Reviewed by:LALIT SONI (A-73)

 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.

o o

o

o

o

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.

Advertised in Lower & High SES Area.