ITC Food's Growth and Future Prospects
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Case Code : MKTG135
Case Length : 20 Pages
Period : 2001-2006
Organization : ITC Ltd.
Pub Date : 2006
Teaching Note :Not Available
Countries : India
Industry : FMCG
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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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ITC Foods: Tasting Success?
Entering the foods business was a strategic decision for ITC. While ITC's core business, tobacco, was under pressure owing to several factors like government bans on advertising cigarettes and on smoking in public places (from February 2001), hikes in the excise duty for cigarettes, and anti-tobacco campaigns, the liberalization of the Indian economy had thrown open several opportunities which the company was eager to exploit. Being a cash-rich company, ITC planned to deploy its surplus in the packaged food business where it saw huge business potential...
In 2001, ITC launched the KoI brand of ready-to-eat gourmet dishes under sub-brands - Bukhara, Dum Pukht, and Dakshin - popular cuisines from specialty restaurants of the same names at ITC Welcomgroup hotels.
With prices ranging from Rs.150 to Rs.200 for a 450g pack, they were positioned as premium products for the food connoisseur, with target groups including tourists, NRIs, etc. Ravi Naware (Naware), CEO, ITC Foods, said, "It's actually ready-to-eat gourmet cuisine from ITC's Bukhara, Dakshin and Dum Pukht restaurants...
ITC entered the confectionery market by acquiring Mint-O, a compressed mint tablets brand, from the Delhi-based Candico India Limited in 2002 and re-launching the brand with new packaging and improved quality. Mint-Os were available in six and twenty mini roll packs and were priced at Rs. 2 and Rs. 5 respectively. They came in mint and orange flavors.
At the end of 2003, ITC launched Candyman in the boiled sugar candy segment in banana, mango, and orange flavors. They were priced at 50 paise per unit. Initially, they were launched in Uttar Pradesh and Tamil Nadu...
ITC entered the staples market in 2002 with wheat flour under the Aashirvaad brand. In the same year, the Government of India's (GoI) proposal to remove restrictions on the movement of agri-commodities across states gave a boost to the trade in wheat flour. In 2003, ITC extended the Aashirvaad brand to edible salt...
ITC entered the biscuits market with Sunfeast in 2003, with three varieties of biscuits - glucose, marie, and cream. While Sunfeast Glucose targeted children in the age group 4-14 years and their mothers, Sunfeast Orange Marie and Marie Light were targeted at housewives/families. Sunfeast Cream (orange, butterscotch, and bourbon) was also targeted at children. The Orange Marie and butterscotch cream variants were introduced after a year long product R&D effort and extensive sampling covering 14,000 consumers. Gradually, the product line was expanded (Refer Table II for the product list in 2006)...