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distribution chain:
frequency of service…)
effectiveness.
Methodology:
(across companies).
LITERATURE REVIEW
MARKETING CHANNEL
From the outset, it should be recognized that not only do marketing channels
quality and price, but they also stimulate demand through the potential
orchestrated network that creates value for the use of consumers through
are:
1. Information
2. Promotion
3. Negotiation
4. Ordering
5. Financing
6. Risk taking
7. Physical possession
To Estimate the Biscuits Industry and identify the critical success factors
8. Payment
affected.
7. Payment: Buyers payment of the bill to the seller through banks and
DISTRIBUTION STRATEGIES
• Exclusive distribution
• Selective distribution
• Intensive distribution
producer wants to maintain a great deal of control over the source level and
the product image and attain larger markups. It requires greater partnership
between the seller and the reseller and it is found in major industrial
Selective distribution: It involves more than a few and less than all of the
In this distribution the company does not have to dissipate its effort over
To Estimate the Biscuits Industry and identify the critical success factors
many outlet, rather it can develop a good working relation with its selected
intermediaries and expect a better than average selling effort with more
location convenience. This strategy is generally used for consumer items like
DISTRIBUTION CHANNEL
Distribution issues come into play heavily in deciding brand level strategy. In
create a large number of low priced automobiles. Some firms can be very
profitable going for quantity where economies of scale come into play and
survives on much smaller margins than upscale restaurants, but may make
where less competition exists (e.g., clothing for very tall people).
Distribution Objectives
related—some will enhance each other while others will compete. For
distribution will generally entail less intensity and lesser reach. Cost has to
be traded off against speed of delivery and intensity (it is much more
Narrow vs. wide reach: The extent to which a firm should seek narrow
search. For example, most consumers will switch soft drink brands rather
discount store, and premium brands may have more credibility if they are
• Recommend the product to the customer and thus sell large quantities;
Thus, for example, Compaq in its early history instituted a policy that all
large firms without sharing the profits with dealers. On the other hand,
dealers were more likely to recommend Compaq since they knew that
asking for IBMs, the dealers were more likely to indicate that if they really
wanted those, they could have them—“But first, let’s show you how you will
the marketer that may normally be associated with other elements of the
marketing mix. For example, for a cost, the firm can promote its objective by
(for which the retailer is often paid). Placement is also an opportunity for
promotion—e.g., airlines know that they, as “prestige accounts,” can get very
good deals from soft drink makers who are eager to have their products
offered on the airlines. Similarly, it may be useful to give away, or sell at low
prices, certain premiums (e.g., T-shirts or cups with the corporate logo.) It
both through conventional channels and through the Internet or factory outlet
question, then, is exactly which strategy should one use? It may not be
compensate for smaller unit sales. Here, various research tools are useful.
In focus groups, it is possible to assess what consumers are looking for and
which attributes are more important. Scanner data, indicating how frequently
various products are purchased and items whose sales correlate with each
To Estimate the Biscuits Industry and identify the critical success factors
other may suggest the best placement strategies. It may also, to the extent
♦ What are “complementing” products that may cue the purchase of others
if placed nearby?
Direct Marketing
against which later channels can be compared. In general, you cannot save
performing certain tasks that they can perform more cheaply than the
consumer through retail stores that take a modest mark-up—it would not
To Estimate the Biscuits Industry and identify the critical success factors
♦ Moving the goods efficiently (e.g., large quantities are moved from
catsup); and
somewhat arbitrary. The main thing to consider here is each firm’s functions
and intentions. Some firms sell directly to consumers with the express
Computer). Others are in the business not so much to save on costs, but
rather to reach groups of consumers who are not easily reached through the
customized services where the user can perform much of the work.
There are certain circumstances when direct marketing may be more useful
—e.g., when absolute margins are very large (e.g., computers) or when a
large inventory may be needed (e.g., computer CDs) or when the customer
that indicate their specific interests. For example, if we want to target auto
who have bought auto supplies through the mail. We can also buy lists of
CHANNEL STRUCTURE
customer. This is especially the case when consumers need to have variety
and assortment (e.g., consumer would like to buy not just toothpaste but
also other personal hygiene products, and even other grocery products at
the same place), when products are bought in small volumes or at low value
(e.g., a candy bar sells for less than Rs. 20), or even intermediaries have
case, most airlines are perfectly happy only being able to buy aircraft and
particularly since the planes are often highly customized. More in the "gray"
would take.
manufacturer and sent directly to the customer’s preferred delivery site. The
negotiations but does not take physical possession of the property. When
planes, and yachts are frequently sold by the manufacturer to a dealer who
then sends directly to the customer. It does not make sense to deliver these
bulky products to a wholesaler only to move them again. On the other hand,
it would not make sense for a Mumbai customer to fly to Delhi, buy a car
there, and then drive it home. As the need for variety increases, a
needs to sell more merchandise than any one manufacturer can produce.
Therefore, a wholesaler will buy a very large quantity of binders, file folders,
staplers, reams of paper, glue sticks, and similar products and sell this in
typewriters, and photocopiers. Note that more than one wholesaler level may
be involved—a local wholesaler serving the Inland Empire may buy from
each of the two wholesalers listed above and then sell all, or most, of the
can be freed, in return for paying the agent, from such tasks, allowing him or
channel member is the cost at which he or she can perform the required
functions at the needed level of service. For example, it will be much less
products to the retailer. On the other hand, it would not be cost effective for
Procter & Gamble and Wal-Mart to involve a third party to move their
Note the important caveat that cost alone is not the only consideration
channels for perishable products are often inefficiently short, but the
carry Rolex watches, but this would destroy value from the brand.
cleaning supplies that already reaches this target. In the case of reciprocal
piggy-backing, the shampoo manufacturer might then, in turn, bring the teeth
least one wholesaler in order to reach the retailer, and it is simply not
efficient for Colgate to sell directly to pathetic little "mom and pop"
Ralph’s buy toothpaste and other Colgate products in such large volumes
distributor and others do not. Note that we may also be tempted to add a
stores. However, note that the full service retailers will likely object to being
"undercut" in this manner and may decide to drop or give less emphasis to
as (1) having outlet stores located in vacation areas not within easy access
regular stores.
To Estimate the Biscuits Industry and identify the critical success factors
attractive earlier but may not, in practice be able to live up to promises. (This
simply did not realize the skills and resources needed to perform to
distributor has expanded its coverage into another region or may have
gained or lost access to certain retail chains). Finally, the extent to which
DISTRIBUTION OPPORTUNITIES
stores nationally, but this may not be realistic. We need to consider, then,
both who will be willing to carry our products and whom we would actually
Note that for convenience goods, intense distribution is less likely to harm
the brand image—it is not a problem, for example, for Haagen Dazs to be
that people will not travel much for these products, so they should be
Distribution Options
Selective distribution
Niche brand
national distribution
distribution
status)
To Estimate the Biscuits Industry and identify the critical success factors
PRODUCT TYPE
The product life cycle. In general, a brand can expect lesser distribution in
its early stages—fewer retailers are motivated to carry it. Similarly, when a
days, computer disks were available only in specialty stores, but now they
products that are not well established may have to get their start on
"infomercials," only slowly getting entry into other types out outlets. (Please
Low service channel members can "free ride" on full service sellers.
Once you have selected and developed a unique product or business idea,
It's fairly easy to change many of your marketing tactics and strategies on a
periodic basis; pricing, packaging, and product mix are among these flexible
choices. However, distribution and sales decisions, once made, are much
more difficult to change. And distribution affects the selection and utilization
or chain
brokers
Distribution choices for a service business follow the same lines as those for
business.
strategy.
with distribution and sales force options. In some cases, the only sales force
consulting/service businesses.
To Estimate the Biscuits Industry and identify the critical success factors
Some distribution channels and sales force options may be attractive, but
off-strategy for the small company. A list of all possible distribution channels
marketing objectives.
brokers
reps
used by celebrity chefs and guaranteed for the life of the end user/buyer.
read upscale food magazines (e.g., Gourmet, Food & Wine), dine out at
To Estimate the Biscuits Industry and identify the critical success factors
gourmet restaurants, drink wine, travel, drive expensive cars, and spend
distributed through every upscale channel that caters to this exclusive target
group.
that hardware stores and direct mail were not consistent with the image and
reputation that they were trying to establish with their positioning. Company
retail stores, while desirable, were financially risky and too expensive at the
time and knowledge required of distributor sales personnel, coupled with the
unattractive.
The company decided the best distribution channels were direct sales to
demos in stores with the cookware. In addition, the company had the extra
margin available to afford this highly trained and motivated sales force since
considering distribution and sales force options. What can you afford, and
what will give you the most bang for your buck?
residential work, has identified three primary distribution channels for its
from home owners and buyers. The contractors and developers are the
Life Designs knows from talking with media suppliers, competitors, and
requires personal time and some minor entertainment expenses (wining and
dining the contractors). This one-man architect firm cannot spare much free
time, and media spending will provide a good alternative when he is busy
with a project.
distribution channel and sales force options over several years of growth and
evolving resources for the company. For example, food supplements and
reps
To Estimate the Biscuits Industry and identify the critical success factors
Club member warehouse stores, with company reps and sales brokers
reps
reps
all possible channels that match the marketing strategy it wants to achieve.
Competitors’ strengths and market share ("Are they big enough and
uniqueness effectively?")
To Estimate the Biscuits Industry and identify the critical success factors
INTRODUCTION
average per capita income hovers around US$ 450 per annum, bakery items
are not very high on the list of priorities for the masses. Low margins, and a
60% in urban areas. This is mainly because these products are consumed
However, over the past few years’ bakery products have shown a marked
improvement in volumes and customer base. But this growth has mainly
come from bread and biscuits segment. Infact one can safely say that bread
Bread and biscuits have grown largely because these products are
were reserved for the small-scale industry earlier. Also, bread to some
The Pie
(Rs m) h n
tonnes)
To Estimate the Biscuits Industry and identify the critical success factors
n l
Other bakery products like cakes and pastries are also on the growth mode,
but the growth rates leave much to be desired. These products do not yet
have a mass appeal and are basically centred on the urban areas. In these
two categories also local manufacturers hold a sizeable chunk of the market.
Over the last few years, branded companies like Parle and Britannia have
upped their ante and introduced new products with slick packaging in order
to grow the market. These companies’ prospects were also buoyed post
deregulation of the biscuit industry in April 1997. Before that, the biscuit
mass, and for margins they continued to stack up their portfolios with new
over 60% of the biscuit market in 1995-96, now sees its share shrunk to
bn. Britannia and Parle control 38% and 29% respectively of the organised
On the other hand, the 1.4 m tonnes bread market valued at Rs 11 bn, is
much higher for organised sector (brands). Brands like Modern and Britannia
are major players in the bread market (10% and 5% market share
respectively), and together they account for 90% of the organised bread
market.
see increased market penetration and rivalry in the years to come. HLL
plans to enter the bakery segment in a big way and this should be a key
the year 2005 (a CAGR growth of 9.3% from current levels). However, with
the current slowdown faced by the FMCG sector as whole, the growth rates
have hit a speed breaker. It is only when the recent good monsoons give
impetus to demand, the segment would see its fortunes reviving. But in the
In the longer term the bakery segment is likely to see competition getting
even more intense with new entrants especially MNC’s. Marketing wars
To Estimate the Biscuits Industry and identify the critical success factors
would get even more cut throat as players try to convert consumers of
continue seeing new high end products in all categories of the bakery
industry. But the road for this segment’s growth would be slow and steady.
• Britannia industries and Parle products top the advertiser list with
category in 2003.
To Estimate the Biscuits Industry and identify the critical success factors
Looking at the graph that shows the trend of advertising in the biscuits
category on the television, one can see there is a rise in advertising in this
category from 2000 onwards. The graph shows the indexed spends of the
with the spends peaking in the first and the last quarter each year.
Let's look at the advertisers, which dominate in this category. The graph
shows that Britannia Industries ltd and Parle products tops the advertiser list
with nearly 35 per cent and 33 per cent of the advertising respectively. Surya
food and Agro pvt ltd at the third position, ITC ltd at the fourth position,
Hindustan Lever ltd at the fifth position, Heinz at the sixtrh position with
nearly 15.6 per cent, 4.7 per cent, 4.4 per cent and 1.7 per cent of the
To Estimate the Biscuits Industry and identify the critical success factors
advertising share. Other advertisers are Anmol Biscuit pvt ltd, Lancer food
Are there any particular program genres, which biscuit advertisers prefer?
The graph makes it clear that drama/soap, feature films and comedies make
up for nearly 54 per cent of the television advertising spends in the biscuits
BRITTANNIA
the ’50s and’ 60s, Britannia expanded operations to Mumbai, Delhi and
Chennai. Exports of sea foods started in the ’70s. In 1987, Nabisco, a well
Singapore based NRI businessman along with the Groupe Danone acquired
Later, Grop Danone and Nusli Wadia took over Pillai’s holdings.
In 1977, the Government reserved the industry for small scale sector, which
contract packers (CP) in the small scale sector. This led to several
the biscuit sector from small scale. Britannia has expanded captive
manufacturing facilities and has modernized and upgraded its facilities in the
last five years. It has also forayed into the Dairy Business with the launch of
Parent Group
To Estimate the Biscuits Industry and identify the critical success factors
Britannia's controlling stake is jointly with Groupe Danone and Nusli Wadia.
Groupe Danone is one of the leading players in the world in bakery products
Plant locations
Britannia's plants are located in the 4 major metro cities - Kolkatta, Mumbai,
Delhi and Chennai. A large part of products are also outsourced from third
party producers. Dairy products are out sourced from three producers -
Business
products account for 90% of the revenues and include Biscuits, Bread and
turnover of Rs13.38bn.
To Estimate the Biscuits Industry and identify the critical success factors
Over the years, Britannia has introduced and developed a full line of brands
in all segments of the biscuit market. The company's Tiger range of glucose
biscuits have been a runaway success, enabling the company to expand its
Britannia’s other major brands include Marie, Thin Arrowroot, Bourbon, Milk-
bikis, Nice, Snax, Coconut Crunchies, Pure Magic, Good Day, Jim-Jam and
Chekkers. It has also launched biscuits like Vita MarieGold, Nutri-Choice etc,
company reported over 11% topline growth during the year, where most of
its FMCG peers found it tough to grow the topline. Focus on improving cost
(EBDIT)
Margin (%)
(%)
(%)
share* (x)
To Estimate the Biscuits Industry and identify the critical success factors
(* annualised)
The key reason for the strength in topline is believed to be the increasing
seemed to have kept the momentum going for Britannia. Apart from this,
Britannia continued to focus on ways to bring down its costs. VRS and lower
The hiving off of properties has led to lower depreciation provisioning. The
company also received an order in favour of closure of its Mumbai plant. The
matter though is still sub-judice. After the break away from the dairy
The company reported a strong 66% growth in other income, seemingly led
by sale of the company's mutual fund investments. All this led to a 36%
The key threats for the company are the growing competition in the biscuit
Competitors such as Parle-G and Surya Foods have already carved out a
Britannia's brand, Tiger, is trying to enlarge its share. At the higher end of
the market too, competition is hotting up, with players such as ITC rolling out
new extensions.
proceedings to close down its Mumbai unit and set up new manufacturing
facilities at Uttaranchal, which will significantly lower its excise and tax
burden.
The cost savings from the Mumbai unit closure, if it proceeds as planned,
could help lower the company's cost structure and put it in a better position
Britannia Industries Ltd. (BIL) is one of the leading producers of biscuits and
cricket mania especially during the World Cup, have probably been the most
successful, which have added to its growth and visibility. The findings of a
Union Budget 2003-04 halved the excise duty on biscuits from 16% to
8%. Excise duty of 16% on biscuits was quite high and hence, BIL was
be the biggest beneficiary of this excise duty reduction. This also took
away some of the pricing advantage from the unorganized sector and
BIL HIGHLIGHTS:
BIL’s biscuit volume growth has outpaced the segment driven by the
1997 led Britannia’s foray into the glucose category. Tiger now
contributes about 40% to the biscuits turnover and has been Britannia’s
biggest success.
BIL has decided to focus on seven core brands in the biscuits and
bakerycategory. The brands include Good Day, Tiger, 50-50, Snax, and
the Cream Treat brands, among others. Last year, the company acquired
To Estimate the Biscuits Industry and identify the critical success factors
50-50, is selling more than the mother brand in certain markets like north
company is now in talks with specialty coffee outlets and petrol pumps to
Biscuits and Snacko Bisc, has the option of hiking the holding in the two
The effect of a poor monsoon last year is not likely to affect growth
significantly. Though, Britannia derives close to 40% of its sales from the
PARLE
A long time ago, when the British ruled India, a small factory was set up in
the suburbs of of Mumbai city, to manufacture sweets and toffees. The year
was 1929 and the market was dominated by famous international brands
that were imported freely. Despite the odds and unequal competition, this
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.
market leaders in their category and have won acclaim at the Monde
Selection, since 1971. Today, Parle enjoys a 40% share of the total biscuit
market and a 15% share of the total confectionary market, in India. The
Parle Biscuit brands, such as, Parle-G, Monaco and Krackjack and
quality, health and great taste! And yet, we know that this reputation has
been built, by constantly innovating and catering to new tastes. This can be
seen by the success of new brands, such as, Hide & Seek, or the single
Parle Products has one factory at Mumbai that manufactures biscuits &
India. Parle Products also has 14 manufacturing units for biscuits & 5
All Parle products are manufactured under the most hygienic conditions.
Great care is exercised in the selection & quality control of raw materials,
packaging materials & rigid quality standards are ensured at every stage of
The extensive distribution network, built over the years, is a major strength
for Parle Products. Parle biscuits & sweets are available to consumers, even
in the most remote places and in the smallest of villages with a population of
just 500.
these wholesalers & retailers. Additionally, there are 31 depots and C&F
the common man. Most Parle offerings are in the low & mid-range price
for the up-market, urban consumers. And in this way, caters a range of
Import-Export
To Estimate the Biscuits Industry and identify the critical success factors
capacity expansion, they have begun spreading their wings and are going
international markets, such as, Abu Dhabi, Africa, Dubai, South America
and Sri Lanka. Even the more sophisticated markets like USA & Australia,
now relish Parle products. As part of the efforts towards a larger share of the
global market, Parle has initiated the process of getting ISO 9000
certification. Many Parle Products have also won Gold, silver and
TOUGH cookie. The term sits well on the shoulders of Shekhar Agarwal,
Director of the Rs 150-crore, Delhi-based Surya Food & Agro Ltd, the
Catalyst that the reactive strategies adopted by his competitors speak for
themselves.
A decade of being in the business has got Priyagold the perception of being
that has helped the brand chart its way in Western India as well, and
recognition for quality production from Surya Food & Agro's manufacturing
plant at Surajpur (Greater Noida) in Uttar Pradesh. And while all these
regional players such as Priyagold offer products at retail prices that are
taste, but are priced very aggressively and do not compromise on quality,"
Good Day and Milk Bikis, for example, have been the victims of this strategy,
To Estimate the Biscuits Industry and identify the critical success factors
AC Nielsen report.
market. In fact, close to 70 per cent of Priyagold's sales are accounted for by
these markets.
On the other hand, intensified competition from regional players has led the
products at various price points, introduce small pack sizes, and offer
between Britannia and Parle on a national level, Surya Agro now claims
industry estimates, accounts for 30 per cent of the overall biscuits market.
For all practical purposes then, Priyagold is hot property, especially for first
time entrants in the biscuits category. Surya Food & Agro has been
company.
It is very difficult for any company to enter the domestic biscuits market.
First, consider the competition. Britannia and Parle are very aggressive
nationally, in the East Priya Biscuits is tough competition for any new player,
To Estimate the Biscuits Industry and identify the critical success factors
while Duke is strong in the South. Then, of course, there is Priyagold. Yet
incurred at dealer, distributor and stockist levels. Then there are other
building. It makes it easier for any company wanting to enter this segment,
of biscuits, Dabur has ruled out an entry and Nestle SA sold off the assets of
Excelsia Foods some months ago. There has been talk of Hindustan Lever,
too, extending its Modern brand to biscuits, but nothing has been announced
yet.
Surya Food & Agro, meanwhile, appears to be going full steam ahead. The
strongholds are Uttar Pradesh, Punjab and Haryana, but they plan to foray
into the Southern market by the end of the current calendar year, beginning
financial year are currently being finalised. The proposed investment in this
is obviously a significant strategy for the company now, with its existing
currently being produced by the company, and there is a plan to foray into
In the current fiscal, meanwhile, expect more of last year's Hak se maango
advertising, complete with its small-town appeal. Surya Food plans to hike
On the exports front, the company plans to take its Priyagold brand to
The Priyagold story, which began in late 1993 as a family business led by
turnover to Rs 300 crore in the current fiscal, the cookie certainly isn't
• Ampro Biscuits
• Bakewal
• Dalmia Biscuits
• Delta Foods
• Real Foods
• Super Snacks
ranks fourth in net profit among India's private sector corporations . ITC has
this source of inspiration "a commitment beyond the market". In his own
words: "ITC believes that its aspiration to create enduring value for the
nation provides the motive force to sustain growing shareholder value. ITC
practises this philosophy by not only driving each of its businesses towards
skills in hoteliering. Over time, the strategic forays into new businesses are
markets in India.
products. ITC is one of the country's biggest foreign exchange earners (US $
strategy, which has already become the subject matter of a case study at
marketing reach.
outsourcing.
ITC's production facilities and hotels have won numerous national and
management systems. ITC was the first company in India to be rated for
which accorded it the second highest rating, signifying "a high level of
ITC employs over 15,000 people at more than 60 locations across India.
Ranked among the top five sustained value creators in India by 'Business
fulfil the aspirations of its stakeholders and meet societal expectations. This
Shareholder."
LEADERSHIP
Chief Executive. Each DMC is responsible for and totally focused on the
balance between the need for focus and executive freedom, and the need
Trusteeship
Customer Focus
We will respect and value people and uphold humanness and human
dignity.
Excellence
Innovation
Preamble
Over the years, ITC has evolved from a single product company to a multi-
businesses is vastly different from the others in its type, the state of its
evolution and the basic nature of its activity, all of which influence the choice
whole.
scenario has begun to alter radically. Globalisation will not only significantly
heighten business risks, but will also compel Indian companies to adopt
will be the new success factors. ITC's governance policy recognises the
resources, we believe that the governance process should ensure that these
CORE PRINCIPLES
are :
effective accountability.
that the decision making powers vested in the executive management is not
only not misused, but is used with care and responsibility to meet
Cornerstones
ethical corporate citizenship. ITC believes that the practice of each of these
leads to the creation of the right corporate culture in which the company is
Trusteeship
ITC believes that large corporations like itself have both a social and
enhance shareholder value, as well as to ensure that the Company fulfils its
Transparency
enhances accountability.
governance that management must have the freedom to drive the enterprise
shareholder value.
To Estimate the Biscuits Industry and identify the critical success factors
Control
change, and ensure that business risks are pre-emptively and effectively
managed.
stakeholder value.
CORPORATE CITIZEN
besides working for the protection and enrichment of the environment and
Community Development
ITC's deep organic link with rural India is almost a century old. The Indian
farming in the country in 1912. It has worked with farmers to improve skills,
and Karnataka. ILTD has also served as the vital link between the Indian
farmer and the global markets. It has educated the farmer on global trends
and helped him grow varieties of tobacco that enjoy significant demand
internationally.
The Division conducts regular free medical camps for eye treatment,
surveys. The Division has improved the quality of life in villages through
community has earned for it the sobriquet, `Talli' company which in Telugu
with NGOs, ITC is engaged in making schools attractive to children and their
Education
and 2 teachers. Today it has 1,150 students and 50 staff members. Only 15
school for employees' children in 1962. It has grown to be a Council for the
ITC pioneered the first private sector institute of hotel management, the
and enrich the environment. The Company has undertaken several major
Guntur. The Company has also taken up plantation and afforestation work in
Chirala, Rajahmundry, Anaparti, Ongole and Mysore. Over the last six years
Karnataka.
gardens and traffic islands in its various locations. ITC has received several
ITC Hotel Maurya Sheraton was India's first five star hotel to obtain the
Systems. The Green Leaf Threshing Plant at Chirala in Andhra Pradesh was
similarly the first tobacco plant in the world to get ISO 14001 environmental
To Estimate the Biscuits Industry and identify the critical success factors
certification. The Kidderpore cigarette factory became the world's first ISO
FINANCIALS
ITC reported a 23.8 per cent jump in net sales for the March quarter, which
is huge considering that sales had grown just 5.6 per cent in the nine months
till December. True, cigarette sales have been higher in the second half of
the year compared with the first six months, but this hardly explains the huge
A look at the segment results shows that growth last quarter was driven by
the agri-business, which grew sales by 63.6 per cent last quarter and
accounted for half the company's incremental sales. This was in stark
contrast to the 14 per cent fall in sales recorded by this segment in the nine
months till December. Analysts point out that soya exports were strong last
quarter; aided by firm prices globally. Soya prices have now come off from
their highs, and one should also note that the agri business fluctuates
because of seasonal variations. In any case, despite the surge in sales last
quarter, the agri business reported margins of less than four per cent.
What's more important is that the cigarette sales have picked up. In the first
half period, revenue from cigarette sales had grown just 3.7 per cent. In the
second half, the growth almost doubled to seven per cent. The incremental
growth is primarily volume driven, since there haven't been price increases
Moreover, for the full year, the division reported a near 100 basis points
garments- grew smartly by 178.5 per cent, but some of that growth was due
to an entry into new segments like biscuits. But losses in the segment were
cut from 112 per cent of sales in FY03 to 57.33 per cent last year. The hotels
notched a 33 per cent increase in sales and an extremely high 740 basis
points jump in profit margin. The paper business grew just 7.8 per cent,
per cent. There's more good news: capacity is set to almost double by the
Dividend payout has inched up from Rs 15 last year to Rs 20 this year, but is
ITC Ltd registered 16.2% rise in net profit at Rs 1,592.85 crore in 2003-04
against Rs 1371.35 crore in the previous fiscal. The company's net income
Rs 323.42 crore in the year-ago period. Net income in the period was up
crore against Rs 2,056.19 crore and net interest liability was Rs 24.79 crore
stood at Rs 241.62 crore against Rs 237.34 crore in the last fiscal. The
the last fiscal, an increase of 6%. ITC leveraged its leadership in the
Rs 8,764 crore last year. The company's operating profit in this segment
ITC Ltd's new FMCG businesses posted a rapid topline growth on the back
target markets. Revenues from these businesses grew three-fold during the
year at Rs 304 crore against Rs 109 crore in 2002-03. However, the division
increased its losses to Rs 174 crore against Rs 122 crore last year. In the
year under review, ITC's hotel business posted a growth in revenues of 33%
Profit before tax trebled compared to last year and stood at Rs 32 crore
against Rs 10 crore. ITC more than doubled its e-Choupal network during
the year, adding over 2,000 choupals. Till date, 4,150 choupals have been
set up, reaching out to over two million farmers in over 20,000 villages
across India.
Agri commodity exports of soya, rice, coffee and marine products touched
Rs 574 crore during 2003-04, an increase of 58% over the previous year.
The revenues from the agri business stood at Rs 1,709 crore against Rs
1,658 crore in the previous year, an increase of 3%. Operating profits of this
The company's paper board, specialty paper and packaging business saw
18% higher sales of value-added products. The revenues from this division
were at Rs 1,253 crore against Rs 1,163 crore last year, a rise of 7.7%.
Profit before tax was at Rs 230 crore against Rs 226 crore in 2002-03, an
increase of 1.8%.
To Estimate the Biscuits Industry and identify the critical success factors
(In Rs crore)
The stock of tobacco major ITC has come down by 9 per cent to Rs1,081 on
March 18, 2004 on BSE, from its 52 week high of Rs1,185 on March 8,
2004. But this 10-day aberration apart, the stock had surged 21.6 per cent
investors moving out of Hindustan Lever may have helped the ITC stock in
recent times.
To Estimate the Biscuits Industry and identify the critical success factors
SEGMENTS
CIGARETTES
ITC is the market leader in cigarettes in India. With its wide range of
Kings, Classic, Gold Flake, Navy Cut, Scissors, Capstan, Berkeley and
Bristol.
the last 5 years, ITC has made capital investments of over Rs. 7 billion
international quality. This strategic focus on the consumer has paid ITC
Gold Cut and Scissors Filter Kings cigarettes in the Middle East. The
Saharanpur and Kolkata. These factories are known for their high levels of
ITC's FMCG businesses have one of the largest retail networks in the
range of the retail spectrum, from premium outlets in the metros to small
AWARDS
ITC's Cigarettes business has won numerous awards for its quality,
♦ The Kolkata factory has been placed First in Category 'B' for having
ER).
To Estimate the Biscuits Industry and identify the critical success factors
♦ ITC has been awarded the "Best Manufacturer of Cigarettes" and "3rd
of India.
♦ The Kolkata factory was the first cigarette factory in the world to
♦ All cigarette factories have ISO 9002 quality certification. ITC's Tobacco
the first independent R&D centre in India to get ISO 9001 accreditation.
♦ The Kolkata factory has won the Rajiv Gandhi National Quality Award
LIFESTYLE RETAILING
Over the last three years, ITC's Lifestyle Retailing Business Division has
of exclusive specialty stores. Beginning with its initial offering of Wills Sport
relaxed wear from the first store at South Extension, New Delhi in July 2000,
it has expanded its basket of offerings to the premium consumer with Wills
Classic formal wear, Wills Clublife evening wear and designer accessories
With a distinctive presence across segments at the premium end, ITC has
also initiated a foray into the popular segment with its men's wear brand
lifestyle.
retailing ambience with the extensive use of glass, steel and granite,
At the Images Fashion Awards 2001 & 2003, Wills Lifestyle was declared
'Wills Sport', fashionable relaxed wear for men and women has, over eight
Fashion Awards 2001, 'Wills Sport' was declared "The Most Admired
Brand Launch of the Year". Following this, Wills Sport was declared "The
fashionable relaxed wear in oceanic blues, haute cirrus whites and bleached
sand beiges.
Wills Classic formal wear was launched in November 2002, providing the
for New Age Leaders, who inspire innovation and enterprise, breaking the
is a fitting tribute to the New Age leader. This season, Wills Classic presents
in a short span of time with Wills Sport premium relaxed wear and Wills
Classic New Age formals, Wills Lifestyle launched Wills Clublife in May
ITC launched its brand of men's apparel in the popular segment, John
the Company offers and further strengthen its robust branded garment
portfolio. This foray into the popular segment leverages ITC's proven
To Estimate the Biscuits Industry and identify the critical success factors
The brand promise is built upon Comfort as its core philosophy. Comfort is a
state of mind and comfortable clothes complement that state of mind, aptly
brand is now available in over 3000 multi-brand outlets across the country.
With the creation of an international class retail chain 'Wills Lifestyle', the
the popular segment, ITC's Lifestyle Retailing is poised to grow and build a
ITC has now become the second largest player in India's greeting cards
industry with its ‘Expressions’ range of Greeting Cards. For attaining this
paperboards.
cards reach over 12,000 multi brand outlets in over 700 cities
nationally. In the last three years, 10,000 greeting card designs have
model. The Greeting Cards Business also markets the SOS Children’s
Villages of India range of greeting cards. The SOS brand is now the third
known artists, This serves as a ready source of creative designs for the
Company's Greeting Cards. This bank of designs has helped ITC offer cards
To Estimate the Biscuits Industry and identify the critical success factors
expression.
reach out to their loved ones in the language of their hearts- their mother
tongue.
market. The ‘Classmate’ range of notebooks for school children and the
‘Paperkraft’ range for college and office usage are now available in over
100 cities. ITC has also launched ‘White Gold’ premium bond paper for
proven strengths in Paper and Packaging but also the design capabilities of
SAFETY MATCHES
FMCG sector, ITC has commenced marketing safety matches sourced from
the small-scale sector. This business leverages the core strengths of ITC in
matches.
These matches are available in unique designs and with innovative value
added features. ITC's brands like iKno, Mangal Deep, VaxLit, Delite and
Aim have already become popular. The Aim brand of ITC Matches has
already become the largest selling brand of Safety Matches in India within
just one year of its launch. Export of premium brands has also commenced
to markets such as The USA and West Africa. Through its participation in
the business, ITC aims to enhance the competitiveness of the small and
AGARBATTIS
sourced from the small-scale sector. This business leverages the core
To Estimate the Biscuits Industry and identify the critical success factors
quality agarbattis.
ITC has launched brands like Spriha and Mangal Deep across a range of
especially the breadth and depth of the Company's trade marketing and
distribution.
Ravishankar of the Art of Living, near Bangalore. At least 100 village women
will benefit from their training in agarbatti rolling. ITC will furthermore extend
support to other NGOs, whereby the agarbattis rolled by these women will
HOTELS
ITC Ltd entered the hotels business in 1975 with the acquisition of a hotel in
India. These include super deluxe and five star hotels, heritage palaces,
havelis and resorts and full service budget hotels. These hotels are
managed by ITC's subsidiary, ITC Hotels Limited. Currently nine of the ITC-
which is part of Starwood Hotels & Resorts, the well known global hospitality
chain.
The 515-room ITC Hotel Maurya Sheraton & Towers at New Delhi is not only
amongst the leading business hotel in the country, but is in a class by itself.
Complete with the 'ITC One', the hotel has played host to a galaxy of world
dignitaries, including Bill Clinton and Bill Gates. In fact, even as he was
leaving the White House, the former US President nostalgically recalled the
memories of a fabulous Indian meal he and his family had at the Bukhara
restaurant in the hotel. Bukhara has been declared the Best Indian
has also been voted the Best Restaurant in Asia and is the only Indian
resort, the 239-room ITC Hotel Sonar Bangla Sheraton & Towers in
Mumbai is underway.
hotel services. It created the exclusive 'ITC One', 'Sheraton Towers' and
the 'Executive Club' each catering to the needs of the global business
grandeur, opulence of romance, valour and adventure for the future Indian
Bengal.
Bukhara, the Dakshin and the Dum Pukht are today powerful cuisine
Fortune hotels are a part of the well thought-out growth strategy that brings
out the mid level business and leisure traveler under the ITC-Welcomgroup
♦ ITC Hotel Maurya Sheraton and Towers is the only hotel in India, to have
♦ ITC Hotel Maurya Sheraton and Towers, New Delhi is also India's first
♦ ITC Hotel Maurya Sheraton and Towers is the first hotel in India to be
♦ ITC Hotel Grand Maratha Sheraton & Towers at Mumbai was declared to
be the Best Luxury Hotel of the Year 2002, by the Federation of Hotel
International Food and Wine Writers Guild, to Bukhara and Dum Pukht
♦ Bukhara at ITC Hotel Maurya Sheraton and Towers in New Delhi has
been declared the Best Indian Restaurant in the world (for the third
also been voted the Best Restaurant in Asia and is the only Indian
♦ Maurya and Mughal Sheraton have both won the 'Green Hotelier
Awards'.
♦ Bay Island at Port Blair, Andaman, was presented 'The Tourism For
PAERBOARD
Limited with ITC, ITC has now integrated its Paperboard and Specialty
Papers businesses into its newly created Paperboards & Specialty Papers
tonnes per year by the end of 2004, the Paperboards business is the
coated board machine of 120,000 tpa and finishing equipment sourced from
near Coimbatore, Tamil Nadu. This KOVAI Unit will allow ITC to improve
customer service with reduced lead time and a wider product range.
boards, white lined chipboards, liquid packaging boards, cast coated papers
and boards.
eco-friendly papers,
photocopier papers.
Cypak' range of folding box boards for high value cartons, the 'Pearl
Graphik' high value SBS boards for greeting cards and covers, the 'Indolux'
high gloss cast coated papers and boards, the value-for-money 'Ecoviron'
range of recycled white lined chip boards for everyday products. The
ITC is the largest exporter of coated boards from India. More than 25 per
cent of the coated boards made by the Company are sold in international
ITC has set up India's first world-class plant for the manufacture of
the basis of the availability of fibre, ITC has launched a major social and
Andhra Pradesh and obtains a part of its raw materials from these
plantations.
fireworks and automotive filters. They are also used for fine printing,
Specific customer needs are the focal point for the Specialty Papers mill of
the Division at Chandrahati, West Bengal. The mill reconfigures systems and
quality standards.
all operations. The TQM group coordinates with the marketing, production
development and research in pulp and paper. ITC has collaborated with
paper
To Estimate the Biscuits Industry and identify the critical success factors
excellence:
Paperboards Business
♦ The CII ENCON Award for 2002-2003. The award has been instituted by
Environment Foundation.
value terms, in the Paper and Paperboard category for 1999-2000 and
2002-2003
development of wastelands.
♦ The Rajiv Gandhi Parti Bhoomi Mitra Award for Developing non-forest
Government of India
♦ National Award for Energy Conservation in the Paper & Pulp Sector
in the world.
♦ The Gold Award for Safety in 1999 from the Royal Society for
PACKAGING
the cigarette, liquor, food & beverage and personal products and IT
packaging.
business. Its client list includes several well-known national and international
Domecq, Whyte & Mackay, Hindustan Lever, Tata Tetley and Nestle,
With two ISO 9000:2000 certified & ISO 14001 certified packaging factories
♦ flip-top boxes
♦ display outers
♦ labels
♦ bundle wraps
♦ flap boxes
♦ inner frames
♦ coupon inserts
♦ folding cartons
♦ shoulder boxes
supplies packaging for 15 billion cigarette sticks a year for the export
ITC has enhanced the value of some of the most favoured brands with
superior look-and-feel packaging, using the best raw materials and process
team uses a unique process to pilot the client's packaging through its
factory conditions.
pack
ITC's Packaging business has won numerous awards for its quality,
♦ Both the Chennai and Munger factories have obtained ISO 9002
1998.
♦ British Safety Council Swords of Honour for both the Chennai and
Munger factories.
♦ CAPEXIL Special Export Award for 1999 and Top Export Award for
2000/01.
♦ The World Star award for Aashirvaad Select 2-kg pack in the Consumer
Pack category in 2002, Wills Natural Lights in 1999, Royal Velvet &
To Estimate the Biscuits Industry and identify the critical success factors
Passport whisky cartons in 1998 and Nargis lined tea cartons and
have received 3 Asiastar awards for Surya 10s, Royal Stag 750ml and
packaging in 2002 for the Aashirvaad Select 2-kg pack and for Bagpiper
AGRI EXPORTS
focuses on exports of :
Foodgrains - Rice (Basmati & Non Basmati), Wheat & Wheat Products,
the latest shipment positions and the prevailing foreign exchange rates.
To Estimate the Biscuits Industry and identify the critical success factors
has established with the farmers. This networking with the farming
farmer. Christened 'e-Choupal', ITC's web plan for the farmer centres
The websites provide data in both English and the local language. Currently,
even at short notice. ITC's processors are handpicked reliable outfits which
ITC has been a significant exporter of seafoods from India since 1971.
Japan, USA and Europe. Its well-known brands include Gold Ribbon, Blue
strategy to retain its position as the one-stop shop for sourcing agri-
of India.
♦ The NASSCOM award for 'Best IT User in FMCG' in 2003. The Award is
♦ The Seagate Intelligent Enterprise of the Year 2003 Award, for the
LEAF TOBACCO
in India. For over 90 years, its Indian Leaf Tobacco Development Division
has worked closely with farmers to grow quality cigarette tobaccos. It is the
ITC buys nearly 40 per cent of all cigarette type tobaccos grown in
India. It has a team of experienced and highly skilled buyers and classifiers
competitive prices.
Pradesh, the tobacco belt of India, are among the best in the world. State-
ITC to process and deliver 100 million kgs of high quality tobaccos per
infestation control.
ITC's quality emanates from its strategy of intimate involvement with the
enables the Indian tobacco farmer to adopt best practices. ITC's team of
qualified and trained managers and support staff constantly assist the
tobacco farmer in assimilating new ideas in quality and productivity. ITC also
This entry into spices, specially branded spices, will further boost ITC's
ITC's Leaf Tobacco business has won national and international laurels
British Standards.
♦ Its Green Leaf Threshing plants were the first of their kind in the world
system certification.
To Estimate the Biscuits Industry and identify the critical success factors
♦ The processing plant at Chirala was the first unit in India to receive the
♦ The processing plants at Anaparti and Chirala have also obtained the
India.
processing plant at Chirala has won this award nine times since 1993
Accidents (RoSPA)
To Estimate the Biscuits Industry and identify the critical success factors
The Chirala plant has won the Greentech Safety Gold Award
FOODS
ITC made its entry into the branded & packaged Foods business in August
2001 with the launch of the Kitchens of India brand. A more broad-based
entry has been made since June 2002 with brand launches in the
restaurants like the Bukhara and the Dum Pukht, nurtured by the
this knowledge into delightful dining experiences for the consumer. ITC has
stood for quality products for over 90 years to the Indian consumer and
The Foods business carries forward this proud tradition to deliver quality
available in the market today have been crafted based on consumer insights
Bangalore.
To Estimate the Biscuits Industry and identify the critical success factors
supply chain for agricultural produce. ITC has over the last 90 years
India and is currently in the process of enhancing the Indian farmer's ability
to link to global markets, through the e-choupal initiative, and produce the
business.
These are:
• Staples
• Confectionery
• Snack Foods
Kitchens of India
cuisine, capturing the pedigree and expertise of ITC Hotels' Master chefs.
Every single recipe ITC brings to the consumer is authentic and comes at
secrets have been handed down through the ages, from one generation to
To Estimate the Biscuits Industry and identify the critical success factors
the next. Kitchens of India allows the consumer to share these wonderful
Products
Bukhara
‘Dal Bukhara’
A combination of whole black lentils, tomatoes, ginger and garlic, stirred over
Dum Pukht
The art of "Dum" cooking (cooked in its own juices) traces its origin to the
‘Dum ki Khumb’
To Estimate the Biscuits Industry and identify the critical success factors
almonds and green chillies. Imbued with saffron. Best enjoyed with rotis.
Khubani ka Meetha
‘Dakshin’
This cuisine is a reflection of the tradition and culture of the southern Indian
‘Chicken Chettinad’
‘Dal Dakshin’
Halved yellow lentils cooked with tomatoes, onions and select Indian spices
Gharana
Paneer Darbari
Soft cubes of fresh cheese in an aromatic tomato gravy, laced with butter.
Chicken Darbari
Cubes of chicken in an aromatic tomato gravy, laced with butter. 400 grams,
Products from Kitchens of India are currently available at ITC Hotels and
ITC Hotels
• Srinagar
• Jammu
• Amritsar
• Jullunder
• Chandigarh
To Estimate the Biscuits Industry and identify the critical success factors
• Ludhiana
• Jaipur
• Gurgaon
• Noida
• Delhi
• Dehradun
• Lucknow
• Kanpur
• Allahabad
• Varanasi
• Agra
• Pune
• Mumbai
• Nasik
• Goa
• Baroda
To Estimate the Biscuits Industry and identify the critical success factors
• Surat
• Ahmedabad
• Nagpur
• Aurangabad
• Bhopal
• Indore
• Kozhikode
• Thiruvananthapuram
• Kochi
• Mysore
• Bangalore
• Mangalore
• Coimbatore
• Madurai
• Chennai
• Vijayawada
To Estimate the Biscuits Industry and identify the critical success factors
• Hyderabad
• Guwahati
• Kolkata
• Patna
• Vizag
• Bhubaneshwar
• Cuttack
Aashirvaad ReadyMeals
currently available in this range i.e. Rajma Masala, Nav Ratan Kurma, Dal
Makhani, Aloo Mattar, Palak Paneer, Pindi Chana and Pav Bhaji. Prices
start at Rs. 35/- for a 285 grams pouch. The unique packaging form ensures
that the original freshness and taste of the recipes is protected without the
use of preservatives.
products.
Staples
To Estimate the Biscuits Industry and identify the critical success factors
ITC entered the branded Atta market with the launch of Aashirvaad Atta in
Jaipur and Chandigarh on 26th May 2002. The product is available all over
India.
Aashirvaad promises the Indian housewife the joy of providing her family
with the most delightful homemade rotis, made from the finest quality atta.
ITC aims to use the sourcing strength of its e-choupals to deliver happiness
e-choupal network. Premium quality atta made from the best wheat in India
ITC's Foods business also aims to delight the consumer through superior
and innovative packaging. The Aashirvaad package is pet poly, with the
was recently awarded the World Star Award for Excellence in Packaging, in
the Consumer Pack Category. This is one of the most prestigious awards in
the world for Packaging. ITC has also created a first in packaging in the
packaging and offering vacuum sealing in the 5kg premium pack. Both these
Aashirvaad Salt
To Estimate the Biscuits Industry and identify the critical success factors
ITC launched branded packaged salt under the brand name "Aashirvaad
Salt" on 26th March, 2003. The product is available in grocery stores around
the country.
Confectionery
ITC currently has two brands in the confectionery segment - "Mint-O" and
"Candyman" .
ITC acquired the brand "mint-o" from Candico in March 2002. ITC re-
launched the compressed mint product mint-o with new and improved
product and packaging. mint-o is the first mint in India to be also available in
mint" flavour was launched on 26th February, 2003. The product is available
in two sizes – rolls of 20s and 6s. mint-o offers the discerning consumer a
December 2003 and is now available in markets across the country. This
marked ITC's entry into the deposited candy market. In addition, Candyman
Eclairs and Candyman hard boiled candies viz. Wild Banana, Mango
Delite, Orange Josh and Pineapple Punch are also available across India.
To Estimate the Biscuits Industry and identify the critical success factors
`Sunfeast' range of high quality biscuits with offerings in Glucose, Marie and
the increasing confidence in the ITC brand and more importantly the trust
The company however, outsourced the entire production from two units at
Burdwan and Nagpur instead of setting up its own manufacturing line. The
They want to emerge as the third largest player in the organised biscuit
market after Britannia and Parle in the next three to four years with a market
share of 10-11 per cent of the organised market. It was hoped that the
turnover of the foods division would jump to Rs. 450-500 crores in the next
four years with biscuits alone contributing close to Rs. 150-200 crores. They
Southern India considering that the value added range market was growing
The Sunfeast range is competitively priced and includes two new product
available in 100 gms, 75 gms and 19 gms priced at Rs. 4, Rs. 3 and Re 1
respectively, targeting children between the age group 4 – 14 years and their
mothers.
gms, priced at Rs. 13 and 'Sunfeast Marie Light' – Light & Crispy, available
in 200 gms and 400 gms, priced at Rs. 13 and Rs. 24 respectively. Targeting
housewives.
To Estimate the Biscuits Industry and identify the critical success factors
Cream – Smooth & Yummy Cream Biscuits, available in 100 gms, priced at
Rs. 11, Rs. 11 and Rs. 12 respectively. Targeting children between the age
group 4 – 14 years.
The launch of “Sunfeast” marked ITC Foods entry into the branded biscuit
market with a range of offerings in both basic and value added segments.
'Sunfeast', with the Brand Essence “Spread the Smile,” connotes happiness,
contentment, satisfaction and pleasure one would derive from the biscuits.
This latest offering from ITC Foods is in tune with the company’s strategic
competencies.
distinctive graphics and fonts identifying sub categories and at the same
quality and the new – first time in the market offerings from Sunfeast. During
outlets – for every purchase of Sunfeast Marie & Sunfeast Cream Biscuits
75gms of
way weighed with the people purchasing products of ITC's Foods division
and the company has been able to capture nearly 10 per cent of the market
share for biscuits within a year of the launch of `Sunfeast' range of biscuits.
The biscuits market, which witnessed a growth of 12 per cent during last
year in the country, is expected to sustain its growth during the current year,
too. The biscuits market in the country was estimated to be worth Rs 4,500
crore annually and in terms of quantity it was around 5.12 lakh tonnes. While
the organised, branded segment had a 60 per cent market share the rest
Pradesh were two of the largest markets for biscuits and Tamil Nadu, with 9
and Cream - and it was the first to come out with two new flavours - Orange
To Estimate the Biscuits Industry and identify the critical success factors
Marie and Butterscotch Cream biscuits. While in the rural markets Glucose
ITC clearly demarcated its two businesses and food products were sold
its Foods Division despite the fact that ITC as a brand has long been
The company's success in the food products business is due to the depth in
outsourcing opportunities.
ITC entered the biscuits market in August 2003 and it has introduced its
biscuits have been able to capture a 10 per cent market share where they
20 per cent of the biscuit market. The market for biscuits is to be good since
the per capita consumption of biscuits was just about 10 kg in India where
ITC expects maximum sale of biscuits in west India which will cater to
around 29 per cent of the company’s total biscuits sales. The share of east
During the current financial year, the company’s food division will
looking at sales or profit right at this moment. Their primary aim now is to
make their products available in all corners of the country. The company has
panwallah play a major role in the corporate sector what with ITC Ltd’s food
division banks on this segment to give it the winning edge in the war to win
While grocery stores remained a large part of the retail rollout plan, growth
for them came from the neighbourhood convenience stores and panwallahs
who are familiar with company and brands. The biscuits are now available
While making inroads into retail has remained a tough challenge for many
MNCs, ITC seems to have cracked the complicated code if you consider the
fact that in a place like Pune, for example- it services four thousand such
outlets on a daily basis with the figure increasing to over two-and-a-half lakh
currently dominated by Britannia and Parle, which currently account for over
seduce palates. Thus, while the Marie takes on a new, orange flavoured
avatar, the company is hoping to lure Indian biscuit lovers with an all-new
Flavour innovation will lead growth in the cream segment and we will
position.
Whether the panwallah will smoothen the journey to number one position
remains to be seen but the company is already claiming that it has got 4-5
To Estimate the Biscuits Industry and identify the critical success factors
per cent of the 600-700 tonnes/month Mumbai market just one month into
the launch.
The company is already launching the product across various cities and
plans to make the brand a national one in the next few months. That is also
planning to offer trade margins that will give competition a run for its money
support of its FMCG growth strategy because the distribution reach of this e-
biz is more important than its revenue – earning potential. This is important
India is a daunting task, and this is the bit that most FMCGs as well as the
And going to that rural part of India is important, as anyone will tell you
because 700-750 million people live in there. Nor is it simply poor people
who live here. According to the NCAER, nearly 400 million of these people
The hit project include Shakti of HLL, Coke trying mobile dispensing units,
paanwallas and TTK Prestige’s Project Mobile Prestige. This is where the e-
reaching 1.8 million farmers and ITC chief Yogi Deveshwar expects the
Move to the Indian retail scene, and there are two things that drive the
business – groceries and clothing. With its e-choupal business helping ITC
improve the quality of its commodities like wheat, coffee, soya, packaged
basmati rice or processed fruits or even frozen and cooked shrimp and
reduce their costs, clearly the company has a head-start in the groceries part
of the business, in terms of its ability to develop private labels. The company
has already made some kind of start into the ready-to-eat business through
its Bukhara brand of dals and various regional preparations. Issues that are
ITC has also forayed into staples like atta and salt, confectionery like mint
and candy, and snack food like biscuits. And guess where the atta is
runs the e-choupals has said the group plans to set up rural malls (selling
All this, needless to say, can go horribly wrong. But there must be a fairly
good chance of it happening since ITC is one of the few FMCG players that
To Estimate the Biscuits Industry and identify the critical success factors
investment firms like SSKI rate as over-performer is the fact that they believe
ITC to be mulling an entry into a core FMCG category leveraging the strong