ITC CASE ANALYSIS

Situation analysis:
Prashant is the owner of M/s Sarala Agencies which is the Wholesale
distributor(WB) of ITC in Himachal Pradesh
Prashant had a meeting with new branch manager Mr Vijay Ashthana
Prashant is doing good business in town but he is lacking in rural areas
In spite of good direct coverage of ITC in rural areas the sales are not coming due to
retailers reluctance in accepting the brand
Retailer is the most important link to get the hold of rural market. And margin is all
what he wants.
The retailers should be serviced more intensely through direct distribution
Mr Asthana suggested appointing Rural stockists (RS)
RS did not worked out in Mandi district due to several issues
Objective of ITC:
ITC wants to fast track its rural penetration
Questions raised in the case:
1. Should Prashant appoint more sub-stockists?
2. How can retailer be made to stock ITCs food brands?
3. How can ITC achieve leadership in this category?
4. Who determines the success of a brand in rural market: consumer, retailer, wholesaler
or the distributor?
Answers:
1. I believe the sub-stockists should be strategically placed so that they get good
business as well as there is no scope for them to enter the territory of other stockists
and WD.
Also ITC should initially allow the stockists to carry the pull products or in other
words whatever product the retailers want to handle and once they capture the market
share in those product categories ITC should go for bundling the products.
For example if a stockist places the order for Aashirwad aata than he must also
take some other product or else he will not get this pull product due to which he will
lose his customers.
2. Again bundling can be adopted. It can take advantage of its retail nework for
cigarettes. As every rural retailer must be keeping ITC cigarettes which is its premium
product.
So ITC can pitch in as if you keep my food brands than you will get a box of
cigarettes at a discount of some 5-10%.
Customer pull is obviously one of the reason because of which retailers will have to
keep ITC food brands.
Also higher margins can be provided on premium brands.

3. ITC can achieve leadership in Food brands by:
a. ITC can go for providing higher margins on premium food brands by cutting
its cost on the raw materials by early procurement.
b. It can jointly work with retailers and can go for store merchandising.
c. ITC must have sound knowledge of local taste & preferences in order to lead
in this category

4. We believe it is the retailer who can change the game in rural market. Rural
population in India isnt that aware. They go by the suggestion made by the retailer.
They believe this local guy who belongs to the same region. They trust this person
more than anyone else. It is same as the pharmacy business.
Also to some extent wholesaler makes a difference by getting the product available at
the retailers place.

Submitted by: (Group 2)
Aatish Rajeshirke
Harsh Agarwal
Ridhima Arora
Rishab jain
Sumitabh Saha