2. Company Overview
• ITC is one of India’s foremost private sector
companies with a market capitalisation of nearly
US $ 19 billion and a turnover of over US $ 5
billion
• 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
3. The Product-Mix
• FMCG
– Cigarette
– Foods
– Lifestyle retailing
– Personal Care
– Stationery
– Safety Matches
– Agarbatti
• Hotels
• Agri-business
• Paperboard and Packaging
• Information Technology
4. Cigarettes Business
• Market leader in cigarettes in India
• Highly popular portfolio of brands includes
Insignia, India Kings, Classic, Gold Flake,
Silk Cut, Navy Cut, Scissors, Capstan,
Berkeley, Bristol and Flake
• Cigarettes are produced in the state-of-
the-art factories at Bengaluru, Munger,
Saharanpur and Kolkata
6. Manufactu Small
ring Unit - Wholesale
Retailers
Atta
MU -
Retailer
Biscuits
Distributor
Hub
- Exclusive
MU – Food
Panwalas
Products
MU - Malls
Cigarettes
7. Distribution Channel - Composition
• Manufacturing Unit
– Separate for each product line
– Contract Manufacturing
– Backward Integration
– E-Chaupal
• Storage Hubs
– Stores all the products
8. Contd…..
• Distributors
– Exclusive based on population
– Needs to stock all FMCG products (Except
Stationery)
• Wholesalers
• Retailers
• Paanwalas
– Deepest penetration possible
9. Factors for Channel selection
• Perishable
– Short Span
– Customers prefer fresh products
• Lot Size
– Smaller Lot sizes
• Convenience
• Waiting Time
• Product Assortment
10. Channel Objectives
• Consumer Behavior
– Quality Conscious
– Convenience goods, Needs Intensive distribution
– Demands variety
– Very less waiting time
• Company Objectives
– Reach masses
– Rural penetration
– Diversification
– Competitive advantage
11. Features
• Selection of Distributor
– Infrastructures, Delivery Van, Computer, Warehouse,
Sales Force
– Population based ( 1 Distributor per 20-25 thousand)
• Control
– Uses Coercive power
– To deal in Cigarettes, it is must to deal in Other goods
• Terms and Conditions
– Price, Selling Condition, Godown Condition etc…
12. Other Features
• Order
– Distributors- Weekly
– Retailers- Twice a week
– Paanwalas- daily
– Online order is placed by distributor
– The periodical order from wholeseller , retailer,
paanwalas is collected by staff of distributor.
• Payment
– Mostly on Cash-Basis; sometimes post dated
cheques
– Very rarely Credit is allowed on cigarettes
13. Contd….
• Transportation
– Uses delivery van, Rickshaw, Cycles, Autos
• Conflicts
– No Conflicts
– Some tiffs raise between distributor and
retailer due to under supply from distributor
• Problems
14. Conclusion
• ITC has the most popular brands of cigarettes in India
– The sale takes place from the largest of retailers like Big Bazaar,
Spencers to the smallest of paanwalas at every nook and corner
in India
– Thus ITC has deeply penetrated the Indian cigarette market
• With an already established distribution channel for
cigarettes, ITC is also selling safety matches, which is
complementary to both the cigarettes and agarbattis
