ITC - Cigarettes A study of sales & distribution of

BY UVISE P.M. SMBS

ITC-Company profile

ITC was established on August 24, 1910

Indian public conglomerate company headquartered in

Kolkata, West Bengal, India

ITC's gross revenue for FY2014-15 stood at Rs. 49964.82 crores.

The number of permanent employees as on 31st March, 2015

was 25,787 and supports livelihoods of ~6 million people.

NameName year

Imperial Tobacco Company of India Limited

1910

Indian Tobacco Company Limited 1970

I.T.C. Limited 1974

ITC Ltd Sept 2001

‘ITC’ not have any Acronym

ITC’s Business Portfolio FMCG

Cigarettes Personal Care Foods Lifestyle Retailing Education & Stationery Safety Matches & Incense Sticks

Paperboards, Paper & Packaging Hotels Agri Business Information Technology

FMCG- Cigarettes 8.7% growth in the Cigarettes

segment last FY. legal cigarette industry in India continues to

be impacted by taxation and discriminatory regulatory regime.

Two rounds of sharp increase in Excise Duty in July 2014 and February 2015.

FMCG- Cigarettes Revenue from sale of cigarettes is >60% of

gross revenue from sale of products and services.

ITC have got one of the finest distribution channel in the country

Market Capitalization (Rs. cr)

ITCGodfrey PhillipVSTKothari ProductGolden TobaccoNTC IndustriesRTCL

Product varients

ITC's major cigarette brands include Wills Navy Cut, Gold Flake Kings, Gold Flake Premium lights, Gold Flake Super Star, Insignia, India Kings, Classic (Verve, Menthol, Menthol Rush, Regular, Citric Twist, Mild & Ultra Mild), 555, Silk Cut, Scissors, Capstan, Berkeley, Bristol, Lucky Strike, Players, Flake and Duke & Royal.

Distribution channel-CigarettesINTERMEDIARY

DESCRIPTION

FACTORIES

C and F/DEPOTSDISTRIBUTOR

WHOLE SALER

RETAILER

CUSTOMER

BANGLORE HOSUR

LAXMAN DASGOVARDAN PVT.LTD

ADAM’S STORES

HOWCKERS(SCOOTER WALA)

BISMI STORES

ERNAKULAM

Retailer Suppliers- wholesaler and distributor Wholesaler through the howckers Retailer approach wholesaler for goods Cash purchase are preferred by supplier. Profit is from the each product. Gets fresh stock almost every day. Margins are different for the packet sale and

single unit sale. Buy a pack for Rs 103 and sell it for 108 or 110.

wholesaler Buy goods from distributor and sell to retailers. At less price compared to retailer. Price rate of product is based on the ordering

quantity. Distributor vehicle directly serve the wholesaler. Cash and carry purchases. He buys the packet at Rs 100.50 and sell at 103

Scooter wala Link b/w distributor and retailer. 501 stores in muvattupuzha. They also sell safety matches and agarbathies. 5 howckers under muvattupuzha division. Each person is allotted to each area. They are supply at demand and they don’t have

any target. They are receiving 0.8% commission from distributor Other than that he gets Rs. 3000/- per month as fuel

charges.

Distributor They distribute most of the ITC product. They receive goods from C and F and

forward toward retailers and wholesalers They provide warehousing for goods. they have receiving certain percentage of

sale as benefit(refused to provide the information ) They are not providing special schemes.

Distributor They place order to depots in every

week and at demand. Average sale of cigarettes is

60,00000 No targets are set by the company And have a sales team managed by

distributor.

C and F They carry and transfer the ITC

products to the distributor. Under direct control of ITC They receive goods from plants. Three depots in Kerala territory. Office is situated at Ernakulum. They transfer goods to distributor by

road.

Smoking is Injurious To HealthIt causes Cancer

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