Strategic Brand Management

Project
On

ITC Sunfeast

Contents
Introduction ............................................................................................................................................ 3
ITC Sunfeast ............................................................................................................................................ 5
Distribution channel of ITC ..................................................................................................................... 6
Brand Architecture .................................................................................................................................. 8
Brand Personality .................................................................................................................................... 8
Pricing...................................................................................................................................................... 9
Promotion and Advertisements .............................................................................................................. 9
Strategies adopted ................................................................................................................................ 11
BCG Matrix ............................................................................................................................................ 12
References ............................................................................................................................................ 14

Introduction

ITC was formed on 24 August 1910 under the name Imperial Tobacco Company of India
Limited. Later the name was changed to India Tobacco Company Limited in 1970 and then to
I.T.C. Limited in 1974. Finally, the company changed its name to 'ITC Limited' on
September 2001.
The earlier decades of the company's activities cantered around the tobacco industry. Since
1964 conclusive epidemiological evidence of the deadly effects of tobacco consumption has
led to a sharp decline in official support for producers and manufacturers of tobacco, in spite
of its large contribution to the agricultural, fiscal, manufacturing and exporting sectors of the
economy. Viewing the changes in the business dynamics in the tobacco industry, the
company started looking to other sources for earning revenue. In 1970s, it started to enter
non-tobacco businesses and in the same period it started reducing the foreign equity holding
in the company to 40%.
In 1975, the company entered Hotel business with the acquisition of a hotel in Chennai which
was rechristened as 'ITC - Welcome group Hotel Chola'. In 1979, ITC entered the Paperboard
business by promoting ITC Bhadrachalam Paperboards Limited, which today has become the
market leader in India.
In 1985, ITC set up Surya Tobacco Co. in Nepal as an Indo-Nepali and British joint venture.
Since inception, its shares have been held by ITC, British American Tobacco and various
independent shareholders in Nepal. In 2002, Surya Tobacco became a subsidiary of ITC
Limited

and

its

name

was

changed

to

Surya

Nepal

Private

Limited.

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 reach a wider student population, a range of
notebooks was launched under brand Classmate in 2003. Classmate over the years has
grown to become Indias largest notebook brand. 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. It offers a diverse portfolio in the premium executive stationery and office
consumables segment.
ITC also entered the Lifestyle Retailing business with the Wills Sport range of casual wear
for men and women in 2000. The Wills Lifestyle chain of exclusive stores later expanded its
range to include Wills Classic formal wear (2002) and Wills Clublife evening wear (2003).
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 IT and IT-enabled services area.
ITC's foray into the Foods business 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). In 2002, ITC entered Safety Matches business with
acquisition of WIMCO Limited. ITC now markets safety matches brands like iKno,
Mangaldeep and Aim. ITC's entered Agarbattis (incense sticks) business in 2003. ITC's
popular agarbattis brands include Spriha and Mangaldeep.
In July 2003, ITC made a foray into the biscuits market by launching the Sunfeast range of
biscuits. Since then, Sunfeast biscuits have always stood for quality and are known for
offering innovative and wholesome biscuits. Sunfeast connotes happiness, contentment,
satisfaction and pleasure. Within a span of 9 years, Sunfeast has established itself in almost
all major categories of biscuits.
ITC introduced Essenza Di Wills, a range of fragrances and bath & body care products for
men and women in July 2005. The company launched 'Fiama Di Wills' range of Shampoos,
Shower Gels and Soaps in 2007. The Company also launched the 'Superia' range of Soaps
and Shampoos in the mass-market segment in 2007 and Vivel De Wills & Vivel range of
soaps and shampoos in 2008.

ITC Sunfeast
"Sunfeast"-- with the Brand Essence "Spread the Smile" connotes happiness, contentment,
satisfaction and pleasure one would derive from great tasting and high quality biscuits. The
brand positioning and imagery is reinforced by the Sun mascot conveying the emotional and
gratifying aspects of the product.
Before entering the segment, ITC dug into market research. Research revealed that the
category had gaps which ITC could settle into. Findings revealed that consumers wished to
taste new and innovative products. That was precisely what the competition had not done in a
big way. In 2003, ITC launched Sunfeast with six ranges. But it was a calculated risk. ITC
stuck to category favourites like Glucose, Marie and Bourbon cream.
Along with that, it also launched innovations such as orange-flavoured Marie, Marie light and
butterscotch-flavoured cream biscuits. In 2004, Sunfeast followed this up with the launch of
Sunfeast Milky Magic. More recently, it also has launched the Sunfeast Snacky and
Sunfeast Golden Bakes.
Analysts believe that just because Sunfeast was a new brand, helped matters. Says a
consultant, "The biscuits industry had not witnessed any major product innovation in years.
Consumers were just waiting for something new, something fresh, when Sunfeast happened."
Even the competition had not made things better. Between 2000 and 2005 neither Parle nor
Britannia launched any major new product. Yes, Britannia did re-launch its Tiger brand in
2005.
But Britannia claims that it is looking at more than just products. Richa Arora, general
manager and head of marketing and innovations, Britannia Industries, says, "We are not just
looking at new products, but tapping newer opportunities -- such as different occasions as
well as out-of-home consumptions."
In 2005, before Diwali, Britannia launched Occasions -- boxes of assorted biscuits priced
between Rs 50 and Rs 200 -- which the company claims has been very successful.
In 2006, however, the industry has seen a flurry of innovations from the big two. Digestive
Marie -- was launched by Parle in early February 2006. Britannia launched its new double-

flavoured Mariegold and 50-50 Chakkar. And Parle is all set to launch at least two new
products before the end of this year.
In 2003, ITC forayed into the Biscuits market with the Sunfeast range of Glucose, Marie and
Cream Biscuits. Sunfeasts brand essence, "Spread the Smile" connotes happiness,
contentment, satisfaction, and pleasure. The mascot sunny reinforces the emotional aspects of
the brand. In span of 6 year sunfeast has launched many new variants and has its presence in
almost all types of biscuit categories.
Sunfeast immediately established itself as a provider of innovative and distinctive products Sunfeast Marie was launched in an innovative orange flavour and the 'Sunfeast Dream
Cream range includes new flavours as well as flavour enhancers. The Sunfeast Dream
Cream range is currently available in 8 variants. The Company has also

introduced

Sunfeast Dark Fantasy', a dark chocolate and vanilla cream offering for the premium
segment in select markets.
Riding on the success of its initial offering, ITC also entered the milk biscuit category with
Sunfeast milk magic biscuit. Apart from milk which helps mental growth, these biscuit also
contain the finest quality wheat adding physical growth.
In the last two years, the Sunfeast biscuits portfolio has been enhanced to include salted
crackers and cookies. The 'Sun feast Snack' salted crackers are available in 2 unique variants
Chilli Flakes and Classic Salted. Sunfeast's latest offering, 'Sunfeast Special biscuits
are also available in select markets. The Sunfeast Special range currently includes cookies in
two variants Butter and Cashew, as well as cream biscuits in two variants Choco and
Orange. The sunfeast product portfolio has been further expanded to include healthy snacks
option. Sunfeast pasta treat is whole wheat based instant pasta for children After a
tremendous success of the 4 initial flavours, the instant pasta range has been expended with
two new exciting flavours pizza, and chicken. The pasta segment was further expanded
with the launch of sunfeast benne vita in 4 innovative variants.

Distribution channel of ITC

ITC provides products and services of superior quality and value by sourcing its technologies,
equipment and inputs from reputed international and Indian manufacturers and suppliers.

Common values, relating to human rights performance, are shared across the entire supply
chain because ITC is committed to the importance of a socially responsible and accountable
supply chain.
As a large and multi-product enterprise whose products are benchmarked nationally and
internationally, ITC's main supply chains can be grouped as follows:
1. For all its operations, technology, machinery and equipment are sourced from reputed
and globally benchmarked suppliers/vendors who are expected to follow
internationally accepted norms and standards on human rights.
2. ITC's major businesses are vertically integrated across several Divisions. A
substantial part of the supply chain is therefore internal through strategic backward
linkages. Common values relating to human rights performance are shared across this
supply chain.
3. Being a major agric-based company, the agriculture sector is a major supplier of
inputs for its operations. The bulk of agricultural commodities are procured from state
controlled trading platforms and the open market.
A very small proportion of ITC's business consists of supply chains comprising local vendors
and suppliers. The policy framework for such entities is enunciated separately in 'Policy to
Ensure Respect for Human Rights across the Supply Chain.

Other factors:

The company used its existing network of convenience stores: the companys name
for the hole-in-the-wall pan-beedi shops for Sunfeast.

The company also looked at grocery stores and other retail formats.

The company says the brand is now available in nearly 1.8 million outlets.
14 manufacturing units

The company has extended its manufacturing capacity by setting up three new biscuit plants
in UP and West Bengal to focus on supply chain management strategy to enhance product
freshness, market servicing and margins

Brand Architecture
ITC has a House of Brands format.

Brand Personality

ITC is perceived as Sincere and competent.

The Sunfeast brand has attributes of Excitement as well.

Pricing

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 and Parle.

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.

Sunfeast look at a two prolonged strategy:

High margin :High margins in cream variants

High volumes: High volumes from the Marie and Glucose segments.

Promotion and Advertisements

The entire range of 'Sunfeast Biscuits' is packed in vibrant colours, distinctive

graphics and fonts identifying sub categories and at the same time, maintaining a
consistent look of Sunfeast.

The brand is supported with Television campaigns across National and Vernacular
media beginning August 2003 that is distinct, highlighting the product attributes,
quality and the new first time in the market offerings from Sunfeast. During the
launch phase, Consumer promotions were conducted across retail outlets for every
purchase of Sunfeast Marie & Sunfeast Cream Biscuits 75gms of Glucose Biscuits
free.

Encyclopedia Networks created an interesting idea, which shows the biscuit pack
literally taking off from the hoarding - what holds it down is a rope that attaches the
end of the pack to the hoarding. The biscuit pack has been designed as a 3D pack.

Well differentiated advertisements, some which showed a complete cream world with
cream rivers, cream mountains and cream trees, were targeted at kids watching
cartoon channels.

The animated Sun this is a symbol of contentment, Satisfaction and Pleasure. This
was also received by the consumers and the ad campaigns are catchy and full of
colours and excitement. The product is also of very high quality. Thus Sunfeast has
manged to get all the winning combinations in the right mix.

At the same time, on general entertainment channels, mothers received information on

the importance of glucose, the wholeness of wheat and so on. Also, the company tied
up with Bey-Blades, the popular television series that was a rage among children, to
promote itself.

Sunfeast tagline Spread the Smile was being endorsed By Sharukh khan. Sharukh
khan use made sense as he was popular among Children and moreover he is among
the favourites about 60% of Indians and moreover his persona is energetic which
corresponds to the mascot of the brand. The various advertisements and promotional
shows featured Sharukh Khan and showed that even Sharukh Khan is also a fan and
enjoy Sunfeast Biscuits. So it created an impression among the audience that their
favourite actor is following this commodity so they should follow the same way. ITC
Foods has tied up with New York-based Company 'House of Spices' to launch its

biscuit brand Sunfeast across the US and that was again done by Sharukh Khan since
he is a global icon.

In the same year, as the official sponsor of the WTA tennis championship -- titled the
Sunfeast Open -- the company had Sania Mirza and Mahesh Bhupathi campaigning
for it. But that's not all. For promotions in southern states, Sunfeast has signed Tamil
super star Surya as a brand ambassador.

Analysts say that ITC's deep pockets have helped Sunfeast in many ways.

The company claims that it has been spending 35-40 per cent of its turnover from the
biscuits segment on advertising and promotions. Going by that number, ITCs annual
marketing spends are estimated to be in the region of about Rs 115-120 crore (Rs
billion).

Strategies adopted
ITC's Sunfeast is a brand driven by innovative product development at ITC's state-of-the-art
food technology centre in Bengaluru. Every Sunfeast product is made with utmost
care, ensuring world class standards of hygiene. Sunfeast symbolises ITC's commitment to
create brands that enrich the quality of life for every Indian as it believes that our people and
our country deserves the best.
The product Sunfeast was launched in the midst when the biscuit market in India was
estimated to be about a value of Rs 45 billion and out of that Britannia and Parle held more
than 80% of the organized sector in value terms. ITC therefore decided to enter the branded
biscuits market with products that would reinforce the gratifying aspects of the brand as well
as offer great taste and quality to customers.
The core competencies on which ITC relies are the depth of distribution, brand building
capability and ability of quality outsourcing. This is a major contributor to its success.
Sunfeast, which was launched in 2003, was one of ITCs diversified arrays. ITC has a well
developed system of distribution which can only be compared only to HLL. As ITC was one
company who has its presence in all major fields, thus Sunfeast is established well in India
and abroad.

The biscuit market is to be estimated about 4500-5000 crore with Parle and Britannia being
the major players. The biscuit market has now moved from core glucose to value added
biscuits. While the rural market prefers Glucose biscuits, the urban market is fond of cream
biscuits. The establishment of brand was never easy as the market was already having big
biscuit companies which were satisfying the needs of people well. Sunfeast monitored the
market demand and carefully handled promotion and brand building which made the brand to
gain market share. The product was made exciting by launching a series of convenience
goods, new tastes and flavours which lead to an interest in the brand. The company continued
a series of launching of products like Milky magic, coconut, strawberry, pineapple,
butterscotch and cream and it also entered the premium biscuit category with Dark Fantasy.
Moreover market research revealed that consumers were looking for innovation, variety, and
fun in all the biscuits categories. A mascot, Sunny, was chosen to convey these aspects of
ITCs biscuit brands. Initial offerings included the Sunfeast Glucose biscuits, targeting
children and their mothers; Sunfeast Orange Marie, targeting housewives and families; and
Sunfeast Orange cream, Butterscotch cream and Bourbon Cream, targeting children in the
age group between 4 and 14 years.
Over the last few years, the Sunfeast range has expanded with the introduction of the
Sunfeast Dark Fantasy range in the premium segment; the Sunfeast Milky Magic in the milk
biscuit category; the Snacky in salted crackers and cookies category.

BCG Matrix

The various divisions of ITC have been divided into the following quadrants in the BCG
matrix.

ITC Sunfeast, which is a part of the FMCG foods division, falls in the question mark category.
The growth for the division is high, but it needs to build on the market share to move into the
star category.

References
1. http://www.itcportal.com/brands-microsite/packaged-foods/sunfeast.asp
2. http://en.wikipedia.org/wiki/ITC_Limited
3. http://timesofindia.indiatimes.com/business/india-business/ITCs-Sunfeast-creamsBritannia/articleshow/26815204.cms

4. http://sunfeastworld.com/aboutitc.html
5. http://www.rediff.com/money/2006/jun/28spec.htm
6. http://www.business-standard.com/article/management/sunfeast-targets-the-creamylayer-113031000300_1.html