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CHAPTER I

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"I like to think of fire held in a man's hand. Fire, a dangerous force, tamed
at his fingertips. I often wonder about the hours when a man sits alone,
watching the smoke of a cigarette, and thinking. I wonder what great things
have come from such hours. When a man thinks, there is a spot of fire alive in
his mind--and it is proper that he should have the burning point of a cigarette as
his one expression."

A cigarette is a product consumed via smoking and manufactured out of

cured and finely cut tobacco leaves, which are combined with other additives,
then rolled or stuffed into a paper-wrapped cylinder generally less than 120 mm
in length and 10 mm in diameter. The cigarette is ignited at one end and allowed
to smolder for the purpose of inhalation of its smoke from the other which is
usually filtered at the end and is usually inserted in the mouth. They are
sometimes smoked with a cigarette holder. The term cigarette as commonly
used, refers to a tobacco cigarette but can apply to similar devices containing
other herbs, such as cannabis. They are colloquially known as 'cigs', 'smokes',
'ciggies', 'straights', 'cancer sticks', 'death sticks', 'coffin nails' and 'fags'.
Cigarettes are proven to be highly addictive, as well as a cause of multiple types
of cancer, heart disease, respiratory disease, circulatory disease and birth
defects. A cigarette is distinguished from a cigar by its smaller size, use of
processed leaf, and white paper wrapping. Cigars are typically composed
entirely of whole leaf tobacco. Commercially manufactured cigarettes are
relatively simple objects consisting mainly of a tobacco blend, paper, PVA glue
to bond the outer layer of paper together, and often also a cellulose acetate
based filter.


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In the beginning of the 16th century, beggars in Seville, Spain developed the
first paper-rolled cigarettes when they collected discarded cigar butts, shredded
them, and rolled them in scraps of paper. Although the Spanish elite first
dismissed them as recycled garbage, these ©
  or little cigars, eventually
gained popularity during the 18th centu ry. Cigarette smoking spread to Italy and
Portugal, and eventually to the rest of Europe and into Asia. Cigarettes were
largely unknown in the English-speaking world before the Crimean War, when
British soldiers began emulating their Ottoman Turkish comrades, who resorted
to rolling their tobacco with newsprint. The cigarette was named sometime in
the 18th century.

During World War I and World War II, cigarettes were rationed to soldiers.
During the second half of the 20th century, the adverse health effects of
cigarettes started to become widely known and text -only health warnings
became commonplace on cigarette packets. The United States has not yet
implemented graphics-based cigarette warning labels, which is considered a
more effective method to communicate to the public the dangers of cigarette
smoking. Canada and Australia, however, have both textual warnings and
graphic visual images displaying, among other things, the damaging effects
tobacco use has on the human body. The cigarette has evolved much since its
conception; for example, the thin bands that tr avel transverse to the "axis of
smoking" (thus forming circles along the length of the cigarette) are alternate
sections of thin and thick paper to facilitate effective burning when being
drawn, and retard burning when at rest. Synthetic particulate filter s remove
some of the tar before it reaches the smoker .

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Companies like Marlboro a brand of Cigarette made by Altria which started

manufacturing cigarettes in 1924 gave advertisements that Marlboro is a
µwomen¶s cigarette¶ based on the slogan ³Mild as May´. It became the most
popular brand of United States in 2001. Marlboro became so popular that its
sales never came down in the States and earned huge revenues. It started giving
sponsorship to motor sports and racing cars. It was the main sponsor for Ferrari
Formula One car and Yamaha in Super Bike Racing. It became famous globally
till 2003 through Ferrari when it won the world championship of Formula One
Racing. In mid-2006, special "racing editions" of Marlboro Red were sold in the
UK, with a Ferrari-inspired design, although the Ferrari name and badge were
not used.

Mostly people smoke cigarettes for pleasure or because of frustration or

problem. Once they start they get addict ed to it. It is very difficult to overcome
the habit of smoking till one becomes used to it. In foreign countries most of the
people started smoking cigarettes because of celebrities smoking in films and
serials. This gave a boost to the cigarette manufact uring companies by increase
in their sales and also promotion of the product as the demand increased. Most
countries in the world have a legal smoking age of 18. Seven exceptions are
Austria, Belgium, Denmark, Germany, Portugal, the United Kingdom, and The
Netherlands, where the age is 16.

Since January 1, 2007 all cigarette machines in public places in Germany

must attempt to verify the customers age by requiring the insertion of a debit
card. Turkey, which has one of the highest percentages of smokers in its
population, has a legal age of 18. Another curiosity is Japan, one of the highest
tobacco consuming nations, which requires purchasers to be 20 years of a ge.


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However, due to the prevalence of cigarette vending machines in the most

public of places the effective ness of an underage ban is in doubt.

In other countries, such as Egypt or India (especially Kerala) it is legal to

use and purchase tobacco products regardless of age. Approximately 5.5 trillion
cigarettes are produced globally each year by the tobacco industry, smoked by
over 1.1 billion people, which is more than 1/6 of the world's total population .

Many governments impose restrictions on smoking tobacco, especially in

public areas. The primary justification has been the negative health effects of
secondhand smoke. Laws vary by country and locality. In India the ban on
tobacco and cigarettes has been implied since 2002, but still the companies
continue to manufacture cigarettes as the smoking habits of the consumers do
not change. Through sponsorship these companies try to publish their brand
name and promotion of their product. Cigarette advertisement is also done
through movies where the celebrities smoke cigarettes in the film. This also
helps in brand and sales promotion. The Indian government is trying hard to
impose strict actions against these advertisements and promotion. Even though
by imposing strict tax rate these companies are able to continue their business as
1.1 billion people of the world consume cigare ttes. In many parts of the world
tobacco advertising and even sponsorship of sporting events has been outlawed.
The ban on tobacco advertising and sponsorship in the EU in 2005 has
prompted Formula One Management to look for races in areas that allow the
tobacco sponsored teams to display their livery. As of 2007, only Ferrari retains
tobacco sponsorship, continuing their relationship with Marlboro until 2011. In
spite of the ill effects and health hazards people continue to smoke cigarettes for
pleasure or because of habit. This habitual of the people helps t he companies to
overcome the ban and advertisement on cigarettes and tobacco.


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The Cigarette Industry is one of the oldest industries in India. It is an

important agro-based industry. It is highly labour intensive and provides
livelihood to about five million people directly and indirectly. Cigarette is an
item falling under the First Schedule to the Industries (Development &
Regulation) Act, 1951 and requires an industrial license.

The cigarette industry has always been on the receiving end when it comes
to imposition of taxes and duties in the financial budget of the country. The
industry has been reeling under ever -increasing excise duties and innovative
form of taxes like luxury tax. Also, due to the high taxes in the country, the
competitiveness of the Indian cigarette manufacture is adversely affected in the
global market. Its growth is being further stifled by the imposition of ban on
smoking at public places and ban on advertisements. In add ition to this,
increasing awareness about harmful effect of smoking and lawsuits in western
countries has made the entire scenario pretty gloomy for the industry. This leads
to increased government regulation and public litigation and a reduced ability to
promote the product. In such a scenario, cigarette companies in India are going
in for unrelated diversification. Also, with the increasing threat to the tobacco
industry as a whole and decreased consumption levels of cigarettes, need gaps
in the market are being met by new products like non -tobacco 0
,  -
(betel leaf) flavored tobacco-free gum lets , and substitutes and tobacco patches
like µClick¶ which are targeted at the traditional cigarette consumer base.

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At present, there are 19 units in the organized sector engaged in the

manufacture of cigarettes with a total installed capacity of about 147.377 billion
pieces per annum. The production of cigarettes during 2001 -02 was 60577
million sticks. During the current year i.e. 2002-03 (April 2002 to December,
2002) the production has been 43198.20 million sticks. In terms of volume, bids
dominate the Indian market for tobacco products.

India is the second largest producer of tobacco in the world after China. It
produced 572 million kilograms of tobacco in 2002-2003. India only holds a
meager 0.7% share of the US$30 billion global Import -Export trade in Tobacco,
with cigarettes/cigarette tobaccos accounting for 85% of the Country's total
tobacco exports.

The tobacco industry holds tremendous potential for India. For the
government, it means excise duties and export revenues, and for the Country in
general, it translates into huge employment opportunities. Despite being the
second largest producer, India is only the ninth largest exporter of tobacco and
tobacco products in the world. Out of the total tobacco produced in India, only
one-third is flue-cured tobacco suitable for cigarette manufacturing. Most of the
tobacco produce is suitable for the manufacture of chewing tobacco, b idis and
other cheap tobacco products, which have no demand outside the country. There
is only an export demand for flue-cured tobacco, which is used for cigarette
manufacturing.

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If India adopted a rational tax policy for the tobacco industry tha t
encouraged the growing of export tobacco, tobacco farmer income would
increase and export revenue would grow. If India adopted China's tax policy on
tobacco, tax revenue could rise from the current Rs 6,031 crores to Rs 54,000
crores. China's economy-oriented tax policies have given cigarettes 100% share
of domestic tobacco consumption. This strong domestic base has proved to be
conducive to exports as well as revenue generation. The Indian tobacco industry
makes a very substantial contribution to employm ent. 35 million people are
directly or indirectly engaged in the production and selling of tobacco &
tobacco products as shown in the table below.

In terms of volume, bidis dominate the Indian market for tobacco products.
This traditional Indian smoke has shown steady growth during the review
period, although manufacturers report that sales are not as high as in the 1980s.
Cigarettes dominate the manufactured tobacco products market. This invaluable
study analyses the market for cigarettes in India o ver the time period 1998-2002
and provides forecasts to the year 2007. This title investigates key trends and
developments and can be used to evaluate competitive threats; identify strategic
partners and acquisition targets; analyse market and brand share trends and
forecast growth opportunities.

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ITC was incorporated on August 24, 1910 under the name of 'Imperial
Tobacco Company of India Limited'. 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 of 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'.

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

capitalization of nearly US $ 15 billion and a turnover of over US $ 4.75 billion.
ITC is rated among the World's Best Big Companies, Asia's 'Fab 50' and the
World's Most Reputable Companies by Forbes magazine, among India's Most
Respected Companies by Business World and among India's Most Valuable
Companies by Business Today. ITC also ranks among India's top 10 `Most
Valuable Company Brands', in a study conducted by Brand Finance and was
also published by the Economic Times. ITC employs over 21,000 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 4,65,000 shareholders, fulfill the aspirations of
its stakeholders and meet societal expectations.

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ITC pioneered the cultivation and development of Leaf Tobaccos in India.

ITC has helped the Indian farmer grow quality leaf tobaccos and linked him to
global markets. ITC is the largest buyer, processor and exporter of leaf tobaccos
in India - creating a global benchmark as the single largest integrated source of
quality tobaccos. ITC serves in 48 countries across more than 69 destinations.
ITC buys nearly 50 per cent of all tobacco types grown in India. ITC's Green
Leaf Processing plants at Chirala and Anaparti in Andhra Pradesh, the tobacco
hub of India, are benchmar ked with the best in the world. ITC process and
deliver 120 million kilo grams of high quality tobaccos annually. ITC's
collaboration with related Government agencies has helped develop new
varieties of tobaccos and explore new areas for tobacco cultivation.

ITC is the market leader in cigarettes in India. It's 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, quali ty, marketing and
distribution. In the extremely competitive US market, ITC offers high-quality,
value-priced cigarettes. ITC's cigarettes are produced in its state-of-the-art
factories at Bangalore, Munger, Saharanpur and Kolkata. These factories are
known for their high levels of quality, contemporary technology and work
environment.

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ITC is the leading player in domestic cigarette market. The company

commands over 60% market share both in value and volume terms. The
company has some of the leading brands of cigarettes like Wills, Gold Flake etc
in its portfolio. The cigarette business forms the bread & butter business of the
company. It gets more than 85% of revenues. The company has slowly and
steadily nurtured its brands over the years to secure this position. With margins
as high as 40% in cigarette business the company has generated huge amount of
cash from its operations and is thus facing the problem of plenty. The problem
is not just restricted to ITC it is through for other tobacco companies also.
Though ITC's management has good track record in managing its ci garette
business, its report card on diversification and success of these unrelated
business has not been good.

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£ Achieved five star Health and Safety Rating from the British Safety
Council for its cigarette factories at Bangalore, Munger, Kolkata and
Saharanpur and the "Sword of Honor" for Bangalore & Saharanpur for
2006-07.

£ Bangalore, Kolkata and Saharanpur cigarette factories won the

prestigious Greentech Safety Gold Award for the year 2007 in the
manufacturing sector. These awards are in recognition of the high
level of performance that the units have achieved in Environment
Health and Safety (EHS). Saharanpur along with Kolkata and Munger
factories were honored with the same award in 2006.

£ Bangalore Factory has also received the Platinum Award for

outstanding achievement in safety management in 2006.

£ Bangalore Factory has won the "Safety Innovation Award 2006" for
Innovative Safety Management System from the Safety & Quality
Forum (Institution of Engineers) and also Unnatha Suraksha Puraskara
Award from NSC Karnataka Chapter.

£ The cigarette factory at Kolkata was awarded the "1st National

Security Today Award 2005" in the category of Best Maintained Fire
Safety System.

£ Bangalore, Munger & Kolkata have won the prestigious Greentech

Environment Excellence Gold Award for the year 2006.

£ Munger factory won the Excellence in Water Management Award

from CII-GBC for 2006.

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Gold Flake is a widely-sold cigarette brand in India and Pakistan. It is sold

in various varieties, including Gold Flake Kings (84mm), Gold Flake Lights,
Gold Flake Filter (Filter tipped) and Gold Flake (plain). It is a well-positioned
brand in India and is the market leader in its segment. This brand is owned,
manufactured and marketed by ITC which is leader in cigarette industry in
India. Other popular cigarette brands owned by ITC are Wills, Scissors. It is
sold in three varieties. Gold Flake Kings is the largest selling brand of cigarettes
in India. It has a mild flavour. Goldflake Filter King Size Lights (84mm)
Goldflake lights is milder than Gold Flake and contains comparatively less
nicotine. Goldflake Filter (Small) Goldflake Filter (small) has the strongest
flavour amongst the three brands.. A pack of 10 costs about 34 Indian rupees.
Goldflake Plain (Filter less). The very original Goldflake is simply known as
Gold Plain or Plain in southern markets. It is the strongest of all.

The cigarette market in India has 4 players ITC, a British American Tobacco
(BAT) affiliate, is the largest cigarette manufacturer with 66% of the market
share. Godfrey Phillips India (GPI), a Phillip Morris affiliate, and Vazir Sultan
Tobacco (VST), a BAT affiliate, each have 13% of the total market share.
Golden Tobacco Company (GTC) has 8% of the market share. There are lots of
popular brands which are present in the Indian market. They are divided into 3
segments which are super premium, premium, and bingo segments. Few of the
brands in these categories are: - Super premium - Wills Insignia Premium- Wills
Classic/Milds Wills Navy Cut, Wills Silk Cut, Gold Flake/Lights, four square
Bingo± Bristol, Red and White.

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Goldflake was neither a brand nor a process of manuf acturing cigarettes.

The word "Gold Flake" refers to cigarettes made using 'bright rich golden
tobacco'. Brands other than wills gold flake are Bacons' Gold Flake, Hignett's
Golden Flaked Honey Dew, Salmon and Gulckstein's Gold Flake.

   

ITC launched the brand Gold flake in India in the seventies. The source of
the positioning of Gold Flake can b e traced back to its early days. In the
Seventies, India was a country of the genteel rich. People aspired to be
honorable and genteel. The lifestyle of the upper class was what the customers
aspired for. The initial ads said, ³Wherever you go they are good´,´ Having f un
wish you were there´ ³Worth its length in gold´, then came the Gracious People
Campaigns ³For the Gracious People´ as the headline followed by, ³A touch of
Gold´, with the headline "A tribute to the Gracious People".

Gold Flake had been traditionally positioned as a premium cigarette. It

targeted adult, male SEC A category smokers. It was meant to be a cigarette for
the best and the rich ± the gracious people of India. It did not differentiate itself
specifically from other brands. The brand wa s compared with Gold for the
quality and purity of experience. Advertising emphasised this comparison to
gold. The statement ± ³For the gracious people´ summed the core of the brand.
The gracious people as defined by the brand were the premium class they w ere
successful, elegant, and responsible, and had a sense of purpose.

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The consumer was bounded in the Indian ethos and roots. He was perceived
to be unapproachable and sociable only in his high class. ITC's share of filter
cigarettes in the country is more than 70%. In pursuit of international
competitiveness, ITC has launched four brands - Checkers, Hi-Val, Royale
Classic and Gold Crest - in the extremely competitive US market. Recently ITC
has launched Royale Classic, Gold Cut and Scissors Filter Kings cigarettes in
the Middle East. The response to these brands has been encouraging .

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Commercially manufactured cigarettes are relatively simple objects

consisting mainly of a tobacco blend, paper, polyvinyl acetate glue (PVA) to
bond the outer layer of paper together, and often also a cellulose acetate based
filter. While the assembly of cigarettes is straightforward, much focus is given
to the creation of each of the components, in particular, the tobacco blend,
which often contains over one hundred ingredients.

Cigarette rods are manufactured at high rates of speed using a cigarette

making machine having a tongue which is equipped such that water is
continuously fed there through in order to exit the surface of the tongue which
contacts a tobacco filler stream passing through the garniture region of the
cigarette making machine. The process of introducing water through the tongue
during a cigarette making operation allows the manufacture to produce a
continuous cigarette rod of controlled integrity. For example, cigarettes of
controlled density and firmness, and having very low amounts of hard spots,
soft spots and loose ends, can be manufactured. The process provides for the
manufacture of cigarettes at high speeds, and for the manufacture of cigarettes
having high filling capacity tobacco blends. For example, cigarettes having
blends comprising relatively high levels of volume expanded tobacco can be
manufactured efficiently and effectively.

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For manufacturing process of cigarettes includes six steps. It is a very long

process. As the demand for cigarettes is increasing the demand for tobacco has
also being increased. Cigarettes are being differentiated according to their
smoothness, hardness, quality, size, tobacco content, etc. but the basic process
for manufacturing is the same. The six steps for manufacturing cigarettes are:

1. Tobacco Harvest.
2. Tobacco Curing.
3. Tobacco grading and buying.
4. Primary processing.
5. Cigarette manufacturing.
6. Packaging.

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m  Harvest :

ITC pi t culti ti and devel pment of Leaf Tobaccos in India.

ITC is t e largest buyer, processor and exporter of leaf tobaccos in India -
creating a global benchmark as the single largest integrated source of quality
tobaccos. Serving customers in 48 countries across more than 69 destinations,
ITC co-creates and delivers value at every stage of the leaf tobacco value chain
and also process and deliver 120 million Kgs of high quality tobaccos annually.
Tobacco is produced in Andaman and Nicobar Islands, Dadra and Nagar Haveli,
Delhi, Pondicherry etc.

Tobacco is harvested in the following steps:-

£ Tobacco is a crop that can be grown in a wide range of soils and climatic
conditions. Tobacco is also the only crop that thrives on low fertility land
and is usually grown in rotation with other food crops and it needs cold
climate.

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£ Tobacco seeds are miniscule and cannot be sown directly in the field.
Seedlings are first produced in plant beds or green houses and then
transported after seven weeks by hand or planting machines into the
fields.
£ These plants are then fertilized according to the type and soil conditions.
The tobacco plant is susceptible to many diseases and therefore, great
care is taken to protect these pl ants.
£ The tobacco plant generally takes around 5 months from the germination
stage to harvest. In some countries such as Malaysia for example, there
are 3 crop harvests in a year.
£ The three types of tobacco typically grown, Virginia, Oriental and Burley
have varying stages of ripeness. Some of the tobacco leaves are harvested
by hand while other plants are cut off at the stalk, taking the entire plant.

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2  acco Cur :

£ Immediately after harvesting, tobacco is cured to remove all of the natural

sap from the leaves so that it can be further processed and manufactured.
There are three primary methods of curing cigarette tobaccos, air curing,
flue curing and sun curing, but all curing focuses on regulating the rate at
which moisture is removed from the tobacco.
£ The three stages of curing: Coloring: The continuation of natural ripening
process. Lamina drying: The leaf tissue is dried to a particular moisture
level. Stem drying: Moisture is removed from the stem.
£ |lue curing takes place in closed structures with ventilation and artificial
heating. Heat and humidity are controlled to remove moisture from the
leaf and this drying process fixes the characteristic orange-yellow color.
|lue curing requires four to seven days.

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£ Air curing requires an open framework where sticks of leaves or whole

tobacco plants are hung. Leaf color changes from green to yellow to its
final brown color as leaves and stems dry slow ly. This process takes
about one to two months.

£ Sun cured tobacco is also called orien tal tobacco. These leaves are
usually dried by stringing the tobacco leaves and leaving them to dry in
the sun. Sun-cured tobaccos have characteris tic aromas. This takes up to
three to four weeks.

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3  obacco grad g and buy ng :

£ The quality of tobacco is dependent on the curing and fermentation

processes. As a result, even within the same types of tobacco, two
different batches of tobacco are not necessarily the same.
£ Depending on the area, tobacco growers use two main methods of selling
tobacco - by auction or by a contract system. The former is when
merchants buy tobacco selectively and the latter is when they buy the
growers' whole crop. ITC mainly purchases tobacco in whole sale as it is
large scale manufacturer of cigarettes.
£ The company has also hired Just in Time (JIT) buyers for buying
qualitative tobacco for manufacturing, so that the manufacturing quality
is also maintained. The JTI buyers know exactly what they are looking
for when it comes to tobacco. They see, smell and feel the difference
between the different tobacco qualities, when they buy it from the
merchants.

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£ Before exporting, Virginia and Burley tobaccos are threshed. This

involves separating the midrib of the leaf, resulting in fairly small pieces
of tobacco lamina suitable for cigarette production. Threshed tobaccos are
then packed to specific controlled moisture levels. For JTI, grading
parameters are stalk position, color, texture, aroma, and leaf size.
£ ITC also purchases tobacco from outside India especially Burley tobacco
which is used for making stronger cigarettes.


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4 ¬r ary ¬rocess ng:

£ After the tobacco is stored and aged, it goes through a final processing
phase according to blend formulas used for making various types of
cigarettes. This process includes blending, conditioning, casing, cutting,
drying and top flavoring. Once this is done, the raw material is finally
ready to be made into cigarettes.
£ In order to produce a characteristic, homogeneous blend of tobacco,
different types of tobacco are mixed according to precise recipes.
Moisture is then added to render it supple enough to be handled,
processed or manufactured.
£ Casing refers to the sauce composed of a variety of ingredients such as
sugars, humectants and aromatic substances applied to tobacco before
being cut into thin strands called cut rag.
£ ^hen the tobacco has been cut it is dried and cooled to the final moisture
required before cigarette manufacture. The tobacco is then ready for the
addition of concentrated scents and aromatic essences called top flavors.
£ The top flavors are sprayed onto the tobacco or applied in drums. In the
manufacturing of menthol cigarettes, menthol is sprayed onto the tobacco
instead of top flavors. After this, the cut tobacco is placed in silos.

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  C garette Manufactur ng :

£ ITC uses industrial machines which are capable of mass-production up to

16,000 cigarettes per minute. After the tobacco has been treated and
processed, the tobacco is made into cigarettes in a machine typically
called the "Maker". They then are put through quality control checks to
ensure they meet predetermined standards before being sent to the
packing machine.
£ Tobacco is transferred from the silos via a pneumatic tube system into the
"Maker" machine and the tobacco is shaped into a circular form. ^hite
cigarette paper is then fed into a machine from a roller.
£ The trademark logo is printed and the paper is wrapped around the bare
tobacco. The paper is then sealed with glue, creating a continuous
cigarette stick. A cutting tool slices this into double-length sticks to which
a filter is added.
£ The double-length sticks are cut in half and a double length filter is
placed between the two sticks. Brown cork paper is wrapped around the
filter to rejoin the two halves and sealed with glue creating two cigarettes
joined back-to-back.

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£ Finally, an ingenious mechanism divides the double cigarette and turns

one half the other ways around. This process ensures that the cigarettes
created are facing the right direction and ready for the packing machine.

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6 ¬ackag ng:

£ Cigarettes that are ready for packaging are transported by conveyer belt
to the "packer" machine where they are separated into feeder channels to
be inserted into packs. Meanwhile, aluminum from a roller as well as
cardboard is fed into another machine and template patterns of the packs
are stamped out. Groups of 10, 20 or 30 cigarettes are inserted into the
finished inner lining and then the final external packing is added.
£ Next comes the wrapping of each pack with a polypropylene film with
pull strings and weld. This is done to preserve the humidity of the freshly
made cigarettes - a vital factor in preserving their overall quality.
£ The packing process, however, does not end there. The final part is to
collect the individual packs of cigarettes into cartons of ten, which are
again wrapped by polypropylene.
£ |or customer shipping, fifty cartons are automatically packed in
cardboard boxes. The pallet machine lifts the 15g cardboard boxes each
containing 10,000 cigarettes, directly on transport pallets.
£ During the cigarette manufacturing process, engineers and technicians
conduct numerous quality control checks aided by an array of monitoring
devices as well as testing and measurement systems.

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CHAPTER III

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Y ,. OF H ¬ OD.C

Gold |lake is a category brand name for the product class of cigarettes. The
Gold |lake cigarettes are composed primarily of golden tobacco, which is
distinctive feature from other cigarettes. Gold |lake cigarette is composed
primarily of golden tobacco (brightly colored tobacco), which like any other
tobacco is considered injurious to health. Some other cigarettes which are
generally not very prevalent also consist of nicotine as opposed to tobacco.
However, such cigarettes are not manufactured under Gold |lake brand name or
by ITC or by any branded company.
The smoke of the cigarettes is considered so harmful that it causes diseases
even to the passive smokers, the diseases primarily of respiratory disorder
nature. Paper is used to roll the tobacco inside. Gold |lake comes in various
lengths and types. The length of a cigarette varies from 60mm to 100 mm. The
various types are filter, plain and micros.
A cigarette has may attributes and components like filter, shape, weight,
color, form material, hard, soft, internal and external parts, style, etc.

¬aper (form FI


Ho%der or Yccessory
obacco Ins de

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The various components and attributes of GOLD FLAKE are: -

M & : The shape of the Gold Flake cigarette is cylindrical and is called
a stick. It has golden tobacco rolled in paper with filter on one side in
case of filtered cigarettes.

M
/ The length of a cigarette varies for different brands. There is

different tax rate charged by the government on basis of cigarette length.
High length of cigarette attract high tax rate. The Gold Flake cigarette
(Large) has the standardized length of 84mm and Small Gol d Flake is
having length of 69mm.

M / Though the tobacco is also consumed in powder form, however in

case of cigarettes it is usually smoked. The smoke carries the burnt
tobacco particles with it which act as a stimulant, satisfying the motive of
consumption for the consumer or smoker.

M     / The cigarette paper for Gold flake comes to the
industry wrapped on Bobbins:
a) Width: 26 - 27mm
b) Length: 5,000 - 6,000m

M ^ / The tobacco is the main component of weight in the cigarette .

GOLD FLAKE is of different sizes 84mm and 69mm where the tobacco
content is different which matters the weight of the cigarette as well as
the size and price.

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M %/ The paper used is generally white in color. However, the

whiteness of the paper varies. The filter comes in two colors that is
golden and white.

M   / The price of large packet of Gold Flake is Rs 34/- containing 10

cigarettes, small packet is Rs 28/- and loose cigarette is Rs3.50/-

M  % / It is a type of material which is used in every cigarette to reduced

irritation, cough, bad breath, excessive phlegm , and smoke by-product on
teeth, fewer symptoms of shortness of breath, tightened chest, and heart
discomfort. Filter is safe, hygienic, and easy to carry. The specifications
of the filter used in GOLD FLAKE cigarettes are:
ë Diameter: 5-7 mm.
ë Length: 13-16mm.
ë Weight: 1g.
ë Filter material: high-quality nontoxic plastic and inner core wood fiber
ë Package material: high-quality nontoxic plastic sheets and aluminum
foil.
ë UV sterilized.

M $ % / As such there is no external part, however, few people
like to smoke with an additional pipe attached to it which also acts as a
filter.

M &% / The inherent word cigarette itself reflects style in some of the
consumer minds. Gold flake is primarily associated with a state of
richness. Most cigarettes give a perception of confidence to the user.

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,      

People smoke cigarettes for many reasons as it helps in losing weight,

release from stress, if anyone has a stuffy nose, and smoking will help the
respiratory tract unobstructed. It also aids in relaxation and reducing boredom.
Smoking a filter cigarette causes lesser harm to health than non filter cigarettes .

The benefits of the product have been divided into two categories.
  ,   " &  ,   "

M Superior quality. M Improves concentration.

M Consistent quality. M Reduces stress.

M Smoothness. M Helps lose weight.

M Mildness. M Helps to relax and reduce

boredom. 
M Refreshing. 
M Helps to socialize.

M Less Tar level.

M Acts as appetite suppressant.

M A companion when lonely.

M Private indulgence for women.

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*    

Gold Flake cigarettes come in packs containing 10 to 20 cigarettes. The

packets are constructed from hard paper, with a water resistant glossy finish on
the outside. The shape is polygonal (similar to packs of many other cigarette
brands) with rectangular faces. The pack can be opened from the top via a paper
lid. The lid is linked and joined for proper rotation.

The body of the packet is chrome yellow with a gold band separating the red
colored lid. The logo is bordered with gold and display ed on both the front and
back faces of the body as well as on the upper portion of the lid. The front face
is depicted in the image above. The front and back faces have a slightly ribbed
texture around the logo. ³FILTER TIPPED´ along with an 8 pointed star is
written in gold on both sides of the lid. On one side of the lid, the no. of
cigarettes inside is written in gold. On the other side of the lid ³NOT FOR
SALE TO MINORS´ is written. The statutory warning is given at the base of
the front face. The no. of cigarettes, price and packaging is displayed at the
bottom of the packet. All the written information is in a Sans Serif style font.

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Each single cigarette is white in color with an ochre colored bottom portion
(with yellow flakes). W.D. & H.O. Wills is inscribed both on the packet and on
each cigarette in a stylized font. The length of the cigarette in is around 69mm
for a pack size of 10.

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