ITC Sunfeast: Sales and Distribution

ITC SUNFEAST BISCUITS

SALES AND DISTRIBUTION

Discussion Outline

INTRODUCTION

ORGANIZATIONAL STRUCTURE

OBSERVATIONS

CHALLENGES OF FOOD DISTRIBUTION

DISTRIBUTION SYSTEM OF SUNFEAST

Discussion Outline

INTRODUCTION

ORGANIZATIONAL STRUCTURE

OBSERVATIONS

CHALLENGES OF FOOD DISTRIBUTION

DISTRIBUTION SYSTEM OF SUNFEAST

Introduction to ITC One of the worlds most reputable company

Market capitalization of nearly US $ 18 billion

Turnover of over US $ 5.1 Billion

Post tax profit of US $750 Million

Diversified product portfolio

Direct group employment of 29000

Introduction to Sunfeast

Launched in July, 2003

Growth rate of 53%

Turnover of over 1000 crore

Wide categorization

PRODUCTS COMPETITORS

GLUCOSE PARLE, BRITANNIA AND HORLICKS

MARIE BRITANNIA AND BISK FARM

BUTTERBITE AND CREAM PRIYA GOLD, ANMOL, BRITANNIA AND PARLE

Products at a Glance

Discussion Outline

INTRODUCTION

ORGANIZATIONAL STRUCTURE

OBSERVATIONS

CHALLENGES OF FOOD DISTRIBUTION

DISTRIBUTION SYSTEM OF SUNFEAST

Organizational Structure

Recruitment at ITC

Entry level Premier management institutes

Middle level Integrity A "will do" attitude High energy Creativity Leadership Team skills Ability to think strategically

Grass root level

Discussion Outline

INTRODUCTION

ORGANIZATIONAL STRUCTURE

OBSERVATIONS

CHALLENGES OF FOOD DISTRIBUTION

DISTRIBUTION SYSTEM OF SUNFEAST

Diagram

FOOD AND

BEVERAGES

OTHER FMCG

PRODUCTS

FMCG

Distribution of Food Products

Strict compliance standards, low profit margins, intense competition, high customer-service expectations.

Fast and effective sales ordering processes.

Flexibility

Quick reaction

Important Factors

FOOD

MARGINSCREDIT SYSTEMS

STOCK OUTS

WASTAGES

PROMOTIONS

DISTRIBUTION CHANNELS

Discussion Outline

INTRODUCTION

ORGANIZATIONAL STRUCTURE

OBSERVATIONS

CHALLENGES OF FOOD DISTRIBUTION

DISTRIBUTION SYSTEM OF SUNFEAST

Distribution Channel

Flow Diagram

FACTORY

CNF

WHOLESALE DISTRIBUTO

R

WHOLESALE DEALER

BASE

RETAILER

Distribution System

ITC uses FIFO method to reduce the wastage of goods due to expiry.

They also keep the good on constant move from low sales area to high sales area.

The company collects all the expired goods four times a year, and destroys them.

Retailers must return expired or damaged products within six months after the date of expire.

Distribution System

Adjustment for them is done in three months time.

ITC provides their retailers with racks, hangers, etc to display the products.

The benefits received by the retailers depend upon their sales volume and also the location of their shops.

ITC has hired IMRB to do the market research.

Discussion Outline

INTRODUCTION

ORGANIZATIONAL STRUCTURE

OBSERVATIONS

CHALLENGES OF FOOD DISTRIBUTION

DISTRIBUTION SYSTEM OF SUNFEAST

Observations

Food products are normally a high volume ball game.

Products have to essentially be available in the market at all given points of time and at all given points of purchase.

The supply of products takes place virtually on a daily basis in fixed quotas or otherwise, to retailers as per their requisitions and the anticipation of demand and the performance of products in the recent past.

Observations

The skeleton of distribution system is same for all the companies.

Companies try very hard to make a difference at some point to get the competitive advantage.

ITC has a very strong distribution network for their cigarette brands and they are using this network to push their new biscuit brands.

Credit system also depends upon the position of the product in the market.

Observations

Companies with top product are hard to bargain on credits.

Companies also use their premium products to push their non premium products.

Discussion Outline

INTRODUCTION

ORGANIZATIONAL STRUCTURE

OBSERVATIONS

CHALLENGES OF FOOD DISTRIBUTION

DISTRIBUTION SYSTEM OF SUNFEAST

Presented by:Amitanshu Srivastava Ashish BaidAlok Kumar Anand Kumar Ankit Nema

ITC SUNFEAST BISCUITS