Cigarette exports during 2007-08 increased by 11 % in volume terms over the exports of previous year. Major markets for cigarettes are UAE and USA, Romania, Saudi Arabia and Iraq where the demand for generic low co st cigarettes is growing. Cigarette account for only 15% of tobacco consumed in India unlike world pattern of 85% due to prolonged punitive taxation.
Cigarette exports during 2007-08 increased by 11 % in volume terms over the exports of previous year. Major markets for cigarettes are UAE and USA, Romania, Saudi Arabia and Iraq where the demand for generic low co st cigarettes is growing. Cigarette account for only 15% of tobacco consumed in India unlike world pattern of 85% due to prolonged punitive taxation.
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Cigarette exports during 2007-08 increased by 11 % in volume terms over the exports of previous year. Major markets for cigarettes are UAE and USA, Romania, Saudi Arabia and Iraq where the demand for generic low co st cigarettes is growing. Cigarette account for only 15% of tobacco consumed in India unlike world pattern of 85% due to prolonged punitive taxation.
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Download as TXT, PDF, TXT or read online from Scribd
The cigarette industry is one of the oldest industries in
India. It is an important AGRO based Industry. It is highly labor intensive & pr ovides livelihood to about 5 million people directly and indirectly. Cigarette i s an item falling under the First Schedule to the Industries (Development & Regu lation) Act, 1951 and requires an industrial license. India is the second larges t producer of tobacco in the world. It exports a good amount of cigarette in var ious countries, which generates a handsome amount of revenue for the company. Cigarette exports during 2007-08 increased by 11 % in volume terms over the exports of previous year. Major markets for cigarettes are UAE and USA, Romania, Saudi Arabia and Iraq where the demand for generic low co st cigarettes is growing. Cigarettes account for only 15% of tobacco consumed in India unlike world pattern of 85% due to prolonged punitive taxation Cigarettes (15% of tobacco consumption) contribute nearly 85% of Revenue to the Exchequer f rom tobacco sector Of the 58% of adult Indian males who consume tobacco, barely 15% can afford cigarettes Biri : Cigarettes ratio = 10 : 1 Annual per capita adult cigarette consumption i n India is appx. one tenth world average : 85 Future growth depends on relative rates of growth of per capita income and moderation in taxes cigarette growth potential 15 % cigarettes chew tobacco 21 % bidis 43% Mfg exports 2% Un-Mfg exports 19% Cigarettes 15% ITC Limited G.T.C. Industries Ltd. Godfrey Phillips (India) Ltd. V.S.T. Industries Ltd. INDIAN cigarette pie GTC 8% ITC VST 8% GPI 12% ITC 72 % Godfrey Phillips VST GTC ITC - CIGARETTES ? GPI GTCI VST Market attractiveness & Competitive strength is also important. One of India s premier private limited groups with over 99 years. Large & established Distribution Networks. Annually turnover of t he co. is RS 2888 Crore It is one of the eight Indian companies to feature in Fo rbes A-list in 2004. It has more then 21,000 employees at more then 60 location across India with 4,86,000 shareholders. Ranks No. 4 among Indian listed Private Sector Companies by market cap. (@ April 09) Rated as- one of India s Most Resp ected Companies (IMRB-Business world Survey 2006) On 24th Aug. 1910 the company was incorporated as a private company under the name, Imperial Tobacco Co. of India ltd. On 27th Oct. 1954 the company was converted into a public limited company. The name of the co mpany was changed from the Imperial Tobacco co. of India ltd., to India Tobacco co. ltd. In May 1970. On Oct. 1972 company entered into Hotel business. On 2000 company has launched a project e- choupal in Bhopal to Web-enable farmers to mak e a beginning in Agriculture e-trade. During the same year ITC has launched Will s sport, a full range of internationally styled premium wear for Men & Women. Vision y Sustain ITC's position as Mission y To enhance the wealth one of India's most valuable corporations through world class performance, creat ing growing value for the Indian economy and the Company s stakeholders. generating capability of the enterprise in a globalizing environment, delivering superior and sustainable stakeholder value. They have a DIFFERANTIAL MARKETING STRATEGY type. o Cigarette companies manipulate menthol levels to lure young smokers o Ma jor brands and their advertising campaigns Always use their existing channels. U tilizing nominal resources related with the brand Brand Ambassador are selected according to the brands and mostly are YOUTH ICONS They emphasize on going with the FLOW and making their Followers . Market leader in India. Powerful Brands across segments. Leadership in all segme nts - geographic & price. Extensive FMCG distribution network. y Direct servicin g of 1,00,000 markets & nearly 2 million Retail outlets. Exciting long term growth potential. World-class state-of-the-ar t technology and products. y Investment - Rs.10 billion in six years About 71% o f the Total Turnover depends upon this Business. Super Premium Products Insignia y ITC Insignia. 97 mm. y Cost: Rs 130 for 20 Where quality touches infinity , redefine perfection y Advertised in Higher SES area y 555 y ITC 555 premium filter: regular 84 mm. y Cost: Rs 100 for 20 y Advertised in H igher SES India King y ITC India King. 84 mm. y Cost: Rs 100 for 20 y Rule your World y Advertised in Higher SES area Wills Silk Cut(king size) y ITC Wills Silk Cut Filter: 84 mm. y Cost: Rs 88 for 20 A blend so right a filter so fine y Advertised in Higher SES y Wills Classic/Mild/Regular/Menthol / Ultra Mild y ITC Wills Classic/Mild Filter: King 84 mm. Cost: Rs 94 for 20 y Discover a passion y Advertised in Higher SES Wills Navy Cut(Filter Tipped) y ITC Wills Navy Cut Filter: ,74 mm. y Cost: Rs 68 for 20 Made for each other y Advertised in Higher SES y Wills Navy Cut(Duotec) y ITC Wills Navy Cut Filter: ,84 mm. y Cost Rs 80 for 20 y Advertised in Higher SES Navy Cut(Regular Size) y ITC Wills Navy Cut Filter: ,69 mm. y Cost Rs 48 for 20 y Advertised in Higher and Lower SES. Gold Flake(Premium) y ITC Gold Flake Premium: Regular 69 mm. Cost: Rs 58 for 20 y It s Honeydew Smooth , Smooth, exquisite, timeless. But the n, all art is y Advertised in Higher and lower SES Gold Flake King/Lights/Ultra Light Filter y ITC Gold Flake King/Light: Regular 84 mm. Cost: Rs 88 for 20 y Now in a Bevelled Edge pack y Advertised in Higher and lowe r SES benson & hedges(light & hard) o B & H under ITC Regular Size 84mm. o Cost : Rs 100 for 20 o Advertised in High er and Lower SES Marlboro (light & hard) o Phillip Morris under ITC Regular Size 84 mm. o Cost : Rs 100 for 20 o Advertis ed in Higher and Lower SES Wills Flake o ITC Wills Flake Filter Regular Size 69mm. o Cost : Rs 58 for 20 o Advertised i n Higher and Lower SES Bristol o o o o ITC Bristol Regular Size 69 mm. Cost : Rs 32 for 20 Rise to the taste Advertised in Higher and Lower SES Strength y Biggest and the largest
Weakness its foot in the cigar market largely dominated by Godfrey Philips. y It still has to consolidate player in the Indian tobacco market with a market share of 80%. y Its Gold Flake tobacco brand is the largest FMCG brand in India and this single brand alone ho lds 70% of the tobacco market. Opportunities y ITC is moving into new and emerging markets like developing coun tries of Eastern Europe, Africa etc.
Threats y The obvious threat is from competition, both domestic and international. y Health hazard y Increasing tax i n Cigarettes  Entry Barrier ANALYSIS  Supplier Bargaining Power  Buyer's Bargaining Power  Indus ivalry  Substitutes REVENUES Y/E March (Rs cr) FMCG-Cigarettes Growth-Share Matrix % % FY2008 FY2007 Growth Contrib. % Market Share Growth Share 13,825.6 12,833.7 7.7 58.41 70% Low High The second largest player in the Indian cigarette industry. Annual turnover exceeds INR 1800 crore (approx. US $369.6 million) Has two major stakeholders, one of India's leading industrial houses - the K. K. Mo di Group and one of the world's largest tobacco companies, Philip Morris. y Incorporated in India in 1936, the Company established its own manufacturing facilities in 1944 y On 1946 GODFREY PHILLIPS became a Public Ltd. Co. with its manufacturing operations in Mumbai y Its produ cts are distributed through an extensive India wide network comprising 484 exclu sive distributors and over 800,000 retail outlets Vision y To become a leading tobacco player in India and beyond.
Mission think and act radically, stretch relentlessly and generate path breaking ideas a nd strategies to propel the Company. This helps to create and build powerful bra nds with unmatched service and world class processes. y empowers all its people to Four Square Filter y GPI Four Square Filter: Regular.69 mm Cost: Rs 48 for 20 y Man with the smooth edge y Advertised in Higher and Lower S ES Stellar y GPI Stellar Slims Cost: Rs76 for 20 Low nicotine, High Satisfaction y Advertised in Higher SES area y GPI Red and White o GPI Red & White flake o Text in Hindi Hum red and white peene walon ki baat hi kuch aur hai o Cost: Rs 48 for 20 Advertised in Higher an d Lower SES I-Gen o GPI Red & White Regular . o Introduced India s 1st King size 5 s pack o India s 1st Euro Norm 10-1-10 cigarette holds the promise of an advanced cigarette quality and immense style. o Advertised in Higher and L ower SES jaisalmer o GPI Jaisalmer Premium king size . o It is a luxurious blend of finest sun drie d Virginia tobaccos which deliver a smooth mellow flavor. o Advertised in Higher a nd Lower SES north pole o GPI North Pole menthol o largest selling menthol cigarette in India o Advertis ed in Higher and Lower SES cavanders o GPI s Oldest & most trusted brand. o providing superb value and satisfaction o Cost:Rs 68 for 20 o Advertised in Higher and Lower SES tipper o Phillip Morris Tipper o The fastest growing micro segment brand o Advertised i n Higher and Lower SES Strength y The second biggest tobacco Weakness y low popularity of most of company in India y The first and only tobacco company to organize the fragmented cigar market in India and secure its position as the market leader in the cigar distribution. y Partnering with some of the top most players in the internation al tobacco industry. its products y No sole authority Opportunities y Already present in the Threats y ITC getting into the cigar Middle East, West Africa, South East Africa and South East Asia, GPI can strengt hen its position as an international player by entering new markets. y Even expa nding market share in the Indian tobacco market is an opportunity market y It has a mere 12% in market share New Entries: Buyers bargaining powers: Oligopoly market situation. Suppliers barga ining power: Fragmentation, consolidatio n & integration. Low switching costs Th reat of substitutes: Depends on buyer to buyer. Some are Brand Loyalists. Compet itive rivalry: New innovative products by rivals. o GPC is a professionally managed organization in the o o o o field of tobacco and tobacco related products. Established in the year 1930 by t he late Shri Narsee Monjee. GTC is the first wholly owned company specializes in manufacturing & exporting an exclusive range of Cigarettes, Flavor Cigar & Non Tobacco smoking product. GTC has manpower strength of 2000 employees spread acro ss manufacturing. The Company has two major production facilities in Mumbai as w ell as Baroda. Vision o To be a largest, Human sensitive , Global Tobacco Company. Mission o Constant R & D to develop the finest blends guided by relentless focus to deliver world class packaging, with the aim to exceed expectations of our co nsumers both in India and around the globe . All of our long-term strategies & s hortterm will be bound by the finest standards of professionalism and dedication . We work with commitment , dedication & Integrity towards a common goal. We are an equal opportunity Employer. We believe that lea rning is a life long process & provide an environment attuned to growth. We are a balance of the boldness, energy and courage of youth, sharpened by the experie nce, foresightedness and wisdom of veterans. PANAMA
A Legendry brand of GTC. The company has launched several variants in the Panama portfolio. Some of these are: o Panama Virginia Regular o Panama Filter o Panama Gold o Panama Premium Filter o Panama Delight o Panama Menthol o Panama Mini Ki ngs chancellor o The Chancellor name is given to Golden Tobacco s Finest Blends. o Chancellor a s a symbol of quality cigarettes.
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o Chancellor Browns: A unique Premium blend in the king size segment It is a sophi sticated & stylish product. Chancellor Royale: Which appeals to the modern age c onsumers who have royal tastes & hearts of Gold. Chancellor Exclusive: Unique Br own Cigarettes in Regular size with Distinctive Flavor. Chancellor Harvard Luxur y: A Consumer s Favorite since ages. Chancellor Lights: A mind blend of finest t obacco, in a style White pack. Golden o Carving a niche for itself in the crowded marketplace is the Golden s Brand. o An assurance of quality, for the value conscious smoker. Golden s Gold Flake o A strong blend. o Which allows the smoker to derive immense pleasure. Golden s Major o A tribute to the Macho, Courageous and Bold personalities. o Th e packaging of Golden major has been inspired from the Defense fraternity. taj chap o A heritage brand of Golden Tobacco o Market for more than 35 years. o The only Premium brown cigarette in the non filter segment. style mini kings o Launch more than 25 years ago o To cater to the changing youth of the country, The name STYLE says it all. o A distinctive blend , which was very well accepted by the Indian Youth. steel(Regular & king size) o Steel- It Separates Men From Boys . o Targeted at the youthful Rich & smooth s moker, With new look packaging & style. o Regular size of Steel has been a huge success . June(Light & menthol Flavors) o Premium quality Virginia blend producing rich & pleasant characteristics. o June Slim has been designed meticulously to s uit the life styles of those who like to carry themselves. just black o A Flavored Filter Cigar o Flavors: Full flavor, mild, menthol, cherry, Chocolate vanilla, peach, rum, raspberry, Sour apple, strawberry & grapes. lips o Lips flavored cigars(in tube pack)have a sweet filtered tip and are loaded with flavor. o Each cigar is packed in its own indiv idual plastic tube. o An ideal product to carry around in your pocket. The company was incorporated in 1930 at Hyderabad . The third largest player of Cigarette industry in India. In 1984 the name of the Company was changed from Th e Vazir Sultan Tobacco Co. Ltd. to VST Industries Ltd. The Company embarked upon a major modernization program designed to improve its competitive ability in dome stic and international markets. The company recorded revenues of INR3,401.7 mill ion (approximately $84.5 million) in the fiscal year ended March 2008. The Compa ny manufactures and distributes Cigarettes The products are sold under the trade names `Charminar Specials', `Shah-I-Deccan', `Qila', `High Court', `Vazir' and `Ambassador'. chArms A Legendry brand of VST. The taste that sets you free Advertised in Lower SES Charminar A Legendry brand of VST. The company has launched several variants in the Charminar portfolio. Some of these are: o Charminar Special Filter o Charminar P lain o Charminar Standard.