An itc [Type text] May and June, 2010 Submitted to: Submitted by: Mr. Aarvind Upadhyay Kaushik banerjee Area Manager PGDM Sem -2 ITC Limited (Kanpur) IPM (Meerut) INSTITUTE OF PRODUCTIVITY & MANAGEMENT {MEERUT} A project report on IT C COMPETITION PAID PRACTICES WITH REFERENCE TO THE LOYALTY OUTLETS VIJETA STORE ,PERFECT STORE, INDIA OUTLET ,STAR OUTLET AND ITC PERSONAL CARE PRODUCTS PERFORMANCE AT THESE OUTLET .
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
An itc [Type text]
May and June, 2010
Submitted to: Submitted by:
Mr. Aarvind Upadhyay Kaushik banerjee
Area Manager PGDM Sem -2
ITC Limited (Kanpur) IPM (Meerut)
INSTITUTE OF PRODUCTIVITY & MANAGEMENT {MEERUT}
A project report on
ITC
COMPETITION PAID PRACTICES WITH REFERENCE TO THE LOYALTY OUTLETS VIJETA STORE ,PERFECT STORE, INDIA OUTLET ,STAR OUTLET AND ITC PERSONAL CARE PRODUCTS PERFORMANCE AT THESE OUTLET .
Content
Chapter 1
Acknowledgement.
Preface.
Introduction: FMCG and product characteristics.
Industry segment.
Project description.
Chapter 2
Company profile.
History, Evolution and overview.
ITC Mission, Vision and core values.
Business portfolio.
Marketing & Pricing strategy.
ITC working structure.
Working of a branch.
GR1, 2, 3 & 4.
Distribution channel.
Market share of all FMCG by ITC .
Chapter 3
Major players.
Competitor’s analysis.
Project objective.
Methodology.
Brand wise categorization.
Chapter 4
Data sheet.
Data analysis.
Chapter 5
Finding and evaluation.
SWOT analysis.
BCG matrix.
Chapter 6
Suggestions and recommendations.
Learning from the project.
Limitations and bibliography.
ACKNOWLEDGEMENT
Before starting a reach out to the innards of the project work, as a part of my
Appreciativeness-interlaid, I would like to highlight the names of certain
people, who not only lent a helping hand in attaining a plurality of practical
exposure, but bailed me out of hardship as and when I encountered it.
I would like to thank Mr. Aarvind upadhyay area manager (Kanpur) ITC
Limited, Lucknow for explaining me each and every aspect of Marketing
Research in a lucid and practical way and for giving me the opportunity to
work on this project.
I am also thankful to Mr.Amit srivastava and Mr. Shrijeet paul area
executive (Kanpur) ITC Lucknow and to Mr. Kunal sahu for making me
aware regarding the field and helping me to complete this summer training
project.
I fell highly delighted in mentioning the name of my friends and last but not
the least thanking to my parents for providing me the entire emotional and-
moral backup without support and encouragement of them this project
would have not been completed.
I hope that the project would be a great event to boost the hierarchy of my
academic career.
PREFACE
Research is the feedback, which any organization sought for the purpose of
effective policy making. It is the systematic problem Analysis, model building
and fact finding for the purpose of important decision -making and control in
the marketing of all goods and services.
Every research is aimed to achieve certain solution to research problems .If
there is no problem then, the meaning of the research becomes vague. The
research problem that I was supposed to deal with was, brand wise
comparison of personal care products and their loyalty schemes given by the
companies in Kanpur market. The study was done on the basis of parameter
like price paid for annual the display, service, and promotional schemes etc.
The different comparative companies of personal care products were
Hindustan unilever, P&G, Marico, Dabur .The sample unit was the retailer of
Kanpur.
With a well define research problem, a study was started two ascertain the
variations and conditions of the existing sales of personal care products.
The overall objective of the study was to analyze the annual display outlets
of the company and judge is it a wrong or a write outlet for display.
Introduction –FMCG
The fast moving consumer goods (FMCG) sector is the fourth largest sector
in the economy with a total market size in excess of Rs 60,000 crore. This
industry essentially comprises of consumer non durable products (CND) and
caters to the everyday needs of the people.
Exports
India is one of the world’s largest producer for a FMCG products but its FMCG
exports are languishing at around 1,000 crore only. There is noteworthy
potential for increasing exports but there are certain factors inhibiting this,
Small-scale sector reservations bound ability to invest in expertise and
quality up gradation to achieve economies of scale. Moreover lower volume
of higher value added products reduce scope for export to developing
countries.
Product characteristics
Products belonging to FMCG sector generally have following characteristics:
They are generally used once in a month.
They are used directly by end users.
They are non durable.
They are sold in packaged form.
They are branded.
Industry Segment
The main segments of FMCG sectors are:
Personal care:
Oral care; Skin care; Personal wash (Soaps); Cosmetics and Toiletries;
Deodorants; Perfumes; Paper products (Tissues, diapers and sanitary); Shoe
care.
Major companies active in this segment are Hindustan unilever, Godrej
soaps, Colgate-Palmolive, Marico, Dabur, Proctor and gamble.
P
e
r
s
o
n
a
l
C
a
r
e
(
I
n
d
i
a
n
v
i
e
w
)
P
e
r
s
o
n
a
l
c
a
r
e
c
a
t
e
g
o
r
y
i
n
I
n
d
i
a
i
s
v
a
l
u
e
d
a
t
R
s
5
4
.
6
b
i
l
l
i
o
n
.
A
n
a
v
e
r
a
g
e
I
n
d
i
a
n
s
p
e
n
d
s
8
%
o
f
h
i
s
i
n
c
o
m
e
o
n
p
e
r
s
o
n
a
l
c
a
r
e
p
r
o
d
u
c
t
s
.
P
e
r
s
o
n
a
l
c
a
r
e
m
a
i
n
l
y
c
o
n
s
i
s
t
s
o
f
H
a
i
r
C
a
r
e
,
S
k
i
n
C
a
r
e
,
O
r
a
l
C
a
r
e
,
P
e
r
s
o
n
a
l
W
a
s
h
(
S
o
a
p
s
)
,
C
o
s
m
e
t
i
c
a
n
d
T
o
i
l
e
t
r
i
e
s
,
F
e
m
i
n
i
n
e
H
y
g
i
e
n
e
.
T
i
l
l
2
0
0
2
-
2
0
0
3
,
P
e
r
s
o
n
a
l
c
a
r
e
p
r
o
d
u
c
t
s
,
e
x
c
e
p
t
t
h
o
s
e
i
n
o
r
a
l
c
a
r
e
c
a
t
e
g
o
r
y
,
w
e
r
e
r
e
g
a
r
d
e
d
a
s
l
u
x
u
r
y
i
t
e
m
s
,
a
n
d
a
t
t
r
a
c
t
e
d
a
h
i
g
h
e
x
c
i
s
e
d
u
t
y
o
f
1
2
0
%
.
B
u
t
t
h
e
t
a
x
a
t
i
o
n
r
e
f
o
r
m
s
i
n
I
n
d
i
a
a
f
t
e
r
1
9
9
1
h
a
v
e
l
o
w
e
r
e
d
t
h
e
e
x
c
i
s
e
d
u
t
y
r
a
t
e
s
t
h
a
t
m
a
k
e
t
h
e
s
e
p
r
o
d
u
c
t
s
m
o
r
e
a
f
f
o
r
d
a
b
l
e
.
I
t
i
s
d
i
v
i
d
e
d
i
n
t
o
t
w
o
s
e
g
m
e
n
t
s
:
Th
Th
The premium segment caters mainly to urban high class and upper middle
class, and is more brand conscious and less price sensitive. The popular
segment caters to mass segments in urban and rural markets; prices here
are around 40% of the premium segment prices.
Growth
With the increase in rural income and improvement in distribution network
(i.e. road development projects), the penetration levels are set to increase.
Since the consumption level in urban areas is already high in most of the
categories, the growth can come only from deeper penetration and higher
consumption in rural areas. In the year 2005-06, the sector witnessed
growth because of the increase in consumer demand from urban and rural
areas. In addition to demand, prices also went up. Also, with the increase in
disposable income, some consumers have moved up in the value chain.
The growth for FMCG products in February 2006 was the highest in 5 years,
on YoY (year over year) basis.
Prospects
The proportion of the consuming class to total households will touch 46%
by FY07 from 17.4% in FY95, estimated by National Council for Applied
Economic Research (NCAER). As the native companies are expanding in
international market, the MNC subsidiaries are looking for greater leverage
of the parent strengths. Also, big MNCs cannot afford to avoid India
because of its potential market
Personal Care Sector in (India)
Increase in per capita income and heightened awareness of personal
appearances; have fuelled the demand for personal care products in India
and today this sector has emerged as one of the fastest growing markets in
the country. Keeping this in mind, we have released an industry Profile on
Personal Care Sector in India. This well researched document is presented in
a series of 105 slides in PDF format, with data tables, and graphs. This profile
has been prepared through extensive secondary and internet research.
This profile will help in providing basic information about the industry to
foreign companies planning to enter the Indian market or existing companies
(foreign / Indian) expand their business in India, companies planning to set
up manufacturing units and companies strategising to increase their market
share, etc. The profile will also be of value to consultants, analysts, market
research organizations and corporate advisors.
Profile on Personal Care Sector in India helps to gain an insight into the
evolution of the industry and competitive dynamics prevalent in the market.
It discusses the recent developments in the industry and analyzes the key
trends and issues.
Personal care (Global view)
The personal care industry had an excellent growth rate in all the major
markets of the world in 2005-2006. Since the past few years, people have
become more conscious about their appearance and look, leading to a huge
demand for these products in the whole world. New products are launched
by the leading brands to attract consumers. The trends in all the leading
personal care markets show that this industry is showing a massive potential
for growth. The women’s beauty industry is growing at rate of approximately
USD 202.254 billion every year where as the global market for cosmetics
alone USD 30.33 billion. The global personal care products industry is
growing at a very rapid pace; some of the factors responsible are:
Rise in consumer spending power,
Increased demand due to people consciousness,
Key demographic factors,
Entry of herbal and organic products,
Lifestyle and climactic changes, and
Massive advertising and promotiom strategy
FutureProspects
The future for the personal care products industry is very prosperous,
which can be analyzed by the rising growth trends of the industry. But
there are many concerns related to the chemicals and toxins used as
ingredients for making personal care products. These substances can
affect our health and the environment also. They are absorbed through
our skin and can enter our bloodstream thereby affecting our kidney and
liver, and thus can have very harmful effects on our bodies and when
these products are washed off from the body, they are released in to the
environment.
Many companies are addressing these problems and are shifting their
focus to the natural and organic products. These products are beneficial to
our health as well as environment, because very less quantity of synthetic
compounds and toxic elements are used in these products. In most of the
countries the demand for organic products has been rising steadily.
According to a study conducted by the Natural Personal Care Consumers:
Unlocking Future Potential, the organic products market in UK alone will
rise from USD 18.19 million in 2007 to USD 24.26 million in the year 2011.
Organic and natural personal care products industry has profited much
from the growing consumer awareness and their changing lifestyles.
These developments have also helped in introduction of a lot of organic
products in the market. Despite many sectors showing signs of maturation
in the key, developed markets, innovation remains high and while
economic prosperity continues many consumers are proving willing to
make the trade up, signaling a positive future for value sales.
Household care:
Fabric wash (Laundry soaps and synthetic detergents);household cleaners
( dish/utensils cleaners, floor cleaners, toilet cleaners, air fresheners,
insecticides and mosquito repellants, metal polishes and furniture polish).
Major companies active in this segment include Hindustan uni lever, Nirma
and Reckitt & Colman.
Branded and packaged Food and Beverages:
Health beverages; soft drinks; staples; bakery products (biscuit, cakes and
3) Availability Vivel toilet soap in 112 Vijeta stores is 193 CFC.
4) Availability of competition is 859 CFC in 112 Vijeta stores.
Finding and Evaluation
1) Payment scheme for the annual display outlets is not so attractive to the
retailers in comparison to other major FMCG companies.
2) No clear communication, retailers are not aware of the extra 4% discount
given to them for the display.
3) Displays not at hot spots.
4) No proper tracking on merchandising.
5) It was found that the low profile respondents wants fixed gift as a part of promotional schemes and high profile respondents want scratch cards, this motivates them more to sell any product.
6) Rate cutting being also a factor for low sales at different areas of Kanpur.
7) Communication gap between company and sales man.
Ie: Hindustan unilever directly reaches there salesman and educates them
about new offers and schemes but ITC does not do so. ITC only reaches to
(wd) and tells them about schemes and offers and (wd) manipulates the
information and then informs the salesman.
8) All display windows of Hindustan unilever in Kanpur are cancelled now due
to their structural change only windows at cosmetic stores are running.
SWOT Analysis
Strengths
ITC leveraged it traditional businesses to develop new brands for new
segments. For example, ITC used its experience of transporting and
distributing tobacco products to remote and distant parts of India to the
advantage of its FMCG products. ITC master chefs from its hotel chain are
often asked to develop new food concepts for its FMCG business.
ITC is a diversified company trading in a number of business sectors
including cigarettes, hotels, paper, agriculture, packaged foods and
confectionary, branded apparel, personal care, greetings cards, Information
Technology, safety matches, incense sticks and stationery.
Weaknesses
The company's original business was traded in tobacco. ITC stands for
Imperial Tobacco Company of India Limited. It is interesting that a business
that is now so involved in branding continues to use its original name,
despite the negative connection of tobacco with poor health and premature
death.
To fund its cash guzzling FMCG start-up, the company is still dependant upon
its tobacco revenues. Cigarettes account for 47 per cent of the company's
turnover, and that in itself is responsible for 80% of its profits. So there is an
argument that ITC's move into FMCG (Fast Moving Consumer Goods) is being
subsidised by its tobacco operations. Its Gold Flake tobacco brand is the
largest FMCG brand in India - and this single brand alone hold 70% of the
tobacco market.
Opportunities
Core brands such as Aashirvaad, Mint-o, Bingo! And Sun Feast (and others)
can be developed using strategies of market development, product
development and marketing penetration.
ITC is moving into new and emerging sectors including Information
Technology, supporting business solutions.
e-Choupal is a community of practice that links rural Indian farmers using
the Internet. This is an original and well thought of initiative that could be
used in other sectors in many 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.
Chairman Yogi Deveshwar's strategic vision is to turn his Indian
conglomerate into the country's premier FMCG business.
Per capita consumption of personal care products in India is the lowest in the
world offering an opportunity for ITC's soaps, shampoos and fragrances
under their Wills brand.
Threats
The obvious threat is from competition, both domestic and international. The
laws of economics dictate that if competitors see that there is a solid profit
to be made in an emerging consumer society that ultimately new products
and services will be made available. Western companies will see India as an
exciting opportunity for themselves to find new market segments for their
own offerings.
ITC's opportunities are likely to be opportunities for other companies 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 secure future.
BCG Matrix for ITC LTD
Suggestions
The company can introduce power points on the basis of these three
factors availability, cleanliness, visibility and sales . The company
should give them some gifts on collection of these points or these
points can also be redeemed by the retailers on time to time basis.
The company is right now offering 4% extra on windows to the retailers
instead of giving this offer the company should offer the retailer a
discount of 4%+2%+1% (cash discount).
Ie: 1000 *4%=40
40*2%=.8
And 1% cash discount can be given if the payment is delivered within
12 days of purchase.
The company should introduce targets for the retailers and they can be
paid accordingly.
The company can try to introduce SMS greeting system to make the
retailers aware about different schemes and offers and they can also
send them greetings on different occasions and festivals.
Learning from the project
1. All theories and concepts as studied till now got a practical application.
2. To get the best response the bar tenders retailers and the sales person
should be visited at the time which best suit them.
3. Never ever we should over-sale and under deliver. This is the worst
thing for a company because customer loses trust in the company if he
do not get what has been promised.
4. It helped me by polishing my communication skills and taught me how
to deal in the market.
5. As I was floated for the first time in the market, it shifted with
tremendous confidence inside me.
6. It did to same extent help in developing a better understanding
different marketing forgone.
7. It brings with in a sense of responsibility and passion to work for the
organization.
8. I had an opportunity to meet professionals placed very well in the
industry.
Limitations
Although every effort is made to make the report as accurate and
appropriate but yet it has some limitation because situation and
environment are not in control. The limitation of my study is:
The study is concentrated in Kanpur city only so the findings are
generalization for Kanpur only.
The study may be infested by the exaggeration of some respondents.
It is possible that some potential source might have remained
entrapped.
This study is limited to time, and is based on a study for 60day.
Sometimes some consumers were busy in personal life so could not
able to give time for interview and hence some of the datas may not