A Project Report On

ITC – Aashirvaad Atta


Contents Topics Executive Summary Introduction ♦ Preamble ♦ History and Evolution ♦ Corporate Strategies ♦ Board of Governors ♦ Operating Units in India Market Analysis ♦ SWOT Analysis ♦ Understanding the four P’s of ITC Food Division ♦ Financial Analysis of ITC ♦ Competitors Analysis ♦ Financial Analysis of Competitors ♦ Price, Place, Product, Promotion Strategies in Orissa ♦ Decision Making Process ♦ Inferences from the Survey Future Strategies Suggestion and Recommendations Annexure References Page No. 3 4 5 9 9 9 10 10 18 25 33 38 39 45 46 47 55


Executive Summary
In ITC’s branded packaged foods business, the company has created a new epicenter of rapid growth by blending its time tested key competencies and organizational strengths. ITC’s portfolio, currently consisting of 45 value added products, appeals to changing consumer preferences in virtually all categories – staple, confectionery, snack foods and biscuits, and ready to eat meals. ITC’s ‘Aashirvaad’ atta has already established leadership as the number one branded atta among national branded players within barely two years of launch. The ‘Aashirvaad’ assurance of quality now extends to ready-to-eat foods, ready –to- cook pastes, atta and salt. ITC pioneered the launch of butterscotch cream and Orange Marie biscuits under the sunfeast brand – example of product innovation widely accepted by the consumer. ITC has achieved a significant market presence in the confectionery segment with the rapid growth of the ‘Mint-o’ and Candyman brands, which between them now have 11 variants. ITC’s ‘Kitchens of India’ ranged of gourmet products showcases India’s traditional cuisine. The company is engaged in scaling up the supply chain through distributed and outsourced manufacturing capacity to service market requirement in the cost effective manner. Significant investment in brand building activities is also envisaged in the light of heighten competition. Despite sluggish performance and pressure on margins in recent times the micro trends in FMCG sector shows compelling opportunities. Per capita consumption and penetration lines of most FMCG categories in India are relatively low as compared to other south Asian countries. Branded atta consumption in India is only 5%. Disposable incomes are projected to grow rapidly and drive up the demand for consumer and FMCG Goods. Gross turnover of the company for the year 2004-05 grew by 13% to Rs. 13350. Pretax Profit increased by 15.3%. The financial for the year include Rs. 692 crores representing net income from exceptional items. ITC has planned to invest around Rs.3500 crores in the Atta, confectionery businesses and greeting cards over the next five years with its prime focus on the food business. Some of the recommendation that can be incorporated for Aashirvaad aata like collaborating with government for the supply of atta in military canteen, and also with fast food retail joints in India by giving them some discount, they company can also try to export its atta to the countries where wheat is currently being exported. Also an aggressive advertisement is required.

Preamble Over the years, ITC has evolved from a single product company to a multi-business corporation. Its businesses are spread over a wide spectrum, ranging from cigarettes and tobacco to hotels, packaging, paper and paperboards and international commodities trading. Each of these businesses is vastly different from the others in its type, the state of its evolution and the basic nature of its activity, all of which influence the choice of the form of governance. The challenge of governance for ITC therefore lies in fashioning a model that addresses the uniqueness of each of its businesses and yet strengthens the unity of purpose of the Company as a whole. Globalization will not only significantly heighten business risks, but will also compel Indian companies to adopt international norms of transparency and good governance. ITC's governance policy recognizes the challenge of this new business reality in India. Definition and Purpose ITC defines Corporate Governance as a systemic process by which companies are directed and controlled to enhance their wealth generating capacity. Since large corporations employ vast quantum of societal resources, we believe that the governance process should ensure that these companies are managed in a manner that meets stakeholders aspirations and societal expectations. Core Principles ITC's Corporate Governance initiative is based on two core principles. These are : Management must have the executive freedom to drive the enterprise forward without undue restraints; and This freedom of management should be exercised within a framework of effective accountability. Cornerstones From the above definition and core principles of Corporate Governance emerge the cornerstones of ITC's governance philosophy, namely trusteeship, transparency, empowerment and accountability, control and ethical corporate citizenship. ITC believes that the practice of each of these leads to the creation of the right corporate culture in which the company is managed in a manner that fulfíls the purpose of Corporate Governance.

History and evolution
ITC was incorporated on August 24, 1910 under the name of 'Imperial Tobacco Company of India Limited'. Its beginnings were humble. A leased office on Radha Bazar Lane, Kolkata, was the centre of the Company's existence. The Company celebrated its 16th birthday on August 24, 1926, by purchasing the plot of land situated at 37, Chowringhee, (now renamed J.L. Nehru Road) Kolkata, for the sum of Rs 310,000. This decision of the Company was historic in more ways than one. It was to mark the beginning of a long and eventful journey into India's future. The Company's headquarter building, 'Virginia House', which came up on that plot of land two years later, would go on to become one of Kolkata's most venerated landmarks. The Company's ownership progressively Indianised, and the name of the Company was changed to I.T.C. Limited in 1974. In recognition of the Company's multi-business portfolio encompassing a wide range of businesses - Cigarettes & Tobacco, Hotels, Information Technology, Packaging, Paperboards & Specialty Papers, Agri-Exports, Foods, Lifestyle Retailing and Greeting Gifting & Stationery - the full stops in the Company's name were removed effective September 18, 2001. The Company now stands rechristened 'ITC Limited'. Though the first six decades of the Company's existence were primarily devoted to the growth and consolidation of the Cigarettes and Leaf Tobacco businesses, the Seventies witnessed the beginnings of a corporate transformation that would usher in momentous changes in the life of the Company. ITC's Packaging & Printing Business Division, was set up in 1925 as a strategic backward integration for ITC's Cigarettes business. It is today India's most sophisticated packaging house. In 1975 the Company launched its Hotels business with the acquisition of a hotel in Chennai which was rechristened 'ITC-Welcomgroup Hotel Chola'. The objective of ITC's entry into the hotels business was rooted in the concept of creating value for the nation. ITC chose the hotels business for its potential to earn high levels of foreign exchange, create tourism infrastructure and generate large scale direct and indirect employment. Since then ITC's Hotels business has grown to occupy a position of leadership, with 66 owned and managed properties spread across India. It also has a marketing and reservation arrangement with the Sheraton Corporation, the reputed international hotel chain. In 1979, ITC entered the Paperboards business by promoting ITC Bhadrachalam Paperboards Limited, which today has become the market leader in India.

a vernacular range of greeting cards in eight languages and ‘Expressions Paperkraft’. Tamil Nadu. ITC acquired Tribeni Tissues Limited. a Specialty paper manufacturing company and a major supplier of tissue paper to the cigarette industry. Now it extends to 6 states covering over 3. Bhadrachalam Paperboards Division. ITC also entered the Lifestyle Retailing business with the Wills Sport range of international quality relaxed wear for men and women in 2000. ITC acquired the paperboard manufacturing facility of BILT Industrial Packaging Co. a range of premium stationery products. John Players. The Division is today one of India's largest exporters. the product range was enlarged with the introduction of Gift wrappers. In 2003. the company rolled out ‘Classmates’. To harness strategic and operational synergies. It has also made an immense contribution to the development of Sarapaka. In August 2002. The Wills Lifestyle chain of exclusive stores later expanded its range to include Wills Classic formal wear (2002) and Wills Clublife evening wear (2003). ITC also initiated a foray into the popular segment with its men's wear brand. In 1985. ITC's Packaging & Printing business launched a line of high quality greeting cards under the brand name 'Expressions'. in 2002. ITC's unique and now widely acknowledged e-Choupal initiative began in 2000 with soya farmers in Madhya Pradesh. ITC also launched ‘Expressions Matrubhasha’.Bhadrachalam Paperboards amalgamated with the Company effective March 13. It is directly involved in education. In November 2002. 2002 and became a Division of the Company. Surya Tobacco became a subsidiary of ITC Limited and its name was changed to Surya Nepal Private Limited (Surya Nepal). ITC's paperboards' technology. a range of notebooks in the school stationery segment. This KOVAI Unit allows ITC to improve customer service with reduced lead time and a wider product range. 6 . environmental protection and community development. an economically backward area in the state of Andhra Pradesh. productivity. In the same year. TTD was merged with the Bhadrachalam Paperboards Division to form the Paperboards & Specialty Papers Division in November 2002. leveraging its agri-sourcing competency. in Nepal as a joint venture with the reputed Soaltee group.1 million farmers. Autograph books and Slam books. In 2000. quality and manufacturing processes are comparable to the best in the world. near Coimbatore. In 2002. ITC set up Surya Tobacco Co. this division merged with the Company's Tribeni Tissues Division to form the Paperboards & Specialty Papers Division. In 1990. Ltd (BIPCO). Also in 1990. The merged entity was named the Tribeni Tissues Division (TTD). ITC set up the International Business Division (IBD) for export of agri-commodities. In 2004.

Mangal Deep. Ensure that each business is internationally competitive in the Indian global market. namely Market Standing. VaxLit. Sambrani and Nagchampa. In 2003 the ‘Candyman’ range was expanded to include deposited candies and éclairs. Sandalwood. 7 . Madhur. In the same year ‘Candyman’ was added to the confectionery range and ‘Aashirvaad’ atta was rolled out. In 2002. The key corporate strategies are: Continue to focus on the core businesses of Cigarettes & Tobacco. Exit from businesses which do not meet these criteria within an agreed time frame. to more aggressively pursue emerging opportunities in this area. Ensure that each of its businesses meets the three criteria of sustainability. Bouquet. The 'Aashirvaad’ brand now extends to ready-to-eat foods. Staples and Snack Foods segments. In 2004 the ‘Kitchens of India’ brand was extended to cooking pastes. Hotels. ITC spun off its information technology business into a wholly owned subsidiary. In 2002. A more broad-based entry has been made since June 2002 with brand launches in the Confectionery. ITC now markets popular safety matches brands like iKno. Corporate Stategies ITC's corporate strategies are aimed at matching its core capabilities with market opportunities to produce superior shareholder value. ITC's popular agarbattis brands include Spriha and Mangal Deep across a range of fragrances like Rose. Profitability and Internal Vitality. Packaging & Paperboard. Jasmine. In 2003 ‘Sunfeast’ biscuits were launched and ‘mint-o’ lemon mint flavour was introduced. ITC made its entry into the branded & packaged Foods business in August 2001 with the launch of the Kitchens of India brand.In 2000. ready-to-cook pastes and salt. ITC's philosophy of contributing to enhancing the competitiveness of the entire value chain found yet another expression in the Safety Matches initiative. ITC's foray into the marketing of Agarbattis (incense sticks) in 2003 marked the manifestation of its partnership with the cottage sector. the 'mint-o’ trade mark was acquired and relaunched in orange and mint flavours. ITC Infotech India Limited. Delite and Aim.

Institute and practise a system of corporate governance appropriate to ITC's character and constitution. Such a system of governance must achieve a wholesome balance between the need for executive freedom for management and the requirement of a framework for effective accountability. residing in various businesses.Create distributed leadership within the organization by nurturing talented and focused top management teams for each of the businesses.Chairmanship .Membership & Quorum .Frequency of Meetings 8 .Authority / Powers . Secure the future growth of the Company by creating new businesses which leverage the strength of íts core competencies.Tenure .Objectives. Terms of Reference of the Board Committees shall include : . Role. Responsibilities .

Board of Directors and Shareholding pattern Shareholding pattern Foreign Holdings Govt. 2005 % 51.85 35. 9 .71 0 12.31 0.14 Company Secretary Director Nominee (LIC) Director Operating Units in India The company’s food division has a Operating units at Nagpur and Vardhman with a development and research centre at Banglore. / Financial Institutions Corporate Bodies(not covered above) Directors and their Relatives Other including Indian Public Board of Directors and remuneration Chairman Executive Director Non Executive Director Yogesh Chander Deveshwar Sahibzada Syed Habib ur Rehman Anup Singh Krishnamoorthy Vaidyanath Charles Richard Green Ajeet Prasad P B Ramanujam Basudeb Sen Ram S Tarneja Balakrishnan Vijayaraghavan Bishwa Behari Chatterjee J P Daly S B Mathur Yesh Pall Gupta As on 31st March.

ITC is now engaged in elevating this partnership to a new paradigm by leveraging information technology through its trail-blazing e-Choupal initiative. Nor can the efforts of a few enterprises make a decisive difference. Only an inspired public-private partnership can transform lives and landscapes in rural India. so as to free millions of our disadvantaged citizens from the indignity of poverty.LET'S PUT INDIA FIRST ITC believes that an effective growth strategy for our nation must address the needs of rural India. home to 75% of our poor. ITC's humble endeavors have demonstrated that it is possible to create and sustain a model that can harmonize the need for shareholder value creation with making a substantial contribution to society. embracing its villages.Social stigma attached with tobacco Opportunities . Additionally.Government restrictions on the tobacco industry Weaknesses .Great stress on the sun-set tobacco industry .E-Choupal Threats . It is imperative to ensure that India's economic growth is inclusive.Presence in varied sectors .Wide distribution network .Emergence of Hyper-Markets ITC Four P’s in India .SWOT Analysis Strengths . It is ITC's belief that India's rural transformation cannot be brought about by the government alone.Smaller regional players .Entry into processed foods . ITC is significantly widening its farmer partnerships to embrace a host of value-adding activities: creating livelihoods 10 . ITC has partnered the Indian farmer for close to a century.

investing in rainwater harvesting to bring much-needed irrigation to parched drylands. it has a leadership position in every segment of the market. ITC's FMCG businesses have one of the largest retail networks in the country. 11 . enhancing livestock quality to significantly improve dairy productivity. Of a true pride in being Citizen First. Munger. In ITC. Scissors. ITC is the market leader in cigarettes in India. consisting of over 2 million retailers. one of the pioneers of market research in India. Capstan. quality. Saharanpur and Kolkata. Of a conviction that country must come before corporation. Gold Flake. This strategic focus on the consumer has paid ITC handsome dividends. ITC's share of filter cigarettes in the country is more than 70%. providing infrastructural support to make schools exciting for village children.in the extremely competitive US market. Recently ITC has launched Royale Classic.Checkers. These factories are known for their high levels of productivity and very contemporary work environment. ITC has made capital investments of over Rs. Royale Classic and Gold Crest . marketing and distribution. Gold Cut and Scissors Filter Kings cigarettes in the Middle East. The most important of these is its enriched product mix.by helping poor tribals make their wastelands productive. the consumer is still the King. Navy Cut. In just the last 5 years. Through these rural partnerships. The response to these brands has been encouraging. from premium outlets in the metros to small shops in the interiors of rural India. With its wide range of invaluable brands. these are expressions of a commitment beyond the market. 7 billion in its cigarettes business. unmatched by competition. empowering rural women by helping them evolve into entrepreneurs. Hi-Val. Its highly popular portfolio of brands includes India Kings. In pursuit of international competitiveness. ITC has launched four brands . For ITC. Berkeley and Bristol. ITC's cigarettes are produced in its state-of-the-art factories at Bangalore. ITC's leadership is founded on its core strategy of continuously enhancing product values through significant investments in product design. The Company continuously endeavours to provide its consumers products that are benchmarked to international quality. ITC touches the lives of over 3 million villagers across India. manufacturing technology. Its reach covers a wide range of the retail spectrum.

12 . closely guarded recipes. The Foods business carries forward this proud tradition to deliver quality food products to the consumer. These delicacies are now available in imported 4-layer retort pouches that keep them fresh for as long as 12 months from the date of packaging. Each one of these legendary delicacies has been created by the Master chefs of ITC Hotels. Apart from the current portfolio of products. and produce the quality demanded by its customers. These are: • • • • Ready To Eat Foods Staples Confectionery Snack Foods :: ‘Ready To Eat’ Products from ‘Kitchens of India‘ Keeping alive long forgotten Culinary traditions. several new and innovative products are under development in ITC's state-of-the-art Product Development facility located at Bangalore. The packaged foods business is an ideal avenue to leverage ITC's proven strengths in the areas of hospitality and branded cuisine. from one generation to the next. A more broad-based entry has been made since June 2002 with brand launches in the Confectionery. All products of ITC's Foods business available in the market today have been crafted based on consumer insights developed through extensive market research. ITC has stood for quality products for over 90 years to the Indian consumer and several of its brands are today internationally benchmarked for quality. through the e-Choupal initiative. contemporary packaging and sourcing of agricultural commodities. handed down through the ages. This long-standing relationship is being leveraged in sourcing best quality agricultural produce for ITC's Foods business. Leadership in the Foods business requires a keen understanding of the supply chain for agricultural produce. ‘Kitchens of India’ presents its range of exotic ready-to-eat cuisines. following rare. Staples and Snack Foods segments. ITC has over the last 90 years established a very close business relationship with the farming community in India and is currently in the process of enhancing the Indian farmer's ability to link to global markets.ITC made its entry into the branded & packaged Foods business in August 2001 with the launch of the Kitchens of India brand. The Foods business is today represented in 4 categories in the market.

in accordance with original.:: ‘Kitchens of India’ Curry Pastes A special blend of handpicked spices. in Hyderabad. 40/. Mutter Paneer and Yellow Dal Tadka. The Dishes are priced between Rs.to Rs. Nav Ratan Kurma. Rajma Masala & Basmati Rice and Yellow Dal Tadka & Basmati Rice are available in Combo packs. Dal Makhani. Made from the finest ingredients and spices. :: Aashirvaad Aashirvaad ReadyMeals ITC Foods launched a range of Ready-To-Eat dishes under the 'Aashirvaad ReadyMeals' label. ensures that the original freshness and taste of the recipes is protected without the use of preservatives. this collection of popular mealtime accompaniments. Palak Paneer. Aloo Mutter. and cook. is truly a feast for the senses.for a 485 gms pack. 45/. traditional recipes. delectable flavors by combining the succulent chunks of fresh fruit with an expert selection of exotic spices. A truly irresistible treat. The dishes on offer currently are Rajma Masala. :: ‘Kitchens of India’ Conserves ‘Kitchens of India’ Fruit & Spice Conserves have been skillfully blended by ITC’s Master Chefs to create unique. on 25th June 2003. The range now comprises nine dishes and two Combo packs. It’s truly the most deliciously authentic way to recreate your favorite dishes (These pastes by themselves are fully vegetarian). 30/. Just add fresh ingredients.for a 285 gms pouch and the Combo packs are priced at Rs. Pindi Chana. using a retort process. :: ‘Kitchens of India’ Chutneys ‘Kitchens of India’ Chutneys have been created by ITC’s Master Chefs. created by the master Chefs of ‘Kitchens of India’. :: Staples 13 . The unique packaging form. Pav Bhaji.

ITC Foods also aims to delight the consumer through superior and innovative packaging. 2003. This is one of the most prestigious awards in the world for Packaging. And processing them to stringent quality standards. mint-o offers the discerning consumer a value-added mint that captures the international essence of youthful "cool". The product is now available all over India. with the design showcasing the farming process undertaken in the rural heartland of India in the form of a Madhubani painting. Aashirvaad iodised salt ensures taste and for the entire family. Aashirvaad ReadyMeals and Cooking Paste make life free for the busy housewife. The product is available in grocery stores around the country. leaving her more time the family. minto is the first mint in India to be also available in an orange flavour besides the regular mint flavour. ITC acquired the brand "mint-o" from Candico in March 2002. Aashirvaad Salt ITC launched branded packaged salt under the brand name ‘Aashirvaad Salt’ on 26th March. :: Confectionery ITC currently has two brands in the confectionery segment . The product is available in two sizes – rolls of 20s and 6s. The Aashirvaad package is PET Poly. ITC has also created a first in packaging in the branded atta category by introducing its premium offering in carton packaging and offering vacuum sealing in the 5kg premium pack. 14 hasslewith health . ITC re-launched the compressed mint product mint-o with new and improved product and packaging. ‘Aashirvaad Select’ Atta (2 kg pack) was awarded the World Star Award for Excellence in Packaging in the Consumer Pack Category. Creating India's largest national atta brand within two years of launch."Mint-O" and "Candyman" . mint-o is currently available in all major markets. Both these innovations maintain the freshness of the product. An innovative "Lemon mint" flavour was launched on 26th February.Extensively using its e-Choupal network to source meticulously selected grains from the best wheat growing regions in India. 2003.

stamina and health. The Company has now launched three new cream flavours -. Strawberry & Pineapple creams have flavour enhancers. Strawberry and Pineapple. Milky Magic. Orange Josh and Pineapple Punch are also available across India. Candyman Butterscotch Licks and Orange Licks was launched in December 2003 and is now available in markets across the country. made with cow's milk. Both the new cream biscuits and milk biscuits have received an enthusiastic response from consumers. The snack food team is geared and ready to further enrich its product portfolio in the near future. 15 . Every Sunfeast product is made with utmost care. In addition. ITC has pioneered the launch of coconut cream biscuits in India. a hard-boiled mint candy. It is in line with its business strategy of providing the adult consumer with the complete range of mint-based confectionery products across price points. :: Snack foods : Sunfeast Riding on the success of offerings in the Glucose. Sunfeast has tied up with ‘Aavin’. gives them high energy. the biggest milk brand in Tamil Nadu. These biscuits are made out of cow’s milk.'Mint-O Fresh'. A flavour enhancer provides a burst of flavour to the consumer.namely Coconut. ‘Sunfeast’ has also entered the milk biscuit category with its ‘Sunfeast Milky Magic’ biscuits. was launched in October 2004 in two flavours. Candyman Eclairs and Candyman hard boiled candies like Wild Banana. while the Jagmag 'flavour bursts' of the Strawberry and Pineapple Cream biscuits melt in their mouths. ITC has recently enriched its ‘Sunfeast’ range of biscuits. This marked ITC's entry into the deposited candy market. This launch extended the Mint-O brand. which had been present only as compressed mint tablets. Mango Delite. ITC's Sunfeast is a brand driven by innovative product development at ITC's state-ofthe-art food technology centre in Bangalore. ensuring world class standards of hygiene. Marie and Cream categories. for sourcing cow’s milk. The launch of Mint-O Fresh is in line with ITC's marketing strategy of adding excitement and contributing to the growth of the confectionery category.

bidi shops it reached out to. The company could leverage its vast and wide-reaching network to ensure that the products are made available everywhere. Promotion and Product of ITC Food division This is one area where the company had some cushion in the form of its extensive and long established distribution network for cigarettes. The company’s rich experience in Indian market comes handy in such situation. The concept of e-Choupal was also used to appeal to the emotions of the people. ITC has added another half-a-million outlets to sell its other products. The company used both television and print media to launch its products.000 tonnes. 16 .50. The company used its available resources and later added on to them in terms of transportation. ITC's paperboards business is the largest in India with a capacity of nearly 3. The company had to ensure that the brands be consolidated and people be made to change their earlier preferences. From the one million paan. This association is expected to yield significant value addition by reinforcing the brand attributes and reiterating the 'spread the smile' positioning. The products have their presence in retail store and supermarkets. The company did not have any problem in making the product available even just after its launch because all the stores and retailers dealing with ITC cigarettes were given the all the new products of food division on credit. Khushiyaan Chun Chun ke (Happiness handpicked) the campaign for Aashirvaad’ promises the Indian housewife the joy of providing her family with the most delightful home-made rotis. The company was sure the superior quality of the products would do the same for them. ITC uses the sourcing strength of its eChoupals to buy wheat directly from the farmers to deliver happiness to the Indian consumer. New distribution inroads were made. made from the finest quality atta. Summary of Price. Place.5 million outlets across the country and continues to expand this network. The company has signed up superstar Shah Rukh Khan as the brand ambassador for Sunfeast. Supported by a unique R&D-based clonal forestry programme which creates thousands of livelihood opportunities for poor tribals. and deepening it remains an ongoing task. inventory storage and location and coverage was already there for the cigarettes.The Elemental Chlorine Free (ECF) paper and paperboards manufactured by ITC have set new norms in consumer safety. Backed by an investment of more than one thousand crores to upgrade technology to global standards. It is the first and only company in India to make environment-friendly ECF paperboards for foodgrade packaging. Today it has a retail network of 1.

ITC's foods division is taking its time to draw upon all the possible synergies it has with the group's cigarettes and hotels businesses. While ITC did its homework well in advance when it made a leap into foods nearly two years ago. The company had to benchmark all its prices against the established players. During the launch the company gave all the products to the wholesalers on credit. Not in a hurry to make profits. Quality was decided to be the main differentiator. ITC’s entry into the food market was a late one and it was one of the new SBUs of the company as part of its diversification strategy.Sales promotions like extra offerings on biscuits and free salt on purchase of Asirvaad Atta are used to boost the sales. The target market for the company in the business was the entire “Great Indian Middle Class”.000 saplings in the Bhadrachalam area of Andhra Pradesh during the last week of August. The Aashirvaad brand of atta was priced very close to other branded atta’s like Pillsbury and Nature fresh. The record aimed is for the maximum number of saplings planted on a single day. taking advantage of its extensive cigarette distribution network. Point-of-purchase promotions like putting posters and banners on shop floors are used to raise the awareness of the brand and influence the buying decision of the consumer at the shop floor. we get a rub-off on all Aashirvaad products such as salt and ready-to-eat foods. though it is still very costly compared to unbranded atta available in the market. The goal was to capture as much as market share possible in the entire packaged food business. The main focus of the company was on volume and thus they followed penetrative pricing policy. 17 . The company follows umbrella branding. There could not be any differentiation on the basis of price. ITC Foods also announced plans to enter the Guinness World Record through a plantation drive. its network with farmers and the brand equity of its hotels' restaurants should give its foods business the competitive advantage it has been looking for. ITC has launched its products on national basis and it caters to the need of all kinds of consumers. The key is the ability to keep costs down. Thus there were established market players in the biscuits and confectionary (Brittania) and branded atta (Pillsbury) sector. A number of farmers and children are expected to participate. To be taken up under the Sunfeast Hara Banao Campaign.00. so that when it advertises Aashirvaad atta. the company aims to plant a record breaking 2.

profitability and operational efficiency of the company . Total income has increased from Rs 12. Close 95%of its sources are shareholders fund (90% being reserves). SOURCES AND USES OF FUNDS ITC is a business conglomerate with huge reserves. The reduction in borrowings has reduced the interest burden on the company. Liquidity ratios – Ability of the business to meet its short term obligations 3. There is huge inventory component. The investments outside the company are huge and have been increasing. There were some debentures issued earlier but all have matured.040 Crore in 2004 to Rs 13585 Crore in 2005.2% of sources. 2. ANALYSIS OF ITC’s FINANCIAL STATEMENTS We will be studying the financial health. Over the years it has reduced its dependence on borrowings.Financial Analysis of ITC PROFITABILITY OF OPERATIONS ITC has traditionally been a profitable company giving the shareholder and excellent performance year on year. Now borrowings form only 2. We have computed the following: 1.5%. Profitability Ratios – To access the profitability of the with regard to its Sales and investments. This does not speak well about the company’s management. the other businesses are not capital intensive. 18 . Presently it has debt equity ratio of approximately 1. Most of financing has been done through the reserves built up over the years. ITC Ltd has posted a net profit of Rs 1837 Crore for the year ended 31st march 2005 as compared to Rs 1593 Crore for the year ended 31st march 2004. Debt Management Ratios– To assess the companies’ ability to meet its long term obligations and to study the capital structure 5. Asset management ratios -To access the operational efficiency 4. The company’s investments vary in nature due to its diversity. Growth Trends – To know the growth trends in total sales and profits of ITC.We have taken the financial statements of ITC Limited for the past 5 years and made an in depth analysis using ratios. The fixed asset component isn’t very large because apart form the hotels & paper processing business. In 2000 borrowings formed a substantial part of the balance sheet approximately 19%. The company has no debentures or bonds.

06 5.15 18.37 16.12 19.60 14.56 7.02 60.24 4.98 4.09 9.98 6.05 7.84 21.41 03-04 5.96 15. INCOME (GROWTH RATES IN %) Sales Other Income Total II.62 16.26 4.61 15.15 24.87 04-05 12.60 5.86 02-03 14.21 02-03 19.62 04-05 15.39 -0.96 13.18 102.47 -14.12 18.96 03-04 19.28 01-02 15.87 I.22 54.72 104.09 19.45 3.18 1.02 8. An important aspect which can be seen is variations in the growth rates of investments. This is because of raw materials and duties which form the major portion of its cost have grown at a slower rate.14 18.28 18. EXPENDITURE (GROWTH RATES IN %) Raw Materials etc. The current liabilities have been growing at fast rate which is because of its better management of its suppliers. A huge proportion of investments are in mutual fund schemes which don’t give very high returns.48 20.28 13.96 7.82 35. With such growth rates we may infer that the company has no strategy in place for the investments.63 01-02 27.80 108. This is mainly due to the growth in retained earnings.67 -34. Expenses Depreciation Total 19 .29 31.25 00-01 -2. Sales have been growing steadily.41 29.94 28.74 15.RATIO ANALYSIS HORIZONTAL ANALYSIS As can be seen from the growth rates share holders funds have been growing steadily.86 -66.86 17.56 -58.49 02-03 21. We can also see the company is moving towards zero debt policy by the negative growth rates in loans.35 29.66 41. This may also be construed as an indication of the company having no “good” projects left.61 9.99 01-02 24. It is important to note that though the manufacturing expenses have grown faster than the sales profitability has not reduced.51 9. GROWTH RATES (%) Share Holders Funds Loans Current Liabilities Fixed Assets (net) Current Assets Investments 00-01 26.04 03-04 8.07 8.53 00-01 9.35 36.48 4.24 04-05 23.88 26. Selling etc.78 1. Excise Duties and Taxes on Sales of Products and Services Manufacturing.55 26.

VERTICAL ANALYSIS Through the common size analysis the note worth aspects that can seen are • Increase in shareholders funds from 81% to 94. We may hazard a guess that inventory management has been improving specially seen in light of increasing sales. • Inventories have fallen from 27%to 25.2% • Fixed assets have grown from 37% to 53. • Current liabilities have increased from 33% to 43.4% • Decrease in loans form 19% to 2.2%.8% • Investments have a very fluctuating pattern.4%. Investment in Years Investment (In Crores) 5000 4000 3000 Investments 2000 1000 0 2000 2001 2002 2003 2004 2005 Years Loans 1000 Loans (In Crores) 800 600 Loan 400 200 0 2000 2001 2002 2003 2004 2005 Years 20 . The implications of the above have been discussed earlier. But this should been seen in isolation.

This is must be seen along with the fact the working capital position is improving.01 0. LIQUIDITY RATIOS Current ratio quick ratio 2001 1.91 2004 1.61 0.e. These would in general move in opposite directions. the ability of the company to pay of its current liabilities are falling.89 1. The company should go in for an optimal trade off between the two.LIQUIDITY RATIOS As can be seen by both the current ratio and quick ratio have been decreasing.18 2003 1.99 2002 1.80 2005 1. Not a very good sign. But as long as the current ratio is more than 1 we can say that the company has the ability to meet its short term obligations. The liquidity of the company is falling i.53 Current Liabilities 400000 350000 Current Liabilities 300000 250000 200000 150000 100000 50000 0 2000 2001 2002 Years 2003 2004 Liabilities Provisions Current Liabilities 21 .47 0.31 0.

54 (365/receivables turnover ratio) inventory (inventory*365/cogs) TA turnover ratio (sales/TA) FA turnover ratio (sales/FA) period 51.45 58. ASSET RATIOS receivables (annual receivables) average collection period 5.81 1.60 43.61 6.78 55. it is not taking advantage of interest deductions as allowed by the tax laws.19 3.06 1.38 turnover credit ratio MANAGEMENT 2001 2002 2003 2004 2005 sales/acc 69. Accept for debtors turnover ratio most have declined over the five year period.41 66.40 49. Its debt managed ratios have improved.37 DEBT MANAGEMENT RATIOS OR THE LEVERAGE RATIOS The company is following a policy to reduce debt.18 46.41 3.92 1.22 59.ASSET MANAGEMENT RATIOS OR THE ACTIVITY RATIOS We have made the calculations assuming that there are no cash sales (only credit sales) The company has not a very good performance here.28 4. This means that though the company’s credit worthiness has improved.09 84. Though the company has made improvements in working capital it has fared rather badly in the inventory days. It’s becoming unleveraged firm. 22 .41 1.21 1. Though such a policy will be helpful if the company is to go in for new debt because its credit rating would be higher it could result in cheaper funds.83 8.32 7.34 3. This is not a very good policy because it reduces the wealth creating capacity of the firm.42 7.45 4.

17 0.0318493 0.19 0.94 59.69617 2003 0.18 0. the increase in the dividend payment.36 2005 0.18 0.1321631 1. it has been paying high dividends as a percentage of net profit which may indicate that the company has fewer opportunities to invest.2430153 0. A ratio of 4 may seem to indicate that its overvalued but that’s not the case because the future expectation for ITC is very good.37 0. The fall is showing a trend. 23 .15 0.39 0.37 TI OS OR THE RATE OF RETURN RATIOS The MV/BV ratio has been decreasing this is mainly due to the increase in share prices.0474749 1.0200969 1.36 2003 0.143273 1.85 24.35 2001 0.023526 0.52 83.35 EV AL UA TI ON RA Net Income over Net worth 0.2332237 0.618817 PROFITABILITY RATIOS Its profit margin has improved over the years from 15% to 19%.38 0.0768422 0.35 2004 0.1 2001 0.6185856 2004 0.5847882 2005 0. As it can be seen.92 19.40 0.39 0.37 0.44 0.014533 1. Hence. Net income over net worth has reducing over the years.45 0.7646651 2002 0. This is probably because of lack of ‘good’ projects.DEBT MANAGEMENT RATIOS debt/net worth loans / TA TA / net worth interest ratio coverage 11.36 2002 0. The retained earning not being able to generate profits at the same rate PROFITABILITY RATIOS Net Income to Sales Net Income to Total Assets Earnings Before Interest and taxes / Total Assets 0.

29 13.29 55.79 0.29 2004 256.17 0.54 0.42 0.10 3.07 706.25 2.34 1043.45 64.24 16.30 73.35 24 .31 12.23 2003 214.72 EARNINGS PER SHARE DIVIDENDS / NET PROFIT 18.24 41.00 4.27 10.Evaluation Ratios BOOK VALUE OF SHARES MARKET PRICES MV/BV EARNINGS PER SHARE MARKET PRICE / 2001 141.00 814.20 0.63 741.41 628.44 2002 177.35 2005 315.30 3.45 5.75 48.

tasty and healthy This particular atta is fortified with extra iron and vitamin B1 (Thiamine). Annapurna Fortified Atta has twice as much iron as chakki atta. It is made from a premium MP sharbati wheat blend that yields soft and tasty chapatis or rotis. What's most important though is that Annapurna is healthy and nutritive. which is equivalent to 300 gms of Annapurna Fortified Atta in our daily meals. Compared to chakki atta (which most consumers normally partake). since it is enriched with extra iron and vitamins. meets the daily requirement of iron and vitamins. Therefore consumption of rotis or chapatis. It proves to be a rich source of iron which consumers cannot obtain even if they use the best quality wheat at the best chakki. B2 (Riboflavin) and B 3 (Niacin). Annapurna Fortified Atta is better in every way. 25 .Competitors Analysis Annapurna Fortified Atta .

RS Net covers about 80% of the company's turnover. one of the key challenges for any marketer. called RSNet. In addition to the ongoing commitment to the traditional grocery trade. Indirect-Coverage 26 . The objective is to catalyse HLL’s growth by ensuring that the right product is available at the right place in right quantities. The distribution network directly covers the entire urban population. This is building traffic into the stores while yielding high growth for our business. HLL Way has also led to implementing best practices in customer management and common norms and processes across the company. stockists have been connected with the company through an Internet-based network. improving their range availability whilst reducing inventories. we have been at the forefront of experimenting with innovative methods to reach the rural consumer. the sales system gets to know every day what HLL stockists have sold to almost a million outlets across the country. An IT-powered system has been implemented to supply stocks to redistribution stockists on a continuous replenishment basis. HLL is building a special relationship with the small but fast emerging modern trade. dispatches.At present. manufactured across the country. For this. for online interaction on orders. Powered by the IT tools it has further improved customer service. information sharing and monitoring. which also includes a back-end system connecting suppliers. HLL's products.000 redistribution stockists covering about one million retail outlets. The challenge of the rural markets 70% of India's population resides in villages. RS Net has come as a force multiplier for HLL Way. RS Net is part of Project Leap. by unshackling the field force to solely focus on secondary sales from the stockists to retailers and market activation. Penetrating the rural markets is. At HLL. are distributed through a network of about 7. Their scale enables us to provide superior customer service including daily servicing. while ensuring superior availability and impactful visibility at retail points. all company sites and stretching right upto stockists. therefore. HLL's end-to-end supply chain. They are using the opportunity of interfacing more directly with our consumers in this retail environment through specially designed communication and promotions. Today. they also impose major challenges. While rural markets present a great opportunity to companies. in the most cost-effective manner. the company's action-plan to maximize the number of outlets reached and to achieve leadership in every outlet.

thereby touching about 100 million consumers. The project. therefore. Operation-Harvest The reach of conventional media and. HLL has mounted an initiative. As a result. with long-term benefits.Under the Indirect Coverage (IDC) method. armed with training from HLL and support from government agencies concerned and NGOs. also comprising advertisements of HLL products. Project Streamline. forge relationships and loyalty with rural consumers. reaching about 250 million consumers. already covers over 5000 villages in 52 districts of Andhra Pradesh. in the process. Cinema Van Operations have films and audio cassettes with song and dance sequences from popular films. It was also not always feasible for the Redistribution Stockist to cover all these markets due to high costs involved.000 villages. Single-Distribution-Channel For rural India. It has already appointed 6000 such sub-stockists. HLL's partnership with Self Help Groups of rural women.000 villages. which serviced a select group of neighboring markets. and is being progressively extended. Operation Harvest endeavored to supplement the role of conventional media in rural India and. The SHGs have chosen to adopt distribution of HLL's products as a business venture. HLL has established a single distribution channel by consolidating categories. 27 . the distribution network directly covers about 50. Distribution will acquire a further edge with Project Shakti. these markets are important since growth opportunities are high. awareness of different products in rural markets is weak. Operation Harvest also involved conducting of product awareness programmes on vans. to further increase its rural reach with the help of rural sub-stockists. In a significant move. Yet. company vans were replaced by vans belonging to Redistribution Stockists. Cinema van operations These are typically funded by the Redistribution Stockiest. Karnataka Madhya Pradesh and Gujarat. The vision is to reach over 100. started in 2001.

1000 per month on a sustainable basis.00 4.00 1.00 8. and provide products/services in agriculture. Current Ratio The current ratio of HLL has more or less remained constant whereas for ITC it’s been coming down lately. This model creates a symbiotic partnership between HLL and its consumers. health. Even though the current ratio for ITC is coming down. and is almost double of their past household income.00 5.00 2000 2001 2002 2003 HLL ITC 28 . Other companies in the cigarette industry are too small for any meaningful comparison. it’s still higher than that of HLL. Plans are being drawn up to cover more states. As we see the decreasing graph of ITC down the years prove that the company is investing in a lot of programs as in e-choupal etc.00 2. some of whom will also draw on the company for their livelihood. and helps build a self-sustaining virtuous cycle of growth.00 0.A typical Shakti entrepreneur conducts business of around Rs. whereas HLL has been keeping a nearly constant liquidity ratio.15000 per month. Debt to Networth Debt Vs Net worth 9. This will both catalyze holistic rural development and also help the SHGs generate even more income.00 7. which gives her an income in excess of Rs. insurance and education. and live in extremely small villages (less than 2000 population).00 6. the project is bringing new villages under direct distribution coverage. For HLL.00 3. INDUSTRY COMPARISON For a meaningful comparison we have chosen HLL because it is the only company with similar interests and of similar size. It gives ITC a better position for any investments needed. this earning is very significant. As most of these women are from below the poverty line.

Total Assets to Net Worth As the total assets of HLL have been increasing over the years.25 0.20 0.50 0. In 2003 we can see a very high value of the ratio mostly because of the high value of debt taken by HLL.The debt to net worth ratio is extremely low for the both the companies from 2000 to 2002. ITC’s ratio has come down since 2001 and now is at a very low level compared to HLL. with a lower value of net worth the ratio has been increasing over the years. As the main competitor’s debt to total assets ratio increases. Debt to Total Assets Debt Vs Total Assets 0. the ratio has gone up for HLL.05 0. ITC has hardly got any debt and so manages to maintain a constant ratio as the high amount of net worth keeps the debt to net worth ratio at a minimum.30 0.35 0. it has actually come down to an extremely low value of debt during the last two years. but in 2003 due to a high value of debt taken by HLL. From the small amount of debt in 2000 and 2001. which enjoys a high value of Total assets.15 0.40 0. 29 . but lower total assets.45 0.10 0. the debt to total assets ratio of ITC is much more than HLL.00 2000 2001 2002 2003 HLL ITC With a very low debt. In case of ITC with total assets reducing from the earlier years but a similar trend of increasing net worth the ratio has been more or less constant.

According to industry estimates.20 0.00 2000 2001 2002 2003 HLL ITC Godrej Pillsbury Godrej Pillsbury has made a considerable dent in south India with its Pillsbury Chakki Fresh Atta cornering about 13 per cent market share in the branded-flour market.30 0. Earlier.8 per cent in May.05 0. Captain Cook’s market share has dropped mainly because of a slowdown in DCW's promotional activity.25 0. The country's branded-flour market has been growing rapidly at around 40 per cent to 45 per cent per annum. Both Lever's Annapurna and Pillsbury's Chakki Fresh Atta brand have gained market share since May this year in the southern market. The loser has been Captain Cook. whose market share has dropped to around 12 per cent in July from 14 per cent in May. Hindustan Lever reigns supreme with its Annapurna brand. said industry observers.35 0. while Annapurna has upped its share to around 31 per cent in July from 28. the Pillsbury brand has appreciated its share to the current position from 9.15 0.Total Assets Vs Net Worth 0.5 per cent in May. This has elevated the Pillsbury brand to the second slot displacing DCW's Captian Cook atta in the south.10 0. DCW's Captain Cook brand had a good grip on the market with its position being second only to Annapurna. The southern market contributes around 25 per cent of the all30 . These two brands have continuously gained market share since their launch.

the 100 per cent subsidiary of the Minneapolis-based. Cargill India Pvt Ltd. The brand is now available across 1. $49 billion agri-foods major. While for atta. And given its historical strengths in agri-economy and logistics management. followed it up by refined vegetable oils. after having tested the waters in the south first. NatureFresh atta accounts for about 50 per cent of Cargill India's sales. Brand NatureFresh began its journey in India with atta. NatureFresh has been highlighting quality. According to Godrej Pillsbury chief executive officer Samir Behl. Industry sources said that the market is seen growing at a faster pace in the south. Director. Earlier this year. According to Sidhant Khosla. and then came maida and suji. Nature fresh SLUGGISH commodity-to-brand movement. across some 600 towns and cities.1 lakh retail outlets.000 outlets are likely to be added this fiscal. NatureFresh is now present across six product categories. and rice in basmati and non-basmati form in five variants was introduced just about two months ago. More branded staples are expected this year. It is learnt that the brand will soon be launched in Mumbai as part of Godrej Pillsbury's expansion drive. Cargill India Pvt Ltd. has varied interests. NatureFresh atta and oils are equally placed. An additional 15. purity is critical and freshness is a commitment. strong regional players as aggressive as Shakti Bhog atta. procurement issues magnified by weak Government policies. NatureFresh was extended to salt.5 lakh tonnes valued at around Rs 200 crore. In terms of value. Cargill India is advantageously positioned to service its supply chain. consistency and packaging as its key differentiators. by volumes. the oils are being pushed on the `light and pure' attribute. 31 . Agro Tech Foods Ltd and Pillsbury. though plans are under wraps for the time being. If NatureFresh is making big names in the industry sit up and take note. The company is in the midst of beefing up its national distribution network. by volumes. NatureFresh's distribution has been up and running. Dandi salt and a host of combatants in South India. Now take brand presence. competition as intimidating as Hindustan Lever. the company will soon roll out the atta brand nationally.India volumes of 1. it is because Cargill India is not exactly just a new kid on the block. Today. The ambition is driven by Cargill Corporation's vision of being the global leader in nourishment.

the new advertising will be significantly different from the earlier communication. packaged sugar is estimated to be a 40. Meanwhile. was added to the brand basket about three months ago. According to an analyst. Cargill India has made "substantial" investment in its research and development facility in Noida (near Delhi). While it is generally accepted that the standards of hygiene of atta ground at the chakki (flour mill) are far from desirable. four for vegetable oils. and working directly with farmers. our products are priced as competitively as any other brand. The commodity market will progressively move into the branded portfolio as long as the `value delivery' is in line with the product price. one reason why salt is bigger than other branded commodities is the Government's iodization drive. a premium variant of NatureFresh atta. While analysts point out that staples is a category extremely sensitive to pricing. In addition to its company-owned production facility in Noida. the new variant is made from pure desi wheat. According to Cargill officials. or the company could consider adding fresh contract manufacturers. Cargill India has three contract manufacturers for atta. while the original NatureFresh is a full-fiber wholewheat fortified atta. Packaging is another area where Cargill says it has invested heavily. Branded. Given that the price relationship with value is critical. as far as pricing goes. Among other reasons.8 lakh tonnes. A fresh communication tack for both NatureFresh atta and vegetable oils is expected to break on television. National brands comprise only 45 per cent share of this market. And according to ORG-MARG's retail store audit data. According to Cargill officials. brands have been moving towards commoditization.On the pricing front. capacities within existing facilities could be increased.000 tonnes market. as commodities move towards branding. One example is transparent pouches for refined oils . to initiate work on process improvement. the size of the iodized branded salt market is estimated at 15 lakh tonnes per annum (which works out to about Rs 500 crore by value). almost double that of the original NatureFresh brand. and one each for salt and rice. the branded atta business continues to account for a minuscule one per cent of the total atta business. NatureFresh has been on par with any other brand on the shelf. identifying wheat by mandi. while the size of the domestic branded wheat market is estimated at roughly 1.a first in the industry. The NatureFresh ad account is handled by HTA. While ad and 32 . NatureFresh Gold. Cargill India says its objective is to straddle as many price points as possible. As and when Cargill's domestic operations expand. NatureFresh Gold is priced at Rs 92 for a 5 kg pack.

e. and Place Strategy in Orissa Market The Product Mix of ITC in Orissa Market ITC offers a Product Mix for the customers i. Promotions. It has a good length and width of the Product Mix. a set of all the products and items that it offers for sale.promotional budgets are not available. The length and width of the Product Mix in orissa can be summarized as follows: 33 . Price. Overview of ITC’s Product. the company says it is doing the needful to take the battle of the brand head on.

and their pricing are competitive with respect to other players in Orrisa like Britannia. the cost function and the competitors’ price. Atta Ready Meal ARM Cooking Paste Confectiona ry Minto Mint-o Fresh Candyman HBC Candyman Eclairs ITC had launched nearly all the products range off Non tobacco Products. The company follows the Going rate pricing that is the price of the product depends upon the competitors price.W. 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. Products Launched in Orissa Market: 1) 2) 3) 4) 5) Sunfeast Biscuit Aashirvaad Atta Aashirvaad Salt Ready Meals Salted Biscuits are to be launched sooner ITC Pricing strategy: The pricing of the ITC food division depends upon the Customers’ demand schedule. 34 . The existing network of ITC’s Cigarettes distribution is being used extensively for the sales all products of ITC Food division. They are trying to capitalized the market by associating the products with the ITC brand. The firm chooses pricing more or less the same as Market leader. they are very aggressive in their distribution of such products.Product Mix Width Biscuits Atta Product Line Length Sunfeast Glucose Sunfeast Cream Marrie Aashirvaa d W. Among them the Ashirvaad is the market leader in Orissa in the branded atta category and at the second rung after Britannia. Parle and Briskfarm.

5% discount on the marked price on all the ITC’s non food division products. This promotional activity was aimed at the low selling areas of Orissa. the local promotion scheme is decided by the Area Sales Manages.The company offers two types of Pricing Discount and allowance: 1) Price Discount: This is the discount in price to those who purchase in the large volumes. No specific ads have been made for the Orissa market. 2) Quantity Discount: Some Extra Packets of Aashirvaad atta are given free to the distributors if they fulfill certain targets at the same price for the same quantity. and the retailer’s are given 15-20% for the same. 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. As the promotional scheme for the Aashirvaad atta 1 Kg of packed Aashirvaad atta was distributed freely to the various house hold through out Orissa.e. it give its suggestion to the District office and that is forwarded to the Head Quarter in Kolkatta. Price reduction is also done for the other customers who buy the product such as Aashirvaad atta in bulk quantity. Credits and Pricing: The price of the products get changed for amount of the credits if they availed that and in certains cases like Sunfeast Biscuits no credits are provided. In case of Aashirvaad atta the credit is usually given for 7 days. 35 . In past the company has done its promotional activity mainly through the local mode of transport like Auto and rickshaw and giving ads in local newspaper. Promotion in Orissa Market: A particular budget is allocated for the promotion of the Aashirvaad Atta and other food division product. off them a certain part is reserved for the retailers and customer if they buy a certain level of biscuit quantity. Later in another promotional scheme a packet of Aashirvaad salt was given free with a packet of 5 Kg Aashirvaad atta. ITC’s too following such discount mostly at the distributor’s level and retailer’s level. of the number of free cases that a particular distributors gets. Free Packets of Biscuit and Aashirvaad atta sample were distributed freely to the people. The distributors are given a 2 -2. as a result of which the discount on the price is reduced by 1%. this was a drop down promotion i.

At present there is no promotional scheme in Aashirvaad atta category but in case of sunfeast biscuit. In case of Aashirvaad ready meal a promotional activity is going to attract the housewife by giving them a free dinning table mat free. Another thing that affects the promotion at the local orissa market is the Advertisement effect done at the national level such as the recent Ads in which Sharukh Khan has given a appearance is acting as an attracting point for children and youngster. supply for whole of the Orissa is done through this godown. Ads in National Magazine and newspaper are given extensively aiming at the literate middle income groups Still much more dedicated local ads are required for the promotions in terms of local ads in newspaper and hoardings for the people who are poor and illiterates. The main branch for distribution of the products is located at Vishakahapattanam to cater the needs of Orissa and Andhra Market. water and during loading and Unloading. Place relevance for ITC products There are nearly 37-38 distributors in Orissa for selling the ITC Food division products. As an promotional activity for attracting the Distributors and retailers the company is quite flexible in replacement policy of the damaged goods as done by Rats. And for every 2 ARM (Aashirvaad ready meal) get a 500 ml Pepsi free (mostly in Big Bazzar and Outlets). The forty strong salesman team for ITC food division is the backbone of the distribution channel in orissa. a promotional scheme to attract the children the company is giving free things that are used by children like Ruler. Eraser. Other Ads of Aashirvaad atta is also liked by the people and have a positive effect in making them compulsive to buy such products. Distribution channel is one of the fortes of the ITC food division. There CNF godown is located at the Telangana Peth in Cuttuck. inside the Biscuit packets. Biz Bazzar also offers the customer a special price for the ITC products like Aashirvaad atta. To promote the various food division product of ITC the company is coaxing distributors and retailers who are already in business of selling the Cigarettes or other Tobacco related product of ITC. Even Sharukh khan is made as the brand Ambassador for Sunfeast Biscuit. where the infrastructure and distribution channel of Cigarettes is used. and Sharpener etc. There 36 .

00 68.00 135.00 135.00 105.00 65.00 37 ATTA ANNAPURNA FORTIFIED ATTA 10KG .00 65. The distributors of Orissa can contact the Branch Manager and the Area Executive for any suggestion or complain they act as interface between the company and the distributors.are two ASM (Area Sales Manager) for Orissa market under which there are twelve Area Executives under him working for Bhubneswar market. Analyzing the Price of the various competitors of the Aashirvaad Atta Unit ATTA 7 STAR GOLDEN CHAKKI 10KG ATTA 7 STAR GOLDEN CHAKKI 5KG ATTA AASHIRVAAD ATTA AASHIRVAAD ATTA ANNAPURNA ATTA ANNAPURNA 5 KG 10 KG 10KG 5KG Mrp 110.

perceptions. but occupation.00 135. More frequently it takes the form of social classes. education and area of residence. preferences and behaviors through his family and culture.00 Understanding the Decision Making Process of Customers The Decision Making process of the customers depends upon a large number of factors among them the following are of more importance: Cultural Factors: A person acquires a set of values. They reflect not only income.ATTA HEALTHY WORLD ATTA NTURE FRESH 10 KG 10 KG 140. 38 .

Initiator. health. There are five roles that people play in buying decisions i. sex.e.Personal Factors: Personal factors like Age. the factors that determines the buying process of the customers in orissa market. Belief and Attitudes: The belief that an individual exist in the mind of the consumer about the Product and the Brand. location of buying. psychographics. and buy in accordance with these belief and attitude. personality plays a important role in the buying behavior of the individual. income group. Our sample size consist of 68 customers chosen from different segments and on other attributes like age. Influencer. with respect to Aashirvaad atta. occupation. Inferences of the survey Reason for Purchasing: 39 . promotions. Buyer and the User itself that who buys the product or service. economic environment etc can also influence the buying decision. The following pattern was seen in the buying decision of the customers of Aashirvaad atta. External factors: Factors like Advertisement. lifestyle. To understand the buying Decision i.e. Decider.

Reason For Purchasing 70 60 50 40 30 20 10 0 Price Quality Promotion Past Experience The main driver in attracting the consumer of the branded atta is Quality of the product itself with nearly 65% of the people surveyed citing it as the main criterion for choosing the product. Price was third criterion with a percentage of 11.8) The Availability of the Product itself determine the effectiveness and the penetration of the distribution channel of that particular brand among the people.7% of the people surveyed gave importance during buying.2% has agreed that the Aashirvaad atta was easily available at retail shop. followed by past experience of the consumer with the brand (17. 40 . Of the total number of people surveyed 88. Availability: Availability Percentage Yes(88. supermarket etc.6%). This shows the distribution channel of the Aashirvaad atta is quite effective.2%) No(11.

41 .Affectiveness of Advertisement: Affectiveness of Advertisement 30 No. and informative in telling the USP of the product. Place: Place of Buying Corporate Store 4 Retail 32 Super Market 28 Wholeseller 0 4 5 10 15 20 25 30 35 Most of the customer buys the product from the nearest retail shop followed by the supermarket and very few buy from the wholeseller or Corporate store. and 41% feels that the advertisement was good enough to make them aware of the product but not capable enough to make them buy and 36% of the consumer surveyed found the advertisement of the Aashirvaad atta to be not effective at all. In our survey only 16 or 23% of the sample agrees that the advertisement of Aashirvaad atta is effective enough to make them buy. of Customers 25 20 15 10 5 0 Highly Affective Affective Somewhat Affective Not Affective An effective advertisement will attract more and more customer to buy. helps in the brand and image formation. And None of the consumer in the surveyed found that advertisement for Aashirvaad are Highly Effective.

The higher the satisfaction level higher will be the chances that the customer will buy the same brand again and again that leads to the building of the Brand loyalty. Decision Maker Decision Maker Self (32) Spouse (32) Child (0) ShopKeeper (4) These are the person who ultimately decides whether to buy the product or not i.5% were extremely satisfied with the product and will buy the product again and again and 6% of the people surveyed where not satisfied with the product. whether the Men or women of the house or the shopkeeper as an external source act as 42 .Customer Satisfaction Customer Satisfaction 60 Number of Customer 50 40 30 20 10 0 Extremely Satisfied Satisfied Somewhat Satisfied Not Satisfied The above graph shows the experience of the customer after using the product i.e. whether they were satisfied with the product as a whole. Also it also determines whether some attribution change or any other modification is required in promoting the brand.e. 71% of the people surveyed were satisfied with the product and 23.

an instigators for making the buying decision. also knowing the income level of the customer will help the company to modify the products according the buying capability of the customer which depends upon the Income level. Income Group: Income Group (Rs per Month) 10 31. Per month) with 26. In our case 47% buying decision is done by the male member of the house and an equal number of people buying decision were done by spouse or women member of the house.3 0-10000 10000-20000 20000-30000 30000+ 42. Children don’t play any role in the buying of Aashirvaad atta according to the sample size surveyed.1% were falling in the income group of 20.1 Income group determines the sector in which a company wants to foray and be a market leader.000 (Rs. Per month).000-30.e.000 Comparison of the Aashirvaad with competitors on the basis of Attributes 43 . Only 5% of the people get influenced by the external sources like the shopkeepers. Here we have divided the customers according to Monthly Income and found that the most of the consumer i.000+.6 26. Followed by the income group of 30. 42. followed by income group of 10000-20000 (Rs. only 10% of the customer were in Income 0-10.3%.

Competitors and Attributes 40 35 30 25 20 15 10 5 0 An na pu rn a Sh ak tib ho g Aa sh irv aa d y Pi lsb ur fre sh Packaging Price Taste Quality Aashirvaad atta ranks high in quality and taste but lags behind in price where shaktibhog has the advantage and on packaging where Pillsbury has the lead in the market. BRAND AWARENESS TOMA 44 Na tur e .

The logic is that if a name is recognized there must be a reason.brand awareness can be a key strategic asset. Awareness provides the brand with a sense of familiarity and people like the familiar. commitment and substance attributes that can be held valuable by the consumers. It is its closest competitor Annapurna that leads in the brand recall. It can provide a host of competitive advantages. Brand Ashirvaad Annapurna Pillusbury Shaktibhog Naturefresh Captain Cook Amritbhog Govindbhog TOTAL 1st recall 16 27 6 10 0 2 0 0 61 TOMA 2nd recall 7 15 20 9 3 3 1 0 58 3rd recall 11 8 11 7 3 4 2 1 47 Ashirvaad 16% 10% 3%0% 0% 0% 26% Annapurna Pillusbury Shaktibhog Naturefresh Captain Cook 45% Amritbhog Govindbhog TOMA at FIRST RECALL A quick look at the data shows that Ashirvaad though being a clear market leader does not lead in the brand recall.Though it is often taken for granted . It needs to invest in aggressive marketing and advertising to connect with the emotions of the consumer to have a sustainable market share and growth. Here we present the result of a TOMA test conducted on a sample of 61 respondents. Name awareness can be a signal of presence. This shows that Ashirvaad has not been able to connect with the consumers. 45 . The salience of a brand will determine if it is recalled at a key time in the purchasing process.

the company’s strategy is to expand the KOI product porfolio. ITC Ltd Foods Division is chalking out a multi-pronged strategy which includes extension of its distribution network. consumers who order at home. This ready to cook pasta comes with a saucemaker inside the pack. the company plans to introduce new products to meet the evolving needs of consumers. It is currently available in four exciting flavours: Masala. This premium brand is targeted at tourists. In this category. Sunfeast Pasta Treat. To make a success of any foods business. Product extension is currently underway to target markets in the North and West. To promote the bran. Sour Cream Onion and Cheese. ITC Foods forayed into the ready to eat category with its brand KOI. further consolidating its position as the clear market leader amongst national branded players. Aashirvaad has been expanding the range and the latest offering includes its combo packs of rice and gravies. Last year. Recommendations 46 . leveraging the strong brand association with superior quality and consistency. 'Aashirvaad' Atta continued to gain increasing consumer acceptance. At present. ITC has launched Aashirvaad Multipurpose Cooking Paste and Kitchens of India Curry Paste. In the ready-to-eat segment. Extending the portfolio under the Aashirvaad brand name. marketing initiatives and new product launches. They are planning to launch our biscuit brand in small towns and villages. spices and rice in the staples segment. the Aashirvaad brand stands for atta and salt and is expected to add suji. they are planning to take it to one million schools by the end of this year. ITC has recently launched India's first instant pasta snack. Sunfeast Pasta Treat is not fried and does not contain maida. Tomato and Cheese. In an aggressive bid to pump up volumes. For starters. Made from high protein Durum wheat. it would be procurement and sourcing which have to deliver on two fronts: mainly that of quality and efficiency. apart from understanding the palate.FUTURE PLANS OF THE COMPANY Today. ITC’s atta brand is available in 500 markets across the country. making it a nutritious snack. an all-purpose curry paste has also been included in the range. As for its ready to eat category Kitchens of India (KOI). NRIs and women in the age group 25 plus. the company is planning to extend the reach of its flagship brand ‘Aashirvaad Atta’ to 350 new markets in the next few months. Besides. The quarter also marked the company's foray into the branded spices market under the 'Aashirvaad' brand.

v The company can approach the government or distributing the atta in Military canteens and can sell them to organization that provides the afternoon meals to the children as a part of mid-day meal scheme. v The Company can collaborate with all the fast food Retail chains like Mc’ Donald. Smokin joe etc and other local fast food outlets so that they will use the Aashirvaad atta at a discounted price or a discount coupon can bee given of that outlet if they are using Aashirvaad atta. In such retail chains all the food division products can be sold at the discounted rate. v The branded atta can be exported to other countries where we are currently exporting the whole wheat. So.According to the survey conducted and after analyzing the Price. Place and Product of the ITC and the consumer behavior in the orissa market the company can implement the following measure for increasing the sales and volume of the Aashirvaad atta. v The company can come up the concept of forming a Retail chain of Food products across all over India as it is follows the marketing strategy of Umbrella branding. Pizza Hut. the company can come up with an aggressive advertisement to attract the Indian housewife as they are found to be the decision maker in the buying of Atta. v Advertisement for the Aashirvaad atta is found to be ineffective and infrequent. 47 . as more and more products are coming under the Umbrella products like food processing. Promotion.

Annexure 48 .

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. Where did you buy the product? ? Wholeseller 53 .. Which other products have you tried before? ? Ashirvaad Atta …………………. ? Pilsbury Atta ………………… ? Nature Fresh …………………. Are you satisfied with the product? ? Extremely satisfied ? Satisfied ? Somewhat satisfied ? Not at all satisfied 4.Is the product easily available? ? Yes ? No 8.. ? Annapurna Atta…………………. What is your opinion about the advertisement and the promotional activities adopted by the company? ? Very attractive ? Attractive ? Somewhat attractive ? Not at all attractive 7.Name of the Respondent: SEX (F/M): Income (Monthly): Usage Rate: ASHIRVAAD AGE: Occupation: 1. 5. Was your choice anyway affected by the promotion/ advertisement strategy adopted by the company? ? Highly affected ? Affected ? Somewhat affected ? Not at all affected 6.... What was the reason for purchasing the above mentioned product? ? Price ? Quality ? Promotion (Advertisement) ? Past Experience 3. Which brand of atta did you buy last time? ? Ashirvaad Atta ………… ? Annapurna Atta………… ? Shaktibhog Atta………… ? Pilsbury Atta ………… ? Nature Fresh…………… ? Others (Please Specify) …… 2. ? Shaktibhog Atta……………………. ? Others (Please Specify) ……………….

11. which brand and why? ? Ashirvaad Atta …………………. ? Shaktibhog Atta…………………….? Supermarket ? Retail Store ? Any Other(Please specify) 9. ? Annapurna Atta…………………. Where will you decide to buy a product? ? Pre-decided (At home) ? Shopkeeper 14. (if they can recall) what are the attributes they talked about and the benefits? 15. Will you like to try any other brand? ? Yes ? No 10. If yes. ? Pilsbury Atta ………………… ? Nature Fresh………… ? Others (Please Specify) ………………. Who is the decision maker? ? Self ? Spouse ? Child ? Other 13. According to advertisement.. Please assign a value from 1-5 to the products mention below according to: 5 for Excellent 4 for Very Good 3 for Good 2 for Average 1 for Bad Packaging Ashirvaad Annapurna Shaktibhog Local Brands Pilsbury Nature Fresh Price Taste Quality 12.... How often is this product used in the home? ? Twice in a week (Heavy User) ? Once in a week (Normal User) ? Once in a fortnight (Average User) ? Once in a month (Low User) ? Other than this ……………… 54 .

? Grocery store ? Drug store ? Department store ? Other. Have you ever recommended Ashirvaad Atta to others? ? Yes ? No 19. Which brand have you consumed most often? ? Ashirvaad Atta ………… ? Annapurna Atta………… ? Shaktibhog Atta………… ? Pilsbury Atta ………… ? Nature Fresh…………… ? Others (Please Specify) …… 17. Are you likely to buy Ashirvaad in the future? ? Definitely Not ? Probably Not ? Might or Might not ? Probably ? Definitely 21. How strongly do you associate the following characteristics with Ashirvaad? Please answer using a 1-5 scale where (1) is "No association" and (5) is “High association. Do they remember any promotional strategy for the brand they opted for and which? 18.16." 1 No Association Packaging 2 3 4 5 High Association N/A Price Advertisement Taste 55 . Where do you buy Ashirvaad? Please choose one answer only. Please Specify 20.

itcportal.com http://www.just-food.co.zgi# (Uploaded the Questionnaire for online survey) 56 .google.com/build/survey-modify.com/ http://www.in/ http://www.nseindia.References Marketing Management – Philip Kotler CMIE database Prowess Database Websites: http://www.blonnet.com http://www.com/ http://www.zoomerang.com/ http://www.thehindubusinessline.org http://www.indiainfoline.com/ http://www.foodindia.

) Number of Characters: 72.Filename: Marketing Management Project (ITC-Aashirvaad-Atta) Directory: C:\Documents and Settings\tapan\Desktop Template: C:\Documents and Settings\tapan\Application Data\Microsoft\Templates\Normal.) .dot Title: Preamble Subject: Author: Shridhar Sharma Keywords: Comments: Creation Date: 12/13/2007 2:57 PM Change Number: 2 Last Saved On: 12/13/2007 2:57 PM Last Saved By: tapan Total Editing Time: 1 Minute Last Printed On: 12/13/2007 3:10 PM As of Last Complete Printing Number of Pages: 56 Number of Words: 12.605 (approx.737 (approx.

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