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    TO UNDERSTAND ITCS

    DISTRIBUTION CHANNEL

    Submitted in partial fulfillment of

    PGDM Programme

    in

    Sri Sharada Institute of Indian Management-Research7, Institutional Area, Phase-II, Vasant Kunj, New Delhi 70

    Website: www.srisiim.org

    Submitted to: Submitted by:

    Dr Ritvik Dubey Sandeep KumarRoll No: 20100144Batch: 2010-12

    Sri Sharada Institute of Indian Management-Research

    New Delhi

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    TO UNDERSTAND ITCSDISTRIBUTION CHANN EL

    Submitted in partial fulfillment of

    PGDM Programme

    in

    Sri Sharada Institute of Indian Management-Research7, Institutional Area, Phase-II, Vasant Kunj, New Delhi 70

    Website: www.srisiim.org

    Submitted to: Submitted by:

    Dr. Ritvik Dubey Sandeep KumarRoll No: 20100144Batch: 2010-12

    Sri Sharada Institute of Indian Management-Research

    New Delhi

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    ACKNOWLEDGEMENT

    I wish to place on record my gratitude to ITC LTD. for providing me an

    opportunity to work with them on this project of such importance. My stay in the

    organization has been a great learning experience and a curtain raiser to an interesting

    and rewarding career. This exposure has enriched me with technical knowledge and has

    also introduced me to the attributes of a successful professional.

    My sincere thanks to Territory Sales In charge Mr. Jitendra Budlakoti for

    providing me an excellent opportunity to work for ITC ltd.

    The guidance of Dr.Ritvik Dubey has always been there to help me sail through

    my problems. Their suggestions and encouragement throughout the project help me in

    learning the various aspects of developing a project and completing the project in the

    stipulated time. Their inputs have been invaluable during the preparation of this project. I

    once again express my deep gratitude towards all of them.

    With a lot of thanks,

    Sandeep Kumar

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    DECLARATION

    I, Kamalesh Bargali, hereby declare that the project on TO UNDERSTAND ITCS

    DISTRIBUTION CHANNEL is written by me under the guidance ofDr Ritvik Dubey.

    The empirical conclusion & findings in the project are based on the data collected by me

    and the entire project work is not a reproduction of any other sources.

    Signature

    Name- Sandeep Kumar

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    CONTENTS

    1. SUMMERY OF THE PROJECT.6

    2. GENERAL INTRODUCTION7

    3. INTRODUCTION TO THE PROJECT8-11

    4. PROFILE OF THE ORGANIZATION12-32

    5. RESEARCH METHODOLOGY ...33

    6. FINDINGS & ANALYSIS .34-49

    7. LIMITATIONS.......52

    8. RECOMMENDATIONS.53-54

    9. BIBLIOGRAPHY55

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    SUMMERY OF THE PROJECT

    Distribution (or place) is one of the four elements of marketing mix. An organization or

    set of organizations (go-betweens) involved in the process of making a product or service

    available for use or consumption by a consumer or business user.

    Frequently there may be a chain of intermediaries; each passing the product down

    the chain to the next organization, before it finally reaches the consumer or end-user.

    Each of the elements in these chains will have their own specific needs, which the

    producer must take into account, along with those of the all-important end-user.

    The channel decision is very important. At least, there is a form of trade-off: the

    cost of using intermediaries to achieve wider distribution is supposedly lower. Indeed,

    most consumer goods manufacturers could never justify the cost of selling direct to their

    consumers, except by mail order. Many suppliers seem to assume that once their product

    has been sold into the channel, into the beginning of the distribution chain, their job is

    finished. Yet that distribution chain is merely assuming a part of the supplier's

    responsibility; and, if they have any aspirations to be market-oriented, their job should

    really be extended to managing all the processes involved in that chain, until the product

    or service arrives with the end-user. This may involve a number of decisions on the part

    of the supplier:

    Channel membership Channel motivation Monitoring and managing channels

    As we progressed into the new millennium, distribution channel is the biggest single

    challenge faced by the organization. If the organization fails to build the strong

    distribution channel and control it then organization cant survive for too long. The aim

    of project is to understand the distribution channel of ITC Ltd, analyze the difficulties

    that arise in part of the wholesale dealers, Stock Carrying Points and the Direct Sales

    Force.

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    GENERAL INTRODUCTION

    Company Profile: ITC Limited

    Type : Public

    Founded : August 24, 1910 Radhabazar Lane, Kolkata, India

    Headquarters: Virginia House, Kolkata, India

    Key People: Mr. Y.C.Deveshwar, Chairman

    Mr. K.Vaidyanath, Director

    Industry: Tobacco, Food, Hotels, AgriBusiness,

    Info. Technology, Paperboards, Paper & Packaging.

    Employees: 29,000

    Take an abiding commitment to world-class quality. Add deep market insight; cutting-

    edge technology; a pervasive culture of innovation. And you have ITC brands that do

    India proud across a range of products and services: Bingo, Aashirvaad, Sunfeast,

    Kitchens of India, mint-o, Candyman, Wills Lifestyle, John Players, ITC-Welcomgroup,

    Expressions, Classmate, Paperkraft, Elemental Chlorine-Free Cyber XLPac, Aim, iKno,

    Mangaldeep. The list goes on...

    Even as its brands delight consumers and enrich their quality of life, ITC

    continues to be powered by its aspiration to make a larger contribution to national

    imperatives.

    Like empowering farmers, greening wastelands, irrigating drylands, nurturing

    small scale enterprises, empowering village women and supporting rural education.

    Because our people and our country deserve the best.

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    INTRODUCTION TO THE PROJECT

    OBJECTIVE OF THE PROJECT

    To understand ITCs current Distribution and provide a plan to improve upon the same.

    Study the following aspects specifically:

    1. Ordering System:

    To study the system adopted by the WSP (Warehouse supplying plant) to

    make the products available in the area. Also to study what area is

    covered by a particular SCP and what mode is the SCP adopting to

    deliver the product to the retail points.

    2. Shipment to SCP from the respective Wholesale

    Dealers (WD):

    To study if there is any fix day for the delivery of the goods to the

    SCPs working under the particular WD.

    To study what mode of delivery is the WD adopting to deliver the

    goods to the SCPs.

    3. Number of Direct Sales (DS) Force working at different

    SCPs:

    To study how many DS are working under the SCPs and how does

    the SCP monitors them. If there is any conflicts between the DS

    and the SCP. What salary is the DS getting from the company and

    if it need any remuneration. What margin is the SCP getting from

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    the WD and is it enough for the SCP, or the SCP requires more ?

    4. Mode of operation (i.e. order taking) of the DS:

    What mode is the DS adopting to take the order from the retail

    points and how much time does they generally take to deliver the

    goods to the retail points.

    5. Plan to improve this current practice of distribution in

    order to increase the sales of the organization in that

    particular area:

    To study the current sales at all SCPs and what are the problems

    and any recommendations to increase the sales of the organization

    at that particular area.

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    NEED OF THE PROJECT

    The basic need of this project is to understand the current stock carrying

    arrangements and provide a plan to improve it.

    One of the ideas behind this project is to know the proper distribution of theproducts in the region.

    Similarly, this project will help us understand the Route detail.

    The system of delivery in the particular region.

    Analyze the difficulties that arise in part of the wholesale dealers, StockCarrying Points and the Direct Sales Force.

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    SCOPE OF THE PROJECT

    For the fulfillment of the Project, the study is conducted in the various areas of Delhi.

    This includes five stock carrying points (SCP). They are:

    Malviyanagar Khanpur mahipalpur Gurgaon Noida.

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    PROFILE OF THE

    ORGANIZATION

    INCEPTION OF THE INDUSTRY

    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

    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

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    witnessed the beginnings of a corporate transformation that would usher in momentous

    changes in the life of the Company.

    ITC's Packaging & Printing Business Division 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 1985, ITC set up Surya Tobacco Co. in Nepal as an Indo-Nepal and British

    joint venture. Since inception, ITC, British American Tobacco and various independent

    shareholders in Nepal have held its shares. In August 2002, Surya Tobacco became a

    subsidiary of ITC Limited and its name was changed to Surya Nepal Private Limited

    (Surya Nepal).

    Also in 1990, leveraging its agri-sourcing competency, ITC set up the

    International Business Division (IBD) for export of agri-commodities. The Division is

    today one of India's largest exporters. ITC's unique and now widely acknowledged e-

    Choupal initiative began in 2000 with Soya farmers in Madhya Pradesh. Now it extends

    to 9 states covering over 3.5 million farmers. ITC's first rural mall, christened 'Choupal

    Saagar' was inaugurated in August 2004 at Sehore. The year 2006 witnessed the ramping

    up of the Company's rural retailing network with 12 'Choupal Saagars' being operational

    in three states of Madhya Pradesh, Maharashtra and Uttar Pradesh. Eight more 'Choupal

    Saagars' are in an advanced stage of construction and will be launched shortly.

    ITC also entered the Lifestyle Retailing business with the Wills Sport range of

    international quality relaxed wear for men and women in 2000. The Wills Lifestyle chain

    of exclusive stores later expanded its range to include Wills Classic formal wear (2002)

    and Wills Club life evening wear (2003). ITC also initiated a foray into the popular

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    segment with its men's wear brand, John Players, in 2002. In December 2005, ITC

    introduced Essenza Di Wills, an exclusive line of prestige fragrance products, to select

    'Wills Lifestyle' stores. In 2006, Wills Lifestyle became title partner of the country's most

    premier fashion event - Wills Lifestyle India Fashion Week - that has gained recognition

    from buyers and retailers as the single largest B-2-B platform for the Fashion Design

    industry.

    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 June 2002 ITC entered the confectionery, staples and snack foods

    segments. In just five years, the Foods business has grown to a significant size with 100

    differentiated products, six distinctive brands, an enviable distribution reach, a rapidly

    growing market share and a solid market standing.

    In 2002, ITC's philosophy of contributing to enhancing the competitiveness of the

    entire value chain found yet another expression in the Safety Matches initiative. ITC

    now markets popular safety matches brands like iKno, Mangaldeep, VaxLit, Delite and

    Aim.

    ITC's foray into the marketing ofAgarbattis (incense sticks) in 2003 marked the

    manifestation of its partnership with the cottage sector. ITC'spopular agarbattis brands

    include Spriha and Mangaldeep across a range of fragrances like Rose, Jasmine,

    Bouquet, Sandalwood, Madhur, Sambrani and Nagchampa.

    ITC is one of India's foremost private sector companies with a market

    capitalisation of nearly US $ 19 billion and a turnover of over US $ 5.1Billion. ITC is

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    rated among the World's Best Big Companies, Asia's 'Fab 50' and the World's Most

    Reputable Companies by Forbes magazine, among India's Most Respected Companies by

    BusinessWorld and among India's Most Valuable Companies by Business Today. ITC

    ranks among India's `10 Most Valuable (Company) Brands', in a study conducted by

    Brand Finance and published by the Economic Times. ITC also ranks among Asia's 50

    best performing companies compiled by Business Week.

    ITC has a diversified presence in Cigarettes, Hotels, Paperboards & Specialty

    Papers, Packaging, Agri-Business, Packaged Foods & Confectionery, Information

    Technology, Branded Apparel, Personal Care, Stationery, Safety Matches and other

    FMCG products. While ITC is an outstanding market leader in its traditional businesses

    of Cigarettes, Hotels, Paperboards, Packaging and Agri-Exports, it is rapidly gaining

    market share even in its nascent businesses of Packaged Foods & Confectionery, Branded

    Apparel, Personal Care and Stationery.

    As one of India's most valuable and respected corporations, ITC is widely

    perceived to be dedicatedly nation-oriented. Chairman Y C Deveshwar calls this source

    of inspiration "a commitment beyond the market". In his own words: "ITC believes that

    its aspiration to create enduring value for the nation provides the motive force to sustain

    growing shareholder value. ITC practices this philosophy by not only driving each of its

    businesses towards international competitiveness but by also consciously contributing to

    enhancing the competitiveness of the larger value chain of which it is a part."

    ITC's diversified status originates from its corporate strategy aimed at creating

    multiple drivers of growth anchored on its time-tested core competencies: unmatched

    distribution reach, superior brand-building capabilities, effective supply chain

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    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 voluntarily seek a corporate governance rating.

    ITC employs over 25,000 people at more than 60 locations across India. The

    Company continuously endeavors to enhance its wealth generating capabilities in a

    globalising environment to consistently reward more than 3,76,000 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."

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    NATURE OF BUSINESS

    FMCG1. Cigarettes2. Foods3. Lifestyle Retailing4. Greeting, Gifting and Stationary.5. Safety Matches and6. Agarbattis7. Personal care

    HOTELS PAPER BOARDS AND PACKAGING

    1. Paper boards and specialty papers.2. Packaging

    AGRI BUSINESS1. Agri commoditiese-Choupal2. Leaf Tobbacco

    INFORMATION TECHNOLOGY GROUP OF COMPANIES

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    ORGANIZATIONAL CHART

    ITC employs over 29,000 people at more than 60 locations across India. The Company

    continuously endeavors to enhance its wealth generating capabilities in a globalising

    environment to consistently reward more than 4,95,000 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."

    ITC is a board-managed professional company, committed to creating enduring value for

    the shareholder and for the nation. It has a rich organisational culture rooted in its core

    values of respect for people and belief in empowerment. Its philosophy of all-round valuecreation is backed by strong corporate governance policies and systems.

    Flowing from the philosophy and core principles, Corporate Governance in ITC

    shall take place at three interlinked levels, namely -

    Strategic supervision by the Board of Directors

    Strategic management by the Corporate Management Committee

    Executive management by the Divisional Chief Executive assisted

    by the Divisional Management Committee

    It is ITC's belief that the right balance between freedom of management

    and accountability to shareholders can be achieved by segregating

    strategic supervision from strategic and executive management. The Board

    of Directors (Board) as trustees of the shareholders will exercise strategic

    supervision through strategic direction and control, and seek

    accountability for effective strategic management from the Corporate

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    Management Committee (CMC). The CMC will have the freedom, within

    Board approved direction and framework, to focus its attention and

    energies on the strategic management of the Company. The Divisional

    Chief Executive, assisted by the Divisional Management Committee, will

    have the freedom to focus on the executive management of the divisional

    business.

    The 3-tier governance structure thus ensures that:

    (a) Strategic supervision (on behalf of the shareholders), being free from involvement

    in the task of strategic management of the Company, can be conducted by the Board

    with objectivity, thereby sharpening accountability of management.(b) Strategic management of the Company, uncluttered by the day-to-day tasks of

    executive management, remains focused and energized; and(c) Executive management of the divisional business, free from collective strategic

    responsibilities for ITC as a whole, gets focused on enhancing the quality, efficiency

    and effectiveness of its business.

    ITCs corporate strategies are:

    Create multiple drivers of growth by developing a portfolio ofworld-class businesses that best matches organisational capabilitywith opportunities in domestic and export markets.

    Continue to focus on the chosen portfolio of FMCG, Hotels, Paper,Paperboards & Packaging, Agri Business and Information

    Technology.

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    Benchmark the health of each business comprehensively across thecriteria of Market Standing, Profitability and Internal Vitality.

    Ensure that each of its businesses is world class and internationallycompetitive.

    Enhance the competitive power of the portfolio through synergiesderived by blending the diverse skills and capabilities residing in

    ITCs various businesses.

    Create distributed leadership within the organization by nurturingtalented and focused top management teams for each of the

    businesses.

    Continuously strengthen and refine Corporate Governance processes and systems to

    catalyze the entrepreneurial energies of management by striking the golden balance

    between executive freedom and the need for effective control and accountability.

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    BUSINESS OPERATIONS FROM

    NATIONAL/GLOBAL POINT OF VIEW

    As one of India's most valuable and respected corporations, ITC is widely perceived to be

    dedicatedly nation-oriented. Chairman Y C Deveshwar calls this source of inspiration "a

    commitment beyond the market". In his own words: "ITC believes that its aspiration to

    create enduring value for the nation provides the motive force to sustain growing

    shareholder value. ITC practices this philosophy by not only driving each of its

    businesses towards international competitiveness but by also consciously contributing to

    enhancing the competitiveness of the larger value chain of which it is a part.

    ITC's diversified status originates from its corporate strategy aimed at creating

    multiple drivers of growth anchored on its time-tested core competencies: unmatched

    distribution reach, superior brand-building capabilities, effective supply chain

    management and acknowledged service skills in hotelier. Over time, the strategic forays

    into new businesses are expected to garner a significant share of these emerging high-

    growth markets in India.

    PRODUCTS/SERVICE PROFILE

    ITC has a diversified presence in Cigarettes, Hotels, Paperboards & Specialty

    Papers, Packaging, Agri-Business, Packaged Foods & Confectionery, Information

    Technology, Branded Apparel, Greeting Cards, Safety Matches and other FMCG

    products. While ITC is an outstanding market leader in its traditional businesses of

    Cigarettes, Hotels, Paperboards, Packaging and Agri-Exports, it is rapidly gaining market

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    share even in its nascent businesses of Packaged Foods & Confectionery, Branded

    Apparel and Greeting Cards.

    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 $ 2.4 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 production facilities and hotels have won numerous national and international

    awards for quality, productivity, safety and environment management systems. ITC was

    the first company in India to voluntarily seek corporate governance rating.

    FMCG:

    ITC Ltd seeks to aggressively scale up the FMCG initiatives and expand the portfolio

    including entry into the Home and Personal Care market. This is sought to be achieved

    through a combination of synergistic investments in brand building and further

    enhancement of supply chain and sales and distribution capabilities. These interventions

    combined with your Companys state-of-the-art information technology transaction

    backbone and the e-Choupal rural distribution network, provide the basis of a low cost,

    broadband fulfillment capability for consumer products. Over the medium to long term,

    these initiatives are expected to provide the basis for sustainable growth in shareholder

    value by establishing the company as the leading FMCG player in the country.

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    FMCG-Cigarettes:

    The Company's uncompromising commitment to providing superior value to consumers

    through world-class products helped in sustaining its leadership position in the cigarette

    industry. The strategy of value addition yielded an impressive performance during the

    year with cigarette sales volumes posting a growth of over 7% during the year.

    In line with the Company's mantra of continuous and consistent offering of value added

    world-class products to the Indian consumer, a unique IT-enabled 'Six Sigma' based

    product development process was implemented during the year. This strategic

    intervention enabled the launch of several key initiatives across the brand portfolio in

    terms of pack modernisation, limited edition offerings in different flavours and the

    introduction of 'Silk Cut' in the King Size and Regular Filter formats. The success of

    these initiatives is evidenced by the significant enhancement of the Company's market

    standing in the Premium categories and higher market shares in all segments in key

    competitive markets across the country. In keeping with the policy of maintaining global

    standards across the value chain, the business continued to induct state-of-the-art and

    cutting-edge technology in its manufacturing facilities such as high speed cigarette

    making and packing machines, round corner / beveled edge packers and automatic filter

    feed systems. The cause for concern, however, remains the severe taxation and regulatory

    milieu for cigarettes in India. Cigarettes continue to be discriminated against cheaper and

    revenue inefficient tobacco products like bidis and chewing tobaccos. Excise duty rates

    on cigarettes were increased for the second successive year. However, while duty rates on

    cigarettes went up in excess of 6% in the Union Budget 2007,the same were left

    unchanged in respect of most of the other tobacco products. Moreover, with effect from

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    1st April 2007, cigarettes have been brought under the ambit of Value Added Tax by the

    States at a rate of 12.5% on invoice price, without a reduction/set off in excise duties

    collected in lieu of State level sales tax.

    Branded Packaged Foods:

    The Branded Packaged Foods business continued to expand rapidly with sales recording

    an impressive growth of 51% over the previous year. The range of offerings now

    comprises more than 150 distinct food products under 6 brands. In terms of consumer

    spend 'Aashirvaad' and 'Sunfeast' have both become five hundred crore rupee brands

    within a short span of time. The year marked the Company's foray into the fast growing

    organised Salty Snacks market with the launch of the 'Bingo!' range of potato chips and

    finger snacks. The launch, initially comprising 16 highly innovative and differentiated

    flavours, is backed by extensive market research leading to crafting of products/variants

    customised for the Indian palate. Initial consumer response has been very encouraging.

    Sales in the Biscuit category grew by 55% over the previous year. The 'Sunfeast' range

    stood further expanded with the launch of 'Sunfeast Special' biscuits in select markets in

    the fast growing mid-price creams segment and the extension of mid-price cookies to

    target markets. The year also saw the launch of 3 exciting variants in the premium creams

    segment and the 'FIT KIT' range of products endorsed by Sachin Tendulkar in two unique

    variants. On the manufacturing front, the business expanded its production capacity by

    adding facilities in two more locations. Product mix continued to improve on the back of

    enhanced sales of value added products like Creams, Cookies etc. which aided, albeit

    only partially, in neutralising the impact of an unprecedented increase in input costs.

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    In the Staples category, 'Aashirvaad Atta' grew from strength to strength with impressive

    gains across each region. The brand now commands a 52% market share amongst

    national branded players and is the clear market leader in most major markets.

    'Aashirvaad Select', the Company's premium atta offering, which was extended to target

    markets during the year met with very good consumer response. The business also scaled

    up the branded spices volumes under the 'Aashirvaad' brand, leveraging the brand's

    strong association with superior quality and consistency.

    In the Confectionery category, the 'Candyman' and 'Mint-o' brands registered strong

    growth with sales growing by nearly 51% over the pervious year driven by 'Eclairs',

    'Cofitino' and the new variants launched during the year viz. 'Natkhat Mango' and 'Maha

    Mango'. The business added incremental capacity during the year to meet the enhanced

    business volumes. Product portfolio was further expanded in the Ready-to-Eat segment

    with the introduction of 12 new products in the domestic market under the 'Kitchens of

    India' (KOI) banner. Exports of KOI products were scaled up during the year. The brand

    is now available in USA, UK, Switzerland, Canada, Australia and Germany. The

    availability of KOI products stood significantly enhanced in leading US retail chains

    providing a strong platform for future growth. Product range in the Pasta segment was

    also augmented with the launch of 'Sunfeast Benne Vita' in four innovative variants.

    Lifestyle Retailing:

    The market standing of the Company's Lifestyle Retailing business stood significantly

    enhanced on the back of an impressive 52% growth during the year under review in both

    the premium and popular segments. The export segment also registered strong growth

    during the year. In the premium segment, the business continued to expand consumer

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    franchise with strong sales growth across its portfolio, viz. the 'Classic' range of formal

    wear, 'Wills Sport' relaxed wear and 'Wills Clublife' evening wear. The brand's

    association with high fashion and premium imagery stood reinforced with the resounding

    success of the 'Wills Lifestyle India Fashion Week' (WIFW) the country's most

    prestigious lifestyle event. As part of the 'Ramp to Racks' initiative, the business in

    collaboration with some of the leading designers of the country successfully introduced

    the 'Wills Signature' range of designer wear in select 'Wills Lifestyle Stores'. These

    product offerings have met with excellent response from discerning consumers. The

    'Wills Lifestyle' range was further augmented during the year with the extension of

    'Essenza Di Wills', an exclusive line of prestige fragrance; bath and body care products,

    to select 'Wills Lifestyle' stores. The products have met with very encouraging response

    from quality conscious consumers. The business continued to post significant

    improvements in several operating indices such as average realisations,

    footfalls/conversion and sell through rates. The 'Wills Lifestyle' range is currently

    available in over 200 locations through 'exclusive brand outlets' (EBOs) and 'shop-in-

    shops'. In a clear recognition of its enhanced market standing, 'Wills Lifestyle' was

    named a 'Superbrand' by the Superbrand Council of India and honoured with the 'Retailer

    of the Year' award at the Idea Zee Fashion Awards. In the popular 'Youth' segment, 'John

    Players' delivered a strong performance leveraging its youthful and fashionable product

    range and a significantly enhanced presence across target outlets. The celebrity

    association with style icon Hrithik Roshan created high buzz for the brand among its

    youthful target audience, mobilizing high degree of trials and garnering enhanced

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    consumer mind share. The brand continued to earn industry recognition winning the 'The

    Most Admired Fashion Campaign of the Year' at the Images Fashion Awards 2007.

    'John Players' has now established a strong pan-India presence with availability at over

    170 Flagship Stores and 1700 Multi Brand Outlets. The number of 'exclusive brand

    outlets' in which the brand is available doubled during the year with a trebling of the

    associated retail space. The business continued to actively pursue opportunities in the

    Exports arena consolidating the existing customer base and establishing long-term

    partnerships with high potential customers. During the year under review, the business

    established an exclusive manufacturing arrangement with a state-of-the-art unit which,

    coupled with an expanded product portfolio, enabled a threefold increase in export

    turnover.

    Greeting, Gifting & Stationery Business:

    Stationery sales doubled during the year driven by the flagship brand 'Classmate'.

    'Classmate' has become India's leading and most widely distributed notebook brand in a

    relatively short span of time, garnering a share of 16% in the branded segment of the

    market. 'Classmate' offers school and college students a memorable writing experience

    with the superior 'Alfa Plus' paper used in these notebooks, custom manufactured at the

    Company's Bhadrachalam Unit. 'Alfa Plus' is India's first 'Elemental Chlorine Free' (ECF)

    paper with superior whiteness, brightness and smoothness characteristics compared to

    other writing and printing papers in the market. During the year, the business enlarged the

    scale and scope of its 'Classmate Connect' school contact programme. The 'Classmate

    Young Author Contest 2006' covered 5000 schools across 34 cities and reached out to

    200,000 students, making it the largest literary event in the national school calendar.

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    Associated events like the 'Classmate Young Artist Contest 2006' and panel discussions

    with eminent educationists were held in selected cities. In line with its 'Citizen First'

    philosophy the Company contributes Re. 1 towards its rural development initiatives for

    every notebook sold. During the year, the premium stationery brand 'Paperkraft' unveiled

    its new designer range. 'Paperkraft' is targeted at discerning executives and college

    students and is available at all leading modern format stationery stores.

    Safety Matches:ITC's philosophy of creating shareholder value through serving society finds expression

    in the marketing of Safety matches and Incense sticks sourced from small scale and

    cottage sector units.

    The Safety Matches business recorded robust growth during the year through continued

    focus on new product availability. The business gained significantly during the year from

    synergy benefits accruing from the recent acquisition of Wimco Ltd. by Russell Credit

    Ltd., a wholly owned subsidiary of ITC. Synergies in the form of a stronger combined

    brand portfolio, rationalisation of sales & distribution, supply chain efficiencies,

    improved servicing of proximal markets, freight optimisation, greater access to better

    quality critical raw materials etc. have resulted in significantly enhanced market standing.

    The business continues to support the small-scale sector through technical and

    management inputs to improve their product quality and processes. Progress was made

    on the export front with initial shipments to certain African markets.

    Implementation of a uniform taxation policy with a view to providing a level playing

    field to all manufacturers would enable investments towards modernising this industry.

    This would not only help the industry in improving its global competitiveness but also

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    provide a safer working environment for the large number of people engaged in this

    industry.

    Incense Sticks (Agarbattis):

    Market standing of the Mangaldeep brand of incense sticks (agarbattis) stood further

    strengthened with sales recording robust growth during the year driven by improved

    distribution reach and the launch of 11new products (7 at regional level and 4 at national

    level). During the year, the Mangaldeep brand was also exported to 11 countries

    including USA and South Africa. The business also commenced exports of incense sticks

    sourced from units in the small-scale and cottage sector leveraging the marketing

    services.

    In pursuance of its abiding social commitment, ITC continues to partner with

    small and medium enterprises to help them raise their quality and process standards. Six

    agarbattis manufacturing units have received ISO 9001:2000 certification till date, a

    pioneering effort in the incense sticks industry, aided by process and technical inputs

    from ITC. The support provided by the business also enabled one of its suppliers to

    obtain membership of the International Fair Trade Association, Netherlands. The

    business continued its collaboration with various NGOs in Bihar, Karnataka, Pondicherry

    and Tamil Nadu to provide vocational opportunities to rural youth and economically

    disadvantaged women in keeping with the Companys commitment to the triple bottom

    line. Sourcing from Khadi and Village Industries Commission (KVIC) approved units

    continued during the year.

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    COMPETITORS

    Cadburrys Priyagold Britannia Perfetti Nestle Frito-Lay Parle Godfrey Philip of India (GPI) and Other local brands.

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    FUTURE PROSPECT AND GROWTH

    VISION:

    Sustain ITCs position as one of Indias most valuable corporations through world class

    performance, creating growing value for the Indian economy and the Companys

    stakeholders.

    MISSION:

    To enhance the wealth generating capability of the enterprise in a globalising

    environment, delivering superior and sustainable stakeholder value.

    Multiple drivers of growth anchored on its time-tested core

    competencies:

    Unmatched distribution reach Superior brand-building capabilities Effective supply chain management

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    RESEARCH METHODOLOGY

    The idea behind this Project is to understand the current distribution system in New Delhi

    and to make it more effective so as to increase the sales in the respective region. For this

    purpose, survey was conducted in various parts of New Delhi.

    DATA COLECTION METHOD

    Secondary data

    Distribution ProcessSupply chain should be cost effective. This can be achieved by elimination of middlemento avail cheap product to the consumers. So the best way in case of FMCG goods isthrough retail channel or Big institutions.ITC has multichannel distribution in which the fmcg goods are distributed viaRetailer/Wholesaler/Institutional.

    How it happens?Each state has a warehouse which is located close to the market. In states where there ishuge volume of sales, the number of warehouse can be more than one. The aim of ITC is

    to reduce distribution cost which is achieved by disposing goods in big trucks in one goto avoid wastage of time, cost, truck handling charges and effort, loading unloading cost,sales tax etc..From warehouse( Hub) , the goods are broken in different lots and sent to Distributers,Wholesalers and retailers and from there to the smaller stockist who will ensure itsavailability in remote areas.

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    In case ofBig Categories the wholesalers may require huge lots in 5-7 days .Theyneed so much Goods that , distribution takes place directly from Factory to wholesaler toensure timely replenishment of stocks, effectiveness, reduce cost, reduce time, loadingunloading cost etc..

    If some distributors also need the stocks frequently within 6-7 days due to large volumesales, the goods are distributed directly from the factory to the Distributor.

    For Small Categories: For small categories who may need less quantity i.e one truckin a month for all products in FMCG category, there are warehouses in each region. Now,four kind of Product will come from four different factories to the warehouse. Fromwarehouse a mix and match of those product is made based on requirement and sent .Thiswill ensure that the stocks being supplied are fresh in each area of that region

    DISTRIBUTION CHANNELS IN ITC

    Trade

    Channel

    Organized

    Retail ITD

    E- Chaupal

    ConventionalChannel of

    Distribution

    COCO

    COFO

    VDP&

    Rural retail

    channel

    Channels

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    Multichannel Distribution:

    ITC uses different channels to reach same or different market segments.

    Vertical Marketing Channel:

    ITC, DISTRIBUTOR, WHOLESALER. RETAILER, PANWALAS, MALLS,

    SMALL RETAILERS: All are used for:

    Same product but different market segments

    Different products with different market segments

    Act as unified system

    Ensure operating efficiency and marketing effectiveness

    Channel Format:

    Producer driven: Effort of ITC to reach its products to consumers/customers

    COCO, Franchisees, Licensed outlets, Company contracted distributer

    Seller Driven: Use of existing channel to use large number of end users.

    ITC does it through existing wholesale retailer, modern retail formats, speciality

    stores, discount stores, hypermarkets etc

    Channel Levels: 3 or 4

    Intensity of Distribution:

    Intensive

    DistributionSelective Distribution Exclusive

    Distribution

    In case of PersonalCare Products, Foodproducts, Cigarettes,Aggarbatti, safety

    matches, stationary

    John PlayersMiss PlayersPaper board &packaging

    Wills Lifestyle

    ITC hotels

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    OUTBOUNDLOGISTIC

    Mode Of Supply :

    By companys own auto,matador,van and three wheelers.

    Order Processing :

    Order processing is done by Dealers Salesman(D.S) once in a week to a particular beat

    and next day the order is delivered to retailer.

    Transit Time :

    It usually takes 24 hours but often vary according to situation.

    Coverage :

    Convenience Duty Free Cluster Grocery

    Average 40-35 outlets are covered by one D.S everyday. The service norms at present for

    coverage is at least once a week.D.S takes order then billing work is done and after then

    goods are delivered to the retailers and wholesalers by stockiest vehicle.

    D.S collects orders from the retailers and after the delivery of goods collects the payment.

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    Frequency of supply:

    Once a week.

    Payment Terms:It depends upon the outlet position,goodwill reputation and the weekly sale of the

    goods.Generally they gave 7 days credit to the retailer.

    After Sale Service:

    All D&D stocks whether they are manufacturing defect, market defect, expiry product

    and the rat bitten goods are replaced as soon as possible.

    Report and feedback:

    DS submit the daily beat report for individual retailer.DS submits the weekly sales report

    to the company.

    Supply structure :

    a)[NTD]

    Factory

    Hub

    Ware Service Provider

    Wholesaler Dealer

    Retail/Wholesale

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    General trade & Modern trade

    Consumer

    b)[TD]

    Factory

    Ware Service Provider

    Wholesaler Dealer

    Retail/Wholesale

    Consumer

    * NTDNon Tobacco division

    * TD - Tobacco division

    Godown norms:

    Keep goods in a proper manner. Keep the warehouse clean and tidy. Damaged goods kept in separate area. Follow FIFO. Handle cartoons carefully

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    FINDINGS & ANALYSISs

    In New Delhi there are many stock carrying points (SCP) all of them gets the

    supply of their products, (i.e. Cigarettes and food which includes biscuits, safety

    matches, incense sticks, ready to make foods, aashirwad salt and flour, and other

    confectionary items) from one Whole sale dealer (WD). This WD gets their

    products two times in a month, from the company, which fulfil the demand for the

    whole month in there region. WD owns one go down to keep the stock also the

    supply of the products in the city itself is fulfilled by the WD. WD also owns one

    delivery van to deliver the products to all the Secondary Wholesale Distributor

    (SWD). In return the WD gets 2% of the sales as the commission.

    MALVIYANAGAR

    Name of the SWD: Shambhu Sharma Average Sales of around Rs 1,00,00,000 per month for foods and

    1,25,00,000 for cigarettes.

    There are ten sales people working in the area to take the order from allthe selling points and then deliver goods to them. There work also

    includes checking that the products are properly displayed to the counters,

    they are also liable to convey the problems of the retail counters to the

    company and to pick the damaged and destructed (D/D) products from the

    market.

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    Sales people are provided with 1 Auto rickshaw, tempo to deliver theproduct to the retail counters.

    Sales people are not covering their routes on which they are required togo.

    There are lots of D/D products are in the market. There is almost no product rotation in the market.

    Stock was short of

    Marie lite 171 gms. Dark Fantasy 150 gms. Candy Jumbo jar Gulab Jamun Mango/ Elachi / Bourbon biscuits. Snacky Chilly 100 gms. and Snacky Salted 70 gms.

    SWD places its order on every Sunday and it gets the supply on Monday. SWD receives 2% of sales as the commission from the WD.

    Mahipalpur

    Name of the SWD: Madan Mohan Agrawal Average Sales of around Rs. 2,00,00,000 per month for foods and

    2,10,00,000 for cigarettes.

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    There are fifteen sales person working in the area to take the order from allthe selling points and then deliver goods to them. There work also

    includes to check that the products are properly displayed to the counters,

    they are also liable to convey the problems of the retail counters to the

    company and to pick the damaged and destructed products (D /D) from the

    market.

    Sales people are provided with Auto rickshaw, tempo to deliver theproduct to the retail counters.

    There is proper communication between the SWD and the sales personworking over there.

    Almost no D/D is there in the market. There was proper product rotation. Also the product was properly displayed in the retail counters.

    Stock was short of

    Marie lite 200 gms. Dark Fantasy 150 gms. Mango/ Elachi / Bourbon biscuits. Chocolate 75 gms Cashew 250 gms. Pasta mix

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    SWD places its order on every Thursday and and it gets the supply onFriday.

    SWD receives 2% of sales as the commission from the WD.

    Khanpur

    Name of the SWD: Neeraj Agrawal Average Sales of around Rs 50,00,000 per month for foods and

    1,00,00,000 for cigarettes.

    There are 14 sales people working in the area to take the order from all theselling points and then deliver goods to them. There work also includes

    checking that the products are properly displayed to the counters, they are

    also liable to convey the problems of the retail counters to the company

    and to pick the damaged and destructed products (D /D) from the market.

    Sales people are provided with Auto rickshaw and DCM to deliver theproduct to the retail counters.

    There are lots of local competitors due to which the sales men are facingproblem to establish the companies product.

    Competitive brands are offering good margins to the retail counters todisplay and to sell their projects.

    Stock was short of

    Marie lite 200 gms Mango/ Elachi / Bourbon biscuits.

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    There is proper communication between the SWD and the sales personworking over there.

    Almost no D/D is there in the market. There was proper product rotation. Also the product was properly displayed in the retail counters.

    Stock was short of

    Marie lite 200 gms. Dark Fantasy 150 gms and 300gms Mango/ Elachi / Bourbon biscuits. Strawberry 100gms Chocolate 75 gms Cashew 250 gms. Pasta mix

    SWD places its order on every Sunday and Wednesday and and it gets thesupply on Monday and Thursday.

    SWD receives 2% of sales as the commission from the WD.Noida

    Name of the SWD: Pawan Agrawal Average Sales of around Rs. 1,50,00,000 per month for foods and

    1,00,00,000 for cigarettes.

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    There are ten sales people working in the area to take the order from allthe selling points and then deliver goods to them. There work also

    includes checking that the products are properly displayed to the counters,

    they are also liable to convey the problems of the retail counters to the

    company and to pick the damaged and destructed products (D /D) from the

    market.

    Due to fewer sales there is less rickshaw and auto provided to the SWD. Products are not in the market. They are not displayed properly.

    Stock is short of

    Marie lite 200 gms. Mango/ Elachi / Bourbon biscuits. Chocolate 75 gms Cashew 250 gms.

    There is no fix days of shipment to this SCP as there is no such sale. SWD receives 2% of sales as the commission from the WD.

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    OVERALL OUTCOMES

    Glucose Biscuits is capturing the market. Other Biscuits are attaining much competition in the market. Confectioneries got much competition. Cigarette is the market leader; still competition is growing in this sector. This can be analyzed that cigarettes, glucose biscuits, and matches have

    got high availability in the SWD channel.

    Awareness through Ads. Ads are very attractive. Demand is there for Mint. Brand Silk Cut which is just launched by the company is not very much popular

    among the smokers.

    Nestle confectionery creating a huge competition. In the area like noida and gurgaon they dont understand the brand, they run for

    low price. Thats why there are many local brands which are cheaper and doing

    good.

    Huge market for Glucose, Minto. Growing market for Butter Licks, Khatta Aam. Marie and Sachins Fit Kit is not hitting the market. WD and Retailers are

    complaining of its poor quality. Tough competitor Brittania Marie.

    Agarbatti not having much market as the customers are running after low price.Sale of Mangaldweep (Rs.5/-) is good.

    WD, Retailers want decrease in price rate. They want more schemes.

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    Sweet & SaltLack of awareness, though attracted by 25% off scheme. MatchesGrowing market for AIM, Deer and tiger. Low market for HomeLight. Quality of Salesman is not much communicative. Their main aim is to sell cig.

    Awareness is required to be given to the WD, Retailers.

    Salesmans view: Cig. has got no competition, no tough competitor, so they arerunning after selling cig.

    Still some upcoming competitors are giving competition.

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    If we see the overall distribution network of ITC in NCR region it contains 41

    distributors. In north ITC have the 5 branches.

    1. Delhi.2. Jammu.3. Jaipur.4. Saharanpur.5. Lucknow.

    The management hierarchy in the branch is

    Branch manager

    Assistant Branch manager

    Area sales manager

    Area executive

    TSI (Territory sales incharge)

    Supervisor

    Wholesale distributor

    Direct sales representative

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    Whenever the company gets the order of goods the minimum time for the

    payment is 7 days except the case of AATA.

    There are three ways of distribution.

    Distribution

    Retailing Wholesaling Institutional sales

    (Channel sales) (Channel sales) (Big bazaar, Reliance etc.)

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    The Composition:

    Manufacturing Unit-

    Separate for each product line

    Contract manufacturing

    Backward integration

    e-chaupal

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    Storage Hubs

    Store all the products

    Distributors

    Exclusive based on population

    Needs to stock all FMCG products except stationary

    Wholesalers

    Retailers

    Paanwalas -For deepest penetration possible

    Suitability:

    1.Perishable- Short span

    Consumers prefer fresh products

    2 .Lot Size: smaller lot size

    3. Convenience

    4. Waiting time

    5. Product Assortment

    Channel Objective:

    1. Consumer Behaviour -

    Quality conscious

    Convenience goods, needs intensive distribution

    Demands Variety

    Very less waiting time

    2. Company Objectives-

    Reach masses

    Rural penetration

    Diversification

    Competitive advantage

    3. Alternatives- Sell ready to eat products through sweet shops like

    Bikanerwala, Showroom for high end products, E- chaupal for rural marketing

    Features:

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    1. Selection: Distributor is selected based on;

    Infrastructure, Delivery van, Computers, Warehouse, Sales force

    Population based : one distributor per 20-25 thousand

    2. Control: Uses coercive power

    3. Terms and Conditions:

    Price, selling condition, godown condition etc

    Functions:

    1. Manpower

    2. Promotion

    3. Credit

    4. Infrastructure

    5. Stocking

    Role of each members:

    Factories- supply to godowns

    Godowns and Branches1. Manage by C & F agents (getting monthly remuneration).

    2. No rent is paid by ITC.

    3. One branch-60 WD, 5 AMs & 20 Area Executives

    Wholesale distributors (WDs)1. Margin- 2% of sales2. Appoints secondary wholesalers

    Physical distribution:

    Demand estimation- collaborative forecasting ( sales force with dealers) Forecast based on last month sales Production plan made according to the forecasting Delivery to C & F agents within 7 days

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    C & F agents deliver goods to dealers on the basis of office root planFactory C & F agents- Trucks

    CFAs Dealers- small vehicles

    Flow:

    Promotion flows

    No volume discounts to channel members No scope for cash discounts

    Information flow

    Main Information source- wholesalers ITC ERP system

    Financial Transactions:

    Zero day credit policy. Supplies are frozen till clearance of dues. Strict regime due to millions of retailers. Strong bargaining power for the company.

    Benefits:

    No Benefit

    Higher Margins

    No credit, only cash payment

    No freebies, paid vacations, gifts etc

    Very rarely cash gift( linked with performance )

    Value Additions:

    Breaking of lot size at State warehouse

    Mix and match at wholesaler and distributors

    Promotion

    Displays and availability

    Confict and its resolution:

    Existence of both Vertical and Horizontal Conflict .

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    Problems Faced by ITC chain:

    Warehousing1. Absence of bigger/designed warehouses.

    2. B class cities have no warehouses.3. Govt. warehouses more focused on the commodities

    Transportation1. Supply lesser than the demand in most of the market thereby

    pushing the cost up.

    2. Transporters profile skewed towards the small truckowner/Brokers.

    SWOT Analysis ITC:

    ITC is one of India's biggest and best-known private sector companies. In fact it is

    one of the World's most high profile consumer operations. Its businesses and

    brands are focused almost entirely on the Indian markets, and despite being most

    well-known for its tobacco brands such as Gold Flake, the business is now

    diversifying into new FMCG (Fast Moving Consumer Goods) brands in a number

    of market sectors - including cigarettes, hotels, paper, agriculture, packaged foods

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

    Technology, safety matches, incense sticks and stationery. Examples of its

    successful new FMCG products include:

    Aashirvaad - India's most popular atta brand with over 50% market share.It is also present in spices and instant mixes.

    Mint-o - Mint-0 Fresh is the largest cough lozenge brand in India.

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    Bingo! - a new introduction of finger snacks. Kitchens of India - pre-prepared foods designed by ITC's master chefs. Sun feast - is ITC's biscuit brand (and the sub-brand is also used on some

    pasta products)

    Strengths:

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

    For exp. ITC used its experience of transporting and distributing tobacco products

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

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

    its FMCG business.

    ITC is a diversified company trading in a number of business sectors

    including cigarettes, hotels, paper, agriculture, packaged foods and confectionary,

    branded apparel, personal care, greetings cards, Information Technology, safety

    matches, incense sticks and stationery.

    Weaknesses:

    The company's original business was traded in tobacco. ITC stands for Imperial

    Tobacco Company of India Limited. It is interesting that a business that is now so

    involved in branding continues to use its original name, despite the negative

    connection of tobacco with poor health and premature death.

    To fund its cash guzzling FMCG start-up, the company is still dependant upon its

    tobacco revenues. Cigarettes account for 47 per cent of the company's turnover,

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

    ITC's move into FMCG (Fast Moving Consumer Goods) is being subsidised by

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

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

    Opportunities:

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

    be developed using strategies of market development, product development and

    marketing penetration. ITC is moving into new and emerging sectors including

    Information Technology, supporting business solutions.

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

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

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

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

    ITC leverages e-Choupal in a novel way. The company researched the

    tastes of consumers in the North, West and East of India of atta (a popular type of

    wheat flour), then used the network to source and create the raw materials from

    farmers and then blend them for consumers under purposeful brand names such as

    Aashirvaad Select in the Northern market, Aashirvaad MP Chakki in the Western

    market and Aashirvaad in the Eastern market. This concept is tremendously

    difficult for competitors to emulate.

    Threats:

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

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

    in an emerging consumer society that ultimately new products and services will

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    CONCLUSION

    The growth in Cigarettes could be attributed to the selective price increases by the

    company during the quarter to pass on the increase in excise duty coupled with higher

    volumes.

    ITCs revenue growth during the quarter was mainly driven by its Cigarettes and

    Agri businesses while its profitability was driven by an improvement in margins of its

    Cigarettes and Hotels segments.

    Other FMCG products continued to clock robust growth. This was mainly driven

    by the Sun feast brand of biscuits, growth in which was primarily led by consistent

    launch of new products under the brand. The company has been extending the brand on a

    regular basis and Sun feast Dark Fantasy, a dark chocolate and vanilla cream offering

    launched recently in select markets was instrumental in driving the brand sales during the

    quarter. However due to the ongoing investments in the product development and brand

    building exercises, the division continued to clock losses in the quarter.

    In the other FMCG businesses, ITC has been aggressively ramping up its

    operations. The Foods portfolio comprises five brands viz., Aashirvaad, Sun feast,

    Candyman, Mint-O and Kitchens of India and 75 distinct products and over 200 SKUs.

    The company has launched Sun feast Snacky salted crackers in two unique variants viz.,

    Chilli Flakes and Classic Salted. It also forayed into the branded spices market under the

    Aashirvaad brand. Apart from the packaged foods business, the company has also

    expanded its FMCG portfolio to include safety matches, iodised salt and agarbattis.

    Working on these lines, the company acquired a stake in Wimco Limited through Russell

    Credit Limited, a wholly owned investment subsidiary of ITC.

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    Going forward, we expect ITC to continue to record higher sales on the back of

    continued growth in Cigarettes supplemented by growth in hotels and paperboards, paper

    and packaging.

    The Board and employees of ITC are inspired by their vision of sustaining

    position as one of Indias most valuable companies through world-class performance,

    creating enduring value for all stakeholders, including the shareholders and the Indian

    society. Each business within the portfolio is continuously engaged in upgrading strategic

    capability to effectively address the challenge of growth in an increasingly competitive

    market scenario. Effective management of diversity enhances your Companys adaptive

    capability and provides the intrinsic ability to effectively manage business risk. The

    vision of enlarging ITCs contribution to the Indian economy is manifest in the creation

    of unique business models that foster international competitiveness of not only its

    businesses but also the entire value chain of which it is a part.

    Inspired by this Vision, driven by Values and powered by internal Vitality, the

    Directors look forward to the future with confidence.

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    LIMITATIONS

    The project was taken as a part of academic curriculum. As the time was limitedso the survey was not confined to the all area of Delhi & NCR.

    This project is entirely based on the sample survey of the markets of Delhi &NCR. It may happen that the other parts of India could come up with different

    kind of facts and figures. But I have given my views under my observations

    according to the survey conducted in DELHI & NCR. So these observations

    might not be free from errors.

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    RECOMMENDATIONS

    Timely and Proper delivery of goods to the Distributor and to the StockCarrying Points.

    Due to improper supply of goods to the Distributors, the SCP fails

    to get the supply due to which Sales get affected, which in turn

    results in switching of customer.

    Additional Racks to certain counters.SCPs in the areas like MALVIYANAGAR and Mahipalpur

    additional racks are required for proper display at certain counters

    which will enhance the sales of ITCs food products.

    Sales promotion at Noida.1. Sponsoring Annual sports meet.2. Conducting various education programmes.3. Distributing free samples in schools, shops.4. Bringing awareness about the products.

    Monitoring of sales person by Sales Supervisor & Stockiest especially atMalviyanagar.

    Proper vigilance on sales persons can be done through regular

    visits in these particular areas by Supervisor and Stockiest.

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    BIBLOGRAPHY

    Sites visited:www.itcportal.com

    Annual Report of ITC Ltd.

    http://www.itcportal.com/http://www.itcportal.com/http://www.itcportal.com/