Marketing strategies of ITC Ltd

INTRODUCTION OF MARKETING Marketing is the link between a societys material requirements and its economic patterns of response. Marketing satisfies these needs and wants through exchange processes and building long term relationships. The process of communicating the value of a product or service through positioning to customers. Marketing can be looked at as an organizational function and a set of processes for creating, delivering and communicating value to customers, and managing customer relationships in ways that benefit the organization and its shareholders. Marketing is the science of choosing target markets through market analysis and market segmentation, as well as understanding consumer buying behavior and providing superior customer value. There are five competing concepts under which organizations can choose to operate their business; the production concept, the product concept, the selling concept, the marketing concept, and the holistic marketing concept. The four
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Marketing strategies of ITC Ltd

components of holistic marketing are relationship marketing, internal marketing, integrated marketing, and socially responsive marketing. The set of engagements necessary for successful marketing management includes, capturing marketing insights, connecting with customers, building strong brands, shaping the market offerings, delivering and communicating value, creating long-term growth, and developing marketing strategies and plans Services marketing relates to the marketing of services, as opposed to tangible products. A service (as opposed to a good) is typically defined as follows: The use of it is inseparable from its purchase (i.e., a service is used and consumed simultaneously).It does not possess material form, and thus cannot be touched, seen, heard, tasted, or smelled. The use of a service is inherently subjective, meaning that several persons experiencing a service would each experience it uniquely. For example, a train ride can be deemed a service. If one buys a train ticket, the use of the train is typically experienced concurrently with the purchase of the ticket. Although the train is a physical object, one is not paying for the permanent ownership of the tangible components of the train. Services (compared with goods) can also be viewed as a spectrum. Not all products are either pure goods or pure services. An example would be a restaurant, where a waiters service is intangible, but the food is tangible. There are several definitions have been proposed for the term marketing. Each tends to emphasize different issues. Memorizing a definition is unlikely to be useful; ultimately, it makes more sense to thinking of ways to benefit from creating customer value in the most effective way, subject to ethical and other constraints that one may have. The 2006 and 2007 definitions offered by the American Marketing Association are relatively similar, with the 2007 appearing a bit more concise. Note that the definitions make several points: Delivering customer value. The central idea behind marketing is the idea that a firm or other entity will create something of value to one or more customers who, in turn, are willing to pay enough (or contribute other forms of value) to make the venture worthwhile considering opportunity costs. Value can be created in a number of different ways. Some firms manufacture basic products (e.g., bricks) but provide relatively little value above that. Other firms make products whose tangible value is supplemented by services (e.g., a computer manufacturer provides a computer loaded with software and provides a warranty, technical support, and software updates). It is not necessary for a firm to physically handle a product to add valuee.g., online airline reservation
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Marketing strategies of ITC Ltd

systems add value by compiling information about available flight connections and fares, allowing the customer to buy a ticket, forwarding billing information to the airline, and forwarding reservation information to the customer. It should be noted that value must be examined from the point of view of the customer. Some customer segments value certain product attributes more than others. A very expensive productrelative to others in the categorymay, in fact, represent great value to a particular customer segment because the benefits received are seen as even greater than the sacrifice made (usually in terms of money). Some segments have very unique and specific desires, and may value whatto some individualsmay seem a lower quality itemvery highly. Some forms of customer value. The marketing process involves ways that value can be created for the customer. Form utility involves the idea that the product is made available to the consumer in some form that is more useful than any commodities that are used to create it. A customer buys a chair, for example, rather than the wood and other components used to create the chair. Thus, the customer benefits from the specialization that allows the manufacturer to more efficiently create a chair than the customer could do himself or herself. Place utility refers to the idea that a product made available to the customer at a preferred location is worth more than one at the place of manufacture. It is much more convenient for the customer to be able to buy food items in a supermarket in his or her neighborhood than it is to pick up these from the farmer. Time utility involves the idea of having the product made available when needed by the customer. The customer may buy a turkey a few days before Thanksgiving without having to plan to have it available. Intermediaries take care of the logistics to have the turkeyswhich are easily perishable and bulky to store in a freezeravailable when customers demand them. Possession utility involves the idea that the consumer can go to one store and obtain a large assortment of goods from different manufacturers during one shopping occasion. Supermarkets combine food and other household items from a number of different suppliers in one place. Certain superstores such as the European hypermarkets and the Wal-Mart super centers combine even more items into one setting. The marketing vs. the selling concept. Two approaches to marketing exist. The traditional selling concept emphasizes selling existing products. The philosophy here is that if a product is not selling, more aggressive measures must be taken to sell ite.g., cutting price, advertising more, or hiring more
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Marketing strategies of ITC Ltd

aggressive (and obnoxious) sales-people. When the railroads started to lose business due to the advent of more effective trucks that could deliver goods right to the customers door, the railroads cut prices instead of recognizing that the customers ultimately wanted transportation of goods, not necessarily railroad transportation.

MEANING OF MARKETING Marketing is the set of human activities directed at facilitating and consummating exchanges. - Phillip Kotler (Marketing Management) Marketing is not only much broader than selling; it is not a specialized activity at all. It encompasses the entire business. It is the whole business seen from the point of view of the final result, that is, from the customers point of view. Concern and responsibility for marketing must therefore permeate all areas of the enterprise. Peter Drucker

Marketing is the process of communicating the value of a product or service to customers. Marketing can sometimes be interpreted as the art of selling products, but selling is only a small fraction of marketing. Marketing satisfy these needs and wants through exchange processes and building long term relationships. The process of communicating the value of a product or service through positioning to customers. Marketing can be looked at as an organizational function and a set of processes for creating, delivering and communicating value to customers, and managing customer relationships in ways that benefit the organization and its shareholders. Marketing is the science of choosing target markets through market analysis and market segmentation, as well as understanding consumer buying behaviour and providing superior customer value. Marketing is any contact that your business has with anyone who isnt a part of your business. Marketing is also the truth made fascinating. Marketing is the art of getting people to change their minds. Marketing is an opportunity for you to earn profits with your business, a chance to cooperate with other businesses in your community or your industry and a process of building lasting relationships.
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Marketing strategies of ITC Ltd

There are five competing concepts under which organizations can choose to operate their business; the production concept, the product concept, the selling concept, the marketing concept, and the holistic marketing concept. Marketing is based on thinking about the business in terms of customer needs and their satisfaction. Marketing differs from selling because (in the words of Harvard Business Schools retired professor of marketing Theodore C. Levitt) Selling concerns itself with the tricks and techniques of getting people to exchange their cash for your product. It is not concerned with the values that the exchange is all about. And it does not, as marketing invariable does, view the entire business process as consisting of a tightly integrated effort to discover, create, arouse and satisfy customer needs. In other words, marketing has less to do with getting customers to pay for your product as it does developing a demand for that product and fulfilling the customers needs. Marketing is the management process responsible for identifying, anticipating and satisfying customer requirements profitably. Marketing is the process of anticipating, managing, and satisfying the demand for products, services, and ideas.

MARKETING MIX A mixture of several ideas and plans followed by a marketing representative to promote a particular product or brand is called marketing mix. Several concepts and ideas combined together to formulate final strategies helpful in making a brand popular amongst the masses form marketing mix. The marketing mix is a business tool used in marketing. The marketing mix is often crucial when determining a product or brands offering, and is often synonymous with the four Ps: price, product, promotion, and place; in service
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marketing, however, the four Ps have been expanded to the seven Ps or eight Ps to address the different nature of services. Elements of Marketing Mix The elements of marketing mix are often called the four Ps of marketing. 1. PRODUCT A product is seen as an item that satisfies what a consumer needs or wants. It is a tangible good or an intangible service. Intangible products are service based like the tourism industry, the hotel industry and the financial industry. Tangible products are those that have an independent physical existence. Typical examples of mass-produced, tangible objects are the motor car and the disposable razor. A less obvious but ubiquitous mass produced service is a computer operating system. Every product is subject to a life-cycle including a growth phase followed by a maturity phase and finally an eventual period of decline as sales falls. Marketers must do careful research on how long the life cycle of the product they are marketing is likely to be and focus their attention on different challenges that arise as the product moves through each stage. The marketer must also consider the product mix. Marketers can expand the current product mix by increasing a certain product lines depth or by increasing the number of product lines. Marketers should consider how to position the product, how to exploit the brand, how to exploit the companys resources and how to configure the product mix so that each product complements the other. The marketer must also consider product development strategies.

2. PRICE The price is the amount a customer pays for the product. The price is very important as it determines the companys profit and hence, survival. Adjusting the price has a profound impact on the marketing strategy, and depending on the price elasticity of the product, often it will affect the demand and sales as well. The marketer should set a price that complements the other elements of the marketing mix. When setting a price, the marketer must be aware of the customer perceived value for the product. Three basic pricing strategies are: market skimming pricing, market penetration pricing and neutral pricing. The reference value
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(where the consumer refers to the prices of competing products) and the differential value (the consumers view of this products attributes versus the attributes of other products) must be taken into account. 3. Place The price is the amount a customer pays for the product. The price is very important as it determines the companys profit and hence, survival. Adjusting the price has a profound impact on the marketing strategy, and depending on the price elasticity of the product, often it will affect the demand and sales as well. The marketer should set a price that complements the other elements of the marketing mix. When setting a price, the marketer must be aware of the customer perceived value for the product. Three basic pricing strategies are: market skimming pricing, market penetration pricing and neutral pricing. The reference value (where the consumer refers to the prices of competing products) and the differential value (the consumers view of this products attributes versus the attributes of other products) must be taken into account. 4. Promotion Promotion represents all of the methods of communication that a marketer may use to provide information to different parties about the product. Promotion comprises elements such as: advertising, public relations, personal selling and sales promotion. Advertising covers any communication that is paid for, from cinema commercials, radio and Internet advertisements through print media and billboards. Public relations is where the communication is not directly paid for and includes press releases, sponsorship deals, exhibitions, conferences, seminars or trade fairs and events. Word-of-mouth is any apparently informal communication about the product by ordinary individuals, satisfied customers or people specifically engaged to create word of mouth momentum. Sales staff often plays an important role in word of mouth and public relations (see product above). Promotion can be through any of the following ways: - Advertising Print media, Television, radio are effective ways to entice customers and make them aware of the brands existence. Billboards, hoardings, banners installed intelligently at strategic locations like heavy traffic areas, crossings, railway
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stations, bus stands attract the passing individuals towards a particular brand. Taglines also increase the recall value of the brand amongst the customers. - Word of mouth One satisfied customer brings ten more customers along with him whereas one dis-satisfied customer takes away ten more customers. Thats the importance of word of mouth. Positive word of mouth goes a long way in promoting brands amongst the customers

Marketing strategies of ITC Ltd

Mission, vision and value

MISSION Our mission is to help our clients maximize the enormous marketing potential of the search engines to fulfil their short term and long term dreams. The mission typically describes what the organization does to achieve its vision. Because the vision is often expressed as a dream or ideal, the mission helps clarify the practical aspects of what the organization will actually do. Most missions emphasize action, using such words as: support, involve, assist, contribute, provide, promote, etc. eg. United Way of Toronto mission: To meet urgent human needs and improve social conditions by mobilizing the communitys volunteer and financial resources in a common cause of caring. The organizations mission must be compatible with its legal purposes and must meet the requirements for notforprofit and (if applicable) charitable status. A good mission statement is concise and precise. It should identify the organizations key stakeholders and set out how the organization will serve them. eg. CNIB (Canadian National Institute for the Blind) mission: To
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enhance independence for people with vision loss and to be the leader in promoting vision health VISION INNOVATION is important in the SEO industry and innovative thinking gets measurable results for our clients. RELIABILITY creates trust, the key to a strong business relationship. Step Forth meets its target deadlines and maintains a consistent record of positive client outcomes. RESPONSIVENESS is another pillar in our vision of good business. This means being available, considerate and flexible enough to meet our clients search marketing needs. We take the challenge of meeting or exceeding our customers expectations very seriously. Since inception, over the last nine years, we have worked hard to build an honest, ethical and responsible company. It is in our character to keep our commitments and to work as hard for our clients as we have for ourselves. A part of our commitment to innovation includes the continued education of our staff through the upgrading of skills and keeping current on the latest industry nether vision sets out what the organization wants to accomplish, and should inspire members, staff and supporters how things would be different as a result of the organizations activities eg. Canadian Cancer Society: Creating a world where no Canadian fears cancer how the organization wants to be seen by others eg. Canadian Institute of Chartered Accountants: We are Canadas most valued, internationally recognized profession of leaders in senior management, advisory, financial, tax and assurance roles Good visions are aspirational. Some are hardtoreach ideals while others are more modest or describe objectives that are achievable in the near future. In either case, the vision helps establish the unique contribution that the organization makes to society. From a practical perspective a vision can be a quick, memorable way to describe the organizations reason for being. This can be valuable in times of crisis when it helps to remember what is really important. The vision and

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mission are often published in the organizations annual reports, brochures and fundraising materials.ws and techniques. Operating Values Ethics: Above all else, Step Forth will provide only legal and ethical services. Relationships: Foster long-lasting, strong, caring relationships with our clients and employees based on honesty and integrity. Success: Provide an intentional environment for the fulfilment of personal and company-wide objectives and goals while enjoying life. Learning: We challenge ourselves regularly by learning new and improved methods of managing our business and maintaining our cutting edge search engine optimization services. Shared values influence everything an organization does, as well as its relationships with stakeholders and its reputation. Values may be expressed as beliefs, guidelines or rules, and may be set out in a code of conduct. A statement of values can provide guidance when tough decisions must be made, for example in allocating scarce resources, or when presented with a donation from a group which may be in compatible with the organizations mission. The values, mission and vision are key elements of a notforprofit organizations strategic planning process, and will guide the development and delivery of program services and activities.

SEGMENTATION, POSITIONING AND TARGET

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Marketing strategies of ITC Ltd

MARKET SEGMENTATION Market segmentation pertains to the division of a market of consumers into persons with similar needs and wants. For instance, Kelloggs cereals, Frosties are marketed to children. Cornflakes are marketed to adults. Both goods denote two products which are marketed to two distinct groups of persons, both with similar needs, traits, and wants. In another example, Sun Microsystems can use market segmentation to classify its clients according to their promptness to adopt new products. Market segmentation allows for a better allocation of a firms finite resources. A firm only possesses a certain amount of resources. Accordingly, it must make choices (and incur the related costs) in servicing specific groups of consumers. In this way, the diversified tastes of contemporary Western
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consumers can be served better. With growing diversity in the tastes of modern consumers, firms are taking note of the benefit of servicing a multiplicity of new markets. Market segmentation can be defined in terms of the STP acronym, meaning Segment, Target and Position.

MARKET POSITIONING In marketing, positioning is the process by which marketers try to create an image or identity in the minds of their target market for its product, brand, or organization. Re-positioning involves changing the identity of a product, relative to the identity of competing products. De-positioning involves attempting to change the identity of competing products, relative to the identity of your own product. The original work on positioning was consumer marketing oriented, and was not as much focused on the question relative to competitive products as much as it was focused on cutting through the ambient noise and establishing a moment of real contact with the intended recipient. As the process of creating an image for a product in the minds of target customers. Any offer has to have particular characteristics that set it apart from competition in the eyes of the customers. Since positioning is based on customers perceptions, it is only partly within the control of marketers. External developments could change the way customers think about a product. This can be so diverse things like for instance changes in price or characteristics of competing products and substitutes, tests by independent magazines and institutions, new legal requirements, or changes in customers preferences.

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Marketing strategies of ITC Ltd

TARGET MARKET A target market is a group of customers that the business has decided to aim its marketing efforts and ultimately its merchandise towards.[1] A well-defined target market is the first element to a marketing strategy. The target market and the marketing mix variables of product, place(distribution), promotion and price are the four elements of a marketing mix strategy that determine the success of a product in the marketplace.

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Marketing strategies of ITC Ltd

MARKETING ENVIRONMENT The market environment is a marketing term and refers to factors and forces that affect a firms ability to build and maintain successful relationships with customers. Three levels of the environment are: Micro (internal) environment forces within the company that affect its ability to serve its customers. Meso environment the industry in which a company operates and the industrys market(s). Macro (national) environment - larger societal forces that affect the microenvironment.

Marketing Environment Micro The micro marketing environment consists of certain forces that are part of an organisations marketing process, but remain external to the organisation. This micro marketing environment that surrounds organisations can be complex by nature, however the company has an element of control over how it operates within this environment. Marketing helps you to manage and make sense of this complexity. The illustration above summarises the order of the immediate external marketing environment that businesses operate in. Current and Potential Customers Your customers are vital to the growth and sustainability of your company. In order to grow you must locate customers, understand their needs and then satisfy those needs both efficiently and profitably.
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Competitors Your competitors however have the same remit as you when it comes to sourcing and satisfying the needs of the customer. They will make it difficult to liaise with customer groups, as by definition they are largely pursuing the same sets of customers as you. As a marketer, you must therefore not only monitor what competitors are doing in the external marketing environment today, but to also anticipate their likely response to your campaigns and to predict what they will do tomorrow. Intermediaries (Distributors/Wholesalers/Retailers) Your business may require a network of wholesalers, distributors and/or retailer. These intermediaries provide an invaluable service in getting your products to the customer. You must therefore think carefully about how best to distribute your goods and build relationships. This area can be fierce in competition as not everyone can get access to the channels of distribution that they want. Suppliers One other important area to consider in the external marketing environment is your suppliers. A key supplier can be an important part of your business and may even attribute to your competitive advantage. Losing important suppliers can interrupt production flow or your competitive edge and prevent you from getting your product to your customers. Choice of suppliers, negotiation of terms and relationship building all become important tasks of the marketer. The wider marketing environment, discussed in a separate knowledge sheet, covers all other influences that might provide opportunities or threats to the organisation. These include technological development, legal constraints, the economic environment and sociocultural changes. This brief overview of the world in which companies operate in demonstrates that there are many relationships that matter. These need to be managed if the company is to conduct its business successfully. The main responsibility for managing these relationships lies within the marketing department. Marketing Environment Macro

The Micro environment discussed above is controllable but the Macro environment is uncontrollable.

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Marketing strategies of ITC Ltd

Demographic environment: - it includes the life style, income, qualification, age, marital status, sex, family structure etc. so the marketer must have the knowledge about it. Like teenage market, kids market. Economic environment: - it means the purchasing power of the consumer the marketer must have the knowledge about the inflation, changing consumer pattern, real income, low saving etc. Natural environment: - the marketer must have the knowledge about natural resources, their shortage if any, government policies etc. Technological environment:-it is the technology which is changing the life of the people. So the marketer must keep an eye on the changing technology. Political environment: - political stability is very important for the growth of any economy it include the law, government agencies etc. marketing decisions are affected by the political environment. Legal environment: - the marketer must function as per the legal formalities and should not work against them. Cultural environment: - it include the values, beliefs, perceptions of the consumer which also affect the marketing environment. So the marketer must have the knowledge about it. So the marketer cannot always control the environment but whenever possible they can take proactive approach to the marketing environment.

MARKETING RESEARCH Marketing research involves conducting research to support marketing activities, and the statistical interpretation of data into information. This information is then used by managers to plan marketing activities, gauge the nature of a firms marketing environment and attain information from suppliers. Marketing researchers use statistical methods such as quantitative research, qualitative research, tests, Chi, linear
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Marketing strategies of ITC Ltd

regression, correlations, frequency distributions, poisson distributions, binomial distributions, etc. to interpret their findings and convert data into information. The marketing research process spans a number of stages, including the definition of a problem, development of a research plan, collection and interpretation of data and disseminating information formally in the form of a report. The task of marketing research is to provide management with relevant, accurate, reliable, valid, and current information. A distinction should be made between marketing research and market research. Market research pertains to research in a given market. As an example, a firm may conduct research in a target market, after selecting a suitable market segment. In contrast, marketing research relates to all research conducted within marketing. Thus, market research is a subset of marketing research. TYPES OF MARKET RESEARCH Market research, as a sub-set aspect of marketing activities, can be divided into the following parts:

Primary research (also known as field research), which involves the conduction and compilation of research for a specific purpose. Secondary research (also referred to as desk research), initially conducted for one purpose, but often used to support another purpose or end goal.

By these definitions, an example of primary research would be market research conducted into health foods, which is used solely to ascertain the needs/wants of the target market for health foods. Secondary research in this case would be research pertaining to health foods, but used by a firm wishing to develop an unrelated product. Primary research is often expensive to prepare, collect and interpret from data to information. Nevertheless, while secondary research is relatively inexpensive, it often can become outdated and outmoded, given that it is used for a purpose other than the one for which it was intended. Primary research can also be broken down into quantitative research and qualitative research, which, as the terms suggest, pertain to numerical and non-numerical research methods and techniques, respectively. The appropriateness of each mode of research depends on whether data can be quantified (quantitative research), or whether subjective, non-numeric or abstract concepts are required to be studied (qualitative research).
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There also exist additional modes of marketing research, which are:

Exploratory research, pertaining to research that investigates an assumption. Descriptive research, which, as the term suggests, describes what is. Predictive research, meaning research conducted to predict a future occurrence. Conclusive research, for the purpose of deriving a conclusion via a research process.

SWOT ANALYSIS SWOT analysis (alternately SWOT Matrix) is a strategic planning method used to evaluate the Strengths, Weaknesses/Limitations, Opportunities, and Threats involved in a project or in a business venture. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favourable and unfavourable to achieve that objective. The technique is credited to Albert Humphrey, who led a convention at the Stanford Research Institute (now SRI International) in the 1960s and 1970s using data from Fortune 500 companies. Setting the objective should be done after the SWOT analysis has been performed. This would allow achievable goals or objectives to be set for the organization.

Strengths: characteristics of the business, or project team that give it an advantage over others Weaknesses (or Limitations): are characteristics that place the team at a disadvantage relative to others Opportunities: external chances to improve performance (e.g. make greater profits) in the environment Threats: external elements in the environment that could cause trouble for the business or project

Identification of SWOTs is essential because subsequent steps in the process of planning for achievement of the selected objective may be derived from the SWOTs.
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First, the decision makers have to determine whether the objective is attainable, given the SWOTs. If the objective is NOT attainable a different objective must be selected and the process repeated. Users of SWOT analysis need to ask and answer questions that generate meaningful information for each category (strengths, weaknesses, opportunities, and threats) in order to maximize the benefits of this evaluation and find their competitive advantage.

MARKETING STRATEGY OF ITC

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Marketing strategies of ITC Ltd

History about ITC Ltd

ITC was incorporated on August 24, 1910 under the name Imperial Tobacco Company of India Limited. As the Companys ownership progressively Indianite, the name of the Company was changed from Imperial Tobacco Company of India Limited to India Tobacco Company Limited in 1970 and then to I.T.C. Limited in 1974. In recognition of the Companys multi-business portfolio encompassing a wide range of businesses - Cigarettes & Tobacco, Hotels, Information Technology, Packaging, Paperboards & Specialty Papers, Agri-business, Foods, Lifestyle Retailing, Education & Stationery and Personal Care - the full stops in the Companys name were removed effective September 18,2001. The Company now stands rechristened ITC Limited.ITCs Packaging & Printing Business was set up in 1925 as a strategic backward integration for ITCs Cigarettes business. It is today Indias most sophisticated packaging house. In 1975 the Company launched its Hotels business with the acquisition of a hotel in Chennai which was rechristened ITC-Welcomgroup HotelChola. The objective of ITCs entry into the hotels business was rooted in the concept of creating value for the nation. In 1979, ITC entered the Paperboards business by promoting ITC Bhadrachalam Paperboards Limited, which today has become
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Marketing strategies of ITC Ltd

the market leader in India. In 1985, ITC set up Surya Tobacco Co. in Nepal as an Indo-Nepal and British joint venture. In 1990, ITC acquired Tribeni Tissues Limited, a Specialty paper manufacturing company and a major supplier of tissue paper to the cigarette industry. The merged entity was named the Tribeni Tissues Division (TTD). Also in 1990, leveraging its agri-sourcing competency, ITC set up the Agri Business Division for export of agri-commodities. The Division is today one of Indias largest exporters. In 2000, ITC forayed into the Greeting, Gifting and Stationery products business with the launch of Expressions range of greeting cards. A line of premium range of notebooks under brand Paper raft was launched in2002. To augment its offering and to reach a wider student population, the popular range of notebooks was launched under brand Classmate in 2003.In 2008, ITC repositioned the business as the Education and Stationery Products Business and launched Indias first environment friendly premium business paper under the Paper raft Brand. ITC also entered the Lifestyle Retailing business with the Wills Sport range of international quality relaxed wear for men and women in 2000.In 2000, ITC spun off its information technology business into a wholly owned subsidiary, ITC InfoTech India Limited, to more aggressively pursue emerging opportunities in this area. ITCs foray into the Foods business is an outstanding example of successfully blending multiple internal competencies to create a new driver of 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 Candy man confectionery and Aashirvaad attar (wheat flour). 2003 witnessed the introduction of Sun feast as the Company entered the biscuits segment. ITCs entered the fast growing branded snacks category with Bingo! in 2007. In 2002, ITCs philosophy of contributing to enhancing the competitiveness of the entire value chain found yet another expression in the Safety Matchesinitiative. ITCs foray into the marketing of Agarbattis (incense sticks) in 2003marked the manifestation of its partnership with the cottage sector.ITC introduced Essenza Di Wills, an exclusive range of fine fragrances and bath & body care products for men and women in July 2005.

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List of products & brands

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Marketing strategies of ITC Ltd

In FMCG, ITC has a strong presence in:

Cigarettes: W. D. & H. O. Wills, Gold Flake Kings, Gold Flake Premium, Navy Cut, Insignia, India Kings, Classic (Verve, Menthol, Menthol Rush, Regular, Citric Twist, Mild & Ultra Mild), 555, Benson & Hedges, Silk Cut, Scissors, Capstan, Berkeley, Bristol, Lucky Strike, Players and Flake. Foods: (Kitchens of India; Aashirvaad,Minto,Sunfeast,Candyman,Bingo,Yippee, Sun feast Pasta brands in Ready to Eat, Staples, Biscuits, Confectionery, Noodles and Snack Foods); Apparel: (Wills Lifestyle and John Players brands); Personal care: ( Fiama di Wills; Vivel; Essenza di Wills; Superia; Vivel di Wills brands of products in perfumes, hair care and skincare) Stationery: (Classmate and Paper Kraft brands) Safety Matches and Agarbattis: [Ship (through ownership of WIMCO); iKno; Mangaldeep; Aim brands]

Other businesses include:

Hotels: ITCs hotels (under brands including WelcomHotel) have evolved into being Indias second largest hotel chain with over 80 hotels throughout the country. ITC is also the exclusive franchise in India of two brands owned by Sheraton International Inc. - The Luxury Collection and Sheraton which ITC uses in association with its own brands in the luxury 5 star segment. Brands in the hospitality sector owned and operated by its subsidiaries include Fortune and Welcome Heritage brands. Paperboard, Specialty Paper, Graphic and other Paper; Packaging and Printing for diverse international and Indian clientele. InfoTech (through its fully owned subsidiary ITC InfoTech India Limited which is a SEI CMM Level 5 company)

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Objective The primary objective of this study is to systematically explore the determinants responsible for the competitive advantage of ITC Limited and how ITC developed new product lines in its foods business drawing on its competencies in brand-building, R&D, packaging, and distribution. However, market analysts were not sure whether ITC would achieve success in all the food categories that it had entered. Why people are buying the products. What all the things which influences them to buy To understand how ITC has diversified themselves to a multi-product corporation from a single product company

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Marketing strategies of ITC Ltd

Profile ITC LTD

Hotels

Agri Business ITC Ltd

Fmcg
FMCG

infoTech

Cigarettes ITC 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. The Company has been able to build on its leadership position because of its single-minded focus on value creation for the consumer through significant investments in product design, innovation, manufacturing technology, quality, marketing and distribution. All initiatives are therefore worked upon with
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the intent to fortify market standing in the long term. This in turns aids in designing products which are contemporary and relevant to the changing attitudes and evolving socio economic profile of the country. This strategic focus on the consumer has paid ITC handsome dividends.

Foods ITC made its entry into the branded & packaged Foods business in August 2001 with the launch of the Kitchens of India brand. A more broad-based entry has been made since June 2002 with brand launches in the Confectionery, Staples and Snack Foods segments. The Foods business is today represented in 4 categories in the market. These are: Ready to Eat Foods Staples Confectionery Snack Foods

In order to assure consumers of the highest standards of food safety and hygiene, ITC is engaged in assisting outsourced manufacturers in implementing world-class hygiene standards through HACCP certification. The unwavering commitment to internationally benchmarked quality standards enabled ITC to rapidly gain market standing in all its 6 brands:* Kitchens of India Aashirvaad Sun feast Mint-o Candy man Bingo!

Lifestyle Retailing ITCs Lifestyle Retailing Business Division has established a nationwide retailing presence through its Wills Lifestyle chain of exclusive specialty stores. Wills Lifestyle, the fashion destination, offers a tempting choice of Wills
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Marketing strategies of ITC Ltd

Classic work wear, Wills Sport relaxed wear, Wills Club life evening wear, fashion accessories and Essenza Di Wills an exclusive range of fine fragrances and bath & body care products and Fiama Di Wills - arrange of premium shampoos and shower gels. Wills Lifestyle has also introduced Wills Signature designer wear, designed by the leading designers of the country. Wills Classic work wear was launched in November 2002, providing the premium consumer a distinct product offering and a unique brand positioning.ITC forayed into the youth fashion segment with the launch of John Players in December 2002 and John Players is committed to be the No. 1 fashion brand for the youth. Education & Stationary products ITC made its entry into the stationery business in 2002 with its premium range of notebooks, followed in the year 2003 with the more popular range to augment its offering. ITCs stationery Brands are marketed as Classmate and Paper raft, with Classmate addressing the needs of school goers and Paper raft targeted towards college students and executives. Agarbattis As part of ITCs business strategy of creating multiple drivers of growth in the FMCG sector, the Company commenced marketing Agarbattis (incense sticks) sourced from small-scale and cottage units in 2003.

Hotels ITC entered the hotels business in 1975 with the acquisition of a hotel in Chennai, which was then rechristened ITC Chola. Since then the ITC-Welcome group brand has become synonymous with Indian hospitality. With over 90 hotels in 77 destinations. Packaging ITCs Packaging & Printing Business is the countrys largest convertor of paperboard into packaging. It converts over 50,000 tonnes of paper and paperboard per annum into variety of value-added packaging solutions for the food & beverage, personal products, cigarette, liquor, cellular phone and IT packaging industries. It has also entered the Flexibles and Corrugated Cartons business.

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Marketing strategies of ITC Ltd

Agri Business E-Choupal The unique e-Choupal model creates a significant two-way multi-dimensional channel which can efficiently carry products and services into and out of rural India, while recovering the associated costs through agri-sourcing led efficiencies. This initiative now comprises about 6500 installations covering nearly 40,000 villages and serving over 4million farmers. Leaf Tobacco ITC is the largest buyer, processor and exporter of leaf tobaccos in India creating global benchmark as the single largest integrated source of quality tobaccos. Serving customers in 50 countries across more than 70 destinations, ITC co-creates and delivers value at every stage of the leaf tobacco value chain.

Information Technology ITC InfoTech offers IT services and solutions across five key industry verticals: Banking, Financial Services & Insurance (BFSI), Consumer Packaged Goods (CPG) & Retail, Manufacturing & Engineering Services, Travel, Hospitality & Transportation and Media& Entertainment.ITC InfoTech, a global IT services company, is today one of Indias fastest growing IT services and solutions providers.

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Marketing strategies of ITC Ltd

ITCs Core Values ITCs Core Values are aimed at developing a customer-focused, highperformance organisation which creates value for all its stakeholders: Trusteeship: As professional managers, we are conscious that ITC has been given to us in trust by all our stakeholders. We will actualise stakeholder value and interest on a long term sustainable basis. Customer Focus: We are always customer focused and will deliver what the customer needs in terms of value, quality and satisfaction. Respect For People: We are result oriented, setting high performance standards for ourselves as individuals and teams. We will simultaneously respect and value people and uphold humanness and human dignity. We acknowledge that every individual brings different perspectives and capabilities to the team and that a strong team is founded on a variety of perspectives.

We want individuals to dream, value differences, create and experimenting pursuit of opportunities and achieve leadership through teamwork. Excellence: We do what is right, do it well and win. We will strive for excellence in whatever we do. Innovation: We will constantly pursue newer and better
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Marketing strategies of ITC Ltd

processes, products, services and management practices. Nation Orientation: We are aware of our responsibility to generate economic value for the Nation. In pursuit of our goals, we will make no compromise in complying with applicable laws and regulations at all levels.

BCG Matrix BCG Matrix a.k.a. Growth-Share Matrix, Boston Box, Bosto n M a trix, Boston Consulting Group analysis. Created by Bruce Henderson for the Boston Consulting Group in 1970to help corporations with analyzing their business units or product lines. This helps the company allocate resources and is used as an analytical tool in brand marketing, product management, strategic management, and port Folio analysis.

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Marketing strategies of ITC Ltd

Initiatives taken- Lets put India first ITC is committed to a national agenda of raising agricultural productivity and making the rural economy more socially inclusive. ITC believes that the urgency and scale of these tasks make market linked solutions and innovations more effective and sustainable than capital intensive approaches. Social & farm Forestry ITC has helped to bring nearly 13,000 hectares of wasteland under social forestry benefiting more than 16,000 poor households in 466 villages.ITCs social forestry programme simultaneously addresses the livelihood problems of marginal farmers and the ecological imperative of regenerating biomass and nurturing depleted soils.

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Marketing strategies of ITC Ltd

Watershed Development ITCs watershed initiatives have led to an improvement in soil and moisture regimes there is more land under irrigation, water tables have risen and farmers can harvest more than one crop, making it possible to live off the land round the year. Agricultural Development ITC offers facilitation to farmers to form agri-business societies, pool knowledge and resources, improve productivity and quality, and reach out beyond local markets to sell at better margins. Women Empowerment The confidence and skills generated among women by forming credit groups and managing businesses become assets to their communities. Livestock Development The milk marketing co-operatives represent exemplary change in rural enterprise, away from dependence on agriculture and local markets. Primary Education School going becomes an empowering process for the child and the community. The awareness of entitlements like education and health grows, along with a sense of the communitys responsibility.

Research & Development ITC is committed to delivering world-class products and services. This requires a clear focus on continuously striving to create a higher value to customers by achieving excellence in all Companys operations. Business excellence calls for a passionate focus on technology, products, services, processes and an operating environment firmly anchored to an impregnable foundation of Quality.
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Marketing strategies of ITC Ltd

ITC firmly believes that quality is not a specifically assignable task. It needs to be firmly rooted and institutionalized in the culture and value system of the Company. ITC nurtures a culture of striving for continuous improvement in quality, be it in products, services, systems or performance. The Company is committed to the establishment of systems and processes to promote organisational creativity and innovation. ITCs development of its Integrated Quality Management System (IQMS) is based on its strong foundation of implementing ISO 9001:2000, ISO 14001, OHSAS 18001, SA 8000, HACCP (for Foods) and IQRS(performance rating and benchmarking of the quality management system). Likewise, ITC s strategic initiatives for developing its people have been based on participative management concepts like QC (Quality Control), TQM (Total Quality Management), KSS (Kaizen Suggestion Scheme), 5S, Six Sigma. All ITC manufacturing units have ISO quality certification. Almost all contract manufacturing units in the Foods Business and all large hotels have food safety and quality systems certified by accredited third party in accordance with Hazard Analysis Critical Control Points (HACCP) standards. Additionally, the quality of all FMCG products of the Company is regularly monitored through Product Quality Rating System (PQRS). The Leaf Tobacco and Printing & Packaging businesses have achieved world-class ratings in the International Quality Rating System (IQRS) for business excellence in which key processes
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are rated against international benchmarks and certified by accredited third party independent assurance providers. ITCs Research & Development Centres

At ITCs Research & Development Centres at Bengaluru, Bhadrachalam and Rajahmundry, the Company has assembled a pool of world-class scientists focused on providing the requisite R&D support to its established and new businesses enabling the Company to consistently attain internationally benchmarked quality standards and constantly offer product innovations.

ITC R&D Centre at Bengaluru provides systemized service to the entire range of ITCs businesses through Product Technology Cells, Common Service Modules, Advanced Research Initiatives and networking with national and international R&D centres. Product Technology Cells (PTCs) are product-specific. Each PTC caters to the needs of the businesses through Market Intelligence, Product Testing & PQRS services, Prototyping services through advanced pilot plants, flavour and fragrance development services, periodic audit of factory quality systems and Product Knowledge and Training Workshops.

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Marketing strategies of ITC Ltd

PTCs assist businesses through sensory evaluations by highly trained and specialised panelists. Common service modules like Packaging and Advanced Analytical labs offer their services across all businesses.

ITC R&D Centres are manned by highly qualified and trained scientists specialised in their fields. The labs and pilot plants have ultra modern, state-ofthe-art testing and prototyping facilities. The laboratory at Bengaluru has obtained accreditation from NABL (National Accreditation Board for Testing & Calibration of Laboratories) for ISO 17025 for key testing protocols. ITC Corporate R&D located in Bengaluru undertakes research programs for multiple ITC businesses built on a common set of core competencies. The initial sets of core competency areas identified are: Plant Breeding and Genetics, Agronomy, Microbiology, Molecular Biology, Silviculture, Cell Biology, Proteomics, Genomics, Biochemistry and Ingredient Sciences. The facility aims to create Centres of Excellence in these areas.

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Marketing strategies of ITC Ltd

ITCs R&D programme at Bhadrachalam is the core of the Companys fibre strategy for its Paperboards and Specialty Papers business. This state-of-the-art research centre is consistently striving to improve the productivity of several tree species, in order to give attractive land-use alternatives to traditional farmers and wasteland owners. So far, more than100 high-yielding, fastgrowing and disease resistant Bhadrachalam clones have been produced on a commercial scale, including 23 site-specific clones adapted to problematic soils. The productivity of these saplings is 6-9 times that of normal seedlings.

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Marketing strategies of ITC Ltd

ITCs comprehensive R&D facilities at Rajahmundry in Andhra Pradesh cover all aspects of tobacco crop cultivation. In collaboration with the Central Tobacco Research Institute and the Tobacco Board, ITC pioneered FCV tobacco cultivation in India and introduced the Burley and HDBRG varieties. ITCs continued focus on crop development has resulted in new varieties of seeds and hybrids in Andhra Pradesh and Karnataka, which have significantly improved farm yields and helped fulfill the demands of a dynamic global market. The Companys R&D team collaborates with other centres of excellence, and leverages expertise from several leading institutes including the University of Agricultural Science, Bengaluru; Indian Institute of Science, Bengaluru; CSIOR, Australia and CSIR, South Africa. Catering to the need of ITCs Lifestyle Business is a contemporary master Design Facility at Gurgaon. It offers R&D facilities that have enabled the Company to offer internationally benchmarked fashion collection every season.

INTRODUCTION ABOUT FOCUS ON MARKETINGSTRATEGY OF ITC IN FMCG INDUSTRY

What is fmcg? Fast Moving Consumer Goods (FMCG) or Consumer Packaged Goods (CPG) are products that are sold quickly and at relatively low cost. Examples include non-durable goods such as soft drinks, toiletries, and grocery items. Though the absolute profit made on FMCG products is relatively small, they generally sell in large quantities, so the cumulative profit on such products can be substantial. ITC Limited, Procter & Gamble and Unilever are the three biggest consumer goods company that operate across the globe.

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Marketing strategies of ITC Ltd

INTRODUCTION on FMCG INDUSTRY It is ITCs strategic intent to secure long-term growth by synergising and blending the diverse pool of competencies residing in its various businesses to exploit emerging opportunities in the FMCG sector. The Companys institutional strengths deep understanding of the Indian consumer, strong trademarks, deep and wide distribution network, agri-sourcing skills, packaging know-how and cuisine expertise continue to be effectively leveraged to rapidly grow the new FMCG businesses. Over the last few years, ITC has rapidly scaled up presence in its newer FMCG businesses comprising Branded Packaged Foods, Lifestyle Retailing, Education and Stationery products, Personal Care products, Safety Matches and Incense Sticks (Agarnbatti) with Segment Revenues growing at an impressive compound annual growth rate of 38% during the last 5 years. The Companys unwavering focus on quality, innovation and differentiation backed by deep consumer insights, world-class R&D and an efficient and responsive supply chain will further strengthen its leadership position in the Indian FMCG industry.

MARKETING MIX OF ITC IN FMCG INDUSTRY ITC pricing The pricing of the ITC food division depends upon the Customers demand schedule, the cost function and the competitors price. The pricing of the company is such that it caters to the need of all income groups of people but special provision has been kept for Low and middle income group, and their pricing are competitive with respect to other players like Britannia, Parle and Brisk farm. The company follows the Going rate pricing that is the price of the product depends upon the competitors price. The firm chooses pricing more or less the same as Market leader. ITC Promotional

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Marketing strategies of ITC Ltd

A particular budget is allocated for the promotion of the products, the local promotion scheme is decided by the Area Sales Manager, it give its suggestion to the District office and that is forwarded to the Head Quarter in Kolkata. In another promotional scheme for Biscuits a particular number of cases is given freely to the distributors according to the amount of sale they make, this was a Drop down promotion i.e. of the number of free cases that a particular distributor gets, off them a certain part is reserved for the retailers and customer if they buy a certain level of biscuit quantity. ITC Distribution Buoyed by a strong distribution network ITC is likely to retain its market share in the cigarettes business; the ban on advertisements is likely to work in favour of ITC thanks to the recall factor. The companys reliable distribution network also ensures superior inventory turnover than its peers.

Challenges CompetitivecontextCompetition including international majors becoming more activeDomestic illegal volumes still very strong. Along with smuggled contraband, emerges as substantive segment Regulatory & Taxation Pictorial Graphic warnings in place w.e.f. June 09. VAT hikes in Maharashtra, Delhi, and Rajasthan & Pondicherry- threatening the concept of the Indian Common Market. Cost table increasing with increase in leaf costs. Future Growth & Value Capture: Strategic Rationale: Blend multiple competencies residing within the ITC Group to create new avenues of growth Best fit between internal capabilities and emerging market opportunities Each segment enhances the depth and width of ITCs FMCG distribution capability Business model retains critical elements of value chains within ITC with other elements outsourced.

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Marketing strategies of ITC Ltd

SWOT Analysis Strengths ITC leveraged it traditional businesses to develop new brands for new segments. For example, ITC used its experience of transporting and distributing tobacco products to remote and distant parts of India to the advantage of its FMCG products. ITC master chefs from its hotel chain are often asked to develop new food concepts for its FMCG business.ITC is a diversified company trading in a number of business sectors including cigarettes, hotels, paper, agriculture, packaged foods and confectionary, branded apparel, personal care, greetings cards, Information Technology, safety matches, incense sticks and stationery. Weaknesses The companys original business was traded in tobacco.ITC stands for Imperial Tobacco Company of India Limited. It is interesting that a business that is now so involved in branding continues to use its original name, despite the negative
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Marketing strategies of ITC Ltd

connection of tobacco with poor health and premature death. To fund its cash guzzling FMCG start-up, the company is still dependent upon its tobacco revenues. Cigarettes account for 47 per cent of the companys turnover, and that in itself is responsible for 80% of its profits. So there is an argument that ITCs move into FMCG (Fast-moving Consumer Goods) is being subsidised by its tobacco operations. Its Gold Flake tobacco brand is the largest FMCG brand in India - and this single brand alone holds 70% of the tobacco market. Opportunities Core brands such as Aashirvaad, Mint-o, and Bingo! And Sun Feast (and others) can be developed using strategies of market development, product development and marketing penetration.ITC is moving into new and emerging sectors including Information Technology, supporting business solutions. EChoupal is a community of practice that links rural Indian farmers using the Internet. This is an original and well thought of initiative that could be used in other sectors in many other parts of the world. It is also an ambitious project that has a goal of reaching 10 million farmers in 100,000 villages. Take a look at e-Choupal herehttp://www.itcportal.com/agri_exports/echoupal_new.htmITC leverages e-Choupal in a novel way. The company researched the tastes of consumers in the North, West and East of India of Atta (a popular type of wheat flour), then used the network to source and create the raw materials from farmers and then blend them for consumers under purposeful brand names such as Aashirvaad Select in the Northern market, Aashirvaad MP Chakki in the Western market and Aashirvaad in the Eastern market. This concept is tremendously difficult for competitors to emulate. Chairman Yogi Deveshwars strategic vision is to turn his Indian conglomerate into the countrys premier FMCG business. Per capita consumption of personal care products in India is the lowest in the world offering an opportunity for ITCs soaps, shampoos and fragrances under their Wills brand.

Threats The obvious threat is from competition, both domestic and international. The laws of economics dictate that if competitors see that there is a solid profit to be made in an emerging consumer society that ultimately new products and services will be made available. Western companies will see India as an

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exciting opportunity for themselves to find new market segments for their own offerings. ITCs opportunities are likely to be opportunities for other companies as well. Therefore the dynamic of competition will alter in the medium-term. Then ITC will need to decide whether being a diversified conglomerate is the most competitive strategic formation for a securefuture.TC was incorporated on August 24, 1910 under the name of Imperial Tobacco Company of India Limited. Its beginnings were humble. A leased office on Radha Bazar Lane, Kolkata, was the centre of the Companys existence. The Company celebrated its 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.

Scope of ITC ltd The term FMCGs refers to those retail goods that are generally replaced or fully used up over a short period of days, weeks, or months, and within one year. This contrasts with durable goods or major appliances such as kitchen appliances, which are generally replaced over a period of several years. FMCG have a short shelf life, either as a result of high consumer demand or because the product deteriorates rapidly. Some FMCGs such as meat, fruits and vegetables, dairy products and baked goods are highly perishable. Other goods such as alcohol, toiletries, pre-packaged foods, soft drinks and cleaning products have high turnover rates. The following are the main characteristics of FMCGs:
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Marketing strategies of ITC Ltd

From the consumers perspective:

Frequent purchase Low involvement (little or no effort to choose the item products with strong brand loyalty are exceptions to this rule) Low price

From the marketers angle:

High volumes Low contribution margins Extensive distribution networks High stock turnover

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