Reviewed by:-

LALIT SONI (A-73)

 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 revenue for the company.

 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.

 Cigarettes account for only 15% of tobacco consumed in

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

Cigarettes (15% of tobacco consumption) contribute nearly

85% of Revenue to the Exchequer from tobacco sector

Of the 58% of adult Indian males who consume tobacco,

barely 15% can afford cigarettes

Biri : Cigarettes ratio = 10 : 1 Annual per capita adult cigarette consumption in India

is appx. one tenth world average : 85

Future growth depends on relative rates of growth of per

capita income and moderation in taxes

cigarette growth potential

15 % cigarettes
chew tobacco 21 % bidis 43% Mfg exports 2% Un-Mfg exports 19% Cigarettes 15%

 ITC Limited G.T.C. Industries Ltd.

Godfrey Phillips

(India) Ltd. V.S.T. Industries Ltd.

INDIAN cigarette pie

GTC 8% ITC

VST 8%

GPI 12%

ITC 72 %

Godfrey Phillips VST GTC

ITC - CIGARETTES

?
GPI

GTCI VST

Market attractiveness & Competitive strength is also important.

 One of Indias premier private limited groups with

over 99 years. Large & established Distribution Networks. Annually turnover of the co. is RS 2888 Crore It is one of the eight Indian companies to feature in Forbes A-list in 2004. It has more then 21,000 employees at more then 60 location across India with 4,86,000 shareholders. Ranks No. 4 among Indian listed Private Sector Companies by market cap. (@ April 09) Rated as- one of Indias Most Respected Companies (IMRB-Business world Survey 2006)

 On 24th Aug. 1910 the company was incorporated as a

private company under the name, Imperial Tobacco Co. of India ltd. On 27th Oct. 1954 the company was converted into a public limited company. The name of the company was changed from the Imperial Tobacco co. of India ltd., to India Tobacco co. ltd. In May 1970. On Oct. 1972 company entered into Hotel business. On 2000 company has launched a project e- choupal in Bhopal to Web-enable farmers to make a beginning in Agriculture e-trade. During the same year ITC has launched Wills sport, a full range of internationally styled premium wear for Men & Women.

 Vision
Sustain ITC's position as

Mission
To enhance the wealth

one of India's most valuable corporations through world class performance, creating growing value for the Indian economy and the Companys stakeholders.

generating capability of the enterprise in a globalizing environment, delivering superior and sustainable stakeholder value.

 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 They emphasize on going with the FLOW and making their Followers .

 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 About 71% of the Total Turnover depends upon this Business.

 Super Premium Products Insignia

ITC Insignia. 97 mm. Cost: Rs 130 for 20 Where quality touches infinity, redefine perfection Advertised in Higher SES area

555
ITC 555 premium filter: regular 84 mm.
Cost: Rs 100 for 20 Advertised in Higher SES

 India King ITC India King. 84 mm.

Cost: Rs 100 for 20 Rule your World Advertised in Higher SES area

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 Advertised in Higher SES

Wills Classic/Mild/Regular/Menthol / Ultra Mild

ITC Wills Classic/Mild Filter: King

84 mm. Cost: Rs 94 for 20 Discover a passion Advertised in Higher SES

Wills Navy Cut(Filter Tipped)

ITC Wills Navy Cut Filter: ,74 mm. Cost: Rs 68 for 20 Made for each other Advertised in Higher SES

 Wills Navy Cut(Duotec) ITC Wills Navy Cut Filter: ,84 mm. Cost Rs 80 for 20 Advertised in Higher SES

Navy Cut(Regular Size) ITC Wills Navy Cut Filter: ,69 mm. Cost Rs 48 for 20 Advertised in Higher and Lower SES.

 Gold Flake(Premium) ITC Gold Flake Premium: Regular 69 mm. Cost: Rs 58 for 20 Its Honeydew Smooth, Smooth, exquisite, timeless. But then, all art is Advertised in Higher and lower SES

Gold Flake King/Lights/Ultra Light Filter

ITC Gold Flake King/Light: Regular 84 mm.

Cost: Rs 88 for 20 Now in a Bevelled Edge pack Advertised in Higher and lower SES

 benson & hedges(light & hard) o B & H under ITC Regular Size 84mm. o Cost : Rs 100 for 20 o Advertised in Higher and Lower SES

Marlboro (light & hard) o Phillip Morris under ITC Regular Size 84 mm. o Cost : Rs 100 for 20 o Advertised in Higher and Lower SES

Wills Flake o ITC Wills Flake Filter Regular Size 69mm. o Cost : Rs 58 for 20 o Advertised in Higher and Lower SES

Bristol o ITC Bristol Regular Size 69 mm. o Cost : Rs 32 for 20 o Rise to the taste o Advertised in Higher and Lower SES

 Strength
Biggest and the largest

Weakness
its foot in the cigar market largely dominated by Godfrey Philips.

It still has to consolidate

player in the Indian tobacco market with a market share of 80%. Its Gold Flake tobacco brand is the largest FMCG brand in India and this single brand alone holds 70% of the tobacco market.

 Opportunities ITC is moving into new and emerging markets like developing countries of Eastern Europe, Africa etc.

Threats

The obvious threat is from

competition, both domestic and international. Health hazard Increasing tax in Cigarettes

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

REVENUES Y/E March (Rs cr) FMCG-Cigarettes

Growth-Share Matrix

% % FY2008 FY2007 Growth Contrib. % Market Share Growth Share 13,825.6 12,833.7 7.7 58.41 70% Low High

 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.

 Incorporated in India in 1936, the 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

 Vision To become a leading tobacco player in India and beyond.

Mission
think and act radically, stretch relentlessly and generate path breaking ideas and strategies to propel the Company. This helps to create and build powerful brands with unmatched service and world class processes.

empowers all its people to

 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

Stellar
GPI Stellar Slims Cost: Rs76 for 20

Low nicotine, High Satisfaction

Advertised in Higher SES area

 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
I-Gen o GPI Red & White Regular . o Introduced Indias 1st King size 5s pack o Indias 1st Euro Norm 10-1-10 cigarette holds the promise of an advanced cigarette quality and immense style. o Advertised in Higher and Lower SES

 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

north pole o GPI North Pole menthol o largest selling menthol cigarette in India o Advertised in Higher and Lower SES

 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

tipper o Phillip Morris Tipper o The fastest growing micro segment brand o Advertised in Higher and Lower SES

 Strength
The second biggest tobacco

Weakness
low popularity of most of

company in India The first and only tobacco company to organize the fragmented cigar market in India and secure its position as the market leader in the cigar distribution. Partnering with some of the top most players in the international tobacco industry.

its products No sole authority

Opportunities

Threats
ITC getting into the cigar

Already present in the

Middle East, West Africa, South East Africa and South East Asia, GPI can strengthen its position as an international player by entering new markets. Even expanding market share in the Indian tobacco market is an opportunity

market It has a mere 12% in market share

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 Loyalists. Competitive rivalry: New innovative products by rivals.

o GPC is a professionally managed organization in the o o

o o

field of tobacco and tobacco related products. Established in the year 1930 by the late Shri Narsee Monjee. GTC is the first wholly owned company specializes in manufacturing & exporting an exclusive range of Cigarettes, Flavor Cigar & Non Tobacco smoking product. GTC has manpower strength of 2000 employees spread across manufacturing. The Company has two major production facilities in Mumbai as well as Baroda.

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

Mission o Constant R & D to develop the finest blends guided by relentless focus to deliver world class packaging, with the aim to exceed expectations of our consumers both in India and around the globe . All of our long-term strategies & shortterm will be bound by the finest standards of professionalism and dedication.

 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.

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 o Panama Menthol o Panama Mini Kings

 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. Chancellor Harvard Luxury: o A Consumers Favorite since ages. Chancellor Lights: o A mind blend of finest tobacco, in a style White pack.

 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 personalities. o The packaging of Golden major has been inspired from the

Defense fraternity.

 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.

style mini kings o Launch more than 25 years ago o To cater to the changing youth of the country, The name STYLE says it all. o A distinctive blend , which was very well accepted by the Indian Youth.

 steel(Regular & king size) o Steel- It Separates Men From Boys. o Targeted at the youthful Rich & smooth smoker, With new look packaging & style. o Regular size of Steel has been a huge success.

June(Light & menthol Flavors) o Premium quality Virginia blend producing rich & pleasant characteristics. o June Slim has been designed meticulously to suit the life styles of those who like to carry themselves.

 just black o A Flavored Filter Cigar o Flavors: Full flavor, mild, menthol, cherry, Chocolate vanilla, peach, rum, raspberry, Sour apple, strawberry & grapes.

lips o Lips flavored cigars(in tube pack)have a sweet filtered tip and are loaded with flavor. o Each cigar is packed in its own individual plastic tube. o An ideal product to carry around in your pocket.

 The company was incorporated in 1930 at Hyderabad . The third largest player of Cigarette industry in India.

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 million (approximately $84.5 million) in the fiscal year ended March 2008. The Company manufactures and distributes Cigarettes The products are sold under the trade names `Charminar Specials', `Shah-I-Deccan', `Qila', `High Court', `Vazir' and `Ambassador'.

chArms

A Legendry brand of VST.

The taste that sets you free Advertised in Lower SES

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.