PROJECT REPORT

ON
“STRATEGISING FOCUS BRAND
DISTRIBUTION IN RURAL MARKET
AND ANCHORING THE EXECUTION”
AT
ITC Limited, SAHARANPUR (UP)

SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE DEGREE OF

MASTERS OF BUSINESS ADMINISTRATION (MBA)

SUPERVISED BY: SUBMITTED BY :

Neeraj Malhotra Kritika Kapoor
(Asst. Branch Manager) MBA

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 CERTIFICATE

Certified that the summer internship project report “STRATEGISING FOCUS

BRAND DISTRIBUTION IN RURAL MARKET AND ANCHORING THE
EXECUTION” is the Bonafide work of Kritika Kapoor, Regd. No: 11813485,
student of Master of Business Administration of School of Business, Lovely
Professional University carried out under my supervision during June 01, 2019
to July 15, 2019.

Signature of the Industry Supervisor

Date : July 15, 2019
Name of Supervisor : Mr. Neeraj Malhotra
Designation : Asst. Branch Manager

2
DECLARATION

I hereby declare that the project report on the topic “STRATEGISING FOCUS
BRAND DISTRIBUTION IN RURAL MARKET IN ANCHORING THE
EXECUTION” is submitted in partial fulfilment of the requirement for the award of
the degree of MBA. The report is a record of original project work done by me during
the period of my study in ITC Limited, Saharanpur (UP).

SUBMITTED BY:

KRITIKA KAPOOR

MBA

3
 ACKNOWLEDGEMENT

Completing a task is never a solo effort. It is often the result of invaluable

contributions by a number of individuals in a direct or indirect manner, which helps in
the shaping and achievement of success.
It gives me enormous pleasure, to express my heartfelt and earnest thanks and
gratitude to Mr. NEERAJ MEHLOTRA (ASST. BRANCH MANAGER) for this
opportunity to pursue my internship and also want to thank Mr. SAHIL
TANEJA(AREA MANAGER) for his invaluable guidance during the course of the
project and for their help and endurance throughout the duration of this project,
without their vision, guidance and support this report would not have materialized.
I am also thankful to all Area Executives who took time out of their busy schedules
and help me carry out this training.
The time at ITC LTD. was very useful in terms of gaining valuable hands on
understanding consumer behaviour toward the loyalty programme. Finally I would
like to thank my parents for their constant support. I wholeheartedly thank them all
for their encouragement and support all the way from home from their hearts. I
dedicate all my success to each one of them.

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CONTENTS
CHAPTER 1
EXECUTIVE SUMMARY
CHAPTER 2
INTRODUCTION TO FMCG INDUSTRY
CHAPTER 3
COMPANY PROFILE
CHAPTER 4
MISSION AND VISSION
CHAPTER 5
COMPANY’S PRODUCTS AND THEIR COMPITITORS
CHAPTER 6
DISTRIBUTION NETWORK AND CHANNEL
CHAPTER 7
SWOT ANALYSIS
CHAPTER 8
OBJECTIVES AND SCOPE OF STUDY
CHAPTER 9
LIMITATIONS AND SCOPE IN FUTURE
CHAPTER 10
BIBLIOGRAPY AND REFERENCE

5
EXECUTIVE SUMMARY
My internship at ITC Ltd was nothing short of a journey. ITC as a whole,is a class
apart.
I went there through reference. It was 45 days internship from 1st june and I assisted
the ASM of marketing branch.
Project tile-“Strategising focus brands distribution in rural market and anchoring the
execution”.
I was coordinating a project called “5 ka dum”
 During office work-“ Analysed and compared the growth of different cig
brands”.
I’ve done market research of 5 premium brands of cig and NTD in rural market and
analysed the data of distribution channel to know the actual position of sales
happening on the daily basis. Whether there is grow or degrow. And further made
strategies on how can we increase the sale to make more profits.
 During field work-“Observed the availability and visibility of 5 premium
brands of cig brands”.
I’ve gathered the data from the different shop keepers then use to collate the data for
area executives.

Limitations –
Survey was done only confined to rural market.
Time span was less
Pendency of data due to busy schedules.
Sometimes maybe in hurry or due to pressure they use to give false data.

Challenges –
The most important setback you face is its working hour. I had asked my guide how
many hours I was supposed to work to which he replied “you work as long as you
can”. And it was indeed true!
I could see marketing and sales department employees working on their laptops,stuck
on some excel sheets. However the fact that one has to work hard even on Saturdays
and Sundays.

6
Learning-
More than just academics learning an industrial internship like ITC gives you an
opportunity to experience the corporate world and interact with such people.

Let me shed some light on the people who work here – I think of words like hard
working,patience,dedicated and helpful.
I got to talk to and learn from experts in every area.

Trying out new dishes made my internship a memorable one.

After all,what is in a life if you haven’t experienced all the hues of the light. But I
believe all the experience made it interesting.

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INTRODUCTION TO FMCG INDUSTRY
OVERVIEW
Fast Moving Consumer Goods (FMCG) Industry in India is one of the fastest
developing sectors in the Indian economy. Fast Moving Consumer Goods (FMCGs)
are goods that are consumed in a short span of time and are most often consumed
daily. FMCGs are one of the most important sectors of an economy and are often
referred to as defensives as they comprise the basic day to day needs of the citizens.
At present the FMCG Industry is worth US$ 13.1 billion and it is the 4th largest in the
Indian Economy. These products have very fast turnaround rate, i.e. the time from
production to the revenue from the sale of the product is very less. In the present
economic scenario, time is regarded as money, so the FMCG companies have to be
very fast in manufacturing and supplying these goods. The Company's institutional
strengths - deep understanding of the Indian consumer, strong trademarks, deep and
wide distribution network, agri-sourcing skills, packaging know-how and cuisine
expertise - continue to be effectively leveraged to rapidly grow the new FMCG
businesses.

INDIAN FMCG INDUSTRY- FACTS

 The Fast Moving Consumer Goods (FMCG) Industry in India include segments like
cosmetics, toiletries, glassware, batteries, bulbs, pharmaceuticals, packaged food
products, white goods, house care products, plastic goods, consumer non-
durables, etc.
 The FMCG market is highly concentrated in the urban areas as the rise in the
income of the middle-income group is one of the major factors for the growth of
the Indian FMCG market.
 The penetration in the rural areas in India is not high as yet and the opportunity
of growth in these areas is huge by means of enhanced penetration in to the
rural market and conducting awareness programs in these areas.
 The scopes for the growth of the FMCG industry are high as the per capita
consumption of the FMCG products in India is low in comparison to the other
developed countries.

8
 The manufacturing of the FMCG goods is concentrated in the western and
southern belt of the country.
ITC has rapidly scaled up presence in its newer FMCG businesses comprising
Branded Packaged Foods, Lifestyle Retailing, Education and Stationery products,
Personal Care products, Safety Matches and Incense Sticks (Agarbatti), at an
impressive pace over the last several years, crossing Rs. 9000 crore mark in 2015.

FMCG INDUSTRY IN INDIA - MAJOR PLAYERS

Dabur India Ltd.

Nirma Ltd.
Cadbury India Ltd.
Nestle
Britannia
ITC Ltd.
Coca Cola
Unilever
Pepsico
Procter & Gamble

9
COMPANY PROFILE

ITC Limited is an Indian multinational conglomerate company headquartered in

Kolkata, West Bengal.

Established in 1910 as the 'Imperial Tobacco Company of India Limited', the

company was renamed as the 'India Tobacco Company Limited' in 1970 and later to
'I.T.C. Limited' in 1974. The dots in the name were removed in September 2001 for
the company to be renamed as 'ITC Limited' where 'ITC' would no longer be an
acronym. The company completed 100 years in 2010 and as of 2012-13, had an
annual turnover of US$8.31 billion and a market capitalization of US$50 billion. It
employs over 30,000 people at more than 60 locations across India and is part of
Forbes 2000 list.

History
10
Tobacco business and early years

"ITC Limited" was incorporated under the name 'Imperial Tobacco' which was later
renamed as 'Imperial Tobacco Company of India Limited', succeeding W.D. & H.O.
Wills on 24 August 1910 as a British-owned company registered in Calcutta. Since the
company was largely based on agricultural resource, it ventured into partnerships in
1911 with farmers of southern part of India for sourcing leaf tobacco. Under the
company's umbrella, the 'Indian Leaf Tobacco Development Company Limited' was
formed in Guntur district of Andhra Pradesh in 1912. The first cigarette factory of the
company was set up in 1913 at Bangalore. In 1918, leaf-buying points were created
in southern India. ITC's cigarette factory at Munger was equipped with printing
facility in 1925, paving way for its first non-tobacco business.

Though the first six decades of the Company's existence were primarily devoted to
the growth and consolidation of the cigarettes and leaf-tobacco businesses, ITC's
packaging & printing business was set up in 1925 as a strategic backward integration
for ITC's cigarettes business. It is today India's most sophisticated packaging
house.More factories were set up in the following years for cigarette manufacturing
across India.

In 1928, construction began for the company's headquarters, the 'Virginia House' at
Calcutta. ITC acquired Carreras Tobacco Company's factory at Kidderpore in 1935 to
further strengthen its presence. ITC helped to set up indigenous cigarette tissue-
paper-making plant in 1946 to significantly reduce the import costs and a factory for
printing and packaging was set up at Madras in 1949. The Company acquired the
manufacturing business of Tobacco Manufacturers (India) Limited and the
complementary lithographic printing business of Printers (India) Limited in 1953.

Towards Indianization and business diversification

The company was converted into a Public Limited Company on 27 October 1954. The
first step towards Indianization was taken in the same year with 6% of Indian
shareholding of the company. ITC also became the first Indian company to foray into

11
consumer research during this time. During 1960's, technology was given more focus
with setting up of cigarette machinery and filter-rod manufacturing facilities aimed
at achieving self-sufficiency in cigarette-making.

Ajit Narain Haskar became the company's first Indian chairman in 1969 and this was
crucial in building up the Indian management for the company. As the company's
ownership progressively Indianised, under Haskar's leadership, the name of the
company was changed from 'Imperial Tobacco Company of India Limited' to 'India
Tobacco Company Limited' in 1970. ITC also became the first company in India to
start phased Indianisation of capital and the Indian shareholding of ITC grew from 6%
to 25%. ITC entered into brand sponsorship for various sporting events, starting from
the 1971 Scissor's Cup. Innovative market campaigns and electronic data processing
were started in the 1970s.

In 1973, ITC set up its integrated research center in Bangalore, aimed at

diversification and venturing into newer businesses with research and development.
With the unfolding diversification plans, the name of the company was changed to
'I.T.C. Limted' in 1974. The Indian shareholding grew further to 40% during this time.
ITC entered into the hospitality sector with hotel business in 1975 with the
acquisition renaming of ITC Welcomgroup Hotel Chola in Madras. ITC chose the
hospitality sector for its potential to earn high levels of foreign exchange, create
tourism infrastructure and generate large scale direct and indirect employment.

The shareholding went over 60% in 1976 and more hotels were started by the
company in the following years. ITC Sangeet Research Academy was set up at
Calcutta in 1977. In 1979, ITC entered the paperboards business by promoting ITC
Bhadrachalam Paperboards Limited. J N Sapru took over as the company's chairman
in 1983 and the international expansion started with the acquisition of Surya Nepal
Private Limited in 1985. The year 1986 saw vigorous moves from the company with
opening of an Indian restaurant was in the city of New York, acquisition and
renaming of Vishvarama Hotels to ITC Hotels Limited, setting up of two new ventures
- the ITC Classic Finance Limited and ITC Agro Tech Limited under its umbrella. ITC
also entered into the edible oils industry with the launch of 'Sundrop' brand of

12
cooking oils in 1988. Tribeni Tissues Limited was acquired in 1990. K L Chugh
assumed the role of chairman in 1991 and ITC Global Holding Private limited was
started as an international trading company in Singapore in 1992. In 1994, all the
hotels under the company were transferred into the listed subsidiary company ITC
Hotels Limited. ITC, through the brand 'Wills', sponsored the 1996 Cricket World
Cup.

Y C Deveshwar took over as the company's chairman in 1996 and the corporate
governance structure was re-crafted to support effective management of multiple
businesses. ITC exited from edible oils business and financial services; sold the ITC
Classic Finance Limited to ICICI Limited and handled the 'Sundrop' business to
ConAgra Foods Limited in 1998. In the year 2000, an innovative initiative for farmers
called 'e-Choupal' was started in Madhya Pradesh in 2000. The same year witnessed
the launch of ITC's 'Wills Sport' range of casual wear with first retail outlet in New
Delhi and ITC's entry into stationery products and gifting business introducing the
'Expressions' range of greeting cards and 'Classmate' notebooks. A wholly owned
information technology subsidiary, ITC Infotech India Limited was also started in
2000 and the ITC Bhadrachalam Paperboards Limited was merged into ITC Limited.
The name of the company was changed to 'ITC Limited' omitting the dots and
adapting the strategy 'No stops for ITC' in 2001. Employee stock option scheme was
introduced for the first time and a web portal for the company was launched.
Subsidiaries for ITC Infotech were set up at United Kingdom and USA.

13
Products and brands

Cigarettes

ITC Ltd sells 81% of the Cigarettes, Bidi in Asia, where 275 million people use tobacco
products and the total cigarette market is worth close to $11 billion (around
Rs. 757399.4 million)

ITC's major cigarette brands include

14
  Wills Navy Cut,
 Gold Flake Kings,

 Gold Flake Premium lights,

 Gold Flake Super Star,

 Insignia, India Kings, Classic (Verve, Menthol, Menthol Rush, Regular, Citric
Twist, Ice Burst, Mild & Ultra Mild),

 555,

 Silk Cut,

 Scissors,

 Capstan,

 Flake

 Royal

Other businesses
 Foods: ITC's major food brands include Kitchens of India; Aashirvaad, B
natural, Sunfeast, Candyman, Bingo! and Yippee!. ITC is India's largest seller
of branded foods with of over Rs. 4,600 crore in 2012-13. It is present across 6
categories in the food business including, snack foods, ready-to-eat meals,
fruit juices, dairy products and confectionery.

 Personal care products include perfumes, haircare and skincare categories.

Major brands are Fiama Di Wills, Vivel,Savlon Soap & Handwash, Essenza Di
Wills, Superia and Engage.

15
  Stationery: Brands include Classmate, PaperKraft and Colour Crew. Launched
in 2003, Classmate went on to become India's largest notebook brand in 2007.

 Safety Matches and Agarbattis: Ship, i Kno and Aim brands of safety matches
and the Mangaldeep brand of agarbattis (Incense Sticks).

 Hotels: ITC's Hotels division (under brands including Welcome Hotel) is

India's second-largest hotel chain with over 90 hotels throughout India. ITC is
also the exclusive franchisee in India of two brands owned by Sheraton
International Inc. Brands in the hospitality sector owned and operated by its
subsidiaries include Fortune Park Hotels and Welcome Heritage Hotels.

 Paperboard: Products such as specialty paper, graphic and other paper are sold
under the ITC brand by the ITC Paperboards and Specialty Papers Division
like Classmate product of ITC well known for their quality .

 Packaging and Printing: ITC's Packaging and Printing division operates

manufacturing facilities at Haridwar and Chennai and services domestic and
export markets.

 Information Technology: ITC operates through its fully owned subsidiary ITC
Infotech India Limited.

VISION & MISSION

VISION: Sustain ITC's position as one of India's most valuable corporations through
world class performance, creating growing value for the Indian economy and the
Company's stakeholders.

16
MISSION: To enhance the wealth generating capability of the enterprise in a
globalising environment, delivering superior and sustainable stakeholder value

The Company's institutional strengths - deep understanding of the Indian consumer,

strong trademarks, deep and wide distribution network, Agri-sourcing skills,
packaging know-how and cuisine expertise - continue to be effectively leveraged to
rapidly grow the new FMCG businesses.

ITC has rapidly scaled up presence in its newer FMCG businesses comprising
Branded Packaged Foods, Lifestyle Retailing, Education and Stationery products,
Personal Care products, Safety Matches and Incense Sticks (Agarbatti), at an
impressive pace over the last several years, crossing Rs. 9700 crore mark in 2015-16.

17
1. CIGARETTES & CIGARS

ITC is the market leader in cigarettes in India. With its wide range of invaluable
brands, ITC has a leadership position in every segment of the market. ITC's highly
popular portfolio of brands includes Insignia, India Kings, Lucky Strike, Classic,

18
Gold Flake, Navy Cut, Players, Scissors, Capstan, Berkeley, Bristol, Flake, Silk Cut,
Duke & Royal.
The Company has been able to consolidate its leadership position with ingle minded
focus on continuous value creation for consumers through significant investments in
creating & bringing to market innovative product designs, maintaining consistent &
superior quality, state-of-the-art manufacturing technology, & superior marketing and
distribution. With consumers & consumer insights driving strategy, ITC has been able
to fortify market standing in the long-term, by developing & delivering contemporary
offers relevant to the changing attitudes & aspirations of the constantly evolving
consumer.
ITC's pursuit of international competitiveness is reflected in its initiatives in overseas
markets. In the extremely competitive US market, ITC offers high-quality, value-
priced cigarettes and Roll-your-own solutions. In West Asia, ITC has become a key
player in the GCC markets through its export operations.
ITC's cigarettes are manufactured in state-of-the-art factories at Bengaluru, Munger,
Saharanpur, Kolkata and Pune, with cutting-edge technology & excellent work
practices benchmarked to the best globally. An efficient supply-chain & distribution
network reaches India's popular brands across the length & breadth of the country.

Revenue and Net Income, EPS Growth Rate

Created with Highcharts 3.0.9Rupees-19%5%Annual Growth2017201820190B250B500B750B

587.32 Billion Rs

2017

Professional Membership

Revenue or turnover or top line is income that a company receives from its
normal business activities. Revenue Growth is used to measure how fast a
company's business is expanding. The figure shows the annual rate of
increase/decrease in a company's revenue or sales growth in terms of

19
percentage change from the previous year.

An ideal company should have an steady upward trend. Year-over-year

performance is frequently used by investors seeking to gauge whether a
company's financial performance is improving or worsening.

Compound Annual Growth Rate of ITC Ltd.

1
year
4.56
Revenue
%
Net Income 12%
EPS Basic 11%

Watch the Accounts (trade) Receivables (aka Sundry Debtors) and Inventory
columns closely. A company can get into serious trouble very quickly if it's
customers are not paying the bills or if its inventory is piling up in warehouses. If
Recievables are growing much faster than sales, it usually means that the
company is having trouble collecting money from customers. More inventory on
the balance sheet means the company is having trouble delivering goods to
customers.

An increase of receivables and inventory above 50% is usually not a good sign
and needs to be investigated further.

Days Sales Outstanding

20
Created with Highcharts

3.0.9Days15.420.529.5DSO2017201820192020101520253035Craytheon.com

Days Sales Outstanding or DSO is also known as "average collection period and
receivable days". It's a measure of the average time it takes to collect the cash
from sales, in simple words, how fast customers pay their bill. DSO does tend to
vary a good deal by industry sector.

MAJOR COMPETITORS:-
ITC Brand Competitors Brand
Classic Marlboro
Gold Flake King Four Square

2. FOODS

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ITC's Branded Packaged Foods business is one of the fastest growing foods
businesses in India, driven by the market standing and consumer franchise of its
popular brands - Aashirvaad, Sunfeast, Bingo!, Yippee!, Kitchens of India, B Natural,
mint-o, Candyman and GumOn. The Foods business is today represented in multiple
categories in the market - Staples, Spices, Ready-to-Eat, Snack Foods, Bakery &
Confectionery and the newly introduced Juices & Beverages.
ITC's uncompromising commitment to the health and safety of its consumers ensures
adherence to the highest levels of quality, safety and hygiene standards in
manufacturing processes and in the supply chain. All ITC-owned manufacturing units
are Hazard Analysis and Critical Control Point (HACCP) certified. The quality
performance of all manufacturing units is monitored continuously online. Going
beyond process control, ITC ensures that quality standards are scrupulously adhered
to while choosing ingredients that go into the preparation of its food products. (Know
more about ITC's Food Policy)
ITC's Foods brands delight millions of households with a wide range of differentiated,
value-added products developed by leveraging ITC's in-house R&D capabilities,
relevant consumer insights, a deep understanding of the Indian palate gained from its
Hotels business, its agri-sourcing & packaging strengths, exciting, innovative
communication and an unmatched distribution network.
The business continues to invest in every aspect of manufacturing, distribution and
marketing to ensure that it can leverage emerging opportunities and fulfill its
aspiration of being the most trusted provider of Branded Packaged Foods in the
country. ITC's Foods business also exports its products to the key geographies of
North America, Africa, Middle East and Australia.

MAJOR COMPETITORS:-
ITC Brand Competitors Brand
Sunfeast Yippee Noodles Maggi (Nestle)

22
Yumitos Chips Lays
Sunfeast Glucose Biscuits Parle
Mom’s Magic Good Day
Bingo Mad Angles Kurkure Triangles
Gum On Center Fresh
B-Natural Juice Dabur Real
Tedha Medha Kurkure
Sunfeast Pasta Nestle Pazzta
Aashirvaad Atta Pitanjali/Puja/Mohan Bhog
Candyman Eclairs Nestle Eclairs
Candyman Tadka Pulse
Jellimal Candies Juzz Jelli
Nice Time Biscuits Parle-Nice

3. PERSONAL CARE

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In line with ITC's aspiration to be India's premier FMCG company, recognised for its
world-class quality and enduring consumer trust, ITC forayed into the Personal Care
business in July 2005. In the short period since its entry, ITC has already launched an
array of brands, each of which offers a unique and superior value proposition to
discerning consumers. Anchored on extensive consumer research and product
development, ITC's personal care portfolio brings world-class products with clearly
differentiated benefits to quality-seeking consumers.
ITC's Personal Care portfolio under the 'Essenza Di Wills', 'Fiama', 'Vivel', "Engage"
and  'Superia' brands has received encouraging consumer response and is being
progressively extended nationally.
ITC's state-of-the-art manufacturing facility meets stringent requirements of hygiene
and benchmarked manufacturing practices. Contemporary technology and the latest
manufacturing processes have combined to produce distinctly superior products
which rank high on quality and consumer appeal.
Extensive insights gained by ITC through its numerous consumer engagements have
provided the platform for its R&D and Product Development teams to develop
superior, differentiated products that meet the consumer's stated and innate needs. The
product formulations use internationally recognised safe ingredients, subjected to the
highest standards of safety and performance.

MAJOR COMPETITORS:-
ITC Brand Competitors Brand
Vivel Soap Lux (HUL)
Superia Soap No.1 (Godrej)
Fiama Di Wills Pears (HUL)
Savlon Dettol (RB)
4. LIFESTYLE RETAILING

24
ITC's Lifestyle Retailing Business Division has established a nationwide retailing
presence through Wills Lifestyle & John Players.
Synonymous with elegance and style that is effortless and chic, Wills Lifestyle
presents a premium fashion wardrobe for men and women. Offering a tempting
choice of Crisp Contemporary formals, Stylist suave Casuals, Wills Glamorous
evening wear and Wills Signature designer wear, Wills Lifestyle offers a truly
delightful shopping experience for the discerning customer.
John Players embodies the spirit of the modern youth that is playful, fashionable and
cool. John Players presents a complete wardrobe of meticulously crafted smart
formals, trendy casuals, edgy denims & accessories incorporating the most
contemporary trends in an exciting mix of colours, styling and fits.

5. EDUCATION AND STATIONERY BUSINESS

ITC made its entry to the education and stationery business with its Paperkraft brand
in the premium segment in 2002; and later expanded into the popular segment with its
Classmate brand in 2003. By 2007, Classmate became the largest Notebook brand in
the country. Together, Classmate and Paperkraft offer a range of products in the
Education & Stationery space to the discerning consumer, providing unrivalled value
in terms of product & price.
Classmate and Paperkraft have become a natural extension of the consumer.
Meticulous understanding of consumer needs helped creating a relevant and
comprehensive portfolio satisfying the needs of different sets of consumers.

25
ITC is the manufacturer of India's first Ozone treated environment friendly Elemental
Chlorine Free (ECF) pulp, paper and paperboard. It blends its knowledge of image
processing, printing and conversion garnered from Packaging & Printing Business
with its brand building and trade marketing & distribution strengths resident in its
FMCG business to offer superior value products to consumers.
Paperkraft Business paper and the papers used in Classmate and Paperkraft notebooks
are superior in quality and environment-friendly. Other offerings available in
education and Stationery range are safe and certified non-toxic.

6. AGARBATTIS & SAFETY MATCHES

26
As part of ITC's business strategy of creating multiple drivers of growth in the FMCG
sector, the Company commenced marketing Agarbattis (Incense Sticks) sourced from
small-scale and cottage units in 2003. This Business leverages the core strengths of
ITC in nation-wide distribution and marketing, brand building, supply chain
management, manufacture of high quality paperboards and the creation of innovative
packaging solutions to offer Indian consumers high quality Agarbattis. With its
participation in the business, ITC aims to enhance the competitiveness of the small-
scale and cottage units through its complementary R&D based product development
and strengths in trade marketing and distribution.

27
DISTRIBUTION NETWORK OF ITC LTD.
ITC has one of the most extensive distribution networks in India. Its products are
available at 4.3 million of the estimated eight million retail stores in India. Of this,
about 2 million are under ITC‟s direct distribution network. Traditionally, ITC, like
all packaged goods companies in India, stocks products at its distribution centres.
Products first go to its exclusive wholesale dealers, then distributors and direct
retailers. In some areas, mostly in rural India, the big retailers supply products to
smaller retail outlets. The entire process takes anything from one week to three weeks,
depending on the distance between the retail outlet and the factory.
 FACTORY
 WSP (Warehouse Service Providers)
 WD (Wholesale Distributors)
 CASH & CARRY (Wholesale)
 Retail Outlets
 Dispatch Center
 Stockist
 Hawkers

DISTRIBUTION CHANNEL- MAJOR PLAYERS

1. FACTORY
These are the manufacturers of the products. At the factory, manufacturing process is
done. There are various manufacturing units of different products at various locations
in India for the ITC products. ITC Limited has two manufacturing facilities of soaps
in India. These are located one each at Bangaluru and Haridwar. Apart from these two
there are four other units which manufacture soaps and other personal care products
for ITC.

2. WSP
WSP refers to the Warehouse Service Providers. These the storage places for the
manufactured goods. These can be owned by the company and owned by third party.
After manufacturing goods/products are moved to the warehouses for the storage
purpose. The goods from the factories go directly to the Wholesale service providers.
These factories are well connected with the branch offices. From here exchange of
28
information takes place which guides the flow of products to the Wholesale service
providers.

3. DISTRIBUTORS
These are also known as WD which means wholesale distributors. In most of cities of
India, there are various distributors of ITC products. It is the traditional channel of
distribution. In Amritsar City there are major distributors of ITC products- Bansal
Traders, Shiva Enterprises, Shehanshah Enterprises. From Company’s warehouse
goods moved to distributors at various locations. These distributors have team of
Salesmen through which the get order from the retail outlets and payment is also
settled through salesmen. Bansal Traders (distributors in Amritsar) have team of 4
salesmen for the Personal Care products.
The role of the WSPs is to simply take delivery of the goods from the factories that
the ITC have at six different locations across India and forward it to the Wholesale
Dealers. They are almost the same as C&F agents in the other companies. They are
given commissions for their handling of the goods. They in turn have to see that the
goods reach the next point of the channel that is the Wholesale dealers in time and
safely. They also have to maintain their stock level and see that the distributor is
maintaining their stock as per the norms of the Company. The stock norms are
maintained in ITC as a real time basis. ITC have software named SIFY Forum for the
same. This is a real time software, by the use of which the WSP agent can know the
stock level maintained by the Distributor and vice versa. It also helps in ordering of
the stock for the Distributor and the other channel members.

4. CASH & CARRY (wholesale)

Cash and carry wholesale represents a type of operation within the wholesale sector.
Cash and carry is a form of trade in which goods are sold from a wholesale warehouse
operated either on a self-service basis, or on the basis of samples (with the customer
selecting from specimen articles using a manual or computerised ordering system but
not serving himself) or a combination of the three. In Amritsar City, Best Price, Metro
and Relience Market is included in this category. These cash and carry stores provide
goods to
 Retail Customers

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  Retail Outlets
5. DISPATCH CENTER
Dispatch centers are the central purchasing center for the Easy Day, More and
Relience Fresh. The goods are directly moved from warehouse to the dispatch centers
and after that these dispatch centre send goods to the various outlets of Easy day etc.

6. STOCKIST
Stockist is a retailer that stocks goods of a particular type for sale. These are the sub-
distributors of goods in the small towns (with 20000 population). Distributors send
goods to the stockist and then stockist send goods to the retail outlets. For example-
Bansal Traders (distributor) has stockist in the Ajnala Town (Amritsar).

7. HAWKERS
A hawker is a vendor of merchandise that can be easily transported. Hawkers sell the
goods at the smaller locations where distributors have no reach. Hawkers sell goods to
the small retail outlets. Hawkers can be private hawkers or Company Owned. The
individual, who actually engages in the solicitation, makes the sale, and delivers the
goods is the peddler, irrespective of whether the person owns the goods or is an agent
or employee of the owner.

8. RETAIL OUTLETS
The retail outlets are the stores that sell smaller quantities of products or services to
the general public. A business that operates as a retail outlet will typically buy goods
directly from manufacturers or wholesale suppliers at a volume discount and will then
mark them up in price for sale to end consumers.

CHANNEL OBJECTIVES
 Consumer Behavior
 Quality Conscious
 Convenience goods, Needs Intensive distribution
 Demands variety
 Very less waiting time
 Company Objectives

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  Reach masses
 Rural penetration
 Diversification
 Competitive advantage
 Alternatives
 Sell ready to eat products through sweet shops like bikanerwala
 Showrooms for High-End products
 E-Chaupal

ITC Limited is an Indian conglomerate involved in the various diversified business.

ITC has 6 different verticals of businesses, FMCG, Hotel, Paperboards, Speciality
papers and packaging; IT and agribusiness. ITC’s cigarette business contributes a
major proportion of its FMCG revenue. ITC’s gross revenue crossed the mark of Rs.
50000 crore in 2016.

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SWOT ANALYSIS
Strengths in the SWOT Analysis of ITC : ITC has 6 strong and diverse
businesses under its name which boasts its total revenue and allows ITC to innovate
and explore other business opportunities.
Strong Brands in various businesses: ITC is a strong house of brands with most of
its products leading the segments in which they operate. ITC owns some of the most
popular cigarette brands like gold flake and Classic. It also owns Sunfeast, which is
amongst the top selling biscuits in India. Similarly, Aashirvaad, Yippee!, Engage,
John Players and Bingo are also amongst the market leader in their respective
categories. ITC’s hotel and property businesses are also doing well.

With a portfolio like this, ITC has become one of the most powerful conglomerates in
India and is admired all over the world.

Effective Social Business Initiatives: ITC has developed a triple-bottom-line

strategy through which concentrates on developing the nation’s economic, social and
environmental capital. ITC has brought in initiatives like E-Choupal, Choupal
Pradarshan Khet (CPK) which benefits the people at the grass root level, i.e. farmers.

These initiatives have also helped ITC to improve its corporate image from a
traditional tobacco manufacturer.

Inter and Intra-divisional Synergy: ITC has successfully utilised the strengths of
existing business to foray into a newer products or categories. ITC leveraged the
strong distribution system of cigarette brands to create a channel for its FMCG
products. Furthermore, ITC leveraged the knowledge of food and bakery items from
its hotel business to enter into Packaged Food category.

Weaknesses in the SWOT Analysis of ITC:

High Proportion of revenues from Tobacco products: ITC has been continuously
making efforts to divert the FMCG business from over dependence on tobacco
products and have been successful in doing so to an extent. But, tobacco products

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remain to be the major source of the revenue contributing more than 60% of the total
revenue from FMCG businesses.

Association with Tobacco Products affects the image: ITC has made a lot of efforts
to improve its corporate image but the fact that ITC has many tobacco products in its
portfolio impacts its corporate image.

An increase in Tax on Tobacco affects revenue: Due to the increase in taxation on

tobacco products, the prices and hence revenues get affected.

Opportunities in the SWOT analysis of ITC

Strategic Acquisitions: ITC should continue making the strategic acquisition like
they have done in the past by acquiring Savlon from Johnson & Johnson and B
Natural from Balan natural Foods. Keeping in mind that the product fits into the
existing distribution network, ITC can look to increase its portfolio of products and
expand its Non-Tobacco FMCG business and thereby strengthening the base of
revenue.

Growth in Purchasing power and improving lifestyle: ITC should tap on the
increasing purchasing power and improving the lifestyle of customers in India. This
could help in increasing revenue for all its businesses.

Growing Personal Hygiene as well as Food processing Industry in India: ITC

should utilise its distribution channel in Personal Hygiene and Food Processing
Industry to capitalise on the growth in the categories and hence increase revenue.

Tap opportunities created in the Rural Market: The growing rural market in India
and other emerging nations create huge opportunities to improve the bottom-line of
the company.

Threats in the SWOT Analysis of ITC :

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Intensifying Competition in FMCG businesses: ITC faces intense competition in its
FMCG business from large MNCs like HUL and P&G and Indian FMCGs like
Patanjali and Dabur. This limits the market share for ITC.

Strict Regulations and Increasing Taxation in Cigarette Business: The Tobacco

and Cigarette Industry in India continue to be targeted by strict government
regulations and taxation system. This possesses a threat to the highly profitable
Cigarette business of ITC.

Increasing awareness on health: There has been an increase in the health

consciousness which has resulted in the decrease in demand for tobacco products in
India. Also, anti-smoking campaigns throughout the country affect the sales of
cigarettes.

OBJECTIVES AND SCOPE OF STUDY

Objectives
The main Objective of the study is listed below:
 To know about the choices of customers regarding different cigarette brands
and their preferences.
 To collect the appropriate identification of Distributors.

 To note down the total purchase of different brands of cigarette done by the
distributors.

 To know about the potential of the company in the market.

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  To know the actual position of sales happening on daily basis whether there is
growth or degrow.

Scope of the Study

The various main scope of the study if given below: -

• It will give us the information regarding different category of customers

on the basis of their purchase data.
• It will give us the data regarding loyal and dedicated distributors of ITC.

• It will give us the market share proportion of ITC with respect to its
competitor in Particular Area of rural market.
• It will give us the insight about the preferences about what customers
want.

• It will tell us regarding the expectation of the customers from ITC Ltd.

• It will tell us that how much consumers are being impacted from the
different types of advertisements that are being run by ITC Ltd.

RECOMMENDATIONS

ITC Limited is a well-known paint company in India but based on the survey done
there are a lot of fields where the company has to still look in order to take some
corrective actions and improve the sales volume in the coming future: -

• While launching of new products, one must see that proper training is being
provided to the other person so as to get them know about the do’s and don’ts or
pros and cons of the product. So the company should arrange proper training
programs in order to make efficient use of the new products.
• One of the alarming factor found was regarding the quality of WAVE and
PILOT. Costomers and dealers said that these brands of ITC are not providing that

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 much coverage which they used to back in past and company should look into that
immediately.
Efforts should be made so that the distributors should be aware of the new products
and launches.
• One of the another factor that is affecting the company’s position is the
versatility
company is providing, so company should look into it and bring more offers and
discounts in the market.

• One thing to be noticed in the comparisons of advertisements was the number

of advertisements and quality of advertisements which can customer more aware of
the products and advantages. Company should look into this thing also.

LIMITATIONS OF THE STUDY

LIMITATIONS
• Survey that was done was only confined to Rural market area

• Time span is limited to 45 days.

• Pending data due to busy schedules of area executives.

• Some times maybe in hurry they use to give false data.

Complaints from the area executives due to burden of work.

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SCOPE IN FUTURE

• This study can be used by the company to convert their degrow to increase the
sales.
• This study can be used for strategizing the market penetration and also
analyzing the requirements of the distributors and customers.

BIBLIOGRAPY AND REFERENCE

BIBILOGRAPY
1. Marketing Management by Philip Kotler

2. Research Methodology by C R Kothari, Gourav Garg

REFERENCES
1. http://en.wiki
pedia.org/

2. http://www.sc
ribd.com/

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3. http://www.sl
ideshare.net/

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