CIGARETTE Analysis IN INDIA

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Reviewed by:Qasim
4/17/12

THE INDUSTRY IN SPECIFIC

The cigarette industry is one of the oldest

industries in India.
It is an important AGRO based Industry. It is highly labor intensive & provides livelihood to

about 5 million people directly and indirectly.

Cigarette is an item falling under the First Schedule

to the Industries (Development & Regulation) Act, 1951 and requires an industrial license.
India is the second largest producer of tobacco in

the world.
It exports a good amount of cigarette in various

countries, which generates a handsome amount of 4/17/12 revenue for the company.

THE INDUSTRY IN SPECIFIC

Cigarette exports during 2007-08 increased by 11

% in volume terms over the exports of previous year.

Major markets for cigarettes are UAE and USA,

Romania, Saudi Arabia and Iraq where the demand for generic low cost cigarettes is growing.

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Cigarettes: Growth potential

Cigarettes account for only 15% of tobacco

consumed in India unlike world pattern of 85% due to prolonged punitive taxation
Cigarettes

(15% nearly of

of 85% adult

tobacco of

consumption) to the who

contribute
Of

Revenue

Exchequer from tobacco sector the 58% Indian 15% males can consume cigarettes
Biri : Cigarettes ratio = 10 : 1 Annual per capita adult cigarette consumption
4/17/12 in India is appx. one tenth world average : 85

tobacco,

barely

afford

Cigarettes: Growth potential

cigarette growth potential

15 % cigarettes

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4/17/12 Surveyed as per March-2009

LIST OF MAJOR PLAYERS IN INDIAN CIGRATTE INDUSTRY

ITC Limited G.T.C. Industries

Ltd.

Godfrey Phillips

(India) Ltd. Ltd

V.S.T. Industries

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Market share
INDIAN cigarette pie

GPI 12%

GT C 8% ITC 72 %

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ITC HISTORY OF THE COMPANY

On 24th Aug. 1910 the company was incorporated

as a private company under the name, Imperial Tobacco Co. of India ltd. into a public limited company.

On 27th Oct. 1954 the company was converted The name of the company was changed from the

Imperial Tobacco co. of India ltd., to India Tobacco co. ltd. In May 1970. business.

On Oct. 1972 company entered into Hotel On 2000 company has launched a project e-

choupal in Bhopal to Web-enable farmers to make a beginning in Agriculture e-trade.

4/17/12 During the same year ITC has launched Wills

MARKETING STRATEGY
They have a DIFFERANTIAL MARKETING STRATEGY

type.

o Cigarette companies manipulate menthol levels to

lure young smokers

o Major brands and their advertising campaigns Always use their existing channels. Utilizing nominal resources related with the brand Brand Ambassador are selected according to the

brands and mostly are YOUTH ICONS making their Followers .

They emphasize on going with the FLOW and

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FMCG- CIGARETTES

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ITCS CIGARETTE BUSINESS

Market leader in India. Powerful Brands across segments. Leadership in all segments - geographic & price. Extensive FMCG distribution network. Direct servicing of 1,00,000 markets & nearly 2

million Retail outlets.

Exciting long term growth potential. World-class state-of-the-art technology and

products.
Investment - Rs.10 billion in six years
4/17/12 About 71% of the Total Turnover depends upon this

CIGARETTE PRODUCTS
Super Premium Products
q Insignia
ITC Insignia. 97 mm. Cost: Rs

130 for 20

Where quality touches infinity, redefine

perfection

Advertised in Higher SES area

q 555
ITC 555 premium filter: regular 84 4/17/12 mm.

q India King
ITC India King. 84 mm. Cost: Rs

100 for 20

Rule your World Advertised in Higher SES area

q Wills Silk Cut(king size)

ITC Wills Silk Cut Filter: 84 mm. Cost: Rs 88 for 20 A blend so right a filter so fine
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Premium Products
Wills Classic/Mild/Regular/Menthol / Ultra Mild
84 mm. Cost: Rs 94 for 20

ITC Wills Classic/Mild Filter: King

Discover a passion Advertised in Higher SES

Wills Navy Cut(Filter Tipped)

ITC Wills Navy Cut Filter: ,74 mm. Cost: Rs 88 for 20 Made for each other
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Gold Flake(Premium)
Cost: Rs 76 for 20

ITC Gold Flake Premium: Regular 69 mm.

Its Honeydew Smooth, Advertised in Higher and lower SES

Gold Flake King/Lights/Ultra Light Filter

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ITC Gold Flake King/Light: Regular 84 mm.

Porters Five Forces analysis

Entry Barrier ANALYSIS Supplier Bargaining Power Buyer's Bargaining Power Industry Rivalry Substitutes

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GPI- Cigarettes

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Godfrey Phillips India ltd.

The second largest player in the Indian

cigarette industry.

Annual turnover exceeds INR 1800 crore

(approx. US $369.6 million)

Has two major stakeholders, one of India's

leading industrial houses - the K. K. Modi Group and one of the world's largest tobacco companies, Philip Morris.

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HISTORY OF THE COMPANY

Incorporated in India in 1936, the

GPI

Company established its own manufacturing facilities in 1944

On 1946 GODFREY PHILLIPS became a

Public Ltd. Co. with its manufacturing operations in Mumbai

Its products are distributed through an

extensive India wide network comprising 484 exclusive distributors and over 800,000 retail outlets
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MAJOR Brands
Super premium products

FS 1
A newly launched cigarette in the market It ha a finest brand in all leading cigarettes in the

market

It contains LUXURY LONG LEAVES(L3), which is

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MAJOR Brands
q Four Square Filter
GPI Four Square Filter: Regular.69 mm

Cost: Rs 48 for 20
Man with the smooth edge Advertised in Higher and Lower SES

q Stellar
GPI Stellar Slims Cost: Rs76 for 20 Low nicotine, High Satisfaction Advertised in Higher SES area
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q GPI Red and White

o GPI Red & White flake o Text in Hindi Hum red and white

peene walon ki baat hi kuch aur hai

o Cost: Rs 48 for 20

Advertised in Higher and Lower SES

q I-Gen
o GPI Red & White Regular . o Introduced Indias 1st King size 5s pack o Advertised in Higher and Lower SES
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q jaisalmer
o GPI Jaisalmer Premium king size . o It is a luxurious blend of finest sun dried

Virginia tobaccos which deliver a smooth mellow flavor.

o Advertised in Higher and Lower SES

q north pole
o GPI North Pole menthol o largest selling menthol cigarette in India o Advertised in Higher and Lower SES
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q cavanders
o GPIs Oldest & most trusted brand. o providing superb value and satisfaction o Cost:Rs 68 for 20 o Advertised in Higher and Lower SES

q tipper
o Phillip Morris Tipper o The fastest growing micro segment brand o Advertised in Higher and Lower SES
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Porters Five Forces analysis

New Entries: Buyers bargaining powers: Oligopoly market situation. Suppliers bargaining power: Fragmentation, consolidation & integration. Low switching costs Threat of substitutes: Depends on buyer to buyer. Some are Brand 4/17/12 Loyalists.

Golden tobacco ltd.

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GOLDEN TOBACCO LIMITED Profile

o GPC is a professionally managed organization

in the field of tobacco and tobacco related products. Narsee Monjee.

o Established in the year 1930 by the late Shri o GTC is the first wholly owned company

specializes in manufacturing & exporting an exclusive range of Cigarettes, Flavor Cigar & Non Tobacco smoking product.
o GTC has manpower strength of 2000
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employees spread across manufacturing.

o The Company has two major production

Vision and Mission

Vision
o To be a largest, Human sensitive , Global Tobacco

Company.

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MARKETING STRATEGY
We work with commitment , dedication & Integrity

towards a common goal.

We are an equal opportunity Employer. We believe that learning is a life long process &

provide an environment attuned to growth.

We are a balance of the boldness, energy and

courage of youth, sharpened by the experience, foresightedness and wisdom of veterans.

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Major brands
q

PANAMA

A Legendry brand of GTC.

The company has launched several variants in

the Panama portfolio.

Some of these are: o Panama Virginia Regular o Panama Filter o Panama Gold o Panama Premium Filter o Panama Delight
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q chancellor
o The Chancellor name is given to Golden Tobaccos

Finest Blends.
o Chancellor as a symbol of quality cigarettes. Chancellor Browns: o A unique Premium blend in the king size segment o It is a sophisticated & stylish product. Chancellor Royale: o Which appeals to the modern age consumers who

have royal

tastes & hearts of Gold.

Chancellor Exclusive: o Unique Brown Cigarettes in Regular size with

Distinctive Flavor.

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q Golden
o Carving a niche for itself in the crowded

marketplace is the Goldens Brand.

o An assurance of quality, for the value conscious

smoker.
Goldens Gold Flake
o A strong blend. o Which allows the smoker to derive

immense pleasure.
Goldens Major o A tribute to the Macho, Courageous and Bold 4/17/12

personalities.

q taj chap
o A heritage brand of Golden Tobacco o Market for more than 35 years. o The only Premium brown cigarette in the

non filter segment.

q style mini kings

o Launch more than 25 years ago o To cater to the changing youth of the country,
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The name STYLE says it all.

Vazir sultan Tobacco Industries ltd.

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Vst ltd.
The company was incorporated in 1930 at

Profile

Hyderabad . India.

The third largest player of Cigarette industry in In 1984 the name of the Company was changed

from The Vazir Sultan Tobacco Co. Ltd. to VST Industries Ltd.
The Company embarked upon a major

modernization program designed to improve its competitive ability in domestic and international markets.
The company recorded revenues of INR3,401.7
4/17/12 million (approximately $84.5 million) in the fiscal

Major brands
q

chArms

A Legendry brand of VST. The taste that sets you free Advertised in Lower SES Rs 40 for 10 cigarettes

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Charminar

A Legendry brand of VST.

The company has launched several variants

in the Charminar portfolio.

Some of these are: o Charminar Special Filter o Charminar Plain o Charminar Standard.

Advertised in Lower & High SES Area

Rs 35 for 10 Charminar cigarettes 4/17/12

Thank you

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