Tuesday, May 13, 2008

Imperial Tobacco Company of India Limited (ITC LTD)

Introduction
Incorporated on 24 August 1910 as the Imperial Tobacco Company of India Limited, the company's name was changed to ITC Limited in 1974. This company is rated among the 'World's Best Big Companies' by Forbes magazine. ITC ranks third on all major profit parameters among India's private sector corporations. ITC employs over 20,000 people at more than 60 locations across India. ITC is one of India's foremost private sector companies with a market capitalization of over US $ 13 billion and a turnover of US $ 3.5 billion.
ITC's unique e-Choupal initiative began in 2000. ITC e-Choupal, the largest Internet-based intervention in rural India, empowers over 3.5 million farmers in 35,000 villages. It enables them to readily access crop-specific, customized information through vernacular websites. The service also creates a two-way direct marketing channel for rural India, eliminating wasteful intermediation and multiple handling.

Business
ITC has a diversified presence in cigarettes, hotels, paperboards and specialty papers, packaging, agri-business, packaged foods and confectionery, branded apparel and greeting cards. ITC's agri-business is one of India's largest exporters of agricultural products. A wholly-owned subsidiary, ITC InfoTech India Limited, provides end-to-end IT solutions, including e-enabled services and business process outsourcing.

About ITC Foods
The 'Foods Division' is the most recent diversification of the ITC Group. ITC's decision to enter the foods business is part of a strategic decision to develop new product lines by synergizing its core competencies in building brands, understanding the Indian consumer's requirements and its strong distribution network as well as its established culinary expertise.

Brands
India Kings, Gold Flake, Scissors, Bristol (cigarettes), ITC-Welcomgroup (hotels), Wills Sport (range of casual wear for men and women), John Players (men's wear), Essenza Di Wills (fragrances), Kitchens of India (Confectionery, staples and snack foods), Aashirvaad (flour), Sunfeast (biscuits), Mangaldeep, VaxLit and Delite (safety matches), Expressions (greeting cards) and Classmates (school note books).

Partnership
In 1985, ITC set up Surya Tobacco Co. in Nepal as an Indo-Nepal-British joint venture. In August 2002, Surya Tobacco became a subsidiary of ITC Limited and its name was changed to Surya Nepal Private Limited. In a short span of five years, ITC Infotech has already crossed over US$ 60 million in revenues.

ITC COMPANY PROFILE
As one of India's most valuable and respected corporations, ITC is widely perceived to be dedicatedly nation-oriented. Chairman Y C Deveshwar calls this source of inspiration "a commitment beyond the market". In his own words: "ITC believes that its aspiration to create enduring value for the nation provides the motive force to sustain growing shareholder value. ITC practises this philosophy by not only driving each of its businesses towards international competitiveness but by also consciously contributing to enhancing the competitiveness of the larger value chain of which it is a part."

ITC's diversified status originates from its corporate strategy aimed at creating multiple drivers of growth anchored on its time-tested core competencies: unmatched distribution reach, superior brand-building capabilities, effective supply chain management and acknowledged service skills in hoteliering. Over time, the strategic forays into new businesses are expected to garner a significant share of these emerging high-growth markets in India.
ITC's Agri-Business is one of India's largest exporters of agricultural products. ITC is one of the country's biggest foreign exchange earners (US $ 2.4 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.
ITC's wholly owned Information Technology subsidiary, ITC Infotech India Limited, is aggressively pursuing emerging opportunities in providing end-to-end IT solutions, including e-enabled services and business process outsourcing.
ITC's production facilities and hotels have won numerous national and international awards for quality, productivity, safety and environment management systems. ITC was the first ITC's Agri-Business is one of India's largest exporters of agricultural products. ITC is one of the country's biggest foreign exchange earners (US $ 2.4 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.
ITC's wholly owned Information Technology subsidiary, ITC Infotech India Limited, is aggressively pursuing emerging opportunities in providing end-to-end IT solutions, including e-enabled services and business process outsourcing.
ITC's production facilities and hotels have won numerous national and international awards for quality, productivity, safety and environment management systems. ITC was the first ITC's Agri-Business is one of India's largest exporters of agricultural products. ITC is one of the country's biggest foreign exchange earners (US $ 2.4 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.


BOARD OF DIRECTORS

CHAIRMAN: Y.C. DEVESHWAR

EXECUTIVE DIRECTORS
  • S.S.H.REHMAN
  • ANUP SINGH
  • K.VAIDYANATH

NON EXECUTIVE DIRECTORS
  • J.P.DALY
  • C.R.GREEN
  • S.H.KHAN
  • S.B.MATHUR
  • D.K.MEHROTRA
  • P.B.RAMANUJAM
  • B.SEN
  • RAM.S.TERNEJA
  • B.VIJYARAGHVAN


CHANGES IN ITC
ITC LAUNCHES SUNFEAST BISCUITS
ITC Limited – Foods Division announced the launch of the 'Sunfeast' range of high quality biscuits with offerings in Glucose, Marie and Cream segments at a function in Chennai on April 20, 2004.
Speaking on the occasion, Sambit Satapathy, Branch Manager, Chennai, ITC said, “The launch of “Sunfeast” marks ITC Foods entry into the branded biscuit market with a range of offerings in both basic and value added segments.”
'Sunfeast', with the Brand Essence “Spread the Smile,” connotes happiness, contentment, satisfaction and pleasure which one would derive from the biscuits. The brand positioning and imagery is reinforced by the Sun mascot conveying the emotional and gratifying aspects of the product.
The latest offering from ITC Foods is in tune with the company’s strategic direction to develop new product lines by synergizing its proven competencies. They believe that their understanding of the Indian consumer is reflected in the increasing confidence in the 'ITC' brand and more importantly the trust that Indian consumers are reposing in all their products.

New recipe
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.
The biscuits industry had witnessed little innovation; Glucose was Glucose and Marie was still Marie. The company decided that this could be its biggest point of attack. 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. A consultant says, "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 then the competition had not made things better
In August 2003, a month after its launch, the company undertook a major sampling exercise to promote the product. For two years then, the brand did all the usual rounds -- riding behind buses, blocking television spots, booking that corner space in your favourite newspaper and so on.
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.
At the same time, on general entertainment channels, mothers received information on the importance of glucose, the wholeness of wheat and so on. In April 2005, Sunfeast launched its major campaign. It signed on Hindi film actor, Shah Rukh Khan as its brand ambassador.
In the same year, as the official sponsor of the WTA tennis championship -- titled the Sunfeast Open -- the company had teenage sensations 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). .
But the company says that the figure will increase substantially in 2006-07. ITC is clearly among the largest spender on ads and promotions in the biscuits category.
Analysts predict that these figures are all set to rise this year.
Pricing models
'Sunfeast Biscuits' – Initial Offerings
Sunfeast Glucose Biscuits deliver the Natural Goodness of Wheat and is available in 100 gms, 75 gms and 19 gms priced at Rs. 4, Rs. 3 and Re 1 respectively, targeting children between the age group 4 – 14 years and their mothers.
Sunfeast Orange Marie – a very differentiated offering is available in 200 gms, priced at Rs. 13 and 'Sunfeast Marie Light' – Light & Crispy, available in 200 gms and 400 gms, priced at Rs. 13 and Rs. 24 respectively that target housewives.
Sunfeast Orange Cream, Sunfeast Butterscotch Cream & Sunfeast Bourbon Cream – Smooth & Yummy Cream Biscuits, available in 100 gms, priced at Rs. 11, Rs. 11 and Rs. 12 respectively that target children between the age group 4 – 14 years.
ITC Limited – Foods Division, being in the forefront of product innovation has introduced two new flavours Orange Marie and Butterscotch Cream Biscuits after 12 months of product research and development and extensive sampling across 14,000 consumers across the nation. Orange Marie and Butterscotch Cream Biscuits are being launched for the first time in the Indian market. 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 the umbrella brand “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 will be conducted across retail outlets – for every purchase of Sunfeast Marie & Sunfeast Cream Biscuits 75gms of Glucose Biscuits FREE.

Key challenges
Back in 2003, nobody thought Sunfeast would have consumers eating out of its hands. The company says that achieving 7% in less than three years is something that they could have only dreamt about.
Importantly, industry barometer AC Nielsen has indicated that both Parle and Britannia are losing market shares. According to the AC Nielsen retail sales audit in March 2006, both Britannia and Parle have lost volumes. Britannia's shares have dropped from 35.8 per cent in 2004-05 to 30.5 per cent in May 2006 (volumes). Parle's shares have also dropped from 42.2 to 38.4 per cent in the same period. 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.
ITC's Sunfeast has been a big gainer with its share increasing from 2.7 to 6.7 per cent.
In terms of value, Britannia leads the market with 37 per cent market share, followed by Parle's 31.3 per cent and ITC's 6.3 per cent. Nevertheless, the gap is still wide. Sunfeast still has a long way to go.
But what can the bigger players do? Both Britannia and Parle have very high volumes and can easily afford to lower their margins.
Sunfeast too may have to drop its prices to be in the reckoning and this will squeeze its margin even lower. While the full game is yet to be played out, for the moment the sun seems to be shining on Sunfeast.

Creaming the market. . .
• Innovation in the product line -- biscuits with butterscotch cream with actual granules in the cream, strawberry cream with flavour-enhancers and orange-flavoured marie.
• Gained an edge from the well established distribution network of its tobacco business.
• Signed up big film stars like Shah Rukh Khan and southern star Surya as brand ambassadors for Sunfeast.
• Branded the WTA tennis tournament with promos starring tennis stars, Mahesh Bhupati and Sania Mirza.
. . . needs further embellishments
• Big brand ambassadors, but not strong enough advertising campaigns for big brand recall.
• The gap between the number three and the top two slots is too wide.
• Competitors can play the low price game as they have volumes to support.


ITC FOODS TIES UP WITH CARTOON NETWORK TO PROMOTE SUNFEAST THROUGH “BEYBLADE”


CARTOON Network Enterprises (CNE) has signed a deal with ITC Foods to promote the Sunfeast Cream Biscuit and Sunfeast Pasta Treat brands through Cartoon Network's popular third-party character, "Beyblade". Kids can now feast on Sunfeast Cream Biscuits and Sunfeast Pasta Treat and also play with their favourite Beyblade toys. As part of the promotion, ITC Foods' brand ambassador and actor, Shah Rukh Khan, will star in a new TV commercial that goes on air on February 17,2006. "Having pioneered the concept of promotional licensing in the country with both traditional kids' clients as well as non-kids' clients, where our iconic characters have promoted and built brands across categories, the Beyblade promo marks Cartoon Network Enterprises's foray into third-party promotional licensing," said Mr Jiggy George, Director, Cartoon Network Enterprises - India & South Asia.
Sunfeast is a brand synonymous with fun and warmth for the child. They have endeavoured to add a touch of excitement to a child's life. Beyblade is the latest craze among children. Sunfeast draws on the synergies arising from the association, by bringing to the child a host of toys centered on the Beyblade theme.
Set on the model of `Buy & Get Free', the Beyblade promotion offers a range of in-pack Beyblade give-away with purchase of Sunfeast Cream Biscuits and Sunfeast Pasta Treat.
Purchase of Sunfeast Pasta Treat offers a Beyblade trading card inside each pack that makes up an interactive game based on the traits of the characters on the Beyblade show. Kids can also redeem rip-off strips from their trading cards to get Beyblade merchandise such as sippers, T-shirts and Beyblade tops.


ITC LAUNCHES SUNFEAST BISCUITS IN CHENNAI
ITC on April 20 launched its `Sunfeast' range of biscuits in Chennai.
Company officials said that the aim was to capture 10 per cent of the biscuit market in Tamil Nadu in the first year of launch.
Sunfeast's launch was on the heels of a launch in other parts of the country last year.
ITC's Chennai Branch Manager, Mr. Sambit Sathapathy, said the timing of the launch was dictated by the importance of the market. Tamil Nadu is the third largest market for biscuits in the country, and the company had wanted to get its supply chain ready before hitting the market.
According to Mr Sathapathy, the company would distribute the biscuits through 20,000 outlets in Chennai. Of the outlets, about half are those which sell the company's cigarettes, while the remaining were developed over the last year, he added. Mr Sathapathy said the annual value of biscuits bought from "organised players" in Chennai was Rs 82 crore, while that of entire Tamil Nadu was Rs 320 crore. He said the State accounted for 9 per cent of the country's consumption.
The biscuits offered under the Sunfeast brand are of glucose, orange Marie and cream varieties. Company officials said the products would be advertised largely through regional television channels.


THE AMAZING STORY OF ITC'S RISE.
It is certainly a formidable force in the country's organized food biz.
They would like to become the number one foods company in India within the next five years.
But ITC Foods isn't balking at the challenge. Already, customer loyalty is being built up for its buffet of food products -- from biscuits, pasta, spices, confectionery and ready-to-eat foods to branded commodity products like flour, salt and spices.
Overall, ITC Foods has managed a 10 per cent market share in segments in which the others are operating -- biscuits {Rs 4,500 crore (Rs 45 billion), confectionery {Rs 2,000 crore (Rs 20 billion), atta and salt {over Rs 1,000 crore (Rs 10 billion) among others.
For the next year or two, the company’s strategy will be to consolidate and offer a greater range in the existing categories and grow these markets.
ITC Foods is all set to invest Rs 450 crore (Rs 4.5 billion) in the next three years {apart from the Rs 150 crore (Rs 1.5 billion) it has already put in} as part of its long-term strategy of ruling the branded food market in India.
What's ITC doing that's different from its competitors?
Well, it is working on a different model from them, but the company feels that the market is too big for anyone to worry about competition.
For instance, branded and packaged foods is only 8 per cent of a total food market worth a staggering Rs 5, 00,000 crore (Rs 5000 billion). This is expected to increase to 15-20 per cent in the next six years.
What is different at ITC though is its ability to leverage its e-Choupals as a pragmatic rural supply chain system?
For the uninitiated, ITC's trading arm, the International Business Division, has set up over 5,000 e-Choupals covering 31,000 villages across the country where farmers can sell their produce directly sans middlemen or having to go to a market at a fair price, and also get information relevant to farming, weather and prices at other market, all on the net.
There two advantages: by cutting the middlemen out, it saves 2 per cent on cost of wheat, which is significant in a low-margin commodity business; and the company classifies the quality of wheat and stores it separately so it does not mix with any inferior varieties, which is common enough if you were to buy it from a market.
The result is an assurance of quality. Using the same route, ITC acquires spices (chilly powder), again with a similar advantage. That it has stayed away from branded rice is because the majority of its e-Choupals are not located in rice farming areas.
The model is simple enough. ITC is looking at creating food verticals to integrate the foods division with that of the e- Choupals. In the case of wheat, Naware explains: "We do the first value addition by offering branded atta, the second value addition is through biscuits, and the third is pastas."
The other key element ITC is leveraging for the foods business is its tobacco distribution chain. It has over 1.5 million tobacco retailers across the country, larger than Unilever's distribution chain of over 1 million, virtually neutralizing the fact that it is a latecomer in the foods game. That's not to say it hasn't had to create a separate distribution system to sell Aashirwad atta and other FMCG products through various stores (3,50,000 outlets).
But biscuits and confectioneries are perfect complementary products that can be sold through the tobacco chain. Currently, as much as half the tobacco retailers carry confectionery and about 300,000 stock its biscuits. And as much as 40 per cent of the tobacco retailers are already stacking FMCG products other than just tobacco.
But perhaps the most important factor that has helped ITC sustain its foods business is its healthy financials backed by attractive tobacco margins that can absorb the pressure of losses in the FMCG business.
Clearly, part of the foods strategy is prompted by ITC's attempt to reduce its dependence on tobacco, which constitutes over 87 per cent of its operating profits and over 71 per cent of its turnover.
To that extent, the non-cigarette FMCG business (at 5 per cent per cent of the company's turnover) might look small, but its contribution to turnover has already surpassed the company's hospitality business and is closing the gap with its paper business.
Also, the FMCG business is growing much faster than others: FMCG revenues in the first quarter were up 90 per cent compared to hotel growth of only 36 per cent and paper of 22 per cent. Of course, the agri-business grew handsomely by 64 per cent and is the second-largest revenue earner after tobacco.
But that isn't likely to put a brake to ITC's foodie ambitions. It has identified its immediate task to expand its reach into more cities and towns, to garner more retailers. The target is to reach 1.2 million retailers (from 8,00,000) in the next two years and to ensure they stack all ITC products.
In confectionery, ITC again changed the rules of the game by introducing flavoured mints in orange and lemon for Mint-O, and as much as 50 per cent of the mint volumes now come from this category.
As for the ready-to-eat food market, ITC has created two distinct segments -- the upper end catered through the Kitchens of India brand (based on recipes from its restaurants in Welcomgroup hotels) and the mid-market through the Aashirwad series.
ITC executives admit that this is a small market {total size: Rs 80 crore (Rs 800 million)} but it's growing at 35 per cent per annum. And even though a large number of players are packing meals into packets, Aashirwad is spreading the banquet across 15,000 retail stores, while Kitchens of India is available at 7,000 outlets.
A branded food isn’t likely to be a simple market to crack. But if the record up to now is any indication, it might suggest that ITC Foods has been able to understand the culinary palate of Indians much better than many of its competitors
ITC FOODS ENTERS U.S.A MARKET
A recent report shows that the foods division of ITC Ltd., has tied up with a New York-based Company ‘House of Spices’ to introduce its Sunfeast biscuits brand in the US market. This brand will be launched in the US by a TV Commercial, starring the King of Bollywood industry Mr. Shah Rukh Khan. To announce Sunfeast’s foray into the US, they are beaming television commercials featuring Shah Rukh Khan on Indian channels in the US.
Sunfeast biscuits target the snack-food of children and this being rich in cow’s milk, pure butter, crisp cashews and a wide range of creamy flavors. The Sunfeast biscuits will give good health to the children in the US and no doubts with Shah Rukh Khan’s motivating the children to have the biscuits in place of burgers and chips will create a huge impact.
ITC WITNESSING PHENOMENAL GROWTH

One of the emerging leaders in the Indian confectionery and bakery industry, ITC Limited is clocking a rapid growth in its fledgling food brands Aashirvaad and Sunfeast. The volumes of Aashirvaad atta has grown by 10 times in the past three years with Sunfeast biscuits volumes rising by 18 times in the couple of years. According to the latest reports of the company, today, Aashirvaad atta commands 45 per cent of the market, having been launched in May 2002.
The year marked the expansion of the 'Sunfeast' range of biscuits with the launch of Cookies ('Sunfeast Golden Bakes') in 3 variants and Sweet & Salt Crackers ('Sunfeast Snacky') in 2 variants. The innovative products under this brand have garnered significant market standing in a short span of time and are being increasingly accepted by consumers as a credible new option to the established players in the industry. During the year, outsourced and distributed manufacturing capacities were geared up to support the increase in scale of operations. The business is in the process of establishing its own production facilities across the country, including in tax-exempt zones, with a view to servicing proximal markets in an efficient and cost-effective manner. The year also saw the roll out to target markets of 'Sunfeast Pasta Treat', a whole-wheat based non-fried product. This healthy snacking option for children is available in 4 exciting flavours and has met with encouraging response from consumers.
Product range in the 'Confectionery' segment was expanded with the launch of 'mint-o masti blue' in a new pack design and 'Cofitino' in the hitherto unrepresented Toffees segment. The Ready-to-Eat product portfolio was augmented with the introduction of Instant Mixes in the 'popular' range under the 'Aashirvaad ReadyMeals' banner, launch of new variants of cooking pastes under the 'Aashirvaad' umbrella brand and a range of packaged desserts, conserves & chutneys under the flagship brand 'Kitchens of India' (KOI).


SUNFEAST: SPREADING THE SMILE

Advertising Strategies
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.


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 continuous 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 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.


ITC TO LAUNCH SUNFEAST SACHIN FIT KIT RANGE OF HEALTH BISCUITS IN COLLABORATION WITH THE MEGA CRICKETER

Strategic co-creation deal to create unique products under the Sunfeast range
Sunfeast, the flagship brand from ITC Ltd - Foods Division November 10, 2006 announced a unique and revolutionary marketing initiative by signing on world's most revered cricketer Sachin Tendulkar. This strategic tie-up goes beyond the conventional Brand Ambassador deal and will be the first of its kind initiative witnessed in the Indian food industry. It is a co-creation deal that will see ITC Foods launch "Sunfeast Sachin's Fit Kit" range of high quality health range of food products, in the making of which Sachin will play an active role.
The alliance is part of Sunfeast's hallmark strategy to bring to its consumers innovative & differentiated product offerings. This is the first time that any brand in the foods industry in India has signed on a co-creation deal. As co-creator, Sachin will be an integral part of the product development process and will provide inputs on creating healthy food products.
The name "Sunfeast Sachin's Fit Kit" has been arrived at to reflect this focus on health and fitness-the new brand will own the platform of active health. The Fit Kit range will, like Sachin and Sunfeast, have wide appeal-which will be reflected in its formulation, communication and pricing.
Speaking on the novel strategic initiative Mr. Ravi Naware, Divisional Chief Executive, ITC Ltd. - Foods Division, said, "The use of celebrities has thus far been limited to advertising and promotional initiatives and this co-creation partnership marks a new beginning for a celebrity to actively participate and contribute in an area that was, until now, the exclusive preserve of in-house experts."
Sachin welcomed his new role, saying, "I am extremely pleased to accept this challenge. This will give me a chance to leverage my penchant for fitness, healthy eating and healthy living by creating a line of my own food products. I could have found no better partner than ITC Sunfeast-a young, energetic and quality brand-to launch my own line of healthy food products with."
According to the company, Sachin is more than an icon - his image projects an aura of a committed and enduring sportsperson. His persona perfectly matches with Sunfeast's own philosophy of constant innovation and delivering the best to its consumers. Sachin's appeal transcends across all sections and demographics of the society, specially the children, who are a vital element for a biscuit brand.
As a co-creator, Sachin Tendulkar will play a key role in brand and product creation aswell as communication on television, print and outdoor media for the Sunfeast Sachin Fit Kit range of snacks. This product range will be supported by a multi-media ad campaign featuring Sachin in his new role, propagating and educating the consumers towards the new dietary regime.



ITC FOODS OPEN TO TIE-UPS FOR ADDING CAPACITIES IN BISCUITS

[Product development works on at ITC's food laboratory at the integrated R&D centre in Bangalore.]
The biscuits segment of ITC Foods Division, spearheaded by the Sunfeast range, is now witnessing a situation of demand outstripping supply. They have chosen the Partnership route instead of the outsourcing route to augment the supply.
Talking to Business Line in Bangalore recently on the scorecard for the branded foods business of the company, with focus on biscuits and confectionery, Mr Ravi Naware, CEO, ITC Foods Division, admitted that the supply position for biscuits right now was not comfortable and that efforts were on to add to capacities.
He said the company was extremely careful in adding new supply locations, which have to fit in with the existing supply chain, as stringent quality control and various mandatory compliance tests have to be adhered to at every stage by the suppliers.
He clarified that there was no problem as such in adding to capacities, as demand exceeding supplies was a positive sign. Maintaining consistent quality at lower prices while keeping overall investments down is a formidable challenge, he admitted. This is particularly so for confectioneries, where it was absolutely essential to maintain attractive price levels.

CHANGES IN RURAL INDIA

LET'S PUT INDIA FIRST
ITC believes that an effective growth strategy for our nation must address the needs of rural India, home to 75% of our poor. It is imperative to ensure that India's economic growth is inclusive, embracing its villages, so as to free millions of our disadvantaged citizens from the indignity of poverty.
It is ITC's belief that India's rural transformation cannot be brought about by the government alone. Nor can the efforts of a few enterprises make a decisive difference. Only an inspired public-private partnership can transform lives and landscapes in rural India. ITC's humble endeavours have demonstrated that it is possible to create and sustain a model that can harmonize the need for shareholder value creation with making a substantial contribution to society.
ITC has partnered the Indian farmer for close to a century. ITC is now engaged in elevating this partnership to a new paradigm by leveraging information technology through its trail-blazing e-Choupal initiative. Additionally, ITC is significantly widening its farmer partnerships to embrace a host of value-adding activities: creating livelihoods by helping poor tribals make their wastelands productive; investing in rainwater harvesting to bring much-needed irrigation to parched drylands; empowering rural women by helping them evolve into entrepreneurs; enhancing livestock quality to significantly improve dairy productivity; providing infrastructural support to make schools exciting for village children.
Through these rural partnerships, ITC touches the lives of nearly 4 million villagers across India.
For ITC, these are expressions of a commitment beyond the market. Of a conviction that country must come before corporation. Of a true pride in being Citizen first…


ITC PLANS 7500 FARM DEMO PLOTS
As part of its e-choupal initiative, ITC is planning to set up 7,500 Choupal Pradarshan Khets (CPK) or demonstration plots in the 2006-07 rabi season in Uttar Pradesh, Rajasthan, Maharashtra and Madhya Pradesh. This will enable a higher productivity for farmers and ensure better quality of procurement for the company.
This rabi season, the CPK will focus on crops, such as wheat, mustard and pulses. In the last rabi season, 415 CPKs were set up.
“The purpose would be to demonstrate the best farming practices available to the farmer. These practices would be customised to the individual context of each farmer,” said S Sivakumar, chief executive, agri business, ITC.
The demonstration plots will complement the information available on the e-choupal website. Farmers are best convinced about certain recommended practices only when they experience a demonstration on their own farms.
Under the CPK initiative, high-quality farm inputs will also be made available to the farmer at his doorstep to improve adoption. As an added incentive, the CPK farmers will be eligible for weather insurance package at a discounted premium. “It has been observed that many farmers do not invest in all the recommended inputs because of the potential financial risk in case the weather turns adverse.
The insurance would mitigate this risk,” added Sivakumar. The benefits to farmers will come in the form of increased yield, improved quality and reduced costs of production, apart from valuable knowledge transfer. It has been observed that farmers’ income rose by 15 to 40 per cent in this kharif season, he said.
ITC had set up 7,500 CPKs in the 2006 kharif season that focused on crops, such as maize, paddy and soybean. With 7,500 more CPKs in the rabi season, ITC’s initiative would probably be the largest in the country by any private sector company.



MY VIEWS REGARDING THE CHANGES IN ITC

ITC’s entry into the Food sector created a great impact on the company’s progress. They took a great risk but were successful because of the following strategies:

• They introduced sunfeast biscuits in 6 flavours which not even the top and famous biscuit companies in India had. This created interest among the customers especially among children.
• They used the policy of CELEBRITY ENDORSEMENT by making Shahrukh Khan as their brand ambassador. This lead to more sales as Shahrukh Khan is very popular among children.
• Their biscuits had been innovated and tasted different from other biscuits increasing the desire for newer taste.
• They introduced other popular brands such as SUNFEAST PASTA TREAT, EASY TO COOK PRODUCTS etc. Fast life of Indians made these easy to cook products very popular.
• ITC has been innovating, creating new type of brands which are of good quality due to which they have customer loyalty.
• ITC has good advertisement policies due to which people are motivated to buy their product at least once. The advertisement about a child entering the cream world makes the children excited about the product leading to increase in sales.
• Their tag line SPREADING THE SMILE itself makes people attracted towards it. Their mascot THE SUN brings happiness and a healthy feeling to the people watching it.
• In short, they have done a great job in marketing, advertising, innovating, providing good quality products. Due to this, their products have become favorites of all children and they have achieved a lot in a small span of time.


CONCLUSION
ITC has grown a lot over these three to four years. The company will surely grow further over the next few years for it is quite stable, innovative and it understands the market and its needs. It has fulfilled all needs and requirements of the people. If the company maintains its standards or increases it in the near future it surely will attain the number one position in the market.


Source : NA

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