GOLD FLAKE

CHAPTER IV

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Marketing Mix of Gold Flake

The marketing mix of Gold Flake consists of four P’s that is Product, Price,
Place and Promotion. The evaluation of the 4 P’s is done on the basis of the
attributes of the product, consumers taste and preference, research and
development carried by the company regarding the product, its retail outlets etc.

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1) Product :

 Brand name: The brand name of Gold flake has a very good position in
the market. The brand name of Gold Flake is popular since last 25 years.

 Quality: Gold Flake offers superior quality of cigarettes with a different

type of tobacco i.e. golden tobacco in it, which is being bleached before
manufacturing of the cigarette. This gives a different type of quality to the
product.

 Safety: It is less harmful as the tobacco content is less. There is also a

filter connected to the end of the product, through which the tobacco
content is inhaled in less proportion while smoking.

 Packaging: The packaging of Gold Flake is done in hard cardboard

paper. A packet contains 10 cigarettes and small packet contains 5
cigarettes. The packaging also includes the raw materials used for the
product, the harmful character of the product and the price of the product.

 Accessories: The accessories offered by the product are a cigarette filter

and also a cigarette holder for smoking.

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2) Price:

 Pricing strategy: The pricing strategy of the company depends upon the
demand of Gold Flake and also the prices of other products. If the price of
other brand is high the prices of Gold Flake are lowered down. If the
demand for the product is high the prices are risen up.

 Retail price: Gold Flake has different categories. The price of large
packet of Gold Flake is Rs 34/-; small packet is Rs 28/- and loose
cigarettes cost around Rs 3.50/-.

 Voloume pricing: The large packet of Gold Flake contains 10 cigarettes

which is Rs 34/-, small packet Rs 28/- contains 5 cigarettes. These prices
are offered to the consumers. To retailers the price offer is comparatively
less than that of consumers as the buy in bulk. The price depends upon
the quantity of the wholesale purchase by the retailers.

 Price flexibility: Price flexibility is very less in this product. The prices
change depending upon the market and consumer’s demand and supply.
The prices also changes as per the tax rate and government rules and
regulations.

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3) Place:

 Distribution channels: The distribution channel starts from the whole

seller then the distributers. The third party is the retailers and then finally
the retailers to the consumers.

 Market coverage: ITC covers a wide range of the retail spectrum, from
premium outlets in the metros to small shops in the interiors of rural
India.

 Order processing: the order processing is done as per the demand and
supply of the product in the market. In this category of product the
demand is increasing day-by –day, therefore each year the company has
to increase its production as per the increasing demand. Especially as the
standard of rural consumer is increasing, the demand for branded
cigarettes is also increasing. Therefore order processing has to be done
well in advance.

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 Transportation: Long distance transportation is done through trucks and

containers depending upon the quantity of the product to be transported.
Small distance transportation like distributing to the local retailers is done
through small tempos.

4) Promotion:

 Promotional strategy: The product was promoted through

advertisements since it was launched. The branding of the product was
done by the ITC by applying two branding strategies: (i) “Honeydew
smooth” campaign (ii) ‘Price hikes’.

 Advertising: Before the ban advertisements were done through

channels of media like television, radio, posters etc. after the ban on
advertisement, it is advertised in magazines and through sponsorship
of different events. After the ban Gold Flake was also promoted
through ‘Word of Mouth’.

 Marketing communications budget: Before the ban advertisement

ITC invested 50 crores on advertisement of Gold Flake. After the ban
on advertisement fewer amounts is spent on marketing
communication.

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