CHAPTER 1: HISTORY AND EVOLUTION

ITC was incorporated on august 24, 1910 under the name imperial tobacco company of India limited. As the company's ownership progressively Indianised, the name of the company was changed from imperial tobacco company of India limited to India tobacco company limited in 1970 and then to i.t.c. limited in 1974. In recognition of the company's multi-business portfolio encompassing a wide range of businesses - fast moving consumer goods comprising foods, personal care, cigarettes and cigars, branded apparel, education and stationery products, incense sticks and safety matches, hotels, paperboards & specialty papers, packaging, agri-business and information technology - the full stops in the company's name were removed effective September 18, 2001. The company now stands rechristened 'ITC limited'.

ITC India Limited

Type public (bse: ITC)

Founded august 24, 1910 radha bazar lane, kolkata, India

Headquarters Virginia house, kolkata, India

Industry tobacco, foods, hotels

Products cigarettes, packaged food, hotels, apparel

Chairman Y. C. Deveshwar

ITC is one of India's foremost private sectors companies with a market capitalization of nearly us $ 15 billion and a turnover of over us $ 4.75 billion. ITC is rated among the worlds companies best big companies, Asias 'fab 50' and the world's most reputable

by forbes magazine, among India's most respected companies by business world and among India's most valuable companies by business today. ITC also ranks among India's top 10 `most valuable (company) brands', in a study conducted by brand finance and published by the economic times. ITC has a diversified presence in cigarettes, hotels, paperboards & specialty apers, packaging, agri business packaged foods & confectionery, information technology, branded

apparel, greeting cards, safety matches and other fmcg products.

While ITC is an outstanding market leader in its traditional businesses of cigarettes, hotels, paperboards, packaging and agri-exports, it is rapidly gaining market share even in its nascent businesses of packaged foods & confectionery, branded apparel and greeting cards.

One of India's most valuable and respected corporations, ITC is widely perceived to be dedicatedly nation-oriented. Chairman y c deveshwar calls this source of inspiration A commitment beyond the market

". In his own words: " ITC believes that its aspiration to create enduring value for the nation provides the motive force to sustain growing shareholder value. ITC practices this philosophy by not only driving each of its businesses towards international competitiveness but by also consciously contributing to enhancing the competitiveness of the larger value chain of which it is a part."

ITC's diversified status originates from its corporate strategy aimed at creating multiple drivers of growth anchored on its time-tested core competencies:

unmatched distribution reach, superior brand-building capabilities, effective supply chain management and acknowledged service skills in hotelier. Over time, the strategic forays into new businesses are expected to garner a significant share of these emerging high-growth markets in India.

ITC employs over 21,000 people at more than 60 locations across India. The company continuously endeavors to enhance its wealth generating capabilities in a globalizing environment to consistently reward more than 3,95,000 shareholders, fulfill the aspirations of its stakeholders and meet societal expectations.

This over-arching vision of the company is expressively captured in its corporate positioning statement.

This is a brand in the snacks food segment. ITC entered the biscuits market with Sunfeast brand in July 2003. The ITC website says:Sunfeasts brand essence, spread the smile connotes happiness, contentment, satisfaction and pleasure. The mascot sunny reinforces the emotional aspects of the brand. Tagline of Sunfeast glucose biscuits is: jo de jitne ki sakti i.e. one that gives the power to win. So, once again it is using emotional appeal.

Over the years ITC has launched several other products like cookies and pasta under Sunfeast brand name. Sunfeast uses celebrity endorsements for promotions. The king khan shahrukh khan and beauty queen diya mirza are shown in Sunfeast ads. Most Sunfeast ads revolve around the theme of happiness. One more common them across Sunfeast ads is that they use children a lot. There seems to be two-fold reason for using children: Children are one key target segment who uses these products. It is very easy to emotional connect with parents (who are the buyers) by using children to promote Sunfeast brand. ITC also goes for sponsoring events like tennis tournaments.

Vision of ITC Sunfeast:

Sustain ITCs position as one of the Indias most valuable corporations Through world class performance, creating growing value for the Indian Economy and the companies stakeholder.

Mission of ITC Sunfeast:

to enhance the wealth generating capabilities of the enterprise in a globalizing environment, delivering superior and sustainable stakeholder value

CHAPTER 2: OBJECTIVE OF THIS STUDY

The primary objective of this study is to systematically explore the determinants responsible for the competitive advantage of ITC Sunfeast limited and how it developed new product lines in its foods business drawing on its competencies in brand-building, r&d, packaging, and distribution.

To know the strategies of ITC Sunfeast

Why people are buying the products.

What all the things which influences them to buy

To understand how ITC Sunfeast has diversified themselves to a multiproduct corporation from a single product company.

To study the perception of the consumer of Sunfeast

CHAPTER 3: BISCUIT INDUSTRY - INDIA

India is the third largest biscuit India is the third largest biscuit manufacturing country after usa and manufacturing country after usa and china

India biscuits industry: largest among all the food industries

Turnover of around Rs. 65.0 billion

The federation of biscuit manufacturers of India (fbmi): steady growth of 15 percent per annum in the next 10 years Urban market penetration 75 - 85 % Rural market penetration 55- 65 %

3.1 Why Sunfeast Biscuit Range Was Launched

The biscuits industry had witnessed little innovation; glucose was glucose and marie was still marie." then ITC decided that this could be its biggest point of attack. In 2003, ITC launched Sunfeast with six ranges.

Sunfeast glucose biscuit Sunfeast Orange Marie Sunfeast marielight Sunfeast orange cream Sunfeast butterscotch cream Sunfeast bourbon cream

3.2 How ITC Turned Biscuits Business Around

Biscuits and tea in the morning were a routine. So were the key market players and their favorite products. The two major players Britannia and Parle were busy biting of chunks of the national market among themselves, with a host of smaller brands in various regions. While the business was still very competitive, there wasn't anything groundbreaking. In 2003, with ITC foraying into the segment, a lot of that changed. At that time, Britannia and Parle held, between them over 82 per cent of the market in value terms. The rest too was firmly held by smaller players like Priya gold which had a strong presence in the north. So, in essence, the market already had strong well entrenched players. So how could a late entrant like ITC make its mark? Three years down the line, however, things have changed a lot. It is a classic story of the hare and the tortoise. While it is far from winning the race, slowly and steadily, the tortoise is gaining ground. The late entrant is already on the podium in the third place with as much as 7 per cent of the market in terms of value. "ITC made hay when the sun wasn't shining," says a consultant who's been tracking the industry for a long time. But first, why did ITC train its eye on biscuits? Ravi naware, chief executive, ITC foods, makes it sound simple. "We decided to enter the foods segment because it's a rs 550,000 crore (Rs billion) market in India. But only 6 per cent of this is branded and packaged. In developed markets, nearly 95 per cent of the food market is branded and packaged. So there was lot of scope for a branded player."

In foods, biscuits were tempting. The rs 4,000-crore (rs billion) Indian biscuits market has grown at 12-14 per cent year-on-year. Then, there was a business synergy. ITC was already value-adding to wheat with its branded atta presence. By entering the biscuits segment, it could also improve its bottom-line further. But despite the fast growth rates, the biscuits industry was not all rosy. Over the years, even giants like Hindustan lever had failed. For instance, hll which had flirted with biscuits under the max brand exited in 2005. But ITC's Sunfeast has a different story to tell so far. The strategist looks at the game plan of a late entrant and how the biscuits industry has responded.

3.3 New Recipe

Before entering the segment, ITC dug into market research. Research revealed that the category had gaps which ITC could settle into. Findings revealed that consumers wished to taste new and innovative products. That was precisely what the competition had not done in a big way. Says naware, "the biscuits industry had witnessed little innovation; glucose was glucose and marie was still marie." the company decided that this could be its biggest point of attack. In 2003, ITC launched Sunfeast with six ranges. But it was a calculated risk. ITC stuck to category favorites like glucose, marie and bourbon cream. Along with that, it also launched innovations such as orange-flavored marie, marie light and butterscotch-flavored cream biscuits. In 2004, Sunfeast followed this up with the launch of Sunfeast milky magic. More recently, it also has launched the Sunfeast snacky and Sunfeast golden bakes.

Analysts believe that just because Sunfeast was a new brand, helped matters. Says a consultant, "the biscuits industry had not witnessed any major product

innovation in years. Consumers were just waiting for something new, something fresh, when Sunfeast happened." Even the competition had not made things better. Between 2000 and 2005 neither Parle nor Britannia launched any major new product. Yes, Britannia did re-launch its tiger brand in 2005. But Britannia claims that it is looking at more than just products. Richa arora, general manager and head of marketing and innovations, Britannia industries, says, "we are not just looking at new products, but tapping newer opportunities -such as different occasions as well as out-of-home consumptions." In 2005, before diwali, Britannia launched occasions -- boxes of assorted biscuits priced between rs 50 and rs 200 -- which the company claims has been very successful. In 2006, however, the industry has seen a flurry of innovations from the big two. Digestive marie -- was launched by Parle in early February 2006. Britannia launched its new double-flavored Mariegold and 50-50 chakkar. And Parle is all set to launch at least two new products before the end of this year.

3.4 Distribution Maze

It's common knowledge, that for fmcg products, distribution channels are very important. Says pravin kulkarni, general manager, marketing, Parle products, "for biscuits, distribution and visibility are extremely important as it's partly a impulse purchase product." and in biscuits, setting up a distribution channel is anything but easy. Consider this. Priya gold, which entered the western region in 2000, is struggling to find its feet even five years later. However, in this regard, Sunfeast has been fortunate: thanks to its tobacco business, ITC already had a good understanding of distribution channels.

The company used its existing network of convenience stores -- the company's name for the hole-in-the-wall pan-beedi shops -- for Sunfeast. Not content with the existing resources, the company also looked at grocery stores and other retail formats. The company says the brand is now available in nearly 1.8 million outlets. Britannia claims it has a superior distribution clout with its presence in nearly 3.3 million outlets. Parle, the seasoned player itself, says it is available in 1.5 million outlets. Sunfeast's next step was to step up its branding and promotion.

3.5 Ad Thrust In august 2003, a month after its launch, the company undertook a major sampling exercise to promote the product. For two years then, the brand did all the usual rounds -- riding behind buses, blocking television spots, booking that corner space in your favorite newspaper and so on. Well differentiated advertisements, some which showed a complete cream world with cream rivers, cream mountains and cream trees, were targeted at kids watching cartoon channels. At the same time, on general entertainment channels, mothers received information on the importance of glucose, the wholeness of wheat and so on. Also, the company tied up with bey blades, the popular television series that was a rage among children, to promote itself. In April 2005, Sunfeast launched its major campaign. It signed on hindi film actor, shah rukh khan as its brand ambassador.

In the same year, as the official sponsor of the wta tennis championship -- titled the Sunfeast open -- the company had teenage sensations sania mirza and mahesh

bhupathi campaigning for it. But that's not all. For promotions in southern states, Sunfeast has signed tamil super star surya as a brand ambassador. Analysts say that ITC's deep pockets have helped Sunfeast in many ways. The company claims that it has been spending 35-40 per cent of its turnover from the biscuits segment on advertising and promotions. Going by that number, ITCs annual marketing spends are estimated to be in the region of about rs 115-120 crore (rs billion). Until last year, priya gold spent close to rs 45-50 crore (rs billion), nearly 10 per cent of its turnover on marketing. Even market leader Britannia with spends of rs 100 crore (rs billion) (2004-05) spends about 10 per cent of sales on marketing. But arora says that the figure will increase substantially in 2006-07. ITC is clearly among the largest spender on ads and promotions in the biscuits category. Analysts predict that these figures are all set to rise this year. But industry experts aren't impressed. Says a consultant, "although Sunfeast's shah rukh khan association is interesting, it is yet to do something groundbreaking, like britannia khao world cup jhao or the lagaan promotion for that matter."

CHAPTER 4: 4 PS OF ITC SUNFEAST BISCUITS

4.1 Products Offered By Sunfeast

Sunfeast Milky Magic

Packed with goodness of milk these deliciously nutritious crisp and crunchy biscuits are a favorite among mothers and kids. Milky Magic has the Magic of 2 - A perfect balance of energy that aids physical strength and mental ability. These biscuits strike the right balance of milk and wheat which helps in an all round development and nurturing of the child.

Sunfeast Glucose

For those light hunger pangs, a wholesome & nutritious choice as these golden brown biscuits are made from the best quality wheat. Sunfeast Glucose biscuits are ideal not just for kids but for adults too.

Sunfeast Dream Cream

A truly scrumptious range of cream biscuits that have become an instant hit with children. ITCs chefs have put their legendary skills into these biscuits to deliver truly tasty cream biscuits.

'Dream Cream' split cream variants are available in and Bourbon A special delight for all those chocolate lovers.

'Choco-Vanilla'

'Strawberry-Vanilla' flavours.

Orange Cream Experience a tangy twist in biscuits with every Orange cream.

Butterscotch Cream Another first, the taste of butterscotch cream biscuits. ice-cream in

Sunfeast Dark Fantasy Choco Fills

Sunfeast Dark Fantasy Choco Fills is the latest and the most premium offering from the portfolio of Sunfeast. An exquisite combination of luscious chocolate filling enrobed within a perfectly baked rich cookie outer. An offer that fully epitomizes the brand promise of "Pure Indulgence".

Sunfeast Dark Fantasy

Inspired by the Master Chefs of ITC hotels, it is the richest of chocolate vanilla biscuits. These biscuits are created using carefully chosen premium ingredients for a sensory experience unlike any other. Dark Fantasy is more than a biscuit, its a luxurious mix of aromatic cocoa and vanilla.

Sunfeast sweet 'n salt

These thin and crisp biscuits come with a distinctive sundry taste, that of salt and sweetness. A bite into one of these one keeps wondering about its taste!

Sunfeast Snacky

Bigger than most others in the salted biscuit category, Snacky is light and crispy like no other. From kids to adults, its the quintessential Family Biscuit. Available in two variants, Classic salted and Chilli flakes - the very first of its kind in India.

Sunfeast Special

ITC Sunfeast presents a range of Special cookies and creams.

Special Cookies: Made with best quality wheat, cashew and butter, Sunfeast Special cookies are baked with real butter and the finest ingredients to give a mouth-watering treat that makes every moment special. Available in Cashew & Butter. Special Creams: Delicious value for money cream biscuits with a thick layer of cream sandwiched between two biscuits. Available in Orange, Chocolate & Elaichi variants.

4.2 ITC Sunfeast Pricing Strategy:

The pricing of the ITC food division depends upon the customers demand schedule, the cost function and the competitors price. The pricing of the company is such that it caters to the need of all income groups of people but special provision has been kept for low and middle income group, and their pricing are competitive with respect to other players like britannia, parle and brisk farm. The company follows the going rate pricing that is the price of the product depends upon the competitors price. The firm chooses pricing more or less the same as market leader.

BUSCUIT

Segmenting

Targeting

Pricing

Sunfeast Glucose Biscuit

Natural Goodness Children Between Rs. 2 To Rs. 10 Of Wheat The Age Group 4-14 Years And Mother

Sunfeast Orange A Marie Differentiate Offering

Very Housewives

Rs. 10

Sunfeast Light

Marie Tight And Crispy

Housewives

Rs. 10

Sunfeast Orange Smooth Cream

And Children Between Rs. 5 to Rs. 10 The Age Group 4-14 Years And Mother

Yummy Cream

Sunfeast Butterscotch Cream

Smooth

And Children Between The Age Group Rs. 5 to Rs. 10 4-14 Years And Mother

Yummy Cream

Sunfeast

Born Smooth

And Children Between Rs. 10 The Age Group 4-14 Years And Mother

Born Cream

Yummy Cream

4.2.1 Pricing Models as Compare To Its Competitors

Essentially parle played a high volume low margin game but Sunfeast looked at a two-pronged, high margin in cream variant and volume from the marie and glucose segment.

For instance cram biscuit from Sunfeast cost rs. 10 for 100 grams. Parle however only charges rs. 5 for its cream variant. The biscuits industry now has two clear models. Parle products plays the low price game at all varieties of biscuits from glucose to cream. Essentially, parle plays a high volume, low margin game. But britannia and Sunfeast look at a two-pronged strategy. High margins in cream variants and volumes from the marie and glucose segments. For instance, cream biscuits from both britannia and Sunfeast cost rs 10 for 100 grams. Parle, however, only charges rs 5 for its cream variants. Except for hide & seek, all of parle's products lie in the price range between rs 4 and rs 6 for 100 gram packs. To be fair, in glucose and marie, the companies have little choice. As there is little differentiation, consumers are extremely price sensitive. But these segments are important. Marie and the popular glucose varieties make up for nearly 55 per cent of the rs 4,000 crore (rs billion) biscuits segment -- a significant rs 2,200 crore (rs billion). Says sunil alagh, chairman, ska advisors, and former ceo of britannia industries, "the biscuit consumer is willing to pay more only when he sees a clearly differentiated product. Hence companies have little choice in terms of pricing." no wonder all the glucose and marie variants straddle price points of rs 4-6 (for 100 grams).

4.2.2 The Turnaround:

The major strategy of ITC was to exploit the gap in innovation in the business industry. There had been no major innovations in the biscuit industry over a long period and people were waiting for these to take place. The want of customers for something new, something fresh was satiated by Sunfeast brand. And though there was a

flurry of innovations at a later stage ITC had gained a strong foothold in the biscuit industry by then. Distribution network are of primary importance in fmcg industry and for this purpose the company Used its existing network of convenience stores: the companys name for the hole -in-the-wall pan-beedi shops for Sunfeast. Not content with the existing resources, the company also looked at grocery stores and other retail formats. The company says the brand is now available in nearly 1.8 million outlets. Britannia claims it has a superior distribution clout with its presence in nearly 3.3 million outlets. Parle, the seasoned player itself, says it is available in 1.5 million outlets. Sunfeasts next Step was to step up its branding and promotion. The company claims that it has been spending 35-40 per cent of its turnover from the biscuits segment on advertising and promotions, whereas until last year, priya gold spent nearly 10 per cent of its turnover on marketing. Even market Leader britannia spends about 10 per cent of sales on marketing. Thus analysts believe that ITCs deep Pockets have helped Sunfeast in many ways.

4.3 Place (Distributions Strategy)

The company used its existing network of convenience stores: the companys name for the hole-in-the-wall pan-beedi shops for Sunfeast. The company also looked at grocery stores and other retail formats. The company says the brand is now available in nearly 1.8 million outlets.

4.3.1 Distribution Network of ITC Sunfeast In India

Strong distribution network Leveraged the existing tobacco distribution channels Provided display items to retailers Gave benefits to retailers to push the product. Uses fifo method to reduce the wastage of goods due to expiry

4.3.2 Segmentation And Targeting

Demographic Segmentation

Age and life cycle stage: Sunfeast glucose biscuits : children between the age group 4 14 years and their mothers Sunfeast orange cream, Sunfeast butterscotch cream & Sunfeast bourbon cream : children

Income: Economy: glucose, milky, special cream

Psychographic Segmentation: Life Style: Sunfeast marie light is directed as light & crispy biscuit targeting housewives. Sunfeast orange marie also has a differentiated offering targeting housewives. Sunfeast snack is directed as light and crispy biscuit

targeted for family members specially for having snacks.

4.4 Promotion And Distribution

4.4.1 ITC Sunfeast Promotional Activities

A particular budget is allocated for the promotion of the products, the local promotion scheme is decided by the area sales manages, it give its suggestion to the district officeand that is forwarded to the head quarter in kolkata. In another promotional scheme for biscuits a particular number of cases is given freely to the distributors according to the amount of sale they make, this was a drop down

promotion i.e. Of the number of free cases that a particular distributors gets, off them a certain part is reserved for the retailers and customer if they buy a certain level of biscuit quantity.

Advertising and promotions: 35-40 % of its turnover Brand ambassador: shahrukh khan and surya (south India) Official sponsor of the wta tennis championship Other initial promotional activities - on buses, print media, hoardings, tv and radio

Promotion At The Launching Time

The brand is supported with television campaigns across national and vernacular media beginning august 2003 that is distinct, highlighting the product attributes, quality and the new first time in the market offerings from Sunfeast. During the launch phase, consumer promotions was conducted across retail outlets for every purchase of Sunfeast marie & Sunfeast cream biscuits 75gms of glucose biscuits free.

Promotion By Advertisement

T h e c o m p a n y s a y s t h e b r a n d i s n o w a v a i l a b l e i n n e a r l y 1.8 million outlets well differentiated advertisements, some which showed a complete cream world with cream rivers, cream mountains and cream trees, were targeted at kids watching cartoon channels. In april 2005, Sunfeast launched its major campaign. It signed on hindi film actor, shah rukhkhan as its brand ambassador.

In august 2003 a month after its launch , the company undertook the major sampling exercise to promote the product. For two years then, the brand did all the usual rounds. Riding behind buses blocking television spots, booking that corner place in your favourite news paper etc.. Sunfeast : spreading the smile

Advertisements Targeting
Mothers (awareness ads)

Children (cartoon channels)

Teenagers (Sunfeast open & Mumbai marathon and Bangalore marathon.)

Masses population of India (srk &surya)

Sales promotion-huge sample distribution at introduction stage

Conducted mass campaign (hara banao campaign)

Positioning
Marie Light: Tea-Time Biscuit Sunfeast Milky Magic: Nutritious Biscuit For Children Sunfeast Benne Vita Flaxseed: Healthy Biscuit Sunfeast Nice: Nice Moments Dark Fantasy: Premium Biscuit Sunfeast Snacky: Family Biscuit

Golden Bakery: Rich Biscuit

Can a cigarette manufacturer succeed in marketing biscuits? What do management thinkers say about unrelated diversification? Unrelated

diversification will succeed if it is based on the core competency of the firm. So what is the core competency of ITC that is being leveraged when it decided to enter the foods market. ITC relies on three core competencies 1. The depth of distribution 2. Its brand building capabilities. 3. The ability of quality outsourcing. Sunfeast has been a success because of these three competencies of ITC. Sunfeast was launched in 2003 was one of the diversification forays of ITC which wanted to establish itself as a serious fmcg player from its position of tobacco products leader. ITC had the advantage of the well entrenched distribution setup which is matched only by hll. Indian biscuit market is estimated to be around 4500 - 5000 crore. The market is dominated by parle and britannia. Parle is the volume leader with brands like parle- g, krackjack and monaco while britannia is the value leader with brands like 50: 50, milk bikis, tiger, goodday etc. The biscuit market has now moved from the core glucose base to more value added categories. The key markets are up, Maharashtra, and tamilnadu. The per capita consumption of biscuits in India is only 1.2 kg per annum while the per capita consumption is 15 kg p.a in developed nations. While the glucose biscuits are popular in rural India , urban market prefer cream biscuits. To establish a brand in this tough market was never easy. Sunfeast using heavy promotion and careful brand building have already garnered 10% market share in this market. Sunfeast is positioned as an exciting brand. This platform is

supported by a series product launches. Since biscuits are convenience goods , new tastes and new products are essential to built excitement in the market. Sunfeast have maintained continuous series of new launches like milky magic, coconut, strawberry, pineapple cream etc. Recently Sunfeast launched a product for the premium segment named dark fantasy" with chocolate flavor and cool advertisements. Sunfeast have used the baseline spread the smile" as the brand essence and the brand is endorsed by shah rukh khan. The use of srk makes sense since the tg is mainly kids . Srk have the energetic persona that goes well with the brand. The mascot of Sunfeast is the animated sun which is the symbol of contentment, satisfaction and pleasure. This mascot has been well received by the tg. The ad campaigns are catchy and full of colors and excitement. The product is also of very high quality. Thus Sunfeast has managed to get all the winning combinations in the right mix. Sunfeast is also trying to garner more share in the marie category which is estimated to be around 600 crore. It launched the marie with different flavours that has enabled it to gain a strong foothold in that category. To expand the brand in to the snack category Sunfeast has launched pasta treat which talks of a healthy snacking option for kids. Sunfeast also uses lot of below the line promotions for brand building. It sponsors Sunfeast open, a recent initiative aiming at the school kids by providing them an opportunity to enhance creativity through painting competitions, hara bano campaign which set a world record in planting maximum number of saplings etc. The constant product launches and careful promotions have enabled Sunfeast to move to the top league in the biscuit market with in a span of 3 years. We may see this brand expanding to many categories.

4.4.2 Differentiation Marketing And Distribution Strategy For Sunfeast Biscuits

Before entering the biscuit business, ITC did a lot of market research and concluded that there were lots of strategic gaps where ITC could benefit. New recipe and innovation was the key here. ITC took a calculated risk by launching Sunfeast with six ranges. However, ITC was still producing category favorites like glucose, marie and bourbon cream. The strategy followed by ITC here was the differentiation strategy. They differentiated their biscuits from the other types of biscuits available in the market. Their aim was to achieve competitive advantage by offering better biscuits at the same price. The company follows the going rate pricing that is the price of the product depends upon the Competitors price. The firm chooses pricing more or less same as that of the market leader. ITCs e Chaupal which is kind of centre of excellence also augurs well for the Sunfeast brand. Biscuits industry had not witnessed any major product innovation in years, so ITC launched innovations such as orange-flavoured marie, marie light and butterscotch-flavoured cream biscuits

4.4.3 Business Level Strategic Analysis

Resources

The physical resources such as the raw material are available in abundance in India. Indian being an agrarian economy the procurement of edible oil, wheat, flour, butter, cocoa, etc is comparatively easier and cheaper.

Capabilities The state of art factories of ITC-Sunfeast are one of the capabilities of the company. The technological advantages of the company combined with the labor have allowed the company to develop their resources well into their capabilities.

Core Competencies ITC knows how to capitalize on its core competencies, which include unmatched distribution, reach, superior brand-building capabilities, effective supply chain management and acknowledged service skills. This has also helped them to enter into the biscuits division (Sunfeast).

Depth of distribution reach

Superior brand-building capabilities

Effective supply chain management and acknowledged service skills in hoteliering

Marketing Strategies of ITC Sunfeast

Innovation in the product line -- biscuits with butterscotch cream with actual granules in the cream, strawberry cream with flavor-enhancers and orange-flavored marie. gained an edge from the well established distribution network of its tobacco business. signed up big film stars like shah rukh khan and southern star surya as brand ambassadors for Sunfeast. branded the wta tennis tournament with promos starring tennis stars, Mahesh bhupati and saniamirza needs further embellishments.

CHAPTER 5 : RECENT ANALYSIS OF ITS BISCUIT SEGMENT

The innovative products under this brand have garnered significant market standing in a short span of time and are being increasingly accepted by consumers as a credible new option to the established players in the industry.

During the year, Outsourced and distributed manufacturing capacities were geared up to support the increase in scale of operations. The business is in the process of establishing its own production facilities across the country, including in tax-exempt zones, with a view to servicing proximal markets in an efficient and cost-effective manner. The biscuits segment of ITC foods division, spearheaded by the Sunfeast range, is now witnessing a situation of demand outstripping supply.

They have chosen the partnership route Instead of the outsourcing route to augment the supply. the supply position for biscuits right now was not comfortable and that efforts were on to add to capacities. Maintaining consistent quality at lower prices while keeping overall investments down is a formidable challenge. This is particularly so for confectioneries, where it was absolutely essential to maintain attractive price levels.

CHAPTER 6: PORTERS FIVE FORCE ANALYSIS

Threat Of New Entrants High entry barrier industry, threats from other companies planning to enter , ,eg. Kraft foods

Power of Suppliers Company dominates suppliers

Power of Buyers Buyers dominate company

Presence of Substitutes Branded as well as homemade bakery items, snacks, chips, wafers

Competitive Rivalry Parle, Britannia etc

CHAPTER 7 : SWOT ANALYSIS OF ITC SUNFEAST

7.1 Strengths
ITC leveraged it traditional businesses to develop new brands for new segments. For example, ITC used its experience of transporting and distributing tobacco products to remote and distant parts of India to the advantage of its fmcg products. ITC master chefs from its hotel chain are often asked to develop new food concepts for its fmcg business.ITC is a diversified company trading in a number of business sectors including cigarettes, hotels, paper, agriculture, packaged foods and confectionary, branded apparel, personal care, greetings cards, information technology, safety matches, incense sticks and stationery.

7.2 Weaknesses
The companys original business was traded in tobacco. ITC stands for imperial tobacco Company of India limited. It is interesting that a business that is now so involved in branding continues to use its original name, despite the negative connection of tobacco with poor health and premature death. to fund its cash guzzling fmcg start-up, the company is still dependent upon its tobacco revenues. Cigarettes account for 47 per cent of the companys turnover, and that in itself is responsible for 80% of its profits. So there is an argument that ITCs move into fmcg (fast moving consumer goods) Is being subsidized by its tobacco operations. Its gold flake tobacco brand is the largest fmcg brand in India. this single brand alone holds 70% of the tobacco market.

7.3 Opportunities
Core brands such as aashirvaad, mint-o, bingo!, sun feast (and others) can be developed using strategies of market development, product development and marketing penetration. ITC is moving into new and emerging sectors including information technology, supporting newer business solutions. E-chou pal is a community of practice that links rural Indian farmers using the internet. This is an original and well thought of initiative that could be used in other sectors in many other parts of the world. It is also an ambitious project that has a goal of reaching 10 million farmers in 100,000 villages.ITC leverages e-chou pal in a novel way. The company researched the tastes of consumers in the north, west and east of India of atta (a popular type of wheat flour), then used the network to source and create the raw materials from farmers and then blend them for consumers under purposeful brand names such as aashirvaad select in the northern market, aashirvaad mp chakki in the western market and aashirvaad in the eastern market. This concept is tremendously difficult for competitors to

emulate. Per capita consumption of personal care products in India is the lowest in the world offering an Opportunity for ITCs soaps, shampoos and fragrances under their wills brand.

7.4 Threats
The obvious threat is from competition, both domestic and international. The laws of economics dictate that if competitors see that there is a solid profit to be made in an emerging consumer society that ultimately new products and services will be made available. Western companies will see India as an exciting opportunity for themselves to find new market segments for their own offerings. ITCs opportunities are likely to be opportunities for other companies as well. Therefore the dynamic of Competition will alter in the medium-term. Then ITC will need to decide whether being a diversified conglomerate is the most competitive strategic formation for a secure future

Key Challenges
Back in 2003, nobody thought Sunfeast would have consumers eating out of its hands. Says Naware, "Seven per cent in less than three years is something that we could have only dreamt about." Importantly, industry barometer AC Nielsen has indicated that both Parle and Britannia are losing market shares. According to the AC Nielsen retail sales audit in March 2006, both Britannia and Parle have lost volumes. Britannia's shares have dropped from 35.8 per cent in 2004-05 to 30.5 per cent in May 2006 (volumes). Parle's shares have also dropped from 42.2 to 38.4 per cent in the same period. Even Priya Gold has seen a minor dip from 6.4 per cent to 5 per cent. ITC's Sunfeast has been a big gainer with its share increasing from 2.7 to 6.7 per cent.

In terms of value, Britannia leads the market with 37 per cent market share, followed by Pales 31.3 per cent and ITC's 6.3 per cent. Nevertheless, the gap is still wide. Sunfeast still has a long way to go. But what can the bigger players do? Alagh has an interesting observation. Says he, "Biscuits have always been a low margin, high volume game. Both Britannia and Parle have very high volumes and can easily afford to lower their margins." A potential after-effect? Sunfeast too may have to drop its prices to be in the reckoning and this will squeeze its margin even lower. While the full game is yet to be played out, for the moment the sun seems to be shining on Sunfeast.

Creaming The Market. . .

Innovation in the product line -- biscuits with butterscotch cream with actual granules in the cream, strawberry cream with flavour-enhancers and orange-flavoured marie.

Gained an edge from the well established distribution network of its tobacco business.

Signed up big film stars like Shah Rukh Khan and southern star Surya as brand ambassadors for Sunfeast.

Branded the WTA tennis tournament with promos starring tennis stars, Mahesh Bhupati and Sania Mirza.

Needs Further Embellishments

Big brand ambassadors, but not strong enough advertising campaigns for big brand recall.

The gap between the number three and the top two slots is too wide. Competitors can play the low price game as they have volumes to support.

Who Are The Main Competitors?

The Major Players In The Biscuit Industry:

The latest statistics of 2010 point out that the total production of biscuits in India is estimated to be around 30 lakh mt, the organized sector accounts for 65% and the unorganized sector accounts for 35%of the total industry volume. The organized sector is valued at above rs 8000 crores. the biscuit industry is estimated to grow over 15-17% in the next few years and the per capita consumption of biscuits in India is 2.0 kg. India is ranked 3rd after us and china amongst the global biscuits producers. The export of biscuits is approximately 17% of the annual production and the imports are not significant amount as compared to the total consumption. The penetration of biscuits in urban and rural

market is 85% and 55% respectively. The biscuit industry employs almost 3.5 lakh people directly and 30 lakh people indirectly. Parle ITC Sunfeast Britannia priyagold

Future Competitions:
GlaxoSmithKline consumer healthcare has come up with junior horlicks biscuits-toddler biscuit category. Pepsico India launched biscuit brand aliva, it will be produced by food division frito lay India. United biscuits (uk), worlds third largest biscuit company, is set to enter India market.

CHAPTER 8: CONCLUSION AND RECOMMENDATION

Conclusion

Consumer behaviour will help to learn consumer buying attitude. In biscuits not get much more awareness from public, so kindly to improve the advertisements and other improvements process. The most biscuits consumer is student and housewife, to introduce more flavors and improve the taste and quality of the biscuits. The most buyers to consume under quality of the biscuits and other option are price. To give important to street vendors because more number of people consumed under street vendors. So kindly improve the advertisement and give more awareness to the people.

Suggestions
Sunfeast have to give attention towards advertisement. Sunfeast have to maintain its status by providing more facilities. Develop more variety of biscuit so that the customer could not return in case of lack of choice. Since the Sunfeast biscuit is not very much recognized so the company should take necessary steps not only on advertisements but the company should also give emphasis on other gift schemes. The company should start the very heavy advertising campaign so that itis easy for them to differentiate with other biscuits available in the market. Improve the prestige & brand name of biscuits The price of biscuit should be reduced.

Bibliography

http://www.itcportal.com/

http://www.scribd.com/doc/62703692/ITsC-Sunfeast-PPT-10062-10074-1008610098-10110-new

http://www.scribd.com/doc/53618978/MAC-ITC-Sunfeast

http://tnmg4u.com/itc-brands-in-food-category-part-1/

http://marketingpractice.blogspot.in/2006/01/sunfeast-spreading-smile.html