ITC SALES AND

DISTRIBUTION
By
V.S.Kaladevi
B.Srimathi
R.Venkatesh
 Discussion Outline

INTRODUCTION

CHALLENGES OF DISTRIBUTION SYSTEM

FOOD DISTRIBUTION OF SUNFEAST

OBSERVATIONS
 Introduction to ITC
 One of the worlds most reputable company

 Market capitalization of nearly US $ 18 billion

 Turnover of over US $ 5.1 Billion

 Post tax profit of US $750 Million

 Diversified product portfolio

 Direct group employment of 29000

 PRODUCT S LINE

CIGARETTES
FOODS
LIFESTYLE RETAILING
PERSONAL CARE
EDUCATION AND
SATATIONARY
SAFETY MATCHES
AGARBATTIS
 Distribution of Food Products

 Strict compliance standards, low profit

margins, intense competition, high customer-
service expectations.

 Fast and effective sales ordering processes.

 Flexibility

 Quick reaction
 Important Factors

CREDIT SYSTEMS MARGINS

PROMOTIONS FOOD STOCK OUTS

DISTRIBUTION CHANNELS WASTAGES

Distribution Channel
 Flow Diagram
CNF

FACTORY

WHOLESALE
DEALER BASE

RETAILER
WHOLESALE
DISTRIBUTOR
 Distribution System

 ITC uses FIFO method to reduce the wastage of

goods due to expiry.

 They also keep the good on constant move from

low sales area to high sales area.

 The company collects all the expired goods four

times a year, and destroys them.

 Retailers must return expired or damaged

products within six months after the date of
expire.
 Distribution System

 Adjustment for them is done in three months

time.

 ITC provides their retailers with racks, hangers,

etc to display the products.

 The benefits received by the retailers depend

upon their sales volume and also the location of
their shops.

 ITC has hired IMRB to do the market research.

 DISTRIBUTION IN RURAL
 ITC launched India's first rural mall, 'Chaupal Sagar',
which offers products ranging from FMCG to electronics
appliance to automobiles. ITC has 23 stores across India.

Mandi e-Choupal

Inbound
Logistics Pricing

Display &
Inspection Inbound
Logistics
Operational
Auction Process
Inspection &
Grading
Bagging &
weighing
Weighing &
Payment
Payment

Outbound Hub Logistics

Logistics
 DISTRIBUTION IN RURAL
• Companies can cater to the needs of rural consumers
by making their products available upto feeder
towns or mandis.

• Feeder markets or mandis provide excellent scope

for distribution of products like consumer durables,
clothes, kitchen equipment, agri-inputs and tools.

• The rural consumers visit these towns at regular

intervals not only for selling their agricultural
produce but also to purchase clothes, jewelry,
hardware, radio, and other consumer durable
products.
 Observations

 Food products are normally a high volume ball

game.

 Products have to essentially be available in the

market at all given points of time and at all given
points of purchase.

 The supply of products takes place virtually on a

daily basis in fixed quotas or otherwise, to
retailers as per their requisitions and the
anticipation of demand and the performance of
products in the recent past.
 Observations

 The skeleton of distribution system is same for all

the companies.

 Companies try very hard to make a difference at

some point to get the competitive advantage.

 ITC has a very strong distribution network for

their cigarette brands and they are using this
network to push their new biscuit brands.

 Credit system also depends upon the position of

the product in the market.
 Observations
 Companies with top product are hard to bargain
on credits.

 Companies also use their premium products to

push their non premium products.
 PACKAGING
 ITC's Packaging & Printing Business is the country's largest
convertor of paperboard into packaging.
 It converts over 50,000 tonnes of paper and paperboard
per annum into a variety of value-added packaging
solutions
 ITC is the first-choice supplier of high value added
packaging

 Its client list includes national and international companies

like British American Tobacco, Philip Morris International,
Surya Nepal Private Limited, VST Industries, UB Group,
Nokia, Flextronics, Foxconn, FMC India Pvt Ltd., Pernod
Ricard, Allied Domecq, Whyte & Mackay, Hindustan Lever,
Tata Tetley, Nestle and Reckitt Benkiser India Ltd.

 It supplies packaging to cover 70 billion cigarettes a year

domestically, and supplies packaging for 15 billion
cigarette sticks a year for the export market.
 It is the largest supplier of liquor mono cartons in the
country.
 Product Range
Flip-top boxes
Display outers
Shells and Slides
Soft cup and strap
Labels
Bundle Wraps
Flap boxes
Inner Frames
Coupon Inserts
Folding Cartons
Fluted Cartons
 Shoulder Boxes
Pre-printed cork tipping
Flexibles Packaging
 Various marketing strategies

 “SHARUKH KHAN” “DHONI” & “SURYA”

as brand ambassador of SUNFEAST

 E-COMMERCE activities for READY-TO-EAT

Snack brand KOI
 Tie-up with leading portals to promote snack range
 Online advertising & can order snack on toll-free number –
1600

 ITC FOOD division rolled out new products in categories –

1. Staples
2. Ready-to-eat
3. Confectionery
4. Snack Food
 ITC Foods has contract manufacturing facility.
Panel tastes & approves it before processing takes place.