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PRODUCT AND BRAND MANAGEMENT REPORT

ITC LIMITED

CONTENTS

Group Details 1

Introduction & History 2

Major Products & Services 6

Business Segment Analysis 7

Brand Management of ITC 11

Branding & Strategy Analysis 17

SWOT Analysis & Suggestions 19

BUSINESS SEGMENT ANALYSISGroup Details

FACULTY NAME: PROF. RAVI SHEKHAR KUMAR

SUBJECT : PRODUCT & BRAND MANAGEMENT

NAME: AKSHAY NIGAMSSID: DB-15093 SMS ID: 2231342

NAME: ANIL C DHYANISSID: DB-15015SMS ID: 2231430

Name- ANUPAM SAHASSID: DB-15068SMS ID:2231446

NAME: TILOTTAMA BHAGATSSID: DB-15047SMS ID: 2231448

NAME: PREETI SINGHSSID: DB-15054SMS ID: 2231431

Name- BAPPADITYA NARUSSID: DB-15032SMS ID:2231436

Page 1

BUSINESS SEGMENT ANALYSISIntroduction & History

INTRODUCTIONITC was incorporated on August 24, 1910 under the name Imperial Tobacco Company of India Limited. As the Company's ownership progressively Indianised, the name of the Company was changed from Imperial Tobacco Company of India Limited to India Tobacco Company Limited in 1970 and then to I.T.C. Limited in 1974. The Company now stands rechristened Limited, ‘where ‘ITC’ is today no longer an acronym or an initialized form.

HISTORY & TIMELINE

YEAR EVENT TYPE DESCRIPTION

2014 Corporate Changes/ExpansionsThe company entered into a joint venture agreement with Sunanda Ram Deka (SRD) Groupand formed North East Nutrients Private Ltd.

2014Acquisitions/Mergers/Takeovers

The company acquired stake in Hotel Leela venture

2014 Corporate Changes/Expansions The company started WelcomHotel Bella Vista at Panchkula-Chandigarh.2014 Corporate Changes/Expansions The company started WelcomHotel Raviz, Kollam and WelcomHotel Raviz, Kadavu in Kerala.2014 Plan/Strategy The company has plans to reach its products distribution to one lakh villages in India

2013Contracts/Agreements

ITC Hotels tie up with RP Group Hotels & Resorts to manage 5 hotels in India and Dubai,under ITC Hotels 5-star WelcomHotel brand and the Fortune brand.‟


The company partnered with Keventer Group to set up its second manufacturing unit for Sunfeast Yippee Noodles in Kolkata, India.


The company acquired Welcom Hotels Lanka (Private) Limited.

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BUSINESS SEGMENT ANALYSIS

YEAR EVENT DESCRIPTION

2011 Contracts/Agreements

The company’s subsidiary, ITC Infotech entered into a partnership with Bergen GroupRosenberg. Under this agreement, ITC Infotech will provide engineering services in the areaof Piping and Structural Design and provides analysis for the Bergen Group's EPC (Engineering Procurement and Construction) contracts.

2011 Contracts/AgreementsThe company signed a memorandum of understanding with Northern TechnologiesInternational Corp to jointly develop and commercialize biopolymer-paper products targeted atthe burgeoning consumer goods packaging market in India.

2011Plan/Strategy

The company is planning to buy the paper and pulp business of Century Textiles & Industries Limited.

2010 Plan/StrategyThe company announced its plans to open 25 hotels across India in the next twelve to eighteen months under its flagship Fortune brand.

2009 New Products/Services The company's subsidiary ITC Infotech introduced a solution for the Media and EntertainmentIndustry, aimed at enhancing the value proposition of companies operating in this space.

2009 New Products/Services The company's subsidiary ITC Infotech launched an innovative internet search engineTipTop, in collaboration with TipTop Technologies.

2009Corporate Awards

ITC s new luxury hotel in Bengaluru, the ITC Hotel Royal Gardenia was conferred the highest‟rating for green buildings in the world – the LEED India Platinum Rating.

2009 Contracts/Agreements The company's subsidiary ITC Infotech, formed a strategic alliance with Trivadis AG.


The company's subsidiary, ITC Infotech acquired Pyxis Solutions, LLC, a US based nicheplayer offering Quality Assurance (QA) solutions and testing services.

2008 Contracts/AgreementsThe company's fully owned subsidiary, ITC Infotech signed a partnership agreement withADAM Software, a leading Digital Asset Management company.

2008 Corporate Awards The company received the Business Today Award for the Best Managed Company – Retailand Consumer Products.

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BUSINESS SEGMENT ANALYSISYEAR EVENT DESCRIPTION

2008Corporate Changes/Expansions

The company's subsidiary, Fortune Park Hotels Ltd. established a Fortune Inn Sree Kanyahotel in Visakhapatnam, Andhra Pradesh (India).


The company's fully owned subsidiary, ITC Infotech acquired the US based Pyxis Solutions,LLC

2008 New Products/Services The company launched Vivel shampoos in Indian market


The company's subsidiary, ITC Infotech signed a partnership agreement with ADAMSoftware, a leading Digital Asset Management company.

2008New Products/Services

The company's subsidiary, ITC Infotech launched a suite of mobility solutions in partnershipwith Singapore based News Page.


The company's subsidiary, Russell Credit Limited acquired 100% equity stake in Technico Pvt .Ltd.

2007 New Products/Services The company launched a new snacks brand Bingo

2007 Contracts/AgreementsThe company partnered with Compuware, under which the company provide services toCompuware solutions for testing and infrastructure services, custom application developmentand Enterprise Resource Planning (ERP).

2006 Contracts/AgreementsThe company's ITC Infotech signed a five year multi-million Euro framework agreement withFinnair for outsourcing of significant projects to be delivered in an onsite-offshore mode.

2006 New Products/Services The company launched idli, dosa, rava idli, khaman dhokla and gulab jamun mix to enter intothe instant mix food product category.


The company acquired majority shareholding in Wimco, a manufacturer of safety matches.

2005 Corporate Awards The company received Development Gateway Award for its ITC e-Choupal initiative.


The company acquired BIPCO's paperboards.

Page 4


YEAR EVENT DESCRIPTION

2003 Contracts/AgreementsThe company signed an agreement to acquire BIPCO's paperboards undertaking, locatednear Coimbatore.

2002 Contracts/AgreementsThe company's greeting cards business entered into a strategic alliance with Maple Leaf,India's leading pop-up card manufacturer

2002 New Products/Services The company launched mint-o and Candyman confectionery and Aashirvaad atta (wheatflour) brands to enter the confectionery and staples business.


The company acquired 56,000 ordinary shares in Surya Nepal.

2001 Corporate Changes/ExpansionsThe company began marketing processed foods under the umbrella brand of Kitchens ofIndia.

2000 Corporate Changes/ExpansionsThe company entered the lifestyle retailing business with the Wills Sport range of internationalquality relaxed wear for men and women.

2000 Spin-offThe company spin off its information technology business into a wholly owned subsidiary, ITCInfoTech India


ITC acquired Tribeni Tissues, a specialty paper manufacturing company.

1979 Corporate Changes/Expansions ITC entered the paperboards business by promoting ITC Bhadrachalam Paperboards.


The company acquired a hotel in Chennai to enter into the hotel business

1974 Corporate Changes/Expansions The company changed its name to ITC Limited.1910 Incorporation/Establishment The company was incorporated as Imperial Tobacco Company.

Page 5


Page 6

BUSINESS SEGMENT ANALYSISMajor Products & Services

PRODUCTS SERVICES BRANDS

Cigarettes Golf InsigniaKitchens of

IndiaFoods Hoteliering India Kings Aashirvaad

Personal CareInformation Technology (IT) Based

ServicesClassic Sunfeast

Education & Stationery Investments Gold Flake Mint-oSafety Matches Resort Silk Cut CandymanAgarbattis Hospitality Navy Cut Bingo!Paperboards & Packaging Materials Scissors Wills LifestylePaperboards & Specialty Papers Capstan John PlayersAgri Commodities Berkeley Wills Classic

Leaf Tobacco BristolEssensa Di

Wills Flake Fiama Di Wills

Mangaldeep Agarbattis

Vivel

Expressions

Aromatic Candles

Classmate

WelcomHotel Paperkraft AAshirvaad i-Kno Mint-o Mangaldeep

Candyman Aim Bingo Aim Mega Sunfeast Aim Metro

Page 7

BUSINESS SEGMENT ANALYSISBusiness Segment Analysis

PRODUCT MIX OF ITC

FMCGCigarettes

ITC is the market leader in cigarettes in India. With its wide range of invaluable brands, it has a leadership position in every segment of the market. It's highly popular portfolio of brands includes Insignia, India Kings, Classic, Gold Flake, Silk Cut, Navy Cut, Scissors, Capstan, Berkeley, Bristol and Flake

The Company has been able to build on its leadership position because of its single minded focus on value creation for the consumer through significant investments in product design, innovation, manufacturing technology, quality, marketing and distribution

All initiatives are therefore worked upon with the intent to fortify market standing in thelong term. This in turns aids in designing products which are contemporary and relevant to the changing attitudes and evolving socio economic profile of the country. This strategic focus on the consumer has paid ITC handsome dividends.

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

Ready to Eat Foods

Staples

Confectionery & Snack Foods

Page 8


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:

Kitchens of India

Aashirvaad

Sunfeast

mint-o

Candyman

Bingo!

Lifestyle Retailing

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 Club life evening wear, fashion accessories and Essenza Di Wills – an exclusive range of fine fragrances and bath & body care products and Fiama Di Wills - arrange of premium shampoos and shower gels. Wills Lifestyle has also introduced Wills Signature designer wear, designed by the leading designers of the country.

Wills Classic work wear was launched in November 2002, providing the premium consumer a distinct product offering and a unique brand positioning.

ITC forayed into the youth fashion segment with the launch of John Players in December 2002 and John Players is committed to be the No. 1 fashion brand for the youth

Page 9


Education & Stationary products

ITC made its entry into the stationery business in 2002 with its premium range of notebooks, followed in the year 2003 with the more popular range to augment its offering. ITC's stationery Brands are marketed as "Classmate" and "Paperkraft", with Classmate addressing the needs of school goers and Paperkraft targeted towards college students and executives.

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.

HotelsITC entered the hotels business in 1975 with the acquisition of a hotel in Chennai, which was then rechristened ITC Chola. Since then the ITC-Welcome group brand has become synonymous with Indian hospitality. With over 90 hotels in 77 destinations.

Packaging ITC's Packaging & Printing Business is the country's largest convertor of paperboard into packaging. It converts over 50,000 tons of paper and paperboard per annum into a variety of value-added packaging solutions for the food & beverage, personal products, cigarette, liquor, cellular phone and IT packaging industries. It has also entered the Flexibles and Corrugated Cartons business

Page 10


AGRI-BUSINESS

E-Choupal 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 are covering the associated costs through agri-sourcing led efficiencies. This initiative now comprises about 6500 installations covering nearly 40,000 villages and serving over 4million farmers.

Leaf TobaccoITC 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.

INFORMATION TECHNOLOGYITC Infotech offers IT services and solutions across five key industry verticals: Banking, Financial Services & Insurance (BFSI), Consumer Packaged Goods (CPG) & Retail, Manufacturing & Engineering Services, Travel, Hospitality & Transportation and Media& Entertainment

ITC Infotech, a global IT services company, is today one of India’s fastest growing IT services and solutions providers.

Page 11

BUSINESS SEGMENT ANALYSISBrand Management of ITC

Page 12

BUSINESS SEGMENT ANALYSISBRAND PORTFOLIO OF ITC

Page 13


BRAND PORTFOLIO OF ITC

ITC is today proud to have created over 50 energetic and popular brands across the categories that delight millions of household and support and sustain around 6 million livelihood across India. With relatively very short span of time , ITC has established vital brands across the diverse business that include branded packaged foods , personal care , lifestyle retailing , education & stationary products , incense sticks , safety matches and hotels . Each ITC’s brand has today garnered significant market standing in the Global Indian market place.

BRAND EQUITY One of India’s most Admired and Valuable companies - Market Capitalization: over US$ 40 Billion

A USD 8 Billion enterprise by Revenue - ~58% of Net Revenue from non-Cigarette segments

Leading Fast Moving Consumer Goods (FMCG) marketer in India - Established several world-class brands in the last 10 years

Page 14

BUSINESS SEGMENT ANALYSIS 10 years Value addition ~ Rs. 2.2 lakh crore (US$ 43 billion) with ~75% accruing to the Exchequer - Among the

top tax payers in the country (Private sector) - Excise payments represent ~7% of Government of India’s total Excise collection

A global exemplar in sustainable business practices - Only Company in the world of comparable dimensions to have achieved the global environmental distinction of being Carbon positive (10th Year), Water positive (13th Year) and Solid waste recycling positive (8th Year)

One of the foremost in the private sector in terms of : -

1. Sustained value creation

2. 2. Operating profits

3. 3. Cash Profits

ITC ranked 3rd amongst leading corporates in India in terms of Corporate Reputation (Nielsen Corporate Image Monitor 2014-15)

ITC ranked most active in CSR for the third year in a row (Nielsen Corporate Image Monitor 2014-15)

Page 15


PERFOMANCE TRACK RECORD

Page 16

BUSINESS SEGMENT ANALYSISMARKET SHARE

Page 17


BCG’S GROWTH SHARE MATRIX FOR ITC

BCG matrix can be used to study the current position of the company which is having 4 strategic business units

1. FMCG-Cigarettes & Food

2. Agri-Business

3. Paper Boards & Packaging

4. Hotels

5. ITC Infotech

Page 18

BUSINESS SEGMENT ANALYSISBranding & Strategy Analysis

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.

The Basic Concept used by ITC is:

“PRICE IS SOMETHING WHICH CUSTOMER IS READY TO PAY FOR YOUR PRODUCT”

Hence it is a majority function of

Consumer’s purchasing Power.

Market condition created by the Competitor in terms of the Price.

PROMOTIONS & ENDORSEMENTS STRATEGY To create a high profile & image for the brand, the company also got sports & Bollywood celebrities to endorse its

brands.

Sunfeast is endorse by Shahrukh Khan, Fiama di wills is endorse by Deepika Padukone. This has allowed the company to capitalize on popularity of these actors in major parts of all its markets.

Page 19


ANALYSIS OF DIVERSIFICATIONS ITC has been a leader in the tobacco business, but it realize from the upcoming trends that remaining with a

single business is not a noble thought, moreover the company was threatened of the anti-tobacco campaign.

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 company has started its retail stores not only in Indian metros but also in the small towns like Ranchi, Jabalpur, Gwalior, Belgaum, Ernakulum etc. 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 San Francisco, 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.

Page 20

BUSINESS SEGMENT ANALYSISSWOT Analysis & Suggestions

STRENGTHS

STRENGTH - STRONG LIQUIDITY POSITION

The company’s liquidity position has strengthened over the year. Its current ratio increased from 1.7 at the end of FY2012 to 1.8 at the end of FY2013, and further to 1.9 at the end of FY2014. This may be attributed to increase in total current assets of the company from INR190, 657 million at the end of FY2013 to INR225, 810.6 million at the end of FY2014 Strengthening liquidity position is an indication of the company s increasing ease in funding its short-term ‟operations.

STRENGTH - FOCUS ON QUALITY

The company puts strong focus on quality and safety. It adheres to stringent quality, safety and hygiene standards in the manufacturing processes and in the whole supply chain. All ITC owned manufacturing plants are Hazard Analysis and Critical Control Point (HACCP) certified. ITC's cigarette factory in Kolkata is the first such unit in India to secure ISO 9000 quality certification and the first among cigarette factories in the world to be awarded the ISO 14001 certification. The quality performance of all manufacturing units is constantly monitored online. Furthermore, the R&D laboratory at Bengaluru has received accreditation from NABL (National Accreditation Board for Testing & Calibration of Laboratories) for ISO/IEC17025:2005 for key testing protocols. The center also has ISO 9001 accreditation.

Page 21

BUSINESS SEGMENT ANALYSISSTRENGTH – STRONG FINANCIAL PERFORMANCE ITC s total revenues increased by 11.7%, from INR316, 275.4 million in FY2013 to INR 353,170.8 million in FY2014. ‟This was primarily due to the organic growth across the company's FMCG, Hotels, Agribusiness and Paperboards, Paper and Packaging segments in FY2014 over FY2013. Its FMCG segment revenues are increased by 12.7% from INR329, 995.8 million in FY2013 to INR371, 982.8 million in FY2014. Its Hotels segment revenues are increased by 5.4% from INR10, 743.9 million in FY2013 to INR11, 328.5 million in FY2014.

Its Agribusiness segment revenues are increased by 7.7% from INR72, 007.3 million in FY2013 to INR77, 520.5 million in FY2014. It’s Paperboards, Paper and Packaging segment revenues are increased by 14.7% from INR45, 043.7 million in FY2013 to INR51, 660.4 million in FY2014. In addition, it’s operating income increased by 18.2% from INR103, 220.9 million in FY2013 to INR121, 990.9 million in FY2014. Its net income increased by 16.9% from INR76, 080.7 million in FY2013 to INR88, 913.8 million in FY2014. Strong financial performance helps the company maintain its stand in the market and enables it to pursue its growth and expansion plans.

WEAKNESSS

WEAKNESS – DEPENDANCE ON FMCG-CIGARETTES SEGMENT

Although the company has wide business portfolio including cigarettes, branded garments, information technology, processed foods, hotels and paper, it depends mainly on the cigarettes segment for its revenues.

In FY2014, the company generated 79.6% of its total gross revenue from its FMCG segment. Of the total revenue of INR371, 884.6 generated by the FMCG segment, the FMCG-cigarettes contributed 78.2%. Also, the FMCG-Cigarettes contributed 62.2% of its total gross revenue. High dependence on the cigarette segment increases the risk associated with the industry.

Page 22

BUSINESS SEGMENT ANALYSISWEAKNESS – DEPENDANCE ON FMCG-CIGARETTES SEGMENT The company’s operations are concentrated in India, making for a competitive disadvantage against the multinational competitors in various categories it operates. Al though, the company exports its product to many countries worldwide, ITC still depends on Indian market for revenue generation.

In FY2014, the company recorded about 91.3% of the total revenue from Indian market. This dependence on the particular region makes the company prone to changes in political, economic and weather conditions. Geographic concentration not only makes the company vulnerable to potential risks arising in the India, but also prevents it from tapping the opportunities in other markets.

OPPURTUNITIES

OPPORTUNITY - POSITIVE OUTLOOK FOR INDIAN FOOD PROCESSING INDUSTRY The company may benefit from the positive outlook forecast for the Indian Food processing Industry. The Indian Food Processing Industry is one of the largest in terms of production, consumption, export and growth prospects. Key market drivers of Indian food processing industry include increasing spending on health and nutritional foods, increasing number of nuclear families and working women, changing lifestyle, functional foods, fresh or processed foods, organized retail and private label penetration, changing demographics and rising disposable incomes.

The key opportunities for the Food processing sector in India include process-able varieties of crop, contract farming, investments in infrastructure through public private partnership (PPP), mega food parks, integrated cold chain and food safety management systems. Being a manufacturer of processed food products such as snack foods, ready to eat foods in India, ITC may benefit from the growing food processing industry.

Page 23

BUSINESS SEGMENT ANALYSISOPPORTUNITY - POSITIVE OUTLOOK FOR INDIAN FOOD PROCESSING INDUSTRY The company may benefit from the positive outlook forecast for the Indian Food processing Industry. The Indian Food Processing Industry is one of the largest in terms of production, consumption, export and growth prospects. Key market drivers of Indian food processing industry include increasing spending on health and nutritional foods, increasing number of nuclear families and working women, changing lifestyle, functional foods, fresh or processed foods, organized retail and private label penetration, changing demographics and rising disposable incomes.

The key opportunities for the Food processing sector in India include process-able varieties of crop, contract farming, investments in infrastructure through public private partnership (PPP), mega food parks, integrated cold chain and food safety management systems. Being a manufacturer of processed food products such as snack foods, ready to eat foods in India, ITC may benefit from the growing food processing industry.

THREATS

THREAT - STRINGENT REGULATIONS The company, being a producer and marketer of food products, is subjected to various regulations by governmental agencies, with respect to production processes, product quality, packaging, labeling, storage and distribution In India, the Food Safety and Standards Authority of India (FSSAI) has been established under Food Safety and Standards Act, 2006. FSSAI develops science based standards for food and regulates the production, storage, distribution, sale and import to ensure availability of safe food for human consumption.

THREAT - FLUCTUATING RAW MATERIAL PRICES The company’s performance is sensitive to raw materials price movements. According to Food and Agriculture Organization of the United Nations, the FAO Food Price Index decreased from 207.5 in July 2013 to 203 in July 2014 and FAO Cereal Price Index decreased from 222.3 in July 2013 to 185.4 in July 2014. Vegetable Oils Index decreased from 186.7 in July 2013 to 181.1 in July 2014.

Page 24

BUSINESS SEGMENT ANALYSISSUGGESTIONS & RECOMMENDATIONS

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 house wife 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 across 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 afternoon meals to the children as a part of mid-day meal scheme

BIBLIOGRAPHY:http://www.itcportal.com/about-itc/shareholder-value/ITC-Corporate-Presentation.pdf

http://www.slideshare.net/ManoharIyer/strategic-mgmt-case-study-itc-ltd

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END

http://www.itcportal.com/about-itc/shareholder-value/ITC-Corporate-Presentation.pdf

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