The cigarette industry in India is dominated by 4 players - ITC, Godfrey Phillips, VST (also a BAT affiliate) and GTC. These four companies together control almost 99% of the market. The cigarette industry faces competition mainly from the unorganized sector 'bidi' manufacturers, who are protected from high duties due to small-scale industry status. Affected by steep duty hikes, the industry has been facing stagnant volume growth in the last 2-3 years. Cigarette sales dropped by 4% in volume terms in FY00. The 2000-01 budget also hiked excise on all types of cigarettes by 5%.
Based on the contribution form various products, ITC's business can be divided into three main divisions, namely cigarettes, tobacco and agri-products. ITC's mainstay of earnings is cigarettes (87%) and tobacco (3%). Agri-products business contributes 5% of the total Rs80bn revenues, while other businesses of hotels, paper and packaging collectively contribute the balance 5%.
Tobacco today is the largest contributor to Indian excise collections. Despite that the industry has been getting step-motherly treatment by the central government. The industry has been facing regular increase in excise duty on cigarettes in every budget for past so many years. The cigarette industry in particular has been suffering both at the hands of central government as well as state governments. In CY12/00 also the cigarette industry was again made a scapegoat and a proposal for additional levy of 1% on cigarette manufacturers was made to pay for the lackadaisical approach of government regarding unregulated tobacco crop. Last year (CY12/00) a number of big events like crop holiday for the current year, proposals of additional levy on cigarettes etc. dominated the industry scenario.
[...] In such a scenario of rising taxes and decreasing consumption, any further imposition of levies or taxes on the cigarette industry seems unjustified. So I think the government should give a glance to these aspects and should try to see the situation from cigarette industry's point of view before finalizing any proposal PRESENT SCENARIO “Scotch is not a mass product any where in the World. What the scotch player will not say but do realize it that the scotch market in India is even not self sustaining.” While the wine industry accounts for less than one percent of the tobacco industry in India, it boasts of a growth of 25 percent per year. [...]
[...] All cigarette factories have ISO 9002 quality certification. ITC's Tobacco Technology Centre at Peenya, Bangalore has the distinction of being the first independent R&D centre in India to get ISO 9001 accreditation. The Kolkata factory has won the Rajiv Gandhi National Quality Award (Best in Eastern Region) for 1998. SISTER CONCERNS COMPANIES A. IN INDIA ITC Bhadrachalam Paperboards Ltd ( 56.00 BFIL Finance Ltd ( 99.99 BFIL Securities Ltd ( 99.98 MRR Trading & Investment Ltd ( 99.98 ITC Hotels Ltd ( 71.23 Srinivasa Resort Ltd Bay Island Hotels Ltd Greenace Holding Ltd Fortune Park Hotel Ltd ( 99.99 Russell Credit Ltd ITC Infotech Ltd All India Tobacco Company Ltd Elan Enterprises Ltd ITC Global Holdings Pvt Ltd Brands . [...]
[...] The research objectives of the study are:- To determine the Market position of Cigarette produced by ITC Ltd. To determine the perception of consumer towards Cigarette of ITC Ltd. To know the market share of ITC Ltd Regard to Cigarette only. To determine the competitors of ITC Ltd. To analyzing the market expansion in future. METHODOLOGY Marketing Research is the backbone of marketing. The objective of my research is to study the consumer perception about Cigarette product of ITC in Indian consumer durable industry. [...]
[...] Besides this no help has been taken from any secondary data of this type in this regard QUESTIONAIRE ANALYSIS Brand % of Liking Gold Flake 19 Wills 21 Classic 10 Capstan 24 India Kings 7 Scissors 2 Other 17 Smoking Habits Percentage Regularly Smoke 55 Occasionally Smoke 33 Do not smoke 12 Attribute Value (in Good 64 Satisfactory 23 Poor 13 Factor Value (in Taste 35 Price 24 Brand Name 20 Packaging 8 Other 13 Feelings Value (in Happy 55 Tense 25 Angry 11 Relaxed 9 Attributes Value (in Loyal 71 Switcher 29 Attribute Value Yes 73 No 13 No Comment 14 Brand Sale Gold Flake 40 Wills 46 Classic 20 Capstan 50 India Kings 15 Other 5 Year Production Volume(in mn.) 2001 51445 2002 52127 2003 56365 2004 55879 FINDINGS Market leadership Powerful brands across segments Leadership in all segments - geographic & price Extensive distribution network Over 900 wholesale dealers serving more than 1 million retail outlets World-class state-of-the-art technology and products Investment - Rs.11 billion in six years Exciting long term growth potential Cigarettes account for only 14% of tobacco consumed in India unlike world pattern of 85% due to prolonged punitive taxation Cigarettes of tobacco consumption) contribute nearly 85% of Revenue to the Exchequer from 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 [...]
[...] In ITC, one of the pioneers of market research in India, the consumer is still the King. The Company continuously endeavours to provide its consumers products that are benchmarked to international quality. This strategic focus on the consumer has paid ITC handsome dividends. The most important of these is its enriched product mix, unmatched by competition. ITC's share of filter cigarettes in the country is more than 70%. In pursuit of international competitiveness, ITC has launched four brands - Checkers, Hi-Val, Royale Classic and Gold Crest - in the extremely competitive US market. [...]
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