cigarette analysis india (07-sept-2011)

8/4/2019 Cigarette Analysis India (07-Sept-2011)

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Reviewed by:-

LALIT SONI (A-73)


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The cigarette industry is one of the oldest industries inIndia.

It is an importantAGRO based Industry.

It is highly labor intensive & provides livelihood to about 5

million people directly and indirectly. Cigarette is an item falling under the First Schedule to the

Industries (Development & Regulation) Act, 1951 andrequires an industrial license.

India is the second largest producer of tobacco in theworld.

It exports a good amount of cigarette in various countries,which generates a handsome amount of revenue for the

company.


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Cigarette exports during 2007-08 increased by 11 % involume terms over the exports of previous year.

Major markets for cigarettes are UAE and USA, Romania,Saudi Arabia and Iraq where the demand for generic low

cost cigarettes is growing.


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Cigarettes account for only 15% of tobacco consumed in

India unlike world pattern of 85% due to prolonged

punitive taxation

Cigarettes (15% of tobacco consumption) contribute nearly

85% of Revenue to the Exchequer from tobacco sector

Of the 58% of adult Indian males who consume tobacco,

barely 15% can afford cigarettes

Biri : Cigarettes ratio = 10 : 1

Annual per capita adult cigarette consumption in India

is appx. one tenth world average : 85

Future growth depends on relative rates of growth of per

capita income and moderation in taxes


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15 %cigarettes


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ITC Limited

G.T.C. Industries Ltd.

Godfrey Phillips(India) Ltd.

V.S.T. Industries Ltd.


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ITC 72 %

GPI 12%

GTC8%


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Market attractiveness & Competitive

strength is also important.

ITC - CIGARETTES GTCIVST

GPI ?


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One of Indias premier private limited groups withover 99 years.

Large & established Distribution Networks.

Annually turnover of the co. is RS 2888 Crore

It is one of the eight Indian companies to feature inForbes A-list in 2004.

It has more then 21,000 employees at more then 60location across India with 4,86,000 shareholders.

Ranks No. 4 among Indian listed Private SectorCompanies bymarket cap. (@ April 09)

Rated as- one ofIndias Most Respected Companies(IMRB-Business world Survey 2006)


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On 24th Aug. 1910 the company was incorporated as aprivate company under the name, Imperial Tobacco Co.

of India ltd.

On 27th Oct. 1954 the company was converted into a publiclimited company.

The name of the company was changed from the ImperialTobacco co. of India ltd., to India Tobacco co. ltd. InMay 1970.

On Oct. 1972 company entered into Hotel business.

On 2000 company has launched a project e- choupal inBhopal to Web-enable farmers to make a beginning in

Agriculture e-trade.

During the same year ITC has launchedWills sport, a fullrange of internationally styled premium wear for Men &

Women.


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Vision Sustain ITC's position as

one of India's mostvaluable corporationsthrough world classperformance, creatinggrowing value for theIndian economy and the

Companys stakeholders.

Mission To enhance the wealth

generating capability of theenterprise in a globalizingenvironment, deliveringsuperior and sustainablestakeholder value.


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They have a DIFFERANTIAL MARKETING STRATEGYtype.

o Cigarette companies manipulate menthol levels to lureyoung smokers

o Major brands and their advertising campaigns

Always use their existing channels.

Utilizing nominal resources related with the brand

Brand Ambassador are selected according to the brandsand mostly are YOUTH ICONS

They emphasize on going with the FLOW and making theirFollowers .


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Market leader in India.

Powerful Brands across segments.

Leadership in all segments - geographic & price.

Extensive FMCG distribution network.

Direct servicing of 1,00,000 markets & nearly 2 millionRetail outlets.

Exciting long term growth potential.

World-class state-of-the-art technology and products.

Investment - Rs.10 billion in six yearsAbout 71% of the Total Turnover depends upon this

Business.


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Super Premium ProductsInsignia ITC Insignia. 97 mm.

Cost: Rs 130 for 20

Where quality touches infinity, redefine perfection

Advertised in Higher SES area

555 ITC 555 premium filter: regular 84 mm.

Cost: Rs 100 for 20

Advertised in Higher SES


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India King

ITC India King. 84 mm. Cost: Rs 100 for 20

Rule your World


Wills Silk Cut(king size)

ITC Wills Silk Cut Filter: 84 mm. Cost: Rs 88 for 20

A blend so right a filter so fine



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Wills Classic/Mild/Regular/Menthol /Ultra Mild

ITC Wills Classic/Mild Filter: King

84 mm. Cost: Rs 94 for 20

Discover a passion


Wills Navy Cut(Filter Tipped) ITC Wills Navy Cut Filter: ,74 mm. Cost: Rs 68 for 20

Made for each other



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Wills Navy Cut(Duotec) ITC Wills Navy Cut Filter: ,84 mm.

Cost Rs 80 for 20 Advertised in Higher SES

Navy Cut(Regular Size) ITC Wills Navy Cut Filter: ,69 mm.

Cost Rs 48 for 20

Advertised in Higher and Lower SES.


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Gold Flake(Premium) ITC Gold Flake Premium: Regular 69 mm.

Cost: Rs 58 for 20 Its Honeydew Smooth, Smooth, exquisite,

timeless. But then, all art is Advertised in Higher and lower SES

Gold Flake King/Lights/Ultra LightFilter ITC Gold Flake King/Light: Regular 84 mm.

Cost: Rs 88 for 20 Now in a Bevelled Edge pack Advertised in Higher and lower SES


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benson & hedges(light & hard)o B & H under ITC Regular Size 84mm.

o Cost : Rs 100 for 20o Advertised in Higher and Lower SES

Marlboro (light & hard)o Phillip Morris under ITC Regular Size 84 mm.

o

Cost : Rs 100 for 20o Advertised in Higher and Lower SES


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Wills Flakeo ITC Wills Flake Filter Regular Size 69mm.o Cost : Rs 58 for 20o Advertised in Higher and Lower SES

Bristolo

ITC Bristol Regular Size 69 mm.o Cost : Rs 32 for 20o Rise to the tasteo Advertised in Higher and Lower SES


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Strength Biggest and the largest

player in the Indiantobacco market with a

market share of 80%. Its Gold Flake tobacco

brand is the largestFMCG brand in India -

and this single brandalone holds 70% of thetobacco market.

Weakness It still has to consolidate

its foot in the cigarmarket largely

dominated by GodfreyPhilips.


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Opportunities ITC is moving into new

and emerging markets likedeveloping countries of

Eastern Europe, Africa etc.

Threats The obvious threat is from

competition, bothdomestic and

international.

Health hazard

Increasing tax in Cigarettes


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Entry Barrier ANALYSIS Supplier Bargaining

Power Buyer's Bargaining Power Industry Rivalry Substitutes


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REVENUESGrowth-Share

Matrix

Y/E March (Rs cr) FY2008 FY2007

%

Growth

%

Contrib. % Market Share Growth Share

FMCG-Cigarettes 13,825.6 12,833.7 7.7 58.41 70% Low High


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The second largest player in the Indian cigaretteindustry.

Annual turnover exceeds INR 1800 crore (approx. US$369.6 million)

Has two major stakeholders, one of India's leadingindustrial houses - the K. K. Modi Group and one ofthe world's largest tobacco companies, Philip Morris.


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Incorporated in India in 1936, the Companyestablished its own manufacturing facilities in1944

On 1946 GODFREY PHILLIPS became a PublicLtd. Co. with its manufacturing operations inMumbai

Its products are distributed through an extensive

India wide network comprising 484 exclusivedistributors and over 800,000 retail outlets


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Vision To become a leading

tobacco player in India andbeyond.

Mission empowers all its people to

think and act radically,stretch relentlessly and

generate path breakingideas and strategies topropel the Company. Thishelps to create and buildpowerful brands with

unmatched service andworld class processes.


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Four Square Filter GPI Four Square Filter: Regular.69 mm

Cost: Rs 48 for 20

Man with the smooth edge

Advertised in Higher and Lower SES

Stellar

GPI Stellar Slims Cost: Rs76 for 20 Low nicotine, High Satisfaction



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GPI Red and Whiteo GPI Red & White flake

o Text in Hindi Hum red and white

peene walon ki baat hi kuch aur hai

o Cost: Rs 48 for 20

Advertised in Higher and Lower SES

I-Geno GPI Red & White Regular .

o Introduced Indias 1st King size 5s pack

o

Indias 1st Euro Norm 10-1-10 cigarette holds the promiseof an advanced cigarette quality and immense style.

o Advertised in Higher and Lower SES


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jaisalmero GPI Jaisalmer Premium king size .

o

It is a luxurious blend of finest sun driedVirginia tobaccos which deliver a smooth

mellow f lavor.


north poleo

GPI North Pole mentholo largest selling menthol cigarette in India



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cavanderso GPIs Oldest & most trusted brand.

o

providing superb value and satisfactiono Cost:Rs 68 for 20


tippero

Phillip Morris Tippero The fastest growing micro segment brand



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Strength The second biggest tobacco

company in India The first and only tobacco

company to organize thefragmented cigar market inIndia and secure itsposition as the marketleader in the cigardistribution.

Partnering with some ofthe top most players in theinternational tobaccoindustry.

Weakness low popularity of most of

its products No sole authority


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Opportunities Already present in the

Middle East, West Africa,South East Africa andSouth East Asia, GPI canstrengthen its position asan international player byentering new markets.

Even expanding marketshare in the Indian tobaccomarket is an opportunity

Threats ITC getting into the cigar

market

It has a mere 12% in marketshare


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New Entries:Buyers bargaining powers:Oligopoly market situation.Suppliers bargaining

power:Fragmentation,consolidation & integration.Low switching costsThreat of substitutes:

Depends on buyer to buyer.Some are Brand Loyalists.Competitive rivalry:New innovative products by

rivals.


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o GPC is a professionally managed organization in thefield of tobacco and tobacco related products.

o Established in the year 1930 by the late Shri NarseeMonjee.

o GTC is the first wholly owned company specializes inmanufacturing & exporting an exclusive range ofCigarettes, Flavor Cigar & Non Tobacco smokingproduct.

o GTC has manpower strength of 2000 employees spreadacross manufacturing.

o The Company has two major production facilities inMumbai as well as Baroda.


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Visiono To be a largest, Human

sensitive , Global TobaccoCompany.

Missiono Constant R & D to develop

the finest blends guided byrelentless focus to deliver

world class packaging, with

the aim to exceedexpectations of ourconsumers both in India andaround the globe . All of ourlong-term strategies & short-

term will be bound by thefinest standards ofprofessionalism anddedication.


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We work with commitment , dedication & Integritytowards a common goal.

We are an equal opportunity Employer.

We believe that learning is a life long process & provide an

environment attuned to growth.We are a balance of the boldness, energy and courage of

youth, sharpened by the experience, foresightedness andwisdom of veterans.


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PANAMAA Legendry brand of GTC.

The company has launched several variants in the Panamaportfolio.

Some of these are:o Panama Virginia Regularo Panama Filtero Panama Goldo Panama Premium Filtero Panama Delighto Panama Mentholo Panama Mini Kings


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chancelloro The Chancellor name is given to Golden Tobaccos Finest Blends.

o Chancellor as a symbol of quality cigarettes.

Chancellor Browns:o A unique Premium blend in the king size segment

o It is a sophisticated & stylish product.

Chancellor Royale:

o Which appeals to the modern age consumers who have royaltastes & hearts of Gold.

Chancellor Exclusive:

o Unique Brown Cigarettes in Regular size with Distinctive Flavor.

Chancellor Harvard Luxury:o A Consumers Favorite since ages.

Chancellor Lights:

o A mind blend of finest tobacco, in a style White pack.


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Goldeno Carving a niche for itself in the crowded marketplace is the

Goldens Brand.

o An assurance of quality, for the value conscious smoker.

Goldens Gold Flakeo A strong blend.

o Which allows the smoker to deriveimmense pleasure.

Goldens Major

o A tribute to the Macho, Courageous and Bold personalities.

o The packaging of Golden major has been inspired from theDefense fraternity.


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taj chapo A heritage brand of Golden Tobacco

o Market for more than 35 years.

o The only Premium brown cigarette in the

non filter segment.

style mini kingso Launch more than 25 years ago

o

To cater to the changing youth of the country,The name STYLE says it all.

o A distinctive blend , which was very well accepted by theIndian Youth.


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steel(Regular & kingsize)o Steel- It Separates Men From Boys.

o Targeted at the youthful Rich & smooth smoker,

With new look packaging & style.o Regular size of Steel has been a huge success.

June(Light & menthol Flavors)o Premium quality Virginia blend producing

rich & pleasant characteristics.o June Slim has been designed meticulously to

suit the life styles of those who like to carry themselves.


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just blacko A Flavored Filter Cigar

o

Flavors: Full flavor, mild, menthol, cherry,Chocolate vanilla, peach, rum, raspberry,

Sour apple, strawberry & grapes.

lipso Lips flavored cigars(in tube pack)have a sweet

filtered tip and are loaded with flavor.

o Each cigar is packed in its own individual plastic tube.

o An ideal product to carry around in your pocket.


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The company was incorporated in 1930 at Hyderabad .

The third largest player of Cigarette industry in India.

In 1984 the name of the Company was changed from TheVazir Sultan Tobacco Co. Ltd. to VST Industries Ltd.

The Company embarked upon a major modernizationprogram designed to improve its competitive ability indomestic and international markets.

The company recorded revenues of INR3,401.7 million(approximately $84.5 million) in the fiscal year endedMarch 2008.

The Company manufactures and distributes CigarettesThe products are sold under the trade names `CharminarSpecials', `Shah-I-Deccan', `Qila', `High Court', `Vazir' and

`Ambassador'.


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chArmsA Legendry brand of VST.

The taste that sets you free

Advertised in Lower SES


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Charminar A Legendry brand of VST.

The company has launched several variants in theCharminar portfolio.

Some of these are:

o Charminar Special Filter

o Charminar Plaino Charminar Standard.

Advertised in Lower & High SES

Area.


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cigarette analysis india (07-sept-2011)

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