Distribution and Supply Chain Management-MBA 4041M

CIA -1

Channel Analysis Report of ITC

BY
Saqib Ibrahim Khan-1827121
Sijo S Prakash-1827123
Jai Assija-1827110
Chris Joel Mathai Varghese- 1827107
Tanya Gaur-1827150

SUBMITTED TO
Prof. Vasudevan M

ITC Introduction
ITC is India's well-known private sector corporation with nearly US$ 19 billion in market
capitalization and over US$ 5 billion in turnover. ITC uses more than 26,000 individuals
across India at more than 60 places. ITC's vision is to maintain its place as one of India's most
precious corporations by generating world-class efficiency and increasing value for the
Indian economy.

In its traditional cigarette, hotel, paperboard, packaging and agri-export companies, ITC is a
market leader. In its nascent Packaged Foods & Confectionery, Branded Apparel, Personal
Care and Stationery companies, it is quickly gaining market share.

ITC Businesses ITC has a corporate strategy directed at generating various growth drivers
based on its time-tested key competencies: unrivaled distribution reach, superior brand-
building capacities, efficient supply chain management and recognized hotel service
capacities.

ITC's Agri-Business is one of the biggest agricultural product exporters in India. ITC is one
of the largest foreign exchange earners in the country (US$ 3.2 billion over the past decade).
The e-Choupal initiative of the ITC has significantly benefited Indian farming by
empowering Indian farmers with the strength of the Internet. It is anticipated that this
approach will gradually generate a enormous rural distribution infrastructure for ITC,
considerably improving the marketing reach of the company.

ITC’s strong Network

 74,000 markets in India.
 1,200,000 Retail outlets
 10000+ Dealer sales force
 1500+ field marketing & promotion teams900+ wholesale dealers

ITC’s Future Growth strategy rationale

 Blend multiple competencies residing within the ITC Group to create new avenues of
growth
 Best fit between internal capabilities and emerging market opportunities
 Each segment enhances the depth and width of ITC’s FMCG distribution capability
 Business model retains critical elements of value chains within ITC with other
elements outsourced
 Contributing to the competitiveness of SMEs

1. ITC Products and Services:

The various businesses that ITC is into are as follows:
 FMCG
 Hotels
 Paperboards & Packaging
 Agri-Businesses
 Information Technology

 FMCG
 Cigarettes: ITC is India's cigarette industry leader. It owes its leadership position
to it a broad range of brands seeking to tackle all Indian consumer segments. It's
brand portfolio comprises Insignia, India Kings, Classic, Gold Flake, Silk Cut,
Navy Cut, Capstan, Berkeley, Bristol, and Flake. ITC has world-class product
design, innovation, manufacturing technology, quality, advertising and distribution
infrastructure that offer it a competitive advantage over the long term. This
 strategic consumer focus has paid beautiful dividends to ITC. In the highly
competitive US market, ITC has also forayed into foreign markets, offering high-
quality, value-priced cigarettes and alternatives owned by Rollyour. In West Asia,
by increasing quantities of its products, ITC has become a main player in the GCC
economies. Bengaluru, Munger, Saharanpur and Kolkata are situated in the ITC
cigarette factories. These factories are renowned for their high quality, state-of -
the-art technology and working atmosphere.

 Foods: In August 2001, ITC entered the branded & packaged food company with
the launch of the Kitchens of India label, followed by the launch of the
Confectionery, Staples and Snack Foods brand in June 2002. The Foods company
pursues this proud tradition of supplying the consumer with quality food products.
All ITC's Foods company products currently available on the market were
designed on the basis of customer ideas created through comprehensive market
research. ITC's state-of - the-art Bengaluru-based product development plant helps
develop fresh versions and SKUs. The unmatched supply chain management
capacities of ITC and its market reach have helped this division gain important
market shares over a very brief period of moment. The Foods company is currently
on the market in four classifications. These are:
 Ready to Eat Foods
 Staples
 Confectionery
 Snack Foods

The brands owned by this division are:

 Kitchens of India
 Aashirvaad
 Sunfeast
 mint-o
 Candyman
 Bingo!
 Lifestyle Retailing: ITC also has a presence in Lifestyle Retailing through its
Wills Lifestyle chain of exclusive specialty stores. Wills Lifestyle, the Retail store,
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. To cater to the mass segment John players was launched in December
2002 followed by Miss Players. John Players offers a complete and vibrant
wardrobe of Casual wear, Party wear, Work wear, Denims, Outer wear and Suits &
Jackets, incorporating the most contemporary trends, an exciting mix of colors,
playful styling, trendy textures and comfortable fits. The brand is available across
the country through a nation-wide network of over 240 exclusive stores and over
1500 multi-brand outlets. ITC aims to be the number one player in this segment in
the coming few years.

 Personal Care: In July 2005, in line with ITC's desire to become India's leading
FMCG firm, ITC forayed into the business of personal care. ITC has already
introduced a range of products, each of which provides discerning customers with a
distinctive and superior value proposition. The dedication of ITC to strong R&D
and customer comprehension supports this. The company has rapidly acquired
significant stocks in some categories and is set to make a substantial contribution to
earnings in the years to come.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.

 Education & Stationary: ITC entered the stationery company in 2002 with its
premium portfolio of notebooks, followed in 2003 with the most famous portfolio
to increase its offering. ITC's Education and Paperwork Products are sold under the
"Classmate" brands aimed at learners and young adults and the "Paperkraft" brand
centered on the requirements of Office Paperwork. The range of Classmate
involves Notebooks, Math Instruments, Scholastic Products and Writing
 Instruments. Paperkraft involves Premium Business Paper, Paper Stationery,
Markers & Highlighters.

 Safety Matches: Based on the logic of supplementary products that can be spread
across the same channel, ITC also forayed into Safet matches. The Safety Matches
range of ITC includes famous brands such as I Kno, Mangaldeep, Aim, Aim Mega
and Aim Metro. The Aim brand is India's biggest Safety Matches selling brand.
ITC also exports to markets such as the Middle East, Africa and the USA frequent
and premium safety games.
 Agarbattis: The company started marketing Agarbattis (Incense Sticks) from
small-scale and cottage units in 2003 as part of ITC's business strategy to create
various growth drivers in the FMCG industry. This business leverages ITC's key
strengths in nationwide distribution and marketing, brand building, supply chain
management, high-quality paperboard manufacturing, and creating innovative
packaging alternatives to deliver high-quality Agarbattis to Indian customers. Rose,
Jasmine, Bouquet, Sandalwood, Madhur, Durbar, Tarangini, Anushri, Ananth and
Mogra are accessible in a broad range of fragrances.

 Hotels: ITC Welcome group launched on October 18, 1975 has come a long way
to becoming one of India's best luxury resorts. With the opening of its first hotel-
Chola Sheraton in Chennai, ITC sought to diversify into other high growth fields.
The brand of the ITC-Welcomgroup has since become synonymous with Indian
hospitality with more than 100 restaurants in over 80 locations.

 Paperboards & Packaging:

 Paperboards & Specialty Papers: The paperboards and specialty papers
division of ITC is India's biggest, most technologically developed and most
environmentally friendly paper and paperboard company. The company
provides a broad range of demands for packaging, graphics, communication,
writing, printing and specialty paper through four world-class manufacturing
units, six sales offices and a network of over 50 dealers in India, along with an
international trade network of 15 distributors / agents. Having pioneered many
special applications such as cigarette fabrics, opaque papers, food grade
 packaging boards and telecard boards, the paperboards and specialty papers
company of ITC enjoys market leadership in value-added paperboards, and
also has a significant share of the Indian fine papers market. It is the largest
exporter of coated boards from India.

 Packaging: ITC's Packaging & Printing Business is the biggest paperboard

packaging converter in the country. It transforms more than 50,000 tons of
paper and paperboard per year into a range of value-added packaging
alternatives for food & beverage, private goods, cigarette, liquor, cell phone
and IT packaging sectors. It also joined the company of Flexibles and
Corrugated Cartons. The Division, established in 1925 as a strategic backward
integration for the cigarette company of ITC, is the most advanced packaging
company in India today. State-of - the-art technology, world-class quality and
a extremely qualified and committed team coupled to position ITC as the
provider of first choice of high value-added packaging.

 Agri-Business:
 Agri Commodities & Rural Services 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 and
domestic trading 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

 Leaf Tobacco, Spices & Agri Inputs: The ITC's vision of providing India's
farming community with reasonable livelihoods has allowed it to pioneer Leaf
 Tobaccos cultivation and growth in India. ITC is India's biggest purchaser,
processor and exporter of leaf tobacco. The following procedures are
benchmarked against the best in the class.

Successfully seeking to leverage its capacities in the Leaf Tobacco business

and venturing into fresh fields of high growth ITC's Leaf Tobacco business has
ventured into spices and made inroads into multiple other company streams.
ITC's spice company foray is an effort to provide quality differentiation from
the farmer to the client across the value chain. This company seeks to assist
farmers to enhance the quality of the products by offering the recent
technology and data. The Agri Inputs company of ITC focuses on the whole
crop cycle with a broad spectrum of products under the three following brands:
Wellgro, Wellpro and Wellsto.

 Information Technology: ITC Infotech, a worldwide IT services corporation, was

designed to provide ITC's multiple divisions with in-house alternatives. Becoming
one of India's fastest growing IT business has come a long way. ITC Infotech
based in Bangalore now offers cutting-edge alternatives and IT services to the
world's leading clients. ITC Infotech provides IT services and solutions across five
main vertical industries: Banking, Financial Services & Insurance (BFSI),
Consumer Packaged Goods (CPG) & Retail, Travel, Hospitality & Transportation
and Media & Entertainment. ITC Infotech complies with ISO 27001, ISO 9001,
SEI CMM Level 5 and BS 7799 accreditations, the largest requirements in global
process quality.Level 5 and BS 7799 accreditations

2. FMCG INDUSTRY

Introduction

Fast-moving consumer products (FMCG) industry is the fourth biggest industry in the Indian
economy, accounting for 50% of FMCG revenues in India with household and personal care.
The main growth drivers for the industry were growing consciousness, easier access and
evolving lifestyles. The urban segment (accounts with a share of income of around 55%) is
the biggest contributor to the general income Generated by the FMCG industry in India The
FMCG industry has grown more rapidly in rural India than in metropolitan India in recent
years. Semi-urban and rural sections are increasing rapidly, with FMCG goods representing
50% of total rural expenditure.

Market Size

It is projected that the FMCG industry in India will reach US$ 1.1 trillion by 2020 from US$
840 billion in 2017, with contemporary trade anticipated to expand at 20%-25% per annum,
which is probable to increase FMCG companies ' profits. FMCG industry revenue in FY18
exceeded Rs 3.4 lakh crore (US$ 52.75 billion) and is estimated at US$ 103.7 billion in 2020.
The growth in the industry was 16.5 percent in value terms between July-September 2018;
supported by moderate inflation, increase in private consumption and rural income. 

Government Initiatives

 Foreign FMCG companies ' minimum capitalization to invest in India is US$ 100
million.
 100% Foreign Direct Investment (FDI) has been approved by the Government of
India in the money and carry section and in single-brand retail, along with 51% FDI in
multi-brand retail.
 The Government of India has drafted a fresh Consumer Protection Bill with particular
emphasis on establishing a comprehensive mechanism to guarantee that consumer
justice is provided in a easy, timely, accessible, affordable and timely manner.
 Goods and Services Tax (GST) benefits the FMCG industry as many of the FMCG
products, such as soap, toothpaste and hair oil, are now below the 18% tax bracket
against the previous 23-24 per cent rate.

PORTER 5 FORCE MODEL OF ITC

The five-force model of Porter helps to reach
where the strength lies in a company scenario.
Porter's Model is in fact a business strategy
instrument that helps analyse an industry
structure's attractiveness. It allows you to
access your competitive position's present
power and the strength of the position you plan to achieve. Porters Model is regarded as an
significant aspect of the set of tools for planning. You can take advantage of your strengths if
you know where the strength lies and enhance the weaknesses and compete effectively and
efficiently. Porters competitive strength model assumes that in a company scenario there are
five competitive forces that identify the competitive strength.

These five competitive forces identified by the Michael Porter are:

 Threat of substitute products

 Threat of new entrants
 Intense rivalry among existing players
 Bargaining power of suppliers
 Bargaining power of Buyers

Threat of new entrants – Market entry of a fresh rival weakens another company's
authority. New entry threat is high when ITC –

 More FMCG start-ups like Genome Labs starting in India and competing with other
FMCG products.
 As there are small switching costs, customers can readily switch from one brand to
another (ITC customers can begin buying HUL goods). So, to prevent this ITC must
provide the quality services to its customers.
 Product differentiation is the main element where the tables can be changed by a fresh
entry. If there is not any product differentiation of ITC products, consumers tend to
loose brand loyalty and switch over those brands which provides a differentiating
feature to the customers.
 Capital requirement.

Intense rivalry among existing players - Industrial rivalry refers to the intensity of rivalry
between present competitors on the market. Rivalry intensity depends on the rivals' quantity
and capacity. Rivalry in the industry is high when:

 There are many competing players in the FMCG market so a consumer can easily
change its preference for a brand e.g. Tide of P & G can be easily replaced by Rin of
HUL if HUL provides a value proposition to the consumer.
  High fixed costs result in massive manufacturing and price reductions.
 A business is suffering from losses but will not be able to leave the industry as the
exit obstacles are large in the FMCG sector and continue to compete with a minute
market share that other FMCG brands can obtain if the company's losses leave the
market.

Bargaining power of suppliers - Bargaining Power of supplier means how strong is the
position of a seller. How much your supplier have control over increasing the Price of
supplies. Suppliers are more powerful when –

 Suppliers are concentrated and well organized

 a few substitutes available to supplies
 Their product is most effective or unique. For e.g. Cigarettes in case of ITC
 Switching cost, from one suppliers to another, is high
 You are not an important customer to Supplies

Bargaining power of buyers - Buyer's bargaining power implies how much control
customers have to drive down the price of their products, they can work together to order big
quantities. Buyers have more negotiating authority when:

 Few buyers pursue too many products

 Buyer purchases in bulk amount
 Product is not distinguished
 Buyer's cost of moving to a competitor's product is small
 Shopping cost is low
 Buyers are price sensitive
 Credible Threat of integration

Threat of substitute products - Replacement products threat implies how readily your
clients can switch to the product of your rivals. Replacement threat is high when:

 A lot of replacement products are accessible. For instance. HUL and ITC's Fiama Di
Wills ponds.
  Every customer can readily discover the product or service at the same or lower cost.
 The competitor's product quality is better
 Replacement product is a business that earns large earnings so that prices can be
reduced to the smallest level.

3. TYPE OF MARKET STRUCTURE OF ITC:

There are many competitors of ITC when it comes to food and personal care products.
Companies like HUL, P&G, Dabur and Godrej Consumer. These companies have
competitive market forces of supply and demand determine market prices and output levels
of goods and services produced by competitive firms. Hence ITC comes under Perfect
Competition type of market. These are economies where the competitive free market model
of supply and demand was discussed in class job to set commodity prices and quantities.
They are highly competitive markets where no vendor or buyer is sufficiently strong to
determine prices and output levels and must therefore acknowledge market forces dictated
prices\output levels.
Name Sales Turnover Net profit Last price
ITC Ltd 44995.65 5,679.31 280.35
HUL 38224 6,036 1,787.85
P&G 2455.29 540.77 113.15
Dabur 6273.19 1,264.29 406.4
Godrej Consumer 5,679.31 5,679.31 669
Table: Market Overview as per 2019 (All figures in Crores)

4. LEVELS OF CHANNELS:

Market representation is the key to providing sharper focus in servicing and managing the
diversities and complexities in the FMCG space. ITC follows it through the following
means:

 Wholesale Dealers (WD)

 WD branches
 WD Stockists
Distribution Channels:

 General Trade:

a) Direct Selling

Producer Customer
Certain products of ITC like Fabelle and YiPee bowl noodles have dedicated retail outlets in
certain cities, The main advantage of this type of channel is that there are no intermediaries
involved because of which material handling and distributor costs are eliminated.

b) Distributor to Retailer Selling:

 K1 K2 K3
Warehouse Wholesale
Producer Supplier Distributor Retailer Customer

This is a classic distribution chain of retailer where in the products which are produced by the
manufacture are supplied to the warehouse supplier. Warehouse supplier stores it for the
temporary purpose. The movement of products from producer to the warehouse supplier is
termed as K1. And when the wholesale distributor places a purchase the purchase order once
in a month based upon the demand forecast. The products are transported from the warehouse
supplier to the wholesale distributor and this transportation is termed as K2. Then based upon
the order placed by the retailer through the distributor salesman, the orders are delivered to
the retailer once in a week, this transportation is termed as K3. Then the retailer sells the
products to the customer

c) Distributor to Retailer Selling via Wholesaler:

K1 K2 K4

Warehouse
Warehouse Wholesale
Wholesale
Producer Supplier Distributor
Wholesaler
Wholesaler Retailer
Retailer Customer
Customer
Supplier Distributor

This distribution chain of retailer where in the products which are produced by the
manufacture are supplied to the warehouse supplier. Warehouse supplier stores it for the
temporary purpose. The movement of products from producer to the warehouse supplier is
termed as K1. And when the wholesale distributor places a purchase the purchase order once
in a month based upon the demand forecast. The products are transported from the warehouse
supplier to the wholesale distributor and this transportation is termed as K2. Then based upon
the order placed by the Wholesaler through the distributor salesman, the orders are delivered
to the retailer once in a week, this transportation is termed as K4. Then the retailer goes to the
wholesaler and makes a purchase of the products and sells it to the customer
 Modern Trade Distribution:
 K1 K2
MT Modern
Producer Warehouse Trade Customer
Supplier Outlet
In Modern Trade the distribution channel does not have many intermediaries. Based upon the
demand of the modern trade outlet the order is placed and the Purchase order is translated to
the warehouse supplier. The MT warehouse supplier purchases the products from the
producer and the transportation is termed as K1. Then based upon the order the products are
supplied to modern trade outlets like Big Bazaar, D-Mart etc. From the MT outlet the
customer makes the purchase.

 E-commerce distribution channel (Online):

Full- E-
Warehouse
Producer Fillment commerce Customer
Supplier
Centre agent

In E-commerce Distribution Channel the products are transported to the wholesale supplier.
From the WSP the products are transported to the Full-fillment centre from where the E-
Commerce agents like Big Basket, Groffers purchase the products based upon the demand
forecast. From here the customer places the order using different e-commerce portals.

 Institutional Sales Distribution Channel (HORECA):

Warehouse HORECA HORECA

Producer Supplier Distributor Outlets
Consumer

HORECA (Hotels-Restaurants-Canteens) has a distribution channel where in the products are

transported WSP and from there the HORECA Distributor places an order once in a month
based upon the demand forecast. The Distributor salesman visits these HORECA outlets and
places order as instructed by the outlets. The products are then delivered to the HORECA
outlets by the delivery team and the customer purchases from these outlets.

5. STRATEGIC PARTNERS /ALLIANCES/ INTEGRATION:

ITC has no strategic partners when it comes to distribution of the foods and PCP products.
ITC Ltd is working on the “leanest possible" distribution model to supply products directly
from its manufacturing units to retail outlets across the country, aiming to ultimately reduce
lead time to just one day. ITC plans to remove as many stocking points as possible as part of
its new model. At each stocking point, products get degraded due to handling. The company
will require less working capital if it eliminates some stocking points.

6. MARKET COVERAGE (TERRITORIES/ROUTE PLANS/MAPPING): ITC

Foods in General Trade is divided its products into 4 categories
i. Snacks (SX)
ii. Personal Care Products (PCP)
iii. Aashirwad Atta Family (AA)
iv. Sun Feast Family (SF)

Each category has approximately 8-10 salesmen per distributor, the permanent journey plan
is made in such a way that the total radius of the salesmen area for whole week is around 5-
7kms. Each salesman visits one retailer only once in a week.

In Bangalore alone there are 24 Wholesale Distributors covering both urban and rural parts of
Bangalore. The route plans are as follows in one of the distributors.
 7. COMMISSION, INCENTIVE, PRICING POLICY:
ITC in general trade offers around 20-25% of commission on foods category of ITC to the
distributor. The distributor from there on has freedom to offer a certain amount of the
commission to the retailer. The retailer gets a margin of around 10-15% of the total MRP.

In General trade, the retail outlets are categorised into 4 categories:

 FC(First Club) Silver Outlet: These are the outlets which do a good and
consistent business with the company. These retail outlets need to give 2*2
sq.ft area for merchandising the products and a sales target is fixed to these
outlets. Upon achieving these targets, the retailers will be awarded with the
incentive in the form of discount in next billing.
 FC(First Club) Gold Outlet: These are the outlets that do a healthy and
coherent business with the company. These retail outlets need to provide 3*
3 sq.ft space for merchandising the products and a sales target is set for
these outlets. Once these goals have been achieved, retailers will be given
the incentive in the form of a discount in the next billing.
 ITC also offers commission to the distributor salesman incentives upon
achieving their monthly targets
ITC will have an estimated operating revenue of 15,037 crore at the end of the financial year
2015 and a revenue of 53,748 crores at the end of fiscal year 2017-18. It has several company
interests and faces a lot of competition from rival firms. In addition, it has chosen to market
its products in every corner of India and has therefore retained competitive and penetration
pricing strategies to cope with rivals and effectively spread its product reach to the remotest
areas of India.
ITC has adopted a pricing strategy pricing policy for its expensive products such as hotels,
but for consumer goods it has adopted a sensible pricing policy because it recognizes that
most Indians adhere to the middle-class sections of society and if prices of goods are pocket-
friendly and accessible, it will assist to create revenues and eventually lead to better income
numbers.
 8. CREDIT AVAILABILITY:
There is no credit facility being offered to the wholesale distributor
ITC Foods Ltd has a billing cycle of 14 days period for the retailer. The billing of a retailer
order takes place in following steps:

 Salesman visits the outlet and takes the order through Vajra App.
 The sales man returns to the distributors office and synchronizes with the main server.
 Once all the salesmen of all categories sync the orders with the servers, the ERP
software Sifi will consolidate all the orders and sent the order to the super stockiest
and a purchase order is made to ITC.
 The Purchase Order is then sent to WSP and the order is loaded into the truck and
released to reach the distributor’s godown.
 The distributor upon receiving the stock, they will sort the stock according to the
retailer’s order and the bill is generated.
 The order is then delivered to the retailers.
 If the retailer clears the bill during the time of delivery, they will get a cash discount
of 2%.
 The retailer upon not clearing the bill during the delivery of the stock will get a 15
days period to clear the bill.

Sample of the credit list of ITC is given below:

 9. CHANNELS PROMOTIONS

Channels promotions can be broadly classified into Above the line promotions and Below the
line promotions.

 Above the line promotions – It means that advertisement is prepared with an intention
to get it deployed around a wider target audience i.e. television, radio etc. This
promotional strategy is helpful to those products which has a broad spectrum of
consumers.
In ITC Bingo, Fiama De Wills, Engage, classmate etc. follows above the line
promotional strategies as they does frequent adverstisement appearing on televisions
and news paper respectively. These are the general usage products as they are used by
majority of India irrespective of any age group or gender. Another above the line
promotional strategy is of ITC hotels. As ITC hotels is classified under premium and
middle class society, so they promote their hotels through televisions and print media
in order to cover a mass audience.
 Below the line promotions – It means that advertisement is going to target a particular
group of audience. This is done by companies through hiring BTL advertisement
agencies that performs direct emailing and product demonstration to a selected group
of people by giving away the samples.
In ITC, recently they have planned to take sunfeast biscuits to school because through
survey they figured out that sunfeast registers better in kids as compared to adults.
Considering the need to garner visibility among kids, the company has earmarked
around Rs 20 lakh for this below-the-line project and their target is to reach 1 million
kids across these 1,000 schools. ITC wants it products to go below the line because A
full television campaign alone costs anywhere between Rs 10 crore and Rs 12 crore
and a 360 degree campaign entails an average investment of anywhere between Rs 20
crore and Rs 25 crore for a single product launch. Also BTL activities ensure greater
interface with the consumer and instant feedback.
10. ANY SPECIAL MERCHANDISING REQUIREMENTS, STORAGE
REQUIREMENTS, VISUAL MERCHANDISING AT POS:
ITC merchandising requirements are different for General Trade and Modern Trade
 General Trade: In general Trade the merchandising of ITC is in the form of
posters, hanger space and the compartment provided by the retailer. The First
Club (FC) outlets have to provide a dedicated space for ITC in order to get
incentives for the same. Th FC outlets are classified as FC Silver and FC Gold
based upon the sakes and the merchandising offered by them to ITC.
 Modern Trade: In Modern Trade the merchandising happens in the form of special
promotions, shelf space offered to ITC by the modern trade outlets and offers and
discounts posters. The shelf space offered by the MT outlet determines the incentives
of merchandising once in a month.
References:

ITD Annual report and Account (2019)

ITC Foods portal. https://www.itcportal.com/businesses/fmcg/foods.aspx
Mulky, A. G. (2013). Distribution challenges and workable solutions . IIMB Management Review ,
179-195.
RS Agarwal. (2016, january 22). Favourable factors to boost FMCG sector: RS Agarwal. Forbes
India .