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ABOUT ITC GROUP Incorporated on 24 August 1910 as the Imperial Tobacco Company of India Limited, the company’s name was changed to ITC Limited in 1974. This company is rated among the ‘World’s Best Big Companies’ by Forbes magazine. ITC ranks third on all major profit parameters among India’s private sector corporations. ITC employs over 20,000 people at more than 60 locations across India. ITC is one of India’s foremost private sector companies with a market capitalization of over US $ 13 billion and a turnover of US $ 3. 5 billion.
ITC has a diversified presence in cigarettes, hotels, paperboards and specialty papers, packaging, agri-business, packaged foods and confectionery, branded apparel and greeting cards. ITC’s agri-business is one of India’s largest exporters of agricultural products. A wholly-owned subsidiary, ITC InfoTech India Limited, provides end-to-end IT solutions, including e-enabled services and business process outsourcing. Since its establishment in 1992, ITC continues to show leadership, flexibility, and creativity in its business and community approaches.
The company’s growth record since it began production in late 1994 has been increasing steadily. As we begin the new century, ITC is at the heart of the Kingdom’s fastest growing establishments. Its success stems from its business acumen, its pursuit of excellence, and its company family spirit. History of Industry The history of Jordan’s cigarette industry is relatively young, with its beginnings in the early 1930s; National Tobacco Company (NTC) owned by British American Tobacco (BAT) was formed first, followed by Jordan Tobacco and Cigarette Company (JTC), a locally owned establishment.
Both were small, using local and imported tobacco, with just the cigarette making and cigarette packing (secondary) production lines functional. In 1971, NTC was forced to close because of competition. JTC remained alone dominating the Jordanian market, mainly due to a restriction on imported cigarettes enforced by the Ministry of Supply until 1989. JTC was also engaged in limited export activities and in 1994 it formed an agreement with RJ Reynolds.
By 1992, the Jordanian market became more conducive to active competition and a group of investors established International Tobacco and Cigarette Company (ITC), launching its first products two years later. ITC gained a sizeable percentage of the market with its high quality and affordable brands. JTC, as well as the Ministry of Supply, which imported multi-national brands in controlled quantities, dominated a substantial portion of the local market. Within two years, ITC had established a solid reputation as a world-class competitor.
In 1993, ITC formed a five-year agreement with Rothmans International Company, to produce Rothmans brands. In 1998, ITC signed an under-license agreement with Philip Morris and produced L (both the full flavor and the lights). With all these products, ITC controlled substantial market share. ITCs agreement with Philip Morris is ongoing and now includes all its cigarette products. In the meantime, the Union Tobacco Company (UTC), founded in association with BAT to produce the latter’s products under license, gradually gained a sufficient share of the local market.
Today, ITC dominates 96% of Jordan’s local brands, which represents 25% of the total market. Philip Morris, BAT, and Japan Tobacco Company (RJ Reynolds), share the medium-upper segment, representing 75% of the total market. VISION AND MISSION OF ITC ?Mission “To use our advanced technologies to develop premium products at reasonable prices, maintain this competitive advantage, and ally with long-term regional and international partners, through total management employee commitment, leading to a rewarding growth in sales and worldwide production operations. ” ?Vision To build the International Tobacco and Cigarettes Company into the premier institution and one of the leading manufacturing enterprises in the region through the provision of the most qualified team of managerial and technical expertise. ” STRATEGIC BUSINESS UNIT OF ITC Cigarettes:ITC is the market leader in cigarettes in India and has a wide range of popular brands such as Insignia, India Kings, Classic, Gold Flake, Silk Cut, Navy Cut, Scissors, Capstan, Berkeley, Bristol and Flake in its portfolio. PackagingITC’s Packaging & Printing Business is the country’s largest convertor of paperboard into packaging.
It was set up in 1925 as a strategic backward integration for ITC’s Cigarettes business. It offers a variety of value-added packaging solutions for the food & beverage, personal products, cigarette, liquor, cellular phone and IT packaging industries. Hotels: ITC entered the hotels business in 1975 with the acquisition of a hotel in Chennai which was rechristened Hotel Chola. Today ITC-Welcomgroup with over 70 hotels is one of the foremost hotel chains in India. Paperboards In 1979, ITC entered the Paperboards business by promoting ITC Bhadrachalam Paperboards.
ITC’s Paperboards business has a manufacturing capacity of over 360,000 tonnes per year and is a market leader in India across all carton-consuming segments. Greeting, Gifting & Stationery ITC’s stationery brands “Paper Kraft” & “Classmate” are widely distributed brands across India. The Paperkraft designer stationery range consists of notepads & multi subject notebooks in hard, soft covers & multiple binding formats including spirals, wiros etc. ITC’s Greeting & Gifting products include Expressions range of greeting cards and gifting products Safety Matches
ITC’s brands of safety matches include ikno, Mangaldeep, VaxLit, Delite and Aim. The Aim is the largest selling brand of Safety Matches in India. ITC also exports premium brands to markets such as Europe, Africa and the USA. Aggarbattis ITC has launched Mangaldeep brand of Aggarbattis with a wide range of fragrances like Rose, Jasmine, Bouquet, Sandalwood, Madhur, Durbar, Tarangini, Anushri, Ananth and Mogra. Mangaldeep is also being exported to USA, UAE, Bahrain, Nepal, Singapore, Malaysia, Oman and South Africa Lifestyle Retailing ITC entered the Lifestyle Retailing business with the Wills Sport range of nternational 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). In 2002, ITC entered into the popular segment with its men’s wear brand, John Players. In 2005, ITC introduced Essenza Di Wills, an exclusive line of prestige fragrance products Food ITC made its entry into the branded & packaged Foods business in August 2001 with the launch of the “Kitchens of India” brand. In 2002 it expanded into Confectionery, Staples and Snack Foods segments.
ITC’s brand in Food category include: Kitchens of India, Aashirvaad, Sunfeast, Mint-O, Candyman, and Bingo! Agri Exports ITC’s International Business Division (IBD) is the country’s second largest exporter of agri-products. ITC exports Feed Ingredients (Soyameal), Foodgrains (Rice, Wheat, Pulses), Coffee & Spices, Edible Nuts, Marine Products, and Processed Fruits. e-choupalThe e-Choupal model of ITC has been very effective in tackling the challenges posed by the unique features of Indian agriculture, characterised by fragmented farms, weak infrastructure and the involvement of numerous intermediaries, among others.
ITC’s e-Choupal won the Stockholm Challenge 2006 award is for using information technology for the economic development of rural communities. Price Price is not just a number on a tag or an item,Price is the percieved value of a good or services, most commonly expressed in the relevent currency. Price can also be expressedin term of other goods. It is related to the precived value at the time of the transaction & is based on the amount of the expected satisfaction to be received from the goods or services not the actual satisfaction. Companies setting the pricing on the following way:- )Selecting the pricing objective 2)Determining demand 3)Estimating cost 4)Analysing competitors costs,prices and offers 5)Selecting the pricing method 6)Selecting final price Price range (within this range company select their price) Low price High price No possible no demand profit at this situation Hence company select the price within this range only. Here we considering only Cigarettes means we taking only one S. B. U of ITC.
In this particular unit ITC is market leader so it fix its prices. Any company adapting the prices in the following way : i. FOB origin ??? The shipping cost from the factory or warehouse is paid by the purchaser. ii. Uniform delivery pricing ??? The same price is charged to all iii. Zone pricing ??? Price increase as shipping distance increase iv. Basing point pricing ??? Certained cities are designated as basing points. All goods shipped from a given basis point are charged the same amount. v. Freight ??? absorption pricing ??? The seller absorbs all or part of the cost of transportation.
This amounts to a price discount, and is used as a promotional tactice. Now itc using Uniform delivery pricing. The price of ITC is same at all its zone but the minor difference is occurs due to Government policy. It is more clear from the following table Zone Delhi Mumbai Kolkata Insignia36 36 36 India kings29 29 29 Classic 45 45 45 Gold flake 27 27 27 Silk cut 42 42 45 Navy cut 35 35 35
Scissors 31 31 31 Capston 21 21 21 Berkeley54 54 54 Bristol & flake80 80 80 Promotional Pricing Promotional pricing are divided in the following major type: ? Loss leader pricing : Under this category the company reduced the price of the maximum selling product. ?Special ??? event pricing: Under this category the company reduced the price in special festivalas. ?Cash rebates: Under this category the company reduced the price in bundle of purchasing. Low interest financing: Under this category the company sell the product in instalments and not taking the interest on the due amount. ?Longer payment term: Under this category the company selling the product and taking the payment in very long term means more than two or three years. ?Warranties & service contracts : Under this category the company selling the product and giving more Warranties. ?Psychological discounting : Under this category the company selling the product and setting the price in 99. 99,999. 90 etc. ITC using “Cash rebates” it gives the discount of bundle purchasing.
It produced different type of “Cigarettes”that are following: ?Insignia ?India kings ?Classic ?Gold flake ?Silk cut ?Navy cut ?Scissors ?Capston ?Berkeley ?Bristol & flake Product Price Whole packet (in Rs) Price (in Rs) Insignia 36 34 India kings 29 26 Classic 45 44 Gold flake 27 26. 5 Silk cut 42 42 Navy cut 35 32 Scissors 31 29. 50 Capstone 21 18 Berkeley 54 51