TO UNDERSTAND ITCS DISTRIBUTION CHANNEL

Submitted in partial fulfillment of PGDM Programme in

Sri Sharada Institute of Indian Management-Research

7, Institutional Area, Phase-II, Vasant Kunj, New Delhi 70 Website: www.srisiim.org

Submitted to:
Dr Ritvik Dubey

Submitted by:
Sandeep Kumar Roll No: 20100144 Batch: 2010-12

Sri Sharada Institute of Indian Management-Research

New Delhi

TO UNDERSTAND ITCS DISTRIBUTION CHANNEL

Submitted in partial fulfillment of

PGDM Programme

in

Sri Sharada Institute of Indian Management-Research

7, Institutional Area, Phase-II, Vasant Kunj, New Delhi 70 Website: www.srisiim.org

Submitted to:
Dr. Ritvik Dubey

Submitted by:
Sandeep Kumar Roll No: 20100144 Batch: 2010-12

Sri Sharada Institute of Indian Management-Research

New Delhi

ACKNOWLEDGEMENT
I wish to place on record my gratitude to ITC LTD. for providing me an opportunity to work with them on this project of such importance. My stay in the organization has been a great learning experience and a curtain raiser to an interesting and rewarding career. This exposure has enriched me with technical knowledge and has also introduced me to the attributes of a successful professional. My sincere thanks to Territory Sales In charge Mr. Jitendra Budlakoti for providing me an excellent opportunity to work for ITC ltd. The guidance of Dr.Ritvik Dubey has always been there to help me sail through my problems. Their suggestions and encouragement throughout the project help me in learning the various aspects of developing a project and completing the project in the stipulated time. Their inputs have been invaluable during the preparation of this project. I once again express my deep gratitude towards all of them. With a lot of thanks, Sandeep Kumar

DECLARATION

I, Kamalesh Bargali, hereby declare that the project on TO UNDERSTAND ITCS DISTRIBUTION CHANNEL is written by me under the guidance of Dr Ritvik Dubey. The empirical conclusion & findings in the project are based on the data collected by me and the entire project work is not a reproduction of any other sources.

Signature Name- Sandeep Kumar

CONTENTS

1. SUMMERY OF THE PROJECT.6

2. GENERAL INTRODUCTION7 3. INTRODUCTION TO THE PROJECT8-11 4. PROFILE OF THE ORGANIZATION12-32 5. RESEARCH METHODOLOGY ...33 6. FINDINGS & ANALYSIS .34-49 7. LIMITATIONS.......52 8. RECOMMENDATIONS.53-54 9. BIBLIOGRAPHY55

SUMMERY OF THE PROJECT

Distribution (or place) is one of the four elements of marketing mix. An organization or set of organizations (go-betweens) involved in the process of making a product or service available for use or consumption by a consumer or business user. Frequently there may be a chain of intermediaries; each passing the product down the chain to the next organization, before it finally reaches the consumer or end-user. Each of the elements in these chains will have their own specific needs, which the producer must take into account, along with those of the all-important end-user. The channel decision is very important. At least, there is a form of trade-off: the cost of using intermediaries to achieve wider distribution is supposedly lower. Indeed, most consumer goods manufacturers could never justify the cost of selling direct to their consumers, except by mail order. Many suppliers seem to assume that once their product has been sold into the channel, into the beginning of the distribution chain, their job is finished. Yet that distribution chain is merely assuming a part of the supplier's responsibility; and, if they have any aspirations to be market-oriented, their job should really be extended to managing all the processes involved in that chain, until the product or service arrives with the end-user. This may involve a number of decisions on the part of the supplier: Channel membership Channel motivation Monitoring and managing channels

As we progressed into the new millennium, distribution channel is the biggest single challenge faced by the organization. If the organization fails to build the strong distribution channel and control it then organization cant survive for too long. The aim of project is to understand the distribution channel of ITC Ltd, analyze the difficulties that arise in part of the wholesale dealers, Stock Carrying Points and the Direct Sales Force.

GENERAL INTRODUCTION
Company Profile: Type : Founded : Headquarters: Key People: ITC Limited Public August 24, 1910 Radhabazar Lane, Kolkata, India Virginia House, Kolkata, India Mr. Y.C.Deveshwar, Chairman Mr. K.Vaidyanath, Director Industry: Tobacco, Food, Hotels, AgriBusiness, Info. Technology, Paperboards, Paper & Packaging.

Employees:

29,000

Take an abiding commitment to world-class quality. Add deep market insight; cuttingedge technology; a pervasive culture of innovation. And you have ITC brands that do India proud across a range of products and services: Bingo, Aashirvaad, Sunfeast, Kitchens of India, mint-o, Candyman, Wills Lifestyle, John Players, ITC-Welcomgroup, Expressions, Classmate, Paperkraft, Elemental Chlorine-Free Cyber XLPac, Aim, iKno, Mangaldeep. The list goes on... Even as its brands delight consumers and enrich their quality of life, ITC continues to be powered by its aspiration to make a larger contribution to national imperatives. Like empowering farmers, greening wastelands, irrigating drylands, nurturing small scale enterprises, empowering village women and supporting rural education. Because our people and our country deserve the best.

INTRODUCTION TO THE PROJECT

OBJECTIVE OF THE PROJECT
To understand ITCs current Distribution and provide a plan to improve upon the same. Study the following aspects specifically:

1. Ordering System:
To study the system adopted by the WSP (Warehouse supplying plant) to make the products available in the area. Also to study what area is covered by a particular SCP and what mode is the SCP adopting to deliver the product to the retail points.

2. Shipment to SCP from the respective Wholesale

Dealers (WD):
To study if there is any fix day for the delivery of the goods to the SCPs working under the particular WD. To study what mode of delivery is the WD adopting to deliver the goods to the SCPs.

3. Number of Direct Sales (DS) Force working at different

SCPs:
To study how many DS are working under the SCPs and how does the SCP monitors them. If there is any conflicts between the DS and the SCP. What salary is the DS getting from the company and if it need any remuneration. What margin is the SCP getting from

the WD and is it enough for the SCP, or the SCP requires more ?

4. Mode of operation (i.e. order taking) of the DS:

What mode is the DS adopting to take the order from the retail points and how much time does they generally take to deliver the goods to the retail points.

5. Plan to improve this current practice of distribution in

order to increase the sales of the organization in that particular area:
To study the current sales at all SCPs and what are the problems and any recommendations to increase the sales of the organization at that particular area.

NEED OF THE PROJECT

The basic need of this project is to understand the current stock carrying arrangements and provide a plan to improve it.

One of the ideas behind this project is to know the proper distribution of the products in the region.

Similarly, this project will help us understand the Route detail.

The system of delivery in the particular region.

Analyze the difficulties that arise in part of the wholesale dealers, Stock Carrying Points and the Direct Sales Force.

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SCOPE OF THE PROJECT

For the fulfillment of the Project, the study is conducted in the various areas of Delhi. This includes five stock carrying points (SCP). They are:

Malviyanagar Khanpur mahipalpur Gurgaon Noida.

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PROFILE OF THE ORGANIZATION

INCEPTION OF THE INDUSTRY

ITC was incorporated on August 24, 1910 under the name of 'Imperial Tobacco Company of India Limited'. Its beginnings were humble. A leased office on Radha Bazar Lane, Kolkata, was the centre of the Company's existence. The Company celebrated its 16th birthday on August 24, 1926, by purchasing the plot of land situated at 37, Chowringhee, (now renamed J.L. Nehru Road) Kolkata, for the sum of Rs 310,000. This decision of the Company was historic in more ways than one. It was to mark the beginning of a long and eventful journey into India's future. The Company's headquarter building, 'Virginia House', which came up on that plot of land two years later, would go on to become one of Kolkata's most venerated landmarks. The Company's ownership progressively Indianised, and the name of the Company was changed to I.T.C. Limited in 1974. In recognition of the Company's multi-business portfolio encompassing a wide range of businesses - Cigarettes & Tobacco, Hotels, Information Technology, Packaging, Paperboards & Specialty Papers, Agri-Exports, Foods, Lifestyle Retailing and Greeting Gifting & Stationery - the full stops in the Company's name were removed effective September 18, 2001. The Company now stands rechristened ITC Limited. Though the first six decades of the Company's existence were primarily devoted to the growth and consolidation of the Cigarettes and Leaf Tobacco businesses, the Seventies

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witnessed the beginnings of a corporate transformation that would usher in momentous changes in the life of the Company. ITC's Packaging & Printing Business Division was set up in 1925 as a strategic backward integration for ITC's Cigarettes business. It is today India's most sophisticated packaging house. In 1985, ITC set up Surya Tobacco Co. in Nepal as an Indo-Nepal and British joint venture. Since inception, ITC, British American Tobacco and various independent shareholders in Nepal have held its shares. In August 2002, Surya Tobacco became a subsidiary of ITC Limited and its name was changed to Surya Nepal Private Limited (Surya Nepal). Also in 1990, leveraging its agri-sourcing competency, ITC set up the International Business Division (IBD) for export of agri-commodities. The Division is today one of India's largest exporters. ITC's unique and now widely acknowledged eChoupal initiative began in 2000 with Soya farmers in Madhya Pradesh. Now it extends to 9 states covering over 3.5 million farmers. ITC's first rural mall, christened 'Choupal Saagar' was inaugurated in August 2004 at Sehore. The year 2006 witnessed the ramping up of the Company's rural retailing network with 12 'Choupal Saagars' being operational in three states of Madhya Pradesh, Maharashtra and Uttar Pradesh. Eight more 'Choupal Saagars' are in an advanced stage of construction and will be launched shortly. ITC also entered the Lifestyle Retailing business with the Wills Sport range of international 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 Club life evening wear (2003). ITC also initiated a foray into the popular

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segment with its men's wear brand, John Players, in 2002. In December 2005, ITC introduced Essenza Di Wills, an exclusive line of prestige fragrance products, to select 'Wills Lifestyle' stores. In 2006, Wills Lifestyle became title partner of the country's most premier fashion event - Wills Lifestyle India Fashion Week - that has gained recognition from buyers and retailers as the single largest B-2-B platform for the Fashion Design industry. ITC's foray into the Foods business is an outstanding example of successfully blending multiple internal competencies to create a new driver of business growth. It began in August 2001 with the introduction of 'Kitchens of India' ready-to-eat Indian gourmet dishes. In June 2002 ITC entered the confectionery, staples and snack foods segments. In just five years, the Foods business has grown to a significant size with 100 differentiated products, six distinctive brands, an enviable distribution reach, a rapidly growing market share and a solid market standing. In 2002, ITC's philosophy of contributing to enhancing the competitiveness of the entire value chain found yet another expression in the Safety Matches initiative. ITC now markets popular safety matches brands like iKno, Mangaldeep, VaxLit, Delite and Aim. ITC's foray into the marketing of Agarbattis (incense sticks) in 2003 marked the manifestation of its partnership with the cottage sector. ITC's popular agarbattis brands include Spriha and Mangaldeep across a range of fragrances like Rose, Jasmine, Bouquet, Sandalwood, Madhur, Sambrani and Nagchampa. 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 $ 5.1 Billion. ITC is

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rated among the World's Best Big Companies, Asia's 'Fab 50' and the World's Most Reputable Companies by Forbes magazine, among India's Most Respected Companies by BusinessWorld and among India's Most Valuable Companies by Business Today. ITC ranks among India's `10 Most Valuable (Company) Brands', in a study conducted by Brand Finance and published by the Economic Times. ITC also ranks among Asia's 50 best performing companies compiled by Business Week. 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. While ITC is an outstanding market leader in its traditional businesses of Cigarettes, Hotels, Paperboards, Packaging and Agri-Exports, it is rapidly gaining market share even in its nascent businesses of Packaged Foods & Confectionery, Branded Apparel, Personal Care and Stationery. As one of India's most valuable and respected corporations, ITC is widely perceived to be dedicatedly nation-oriented. Chairman Y C Deveshwar calls this source of inspiration "a commitment beyond the market". In his own words: "ITC believes that its aspiration to create enduring value for the nation provides the motive force to sustain growing shareholder value. ITC practices this philosophy by not only driving each of its businesses towards international competitiveness but by also consciously contributing to enhancing the competitiveness of the larger value chain of which it is a part." ITC's diversified status originates from its corporate strategy aimed at creating multiple drivers of growth anchored on its time-tested core competencies: unmatched distribution reach, superior brand-building capabilities, effective supply chain

15

management and acknowledged service skills in hoteliering. Over time, the strategic forays into new businesses are expected to garner a significant share of these emerging high-growth markets in India. ITC's Agri-Business is one of India's largest exporters of agricultural products. ITC is one of the country's biggest foreign exchange earners (US $ 3.2 billion in the last decade). The Company's 'e-Choupal' initiative is enabling Indian agriculture significantly enhance its competitiveness by empowering Indian farmers through the power of the Internet. This transformational strategy, which has already become the subject matter of a case study at Harvard Business School, is expected to progressively create for ITC a huge rural distribution infrastructure, significantly enhancing the Company's marketing reach. ITC's wholly owned Information Technology subsidiary, ITC Infotech India Limited, is aggressively pursuing emerging opportunities in providing end-to-end IT solutions, including e-enabled services and business process outsourcing. ITC's production facilities and hotels have won numerous national and international awards for quality, productivity, safety and environment management systems. ITC was the first company in India to voluntarily seek a corporate governance rating. ITC employs over 25,000 people at more than 60 locations across India. The Company continuously endeavors to enhance its wealth generating capabilities in a globalising environment to consistently reward more than 3,76,000 shareholders, fulfill the aspirations of its stakeholders and meet societal expectations. This over-arching vision of the company is expressively captured in its corporate positioning statement: "Enduring Value. For the nation. For the Shareholder."

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NATURE OF BUSINESS FMCG

1. 2. 3. 4. 5. 6. Cigarettes Foods Lifestyle Retailing Greeting, Gifting and Stationary. Safety Matches and Agarbattis

7. Personal care

HOTELS PAPER BOARDS AND PACKAGING

1. Paper boards and specialty papers. 2. Packaging

AGRI BUSINESS
1. Agri commodities e-Choupal 2. Leaf Tobbacco

INFORMATION TECHNOLOGY

GROUP OF COMPANIES

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BOARDS OF DIRECTORS
Chairman

Mr. Yogesh Chander Deveshwar Executive Directors Mr. Sahibzada Syed Habib-ur-Rehman Mr. Anup Singh Mr. Krishnamoorthy Vaidyanath Non-Executive Directors John Patrick Daly Mr. Charles Richard Green Mr. Serajul Haq Khan Mr. Sunil Behari Mathur Mr. Dinesh Kumar Mehrotra Mr. Pillappakkam Bahukutumbi Ramanujam Mr. Basudeb Sen Mr. Ram S Tarneja Mr. Balakrishnan Vijayaraghavan Executive Vice President & Company Secretary Mr. Biswa Behari Chatterjee

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ORGANIZATIONAL CHART
ITC employs over 29,000 people at more than 60 locations across India. The Company continuously endeavors to enhance its wealth generating capabilities in a globalising environment to consistently reward more than 4,95,000 shareholders, fulfill the aspirations of its stakeholders and meet societal expectations. This over-arching vision of the company is expressively captured in its corporate positioning statement: "Enduring Value, for the nation, for the Shareholder." ITC is a board-managed professional company, committed to creating enduring value for the shareholder and for the nation. It has a rich organisational culture rooted in its core values of respect for people and belief in empowerment. Its philosophy of all-round value creation is backed by strong corporate governance policies and systems. Flowing from the philosophy and core principles, Corporate Governance in ITC shall take place at three interlinked levels, namely Strategic supervision by the Board of Directors Strategic management by the Corporate Management Committee Executive management by the Divisional Chief Executive assisted by the Divisional Management Committee

It is ITC's belief that the right balance between freedom of management and accountability to shareholders can be achieved by segregating strategic supervision from strategic and executive management. The Board of Directors (Board) as trustees of the shareholders will exercise strategic supervision through strategic direction and control, and seek accountability for effective strategic management from the Corporate

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Management Committee (CMC). The CMC will have the freedom, within Board approved direction and framework, to focus its attention and energies on the strategic management of the Company. The Divisional Chief Executive, assisted by the Divisional Management Committee, will have the freedom to focus on the executive management of the divisional business.

The 3-tier governance structure thus ensures that:

(a) Strategic supervision (on behalf of the shareholders), being free from involvement in the task of strategic management of the Company, can be conducted by the Board with objectivity, thereby sharpening accountability of management. (b) Strategic management of the Company, uncluttered by the day-to-day tasks of executive management, remains focused and energized; and (c) Executive management of the divisional business, free from collective strategic responsibilities for ITC as a whole, gets focused on enhancing the quality, efficiency and effectiveness of its business.

ITCs corporate strategies are:

Create multiple drivers of growth by developing a portfolio of world-class businesses that best matches organisational capability with opportunities in domestic and export markets. Continue to focus on the chosen portfolio of FMCG, Hotels, Paper, Paperboards & Packaging, Agri Business and Information Technology.

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Benchmark the health of each business comprehensively across the criteria of Market Standing, Profitability and Internal Vitality. Ensure that each of its businesses is world class and internationally competitive. Enhance the competitive power of the portfolio through synergies derived by blending the diverse skills and capabilities residing in ITCs various businesses.

Create distributed leadership within the organization by nurturing talented and focused top management teams for each of the businesses.

Continuously strengthen and refine Corporate Governance processes and systems to catalyze the entrepreneurial energies of management by striking the golden balance between executive freedom and the need for effective control and accountability.

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BUSINESS OPERATIONS FROM NATIONAL/GLOBAL POINT OF VIEW

As one of India's most valuable and respected corporations, ITC is widely perceived to be dedicatedly nation-oriented. Chairman Y C Deveshwar calls this source of inspiration "a commitment beyond the market". In his own words: "ITC believes that its aspiration to create enduring value for the nation provides the motive force to sustain growing shareholder value. ITC practices this philosophy by not only driving each of its businesses towards international competitiveness but by also consciously contributing to enhancing the competitiveness of the larger value chain of which it is a part. ITC's diversified status originates from its corporate strategy aimed at creating multiple drivers of growth anchored on its time-tested core competencies: unmatched distribution reach, superior brand-building capabilities, effective supply chain management and acknowledged service skills in hotelier. Over time, the strategic forays into new businesses are expected to garner a significant share of these emerging highgrowth markets in India.

PRODUCTS/SERVICE PROFILE
ITC has a diversified presence in Cigarettes, Hotels, Paperboards & Specialty Papers, Packaging, Agri-Business, Packaged Foods & Confectionery, Information Technology, Branded Apparel, Greeting Cards, Safety Matches and other FMCG products. While ITC is an outstanding market leader in its traditional businesses of Cigarettes, Hotels, Paperboards, Packaging and Agri-Exports, it is rapidly gaining market

22

share even in its nascent businesses of Packaged Foods & Confectionery, Branded Apparel and Greeting Cards. ITC's Agri-Business is one of India's largest exporters of agricultural products. ITC is one of the country's biggest foreign exchange earners (US $ 2.4 billion in the last decade). The Company's 'e-Choupal' initiative is enabling Indian agriculture significantly enhance its competitiveness by empowering Indian farmers through the power of the Internet. This transformational strategy, which has already become the subject matter of a case study at Harvard Business School, is expected to progressively create for ITC a huge rural distribution infrastructure, significantly enhancing the Company's marketing reach. ITC's production facilities and hotels have won numerous national and international awards for quality, productivity, safety and environment management systems. ITC was the first company in India to voluntarily seek corporate governance rating.

FMCG:
ITC Ltd seeks to aggressively scale up the FMCG initiatives and expand the portfolio including entry into the Home and Personal Care market. This is sought to be achieved through a combination of synergistic investments in brand building and further enhancement of supply chain and sales and distribution capabilities. These interventions combined with your Companys state-of-the-art information technology transaction backbone and the e-Choupal rural distribution network, provide the basis of a low cost, broadband fulfillment capability for consumer products. Over the medium to long term, these initiatives are expected to provide the basis for sustainable growth in shareholder value by establishing the company as the leading FMCG player in the country.

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FMCG-Cigarettes:
The Company's uncompromising commitment to providing superior value to consumers through world-class products helped in sustaining its leadership position in the cigarette industry. The strategy of value addition yielded an impressive performance during the year with cigarette sales volumes posting a growth of over 7% during the year. In line with the Company's mantra of continuous and consistent offering of value added world-class products to the Indian consumer, a unique IT-enabled 'Six Sigma' based product development process was implemented during the year. This strategic intervention enabled the launch of several key initiatives across the brand portfolio in terms of pack modernisation, limited edition offerings in different flavours and the introduction of 'Silk Cut' in the King Size and Regular Filter formats. The success of these initiatives is evidenced by the significant enhancement of the Company's market standing in the Premium categories and higher market shares in all segments in key competitive markets across the country. In keeping with the policy of maintaining global standards across the value chain, the business continued to induct state-of-the-art and cutting-edge technology in its manufacturing facilities such as high speed cigarette making and packing machines, round corner / beveled edge packers and automatic filter feed systems. The cause for concern, however, remains the severe taxation and regulatory milieu for cigarettes in India. Cigarettes continue to be discriminated against cheaper and revenue inefficient tobacco products like bidis and chewing tobaccos. Excise duty rates on cigarettes were increased for the second successive year. However, while duty rates on cigarettes went up in excess of 6% in the Union Budget 2007,the same were left unchanged in respect of most of the other tobacco products. Moreover, with effect from

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1st April 2007, cigarettes have been brought under the ambit of Value Added Tax by the States at a rate of 12.5% on invoice price, without a reduction/set off in excise duties collected in lieu of State level sales tax.

Branded Packaged Foods:

The Branded Packaged Foods business continued to expand rapidly with sales recording an impressive growth of 51% over the previous year. The range of offerings now comprises more than 150 distinct food products under 6 brands. In terms of consumer spend 'Aashirvaad' and 'Sunfeast' have both become five hundred crore rupee brands within a short span of time. The year marked the Company's foray into the fast growing organised Salty Snacks market with the launch of the 'Bingo!' range of potato chips and finger snacks. The launch, initially comprising 16 highly innovative and differentiated flavours, is backed by extensive market research leading to crafting of products/variants customised for the Indian palate. Initial consumer response has been very encouraging. Sales in the Biscuit category grew by 55% over the previous year. The 'Sunfeast' range stood further expanded with the launch of 'Sunfeast Special' biscuits in select markets in the fast growing mid-price creams segment and the extension of mid-price cookies to target markets. The year also saw the launch of 3 exciting variants in the premium creams segment and the 'FIT KIT' range of products endorsed by Sachin Tendulkar in two unique variants. On the manufacturing front, the business expanded its production capacity by adding facilities in two more locations. Product mix continued to improve on the back of enhanced sales of value added products like Creams, Cookies etc. which aided, albeit only partially, in neutralising the impact of an unprecedented increase in input costs.

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In the Staples category, 'Aashirvaad Atta' grew from strength to strength with impressive gains across each region. The brand now commands a 52% market share amongst national branded players and is the clear market leader in most major markets. 'Aashirvaad Select', the Company's premium atta offering, which was extended to target markets during the year met with very good consumer response. The business also scaled up the branded spices volumes under the 'Aashirvaad' brand, leveraging the brand's strong association with superior quality and consistency. In the Confectionery category, the 'Candyman' and 'Mint-o' brands registered strong growth with sales growing by nearly 51% over the pervious year driven by 'Eclairs', 'Cofitino' and the new variants launched during the year viz. 'Natkhat Mango' and 'Maha Mango'. The business added incremental capacity during the year to meet the enhanced business volumes. Product portfolio was further expanded in the Ready-to-Eat segment with the introduction of 12 new products in the domestic market under the 'Kitchens of India' (KOI) banner. Exports of KOI products were scaled up during the year. The brand is now available in USA, UK, Switzerland, Canada, Australia and Germany. The availability of KOI products stood significantly enhanced in leading US retail chains providing a strong platform for future growth. Product range in the Pasta segment was also augmented with the launch of 'Sunfeast Benne Vita' in four innovative variants.

Lifestyle Retailing:
The market standing of the Company's Lifestyle Retailing business stood significantly enhanced on the back of an impressive 52% growth during the year under review in both the premium and popular segments. The export segment also registered strong growth during the year. In the premium segment, the business continued to expand consumer

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franchise with strong sales growth across its portfolio, viz. the 'Classic' range of formal wear, 'Wills Sport' relaxed wear and 'Wills Clublife' evening wear. The brand's association with high fashion and premium imagery stood reinforced with the resounding success of the 'Wills Lifestyle India Fashion Week' (WIFW) the country's most prestigious lifestyle event. As part of the 'Ramp to Racks' initiative, the business in collaboration with some of the leading designers of the country successfully introduced the 'Wills Signature' range of designer wear in select 'Wills Lifestyle Stores'. These product offerings have met with excellent response from discerning consumers. The 'Wills Lifestyle' range was further augmented during the year with the extension of 'Essenza Di Wills', an exclusive line of prestige fragrance; bath and body care products, to select 'Wills Lifestyle' stores. The products have met with very encouraging response from quality conscious consumers. The business continued to post significant improvements in several operating indices such as average realisations, footfalls/conversion and sell through rates. The 'Wills Lifestyle' range is currently available in over 200 locations through 'exclusive brand outlets' (EBOs) and 'shop-inshops'. In a clear recognition of its enhanced market standing, 'Wills Lifestyle' was named a 'Superbrand' by the Superbrand Council of India and honoured with the 'Retailer of the Year' award at the Idea Zee Fashion Awards. In the popular 'Youth' segment, 'John Players' delivered a strong performance leveraging its youthful and fashionable product range and a significantly enhanced presence across target outlets. The celebrity association with style icon Hrithik Roshan created high buzz for the brand among its youthful target audience, mobilizing high degree of trials and garnering enhanced

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consumer mind share. The brand continued to earn industry recognition winning the 'The Most Admired Fashion Campaign of the Year' at the Images Fashion Awards 2007. 'John Players' has now established a strong pan-India presence with availability at over 170 Flagship Stores and 1700 Multi Brand Outlets. The number of 'exclusive brand outlets' in which the brand is available doubled during the year with a trebling of the associated retail space. The business continued to actively pursue opportunities in the Exports arena consolidating the existing customer base and establishing long-term partnerships with high potential customers. During the year under review, the business established an exclusive manufacturing arrangement with a state-of-the-art unit which, coupled with an expanded product portfolio, enabled a threefold increase in export turnover.

Greeting, Gifting & Stationery Business:

Stationery sales doubled during the year driven by the flagship brand 'Classmate'. 'Classmate' has become India's leading and most widely distributed notebook brand in a relatively short span of time, garnering a share of 16% in the branded segment of the market. 'Classmate' offers school and college students a memorable writing experience with the superior 'Alfa Plus' paper used in these notebooks, custom manufactured at the Company's Bhadrachalam Unit. 'Alfa Plus' is India's first 'Elemental Chlorine Free' (ECF) paper with superior whiteness, brightness and smoothness characteristics compared to other writing and printing papers in the market. During the year, the business enlarged the scale and scope of its 'Classmate Connect' school contact programme. The 'Classmate Young Author Contest 2006' covered 5000 schools across 34 cities and reached out to 200,000 students, making it the largest literary event in the national school calendar.

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Associated events like the 'Classmate Young Artist Contest 2006' and panel discussions with eminent educationists were held in selected cities. In line with its 'Citizen First' philosophy the Company contributes Re. 1 towards its rural development initiatives for every notebook sold. During the year, the premium stationery brand 'Paperkraft' unveiled its new designer range. 'Paperkraft' is targeted at discerning executives and college students and is available at all leading modern format stationery stores.

Safety Matches:
ITC's philosophy of creating shareholder value through serving society finds expression in the marketing of Safety matches and Incense sticks sourced from small scale and cottage sector units. The Safety Matches business recorded robust growth during the year through continued focus on new product availability. The business gained significantly during the year from synergy benefits accruing from the recent acquisition of Wimco Ltd. by Russell Credit Ltd., a wholly owned subsidiary of ITC. Synergies in the form of a stronger combined brand portfolio, rationalisation of sales & distribution, supply chain efficiencies, improved servicing of proximal markets, freight optimisation, greater access to better quality critical raw materials etc. have resulted in significantly enhanced market standing. The business continues to support the small-scale sector through technical and management inputs to improve their product quality and processes. Progress was made on the export front with initial shipments to certain African markets. Implementation of a uniform taxation policy with a view to providing a level playing field to all manufacturers would enable investments towards modernising this industry. This would not only help the industry in improving its global competitiveness but also

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provide a safer working environment for the large number of people engaged in this industry.

Incense Sticks (Agarbattis):

Market standing of the Mangaldeep brand of incense sticks (agarbattis) stood further strengthened with sales recording robust growth during the year driven by improved distribution reach and the launch of 11new products (7 at regional level and 4 at national level). During the year, the Mangaldeep brand was also exported to 11 countries including USA and South Africa. The business also commenced exports of incense sticks sourced from units in the small-scale and cottage sector leveraging the marketing services. In pursuance of its abiding social commitment, ITC continues to partner with small and medium enterprises to help them raise their quality and process standards. Six agarbattis manufacturing units have received ISO 9001:2000 certification till date, a pioneering effort in the incense sticks industry, aided by process and technical inputs from ITC. The support provided by the business also enabled one of its suppliers to obtain membership of the International Fair Trade Association, Netherlands. The business continued its collaboration with various NGOs in Bihar, Karnataka, Pondicherry and Tamil Nadu to provide vocational opportunities to rural youth and economically disadvantaged women in keeping with the Companys commitment to the triple bottom line. Sourcing from Khadi and Village Industries Commission (KVIC) approved units continued during the year.

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COMPETITORS
Cadburrys Priyagold Britannia Perfetti Nestle Frito-Lay Parle Godfrey Philip of India (GPI) and Other local brands.

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FUTURE PROSPECT AND GROWTH

VISION:
Sustain ITCs position as one of Indias most valuable corporations through world class performance, creating growing value for the Indian economy and the Companys stakeholders.

MISSION:
To enhance the wealth generating capability of the enterprise in a globalising environment, delivering superior and sustainable stakeholder value.

Multiple drivers of growth anchored on its time-tested core competencies:

Unmatched distribution reach Superior brand-building capabilities Effective supply chain management

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RESEARCH METHODOLOGY

The idea behind this Project is to understand the current distribution system in New Delhi and to make it more effective so as to increase the sales in the respective region. For this purpose, survey was conducted in various parts of New Delhi.

DATA COLECTION METHOD

Secondary data

Distribution Process
Supply chain should be cost effective. This can be achieved by elimination of middlemen to avail cheap product to the consumers. So the best way in case of FMCG goods is through retail channel or Big institutions. ITC has multichannel distribution in which the fmcg goods are distributed via Retailer/Wholesaler/Institutional. How it happens? Each state has a warehouse which is located close to the market. In states where there is huge volume of sales, the number of warehouse can be more than one. The aim of ITC is to reduce distribution cost which is achieved by disposing goods in big trucks in one go to avoid wastage of time, cost, truck handling charges and effort, loading unloading cost ,sales tax etc.. From warehouse( Hub) , the goods are broken in different lots and sent to Distributers, Wholesalers and retailers and from there to the smaller stockist who will ensure its availability in remote areas.

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In case of Big Categories the wholesalers may require huge lots in 5-7 days .They need so much Goods that , distribution takes place directly from Factory to wholesaler to ensure timely replenishment of stocks, effectiveness, reduce cost, reduce time, loading unloading cost etc.. If some distributors also need the stocks frequently within 6-7 days due to large volume sales, the goods are distributed directly from the factory to the Distributor.

For Small Categories: For small categories who may need less quantity i.e one truck
in a month for all products in FMCG category, there are warehouses in each region. Now, four kind of Product will come from four different factories to the warehouse. From warehouse a mix and match of those product is made based on requirement and sent .This will ensure that the stocks being supplied are fresh in each area of that region

DISTRIBUTION CHANNELS IN ITC

Channels

Trade Channel

Organized Retail Channel

E- Chaupal ITD

Conventional Channel of Distribution

COCO COFO

VDP &

Rural retail channel

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Multichannel Distribution:
ITC uses different channels to reach same or different market segments. Vertical Marketing Channel: ITC, DISTRIBUTOR, WHOLESALER. RETAILER, PANWALAS, MALLS, SMALL RETAILERS: All are used for: Same product but different market segments Different products with different market segments Act as unified system Ensure operating efficiency and marketing effectiveness

Channel Format: Producer driven: Effort of ITC to reach its products to consumers/customers
COCO, Franchisees, Licensed outlets, Company contracted distributer

Seller Driven: Use of existing channel to use large number of end users.
ITC does it through existing wholesale retailer, modern retail formats, speciality stores, discount stores, hypermarkets etc

Channel Levels: 3 or 4 Intensity of Distribution:

Intensive Distribution Selective Distribution Exclusive Distribution

In case of Personal Care Products, Food products, Cigarettes, Aggarbatti, safety matches, stationary

John Players Miss Players Paper board & packaging

Wills Lifestyle ITC hotels

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OUTBOUND LOGISTIC Mode Of Supply :

By companys own auto,matador,van and three wheelers.

Order Processing :
Order processing is done by Dealers Salesman(D.S) once in a week to a particular beat and next day the order is delivered to retailer.

Transit Time :
It usually takes 24 hours but often vary according to situation.

Coverage :
Convenience Duty Free Cluster Grocery

Average 40-35 outlets are covered by one D.S everyday. The service norms at present for coverage is at least once a week.D.S takes order then billing work is done and after then goods are delivered to the retailers and wholesalers by stockiest vehicle.

D.S collects orders from the retailers and after the delivery of goods collects the payment.

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Frequency of supply:
Once a week.

Payment Terms:
It depends upon the outlet position,goodwill reputation and the weekly sale of the goods.Generally they gave 7 days credit to the retailer.

After Sale Service:

All D&D stocks whether they are manufacturing defect, market defect, expiry product and the rat bitten goods are replaced as soon as possible.

Report and feedback:

DS submit the daily beat report for individual retailer.DS submits the weekly sales report to the company.

Supply structure :
a)[NTD]

Factory Hub Ware Service Provider Wholesaler Dealer Retail/Wholesale

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General trade & Modern trade Consumer

b)[TD]

Factory Ware Service Provider Wholesaler Dealer Retail/Wholesale Consumer

* NTD Non Tobacco division * TD - Tobacco division

Godown norms:
Keep goods in a proper manner. Keep the warehouse clean and tidy. Damaged goods kept in separate area. Follow FIFO. Handle cartoons carefully

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FINDINGS & ANALYSISs

In New Delhi there are many stock carrying points (SCP) all of them gets the supply of their products, (i.e. Cigarettes and food which includes biscuits, safety matches, incense sticks, ready to make foods, aashirwad salt and flour, and other confectionary items) from one Whole sale dealer (WD). This WD gets their products two times in a month, from the company, which fulfil the demand for the whole month in there region. WD owns one go down to keep the stock also the supply of the products in the city itself is fulfilled by the WD. WD also owns one delivery van to deliver the products to all the Secondary Wholesale Distributor (SWD). In return the WD gets 2% of the sales as the commission.

MALVIYANAGAR
Name of the SWD: Shambhu Sharma Average Sales of around Rs 1,00,00,000 per month for foods and
1,25,00,000 for cigarettes.

There are ten sales people working in the area to take the order from all
the selling points and then deliver goods to them. There work also includes checking that the products are properly displayed to the counters, they are also liable to convey the problems of the retail counters to the company and to pick the damaged and destructed (D/D) products from the market. 39

Sales people are provided with 1 Auto rickshaw, tempo to deliver the product to the retail counters.

Sales people are not covering their routes on which they are required to
go.

There are lots of D/D products are in the market.

There is almost no product rotation in the market.

Stock was short of

Marie lite 171 gms.

Dark Fantasy 150 gms. Candy Jumbo jar Gulab Jamun Mango/ Elachi / Bourbon biscuits. Snacky Chilly 100 gms. and Snacky Salted 70 gms.

SWD places its order on every Sunday and it gets the supply on Monday.
SWD receives 2% of sales as the commission from the WD.

Mahipalpur
Name of the SWD: Madan Mohan Agrawal Average Sales of around Rs. 2,00,00,000 per month for foods and
2,10,00,000 for cigarettes.

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 There are fifteen sales person working in the area to take the order from all
the selling points and then deliver goods to them. There work also includes to check that the products are properly displayed to the counters, they are also liable to convey the problems of the retail counters to the company and to pick the damaged and destructed products (D /D) from the market.

Sales people are provided with Auto rickshaw, tempo to deliver the product to the retail counters.

There is proper communication between the SWD and the sales person
working over there.

Almost no D/D is there in the market.

There was proper product rotation.

Also the product was properly displayed in the retail counters.

Stock was short of

Marie lite 200 gms.

Dark Fantasy 150 gms. Mango/ Elachi / Bourbon biscuits. Chocolate 75 gms Cashew 250 gms. Pasta mix

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 SWD places its order on every Thursday and and it gets the supply on
Friday.

SWD receives 2% of sales as the commission from the WD.

Khanpur
Name of the SWD: Neeraj Agrawal Average Sales of around Rs 50,00,000 per month for foods and
1,00,00,000 for cigarettes.

There are 14 sales people working in the area to take the order from all the
selling points and then deliver goods to them. There work also includes checking that the products are properly displayed to the counters, they are also liable to convey the problems of the retail counters to the company and to pick the damaged and destructed products (D /D) from the market.

Sales people are provided with Auto rickshaw and DCM to deliver the product to the retail counters.

There are lots of local competitors due to which the sales men are facing
problem to establish the companies product.

Competitive brands are offering good margins to the retail counters to

display and to sell their projects. Stock was short of

Marie lite 200 gms

Mango/ Elachi / Bourbon biscuits.

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 Chocolate 75 gms Cashew 250 gms. Glucose biscuit 19 gms.and 75 gms. Chocolate 250 gms. Home lite medium SWD places its order on every Wednesday and and it gets the supply on
Thursday.

SWD receives 2% of sales as the commission from the WD.

Gurgaon
Name of the SWD: Bankey Bihari Sharma Average Sales of around Rs 2,00,00,000 per month for foods and
2,25,00,000 for cigarettes.

There are seventeen sales people working in the area to take the order from all the selling points and then deliver goods to them. There work also includes checking that the products are properly displayed to the counters, they are also liable to convey the problems of the retail counters to the company and to pick the damaged and destructed products (D /D) from the market.

Sales people are provided with Auto rickshaw and DCM to deliver the product to the retail counters.

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 There is proper communication between the SWD and the sales person
working over there.

Almost no D/D is there in the market.

There was proper product rotation.

Also the product was properly displayed in the retail counters.

Stock was short of

Marie lite 200 gms.

Dark Fantasy 150 gms and 300gms Mango/ Elachi / Bourbon biscuits. Strawberry 100gms Chocolate 75 gms Cashew 250 gms. Pasta mix

SWD places its order on every Sunday and Wednesday and and it gets the
supply on Monday and Thursday.

SWD receives 2% of sales as the commission from the WD.

Noida
Name of the SWD: Pawan Agrawal Average Sales of around Rs. 1,50,00,000 per month for foods and
1,00,00,000 for cigarettes. 44

 There are ten sales people working in the area to take the order from all
the selling points and then deliver goods to them. There work also includes checking that the products are properly displayed to the counters, they are also liable to convey the problems of the retail counters to the company and to pick the damaged and destructed products (D /D) from the market.

Due to fewer sales there is less rickshaw and auto provided to the SWD.

Products are not in the market. They are not displayed properly.
Stock is short of

Marie lite 200 gms.

Mango/ Elachi / Bourbon biscuits. Chocolate 75 gms Cashew 250 gms.

There is no fix days of shipment to this SCP as there is no such sale. SWD receives 2% of sales as the commission from the WD.

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OVERALL OUTCOMES
Glucose Biscuits is capturing the market. Other Biscuits are attaining much competition in the market. Confectioneries got much competition. Cigarette is the market leader; still competition is growing in this sector. This can be analyzed that cigarettes, glucose biscuits, and matches have got high availability in the SWD channel. Awareness through Ads. Ads are very attractive. Demand is there for Mint. Brand Silk Cut which is just launched by the company is not very much popular among the smokers. Nestle confectionery creating a huge competition. In the area like noida and gurgaon they dont understand the brand, they run for low price. Thats why there are many local brands which are cheaper and doing good. Huge market for Glucose, Minto. Growing market for Butter Licks, Khatta Aam. Marie and Sachins Fit Kit is not hitting the market. WD and Retailers are complaining of its poor quality. Tough competitor Brittania Marie. Agarbatti not having much market as the customers are running after low price. Sale of Mangaldweep (Rs.5/-) is good. WD, Retailers want decrease in price rate. They want more schemes.

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Sweet & Salt Lack of awareness, though attracted by 25% off scheme. Matches Growing market for AIM, Deer and tiger. Low market for HomeLight. Quality of Salesman is not much communicative. Their main aim is to sell cig. Awareness is required to be given to the WD, Retailers.

Salesmans view: Cig. has got no competition, no tough competitor, so they are running after selling cig.

Still some upcoming competitors are giving competition.

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If we see the overall distribution network of ITC in NCR region it contains 41 distributors. In north ITC have the 5 branches. 1. Delhi. 2. Jammu. 3. Jaipur. 4. Saharanpur. 5. Lucknow.

The management hierarchy in the branch is Branch manager

Assistant Branch manager

Area sales manager

Area executive

TSI (Territory sales incharge)

Supervisor

Wholesale distributor

Direct sales representative

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Whenever the company gets the order of goods the minimum time for the payment is 7 days except the case of AATA. There are three ways of distribution. Distribution

Retailing (Channel sales)

Wholesaling (Channel sales)

Institutional sales (Big bazaar, Reliance etc.)

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The Composition:
Manufacturing UnitSeparate for each product line Contract manufacturing Backward integration e-chaupal

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Storage Hubs Store all the products Distributors Exclusive based on population Needs to stock all FMCG products except stationary Wholesalers Retailers Paanwalas -For deepest penetration possible

Suitability:
1.Perishable- Short span Consumers prefer fresh products 2 .Lot Size: smaller lot size 3. Convenience 4. Waiting time 5. Product Assortment

Channel Objective:
1. Consumer Behaviour Quality conscious Convenience goods, needs intensive distribution Demands Variety Very less waiting time

2. Company ObjectivesReach masses Rural penetration Diversification Competitive advantage 3. AlternativesBikanerwala, Sell ready to eat products through sweet shops like

Showroom for high end products, E- chaupal for rural marketing

Features:
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1. Selection: Distributor is selected based on;

Infrastructure, Delivery van, Computers, Warehouse, Sales force Population based : one distributor per 20-25 thousand

2. Control:

Uses coercive power

3. Terms and Conditions: Price, selling condition, godown condition etc

Functions:
1. Manpower 2. Promotion 3. Credit 4. Infrastructure 5. Stocking

Role of each members:

Factories- supply to godowns Godowns and Branches 1. Manage by C & F agents (getting monthly remuneration). 2. No rent is paid by ITC. 3. One branch-60 WD, 5 AMs & 20 Area Executives Wholesale distributors (WDs) 1. Margin- 2% of sales 2. Appoints secondary wholesalers

Physical distribution:
Demand estimation- collaborative forecasting ( sales force with dealers) Forecast based on last month sales Production plan made according to the forecasting Delivery to C & F agents within 7 days 52

C & F agents deliver goods to dealers on the basis of office root plan Factory CFAs C & F agents- Trucks Dealers- small vehicles

Flow:
Promotion flows No volume discounts to channel members No scope for cash discounts

Information flow Main Information source- wholesalers ITC ERP system

Financial Transactions:
Zero day credit policy. Supplies are frozen till clearance of dues. Strict regime due to millions of retailers. Strong bargaining power for the company.

Benefits:
No Benefit Higher Margins No credit, only cash payment No freebies, paid vacations, gifts etc Very rarely cash gift( linked with performance )

Value Additions:
Breaking of lot size at State warehouse Mix and match at wholesaler and distributors Promotion Displays and availability

Confict and its resolution:

Existence of both Vertical and Horizontal Conflict .

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Problems Faced by ITC chain: Warehousing

1. Absence of bigger/designed warehouses. 2. B class cities have no warehouses. 3. Govt. warehouses more focused on the commodities

Transportation
1. Supply lesser than the demand in most of the market thereby pushing the cost up. 2. Transporters profile skewed towards the small truck owner/Brokers.

SWOT Analysis ITC:

ITC is one of India's biggest and best-known private sector companies. In fact it is one of the World's most high profile consumer operations. Its businesses and brands are focused almost entirely on the Indian markets, and despite being most well-known for its tobacco brands such as Gold Flake, the business is now diversifying into new FMCG (Fast Moving Consumer Goods) brands in a number of market sectors - including cigarettes, hotels, paper, agriculture, packaged foods and confectionary, branded apparel, personal care, greetings cards, Information Technology, safety matches, incense sticks and stationery. Examples of its successful new FMCG products include: Aashirvaad - India's most popular atta brand with over 50% market share. It is also present in spices and instant mixes. Mint-o - Mint-0 Fresh is the largest cough lozenge brand in India.

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Bingo! - a new introduction of finger snacks. Kitchens of India - pre-prepared foods designed by ITC's master chefs. Sun feast - is ITC's biscuit brand (and the sub-brand is also used on some pasta products)

Strengths:
ITC leveraged it traditional businesses to develop new brands for new segments. For exp. ITC used its experience of transporting and distributing tobacco products to remote and distant parts of India to the advantage of its FMCG products. ITC master chefs from its hotel chain are often asked to develop new food concepts for its FMCG business. ITC is a diversified company trading in a number of business sectors including cigarettes, hotels, paper, agriculture, packaged foods and confectionary, branded apparel, personal care, greetings cards, Information Technology, safety matches, incense sticks and stationery.

Weaknesses:
The company's original business was traded in tobacco. ITC stands for Imperial Tobacco Company of India Limited. It is interesting that a business that is now so involved in branding continues to use its original name, despite the negative connection of tobacco with poor health and premature death. To fund its cash guzzling FMCG start-up, the company is still dependant upon its tobacco revenues. Cigarettes account for 47 per cent of the company's turnover, and that in itself is responsible for 80% of its profits. So there is an argument that ITC's move into FMCG (Fast Moving Consumer Goods) is being subsidised by

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its tobacco operations. Its Gold Flake tobacco brand is the largest FMCG brand in India - and this single brand alone hold 70% of the tobacco market.

Opportunities:
Core brands such as Aashirvaad, Mint-o, Bingo! And Sun Feast (and others) can be developed using strategies of market development, product development and marketing penetration. ITC is moving into new and emerging sectors including Information Technology, supporting business solutions. e-Choupal is a community of practice that links rural Indian farmers using the Internet. This is an original and well thought of initiative that could be used in other sectors in many other parts of the world. It is also an ambitious project that has a goal of reaching 10 million farmers in 100,000 villages. ITC leverages e-Choupal in a novel way. The company researched the tastes of consumers in the North, West and East of India of atta (a popular type of wheat flour), then used the network to source and create the raw materials from farmers and then blend them for consumers under purposeful brand names such as Aashirvaad Select in the Northern market, Aashirvaad MP Chakki in the Western market and Aashirvaad in the Eastern market. This concept is tremendously difficult for competitors to emulate.

Threats:
The obvious threat is from competition, both domestic and international. The laws of economics dictate that if competitors see that there is a solid profit to be made in an emerging consumer society that ultimately new products and services will

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be made available. Western companies will see India as an exciting opportunity for themselves to find new market segments for their own offerings. ITC's opportunities are likely to be opportunities for other companies as well. Therefore the dynamic of competition will alter in the medium-term. Then ITC will need to decide whether being a diversified conglomerate is the most competitive strategic formation for a secure future.

BCG Matrix for ITC Ltd.

H I G H GROWTH RATE

L O W

HIGH HIGH

LOW LOW

MARKET SHARE

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CONCLUSION
The growth in Cigarettes could be attributed to the selective price increases by the company during the quarter to pass on the increase in excise duty coupled with higher volumes. ITCs revenue growth during the quarter was mainly driven by its Cigarettes and Agri businesses while its profitability was driven by an improvement in margins of its Cigarettes and Hotels segments. Other FMCG products continued to clock robust growth. This was mainly driven by the Sun feast brand of biscuits, growth in which was primarily led by consistent launch of new products under the brand. The company has been extending the brand on a regular basis and Sun feast Dark Fantasy, a dark chocolate and vanilla cream offering launched recently in select markets was instrumental in driving the brand sales during the quarter. However due to the ongoing investments in the product development and brand building exercises, the division continued to clock losses in the quarter. In the other FMCG businesses, ITC has been aggressively ramping up its operations. The Foods portfolio comprises five brands viz., Aashirvaad, Sun feast, Candyman, Mint-O and Kitchens of India and 75 distinct products and over 200 SKUs. The company has launched Sun feast Snacky salted crackers in two unique variants viz., Chilli Flakes and Classic Salted. It also forayed into the branded spices market under the Aashirvaad brand. Apart from the packaged foods business, the company has also expanded its FMCG portfolio to include safety matches, iodised salt and agarbattis. Working on these lines, the company acquired a stake in Wimco Limited through Russell Credit Limited, a wholly owned investment subsidiary of ITC.

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Going forward, we expect ITC to continue to record higher sales on the back of continued growth in Cigarettes supplemented by growth in hotels and paperboards, paper and packaging. The Board and employees of ITC are inspired by their vision of sustaining position as one of Indias most valuable companies through world-class performance, creating enduring value for all stakeholders, including the shareholders and the Indian society. Each business within the portfolio is continuously engaged in upgrading strategic capability to effectively address the challenge of growth in an increasingly competitive market scenario. Effective management of diversity enhances your Companys adaptive capability and provides the intrinsic ability to effectively manage business risk. The vision of enlarging ITCs contribution to the Indian economy is manifest in the creation of unique business models that foster international competitiveness of not only its businesses but also the entire value chain of which it is a part. Inspired by this Vision, driven by Values and powered by internal Vitality, the Directors look forward to the future with confidence.

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LIMITATIONS
The project was taken as a part of academic curriculum. As the time was limited so the survey was not confined to the all area of Delhi & NCR. This project is entirely based on the sample survey of the markets of Delhi & NCR. It may happen that the other parts of India could come up with different kind of facts and figures. But I have given my views under my observations according to the survey conducted in DELHI & NCR. So these observations might not be free from errors.

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RECOMMENDATIONS
Timely and Proper delivery of goods to the Distributor and to the Stock Carrying Points. Due to improper supply of goods to the Distributors, the SCP fails to get the supply due to which Sales get affected, which in turn results in switching of customer.

Additional Racks to certain counters. SCPs in the areas like MALVIYANAGAR and Mahipalpur additional racks are required for proper display at certain counters which will enhance the sales of ITCs food products.

Sales promotion at Noida. 1. Sponsoring Annual sports meet. 2. Conducting various education programmes. 3. Distributing free samples in schools, shops. 4. Bringing awareness about the products.

Monitoring of sales person by Sales Supervisor & Stockiest especially at Malviyanagar. Proper vigilance on sales persons can be done through regular visits in these particular areas by Supervisor and Stockiest.

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Common salesperson for both Cigarette & Food product in a particular Area. Involving one sales person for marketing of various products of ITC rather than two or more i.e. employing one sales person for both cigarettes and Food products rather than two sales people for two different products.

Proper stock keeping. Proper maintenance of Godowns by following company norms switch will help in avoiding wastage of products.

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BIBLOGRAPHY
Sites visited: www.itcportal.com

Annual Report of ITC Ltd.

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