Project title

Students name

Mayank Jain

Course

BBA

Roll No.

A30606411066

Year

2011 TO 2013

Guide name

MARKETING AND BUSINESS STRATERGY OF ITC PVT

Mrs.surekha Thakur

Date of submission -ACKNOWLEDGEMENTS

ACKNOLDGMENT

I inhale pleasure in thanking my faculty for giving me a wonderful opportunity

to implement my ideas on MARKETING. I also express my heartiest thanks to
our principal
and professor who helped in me in making this project a
successful one.
I also thank my internal guide Mrs.surekha Thakur and external guide
Miss.vibhuti Jain whose valuable suggestions have helped me to complete the
project successfully. Last but not the least I extend my sincere thanks to all our
staff members who have contributed their ideas for the betterment of the project.

Executive summary

This topic has been chosen to study the Marketing & Business strategy of ITC
Ltd. There are certain prospective on which a company sells their products in to
the market and diversifies their business. This project has been a great learning
experience for me; at the same time it gave me enough scope to implement my
analytical ability. Full project gives an insight about the strategies and its
various aspects. It is purely based on whatever their researcher learned at EMPI
Business School. All the topics have been covered in a very systematic way. The
language has been kept simple so that even a layman could understand. The
whole theoretical part is covered with relation to the product. It helped to
understand the various concepts of marketing. The various theories like
learning, perception, attitude, motivation, and personality are fully studied in the
project.

DECLARATION

I hereby declare to the best of my knowledge and belief that the dissertation
report entitled as Marketing and business strategy of ITC. Pvt. Ltd being
submitted as the partial fulfillment of Master of Business Administration, has
been written and submitted under the guidance of prof.krishna reddy my faculty
guides.
I further declare that it is original work done as a part of the academic course
and has not been submitted elsewhere.
The conclusion and recommendation written in this project are based on the
data collected by me while preparing this report.

NAME Mayank Jain

Roll No A30606411066

TABLE OF CONTENTS

1. Introduction

Page No.

1.1 Introduction

1.2 Nature of marketing & business strategy

1.3 Importance of marketing & business strategy

1.4 The main parts of a small business marketing plan

1.5 General advantages & disadvantages of marketing

10

1.6 Specific advantage & disadvantages of marketing

11

1.7 Purpose of marketing plan

13

1.8 BCG matrix

14

2. Company profile
2.1 Chairman speech

15

2.2 About the company

18

2.3 products and services of itc pvt ltd

22

FMCG goods
Awards
Paper boards & specialty paper
Awards
Agri business
Awards
InfoTech
Awards
Hotels
Awards

2.4 Business segments and brands

68

2.5Business strategy of itc

69

2.6 Sales promotion

70

2.7Analysis of diversification

72

2.8Limitation

73

3. Objective

74

4. Research methodology
4.1 Data source
4.2 Research approach
4.3 Data completion & analysis
4.4 Research design
4.5 Research instruments

75
76
77
77
78

5. Data analysis and finding

5.1 SWOT analysis
5.2 Analysis and interpretation

79
84

6. Conclusion

87

7. Recommendation

88

8. Bibliography

89

9. Annexure
Questionnaire

90

Introduction - 1
1.1
Introduction
Making and using a marketing strategy has a strong positive impact on profitability. This is
because small businesses that employ a marketing strategy tend to focus on their customers
and markets, integrate their marketing responses and work out in advance where their profits
will come from.
Marketing is defined by Wikipedia as the process by which companies create customer
interest in goods or services through which companies build strong customer relationships
and creates value for their customers and for themselves.
Start with a marketing plan identifying the customer and their needs and wants. Since the
essence of business is fulfilling a need it is an important to know which need you are trying to
fulfill. Then you need to know how best to reach those customers who have that need.
There are many different marketing mediums and working out which is best for your business
is essential, both to keep costs down and to get the most back from your marketing campaign.
There are differing advantages and disadvantages of marketing depending on your chosen
medium. But there are also general advantages and disadvantages of marketing across every
spectrum.
This briefing answers a range of questions people in small business often ask about marketing
strategy. A marketing strategy defines objectives and describes the way you're going to satisfy
customers in your chosen markets. It does not have to be written down but it is easier to
communicate to outsiders, like your bank manager or other investors, when it is.
A set of strategies found quite commonly in smaller businesses are growth strategies. One
way to look at strategies to grow your business is through the way you will use products and
markets or customers.

Current product/current market

Market penetration is a strategy of increasing your share of existing markets. You might
achieve this by raising customers' awareness of your products and services or finding new
customers. For further information on planning effective marketing communications see
the Related Items section below for a link to the Factsheet: Planning marketing
communications.

Current product/new market

Market development is a strategy of finding and entering new markets with your current
product or service range. The new market could be a new region, a new country or a new
segment of the market. For further information on selecting and entering new markets see
the Related Items section below for a link to the Factsheet: Entering new markets.

New product/current market

Product development is a strategy for enhancing benefits you deliver to customers by
improving your existing products and services or developing new ones.

New product/new market

Diversification is a strategy that usually carries high costs and high risks. It often requires
firms to adopt new ways of doing business and so has consequences far beyond simply
offering new products/services in a new market. It is therefore usually a strategy to be
adopted when other options are not feasible.

1.2
Nature of marketing and business strategy:-

The marketing strategy focuses on markets and customers and is just one part of
business strategy. Business strategy takes a broader view that includes other business
functions such as manufacturing and operations, finance, quality, purchasing and
supply chain, and information and communication technology. For example, a
business objective may be to increase sales. Marketing objectives to achieve this would
be to reach new customers, promote repeat buying among existing customers and
launch new products.

The marketing strategy focuses on markets and customers and is just one part of
business strategy. Business strategy takes a broader view that includes other business
functions such as manufacturing and operations, finance, quality, purchasing and
supply chain, and information and communication technology. For example, a
business objective may be to increase sales. Marketing objectives to achieve this would
be to reach new customers, promote repeat buying among existing customers and
launch new products.

1.3
8

Importance of marketing and business strategy:In every company, the preparation of a marketing plan is vital for monitoring and tracking of
the companys marketing strategies for a certain product or service. The marketing plan is
used as a tool by management or the owner to check whether the strategies that have been put
into record are being implemented. It will also be a tool to determine or measure the
performance of that certain product or service and also be a guide for management to revise
the marketing strategy.
A marketing plan is a detailed written document that describes the strategies and steps to
achieve a specific companys marketing objectives. The marketing plan can be created for a
certain product or service, a brand name or a product line. The plan can be for a period of one
year or five years.
The marketing plan can be included in the business plan as part of it. The foundation of a
well-written and organized plan is an effective and strong marketing strategy. Even if the
marketing plan states a list of detailed action plans, the marketing plan that doesnt have a
strategic and sound basis is of lesser use. In most of the companies, strategic planning is a
process that is undergone on a yearly basis. Few business organizations use marketing plans
that are older than three years.
In addition to the corporate objectives that are ingrained in the marketing plan, it should also
consist of the corporate mission which also lays down the guidelines for the companys
objectives in marketing activities. The emphasis in this process is to capture a complete and
accurate picture of the plans and objectives. Certain customer related factors should be
considered in the marketing plan.
The marketing objectives must state where the business organization plans to be at a certain
and specific period in the future; what end objectives identified by the company should be
achieved and at what period of time they are to be accomplished. However, very precise
description of how the results are expected to be achieved is not required.
To achieve a high efficiency rate, the marketing results of your marketing efforts should be
measurable. This measurement may be according to sales volume, value in currency, market
share, the rate of market penetration for distribution channels and others. The marketing
objective must be based on the companys financial objectives that will convert these
quantifiable measurements into measurements for marketing. The marketing strategies can be
viewed as a definite action plan in which marketing objectives will be accomplished and
within the structure that was selected by the company for use.

1.4
The main parts of a small business marketing plan are:
9

Identifying your target market

Understanding the competition and your differentiation
Setting up your marketing goals
Defining your marketing strategy (ways to achieve your marketing goals)
Projecting the costs of the marketing activities

1.5
General Advantages of Marketing:-

An obvious advantage of marketing is the promotion of your business; getting the

recognition and attention of your target audience across a wide ranging or specific market.
Going hand-in-hand with this is the enhanced brand recognition. Over time potential
customers and members of the public will begin to associate your logo and your brand with
your business.
Every business needs to spend money to make money. Investing in marketing is no
different. The most important advantage of marketing is therefore quite simply improving
the businesses profits by boosting sales.

General Disadvantages of Marketing:-

The first disadvantage of marketing in general is the cost. Adverting and marketing costs
money. If you dont do the proper research then you might end up throwing money away.
Wasting marketing efforts by targeting the wrong audience using an inappropriate medium
would be a serious and costly mistake. So it is important to do your research beforehand and
keep your costs to a minimum.
As well as the financial cost, marketing your business will require investment of time.
Researching the appropriate marketing strategy, designing and writing the adverts, getting
them published, dealing with any response. Its important to spend time keeping track of how
successful or not your marketing campaign is. A potential disadvantage of marketing here is
the risk of time wasted for an unsuccessful campaign.
Research shows that people in general have to see a piece of information between 3 and 30
times before it sinks in. So the obvious disadvantage of marketing here is the fact that your
marketing campaign will need to be ongoing and consistent. Increasing costs and time spent
on it. This is where drip marketing comes in.

10

1.6
Specific Advantages and Disadvantages of Marketing
For specific types of media there may be other advantages and
disadvantages of marketing. Each will obviously vary depending on your
business, your market and your chosen marketing techniques.

Print Advertising
Advantages and disadvantages of print marketing are reasonably obvious.
Advantages:

Choosing the appropriate magazine or newspaper to advertise and market your

business allows you to appeal to a specific audience and demographic. Targeting
your adverts at the right audience to maximize its effectiveness.

Often an advantage of marketing via print media is the flexibility. The size,
placement and type of advert can be adopted and changed according to your
needs.

Another advantage marketing this way is the repeated display of your advert over
time. Multiple appearances in various issues of the paper or magazine will
improve chances of your brand sticking with the customers and also the results
you will see in terms of sales leads.

Disadvantages:

Cost can be prohibitive. The bigger the advert the more the cost. Magazines and
newspapers with a wider audience generally cost more to advertise in and
marketing over time in this manner may be too expensive for some businesses.

Competition in the marketing space may be another disadvantage. You want your
advert to stand out, but unless you can afford to pay for a full page spread you will
be competing with the other businesses scrambling for attention.

Magazines are often released on a monthly basis, meaning it can take longer for
your advert to take hold in a potential customers mind.

Television & Radio Marketing

11

The advantages and disadvantages of marketing via radio or television will clearly be
considerably different to those of print.
Advantages:

There are many radio and television stations out there. You can appeal to your
local audience by using a local radio or television station. You may also run an
advert on a specific station with a genre which would suit your business. The
variety of radio and television stations makes it easy to appeal to a specific
audience.

Your advert may well be repeated throughout the day at specific times, which
would allow you to reach the best audience for your marketing.

Radio and television marketing allows for regular repetition of your advert,
helping satisfy the law of 29.

Disadvantages:

Unless you are targeting a specific audience, you might have to push your advert
across a number of radio and television stations to reach everyone you need to.

An obvious disadvantage of radio and television marketing is the temporary

nature of the advert. Unlike print, potential customers cannot go back to look for
your contact information. So you will need to run the advert many times to get the
best effect.

Listeners/viewers may stop paying attention during advert breaks, which are
essentially a disturbance to their enjoyment of the show.

Direct Mail Marketing

Your chosen market might benefit from a direct marketing campaign. Send your adverts,
catalogues or product samples straight through your customers letterbox. You could target
the right audience by using the electoral register to find the right age, sex and demographic or
acquire access to marketing mailing lists.
Advantages:

Direct mail marketing will allow you to target to your specific customer.
Personalizing your message to have the best possible impact on them.

Unlike other forms of advertising, your marketing will not need to stand out on a
page full of other adverts. It will just need to stand out from the pile on the
doormat. A brightly colored, appealing envelope may be all it takes.

This type of marketing allows you target a specific area or locality. Especially
important if your business is local.
12

Disadvantages:

Direct mail is often seen as junk mail. So if your marketing doesnt stand out
and appeal in just the right way it might find its way straight from the letterbox to
the bin.

The law of 29 means you will need to do a direct mailing campaign many times
before it has an effect.

You risk annoying your customers by plaguing them with regular junk mail
campaigns.

Telemarketing

Cold-calling and other telemarketing campaigns have their place in business. They can be
effective if done correctly. Like the other types of marketing, they have their own advantages
and disadvantages.
Advantages:

Personal contact with the customer is more effective than something abstract
designed to appeal to a multitude of people. It makes the customer feel more
important if you can make them think you are only there to help them
with their needs.

Results are easy to measure and often a potential customer can be easily led to a
sale over the phone. In other words the call to action will be more effective.

Disadvantages:

Cold-calling, like junk mail, can have an unwanted effect as it has negative
connotations. Unwanted calls are often dealt with harshly and you might risk
damaging your reputation.

Technology is out there which is being used to block unwanted telemarketing

calls. There is also legislation that needs to be abided by (Privacy and Electronic
(EC Directive) Regulations 2003.)
Costs may be more expensive than other forms of marketing, depending on your plan

1.7
Purpose of marketing plan:

The purpose of creating a marketing plan is to clearly show what steps will be
undertaken to achieve the business' marketing objectives.

13

While some small business owners include their marketing plan as part of their
overall business plan, if a business owner follows the recommended SBA format,
parts of the marketing plan will be included in the various areas of the business plan.
As an alternative, the marketing plan may be attached in its entirety as an appendix to
a business plan.

1.8
BCG MATRIX

14

Star

Question mark
Agri business
Hotels
Paperboards & Packing

FMCG
foods

Cash cow

Dog

FMCG
Cigarettes

itc InfoTech

Company profile - 2
2.1
CHAIRMANS STATEMENT

Chairman's Statement
ITC's Vision and Strategy

"Envisioning a larger societal purpose ('a commitment beyond the market')

has always been a hallmark of ITC. The Company sees no conflict between
the twin goals of shareholder value enhancement and societal value
creation. The challenge lies in fashioning a corporate strategy that enables
realisation of these goals in a mutually reinforcing and synergistic manner"

I am delighted to present ITC's third Sustainability Report. This Sustainability Report,

prepared in accordance with G3, the latest Revision of the Global Reporting Initiative
guidelines and assured by PricewaterhouseCoopers Pvt. Ltd., represents a balanced and
reasonable presentation of ITC's economic, social and environmental performance.
ITC is committed to sustain its position as one of India's most valuable corporations through
15

world-class performance, creating growing value for the Company's stakeholders and the
Indian economy. Over the last decade, Total Shareholder Returns, measured in terms of
increase in market capitalization and dividends, grew at a compound rate of over 30% per
annum, placing ITC among the foremost in the country in terms of efficiency in servicing
financial capital. ITC aims to sustain its premier market standing and leadership position in
each of the business segments.
Sustainability reporting by corporate is of significant relevance and meaning in these times of
escalating global opportunities and challenges. Business leadership worldwide is confronted
with the realization that the limits to sustainable growth will be determined less by access to
financial capital and more by the commitment to preserve and augment social and ecological
capital. Given the growing influence of corporations in driving economic, environmental and
social change, investors and other stakeholders will expect the highest standards of ethics,
transparency, sensitivity and responsiveness from corporate. It is my belief that stakeholders,
including consumers, will increasingly raise the bar of expectation in relation to corporate
response to issues of sustainable development. In keeping with this belief, ITC, along with
the Confederation of Indian Industry, launched the -CII-ITC Centre of Excellence for
Sustainable Development' in January 2006. The Centre seeks to address the institutional void
in developing the requisite capability among Indian industry to pursue sustainability goals.
The Centre will Endeavour to transform Indian businesses by providing thought leadership,
promoting awareness and building capacity.
Development in a country as large and diverse as India poses special challenges. As India
embarks on a trajectory of high rates of economic growth, it is imperative to focus on the
impact of such growth on society and the environment. Economic growth will translate to
sustainable development only when it is inclusive, creating the capacity to consume among
those living at the margin - the lion's share of whom are in rural India. Equally, sustainable
development will be achieved only when environmental capital is enriched. The sharp decline
in per capita availability of water, the low forest cover due to continuing deforestation,
increasing levels of air and water pollution, the remorseless increase in the quantum of
wastelands and the rising demand for fossil fuels are some of the serious issues that need to
be addressed on a war footing if India has to realize its ambitious agenda for sustainable
progress.
Envisioning a larger societal purpose has always been a hallmark of ITC - 'a commitment
beyond the market'. This commitment finds expression in the Company's sustainable
development philosophy, which recognizes the need to not only preserve but also enrich
precious environmental resources while providing a safe and healthy workplace for its
employees. ITC sees no conflict between the twin goals of shareholder value enhancement
and societal value creation. The challenge lies in fashioning a corporate strategy that enables
realization of these goals in a mutually reinforcing and synergistic manner. ITC's e-Choupal
and social forestry programme represents just two of the stellar examples of this philosophy
in action.
Apart from crafting business models that establish direct linkages between businesses and
societal goals, ITC is also engaged in implementing various other sustainable development
initiatives towards making a meaningful contribution in the economic vicinity of its operating
locations. The thrust of these initiatives, christened 'Mission Sunehra Kal', is in three areas:
(i) natural resource management, which includes wasteland, watershed and

16

ITC
seeks
to
contribute
in
meaningful measure
towards
social
empowerment and
genderised
development

Agriculture development; (ii) sustainable livelihoods, comprising

genetic improvement in livestock and economic empowerment of
women; and (iii) community development, with focus on primary
education and health and sanitation.

ITC is committed to conducting its business operations with

passionate respect for the environment. Several prestigious national
and international awards (listed elsewhere in this report) testify to
ITC's abiding commitment. Such recognition has further reinforced
the Company's commitment to consciously synergies and direct the
collective Endeavour of its employees at all levels across all
businesses, functions and locations to continuously improve sustainability practices, to
ultimately attain and exceed global standards.
Internationally benchmarked specific consumption of water, dedicated pursuit of the goal of
zero discharge and scaling up of rainwater harvesting in several moisture-stressed districts of
India have enabled ITC retain its enviable position of a 'water positive' Company for the
fourth successive year. The water harvesting potential created so far is over four times the
Company's net water consumption.
It is a matter of pride that ITC became 'carbon positive' during the year on the back of several
energy conservation measures, usage of carbon neutral fuels and carbon sequestration
through large-scale agro forestry programmes. ITC is making rapid strides towards attaining
'zero solid waste' status. Upon this achievement in the near term, ITC would perhaps be the
only global enterprise of its size in the world to have achieved these milestones encompassing
all three critical facets of environmental sustainability.
In a nation where economic deprivation is widespread and the capacity of a large share of its
citizens to participate effectively in economic growth is grossly limited, ITC seeks to
contribute in meaningful measure towards social empowerment and tenderized development.
The ITC e-Choupal and Choupal Saagar infrastructure - a combination of digital, human and
physical assets - already serves over 3.5 million farmers and is potentially an efficient
delivery channel for rural development. Similarly, ITC's social farm forestry strategy enables
the creation of substantial employment both on farms and off farms, besides converting
private wastelands into productive assets, and simultaneously addressing serious issues
relating to biomass depletion, soil erosion, water security, ecological balance and biodiversity.
ITC dedicates this Report to the cause of the Bharat Nirman programme initiated by the
Prime Minister as a leading symbol of public-private partnership in India's development. It
also acknowledges the contribution made by the employees of the ITC Group, whose
initiative and commitment have enabled the Company make great strides in its sustainability
performance.
Y. C. Deveshwar

17

2.2
About the company

ITC Limited (BSE: 500875) or ITC is an :-Indian public conglomerate company

headquartered in Kolkata, West Bengal, India.[2] Its diversified business includes four
segments: Fast Moving Consumer Goods (FMCG), Hotels, Paperboards, Paper & Packaging
and Agri Business. ITC's annual turnover stood at $7 billion and market capitalization of over
$33 billion. The company has its registered office in Kolkata. It started off as the Imperial
Tobacco Company, and shares ancestry with Imperial Tobacco of the United Kingdom, but it
is now fully independent, and was rechristened to India Tobacco Company in 1970 and then
to I.T.C. Limited in 1974.
The company is currently headed by Yogesh Chander Deveshwar. It employs over 26,000
people at more than 60 locations across India and is listed on Forbes 2000. ITC Limited
completed 100 years on 24 August 2010.
ITC has a diversified presence in FMCG (Fast Moving Consumer Goods), Hotels,
Paperboards & Specialty Papers, Packaging, Agri-Business and Information Technology.
While ITC is an outstanding market leader in its traditional businesses of Hotels,
Paperboards, Packaging, Agri-Exports and Cigarettes, it is rapidly gaining market share even
in its nascent businesses of Packaged Foods & Confectionery, Branded Apparel, Personal
Care and Stationery.

FOUNDER OF THE COMPANY

18

Henry Overton Wills III (22 December 1828 - 4 September 1911) was the founder of itc.
Wills entered the family firm of W. D. & H. O. Wills in 1846, but retired from active
association with the business in 1880, due to poor health. When the formation of Imperial
Tobacco greatly increased the familys wealth, .
Henry was the cousin of William Henry Wills, first Chairman of Imperial Tobacco.

PRESENT CHAIRMAN OF ITC.LIMITED

Yogesh Chander Deveshwar

The Companys 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.
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.

19

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.
In 1975 the Company launched its Hotels business with the acquisition of a hotel in Chennai
which was rechristened 'ITC-Welcome group Hotel Chola'. 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.
In 1979, ITC entered the Paperboards business by promoting ITC Bhadrachalam
Paperboards Limited, which today has become the market leader in India. 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.
In 1985, ITC set up Surya Tobacco Co. in Nepal as an Indo-Nepal and British joint venture.
Since inception, its shares have been held by ITC, British American Tobacco and various
independent shareholders in Nepal. In August 2002, Surya Tobacco became a subsidiary of
ITC Limited and its name was changed to Surya Nepal Private Limited (Surya Nepal).
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.
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. ITC's first rural mall, christened 'Choupal Saagar' was inaugurated in August 2004 at
Sehore. On the rural retail front, 24 'Choupal Saagars' are now operational in the 3 states of
Madhya Pradesh, Maharashtra and Uttar Pradesh.
In 2000, ITC forayed into the Greeting, Gifting and Stationery products business with the
launch of Expressions range of greeting cards. A line of premium range of notebooks under
brand Paperkraft was launched in 2002. To augment its offering and to reach a wider

20

student population, the popular range of notebooks was launched under

brand Classmate in 2003. Classmate over the years has grown to become Indias
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 Children Books, Slam Books, Geometry
Boxes, Pens and Pencils under the Classmate brand. In 2008, ITC repositioned 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. Paperkraft entered new categories in the office
consumable segment with the launch of Text liners, Permanent Ink Markers and White Board
Markers in 2009.
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 Club
life 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 'Celebration Series', taking the
event forward to consumers.
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 Indias 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 - Manufacturing, BFSI (Banking, Financial Services & Insurance), CPG&R
(Consumer Packaged Goods & Retail), THT (Travel, Hospitality and Transportation) and
Media & Entertainment.
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's
entered the fast growing branded snacks category with Bingo! in 2007. In eight years, the
Foods business has grown to a significant size with over 200 differentiated products under six
distinctive brands, with an enviable distribution reach, a rapidly growing market share and a
solid market standing.
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, Aim, Aim Mega and Aim Metro.

21

ITC's foray into the marketing of Agarbattis (incense sticks) in 2003 marked the
manifestation of its partnership with the cottage sector. ITC's popular agarbattis brands
include Spriha and Mangaldeepacross a range of fragrances like Rose, Jasmine, Bouquet,
Sandalwood, Madhur, Sambrani and Nagchampa.
ITC introduced Essenza Di Wills, an exclusive range of fine fragrances and bath & body care
products for men and women in July 2005. Inizio, the signature range under Essenza Di
Wills provides a comprehensive grooming regimen with distinct lines for men (Inizio
Homme) and women (Inizio Femme). Continuing with its tradition of bringing world class
products to Indian consumers the Company launched 'Fiama Di Wills', a premium range of
Shampoos, Shower Gels and Soaps in September, October and December 2007 respectively.
The Company also launched the 'Superia' range of Soaps and Shampoos in the mass-market
segment at select markets in October 2007 and Vivel De Wills & Vivel range of soaps in
February and Vivel range of shampoos in June 2008.

2.3
PRODUCTS AND SERVICES OF ITC LTD
FMCG GOODS
Cigarette

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. ITCs highly popular portfolio of
brands includesInsignia, India Kings, Lucky Strike, Classic, Gold Flake, Navy Cut,
Players, Scissors, Capstan, Berkeley, Bristol, Flake, Silk Cut, Duke & Royal.

22

The Company has been able to consolidate its leadership

position with single 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.
Awards
ITC's Cigarettes business has been winning numerous awards for its quality,
environmental management systems and product excellence:

'Best Manufacturer of Cigarettes' for the year 2008 & 2007 and Best Exporter of
Cigarettes for 2008 by the Tobacco Board based on previous three years'
performance.

Occupational Health and Safety Award 2007 for Excellence in Safety Management
to the Bengaluru, Saharanpur and Kolkata factories from the Royal Society for
Prevention of Accidents (ROSPA), U.K.

5 Star Health and Safety Rating in 2007 from the British Safety Council to the
Bengaluru, Munger, Kolkata and Saharanpur factories and the "Sword of Honour" for
Bengaluru & Saharanpur factories in 2006.

Greentech Gold Award for excellence in Safety Management for the year 2007 to
the Bengaluru, Kolkata and Saharanpur cigarette factories for the high level of
performance that the units have achieved in Environment Health and Safety (EHS).

23

Saharanpur along with Kolkata and Munger factories were honoured with the Gold
award and the Bengaluru Factory with the Platinum Award in 2006.

Greentech Gold Award for Excellence in Environment Management 2007 to the

Bengaluru, Kolkata and Munger factories.

Safety Innovation Award for 2007 and 2006 for Innovative Safety Management
System to the Bengaluru Factory from the Institution of Engineers and also
the Unnatha Suraksha Puraskara Award 2006 from NSC Karnataka Chapter.

Golden Peacock Award for Occupational Health and Safety from the Institute of
Directors, New Delhi; Award for Outstanding Performance in Environment
Health and Safety from the CII and the Suraksha Puraskar Award from the
National Safety Council, Mumbai to the Kolkata factory in 2007 and the "1st
National Security Today Award" in the category of Best Maintained Fire Safety
System in 2005.

Occupational Health and Safety Gold Award from the ROSPA, UK; the Winners
Trophy - Safety Health and Environment Award from the CII Eastern
region; National Award for Excellence in Water Management and Innovative
Project Award Initiatives for Energy Conservation from the CII to the Munger
factory in 2007 and also the Excellence in Water Management Award fromCIIGBC for 2006.

All the four factories are certified by Det Norske Veritas (DNV) for ISO 14001, for
their Environment Management Systems, OHSAS 18001 for their Occupational
Health and Safety Management Systems (OHSMS) and the ISO 9000-2000 for
Quality Management Systems. The Kolkata factoryis the first cigarette factory in
India to be awarded the SA 8000 Certificate for Social Accountability by Det Norske
Veritas
(DNV)
in
June
2004.
ITC's R&D Centre at Peenya, Bengaluru has the distinction of being the first
independent R&D centre in India to get ISO 9001 accreditation and certified
with ISO 14001 for Environment Management Systems by DNV. The R&D Centre is
also certified for the standardISO/IEC17025:2005, by National Accreditation Board
for Testing and Calibration Laboratories (NABL). This certification is awarded for
"General requirement for the competence of Testing & Calibration Laboratories"

24

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 Confectionery, Staples and Snack Foods segments.
The packaged foods business is an ideal avenue to leverage ITC's proven strengths in the
areas of hospitality and branded cuisine, contemporary packaging and sourcing of agricultural
commodities. ITC's world famous restaurants like the Bukhara and the Dum Pukht,
nurtured by the Company's Hotels business, demonstrate that ITC has a deep understanding
of the Indian palate and the expertise required to translate this knowledge into delightful
dining experiences for the consumer. ITC has stood for quality products for over 100 years to
the Indian consumer and several of its brands are today internationally benchmarked for
quality.
The Foods business carries forward this proud tradition to deliver quality food products to the
consumer. All products of ITC's Foods business available in the market today have been
crafted based on consumer insights developed through extensive market research. Apart from
the current portfolio of products, several new and innovative products are under development
in ITC's state-of-the-art Product Development facility located at Bengaluru.
Leadership in the Foods business requires a keen understanding of the supply chain for
agricultural produce. ITC has over the last 100 years established a very close business
relationship with the farming community in 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 quality demanded by its customers. This long-standing relationship is being
leveraged in sourcing best quality agricultural produce for ITC's Foods business.
25

The Foods business is today represented in 4 categories in the market. These are:

Ready To Eat Foods

Staples

Confectionery

Snack Foods

In order to assure consumers of the highest standards of food safety and hygiene, ITC is
engaged in assisting outsourced manufacturers in implementing world-class hygiene
standards through HACCP certification. The unwavering commitment to internationally
benchmarked quality standards enabled ITC to rapidly gain market standing in all its 6

brands:

Lifestyle Retailing

26

ITC's Lifestyle Retailing Business Division has established a nationwide retailing presence
through its Wills Lifestyle chain of exclusive specialty stores. Wills Lifestyle, the fashion
destination, offers a tempting choice of Wills Classic work wear, Wills Sport relaxed
wear, Wills Clublife evening wear, fashion accessories and Essenza Di Wills - an exclusive
range of fine fragrances and bath & body care products and Fiama Di Wills - a range of
premium shampoos and shower gels. Wills Lifestyle has also introduced Wills
Signature designer wear, designed by the leading designers of the country.
With a distinctive presence across segments at the premium end, ITC has also
established John Players as a brand that offers a complete fashion wardrobe to the male
youth of today. With its brands, ITC is committed to build a dominant presence in the apparel
market through a robust portfolio of offerings.
Awards
ITC's Lifestyle Retailing Business has won numerous awards for its quality, marketing
and product excellence:

LRBD has won several Images Fashion Awards over the years:
2009: Most admired Fashion Brand of the year - Fashion Forward - Wills Lifestyle
2007: Most Admired Fashion Campaign - John Players
2005: Most Admired Shirt Brand of the Year - John Players
2004: Rising Star Brand of the Year - John Players
2003: Most Admired Exclusive Brand Retail Chain of the Year - Wills Lifestyle
2002: Most Admired Women's Wear Brand of the Year - Wills Sport
2001: The Most Admired Brand Launch of the Year - Wills Sport
27

The Most Admired Exclusive Brand Retail Chain of the Year - Wills Lifestyle.

"Retailer
of
the
Year
(Fashion
Award at Reid & Taylor Awards for Retail Excellence in 2011

"Best Retail Marketing Campaign of the Year" Award at Reid & Taylor Awards for
Retail Excellence in 2011

Award for Customer and Brand Loyalty in Retail Sector category at the 4th
Loyalty Summit, 2011

Retailer of the Year Award to Wills Lifestyle in Fashion & Lifestyle category
at Asia Retail Congress 2008.

Wills Lifestyle rated amongst the top 5 Luxury brands in the country in a Global
Luxury Survey conducted by TIME Magazine.

Front runner Award - 2007 to Wills Lifestyle in the Retail category by Real Estate
Observer & Trammel Crow Meghraj.

Super brand 2006 awarded to Wills Lifestyle by the Super brands Council of India.

The "Best Supply Chain Practices Award 2006" for time-effective and costefficient Logistics management in Organized Retail. The awards were organized by
Retailers Association of India (RAI) in association with ITW Signode - the
International leaders in packaging solutions.

The Division's Product & Quality Testing facilities were awarded the prestigious
accreditation by the National Accreditation Board of Laboratories of the
Department of Science and Technology, GOI (affiliated to the International
Laboratories Accreditation Cooperation - Geneva) in 2006. This accreditation is
awarded after rigorous procedures confirmed that LRBD's Testing facilities truly
conform to international standards in terms of quality and technical competence. The
Division also obtained ISO 9001:2000 certification in the area of Receipt, Storage &
Distribution of Merchandise / Finished Goods by Det Norske Veritas, Netherlands.

NID Awards for Design Excellence for Best Packaging Design In The FMCG
Category for John Players.

Award for Customer and Brand Loyalty in Retail Sector category at the 2nd
Loyalty Summit.

Personal Care

28

and

Lifestyle)"

In line with ITC's aspiration to be India's premier FMCG company, recognised for its worldclass 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 Di Wills', 'Vivel
UltraPro', 'Vivel' 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
29

formulations use internationally recognised safe ingredients, subjected to the highest

standards of safety and performance.

Education and Stationery

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
30

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.

Safety Matches

As part of its strategic initiative to create multiple drivers of growth in the FMCG sector, ITC
commenced marketing safety matches sourced from the small-scale sector. The Matches
business leverages the core strengths of ITC in marketing and distribution, brand building,
supply chain management and paperboard & packaging to offer Indian consumers high
quality safety matches.
31

ITC's range of Safety matches include popular brands like Aim, Aim Special, Aim Premium
and i Kno. With differentiated product features and innovative value additions, these brands
effectively address the needs of different consumer segments. ITC also exports regular and
premium safety matches brands to markets such as Middle East, Africa and the USA. The
successful acquisition of Wimco Ltd., a subsidiary of ITC has consolidated the market
standing of the Company's Matches business through synergy benefits derived through
combined portfolio of offerings, improved servicing of proximal markets and freight
optimization. Through its participation, ITC aims to enhance the competitiveness of the small
and medium scale sectors through its complementary R&D based product development and
marketing strengths, especially the breadth and depth of the Company's trade marketing and
distribution.

Agarbattis

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 and medium scale sectors through its complementary R&D
based product development and strengths in trade marketing and distribution.

32

Mangaldeep Agarbattis are available in a wide

range of fragrances like Rose, Jasmine, Bouquet, Sandalwood, Durbar, Anushri etc. New
launches include Fragrance of Temple Gold Tradition & Silver Edition; Champa, Tarangini
& Malligai in an attractive pouch format.

The pouch format of packaging is increasingly becoming

popular. To meet this need of the market Mangaldeep has
launched three variants Champa, Tarangini & Malligai. Each
of them has been designed keeping the relevant market needs
in mind. The products have received a tremendous response
not only from the consumers and also by the trade.
Fragrance of Temple is a flagship sub brand in the Mangaldeep portfolio. Superior fragrance,
high quality sticks and differentiated packagings are some of the highlights of Fragrance of
Temple. New launch included Fragrance of Temple Gold Edition & Fragrance of Temple
Silver Edition. Both packs are industry first gold/silver metalized plastic pack. Fragrance of
Temple Silver Edition has won the prestigious "IFCA Star Award 2011" which
recognizes Packaging Excellency in terms of design, development, innovation and
creativity.

Mangaldeep Dhoop, made with Natural Ingredients, is

available in specific markets and is fast emerging as a key
player in North India. Having varied consumer offers and
differentiated product offerings, Mangaldeep Dhoop is fast
emerging a force to reckon with. New launches include
Sandal & Mogra variants as well as 3in1 offering in a
singular pack.

33

The Business continues to work on various exciting new offerings to the

consumers and is planning to launch them in the near future.
In line with ITC's Triple Bottom Line philosophy of every business contributing
to the nation's economic, environmental and social capital, Mangaldeep
agarbattis are manufactured by small scale and cottage units, providing
livelihood opportunities for more than 12,000 people. Six out of 17 Mangaldeep
Agarbatti manufacturing units are ISO 9000 certified. Mangaldeep ASHA
(Assistance in Social Habilitation through Agarbattis) is an ITC initiative to
improve the quality of raw agarbatti production and provide better value
realization for women rollers. Under the project, ITC has extended support to
NGOs in states and like Bihar, Tripura, Tamil Nadu, who are setting up agarbatti
units, training village women in rolling agarbattis and employing them in these
units. In the latest initiative, ITC signed a MoU with Orissa Government run Orissa Rural
Development and Marketing Society (ORMAS) for marketing raw incense sticks in the statea move that is expected to provide employment opportunities to over 3000 rural women

PAPERBOARDS AND PACKINGS

Paperboards and Specialty Papers

ITC's Paperboards and Specialty Papers Division is India's largest, technologically advanced
and most eco-friendly, paper and paperboards business. The business caters to a wide
spectrum of packaging, graphic, communication, writing, printing and specialty paper
requirements through its four world-class manufacturing units, 7sales offices and a network
of more than 50 dealers in India, along with an international trade network of 18 distributors /
agents and 4 finishing operations close to the market for providing faster service to the
customers.
The product range includes:

34

Packaging
Virgin

Recycled

Folding Box Boards

Coated Duplex White back

Solid Bleached Boards

Coated Duplex Grey back

Coated High Burst Liner

Specialty PAPER GRAPICS

Having pioneered many specialty applications, ITC's Paperboards and Specialty Papers
business enjoys market leadership in the value-added paperboards segment, and also has a
significant share of the Indian fine papers market. It is the largest exporter of coated boards
from India.
ITC takes great pride in servicing a large cross-section of industry requirements - from
cigarette tissues to FMCG cartons, from electrical insulation papers to PLA Coated Boards,
from decorative laminate base to writing and printing papers and much more. ITC straddles
the entire spectrum of paperboards - from 100% virgin, food-grade boards which are from
renewable and sustainable resources to 100 % recycled boards
Some of ITC's prominent paperboard brands are:
Folding Box Boards: Cyber XLPac, Cyber Cypak, Cyber Propac, Cyber Premium,
Pearl XL Pac
Solid Bleached Sulphate Boards: Safire Graphik, Art Maestro, Carte Persona, Carte
Lumina, Safire XL Pac, Digiart
Poly coated boards: Indobev, Indobarr
PLA Coated boards: Omegabev, Omegabarr, Omegawrap
Recycled boards: Eco Blanca, Eco Natura
Fine Papers: AlfaZap, Alfa Plus, Hi Brite, Paperkraft , Alfazine, Perma White
Each of the units specialises in a range of products. Together, these units produce close to
5,50,000 TPA of paper and paperboards that meet stringent quality requirements across the

35

world. All four manufacturing units are ISO 9001, ISO 14001 and OHSAS 18001 certified
and meet strict Environment, Health and Safety norms.
The unit in Bhadrachalam is India's largest integrated pulping and paperboard manufacturing
unit. It boasts of equipment supplied by internationally renowned suppliers for pulping
processes, paper machines, web detection & inspection systems, and finishing & packing
lines. Currently the unit produces high-end virgin and recycled boards for packaging and
graphic applications, and fine printing papers. The Bhadrachalam unit manufactures and uses
pulp made from ozone bleaching process known as light ECF process. The use of ozone
technology significantly reduces the load of toxins in the effluent discharged, and helps
customers get a brighter, stronger product that is also environmentally responsible with the
BOD (Biochemical oxygen on demand) and COD (Chemical oxygen on demand) level way
below the National Standards Limits. PM 4 & PM 5 of Unit Bhadrachalam is BRC IOP
certified for food grade boards.
The Kovai unit currently focuses entirely on recycled boards, servicing requirements for both
greyback and whiteback recycled boards, The Kovai unit is a benchmark in environmental
performance - helping ITC turn solid waste recycling positive by consuming more paper
waste generated than is generated internally. This is done by collecting waste from
households and institutions and recycling it at this facility.
The Tribeni unit specializes in fine papers and tissues and the product range from this unit
comprises opaque papers for fine printing like the Bible, dictionaries, cigarette tissues,
medical grade papers, anti-rust papers, electrical insulation papers, decor surface, printing
and barrier papers. The Bollaram unit manufactures specialty boards such as cast coated
papers and boards, poly extrusion coated barrier boards and C2S art boards and ivory boards.
This unit is BRC- IOP certified for food grade boards.
Customers are at the core of the business. This is reflected in the diverse range of products,
grades and value added services. There is a strong focus on partnering customers to co-create
and deliver superior solutions, enhancing their competitive advantage.
All the 4 units of ITC PSPD are FSC-CoC (Forest Stewardship Council - Chain of
Custody) certifiedenabling it to provide a diverse range of paperboards/paper with FSC
certificate which is a gold standard in wood certification for ethical and legal sourcing.
The Business' quality philosophy is reflected at every stage - from the selection of clones
used for growing pulpwood to world-class manufacturing facilities to the finishing and
packing lines. It embraces the relevant skills and competencies of employees, managers and
specialists as well.
A dedicated network of regional sales offices, an extensive dealer and agent network in India
and across the globe along with close to market finishing and stock holding facilities enable
ITC's Paperboards and Specialty Papers business to reach out to customers faster, to service
them better. With the division-wide implementation of Enterprise Resource Planning (ERP)

36

in 2009, the business also offers customers an enriched experience through enhanced
connectivity and web-access to many of the services that were handled offline.
ITC's commitment beyond the market finds a strong expression in the Social and Farm
forestry programmes spearheaded by the business. These programmes help create man hours
of employment for the rural poor, besides being a sustainable source of high-quality raw
material for the business. ITC's Research and Development efforts in creating disease
resistant, high yielding clones help farmers realize greater yields in a shorter time - from land
that may be otherwise unproductive. More than 1,24,000 hectares of planted area stands
testimony to ITC's commitment to sustainable forestry.
Working towards credible certification of its environmentally responsible processes and
products, ITC is the first Indian company to be invited to become a member of the WWF
GFTN programme. With this membership, ITC has committed to bring larger volumes of its
products and its operations under credibly certified schemes like FSC.
Supporting the cause of clean technology, ITC is a front-runner in introducing environmentfriendly Elemental Chlorine Free (ECF) technology, and more recently, Ozone bleaching in
India. ITC's focus on being a carbon-positive, water-positive, zero-solid waste disposal
organization leads it to constantly develop ways of reducing, reusing and recycling. ITC has
been Carbon Positive for six years in a row, Water Positive for nine consecutive years
and Solid Waste Recycling Positive for the last four years.
ITC's Paperboards and Specialty Papers business has also been a first-mover in the field of
collecting and recycling post-consumer waste from residential localities, corporate and
educational institutes through its WOW programme. ITC reaches out directly to consumers
with its Wealth Out of Waste (WOW) campaign, that has been successfully implemented in
select locations across southern India, and has plans to expand into other locations across the
Country.
For more information on ITC PSPDs sustainability initiatives please
visit www.itcpspd.com andwww.itcgreenpapers.com.
Awards
ITC's Paperboards & Specialty Papers business has won numerous awards for quality,
environmental management systems and product excellence. For more information
please visitwww.itcpspd.com.
Operations & Energy
Gold Award 2007 and 2006 to Unit Bollaram by Frost & Sullivan in acknowledgement of
the achievement in sustaining and maintaining manufacturing excellence.
Paper Mill of the Year 2005-06 Award to the Bhadrachalam paperboards mill by the Indian
Paper Manufacturers Association (IPMA).

37

The British Safety Council's Five Star Health and Safety Award 2011 to Tribeni Unit and to
the Bhadrachalam Unit in 2008. In 2011, Tribeni and Bollaram Units were also awarded the
Sword of Honour. Five Star rating from the British Safety Council to Bollaram in 2011 and
2007, Kovai Unit in 2008 and 2007, and Tribeni Unit in 2006. The British Safety Council
also awarded unit Kovai the International Safety Award with Distinction in 2011 These
awards are given for excellence in Health & Safety management.
Over the years Unit Bhardrachalm has been consistently awarded by National Award for
Excellence in Energy Management and the National Award for Excellence in Water
Management and also the Best Innovative Project Award in 2006 by the CII. The awards
were given for successful implementation of energy saving projects and for significant
reduction in specific energy and water consumption. The same were also awarded to the
Tribeni factory in 2008. Tribeni also received the Innovative Case study award. Munger Unit
received the CII-GBC National Award for Excellence in Water Management 2008 for
the third time. Unit Kovai was also declared as the Excellent Water Efficient
Unit underNational Award for Excellence in Water Management 2011 for the fourth time.
National Award for Energy Conservation 2008 to Unit Tribeni from the Ministry of Power
& Non-conventional energy sources. This is the third year in succession that Tribeni Unit has
received this recognition. Unit Bhadrachalam won the same award in 2005.

Environment
ITCs Social and Farm Forestry programme won the 2nd NASSCOM Social Innovation
Honours 2010 for bringing about social change and development through technology
The BIR (Bureau of International Recycling) Paper Division, has conferred upon ITC
Paperboards and Specialty Papers Business 'The Papyrus Award' 2009, in recognition of
services and contribution to the recycling industry, in 2009.
In 2011, the British Safety Council, London conferred the Globe of Honour Award for best
Environment Prevention and Protection to Bhadrachalam and Kovai Units. Both units also
achieved 5 star rating in Environment Audit.
The Greentech Environment Excellence Gold Award 2008, 2006 and 2004 in the
manufacturing sector, for the Bhadrachalam factory. Through these awards the Greentech
Foundation recognizes industrial and service sector organizations for their outstanding
achievements in environment protection.
'Top Green Rating' in 2004 by the Centre for Science & Environment (CSE). The
Bhadrachalam Unit was adjudged as India's most environment-friendly paper mill.
Golden Peacock Award - 2003 - The World environmental foundation presents this award
for the highest achievement in environmental management.

38

Others
Capexil's Top Export Award 2005-06, 2004-05 and 2003-04 for the 5th consecutive year in
recognition of highest exports in value terms, in the Paper and Paperboard category.
The prestigious Indira Priyadarshini Vrikshamitra Award for outstanding contribution to
the cause of afforestation and the development of wastelands.
Packaging

ITC's Packaging & Printing Business is the largest value added converter of paperboard
packaging in South Asia. It converts over 70,000 tonnes of paper, paperboard and laminates
per annum into a variety of value-added packaging solutions for the food & beverage,
personal products, cigarette, liquor and consumer goods industries.
The Division, which was set up in 1925 as a strategic backward integration for ITC's
Cigarettes business, is today India's most sophisticated packaging house. State-of-the-art
technology, world-class quality and a highly skilled and dedicated team have combined to
position ITC as the first-choice supplier of high value added packaging.
The Division supplies value-added packaging to ITC's various FMCG businesses. Its client
list includes several well-known national and international companies like Nokia, Colgate
Palmolive, Pernod Ricard, Diageo, British American Tobacco, Philip Morris
International, Agio Cigars, UB Group, Tata Tetley, Tata Tea, Reckitt Benckiser, Radico
Khaitan, Akbar Brothers, Surya Nepal, VST Industries, etc.
With three packaging factories at Tiruvottiyur near Chennai (in the South), Munger in Bihar
(in the East), and Haridwar (in the North of India), the Company offers a comprehensive
product range in packaging backed by its packaging expertise over the decades and cutting
edge technology making it truly a "One stop shop for Packaging".
Product Lines
39

ITC's Packaging Business has 3 major product lines

Carton Board Packaging

Printed Cartons

Fluted cartons

Flexible Packaging

Tobacco Packaging

Carton Board Packaging : ITC occupies a leadership

position in catering to the needs of the liquor, mobile phones & food. ITC offers a range of
value additions for carton board packaging such as UV offset printing, Foil Stamping,
Embossing, Window patching & lined cartons, etc.

Flexible Packaging : is an area of high growth, supported

with investments in technology and equipment from world class suppliers. ITC offers a
completely integrated solution for laminates from Pre-press, In-house Blown Film, Cast film,
Extrusion Lamination, Hot Melt Coating, specialty pouching and bag making. This is backed
by in house cylinder making and pre press support.

40

Tobacco packaging : ITC offers a range of products line including flip top boxes (Square,
Round, Beveled and Pillow Pack Hinge lids etc), Outers, Soft Cup labels, Pack inserts,
Printed cork tipping, printed overwraps, inner frames. ITC makes value added shoulder
boxes for cigars and cigarettes. ITC supplies packaging for over 80 billion cigarettes a year
domestically, and supplies packaging for 15 billion cigarette sticks a year for the export
market to leading tobacco majors.

Innovation & New Product Development

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 combinations, and an in-house pre-press
Design Centre.
A Product Introduction Process team pioneers packaging innovations. The team uses a unique
process to pilot the client's packaging through its manufacturing system. Specifications are
evolved based on clients' needs based on which a variety of packaging solutions is generated.
The efficacy of the packaging is tested simulating the client's factory conditions. ITC has
contemporary laboratories for its 3 product lines for testing packaging requirements.

Green Packaging

ITC Packaging has pioneered offering of Green Packaging which includes usage of raw
material from sustainable sources and conversion of the same in a facility which is 100%
powered by renewable energy (Wind Energy). This clean energy initiative along with the
other sustainability initiatives helps the Packaging Business to significantly contribute to ITC
being a carbon Positive, Water Positive and Solid Waste Recycling Positive Company.
ITC's Packaging business has won numerous awards for its quality, environmental
management systems and product excellence:
41

All the 3 factories are ISO 9001, ISO 14001 and OSHAS 18001 certified.

ITC Packaging is the First in India to achieve Level 8 certification on

the International Quality Rating System (IQRS).

Chennai Unit & DHQ achieved Level 8 in 2007 , Munger Unit in 2009.

About IQRS

The IQRS is a 10 level rating system developed by DNV Norway.

The IQRS is an amalgam of the EFQM (European Foundation for

Quality Management), the Malcolm Baldrige Award, ISO9000 &
QS9000 criteria.

It has 14 elements encompassing all aspects of business from

Leadership to Stakeholder satisfaction.

Several World Star Awards including 2 Awards in 2009. Asiastar ,

IndiaStar & PFFCA Star Awards (Paper Film & Foil Convertors Association)
for unique, innovative and visually appealing packaging.

Several CAPEXIL awards for Exports of packaging.

Golden Leaf Award in 2009 in the Category "Most Committed to Quality".

5 Star Rating from the British Safety Council for Occupational Health &
Safety for all 3 factories. The units have won the Sword of Honour 11 times
from the British Safety Council.

5 Star Rating from the British Safety Council for Environment for the Chennai
Factory.

Greentech Environment Excellence Award - The Greentech Foundation

recognizes industrial and service sector organizations for their outstanding
achievements in environment protection.

The Greentech Gold & Silver Awards for Occupational Health & Safety for
Munger & Chennai Units

AGRI BUSINESS

42

ITC's pre-eminent position as one of India's leading corporates in the agricultural sector is
based on strong and enduring farmer partnerships that has revolutionized and transformed the
rural agricultural sector. A unique rural digital infrastructure network, coupled with deep
understanding of agricultural practices and intensive research, has built a competitive and
efficient supply chain that creates and delivers immense value across the agricultural value
chain. One of the largest exporters of agri products from the country, ITC sources the finest
of Indian Feed Ingredients, Food Grains, Marine Products, Processed Fruits, Coffee &
Spices.
ITC's Agri Business Division is the country's second largest exporter of agri-products. It
currently focuses on exports and domestic trading of:

Feed Ingredients - Soyameal

Food Grains - Rice (Basmati), Wheat

Marine Products - Shrimps and Prawns

Processed Fruits - Fruit Purees/Concentrates, IQF/Frozen Fruits, Organic Fruit

Products, Fresh Fruits

Coffee & Spices - Coffee, Black Pepper, Chilly, Turmeric, Ginger, Celery and other
Seed Spices

Farmer empowerment through e-Choupals

43

ITC's unique strength in this business is the extensive backward

linkages it has established with the farmers. This networking with the farming community has
enabled ITC to build a highly cost effective procurement system. ITC has made significant
investments in web-enabling the Indian farmer. Christened 'e-Choupal', ITC's empowerment
plan for the farmer centres around providing Internet kiosks in villages. Farmers use this
technology infrastructure to access on-line information from ITC's farmer-friendly
website www.echoupal.com. Data accessed by the farmers relate to the weather, crop
conditions, best practices in farming, ruling international prices and a host of other relevant
information.
e-Choupal today is the world's largest rural digital infrastructure.
The unique e-Choupal model creates a significant two-way multi-dimensional channel which
can efficiently carry products and services into and out of rural India, while recovering the
associated costs through agri-sourcing led efficiencies. This initiative now comprises
about 6500 installations covering nearly 40,000 villages and serving over 4 million
farmers. Currently, the 'e-Choupal' websiteprovides information to farmers across the 10
States of Madhya Pradesh, Haryana, Uttarakhand, Uttar Pradesh, Rajasthan, Karnataka,
Maharashtra, Andhra Pradesh and Tamil Nadu. Over the next 5 years it is ITC's Vision to
create a network of 20,000 e-Choupals, thereby extending coverage to 100,000 villages
representing one sixth of rural India.
Supporting the e-Choupal network are ITC's procurement teams, handling agents and
contemporary warehousing facilities across India, enabling its Agri Business to source
identity-preserved merchandise even at short notice. ITC's processors are handpicked, reliable
high quality outfits who ensure hygienic processing and modern packaging. Strict quality
control is exercised at each stage to preserve the natural flavour, taste and aroma of the
various agri products.

Choupal Saagar

44

Following the success of the e-Choupal, the

Company launched Choupal Saagar, a physical infrastructure hub that comprises collection
and storage facilities and a unique rural hypermarket that offers multiple services under one
roof. This landmark infrastructure, which has set new benchmarks for rural consumers also
incorporates farmer facilitation centres with services such as sourcing, training, soil testing,
health clinic, cafeteria, banking, investment services, fuel station etc. 24 'Choupal
Saagars' have commenced operations in the states of Madhya Pradesh, Maharashtra and
Uttar Pradesh. ITC is engaged in scaling up the rural retailing initiative to establish a chain of
100 Choupal Saagars in the near future.
Choupal Fresh

Choupal Fresh, ITC's fresh food wholesale and retail initiative, leverages
its extensive backward linkages with farmers and supply chain efficiencies. It focuses on
stocking fresh horticulture produce like fresh fruits and vegetables. Choupal Fresh retail
stores are currently operational at Hyderabad. The company has also set up a complete cold
chain for ensuring the availability of fresh products in the market, besides directly sourcing
farm fresh produce from the farmers.
Choupal Pradarshan Khet

In line with its mission of improving the

quality of life in rural India, ITC's Agri Business has launched a flagship extension
programme called 'Choupal Pradarshan Khet' (CPK) or demonstration plots to help farmers
enhance farm productivity by adopting agricultural best practices. Started in 2005-06, the
45

crop portfolio includes soya, paddy, cotton, maize, bajra, wheat, gram, mustard, sunflower
and potato. This initiative, has covered over 70,000 hectares and has a multiplier impact and
reaches out to 1.6 million farmers.

Processed Fruits
In line with its strategy of achieving a higher order of value capture, the business also focuses
on the value added segment, steadily enhancing its basket of offerings with several new
products. These include frozen foods, IQF (individually quick frozen) fruits, niche
products like baby-food quality purees and high brix pulp and organic purees. ITC
seeks to focus on this segment and exploit the market opportunity for tropical fruits and fruit
products, where India has a natural advantage of growing the complete range, including
exotic varieties. In Processed Fruits category, ITC exports from HACCP certified plants to
Western Europe, North Africa, West Asia, Japan and North America, a wide range of
Processed Fruit products made from Mango (Alphonso, Kesar & Totapuri), Guava, Papaya
and Pomegranate. ITC is the leading Indian exporter of Organic Fruit Products certified to
European (EC 2092/91) and US (NOP) Standards.
Fresh Table Grapes & Pomegranates are sourced from ITC's EUREPGAP certified farmer
groups & retailed through prominent supermarkets like Sainsbury's and Albert Heijn in
Europe and Daiei in Japan.

Marine Products
ITC has been a significant exporter of seafood from India since 1971. It exports frozen as
well as cooked shrimps and other seafood products to Japan, USA and Europe. Its wellknown brands include Gold Ribbon, Blue Ribbon, Aqua Kings, Aqua Bay, Aqua Feast
and Peninsular.

A Customer Centric Approach

ITC's Agri Business Division continues to use innovation as its core strategy to retain its
position as the one-stop shop for sourcing agri-commodities from India. Besides setting
benchmarks in quality, reliability and value-added services, ITC is a trendsetter in customer
care particularly in commodity trading. Major customers include Cargill, Marubeni,

46

Toepfer, among others, who source agriculture commodities and food products from India.
Customers can log onto www.itcabd.com, and readily access information on crop production
and forecast, market updates, the latest shipment status and the prevailing foreign exchange
rates.
Sourcing for ITC
ITC's Agri business is progressively aligning its commodity portfolio with the sourcing needs
of the Company's Foods business to generate higher order value from its agri procurement
infrastructure. The business has commenced procurement of chipstock potatoes, one of the
critical raw materials in the manufacture of the Company's 'Bingo!' brand of potato chips. The
acquisition of Technico, an Australian company with technology leadership in the production
of early generation seed potatoes, helped the business access a ready pipeline of new highyielding varieties of chipstock potato seeds.
ITC's Agri Business Division has won numerous awards:

United Nations Industrial Development Organisation (UNIDO) Award at the

international conference on Sharing Innovative Agribusiness Solutions 2008 at
Cairo for ITC's exemplary initiatives in agri business through the e-Choupal.

The Ashoka - Changemakers 'Health For All' Award 2006 for the Rural Health
Services model for delivery of health services through the e-Choupals.

The Stockholm Challenge 2006 for the e-Choupal initiative. This award is for using
information technology for the economic development of rural communities.

Innovation for India Award 2006 for ITC e-Choupal in the Social Innovations
category for business organizations. The first of its kind in India, based on
parameters of number of lives impacted, degree of impact on organization and
environment, uniqueness, leverage of resources and whether it was scalable and
sustainable, e-Choupal was declared as one of 'India's Best Innovations'.

The Development Gateway Award 2005 (previously known as the Petersberg Prize)
for its trailblazing e-Choupal initiative. ITC is the first Indian company and
the second in the world to win this prestigious award.

The 'Golden Peacock Global Award for Corporate Social Responsibility (CSR) in
Emerging Economies for 2005'. The Company received this award for its eChoupal and social and farm forestry initiatives that are impactfully transforming
lives and landscapes in rural India.

The Corporate Social Responsibility Award 2004 from The Energy and
Resources Institute(TERI) for its e-Choupal initiative. The Award provides impetus
to sustainable development and encourages ongoing social responsibility processes
within the corporate sector.

47

The inaugural 'World Business Award', instituted jointly by the International

Chamber of Commerce (ICC), the HRH Prince of Wales International Business
Leaders Forum (IBLF) and the United Nations Development Programme
(UNDP) for the e-Choupal intervention. This award recognises companies who have
made significant efforts to create sustainable livelihood opportunities and enduring
wealth in developing countries.

The 'Enterprise Business Transformation Award' for Asia Pacific (Apac),

instituted by Infosys Technologies and Wharton School of the University of
Pennsylvania, for e-Choupal.

PC Quest's IT Implementation Award in the 'Best Project' category, for the eChoupal initiative.

The Golden Peacock Innovation Award 2004 for e-Choupal.

The coveted "Golden Star Trading House" status by the Government of India.

The NASSCOM award for 'Best IT User in FMCG' in 2003. The Award is a
recognition of ITC's successful integration of its IT usage with its business processes,
specially the e-Choupal initiative.

The Seagate Intelligent Enterprise of the Year 2003 Award, for the most innovative
usage of Information Technology. This award recognises ITC's pathbreaking eChoupal initiative.

e-Choupal

The Big Picture:

48

ITC's Agri Business Division, one of India's largest exporters of agricultural commodities,
has conceived e-Choupal as a more efficient supply chain aimed at delivering value to its
customers around the world on a sustainable basis.
The e-Choupal model has been specifically designed to tackle the challenges posed by the
unique features of Indian agriculture, characterised by fragmented farms, weak infrastructure
and the involvement of numerous intermediaries, among others.

The Value Chain - Farm to Factory Gate:

'e-Choupal' also unshackles the potential of Indian farmer who has been trapped in a vicious
cycle of low risk taking ability > low investment > low productivity > weak market
orientation > low value addition > low margin > low risk taking ability. This made him and
Indian agribusiness sector globally uncompetitive, despite rich & abundant natural resources.
Such a market-led business model can enhance the competitiveness of Indian agriculture and
trigger a virtuous cycle of higher productivity, higher incomes, enlarged capacity for farmer
risk management, larger investments and higher quality and productivity.

49

Further, a growth in rural incomes will also unleash the latent demand for industrial goods so
necessary for the continued growth of the Indian economy. This will create another virtuous
cycle propelling the economy into a higher growth trajectory.
The Model in Action:
Appreciating the imperative of intermediaries in the Indian context, 'e-Choupal' leverages
Information Technology to virtually cluster all the value chain participants, delivering the
same benefits as vertical integration does in mature agricultural economies like the USA.
'e-Choupal' makes use of the physical transmission capabilities of current intermediaries aggregation, logistics, counter-party risk and bridge financing -while disintermediating them
from the chain of information flow and market signals.

With a judicious blend of click & mortar capabilities,

village internet kiosks managed by farmers - called sanchalaks - themselves, enable the
agricultural community access ready information in their local language on the weather &
market prices, disseminate knowledge on scientific farm practices & risk management,
facilitate the sale of farm inputs (now with embedded knowledge) and purchase farm produce
from the farmers' doorsteps (decision making is now information-based).
Real-time information and customised knowledge provided by 'e-Choupal' enhance the
ability of farmers to take decisions and align their farm output with market demand and
secure quality & productivity. The aggregation of the demand for farm inputs from individual
farmers gives them access to high quality inputs from established and reputed manufacturers
at fair prices. As a direct marketing channel, virtually linked to the 'mandi' system for price
discovery, 'e-Choupal' eliminates wasteful intermediation and multiple handling. Thereby it
significantly reduces transaction costs.
'e-Choupal' ensures world-class quality in delivering all these goods & services through
several product / service specific partnerships with the leaders in the respective fields, in
addition to ITC's own expertise.
While the farmers benefit through enhanced farm productivity and higher farm gate prices,
ITC benefits from the lower net cost of procurement (despite offering better prices to the
farmer) having eliminated costs in the supply chain that do not add value.
The Status of Execution:

50

Launched in June 2000, 'e-Choupal', has already

become the largest initiative among all Internet-based interventions in rural India. 'e-Choupal'
services today reach out to over 4 million farmers growing a range of crops - soyabean,
coffee, wheat, rice, pulses, shrimp - in over 40,000 villages through 6500 kiosks across ten
states (Madhya Pradesh, Haryana, Uttarakhand, Karnataka, Andhra Pradesh, Uttar Pradesh,
Rajasthan, Maharashtra, Kerela and Tamil Nadu).
The problems encountered while setting up and managing these 'e-Choupals' are primarily of
infrastructural inadequacies, including power supply, telecom connectivity and bandwidth,
apart from the challenge of imparting skills to the first time internet users in remote and
inaccessible areas of rural India.

Several alternative and innovative solutions - some of

them expensive - are being deployed to overcome these challenges e.g. Power back-up
through batteries charged by Solar panels, upgrading BSNL exchanges with RNS kits,
installation of VSAT equipment, Mobile Choupals, local caching of static content on website
to stream in the dynamic content more efficiently, 24x7 helpdesk etc.
Going forward, the roadmap includes plans to integrate bulk storage, handling &
transportation facilities to improve logistics efficiencies.
As India's 'kissan' Company, ITC has taken care to involve farmers in the designing and
management of the entire 'e-Choupal' initiative. The active participation of farmers in this

51

rural initiative has created a sense of ownership in the project among the farmers. They see
the 'e-Choupal' as the new age cooperative for all practical purposes.
This enthusiastic response from farmers has encouraged ITC to plan for the extension of the
'e-Choupal' initiative to altogether 15 states across India over the next few years. On the anvil
are plans to channelise other services related to micro-credit, health and education through
the same 'e-Choupal' infrastructure.
Another path-breaking initiative - the 'Choupal Pradarshan Khet', brings the benefits of
agricultural best practices to small and marginal farmers. Backed by intensive research and
knowledge, this initiative provides Agri-extension services which are qualitatively superior
and involves pro-active handholding of farmers to ensure productivity gains. The services are
customised to meet local conditions, ensure timely availability of farm inputs including
credit, and provide a cluster of farmer schools for capturing indigenous knowledge. This
initiative, which has covered over 70,000 hectares, has a multiplier impact and reaches out to
over 1.6 million farmers.
Awards
ITC's e-Choupal has won numerous awards:

United Nations Industrial Development Organisation (UNIDO) Award at the

international conference on Sharing Innovative Agribusiness Solutions 2008at
Cairo for ITC's exemplary initiatives in agri business through the e-Choupal.

The Ashoka - Changemakers 'Health For All' Award 2006 for the Rural Health
Services model for delivery of health services through the e-Choupals.

The Stockholm Challenge 2006. This award is for using information technology for
the economic development of rural communities.

Innovation for India Award 2006 for ITC e-Choupal in the Social Innovations
category for business organizations. The first of its kind in India, based on
parameters of number of lives impacted, degree of impact on organization and
environment, uniqueness, leverage of resources and whether it was scalable and
sustainable, e-Choupal was declared as one of 'India's Best Innovations'.

The Development Gateway Award 2005 (previously known as the Petersberg Prize)
for the trailblazing e-Choupal initiative. ITC is the first Indian company and
the second in the world to win this prestigious award.

The 'Golden Peacock Global Award for Corporate Social Responsibility (CSR) in
Emerging Economies for 2005'. The Company received this award for its eChoupal and social and farm forestry initiatives that are impactfully transforming
lives and landscapes in rural India.

52

The Corporate Social Responsibility Award 2004 from The Energy and
Resources Institute(TERI) for its e-Choupal initiative. The Award provides impetus
to sustainable development and encourages ongoing social responsibility processes
within the corporate sector.

The inaugural 'World Business Award', instituted jointly by the International

Chamber of Commerce (ICC), the HRH Prince of Wales International Business
Leaders Forum (IBLF) and the United Nations Development Programme
(UNDP). This award recognises companies who have made significant efforts to
create sustainable livelihood opportunities and enduring wealth in developing
countries.

The 'Enterprise Business Transformation Award' for Asia Pacific (Apac),

instituted by Infosys Technologies and Wharton School of the University of
Pennsylvania.

PC Quest's IT Implementation Award in the 'Best Project' category.

The Golden Peacock Innovation Award 2004.

The NASSCOM award for 'Best IT User in FMCG' in 2003. The Award is a
recognition of ITC's successful integration of its IT usage with its business processes.

The Seagate Intelligent Enterprise of the Year 2003 Award, for the most innovative
usage of Information Technology.

Leaf Tobacco

ITC pioneered the cultivation and development of Leaf Tobaccos in India. Nearly a
century of creating customer delight ensures that globally, ITC's Leaf Tobacco business is
synonymous with being "The One Stop Shop for Quality Indian Tobaccos". The Leaf
Tobacco business' partnership with the farmer is also almost a 100 years old. In a spirit that

53

truly embodies the Company's "commitment beyond the market", ITC has helped the Indian

farmer grown quality leaf tobaccos and linked him to global markets.
ITC is the largest buyer, processor and exporter of leaf tobaccos in India - creating a
global benchmark as the single largest integrated source of quality tobaccos. Serving
customers in 50 countries across more than 70 destinations, ITC co-creates and delivers
value at every stage of the leaf tobacco value chain.
ITC buys nearly 50 per cent of all cigarette tobacco types grown in India. It has a team of
experienced, highly skilled and professional buyers and classifiers who source and segregate
tobaccos to exacting customer specifications. A large inventory base of quality tobaccos
provides an edge in serving customers through product customization, portfolio
rationalization, product bundling and value added services. This strategic direction insulates
customers from crop fluctuations, a key 'winning proposition' acknowledged worldwide.

ITC's comprehensive and sophisticated R&D facilities cover

all aspects of cultivation, product development and processing through fundamental
and applied research. Thus, ITC's value proposition to its customers is "On Time In Full"
delivery of quality tobaccos spanning across all tobacco types at competitive prices.
ITC's Green Leaf Processing plants at Chirala and Anaparti in Andhra Pradesh, the tobacco
hub of India, are benchmarked with the best in the world. State-of-the-art technology,
shared product knowledge base, sophisticated process and quality controls enable ITC
to process and deliver 120 million Kgs of high quality tobaccos annually. These factories
have integrated warehousing complexes that match international standards in hygiene,
infestation control and monitoring.

ITC's quality emanates from its intimate involvement

with the tobacco farmers in India. Effective reach mechanisms help transfer 'best practices'
54

from the lab to the land. With an extensive presence in rural India, ITC's Leaf Tobacco
business maps critical Soil, Crop and Process control parameters across cultivated areas.
Intermediation through a dedicated pool of trained managers in critical areas like soil testing,
varietal improvements, vermin composting, nutrient management and post harvest
management results in a superior agri output. These initiatives position ITC as an integral part
of India's agricultural landscape. ITC's collaboration with related Government agencies
has helped develop new varieties of tobaccos and explore new areas for tobacco
cultivation.

Awards
ITC's Leaf Tobacco business has won national and international laurels for research
and development, quality, environmental management systems and product excellence.
The more important of these are:

The Golden Leaf Awards 2007 in the categories Most Committed to

Quality and Most Impressive Public Service Initiative. ILTD is the first time
winner in these two categories of the Golden Leaf Awards.

The International Quality Rating System IQRS Level 7, awarded by Det Norske
Veritas in March 2006.

The Greentech Safety Platinum Award - 2006 in the Manufacturing Sector

Category for its leaf processing plant at Chirala, Andhra Pradesh.

The "Golden Peacock Environment Management Award" for the year 2005 by
World Environment Foundation, New Delhi (Institute of Directors, New Delhi) for its
Chirala Unit.

Human Resource Excellence Award 2004 from Confederation of Indian Industry

(CII), Chennai.

British Standard 7750, a certification that is an equivalent of ISO 14001 to the

processing plant in Chirala for its commitment to Environment management
systems, as defined by British Standards.

ITC's R&D Center for leaf tobacco has received

The Best Research and Development of New Innovation Gold award for
its contribution to farm productivity improvement through the introduction of
improved varieties and propagation of contemporary and cost effective agrotechniques.

55

The Best Energy Conservation Implementation Gold Award for energy

and eco-conservation measures.

Its Green Leaf Threshing plants were the first of their kind in the world to receive
the ISO 9001quality accreditation. They were also internationally the first to get
the ISO 14001 environmentmanagement system certification.

The processing plant at Chirala was the first unit in Asia to receive the Social
Accountability Standard Certification (SA 8000) from Det Norske Veritas. The
processing plant at Anaparti has also been accredited with SA 8000 in the year 2002.

The OHSAS 18001:1999 Certificate to the processing plants at Anaparti and Chirala.
This facilitates the integration of Quality, Environment, Social Accountability and
Occupational Health and Safety Management Systems.

ILTD has been the recipient of the following awards:

The ISO 9001 quality accreditation for Warehouse Management of Redried

Leaf Tobacco.

The "Cleaner Production Award" for the year 2004-05 by Andhra Pradesh
Pollution Control Board for its Chirala plant.

IMC Rama Krishna Bajaj National Quality Commendation

Certification(Manufacturing category) for the year 2004 to the Chirala plant.

"Best Exporter of Unmanufactured Tobacco" in 2008 for the 7th

consecutive year (Manufacturers category) for 2003 & 2004 from
the Tobacco Board of India.

The Rajiv Gandhi National Quality Award in the 'Best of All' category for
1994 and 1995 from the Government of India.

National Safety Awards from the British Safety Council

Swords of Honour and Five Star ratings from the British Safety Council.
The processing plant at Chirala has won this award eleven times since 1993
and the Anaparti plant seven times since 1994.

"SECTOR 2000" Award in the Sector of Food, Drink and Tobacco in the
World in the year 2000 from RoSPA (Royal Society for Prevention of
Accidents), UK, to the processing plant at Chirala.

RoSPA Gold Awards from the Royal Society for Prevention of Accidents
(RoSPA)

56

Special Commendation Safety Certificate from the Ministry of Labour,

Government of India.

Greentech Safety Gold Award for the years 2002-03, 2003-04 & 2004-05 to
the Chirala plant. The Anaparti won the Greentech Safety Gold Award for
the year 2004-05.

QualTech Commendation Certificate to the Chirala plant from QIMPRO,

Mumbai, in the year 2004.

Information Technology

Formed in 2000, ITC Infotech has today carved a niche for itself
in the arena of global IT services and solutions. The company has established technology
Centers of Excellence (CoE) to deepen capabilities and incubate cutting-edge technical
competencies. A robust outsourcing model, comprehensive suite of differentiated solutions &
services and focus on excellence in execution has provided the company a leadership position
in chosen domains.
ITC Infotechs customer centric go-to-market approach is organized by industry verticals.
The company services industries including, Banking Financial Services & Insurance
(BFSI), Consumer Packaged Goods (CPG), Retail, Manufacturing, Engineering
Services, Media & Entertainment, Travel, Hospitality, Life Sciences and Transportation
& Logistics.

57

The company enjoys the rare advantage of having a

practitioner's expertise in some of these industry verticals, which has in part been bequeathed
by parent ITC Limited, which runs market leading businesses in these verticals. While an
enterprise range of technology capabilities and world class quality processes form the
foundation of ITC Infotech's cutting-edge IT service strength, a sharp domain focus ensures
that IT services delivery always places business needs ahead of technology.
ITC Infotech provides IT solutions by addressing customer pain points through innovative
solutions, optimizing their IT landscape and maximizing returns from IT investments. The
company focuses on developing deep and differentiated capabilities to enhance expertise in
specific industry domains, business solutions and technologies. This steadfast focus on
delivering enduring value to customers has formed the bedrock of the ITC Infotechs growth
strategy. The company has been successful in attaining differentiation in niches and continues
to gain competitive advantage and strengthen market standing. ITC Infotech's leadership
capabilities also accrue from business critical engagements with leading organisations across
five continents, and a service delivery footprint spanning over 140 countries.
ITC Infotech conforms to the highest standards in international process quality, with ISO
27001, ISO 9001, CMMi Level 3 and BS 7799 accreditations. These reflect the company's
ongoing enterprise-wide focus to ensure that every engagement, program and project delivers
international quality consistently.
People first

ITC Infotech nurtures its employees through numerous training and

development programmes to help them actualize their potential. The overarching objective is
to ensure for each individual, a wholesome and challenging job profile, thereby constantly
aligning individual aspirations to organizational needs. ITC Infotech offers global careers,
global exposure and a diversity of opportunities to create business and technology leaders of
tomorrow.
The company became the first Indian IT company to receive the prestigious Social
Accountability (SA) 8000:2008 certification. SA8000 is widely accepted as the most viable
and comprehensive international workplace management system.
Industry Recognition
58

Premier analyst and market research agencies have recognized ITC Infotech's position as the
preferred IT partner. The company has been:

Featured amongst Top 100 Global Outsourcing Companies in the Leaders

category - International Association of Outsourcing Professionals

Ranked amongst Top 10 Specialty Application Development Providers

- Global Services, CMP Media

Named amongst major Indian global service providers for PLM

implementation and engineering services - ARC Advisory

Listed as a leading Player in CRM & CPG Space, and mentioned amongst
top service providers for Radio Frequency Identification (RFID) and SAP
- Forrester

Featured among cool vendors in application services, hype cycle for IT

Outsourcing and mentioned in reports on PLM Services Providers
- Gartner

Referred to as a Key Offshore Testing Services Provider - AMR Research

ITC Infotech won the Architecture Award of Excellence 2010 from

Steve Towers & John Zachman, acclaimed pioneers in the field of BPM & EAI

Group Companies

59

60

Hotels

ITC Hotels, India's premier chain of luxury hotels was

launched on October 18, 1975, with the opening of its first hotel - Chola Sheraton (now
rechristened as My Fortune) in Chennai. Since then the ITC Hotels brand has become
synonymous with Indian hospitality. With over 100 hotels in more than 90 destinations, ITC
Hotels has set new standards of excellence in the hotel industry in Accommodation, Cuisine,
Environment
and
Guest
Safety.

61

A leader in the premium hospitality segment, ITC Hotels have had the privilege of hosting
world leaders, Heads of State and discerning guests from across the world and within.

As one of India's most dynamic hospitality chains, ITC Hotels has set
standards for excellence in the hotel industry by pioneering the concept of branded
accommodation. The chain has developed three brands of accommodation ITC One',
'Towers' and the 'Executive Club' to differentiate between the needs of various travelers
and provide high levels of service.

First to introduce branded cuisine, its restaurants Bukhara,

Dakshin andDumPukht are renowned for their delicious and authentic Indian cuisines from
the different regions of India. ITC Hotels also showcases international cuisine in its specialty
restaurants West View and Pan Asian.
ITC Hotels has strategically customized its hotels and appropriately categorized them to
fulfill the service and budgetary needs of travellers. With its exclusive strategic tie up with
Starwood for its top of the line premium brand the 'Luxury Collection', the group is
strengthening its international marketing stance. ITC Hotels was also instrumental in
bringing the 'Sheraton' brand to India, with which it enjoyed a three-decade exclusive
partnership.
ITC Hotels's properties are classified under four distinct brands:
ITC

Hotels -

Luxury

Collection

In 2007, ITC Hotels entered a new phase in its

collaboration with Starwood Hotels & Resorts. ITC Hotels now has an exclusive tie-up with
Starwood in bringing its premium brand, the 'Luxury Collection', to India. These are super
deluxe and premium hotels located at strategic business and leisure locations. The ten hotels
which are part of this collection are: ITC Grand Chola in Chennai, ITC Maurya in Delhi, ITC
Maratha in Mumbai, ITC Sonar in Kolkata, ITC Grand Central in Mumbai, ITC Windsor

62

& ITC Gardenia in Bengaluru, ITC Kakatiya in Hyderabad and ITC Mughal in Agra and
ITC Rajputana in Jaipur.

Welcom Hotels offer five-star hospitality for the discerning

business and leisure traveller. Currently there are three hotels under this brand
namely, Welcom Hotel Rama International Aurangabad, Welcom Hotel Vadodara and
WelcomHotel Grand Bay Vishakhapatnam. Two other Welcom Hotel Sheratons - Sheraton
Park Hotel and Towers, Chennai and Sheraton New Delhi offer warm, comforting
services to the global traveller and a chance to connect.

Fortune Hotels operates mid-market to upscale properties

in the first-class, full-service business hotel segment all over India, in major metros, mini
metros, state capitals and business towns, promising business and leisure travelers a wide
choice of destinations and accommodation. Fortune Hotels currently has hotels operating in
Ahmedabad, Chennai, Gurgaon, Indore, Jaipur, Jammu, Jamshedpur, Kolkata, Ludhiana,
Madurai, Navi Mumbai, Ooty, Port Blair, Pune, Tirupati, Trivandrum, Vapi, Vijayawada,
Vishakhapatnam, Hyderabad, Lavasa, Noida, Manipal, Bengaluru, Mussoorie, Goa, Thane,
Gandhinagar and Mysore while several more hotels are expected to be commissioned soon in
other key locations in India.

Welcome Heritage brings together a chain of palaces,

forts, havelis and resorts that offer a unique experience. Welcome Heritage endeavours to
preserve ancient royal homes and the historical Indian grandeur and opulence for the future

63

Indian generations. WelcomHeritage provides a fine range of hotel services inside these
architectural legacies present in Rajasthan, Madhya Pradesh, Uttarakhand, Himachal
Pradesh, Jammu & Kashmir, West Bengal, Karnataka, Tamil Nadu, Punjab, Haryana, Assam,
Sikkim, Meghalaya, Arunachal Pradesh, Uttar Pradesh, Maharastra, Kerala, Andhra Pradesh
and Puducherry.
WelcomEnviron

WelcomEnviron is ITC Hotels' vision for a green world. It's a multi-faceted programme
started in order to propagate environmental causes in the cities where ITC Hotels' hotels are
located. With the guiding principle of 'Reduce, Reuse and Recycle', each hotel has its own
programme, encompassing local participation, creating awareness among employees and
internal
conservation.

ITC Green Centre

The ITC Green Centre in Gurgaon, the headquarters of

ITC's Hotels Business is the physical expression of this commitment to
sustainability - Ecological, Social and Economic. This building is one of the world's largest
green buildings with space of over 170,000 square feet and the first non-commercial complex
in the country to be awarded the United States Green Building Council-Leadership in Energy
and Environmental Design's (USGBC-LEED) platinum rating - the highest in the order.
At ITC Green Centre, energy consumption has been reduced significantly through design
integration. The building has been designed to maximize the effect of natural light during
daytime, largely eliminating the need for artificial ones. At the same time, the window glass,
while allowing light inside, does not allow heat. This not only keeps the office cool from
inside during the day, but also decreases the load on air-conditioners. Again, there is
minimum exterior lighting to limit night sky pollution. The water consumption has dropped
by 40 per cent and, with a water re-cycling plant, the building is now a zero water discharge
64

building.
Hillary Clinton's visit to ITC Green Centre

ITC Hotels - Empowering Differently-abled people

ITC Hotels has established that if provided with an opportunity to

work and become self-sufficient, people who are differently abled can significantly
contribute to the workplace, families and the community. ITC Hotels has taken a positive
step in this direction by employing people who are differently abled across its hotels. ITC
Hotels believes that everyone should be treated with sensitivity and empathy. The models it
has created have been effective and have succeeded in sensitising other employees to the
needs of those differently-abled. Keeping in mind their specific skills, over 100 differently
abled have been employed in diverse functions like housekeeping, teleworking, bakery and
as musicians. Special badges for the visually impaired, whistles for hearing impaired
employees to use in an emergency and sign language classes for the staff to communicate
with them are just a few examples of how ITC Hotels has created an atmosphere of
sensitivity and caring.

ITC Hotels has also published a booklet aimed at sharing experiences with the rest of the
corporate world and laying down a step-by-step guide to demystify the perceived
complexities around employing persons with disabilities.

Please click on the following link to download the booklet:

Awards
ITC Hotels' strategy of benchmarking against international standards has won its hotels
many laurels.

ITC Gardenia, Bengaluru is the first Indian Hotel and world's largest, to get
the LEED Platinum rating - the highest green building certification globally.

ITC Hotels was named the Best Premier Hotel Brand at the Galileo-Express
TravelWorld Awards 2008 & 2006. ITC WelcomHeritage won the Best Heritage
Hotel Brand award in 2006.

65

ITC Maurya, New Delhi received the award for 'Best Luxury Hotel' at the Star
Hospitality Awards 2007-08 and the NATIONAL TOURISM AWARD 2007 for
'Best Eco-Friendly Hotel' from Ministry of Tourism.

WelcomHotel Sheraton New Delhi won the Golden peacock Award 2008 for
Environment Management. It was also conferred the '6th Annual Greentech Safety
Award' in the Service Sector for the year 2006.

The NCPEDP-Shell Helen Keller Award 2008, 2007 and 2006 to ITC Hotels for
the vision, policies and practices demonstrating the belief in equal rights and gainful
employment for persons with disabilities.

The National Tourism Award 2007-08 to ITC Grand Central, Mumbai for the best
private public enterprise providing facilities for physically challenged guests at the
hotel. WelcomHotel, Delhi won the same under the category - Best Eco-Friendly
Hotel in 2004-05.

The PATA Gold Award 2005 in the Corporate Environmental category for
the WelcomEnvironinitiatives of ITC Hotels.

ITC Sonar, Kolkata has been declared as one of the best hotels in the
worldby the Association of British Travel Agents (ABTA) in the April 2004 issue of
its magazine 'Business & Travel'. ABTA also rated Dublin amongst the top 20
bars and Bukhara the best restaurant in Asia and the finest Indian restaurant in the
world.

ITC Maurya, New Delhi is the only hotel in India, to have won the British Safety
Council's 'Sword of Honour' thrice.

ITC Maurya, New Delhi is also India's first hotel to be accorded the ISO 14001
certification for its Environment Management Systems. Eight more ITC
Hotels followed in quick succession: ITC Windsor, Bengaluru; ITC Kakatiya,
Hyderabad; ITC Mughal, Agra; ITC Rajputana, Jaipur; MyFortune, Chennai;
Sheraton Park Hotel and Towers, Chennai, ITC Maratha, Mumbai and ITC Sonar,
Kolkata.

ITC Maurya won the Golden Peacock Innovation Management Award in 2008. It
is the first hotel in India to be awarded the Golden Peacock Environment

66

Management Award for 2001 by the World Environment Foundation. It won this
award again in 2004.

ITC Maurya has been awarded certificate for Excellence in Food Safety
Standard from Starwood Asia Pacific Hotels & Resorts in 2008.

ITC Maratha at Mumbai was declared to be the Best Luxury Hotel

of the Year 2002, by the Federation of Hotel and Restaurant Associations of India.

ITC Mughal at Agra was Asia's first winner of the Aga Khan Award for
Architecture.

ITC Mughal was conferred the Greentech Silver Award for safety and
Environment in 2008.

The prestigious 'Golden Fork Award', was also bestowed, by the International Food
and Wine Writers Guild, to Bukhara and Dum Pukht restaurants at ITC Maurya.

Bukhara at ITC Maurya in New Delhi has been declared the Best Indian
Restaurant in the worldby 'The Restaurant Magazine', UK. It has also been voted
the Best Restaurant in Asia and is the only Indian restaurant to feature in the list
of 50 Best Restaurants in the World for five years since 2002.

ITC Maurya has won Awards for the Best North Indian (DumPukht) and the Best
Whisky Bar (Golf Bar) in India. Icons of Whisky, the most prestigious Whisky
Awards in the World was launched in India for the first time at ITC Maurya in the
year 2008.

Kaya Kalp - The Royal Spa at ITC Mughal Agra, launched in May 2008, has been
rated the'World's Best City Spa', by Tatler. It is the only winner from India in 2008
and finds a place, in the prestigious Tatler Spa Guide for 2008 - featuring 101 of the
best spas of the world.

ITC Maurya and ITC Mughal have both won the 'Green Hotelier Awards'.

ITC Maurya has also won the International Hotels & Restaurants Association (IH &
RA) environmental award twice.

67

ITC Grand central received the Federation of Hotel & Restaurant Association of
India 'Environment Champion Hotel of the Year' in 2008. ITC Maurya won this
award in 2002 and 1997 and ITC Mughal, Agra, in 2003.

Fortune Hotels won the Hospitality India Award for the year 2008 in the category of
the Best First Class Hotel Chain for the second time since 2006.

Bay Island at Port Blair, Andaman, was

Tomorrow' award by British Airways in 1993.

presented 'The

2.4
BUSINESS SEGMENTS & BRANDS

68

Tourism

For

As seen from the graphs given below, Cigarettes contribute close to 65% of ITCs total gross
revenues however owing to the high incidence of taxes, this segment amounts to ~50% of the
revenue on a net basis. FMCG others segment has gradually increased its contribution over
the years and is expected to be a major growth driver in the coming years.

2.5
THE FINANCIAL PERFORMANCE OF ITC LIMITED :The 10 YEAR X-RAY of ITC Ltd. shows that the financial performance of the company has
been very good for the last 10 years except for a bit of a slowdown in FY 2009. With a
monopolistic position in the cigarette business (the major revenue contributor) and addictive
nature of the product leading to inelastic demand, Net Sales have registered a growth of more
than 12% for most of the years.
Also, with this leadership position and a strong brand image, it has been able to pass on
excise duty hikes by government to the consumers and thus maintained its margins. Infact
cigarette EBIT margins have gone up from 21% in FY 2002 to close to 28% in FY 2011.
Over the years ITC has also diversified into other businesses. This has led to a slight
reduction in Operating Profit and Net Profit margins over the years; however with the other
FMCG businesses showing good performance over the last 2 years and getting close to
breaking even, margins have shown improvement in the last 2 years and are expected to
improve further. ITC has thus shown good, consistent growth in EPS over the last 10 years
and is expected to continue it going ahead. With retention of close to 50% of its profits over
the last 6 years, Book value per share has also shown good growth except in FY 2010 when
company paid out special dividend. The cigarette business is a strong cash generator while
69

cash consuming businesses like Lifestyle retailing, Personal care, Foods etc are slowly
moving towards breaking even. This combined with very efficient working capital
management has helped ITCs strong cash generation.
The company has also managed its funds efficiently which is indicated by the Return on
Invested Capital which stands at ~32% on an average over the last 6 years. The company is a
virtually debt free company which is a big positive. Working capital days are on the higher
side largely due to the large amount of cash in books (~Rs. 2240 Cr. as of FY 2011).

2.6
Business Strategy of ITC Pvt .Ltd.
ITC Pricing strategy:
The pricing of the ITC food division depends upon the Customers demand schedule, the cost
function and the competitors price. The pricing of the company is such that it caters to the
need of all income groups of people but special provision has been kept for Low and middle
income group, and their pricing are competitive with respect to other players like Britannia,
Parle and Brisk farm. The company follows the Going rate pricing that is the price of the
product depends upon the competitors price. The firm chooses pricing more or less the same
as Market leader.
ITC Promotional activities
A particular budget is allocated for the promotion of the products, the local promotion
scheme is decided by the Area Sales Manages, it give its suggestion to the District office and
that is forwarded to the Head Quarter in Kolkata. In another promotional scheme for Biscuits
a particular number of cases is given freely to the distributors according to the amount of sale
70

they make, this was a Drop down promotion ,i.e. of the number of free cases that a particular
distributors gets, off them a certain part is reserved for the retailers and customer if they buy a
certain level of biscuit quantity.
ITC Distribution
Buoyed by a strong distribution network ITC is likely to retain its market share in the
cigarettes business; the ban on advertisements is likely to work in favour of ITC thanks to the
recall factor. The company's reliable distribution network also ensures superior inventory
turnover than its peers.
Advertising
Advertising is the means of information and influencing the general public to buy products
and services through visual or oral message. the product or services are advertised to creat
awareness in the minds of the potential buyers. Some of the commonly used media are like
t.v. ,website,newspapers,magazines,etc..

2.7
Sales promotion
There are three types of sales promotion strategies :1.a push strategy
2.a pull strategy
3. combination of both
A push sales promotion involves pushing distributor or retailer to sell your product or
services to the consumer by offering various kind of promotion and selling effort. The basic
objective of the strategy is to persuade retailers, wholesaler, and distributors to carry the
brand, give it shelf space, promote it by advertising and ultimately push it forward to the
consumer. Typical
push sales promotion includes buy back guarentees,free
trials,contest,discount,and special advertising items.
Consumer Buying Decision
The main driver in attracting the consumers is Quality of the product itself with nearly65% of
the people surveyed citing it as the main criterion for choosing the product, followed by past
experience of the consumer with the brand (17.6%). Price was third criterion with a
percentage of 11.7% of the people surveyed gave importance during buying .An effective
advertisement will attract more and more customer to buy, helps in the brand and image
formation, and informative in telling the USP of the product.
The above graph shows the experience of the customer after using the product i.e. whether
they were satisfied with the product as a whole. The higher the satisfaction level higher will
be the chances that the customer will buy the same brand again and again that leads to the
building of the Brand loyalty. The Availability of the Product itself determine the

71

effectiveness and the penetration of the distribution channel of that particular brand
among the people.
Analysis on Diversification
ITC has been a leader in the tobacco business, but it realize from the up coming trends that
remaining with a single business is not a noble thought, moreover the company was
threatened of the anti-tobacco campaign. Therefore the company decided to venture into
InfoTech with ITC InfoTech, foods via Kitchens of India, greeting cards through Expressions
and lifestyle retailing through Wills Sport. Each of these is intended to draw revenues of at
least Rs. 250 crore by 2005.ITC was a cash rich company with a liquidity of Rs.8816 million
in the cigarette business, even though the company understood the need and usefulness of
diversification. The writer in the article is mainly concerned with the way ITC spreads its
wings in the lifestyle segments, he writes:
forty-five stores in 34 cities in just under a year, selling an expensive fashion brand of
relaxed-wear. If retail swamp-out and brand salience were the goals, ITCs Wills Sport would
be on a victory lap already.The company has started its retail stores not only in Indian
metros but also in the small towns like Ranchi, Jabalpur, Gwalior, Belguam, Ernakulam etc.
the article also talks about the strong market campaign done by the company, it also describe
how the company has used its brand image to attract the Indian youth. It also tells about the
strategy adopted by the company to differentiate itself in this segment, like the company is
outsourcing its designs form
the
American Design Intelligence Group (ADIG), a SanFrancisco, US-based garment and retail
consultancy. Now it has its own six-member team, even as it continues a tie-up with Science
& Designs, an Italian fashion design house through which it keeps a watch on hot western
labels such as Banana Republic and Armani Exchange.
Financial Analysis of ITC Ltd.
In the quarter ended June, 07, ITCs net profit grew 20% to Rs.782.87 million and net sales
rose up 17% to Rs.3325.23 million. This profit growth was primarily driven by its cigarette
business because of high margin and agribusiness, but its top line growth mainly comes from
non tobacco business and agro business. ITC is facing pressure on its consolidating operating
margin due to continued losses by its non- cigarette FMCG business and decline in the
profitability for paper and paper board business. Higher advertising expanses, which grew
35% in FY07 and freight cost, which were up 31% last year, have also affected the margins.
Going forward, the focus will be on the performance of its non tobacco FMCG business,
which has begin to show sign of turning around. ITCs top line and bottom-line growth is
likely to be marginally affected looking at its aggressive investment in hotel and other FMCG
business. Its recent foray in to home and personal care also need immediate investment. At
the current market price of Rs.180, the stock is valued at around 20.5 times its FY08estimated
earning per share of Rs.9. this is significantly lower than its historical price to earnings
multiple of around 25 and also lower than its peers in FMCG sectors. This provides 20-25%
upside over the next 12-18 months

72

2.8
The limitation of the project
Skill set shortage
Maintaining high quality standards
Lack of talent pool
Unable to do primary research
Confidentiality
Enhanced risk management
Time constraint

73

OBJECTIVE - 3

The objective of the project

The primary objective of this study is to systematically explore the determinants responsible
for the competitive advantage of ITC Limited and how ITC developed new product lines in
its foods business drawing on its competencies in brand-building, R&D, packaging, and
distribution. However, market analysts were not sure whether ITC would achieve success in
all the food categories that it had entered.
Why people are buying the products.
What all the things which influences them to buy
To understand how ITC has diversified themselves to a multi-product corporation
from a single product company

74

RESEARCH METHODOLOGY -4
4.1
Research methodology:It is well known fact that the most important step in marketing research process is to define
the problem. Choose for investigation because a problem well defined is half solved. That
was the reason that at most care was taken while defining various parameters of the problem.
After giving through brain storming session, objectives were selected and the set on the base
of these objectives. A questionnaire was designed major emphasis of which was gathering
new ideas or insight so as to determine and bind out solution to the problems.

DATA SOURCE
Research included gathering both primary and secondary data. Primary data is the first hand
data, which are selected a fresh and thus happen to be original in character. Primary Data was
crucial to know various customers and past consumer views about bikes and to calculate the
market share of this brand in regards to other brands. Secondary data are those which have
been collected by someone else and which already have been passed through statistical
process. Secondary data has been taken from internet, newspaper, magazines and companies
web sites.

RESEARCH APPROACH
The research approach was used survey method which is a widely used method for data
collection and best suited for descriptive type of research survey include research instrument
like questionnaire which can be structured and unstructured. Target population is well
identified and various methods like personal interviews and telephone interviews are
employed
.

DATA COMPLETION AND ANALYSIS

After the data has been collected, it was tabulated and findings of the project were presented
followed by analysis and interpretation to reach certain conclusions

75

4.2
RESEARCH DESIGN:-

A research design is the specification of methods and procedure for acquiring the
information needed. It is the over - all operation patterns or frame work of the project that
stipulates what information is to be collected from which sources by what procedure. It is
also refers to the blue print of the research process.

Key issues

Option

Research design

Descriptive

Data

Primary data

Research

Survey method

Research instrument

Questionnaire, expert interviews

Research design consists of:-

A clear statement of the research problem.

Procedures & techniques to be used for gathering information

The population to be studied

Method to be used in processing & analyzing the data

76

There are four types in research design:

Exploratory of formative study

Diagnostic study

Experimental study

Descriptive study

Descriptive study:A study, which wants to portray the characteristics of a group of individual or situation, is
known as descriptive study.
Universe of study:The first step in developing any sample design is to clearly define the set of objects
technically called universe to be studied. In this case the universe includes all employees of
Yashoda hospital.
Data collection
The required data for the project has collected from primary data.
Primary data
It is a fresh data, which was collected from the employees having discussion and interaction
with employees.

4.3
Research instruments

Questionnaire :Questionnaire refers to a device for securing answer to a formally arranged list of question by
using a term, which the respondents fill in himself :-

Questionnaire design :77

Open ended

Closed ended

Dichotomous question

Multiple question

A. OPEN ENDED QUESTIONS :In this question, the respondents answer in his own words . this type of questions is
used rarely because it difficult to weight the result.

B. CLOSED ENDED QUESTIONS:This questions in which respondents is given a limited number of alternatives
from which he will select the one that is more closely matches his opinion or attitude.
C. DICHOTOMOUS QUESTION:A dichotomous question refers to one. Which offers the respondents a choice
between only two alternatives and reduces the issues to its simplest form.
D. MULTIPLE QUESTION:A multiple choice question refers to one. Which provides several set of alternative for
its answer. These type of questions are asked are asks on demographic section of
researcher

DATA ANALYSIS & FINDING - 5

5.1
SWOT Analysis

78

.
SWOT ANALYSIS OF ITC LIMITED- 100 YEARS JOURNEY

ITC Ltd. is one of the Indias largest multinational corporate enterprises. It was registered in
Calcutta with a small office in Radhabazar Lane, with one expatriate manager and one
acquired cigarette manufacturing facility in Munger, in 1910. Now, ITC is one of India's
biggest and best-known private sector companies. In fact it is one of the World's most high
profile consumer operations organizations.
This article is a SWOT analysis of this organisation in its 100th year of operation.
Strengths:
The organisation has some major strength that give it a competitive advantage over its rivals.
1. Strong Financial Performance:
On 31st march, 2010, ITCs market cap was Rs. 114000 crores with a Gross income of Rs.
26,863 crores and Profit after tax of Rs. 4061 crores. The company continues its impressive
record of financial performance.
2. Products Portfolio:
ITCs portfolio of products and services is represented by over 50 energetic Brands in a range
of more than 650 stock keeping units (SKUs).
3. Distribution Network:
ITCS products are available in over 6 million retail outlets in the country.
Its formidable Distribution organisation directly services more than 2 million of these retail
outlets. It used its experience of transporting and distributing tobacco products to remote and
distant parts of India to the advantage of its FMCG products.
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4. Environmental Friendly:

ITC has a status of being Water Positive for the 8th consecutive year, Carbon Positive for
the 5th year in succession and solid waste recycling positive for 3 years in a row. ITC is the
only enterprise in the world of its size to have achieved and sustained these three global
environmental distinctions. As consumers and investors become more environment friendly,
these considerations will provide the organisation an opportunity to create USPs and stronger
brand loyalty and brand equity.
5. Research & Development:
ITC recognizes that cutting edge R&D can foster breakthrough innovation and create
powerful sources of sustainable competitive advantage. This vision has led to the
establishment of a state of the art R&D centre at Bangalore with over 50 world- class
scientists. Its R&D program will create new game changing business opportunities.
6. Socially Responsibility:
ITCs initiatives to build social capital through extensive community engagement have led to
the creation of sustainable livelihood opportunities for over 5 million people. ITC has helped
create more than 20,000 rural women entrepreneurs. ITCs supplementary education initiative
has reached out to over 200000 school children in rural areas. ITCs value chain supports
over 5 million livelihoods.
7. Brand Equity:
ITC is one of the best known brands in India.
The above factors definitely make the company a strong corporate organisation.
Weaknesses:
In spite of several strengths, there remain some areas of weakness and concern for the
organisation.
1. Dependency on the tobacco business:
To fund its cash guzzling FMCG start-up, the company is still dependent upon its tobacco
revenue. Cigarettes account for 47% of the companys turnover and for 80% of its profits. So
there is an argument that ITCs move into FMCG is being subsidised by its tobacco
operations.

80

2. Not present in many important sectors:

Although ITC is a diversified company trading in a number of business sectors such as
cigarettes, hotels, paper, agriculture, packaged foods and confectionary, branded apparel,
personal care and other FMCG products, greeting cards, Information Technology, safety
matches, incense sticks and stationery etc. Yet, it does not have presence in many important
sectors such as insurance, infrastructure, banking and financial services, BPO, telecom,
automotive etc. and thus becomes comparatively weak when compared with other
conglomerates like the Bharti group, the Tata group and the Ambani groups.
3. Local Company:
ITC is a local company. It does not have a large portfolio of exports in either products or
services. This makes the company comparatively weak in terms of being able to leverage
global opportunities, talent & financing.
The above represent some of the major weaknesses the company has.

Opportunities
What does the future have as areas of opportunities for the company?
1. Leveraging its brand equity
ITCs products & services are of high quality. If ITC enter into any business or launch any
product, consumer know its ITCs product, consumers shall trust these to be of good quality.
ITCs brand equity would make ITC successful in most sectors.
2. Right size at the right time:
A corporate must have the right organisational and investment capability and this must
coincide with a growth stage in the economy in which it operates. This seems to be a perfect
setting for ITC. Given the consumption of most products and services in India at a level far
below the global standards and that the Indian economy is on a roll make it a perfect platform
for a company like ITC which already is at a fairly strong stage in its own growth with the
necessary organisational and financial muscle. For example, the FMCG sector is expected to
triple in size to over Rs. 355000 crores by 2018. ITC is a major player in this sector. ITC has
investment opportunity of up to Rs. 8000 crores over the next 7 to 10 years to drive growth in
this sector

81

For example, in Personal Care Products, Per capita consumption in India is among the lowest
in the world offering an opportunity for ITCs soaps, shampoos and fragrances. Similarly,
Indias consumption of Paper, Paperboard & Packaging is one of the lowest in the world at
around 5 kg. per year compared to nearly 300 Kgs in US, 200 Kgs in UK and 45 Kgs in
China. With spread of education and economic growth, demand is expected to grow. ITC has
an investment opportunity of up to Rs. 6000 crores for growth.
Further, ITCs Hotels are at the vanguard of service excellence and are an embodiment of
"Responsible Luxury". International arrivals in India are only 5 million a year, compared to
around 80 million in France, 58 million in US and 55 million in China. At conservative
estimates, India needs 50000 rooms in next 2 to 3 years. This sector too carries an investment
opportunity for ITC of up to Rs.9000 crores in the next 7 to 10 years to fuel its growth.
ITC FMCG brands such as Aashirvaad, Mint-o, Bingo, Sun feast and others operate in such
high growth segments that given ITCs strengths in market development, product development
and marketingpenetration, the company can script its own growth targets and achieve it.
3. Synergies across businesses and leveraging domain expertise for growth in other sectors:
ITCs fast growing Information Technology subsidiary is founded on a strong base of domain
knowledge derived from ITCs multiple businesses. It will continue to add significant value
to ITCs business by providing solution and by enabling them to leverage Information
Technology as a source of superior competitive advantage.
Similarly, ITCs agri-business with its deep rural linkage is well poised as a supply chain
partner to create value for ITCs Food and Tobacco businesses. Its large presence in rural
India, with the unique e-choupal infrastructure, will be progressively leveraged to widen
ITCs FMCG distribution network. ITC uses the network to source and create the raw
material from the farmers.
4. The unique reach and distribution network of E-choupal:
E-choupal is a community of practice that links rural Indian farmers using the internet. It is
also an ambitious project that has a goal of reaching 10 million farmers in 100000 villages. It
has already benefited 4 million farmers in 40000 villages. This platform provides ITC an
opportunity, virtually unmatchable, to ride the rural growth that India in witnessing for the
current sets of products and services and additional ones that can be offered from the same
network.
The above opportunities beckon the organisation as it gets into its second century of
operations.

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Threats
Are there any threats the company needs to be watchful about?
1. Competition:
The obvious threat is from competition, both domestic and international. The law of
economies dictate that if competitors see that there is a solid profit to be made in an emerging
economy, more and new products and services will be made available. Global companies will
see India as an exciting opportunity for themselves to find new market segment for their own
offerings. This will put ITC under constant and sustained competitive pressure from
international offerings with deep pockets for a long battle.
2. Pressure groups and Government Policy:
Tobacco and allied product businesses, a major cash cow for ITC, will remain under public,
anti-tobacco, health lobbies and governments through higher excise duties, advertising
restrictions, and packaging guidelines, point of sale restrictions, cancer and TB campaigns
with even a remote possibility of complete ban.
3. General threats:
Wide income disparities leading to social tensions, terror acts, political risks, legislation
changes, tiffs with taxation and excise authorities and public outrage from negative impacts
of products d services remain general treats for the company.
The above, though few, could be potent threats to the company.
In summary, ITC will need to overcome its weaknesses, leverage the opportunities through its
multiple strengths and be wary of the threats to march into another 100 years of its glorious
journey.

5.2
ANALYSIS & INTERPRETATION

1) How many people use itc products and services?

83

yes
no

2) Which INFOTEC SERVICES do you use more?

50
40
30
20
10
0
ITC

HCL

DELL

3) Where do you buy itc products from?

malls
super market
retail stores

4) Which factor below influence you to decide the product?

84

50
40
30
20
10
0
price

quality

status symbol

5) Does advertisement influence your decision in choosing product?

Sales
yes
2nd Qtr
can't say

6) How do you come to know about itc product?

friends/relatives
magazine
television
news paper
0

5 10 15 20 25 30 35 40 45

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CONCLUSION - 6
ITC promoting their brands through advertisement campaign as well as door to door promotion.
ITC is also focusing on Retailers and Wholesalers to promote their brand.
The demand of their product in very low, because people dontknowabouttheirbrandsverywell.
ITC knows their strength and weakness in the personal care market, so they are applying new concept to
overcometheirweaknesses.
ITC now offering more margins, exiting offers and long credit period to retailers and wholesalers.

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RECOMMENDATION - 7

According to the survey conducted and after analyzing the Price, Promotion, Place
and Product of the ITC and the consumer behavior in the market the company can
implement the following measure for increasing the sales and volume of their
products.

Advertisement for the Aashirvaad atta is found to be ineffective and infrequent. So,
the company can come up with an aggressive advertisement to attract the Indian
housewife as they are found to be the decision maker in the buying of Atta.

The company can come up the concept of forming a Retail chain of Food products a
cross all over India as it is follows the marketing strategy of Umbrella branding .In
such retail chains all the food division products can be sold at the discounted rate, as
more and more products are coming under the Umbrella products like food
processing.

The branded atta can be exported to other countries where we are currently exporting
the whole wheat.

The company can approach the government or distributing their products in Military
canteens and can sell them to organization that provides the after noon meals to the
children as a part of mid-day meal scheme.

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BIBILOGRAPHY - 8

Books:Marketing strategy by O.C.Ferrell, Michael Hartline

Times of India daily newspaper
Times of India magazine, itc topic.

www.itcportal.com
www.sharetermpaper.com
www.google.com
WWW.MONEYCONTROL.COM

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ANNEXURE-9

QUESTIONNARIE

1) How many people use itc products and services?

Yes
No
2) Which infotech services do you use?
Itc
Hcl
Dell
3) Where do you buy itc products from?
Mall
Super market
Retail store
4) Which factor below influence you decision?
Price
Quality
Status symbol
5) Does advertisement influences your decision in choosing product?
Yes
No
Cant say
6) How do you come to know about itc products ?
Newspaper
Television
Magazine
Friends/relatives

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