itc sunfeast mm

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Marketing Management Project

On

ITC Sunfeast



Contents

Introduction ............................................................................................................................................ 3

ITC Sunfeast ............................................................................................................................................ 4Distribution channel of ITC ..................................................................................................................... 6

Pricing...................................................................................................................................................... 7

Promotion and Advertisements .............................................................................................................. 8

Competitor Analysis ................................................................................................................................ 9

Indian Biscuit Industry ...................................................................................................................... 10

Competitor 1: Britannia .................................................................................................................... 10

Company Profile: ........................................................................................................................... 10

Product .......................................................................................................................................... 11

Achievements................................................................................................................................ 11

Competitor 2: PARLE ......................................................................................................................... 12

Company Profile: ........................................................................................................................... 12

Achievements................................................................................................................................ 12

Strategies adopted ................................................................................................................................ 13

References ............................................................................................................................................ 15



Introduction

ITC was formed on 24 August 1910 under the name Imperial Tobacco Company of India

Limited. Later the name was changed to India Tobacco Company Limited in 1970 and then to

I.T.C. Limited in 1974. Finally, the company changed its name to 'ITC Limited' on

September 2001.

The earlier decades of the company's activities cantered around the tobacco industry. Since

1964 conclusive epidemiological evidence of the deadly effects of tobacco consumption has

led to a sharp decline in official support for producers and manufacturers of tobacco, in spite

of its large contribution to the agricultural, fiscal, manufacturing and exporting sectors of the

economy. Viewing the changes in the business dynamics in the tobacco industry, the

company started looking to other sources for earning revenue. In 1970s, it started to enter

non-tobacco businesses and in the same period it started reducing the foreign equity holding

in the company to 40%.

In 1975, the company entered Hotel business with the acquisition of a hotel in Chennai which

was rechristened as 'ITC - Welcome group Hotel Chola'. In 1979, ITC entered the Paperboard

business by promoting ITC Bhadrachalam Paperboards Limited, which today has become the

market leader in India.

In 1985, ITC set up Surya Tobacco Co. in Nepal as an Indo-Nepali and British joint venture.

Since inception, its shares have been held by ITC, British American Tobacco and various

independent shareholders in Nepal. In 2002, Surya Tobacco became a subsidiary of ITC

Limited and its name was changed to Surya Nepal Private Limited.

ITC's first rural mall, christened 'Choupal Saagar' was inaugurated in August 2004 at Sehore.

On the rural retail front, 24 'Choupal Saagars' are now operational in the 3 states of Madhya

Pradesh, Maharashtra and Uttar Pradesh.

In 2000, ITC forayed into the Greeting, Gifting and Stationery products business with the

launch of „Expressions‟ range of greeting cards. A line of premium range of notebooks under

brand „Paperkraft‟ was launched in 2002. To reach a wider student population, a range of

notebooks was launched under brand „Classmate‟ in 2003. Classmate over the years has

grown to become India‟s largest notebook brand. Years 2007 - 2009 saw the launch of

Children Books, Slam Books, Geometry Boxes, Pens and Pencils under the Classmate brand.



In 2008, ITC repositioned the business as the Education and Stationery Products Business

and launched India's first environment friendly premium business paper under the „Paperkraft‟

brand. It offers a diverse portfolio in the premium executive stationery and office

consumables segment.

ITC also entered the Lifestyle Retailing business with the Wills Sport range of casual wear

for men and women in 2000. The Wills Lifestyle chain of exclusive stores later expanded its

range to include Wills Classic formal wear (2002) and Wills Clublife evening wear (2003).

In 2000, ITC spun off its information technology business into a wholly owned

subsidiary, ITC InfoTech India Limited, to more aggressively pursue emerging opportunities

in IT and IT-enabled services area.

ITC's foray into the Foods business began in August 2001 with the introduction of Kitchens

of India ready-to-eat Indian gourmet dishes. In 2002, ITC entered the confectionery and

staples segments with the launch of the brands „Mint-o‟ and „Candyman‟ confectionery and

„Aashirvaad atta‟ (wheat flour). In 2002, ITC entered Safety Matches business with

acquisition of WIMCO Limited. ITC now markets safety matches brands like „iKno‟,

„Mangaldeep‟ and „Aim‟. ITC's entered Agarbattis (incense sticks) business in 2003. ITC's

popular agarbattis brands include „Spriha‟ and „Mangaldeep‟.

In July 2003, ITC made a foray into the biscuits market by launching the Sunfeast range of

biscuits. Since then, „Sunfeast‟ biscuits have always stood for quality and are known for

offering innovative and wholesome biscuits. „Sunfeast‟ connotes happiness, contentment,

satisfaction and pleasure. Within a span of 9 years, „Sunfeast‟ has established itself in almost

all major categories of biscuits.

ITC introduced „Essenza Di Wills‟, a range of fragrances and bath & body care products for

men and women in July 2005. The company launched 'Fiama Di Wills' range of Shampoos,

Shower Gels and Soaps in 2007. The Company also launched the 'Superia' range of Soaps

and Shampoos in the mass-market segment in 2007 and „Vivel De Wills‟ & „Vivel‟ range of

soaps and shampoos in 2008.

ITC Sunfeast



"Sunfeast"-- with the Brand Essence "Spread the Smile" connotes happiness, contentment,

satisfaction and pleasure one would derive from great tasting and high quality biscuits. The

brand positioning and imagery is reinforced by the Sun mascot conveying the emotional and

gratifying aspects of the product.

Before entering the segment, ITC dug into market research. Research revealed that the

category had gaps which ITC could settle into. Findings revealed that consumers wished to

taste new and innovative products. That was precisely what the competition had not done in a

big way. In 2003, ITC launched Sunfeast with six ranges. But it was a calculated risk. ITC

stuck to category favourites like Glucose, Marie and Bourbon cream.

Along with that, it also launched innovations such as orange-flavoured Marie, Marie light and

butterscotch-flavoured cream biscuits. In 2004, Sunfeast followed this up with the launch of

Sunfeast Milky Magic. More recently, it also has launched the Sunfeast Snacky and

Sunfeast Golden Bakes.

Analysts believe that just because Sunfeast was a new brand, helped matters. Says a

consultant, "The biscuits industry had not witnessed any major product innovation in years.

Consumers were just waiting for something new, something fresh, when Sunfeast happened."

Even the competition had not made things better. Between 2000 and 2005 neither Parle nor

Britannia launched any major new product. Yes, Britannia did re-launch its Tiger brand in

2005.

But Britannia claims that it is looking at more than just products. Richa Arora, general

manager and head of marketing and innovations, Britannia Industries, says, "We are not just

looking at new products, but tapping newer opportunities -- such as different occasions as

well as out-of-home consumptions."

In 2005, before Diwali, Britannia launched Occasions -- boxes of assorted biscuits priced

between Rs 50 and Rs 200 -- which the company claims has been very successful.

In 2006, however, the industry has seen a flurry of innovations from the big two. Digestive

Marie -- was launched by Parle in early February 2006. Britannia launched its new double-

flavoured Mariegold and 50-50 Chakkar. And Parle is all set to launch at least two new

products before the end of this year.



In 2003, ITC forayed into the Biscuits market with the Sunfeast range of Glucose, Marie and

Cream Biscuits. Sunfeast‟s brand essence, "Spread the Smile" connotes happiness,

contentment, satisfaction, and pleasure. The mascot sunny reinforces the emotional aspects of

the brand. In span of 6 year sunfeast has launched many new variants and has its presence in

almost all types of biscuit categories.

Sunfeast immediately established itself as a provider of innovative and distinctive products -

Sunfeast Marie was launched in an innovative orange flavour and the 'Sunfeast Dream

Cream‟ range includes new flavours as well as flavour enhancers. The Sunfeast Dream

Cream range is currently available in 8 variants. The Company has also introduced

„Sunfeast Dark Fantasy', a dark chocolate and vanilla cream offering for the premium

segment in select markets.

Riding on the success of its initial offering, ITC also entered the milk biscuit category with

Sunfeast milk magic biscuit. Apart from milk which helps mental growth, these biscuit also

contain the finest quality wheat adding physical growth.

In the last two years, the Sunfeast biscuits portfolio has been enhanced to include salted

crackers and cookies. The 'Sun feast Snack' salted crackers are available in 2 unique variants

– „Chilli Flakes‟ and „Classic Salted‟. Sunfeast's latest offering, 'Sunfeast Special‟ biscuitsare also available in select markets. The Sunfeast Special range currently includes cookies in

two variants – Butter and Cashew, as well as cream biscuits in two variants – Choco and

Orange. The sunfeast product portfolio has been further expanded to include healthy snacks

option. Sunfeast pasta treat is whole wheat based instant pasta for children After a

tremendous success of the 4 initial flavours, the instant pasta range has been expended with

two new exciting flavours – pizza, and chicken. The pasta segment was further expanded

with the launch of sunfeast benne vita in 4 innovative variants.

Distribution channel of ITC

ITC provides products and services of superior quality and value by sourcing its technologies,

equipment and inputs from reputed international and Indian manufacturers and suppliers.

Common values, relating to human rights performance, are shared across the entire supply

chain because ITC is committed to the importance of a socially responsible and accountable

supply chain.



As a large and multi-product enterprise whose products are benchmarked nationally and

internationally, ITC's main supply chains can be grouped as follows:

1. For all its operations, technology, machinery and equipment are sourced from reputed

and globally benchmarked suppliers/vendors who are expected to follow

internationally accepted norms and standards on human rights.

2. ITC's major businesses are vertically integrated across several Divisions. A

substantial part of the supply chain is therefore internal through strategic backward

linkages. Common values relating to human rights performance are shared across this

supply chain.

3. Being a major agric-based company, the agriculture sector is a major supplier of

inputs for its operations. The bulk of agricultural commodities are procured from state

controlled trading platforms and the open market.

A very small proportion of ITC's business consists of supply chains comprising local vendors

and suppliers. The policy framework for such entities is enunciated separately in 'Policy to

Ensure Respect for Human Rights across the Supply Chain.

Other factors:

The company used its existing network of convenience stores: the company‟s name

for the hole-in-the-wall pan-beedi shops for Sunfeast.

The company also looked at grocery stores and other retail formats.

The company says the brand is now available in nearly 1.8 million outlets.

14 manufacturing units

The company has extended its manufacturing capacity by setting up three new biscuit plants

in UP and West Bengal to focus on supply chain management strategy to enhance product

freshness, market servicing and margins

Pricing



• The pricing of the ITC food division depends upon the Customers‟ demand schedule,

the cost function and the competitors‟ price.

• 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, and

their pricing are competitive with respect to other players like Britannia and Parle.

• The company follows the Going rate pricing that is the price of the product depends

upon the competitors price. The firm chooses pricing more or less the same as Market

leader.

Sunfeast look at a two prolonged strategy:-

High margin :High margins in cream variants

High volumes: High volumes from the Marie and Glucose segments.

Promotion and Advertisements

The entire range of 'Sunfeast Biscuits' is packed in vibrant colours, distinctive

graphics and fonts identifying sub categories and at the same time, maintaining a

consistent look of “Sunfeast”.

The brand is supported with Television campaigns across National and Vernacular

media beginning August 2003 – that is distinct, highlighting the product attributes,

quality and the new – first time in the market offerings from Sunfeast. During the

launch phase, Consumer promotions were conducted across retail outlets – for every

purchase of Sunfeast Marie & Sunfeast Cream Biscuits 75gms of Glucose Biscuits

free.

Encyclopedia Networks created an interesting idea, which shows the biscuit pack

literally taking off from the hoarding - what holds it down is a rope that attaches the

end of the pack to the hoarding. The biscuit pack has been designed as a 3D pack.

Well differentiated advertisements, some which showed a complete cream world with

cream rivers, cream mountains and cream trees, were targeted at kids watching

cartoon channels.



The animated Sun this is a symbol of contentment, Satisfaction and Pleasure. This

was also received by the consumers and the ad campaigns are catchy and full of

colours and excitement. The product is also of very high quality. Thus Sunfeast has

manged to get all the winning combinations in the right mix.

At the same time, on general entertainment channels, mothers received information on

the importance of glucose, the wholeness of wheat and so on. Also, the company tied

up with Bey-Blades, the popular television series that was a rage among children, to

promote itself.

Sunfeast tagline “Spread the Smile” was being endorsed By Sharukh khan. Sharukh

khan use made sense as he was popular among Children and moreover he is among

the favourites about 60% of Indians and moreover his persona is energetic which

corresponds to the mascot of the brand. The various advertisements and promotional

shows featured Sharukh Khan and showed that even Sharukh Khan is also a fan and

enjoy Sunfeast Biscuits. So it created an impression among the audience that their

favourite actor is following this commodity so they should follow the same way. ITC

Foods has tied up with New York-based Company 'House of Spices' to launch its

biscuit brand Sunfeast across the US and that was again done by Sharukh Khan since

he is a global icon.

In the same year, as the official sponsor of the WTA tennis championship -- titled the

Sunfeast Open -- the company had Sania Mirza and Mahesh Bhupathi campaigning

for it. But that's not all. For promotions in southern states, Sunfeast has signed Tamil

super star Surya as a brand ambassador.

Analysts say that ITC's deep pockets have helped Sunfeast in many ways.

The company claims that it has been spending 35-40 per cent of its turnover from the

biscuits segment on advertising and promotions. Going by that number, ITCs annual

marketing spends are estimated to be in the region of about Rs 115-120 crore (Rs

billion).

Competitor Analysis



Indian Biscuit Industry

• Indian Biscuits Industry came into limelight after 20th century when the urbanized

society called for ready-made food products at a tenable cost. It was assumed as

“sick -man's diet” in earlier days.

• Bread and biscuits is the two major product of the bakery industry and covers around

80% of the total bakery market, out of which industry size is about 14500 crores.

Biscuit covers up to 70% of the total production

• The organized and unorganized sector of the biscuit industry is in the proportion of

65:35 respectively.

• Back in 2003, nobody thought Sunfeast would have consumers eating out of its hands.Importantly, industry barometer AC Nielsen has indicated that both Parle and Britannia are

losing market shares. Even Priya Gold has seen a minor dip from 6.4 per cent to 5 per cent.

ITC's Sunfeast has been a big gainer with its share increasing from 2.7 to 6.7 per cent.

• In terms of value, Britannia leads the market with 37 per cent market share, followed by

Parle's 31.3 per cent and ITC's 6.3 per cent. Nevertheless, the gap is still wide. Sunfeast still

has a long way to go.

• A potential after-effect could be that Sunfeast too may have to drop its prices to be in the

reckoning and this will squeeze its margin even lower. While the full game is yet to be playedout, for the moment the sun seems to be shining on Sunfeast.

Competitor 1: Britannia

Company Profile: The Company enjoys a share of 32% in the market in terms of volume.

Started way back in 1892 with an investment of Rs. 295, biscuits were manufactured in a

small house in central Kolkata. Later, the business was acquired by the Gupta brothers and

operated under the name of V.S. Brothers. In 1918, C H Holmes, an English businessman in

Kolkata was taken as a partner and „The Britannia Biscuit Company Limited (B. B. Co.) was

launched. The Mumbai factory was setup in 1924. Biscuits were in big demand during World

War II, which gave a fillip to the company‟s sales. BBCo celebrated its golden jubilee in

1968 and the company name was changed to the current Britannia Industries Limited in 1979.

In 1982 Nabisco Brands Inc., USA became a major foreign shareholder. Ten years later in

1992, Britannia Industries Limited celebrated its platinum jubilee. The following year, the



Wadia Group acquired a stake in ABIL, UK and became an equal partner with Groúpe

Danone in Britannia Industries Limited.

Product

Britannia has restructured its portfolio of products at regular intervals. This strategy has

enabled it to serve the key needs of the Indian consumer across age groups and diverse

consumption situations, through an optimum range of brands. The success of this strategy

enabled Britannia to reduce the number of focus-brands from 24 in 1998, to nine in 2001.

All its product offerings derive their premium qualities from the principles of health and taste.

This key premise has led to the evolution of a lifetime menu where a Britannia product exists

for every stage in a person‟s life. The highest consumption group for biscuits are children;

here Britannia offers Milk Bikis with all the „goodness of milk‟ required by younger kids,

while the Tiger brand is aimed at 7-14 year olds and provides them with the exuberant health

required by „winners of tomorrow‟. Another offering for children – Treat, a range of delicious

cream biscuits – is meant as a treat for children during fun times.

A particularly notable success has been Little Hearts, meant for teenagers and kids, to target

group which did not snack on sweet biscuits. The company moved into the mass market for

biscuits introducing low priced varieties under the umbrella, Tiger.

Achievements

Britannia is synonymous with the rise and growth of the biscuit industry in India. It brought

the health dimension to an industry that was traditionally driven by taste alone. This is

reflected in Britannia‟s brand slogan, introduced in 1997 that exhorted consumers to „Eat

Healthy, Think Better‟. This was quickly embraced by the entire industry to come up with

similar promotional campaigns showing biscuits to be an epitome of a healthy, happy diet.

Britannia‟s products retail in over 2 million outlets selling approximately 200 million packs a

month. With millions of happy consumers every month, Britannia is considered to be one of

the most trusted food brands in India. Britannia has also successively made the Forbes List of

200 Best Small Companies in the world for the years 1999, 2000 and 2002.



The four metros account for 65% of the sales of Britannia. Britannia industries has acquired

49% stake in Kwality Biscuits.

Competitor 2: PARLE Company Profile: Parle enjoys a 43% share of the total biscuit market. A long time ago,

when the British ruled India, a small factory was set up in the suburbs of Mumbai city, to

manufacture sweets and toffees. Despite the odds and unequal competition, this company

called Parle Products, survived and succeeded, by adhering to high quality and improvising

from time to time.

A decade later, in 1939, Parle Products began manufacturing biscuits, in addition to sweetsand toffees. Having already established a reputation for quality, the Parle brand name grew in

strength with this diversification. Parle Glucose and Parle Monaco were the first brands of

biscuits to be introduced, which later went on to become leading names for great taste and

quality.

Parle is the second largest producer of biscuits in the organized sector. In the popular brands

segment, its Parle-G remains a popular brand in the glucose biscuit segment and is world‟s

largest selling brand of biscuit. In the premium segment, it‟s HIDE & SEEK is attracting

competition due to the sway it holds in the market place.

In the salty biscuits category, Monaco has been quite popular.

Achievements

Be it a big city or a remote village of India, the Parle name symbolizes quality, health and

great taste. This reputation has been built by constantly innovating and catering to new tastes.

This can be seen by the success of its products such as Hide & Seek.

In this way, by concentrating on consumer tastes and preferences and emphasizing Research

& Development, the Parle brand grows from strength to strength. It has an extensive

distribution network, even for the most remote places and in the smallest of villages with a

population of just 500. Parle has nearly 1,500 wholesalers, catering to 4, 25,000 retail outlets

directly or indirectly. A two hundred strong dedicated field force services these wholesalers



& retailers. Additionally, there are 31 depots supplying goods to the wide distribution

network.

They are dedicated to designing products that provide nutrition & fun to the common man.

Most Parle offerings are in the low & mid-range price segments. This is based on our

cultivated understanding of the Indian consumer psyche. The value-for-money positioning

helps generate large sales volumes for the products.

Parle-G sells the most because it is the cheapest biscuit in the branded category. Most Parle

offerings, unlike Britannia, are mass brands in the low and mid-range price segments. As it

has been around for over 60 years, it has a loyal consumer base. However, Parle Products

also manufactures a variety of premium products for the up-market, urban consumers. And in

this way, caters a range of products to a variety of consumers.

Strategies adopted

ITC's Sunfeast is a brand driven by innovative product development at ITC's state-of-the-art

food technology centre in Bengaluru. Every Sunfeast product is made with utmost

care, ensuring world class standards of hygiene. Sunfeast symbolises ITC's commitment to

create brands that enrich the quality of life for every Indian as it believes that our people and

our country deserves the best.

The product Sunfeast was launched in the midst when the biscuit market in India was

estimated to be about a value of Rs 45 billion and out of that Britannia and Parle held more

than 80% of the organized sector in value terms. ITC therefore decided to enter the branded

biscuits market with products that would reinforce the gratifying aspects of the brand as well

as offer great taste and quality to customers.

The core competencies on which ITC relies are the depth of distribution, brand building

capability and ability of quality outsourcing. This is a major contributor to its success.

Sunfeast, which was launched in 2003, was one of ITC‟s diversified arrays. ITC has a well

developed system of distribution which can only be compared only to HLL. As ITC was one



company who has it‟s presence in all major fields, thus Sunfeast is established well in India

and abroad.

The biscuit market is to be estimated about 4500-5000 crore with Parle and Britannia being

the major players. The biscuit market has now moved from core glucose to value added

biscuits. While the rural market prefers Glucose biscuits, the urban market is fond of cream

biscuits. The establishment of brand was never easy as the market was already having big

biscuit companies which were satisfying the needs of people well. Sunfeast monitored the

market demand and carefully handled promotion and brand building which made the brand to

gain market share. The product was made exciting by launching a series of convenience

goods, new tastes and flavours which lead to an interest in the brand. The company continued

a series of launching of products like Milky magic, coconut, strawberry, pineapple,

butterscotch and cream and it also entered the premium biscuit category with Dark Fantasy.

Moreover market research revealed that consumers were looking for innovation, variety, and

fun in all the biscuits categories. A mascot, Sunny, was chosen to convey these aspects of

ITC‟s biscuit brands. Initial offerings included the Sunfeast Glucose biscuits, targeting

children and their mothers; Sunfeast Orange Marie, targeting housewives and families; and

Sunfeast Orange cream, Butterscotch cream and Bourbon Cream, targeting children in the

age group between 4 and 14 years.

Over the last few years, the Sunfeast range has expanded with the introduction of the

Sunfeast Dark Fantasy range in the premium segment; the Sunfeast Milky Magic in the milk

biscuit category; the Snacky in salted crackers and cookies category.



References

1. http://www.itcportal.com/brands-microsite/packaged-foods/sunfeast.asp

2.

http://en.wikipedia.org/wiki/ITC_Limited 3. http://timesofindia.indiatimes.com/business/india-business/ITCs-Sunfeast-creams-

Britannia/articleshow/26815204.cms

4. http://sunfeastworld.com/aboutitc.html

5. http://www.rediff.com/money/2006/jun/28spec.htm

6. http://www.business-standard.com/article/management/sunfeast-targets-the-creamy-

layer-113031000300_1.html

http://www.itcportal.com/brands-microsite/packaged-foods/sunfeast.asp


http://en.wikipedia.org/wiki/ITC_Limited


http://timesofindia.indiatimes.com/business/india-business/ITCs-Sunfeast-creams-Britannia/articleshow/26815204.cms





http://sunfeastworld.com/aboutitc.html


http://www.rediff.com/money/2006/jun/28spec.htm


http://www.business-standard.com/article/management/sunfeast-targets-the-creamy-layer-113031000300_1.html













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