ITC~

TOUCHING YOUR LIFE.

EVERYDAY
 
A study on the Channel Distribution

By:

Radhika Gupta- 91041

Shivi Aggarwal – 91051
Madhusudan partani- 91029
 What is ITC
 ITC is one of India's foremost private sector
companies with a market capitalisation of
nearly US $ 19 billion and a turnover of over
US $ 5 billion
 ITC has a diversified presence in Cigarettes,
Hotels, Paperboards & Specialty Papers,
Packaging, Agri-Business, Packaged Foods &
Confectionery, Information Technology,
Branded Apparel, Personal Care, Stationery,
Safety Matches and other FMCG products
 ITC's diversified status originates from its
corporate strategy aimed at creating multiple
drivers of growth anchored on its time-tested
core competencies: unmatched distribution
reach, superior brand-building capabilities,
effective supply chain management and
 The Product-Mix
 FMCG
Cigarettes
Foods
Lifestyle retailing
Personal Care
Stationery
Safety Matches
Agarbatti
 Hotels
 Agri-business
 Paperboard and Packaging
 Information Technology
Overview
 The Composition
Manufacturing Unit
Separate for each product line
Contract Manufacturing
Backward Integration
E-Chaupal
Storage Hubs
Stores all the products
 Cont…
Distributors
Exclusive based on population
Needs to stock all FMCG products( Except
Stationery)
Wholesalers
Retailers
Paanwalas
Deepest penetration possible

 Suitability
Perishable
Short Span
Customers prefer fresh products
Lot Size
Smaller Lot sizes
Convenience
Waiting Time
Product Assortment
 Channel Objectives
 Consumer Behavior
 Quality Conscious
 Convenience goods, Needs Intensive distribution
 Demands variety
 Very less waiting time
 Company Objectives
 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
 Features
Selection
Distributor is selected based on
 Infrastructures, Delivery Van, Computer,
Warehouse, Sales Force
 Population based ( 1 Distributor per 20-25
thousand)
Control
Uses Coercive power
To deal in Cigarettes, it is must to deal in
Other goods
Terms and Conditions
Price, Selling Condition, Godown Condition
etc…
 Functions
Manpower
Promotion
Credit
Infrastructure
Stocking
 Benefits
No Benefits 
Higher margins
No Credit- Only Cash Payments
No Freebies, Paid Vacations Gifts etc..
Very rarely Cash gifts (linked with
performance)

 Others
Order
Distributors- Weekly
Retailers- Twice a week
Paanwalas- daily
Online order is placed by distributor
The periodical order from wholeseller ,
retailer, paanwalas is collected by staff of
distributor.

Payment
Mostly on Cash-Basis; sometimes post dated
cheques
Very rarely Credit is allowed on cigarettes
 Cont…
Transportation
Uses delivery van, Rickshaw, Cycles, Autos
Conflicts
No Conflicts
Some tiffs raise between distributor and
retailer due to under supply from
distributor
Problems
 Analysis
 ITC has the most popular brands of cigarettes in
India.
The sale takes place from the largest of retailers
like Big Bazaar, Spencers to the smallest of
paanwalas at every nook and corner in India.
Thus ITC has deeply penetrated the Indian
cigarette market.
 With an already established distribution channel
for cigarettes, ITC is also selling safety
matches, which is complementary to both the
cigarettes and agarbattis.
 The retailers and paanwalas are also ready to
stock ITC’s candies, potato chips and finger
snacks because of the higher margin as
compared to Frito lays, which is its biggest
rival in potato chips and finger snacks
 Analysis
By entering into the branded Indian biscuit
industry there was a business synergy.
ITC was already value-adding to wheat with
its branded atta presence. By entering the
biscuits segment, it improved its bottom-
line further.
The company used its existing network of
convenience stores -- the company’s name
for the hole-in-the-wall pan-beedi shops--
for Sunfeast.
The company says the brand is now
available in nearly 1.8 million outlets.
Sunfeast captured around 7% in mere 3
years since its launch in 2003
THANK YOU