ITC Limited

Type Public (BSE: 500875)

Industry Conglomerate

Founded 24 August 1910

Headquarter
Kolkata, India
s

Yogesh Chander Deveshwar,

Chairman
Key people K. Vaidyanath, Director,
Kurush Grant, Director,
Rajiv Tandon (CFO)

Cigarettes
Hotels
Apparel
Tobacco
Foods
Products Stationery
Personal Care
Paperboard and specialty papers
Printing and packaging
Matches and Agarbattis
Infotech
Revenue ▲ US$6 billion (2009)

Employees 26,150 (2009)

ITC Limited,[1] is an Indian conglomerate with a turnover of US $ 6 billion and a market

capitalisation of over US $ 22 Billion. The company has its registered office in Kolkata.

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 completes 100
years on 24th August, 2010.

ITC has a diversified presence in Cigarettes, Hotels, Paperboards & Specialty Papers, Packaging,
Agri-Business, Packaged Foods & Confectionery, Information Technology, Branded Apparel,
Personal Care, Stationery, Safety Matches and other FMCG products. While ITC is an
outstanding market leader in its traditional businesses of Cigarettes, Hotels, Paperboards,
Packaging and Agri-Exports, it is rapidly gaining market share even in its nascent businesses of
Packaged Foods & Confectionery, Branded Apparel, Personal Care and Stationery.

ITC's aspiration to be an exemplar in sustainability practices is manifest in its status as the only
compnay in the world of its size and diversity to be 'carbon positive', 'water positive' and 'solid
aste recycling positive.' In addition, ITC's businesses have created sustainable livelihoods for
more than 5 million people, a majority of whom represent the poorest in rural India.

Contents

• 1 List of products & brands

• 2 Rural initiatives
• 3 Corporate philanthropy
• 4 Forbes ranking
• 5 Global and other Honours
• 6 References
• 7 External links
List of products & brands

ITC has a diversified presence in

• Cigarettes: W. D. & H. O. Wills, Gold Flake, Navy Cut, Insignia, India

Kings, Classic (Verve, Regular, Mild & Ultra Mild), Silk Cut, Scissors,
Capstan, Berkeley, Bristol, Lucky Strike and Flake.

• Hotels: ITC Welcomgroup Hotels, Palaces and Resorts is India's second

largest hotel chain with over 80 hotels. Based out of Hotels Division
Headquarters at the ITC Green Centre in Gurgaon, ITC Welcomgroup is
also the exclusive franchisee of The Luxury Collection brand.

ITC has a strong presence in:

• Foods business (Kitchens of India; Ashirvaad; Minto; Sunfeast;

Candyman; Bingo brands in Ready to Eat, Staples, Biscuits,
Confectionery and Snack Foods);
• Apparel business (Wills Lifestyle and John Players brands);
• Personal Care Products business(Fiama di Wills; Vivel; Essenza di Wills;
Superia brands of products in perfumes, haircare and skincare)
• Stationery (Classmate and Paperkraft brands)
• Safety Matches and Agarbattis [Ship (through ownership of WIMCO);
iKno; Mangaldeep; Aim brands]

Other businesses include:

• Paperboard, Specialty Paper, Graphic and other Paper;

• Packaging and Printing for diverse international and Indian clientele.
• Infotech (through its near-wholly owned subsidiary ITC Infotech India
Limited which is a SEI CMM Level 5 company)
Rural initiatives

ITC's Agri-Business is India's second largest exporter of agricultural products. ITC is one of the
India's biggest foreign exchange earners (US $ 2 billion in the last decade). The Company's 'e-
Choupal' initiative is enabling Indian agriculture significantly enhance its competitiveness by
empowering Indian farmers through the power of the Internet. This transformational strategy,
which has already become the subject matter of a case study at Harvard Business School, is
expected to progressively create for ITC a huge rural distribution infrastructure, significantly
enhancing the Company's marketing reach.

The company places computers with Internet access in rural farming villages; the e-Choupals
serve as both a social gathering place for exchange of information (choupal means gathering
place in Hindi) and an e-commerce hub. What began as an effort to re-engineer the procurement
process for soy, tobacco, wheat, shrimp, and other cropping systems in rural India has also
created a highly profitable distribution and product design channel for the company—an e-
commerce platform that is also a low-cost fulfillment system focused on the needs of rural India.
The e-Choupal system has also catalyzed rural transformation that is helping to alleviate rural
isolation, create more transparency for farmers, and improve their productivity and incomes.

Corporate philanthropy

ITC Echoupal creatively leverages information technology to set up a meta-market in favour of

India's small and poor farmers, who would otherwise continue to operate and transact in 'un-
evolved' markets.

As of July 2010, services through 6500 Echoupal across 10 states, reach more than 4 million
farmers in about 40,000 villages. Free access to Internet is also opening windows of rural India
to the world at large.

ITC eChoupal e-choupal is now being regarded as a reliable delivery mechanism for resource
development initiatives. Its potential is being tested through pilot projects in healthcare,
educational services, water management and cattle health management with the help of several
service providers including non-governmental organizations.

When Classmate notebooks were launched, it came up with the initiative of contributing 1 rupee
towards the education of poor children,from every single notebook it sold.

Forbes ranking

ITC features on the Forbes Global 2000 rankings for 2007 at position 1256 [2].
ITC is the only Indian FMCG company that features on the Forbes Global 2000 rankings for
2009 at position 987.[3]

ITC also featured on the Forbes World's Most reputable Companies List at position 95.[4]

Global and other Honours

• ITC is the first from India and among the first 10 companies in the world to
publish its Sustainability Report in compliance (at the highest A+ level) with
the latest G3 guidelines of the Netherlands-based Global Reporting Initiative
(GRI), a UN-backed, multistakeholder international initiative to develop and
disseminate globally applicable Sustainability Reporting Guidelines.

• ITC is the first Indian company and the second in the world to win the
prestigious Development Gateway Award. It won the $100,000 Award for the
year 2005 for its trailblazing ITC e-Choupal initiative which has achieved the
scale of a movement in rural India. The Development Gateway Award
recognizes ITC's e-Choupal as the most exemplary contribution in the field of
Information and Communication Technologies (ICT) for development during
the last 10 years. ITC e-Choupal won the Award for the importance of its
contribution to development priorities like poverty reduction, its scale and
replicability, sustainability and transparency.

• ITC has won the inaugural 'World Business Award', the worldwide business
award recognising companies who have made significant efforts to create
sustainable livelihood opportunities and enduring wealth in developing
countries. The award has been instituted jointly by the United Nations
Development Programme (UNDP), International Chamber of Commerce (ICC)
and the HRH Prince of Wales International Business Leaders Forum (IBLF).

• ITC is the first Corporate to receive the Annual FICCI Outstanding Vision
Corporate Triple Impact Award in 2007 for its invaluable contribution to the
triple bottom line benchmarks of building economic, social and natural capital
for the nation.

• ITC has won the Golden Peacock Awards for 'Corporate Social Responsibility
(Asia)' in 2007, the Award for ‘CSR in Emerging Economies 2005’ and
‘Excellence in Corporate Governance' in the same year. These Awards have
been instituted by the Institute of Directors, New Delhi, in association with
the World Council for Corporate Governance and Centre for Corporate
Governance.

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

• The Stockholm Challenge 2006 for the e-Choupal initiative. This award is for
using Information Technology for the economic development of rural
communities.
• 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 Corporate Social Responsibility Crown Award for Water Practices from
UNESCO and Water Digest for its distinguished work carried out in the water
sector in India. ITC also received the National Award for Excellence in Water
Management 2007 in the 'beyond the fence' category from the CII Sohrabji
Godrej Green Business Centre for its leadership role in implementing water
and watershed management practices.

• The watershed programme also won the Asian CSR Award 2007 for
Environmental Excellence given by the Asian Institute of Management. The
Award recognizes and honours Asian companies for outstanding, innovative
and world-class projects. The Company also received the Ryutaro Hashimoto
Incentive Prize 2007 for Environment & Development from the Asia Pacific
Forum. This Award aims at promoting information dissemination of good
practices towards sustainable development in the Asia-Pacific region.

• The Readers' Digest Pegasus Award for corporate social responsibility,

recognising outstanding work done by socially conscious companies.

• The Corporate Award for Social Responsibility 2008 from The Energy and
Resources Institute (TERI) in recognition of its exemplary initiatives in
implementing integrated watershed development programmes across 7
states in India. The company also won the award in 2004 for its e-Choupal
initiative. The Award provides impetus to sustainable development and
encourages ongoing social responsibility processes within the corporate
sector.

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

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

• The Best Corporate Social Responsibility Practice Award 2008 jointly

instituted by the Bombay Stock Exchange, Times Foundation and the
NASSCOM Foundation.

• The NASSCOM – CNBC IT User Award 2008 in the Retail & Logistics category.
The Company has been recognised for its pro-active and holistic approach to
IT adoption and the seamless alignment of IT with business strategy. This is
the fourth time that ITC has won Nasscom's Best IT User Award since it was
instituted in 2003.

• The Institute of Chartered Accountants of India Award for Excellence in

Financial Reporting with its Annual Report and Accounts, adjudged as a
commendable entry under the Category 'Manufacturing and Trading
Enterprises’.
 • The Business Today Award for the Best Managed Company in recognition of
its outstanding initiatives in the consumer products segment.

Brands - Building A Brand

What factors are important in building brand value?

Professor David Jobber identifies seven main factors in building successful brands, as illustrated
in the diagram below:

Quality

Quality is a vital ingredient of a good brand. Remember the “core benefits” – the things
consumers expect. These must be delivered well, consistently. The branded washing machine
that leaks, or the training shoe that often falls apart when wet will never develop brand equity.
Research confirms that, statistically, higher quality brands achieve a higher market share and
higher profitability that their inferior competitors.

Positioning

Positioning is about the position a brand occupies in a market in the minds of consumers. Strong
brands have a clear, often unique position in the target market.

Positioning can be achieved through several means, including brand name, image, service
standards, product guarantees, packaging and the way in which it is delivered. In fact, successful
positioning usually requires a combination of these things.

Repositioning

Repositioning occurs when a brand tries to change its market position to reflect a change in
consumer’s tastes. This is often required when a brand has become tired, perhaps because its
original market has matured or has gone into decline.

The repositioning of the Lucozade brand from a sweet drink for children to a leading sports drink
is one example. Another would be the changing styles of entertainers with above-average
longevity such as Kylie Minogue and Cliff Richard.

Communications

Communications also play a key role in building a successful brand. We suggested that brand
positioning is essentially about customer perceptions – with the objective to build a clearly
defined position in the minds of the target audience.

All elements of the promotional mix need to be used to develop and sustain customer
perceptions. Initially, the challenge is to build awareness, then to develop the brand personality
and reinforce the perception.

First-mover advantage

Business strategists often talk about first-mover advantage. In terms of brand development, by
“first-mover” they mean that it is possible for the first successful brand in a market to create a
clear positioning in the minds of target customers before the competition enters the market.
There is plenty of evidence to support this.

Think of some leading consumer product brands like Gillette, Coca Cola and Sellotape that, in
many ways, defined the markets they operate in and continue to lead. However, being first into a
market does not necessarily guarantee long-term success. Competitors – drawn to the high
growth and profit potential demonstrated by the “market-mover” – will enter the market and
copy the best elements of the leader’s brand (a good example is the way that Body Shop
developed the “ethical” personal care market but were soon facing stiff competition from the
major high street cosmetics retailers.
Long-term perspective

This leads onto another important factor in brand-building: the need to invest in the brand over
the long-term. Building customer awareness, communicating the brand’s message and creating
customer loyalty takes time. This means that management must “invest” in a brand, perhaps at
the expense of short-term profitability.

Internal marketing

Finally, management should ensure that the brand is marketed “internally” as well as externally.
By this we mean that the whole business should understand the brand values and positioning.
This is particularly important in service businesses where a critical part of the brand value is the
type and quality of service that a customer receives.

Think of the brands that you value in the restaurant, hotel and retail sectors. It is likely that your
favourite brands invest heavily in staff training so that the face-to-face contact that you have with
the brand helps secure your loyalty.
THOUGH the ITC brand is almost synonymous with tobacco, it has in no way weighed
with the people purchasing products of ITC's Foods division and the company has been
able to capture nearly 10 per cent of the market share for biscuits within a year of the
launch of `Sunfeast' range of biscuits, according to an ITC executive.

The biscuits market, which witnessed a growth of 12 per cent during last year in the
country, is expected to sustain its growth during the current year, too.

Speaking to Business Line after the launch of `Sunfeast' range of biscuits here the
other day, Mr Sunil S. Narayan, Branch Manager, ITC Ltd, Coimbatore, said the biscuits
market in the country was estimated to be worth Rs 4,500 crore annually and in terms
of quantity it was around 5.12 lakh tonnes. While the organised, branded segment had
a 60 per cent market share the rest was accounted for by the unorganised sector.

Maharashtra and Uttar Pradesh were two of the largest markets for biscuits and Tamil
Nadu, with 9 per cent market share, was ranked third.

He said the ITC Foods division launched biscuits in three segments - Glucose, Marie and
Cream - and it was the first to come out with two new flavours - Orange Marie and
Butterscotch Cream biscuits.

While in the rural markets Glucose biscuits do well, in the urban markets it is the cream
biscuits segment.

Asked about the consumer readiness to accept biscuits, ready-to-eat food products and
chocolates marketed by ITC through its Foods Division despite the fact that ITC as a
brand has long been associated with tobacco, he said ITC clearly demarcated its two
businesses and food products were sold through groceries/departmental stores that did
not deal in tobacco products. Hence there was no hesitation on the part of the
consumers.

This has been borne out by the fact that atta and salt launched under the `Aashirvaad'
brand name by ITC Foods division had done very well in the markets and in Coimbatore
district, ITC'satta has garnered a 19 per cent market share.

He attributed the company's success in the food products business to the depth in its
distribution network, ability in brand building and in identifying quality outsourcing
opportunities.

Mr Narayan said ITC entered the biscuits market in August 2003 and it has introduced
its products in Uttar Pradesh, Maharashtra, Kerala, etc.

The `Sunfeast' brand of biscuits have been able to capture a 10 per cent market share
where they have been launched.
In Coimbatore, he hoped by the end of 2004-05, it would garner 20 per cent of the
biscuit market.

He expected the market for biscuits to be good since the per capita consumption of
biscuits was just about 10 kg in India where was it was 100 kg in countries like the US
and even China.

Moreover, from being essentially a favourite of children , biscuits are emerging as a

preferred snacks to be consumed with coffee or tea and this wider consumer choice
promised growing demand for them, he added.
Brand : Sunfeast
Company : ITC Ltd
Can a cigarette manufacturer succeed in marketing Biscuits? What do management
thinkers say about unrelated diversification? Unrelated diversification will succeed if it
is based on the core competency of the firm. So What is the core competency of ITC that
is being leveraged when it decided to enter the Foods market. ITC relies on three core
competencies

1. The depth of distribution

2. Its brand building capabilities.

3. The ability of Quality outsourcing.

Sunfeast has been a success because of these three competencies of ITC. Sunfeast was
launched in 2003 was one of the diversification forays of ITC which wanted to establish
itself as a serious FMCG player from its position of Tobacco products leader. ITC had
the advantage of the well entrenched distribution setup which is matched only by HLL.
Indian biscuit market is estimated to be around 4500 - 5000 crore. The market is
dominated by Parle and Britannia. Parle is the volume leader with brands like parle- G,
Krackjack and Monaco while Britannia is the value leader with brands like 50: 50, milk
bikis, Tiger, Goodday etc. The biscuit market has now moved from the core Glucose base
to more value added categories. The key markets are UP, Maharashtra, and Tamilnadu.
The percapita consumption of biscuits in India is only 1.2 kg per annum while the
percapita consumption is 15 kg p.a in developed nations. While the glucose biscuits are
popular in Rural India , Urban market prefer Cream biscuits.

To establish a brand in this tough market was never easy. Sunfeast using heavy
promotion and careful brand building have already garnered 10% market share in this
market. Sunfeast is positioned as an exciting brand. This platform is supported by a
series product launches. Since Biscuits are convenience goods , new tastes and new

products are essential to built excitement in the market. Sunfeast have maintained
continous series of new launches like Milky Magic, Coconut, strawberry, pineapple
cream etc. Recently Sunfeast launched a product for the premium segment named "
Dark Fantasy" with chocolate flavour and cool advertisements.

Sunfeast have used the baseline " spread the smile" as the brand essence and the brand
is endorsed by Shah Rukh Khan. The use of SRK makes sense since the TG is mainly
kids . SRK have the energetic persona that goes well with the brand. The mascot of
Sunfeast is the Animated Sun which is the symbol of contentment, satisfaction and
Pleasure. This mascot has been well received by the TG. The ad campaigns are catchy
and full of colors and excitement. The product is also of very high quality. Thus Sunfeast
has managed to get all the winning combinations in the right mix.

Sunfeast is also trying to garner more share in the Marie category which is estimated to
be around 600 crore. It launched the Marie with different flavours that has enabled it to
gain a strong foothold in that category. To expand the brand in to the snack category
Sunfeast has launched Pasta Treat which talks of a healthy snacking option for kids.

Sunfeast also uses lot of Below the line promotions for brand building. It sponsors
Sunfeast Open, a recent initiative aiming at the school kids by providing them an
opportunity to enhance creativity through painting competitions, " Hara Bano "
campaign which set a world record in planting maximum number of saplings etc.

The constant product launches and careful promotions have enabled Sunfeast to move
to the top league in the biscuit market with in a span of 3 years. We may see this brand
expanding to many categories .Hope they don't mess the brand by extending it to
underwears.