SEGMENTATION, TARGETING AND POSITIONING (STP) OF ITC

 The first step of the STP marketing model is the segmentation stage. The main goal here is to create
various customer segments based on specific criteria and traits. The four main types of audience
segmentation include:
 Geographic segmentation- Country, state, city
 Demographic segmentation- Age, Gender, Income
 Behavioral segmentation- Benefits, Attitude, Usage rate
 Psychographic segmentation- Lifestyle, Personality, class
 ITC has segmented its business activities into:
1) FMCG
2) HOTELS
3) PACKAGING AND PRINTING
4) AGRI BUSINESS
5) INFORMATION TECHNOLOGY
6) PAPER BOARDS AND SPECIALITY PAPERS
 In FMCG Sector, ITC operates for different segment

1a) Cigarettes- ITC is the market leader in cigarettes in India. Almost 40% Indian youths consume tobacco.

1b) Food and Beverages- The Foods business is today represented in 4 segment in the market.
• Ready To Eat Foods-All purpose gravies like cashew onion, Frozen bites like Veggie Pizza
Pockets
• Staples- Ashirvaad atta
• Confectionery- Sunfeast All Rounder, Dark Fantasy choco nut fills.
• Snack Food- Bingo chips, Mad angles, Tedhe Medhe

They have products for everyone starting from the age 5 to 60 years.
c) Stationary- India has highest number of young people. ITC's stationery Brands are marketed as
"Classmate" and "Paperkraft", with Classmate addressing the needs of school goers and Paperkraft
targeted towards college students and executives.

d) Incense sticks and matchsticks- As part of ITC's business strategy of creating multiple drivers of
growth in the FMCG sector, the Company commenced marketing Agarbattis (incense sticks) sourced
from small-scale and cottage units. Eg Mangaldeep Agarbatti, AIM matchsticks.

e) Clothing- Wills Lifestyle, the fashion destination, offers a tempting choice of Wills Classic work
wear, Wills Sport relaxed wear, Wills Clublife evening wear and other fashion accessories.

f) Personal care- It has wide range of personal care products like Fiama, Savlon, Nimwash etc.
 ITC HOTELS

ITC Hotels properties are classified under four distinct brands:

1) ITC HOTELS- Works in luxury segment. Eg. ITC Maurya in Delhi, ITC Grand Bharat in Gurugram.
2) Welcomhotel by ITC Hotels- Offers five-star hospitality. Hotels under this brand namely, Welcomhotel
Dwarka New Delhi, Welcomhotel Bella Vista, Panchkula-Chandigarh.
3) Fortune Hotels- Operates mid-market to upscale properties in the first-class.
4) WelcomHeritage- A chain of palaces, forts, havelis and resorts that offer a unique experience.
3)Packaging and printing- ITC's Packaging & Printing Business provides a variety of value-added
packaging solutions for the food & beverage, personal & home care products, cigarette, liquor, quick
service restaurants and consumer goods industries. ITC position it as the first-choice supplier for
high value added and sustainable packaging.

4)Agri-Business- ITC's Agri Business is the country's second largest exporter of agri-products. It
currently focuses on exports and domestic trading of:

Feed Ingredients - Soyameal

Food Grains - Wheat & Wheat Flour, Rice, Pulses, Barley & Maize
Marine Products - Shrimps and Prawns
Processed Fruits - Fruit Purees/Concentrates, Frozen Fruits, Organic Fruit Products
Coffee
5)Information technology-  ITC Infotech provides business-friendly solutions to help clients succeed and be future-ready. The
company provides technology solutions and services to enterprises across industries such as Banking & Financial Services,
Healthcare, Manufacturing, Consumer Goods, Travel and Hospitality

6) Paper Boards- ITC's Paperboards and Specialty Papers Business is the leader in volume, product range, market
reach and environmental performance, and is the clear market leader in the value-added paperboards segment.
 Porter’s Five Force Model in ITC
1. Bargaining power of suppliers(low):
• There are many small scale, unorganized suppliers
• ITC consumer product faces low supplier power as it deals in huge volume of goods and have direct
access to its distribution network.
• Due to constant pressure of taxes on tobacco, ITC has created a separate division for distribution. Earlier
distribution was a part of firms cigarette division.
• ITC’s innovation e-choupal also helped the firm in a way to have direct access to products and faster
delivery.
• 2. Bargaining power of buyer(Low):

-Bargaining power of buyer is low as the nature of the products are addictive.

-Low switching costs in terms of price.

-Customer loyality is high.

3. Threat from new entrants (Low):

-FMCG sector is already dominated by brands like ITC, HUL, P&G, Britannia ,Nestle and these companies have maintained a direct and strong
control over its distribution network which makes it difficult for the new player to invest in this sector.

-New product differentiation very tough as the company has already launched variety of products and its variants in different price segments.

-Capital requirement is huge for pan India launching.

-Government policy- High taxes, No ads allowed for contagious products.

4. Threat of substitutes (Moderate):
-The threat of substitute is moderate as ITC has big consumer base and brand power.

-HUL giving stiff competition to ITC FMCG sector. According to a research out of 10 Indian homes 9 are using some
of HUL’s product.

-Its competitor Godfrey Philips prices were strategically kept low to capture market share of gold flake. In order to
fight this, ITC launched a similar variant which was cheaper and smaller in size.

-ITC’s diversification strategy has further helped the firm in keeping its hold over market share.

-ITC has launched 20 flavours of bingo which was comparatively huge in number than its competitors lays and Frito
Lays.

-It also launched new flavours for its yippee noodles which is giving tough competition to Nestlé’s
 maggi.
5. Competitive Rivalry(High):

-ITC has a tough competition between established brands like HUL, Parle, Nestle etc over price. Every
industry indulging in product differentiation are providing customers with numerous varieties to switch
to other products. Therefore, price sensitivity plays a major in increasing rivalry between competitors
in this sector.

-Creative and persuasive advertisements by the rivalry firms to lure the customers.

-Frequent offers and promotional techniques made by rivalries to create awareness about the products.