One

of the oldest and important agro based industry. India is the second largest producer of tobacco in the world. Cigarettes (15% of tobacco consumption) contribute nearly 85% of Revenue to the Exchequer from tobacco sector. It is highly labor intensive & provides livelihood to about 5 million people directly and indirectly.

ITC Godfrey Phillips Others

Brands Gold Flake Regular Big Benson and Hedges Classic Milds

Price per cigarette Rs. 5 Rs. 5 Rs. 5

Price for packet of 10 Rs. 48 Rs. 52 Rs. 48 Rs. 52 Rs 72 Rs. 38 Rs. 54

Marlboro Rs. 5 Regular/ Lights Gudaang Garam Four Square Davidoff Rs. 7 Rs. 4 Rs. 5

Brands Gold Flake Regular Big Benson and Hedges Classic Milds

Price per cigarette Rs. 6 Rs. 6 Rs. 6

Price for packet of 10 Rs. 50 Rs. 52 Rs. 44 Rs. 52 Rs. 68 Rs. 38 Rs. 54

Marlboro Rs. 6 Regular/ Lights Gudaang Garam Four Square Davidoff Rs. 7 Rs. 5 Rs. 6

 Market

Leader in India Powerful brands across segments Leadership in all segments- geographic and price Extensive FMCG distribution network Direct servicing of one lakh markets and nearly two million retail outlets Long term growth potential About 71% of the total turnover depends upon cigarette business.

 ITC

INSIGNIA Size: 97 mm Cost: Rs 140 for 20 sticks Premium Pricing Strategy (High Quality & High Price)

 Wills

Silk Cut Size: 84 mm Cost: Rs 88 for 20 sticks Super Value Pricing Strategy (High Quality & Low Price)

Wills Classic/Mild/Regular/Menthol /Ultra Mild Size: 84mm Cost: Rs 94 for 20 sticks Medium Value Pricing Strategy (Medium Quality, Medium Price)

 Gold

Flake(Premium) Size: 69mm Cost: Rs 60 for 20 sticks Economy Pricing Strategy (Low Quality, Low Price)

Benson & Hedges(light & hard) / Marlboro Size: 84mm Cost: Rs. 100 for 20 Sticks High Value Pricing Strategy

(High Quality, Medium Price)

 Second

Largest player in the Indian Cigarette

Industry. Annual turnover exceeds INR 1800 crores. HAs to major stake holders, one of Indias leading industrial houses- The K.K. Modi Group and one of the worlds largest tobacco company Phillip Morris.

 Four

Square Filter Size: 69mm Cost: Rs 40 for 10 sticks Good Value Pricing Strategy (Medium Quality Low Price)

 Stellar

(Low on Nicotine) Size: 69mm Cost: Rs 76 for 20 sticks Medium value Pricing Strategy (Medium Quality & Medium Price)

 Gudang

Garam Regular /Lights Size: 69mm Cost: Rs 70 for 10 sticks Premium Pricing Strategy (High Quality, High Price)

 Davidoff

Size: 69mm Cost: Rs 54 for 10 sticks Premium Pricing Strategy (High Quality High Price)

 Pricing

Strategy is product based. Penetration Pricing Strategy- Established Product, Many Competitors. Skimming Pricing Strategy- Super Premium and Premium Brands. Product Line Pricing Strategy is followed because there is a well balanced demand for all the products in the product line. The Industry operates on low margin, focuses on increasing sales volume for profit maximization.

 The

demand for cigarettes is price inelastic as cigarettes are addictive. Government imposes high taxes on cigarettes to increase revenue and to reduce cigarette consumption.

Presented by:

Brinda Desai 10070 Deepika Bathija 10072 Nishit Doshi 10081 Rashmi Datta 10089 Srikant Bandi 10100