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Marketing Strategy

of

ITC
Biscuits

Sunfeast

Group 3:Section A Akhilesh Aggarwal (03) Divya Sajja (16) Nitin Kumar (27) Ridhi Katira (40) Tulika Prasad (52)

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Table Of Contents

Executive Summary Introduction Industry Analysis Competitor Analysis Consumer Analysis Market Segmentation Marketing Mix Positioning of ITC Website Analysis Future Marketing Strategy Annexure

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Executive Summary We have begun this paper by analyzing the market as well as the industry structure in biscuits in India. The biscuit industry in India is dominated by Britannia and Parle and off late ITC Sunfeast has joined the league, since it’s inception in 2003. The industry is still in the growth phase with a huge and untapped potential. Most brands are present in all price segments. After doing an analysis of the marketing strategy followed by ITC vis- a- vis its competitors, we discovered that there is a potential for improvement for ITC Sunfeast. This paper presents an analysis of the market for biscuits and accordingly it suggests a marketing strategy for the firm. The changes in the tastes and preferences has provided a unique opportunity for ITC to enter the market and develop a relationship with the customer. It has become number three in the biscuit market since its entry in 2003. The focus of the marketing strategy should now be on how to expand its market share and maintain the interest of its consumers while finding a more loyal base as well. There are various other aspects of marketing strategy that have been studied for ITC Sunfeast. We have begun with an analysis of their branding exercise and compared it with its competitors. This paper also looks into the current marketing strategy concerning promotion and advertisement, pricing, positioning, communication and distribution channels, and others. On the basis of this study, we have suggested measures that ITC Sunfeast can take for the coming year ( 2010-11). Introduction Incorporated on August 24, 1910, ITC is one of India's foremost private sector companies with a market capitalization of nearly US $ 19 billion and a turnover of over US $ 5 billion as on 31 march,2009. . It employs more than 26,000 people at more than 60 locations spread across India, as on 31st march 2009. The organization is divided into various divisions/strategic business units, namely: FMCG, Hotels, Paperboards, Specialty Papers & Packaging, Agri Business and Information Technology

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ITC

FMCG:
 Cigarette s  foods  lifestyle retailing,  Personal care  Educatio n& stationary  Safety matches  Agarbatti s

Hotel s

Paper boards & Packaging
 Paperboa rds & specialty Papers  g Packagin

Agri Business
 Agricommodities : e-choupal  Tobacco

Information Technology

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Agri Business 5. creating growing value for the Indian economy and the Company’s stakeholders 5 .PRODUCT LINE 1. Scissors. Saathi Aim. Greeting.Choupal Retailing g. Wills Signature Essenza Di Wills. Classmate. Bristol. Spices Sunfeast Bingo Candyman. Aashirvaad Ready meals. Ready To Eat f. Biscuits c. Capstan. Fortune e. VaxLit. John Players. Confectionery e. Gifting & Stationery i. Paper boards & Packaging Vision: Sustain ITC's position as one of India's most valuable corporations through world class performance. Cigarettes 2. India Kings. Aashirvaad Instant Mix. Classic. Mint O Insignia. I-Kno. Welcom. Homelites.Others a. Matches & Incense Sticks 3. Navy Cut. Paperkraft. Ship. Mangaldeep ITC . Fiama Di Wills Expressions. Aashirvaad Atta. Delite. Gold Flake. FMCG. Berkeley. Salt. Silk Cut. Benson & Hedges and State Express 555 Kitchens of India. Sunfeast Pasta Lifestyle Wills Lifestyle. Flake. Staples b. Salty Snacks d. Personal Care h. Miss Players. Hotels 4.

The Organized as well as unorganized sector has about 50% each share of the market. delivering superior and sustainable stakeholder value Core Competencies: 1. and Priyagold are the big players in this industry.000 small and medium-size producers constitute unorganized sector in this industry. The depth of distribution 2. The biscuit market in India has acquired a value worth 71 Billion Rupees in 2008 growing at a rate 15% in current value terms. between them over 82 per cent of the market in value terms. Britannia and Parle held. At that time. Its brand building capabilities. There are about 15 Players in the organized sector. ITC was already value adding to wheat with its branded atta presence. ITC Sunfeast. it could also improve its bottom line further. Biscuit is a comparatively low margin food product in the PMCG (Packaged Mass Consumption Goods) sector.Mission: To enhance the wealth generating capability of the enterprise in a globalizing environment. Britannia. Biscuit is a comparatively low margin food product in the PMCG (Packaged Mass Consumption Goods) sector. 3.000 crore market in India. Industry Analysis: Biscuit is one of the major bakery products. Parle. By entering the biscuits segment. ITC forayed into biscuit industry. Biscuits are estimated to enjoy around 37% share by volume and 75% by value of the bakery industry. The ability of Quality outsourcing. Only 6 per cent of this is branded and packaged. The share of key players in glucose and nonglucose biscuit segments is as follows: 6 . ITC decided to enter the foods segment because it is an Rs 550. An estimated 50. In 2003.

The following gives the market share of the various players present in the biscuit industry PARLE BRITANNIA PRIYA GOLD ITC REST The organised sector consists of the branded and packaged biscuits. The biscuits in the unorganised sectors are mostly sold loose. The following pie chart gives a break 7 .

Unorganised sector caters to the rural market and tier 3 cities. 40% ORGANISED SECTOR UN ORGANISED SECTOR 60% Next we show the segmentation of the four zonal markets 24% 25% NORTH Z ONE WEST Z ONE EAST Z ONE SOUTH Z ONE 28% 23% 8 .up of the market shared by these two sectors.

like chocolates. and wheat flour which have been accounted for the industry’s low margins of profit. they have to come up with new and innovative varieties of biscuits. • Added to this is the heavy burden of taxation. 9 . the biscuit industry is facing a number of challenges such as: • Low margins of profit due to hike in the prices of major raw materials like sugar. vegetable oil.5 per cent . • The ever-growing population and the growing middle class. • Constant innovation to be at par with the competitors and the various customized bakers of the neighborhood. which is making it difficult for the organised biscuits industry to operate at an optimum level. At the same time. • New launches: In the scenario of intense rivalry among competitors.Growth drivers and Challenges for the biscuit market: The growth drivers for biscuit industry are: • Focused advertising: For more growth people need to be educated about the various new launches in the market and this promotion is done with the help of large-scale advertising by various companies. milk. • Urban Market: The market penetration in urban areas is 75-85% and this area is the major growth driver of the biscuit market as the people over here have high disposable income. Biscuits attract VAT at 12. confectionery and ice cream that cater to a much smaller and relatively more affluent consumer base. • The biscuit industries have the challenge is to improve and enhance their productivity to absorb inflation in their input cost to the highest possible extent and make their brands available for consumers at affordable prices. which would help them create a unique identity for themselves.

Champion. Digestive Marie. Monaco Jeera. Nice Time Hide Seek and Britannia Parle Kreams.Treat Salt biscuits 50-50. Kreams Gold Krackjack. Nimkin Parle-G Parle Marie. Madhabi. Veeramani. Kids Cracker. Time Pass Glucose biscuits Tiger. Ankit. Bhagwati. Magix Marie Lite Milk Shakti Priyagold Sunfeast Classic Cheese Don Cream. Nalanda Looking at the different brands of products of these players in different categories:Cream biscuits Bourbon.Competitor Analysis: Major players:• • • • Britannia Parle PriyaGold Sunfeast Other players:• Cremica. crunch. Snacks Bourbon Zig zag. Others Little Hearts. Glucose Dream cream Sweet & Salt Magic Butterbite. Big Coconut Boss. CNC Dark Fantasy. Biskfarm. Health biscuits Marie Gold. Good Day. Shangrila. Dukes. Monaco. Windsor. Marie Light Milky Magic Nice 10 . Horlicks. Milk biscuits Milk Bikis. Bonn. Anmol. Sobisco. Raja. Gold. Snacky. Cheese Bit Classic Salt. Nezone. Cream.

200 crore Weaknesses • • Strengths • • Not coming up with new products Has been in this business since • Geographic Concentration 1892 • Decreasing Cash from Operating • Brand value Activities • Has an established and popular • High overhead costs basket of products • Focus on Research and Development • Robust Manufacturing capabilities and world class factories • Strong segment performance • Superior technology Opportunities Threats • • • Growing market showing growth rates of over 15% Increasing Demand for Healthier Lifestyle Products Opening up of new markets • Entry and rise of new players such as Priyagold and ITC. Milk Bikis.a. Rising raw material prices Government regulations Unorganized bakeries • • • 11 . India.a."Eat Healthy. Rs. Good Day. they unveiled its new corporate identity .. Nice Time. Nice Time. West Bengal. Nutrichoice. Bourbon. Think Better" Occupies a 38% of the biscuit market share in India Brands. 2. Treat. compared to the industry growth rate of 20% p.Britannia • • • • Established in 1892 in Kolkata.Tiger. If even one or two more such players enter and meet with success. Little Hearts. 50-50. Marie Gold. Britannia will suffer heavily. Time Pass The company has been growing at 27% p. In 1997.

Krackjack. Chox. Entry of foreign biscuit brands with the coming up of organized retail. Nimkin.Parle G. Parle Marie.Parle • • • • • • • • • Established in 1929 1st brands – Parle Glucose and Parle Monaco Occupies a 40% share of the total biscuit market in India Has 14 manufacturing units for biscuits & 5 manufacturing units for confectioneries It has the largest such manufacturing units in India Annual turnover 2000 crores It has provided products to the masses within affordable range Brands. Kreams Gold. Goldenarcs. Unorganized bakeries Decline Share of glucose biscuits is a major threat as Parle G is a flagship product 12 . Monaco Jeera Weaknesses • • Dependence on retailers and grocery stores for displaying Parle products Over-dependence on Parle-G Strengths • • • • • • • • Market leader Strong product basket Parle-G is the world’s largestselling biscuit Strong reach in rural and remote areas Brand value Frequently coming up with new products Extensive distribution network Good understanding of consumer psyche Opportunities • • • Growing market showing growth rates of over 15% Increasing Demand for Healthier Lifestyle Products Opening up of new markets Threats • • • • Entry and rise of new players such as ITC. Hide and Seek. Magix. Monaco. Kreams. Digestive Marie.

Brands.Priyagold • Company called Surya Food & Agro Ltd. was incorporated in November 1992 and commenced commercial operations of manufacturing & selling of biscuits under brand “Priyagold” in October 1993. Unorganized bakeries • 13 . 50. Occupies a 15% share of the Indian biscuit market Have established strong manufacturing capabilities and have invested strongly in developing consumer preference for brands. Don. Coconut crunch. Lucknow & Surat. Marie Lite. Cheese Cracker. They are also outsourcing manufacturing to a plant located in Hyderabad. Bourbon. Classic Cream. Snacks Zig Zag. Consumers buy • Have to create demand for because available cheaply their products Opportunities Threats • • • Growing market showing growth rates of over 15% The market is expanding and biscuit consumption is increasing Rural areas demand cheaper branded biscuits • Maintaining lower prices is increasingly becoming difficult because of increasing raw material costs and increasing transportation and distribution costs.a. CNC.000 MT p..Butterbite. Three plants located in Greater Noida. Magic Gold. Kids Cream. Big Boss. Production capacity is of 1. Trademarks / brands “Haq Se Maango” & “Priyagold” are some of the most powerful brands in the FMCG sector. Cheese Bit Classic Salt • • • • • • Strengths • Weaknesses Good products at affordable • Have yet to establish strong prices brands • Push strategy.

2) Social factors • The people around them easily influence reference groups. Friends. They want to eat biscuits if they see others around them having one.cash. Objectives Organizations Operations Occasions Outlets Tea time snack. nutritious. choco-chip biscuit. tea time snack. shorter credit (‘khata system’) Daily routine.e. cream-filled cookies.Consumer Analysis: 7o’s of Biscuits Occupants Objects People of all age groups specially Children. glucose biscuit. i. glucose alternative Individuals . paan shops. parents. orange cream biscuit. in-store bakery cookies and eggbased cookies. parties Kirana stores.The major target segment of biscuits. on the move food. local bakery shops Factors Influencing Consumer behavior: The factors influencing the consumer behavior are divided into various categories as shown below: 1) Cultural factors do not have much influence on a low involvement product like biscuit. health conscious brands. school canteens. artisanal cookies. children. wafer cookies. office canteen. marie biscuit. In a 14 . healthy and filling. vanilla cream biscuit. chocolate cookies. cookies. butter-based cookies. birthdays. college canteens. plain cookies. home makers (mostly house wives) Market place .students. assortment cookies. relatives and especially family members are a huge influence. retail outlets. elaichi flavoured biscuit. chocolate cream biscuit. get togethers. retail outlets Crispy snack. kirana stores. regular snack. working crowd.

a poor laborer may buy inexpensive biscuits for satisfying his hunger. Market Segmentation: 15 . Consumers in the highincome bracket would prefer to buy premium biscuits like dark fantasy as opposed to glucose biscuit. Senior citizens prefer biscuits for its easy in eating and digestion. Whereas a poor laborer will not spend more than the minimal amount required for the cheapest biscuit. fun. 4) Psychological factors • Motivation. • Perception . 3) Personal factors• Age .consumers perceive ITC Sunfeast to be a good quality product. For him it is not a matter of choice but one of necessecity.group of friends. Kids from 5-10 years are the major consumers of biscuits because it is novel and tasty for them. which gives value for money. Youngsters in the age group 11-18 years purchase it for taste and convenience.all age groups consume biscuits for different reasons. • Status . They are also influenced by the endorsement by a celebrity like Shah Rukh Khan. which compels people to buy biscuits specially those of lesser price. A person who is earning more also buys biscuits but goes for the premium brands. Since biscuits are one of the favorite teatime snacks one is motivated to buy it for that purpose too. • Income .there are biscuits available in various price ranges.hunger is one motivating factor. say five of them if three prefer ITC Sunfeast then the other two would also eat the same to get acceptance as the part of the group.the income decides the expenditure segment of people. • Occupation . It is also perceived to be crispy. Working people also consume it for convenience. innovative and healthy. Students and executives may buy a more expensive biscuit.

Segmentation refers to identifying the needs & preferences of different groups of consumers. Segmentation basis Income levels rural urban comments Higher signifies income higher of Low(85%.4000) disposable income Family size Large(65. A look into the penetration of the biscuits in rural & urban areas gives us a fair view of this segment. Urban/ Rural: Another basis for segmenting the market is through the Urban/ Rural divide. The detailed segmentation of the biscuit market is as follows: Geographic Segmentation: The biscuit market can be segmented based on the geographic boundaries. the rural households can afford only three square meals a day & could seldom afford an evening snack. The lower penetration in rural areas can also be associated with the fact that with their income levels. biscuits in India are primarily served along with tea/coffee during the evening snacks.500< High(>20000) >Rs.Rs.3%)(5-6) Small(60%)(1-4) Presence the sales packets nuclear families in urban-higher of smaller 16 . This can be classified as: a) North (25%) b) South (24%) c) East (28%) & d) West (23%) A look into the data for the biscuit market tells us there is no geographic bias in the purchase of cream biscuits. This can also be attributed to the fact that due to the lowincome levels. The biscuit penetration in Urban is around 75 to 85% whereas in rural areas it is only 50 to 65%. In addition. the rural households prefer to eat homemade food rather than buying biscuits.

Gender Male dominated Female dominated Advertisements need to be different for both the habits by segments Occupation Mostly farmers and Working class unskilled labor. Ruralreduction brand counterfeit products leading to dissatisfaction Attitude Price towards Indifferent Very important Depends on the Awareness is less in rural Quality important price in rural. Packet size Lifestyle Big Simpler mundane. of the quality of a by other products age segmentation Lesser level is less than . Small/compact and “on the toes” Owing to the family size. teatime indulgence. Eating influenced corporate culture Awareness Low High Consequences: Fake products high in advertisement penetration low Occasion Festive occasions Regular consumption Urban-on the move food option and snack. The urban sector has more potential 17 rural. Benefits Luxury good Hunger and taste Infrequent satisfaction Brand loyalty Less Moderate-high purchase commodity.

Demographic Segmentation: Age: Another basis of segmentation is the age of the consumer. The consumers in this category can be classified as: Category Children Adults Elders Age 4 to 14 15 to 45 above 45 It can be seen that the children are a lucrative market for cream biscuits as they have a natural liking for cream.as consumption of “easy to eat” items prevail. On the other hand. Porter’s 5 Forces: 18 . the adults and elders have a natural tendency towards glucose and Marie biscuits. as these are teatime snacks and are not harmful to their health.

Power of SuppliersLOW The ingredients are basic commodities such as wheat. bread and bakery products 19 .HIGH High competition among existing players to capture maximum market share. Power of Buyer. Internal Rivalry.Threat of new entrantsLOW Capital-intensive manufacturing. bread and bakery products Marketing Mix: Threat of substituteHIGH Traditional Indian homemade snacks. Many substitutes and Low switching cost Threat of substituteHIGH Traditional Indian homemade snacks. sugar etc.LOW to MEDIUM Buyers have no market power. advertising and distribution system.

e. Marie Lite and Milky Magic are mass products but a few Sunfeast products such as Sunfeast Golden Bakery and Dark Fantasy are premium or prestige products.. 20 .Product Level: Product Classification: 1) Based on Tangibility: Sunfeast biscuits are tangible. i. 2) Based on functional life: Sunfeast biscuits are consumable since biscuits form a part of food and have a short life. 3) Based on price and quality: Many of Sunfeast’s products such as Sunfeast Nice. one can touch and see them.

Product Life Cycle: The product life cycles of products in the biscuit. they are partly impulse products. Biscuit companies are constantly trying to innovate and come up with unique flavors and concepts in the market. Britannia Treat. Product Mix: Width: Sunfeast produces Biscuits. the Product width is three. Parle Hide and Seek Milano etc. products like wafer products are in their decline stage and gradually are getting out of the market. These variants generally within the Introduction and the Growth phase of the product life cycle. Sunfeast Dark Fantasy. They are staples since consumers buy them regularly. These variants have a short product life cycle during which these are promoted heavily and decline faster than the normal glucose and cream biscuits. Length: The length of Sunfeast products is as follows: 21 . On the other hand. industry is different. Various varieties like glucose biscuits and cream biscuits are in their maturity stage wherein the market demand has become stable and now the company’s are only fighting for maximizing their market share. Therefore. In addition.4) Based on Utility: Sunfeast biscuits are convenience goods. The various examples of such variants can be Sunfeast Golden Bakery. Cookies and Pastas.

They all come in one size.has four variants: Strawberry Cream. Consistency: The product consistency generally depends on three factors: 1) Production 2) Distribution 3) Consumer End-Use 22 . butterscotch and Choco-nuts. Bourbon. Sunfeast Golden Bakery. depth is two. Butterscotch Cream.has two variants: Marie Light Original and Marie Light Orange. Sunfeast Dream Cream. So depth is four. depth is three.has three variants: Butternut. and Orange Cream. Therefore. Therefore. They both come in only one size.BISCUITS Milky Magic Marie Light Golden Bakery Dark Fantasy Glucose Dream Cream Snacky Sweet and Salt Benne Vita Flaxseed Biscuits COOKIES Sunfeast Special PASTAS Pasta Treat Depth: Sunfeast Marie Light.

23 . 2nd and 3rd level of distribution channels. In this way. in Dark Fantasy extra amount of chocolate is added to give it more taste etc. by concentrating on consumer’s tastes and preferences and emphasizing on R&D. Sunfeast Golden Bakery and Sunfeast Dark Magic. E. then depending upon the product extra ingredients are added. vegetable oil. inverted syrups. The basic end use of all Sunfeast products remains the same. ITC uses the same distribution channels for selling all its products under the biscuits category. Sunfeast is the umbrella brand under which all the biscuits are named using Sunfeast as prefix such as Sunfeast Marie light.g. Chocolate and Elaichi). Products like Sunfeast Milky Magic may also be consumed for intake of high glucose levels for immediate strength and energy.Orange. the Sunfeast brand grows from strength to strength. Sunfeast followed brand extension by introducing Pasta Treat in the snacks category. i. Brand Name Strategy: ITC follows Individual names strategy for its biscuits category by naming them Sunfeast.The production process of every Sunfeast biscuit follows some basic ingredients like wheat flour.e. skimmed milk powder etc.eating it simply to satisfy hunger. For a product like Sunfeast Special it followed line extension with the introduction of Sunfeast Special Cookies (has two variants-Cashew and Butter) and Sunfeast Special Creams (has three variants. when it introduces any new product in the biscuit category it follows line extension. Similarly. Brand Name Decision: ITC follows both line extension and brand extension for its products. 1st.

These appeals to the kids who are Sunfeast’s main target market. if it attempts to move up the price ladder in its biscuits portfolio. active and sweet toothed ids. satisfaction and Pleasure. which is the symbol of contentment. biscuits become highly price sensitive. In Glucose business segments. A typical biscuit portfolio of a company straddles across the economy and the highend consumer segment. There is a fairly high possibility of the demand for a particular brand dipping. it has its flagship brands to take on competition from economy segment biscuit brands like Parle-g. & from premium segment biscuits like Britannia Good Day. The mascot of Sunfeast is the Animated Sun. Britannia Tiger etc. ITC Foods with its economy brand ‘Special’ and premium brand. Parle hide & Seek etc. as this segment is basically a value for money segment. ‘Dark Fantasy’ echoes a strategy of having different brands at different price points to cover both segments in biscuits. Sunfeast biscuit is a biscuit that takes the customers into a fantasy world (‘Sunfeast ki duniya’)” Its tag line “spread the smile” has an emotional connotation attached to it. Sunfeast Size MRP Per 100 24 . It has also created a Sunfeast ki duniya. In such a competitive scenario. This is also because brand loyalty in biscuits sector happens to be frail. the high-end consumer segment does not have a price-limitation. Price: The biscuit market in India is also extremely fragmented with a substantial proportion of sales accounted for by the unorganized sector.POSITIONING of ITC (Sunfeast): Positioning statement “To energetic. which is an imaginative fantasy world where one is transported on consuming the biscuit. Therefore. However. ITC keeps a low MRP like its competitors.

20) Marie Gold (10.00 5.00 Segments ITC Sunfeast Britannia (Rs/100 Parle (Rs/100gm) gm) 50-50 (10.55) Good (13.67) Butter Cookies 2020 (8.77) Parle-G Glucose Biscuits (4.Classic Salted Sunfeast Snacky -Chilli Flakes Marie Light Sunfeast Special Golden Bakery 82 82 82 82 150 78 147 70.33 8.88) Treat Cream (12) Light Hide & Sike Bourbon (12.84) Monaco (Classic & Regular ) (9.69) Classic Cracker(8) Tiger-Glucose biscuits (4.92) Economy Segment a Special (13.6 70. 12.20 12.) Dream Cream Strawberry Dream Cream Bourbon Dream Cream Orange Dream Cream Butterscotch Dark Fantasy-Vanilla Cream Sunfeast Glucose Orange Marie Sunfeast Snacky .20 12.16 9.20 20.25) Kreams Chocolate(7.16) Sunfeast (9.33 20.77) 25 .20 12.(Gms.6 147 150 75 10 10 10 10 30 4 12 7 8 12 20 15 gms.14) Milk Shakti (Milk and Honey ) (6.33) Dream (12.53) day pista Kreams (6.13) Marie Light (8.33) Krackjack (8.13 8.85) (Rs/100gm) Glucose (5.16 13.33) cream Time pass (8.92 11.33) Mango snacky Milk Bikis (8.

55) Milk (16. Company C&F / Super Stockist Distributor Retailer Wholesalers 26 Consumer Retailer .69) Vita Little Heart (16.Cream (Cream (14) Marie (6. But Britannia seems to have a superior distribution clout with its presence in nearly 3.3 million outlets.85) Nutri Choice (15) Cream carbon chocolate) Bakery Good day choco Hide & Seek (16) chip (20) Pure Magic Nutrichoice (15) Creamy (17. In nearly 1. ITC is leveraging its well-established distribution channel of tobacco business for Sunfeast biscuits.67) Golden (20) Dark Fantasy (20) Benne Flaxseed Premium segment Bourbon (16. as it is partly an impulse purchase product.8 million outlets.80) PLACE (distribution Channels): For biscuits. Sunfeast is available. distribution and visibility are extremely important.67) Milano (23.

Zee and news channels. it was promoted by sticking posters on walls and behind the buses Print Media: Corner space in leading newspapers is booked for advertisement. Shah Rukh Khan as its brand ambassador. ITC has around 20 spots on a variety of radio channels. It sponsors Sunfeast Open. Television and Radio: In April 2005. hangers to display their products. " Hara Bano " campaign that set a world record in planting maximum number of saplings etc.PROMOTION: Non-personal communication: Advertising: Outdoor advertising: For two years after the launch of Sunfeast. mass Hindi channels like Star TV. a recent initiative aiming at the school kids by providing them an opportunity to enhance creativity through painting competitions. 27 . as the official sponsor of the WTA tennis championship — titled the Sunfeast Open — the company had teenage sensations Sania Mirza and Mahesh Bhupathi campaigning for it. ITC Foods Ltd covered more than 1. it signed on Hindi film actor. For promotions in southern states. The company books nearly 10-15 spots per channel per day on youth channels such as MTV and Star World. in a bid to reinforce its brand on kids. In the same year. Events & Experiences: In 2004.000 schools across the country as part of its Sunfeast school programme. Sunfeast signed Tamil super star Surya as a brand ambassador. Sales promotion: (Pull strategy) ITC also provides its retailers with racks.

Hotels.itcportal. At Food Bazaar. As per a survey conducted by Future TV in April 2008 to study the impact of advertising on awareness and brand recall of Sunfeast. • • Majority at Big Bazaar recall seeing the ads. recall of Sunfeast has gone up but to a lesser extent. Annual advertising budget for ITC biscuit segment is 115-120 crores. • • 3 out of 4 of the respondents who recalled Sunfeast recall seeing ShahRukh Khan. Sunfeast biscuits are listed under the foods category. Aided brand r: Pre Website Analysis ITC has a website in place for all its products including Sunfeast biscuits (www. The company undertook an elaborate advertisement campaign in print as well as electronic media to advertise the scheme. their findings were: (Annexure 1) • Spontaneous awareness has gone up significantly across stores for Sunfeast and TOM (Top of Mind) increases in Big Bazaar. The advertisement said ' buy a pack of delicious Sunfeast Golden Bakes Biscuits and you could find a real gold coin inside absolutely free'. It is quite an extensive website and has all the company information. questionnaires were distributed to a sample of 300 people visiting food bazaar and big bazaar in Mumbai. Agri-Businesses and Information Technology. Brand recall for Sunfeast has gone up significantly in Big Bazaar. Comments on the website content and appearance: • The website has light tone and colours such as a white background.com). • Higher purchase intention for Sunfeast more so in Big Bazaar where a high majority would definitely buy. 28 .(Push strategy)Sometime back ITC Limited started a prize scheme to promote its Sunfeast brand biscuits. All the businesses of ITC are listed in one section including FMCG.

com.com has a page dedicated to all the information relating to the Sunfeast biscuits. One major reason for ITC’s biscuit website not being so comprehensive is that ITC deals in a wide range of products and has brief information about all its product categories. There is also a link provided to all the media releases related to ITC products. • The contents of biscuits are not mentioned in www. But the competitors many 29 . Comments from Sunfeast’s perspective: • Itcportal. No elaborate description of any of the products. It does take a while to find specific information within the website.• • • It is representative of all the new products and services offered by ITC. • The page tells about all the biscuits being manufactured under the “Sunfeast” brand and their description along with the wrapper photographs. • The websites of the competitors are more appealing and they have even posted the latest clipping of their advertising campaigns on their websites. finding information within links is a cumbersome process. • At the same time. This feature is also missing in ITC’s website. Links have been provided for all the products of ITC clicking on which one can get all the information about the products. This also helps the company in a way that they get to know about any problems which the consumers may be facing. • There are blogs on the websites of Britannia and Parle wherein the consumers can interact with each other.itcportal. • The variants in which a particular biscuit is available is also mentioned. although the search bar has been provided for the purpose. But comparing with the websites of the competitors there are still a lot of things missing in the website when seen from Sunfeast’s perpective. the list of all the contents is given in the respective websites. However for biscuits manufactured by Britannia and Parle. • The number of sizes in which a particular biscuit comes is also not mentioned.

In order to prevent channel conflicts.com etc.13500/. etc. sponsored links.com. This can be done via a questionnaire that can be voluntarily filled by the customers. • Banners and pop-up’s can be placed on the site most visited and these sites can be identified through the table below. • Also. ITC should also make use of this ubiquitous Internet marketing to promote its products. trade leads. ITC should register itself as with various online trading portals such as tradeindia. Online Selling Strategy In today’s technology driven environment with an expected growth of the number of internet users somewhere around 30%. • Feedback and review: In order to ensure the reliability and relevance of data.one can a get a basket of benefits such as online company listing.of whom deal only in confectionary products provide much more information about the products. • Blog marketing – This will help to promote the product to more of a active population on internet and it will cover ¼ th of the internet user population. This would help boost sales both in the national as well as international market. Whenever a prospective customer (either in India or abroad) searches online for biscuit manufacturers then the name of ITC should appear. ITC must make use of its current delivery network to send the goods directly to the customers. website and much more. 30 . for Rs.The information received will be used by the company to improve its online and general operations.com. This can be done in the following ways: • An online portal should be created for its distribution network from where the dealers and distributors can directly place their orders. This will be made effective through various techniques like banners. In tradeindia. Here the individual customers can come and discuss their views and problems. alibaba. the company must institute measures to receive feedback from its customers. Also the websites are more interactive and colourful. However for a product like biscuits the order should be in bulk and a minimum order needs to be specified. webmail account.

According to NCAER study. 3 Instant messaging Indiatimes. Reviews of the customer about the product can be obtained. gmail.5 kg in southeastern countries and in Europe and us respectively. etc Yahoo.etc. ITC has been able to capture about 14% market share within short span of time. Future Marketing Strategy Since the entry into biscuit market in 2003.5-5. per capita consumption of biscuit is 1. Naukri. etc Cricinfo.com. which consisted of 1. rediff. ITC and 31 . This reflects the huge growth potential for the industry. ITC does not believe in capturing its competitors turf in order to compete with them.com. ITC can take advantage of its wide rural distribution network as well as its choupal sagar initiative to penetrate rural market further. etc Orkut. Customer grievances can be considered online. etc 10 Dating/Friendship Other uses of the site – Interaction between customers can be encouraged.Rank 1 2 4 5 6 7 8 9 Online Activities E-mailing Job search Check news Online music Chatting E-greeting Check sports Online games Sites Gmail. it would like to expand its market coverage to 15-16% by 2010-2011. hi5. yahoo. etc MonsterIndia.8 million retailers.9 kg compared to 2. 50% of biscuit is consumed in rural areas.com. One way of achieving this target is to go for “market penetration” strategy. msn Timesofindia. They do not indulge in undercutting their competitors leading to price wars. Continuing with this momentum. In India.com.com. ITC can penetrate the market further by leveraging its extensive distribution network.hinduonline.

The overall prices have gone up by13 % the main contributors being the price of sugar. Priya gold. • Impact of rise in Raw Material Cost: There has been a substantial rise in the price of the raw materials for biscuits recently.consequently Sunfeast plays on its strengths.4 13 9.4 Raw kg (rs) 2010 9 6 5. by keeping easy price points ITC can compete with local players.5 kg (rs) 2009 8. Raja Biscuit.3 5.1 20. Biskit. It wants to maintain its innovative image by bringing out new products. Input % Price Kg (rs) 2009 Wheat flour Sugar Vegetable oil Others Total Increase % Sugar led 5 18.4 material per material per 32 .6 60 25 10 14 17 49. Thus to expand its market share they want to capture new markets instead of snatching away its competitor’s share.4 4. Price is the important factor by which ITC can eat away the market share of unorganized sector. developing an extensive product line with attractive price point variation will enable them to fight with local players like. Price • On the pricing front. one of the major components. The unorganized sector accounts for over 40% of the market.5 per Price per kg Raw (rs) 2010 15 24 49. ITC Sunfeast is known as a very innovative brand. whose price has increased by 75%. Indian Biscuits Manufacturers Association has announced a 10% Increase in biscuits prices because of higher input costs. The market has been growing at the rate of CAGR of 6-7% per annum. Therefore.

it can be recycled. It also uses its paper and packaging for fast. Sunfeast is not able to convert many to its potential customers since the awareness levels are low. bags. If these wastes are recycled. • There is a lot of waste generated in the biscuit industry. This cost benefit can be transferred to the customers in the form of lower prices or maintaining the current prices. which will help it to capture larger market shares. tins. flour dust. when the cost of raw materials is rising. 33 . If a customer wants a chocolate cream biscuit. polythene. Promotion ObjectivesITC currently markets its biscuits under the umbrella brand of Sunfeast. baking soda. visibility is the important turf where firms fight battles. there can be substantial saving in the procurement costs. They should promote the brands of their individual biscuits since it has a higher recall rate and scores higher on AIDA. sacks etc in packaging. The recyclable wastes generated include dough. • ITC Sunfeast is able to reduce its cost because of electronic procurement of raw material through its e-choupal network.increase Others ingredients include starch. The cost of recycling is lower than the cost of procurement. this can prove to be the competitive advantage for Sunfeast. it is necessary to promote the individual brand of the biscuits. In the present scenario. cores. he will ask the retailer for Bourbon rather than Sunfeast’s dark fantasy which is lesser known and has a low recall level. Either the waste can be disposed off or in many cases. • Being innovative and nimble is not sufficient for propelling growth in tough market like biscuit. efficient and inexpensive packaging of biscuits. Thus. salt etc. sugar dust in the process and wrappers. cardboard boxes.

they have separate website for Aashirwad. Push strategy . • Sunfeast may offer more affordable price points such as Rs 2. regional language newspapers.ITC has impressive celebrity endorsement with stars like Sachin Tendulkar. magazines and pamphlets providing information about the various products Broadcast media .2 crore annually.ITC Sunfeast give incentives to the retailers so that they sell Sunfeast to their customers. Sania Mirza. This objective is attained by selling biscuits in smaller pack size. Therefore.they already have group websites for their different divisions.English daily newspapers. Bingo. Disney. To take its growth to next level ITC should focus on rural areas of different zones. Rs 4 etc. Kitchen of India and Candyman Club but not for Sunfeast. This means adopting a push strategy by Sunfeast to push their biscuits towards the consumers through the retailers. Such step caters to the trend of ‘out-of-home’ consumption. where these celebrities are not as popular as the local stars. Pogo. • According to Govindkrishna Seshan ITC spends 35-40% of its turnover from biscuits on advertising and promotion. Keeping these options in mind ITC has increased its ad budget on food portfolio by 25% to gain high visibility. and Mahesh Bhupati and Shahrukh Khan promoting its Sunfeast brand. Product 34 . to increase the popularity of its product in the rural areas local celebrity or local sports personality is better option. Hungama Electronic media .Sunfeast can increase its advertisements on various kid’s channels like cartoon network. For example in food segment. This figure turns out to be around Rs 4. Print media .

they captured a significant portion of the market in short span of time. Place 35 . The main perception of people regarding healthy biscuits is that it should be “fat free”. enriched with vitamins and proteins. chilly flakes in biscuits and honey flavor under the Sunfeast brand. a butterscotch cream biscuits. It is being sold as “Sachin’s Fit Kit”. ITC launched differentiated product in every segment. sugar free biscuits it can open new source of growth for itself. the consumers in the middle to higher income range want a product. sweet and salt crackers. Since consumer is acquiring cosmopolitan taste hence by being innovative and having a better product depth will give them a position from which they can serve market effectively. Producing sugar less and gluten free biscuits will help cater to this perception. it can follow either of the two approaches- Healthy biscuits . Sunfeast has only four products in this segment whereas the competitors are offering a number of products in this segment and are getting thriving results out of it.• “Product development” strategy can be another tool for increasing market share. Premium biscuits. it introduced an orange Marie. Continuing with this strategy will help them in achieving a greater pie of the market. it is important for Sunfeast to keep up with this dynamic trend. For this. for example. It has launched its Multi Grain Biscuits. which complements their status.In today’s world where people are becoming more and more health conscious. Sunfeast is considered as an inexpensive brand which gives value for money. They used this strategy in past to capture the market.They should add some premium biscuits in their range of products. It will help capture new customer segments like students and young adults. • ITC should follow a multi pronged strategy where their target market should not be just the kids segment but other age groups as well. They used this strategy to make inroad into the market and by being innovative. Sunfeast does not have many products to satisfy this psychological need of its consumers. However. However. By launching new varieties of cookies. this is not enough.

Another mass buyer are organized retailers. • ITC has a 5400 strong e-choupal network covering 34000 villages. to maintain the freshness the company should try to minimize the transit time and closely monitor the aspects of supply chain lie warehouses. eastern states: 23%. western states: 25%. Assumtions And calculations For projecting PBT for 2010 for the company ITC: 36 . such network provides ITC Sunfeast unparallel procurement muscle. Therefore. Government supplies biscuits to the tribal belts in Uttaranchal.according to a recent study the average consumption scenario of biscuit in four zones of the country are . Madhya Pradesh and Orissa for students in school to take care of their nutritional needs. can also be a source of credibility for the product. Government. southern states: 24%. • Biscuits being a perishable product. so by having strategic alliance with them can be good source of increasing market share.• Another strategy for enhancing market share is to go for “market development “strategy . Government is one agency with whom ITC can have alliance. by reviewing its performance in respective zones they can decide which zone is underserved and hence give more attention to serve that region. which is a mass buyer. Besides these strategies. trucks etc. looking for unconventional channels can be driver of growth. northern states: 28%. Since the main input in biscuits are from the agricultural sector. They can exploit this advantage to the fullest.

15)^2= 94 billion appx. so for year 2010 it has been projected to grow by 10%. so. ITC share comes out to be 13% of 94 billion= 12. biscuit industry by 2010 will be (71)*(1. So for 2010 it has been assumed to grow by 9%. expected to grow at 15% p. but due to recession it has grown by only 9.a (CAGR). • Manufacturing and selling expenses have grown by 16% appx in 2008.3%. • Raw material costs have grown by 15%appx in 2008 due to rise in commodity prices it is assumed to grow to 18%.8%. ITC share in 2008 was 11% which is expected to grow to 13% by 2010. For projecting PBT of ITC sunfeast: Total biscuit industry was 71billion in 2008.5% • Net Income was growing at a rate of 16% appx till 2008.22 billion (1222 crore) Hence Sunfeast biscuit will contribute (1222/25809)*100 = 4.73% of ITC sales 37 .77 %since 2000 upto 2009. • CAGR of excise duty is 6. but due to slow down in 2008 .• ITC revenue had been growing at CAGR of 11. • Depreciation has bben increased proportionately by 25% . So. it increased by 7. which have been taken to grow to 18% to speed up sales in recession.

wheat. • ITC is expected to spend upto 30% of advertising expenses to promote its food division. 38 . • Since major raw material like sugar. • Other income has been taken proportionately. Due to non availability of such onformation. 50% of gross sales are considered exempt from duty.• Biscuits with MRP upto Rs 100/kg are exempt from excise duty. vegetable alsone are expected to lead to a hike in biscuit price of 13% (table given in future pricing strategy). Rest are charged are 8% rate.total raw material increase is expected to be 20% for biscuit segment.the same have been taken for sunfeast biscuits. most of biscuit manufacturing is outsurced and only quality tests are conducted by ITC for them. because ITC does not have many plants as of now for manufacturing biscuits. • Depreciation for sunfeast biscuits is calculated by taking 15% increase from 2008.

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2 88 686.41 4825.50591104 29. 46 Budge ted FY 10 25809.686747 828.9192328 67.93 15923.1 1 549.ITC compa ny For Sunfeast Biscuits Actual FY 09 23678.0 94 365. 53 7755.1654704 45 . 45 8259. 34 1193. 11 534. selling etc expenses Depreciation 0 -1193. 4 42741.7 4 7607.2 4757.210976 Less: exice duty Net sales Other income Net income Expenditure: Raw material Mnufacturing.210976 2021.76 25 4464.7 8 4101. 52 Budgeted FY10 Gross Income Net Income Gross sales 23143.4757712 6446.88515695 PBT 365. 79 17515. 04 25226.5 22 25226.4 2 15388.

com www. 11th and 13th edition Kellogs on marketing by iacobucci & others www.in Marketing management by Philip kotler & others.parleagro.indiastat.com www.com Business world marketing whitebook www.britannia.thehindubusinessline.com www.References • • • • www.itcportal.ibmabiscuits.priyagold.business-standard.com www.com www.in • • • • • • • 46 .co.