A REPORT

ON
UNDERSTANDING CHANNEL DYNAMICS FOR ENHANCING
THE SALES OF ITC PRODUCT
(B- NATURAL JUICES.)

At

By
SAKETH VEMULA
18BSPHH01C1081

IBS HYDERABAD

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 A REPORT
ON
UNDERSTANDING CHANNEL DYNAMICS FOR ENHANCING
THE SALES OF ITC PRODUCT
(B- NATURAL JUICES.)
At

ITC Ltd.
Secunderabad, 500003, India

A report submitted in partial fulfilment of the requirements of MBA

Program of IBS Hyderabad

Faculty Guide Name: - Mr. Venu Gopal Rao

Company Guide Name: - Mr. Uday Bapanapalli
(Assistant Branch Manager)

Date of Submission: 12th May, 2019

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 AUTHORISATION

This is to certify that I, Mr. Saketh Vemula, a student of Post Graduate Degree in
MBA 2018-2020 ICFAI Business School, Hyderabad has worked under the
guidance and supervision of Mr. Venu Gopal Rao. This Summer Project report has
the requisite standard for the partial fulfillment of the Post Graduate Degree in
Business Administration. To the best of my knowledge, no part of this report has
been reproduced from any other report and the contents are based on original
research.

Saketh Vemula
18BSPHH01C1081 -------------------------

Certified by:
Udaya Kumar Bapanapalli -------------------------
Company Guide

Certified by:
Mr. Venu Gopal Rao -------------------------
College Faculty Guide

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 ACKNOWLEDGEMENTS

I take this opportunity to acknowledge and express my gratitude towards some of

the most eminent people whose presence is noteworthy & seminal in giving me a
grand opportunity to associate myself with an esteemed organization like ITC Ltd.
I am grateful to Mr. Udaya Kumar Bapanapalli (Assistant Branch Manager) and
Mr. Phani (Area Manager) for entrusting upon me the confidence and providing
me a chance to get an on-the-job experience in the various fields of Marketing &
Sales.

I am also thankful to Mr. Upendra Bantu (Area Executive) for his Endeavour
towards providing continuous guidance to help build an understanding of the
practical aspects of the work, gain knowledge & valuable experiences. I am grateful
to him for his outreaching support and helping to build a motivating work
environment and inculcating a feeling of constantly striving to achieve higher goals.
His enterprising, dynamic, forward-looking, radical approach provides an
opportunity to work under an accomplished mentor like him to inculcate and instill
valuable talent.

I consider my nearly three month’s summer internship at ITC Ltd. (Hyderabad)

to be a crucial learning period. I am deeply indebted to all the supervisors to
provide all the support when necessary. I am thankful to Faculty Mentor Mr. Venu
Gopal Rao for his valuable time and guidance provided whenever needed. His
suggestions have been instrumental in building the foundation for this report.

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 TABLE OF CONTENTS
S. No Contents Page No
Cover Page 1
Title Page 2
Authorization 3
Acknowledgement 4
Table Of Contents 5-6
Abstract 7-8
Scope of the study 9
Project Objectives 9
Research methodology and Limitations 10

Chapter One - Introduction

1.1 About the company 11
1.2 ITC in FMCG sector 12-14

Chapter Two – Research study

2.1 B Naturals 15-16
2.2 Research 17

Chapter Three – Data Analysis

3.1 SWOT Analysis 18
3.2 Questionnaire analysis 19-22
3.3 Pricing 23-27
3.4 Merchandising 28
Findings 29
Recommendations and conclusion 30

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 Attachments 31
References 32
Glossary 33

LIST OF ILLUSTRATIONS
Figure no. Particulars Page No.
1 Market segmentation of 12
FMCG
2 ITC sales growth 13
3 B Natural new pet bottles 16
4 B Natural Pricing 23
5 Real Pricing 24
6 Real Pricing 24
7 B Natural Merchandising 29
schemes

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 ABSTRACT

This internship is part of the Summer Internship Program of IBS Hyderabad and is
taken up by ITC Limited, Hyderabad. The main goal of the internship is to promote
and scale up the sales of food sector but mainly B Natural Juices which comes in
Tetra pack having 12 different flavors.
ITC being the leading FMCG Company in India however faces tough competition
from many other companies the sector like HUL, P&G, PEPSICO, NESTLE,
FRITO-LAY, COCACOLA and many other brands including few local brands as
well.
The internship started with a brief understanding about marketing and sales in ITC
and some ways to achieve the desired targets and goals by the means of salesman.
Later I was allocated to one of the 22 WD’s (Wholesale dealer) /Distributer present
in Hyderabad named Shanmuganand and Sons located at Sanath nagar. Almost
900-1000 outlets like Grocery stores, Bakeries, Supermarkets, ISS and Wholesale
outlets are under service of our WD.
Initially I undergone training by working with GR1C ‘Dealer Salesmen’ (DS) for
Juices Drive for a month where I observed and learned many things about sales and
marketing and its importance to achieve targets and improve sales. Also many other
things like customer relationship & support, schemes over the products, incentives
and also how merchandising helps a consumer and customer choosing over the right
product in this cut throat completion.
I also started following AVF concept i.e. Availability, Visibility and Freshness of
the ITC products in the respective market and achieving all these three is a major
challenge but once done right can do wonders to the sales of the products.
Then I also worked with other DS(salesmen) of GR1A, GR1B, GR1C to gain more
insights about ITC and its products and know how products like Biscuits, Personal
care, Atta, Chips, Snacks, Noodles, Confectionary and so on move in and issues and
problems faced in market and gained more knowledge about the market & different
products.

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Later I started the competitive Analysis of B Natural juices by considering
different factors like Price, Availability, Brand awareness, Consumer and Customer
behavior over B Natural and also looking at the major competitors being Real,
Tropicana, Minute Maid and few other local brands using questionnaire and also
through my observations and direct interactions with people.
I almost visited nearly 900 outlets with salesmen during this internship where I had
direct conversation with our customers/outlet owners and collected so much data and
gained practical knowledge. I also observed buying behavior of different people,
consumers, shopkeepers and how different outlets in different market behaves
differently with a keen eye over competitors in each area and locality to understand
about juices industry and how it operates.
Work timings of salesman were from 9am to 3pm where I started on route with
salesman and used to visit nearly 35 outlets each day and used to observe the market
and collect the data accordingly on different things like issues faced and factors
affecting B Natural.

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 SCOPE OF THE STUDY

This study is helpful to the company in knowing different factors effecting B natural
juices and its sales and also possible solutions to overcome the issues faced in the
market. This report is based on my direct interactions, data collected through
questioners and my observations.
During my internship, I was daily vising outlets along with the salesman in his
respective route map where I had direct interactions with customers (Retailers, Shop
keepers, ISS staff, Supermarket staff and Wholesalers). I also observed many things
about buying behavior of both customers and consumers.
I also compared our product (B Natural) with competitors and the way different
markets accepting different type of products.

PROJECT OBJECTIVES

 To learn and acquire knowledge about the various products and services of
the organization.
 To understand the different distribution channels and dynamics of FMCG
sector.
 To enhance the sales of B natural Juices.
 To Analyze different market situations and their behavior
 To apply marketing concepts to problems and issues within industry.
 To identify and analyze a target market and segmentation.
 To observe and participate in business operations
 To apply Marketing & business concepts to real-world decision-making to
enhance sales.
 To do analysis of ITC products with its competitors.
 To understand buying behavior of Retailers, Wholesalers, bakery and ISS
outlets & understand consumer behavior.

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 RESEARCH METHODOLOGY

This report is based on Primary data.

Research Design : Competitive and descriptive analysis.
Research Instrument : Questionnaire, Direct interactions, Observations.
Sample Method : Random Consumers and Customers data
Sample Size : 86
Sampling Design : Convenience Sampling

LIMITATIONS OF THE RESEARCH

 This Project is confined to only General trade.

 This Project is restricted to a particular geographical region i.e. outlets
serviced by Shanmuganand and Sons ( Sanath nagar, Hyderabad )
 Time constrain.
 This project is also based on data collected by questionnaire where responses
can be biased.

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 Chapter 1- INTRODUCTION

Background of study:-
1.1 About the company:-
ITC Limited is an Indian Multinational Conglomerate Company headquartered in
Kolkata, West Bengal which was founded in 1910.
ITC provides employment to 32,000 people at more than 60 locations all over India
and is part of Forbes 2000 List. ITC is India's most valuable and admired companies
with a market capitalization of 3.3 lakh crores.
Previously, ITC is mostly known for its cigarettes & tobacco. Currently ITC sells
81% of cigarettes in Asia where the market worth is close to $11 billion. Now ITC
is a leading multi-business Indian enterprise with presence in FMCG, Paper,
Packaging, Agribusiness and Hotels & IT
ITC is hugely diversified with multi-business portfolio having a wide range of
products and sectors such as
 FMCG sector
i) Foods
ii) Personal Care,
iii) Cigarettes and Cigars,
iv) Branded Apparel
v) Education
vi) Stationery Products
vii) Incense Sticks and Safety Matches
 Paperboards & Specialty Papers
 Hotels
 Packaging
 Agri-Business (such as Food Grains, Marine Products, Processed food,
Coffee, etc.)
 Information Technology

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ITC Mission:

To enhance the wealth generating capability of the enterprising in the globalizing

environment, delivering superior and sustainable stakeholder value.

ITC Vision:

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

1.2 ITC in Indian FMCG Sector:-

India is a developing mixed economy where it is world’s seventh largest economy
and also third largest in PPP (Purchasing Power Parity). Also 1st in terms of more
youth population in the world. Services sectors like IT and BPO industry is one of
the fastest growing and largest in the world.
In India, FMCG industry occupies fourth position with youth population growing
with the Purchasing power of the people. This sector has 3 main segments i.e. food
and beverages which accounts for 19 % of the sector, healthcare which accounts for
31 % and comes personal care & household which accounts for almost 50 %.
Indian FMCG sector is one of the fastest growing where it has grown from US$ 31.6
billion in 2011 to US$ 49 billion in 2016. Later it grew 14.8 % during October-
December 2017. The sector is further expected to grow at a Compound Annual
Growth Rate (CAGR) of
Market Segmentation Of Fmcg 20.6 % to reach US$ 103.7
2% billion by 2020.
10% Food & Beverages
Personal Care
15% ( Figure 1)
Tobacco
53%
Household Care
20% Lightning

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ITC is one of the India’s largest and leading marketer in FMCG business.
ITC has majorly 25 mother brands which are growing and increasing market share
day by day.
Sales growth of ITC in FMCG sector:

(Figure 2)
ITC has FMCG portfolio as
1. Foods
i. Sunfeast
ii. Aashirvaad
iii. Bingo
iv. Kitchens of India
v. Yipee Noodles
vi. B Natural
vii. Mint-O
viii. Candyman
ix. Gumon
x. Fabelle
xi. Sunbean
xii. Wonderz milk
xiii. ITC Master chef
xiv. Farmland.

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2. Personal care
i. Fiama
ii. Vivel
iii. Engage
iv. Nimyle
v. Savlon
vi. Charmis
vii. Dermafique
viii. Essenza Di Wills.
ix. Shower to Shower

3. Education & stationary

i. Classmate
ii. Paper Kraft

4. Cigarettes
i. Insignia
ii. India Kings,
iii. Classic,
iv. Gold Flake,
v. American Club,
vi. Navy Cut, Players,
vii. Scissors, Capstan,
viii. Berkeley,
ix. Bristol, Flake,
x. Silk Cut,
xi. Duke
xii. Royal

5. Agarbattis
i. Mangaldeep

6. Lifestyle retailing
i. Wills

7. Safety matches
i. Home lites
ii. Aim

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However my project and report is confined to only GR 1(FOODS) sector especially
B Natural juices.
GR 1(FOODS) is divided as follows:-
GR1 (A) - BISCUTS, CONFECTIONARY, NOODLES, PASTA.
GR1 (B) - ATTA, SPICES, SALT, RT (GJ)
GR1 (C) - SNACKS, JUICES, CONFECTIONARY.

Chapter -2 (2.1) B-Natural:

B Natural entered the Juice market in 2015 as it keeps on diversifying into different
areas and sectors and increasing the product portfolio and started competing with
existing brands like Real and Tropicana
B Natural Made from Fruit not from Concentrate

B Naturals comes in Tetra packs of 200ml and 1 liter having 12 different flavors
namely Mango, Guava, Litchi, Pomegranate, Orange, Mixed Fruit , Pineapple,
Apple, Masala Jamun and also Punjab da Kinnow for North, Bael for North &
East and Phalse for North & West.

ITC positioned B Naturals as a healthy drink made from fresh fruits without adding
preservatives so it can have a competitive advantage over other juices.

These juices comes in both 200ml and 1000ml tetra packs priced at MRP ₹20 and
₹99 respectively.

(Picture from https://www.itcportal.com/businesses/fmcg/foods.aspx)

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 Recently, B Naturals also launched new range of pet bottle beverages of
premium category juices focusing a specific target consumers who prefer even
more natural taste of juice made from pulp and not concentrate and no
preservatives which is priced at MRP ₹ 40 and ₹45 for 300ml and ₹109 &₹99
for 750ml bottles.
The new range is of three variants i.e. Himalayan Mixed Fruit & Dakshin Pink
Guava priced at ₹40 and Ratnagiri Alphonso is priced at ₹45. For 300ml.
According to a release, the brand has rolled out India's first packaged 'Premium
Fruit Beverages' where it is environment friendly recyclable Aseptic PET Bottles
with no added preservatives.

Figure 3 -(Captured in ISS Outlet)

Sales of B Natural at our WD during my internship. (in lakhs)

Sales of B Natural juices has risen rapidly from February 2019 onwards and in the
month of March 2019 with all-time high of 5.31 lakhs followed by April month at
4.25 lakhs. We are expecting to increase the sales even more in this month of May.

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 2.2 RESEARCH

Methodology
The research methodology used here is completive analysis where I compared B
natural with its competitor’s i.e. Tropicana, Real and Minute maid where data is
collected by primary data through direct interactions and questionnaire.
Here, No hypothesis is assumed and data is interpreted only after the data is
collected.

Type of Sampling
Random and convenience sampling is used. Convenience sampling is a type of
sampling done non profitably where the sample is taken from group of people easy
to contact or to reach.
The entire study and research is based upon Primary data and personal & direct
interaction with customers (Retailers, Shop keepers, ISS staff, Supermarket staff and
Wholesalers).

Sample size
The sample size taken is 86 where around 60 are consumer responses and remaining
26 are responses from retailers, Bakers and ISS outlets where all the juices are sold
i.e. B natural, Real, Tropicana and Minute maid .

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 Chapter 3 - DATA ANALYSIS

3.1 - SWOT ANALYSIS of B Natural Juices.

• No Brand Awareness
• Natural & No preservatives • Damage prone
• Healthy • Expensive (consumer
• Tetra pack preferring low price )
• Increasing market of health • Tough Competition.
conscious consumers.

STRENGHTS WEEKNESS

OPPORTUNITIES THREATS

• Local Products
• Creating Brand awareness. • Cheaper drinks
• Positioning as a health drink. • Competition from existing
• Collaborations with fitness and new entrants.
events. • Brand Switchers.

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3.2 - Observations from Data collected through questionnaire:-
These observations are in comparison between B Natural, Tropicana, Real and
Minute maid which are based on consumer and customer responses.

How often People are consuming juices

Most of the responses say that majority of people are consuming juices weekly and
daily basis.
----------------------------------------------------------------------------------------------------
The product people and shopkeepers are most familiar with?

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Tropicana has the most awareness among people (38.4%) then comes Minute
maid with almost 33% followed by B Natural and Real with 18.6% and 9.3%
respectively.
----------------------------------------------------------------------------------------------------
Which Product is mostly demanded by customers?

Tropicana is mostly demanded by customers (45.3%), then next most demanded is

minute maid (26.7%) followed by Real (14%) and least demanded is B Natural
(11.6%)
----------------------------------------------------------------------------------------------------
Do people compare juices with other brands like Paperboat or any other local
brands?

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Which Product gives you the best margin (PTR to MRP)?

Majority 32.7% of Retailer and shopkeepers felt Real gives more profit margin,
then comes Tropicana with 26.9% and Followed by B Natural with 21.2% and
minutemaid with 19.2%.

----------------------------------------------------------------------------------------------------

Which product do you feel as a healthier?

Tropicana is assumed as healthier product with majority of 33.7%, then comes B

Natural with 31.4 % assuming it as healthier followed by Minute maid and Real with
22.1% and 8.1% respectively.

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Which product has best taste?

Again 36% of respondents think Tropicana is tastier, then 29.1% think Minute maid
as tastier followed my B Natural and Real with 17.4% and 16.3% respectively.
----------------------------------------------------------------------------------------------------

Which Product is more attractive or has best packaging?

Almost half of the respondents( 48.8%) think Tropicana has best packaging, then
more than quarter of respondents (25.6%) feel B Natural has best packaging
followed by Minute maid and Real.

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 3.3 PRICING
B Natural
B Natural pricing for 200 ml and 1 litre tetra packs.

(Figure-4)
B Natural pricing for 300 ml and 750 ml pet bottles.

PRODUCT (ml) MRP PTR (Price to Retailer)

300 ml (new) 45 & 40 37 & 33

750 ml 99 & 109 87 (APPX)

Real
Real pricing for 200 ml and 1 litre tetra packs
PRODUCT MRP PTR (Price to Retailer)

200 ml 20 14

1000 ml 99 & 109 78 & 85

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Tropicana and Minutemaid (figure 5&6)
Tropicana and Minutemaid have PTR and schemes similar to B natural and doesn’t
have much a difference among the prices.

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 Pricing in ISS Outlets and Supermarkets:-

Pricing in ISS and supermarket outlets differs a lot from one outlet to other and
differs constantly from month to month periodically and also based on the stock.
Few outlets chooses aggressive offers to let out the old stock move faster. So,
comparison in these outlets give vague idea.
However, here are some of the different offers given by ISS outlets

REAL (BUY 1 ltr and get one 200 ml free)

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B Natural ( Buy 2 get 1 Free)

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Minutemaid (₹30 off on MRP)

Tropicana (3% off on MRP)

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 3.4 Merchandising

B Natural merchandizing
These are the slabs for B Natural’s display ads and shelves based on the category the
outlet falls under. Generally ₹500 is given for the display in any normal outlet.

(Figure 7)

Also, we are trying to spend a lot in end caps as well to promote our product where
we are spending ₹ 5000 for GOLD, PLATINUM and for few FC tier outlets and also
₹15000 for few PLATINUM tier outlets
Moreover, we are spending ₹1500 regularly on category branding.

Similarly, Tropicana and Real are also equally good in merchandising their products
by regularly utilizing display ads and buying end caps.
Merchandising schemes for Tropicana and Real are also similar to B Natural.

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 FINDINGS
Tropicana having more brand value:-
Tropicana being the oldest brand of all compared to competitors, it has gained a lot
of brand awareness and brand value where people are ready to consume it anytime
and over any product.
B Natural having bad taste:-
B Natural has opinions of bad taste compared to other products. Mainly flavors like
Orange, Apple and Mixed fruit where people complained of Orange juice having
bitter taste, Apple juice having Syrup taste and mixed fruit having odd taste.
Real used in Mocktails and Cocktails:-
Most of the pubs and clubs in Banjarahills have a huge demand for Real juices since
it is lighter and the juice easily blends with other beverages and is used in making of
mocktails and cocktails.
Minutemaid being parent friendly:-
During my most of the interactions with ISS outlets, most of the households and
moms are preferring Minutemaid over any other juices as Minutemaid is positioned
as a drink where parents taking an important role in giving right nutrition to their
kids.
Real being cheapest of all:-
Real’s Price to retailer (PTR) being lowest of all even if retailer buys only six juices
without any scheme which makes Real the most pocket friendly to retailers and
outlets.
B Natural = Be Natural:-
B Natural has an advantage of being more natural and healthier of all and it has
positioned it has a health drink where it has a separate target market which prefer
natural and no concentrate drinks.
B Natural!!!!!!!!! :-
B Natural being newest brand of all it is still facing problems in brand recognition
and brand awareness.

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 RECOMMENDATIONS AND CONCLUSION

ITC being leading FMCG company, however it has cut throat competition in every
sector and same with the B natural juices where Tropicana, Real and Minutemaid
has penetrated well in the market but B Natural struggling to compete with the other
brands. So, it needs aggressive promotion and sales techniques to compete well
with recognized brands like Tropicana, Real and Minutemaid.
Major problem with B Natural is its brand awareness, since B Natural is already
positioned as a health and natural juice it can easily associate itself with more
recognised celebrity and need to spend more on advertisements to position the
brand in minds of consumers and need to gain more popularity.
B Naturals also can participate in Fitness events and clubs so that it can be
positioned as healthy drink in minds of consumers and also helps in company’s CSR
activities as well where is plays an important role direct touch with consumers and
customers.
Another important thing is ITC can offer apparels like T – Shirts and Caps to
Salesman where people can look at and it becomes a much easier and cheaper way
of advertisements.
B Natural can opt for Brand Reinforcement where it can periodically reinforce its
brand and gain even more market size and customers.
What is Brand Reinforcement?
The Brand Reinforcement majorly focuses on maintaining the Brand Equity by
keeping the brand alive among both the existing and new customers. This can
be done through consistently conveying the meaning of brand in terms of:
 Core benefits and how it satisfies the demand?
 How is the brand different from other brands?

Finally Collaborations
Collabs with different companies which are positioned themselves in health.
Collabs with Schools and colleges by offering free samples and acquiring the market
share of young population.

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 ATTACHMENTS

Here is the attachment for the Questionnaire

Here is the attachment for the customer and consumer responses

B Natural vs
Tropicana Vs Real (Responses).xlsx

Here is the attachment for the payout details for end cap and merchandising

HYX JU ENDCAP
FINAL.xlsx

Here are attachments for First club program details

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 REFERENCES

https://www.itcportal.com/
https://en.wikipedia.org/wiki/ITC_Limited
https://www.linkedin.com/company/itc-limited/
http://www.adageindia.in/marketing/news/market-share-of-pepsis-
tropicana-slips-by-5-daburs-real-gains-by-2-5/articleshow/57685810.cms
. Kotler, P. and Keller, K.L. (2018): Marketing Management. 16th Edition.

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 GLOSSARY

WD – Wholesale Dealer / Distributor

DS – Distributor Salesman
UOB – Unique order Built.
AE – Area Executive
AM – Area Manager
ABM – Assistant Branch Manager.
ISS outlet – Independent self-service outlet
PTR – Price to Retailer

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