like Rose, Jasmine, Bouquet, Sandalwood,
Madhur, Durbar, Tarangini, Anushri, Ananth and Mogra.
Mangaldeep Yantra is a special offering from ITC and this specially created
fragrance evokes the ambience of a temple. The premium ranges from ITC; Mangaldeep
Spriha has two offerings, Pratiti and Sarvatra and are specially hand rolled by Cottage
Industries.
Seven out of 10 Mangaldeep Agarbatti manufacturing units are ISO 9000
certified.
Packaging and printing :
The company has leadership position in cigarette and liquor packaging The
company's much-talked about acquisition of Rollatainers didn't materialize and it was
called off. The division attained Level-6 in the international Quality rating system from
an international accreditation agency. It also got World Star award for excellence in
packaging. The exports by the division increased by 20% yoy following technology
upgradation at its manufacturing plants.
Specialty paper:
ITC operates a 33000 tpa plant at Tribeni, West Bengal, to manufacture specialty
papers, mainly with the imported wood pulp. Besides captive consumption, ITC also
exports cigarette-packaging paper to BAT subsidiaries in Africa and Central Asia.
Margins in the business have been adversely affected with stiff price competition from
domestic as well as imported products post reduction in import duty. ITC has been
scouting for an international joint venture partner for upgrading technology in this
business. The division received certification under ISO9001 quality standards and Gold
Star award from Royal Society for Prevention of Accidents UK. The specialty paper
division contributed Rs1bn to the total revenues during FY00 compared to Rs880.5mn in
FY99. The company produced 16355 tons of specialty paper during the year.
International business division, which is involved in handling exports from the company,
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
did exports of Rs3.2bn during FY00. The division exports agri-products to various
countries across the globe. Recently the division has decided to set up e-choupals for
shrimps and coffee. These e-choupals would provide up-to-date information regarding
local and global weather and scientific practices followed at different places to farmers.
The division has plans of setting up 300 such choupals across the country in current year.
ITC also has a infotech division, which is being realigned to focus on e-commerce
software solutions. The company plans to hive off its Infotech division into a separate
subsidiary.
Earnings sensitivity factors:
Excise duty changes on cigarettes
New product launches: Rothmans’ international brand portfolio may be
launched through ITC, as Rothmans has withdrawn proposal for 100% subsidiary
post global merger with BAT.
Leaf tobacco crop depends on weather conditions and has significant impact on
raw material costs.
Export markets reduce dependence on domestic market. Exports are also affected
by the domestic crop production.
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
Paper/ paperboard margins depend on international paper and wood pulp prices as
well as changes in custom duty rates.
Excise duty exemption in northeastern states.
Growing gray market for foreign branded cigarettes
Success in new business ventures
Returns from investments in hotel business
Financial Review of ITC Ltd
ITC Ltd posted a 16 per cent rise in gross income at Rs 6009 crore in the fourth
quarter (Q4) of fiscal 2009-10 (against Rs 5279 crore in Q4 of fiscal 2008-09) with post-
tax profit up 14 per cent at Rs. 736 crore (from Rs 650 crore) after adjusting for income
tax refunds. For the full year 2007-08, ITC gross turnover rose to Rs.21966 crore (from
Rs 19636 crore in 2006-07) while profit before tax rose to Rs 4571 crore (from Rs 3926
crore) and profit after tax for 2007-08 to Rs 3120 crore (from Rs 2699 crore). Cigarettes,
reeling under a higher taxation regime, reported Q4 net sales of Rs 3583 crore (Rs3294
crore in Q4 of 2006-07) with segment gross profit at Rs 870 crore for Q4 (against Rs 741
crore).For the full year 2007-08, gross sales from the cigarettes business was Rs13825
crore (from Rs 12833 crore in 2006-07) while the segment gross profit from the cigarettes
business was Rs 3634 crore (from Rs 3172 crore in 2006-07).
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
ITC - Financial Snapshot
(Rs. 1 crore = Rs. 10 million)
Segment Revenues 2007-2008
1. Segment RevenueYear ended 31.03.2011 (Audited)
a) FMCG - Cigarettes - Gross13825.60
- Net 6634.98- Others – Gross
2511.05- Net 2509.57
Total FMCG – Gross16336.65
- Net 9144.55b) Hotels – Gross
1100.20- Net 1012.10
c) Agri Business – Gross3868.44
- Net3868.44
d) Paperboards, Paper & Packaging - Gross 2364.33
- Net2157.94
Total – Gross23669.62
- Net16183.03
Less : Inter-segment revenue - Gross 2313.68
- Net2235.50
Gross sales / Income from operations21355.94
Net sales / Income from operations13947.53
2. Segment Results
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
a) FMCG – Cigarettes3634.04
- Others(263.52)
Total FMCG3370.52
b) Hotels410.77
c) Agri Business129.19
d) Paperboards, Paper & Packaging453.14
Total4363.62
Profit Before Tax4571.77
Provision for Taxation1451.67
Profit After Tax3120.10
3. Capital Employeda) FMCG - Cigarettes
2314.64 - Others
1826.66Total FMCG
4141.30b) Hotels
1865.32c) Agri Business
1468.97d) Paperboards, Paper & Packaging 3264.18Total Segment Capital Employed
10739.77
Operating results of ITC Ltd.
Year Ending 31st March 2005 2008 2011Gross Income 8069.37 13585.39 21966.84Excise Duties etc. 4133.89 5710.13 7408.41
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
Net Income 3935.48 7875.26 14558.43Cost of Sales 2475.45 4846.89 9543.59PBDIT 1460.03 4846.89 5014.84PBDT 1347.48 2985.94 5010.23PBIT 1341.50 2715.50 4576.38PBT 1228.95 2673.07 4571.77Tax 436.51 836.00 1451.67Profit after tax(Before exceptional items)
792.44 1837.07 3120.10
Exceptional Items (Net Of Tax)
- 354.33 -
Profit after taxation 792.44 2191.40 3120.10Dividends 224.55 881.70 1543.18Retained Profits 567.89 1309.70 1576.92
Gross incomes Comparison
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
Comparison between non-cigarette of different year of ITC Ltd.
Profit trends of ITC Ltd.
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
MAJOR FACTORS INFLUNCING BUYING BEHAVIOUR
CULTURAL
Culture
Subculture
Social class
Social
Reference group
Family
Roles and status
PERSONAL
Age
Occupation
Economic
Lifestyle
Personality
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
PHYCHOLOGICAL
Motivation
Perception
Learning
Beliefs
Buyer
OTHER FACTOROTHER FACTOR
ECONOMIC FACTORECONOMIC FACTOR
The economic factor determines the demand and supply of the brands. it can be said that people from any income group can readily have an access to the product and this determines a good for it.
CULTURAL FACTOR
India market has opened up for long and the effect of liberalization can be seen in the culture of the country too. People are opening up to new national product as which were once not even spelled of in the country. Moreover the desi product with an international name such as slice is very of a know substance in the country and is highly liked.
PERSONAL FACTOR
Customers are highly drive to a product by virtue of personal reasons. look for is a ‘construction’ this way it has been quite a successful product.
PSYCHOLOGICAL FACTOR
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
The slice seals off due to same Psychological factor. People construction it sometimes feel that it’s different from the rest and distinct among the crowd. This helps the craze grow for the brand and its products
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
RESEARCH METHODOLOGY
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
RESEARCH METHODOLOGY
Marketing Research is the backbone of marketing. The objective of my research
is to study the consumer perception about Cigarette product of ITC in Indian consumer
durable industry. The nature of this research is exploratory research. Its goal to shed light
on the real nature of the problem and to suggest possible selection and to suggest possible
selection and it involves number of steps.
Methodology The research is exploratory in nature and the approach was very flexible and
judgmental in order to provide opportunity for considering different aspects of the
problem. The enabled the respondents to raise issues and questions which are considered
to our projects.
Exploratory researchIn the case of exploratory research, the focus is on the discovery of ideas.
Objective of the study is to generate new ideas; respondents have been given sufficient
freedom to express themselves. We as the interviewer allowed the participants to discuss
the issue fully when we feel that some important aspects in the discussion are likely to be
left out by the respondent.
Define the Problem & Research Objective:Management must define a problem in broader way. Because it is said that “that
the well defined problem is half solved” and the objective of this research is to study the
consumer perception about ITC Cigarette products in Indian consumer durable industry.
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
Developing the Research PlanThe second stage of marketing research is to develop the most efficient plan for
gathering the needed information. Research plan development includes decision on the
data sources, Research Approaches, Research Instruments, and Sampling Plans &
Contact Methods.
Size and Selection of Sample
Sample size The size of sample as specified by the project guide is taken for the study. Large
samples give more reliable results than small sample. 500 respondents have been
interviewed for the data collection.
Selection of sample
There are two types of sampling methods:
Probability sampling method
Non-Probability sampling method
Probability sampling has been used in this study. Again this method is divided in
different parts.
Probability sampling method
Random Multi-stage Cluster Systemic
Sampling Sampling Sampling Sampling
Probability sampling has been project. Persons were interviewed, as they were
available at the time. This sampling is also called accidental sampling, as the respondents
in the sample are included merely because of their presence on the spot.
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
Sampling Plan:Primary data is collected from MEERUT and sub urban areas and respondents are
contacted directly along with the questionnaire.
Sample Procedure:To obtain representative samples. Simple random sampling has been used that
comes under the probability sampling.
Contact Method:
Once the sampling plan has been determined the marketing research must decide
how the subject should be contacted. Personal interviews are used for the collection of
the data.
Methods of data collectionIn this research study process, after the objective of study has been finalized, the
research problem and the design have been chalked out; the next important step is of Data
Collection. This applies for Primary Data as secondary data.
Primary dataPrimary data were collected by conducting personal interviews of retailers in
specified areas in the territory (questionnaire enclosed).
Survey of the outlets and personal interviews of consumers:
This method has been chosen because of the following reasons: -
a. Relevant information could be gathered.
b. Economical
c. Simple to be carried out
d. Conformance to respondents way to thinking
e. Time involved is also not much
This technique is preferred as it is: Economical More informative non-responses
are low Spontaneous relations-which are more realistic lots of supplementary
information, comes up.
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
Secondary dataSecondary data was collected from the websites of ITC Ltd, and through the press
release, and it was used in designing of the Questionnaire to analyse the market size of
cigarette brand of ITC Ltd. Figures are also collected from annual reports of ITC Ltd.
Magazines, Catalogue, Newspapers, Product Profile & Internet are also used to gather the
secondary data.
Research approachesPrimary data can be collected into five ways – observations, focus groups, survey,
behavioral data & experiments and here I have used survey research.
Survey ResearchSurveys are best suited for exploratory research ITC take survey & resurveyed to
learn about people’s, knowledge, beliefs, preference & satisfaction & to measure these
magnitudes in the general population.
TYPE OF RESEARCH:
The basic type of research are as follows:
1. Descriptive vs Analytical : Descriptive research includes surveys and
finding enquires of different kinds. The MAJOR purpose of descriptive
research is description of the state of affairs as it exits at present. In social
science and business research we quite often use the term ex post facto
research for descriptive research studies.
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
In analytical research on the other hand the researchers has to use facts or
information already available, and analyze to make a critical evaluation of the
material.
2. Applied vs Fundamental : Research can either be applied (or action) research
or fundamental (or basic or pure) research. Applied reseachaims at finding a
solution for an immediate problem facing a society or an industrial or business
organization , whereas fundamental research is mainly concerned with
generation and with the formulation of a theory. “Gathering knowledge for
knowledge sake is termed as a pure or basic research”.
3. Quantitative vs qualitative: Quantitative research is based on the
measurement of quantity or amount. It is applicable to phenomena that can be
expressed in terms of quantity.
Qualitative research on the other hand is concerned with qualitative
Phenomenon i.e., phenomenon related to or involving quality or kind.
4. Conceptual vs Empirical: Conceptual research is that related to some
abstract idea(s) or theory. It generally used by philosophers and thinkers to
develop new ideas new concept or to reinterpret existing ones.
On the other hand, empirical research relies on experience or observation alone often
without due to regard for system and theory.
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
RESEARCH PROCESS:
The various step provides a useful guide line regarding the research process:
1. Formulating the research problem.
2. Extensive literature survey.
3. Developing the hypothesis.
4. Preparing the research design.
5. Determining sample design.
6. Collecting of data.
7. Execution of project
8. Analysis of data.
9. Hypothesis of testing.
10.Generalization and interpretation
11. Preparation of the result, i.e., formal write up of conclusion reached.
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
CUSTOMER SATISFACTION
Satisfaction or dissatisfaction has been called an episodic measure in that it relates
to the quality of ITC Ltd. By contrast, cement quality is a global evaluation of all
past service experiences Research has found that customer, perceived evaluation
of cement quality has an impact on their level of satisfaction. Therefore, cement
quality evaluation is an antecedent to customer satisfaction
In case of quality failure the level of customer dissatisfaction will be determined
by how and where customers attribute the cause of the failure or poor quality. The
process of deciding the cause of a quality failure is called attribution theory.
Controllable and uncontrollable factors are situational in nature and will vary
from one consumer to another.
Managing Consumer Expectations (During Post Purchase Phase)
Managing consumer expectations does not after the service is performed. Service
firms have three strategies they can use after the service has been completed.
First, companies should communicate with customers immediately after the
service is completed to see if expectations were met.
Second, firms can use a follow-up program, such an evaluation survey sent to the
customer through the personal meting or phone call.
Third, companies should have a procedure for dealing with dissatisfied customers
that will assist in managing future expectations.
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
Upon the completion of a service, service personnel should talk with customers
about the service. If customer expectations have been met, the probability of the
customer coming back is greatly increased.
Some services are difficult for customers to evaluate immediately, so follow up
calls are an effective way to manage customer expectations.
My project forms the part of such services sells services.
If customer expectations have not been met, the service provided was below the
adequate serves level and outside of the tolerance zone.
Tools and Techniques used
Percentage To calculate the percentage of the respondent’s attitude for a particular question,
firstly I made the tally tables, to find number respondents having similar attitude, and
then I have divided that number of respondents with the total number of respondents and
multiplied it with hundred.
Chi Square The major objective of the study was to analyse the market share and customer
satisfaction. For this purpose I used chi square method taken null hypothesis, as
customers are not satisfied with the product. Null hypothesis is taken as the customers are
not satisfied with the product. Level of significance is 5%.
Research InstrumentMarketing Researcher has choice between two main research instruments in
collecting primary data Questionnaire & Mechanical device. Questionnaire has been as a
research instrument.
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
Questionnaire:Questionnaire contains 09 questions and presented to know about the views of
consumers. In preparing this questionnaire open ended as well as close-ended questions
have been used-
The questionnaire measure the responses using parameter like
Awareness of Brand/product.
Factors affecting while buying the cigarette
Consumption of cigarette of different brands.
Determinant factor for the consumption of cigarette of ITC Ltd.
Satisfaction level of consumer at different parameters.
Behavior of retailers while selling the product.
Analyzing the informationThe step in the marketing research process is to analyse the data and extract the
findings from the collected data.
Findings of the studyIn the later segment of the report findings are mentioned that are relevant to make
the major marketing decisions by the management.
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
SWOT ANALYSIS
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
SWOT ANALYSIS
Organization performs SWOT (Strength, Weakness, Opportunity, Threats)
analysis to identify and evaluate their competitive position.
STREGTHS:
The company has excellent distribution system.
The company has built a strong image among the customers.
The company experiences excellent Brand loyalty for its Products from the
customers.
The company has made its Packaging attractive which lures the customers and
consequently the products are favorite among the customers.
WEAKNESSES
Some products have high prices as compared to the other products OF Godfrey
Philips India Ltd. & Gallaher Group.
The company branches are not spread through out the region; as a result load of
the work at the regional offices are tremendous.
The company pays less attention towards advertisement as against its competitors.
The brewery of the company is old and not up to expectation of modern times.
OPPORTUNITIES
India has a vast potential market, which the company can get hold up.
The company can prove to be major threats for its competitor’s if it increases its
marketing efforts.
Tobacco market in India is at a growing stage.
ITC Ltd. should concentrate on the premium segment market.
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
THREATS
The major threat that company faces is from its competitors who are introducing
products with good features like soft filter and good quality tobacco in the
cigarette at lower cost backed by aggressive promotional schemes to attract buyer.
The arrival of the MNC is a major serious threat for the company.
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
DATA ANALYSIS
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
INTERPRETATION AND ANALYSIS OF DATA
The questionnaire was designed to find out the perception of consumer towards
Cigarette of ITC Ltd and to determine the market share of Cigarette of ITC Ltd. The
sample size taken for this questionnaire was 500. The area of survey included Meerut and
suburban area.
The analysis of each question of the questionnaire is as follows:
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
Q1. Do you smoke?
This question was asked to find out the percentage of smokers among the
surveyed population. The sample size for the survey was 500. Various responses from the
respondents are summarized in the following table:
Response No of respondents
Yes 165
No 335
Total 500
We can further analyze it with the help of a pie chart that is given on the next page.
So we can see from the above figure that among the population surveyed 149
respondents are smokers that constitute a major proportion (approx.33 %) of the
category and 67% of the respondents are non-smokers.
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
Q2. What do you smoke?
This question was asked so that consumers of cigarette can be sorted out from the
respondents. Responses are summarized in the following table
Product No. of Respondents
Cigarette 71
Bidi 68
Both 26
Total 165
We can also find the percentage number of cigarette consumers with the help of following pie chart.
No. of Respondents
Cigarette43%
Bidi41%
Both16%
Cigarette
Bidi
Both
41.21% of the respondents consume Bidi, 43.03% of the respondents consume
cigarette and 15.76% of the respondents consume both Cigarette and Bidi.
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
Q3. If cigarette then, what are most determinates factors affect you while buying
cigarette?
This question was asked to find out what are the
factors that affect a consumer buying behaviour while
purchasing a cigarette. Do they emphasize over the
brand/company, price, taste or anything else.
Features No. of Respondents
Brand/Company 43
Price 12
Taste 44
All of the above 12
Any other 8
Total 71
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
Out of 71 cigarette consumers 60.56 % said that they emphasize on the brand
while 61.97 % said that they prefer the taste and 16.90 % focus on the all given factors
and minority of 11.26 % go for the any other factor.
Factors Determining Purchase of Cigartte
43
12
44
128
05
101520253035404550
Names of Factors
No
. of R
esp
on
den
ts
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
Q4. Which brand do you prefer most among the following?
This question was asked to find out the percentage
of ITC cigarette consumers. The responses from the
various respondents are given in the following table:
Brands No. of Respondents
ITC 50
VTC 5
GST 4
Godfrey Phillips 7
Don’t know 5
Total 71
Out of 71 cigarette consumers 70 % prefer cigarette of ITC while 7 %, 6 %, 10 %
like the cigarette of VTC, GST and Godfrey Phillips respectively.
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
Q5. Which product of ITC you like most?
This question was asked to find out the most popular product of ITC Ltd. Four
different options were given, Gold Flake, Wills, Classic and India Kings. The responses
of the respondents are given in the following table.
Brand No. of Respondents
Gold Flake 19
Wills 15
Classic 7
India Kings 6
Any Other 3
The graphical representation of the above table will give a clearer view about the
“Brand Preference” among ITC Cigarette consumers.
Brand Preference among ITC Cigarette Consumers
19
15
7
63
Gold Flake
Wills
Classic
India Kings
Any Other
From the above pie chart it is clear that Gold Flake and Wills are the most popular
brand of ITC Ltd. with a consumer base of 68% of the ITC cigarette consumers.14% of
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
the respondents prefers Classic and 12% of the respondents prefer India Kings. While 6%
of the respondents prefer any other brand of ITC Ltd.
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
Q6. Please rate ITC’s product on the following parameters: -
This question was asked to find out the rating of the ITC cigarette on the given
parameters and to find out that which factors satisfies the consumers most.
Features
No. Of Respondents
Very
Good
Good Average Below
Average
Poor
Quality 13 19 12 4 2
Packaging 14 23 9 4 0
Various Varieties of product 15 17 4 9 5
Price 11 12 14 12 1
Availability in retail store 8 22 11 6 3 Awareness about the Product 7 15 8 16 4
Taste 10 22 9 6 3
To analyze the above table Likert scale technique has been used. In this we will
give points to various scales, which have been used to rate the different statements. The
points are given are as follows: -
Very Good : +2
Good : +1
Average : 0
Below Average : -1
Poor : -2
After this we multiply it with the number of respondents for a particular statement
in each scale to get the score for that particular statement. Like this score for each
statement can be obtained.
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
Thus the score for a particular statement will range from +100 to –100 with the
average score being 0. if the score falls-
Between –100 to –75 it will be considered as Poor.
Between –75 to –25 it will be considered as Below Average.
Between –25 to +25 it will be considered as Average.
Between +25 to +75 it will be considered as Good.
Between +75 to +100 it will be considered as Very Good.
By using all these things the analysis of all the statements in the question is as
follows: -
Quality of the product+37 points
The score of this statement falls between +25 to +75 that means it is good.
According to the respondents Quality of the product is good.
Packaging of the product: + 47 points
The score of this statement falls between +25 to +75 that means it is good.
According to the respondents Packaging of the product is good.
Various Varieties of product: +28
The score of this statement falls between +25 to +75 that means it is good.
According to the respondents Various Varieties of product is good.
Price of the product: +20
The score of this statement falls between –25 to +25 that means it is average.
However it has positive score but the price of the product is average.
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
Availability in retail store: +26
The score of this statement falls between +25 to +75 that means it is Good.
Awareness about the Product: +5
The score of this statement falls between –25 to +25 that mean it is average.
According to the respondents it is considered that Awareness about the Product is just
satisfactory.
Taste of the product: +30
The score of this statement fall between +25 to +75 that means it is good.
According to the respondents Taste of the product can be considered as Good.
All the factors given in this question can analyze the various features of ITC
products. By the analysis it is concluded that Quality of the ITC cigarette has been given
+37 points which indicates that consumers are satisfied with the quality of ITC cigarette,
packaging of the ITC cigarette is given +47 points that indicates that packaging is also
good. Various varieties of the products are given +28 points that are a good performance.
It shows consumers are quite happy with the varieties provided by ITC. Pricing of the
products is given +20 points that indicate average pricing of ITC cigarettes. Availability
of ITC cigarettes in retail stores is given 26 points that shows that retailing of ITC
products is good and consumers get their favorite brands from retailers. Awareness about
the products is not satisfactory and it has been given +5 points. Taste of the ITC products
is given +30 points and it shows consumer satisfaction towards ITC cigarettes. For the
further analysis of this question we can draw the column charts. The representation of
charts is as follows:
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
QUALITYWISE PERFORMANCE OF ITC CIGARETTE
13
19
12
42
02468
101214161820
Very Good Good Average BelowAverage
Poor
Rating
No.
of
Res
pond
ents
From the above column chart it is clear that out of 50 respondents 32 (64%) rated
the quality of ITC Cigarettes as either “very good or good”. A minority of respondents 6
(12%) is of the view that ITC cigarettes are of “below average or of poor quality.” Rest of
12 (24%) respondents think the quality of ITC Cigarette as “average”
Packaging Base performance of ITC Cigarette
14
23
9
4
00
5
10
15
20
25
Very Good Good Average BelowAverage
Poor
Rating
No.
of
Res
pond
ents
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
From the above column chart it is clear that out of 50 respondents 37 (74%) rated
the packaging of ITC Cigarettes as either “very good or good”. A minority of respondents
4 (8%) is of the view that packaging of ITC cigarettes is “below average or of poor.” Rest
of 9 (18%) respondents think the packaging of ITC Cigarette as “average”
Variety Base Performance of ITC Cigarette
1517
4
9
5
02468
1012141618
Very Good Good Average BelowAverage
Poor
Rating
No.
of
Res
pond
ents
From the above column chart it is clear that out of 50 respondents 32 (64%)
thinks that ITC has presented sufficient varieties of the cigarette and they rated the
variety dimension of ITC Cigarettes as either “very good or good”. A minority of
respondents 14 (28%) is of the view that ITC has not presented sufficient varieties of the
cigarette and they rated the variety dimension of ITC cigarettes is “below average or of
poor.” Rest of 4 (8%) respondents think the variety of ITC Cigarettes as “average”
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
Price Base Performance Of ITC Cigarette
1112
1412
1
02468
10121416
Very Good Good Average BelowAverage
Poor
Rating
No.
of
Res
pond
ents
11(22%) of the respondents said price of ITC cigarettes is very good, 12(24%)
said it is good, 14(28%) said average, 12(24%) said it’s below average and only 1(2%)
respondent said it is poor. If I consider the respondents who gave the rating average,
below average and poor, they are not satisfied with the prices and the respondents who
have given rating very good and good considered as satisfied with it. Now I can say that
23(46%) consumers are satisfied and 27(54%) are not satisfied. Overall it can be
considered that price of ITC cigarettes are acceptable.
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
Availability Base Performance of ITC Cigarette
8
22
11
63
0
5
10
15
20
25
Very Good Good Average BelowAverage
Poor
Rating
No.
of
Res
pond
ents
8(16%) of the respondents said availability of ITC cigarettes is very good,
22(44%) said it is good, 11(22%) said average, 6(12%) said it’s below average and only
3(6%) respondent said it is poor. If I consider the respondents who gave the rating
average, below average and poor, they are not satisfied with the availability and the
respondents who have given rating very good and good considered as satisfied with it.
We can say that 30(60%) consumers are satisfied and 20(40%) are not satisfied. Overall
it can be considered that ITC cigarettes are easily available.
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
Awareness Base Performance of ITC Cigarette
7
15
8
16
4
02468
1012141618
Very Good Good Average BelowAverage
Poor
Rating
No.
of
Res
pond
ents
From the above column chart it is clear that out of 50 respondents 22 (44%) are
well aware about the ITC cigarette and they rated the awareness of ITC is either “very
good or good”. 20 (40%) of respondents is of the view that awareness of ITC cigarette is
“below average or of poor.” Rest of 8(16%) respondents rated the awareness of ITC
Cigarettes as “average”
Taste Base Performance Of ITC Cigarette
10
22
96
3
0
5
10
15
20
25
Very Good Good Average BelowAverage
Poor
Rating
No.
of
Res
pond
ents
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
From the above column chart it is clear that out of 50 respondents 32 (64%)
thinks that the taste of ITC cigarette is either “very good or good”. A minority of
respondents 9 (18%) is of the view that taste of ITC cigarette is “below average or of
poor.” Rest of respondents rated the variety of ITC Cigarettes as “average”
The next fact to analyze is “Whether the consumers are satisfied with ITC
Cigarettes or not.”
We can clear above question with the help of Chi Square. For the Chi Square we
can take null hypothesis, as consumers are not satisfied with the ITC Products.
Features No. of Respondents
Satisfied Dissatisfied Total
Quality 32 18 50
Packaging 37 13 50
Various Varieties of product 32 18 50
Price 23 27 50
Availability in retail store 30 20 50
Awareness about the Product 22 28 50
Taste of the product 32 18 50
Total 208 142 350
For satisfied consumers
E (32)=50*208/350 =29.71
The expected value for all satisfied consumers will be 29.71.
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
For dissatisfied consumers
E (18)=50*142/350 =20.29
Similarly expected value will be 20.29 for all the dissatisfied consumers. Computation of 2
Observed
Frequency
Expected
Frequency O-E (O-E) 2 (O-E) 2/E
32 29.71 2.29 5.2441 0.176510
37 29.71 7.29 53.1441 1.788761
32 29.71 2.29 5.2441 0.176510
23 29.71 -6.71 45.0241 1.515453
30 29.71 0.29 0.0841 0.002831
22 29.71 -7.71 59.4441 2.000811
32 29.71 2.29 5.2441 0.176510
18 20.29 -2.29 5.2441 0.258457
13 20.29 -7.29 53.1441 2.619226
18 20.29 -2.29 5.2441 0.258457
27 20.29 6.71 45.0241 2.219029
20 20.29 -0.29 0.0841 0.004145
28 20.29 7.71 59.4441 2.929724
18 20.29 -2.29 5.2441 0.258457
Total 14.208370
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
2 = [(O-E) 2] E
= 14.208370
Degree of freedom = (7-1)*(2-1)=6*1=6
At 5% level of significance 2 =14.067 We get above value from the chi square distribution table.
Decision rule
Since calculated value of 2 is greater than tabulated value, it is significant at 5%
level of significance. Hence the null hypothesis is rejected and it is concluded that
consumers are satisfied with the products.
Q7. Are you satisfied with ITC’s cigarette?
In response to the above question the following numbers were found out of 50
respondents are: -
Response No of respondents
Yes 43
No 5
Indifferent 2
Total 50
Out of total 5o consumers 43 respondents said they are satisfied with ITC
cigarettes while 5 respondents said they are not satisfied with ITC cigarettes and 2 the
respondents were indifferent.
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
Q8. Does the retailer force you to purchase other brands in the absence of demanded brands?
In response to the above question the following responses were found out of 50
respondents: -
Out of 50 consumers 7 said that retailer forces them to purchase other brands in
the absence of demanded brands and 43 said that retailer never forces them to purchase
any other brands in the absence of demanded brands.
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
Q9. Do you want to give any suggestion to ITC for their product? If yes, then please
Suggestions from the consumers are included in the recommendation section of the
report.
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
FINDINGS
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
FINDINGS
From the analysis and interpretation of data we can find the following facts from the
allocated are for the study: -
Only 33% of the total respondents smoke in the allocated area of the study.
43 % of the smokers consume cigarette and 41% consume Bidi, we can say that
the Bidi producers are the main competitors for the cigarette producers in the
Indian cigarette market.
A majority of the cigarette consumers agreed to the fact that most determent
factor that affects them while buying cigarette is taste (62%) and brand (60%) and
cigarette of ITC has a good taste.
Analysis of the questionnaire suggests that ITC has a market share of 70.42 % in
the cigarette market, while the VTC, GST and Godfrey Phillips have captured
7.04 %, 5.63 %, and 9.85 % market respectively while 7 % respondents don’t
know about the company name.
ITC has the market leadership.
Gold Flake and Wills are the most popular brand of ITC Ltd. with a consumer
base of 68% of the ITC cigarette consumers.
Powerful brands across segments and leadership in all segments - geographic &
price and exciting long-term growth potential.
Quality of the cigarette, packaging and varieties is good while consumers say that
the price is average. Availability and taste of the ITC cigarette is said to be good
by the respondents.
Future growth depends on relative prices of product and growth in per capita
income and moderation in taxes.
On the basis of Chi Square we can say that the consumers of ITC product are
satisfied.
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
86 % of the ITC cigarette consumers are satisfied with the product when 10%
found to be unsatisfied and 4% are indifferent.
14% said that the retailer forces them to purchase another brand in the absence of
demanded brand.
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
RECOMMENDATIONS
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
RECOMMENDATIONS
The following are Recommendations for the company to improve itself which the study
has been shown:-
ITC should focus on the sales promotion as competitors are offering lower prices
for the similar type of the products.
ITC should revise the pricing of the cigarettes.
The behavioral analysis of the retailers and customers shows that most of the
customers give the preference to the price of a product, then performance of the
products at most of the times. There are very less people who prefer both the
options. So it should be more and more price oriented.
We can see that the most important factor, which is considered by the retailers to
keep the products of a company, is profit margin. After that it is followed by
brand/company, price of product, various schemes and performance respectively.
Retailers prefer that product, which gives more profit margins so it should
increase profit margin for retailers.
ITC should focus on surrogate advertising as awareness of ITC’s cigarettes is less
among the customers, as direct advertising of tobacco products is banned as per
Indian government rules.
Incentive schemes for Retailers should be started by ITC Ltd to increase the sale,
if they loose the confidence of the Retailers, the company can loose the market
share.
The company Representative should regularly visit to the Retailers to solve their
problems, and to tell them about new products and schemes. This would help
them to know about the consumer behaviour, their taste and preferences.
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
Schemes provided by the company are also an important factor for the retailers.
Schemes distribution of the Redistribution Stockiest is not so much accepted by
the retailers, so it should provide proper scheme distribution to keep them happy.
The company should also offer some Gifts and scratch coupon schemes for the
consumers.
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
CONCLUSION
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
CONCLUSION
The study that has undertaken concludes that the product of ITC is delightful
product for the consumers. Thus from the analysis and interpretation of data we can
conclude the following things. The sale of ITC is good but we should say it satisfactory,
as it is the first entrant in the Indian market.
Conclusion is as follows: -
The awareness of ITC’s cigarettes is less to the consumer due to advertisement
banned.
Taste of Cigarette is the factor that attracts the consumers most while they go for
smoking.
Extensive distribution network
o Over 900 wholesale dealers serving more than 1 million retail outlets
Consumers prefer filtered cigarette to the non-filtered.
Gold Flake & Wills are more preferred by the consumers.
No attractive scheme is offered by the ITC to the retailers and consumers.
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
LIMITATIONS
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
LIMITATIONS
In spite of making all my efforts to make the dissertation a perfect one there are
certain limitations in the study, which are felt while conducting the survey. As the study
is an exploratory one designed to find new hypothesis, readers are not suggested to
conclude the result. The study suffers from the basic limitations of the possibilities of
difference between what is recorded and what is true.
In addition, some limitation regarding of the study are mentioned.
The sample size is very less and therefore the test that could be done on large
population cannot be done.
The findings of the survey are based on the subjective opinion of the respondents
and there is no way of assessing the truth of the statements.
There is some respondent’s bias that cannot be removed.
Absence of seriousness of the respondent while filling the questionnaire.
Even after assuring the retailers that the survey was purely for academic purpose,
they were reluctant to share information.
No competitors are interviewed and hence there is a problem of comparing the
brand with others thoroughly. Besides this no help has been taken from any
secondary data of this type in this regard
Some retailers were not friendly and gave distorted information.
Certain questions, which are not properly, respond by the respondent.
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
And like any other research the limitation of personal bias of respondents
limit the scope of the study.
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
BIBLIOGRAPHY
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
BIBLIOGRAPHY
Books:
Kotler, Philip, Marketing Management: Pearson Publication, Kotler Armstrong, Principles of Marketing: Pearson Education,
Beri G.C., Marketing Research: Tata McGraw Hill,
Bhattacharya D.K., Research Methodology: Excel Books,
Gupta S.C., Fundamental of Statistics: Himalaya Publishing House
B.C. Marketing Research
Chabbra T.N. Marketing Management
Magazines:
Business WorldBusiness TodayTobacco or health: A global status report. WHO publication
Websites:
www.itcportal.comwww.itcltd.comwww.itcwelcomgroup.in www.welcomeheritagehotels.comwww.fortunehotels.com
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
QUESTIONNAIRE
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
QUESTIONNAIRE
1. Do you smoke?
Yes No
2. What do you smoke?
Bidi Cigarette Both
3. If cigarette then, what are most determinates factors affect you while buying
cigarette?
Brand / Company
Price of Product
Taste
All of the above
Any other
4. Which brand do you prefer most among the following
ITC VST GTC Godfrey Phillips
Don’t know Any other (please specify)……………..
5. Which product of ITC you like most?
Gold Flake Wills Classic
India Kings Other please specify………….
6. Please rate ITC’s product on the following parameters: -
Very good Good Average Below Poor Average
I) Quality
Comparative Research on Market Size of Cigarette Brand of ITC Ltd.
II) Packaging
III) Various Varieties of product
IV) Price
V) Availability in retail store
VI) Awareness about the Product
VII) Taste
7. Are you satisfied with ITC’s cigarette?
Yes No Indifferent
8. Does the retailer force you to purchase other brands in the absence of demanded brands?
Yes No
9. Do you want to give any suggestion to ITC for their product?If yes then Please. ……………
Name:Gender:Occupation: