Bharati Vidyapeeth

(Deemed to be University), Pune, India

Institute of Management and Entrepreneurship
Development, Pune

“How to increase cigarette Sales in Independent Self Service Outlet

(ISS) from I.T.C. Limited Lucknow”

A Summer Training Project Report

Submitted in Partial Fulfilment of the Requirements for the

Award of Degree of Master of Business Administration

2022-2024

Submitted by- Guided by-

Shivamm Singh Dr. Vijay Phalke
Roll no.: 173 (Internal Guide)
Division: C

DECLARATION
I Under signed, hereby declare that the project titled “How to increase
cigarette Sales in Independent Self Service Outlet (ISS)”
submitted in partial fulfillment for the award of Degree of Master of
Business Administration of Bharati Vidyapeeth (Deemed to be University),
Pune Maharastra, India is a bonafide record of work done by me under
the guidance of Prof Dr. Vijay Phalke .

Shivamm Singh
 MASTER OF BUSINESS ADMINISTRATION

CERTIFICATE

This is to certify that the report titled HOW TO INCREASE

CIGARETTE SALES IN INDEPENDENT SALF SERVICE OUTLET (ISS)
Being submitted SHIVAMM SINGH, Roll no.173, in partial
fulfilment of the Requirements for the award of the Degree of
Master of Business Administration, is a bonafide record of the
project work done by SHIVAMM SINGH of Master of Business
Administration, .

DR. VIJAY PHALKE

 ACKNOWLEDGEMENT

Through this acknowledgement I express my sincere gratitudetowards all those people who
helped me in this project, which has been a learning experience.

This space wouldn’t be enough to extend my warm gratitude towards my project guide Dr.
Vijay phalke for his efforts in coordinating with my work and guiding in right direction.
The internship project report opportunity I had with Independent Self Service Outlet (ISS)
from “ITC Limited”was a great chance for learning and professional development. Therefore, I
consider myself as a very lucky individual as I was provided with an opportunity to be a part of it.
I am also grateful for having a chance to meet so many wonderful people and professionals who
led me though this internship period.

I am using this opportunity to express my deepest gratitude and special thanks to “Mr. Vinay
Jaiswal” “Area executive” of I.T.C. Limited Lucknow, Uttar Pradesh who in spite of being
extraordinarily busy with “her/his” duties, took time out to hear, guide and keep me on the
correct path and allowing me to carry out my internship at their esteemed organization.

I express my Deepest thanks to Mr. Santosh kumar Dalai Manager Convenience I.T.C
Limited who is founder for taking part in useful decision & giving necessary advices and
guidance and arranged all facilities to make life easier. I choose this moment to acknowledge
his/her contribution gratefully.

I would also like to thank to Mr. Ashutosh Singh “Area executive” I.T.C. Limited & My
parents and friends who helped me a lot during my life and this research project report
period.I perceive this opportunity as a big milestone in my career development. I will strive to
use gained skills and knowledge in the best possible way, and I will continue to work on their
improvement, in order to attain desired career objectives. Hope to continue cooperation with all
of you in the future.

Name of Student

SHIVAMM SINGH
CERTIFICATE OF INTERNSHIP
 TABLE OF CONTENTS

Contents Page Numbers

 Title Page 1

 Declaration 2

 Certificates by Guide 2-5

 Acknowledgement 6

1. INTRODUCTION 7-40

2. INDUSTRY OVERVIEW 41-61

3. COMPANY PROFILE 62-67

4. OBJECTIVES OF THE STUDY 69

5. RESEARCH METHODOLOGY 68-74

6. DATA ANALYSIS AND INTERPRETATION 75-81

7. FINDINGS 82-84

8. CONCLUSION & SUGGESTIONS 85-87

 BIBLIOGRAPHY 88-90

 ANNEXURE 1 91-92

 ANNEXURE 2(QUESTIONNAIRE) 92-94

 CHAPTER 1
INTRODUCTION

1) Introduction

ITC is one of India's foremost private sector companies with a market capitalisation of nearly
US $ 14 billion and a turnover of over US $ 5 billion.* ITC is rated among the World's Best
Big Companies, Asia's 'Fab 50' and the World's Most Reputable Companies by Forbes
magazine, among India's Most Respected Companies by BusinessWorld and among India's
Most Valuable Companies by Business Today. ITC ranks among India's `10 Most Valuable
(Company) Brands', in a study conducted by Brand Finance and published by the Economic
Times. ITC also ranks among Asia's 50 best performing companies compiled by Business
Week.
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.
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 practices 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

7
reach,

8
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 $ 3.2 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.
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
company in India to voluntarily seek a corporate governance rating.
ITC employs over 25,000 people at more than 60 locations across India. The Company
continuously endeavors to enhance its wealth generating capabilities in a globalising
environment to consistently reward more than 3,60,000 shareholders, fulfill the aspirations of
its stakeholders and meet societal expectations. This over-arching vision of the company is
expressively captured in its corporate positioning statement: "Enduring Value. For the nation.
For the Shareholder."

2) History

 ITC was incorporated on August 24, 1910 under the name of 'Imperial Tobacco
Company of India Limited'. Its beginnings were humble. A leased office on Radha Bazar
Lane, Kolkata, was the centre of the Company's existence. The Company celebrated its
16th birthday on August 24, 1926, by purchasing the plot of land situated at 37,
Chowringhee, (now renamed J.L. Nehru Road) Kolkata, for the sum of Rs 310,000. This
decision of the Company was historic in more ways than one. It was to mark the
beginning of a long and eventful journey into India's future. The Company's headquarter
building, 'Virginia House', which came up on that plot of land two years later, would go
9
on to become one of Kolkata's

1
0
 most venerated landmarks. The Company's ownership progressively Indianised, and the
name of the Company was changed to I.T.C. Limited in 1974. In recognition of the
Company's multi-business portfolio encompassing a wide range of businesses -
Cigarettes & Tobacco, Hotels, Information Technology, Packaging, Paperboards &
Specialty Papers, Agri-Exports, Foods, Lifestyle Retailing and Greeting Gifting &
Stationery - the full stops in the Company's name were removed effective September 18,
2001. The Company now stands rechristened 'ITC Limited'.
 Though the first six decades of the Company's existence were primarily devoted to the
growth and consolidation of the Cigarettes and Leaf Tobacco businesses, the Seventies
witnessed the beginnings of a corporate transformation that would usher in momentous
changes in the life of the Company.
 ITC's Packaging & Printing Business was set up in 1925 as a strategic backward
integration for ITC's Cigarettes business. It is today India's most sophisticated packaging
house.
 In 1975 the Company launched its Hotels business with the acquisition of a hotel in
Chennai which was rechristened 'ITC-Welcomgroup Hotel Chola'. The objective of
ITC's entry into the hotels business was rooted in the concept of creating value for the
nation. ITC chose the hotels business for its potential to earn high levels of foreign
exchange, create tourism infrastructure and generate large scale direct and indirect
employment. Since then ITC's Hotels business has grown to occupy a position of
leadership, with over 100 owned and managed properties spread across India.
 In 1979, ITC entered the Paperboards business by promoting ITC Bhadrachalam
Paperboards Limited, which today has become the market leader in India. Bhadrachalam
Paperboards amalgamated with the Company effective March 13, 2002 and became a
Division of the Company, Bhadrachalam Paperboards Division. In November 2002, this
division merged with the Company's Tribeni Tissues Division to form the Paperboards &
Specialty Papers Division. ITC's paperboards' technology, productivity, quality and
manufacturing processes are comparable to the best in the world. It has also made an
immense contribution to the development of Sarapaka, an economically backward area in
the state of Andhra Pradesh. It is directly involved in education, environmental protection
and community development. In 2004, ITC acquired the paperboard manufacturing
facility of BILT Industrial Packaging Co. Ltd (BIPCO), near Coimbatore, Tamil Nadu.
The Kovai
1
1
 Unit allows ITC to improve customer service with reduced lead time and a wider product
range.
 n 1985, ITC set up Surya Tobacco Co. in Nepal as an Indo-Nepal and British joint
venture. Since inception, its shares have been held by ITC, British American Tobacco
and various independent shareholders in Nepal. In August 2002, Surya Tobacco became
a subsidiary of ITC Limited and its name was changed to Surya Nepal Private Limited
(Surya Nepal).
 In 1990, ITC acquired Tribeni Tissues Limited, a Specialty paper manufacturing
company and a major supplier of tissue paper to the cigarette industry. The merged entity
was named the Tribeni Tissues Division (TTD). To harness strategic and operational
synergies, TTD was merged with the Bhadrachalam Paperboards Division to form the
Paperboards & Specialty Papers Division in November 2002.
 Also in 1990, leveraging its agri-sourcing competency, ITC set up the Agri Business
Division for export of agri-commodities. The Division is today one of India's largest
exporters. ITC's unique and now widely acknowledged e-Choupal initiative began in
2000 with soya farmers in Madhya Pradesh. Now it extends to 10 states covering over 4
million farmers. 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 operatonal
in the 3 states of Madhya Pradesh, Maharashtra and Uttar Pradesh.
 In 2000, ITC launched a line of high quality greeting cards under the brand name
'Expressions'. In 2002, the product range was enlarged with the introduction of Gift
wrappers, Autograph books and Slam books. In the same year, ITC also launched
'Expressions Matrubhasha', a vernacular range of greeting cards in eight languages and
'Expressions Paperkraft', a range of premium stationery products. In 2003, the
company rolled out 'Classmate', a range of notebooks in the school stationery segment.
 ITC also entered the Lifestyle Retailing business with the Wills Sport range of
international quality relaxed 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). ITC also initiated a foray into the popular
segment with its men's wear brand, John Players, in 2002. In 2006, Wills Lifestyle
became title partner of the country's most premier fashion event - Wills Lifestyle India
Fashion Week - that has gained recognition from buyers and retailers as the single
largest B-2-B platform for the Fashion Design industry. To mark the occasion, ITC
10
launched a special

10
 'Celebration Series', taking the event forward to consumers. In 2007, the Company
introduced 'Miss Players'- a fashion brand in the popular segment for the young woman.
 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 this area. Today ITC Infotech is one of India’s fastest growing global IT
and IT-enabled services companies and has established itself as a key player in offshore
outsourcing, providing outsourced IT solutions and services to leading global customers
across key focus verticals - Manufacturing, BFSI (Banking, Financial Services &
Insurance), CPG&R (Consumer Packaged Goods & Retail), THT (Travel, Hospitality
and Transportation) and Media & Entertainment.
 ITC's foray into the Foods business is an outstanding example of successfully blending
multiple internal competencies to create a new driver of business growth. It 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).
2003 witnessed the introduction of Sunfeast as the Company entered the biscuits
segment. ITC's entered the fast growing branded snacks category with Bingo! in 2007. In
just seven years, the Foods business has grown to a significant size with over 200
differentiated products under six distinctive brands, with an enviable distribution reach, a
rapidly growing market share and a solid market standing.
 In 2002, ITC's philosophy of contributing to enhancing the competitiveness of the entire
value chain found yet another expression in the Safety Matches initiative. ITC now
markets popular safety matches brands like iKno, Mangaldeep, Aim, Aim Mega and
Aim Metro.
 ITC's foray into the marketing of Agarbattis (incense sticks) in 2003 marked the
manifestation of its partnership with the cottage sector. ITC's popular agarbattis brands
include Spriha and Mangaldeep across a range of fragrances like Rose, Jasmine,
Bouquet, Sandalwood, Madhur, Sambrani and Nagchampa.
 ITC introduced Essenza Di Wills, an exclusive range of fine fragrances and bath & body
care products for men and women in July 2005. Inizio, the signature range under
Essenza Di Wills provides a comprehensive grooming regimen with distinct lines for
men (Inizio Homme) and women (Inizio Femme). Continuing with its tradition of
bringing world class products to Indian consumers the Company launched 'Fiama Di
11
Wills', a premium

12
 range of Shampoos, Shower Gels and Soaps in September, October and December 2007
respectively. The Company also launched the 'Superia' range of Soaps and Shampoos in
the mass-market segment at select markets in October 2007 and Vivel De Wills & Vivel
range of soaps in February and Vivel range of shampoos in June 2008.

3) Meaning of Name
 ITC stands for “Imperial Tobacco Company” initially when it was incorporated for
the 1st time in 1924. Later on the name has been changed to “Indian Tobacco Limited”
in 1974. After that, in recognition of the Company's multi-business portfolio
encompassing a wide range of businesses - Cigarettes & Tobacco, Hotels, Information
Technology, Packaging, Paperboards & Specialty Papers, Agri-Exports, Foods,
Lifestyle Retailing and Greeting Gifting & Stationery - the full stops in the Company's
name were removed effective September 18, 2001. The Company now stands
rechristened 'ITC Limited'. There is no specific meaning of ITC name is given on
their website. But what I think is that it is the name given to the company to signify
the operation of the company. Since ITC started its business in tobacco industry, they
have chosen the name to demonstrate their nature of business and what exactly what
they want to perform.

4) Evolution of Name
 ITC was incorporated on August 24, 1910 under the name of 'Imperial Tobacco
Company of India Limited'. ITC had a humble beginning and in the initial days it used to
operate from a leased office on Radha Bazar Lane, Kolkata. On its 16th birthday on
August 24, 1926, ITC purchased the plot of land situated at 37, Chowringhee, (now
renamed J.L. Nehru Road) Kolkata. Two years later company's headquarter building,
'Virginia House' came on that plot. Progressively the ownership of the company
Indianised, and the name of the Company was changed to I.T.C. Limited in 1974. In
recognition of the Company's multi-business portfolio encompassing a wide range of
businesses, the full stops in the Company's name were removed effective September 18,
2001 and the Company was rechristened as 'ITC Limited'.
13
 5) About Logo

The logo basically showing the name of the company i.e. “Imperial Tobacco
Company” and later on “Indian Tobacco Company”. Company using the logo to
show their company name which is clearly understood from the logo.

6) Operation
 ITC is a board-managed professional company, committed to creating enduring value
for the shareholder and for the nation. It has a rich organisational culture rooted in its
core values of respect for people and belief in empowerment. Its philosophy of all-
round value creation is backed by strong corporate governance policies and systems.
Its main operation is related to tobacco industry of India from which the company
grab maximum revenue. Additional to this company has its footprints in other sectors
also. Starting from Hotel industry, FMCG foods, Personal care, Agarbattis, Match
box, Apparels, Papers, Greetings cards, Pens etc. ITC is one of the top conglomerates
of India and the 2nd largest exporter from India. The main strength of ITC is their
“Brand value” and “Distribution Channel” which has its reach at all parts of the
company.

Cigarettes
 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
14
minded focus on value creation for the consumer through significant investments in

15
 product design, innovation, manufacturing technology, quality, marketing and
distribution.
 All initiatives are therefore worked upon with the intent to fortify market standing in
the long 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.
 ITC's pursuit of international competitiveness is reflected in its initiatives in the
overseas markets. In the extremely competitive US market, ITC offers high-quality,
value-priced cigarettes and Roll-your-own solutions. In West Asia, ITC has become a
key player in the GCC markets through growing volumes of its brands.
 ITC's cigarettes are produced in its state-of-the-art factories at Bengaluru, Munger,
Saharanpur and Kolkata. These factories are known for their high levels of quality,
contemporary technology and work environment.

FMCG 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 packaged foods business is an ideal avenue to leverage ITC's proven strengths in
the areas of hospitality and branded cuisine, contemporary packaging and sourcing of
agricultural commodities. ITC's world famous restaurants like the Bukhara and the
Dum Pukht, nurtured by the Company's Hotels business, demonstrate that ITC has a
deep understanding of the Indian palate and the expertise required to translate this
knowledge into delightful dining experiences for the consumer. ITC has stood for
quality products for over 98 years to the Indian consumer and several of its brands are
today internationally benchmarked for quality.
 The Foods business carries forward this proud tradition to deliver quality food
products to the consumer. All products of ITC's Foods business available in the
market today have been crafted based on consumer insights developed through
extensive market research. Apart from the current portfolio of products, several new
and innovative products are under development in ITC's state-of-the-art Product
Development facility located at Bengaluru.

16
  Leadership in the Foods business requires a keen understanding of the supply chain
for agricultural produce. ITC has over the last 98 years established a very close
business relationship with the farming community in India and is currently in the
process of enhancing the Indian farmer's ability to link to global markets, through the
e-Choupal initiative, and produce the quality demanded by its customers. This long-
standing relationship is being leveraged in sourcing best quality agricultural produce
for ITC's Foods business.
 The Foods business is today represented in 4 categories in the market. These are:
 Ready To Eat Foods
 Staples
 Confectionery
 Snack Foods
 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 Clublife evening wear, fashion accessories and
Essenza Di Wills – an exclusive range of fine fragrances and bath & body care
products and Fiama Di Wills - a range of premium shampoos and shower gels. Wills
Lifestyle has also introduced Wills Signature designer wear, designed by the leading
designers of the country.

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  With a distinctive presence across segments at the premium end, ITC has also
established John Players as a brand that offers a complete fashion wardrobe to the
male youth of today. The recent launch of Miss Players with its range of trendy
fashion wear for young women has been a successful addition to the youthful offering.
With its brands, ITC is committed to build a dominant presence in the apparel market
through a robust portfolio of offerings.
 At Wills Lifestyle, customers can browse at leisure, and shop in a relaxed and
pleasing atmosphere. The use of space is refreshing, which is reflected even in the
spacious changing rooms. Every store offers an international retailing ambience with
the extensive use of glass, steel and granite, reflecting the most contemporary trends
in store design, thereby creating a splendid backdrop for the premium offerings.
 Wills Lifestyle was named Superbrand 2009 by the Superbrands Council of
India recently. Wills Lifestyle has been twice declared 'The Most Admired
Exclusive Brand Retail Chain of the Year' at the Images Fashion Awards in 2001
& 2003 as well as 'Most Admired Fashion Brand of the year - Fashion Forward'
in 2009.

Personal Care
 In line with ITC's aspiration to be India's premier FMCG company, recognised for its
world-class quality and enduring consumer trust, ITC forayed into the Personal Care
business in July 2005. In the short period since its entry, ITC has already launched an
array of brands, each of which offers a unique and superior value proposition to
discerning consumers. Anchored on extensive consumer research and product
development, ITC's personal care portfolio brings world-class products with clearly
differentiated benefits to quality-seeking consumers.
 ITC's Personal Care portfolio under the 'Essenza Di Wills', 'Fiama Di Wills', 'Vivel
Di Wills' 'Vivel UltraPro', 'Vivel' and 'Superia' brands has received encouraging
consumer response and is being progressively extended nationally.
 ITC's state-of-the-art manufacturing facility meets stringent requirements of hygiene
and benchmarked manufacturing practices. Contemporary technology and the latest
manufacturing processes have combined to produce distinctly superior products which
rank high on quality and consumer appeal.

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  Extensive insights gained by ITC through its numerous consumer engagements have
provided the platform for its R&D and Product Development teams to develop
superior, differentiated products that meet the consumer's stated and innate needs. The
product formulations use internationally recognised safe ingredients, subjected to the
highest standards of safety and performance.

Education & Stationary products

 ITC made its entry into the stationery business in the year 2002 with its premium
range of notebooks, followed in the year 2003 with the more popular range to
augment its offering.
 Today, ITC continues to blend its core capabilities to market a growing range of
education and stationery products. These capabilities include,
a. Manufacturer of India’s first Ozone treated environment friendly Elemental
Chlorine Free (ECF) pulp, paper and paperboard.
b. Knowledge of image processing, printing & conversion garnered from its
Packaging & Printing Business.
c. Brand Building & Trade Marketing & Distribution strengths resident in its FMCG
Business.

 ITC’s stationery Brands are marketed as “Classmate” and “Paperkraft”, with

Classmate addressing the needs of students and Paperkraft targeted towards college
students and executives.
 Classmate - India’s truly largest National brand, reaching 65,000 outlets across the
country, has over 300 variants in its range which comprises notebooks, long books,
practical books, drawing books, scrap books, reminder pads etc.
 The Classmate Fun N Learn range of children books targeting pre school learners,
comprising categories like Pre School Learner, Active Minds and Read Aloud
Tales with features like Wipe n Use again, Trace & Color and Puzzles ensure that a
child's first lessons are truly enjoyable.
 Classmate Invento Geometry Boxes, launched for school students comprise a world-
class precision compass and high quality plastic instruments coupled with interesting
trivia and useful information, to make geometry more fascinating for students.
 Aesthetically designed, Classmate pens offer the consumer a smoother and more
comfortable writing experience through use of ergonomic design, reducing the effort
required for writing. The initial launch comprises ball pens - Classmate Safari and
Classmate Ilet - and gel pens - Classmate Glider and Classmate Octane.

19
  A new entry to the Classmate portfolio is its range of HB Jet Black pencils. Designed
attractively for school kids, the pencils offer a unique advantage of lesser lead wear
out and thus, “Stay Sharper for Longer”.
 The Classmate Notebook range builds in regional preferences and caters to the
requirements of All India & State Education Boards. Every Classmate notebook
carries ITC's Corporate Social Responsibility message on its back. For every four
Classmate Notebooks, ITC contributes Re. 1 to its rural development initiative that
supports, among other projects, primary education in villages.
 Classmate has successfully run the “Classmate Young Author & Artist Contest”
for 5 years. The contest is a national level event going across 34 cities and getting
participation from 5000 schools.
 The Paperkraft range consists of premium stationery with a wide variety for
executives to choose from. The assortment consists of notepads & multi subject
notebooks in hard, soft covers & multiple binding formats including spirals, wiros etc.
 The Paperkraft brand recently launched premium business paper – an environment
friendly multipurpose paper for office and home use. The paper has been crafted by
ITC’s Bhadrachalam unit using a pioneering technology, called “Ozone Treated
Elemental Chlorine Free technology”. Paperkraft business paper is the whitest and
brightest 75 & 70 GSM papers manufactured in India and provides consumers an
opportunity to “Go Green”.

Safety Matches
 As part of its strategic initiative to create multiple drivers of growth in the FMCG
sector, ITC commenced marketing safety matches sourced from the small-scale
sector. The Matches business leverages the core strengths of ITC in marketing and
distribution, brand building, supply chain management and paperboard & packaging
to offer Indian consumers high quality safety matches.
 ITC’s range of Safety matches include popular brands like i Kno, Mangaldeep, Aim,
Aim Mega and Aim Metro. With differentiated product features and innovative value
additions, these brands effectively address the needs of different consumer segments.
The Aim brand is the largest selling brand of Safety Matches in India. ITC also
exports regular and premium safety matches brands to markets such as Middle East,
Africa and the USA. The successful acquisition of Wimco Ltd. by Russell Credit

11
0
Ltd., a wholly

11
1
 owned subsidiary of ITC has consolidated the market standing of the Company's
Matches business through synergy benefits derived through combined portfolio of
offerings, improved servicing of proximal markets and freight optimization. Through
its participation, ITC aims to enhance the competitiveness of the small and medium
scale sectors through its complementary R&D based product development and
marketing strengths, especially the breadth and depth of the Company's trade
marketing and distribution.

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. This business leverages the core strengths of
ITC in nation-wide distribution and marketing, brand building, supply chain
management, manufacture of high quality paperboards and the creation of innovative
packaging solutions to offer Indian consumers high quality Agarbattis. With its
participation in the business, ITC aims to enhance the competitiveness of the small
and medium scale sectors through its complementary R&D based product
development and strengths in trade marketing and distribution.
 Mangaldeep Agarbattis are available in a wide range of fragrances like Rose, Jasmine,
Bouquet, Sandalwood, Madhur, Durbar, Tarangini, Anushri, Ananth and Mogra.
 Mangaldeep Yantra is a special offering from ITC and this specially created
fragrance evokes the ambience of a temple. The premium range from ITC,
Mangaldeep Spriha has two offerings, Pratiti and Sarvatra and are specially hand
rolled by Cottage Industries, Sri Aurobindo Ashram, Puducherry. Cottage Industries,
Puducherry, has recently been accredited with IFAT certification, which is an
internationally recognized benchmark for fair trade practices.
 Mangaldeep is also available in 3-in-1 and 5-in-1 packs giving the consumer a choice
of multiple fragrances in a single pack. Mangaldeep appeals to a cross-section of
consumers with offerings at various price points. These agarbattis are available in
innovative 'Fragrance-Locked' packaging. 'Fragrance locking' is a unique concept of
packaging which retains the fragrance for a longer period and helps in "Completing
the
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 Purity of Prayer". Mangaldeep is fast emerging as the only national brand in an
industry dominated by multiple local brands.
 In line with ITC's Triple Bottom Line philosophy of every business contributing to the
nation's economic, environmental and social capital, Mangaldeep agarbattis are
manufactured by small scale and cottage units, providing livelihood opportunities for
more than 5000 people. Seven out of 10 Mangaldeep Agarbatti manufacturing units
are ISO 9000 certified. Mangaldeep ASHA (Assistance in Social Habilitation through
Agarbattis) is an ITC initiative to improve the quality of raw agarbatti production and
provide better value realization for women rollers. Under the project, ITC has
extended support to NGOs in states and like Bihar, Tripura, Tamil Nadu, who are
setting up agarbatti units, training village women in rolling agarbattis and employing
them in these units.

 Expressions Aromatic Candles

o Leveraging its deep consumer insight, ITC's Agarbatti business recently
launched "Expressions" Premium Range of Aromatic Candles in India
through Wills Lifestyle Stores. Research on usage and attitude reveals a strong
linkage of candles to attributes like Romance, Decoration and Wellness
(Aromatherapy).
o The Expressions range of Aromatic candles comprises Amour - the Romance
Series, Adora - the Decor Series and Nirvana - the Spa Series. The basis of
segmentation is colour and fragrance - Red for romance, Purple for décor and
Green for wellness. The fragrance of the candles have been specially selected
are made from the finest perfumes and oils. Each candle's fragrance, shape and
design are carefully chosen with a distinct sensation and ambience in mind.
Ideal for gifting, Expressions Aromatic Candles promise to soothe, uplift and
transform.

Hotels
 ITC entered the hotels business in 1975 with the acquisition of a hotel in Chennai,
which was then rechristened ITC Chola. Since then the ITC-Welcomgroup brand has
become synonymous with Indian hospitality. With over 100 hotels in more than 80
destinations, ITC-Welcomgroup has set new standards of excellence in the hotel
20
industry in

20
 Accommodation, Cuisine, Environment and Guest Safety. ITC's Hotels business is
one of India's finest and fastest growing hospitality chains. ITC Hotels' commitment
to delivering globally benchmarked services, embedded in a culture deeply rooted in
India's rich tradition of hospitality, gives it a unique and distinct identity.

 A leader in the premium hospitality segment, ITC Hotels have had the privilege of
hosting world leaders, Heads of State and discerning guests from across the world and
within.
 ITC-Welcomgroup pioneered the holistic concept of 'branded accommodation' in the
hospitality industry. It was the first to launch the idea of a 'Hotel within a Hotel' by
segmenting, customizing and branding hotel services like 'ITC One', 'Towers' and the
'Executive Club'. Each of these caters to specialized needs of the global business
traveller with unmatched quality and a range of custom-made services.
 ITC-Welcomgroup was the first to introduce branded
cuisine. Its restaurants Bukhara, Dakshin and DumPukht are
today powerful cuisine brands. ITC-Welcomgroup also
showcases international cuisine in its specialty restaurants
West View and Pan Asian.
 ITC has strategically customized its hotels and appropriately categorized them to
fulfill the service and budgetary needs of travellers. ITC-Welcomgroup has an
exclusive tie- up with global partner Starwood for its top of the line premium brand,
the 'Luxury Collection'. ITC Hotels was also instrumental in bringing the 'Sheraton'
brand to India, with which it enjoyed a three-decade exclusive partnership.

 ITC-Welcomgroup's properties are classified under four distinct brands:

 ITC Hotels - Luxury Collection

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  In 2007, ITC-Welcomgroup entered a new phase in its
collaboration with Starwood Hotels & Resorts. ITC-
Welcomgroup now has an exclusive tie-up with Starwood
in bringing its premium brand, the 'Luxury Collection',
to India. These are super deluxe and premium hotels
located at strategic business and leisure locations. The
seven hotels which are part of this collection are: ITC
Maurya in Delhi,
ITC Maratha in Mumbai, ITC Sonar in Kolkata, ITC Grand Central in Mumbai, ITC
Windsor in Bengaluru, ITC Kakatiya in Hyderabad and ITC Mughal in Agra.
 WelcomHotels offer five-star hospitality for the
discerning business and leisure traveller. Currently
there are three hotels under this brand namely,
WelcomHotel Rama International Aurangabad,
WelcomHotel Vadodara and WelcomHotel Grand
Bay Vishakhapatnam. Four other ITC-
Welcomgroup
Sheraton Hotels – Sheraton Rajputana Hotel Jaipur, Sheraton Chola Hotel
Chennai and Sheraton New Delhi offer warm, comforting services to the global
traveller and a chance to connect.

 Fortune Hotels offer full service properties all over

India, including smaller towns and cities, ideal for the
budget traveller. Fortune Hotels have a strong presence
in Ahmedabad, Thiruvananthapuram, Calicut, Darjeeling,
Jamshedpur, Vapi, Hyderabad, Gurgaon, Indore,
Ootacamund, Madurai, Jodhpur, Vijaywada, Chennai, Visakhapatnam,
Mahabalipuram, Kolkata, Bengaluru, Navi Mumbai, Tirupati and Port Blair, while
several more hotels are expected to be commissioned soon in other key locations in
India.

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 WelcomHeritage brings together a chain of
palaces, forts, havelis and resorts that offer a
unique experience. WelcomHeritage endeavours
to preserve ancient royal homes and the historical
Indian grandeur and opulence for the future
Indian generations. WelcomHeritage provides a
fine range of hotel services inside these
architectural
legacies present in Rajasthan, Madhya Pradesh, Uttarakhand, Himachal Pradesh,
Jammu & Kashmir, West Bengal, Karnataka, Tamil Nadu, Punjab, Haryana, Assam,
Sikkim, Meghalaya, Arunachal Pradesh, Uttar Pradesh, Maharastra, Kerala, Andhra
Pradesh and Puducherry.
 Welcom Environment
 WelcomEnviron is ITC-Welcomgroup's vision for a green world. It's a multi-faceted
programme started in order to propagate environmental causes in the cities where
ITC- Welcomgroup's hotels are located. With the guiding principle of 'Reduce, Reuse
and Recycle', each hotel has its own programme, encompassing local participation,
creating awareness among employees and internal conservation.
 ITC Green Centre
 The ITC Green Centre in Gurgaon, the
headquarters of ITC's Hotels Business is the
physical expression of this commitment to
sustainability - Ecological, Social and
Economic. This building is one of the world's
largest green buildings with space of over
170,000 square feet
and the first non-commercial complex in the country to be awarded the United States
Green Building Council-Leadership in Energy and Environmental Design's (USGBC-
LEED) platinum rating - the highest in the order.
 At ITC Green Centre, energy consumption has been reduced significantly through
design integration. The building has been designed to maximize the effect of natural
light during daytime, largely eliminating the need for artificial ones. At the same time,
the window glass, while allowing light inside, does not allow heat. This not only
23
keeps the office cool from inside during the day, but also decreases the load on air-
conditioners. Again, there is minimum exterior lighting to limit night sky pollution.
The

24
 water consumption has dropped by 40 per cent and, with a water re-cycling plant, the
building is now a zero water discharge building.
 ITC Welcomgroup - Empowering Differently-abled people
 ITC-Welcomgroup has established that if provided with an opportunity to work and
become self-sufficient, people who are differently abled can significantly contribute to
the workplace, families and the community. ITC-Welcomgroup has taken a positive
step in this direction by employing people who are differently abled across its hotels.
ITC-Welcomgroup believes that everyone should be treated with sensitivity and
empathy. The models it has created have been effective and have succeeded in
sensitising other employees to the needs of those differently-abled. Keeping in mind
their specific skills, over 100 differently abled have been employed in diverse
functions like housekeeping, teleworking, bakery and as musicians. Special badges
for the visually impaired, whistles for hearing impaired employees to use in an
emergency and sign language classes for the staff to communicate with them are just a
few examples of how ITC-Welcomgroup has created an atmosphere of sensitivity and
caring.

Paperboard and Speciality papers

ITC’s Paperboards and Specialty Papers Division is India’s largest and most technologically
advanced paper and paperboards business. ITC caters to a wide spectrum of packaging,
graphic, communication, writing, printing and specialty paper requirements through its four
world-class mills in India. Having pioneered many speciality applications like cigarette
tissues, packaging boards, aseptic cartons and gypsum liners, ITC’s Paperboards and
Specialty papers business enjoys market leadership in the value-added paperboards segment,
and also has a significant share of the Indian paperboards market. It is also the largest Indian
exporter of coated boards. Packaging
ITC's Packaging & Printing Business is the country's largest convertor of paperboard into
packaging. It converts over 50,000 tonnes 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.
The Division, which was set up in 1925 as a strategic backward integration for ITC's
Cigarettes business, is today India's most sophisticated packaging house. State-of-the-art
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technology,

26
world-class quality and a highly skilled and dedicated team have combined to position ITC as
the first-choice supplier of high value added packaging.
The Division supplies value-added packaging to the Company's Cigarettes business. Its client
list includes several well-known national and international companies like British American
Tobacco, Philip Morris International, Surya Nepal Private Limited, VST Industries, UB
Group, Nokia, Flextronics, Foxconn, FMC India Pvt Ltd., Pernod Ricard, Allied
Domecq, Whyte & Mackay, Hindustan Lever, Tata Tetley, Nestle and Reckitt Benkiser
India Limited, etc.
With all the three factories at Tiruvottiyur near Chennai, Munger in Bihar and
Haridwar in Uttarakhand certified to ISO 9001, ISO 14001 and OHSAS 18001, the
Company offers a comprehensive product range in packaging:
Flip-top boxes Display outers Shells and Slides Soft cup and strap Labels
Bundle Wraps Flap boxes Inner Frames Coupon Inserts Folding Cartons
Fluted Cartons Shoulder Boxes Pre-printed cork tipping Flexibles Packaging
ITC occupies a leadership position in cigarette and liquor packaging in India. It supplies
packaging to cover 70 billion cigarettes a year domestically, and supplies packaging for 15
billion cigarette sticks a year for the export market. It is the largest supplier of liquor mono
cartons in the country.
ITC has enhanced the value of some of the most favoured brands with superior look-and-feel
packaging, using the best raw materials and process combinations, and an in-house pre-press
Design Centre.
A Product Introduction Process team pioneers packaging innovations. The team uses a unique
process to pilot the client's packaging through its manufacturing system. Specifications are
evolved based on clients' needs. Corresponding to the specifications, a variety of packaging
solutions is then generated. The efficacy of the packaging is tested simulating the client's
factory conditions.
E-Chaupal
ITC's pre-eminent position as one of India's leading corporates in the agricultural sector is
based on strong and enduring farmer partnerships, that has revolutionized and transformed
the rural agricultural sector. A unique rural digital infrastructure network, coupled with deep
understanding of agricultural practices and intensive research, has built a competitive and
efficient supply chain that creates and delivers immense value across the agricultural value
chain. One of the largest exporters of agri products from the country, ITC sources the finest

27
of

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Indian Feed Ingredients, Food Grains, Edible Nuts, Marine Products, Processed Fruits,
Coffee & Spices.
ITC's Agri Business Division is the country's second largest exporter of agri-products with
exports of over Rs. 1000 Crores (Rs. 10 billion). Its domestic sales of agri-products are in
excess of Rs. 1500 Crores (Rs. 15 billion). It currently focuses on exports of:
• Feed Ingredients – Soyameal
• Food Grains - Rice (Basmati & Non Basmati), Wheat, Pulses
• Edible Nuts - Sesame Seeds, HPS Groundnuts, Castor oil
• Marine Products - Shrimps and Prawns
• Processed Fruits - Fruit Purees/Concentrates, IQF/Frozen Fruits, Organic
Fruit Products, Fresh Fruits
• Coffee & Spices - Coffee, Black Pepper, Chilly, Turmeric, Ginger, Celery
and other Seed Spices
 Farmer empowerment through e-Choupals
ITC's unique strength in this business is the
extensive backward linkages it has established
with the farmers. This networking with the
farming community has enabled ITC to build a
highly cost effective procurement system. ITC has
made significant investments in web-enabling the
Indian farmer. Christened 'e-Choupal', ITC's
empowerment plan for the farmer centres around
providing Internet kiosks in villages. Farmers use
this technology infrastructure to access on-line information from ITC's farmer-friendly
website www.echoupal.com. Data accessed by the farmers relate to the weather, crop
conditions, best practices in farming, ruling international prices and a host of other relevant
information. e- Choupal today is the world's largest rural digital infrastructure.
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 recovering the
associated costs through agri-sourcing led efficiencies. This initiative now comprises about
6200 installations covering nearly 40,000 villages and serving over 4 million farmers.
Currently, the 'e-Choupal' website provides information to farmers across the 10 States of

29
Madhya Pradesh, Haryana, Uttarakhand, Uttar Pradesh, Rajasthan, Karnataka, Maharashtra,
Andhra Pradesh, Kerala and Tamil Nadu. Over the next 5 years it is ITC's Vision to create a
network of 20,000 e-Choupals, thereby extending coverage to 100,000 villages representing
one sixth of rural India.
Supporting the e-Choupal network are ITC's procurement teams, handling agents and
contemporary warehousing facilities across India, enabling its Agri Business to source
identity- preserved merchandise even at short notice. ITC's processors are handpicked,
reliable high quality outfits who ensure hygienic processing and modern packaging. Strict
quality control is exercised at each stage to preserve the natural flavour, taste and aroma of
the various agri products.

 Choupal Saagar
Following the success of the e-Choupal, the
Company launched Choupal Saagar, a physical
infrastructure hub that comprises collection and
storage facilities and a unique rural hypermarket
that offers multiple services under one roof. This
landmark infrastructure, which has set new
benchmarks for rural consumers also incorporates
farmer facilitation centres with services such as sourcing, training, soil testing, health clinic,
cafeteria, banking, investment services, fuel station etc. 24 'Choupal Saagars' have
commenced operations in the states of Madhya Pradesh, Maharashtra and Uttar Pradesh. ITC
is engaged in scaling up the rural retailing initiative to establish a chain of 100 Choupal
Saagars in the near future.
Choupal Fresh
Choupal Fresh, ITC's fresh food wholesale and retail
initiative, leverages its extensive backward linkages
with farmers and supply chain efficiencies. It focuses
on stocking fresh horticulture produce like fresh fruits
and vegetables. Three Choupal Fresh Cash & Carry
Stores and Six Choupal Fresh retail stores are
currently operational at Hyderabad. The company has

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0
also set up a complete cold chain for ensuring the availability of fresh products in the market,
besides directly sourcing farm fresh produce from the farmers.

 Choupal Pradarshan Khet

In line with its mission of improving the
quality of life in rural India, ITC's Agri
Business has launched a flagship extension
programme called 'Choupal Pradarshan
Khet' (CPK) or demonstration plots to help
farmers enhance farm productivity by
adopting agricultural best practices. Started
in 2005-06, the crop portfolio includes soya,
paddy, cotton, maize, bajra, wheat, gram,
mustard, sunflower and potato. This initiative, has covered over 70,000 hectares and has a
multiplier impact and reaches out to 1.6 million farmers.
Processed Fruits
In line with its strategy of achieving a higher order of value capture, the business also focuses
on the value added segment, steadily enhancing its basket of offerings with several new
products. These include frozen foods, IQF (individually quick frozen) fruits, niche
products like baby-food quality purees and high brix pulp and organic purees. ITC
seeks to focus on this segment and exploit the market opportunity for tropical fruits and fruit
products, where India has a natural advantage of growing the complete range, including
exotic varieties. In Processed Fruits category, ITC exports from HACCP certified plants to
Western Europe, North Africa, West Asia, Japan and North America, a wide range of
Processed Fruit products made from Mango (Alphonso, Kesar & Totapuri), Guava, Papaya
and Pomegranate. ITC is the leading Indian exporter of Organic Fruit Products certified to
European (EC 2092/91) and US (NOP) Standards.
Fresh Table Grapes & Pomegranates are sourced from ITC's EUREPGAP certified farmer
groups & retailed through prominent supermarkets like Sainsbury's and Albert Heijn in
Europe and Daiei in Japan.

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1
 Marine Products
ITC has been a significant exporter of seafood from India since 1971. It
exports frozen as well as cooked shrimps and other seafood products to
Japan, USA and Europe. Its well-known brands include Gold Ribbon,
Blue Ribbon, Aqua Kings, Aqua Bay, Aqua Feast and Peninsular.

 A customer centric approach

ITC's Agri Business Division continues to use innovation as its core strategy to retain its
position as the one-stop shop for sourcing agri-commodities from India. Besides setting
benchmarks in quality, reliability and value-added services, ITC is a trendsetter in customer
care particularly in commodity trading. Major customers include Cargill, Marubeni,
Toepfer, among others, who source agriculture commodities and food products from India.
Customers can log onto www.itcibd.com, and readily access information on crop production
and forecast, market updates, the latest shipment status and the prevailing foreign exchange
rates.
Sourcing for ITC
ITC's Agri business is progressively aligning its commodity portfolio with the sourcing needs
of the Company's Foods business to generate higher order value from its agri procurement
infrastructure. The business has commenced procurement of chipstock potatoes, one of the
critical raw materials in the manufacture of the Company's 'Bingo!' brand of potato chips. The
acquisition of Technico, an Australian company with technology leadership in the production
of early generation seed potatoes, helped the business access a ready pipeline of new high-
yielding varieties of chipstock potato seeds.

7) Chairman
The chairman of ITC limited:
 Yogesh Chander Deveshwar

Executive Directors:
 Sahibzada Syed Habib –ur-Rehman
 Anup Singh
 Krishnamoorthy Vaidhyanath

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2
8) Critical Events that change the course
 Indian rural and agri. market is 70% to other resources in India ,but only 30 % of GDP
is from agriculture sector . ITC realized it that their cigarette business has a limit
further which they wont be able to tap profit and their expansion plans. So
diversification was needed in any case to build a foothold in Indian market.
 FMCG bieng the fourth largest sector in the field which is expanding at a very fast
pace and it has huge potential , along with the benefit that it can be accrued by
organizing the existing fragmented market leading to concept of ‘one stop shop’.
 Further India being one of the largest economies with the benefit of its vast market, it
attracted ITC to expand its operation in various areas of hospitality, FMCG ,Greeting
cards Branded Apparels etc.

9) The Responsibility Factor

Preamble
Over the years, ITC has evolved from a single product company to a multi-business
corporation. Its businesses are spread over a wide spectrum, ranging from cigarettes
and tobacco to hotels, packaging, paper and paperboards and international
commodities trading. Each of these businesses is vastly different from the others in its
type, the state of its evolution and the basic nature of its activity, all of which
influence the choice of the form of governance. The challenge of governance for ITC
therefore lies in fashioning a model that addresses the uniqueness of each of its
businesses and yet strengthens the unity of purpose of the Company as a whole.
Since the commencement of the liberalisation process, India's economic scenario has
begun to alter radically. Globalisation will not only significantly heighten business
risks, but will also compel Indian companies to adopt international norms of
transparency and good governance. Equally, in the resultant competitive context,
freedom of executive management and its ability to respond to the dynamics of a fast

30
changing business environment will be the new success factors. ITC's governance
policy recognises the challenge of this new business reality in India.
Definition & Function
ITC defines Corporate Governance as a systemic process by which companies are
directed and controlled to enhance their wealth generating capacity. Since large
corporations employ vast quantum of societal resources, we believe that the
governance process should ensure that these companies are managed in a manner that
meets stakeholders aspirations and societal expectations.

Core Principles
ITC's Corporate Governance initiative is based on two core principles. These are :
i. Management must have the executive freedom to drive the enterprise forward
without undue restraints; and
ii. This freedom of management should be exercised within a framework of effective
accountability.
ITC believes that any meaningful policy on Corporate Governance must provide
empowerment to the executive management of the Company, and simultaneously
create a mechanism of checks and balances which ensures that the decision making
powers vested in the executive management is not only not misused, but is used with
care and responsibility to meet stakeholder aspirations and societal expectations.
Cornerstones
From the above definition and core principles of Corporate Governance emerge the
cornerstones of ITC's governance philosophy, namely trusteeship, transparency,
empowerment and accountability, control and ethical corporate citizenship. ITC
believes that the practice of each of these leads to the creation of the right corporate
culture in which the company is managed in a manner that fulfils the purpose of
Corporate Governance.
Trusteeship:
ITC believes that large corporations like itself have both a social and
economic purpose. They represent a coalition of interests, namely those of the
shareholders, other providers of capital, business associates and employees.
This belief therefore casts a responsibility of trusteeship on the Company's
Board of Directors. They are to act as trustees to protect and enhance
31
shareholder value, as well as to ensure that the Company fulfils its obligations
and responsibilities to its other stakeholders. Inherent in the concept of
trusteeship is the responsibility to ensure equity, namely, that the rights of all
shareholders, large or small, are protected.
Transparency:
ITC believes that transparency means explaining Company's policies and
actions to those to whom it has responsibilities. Therefore transparency must
lead to maximum appropriate disclosures without jeopardising the Company's
strategic interests. Internally, transparency means openness in Company's
relationship with its employees, as well as the conduct of its business in a
manner that will bear scrutiny. We believe transparency enhances
accountability.
Empowerment and Accountability:
Empowerment is an essential concomitant of ITC's first core principle of
governance that management must have the freedom to drive the enterprise
forward. ITC believes that empowerment is a process of actualising the
potential of its employees. Empowerment unleashes creativity and innovation
throughout the organisation by truly vesting decision-making powers at the
most appropriate levels in the organisational hierarchy.
ITC believes that the Board of Directors are accountable to the shareholders,
and the management is accountable to the Board of Directors. We believe that
empowerment, combined with accountability, provides an impetus to
performance and improves effectiveness, thereby enhancing shareholder value.
Control:
ITC believes that control is a necessary concomitant of its second core
principle of governance that the freedom of management should be exercised
within a framework of appropriate checks and balances. Control should
prevent misuse of power, facilitate timely management response to change,
and ensure that business risks are pre-emptively and effectively managed.
Ethical Corporate Citizenship:
ITC believes that corporations like itself have a responsibility to set exemplary
standards of ethical behaviour, both internally within the organisation, as well

32
 as in their external relationships. We believe that unethical behaviour corrupts
organisational culture and undermines stakeholder value.

Overview-

It is the study of when, why, how, where and what people do or do not buy products. It blends
elements from psychology, sociology, social, anthropology and economics. It attempts to
understand the buyer decision making process, both individually and in groups. It also tries to
assess influences on the consumer from groups such as family, friends, reference groups, and
society in general.

Customer behaviour study is based on consumer buying behaviour, with the customer playing
the three distinct roles of user, payer and buyer. Relationship marketing is an influential asset
for customer behaviour analysis as it has a keen interest in the re-discovery of the true
meaning of marketing through the re-affirmation of the importance of the customer or buyer.
A greater importance is also placed on consumer retention, customer relationship
management, personalization, customization and one-to-one marketing. Marketing provides
services in order to satisfy customers. With that in mind, the productive system is considered
from its beginning at the production level, to the end of the cycle, the consumer

The study of consumers helps firms and organizations improve their marketing strategies by
understanding issues such as how

• The psychology of how consumers think, feel, reason, and select between different
alternatives (e.g., brands, products);

• The psychology of how the consumer is influenced by his or her environment (e.g.,
culture, family, signs, media);

• The behaviour of consumers while shopping or making other marketing decisions;

• Limitations in consumer knowledge or information processing abilities influence

decisions and marketing outcome;

• How consumer motivation and decision strategies differ between products that differ
in their level of importance or interest that they entail for the consumer; and

33
• How marketers can adapt and improve their marketing campaigns and marketing
strategies to more effectively reach the consumer.

One "official" definition of consumer behaviour is "The study of individuals, groups, or

organizations and the processes they use to select, secure, use, and dispose of products,
services, experiences, or ideas to satisfy needs and the impacts that these processes have on
the consumer and society."

Steps of Consumer Behaviour

The first step is problem recognition—you realize that something is not as it should be.
Perhaps, for example, your car is getting more difficult to start and is not accelerating well.
The second step is information search—what are some alternative ways of solving the
problem? You might buy a new car, buy a used car, take your car in for repair, ride the bus,
ride a taxi, or ride a skateboard to work.

The third step involves evaluation of alternatives. A skateboard is inexpensive, but may be
ill- suited for long distances and for rainy days.

Finally, we have the purchase stage, and sometimes a post-purchase stage (e.g., you return a
product to the store because you did not find it satisfactory). In reality, people may go back
and forth between the stages. For example, a person may resume alternative identification
during while evaluating already known alternatives.

Consumer involvement will tend to vary dramatically depending on the type of product. In
general, consumer involvement will be higher for products that are very expensive (e.g., a
home, a car) or are highly significant in the consumer’s life in some other way (e.g., a word
processing program or acne medication).

It is important to consider the consumer’s motivation for buying products. To achieve this
goal, we can use the Means-End chain, wherein we consider a logical progression of
consequences of product use that eventually lead to desired end benefit. Thus, for example, a
consumer may see that a car has a large engine, leading to fast acceleration, leading to a
feeling of performance, leading to a feeling of power, which ultimately improves the
consumer’s self- esteem. A handgun may aim bullets with precision, which enables the user
to kill an intruder, which means that the intruder will not be able to harm the consumer’s
family, which achieves the desired end-state of security. In advertising, it is important to

34
portray the desired end-states.

35
Focusing on the large motor will do less good than portraying a successful person driving the
car.

Information search and decision making. Consumers engage in both internal and external
information search.

Internal search involves the consumer identifying alternatives from his or her memory. For
certain low involvement products, it is very important that marketing programs achieve “top
of mind” awareness. For example, few people will search the Yellow Pages for fast food
restaurants; thus, the consumer must be able to retrieve one’s restaurant from memory before
it will be considered. For high involvement products, consumers are more likely to use an
external search. Before buying a car, for example, the consumer may ask friends’ opinions,
read reviews in Consumer Reports, consult several web sites, and visit several dealerships.
Thus, firms that make products that are selected predominantly through external search must
invest in having information available to the consumer in need—e.g., through brochures, web
sites, or news coverage.

A compensatory decision involves the consumer “trading off” good and bad attributes of a
product. For example, a car may have a low price and good gas mileage but slow
acceleration. If the price is sufficiently inexpensive and gas efficient, the consumer may then
select it over a car with better acceleration that costs more and uses more gas. Occasionally, a
decision will involve a non-compensatory strategy. For example, a parent may reject all soft
drinks that contain artificial sweeteners. Here, other good features such as taste and low
calories cannot overcome this one “non-negotiable” attribute.

The amount of effort a consumer puts into searching depends on a number of factors such as
the market (how many competitors are there, and how great are differences between brands
expected to be?), product characteristics (how important is this product? How complex is the
product? How obvious are indications of quality?), consumer characteristics (how interested
is a consumer, generally, in analysing product characteristics and making the best possible
deal?), and situational characteristics (as previously discussed).

Two interesting issues in decisions are:

• Variety seeking (where consumers seek to try new brands not because these brands
are expected to be “better” in any way, but rather because the consumer wants a “change of
pace,” and
36
• “Impulse” purchases—unplanned buys. This represents a somewhat “fuzzy” group.
For example, a shopper may plan to buy vegetables but only decide in the store to actually
buy broccoli and corn. Alternatively, a person may buy an item which is currently on sale, or
one that he or she remembers that is needed only once inside the store.

A number of factors involve consumer choices.

In some cases, consumers will be more motivated. For example, one may be more careful
choosing a gift for an in-law than when buying the same thing for one self. Some consumers
are also more motivated to comparison shop for the best prices, while others are more
convenience oriented.

Personality impacts decisions.

Some like variety more than others, and some are more receptive to stimulation and
excitement in trying new stores.

Perception influences decisions. Some people, for example, can taste the difference between
generic and name brand foods while many cannot. Selective perception occurs when a person
is paying attention only to information of interest. For example, when looking for a new car,
the consumer may pay more attention to car ads than when this is not in the horizon.

Some consumers are put off by perceived risk. Thus, many marketers offer a money back
guarantee.

Family Decision Making.

Individual members of families often serve different roles in decisions that ultimately draw
on shared family resources. Some individuals are information gatherers/holders, who seek out
information about products of relevance. These individuals often have a great deal of power
because they may selectively pass on information that favors their chosen alternatives. The
decision maker(s) have the power to determine issues such as:

• Whether to buy;

• Which product to buy (pick-up or passenger car?);

• Which brand to buy;

• Where to buy it; and

37
• When to buy.

It should be noted that family decisions are often subject to a great deal of conflict. Note that
many decisions inherently come down to values, and that there is frequently no "objective"
way to arbitrate differences. One spouse may believe that it is important to save for the
children’s future; the other may value spending now (on private schools and computer
equipment) to help prepare the children for the future. Who is right? There is no clear answer
here.

Some family members may resort to various strategies to get their way. One is bargaining—
one member will give up something in return for someone else. For example, the wife says
that her husband can take an expensive course in gourmet cooking if she can buy a new
pickup truck. Alternatively, a child may promise to walk it every day if he or she can have a
hippopotamus. Another strategy is reasoning—trying to get the other person(s) to accept
one’s view through logical argumentation. Note that even when this is done with a sincere
intent, its potential is limited by legitimate differences in values illustrated above. Also note
that individuals may simply try to "wear down" the other party by endless talking in the guise
of reasoning (this is a case of negative reinforcement as we will see subsequently).

Major factors affecting the consumer behaviour:

There are many factors in consumer behaviour. However, following are the factors we are
mainly focusing for the purpose.

Cultural factors:

Cultural factors are coming from the different components related to culture or cultural
environment from which the consumer belongs.

a. Culture and societal environment:

Culture is crucial when it comes to understanding the needs and behaviours of an individual.
For a brand, it is important to understand and take into account the cultural factors inherent to
each market or to each situation in order to adapt its product and its marketing strategy. As
these will play a role in the perception, habits, behaviour or expectations of consumers.

38
 b. Sub-cultures :

A society is composed of several sub-cultures in which people can identify. Subcultures are
groups of people who share the same values based on a common experience or a similar
lifestyle in general. Subcultures are the nationalities, religions, ethnic groups, age groups,
gender of the individual, etc. The subcultures are often considered by the brands for the
segmentation of a market in order to adapt a product or a communication strategy to the
values or the specific needs of this segment.

Social classes:
Social classes are defined as groups more or less homogenous and ranked against each other
according to a form of social hierarchy. Even if it’s very large groups, we usually find similar
values, lifestyles, interests and behaviours in individuals belonging to the same social class.
We often assume three general categories among social classes: lower class, middle class and
upper class. According to some researchers, behaviour and buying habits would also be a way
of identification and belonging to its social class and so is important to consider while
researching.

c. Cultural trends:

Cultural trends or “Bandwagon effect” are defined as trends widely followed by people and
which are amplified by their mere popularity and by conformity or compliance with social
pressure. The more people follow a trend, the more others will want to follow it. They affect
behaviour and shopping habits of consumers and may be related to the release of new
products or become a source of innovation for brands.

Social factors

Social factors are among the factors influencing consumer behaviour significantly. They fall
into three categories: reference groups, family and social roles and status.

a. Reference groups and membership groups

The membership groups of an individual are social groups to which he belongs and which
will influence him. The membership groups are usually related to its social origin, age, place
of residence, work, hobbies, leisure, etc. he influences level may vary depending on
individuals and groups. But is generally observed common consumption trends among the
members of a
39
same group. The understanding of the specific features (mindset, values, lifestyle, etc..) of
each group allows brands to better target their advertising message.

b. Family

The family is maybe the most influencing factor for an individual. It forms an environment of
socialization in which an individual will evolve, shape his personality, acquire values. But
also develop attitudes and opinions on various subjects such as politics, society, social
relations or himself and his desires. Perceptions and family habits generally have a strong
influence on the consumer buying behaviour. People will tend to keep the same as those
acquired with their families.

c. Social roles and status

The position of an individual within his family, his work, his country club, his group of
friends, etc.. – All this can be defined in terms of role and social status. A social role is a set
of attitudes and activities that an individual is supposed to have and do according to his
profession and his position at work, his position in the family, his gender, etc.. – and
expectations of the people around him.

Personal factors

Decisions and buying behaviour are obviously also influenced by the characteristics of each
consumer.

d. Age and way of life

A consumer does not buy the same products or services at 20 or 70 years. His lifestyle, values
, environment, activities, hobbies and consumer habits evolve throughout his life. For a brand
or a retailer, it may be interesting to identify, understand, measure and analyze what are the
criteria and personal factors that influence the shopping behaviour of their customers in order
to adapt.

e. Purchasing power and revenue

The purchasing power of an individual will have, of course, a decisive influence on his
behaviour and purchasing decisions based on his income and his capital. As for social status,
some consumers may also look for the “social value” of products they buy in order to show
“external indications” of their incomes and their level of purchasing power.

31
0
 f. Lifestyle

The lifestyle of an individual includes all of its activities, interests, values and opinions. The
lifestyle of a consumer will influence on his behaviour and purchasing decisions.

g. Personality and self-concept

Personality is the set of traits and specific characteristics of each individual. It is the product
of the interaction of psychological and physiological characteristics of the individual and
results in constant behaviours.

Psychological factors
Among the factors influencing consumer behaviour, psychological factors can be divided into
4 categories: motivation, perception, learning as well as beliefs and attitudes.

h. Motivation

Motivation is what will drive consumers to develop a purchasing behaviour. It is the

expression of a need is which became pressing enough to lead the consumer to want to satisfy
it. It is usually working at a subconscious level and is often difficult to measure.

i. Perception

Perception is the process through which an individual selects, organizes and interprets the
information he receives in order to do something that makes sense. The perception of a
situation at a given time may decide if and how the person will act. Depending to his
experiences, beliefs and personal characteristics, an individual will have a different
perception from another.

j. Learning

Learning is through action. When we act, we learn. It implies a change in the behaviour
resulting from the experience. The learning changes the behaviour of an individual as he
acquires information and experience.

k. Beliefs and attitudes

A belief is a conviction that an individual has on something. Through the experience he

acquires, his learning and his external influences (family, friends, etc..), he will develop
beliefs that will influence his buying behaviour.

40
CHAPTER 2
INDUSTRY
OVERVIE
W

41
 CHAPTER 2
INDUSTRY OVERVIEW
Introduction

Introduction about the

sector

Industry is the production of a good or service within an economy. Manufacturing

industry became a key sector of production and labour in European and North American
countries during the Industrial Revolution, upsetting press mercantile and feudal comics.
This occid through many successive rapid advances in technology, such as the
production of steel and coal.

What Are Fast-Moving Consumer Goods (FMCG)?

Fast-moving consumer goods are products that sell quickly at relatively low cost. These
goods are also called consumer packaged goods FMCGs have a short shelf life because
of high consumer demand (eg, soft drinks and confections) or because they are
perishable (eg, meat, dairy products, and baked goods). These goods are purchased
frequently, are consumed rapidly, are priced low, and are sold in large quantities. They
also have a high turnover when they're on the shelf at the store.

1.1 Understanding Fast-Moving Consumer Goods (FMCG)

Consumer goods are products purchased for consumption by the average consumer.
They are divided into three different categories: durable, nondurable goods, and services.
Durable goods have a shelf life of three years or more while nondurable goods have a
shelf life of less than one year. Fast-moving consumer goods are the largest segment of
consumer goods. They fall into the nondurable category, as they are consumed
immediately and have a short shelf life. Following the Industrial Revolution, perhaps a
third of the world's economic output is derived from manufacturing industries. Many
developed and many developing/semi-developed countries (People's Republic of China,
India etc.) depend significantly on manufacturing industry. Industries. the countries they
reside in, and the economies of those countries are interlinked in a complex web of

42
interdependence

43
1.2 Marketing concept:

Marketing is the communication between a company and the consumer audience that aims to
increase the value of the company or its merchandise, or to raise the profile of the company
and its products in the public mind. The purpose of marketing is to induce behavioral change
in the receptive audience. The American Marketing Association has defined marketing as
"the activity, set of institutions, and processes for creating, communicating, delivering, and
exchanging offerings that have value for customers, clients, partners, and society at large."
The techniques used in marketing include choosing target markets through market analysis
and market segmentation , as well as understanding methods of influence on the consumer
behavior. From a societal point of view, marketing provides the link between a society's
material requirements and its economic patterns of response. This way marketing satisfies
these needs and wants through the development of exchange processes and the building of
long-term relationships. In the case of nonprofit organization marketing, the aim is to deliver
a message about the organization's services to the applicable audience. Governments often
employ marketing to communicate messages with a social purpose, such as a public health or
safety message, to citizens.

1.3 TYPES OF MARKETING

 Services marketing

Services marketing relates to the marketing of services, as opposed to tangible

products. A service (as opposed to a good) is typically defined by the paraphrase of 5
I's :

 Inseparability - The customer cannot be separated from the service and therefore,
the use of it is inseparable from its purchase (i.e., a service is used and
consumed simultaneously)

 Intangibility - It does not possess material form, and thus cannot be touched. Yet,
many services are directly connected to products. Services (compared with
goods) can also be viewed as a spectrum. Not all products are either pure goods or
pure services. An example would be a restaurant, where a waiter's service is
44
intangible, but the food is tangible.

45
  Service Products - Those pure services or major service components,
directly offered to customers, such as a gig.

 Product Services - Those service elements associated with a physical

objects such as online shopping or instrument tuning

 Inconsistency (Variability) – Every delivery of the service will be different.

Furthermore, the use of a service is inherently subjective, meaning that several
persons experiencing a service would each experience it uniquely.

 Inventory (Perishability) – The service cannot last

 Involvement – Customer can tailor the service while using it (e.g. hairdresser) For
example, a train ride can be deemed a service. If one buys a train ticket, the use of the
train is typically experienced concurrently with the purchase of the ticket. Although
the train is a physical object, one is not paying for the permanent ownership of the
tangible components of the train.

 Right-time marketing-- Right-time marketing is an approach to marketing which

selects an appropriate time and place for the delivery of a marketing message.

 Guerrilla marketing-- Guerrilla marketing is an advertising strategy in which low-

cost unconventional means (graffiti or street art, sticker bombing, flash mobs) are
used, often in a localized fashion or large network of individual cells, to convey or
promote a product or an idea.

 Digital marketing-- Digital marketing is an umbrella term for the targeted,

measurable, and interactive marketing of products or services using digital
technologies to reach and convert leads into customers. The key objective is to
promote brands, build preference and increase sales through various digital marketing
techniques. It is embodied by an extensive selection of service, product and brand
marketing tactics, which mainly use the Internet as a core promotional medium, in
addition to mobile and traditional TV and radio.

 Psychological marketing

46
 Psychological marketing deals mainly with intangible aspects of communications, on
the role of mental images and representations. The Psychology of Marketing
represents an interdisciplinary research area, where several contributions converge,
from cognitive science, neuroscience, social psychology, and dynamic psychology.
Early contributions were rooted mainly in social psychology, with a strong attention
to attitude research and the analysis of behavioral effects. Recent approaches include a
comprehensive analysis of several areas, including neuroscience, linguistics, and
experimental research. Key aspects are: effects of visual and verbal messages on
mental maps, effects of advertising on attitudes and emotions, psychophysiological
response to advertising messages and products observation, effects of marketing on
emotional states, consumer psychology insights, and group psychological dynamics.

1.4 Consumer Buying Behavior

1.1 The collective actions, including the searching, evaluation, selection, purchasing,
consuming, disposing of products, taken by consumers in determining which goods
and services hold the most value for meeting their wants and needs. Marketers study
consumer buying behavior to determine the influence of psychological, sociological,
demographical, and cultural factor shave on buying decisions. The ultimate objective
of all production is consumption for the satisfaction of varied needs of man. A free
market economy provides freedom to the consumers to buy and consume goods of
their choice. Buying preferences of the consumers send signals to the producers to
produce various commodities in required quantities. Producers, therefore, produces
only those commodities which are desired by the consumers. Consumer behavior is
related to likes and dislikes and expectations of the consumers. Consumer behavior
has changed in recent year sowing to enhanced awareness, information technology
and more importantly governmental intervention through legislations. Thus, the
manufacturers are more cautious in dealing with consumers of their respective
products .In recent years, the lifestyle of a large number of consumers in India has
changed dramatically and the process of change is on. The buying behavior of the
consumers is influenced by several factors such as socio-economic conditions, cultural
environment, literacy level, occupation, geographical location, efforts on the part of
sellers, exposure to media etc. Consumer behavior in the market is perplexing because

47
of a singular lack of consistency

48
 in groups which are homogeneous in parameters of demographics Age, occupation,
education and income .The study of consumer behavior implies how & why a
particular consumer reacts to the decisions of producers. It is the study of how
individual make decision to spend their available resources (time, money, effort) on
consumption related items. It includes the study of why they buy it, when they buy it,
where they buy it, how often they buy it & how often they use it. This study focused
on understanding the consumer buying behavior of FMCG products with reference to
Aashirvaad flour .It also focused on the issue that whether the marketing strategies
are properly implemented or not. The study would be beneficial for the ITC Company
to formulate the strategy for future.

ITC BACKGROUND

In 2017, the Indian Tobacco Company Limited (ITC) was the cigarette market leader in India
(the 8th largest cigarette market in the world).

British American Tobacco (BAT), through its subsidiaries Tobacco Manufacturers (India)
Limited, Rothmans International Enterprises Ltd, and Myddleton Investment Company Ltd,
was ITC’s major shareholder with 30% of shares. Government owned insurance company
Life Insurance Corporation of India is the second largest shareholder in the company with
16.16% shareholding.

According to several media reports345 BAT tried to increase its stake in ITC on several
occasions but ITC “thwarted all attempts”, with the Indian ban on all Foreign Direct
Investment in the cigarette industry (which took effect on 8 April 2010) allegedly a direct
result of ITC’s lobbying of the Indian health and finance ministries.

49
Background

Headquartered in Kolkata, ITC was established in 1910 as the Imperial Tobacco Company of

India Limited.7 The company name was changed to India Tobacco Company

Limited (1970), I.T.C. Limited (1974), and finally to ITC Limited in 2001. The name

changes reflect ITC’s attempts at “shedding the cigarette tag” by diversifying into non-

tobacco goods and services.

In addition to tobacco, the company manufactures food products and stationery, and is active
in the hospitality industry, packaging industry, and the agricultural and information

technology sectors.2 As of 2020, ITC has 34 fully and partially owned subsidiary and

associate companies. 2

In March 2017, the media reported that ITC was given shareholder approval to explore

health care services, with the aim of establishing multi-speciality hospitals in India.10 In July
2017 ITC announced that it had amended the company’s Articles of Association to
incorporate “healthcare” under its purview and was searching for a CEO to take the initiative

forward.1112. Sanjeev Puri was appointed ITC’s Chairman in May 2019. He succeeded

Y.C.Deveshwar. Puri became CEO in 2017 and Managing Director the following year.13

41
0
Cigarettes remain ITC’s biggest earner, representing 62% of the company’s gross revenue in

2016 (42% of its net revenue).814 ITC’s popular brands of cigarettes and cigars include

Insignia, India Kings, Lucky Strike, Classic, Gold Flake, Navy Cut, Players, Scissors,

Capstan, Berkeley, Bristol, Flake, Silk Cut, Duke & Royal.7

Membership and Affiliations

ITC representatives were speakers at the annual tobacco industry event, the Global Tobacco

and Nicotine Forum, in 2012, 2013 and 2014.

ITC is a leading member of The Tobacco Institute of India (TII), “a representative body of
farmers, manufacturers, exporters and ancillaries of the cigarettes’ segment of the tobacco
industry in India”.

As of 2017, TII reported to be a member of the following organisations:

International Tobacco Growers Association (ITGA) International Tobacco Documentation

Centre, UK Tobacco Merchants’ Association (TMA), USA Confederation of Indian Industry
(CII) Federation of Indian Chambers of Commerce and Industry (FICCI) Associated
Chambers of Commerce and Industry of India (ASSOCHAM) PHD Chamber of Commerce
and Industry (PHDCCI) Indian Chamber of Commerce & Industry (ICCI) Federation of
Andhra Pradesh Chamber of Commerce & Industry (FAPCCI) Chambers of Commerce:
Andhra, Karnataka and Maharashtra

41
1
Controversial Marketing Strategies

ITC has been criticised for using direct and indirect advertisements to promote their tobacco

products despite the Indian tobacco advertisement ban.171819 Some of the criticisms were:

 illegal display of advertising billboards and posters

 glamourising cigarette smoking to target youth and low socio-economic

groups (for example by associating cigarette brands with success,
wealth, achievement and western lifestyles)

 using brand variant extensions (for example a ‘light’ version)17

 point of sale marketing targeting minors (for example by placing

cigarettes and cigarette advertising in close proximity to candies and
snacks)

 camouflaging tobacco marketing by coupling it with other

ITC products17

 misleading retailers to display tobacco advertisements near

their shops1819

 paying retailers to promote and market tobacco products1819

 indirectly targeting women (for example including women in the

advertisements and using images that create an aura of elegance, sexual
allure, culture and style)

41
2
Tactics to Subvert Tobacco Control Campaigns and Policies

Intimidating Government with Litigation or Threat of Litigation

ITC has legally challenged tobacco control laws on two occasions:20

 2016 – As a member of TII, challenged expansion of Pictorial

Health Warnings (PHWs) to 85% in a court case filed collectively
with a retailer, farmer and a smoker

 2003 – Challenged implementation of the Cigarettes and Other Tobacco

Products Act and appealed against prohibition of smoking in public
places.

More information about other tobacco industry challenges against tobacco control measures
internationally, go to Legal Claims.

Tactical Temporary Closure of ITC Cigarette Factories

ITC shut down its cigarette factories twice as a response to government initiatives to
implement PHWs on tobacco packs as detailed below:

 December 2010 – The Indian government announced that it would

introduce new graphic PHWs from 1 December 2010, including one
about mouth cancer. ITC and Godfrey Philips India Limited, the two
leading cigarette manufacturers at the time, halted cigarette production
for a month from the supposed date of implementation, stating they did
not receive clear instructions on the graphic warnings to be included.

50
 This led to a delay in implementing the new PHWs and slowed down
the rotation of PHW to every two years, rather than annually.

 April 2016 – ITC, and the other two cigarette companies that are
members of TII, closed their factories as a response to the government’s
decision to expand pictorial health warnings from 40% to 85% of
surface of the cigarette packs.

Mobilising Support through Allies

ITC tried to influence tobacco control actions and policies by mobilising support from the
following groups:

Tobacco Institute of India (TII)

The media reported several occasions in which TII lobbied against tobacco control measures.
For example, the organisation:

 sent repeated representations to the Union Ministry of Health and

Family Welfare asking it to withdraw the large mandatory pictorial

health warnings1625

 organised large media campaigns generating doubt about effectiveness

of PHWs and organised farmers’ protests against the expansion of

PHWs on cigarette packs from 20% to 85%.26

 demanded the Indian government include them in the national

delegation to the 7th Conference of Parties (CoP 7) of
WHO Framework Convention on Tobacco Control (FCTC) held in New
Delhi in November 2016, stating tobacco control policies should not be

biased towards views of “tobacco control activists and NGOs”27

51
  publicly criticised FCTC for refusing CoP ‘Observer’ status to the

Federation of All India Farmers Association28

 objected against the increase of cigarette tax under the Goods and
Services Tax scheme, claiming it would be detrimental to tobacco

farmers29

Federation of Indian Chambers of Commerce and Industry (FICCI)

FICCI sent representations against the expansion of pictorial health warnings to the Ministry

of Health and Ministry of Commerce.

The Associated Chambers of Commerce and Industry of India (ASSOCHAM)

ASSOCHAM requested a revision of the inclusion of an advertising ban with the tobacco
control act in order to “save livelihood of scores of tobacco farmers and farm workers, bide
workers, tribals and retailers”.

Corporate Social Responsibility Initiatives

The Economic Times reported that ITC spent 1.2% of its 2014 net profit on Corporate Social
Responsibility (CSR) activities.

ITC’s 2017 annual report highlighted rural development and sustainable agriculture practices
as examples of the company’s social investments.

In the financial year 2019-20 ITC spent INR 326.49 crores on CSR activities.2 COVID-19-
related CSR activities have been a key industry tactic during the pandemic. ITC set up a
COVID Contingency Fund of INR 150 crores for supplying food and personal hygiene
products to District Authorities and other government bodies as well as personal protective

52
equipment (PPE) kits to district hospitals. Public officials in Bangalore publicly thanked ITC
for their CSR contributions.

CSR practices like those of ITC have been criticised as “one more tool for unscrupulous
companies to circumvent the public health laws”. In lieu of tobacco advertising, which has
been banned, it is argued that CSR activities function as “proxy advertising” for ITC to
improve its corporate image.

Diversification into Newer Nicotine Products

In its 2021 annual report, ITC stated that it had established a wholly-owned subsidiary, ITC
IndiVision, and would be setting up a facility in Karnataka, for the manufacture and export of

“nicotine and nicotine derivative products”.34 These were reported to be mainly for the US
and European Union markets, in order to capitalise on the increasing demand for nicotine

products in those countries.35

These products include e-cigarettes (also known as electronic nicotine delivery systems, or
ENDS) and nicotine pouches. It was not clear which companies would be purchasing
these products from IndiVision.

As of January 2022, “the production, manufacture, import, export, transport, sale,

distribution, and advertising of e-cigarettes” is prohibited in India. For up-to-date information
on tobacco regulation, see the Tobacco Control Laws website, published by the Campaign for
Tobacco Free Kids (CTFK).

TobaccoTactics Resources

53
  British American Tobacco

 International Tobacco Growers Association

 CSR Strategy

 Global Tobacco and Nicotine Forum

 Legal Claims

References

1. ↑Tobacco Free Kids, The Global Cigarette Industry, September 2017, accessed
November 2017

2. ↑abcdeITC Company Ltd, Annual Report 2020, 2020, accessed March 2021

3. ↑S. Reckhi, R. Banerjee, Raising the Stake, indiatoday, 31 December 1994,

accessed May 2017

4. ↑BAT not averse to raising stake in ITC, The Times of India, 5 July 2002, accessed
May 2017

5. ↑I. Gupta, T. Surendar, Remaking Indian Tobacco Co., Forbes, 30 June 2010,
accessed May 2017

6. ↑J. Kothari, Why is the government brazenly batting for ITC, Moneylife India, 2
November 2012, accessed January 2018

7. ↑abITC Limited, FMCG: Cigarettes, 2017, accessed May 2017

8. ↑abMoneyControl, ITC hasn’t kicked the butt, but journey from ‘health hazard’
to healthcare is complete, 29 September 2017, accessed October 2017
54
9. ↑ITC Limited, Company Profile: History and Evolution, 2017, accessed June 2017

10. ↑Shareholders approve plans to enter health care: ITC, The Times of India, 17 March
2017, accessed May 2017

11. ↑U.P. Mukherji, ITC to enter healthcare sector with hospital, The Times of India, 29
July 2017, accessed October 2017

12. ↑ITC looking for a CEO to enter healthcare, The Economic Times, 28 July 2017,
accessed November 2017

13. ↑ET Online, ITC appoints managing director Sanjiv Puri as chairman, The
Economic Times, 13 May 2019, accessed February 2021

14. ↑ITC Limited, ITC Limited: One of India’s Most Admired and Valuable Companies,
ITC Corporate Presentation, 2017, accessed May 2017

15. ↑abThe Tobacco Institute of India, About Us, 2017, accessed October 2017

16. ↑abcdA. Jithendra, U. Bhojani, How The Tobacco Industry Wins Friends And
Influences Policy, 2 June 2015, accessed October 2017

17. ↑abcdefgR. Bansal, S. John, P.M. Ling, Cigarette advertising in Mumbai, India:
targeting different socioeconomic groups, women, and youth, Tobacco Control,
2005(14):201–206

18. ↑abcdefA. Kalra, P. Bansal, T. Lasseter et al, India fumes as Big Tobacco targets young
people in bid to recruit new smokers, The Independent, 19 July 2017, accessed
October 2017

19. ↑abcS. Patel, H. Rendell, S. Maudgal et al. Tobacco industry tactics with
advertisements at the point of sale in Mumbai, Indian Journal of Cancer,
2013:50(3);245-249

55
20. ↑Tobacco Free Kids, Tobacco Control Laws: India, 2017, accessed October 2017

21. ↑India cigarette firms stop production over health warnings, The Independent, 4
December 2010, accessed October 2017

22. ↑ET Bureau, ITC, Godfrey Phillips India shutter factories over warning pics, The
Economic Times, 3 December 2010, accessed October 2017

23. ↑India tobacco firms halt production over health warning, BBC News South Asia, 3
December 2010, accessed October 2017

24. ↑B. B. Chatterjee, Cigarette Factories – Shutdown, ITC Limited, 2 April 2016,
accessed October 2017

25. ↑abTobacco Companies Shut Factories; Opposing Cigarette Larger Pictorial

Warnings, Punjab Today, 01 April 2016, accessed October 2017

26. ↑A. Pasricha, India’s Tobacco Industry, Farmers Resist Warnings on Cigarettes, VOA
News Asia, 6 May 2016, accessed October 2017

27. ↑W. Mukherjee, Tobacco Institute doesn’t want Tobacco policy development to be
left to activists alone, The Economic Times, 30 August 2016, accessed October 2017

28. ↑WHO tobacco conference rejects applications for observer, Press Trust of India,
undated, accessed October 2017

29. ↑Cigarette industry body wants GST Council to roll back tax increase , The
Economic Times, 17 October 2017, accessed October 2017

30. ↑W. Mukherjee, India’s Best Companies for CSR 2014: Here’s how ITC’s social
outreach programme works, 28 April 2015, accessed November 2017

56
 31. ↑W. Mukherjee, ITC announces Rs 150 crore COVID-19 contingency fund for
vulnerable sections of society, The Economic Times, 27 March 2020, accessed
March 2021

32. ↑L. Laurence, STOP COVID-19 Monitoring Brief: The tobacco industry, its interests
and allies. Edition 5, Stopping Tobacco Organizations and Products (STOP), 18 June
2020, accessed March 2021

33. ↑abN.V. Rao, Neethi V Rao: Corporate social responsibility in India, thebmjopinion, 9
May 2014, accessed October 2017

FMCG INDUSTRY

Fast Moving Consumer Goods (FMCG), also known as Consumer-Packaged Goods (CPG),
are products that are sold quickly at relatively low cost. Though the absolute profit made on
FMCG products is relatively small, they generally sell in large quantities, so the cumulative
profit on such products can be large.

Examples of FMCG generally include a wide range of frequently purchased consumer

products such as toiletries, soap, cosmetics, teeth cleaning products, shaving products and
detergents, as well as other non-durables such as glassware, light bulbs, batteries, paper
products and plastic goods. FMCG may also include pharmaceuticals, consumer electronics,
packaged food products and drinks, although these are often categorized separately.

FMCG have a short shelf life, either as a result of high consumer demand or because the
product deteriorates rapidly. Some FMCGs-such as meat, fruits and vegetables, dairy
products, and baked goods are highly perishable. Other goods such as alcohol, toiletries, pre-
packaged foods, soft drinks, and cleaning products have high turnover rates. An excellent
example is a newspaper- every day's newspaper carries different content, making one useless
just one day later, necessitating a new purchase every day.

57
FMCG Industry in India is one of the quickest developing divisions in the Indian market
taking into account the Indian crowd. There're 3 essential areas inside the division - food and
refreshments which represent 19% of the portion, healthcare sector services which represent
31% and family and individual consideration representing the remaining portion.

It is the 4th biggest area in the market. The size of the sector was regarded at $10,020.0
billion in 2017 and is foreseen to reach $ 15,361.8 billion by 2025, having an exacerbated
yearly development pace of 5.4% from 2018 to 2025. Quick moving items consist of things
that are sold quickly and for the most part at a low cost. Illustrations incorporate non-durable
family products like packaged items, refreshments, toiletries, OTC medications, and different
consumables.

 Contribution in FMCG sector

These services have taken up probably the greatest division - both as far as pay is concerned
or the employability and addresses 31 percent of industry. Sector is spiraling at the incredible
and quick pace because of its fortifying inclusion, administrations and expanding
consumption by the both open segment players and the private part players.

Household & Personal Care

It is the undeniable part and records for 50 percent of the general piece of the pie. Hair care
takes to 23 percent comes following regarding piece of the overall industry. Beauty care
products, aromas, hair care, healthy skin, are the key sections of the segment Every one of
these fragments shows their intriguing examples and development structures.

Food & Beverages

This segment addresses 19% in sector. This segment includes processed natural products &
vegetables, dairy item, cereals, pastry kitchen items, snacks, supplying crude chocolates, ice
cream, tea/coffee/soft drinks etc.

58
FMCG: The Indian Journey

The mighty Indian FMCG is the fourth largest sector in the Indian economy. The growth rate
has shot up astronomically from $30 billion to a projected $74 billion between 2011 and
2018. The sector is characterised by a strong presence of global businesses, intense
competition between organised and unorganised players, and a well-established distribution
network. The availability of key raw materials, cheaper labour and a ubiquitous presence
across the entire value chain gives the Indian FMCG sphere a huge impetus.

But then as they say Rome wasn't built in a day, the FMCG sector also did not evolve into
such mammoth proportions overnight. India has always been one of the most populated
countries in the world thus, leading to even larger demand for consumer goods. A country
where reduction in price of FMCG goods has often been one of the main pointers in election
manifestos, we can well ascertain the importance of this sector. So how about we take a walk
down the history lane of the FMCG sector in India.

The period from 1950's to 1980's did not see much of a growth in this sector owing to the low
purchasing power of Indians and the government pushing for small scale sectors. HUL and
Amul were one of the only companies that stuck around and evolved as market players. Amul
metamorphosized the dairy sector in India. Established in 1946. Amul brought about white
revolution in India and transformed the unorganized dairy sector to an organized one They
pioneered products like milk powder and baby food from buffalo milk. The brand continues
to grow stronger by the day and sells around 3960 tones of milk products every year. The
Amul girl. their mascot for ages till date catches our attention, doesn't it?

Another big hotshot at that time-HUL-focused more on the urban sector which then made up
for a tiny part of the Indian population. A game-changing event took place when NIRMA
entered the market and jolted the FMCG sector. It was the first company that bought the
concept of "Value for Money and made FMCG a common man commodity. MNCs focusing
on the urban and middle class woke up to new market realities and noticed the latent rural
market, thus, came Wheel-yet another household item for many families.
59
Liberalisation of the Indian Economy saw not only rise in domestic choices but also in
imported ones. Diminishing trade barriers encouraged MNC's to invest more to cater to the
ever-growing Ibn plus population. Rising standards of living in urban areas coupled with the
purchasing power of rural India saw companies introduce everything from a low-end
detergent to a high- end sanitary napkin. Their strategy became two-pronged over the last
decade One, invest in expanding the distribution reach far and wide across India to enable
market expansion. And two, upgrade existing consumers to value-added premium products
and increase usage of existing.

Product Ranges

So you could see almost all companies-be it an HUL. Godrej, or a Marico outdoing each
other in trying to reach the rural consumers first. Each of them has seen a significant
expansion in their retail reach in mid-sized towns and villages. Some who could not do it on
their own have piggy- backed on other FMCG major's distribution network (P&G and Marico
for example). Consequently, companies that took to rural India saw their sales and profits
expanding. For example, currently 50% of all HUL sales come from rural India, making it
one of the biggest beneficiaries.

One of the biggest changes to hit the FMCG industry was the 'sachet revolution. In the last 3
years, detergent, shampoo, hair oil, biscuit, chocolate and a host of other companies, have
introduced products in smaller package sizes, at lower price points. This is the single big
innovation to reach new users and expand market share for value-added products in urban
India (especially tier II and tier III cities), and for general FMCG products like detergents,
soaps and oral care in rural India. From being luxuries to becoming necessities, FMCG sector
has come a long way. It has deeply penetrated our lives and spoilt us with choices. These
latest trends have tremendously evolved the face of this sector.

Market size

EVOLUTION OF FMCG IN INDIA

60
FMCG is the fourth largest sector in the Indian economy.

 India's household and personal care is the leading segment, accounting for 50 per cent of
the overall market. Healthcare (31%) and food and beverages (19%) comes next in terms
of market share.
 Growing awareness, easier access and changing lifestyles have been the key growth
drivers for the sector.
 The number of online users in India is likely to cross 850 million by 2025.
 FMCG industry expected to grow 7.5-8.5 per cent in first quarter of 2020.
 Retail market in India is estimated to reach USS 1.1 trillion by 2020, with modern trade
expected to grow at 20 per cent -25 per cent per annum, which is likely to boost revenues
of FMCG companies.
 In 2018, e-commerce segment contribution is projected to be around 1.3 per cent of the
overall branded packaged FMCG sales.

 People are gracefully embracing Ayurveda products, which has resulted in Patanjali being
ranked as the most trusted FMCG brand in India.

61
CHAPTER 3
COMPANY
PROFILE

62
 CHAPTER 3

COMPANY PROFILE

ITC Limited (ITC), headquartered in Kolkata, is the main cigarette manufacturer in

India.[1][2] ITC’s commonly sold cigarette and cigar brands include; Insignia, India Kings,
Lucky Strike, Classic, Gold Flake, Navy Cut, Players, Capstan, Bristol, Flake, Silk Cut, Duke
& Royal. In 2016, cigarettes provided 62% of the gross revenue of the company.

ITC, established in 1910 as a subsidiary of British American Tobacco (BAT), was first
titled Imperial Tobacco Company of India Limited, acronymic as “ITC”. It underwent
several title changes, India Tobacco Company Limited (1970), I.T.C. Limited (1974)
and ITC Limited (2001), the final name change reportedly to “shed(ding) the cigarette tag”.
The company’s multi-business portfolio includes:

Image 1: ITC Colombo ground breaking ceremony with the participation of Basil Rajapaksa (Minister for Eco

 Fast Moving Consumer Goods (FMCG) and Tobacco products – a range of

products including food, personal care products, stationary and incense
sticks
 Packaging and Printing – was initiated as a support industry for their cigarette
63
production. They also provide packaging to other Indian and multi-national

64
 tobacco companies, such as British American Tobacco (BAT), Philip Morris
International, Agio Cigars and Vazir Sultan Tobacco (VST) Industries.
 Hospitality – ITC Hotels, a chain of luxury hotels, initiated its first international
venture in Sri Lanka (Image 1) under its fully owned subsidiary Welcome Hotels
Lanka Private Limited. To read the relevance on tobacco industry merging its
businesses with the hospitality industry, please see the page Hospitality Industry
Manipulated against Tobacco Control Policies.
 Paperboards and Speciality Papers – was established to supply material to ITC
packaging. It’s raw material is produced by a forest cultivation project, which
won them the membership of the WWF’s Global Forest and Trade Network.
 Agri Business - Is engaged in cultivating, processing and exporting tobacco
leaves.
 Information Technology – ITC Infotech India Limited, established in 2000,
provides offshore outsourcing to “global customers”. The list of partner
organisations for the information technology business in 2017 can be found in
their website.

Investors

The two main investors of ITC are the Government of India and the British American
Tobacco (BAT). As of 2017, BAT held 24.68% via its subsidiary Tobacco Manufacturers
(India) Limited.[16] According to media BAT unsuccessfully attempted to increase its shares
in ITC in several occasions.[17][18][19] The second largest (14.35%) shareholder was Life
Insurance Corporation, the Indian government-owned insurance company. There are four
other government-owned insurance companies (General Insurance Corporation of India, The
New India Assurance Company Limited, The Oriental Insurance Company
Limited and National Insurance Company Limited) among the top 10 investors of ITC.
[16]
Thus, as of 2017, Indian government owned around 31% of ITC shares, receiving
criticisms for the “irony” of its attempts to control tobacco while being the “biggest investor”
of the industry.

Governing Board

ITC is governed by a Board of Directors headed by a Non-Executive Chairman. In 2017,

Board included all Indians except for the BAT representative David Robert Simpson. A
complete list of ITC’s Board of Directors can be found on the [1]. In 2017, the list
included Nirupama Rao, the former (2004-2006) Indian High Commissioner for Sri Lanka as
a Non-executive Director.

Overseas Tobacco Subsidiaries

ITC owns a tobacco company in Nepal, Surya Nepal Private Limited (Surya Nepal), in
partnership with BAT.

Controversial Activities

65
Temporary Shut-down of Cigarette Factories

As of 2017, ITC shut down their cigarette factories twice. This was as a response to the
government’s initiatives to implement Pictorial Health Warnings (PHWs) on cigarette packs
as detailed below:

 December 2010 – Indian government planned to implement 20% pictorial health

warnings in tobacco packs from 1st December 2010. ITC and Godfrey Philips
India Limited, the two leading cigarette manufactures in India, halted cigarette
production for a month from the supposed date of implementation, stating they
did not receive clear instructions on the graphic warnings to be included.
 April 2016 - ITC and two other cigarette companies (Godfrey Philips India
Limited and VST Industries Limited) closed their cigarette manufacturing
factories as a response to the government’s decision to expand pictorial health
warnings from 20% to 85% of surface of the cigarette packs.

Involvement in Healthcare Services

In 2017, media reported ITC has decided to explore health care services, with the aim of
establishing multi-speciality hospitals in India.

Establishing Apparel Brands Based on Cigarette Brand Names

Logos of the two ITC apparel chains based on the cigarette brand names

Wills Sport, Classic and Clublife

“Wills Navy Cut”, commonly known as “Wills”, was the first filtered cigarette brand of ITC.
Introduced to the Indian market in 1963, it was promoted through a campaign tag-lined
“Made for each other” depicting a young couple in different day-to-day scenes.[34][6] In 2000,
it established an apparel chain branded “Wills Sport”, entering into sports-wear and casual
wear market (Image 2). The apparel chain was later expanded to “Wills Classic” (formal
wear
– 2002) and “Wills Clublife” (evening wear – 2003).

In 2004, with the implementation of new legislations in India restricting advertisement and
promotion of tobacco, ITC announced that they will “dissociate” the brand name “Wills”
from the cigarettes and make it “inconspicuous” to avoid claims on ‘surrogate advertising’.
However, even though the word “Wills” was separated from the “Navy Cut”, it remained
prominent in the packaging , earning criticisms from the health advocates.
66
 The change of Wills Navy Cut package[36]

An Apparel Chain Targeting Youth

John Players Men’s Wear - In 2003, ITC established a global mid-price ranged
Men’s wear chain branded “John Players”. According to ITC officials, it "caters
to the fashion-conscious youth at affordable price". The brand name was a direct
take on of the commonly sold BAT cigarette brand “John Player”. ITC refused
they are ‘brand stretching’ stating absence of a cigarette similarly named in India
and the use of suffix “s” as reasons. However, ITC has a commonly sold cigarette
brand named “Players” in the Indian market. The apparel brand was in the Indian
market since 2001.

Using the same colour scheme (red and white) as the logo of the BAT “John Player” cigarette
pack, “John Players” apparel chain runs a prominent advertisement campaign targeting youth,
sometimes even involving popular Bollywood actors.

 ”Miss Players” - In 2006, the “John Players” apparel chain was expanded
to include female wear for young females, introducing a brand named
67
“Miss

68
 Players”. As mentioned earlier, ITC sells a cigarette brand named “Players” in the
Indian market.

Fabricating Support through Front Groups

ITC is reportedly a leading member of The Tobacco Institute of India (TII), “a representative
body of farmers, manufacturers, exporters and ancillaries of the cigarettes’ segment of the
tobacco industry in India”. However, TII does not list its members in its website. As of 2017,
TII reported to be a member of the following organisations: International Tobacco Growers’
Association (ITGA) | International Tobacco Documentation Centre, UK | Tobacco
Merchants’ Association (TMA), USA | Confederation of Indian Industry (CII) | Federation of
Indian Chambers of Commerce and Industry (FICCI) | The Associated Chambers of
Commerce and Industry of India (ASSOCHAM) | PHD Chamber of Commerce and Industry
(PHDCCI) | Indian Chamber of Commerce & Industry (ICCI) | Federation of Andhra Pradesh
Chamber of Commerce & Industry (FAPCCI) | Chambers of Commerce: Andhra, Karnataka
& Maharashtra

Media reported several occasions in which TII attempted to influence tobacco control actions
and policies. A few selected examples are listed below:

 Implementation of PHWs - “sent repeated representations to the Union Ministry

of Health and Family Welfare asking it to withdraw the notification mandating
large-size pictorial health warnings”; conducted massive media campaigns
generating doubt about effectiveness of PHWs and organised farmers’ protests
against the expansion of PHWs on cigarette packs from 20% to 85%.
 Influencing Conference of Parties - demanded the Indian government to include
them in the national delegation to the 7th Conference of Parties (CoP 7) of
WHO Framework Convention on Tobacco Control (FCTC) held in New Delhi in
November 2016. Further, TII publicly criticized FCTC for refusing the observer
status to Federation of All India Farmers Association, a known front group with
vested interests, to CoP 7.
 Tax increase - objected against an increase of cess on cigarettes stating it would
be detrimental to tobacco farmers

Corporate Social Responsibility (CSR) Initiatives

ITC has been criticised for using their CSR initiatives to engage tobacco farmers.

TobaccoUnmasked Resources

 British American Tobacco (BAT)

69
 CHAPTER 4
RESEARCH
METHODOLOGY

61
0
 CHAPTER 4

RESEARCH METHODOLOGY
The project consists of information from one source primary source ,The study seems to be the
observation and a description of the project where we try to find out the hidden aspect or bring out
the concept for further explanation, but some scientific method and techniques classified it as the
research, that’s why the following research methods, techniques and components are used to
facilitate the study
Primary data was collected through surveys/questionnaire into various ISS outlets. The
questionnaire was prepared very carefully so that the data would be relevant &authentic.

Method of collection of data-Survey

Total Outlet-54
Existing ISS outlet- 42
Newly added outlet -12

OBJECTIVES OF THE STUDY

-To Understand the operation of ISS outlet.

-To Established cigarette as a categories and enhance new customer based in ISS outlet.
- To Growth the cigarette sales opportunity to Modern trade through ISS outlet’

Scope of the research:

To Increase the Cigarette Sales in Independent self service outlet (ISS) This
research is prepared on the basis of the surveys. The scope of the research revolves
around identifying and proposing effective strategies that I.T.C. Limited can
implement to increase cigarette sales specifically in Independent Self Service
Outlets (ISS) The research will encompass various aspects that can influence
consumer behavior, retail operations, and marketing efforts. The primary focus will
be on generating actionable insights that I.T.C. Limited can leverage to enhance its
market share and profitability within the ISS channel.

61
1
Research Design- Descriptive research design

Descriptive research design is a scientific method that is used in this study which helps in
observing and describing the behavior of a subject without influencing it in any way to obtain
a general overview of the subject. This design allows observation without affecting normal
behavior. It is also useful because it is not possible to test and measure the large number of
samples needed for more quantitative types of experimentation

These types of experiments are often used by anthropologists, psychologists and social
scientists to observe natural behaviors without affecting them in any way. It is also used by
market researchers to judge the habits of customers, or by companies wishing to judge the
morale of staff. Though the results from a descriptive research can in no way be used as a
definitive answer or to disapprove a hypothesis but, if the limitations are understood, they can
still be a useful tool in many areas of scientific and normal study research such as this project.

Type of data

This study deployed only primary Data

PRIMARY DATA:

The primary data source was collected through questionnaire. A questionnaire was prepared
carefully so that it may prove to be effective in collecting the right information.

70
 WHAT IS FOCUS BRANDS?

Focus Brands are those brands which company focuses to increase the sale of that
brand.Company make various strategy to state that product into the market In Lucknow The
Starting Point of the company was Imperial Tobacco CO. of India Ltd. The
company manufacture and distribute cigarette and smoking tobaccos and
specialist papers including cigarette tissue papers (Solo manufacturer in the
country).

 Insignia
 India Kings
 Classic
 Gold Flake
 Silk Cut
 Navy Cut
 Scissors
 Capstan
 Berkeley
 Bristol
 Flake

Cigarette length types-

PKSFT (97mm)- Premium King Size Filter tip

KSFT (84mm)- King Size Filter tip
RSFT (69mm)- Regular Size Filter tip
DSFT(64mm)-DeluxeSizeFiltertip

71
I.T.C. Cigarette Visibility in “ISS”Outlet

72
73
74
 CHAPTER 5
DATA ANALYSIS
AND
INTERPRETATION

75
 CHAPTER 5

ASSESMENT PROFORMA/QUESTIONNAIRE OF SURVEYS

-ISS outlet Name

-Highest selling cigarette brand of ITC

- Lowest selling cigarette brand of ITC

-
Highest selling cigarette brand of competitor

- Lowest selling cigarette brand of competitor

-Continuous Supply by DS (Yes/No)

-Merchandising Element (Any)

-Average Sales of ITC (per day)

-Average Sales of Competitor (per day)

-Highest Selling cigarette size (by cigarette Length)

-Retailer Satisfaction Rate

76
DATA INTERPRETATION & ANALYSIS
• Highest selling cigarette brand of ITC-GF Premium

Highest Selling ITC Cigarett e

2%
9%
19%
6%
2%
4%
11% 6%

6%
2%
2%
4%
28%

CLASSIC REFINED TASTE CLASSIC RICH TASTE WAVE INDIA KINGS

CLASSIC CONNECT NAVYCUT WILLS CLASSIC BALANCE TASTE CLASSIC DB
CLASSIC IB B&H GF PREMIUM GFK BLUE
CLASSIC VERVE BT GF INDIEMINT

77
Lowest selling cigarette brand of ITC-Classic Verve BT

Lowest Selling ITC Cigarett e

2%
9%
19%
6%
2%
2% 4%

11% 6%

6%
2%
2%
4%
28%

CLASSIC REFINED TASTE CLASSIC RICH TASTE WAVE INDIA KINGS

CLASSIC CONNECT NAVYCUT WILLS CLASSIC BALANCE TASTE CLASSIC DB
CLASSIC IB B&H GF PREMIUM GFK BLUE
CLASSIC VERVE BT GF INDIEMINT

78
 CONTINUOUS SUPPLY BY DS

CONTINUOUS SUPPLY
YESNO

2%

9 98%

79
-Merchandising Element (Any)

MERCHANDISING

20%

10%

70%

BACKWALL SHELF STRIP NO ELEMENTS FOUND

Highest Selling Cigarette Brand Size(by length)-RSFT

Highest Selling ITC Cigarett e

6% 4%

38%

53%

PKSFT KSFT RSFT DSFT

71
0
Retailer Satisfaction rate-Satisfied

Sales
5%

95%

SATISFIED NOT SATISFIED

Competitors of I.T.C. Cigarette

 Philip Morris International (Malboro)
 Golden Tobacco Limited
 Godfrey Philips India Ltd.
 VST Industries Ltd. (Vazir sultan Tobacco Company.)
 RTCL Ltd. (Raghunath Tobacco Company Ltd)

71
1
 Highest Selling Competi ti on Cigarett e
6%
4%
2% 21%

19%

49%

MALBORO GOLD ADVANCE MALBORO ADVANCE COMPACT MALBORO POCKET

MALBORO VISTA TOTAL MOMENTS
ZAFRAAN

80
 SWOT ANALYSIS
Strength –
-Independent self service(ISS) outlet provide customer with a quick and easy way to purchase
cigarettes without waiting in long queues
-The sale of tobacco products, particularly cigarettes, can be a significant source of revenue for the
outlet.
- ISS often situated in high-traffic areas, these outlets can attract a steady flow of potential

customers.

Weakness-
-Self Service outlet may lack personalized customer service and expertise on product
recommendations, less personal interaction
- Selling tobacco products raises ethical and health-related concerns due to the well-established
risks associated with smoking. This may lead to negative public perception or customer reluctance
to support the business.
- Strict regulations govern the sale of tobacco products, and non-compliance can result in legal

repercussions or fines.

Opportunity-
-ITC Holds a very limited or few number of (ISS) Outlet, so we have large market to expand.
- Implementing loyalty programs or rewards for repeat customers can help retain existing clientele
and encourage brand loyalty.

-Customer can choose a large number of variety at single point.

Threats-
-Biggest competitors of ITC (ISS) outlet is PMI (Marlboro) ISS outlet.
- As more people become aware of the health risks associated with smoking, there is a trend of

declining smoking rates, potentially reducing demand for tobacco products.

- The outlet may face competition from other tobacco retailers, as well as alternative products and
channels like online sales.

81
- Governments may introduce stricter regulations or taxes on tobacco products, affecting sales and
profitability.

81
CHAPTER 6
FINDING

82
 CHAPTER 6

FINDING

An Independent self-service(ISS) cigarette outlet refers to a retail establishment where customers

can purchase tobacco products, primarily cigarettes, without the need for assistance from store
staff. These outlets are typically small-scale retail locations, such as convenience stores, gas
stations, or kiosks, where customers can select and purchase tobacco products themselves
-Merchandising elements at ISS stores like-backwall,adboards,merchandising sheets
-ITC is a market leader in cigarettes industry and it is recently moves a step towards for ISS
Cigarette store so we have large market to expand this facility to the consumer,
-Continuous Supply by DS is 100%.
-WD is a source point of distribution process. From WD(Wholesale Dealer) cigarette supply to
the various channels like retailers, wholesalers, convenience and ISS (Independent Self service
Outlets)
-There were 42 outlets of ISS in Lucknow and I added 11 more outlet into that.
-Highest selling ITC Cigarette Brand in ISS(Lucknow) is GF Premium
- Highest selling Competition Cigarette Brand in ISS(Lucknow) is Marlboro Advance Compact

 100% continuous supply by DS and the retail owner satisfaction rate is in positive.

 WD is a source point of distribution process from WD(Wholesale Distributor) cigarettes

supply to the different channels like-
SWD,Stockist,Retailer,Wholeseller,Convenience

 Cigarettes are distributed through a complex supply chain that includes tobacco companies,
wholesalers, and retailers. The process begins with tobacco companies, which grow and
harvest tobacco leaves and manufacture them into cigarettes. The

83
 cigarettes are then sold to wholesalers, who distribute them to retailers such as
convenience stores, gas stations, and tobacco shops. The retailers then sell the
cigarettes to consumers

 In many countries, cigarettes are heavily taxed, and the taxes are collected at various points
in the supply chain. For example, in the United States, federal and state taxes are collected
on cigarettes when they are sold by the manufacturer or importer to the wholesaler, and
additional taxes may be collected when the cigarettes are sold to the retailer or consumer.

 The distribution of cigarettes is regulated by national and international laws, which can
vary significantly from one country to another. These laws may cover issues such as
minimum age for purchasing cigarettes, advertising and marketing restrictions, and labeling
requirements.

84
 CHAPTER 7

CONCLUSIONS

85
 CHAPTER 7

CONCLUSIONS
-In conclusion, an independent self-service cigarette outlet is a retail establishment that offers
customers a convenient way to purchase tobacco products, primarily cigarettes, without the need
for assistance from store staff.
-These outlets are typically found in high-traffic locations such as convenience stores, gas stations,
or kiosks. While these outlets may generate revenue from the sale of tobacco products, they face
several challenges and ethical considerations. The health risks associated with smoking have led
to increasing regulations and public health campaigns to discourage smoking and protect public
well-being. As a result, selling tobacco products can be subject to strict legal restrictions and
negative public perception.
-To thrive in the face of these challenges, independent self-service cigarette outlets could consider
diversifying their product range to include healthier alternatives or non-tobacco items that
promote well-being. Implementing loyalty programs and utilizing digital marketing could also
help attract and retain customers.
-Ultimately, the success of an independent self-service cigarette outlet should be balanced with a
commitment to ethical business practices and a focus on promoting products that contribute
positively to customers' health and well-being. Prioritizing customer satisfaction, adhering to
relevant regulations, and staying responsive to changing market trends will be crucial for long-
term sustainability and growth
 Cigarette smoking is a leading cause of preventable death and illness worldwide. It is a
major cause of cardiovascular disease, including heart attack and stroke, and is also a major
cause of cancer, particularly lung cancer. In addition to the health risks, smoking is also
harmful to the environment due to the pollution caused by cigarette production and
disposal. There are many resources available to help people quit smoking and lead a
healthier life. If you are a smoker, it is never too late to quit and reap the benefits of a
smoke-free lifestyle

 Cigarette smoking is a major cause of illness and death worldwide. It is the leading cause
of preventable death and disease, responsible for an estimated 6 million deaths each year.
Smoking is associated with a number of serious health problems, including cancer, heart

86
 disease, stroke, lung diseases, and other respiratory illnesses. It can also worsen a number
of other health conditions. The best way to reduce the risks associated with smoking is to
quit completely. If you are a smoker, quitting is the single most important step you can take
to improve your health. There are many resources available to help you quit smoking,
including nicotine replacement therapy, prescription medications, and support from friends
and family.

 Cigarette smoke contains hundreds of harmful chemicals, including nicotine, tar, and
carbon monoxide, which can damage the body's organs and lead to numerous health
problems.

87
 SUGGESTIONS

 It is generally accepted that the best way to improve the cigarette industry would be to reduce
the number of people who smoke. This could be achieved through a variety of strategies,
including education campaigns to raise awareness about the health risks of smoking,
increasing taxes on cigarettes to make them more expensive and less attractive, implementing
stricter advertising and marketing regulations, and providing support to help people quit
smoking.
 Another way to potentially improve the cigarette industry would be to develop and promote
alternatives to traditional cigarettes, such as e-cigarettes or other less harmful tobacco
products. While these products are not without risk, they may be less harmful than traditional
cigarettes and could potentially serve as a safer option for smokers who are unable or
unwilling to quit.
 It is important to note, however, that the most effective way to improve public health and
reduce the negative impacts of the cigarette industry is to reduce the overall prevalence of
smoking. This can be achieved through a combination of education, policy measures, and
support for smokers who want to quit.
 or never start. This can be done through a combination of public education campaigns, policies
such as higher taxes on cigarettes and laws that restrict advertising and sales to minors, and the
availability of smoking cessation aids and resources.
 However, it is important to note that quitting smoking is not easy and can be very challenging
for many people. It often requires a combination of willpower and the use of proven quitting
aids and techniques, such as nicotine replacement therapy, prescription medications, and
counseling.
 If you are a smoker and are interested in quitting, there are many resources available to help
you, including nicotine replacement therapies and prescription medications, as well as support
from healthcare providers and support groups. Quitting smoking can be difficult, but it is
worth the effort, as it can significantly improve your health and reduce your risk of tobacco-
related illnesses.

88
BIBLIOGRAPHY

89
 BIBLIOGRAPHY

 Auker, C. (n.d.). Social Media and Its Application in Business Marketing. SSRN Journal.
 Balakrishnan, B., Dahnil, M. and Yi, W. (2014). The Impact of Social Media Marketing
Medium toward Purchase Intention and Brand Loyalty among Generation Y. Procedia -
Social and Behavioral Sciences, 148, pp.177-185.
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An exploratory study. J. Cust. Behav., 11(2), pp.101-115.
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quality's dimensions on customer satisfaction and buying impulse. J. Cust. Behav., 6(1),
pp.37-56.
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Predictors of Customer Intention to Re-Purchase South African Retailing Industry.
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Websites
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1. https://ifortisworldwide.com/

2. www.wikipedia.org

3. https://www.socialmediatoday.com

4. https://avivdigital.in

5. https://www.forbes.com

6. http://www.academia.edu/

7. http://www.studymode.com/

8. https://www.bluecorona.com/

9. http://businessdirectories.com/

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Assessment proforma/questionnaire/survey
Primary Questionnaire

(To be filled only on actual response base of Outlet Owner/Manager)

1- Does shopkeeper dealing in CG ?
Ans. - Yes/No.
2- If No, then does he interested to deal with CG in future ?
Ans.- Yes/No.
3- Does customer ask him about CG ?
Ans.- Yes/No
4- How many customers usually ask about ?
Ans.- Less than 5% / 5-10% / 10-20% / More than 20%
5- Ratio of customer asking about CG (Male/Female) ?
Ans.- __ / __
6- Major Type of Customer purchasing CG.
Ans.- Student / Employed / Businessman
7- Major age group of customers purchasing CG.
Ans.- 18-25 / 26-35 / 35+
8- Any institute or Corporate Office nearby, if yes mention name.
Ans.-
9- Daily Business of CG in Volume (10s Pack).
Ans.-
10- By brand Sales in 10s Pack-
 IK-
 Classic Rich & Balanced-
 Classic Refined-
 Classic Burst Segment-
 Connect-
 B&H-
 GFK Red-
 GFK Blue-
 Other ITC KSFT-
 GFP-
 GF Indie Mint-
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  Wave-
 Other ITC RSFT-
 MGA-
 MGA Gold-

 Other PMI KSFT-

 Contra KSFT-

Any Other left, kindly mention name & quantity—

 
 

11- Outlet is serviced by ITC or Not, also mention service frequency if Yes?
Ans.-
12- Outlet is serviced by PMI or Not, also mention service frequency if Yes?
Ans.-
13- Source of purchasing CG if not serviced.
Ans-
14- Mode of purchase (Cash/Credit), mention days if on credit mode.
(Mandatory to fill for non
CG handler if ready to deal in future).
Ans.-
15- Space available inside shop for merchandising (Min. 2*3 feet)?
Ans.-
16- Any Merchandising input available (ITC/PMI)?
Ans.-
17- Type of Input, if available.
Ans.-
18- Mention amount/month if any.
Ans.-
19- Interested in merchandising input of ITC, if not available any?
Ans.-
20- Any feedback for ITC services.

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