Marketing Strategy by ITC:

Using a six-pillar strategy that straddles consumer insighting to productdevelopment and packaging, ITC has created a powerful personal careportfolio with five brands across multiple categories and price-points

SEGMENTATIONCreating brands from scratch with no history and lineage, ITC used clear segmentation across its five product lines and the target audience, each brand was meant for.

GROUP SYNERGYOnce the five products were created and communication strategies set, ITC leveraged its properties like hotels, foods and apparel store network to retail these brands.

COMMUNICATION STRATEGYLike HUL, these brands sport Western names, and different communication. Essenza & Fiama, meant for the elite, have English communication, while Vivel & Superia use Hindi.

BRAND EXTENSIONSA selective extension as it doesn’t want to confuse consumers with too many irrelevant brand extension & sub-brands. The Essenza range is the only exception.

BRAND AMBASSADORSITC uses brand ambassadors strategically. While for the Fiama and Vivel ranges it has roped in brand ambassadors, for the Superia & Essenza ranges the key target is the real king.

PACKAGINGSince packaging plays a key role in product differentiation, ITC uses it to the hilt. It has taken foreign experts’ help to make its products stand out from competition.

ITC Commercial Initiatives complementing Above Strategies:

The Company is planning to double its distribution and its advertisement budget to counter the PepsiCo's Frito lay.

“SHARUKH KHAN” “DHONI” & “SURYA” as brand ambassador of SUNFEAST

Sunfeast World 10K Bangalore-Brand philosophy -Spread the smile

E-COMMERCE activities for READY-TO-EAT Snack brand KOI

Tie-up with leading portals to promote snack range

Online advertising & can order snack on toll-free number 1600

ITC Foods has contract manufacturing facility.

Panel tastes & approves it before processing takes place.

Effective Distribution System by ITC

Strict compliance standards, low profit margins, intense competition, high customer-service expectations.

Fast and effective sales ordering processes.

Flexibility

Quick reaction

ITC uses FIFO method

They also keep the good on constant move from low sales area to high sales area.

The company collects all the expired goods four times a year, and destroys them.

Retailers must return expired or damaged products within six months after the date of expire.

Adjustment for them is done in three months time.

ITC provides their retailers with racks, hangers, etc to display the products.

The benefits received by the retailers depend upon their sales volume and also the location of their shops.

ITC has hired IMRB to do the market research.

Flow DiagramFACTORY

CNF

WHOLESALE

DISTRIBUTOR

WHOLESALE

DEALER BASE

RETAILER

ITC: Creating World-Class Brands that Put India First

A country's brands are a reflection of its competitive strengths and a manifestation of its innovation and intellectual capacity. I strongly believe that a country's economic capacity is significantly enriched when its institutions build and own internationally competitive brands. Winning brands serve as market anchors to support the competitiveness of the entire value chains of which they are a part. Strong domestic brands create much larger value since they create, capture and retain value within the country. ITC takes justifiable pride in creating world-class Indian brands that have demonstrated immense vitality in the global Indian market place.

Y C Deveshwar, Chairman, ITC Limited

ITC. Touching your life. Everyday

Places

ITC's Brand Image heps in economic Growth Of the country

Great brands are not just about delighting the consumer, they are also about powering national economic growth. Brands capture value for the nation in numerous ways – creating intellectual capital, boosting R&D and innovation, and creating large-scale livelihoods by empowering value chains, investing in physical infrastructure and expanding markets.

ITC is today proud to have created over 50 energetic and popular brands across categories that delight nearly 140 million households. Within a relatively short span of time, ITC has established vital brands with significant salience among consumers like Aashirvaad, Sunfeast, Bingo!, Yippee!, Candyman, mint-o and Kitchens of India in the Branded Foods space and Essenza Di Wills, Fiama Di Wills, Vivel and Superia in the Personal Care products segment. In addition, brands like Classmate and Paperkraft in Education & Stationery products; Wills Lifestyle and John Players in the Lifestyle Apparel business; Mangaldeep in Agarbattis as well as Aim in Matches have established significant market standing and continue to delight consumers with superior offerings.

ITC Hotels, with its credo of “Responsible Luxury”, stands apart not only for its exquisite signature properties, cuisine and service excellence but also for being the greenest luxury hotel chain in the world. ITC's hotels business also contributes to the country's tourism landscape and livelihood creation through its other high quality offerings embodied in the WelcomHotels, Fortune and WelcomHeritage brands. ITC’s hotels have pioneered the concept of branded cuisine in India with globally acclaimed restaurants including Bukhara, Dum Pukht and Dakshin. ITC has also set new benchmarks in wellness with its Kaya Kalp Spa brand that offers a new dimension in luxury and an enriching experience.

ITC's Brand Customisation as per Indian need ITC’s strong portfolio of brands and products are supported by well-defined research and development strategies executed by the dedicated state-of-the-art ‘ITC Life Sciences and Technology Centre’ in Bengaluru. This Centre, an integral part of ITC's future-ready capabilities, is set to drive game-changing innovations for its businesses of tomorrow. The core of this strategy is to design and provide customised superior solutions that address the unique needs of the Indian consumer. A large pool of highly qualified scientists with global exposure relentlessly drives innovation that helps create world-class winning brands and

growing value for the consumer.

A slew of innovative products are already in the market and there is a continuous pipeline of such products that are being readied for launch. Such innovation finds articulation in brand variants such as Aashirvaad Atta with Multigrains which is designed as a healthier nourishment option, smooth non-sticky Sunfeast Yippee! Noodles in a unique round block and Sunfeast Yippee! Chinese Masala – a unique combination of flavours which gives the consumer tasty Chinese noodles in minutes..

This spirit of innovation is also visible in a range of products developed for the Biscuits segment. This includes Sunfeast Dream Cream Butterscotch Zing that offers an innovative combination of sweet butterscotch and tangy Zing and Sunfeast Dark Fantasy Choco Meltz– a delightful triple layer structure of chocolate coating on the outside, crisp cookie in the middle and a luscious chocolate filling inside. Innovative products in the confectionery segment include mint-o Ultra mintz – India's most premium, sugarfree power mints packed in a stylish black case and Candyman Crème Lacto which is made with the goodness of milk and caramel with a rich, delicious crème filling.

In the personal care products category, ITC has developed Liquid Crystal Freezing Technology for its Fiama Di Wills brand, a revolutionary method to freeze the goodness of shower gels in soap. Equally unique in their value propositions are the Fiama Di Wills Men Aqua Pulse De-stressing and brightening Face Wash, enriched with unique revitalising beads, the Fiama Di Wills Men Moisture Guard Instant Foam Wash with triple skin conditioners that hydrate deeply to combat rough and dry skin, the Vivel Cell Renew skincare range that repairs and fortifies skin at a cellular level with the power of Vitamin E and Vivel Perfect Glow which is a unique multi-layer skin tone perfector that works at every layer of the skin to lighten dark spots.

ITC's Brands: An Asset for the Nation The consumer needs and aspirations they fulfil, the benefit they generate for millions across ITC’s value chains, the future-ready capabilities that support them, and the value that they create for the country, have made ITC’s brands national assets, adding to India’s competitiveness.

It is ITC’s aspiration to be the No 1 FMCG player in the country, driven by its new FMCG businesses. A recent Nielsen report has highlighted that ITC's new FMCG businesses are the fastest growing among the top consumer goods companies operating in India. ITC takes justifiable pride that, along with generating economic value, these celebrated Indian brands also drive the creation of larger societal capital through the virtuous cycle of sustainable and inclusive growth.

Marketing Policy of ITC:

Segmentation:

Targeting: All sets of customers including rural people, farmers, cigarette smoking people, students, etc.

Positioning:

COMPETITION ANALYSIS

Near competitors of ITC (FMCG):

From the charts drawn below, it becomes obvious that following are the competitors of ITC:

HUL P&G

H P&G HUL ITCDISTRIBUTION MCHANNEL L

H M L

BRAND IMAGE

H ITC QUALITY P&G,HUL M

L H M L INNOVATION

Key success factors of ITC:

There could be number of factors that contribute to the success of the company, but the key factors for the success of ITC include:

Quality Innovation Distribution channel Brand image Variety of products Promotion

Comparison on the basis of key success parameters:

Wt. allotted

Parameters

ITC HUL P&G

Rating WAS Rating WAS Rating

WAS

20% Quality 4 .8 4 .8 4 .820% Innovatio

n4 .8 3 .6 3 .6

20% Distribution

3 .6 4 .8 4 .8

20% Brand Image

3 .6 4 .8 4 .8

10% Variety 3 .6 4 .4 4 .410% Promotio

n4 .3 4 .4 4 .4

Total 3.5 3.8 3.8

*WAS : Weighted Average Success rate

From the above comparison it could be inferred that besides ITC is new in the FMCG sector but still it has managed to reach a level at which the other strong companies are. A score of 3.5 is a very good score at a point when the old competitors (leaders) are at a score of 3.8. ITC is paying heavy competition to the old competitors and this growth will help the company to boom in future. The innovation, R&D (e-chaupal ,Aashirwad Aata) and the Brand Image (100 years old) of the company is making a strong base for the company to develop its potential and market in FMCG.

Brand Reach

The company has started its retail stores not only in Indian metros but also in the small towns like Ranchi, Jabalpur, Gwalior, Belguam, Ernakulam etc. thus the company adopted strong market campaign, and used its brand image to attract the Indian youth. The strategies adopted by the company has helped it to differentiate itself in this segment, like the company is outsourcing its designs to The American Design Intelligence Group (ADIG), a San Francisco, US-based garment and retail consultancy. Now it has its own six-member team, even as it continues a tie-up with Science & Designs, an Italian fashion design house – through which it keeps a watch on hot western labels such as Banana Republic and Armani Exchange.

Thus by adopting these strategies ITC will surely maintain its success and add many more new sub-brands to its corporate group-ITC.