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LOVELY PROFESSIONALUNIVERSITY

DEPARTMENT OF MANAGEMENT
Report on Field Project

Submitted to Lovely Professional University

In partial fulfillment of the Requirements for the award of Degree of


MASTER OF BUSINESS ADMINISTRATION
Submitted by:
SAGAR KAPOOR

11203656

DEPARTMENT OF MANAGEMENT
LOVELY PROFESSIONAL UNIVERSITY
PHAGWARA
PUNJAB
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.
KAPIL CHAUDHARY (AREA MANAGER) for his invaluable guidance during the course of
the project and for his help and endurance throughout the duration of this project, without his
vision, guidance and support this report would not have materialized.
I am also thankful to all customers and retail outlet owners who took time out of their busy
schedules and helped me carry out this training.
I am thankful to Miss. SHAMILY JAGGI (ASSISTANT PROFESSOR, SCHOOL OF
BUSINESS) for her exertions and persistent assistance during my OJT at ITC LTD. Finally, I
thank LOVELY PROFESSIONAL UNIVERSITY for giving me this wonderful opportunity to
pursue my OJT at ITC LTD.
The time at ITC LTD. was very useful in terms of gaining valuable hands on understanding
consumer behavior toward the loyalty programme. Finally, I would like to thank my parents for
their constant support and encouragement. I dedicate all my success to each one of them.

SAGAR KAPOOR
ITC Limited:

ITC was incorporated on August 24, 1910 under the


name Imperial Tobacco Company of India Limited. As the
Company's ownership progressively Indianised, the name of
the Company was changed to India Tobacco Company
Limited in 1970 and then to I.T.C. Limited in 1974. ITC
rules various and huge market segments in India.
ITC Limited has set its foot in various categories present in the
market.
ITC Limited is Indian conglomerate which works in five
segments:

FMCG (Fast Moving Consumer Goods): comprising Foods, Personal Care, Cigarettes and Cigars, Branded
Apparel, Education and Stationery Products, Incense Sticks and Safety Matches
Hotels
Paperboards and Specialty Papers
Packaging
Agri Business and Information Technology

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, the Seventies witnessed the beginnings of a corporate transformation
that would usher in momentous changes in the life of the Company. In the current scenario, ITC employs over
22,000 people at more than 60 locations across India. The Company continuously endeavors to enhance its wealth
generating capabilities in a globalizing environment to consistently reward more than 3, 74,000 shareholders, fulfill
the aspirations of its stakeholders and meet societal expectations. ITC is one of India's foremost private sector
companies with a market capitalization of nearly US $ 8 billion and a turnover of over US $ 4.75 billion.
FMCG INDUSTRY IN INDIA - MAJOR PLAYERS
Dabur India Ltd.
Nirma Ltd.
Cadbury India Ltd.
Nestle
Britannia
ITC Ltd.
Coca Cola
Unilever
Pepsico
Procter & Gamble

INTRODUCTION TO THE COMPANY


ITC is one of India's leading multi-business enterprises with a market capitalization of US $ 40
billion and a turnover of US $ 8 billion. ITC is rated among the World's Best Big Companies,
Asia's 'Fab 50' and the World's Most Reputable Companies by Forbes magazine and as 'India's
Most Admired Company' in a survey conducted by Fortune India magazine and Hay Group. ITC
also features as one of world's largest sustainable value creator in the consumer goods industry in
a study by the Boston Consulting Group. ITC has been listed among India's Most Valuable
Companies by Business Today magazine. The Company is among India's '10 Most Valuable
(Company) Brands', according to a study conducted by Brand Finance and published by the
Economic Times.

Company Conglomerate
Founded 1910
Headquarters Kolkata (West Bengal)
HISTORY
Chairman AND EVOLUTION Y. C. Deveshwar
Number of Employees 30,000 (approx)
Divisions ITC Infotech, Surya Nepal Pvt. Ltd.
Website www.itcportal.com
ITC was incorporated on August 24, 1910 under the name Imperial Tobacco Company of India
Limited. As the Company's ownership progressively Indianised, the name of the Company was
changed from Imperial Tobacco Company of India Limited to India Tobacco Company Limited
in 1970 and then to I.T.C. Limited in 1974. In recognition of the Company's multi-business
portfolio encompassing a wide range of businesses - Fast Moving Consumer Goods comprising
Foods, Personal Care, Cigarettes and Cigars, Branded Apparel, Education and Stationery
Products, Incense Sticks and Safety Matches, Hotels, Paperboards & Specialty Papers,
Packaging, Agri-Business and Information Technology - the full stops in the Company's name
were removed effective September 18, 2001. The Company now stands rechristened 'ITC
Limited,'where ITC is today no longer an acronym or an initialised form.

A MODEST BEGINNING
The Company's beginnings were humble. A leased office on Radha Bazar Lane, Kolkata, was the
centre of the Company's existence. The Company celebrated its 16th birthday on August 24,
1926, by purchasing the plot of land situated at 37, Chowringhee, (now renamed J.L. Nehru
Road) Kolkata, for the sum of Rs 310,000. This decision of the Company was historic in more
ways than one. It was to mark the beginning of a long and eventful journey into India's future.
The Company's headquarter building, 'Virginia House', which came up on that plot of land two
years later, would go on to become one of Kolkata's most venerated landmarks.
1925: Packaging and Printing: Backward Integration
1975: Entry into the Hospitality Sector - A 'Welcom' Move
1979: Paperboards & Specialty Papers - Development of a Backward Area
1985: Nepal Subsidiary - First Steps beyond National Borders
1990: Paperboards & Specialty Papers - Consolidation and Expansion
1990: Agri Business - Strengthening Farmer Linkages
2000: Lifestyle Retailing - Premium Offerings
2000: Information Technology - Business Friendly Solutions
2001: Branded Packaged Foods - Delighting Millions of Households
2002: Agarbattis & Safety Matches - Supporting the Small and Cottage Sector
2002: Education & Stationery Products - Offering the Greenest products
2005: Personal Care Products - Expert Solutions for Discerning Consumers
2010: Expanding the Tobacco Portfolio

1925: Packaging and Printing: Backward Integration


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.

1975: Entry into the Hospitality Sector - A 'Welcom' Move


The Seventies witnessed the beginnings of a corporate transformation that would usher in
momentous changes in the life of the Company. In 1975, the Company launched its Hotels
business with the acquisition of a hotel in Chennai which was rechristened 'ITC-Welcomgroup
Hotel Chola' (now renamed My Fortune, Chennai). The objective of ITC's entry into the hotels
business was rooted in the concept of creating value for the nation. ITC chose the Hotels
business for its potential to earn high levels of foreign exchange, create tourism infrastructure
and generate large scale direct and indirect employment. Since then ITC's Hotels business has
grown to occupy a position of leadership, with over 100 owned and managed properties spread
across India under four brands namely, ITC Hotels - Luxury Collection, WelcomHotels, Fortune
Hotels and WelcomHeritage.
ITC Hotels recently took its first step toward international expansion with an upcoming super
premium luxury hotel in Colombo, Sri Lanka. In addition, ITC Hotels also recently tied up with
RP Group Hotels & Resorts to manage 5 hotels in Dubai and India under ITC Hotels' 5-star
'WelcomHotel' brand and the mid-market to upscale 'Fortune' brand.
1979: Paperboards & Specialty Papers - Development of a Backward Area
In 1979, ITC entered the Paperboards business by promoting ITC Bhadrachalam Paperboards
Limited. Bhadrachalam Paperboards amalgamated with the Company effective March 13, 2002
and became a Division of the Company, Bhadrachalam Paperboards Division. In November
2002, this division merged with the Company's Tribeni Tissues Division to form the Paperboards
& Specialty Papers Division. ITC's paperboards' technology, productivity, quality and
manufacturing processes are comparable to the best in the world. It has also made an immense
contribution to the development of Sarapaka, an economically backward area in the state of
Andhra Pradesh. It is directly involved in education, environmental protection and community
development. In 2004, ITC acquired the paperboard manufacturing facility of BILT Industrial
Packaging Co. Ltd (BIPCO), near Coimbatore, Tamil Nadu. The Kovai Unit allows ITC to
improve customer service with reduced lead time and a wider product range.
1985: Nepal Subsidiary - First Steps beyond National Borders
In 1985, ITC set up Surya Tobacco Co. in Nepal as an Indo-Nepal and British joint venture. In
August 2002, Surya Tobacco became a subsidiary of ITC Limited and its name was changed to
Surya Nepal Private Limited (Surya Nepal). In 2004, the company diversified into manufacturing
and exports of garments.
1990: Paperboards & Specialty Papers - Consolidation and Expansion
In 1990, ITC acquired Tribeni Tissues Limited, a Specialty paper manufacturing company and a
major supplier of tissue paper to the cigarette industry. The merged entity was named the Tribeni
Tissues Division (TTD). To harness strategic and operational synergies, TTD was merged with
the Bhadrachalam Paperboards Division to form the Paperboards & Specialty Papers Division in
November 2002.
1990: Agri Business - Strengthening Farmer Linkages
Also in 1990, leveraging its agri-sourcing competency, ITC set up the Agri Business Division for
export of agri-commodities. The Division is today one of India's largest exporters. ITC's unique
and now widely acknowledged e-Choupal initiative began in 2000 with soya farmers in Madhya
Pradesh. Now it extends to 10 states covering over 4 million farmers. Also, through the 'Choupal
Pradarshan Khet' initiative, the agri services vertical has been focusing on improving
productivity of crops while deepening the relationship with the farming community.
2002: Education & Stationery Products - Offering the Greenest products
ITC launched line of premium range of notebooks under brand Paperkraft in 2002. To augment
its offering and to reach a wider student population, the Classmate range of notebooks was
launched in 2003. Classmate over the years has grown to become India's largest notebook brand
and has also increased its portfolio to occupy a greater share of the school bag. Years 2007- 2009
saw the launch of Practical Books, Drawing Books, Geometry Boxes, Pens and Pencils under the
'Classmate' brand. In 2008, ITC positioned the business as the Education and Stationery Products
Business and launched India's first environment friendly premium business paper under the
'Paperkraft' Brand. 'Paperkraft' offers a diverse portfolio in the premium executive stationery and
office consumables segment. In 2010, Colour Crew was launched as a new brand of art
stationery.
2000: Lifestyle Retailing - Premium Offerings
ITC also entered the Lifestyle Retailing business with the Wills Sport range of international
quality relaxed wear for men and women in 2000. The Wills Lifestyle chain of exclusive stores
later expanded its range to include Wills Classic formal wear (2002) and Wills Clublife evening
wear (2003). ITC also initiated a foray into the popular segment with its men's wear brand, John
Players, in 2002. In 2006, Wills Lifestyle became title partner of the country's most premier
fashion event - Wills Lifestyle India Fashion Week - that has gained recognition from buyers and
retailers as the single largest B-2-B platform for the Fashion Design industry. To mark the
occasion, ITC launched a special 'Wills Signature', taking the event forward to consumers.
2000: Information Technology - Business Friendly Solutions
In 2000, ITC spun off its information technology business into a wholly owned subsidiary, ITC
Infotech India Limited, to more aggressively pursue emerging opportunities in this area. Today
ITC Infotech is one of India's fastest growing global IT and IT-enabled services companies and
has established itself as a key player in offshore outsourcing, providing outsourced IT solutions
and services to leading global customers across key focus verticals - Banking Financial Services
& Insurance (BFSI), Consumer Packaged Goods (CPG), Retail, Manufacturing, Engineering
Services, Media & Entertainment, Travel, Hospitality, Life Sciences and Transportation &
Logistics.
2001: Branded Packaged Foods - Delighting Millions of Households
ITC's foray into the Foods business is an outstanding example of successfully blending multiple
internal competencies to create a new driver of business growth. It began in August 2001 with
the introduction of 'Kitchens of India' ready-to-eat Indian gourmet dishes. In 2002, ITC entered
the confectionery and staples segments with the launch of the brands mint-o and Candyman
confectionery and Aashirvaad atta (wheat flour). 2003 witnessed the introduction of Sunfeast as
the Company entered the biscuits segment. ITC entered the fast growing branded snacks
category with Bingo! in 2007. In 2010, ITC launched Sunfeast Yippee! to enter the Indian instant
noodles market. In just over a decade, the Foods business has grown to a significant size under
seven distinctive brands, with an enviable distribution reach, a rapidly growing market share and
a solid market standing.
2002: Agarbattis & Safety Matches - Supporting the Small and Cottage Sector
In 2002, ITC's philosophy of contributing to enhancing the competitiveness of the entire value
chain found yet another expression in the Safety Matches initiative. ITC now markets popular
safety matches brands like iKno, Mangaldeep and Aim.
ITC's foray into the marketing of Agarbattis (incense sticks) in 2003 marked the manifestation of
its partnership with the cottage sector. Mangaldeep is a highly established national brand and is
available across a range of fragrances like Rose, Jasmine, Bouquet, Sandalwood and 'Fragrance
of Temple'.
2005: Personal Care Products - Expert Solutions for Discerning Consumers
ITC entered the Personal Care Business in 2005. In eight years, the Personal Care portfolio has
grown under 'Essenza Di Wills', 'Fiama', 'Vivel' and 'Superia' brands which have received
encouraging consumer response and have been progressively extended nationally. In May 2013,
the business expanded its product portfolio with the launch of Engage - one of India's first range
of 'couple deodorants'
2010: Expanding the Tobacco Portfolio
In 2010, ITC launched its handrolled cigar, Armenteros, in the Indian market. Armenteros cigars
are available exclusively at tobacco selling outlets in select hotels, fine dining restaurants and
exclusive clubs.

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

FINANCIAL HIGHLIGHTS
(Figures in Rs. Crores)
ITC : Financial Highlights 2016
Gross Income 53,748
Net Segment Revenue (other than Cigarettes) 23,465
PBIT 15,008
Profit After Tax 9,845
Assets Employed 49,518
Market Capitalization 2,63,989*

MAJOR BRANDS
ITCs aim to create enduring value for the nation and its stakeholders is evident in its robust
portfolio of traditional and Greenfield businesses. Its main business categories are
Fast Moving Consumer Goods (FMCG)
Hotels, Paperboards & Specialty Papers
Packaging
Agri-Business
Information Technology

This diversified presence in the businesses of tomorrow is powered by a strategy to pursue


multiple drivers of growth based on its proven competencies, enterprise strengths and strong
synergies between its businesses.
Within a relatively short span of time, ITC has established vital brands like
Branded Foods - Aashirvaad, Sunfeast, Dark Fantasy, Delishus, Bingo, Yippee, Candyman,
mint-o, Kitchens of India
Personal Care products - Essenza Di Wills, Fiama Di Wills, Vivel, Vivel Cell Renew, Engage
and Superia
Stationery products - Classmate and Paperkraft
Lifestyle Apparel business - Wills Lifestyle and John Players
Agarbattis and Dhoop - Mangaldeep
Safety Matches Aim
LEADERSHIP
Flowing from the concept and principles of Corporate Governance adopted by the Company,
leadership within ITC is exercised at three levels. The Board of Directors at the apex, as trustee
of shareholders, carries the responsibility for strategic supervision of the Company. The strategic
management of the Company rests with the Corporate Management Committee comprising the
wholetime Directors and members drawn from senior management. The executive management
of each business division is vested with the Divisional Management Committee (DMC), headed
by the Chief Executive. Each DMC is responsible for and totally focused on the management of
its assigned business. This three-tiered interlinked leadership process creates a wholesome
balance between the need for focus and executive freedom, and the need for supervision and
control.

Y C Deveshwar
CHAIRMAN
R Tandon Sanjiv Puri Nakul Anand
EXECUTIVE DIRECTORS
PRODUCT PORTFOLIO
It is ITC's strategic intent to secure long-term growth by synergizing and blending the diverse
pool of competencies residing in its various businesses to exploit emerging opportunities in the
FMCG sector.
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.

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, 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.

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

2. FOODS
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)
Yumitos Chips Lays
Sunfeast Glucose Biscuits Parle
Moms 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

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

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.
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


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.

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
ITCs 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 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 Companys 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
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
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

TRAINING MODULE 1- CORE INDUCTION DOCKET


The Sales Trainee Core Induction Docket has been designed in a way to facilitate and enhance
the learning about ITCs main functions, Structure and the different activities. The structure of
Core Induction is such that a day wise schedule has been created which contains:
1. Defined Learning Objectives
2. Specific Tasks
3. Preparation for the task Instructions which would allow us to be prepared for the task
4. Independent Exercises A set of activities to be diligently performed so as to achieve the
Learning objectives for the day.

Area Task

District Induction TM&D Organization Structure, ITC Policies/ Rules/ SOPs/ EHS/
L&D and Appraisal System
Cigarette/ Foods/ Personal Care Overview
Branch Induction Branch Structure, Sales & Distribution Guidelines, Outlet
Classification & Coverage Norms, ITC products Portfolio
Cigarettes Portfolio Gain understanding of Cigarettes Portfolio

Foods Portfolio Gain understanding of Foods Portfolio

Personal Care & Gain understanding of Personal Care & Agarbatti Portfolio
Agarbatti Portfolio
CDM and Non-CDM To develop understanding of Cigarettes DS- CDM Model & Non-
Model CDM Model
Working with To develop understanding of operations of Grocery 1 DS
Grocery 1 DS
Working with To develop understanding of operations of Grocery 2 DS
Grocery 2 DS
AVF Understanding Develop practical understanding of how the availability, visibility and
freshness norms are executed at a convenience outlets
Convenience Working the SWD Market with the TL/DS and Understand Spot Test
Channel Working & its importance
Obtain Practical understanding convenience TL deliverables

Understand working of Convenience DS in Non-CDM Model

Understand the Convenience Moped DS & Van DS working

Town SWD Working Understand dynamics of Wholesale Channel- How different is it from
General Retail Channel
Rural Market To gain an understanding of PSR working and Stockist Operations
Working
Develop understanding of Rural Order Capture Model

Grocery DS Working To develop understanding of Grocery DS working

Delivery Working To develop understanding of Delivery Planning & Process

Usage of Enablers To develop understanding of Grocery DS Enablers (MAR & Market


Planner)
Dus Ka Dum To gain understanding of various steps of Sales Call
Working
Warehouse Develop understanding of K0, K1, K2, K3, K4 operations
Operations
HQ Reports Branch HQ activities familiarization

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 consumed oftenly. 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.
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.

CURRENT SCENARIO
There is a lot of scope for growth from rural markets with consumption expected to grow in
these areas as penetration of brands increases. Also demand for durables like refrigerators as well
as consumer electronic goods are likely to witness growing demand in the coming years in the
rural markets as the government plans to invest significantly in rural electrification.
The FMCG sector has grown at an annual average of about 11 per cent over the last decade. The
overall FMCG market is expected to increase at (CAGR) of 14.7 per cent to touch US$ 110.4
billion during 2012-2020, with the rural FMCG market anticipated to increase at a CAGR of
17.7 per cent to reach US$ 100 billion during 2012-2025.Food products is the leading segment,
accounting for 43 per cent of the overall market. Personal care (22 per cent) and fabric care (12
per cent) come next in terms of market share.
Growing awareness, easier access, and changing lifestyles have been the key growth drivers for
the consumer market. The Government of India's policies and regulatory frameworks such as
relaxation of license rules and approval of 51 per cent foreign direct investment (FDI) in multi-
brand and 100 per cent in single-brand retail are some of the major growth drivers for the
consumer market.

ROAD AHEAD
FMCG brands would need to focus on R&D and innovation as a means of growth. Companies
that continue to do well would be the ones that have a culture that promotes using customer
insights to create either the next generation of products or in some cases, new product categories.
One area that we see global and local FMCG brands investing more in is health and wellness.
Health and wellness is a mega trend shaping consumer preferences and shopping habits and
FMCG brands are listening. Leading global and Indian food and beverage brands have embraced
this trend and are focused on creating new emerging brands in health and wellness.
According to the PwC-FICCI report Winds of change, 2013: the wellness consumer, nutrition
foods, beverages and supplements comprise a INR 145 billion to 150 billion market in India, is
growing at a CAGR of 10 to 12%.