Summer Internship ProgramIBS Hyderabad

ANUKRITI KALTA09BSHYD014209BSHYD0142

HISTORY OF ITCHISTORY OF ITC

ITC was incorporated on August 24, 1910 under the name Imperial TobaccoCompany of India Limited. As the Company's ownership progressivelyIndianised, the name of the Company was changed from Imperial TobaccoCompany of India Limited to India Tobacco Company Limited in

d h i i f h1970 and then to I.T.C. Limited in 1974. In recognition of the Company'smulti-business portfolio encompassing a wide range of businesses, the fullstops in the Company's name were removed effective September 18,2001 The Company now stands rechristened 'ITC Limited'2001. The Company now stands rechristened 'ITC Limited'.

PORTFOLIOPORTFOLIO

ITC is one of the leading business conglomerates in India with business i i Ci & T b H l I f i T h l P k iinterests in Cigarettes & Tobacco, Hotels, Information Technology, Packaging, Paperboards & Specialty Papers, Agri-business, Foods, Lifestyle Retailing, Education & Stationery and Personal Care.

ITC FOODSITC FOODSThe Foods business is today represented in 4 categories in the market. These are:

1 Ready To Eat Foods1.Ready To Eat Foods 2.Staples 3.Confectionery 4.Snack Foods .S ac oods

The six rapidly gaining market share Brands under ITC Foods are as follows:

1.Kitchens of India2.Aashirvaad3.Sunfeast

i4.mint-o5.Candyman6.Bingo!

MARKET AND COMPETITION

Indian Foods market is a monopolistic market There are many competitors in allIndian Foods market is a monopolistic market. There are many competitors in all the categories and although they all have similar products available at similar prices, they are trying to prove themselves different through their marketing strategies. However, entry to this business is easy and ITC has utilized this fact g , y yvery efficiently to their benefit as they entered into the several categories among this Foods business.

READY TO EAT SEGMENT

Market Share - Ready To Eat

8%9% ITC Ltd.

48%

35%

MTR

Kohinoor

Others(Gits, PriyaFoods etc.)

ITC takes away a high share of 48% in the ready to eat segment with the main competitors being MTR ,Kohinoor,segment with the main competitors being MTR ,Kohinoor, Nestle & Others like Gits, Priya Foods etc.

SUNFEAST PASTASUNFEAST PASTAITC saw potential in the instant food segment and hence decided to enter into this space with its offering of Ready to eat pasta under the brand name of SUNFEAST, in the year 2005. This was a first of its kind in the industry. The product they offered was a healthier and tasty alternative to Maggi noodles, which at that point of time was the market leader in the ready to eat category.

TARGET POPULATION: working women, students,kids and mothers(as mothers now a days are looking for an instant and healthy snack option for children)now a days are looking for an instant and healthy snack option for children).

MAIN INGREDIENT: durum hi-protein wheatMAIN INGREDIENT: durum hi protein wheat

PRICE &PACKAGE: Rs 15 & Rs 18 packs of weight 83gms including a 15gms sauce maker

VARIANTS:•Masala•Tomato & Cheese•Sour & Onion•Tangy tomato•Pizza•Chicken

NUTRITIONAL FACTS ABOUT PASTANUTRITIONAL FACTS ABOUT PASTA

•Every 100gms of pasta provides body 14-15% energy content as is an excellentsource of carbohydrates.

•It is clinically proved that pasta reduces the cholesterol grade in blood.

• Pasta moderately spiced can be included in slimming dietsPasta, moderately spiced, can be included in slimming diets

•Pasta is a good source of B vitamins, iron and niacin. It is very low in sodiumand is cholesterol free.

MAJOR PLAYERSMAJOR PLAYERS

Sunfeast pasta not only faces stiff competition from the instant pasta “ready toSunfeast pasta not only faces stiff competition from the instant pasta ready-to eat” category but also from “to-be-prepared” pasta category.

Ready-to-eatReady to eatMaggi pasta( Nestle)Knorr pasta

To-be-preparedBambinoImportedImported

PROJECT TITLEPROJECT TITLE

Study of effectiveness of Customer(Retailer & E d C ) b i b h i f S fEnd Consumer) buying behavior of Sunfeast

Pasta(ITC Ltd) using extensive primary market h h d S b l hresearch methods. Subsequently report the

findings and recommend for suitable changes

PROJECT OBJECTIVESPROJECT OBJECTIVES

Key Performance Indicators(KPIs)

Evaluation of competition and its analysis- Qualitative factors affecting the consumer(retailer) buying behavior in aspects Qua tat ve acto s a ect g t e co su e ( eta e ) buy g be av o aspects

such as:1.) Brand availability2 ) Demand2.) Demand 3.) Margin Offered4.) Quality of service and product

) i l d h i l h5.) Display and other promotional schemes

Qualitative factors affecting the customer (end consumer) buying behavior in aspects such as:such as:

1.) Brand and Product Awareness 2.) Consumer perception about the product3.) Competition3.) Competition4.) Age, Lifestyle & Employment Status 5.) Promotional activities6.) Price and Packaging) g g7.) Brand Image8.) Availability

METHODOLOGYMETHODOLOGY

RESEARCH PLANData source: Primary data collection through questionnaires and surveys and secondary data collection from company websites.R h h Ob ti l d hResearch approaches: Observational and survey research Research instruments: QuestionnairesSampling plan:

Sampling unit- Retailers and customers in different market typesSample size- 100 customers and 50 retailersSampling Procedure- Randomp g

Contact methods: Personal interview

DATA PROCESSING AND ANALYSISDATA PROCESSING AND ANALYSIS

1.) Data sheet (MS Excel format)2.) SWOT Analysis3.) Regression Analysis using SPSS of

Sunfeast by ITCSunfeast by ITC Maggi by Nestle Bambino O h iOther competitors

4.) Factor Analysis using SPSS of Sunfeast by ITC5.) Graphs & Charts Analysis

SWOT ANALYSISSTRENGTH:•First of its kind (pioneer) in the ready to eat pasta category.•Healthy option

OPPROTUNITIES:•Niche market and hence high potential.•Target market can be expanded as consumers taste and preference is y p

•Distribution network is strong•No availability issues in the market• Strong Brand name

pChanging.•Optimum utilization of the strong distribution network of cigarettes•Enter rural market as an healthy and quick option y q pof food.•Brand extension and repositioning in customers mind as a healthyfood item.

WEAKNESS:•Limited target marketL i k t

THREATS:•Competitor like “Maggi” which has a good brand

d t S f t•Less awareness in market•Less popular in the lower end market.

name as compared to Sunfeast•Small players like bambino which are less expensive.•Changing people’s preference from “ready to eat” t “t b d t ”to “to be prepared pasta”.•Other ready to eat items like, MTR upma, Maggi noodles etc as market challengers.

GRAPHS & CHARTS ANALYSIS

Analysis Of The Retailer Buying behavior of Sunfeast pasta

DETERMINATION OF THE MARKET POTENTIAL OF SUNFEAST PASTA

PARAMETERS THAT DETERMINE EXTERNAL OPPORTUNITIES

PARAMETERS THAT DETERMINE INTERNALOPPORTUNITIES INTERNAL OPPORTUNITIES

PARAMETERS THAT DETERMINE EXTERNAL OPPORTUNITIES

• Packets Purchased/Week• Brand Purchaser (out of 10 customers)• Brand Purchaser (out of 10 customers)• Margin offered

PARAMETERS THAT DETERMINE INTERNAL OPPORTUNITIES

•Brand Availability •Quality & Service of the Product•Di l & P ti l S h•Display & Promotional Schemes

SunfeastMaggiMaggiBambinoOthers

Availability is an important factor that determines the buying decision of consumer. The pasta purchaser may switch from buying Maggi pasta to Sunfeast pasta (or vice versa) if availability

f S f t i bl ith th t il hi h l d t l fof Sunfeast is a problem with the retailer which leads to loss of sales for the company. Hence, distribution network of the company and its market penetration strategy within optimum resources are the two strong parameters which a company shouldresources are the two strong parameters which a company should take utmost care of.

DEMAND OF PASTA IN THE MARKET:

Nestle launched Maggi pasta in November, 2009 and in a short span of time it has become a major challenger for Sunfeast pasta. Also it is seen that though Bambino and Imported pasta are not directseen that though Bambino and Imported pasta are not direct competitors of Sunfeast but its market share gets affected by them. As can be observed from the analysis that the demand of bambino is slightly less than the demand of the Sunfeast pasta thereby acting as a g y p y gthreat for Sunfeast pasta.

QUALITY OF SERVICE AND PRODUCT OFFEREDAND PRODUCT OFFERED OF PASTA IN THE MARKET:

Quality of the service offered by the company and the product is one important factor on which the retailer buying decision depends. If the company-retailer relationship is strong the probability of market potential p y p g p y pof the product remains high and vice versa. Though the impact of this factor is less on the buying decision but it stands a vital parameter and must be taken into consideration.

Analysis Of The End Consumer Buying behavior of Sunfeast pasta

FOLLOWING FACTORS ATTRIBUTE TO CUSTOMER BUYING DECISIONS:

BRAND AWARENESS & PRODUCT AWARENESSCOMPETITIONCOMPETITIONCUSTOMER PERCEPTION ABOUT PATSAPROMOTIONAL ACTIVITIESPRICING & PACKAGINGAVAILABILITY

CONSUMER PERCEPTION ABOUT THE PRODUCT

Consumer perception about the ingredient of sunfeast pasta

15%19%

Atta Maida Suji

15%

66%

19%

66%

Consumer perception about the brand & product plays a vital role in interpreting their buying behavior. As is observed 66% of the sample consumers think ‘Maida’ to be the ingredient of Sunfeast pasta which positionsconsumers think Maida to be the ingredient of Sunfeast pasta which positions the product as an unhealthy food item and hence affects the sales. Therefore positioning itself as a healthy product should be the focus of the company

Consumer choose to have Sunfeast pasta because:

it is easy to cook it is a healthy option it tastes good

26%

60%14%

60% of sample population choose to have Sunfeast pasta because it is an easy and60% of sample population choose to have Sunfeast pasta because it is an easy and a convenient food option. 14% opts for a “healthy option” clearly indicating that very few customers purchase pasta solely because it is a healthy snack item, instead customers believes more in its good taste and not its nutrient value. , g

Favorite brand?bambino sunfeast maggi others

23%

gg

29%

18%

23%

30%

18%

It was observed that even though Maggi pasta has created a strong consumer base for itself in this newly entered instant food segment, it was unable to break the strong brand loyalty Sunfeast won over the past few years. But Maggi has still managed to give Sunfeast a stiff competition. 29% of the chart space is occupied b B bi i di ti th t th k t h f S f t i t th t d lby Bambino indicating that the market share of Sunfeast is not threatened alone by Maggi but also by To-be-Prepared segment, domestic and imported.

COMPARITIVE ANALYSIS OF THE THREE BRANDS ON THE BASIS OF CERTAIN PRODUCT PARAMETERS

SCORE

Parameter SUNFEAST MAGGI BAMBINO

Brand image 1.5 1.44 1.83

Packaging 1.42 1.53 1.88

Value For Money 1.72 1.65 1.76

Quantity Provided 1.75 1.68 1.72

Taste 1.82 1.52 1.79

Quality 1.62 1.63 1.82

Satisfaction 1.86 1.64 1.83

Availability 1.51 1.52 1.86

1=“GOOD”2=“AVERAGE”3=“BAD”

COMPARITIVE ANALYSIS OF SUNFEAST PASTA ON THE BASIS OF EMPLOYMENT STATUS OF CUSTOMER

100%

•How many times have you tasted Pasta?

0%20%40%60%80%

100%

Axis

Titl

e

quite often rarely never

Student 43% 45% 12%Working 53% 37% 10%

0%

Homemaker 86% 7% 7%

The table indicates that theThe table indicates that the biggest buyer group of pasta are the HOMEMAKERS, owing to the fact hat they are thethe fact hat they are the OPINION LEADERS of the family.

•What do you prefer the most?

15% 23%

62%

30% 33% 37%20%

67%

13%20%40%60%80%

Axis

Titl

e

ready to eat pasta cooked at home

pasta at restaurants

Student 15% 23% 62%

0%20%A

Student 15% 23% 62%Working 30% 33% 37%Homemaker 20% 67% 13%

Out of the few customer who choose Ready-to-eat pasta overchoose Ready to eat pasta over others, maximum no. is from the working status. This Clearly points out that the instant cook option is the prior feature that governs theirthe prior feature that governs their purchase decision.

REGRESSION ANALYSIS USING SPSSOBSERVATIONS

Sunfeast PastaEquation of regression line is(un standardized)

-.5 Quality -.356 Offers - .002 Brands + 3.731(constant) = Packs purchase for f tsunfeast

Negative correlation with all the variables- R square of the regression model(sunfeast) is .031

Maggi PastaEquation of regression line is(un standardized)

430 Q lit + 076Off + 616 B d + 251( t t) P k h f.430 Quality +.076Offers +.616 Brands + .251(constant) = Packs purchase for MaggiPositive correlation with all the variablesR square of the regression model (maggi) is 559R square of the regression model (maggi) is .559

Bambino PastaEquation of regression line is(un standardized)

.146 Quality +.302Offers +.367 Brands + .024(constant) = Packs purchase for bambinobambinoNegative correlation with all the variablesR square of the regression model(bambino) is .529

Others(Imported)Equation of regression line is(un standardized)

355Q li 128Off 1 289 B d 002( ) P k h f-.355Quality +.128Offers +1.289 Brands + .002(constant) = Packs purchase for bambinoNegative correlation with all the variablesR square of the regression model(bambino) is .634

FACTOR ANALYSIS USING SPSSFactor Analysis is a correlation technique to determine meaningful clusters of shared variance. It begins with large number of variable and then tries to reduce the interrelationship amongst the variables and reduces them to a fewreduce the interrelationship amongst the variables and reduces them to a few number of factor or cluster.

Null Hypothesis: H0: Correlation does not exist.Null Hypothesis: H0: Correlation does not exist.Alternate Hypothesis: H1: Correlation exists.

“DESCRIPTIVE STATISTICS” of the attributes and the number of respondents for each of the attributes.

KMO & BARTLETT’s TEST PREDICTING “SAMPLING ADEQUECY”Q

Value: 0.824 indicating high correlation amongst variables and hence rejecting the Null Hypothesis.

CORRELATION MATRIX:

Rotated component matrix is the orthogonally rotated component matrix indicating the no of mutually exclusive factors that exists which is inclusive of four correlated factors each.

INTERPRETATION OF THE ANALYSIS

It can be concluded from the analysis that the two main factors on which the perception and hence the buying behavior of the consumer depends are as follows.

Packaging Taste1.) 2.)

VALUES DELIVEREDBrand

VALUES PERCEIVED V l fQ i

) )

DELIVERED BY THE

COMPANY

QualityBrand Image

PERCEIVED BY THE

CONSUMERS

Value for money

Quantity provided

Availability Satisfaction

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