ACKNOWLEDGEMENT

I owe a great thank to people who have helped and supported me during the researchonmytopic. My deepest thank is to Dr.Bhavna chadda and Ms.Dilpreet Kaur for guiding and correctingvariousdocumentswithattentionandcare.Theyhavetakenthepainto gothroughtheprojectandmakenecessarychangeswhenrequired. I extend my heartfelt thanks to the team of ITC organization that helped me in seeking all the required information. I would also thank my family and friends in helpingmeatrequiredstages.

TABLEOFCONTENT S.NO.
1 2

PARTICULARS
Introduction Organizationstrategies 3levelofstrategies Environment

PAGENUMBERS
38 1022 2330 3151 5256 5769 7071 72

Customerstrategy Operationstrategy

4 5

Conclusion References

CHAPTER1 INTRODUCTION

 ITCisoneofIndia'sforemostprivatesectorcompanieswithamarketcapitalization ofnearlyUS$19billionandaturnoverofoverUS$5billion.ITCisratedamongthe World's Best Big Companies, Asia's 'Fab 50' and the World's Most Reputable Companies by Forbes magazine, among India's Most Respected Companies by BusinessWorldandamongIndia'sMostValuableCompaniesbyBusinessToday.ITC ranksamongIndia's`10MostValuable(Company)Brands',inastudyconductedby BrandFinanceandpublishedbytheEconomicTimes.ITCalsoranksamongAsia's50 bestperformingcompaniescompiledbyBusinessWeek. ITChasadiversifiedpresenceinCigarettes,Hotels,Paperboards&SpecialtyPapers, Packaging, AgriBusiness, and Packaged Foods & Confectionery, Information Technology,BrandedApparel,PersonalCare,Stationery,SafetyMatchesandother FMCG products. While ITC is an outstanding market leader in its traditional businesses of Cigarettes, Hotels, Paperboards, Packaging and AgriExports, it is rapidly gaining market share even in its nascent businesses of Packaged Foods & Confectionery,BrandedApparel,PersonalCareandStationery. AsoneofIndia'smostvaluableandrespectedcorporations,ITCiswidelyperceived to be dedicatedly nationoriented. Chairman Y C Deveshwar calls this source of inspiration"acommitmentbeyondthemarket".Inhisownwords:"ITCbelievesthat its aspiration to create enduring value for the nation provides the motive force to sustaingrowingshareholdervalue.ITCpracticesthisphilosophybynotonlydriving eachofitsbusinessestowardsinternationalcompetitivenessbutbyalsoconsciously contributingtoenhancingthecompetitivenessofthelargervaluechainofwhichitis part." ITC's diversified status originates from its corporate strategy aimed at creating multiple drivers of growth anchored on its timetested core competencies: unmatched distribution reach, superior brandbuilding capabilities, effective supply chain management and acknowledged service skills in hoteliering. Over time, the

strategic forays into new businesses are expected to garner a significant share of theseemerginghighgrowthmarketsinIndia. http://www.itcportal.com/the_itc_profile/itc_profile.htmltop ITC employs over 26,000 people at more than 60 locations across India. The Companycontinuouslyendeavorstoenhanceitswealthgeneratingcapabilitiesina globalizing environment to consistently reward more than 3,41,000 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:"EnduringValue.Forthenation.FortheShareholder." http://www.itcportal.com/the_itc_profile/itc_profile.html TYPE FOUNDED HEADQUARTERS KEYPEOPLE Public(BSE:ITC) 24August,1910 Kolkata,India Chairman:YogeshChanderDeveshwar Director:K.Vaidyanath CFO:ParthoChatterjee INDUSTRY REVENUE EMPLOYEES WEBSITE 5 FMCG, Hotels, AgriBusiness, Paperboards, Speciality Paper, Packagingand,InformationTechnology 21,000(2007) www.itcportal.com

PERSPECTIVE Vision: Sustain ITCs position as one of Indias most valuable corporations through world class performance, creating growing value for the Indian economy and the Companysstakeholders. Mission: To enhance the wealth generating capability of the enterprise in a globalizing environment,deliveringsuperiorandsustainablestakeholdervalue. PERSPECTIVE As an entrepreneur, one is expected to connect oneself with the external environment such that requisite strategies are formulated & implemented for achieving organizational goals. The organization follows a certain perspective to formulateastrategy.Astrategyhasbeendefinedas:strategyasactioninclusiveof objectivesetting. The3perspectivesofidentifyinganorganizationsstrategyare: 1) 2) 3) An organization follows any one of them or even a mix of the above mentioned perspectives.Belowarethedetailsofwhatallthe3said: 1) William f Glueck (1972) A unified, comprehensive & integrated plan designedtoassurethatthebasicobjectivesoftheenterpriseareachieved. The3adjectivesmeant: a)Unifiedmeansthattheplanjoinallthepartsofanenterprisetogether. b)Comprehensivemeansitcoversallthemajoraspectsoftheenterprise. WilliamFGlueck AlfredDChandler PeterDrucker.

c) Integrated means that all parts of the plan are compatible with each other. 2) Alfred D Chandler (1962) He made a comprehensive analysis of interrelationshipsamongenvironment,strategy,&organizationalstructure. Hefocusedon3majorthings.Theyareasfollows: a) Determinationofbasiclongtermgoal b) Adoptionofcourseofactionstoachievethesegoals. c) Allocationofnecessaryresourcesforcarryingoutthesegoals. 3) Peter Drucker Even the business has money, it will never have enough goodpeople.Ithastosetpriorities. Hebelievedonthe3majorthings.Theyareasfollows: a) Tosetprioritiesofthebusinesscarriedoutbyanorganization. b) Itisbettertopickthewrongprioritythannoneatall. c) Nobusinesscandoeverything. ITC as an organization follows perspective of William F Glueck. The organization concentratesonthefollowing: 1) ValuableCorporation 2) Worldclassperformance 3) Companystakeholders 4) Wealthgeneratingcapability 5) Globalizingenvironment 6) Superior&sustainablestakeholdervalue ITCsperspectivecouldntbeaperspectiveofPeterDruckerbecauseDruckersmain focuswasonToSetPrioritiesandhebelievedthatnobusinesscandoeverything,

Apparently ITC has diversified its business. It has almost every sector like for e.g. FMCG,PersonalCare,Hotels&Infrastructure,Tobacco,Packaging.etc. ITCsperspectivecouldntbeaperspectiveofAlfredDChandlerbecausefocusedon longtermgoals.Hewantedanadoptionofcourseofactionsinhisbusiness,whichin ITCisnotdonemajorly.Hisverybasicpointscouldbeconsidered.Butmajorlythe perspective,whichITCfollows,isofWilliamfGlueck.

CHAPTER2

 A.ORGANISATIONSTRATEGIES
I. CORPORATESTRATEGY ITCisaboardmanagedprofessionalcompany,committedtocreatingenduringvalue fortheshareholderandforthenation.Ithasarichorganizationalculturerootedin its core values of respect for people and belief in empowerment. Its philosophy of allround value creation is backed by strong corporate governance policies and systems. ITCscorporatestrategiesare: Create multiple drivers of growth by developing a portfolio of world class businessesthatbestmatchesorganisationalcapabilitywithopportunitiesin domesticandexportmarkets. Continue to focus on the chosen portfolio of FMCG, Hotels, Paper, Paperboards&Packaging,AgriBusinessandInformationTechnology. Benchmark the health of each business comprehensively across the criteria ofMarketStanding,ProfitabilityandInternalVitality. Competitivebusinesses Blendingskillsandcapabilities Nurturingtalentedandfocusedtopmanagementteams. Needforeffectivecontrolandaccountability. Corecompetencies Distributionreach

10

Superiorbrandbuilding Effectivesupplychainmanagement

II. MARKETINGSTRATEGY ITC started an earnest exercise in creating a new brand image and corporate philosophy by investing in new business categories like personal care, premium apparel, rural business and food. They have a differential marketing strategy type. Rather than acquiring weaker brands to get into new segments inorganically, it createdarangeofnewpersonalcareandbrandedapparelbrands.Alsothrough: Flagshipeventassociationwiththefashionweek Massmediaadvertisinglikemagazines,newspapers,etc.

The company spends roughly 12 percent of its turnover on advertising and marketing,andisalsolookingatfacebookandyoutubetoattracttheyouth,through personalmarketing. FormulationBINGO Bingotouchedachordwithconsumersthroughhumourandirreverentadvertising. On television, the company booked 10 to 15 spots per channel per day on youth channelssuchasMTVandStarWorld,massHindichannelslikeZeeandStarTV,and news channels. It also had around 20 spots on a variety of radio channels and advertisedinmostleadingnationaldailies.Inthetop30cities,over1,000outdoor hoardingsadvertisedtheproduct.Italsocreatedawebsitewww.bingeonbingo.com withoffers,onlinegames,downloadsandevenmobilegames.Accordingtoindustry estimates,ITCspentclosetoRs100croreonmarketing.
http://www.scribd.com/doc/11518224/MarketingStrategyofITCLtd http://www.slideshare.net/rv1709/itcsbingomarketingstrategy

11

 III. DIVERSIFICATIONSTRATEGY Diversification is a form of corporate strategy for a company. It seeks to increase profitability through greater sales volume obtained from new products and new markets.Itcanoccureitheratthebusinessunitleveloratthecorporatelevel.Atthe businessunitlevel,itismostlikelytoexpandintoanewsegmentofanindustrythat thebusinessisalreadyin.thepurposeofdiversificationistoallowthecompanyto enterlinesofbusinessthataredifferentfromcurrentoperations. ITCs diversified status originates from its corporate strategy aimed at creating multiple drivers of growth anchored on its timetested core competencies: unmatched distribution reach, superior brandbuilding capabilities, effective supply chainmanagementandacknowledgeserviceskillsinhotel. FORMULATIONPERSONALCARE InlinewithITC'saspirationtobeIndia'spremierFMCGcompany,recognizedforits worldclassqualityandenduringconsumertrust,ITCforayedintothePersonalCare businessinJuly2005.Intheshortperiodsinceitsentry,ITChasalreadylaunchedan array of brands, each of which offers a unique and superior value proposition to discerning consumers. Anchored on extensive consumer research and product development, ITC's personal care portfolio brings worldclass products with clearly differentiatedbenefitstoqualityseekingconsumers.

12

ITC

FMCG

HOTELS

PAPERBOARDS ANDPACKAGING

AGRIBUSINESS

INFORMATION TECHNOLOGY

Cigarettesand cigars

Paperboards

Agricommodities andruralservices

Food

Specialitypapers

Echaupal

Lifestyleretailing

Packaging

Leaftobacco, spices&agri inputs

Personalcare

Educationand Stationery

Safetymatches

Agarbattis

www.scribd.comITClimiteddiversificationstrategy

IV. DISTRIBUTIONSTRATEGY An organization or set of organizations (gobetween) involved in the process of making a product or service available for use or consumption by a consumer or businessuser.

13

ITC uses FIFO method to reduce the wastage of goods due to expiry. FIFO, which stands for "firstinfirstout," is an inventory costing method, which assumesthatthefirstitemsplacedininventoryarethefirst,sold.Thus,the inventoryattheendofayearconsistsofthegoodsmostrecentlyplacedin inventory. Theyalsokeepthegoodonconstantmovefromlowsalestohighsalesarea. The company collects al the expired goods four times a year and destroys them. Retailers must return expired or damaged products within six months after thedateofexpiry. Adjustmentforthemisdoneinthreemonthstime. ITCprovidestheirretailerswithracks,hangersetctodisplaytheproducts. The benefits received by the retailers depend upon their sales volume and alsothelocationoftheirshops. ITChashiredIMRBtodothemarketresearch.

Productshavetoessentiallybeavailableinthemarketatallgivenpointsoftime andatallgivenpointsofpurchase.Thesupplyofproductstakesplacevirtually onadailybasisinfixedquotasorotherwise,toretailersaspertheirrequisitions andtheanticipationofdemandandtheperformanceofproductsintherecent past.ITChasaverystrongdistributionnetworkandtheskeletonofthesystem remainssameforallitscompanies. Distributorisselectedbasedon: Deliveryvan,infrastructure,computer,warehouse,salesforce. Populationbases(1distributorper2025thousand)

Ordersareplacedtothedistributorsonweeklybases,totheretailerstwiceaweek, paanwalas daily. Payment is done mostly on cash basis, sometimes post date cheques and rarely only credit is allowed on cigarettes. Transportation used is the deliveryvans,rickshaws,cyclesandautos.

14

Separateforeachproduct line. contractmanufacturing backwardintegration Echaupal

MANUFACTURINGUNIT

Storealltheproducts

STORAGE HUBS

Exclusivebasedon population needtostockallFMCG productsexcptstationery.

DISTRIBUTORS

Wholesalers

Retailers

Paanwalas

Malls

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FORMULATIONBINGO ITC had a wellestablished distribution network through its cigarette and tobacco related offerings that was leveraged in the case of Bingo. Further, the company distributed 4lakh racks across all retailers to display the brand at all pointsofsale. Within6months,Bingowasavailableacross2,50,000retailersacrossthecountry.A crucialalliancewithfuturegroupthatleadtoallthefuturegroupretailoutletslike bigbazaar, food bazaar stocking only ITCsBingo. HORECA(hotels, restaurantsand cafes), local betel shops are all being used to distribute bingo to a wide range of population. V. PRICINGSTRATEGY Pricingstrategyreferstomethodcompaniesusetopricetheirproductsorservices. Almostallcompanies,largeorsmall,basethepriceoftheirproductsandserviceson production,laborandadvertisingexpensesandthenaddonacertainpercentageso theycanmakeaprofit.Thereareseveraldifferentpricingstrategies. The pricing of the ITC food division depends upon the Customers demand schedule,thecostfunctionandthecompetitorsprice.Thepricingofthecompany issuchthatitcaterstotheneedofallincomegroupsofpeoplebutspecialprovision hasbeenkeptforLowandmiddleincomegroup,andtheirpricingarecompetitive withrespecttootherplayerslikeBritannia,ParleandBriskfarm. ThecompanyfollowstheGoingratepricingthatisthepriceoftheproductdepends upon the competitors price. The firm chooses pricing more or less the same as Marketleader. TheBasicConceptusedbyITCis: PRICEISSOMETHINGWHICHCUSTOMERISREADYTOPAYFORYOURPRODUCT ThemainobjectiveofITCistocompeteeffectivelywiththeplayerswhoarealready inthemarket.Hence,itlaunchesadirectfrontalattackbyintroducingsimilarpriced

16

SKUs. ITC already enjoys cost advantage over competitors through its Echaupal initiative. This also facilitates timely supply of raw material. ITCs printing and packagingbusinessalsoleadtohighquality,costeffectiveandinnovativepackaging. VI. SOCIALSTRATEGY Envisioning a larger societal purpose has always been a hallmark of ITC. The companyseesnoconflictbetweenthetwingoalsofshareholdervalueenhancement andsocietalvaluecreation.Thechallengeliesinfashioningacorporatestrategythat enablesrealizationofthesegoalsinamutuallyreinforcingandsynergisticmanner. 1. Asasociallyresponsiblecorporatecitizen,ITCendeavorstocreatevalueforthe Indian society in multiple ways, one of them being preservation of India's rich cultural heritage. ITC has made significant contribution to the promotion of Indianclassicalmusic,theatre,artandcuisine. ITC established the prestigious ITC Sangeet Research Academy (ITCSRA) at Kolkata in 1978 with the objective of preserving and promoting Hindustani ClassicalMusic. ITC's hotels business (ITCWelcomgroup) actively supports the cause of theatre. 'WelcomTheatre', launched a decade ago, showcases the best of Indiantheatreproductions,especiallytheexperimentalstage. The Shristi art galleries located at various Welcomgroup hotels regularly sponsortheworksofupcomingIndianartists. ITCWelcomgroup has done pioneering work in reviving India's Heritage cuisine.Theseinclude: i. Dumphukt ii. Bukhara iii. Dakshin 2. ITCs commitments in agricultural R&D and knowledge sharing have spanned vital aspects of competitiveness efficient farm practices, soil and water management. 17

3. In 2000, harnessing the empowering force of information technology and its scalabilty,ITClaunchedeChoupalaknowledgeportalprovidingfarmerswitha range of information and services. Designed to enable them to bargain collectivelyandenhancetheirtransactivepower.ITClaunchedMissionSunehra Kal, a rural capacity building programme fostering local initiatives to develop waterandforestresources,openupnewnonfarmlivelihoods,empowerwomen economicallyandexpandprimaryeducation. 4. ITC has made significant efforts in solid waste recycling and nearly 100% of wastesgeneratedbyitsUnitsisrecycled. 5. ITCssocialdevelopmentInitiativeshave:

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MILESTONES e - Choupal 4 million farmers empowered, 6,500 e - Choupals installed

Social & Farm 119,919 hectares greened, generating 53.77 million Forestry person - days of employment Watershed 73,884 hectares Development Brought under soil and moisture conservation Women's 15,763 women members Empowerment 1343 self - help groups Livestock Development 260 Cattle Development Centres Primary Education VII. PRODUCTSTRATEGY Ouruncompromisingcommitmentinprovidingworldclassproductsandservicesto satisfycustomersonaconsistentbasisissupportedbyconcernforthesafetyofour consumers/customers. AllproductsinourCigarettesbusinessareinternationallybenchmarkedandare supportedbycomprehensiveresearchandtestingfacilitiesattheITCResearch& Development Centre, where laboratories conform to ISO/IEC 17025 and are certifiedbyNABL(NationalAccreditationBoardforTestingandCalibration).The useofproprietarysoftwarefacilitatesregularmonitoringandreviewofstringent productspecificationsandrawmaterials.Themanufacturingunitshavestateof theartfacilities,cuttingedgetechnologyandinternationalqualitymanagement systems,whichareconstantlyreviewedandupgraded. Withtheobjectiveofpreservingcustomerhealthandsafety,theFoodsbusiness ensures adherence to highest levels of quality, safety and hygiene standards in manufacturing processes and in the supply chain. The business operates Covering 2,81,000 children Through 2,554 Supplementary Learning Centres till date

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predominantly on a model of outsourced manufacturing. The quality performance of each manufacturer is monitored on a daily basis. 33 out of 37 manufacturinglocationshavealreadybeenHazardAnalysisandCriticalControl Point(HACCP)certifiedandtheremaininglocationsareprogressingfasttowards achievingthiscertification. All the products in our Education & Stationery Products business use approved nonhazardousmaterialse.g.ECF(ElementalChlorineFree)paper,ink,dyesetc. Since the primary consumers of these products are children, stringent process qualitycontrolmeasuresareinplacetoensuresafeproducts. In our Agarbatti business IFRA (International Fragrance Resource Association, Geneva)approvedchemicalsareusedinthefragrancesforthemanufactureof MangaldeepAgarbattis.Thelaiddownprocessesinmanufacturingaredesigned toensureproductsafetyandconsistency. In our Personal Care Products business, products have been created through extensive research and consumer engagement. The products have been developed in the stateoftheart R&D centre in Bengaluru, by our team of highly skilled professionals over the last several years. The formulations use internationally recognised safe ingredients and are subjected to the highest standards of safety and performance. The manufacturing facilities adopt stringent hygiene standards, benchmarked manufacturing practices and robust qualitysystems. In our Information Technology business quality of the software is assured throughwelldefinedQMSfollowingSEICMMframeworkandcertifiedbyISO 90012000 IT guidelines. We ensure the security of the software by using standard software packages from reputed specialist organisations. Effective accesscontrolandassetmanagementmechanismsarecertifiedunderISO27001 frameworks. In our Hotels business, policies are in place to ensure the highest standards of customerhealth,securityandsafety.Effectivemeasuresaretakentoensurethat thesepoliciesareimplementedandstandardscontinuallyimprovedupon. OurPaperboards&SpecialtyPapersbusinessisthepioneeringmanufacturerof elemental chlorine free (ECF) pulp in India, which ensures the levels of dioxins 20

and furans in the pulp to be less than 1 PPT (Parts Per Trillion). The global migrationtestisconductedperiodicallyonallfoodgradepaperandpaperboards forcompliancewiththeUSFDAstandardsandtoadheretoprescribedlimitsfor presence of heavy metals. All manufacturing ingredients are procured from reputedinternationalsuppliersandmustconformtoUSFDAstandardsaswellas BFRrecommendationNo.36.Weensurethatthecomponentsoffoodallergens listedinECdirective2003/89/EC,USFDAfoodallergenlabellingandconsumer protectionarenotusedinanyofthevirgingradeboardsandpapers. The Bollaram Unit, manufacturing food grade board for direct food contact, is third party certified in accordance with BRC/IoP (British Retail Consortium/ InstituteofPackaging)standards.Pira,arenownedtestingandconsultancyfirm, now certifies our Indobarr and Cyber Propac brands to be compliant with GermanBFRstandardsforFoodPackaging. InourSafetyMatchesbusiness,allproductsconformtothespecifiedstandards asperBIS.Inaddition,allmatchsticksinourproductsarespeciallycarborisedto preventafterglowtherebyenhancingconsumersafety. OurPackaging&Printingbusinessusesonlynonhazardousmaterials/filmsand paperboards from either our own Paperboards & Specialty Papers business or other approved suppliers. The Chennai unit is the first in India to achieve IQRS (International Quality Rating System) Level 8 (Certified by DNV) and the MungerunitisprogressingtowardsIQRSLevel7. In the Agri Business products are sold or exported entirely as per customer specificationsandrequirements.ProductsinChoupalSaagarsandChoupalFresh aresourcedfromreputedcompaniesasperstatutorynorms.Inaddition,fruits andvegetablesinChoupalFresharesourcedfromfarmersandmandis.Stringent processcontrolandqualityinspectionnormsareinplacetoensurethequalityof allproducts. In the Leaf Tobacco business the products are manufactured as per customer specifications. The customers in this business are large domestic and international Cigarette Manufacturers and Tobacco Merchants. We ensure that the specifications are meticulously complied with. Hygiene and Infestation ManagementSystemstocontrolinfestationareinplace. 21

OurAgriExtensionServicesaredesignedtoensureSeedIntegrity,PesticideResidue LevelmonitoringandNonTobaccoRelatedMatter(NTRM)eliminationtopromote Product Hygiene standards. Several additional measures to eliminate NTRM across thevaluechainwereimplementedduringtheyear. Both Anaparti and Chirala GLTs have been certified to ISO 9001, IQRS Level 7 and otheraccreditedthirdpartycertifications. With a view to provide the highest standards of customer satisfaction, health and safetyinourLifestyleRetailingbusiness,priortomanufacture,inputsaretestedfor conformanceinourinhousestateoftheartR&Dcentre,accreditedwithNABLand certifiedtointernationalstandards.ProductQualityismonitoredthroughaninternal rating system (PQRS) along with an externalAQLnorm followed internationally for apparel.
ITCsustainabilityreport2010

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3LEVELSOFSTRATEGIES Strategycanbeformulatedonthreedifferentlevels: Corporatelevel Businessunitlevel Functionalordepartmentlevel CORPORATELEVELSTRATEGY: Corporatelevelstrategyfundamentallyisconcernedwiththeselectionofbusinesses inwhichthecompanyshouldcompeteandwiththedevelopmentandcoordination ofthatportfolioofbusinesses. Itsabroadlevelstrategyandallitsplanofactionsisatcorporateleveli.e.whatthe companyasawhole.ItcoversthevariousstrategiesperformedbydifferentSBUs. Strategiesneedsshouldbeinalignwiththecompanyobjective. The strategy is already been explained above under organizational strategies. TYPEOFBUSINESSESOFITC:

FMCG

Hotels

Paperboards, Speciality Paper, Packaging

Agri Business

Information Technology

COMPETITION ITCsmajorcompetitorsarenirmaltd.,GodfreyPhillip,GoldenTobacco,Kothari Product,VST,HUL.etc.amongstthemITCcompetesimmenselywithnirmaltd.

www.quickMBA.comStrategicmanagementhierarchiallevelsofstrategy

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 NIRMALTD. NirmaisoneofthemostrecognizableIndianbrands.Its storyisaclassicexampleofthesuccessofIndian entrepreneurshipinthefaceofstiffcompetition.Nirmatook onthemightofgiantmultinationalsandwroteanewchapterintheIndian corporatehistory.Startingasaonemanoperationin1969,today,Nirmahasabout 14,000employeebaseandannualturnoverofmorethanRs.25,00crores. BUSINESSUNITLEVELSTRATEGY Astrategicbusinessunitmaybeadivision,productline,orotherprofitcenterthat canbeplannedindependentlyfromtheotherbusinessunitsofthefirm. ITCLtd.operatesvariousbusinessescomprisingofcigarettes&cigars,foods,lifestyle retailing, personal care, education & stationery, safety matches, agarbattis and more. Business unit taken within ITC Ltd. personal care products that falls under the categoryofFMCG. PersonalCareProducts: This business continued to expand its portfolio Fiama Di Wills, Vivel Di Wills, Vivel andSuperiabrands. InlinewithITC'saspirationtobeIndia'spremierFMCGCompany,recognisedforits worldclassqualityandenduringconsumertrust,ITCforayedintothePersonalCare businessinJuly2005.Intheshortperiodsinceitsentry,ITChasalreadylaunchedan array of brands, each of which offers a unique and superior value proposition to discerning consumers. Anchored on extensive consumer research and product 24

development, ITC's personal care portfolio brings worldclass products with clearlydifferentiatedbenefitstoqualityseekingconsumers. ITC's Personal Care portfolio under the'Essenza Di Wills','Fiama Di Wills', 'Vivel Di Wills' 'Vivel UltraPro', 'Vivel'and'Superia'brands has received encouraging consumerresponseandisbeingprogressivelyextendednationally. COMPETITON: FiamadiwillsmajorchallengersincludeHULsdoveandVaseline,Nivea,L'Orealand GarniershampoosandConditioners.
Hautemarketing,thefaceofmarketingbyonkarpandey

25

26

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 FUNCTIONALLEVELSTRATEGY The functional level of the organization is the level of the operating divisions and departments. The strategic issues at the functional level are related to business processes and the value chain. Functional level strategies in marketing, finance, operations,humanresources,andR&Dinvolvethedevelopmentandcoordinationof resources through which business unit level strategies can be executed efficiently andeffectively. InITCorganization,allthefunctionsworkverticallythroughoutallitsbusinessunits. Alltheunitsoperateonthesameconceptstated.Thosefunctionscomprisesof: FINANCE ITCoperatesaFinancefunctionthatservesallitsbusinesses.TheFinancefunction in ITC proactively partners the various businesses of ITC. The functional role is a dynamicamalgamof3distinctdimensions,namely,thatofaValueStrategist,aRisk & Opportunity Manager and Service & Solution Provider. ITC's multibusiness context provides opportunities for working in a wide range of business environments,enablinggrowththroughprofessionaldevelopment. TECHNICAL 17 factories, best in class technology, state of the art facilities, diversity in roles, processesandinbusinessesismajorTechnicalfunctionsofITC.TheobjectiveofITC's Technical function is to service the market with worldclass products and huge investmentsaremadecontinuouslytoremainatthecuttingedgeoftechnologyand mostimportantly,towardstheenrichmentanddevelopmentofourhumancapital. SUPPLYCHAINMANAGEMENT Theobjectiveofsupplychainfunctionistoensurethatproductsareavailablealways fresh,attherighttimeandintherightplace.ThecomplexityofITC'sSupplyChain networkcanbegaugedbythefactthatITCcurrentlyhasmorethan50warehouses

28

and70factoriesspreadacrossthecountryandover1200truckstransportingITC's goodsonadailybasis. The supply chain function in ITC is responsible for distribution of 18 product categories,75subproductcategoriestoover2millionoutletsdistributedover1lakh markets. The wide product range, uniqueness of each category in terms of requirement,largenetworkoperationandearlyresponsibilitiesmakeacareerinthe supplychainfunctionextremelychallengingandenriching. SPECIALISTS ITC recognizes the need to nurture specialism and expertise in areas that give the Companyadistinctcompetitiveadvantage. Certain positions have been identified to be "specialist" in nature. These include Research Scientist, Leaf Blender, Agronomist, and Legal Resource in Trade Marks, TobaccoandHealth,PaperMaker,ForexDealer,CommodityTrader,Chef,Foodand Beveragespecialist,etc. ExtensiveinsightsgainedbyITCthroughitsnumerousconsumerengagementshave providedtheplatformforitsR&DandProductDevelopmentteamstodevelopfiama diwills,differentiatedproductsthatmeettheconsumer'sstatedandinnateneeds. Theproductformulationsuseinternationallyrecognisedsafeingredients,subjected tothehigheststandardsofsafetyandperformance. HUMANRESOURCES Withover26,000employeesacrossthegroup,scoresofmanufacturingfacilitiesand operations spread all over the country. With a legacy of over a hundred years, management of the human resource relies heavily on the wealth of experience of thepastandsimultaneouslyconstantlyreinventsitselftoremaincontemporaryand contributetotheachievementofthestrategicobjectives. ITC'sHumanResourcespoliciesandstrategiesseektoensurethatHRSystemsand processesfocusonbuildingacustomerfocusedorganizationthatfurtherenhances

29

theorganizationalcapabilitytocompeteandwinthemarket.PeopleareITC'sunique source of competitive advantage and HR Systems and processes ensure that the potential of the human resources is leveraged to enhance the wealth generating capabilityoftheenterpriseandinbuildingawinningorganization. Therearevarieddynamicsofthefunctionthatcomesintoplayindifferentbusiness scenarios.

http://www.itcportal.com/ 30

B.ENVIRONMENT
FunctioningofITCLtd.underdifferentenvironmentsituations: 1. RecyclingandWasteManagement Resourceconservation 100%recycling Creating Wealth out of Waste use of post consumer waste as raw material 2. SignificantAirEmissions 3. WaterManagementStewardship 4. EnvironmentalPerformance ClimateChangeandSustainableDevelopment WaterManagementStewardship RecyclingandWasteManagement SignificantAirEmissions MaterialSustainabilityinITC'sBusinesses 5. ClimateChangeandSustainableDevelopment HolisticTripleBottomLineapproach Ensuringlowerspecificwaterandrecyclingwastewater Sustainedeffortstoensurezeroeffluentdischarge IntegratedWatershedManagementProgrammes WaterPositiveforthe9thyearinarow Cleanerfuels Monitoringcombustionefficienciestoachievelowerspecificemissions Investmentsinstateoftheartpollutioncontrolequipment

31

Enhanceduseofrenewableenergy Establishmentofgreenbuildings Reductionofspecificenergyconsumption AlignmentwiththeNationalActionPlanonClimateChange(NAPCC) NaturalResourceAugmentationthroughafforestationandsoil&moisture conservationprogrammes CarbonPositiveforthe6thyearinarow.

BASICPARAMETERS:5PS The following are the basic parameter to develop the competitive advanatge i.e. 5 PsofthepersonalcareunitofITCLTD. PRODUCT EssenzaDiWills: It launched Mikkel A Mens Prestige Fragrance. The flagship brand in Consumer Care & Lighting stable and the 2nd largest brand of soap in India in the popular segmentofthecategory.Thebrandenjoystwodecadesoftrustsinceitslaunchin 1986 and has grown to be counted amongst the top brands in the Country in an intensivelycompetitivemarket.

Fiama di wills: The popular and muchloved brand of ITC Products has been a
favoriteofpeopleformanyyears.Alldifferentsoaps,shampooandshowergelsin its range are having feelfresh fragrance and high TFM index. Its range covers an economic Limefresh. For decades, fiama di wills Original is one of the best soaps made in India. It had a simple redcover which attracts none! But was still able to sustain itself in the market. The eyecatching and vibrant packaging symbolizes a sense of adventure, zest and action. The new range will be available across the country at modern retail and other outlets and will be supported by highimpact advertisingontelevision,print,outdoor,onlineandradio.

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Vivel:TheVivelDiWillsrangeisavailableintwovariants.Itsuniquecartonpackhas
beendevelopedbyITC'sdesignteamtoprovideanovelconsumerexperience

Superia
Inthepopularsegment,ITChaslaunchedarangeofsoapsandshampoosunderthe brand name Superia. Superia Soaps enriched with natural ingredients give radiant glowingskin.Superia

ITCSoaps Superia,Vivel, Fiamadiwills, Esencediwills Shampoo,Shower gel,Bodyfoam, Aqua,Conditioners

SHAMPOOS:ForShiny Hair.Showergelsfor healthyskin.Soapsfor glowingskin.

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DIFFERENTPRODUCTS Women Essenzadiwills EauDePerfume EauDeToilette ShowerGel Shampoo BathingBar BodyLotion CleansingMilk Toner NourishingCream Deodorant Shampoo Conditioner Showergel Bathingbars SOAPS SHAMPOO Shampoo Tripleconditioner Soaps Fiamadiwills Vivel Superia

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FIAMADIWILLS Shampoos

EverydayMild(withextractsofThyme&Juniper)isagentlecaringshampoo suitableforregularuse. AquaBalance(withextractsofMagnoliaBlossoms&Watercress)isagentle moisturizingshampooidealfordry,dullhair. Volume Boost(with extracts of Rosemary & Sage) is a gentle volumizing shampooidealforthin,limphair. Silky Strong(with oils of Macadamia Nut and Babassu) helps make hair smooth,silkyandstrongandisidealforweak,damagedhair. Showergelsoffered

MildDewContainsextractsofpeachandavocadowhichmoisturizetheskin ClearSpringsContainsextractsoflemongrass&seaweedwhichgivesClear skin.

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DIFFERENTPRODUCTS Men

Essenzadiwills ESSENZADIWILLS TherangecombinesexoticnaturalslikeSage,Watercress,Magnoliablossoms. VIVEL SOAPS VivelYoungGlowisenrichedwithVitaminEandFruitInfusionswhichhelpin providingyouthfulglowtotheskin. VivelSatinSoftisenrichedwithVitaminEandAloeVerawhichhelptheskin feelbeautifullysoft. EauDeToilette After Lotion BathingBar Deodorant Bodyfoam Aquafragrances Shave SOAPS SHAMPOO Vivel

36

Vivel Sandal Sparkleis enriched with Sandalwood Oil and Active Clay which helpsinprovidingclearskin. VivelAyurvedaEssenceisenrichedwithmultipleAyurvedicIngredientswhich helpprotectskinfromgermsandharshenvironment,keepingithealthyand beautiful. Vivel Silk Springis enriched with Green Apple extracts and Olive oil which helpinmakingskinsmooth. VivelDiWillsSheerRadianceisenrichedwithOliveOil,toprovideskinlustre tomakeitradiant. VivelDiWillsSheerCrmeisenrichedwithSheaButter,tomoisturizeskinto makeitsoftandsupple..

SHAMPOOS

Vivel Shine & Glowis suitable for dull to normal hair and is enriched with GreenTeaExtractandConditioners.Itaddsshinetohair. Vivel Soft & Freshis suitable for dry to normal hair and contains Extra ConditionersandSoyaProtein.Itmakeshairsoftandfragrant. VivelVolume&BounceissuitableforoilytonormalhairandcontainsJojoba OilandConditioners.Itaddsvolumeandbouncetohair.

The product portfolio was further enhanced with the launch ofUltrapro anti dandruff shampoo under the umbrella brand Vivel in December 2008.Ultrapropromises to fight dandruff twice as effectively while also providing careforhairthroughtheplusplusbenefitsofNourishmentandMoisturisation.

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PLACE ITC caters all sorts of segments but its basic aim is to cater the lowest level for segmentation that has been named as bingo segment people. Smartly concentrate its production in tax free zones in Jammu & Kashmir, Himachal Pradesh and Uttranchal.Itproducesnearly70percentofitsproductsintheseareas.Theygive usa10percentgrosssaving,whichisanimportantfactorinthehighvolume,low marginFMCGbusiness,isaspopularamongtheSaudisandEgyptiansasitisamong NRIslivingthere, Superpremium:Itcoverstheuppersegmentofthemarketthathavehighincome level and more brand conscious while selecting the product from the market and whoarenotconcernaboutthepriceoftheproduct.Theconsumerstargetedatthis levelareentrepreneurs,ITprofessionals,Doctors,Lawyers,toplevelexecutivesand otherpeopleathighpostingovernmentjobs. b)Premium:Thenextlevelofsegmentationdonebythemarketerispremiumlevel, where Middle level people are targeted who is concern about both the factors i.e. Brand as well as Price of the different brands of soaps. In early stage of time, this segmentationwasgivenmoreattentionintermsofPromotionandBrandawareness due to high consumption of products of personal care at this level as compare to other but with changing period of time, the concern for super premium has also drawnequalattention. c)Bingo:Thelowestlevelforsegmentationdefinedbythemarketersinindustryof personalcareproductswherepeoplewithlowincomelevelaretargeted.Aspeople herearemoreconcernaboutthepriceoftheproductratherthanthequalityorthe brand, the companies are rarely concern about their brand awareness and Promotionalactivities. 38

SecondbasesofsegmentationisdoneontheGeographicalfactorsmainlytargeting threeareasi.e. Urban areas like metropolitans cities Delhi, Bangalore, Mumbai, ludhiana and Kolkataetc SuburbanareaslikeNagpur,Indore,andAllahabad Ruralareasconsistofallvillagesandotherbackwardareas

ITCProductsofpersonalcarehave35exclusiveoutletsandwewillbeexpandingit to 70 outlets in the region outlets in Delhi, Chennai, Ahmadabad, Jaipur, Mumbai, Chandigarh and Saharanpur at present. Spread over 5 acres of land at Sehore in MadhyaPradesh.

39

Essenzadiwills

Fiamadiwills

Vivel

Superia

Catersto Superpremium segmentwiththe uppereliteclass Availablein Itcwelcomegroup hotels Willslifestyle Essenza di wills is available at selected wills lifestyle showrooms in Ahemdabad, Jammu, Bangalore, Kerala, Kolkata, Lucknow, Ludhiana, Baroda, Pune, Chandigarh, Dehradun,Delhi,Goa,Gurgaon,Hyderabad,Jaipur,Kanpur,Lucknow. Willslifestyle stores Spencershyper Bigbazaar Reliancefresh Itchotels Reliancefresh 365 Bigapple WalMart Departmental stores Johnplayers showrooms Bigbazar Retailoutlets Premiumsegment with themidandupper middleclass Specificallyto uppermiddle classconsumers Bingosegmenti.e. lowerincomeand ruralsegments

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PRICE The pricing of ITC soaps caters all sorts of income groups of people but special provisionhasbeenkeptforlowandmiddlegrouppeopleandpricingiscompetitive for other market players. The company faces going rate pricing that is prices of products like Fiama di wills depends on competitors product like lux. The firm choosespricingmoreorlessthesameasmarketleader. Current industry consumer spends estimated at over Rs. 21000 crores p.a. (growingat12%) Essenzadiwills Shampoo StartsFromRs2000 400milligram shampooRs.154. 200mlforrs109 Showergel 200mlforrs99 100mlforrs54 Soap 70gmsforrs30 300gmsforrs100 100gmsforrs40 Conditioner 100mlforrs68 32mlforrs6 8mlforrs2 Soap 45gmsforrs6 92gmsforrs17 225gmsforrs49 75gmRs18 92gmforrs10 186gmforrs30 125gmforrs12 464gmforrs50 7mlforrs1 100mlforrs25 50mlforrs10 8mlforrs1 4mlforrs0.5 Shampoo 100mlforRs.59 9mlforRs3 Shampoo 200mlforrs89 100mlforrs49 Shampoo 125mlforrs35 56mlforrs15 Fiamadiwills Vivel Superia

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Superiasoapswillbeavailableinsizesrangingfrom50gto125g,andtheshampoos in125mland55mlVivelDiWillscomesinanattractivecartonpackagewithsome elegantcolorscheme. PROMOTION ESSENZADIWILLSoffer A 'pull' sales promotion strategy focuses more on the consumer instead of the reseller or distributor. This strategy involves getting the consumer to 'pull' or purchasetheproduct/servicesdirectlyfromthecompanyitself.Thisstrategytargets itsmarketingeffortsdirectlyontheconsumerswiththehopethatitwillstimulate interest and demand for the product. This pull strategy is often used when distributorsarereluctanttocarryordistributeaproduct. FIAMADIWILLSofferlowintroductorypricestothecustomerslikeincaseoftheir newproduct. LAUNCINGITSNEWSHAMPOO Theygivesomecomplementarygifts. A 'combination' sales promotion strategy is just that; it is a combination of a push and a pull strategy. It focuses both on the distributor as well as the consumers, targetingbothpartiesdirectly.Itoffersconsumerincentivessidebysidewithdealer discounts. Inruralareas Communication Strategy Based on information regarding buyer behavior. Motivatingdealersaswellasopinionleaderstogeneratewordofmouthpublicity. This was followed by extensive van operation in 5000+ population areas with audienceparticipationtechniquesformouthingthebrand,supportedbymassmedia campaigninregionalpress(districtwiseedition),ruralcinemas,radio,wallpainting andintensivemerchandisingactivities.

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Inurbanareas Newspaper:Eenadu(A.P),DinaThanthi(TamilNadu),PunjabKesari(North), Loksatta (Maharashtra), Anand Bazaar Patrica (West Bengal), Daink Baskar (North) Television: Sun TV (Tamilnadu), Asianet (Kerla), Eenadu( AP), Aplha Punjabi (North),AplhaMararthi(Maharashtra). Radio: Radio reach is highest in Kerla (62%) followed by Tamil Nadu (35%) andKarnataka(32%).Example:nirma,superisaresomeofthebrandsusing radiocommunicationprogramme. AtensecondspotinRegionalstationwouldcostonlyaboutRs.2000/

OutdoorAdvertisement Form of media which includes signboard, wall painting, hoardings, tree boards,busboardsetc. SUPERIA With the objective of creating awareness for superia shampoo pouches in towns with less than 20,000 population in Tamil Nadu, and in order to convert loose shampoo buyers into superia pouch customers, ITC launched a van campaign. The communication Strategy focussed on getting women out of their homes to participateinthevancampaign,whichwasaimedexclusivelyforthemandforthe firsttimeconductedbywomen. Resultitshoweda25percentconversionfromlooseshampoousagetosuperia Pack. PromotionalActivitiesin2009 ITCSOAPS,thefastmovingconsumergoodgianthasreducedpromotionaloffersin 2009asitfocusedonprofitabilityatatimewhenvolumegrowthwasback. ITCsmobileVanstakethemessageofechoupaltonewvillage.

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Ithaslaunchedaslewofoffersinyear2008onfiamadiwillsproducts,whichisits secondlargestsellingsoapbrandhaswithdrawntheoffer.Ithasamarketshareof 15.5percentintheRs7,500croresoapmarkets.Ithasamarketshareofover25 percentintheRs.2,500croreshampoomarket. ITChasbeenaffectedbythevolatilityin2008themost,withthecompanylosing marketshareacrossallitskeysoap,detergentandoralcarecategories.Soinabidto getthevolumesback,itwentinforconsumeroffersandaggressiveadvertising.This moveworked,asthecompanysawa2percentvolumegrowthintheJunequarter of 2009 financial year compared to a 4 per cent decline in the previous quarter of thepreviousyear. 70 per cent of the category sales in case of shampoos sachets are dominated by players like ITC and CavinKare which are running '25 per cent extra' schemes. Companies also adopt "buy more to save more" concept to boost sales during the slowdown. While price correction is clearly a focus area, fast moving consumer goods(FMCG)companieslikeITCConceptstobeatthecurrentrecession. ITC promotional offers, for instance, include one free cake of soap on purchase of three, and discounts on purchase of linked packs. According to officials at ITC discounts and promotional offers are temporary means to achieve strategic ends, which could include trial and competitive reaction. Reasons for promotional offers include rewarding loyal customers, passing on cost savings to consumers and inducingtrial. ITC brands are new hence marketing efforts are geared towards enhancing consumerengagementandtrial.Theconsumerresponsetobrands,FiamaDiWills, VivelandSuperia,hassofarbeenexcellentsaysofficialsatITC.

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Essenza di wills

Tools used

Promotional tool used

Magazines Websites

Pr tools used

Magazine articles, Press release.

Schemesused
Free samples to elite consumers who regularly visit these stores.

Brand ambassador Deepika padukone Medium used News print media and electronic print media

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Fiama di wills

USP This range is a combination of science and natural extracts for shampoos.

Promotional tools used

Television Radio Websites Telemarketing personal sales letters

PR tools used

Media Relations Media Tours Newsletters Press release

SCHEMES/PROMOTIONAL STRATEGIES
Free conditioner on 200ml shampoo Buy three, get one free' offer on the Rs 100 multipack

Brand ambassador Deepika padukone Medium used News print media and electronic print media

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Vivel

USP

Vivel range is nourishment, protection and hydrating ingredients for complete skincare
.

Promotional tool used

through door-to-door sales through prize giving competitions

PR tools used
Special Events Speaking Engagements Contest

SCHEMES/PROMOTIONAL STRATEGIES
Offers shampoo (200 ml) free with its 75 gm bathing soap Buy four and get one free offer on its Vivel soap. Buy 2 and get a Reynolds pen free to Rs.1 discount on a soap bar of Rs.18.

Brand ambassador Kareena kapoor, Hrithik roshan Medium used News print media and electronic print media

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Superia

Promotional tool used

Through prize giving competitions A gift campaign Through door-to-door sales

Pr tools used
Contest Opportunity to meet superstars Melas Employee Relations Community Relations and Philanthropy

Contest SCHEMES/PROMOTIONAL STRATEGIES

launched its products in sachets

2 +1 scheme on the Superia soap. Meet Superstar Ileana D'Cruz

Brand ambassador No brand ambassador for superia Medium used News print media

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PERSONALITY 1) ESSENZADIWILLS Essenza, as the Western name suggest, targets the luxury seekingelite. It caterstothosepeoplewhomostlyspeakinEnglish,andabitofFrenchthe languageofsuperelite.Thesuperachieversarethetargets.Insteadofbrand extensionsithassubbrandslikeInizio,AquaandMikkle.Thepersonalityof thebrandistotallyexclusive.Ithasaninternationalappeal. 2) FIAMADIWILLS It is targeted at the inspirational, urban & young women. The language spokenbytheconsumerisgenerallyEnglish.Premiumpackagingisdoneto competewiththelikesofdove. 3) VIVEL Vivel Di wills targets the uppermiddle class and Vivel for the popular mid segment.CommunicationforthisrangeisdoneinbothEnglishandHindito catertobothkindsofsegments. 4) SUPERIA Itcaterstolowersegmentandruralkindsegment.Itcaterswherethefamily is very closenit. The brand has a familyoriented communication strategy too.Itistheonlybrand,whichisavailableinsachets.

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 CHAPTER3

50

A. CUSTOMERSTRATEGY
Acustomerservicestrategyisanimportantpartofanybusinessplan.Sincebusiness reliesoncustomersatisfaction,anygoodbusinessshoulddevelopastrategythatnot onlydrawsincustomers,butalsokeepsthemhappysotheyarenottemptedtotry outacompetitor. A customer strategy, often called a customer experience strategy, is a plan for creating or improving the customer experience you provide. A good strategy considersyourcustomers,theirneeds,andhowyoucanbestmeetthem. CUSTOMERSERVICEOBJECTIVE: ITC's Core Values are aimed at developing a customerfocused, highperformance organization,whichcreatesvalueforallitsstakeholders. CUSTOMERFOCUS Wearealwayscustomerfocusedandwilldeliverwhatthecustomerneedsinterms ofvalue,qualityandsatisfaction. RESPECTFORPEOPLE We are result oriented, setting high performance standards for ourselves as individualsandteams. Wewillsimultaneouslyrespectandvaluepeopleandupholdhumannessandhuman dignity. Weacknowledgethateveryindividualbringsdifferentperspectivesandcapabilities totheteamandthatastrongteamisfoundedonavarietyofperspectives. Wewantindividualstodream,valuedifferences,createandexperimentinpursuitof opportunitiesandachieveleadershipthroughteamwork.

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ITC believes that corporations like itself have a responsibility to set exemplary standards of ethical behavior, both internally within the organization, as well as in their external relationships. ITC believes that unethical behavior corrupts organizationalcultureandunderminesstakeholdervalue. ORGANIZATIONALCULTUREOFITC INTERNALCLIENT InternalclientreferstoalltheemployeesandstaffmembersofITCLTD. ITC believes that all its employees must live with social and economic dignity and freedom,regardlessofnationality,gender,race,economicstatusorreligion.Inthe managementofitsbusinessesandoperationstherefore,ITCensuresthatitupholds thespiritofhumanrightsasenshrinedinexistinginternationalstandardssuchasthe UniversalDeclarationandtheFundamentalHumanRightsConventionsoftheILO. ITC maintains an open door for reporters; encourages employees to report any harassment concerns and is responsive to employee complaints about harassment or other unwelcome and offensive conduct. A Grievance Committee on Gender Issues has been constituted to enquire into complaints and to recommend appropriateaction,whereverrequired. ITC demands, demonstrates and promotes professional behavior and respectful treatmentofallemployees. The organizations directors and senior management set the professional tone for the Company. Through both their words and their actions, the organizations leadership conveys what is acceptable and unacceptable behavior. ITCs directors, seniormanagementandemployeesmustconstantlyreinforcethroughtheiractions andbehaviorthatITCsstatedbeliefsofresponsiblecorporatecitizenshiparerooted inindividualconvictionandpersonalintegrity. Policiesforitsemployeesinclude: Policytoensurerespectforhumanrightspolicyacrossthesupplychain. Policytopreventdiscriminationattheworkplacetheaccountabilityforthe

52

applicationofthenondiscriminationemploymentpolicyrestswiththeUnit Head who reviews antidiscriminatory complaints annually or on a caseby casebasis. PolicyonfreedomofassociationEachITCUnithasappropriatesystemsand checks to ensure compliance with the Policy and statutory provisions, includingmeansforfilingofgrievances,collectivebargainingagreementsand minutes from worker meetings. Divisional and Corporate HR regularly monitorcompliancewiththePolicy. CorporateInternalAuditandtheEnvironment,OccupationHealthandSafety function undertake policy Prohibiting Child Labor and Preventing Forced LaborfromWorkplaceAuditandassessmentannually. Policy on Information and Consultation on Changes Compliance with the PolicyisregularlymonitoredbytheUnitHead. HIV/AIDS:PolicyGuidelines EXTERNALCLIENTCUSTOMERS ITC is always customer focused and delivers what the customer needs in terms of value,qualityandsatisfaction. Alldirectors,seniormanagementandemployeesshallensurethatintheirdealings with suppliers and customers, the Companys interests are never compromised. Accepting gifts and presents of more than a nominal value, gratuity payments and other payments from suppliers or customers will be viewed as serious breach of disciplineasthiscouldleadtocompromisingtheCompanysinterest. Understanding customers needs and aspirations and continuing to seek consumer delight by making available products and services of high quality along with cost competitiveness and on time delivery thereby developing a strong long term customerrelationshipistheprimefocusinallourbusinesses. Eachbusinesshasvariousmechanismstocapturetheneedsandexpectationsofthe customer such as market surveys, personal contacts/ visits, events, customer satisfaction surveys, joint development and improvement projects, key account management, multilevel interfaces at dealercustomerend user, personalized

53

lifestyleprivilegeprogramme,etc.ITCcontinuestoengagewithcustomersonanon going basis to capture their needs and aspirations. Product/service quality, availability, visibility & on time delivery, cost competitiveness, continuous product/process innovation, demand for green product and value added services are the major topics/ issues which are being discussed during the customer engagement process. Robust Quality Assurance systems supported with process innovations, adoption of green technology, lean management, six sigma, and TPM help to achieve benchmarks in products and services quality in line with customer expectations.WecontinuetoinvestsignificantlyinR&Dtodevelopnewerproducts/ variants. ITC Ltd. follows integrated approach to its services that is through out the organization, ITC is prioritizing different types of businesses embracing FMCG includingcigarettes,lifestyleretailing.Education&stationery,HOTELS,ITandmuch moresectorsofbusinesses. ITCcreatescustomerloyaltyvia: Customizedservices Smartcard(nopointssystem) 3dayssaleperiodyearmarkedjustforclubwillsmembers. InvitationtotheIndiafashionweek Interactionwiththetopdesigners. Noquestionaskedreturnpolicyforupto2years. Threetieredcards:silver,goldandselectgold. Rewardslikeexoticholidays,finedining,freeflyfasteretc. Monetarybenefitslikegiftvouchers,discounts,andcomplementarystay. CUSTOMERSATISFACTION=FUNCTIONAL+EMOTIONAL+SOCIALVALUE Iftherewouldbesatisfactiontherewouldbeintentionalloyaltybecauseofwhich therewouldbebehavioralloyalty.

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Allthekeyelementsofcustomerstrategyhavebeendescribedabove: Deliverychannelsunderdistributionstrategy Communicationsundermarketingstrategy Aboveexplainedinchapter2,productstrategyandsocialstrategygivesafullproof evidenceofaqualitycustomerservicestrategybyITC.Productstrategyfocusingon givingthemostofitsqualityproductwithadefinitecertificationandsocialstrategy focusing on creating value by developing numerous initiatives like echaupal etc mentionedabove.
CustomerStrategyDefinitionByNeilKokemuller,eHowContributor Readmore:CustomerStrategyDefinition|eHow.comhttp://www.ehow.com/facts_6940334_customer strategydefinition.html#ixzz1frVKvqhJ

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B.OPERATIONALSTRATEGY
Operational strategy is a longterm development of a plan to use the resources of thefirminordertohaveahigherdegreeofcompatibilitybetweentheresourcesand business objectives of the firm. Operations of the firm depend on the goals of the firm.Itworksupontheperformanceobjectives. ITC'sstateoftheartmanufacturingfacilitymeetsstringentrequirementsofhygiene andbenchmarkedmanufacturingpractices.Contemporarytechnologyandthelatest manufacturing processes have combined to produce distinctly superior products, whichrankhighonqualityandconsumerappeal. PerformanceobjectivesofFiamadiwillsinclude: 1. Quality The product formulations use internationally recognized safe ingredients,subjectedtothehigheststandardsofsafetyandperformance. 2. FlexibilityITChasprovidedtheplatformtodevelopdifferentiatedproducts thatmeettheconsumersstatedandinnateneeds. 3. Differential pricing ITC caters to all the segments of the society through developingdifferentcostproductsgivingdifferentfunctions. 4. TechnologyContemporarytechnologyi.e.natureandscienceandthelatest manufacturing processes have combined to produce distinctly superior products,whichrankhighonqualityandconsumerappeal. 5. SpeedTheobjectiveofsupplychainfunctionistoensurethatproductsare availablealwaysfresh,attherighttimeandintherightplace. Coreobjectiveofpersonalcareproductdealswiththequalityoftheproductsthat they offer. They mainly focus on giving the best quality to its customer for their maximum satisfaction. Followed by the technology of nature and science that ITC usesinthemanufacturingtheirpersonalcareproducts.Followedbytheflexibilityof products and the speed of delivering its products with the numerous distributors locatedthroughoutthecountry.

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SPEED

FLEXIBILITY

TECHNOLOGY

QUALITY

CONTENT

CONTENT

StructuralDecision

Infrastructural Decision

HardwareoftheComapny

Sozwareofthe Company

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1) STRUCTURALDECISIONHARDWAREOFTHECOMPANY ManufacturingPlantofPersonalCareITCLtd. ThefirmhasonlyonemanufacturingfacilityinHaridwardedicatedto manufacture personal care products. While, Fiama Di Wills is wholly manufactured in this plant and 90 per cent of the Vivel brand is manufactured in this facility, only 50 per cent of the products under Superia brand name are made here. The rest of the products manufacturing is taken care of by outsourced plants. Seeing the marketresponseofourproducts,weareatpresentlookingatoptions of either expanding the present facility or setting up new manufacturing plant in a different location," said Kaul. ITC Ltd is setting up a Rs 125.21crore plant in the BHEL industrial estate at Haridwar in Uttaranchal to manufacture food and personal care products. HeadquartersLocationofPersonalCareITCLtd. ITC Limited (BSE:500875) public conglomerate company headquarteredatVirginiaHouse,37,JLNehruRoad,Kolkata700071 (India). It is engaged in four business segments: Fast Moving Consumer Goods (FMCG), Hotels, Paperboards, Paper & Packaging and Agri Business. Its turnover is $7 billion and a market capitalization of over $33 Billion. The company has its registered officeinKolkata.ItstartedoffastheImperialTobaccoCompany,and sharesancestrywithImperialTobaccooftheUnitedKingdom,butitis now fully independent, and was rechristened to Indian Tobacco Companyin1970andthentoI.T.C.Limitedin1974.YogeshChander Deveshwarcurrentlyheadsthecompany.Itemployees26,000people across60locationsinIndia.

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SupplyNetworkofITCasanorganization Theobjectiveofsupplychainfunctionistoensurethatproductsare available always fresh, at the right time and in the right place. ITC's Supply Chain function will involve roles in Supply Chain Planning, which involves demand, and supply planning or in Physical Distribution, which involves warehousing and transportation. The complexity of ITC's Supply Chain network can be gauged by the fact that ITC currently has more than 50 warehouses and 70 factories spread across the country and over 1200 trucks transporting ITC's goodsonadailybasis.ThesupplychainfunctioninITCisresponsible for distribution of 18 product categories, 75 sub product categories to over 2 million outlets distributed over 1 lakh markets. A unique "Route to Market" models, coupled with best in class technology suchasAPO,I2SCS,SAP,constantandunparalleledinvestmentsinto technology, infrastructure and most important of all into people development through training sessions makes it very complex and widetoo.

ITCsInfoTechITCasanorganization Formedin2000,ITCInfotechhastodaycarvedanicheforitselfinthe arenaofglobalITservicesandsolutions.Thecompanyhasestablished technology Centers of Excellence (CoE) to deepen capabilities and incubate cuttingedge technical competencies. Industry verticals organizeITCInfotechscustomercentricgotomarketapproach.The company services industries including, Banking Financial Services & Insurance (BFSI), Consumer Packaged Goods (CPG), Retail, Manufacturing,EngineeringServices,Media&Entertainment,Travel, Hospitality, Life Sciences and Transportation & Logistics. While an enterprise range of technology capabilities and worldclass quality processes form the foundation of ITC Infotech's cuttingedge IT service strength, a sharp domain focus ensures that IT services

59

delivery always places business needs ahead of technology. The company focuses on developing deep and differentiated capabilities toenhanceexpertiseinspecificindustrydomains,businesssolutions andtechnologies.ITCInfotechconformstothehigheststandardsin internationalprocessquality,withISO27001,ISO9001,CMMiLevel3 and BS 7799 accreditations. The company became the first Indian IT Company to receive the prestigious Social Accountability (SA) 8000:2008certification.SA8000iswidelyacceptedasthemostviable andcomprehensiveinternationalworkplacemanagementsystem. S.NO. 1 CATEGORY Computers ITEMS Server/Desktopcomputer(CPU,Monitor, KeyboardandMouse),Laptop,Notebook,Dumb terminal,etcorsimilaritems Printer,Scanner,PrinterCartridge,Toner,etcor similaritems 3 Network Equipments 4 ITAccessories Routers,Switches,Patchpanel,Modem,Converter, VSATequipments,etcorsimilaritems TVTunerbox,Floppy,CDandDVD,PenDrive, ExternalHarddisk,ExternalCD/DVDwriter,DAT Drive,Speaker,LaptopBattery,HandHelddevice, VCequipments,DataCartridge,etcorsimilarit 5 AssociatedElectricalItems Powercable,Datacable,UPS,etcorsimilaritems

PrinterandAccessories

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2) INFRASTRUCTURALDECISIONSOFTWAREOFTHECOMPANY Human Resource of ITC Recruitment Process. With over 26,000 employees across the group, scores of manufacturing facilities and operations spread all over the country, the Human Resources function in ITC offers very challenging careeropportunities. RECRUITMENTPROCESS It Ensures that provided candidates, are most suitable for your specificrequirements.Ourtrainedconsultantsprescreenandpre Compensation Recruitment

SelectingfromamongtheApplicants

PlacementandOrientation

TrainingandDevelopment

PerformanceAppraisal

PromotionandCareerPlanning

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select applicants before submitting their details for we want to assure accurate matching between our company and any prospectiveemployee. CollectionofCurriculumVitaefromapplicantsinterestedinoneormore of our offers. Every Curriculum Vita is written in the ITC format, which allowsforeasycomparisonofeachcandidate'sdetails. Performing the first telephone interview in order to make preliminary assessments of the overall competency of a candidate, especially in regardstotheirlevelofEnglish. All documents are then collected and reference checks are performed includingemploymenthistory,criminalbackgroundandhealthchecks. Ifthepanelisfullysatisfiedwiththeresultsandfeelsconfidentthatthe candidate is suitable for your specific requirements, then the second interview is done and later sends the application to the potential employerwhothenobviouslymakesthefinaldecision. ThefinalinterviewisthenconductedatKrakow,headoffice. Also, arranging travel for any prospective employee to ensure the final steprunssmoothly. SELECTIONPROCESS The selection process is objective and robust. ITC soaps select talent for the Technical function from the 5 IITs (Chennai, Delhi, Kanpur, Kharagpur, Powai) and some of the NITs. Engineers from disciplines such as Mechanical, Electrical and Electronics, Production Engineering, Chemical and Civil are considered for placement. The process starts in August each year with a campus visit and a preplacement presentation. This provides an opportunityforyoungaspirantstolearnmoreabouttheCompany,

62

its achievements, its strategies and the kind of careers they can lookforwardto. A range of selection tools is used. These include assessment centers, grouptasksandindepthpersonalinterviews. Candidates found suitable for employment are immediately given offers to Join ITC in July of the following year. After a comprehensive induction programme,theyareassignedtovariousbusinessesoftheCompany. ITCalsoselectsfirstyearstudentsforSummerInternships AteamofITCmanagersvisitscampusesonceagainbetweenDecemberand March for final placement. The process consists of group discussions and personalinterviewsprecededbypsychometrictestsandassessmentcenters. Employmentoffersaremadetoselectedcandidatesimmediately.Onjoining ITC in July, candidates undergo an induction programme before being assignedtooneoftheCompany'sbusinesses. Employmentoffersaremadetoselectedcandidatesimmediately.Onjoining ITC in July, candidates participate in an induction programme. Thereafter theyareassignedtoresponsibilitiesinTrading,SourcingandLogisticsinthe AgriBusinessDivision. ITC believes in taking out the best out of the pool of application received duringrecruitmentprocess.Itbelievesininfusionofnewbloodintheirorganization. People are ITC's unique source of competitive advantage and HR Systems and processesensurethatthepotentialofourhumanresourcesisleveragedtoenhance the wealth generating capability of the enterprise and in building a winning organizationITCprovidesanopportunitytoexperiencethediversitypresentwithin the Human Resources function ranging from Employee Relations and Employee Engagement Negotiations, Employee Welfare, Building Alignment, Productivity Enhancement, Process Excellence to Salary and Wage Administration, Statutory Compliance,CorporateSocialDevelopmentinitiatives

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Remunerationdistributionof20082009 Minimum wages are paid to employer as per rate in state decided by state governmentaccordingtotheturnover.Lastyearsalaryofpersonwasbetween Rs.10,00012,000permonth. Sales incentives are based on targets at the store. However employees are encouraged to concentrate on producing goods to standards lay down by company. As employees are encouraged to give more output in order to get more incentives with their salaries. Incentives like bonus, free education for childrenfor1year,travelingexpenses,flat,etcisgiven. MedicalreimbursementofRs.9000foraperiodof3years. Rs.10,000reimbursementsonalltheITCProductsin1year. Note:Importanceonhealthstandardsofsafetyasrequiredunderlawfactoryat 1948andisstrictlymaintainedbyITCsoaps.

TRAININGANDDEVELOPMENT Training has become most crucial aspect in ITC SOAPS because of chanding standards of technology and its services. Training courses are sometimes offeredfor6monthswithinternshipsoitinvitesfresher,whicharemotiveof ITC SOAPS. Training is given by practical demos with latest and modern machinesandequipmentsandisconductedprofessionally.

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PROCESS

PROCESS

MARKETLED

OPERATIONS LED

1) MarketLedstrategyformulation A marketing strategy in which a company seeks to determine what products a consumer might want, and then moves the company to developthoseproducts.Itreliesheavilyonmarketresearch.Amarketled marketingstrategyasks,"Whatdoconsumerswant?Howcanwesatisfy this want?" This strategy can be used concurrently with an assetled marketingstrategy. 2) OperationsLedstrategyformulation A strategy in which a company has excellent operations. Welltodo HR. Andalltheoperationalfunctionsareperformedaccurately.

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ITCspersonalcarefollowsMarketledstrategy.Ithaswidelydistributedand segmenteditsTargetMarket.Ithasalsokeptondevelopingnewproductsso thatitsatisfiesallthecustomersneeds. ITChas4widemarkets. In mid 2005 ITC launched Essenza Di Wills, which catered to Niche segment.Thenin2007itcamewithFiamaDiWills,whichfocusedon Superpremiumsegment.BetweenFebruary&June2008camewitha premium segment called Vivel Di Wills and then came with for the lowersegmentsuperiawhichistheonlybrandinITCwhichcomesin sachets. Segmentationofretailers,loyaltyprogramsandengagementactivities are some of the ways through which ITC has managed to excel its reach to consumers. In an everexpanding market where within the last year, two crore television sets were added and seven million people became digitally enabled, ITC connects with consumers in twelve different ways. Apart from this, the company also thrives on innovative advertising, be it print, digital or last minute reach. Kaul says the company's distribution network is also one of its core strengths with 1400 distribution centers, 4000 stockists and 26,000 salesmen across the country. To elaborate, Sandeep talks about the ITCVivelcampaigninKolkataduringtheDurgaPujathisyear.While thespeciallycreatedtelevisioncommercialfeaturedtheKnightriders, Kaulsaysthecompanyconnectedwithpeoplethrough400locations. In four days, the company reached overall 1.5 lakh individuals, of which40,00050,000werefromthetargetgroup. (http://itcportal.com/aboutitc/newsroom/press reports/PressReport.aspx?id=1145&type=C&news=winninghasto becontextuallyrelevantsandeepkaul) 66

ITC's Personal Care Products Division is eyeing a foray into the domestic deodorant market. Mr. Sandeep Kaul, Chief Executive, Personal Care Products Business, ITC Ltd, told Business Line that the deo segment was a rapidly growing market in India, and the company was closely eyeing the developments in the market for a possible extension of the Fiama Di Wills brandinthecategory.ThedeosmarketisvaluedataboutRs900croreand has more than 60 players. The company already has the Essenza range of fragrances in the premium category, but has no presence in the deo range pricedbetweenRs100andRs150thatisapopularsegmentinthecountry. Other players that have a significant presence in this segment are Wipro, HUL,CavinKare,VLCC,apartfromsportbrandssuchasReebokandNikeand severalprivatelabelbrandsoflargeretailers.

Vivelseemstobefocusingonyoungconsumerswhoarelookingforachange and people who are not necessarily tied to a brand for many years. The strategyhashelpedthecompanygainsomemarketsharequiteearlyinthe productlifecycle. Vivelhasadoptedthestrategyofcapturingdifferentconsumersthroughits differentvariantswithinthemidsegmentofthesoapcategory. YCDeveshwarledITCisplanningaforayinthefastgrowingfairness cream market under the Vivel banner to compete with the likes of Hindustan Unilever, Emami, CavinKare and Elders Pharma that also operate in this segment. According to ITC officials, the cream, to be christened Vivel Active Fair, was first introduced in Kerala and later extended to other markets. They have received encouraging response during test marketing of the fairness cream and are confidentofmakinginroadsinthisgrowingmarket,anofficialsaid. ITCpriceditsfairnesscreambetweenRs5toRs70dependingonthe size. So, we can see that ITC has not left any part of personal care. Being it 67

deodorant,showergels,bathingsoapsetc.Soitwouldlieundermarket Ledstrategyformulation.Ithastargetedall4majorsegments. FIAMADIWILLSfallsunderthecategoryofredoceanstrategyas: Itiscompetingintheexistingmarkettheknownmarketplace. Itismainlyfocusingonthecurrentcustomersofthefiamadiwillsproducts. Industryboundariesaredefinedandaccepted,andthecompetitiverulesof thegameareknown. 68

CONCLUSION
ITC Ltd. Has diversified itself into 5 bottom lines. They are mainly: FMCG, Hotels,andPaperboardswhichincludesspecialtypaperandpackaging,Agri BusinessandlastisInformationTechnology. ITC constitutes 2% share for Personal Care Products in the market. It is basicallycategorizedinto4majorbrandsi.e.EssenzaDiWills,FiamaDiWills, VivelDiWillsandSuperia. ITChascontributedeconomicallyinthetriplebottomlineasfollows: It has made sizeable investments in launching personal care products, spending heavily on advertising and promotions and distribution. The companys sales grew 16% to Rs7, 662.99 crore and net profit declined by 0.15%toRs1,551croreinthefirstsixmonthsof200809.Wehaveveryclear internal targets and milestones for our progress and we are meeting those milestones. ThepersonalcaresegmentisdominatedbyHUL,whosebrands,including Lux, Dove, Sunsilk and Clinic Plus, have 52.7% market share in soaps and 46.5%inshampoos,accordingtoHUL.TwoanalystsbasedinMumbaireveal thatthecompanyhadarounda2%shareofthetotalpersonalcareproducts market. (http://www.itcportal.com/newsroom/itcmullsexpansionpersonalcare brands.html.) ITC has one of the best corporate strategies like continue to focus on the chosen portfolio of FMCG, Hotels, Paper, Packaging, Agri Business and InformationTechnology. Enhancethecompetitivepoweroftheportfoliothroughsynergiesderivedby blending the diverse skills and capabilities residing in ITC are various businesses

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 Someofthebesthonorsandawards,whichITChasgot,areTheBest CorporateSocialResponsibilityPracticeAward2008jointlyinstituted bytheBombayStockExchange,TimesFoundationandtheNASSCOM Foundation. The"BestSupplyChainPracticesAward"fortimeeffectiveandcostefficient LogisticsManagementinOrganizedRetailtoITC'sLifestyleRetailingBusiness Division(LRBD). The vision of the company is To be a leading labor administrator in their regioninordertoenhancethewellbeingofworkforceprogressivelyandto promotethesafetyandhealthofthoseatwork. The mission of the company is to improve and safeguard employees rights andbenefitsinanequitablemanner.

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http://www.ehow.com/facts_6940334_customerstrategy definition.html#ixzz1frVKvqhJ ITCsustainabilityreport2010 Businessstrategyofitcltd. file:///Users/disha/Desktop/work%20level%202/strategy/ITC/Business%20St rategy%20for%20ITC%20Ltd..webarchive http://www.itcportal.com/ http://en.wikipedia.org/wiki/ITC_Limited www.authorstream.comschoolofcommerce,presentationonITC. www.quickMBA.comStrategicmanagementhierarchiallevelsofstrategy www.scribd.comITClimiteddiversificationstrategy http://www.scribd.com/doc/11518224/MarketingStrategyofITCLtd http://www.slideshare.net/rv1709/itcsbingomarketingstrategy http://www.docstoc.com/docs/72144810/ItcPricingStrategy http://www.slideshare.net/madhusudanpartani/itcdistributionchannel Hautemarketing,thefaceofmarketingbyonkarpandey http://www.blonnet.com http://www.justfood.com http://www.thehindubusinessline.com http://www.imcri.org http://www.businessstandard.com/india/news/itcplantin haridwar/213948/ http://www.itcportal.com/itcbusiness/fmcg/personalcareproducts/fiama diwills.aspx

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http://itcportal.com/aboutitc/newsroom/press reports/PressReport.aspx?id=1145&type=C&news=winninghastobe contextuallyrelevantsandeepkaul) http://itcportal.com/aboutitc/newsroom/press reports/PressReport.aspx?id=1127&type=C&news=ITCsmellsopportunity inthedeomarket http://www.itcportal.com/aboutitc/newsroom/press reports/PressReport.aspx?id=77&type=C&news=fairnessmart

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