Marketing Strategy of ITC

Marketing Strategy of ITC
in
Tobacco Industry
Scope
Study the consumer behaviour in Tobacco Industry
SWOT and PEST analysis of ITC cigarettes
Porter’s Five forces Model
Analysis of cigarette consumption
Positioning Strategies
Future Research
ITC Cigarettes
Marketed under 14 different brands

70% market share in the Indian cigarette market
Contribute 80% to the total profits
Serves 100,000+ markets and 2 million retail outlets
SWOT analysis
Weaknes
Strengths s
Losing out on smokers because of
World class Research
increase in prices
Efficient Supply chain mechanism
Declining sales growth
Highest Market share
Ethical dilemma
Opportunitie Threats
s
Opportunity for Less hazardous
Low entry barrier, low entry cost
low nicotine/ light cigarettes
Increase in excise duty
Innovative packing designs
Rising health concerns
Increasing high income group
PEST analysis
Political
Smoking in public places is strictly prohibited

Advertising of tobacco products is not allowed
Health warning labels need to be put up on the
packaging
Hike of excise duty from 11% to 72% for cigarettes
Economic
India is the second largest producer of tobacco

Highly labour intensive, employing 5 million+ people
In 2008 recession, sales increased by 11%
Lower income groups use bidis as alternatives
Social
Health conscious population

Awareness through advertisement
Primary education
More rehabilitation centres
Technological
Automated production process

Smoke-free cigarettes and e-cigarettes
New flavours
Different packaging
Porter’s Five Forces Model
Competitive Rivalry
Highest market share of 70% in India

No major threat from the existing players in the market
Availability at local stores helps beat the competition
Bargaining Power of
suppliers
Shopkeepers, friends are major drivers of consumer

choices
Suppliers who can influence shopkeeper have great
power
Brand loyalty is comparatively lower, so availability
important
Bargaining Power of
buyers
Greater preference to taste than price

Easily switch to another brand, low loyalty
Shift in consumption from bidis to cigarettes due to
higher income
Threat of new entrants
Cigarette industry is very stable

New entrant cannot match distribution of existing
players
Government policy against tobacco acts as a virtual
entry barrier
Threat of substitutes
Other forms of tobacco such as bidis, chewing tobacco

More health conscious and may switch to less harmful
forms of tobacco such as nicotine gums, patches and
electronic cigarettes
Rehabilitation centres
Data Analysis of consumer preference
Consumer preference of cigarettes
11%
5%
32%
18%
34%
Goldflake Classic Marlboro India Kings Others

Consumer Priorities
18
16
16
15
14
13
12
11 11 11
10 10 10
# of consumers
10
9 9 9 9
8 8
8
7 7
6 6
6
5 5
4 4
4
3 3
Ratings
0
1 2 3 4 5
Price Taste Brand Packaging Preference Availability Preference

Modes of awareness
90
80
70
60
50
40
30
20
10
0
s ts s s
nd en p er er
ie m ee ok
Fr e
pk -sm
t is
v er sh
o co
n
Ad by ow
n kn
tio un
da
en by
m n
om a tio
e c d
R en
m
om
R ec
Recommendation Count Percentage
Promoters 13 29.55
Detractors 20 45.45
NPS -7 -15.91
30% of the consumers will actively promote the

brand to others as they are loyal enthusiasts and
fuel growth
Around 45% of the consumers fall into the
category of detractors who may impede growth
with negative word-of-mouth
Positioning Strategies
Function
Symbolic
al
Position itself as the largest
producer of cigarettes across India Positioned itself as the producer of
consistent and superior quality
Position its cigarette brands as the products with the state of the art
most easily available brands in the manufacturing technology
retail stores
Experientia
l
Position itself as the producer of

all flavours and tastes of cigarettes
Future Scope/ Foresight
Increasing the number of cigarette flavours offered

Improving the brand value
Penetration to every nook and corner
Reduction of focus on packaging
Encouraging consumers to actively promote the brand
as they are the best source of fuelling growth
Cannibalization with respect to ITC
Thanks!

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Marketing Strategy of ITC

Marketed under 14 different brands

Smoking in public places is strictly prohibited

India is the second largest producer of tobacco

Health conscious population

Automated production process

Highest market share of 70% in India

Shopkeepers, friends are major drivers of consumer

Greater preference to taste than price

Cigarette industry is very stable

Other forms of tobacco such as bidis, chewing tobacco

Goldflake Classic Marlboro India Kings Others

Price Taste Brand Packaging Preference Availability Preference

30% of the consumers will actively promote the

Position itself as the producer of

Increasing the number of cigarette flavours offered

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