SUMMER TRAINING PROJECT REPORT

on

“URBAN/RURAL DEVELOPMENT PROGRAM

SL/SLROU”
at

ITC LIMITED
{MARKETING BRANCH SAHARANPUR}

Submitted in partial fulfilment of the requirement for the degree of

MASTER OF BUSINESS ADMINISTRATION (MBA)

Submitted To

INTERNAL GUIDE EXTERNAL GUIDE

Dr. Raj Kumar Singh Mr. Harish Mitra
Asst Professor (GEHU) ASM (ITC SAHARANPUR)

Submitted by
PRASOON DEOLAL
(2302345)

GRAPHIC ERA HILL UNIVERSITY, DEHRADUN

BATCH 2023 – 2025
 ACKNOWLEDGEMENT

I would like to express my sincere gratitude to “Graphic Era Hill University” for providing me
the opportunity to pursue my internship at “ITC, Sharanpur”, It has been an invaluable learning
experience that has contributed immensely to my professional and personal development.
I am extremely grateful to my supervisor “Harish Mitra” for his invaluable guidance,
encouragement, and support during my time here. His insights and advice have pushed me to
grow and learn in ways I did not think possible. I could not have asked for a better mentor.
I would also like to thank the wonderful team at ITC.
Finally, I want to thank my internal guide, “Dr. Raj Kumar Singh” and my professors at Graphic
era University, for laying the foundation that allowed me to maximize this internship opportunity.
This internship has been a defining period in my life, and I could not have done it without all your
help.

Thank you.
 INTERNAL GUIDE CERTIFICATE

I have the pleasure in certifying that Prasoon Deolal is a bonafide student of 3rd semester of the Master of
Business Administration (Batch 2023 - 2025), of Graphic Era Hill University, Dehradun, Roll No: 2302345

He has completed his project work entitled “ITC ShubhLaabh Project” under my guidance.

I certify that this is his/her original effort & has not been copied from any other source. This project has also not
been submitted to any other Institute / University for the purpose of award of any Degree.

This project fulfils the requirement of the curriculum prescribed by this University for the said course. I
recommend this project work for evaluation & consideration for the award of Degree of MBA to the student.

Name of the Guide: Dr. Raj Kumar Singh

Designation: Asst Professor, GEHU
Signature:
Date:

3
COMPLETION CERTIFICATE

4
 EXECUTIVE SUMMARY

The provided project report outlines a detailed assessment of ITC's ShubhLaabh Project and the Unnati App,
emphasizing their role in enhancing distribution efficiency in the Fast-Moving Consumer Goods (FMCG) sector.
This summary will highlight the key aspects of the report, focusing on distribution management, the impact of
digital tools, and ITC's rural and urban market strategies.

The report's primary goal is to evaluate ITC’s distribution strategies and the technological innovations that
contribute to supply chain optimization. Through this evaluation, the ShubhLaabh Project emerges as a pivotal
initiative designed to improve ITC's distribution network by targeting wholesalers, particularly in rural markets.
Additionally, the Unnati App plays a crucial role in streamlining communication, order management, and real-
time inventory tracking, which fosters greater efficiency and engagement among wholesalers.

The ShubhLaabh Scheme was instrumental in improving the efficiency of ITC's distribution network. The report
highlights that ITC focused on expanding its rural footprint by incentivizing wholesalers to stock a more
comprehensive range of products. These efforts were supported by the Unnati App, which facilitated
communication between wholesalers and ITC, enabling real-time management of orders and stock levels. This
digital tool reduced the reliance on traditional, manual processes, making the distribution system more agile and
responsive to market needs.

Moreover, the initiative aimed to enhance relationships with current wholesalers by offering incentives tied to
performance. This was reflected in increased sales and better visibility of ITC products in retail outlets.
Wholesalers benefited from targeted promotions and the ability to place orders more efficiently through the
Unnati App, which also provided insights into their sales performance.

The Unnati App stands out as a key innovation in ITC’s distribution model. By digitizing order management and
providing real-time inventory tracking, the app significantly reduced the time and effort required for wholesalers
to manage their stock. It also facilitated better communication between ITC and its partners, offering wholesalers
updates on promotions, sales targets, and incentive schemes. This direct engagement with wholesalers through a
mobile platform fostered a more proactive and informed approach to distribution, particularly in remote areas.

5
Despite these advances, ITC faces several challenges in penetrating rural markets. The report identifies key
obstacles such as:

Infrastructure limitations: Poor Road conditions and underdeveloped transportation networks in rural areas
often delay product delivery.

Price sensitivity: Rural consumers are highly price-sensitive, making it difficult for premium products to gain
traction in these markets.

Competition from local brands: In many rural regions, local brands dominate the FMCG landscape, offering
lower-cost alternatives that appeal to price-conscious consumers.

Digital adoption: While the Unnati App has proven beneficial, slow digital adoption in rural areas—due to
limited internet access and digital literacy—remains a significant barrier.

The report concludes with insights into market dynamics, particularly the growing demand for affordable FMCG
products in rural areas. It emphasizes the importance of localized marketing strategies that cater to regional tastes
and preferences, suggesting that ITC could further strengthen its position by expanding its range of low-cost
products tailored to rural consumers. Additionally, enhancing the visibility of ITC products through better in-
store displays and targeted promotions is recommended to boost brand recognition and loyalty.

The report successfully demonstrates that ITC’s distribution strategies, particularly the ShubhLaabh Project and
the Unnati App, have had a positive impact on its business operations. By leveraging technology to streamline
distribution and engaging wholesalers through performance-based incentives, ITC has improved its market reach
and distribution efficiency. However, challenges in rural markets, such as infrastructure and price sensitivity,
require continued attention. The report suggests that a focus on affordability, localized marketing, and digital
engagement will be critical to ITC’s future success in expanding its rural market share.

6
 OBJECTIVE

 To Evaluate ITC's Distribution Strategies.

 To Analyse the Impact of Technology on Supply Chain Optimization.
 To Understand ITC’s Community Engagement and Sustainability
Efforts.
 To Identify Challenges and Opportunities in Rural Distribution.

7
 TABLE OF CONTENT

PAGE
SECTION TITLE
NUMBER
1. INTRODUCTION 9
1.1 FMCG Industry Overview 10
1.2 Evolution of FMCG Sector in India 14
1.3 Current Scenario of FMCG Industry in India 15
1.4 ITC Product Portfolio 17
1.5 About ShubhLaabh 18
1.6 Unnati App 21
2. LITERATURE REVIEW 23
2.1 Distribution Management in the FMCG Sector 24
2.2 The Role of Incentive Programs in Distribution 24
2.3 Technology in Supply Chain Optimization 25
2.4 Sustainability and CSR 25
2.5 Challenges in Rural Distribution 25
3. RESEARCH
28
METHODOLOGY
3.1 Objective of the Study 28
3.2 Scope of the Study 29
3.3 Significance of the Study 31
3.4 Sources of Data 33
4. DATA ANALYSIS AND
37
DISCUSSION
Market Analysis for ITC Products with Consumer &
4.1 38
Wholesaler Behaviour
4.2 Challenges Faced by SL/SLROU 41
4.3 Price Discrepancies in MOP of FMCG Products 44
4.4 Scope of Improvement for ITC FMCG Products 46
4.5 ITC vs. Competitors 48
4.6 Schemes and offers 51
5. CONCLUSION AND
54
SUGGESTIONS
5.1 ITC FMCG Market Insights 2024 55
5.2 My Initiative 58
5.3 Conclusion 61
5.4 Suggestions for Future Growth 64
REFERENCE & ANNEXURE
65

8
 CHAPTER 1

INTRODUCTION

9
1.1 FMCG INDUSTRY OVERVIEW

Fast-moving consumer goods (FMCG) represent the fourth-largest industry within the Indian economy. The
sector is divided into three primary categories — food and beverages, which make up 19% of the sector;
healthcare, which constitutes 31% of the share; and household and personal care, representing the remaining
50% share. Approximately 55% of the revenue comes from the urban segment, while the rural segment
contributes 45%. An increase in rural consumption is expected to propel the FMCG market forward. The Indian
processed food market is anticipated to grow to US$ 470 billion by 2025, an increase from US$ 263 billion in
2019-20.

During the lockdowns caused by Covid-19, limitations on movement and social interactions led to a surge in
online and mobile shopping, particularly in areas such as groceries, food, beverages, and essential items. With
the decrease in Covid-19 cases and the rollout of vaccinations, these shopping habits are likely to remain
permanent. In 2021, global inflation affected consumer spending growth and resulted in increased prices that
shoppers had to absorb. In terms of volumetric sales in the FMCG sector and shopping frequency, most regions,
including East Africa and North America, experienced a decline, with Egypt being the exception. Nonetheless,
one category on a global scale exhibited significant promise: the Chocolate Confectionery market. According to
forecasts, the market size is expected to reach $265.9 billion by 2028, with a compound annual growth rate
(CAGR) of 6.7% between 2022 and 2028. Among this sector, nut manufacturers are likely to benefit, as nuts
pair wonderfully with chocolate, offering various nutritional and sensory advantages. Additionally, a growing
number of consumers are opting for healthier chocolate choices that are better for their health and the planet.

10
It is essential to highlight that there has been a significant increase in the demand for premium or specialty
chocolates, particularly in developed markets, with a continued rise anticipated in the upcoming years. Today,
consumers want information about the origins of ingredients used in chocolate confectioneries. Also, the growing
popularity of clean-label and organic products for general well-being has furthered the demand for dark and sugar-
free chocolate treats with higher cocoa content. Soon, an increase in public awareness regarding labour rights is
expected to elevate the demand for fair-trade chocolate.
As every industry today is intertwined with global market dynamics, economic tectonics cannot be ignored. While
we witnessed robust recovery from the impact of Covid-19 in 2021, registering the highest growth rate in more
than four decades, majorly fuelled by strong consumer spending and uptick.

11
In investments with trade in goods crossing pre-pandemic levels, regions such as China, the United States, and
the European Union saw considerable slowdown by the end of 2021 as the impact of monetary and fiscal stimuli
began to retreat and supply chain disruptions emerged. The growing inflationary conditions are also impacting
recovery momentum. There are added headwinds such as labour market challenges and the emergence of new
variants of the omicron virus.

About FMCG Sector: - Fast Moving Consumer Goods (FMCG) are goods or products that are sold quickly at a
lower cost. They are also known as Consumer-Packaged Goods. These products are affordable and are termed as
'Fast-Moving' as they leave the store or supermarket in no time as these products are purchased by the consumers
at regular intervals.

Examples of FMCG Products: The common examples of Fast-Moving Consumer Goods are as follow: -

● Soft Drinks
● Baked Items
● Dairy Products
● Meat
● Fruits
● Vegetables
● Personal Care Items
● Processed Food

Fast Moving Consumer Goods are perishable and have a short shelf life, therefore they must be consumed quickly
after the manufacturing date. FMCG products are sold in enormous quantities, but the profit margins are
comparatively low for the producers as compared to the retailers. But the profit earned by the companies by
selling the products in enormous quantities is sufficient for the companies to sustain their business

12
Characteristics of FMCG: -The following are the characteristics of FMCGs:
From the consumer perspective: -
● Regular purchases
● Low research
● Low prices
● Short shelf life
● Quick consumption
● Price comparison over online purchase by customer

From the marketer perspective: -

● Huge volumes
● Low contribution margins
● Extensive distribution
● High inventory turnover

Features FMCG Products: The following are the features of FMCG products: -

● Extensively used product: Each person uses FMCG products. Right from the beginning till the
end of the day, these products are continuously in use. It is almost impossible to survive without
FMCG Products.
● Unaffected by economic slowdown: FMCG is one of the industries where there is no recession.
Whether a global pandemic or a natural disaster occurs, this industry always remains unaffected.
● A large chunk of monthly budget: According to research, all FMCG products contribute to
approximately 90% of a family’s monthly budget.
● Rapid buying decision: Individuals usually do not spend a lot of time while purchasing FMCG
products. Rapid buying decision is one of the most key features of FMCG products. People do not
think too much while purchasing these products, neither do they do extensive research before
purchasing.
● Employment opportunities: The FMCG industry provides huge opportunities for employment.
Big retailers, wholesalers, distributors or warehousing and logistic companies generate a lot of job
opportunity.

13
1.2 EVOLUTION OF FMCG SECTOR IN INDIA

The FMCG sector was introduced in India between 1950 and 1980. During this period the FMCG sector
had limited investments, as people in those days had lower purchasing power and gave more importance
to necessity products instead of premium products. The Indian government gave preference to the local
shops and retailers. From 1980 to 1990, the purchasing power of the people increased and wanted more
variety of products. This encouraged the government to introduce more products in the market. This
was the time when the FMCG Industry started becoming lucrative as more companies started entering
the industry. Media industry in India had also boomed at that time, this made the newly entered FMCG
companies’ business even more profitable. Before 1991, western products and foreign FMCG goods
were not available to local consumers. People were not aware of brand recognition. But after 1991, all
the FMCG brands were introduced in the Indian market, which became a tremendous success. Since
the last few decades, the Indian FMCG industry has been one of the most profitable sectors of India.
They have managed to generate job opportunities for more than 3 million people. The most familiar
places where people buy their necessity products are supermarkets, department stores and local grocery
shops. The government has introduced these stores, so that it becomes convenient for the local people
to buy these goods which are required for their daily consumption. The most common stores in India
are Reliance Retail, Big Bazaar, D-Mart, Easy day, MORE, Spencer’s, Spar, Hyper City, and Star
Bazaar. Online retail is still developing in India, as a large chunk of the Indian consumers still prefer to
visit the stores or street markets.

14
1.3 CURRENT SCENARIO OF FMCG INDUSTRY IN INDIA

Fast moving consumer goods is the 4th largest sector in the Indian economy. The 3 main segments of
the sector are – food and beverages, which accounts for 19% of the sector; healthcare, which accounts
for 31%; and household and personal care, which accounts for the remaining 50%. Growing awareness,
easy access, and changing lifestyles have been the key growth drivers for the FMCG sector. The urban
segment (which accounts for a revenue share of around 60%) is the largest contributor to the overall
revenue generated by the FMCG sector in India and recorded a market size of around US$ 29.4 billion
in 2016-17. However, in the last few years, the FMCG market has grown faster in rural India compared
with urban India.

Fast Moving Consumer Goods (FMCGs) are products that are sold quickly at a relatively low cost. It
is the 4th largest sector in the Indian economy with Food & Beverages, Household and Personal Care
accounting for 83% of FMCG sales in India. The urban segment (accounts for a revenue share of around
55%) is the most significant contributor to the overall revenue generated by the FMCG sector in India.
However, in the last few years, the FMCG sector has grown at a faster pace in rural India as compared
to urban India.

Global and Indian FMCG Market Trends:

● Market Size and Growth: The global FMCG market was valued at approximately USD 10 trillion in

2020, with a projected compound annual growth rate (CAGR) of 4-6% through 2026. India, as one
of the largest FMCG markets, is expected to grow at a similar pace, driven by increasing consumer
spending, urbanization, and rural market penetration.

● Digital Transformation in FMCG: Across global markets, digital tools are increasingly being
adopted to enhance supply chain efficiency and consumer reach. Mobile apps, CRM platforms, and
AI-driven analytics are being integrated to drive personalization, improve demand forecasting, and
reduce supply chain bottlenecks.

● Consumer Behaviour Shifts: Post-pandemic, there has been a shift toward online shopping and home

delivery services. As consumers increasingly expect convenience, FMCG companies have had to
pivot toward digital solutions to remain competitive.

15
Impact of Digitalization on FMCG Distribution:

The distribution networks in the FMCG sector, especially in emerging markets like India, are evolving.
Traditional models that rely on physical interactions between suppliers and retailers are being replaced
by digitally enabled models that offer more agility, better data, and faster responses.

Key impacts include:

● Reduced Distribution Costs: Digital tools, such as the Unnati App, help companies reduce
logistics costs and middlemen, leading to more direct connections with wholesalers and retailers.

● Improved Stock Management: Apps and digital systems enable real-time inventory management,
reducing the risk of overstocking or understocking.

● Enhanced Data Analytics: Digital tools provide valuable insights into consumer and market
behaviour, allowing companies to fine-tune their strategies.

16
1.4 ITC PRODUCT PORTFOLIO

ITC Limited boasts a diverse and comprehensive product portfolio that spans several sectors, primarily
focusing on Fast Moving Consumer Goods (FMCG), hotels, packaging, and agri-business. This
diversified approach allows ITC to cater to a wide range of consumer needs while maintaining a strong
presence in the Indian market. Below is an expanded overview of ITC's key product categories:

FMCG (Fast Moving Consumer Goods)

ITC is one of the leading players in the FMCG sector in India, offering a wide range of products that are
categorized into several segments:

1.1 Food and Beverage

● Packaged Foods: ITC offers an extensive array of packaged food products, including:
● Aashirvaad: A leading brand in the flour segment, offering whole wheat flour, rice, and other
staple food products.
● Sunfeast: A popular range of biscuits, cakes, and instant noodles. The brand is known for its
quality and innovation, with products like Sunfeast Bounce and Sunfeast Dark Fantasy.
● Bingo! A brand of snacks that includes potato chips, extruded snacks, and healthy snack options.
● Yippee! Instant noodles that have gained popularity for their taste and convenience.
● B Natural: A range of 100% fruit juices and beverages made from natural ingredients, promoting
health and wellness.

1.2 Personal Care

● ITC's personal care segment includes a variety of products designed for daily hygiene and
grooming:
● Fiama: A range of personal care products including body washes, soaps, and hair care items
known for their unique fragrances and formulations.
● Vivel: Targeting the personal care market with soaps and body lotions that emphasize skincare
and nourishment.
● Engage: A brand focusing on fragrances, offering a range of deodorants and perfumes.

1.3 Cigarettes and Tobacco

● ITC is a market leader in the Indian cigarette industry, offering various brands, such as:
● Gold Flake: One of the most recognized cigarette brands in India, known for its premium quality.

17
 ● Classic: A strong contender in the premium segment, offering a range of products that cater to
discerning consumers.

1.5 ABOUT SHUBHLAABH

The ShubhLaabh Scheme is a strategically designed trade incentive program implemented by ITC
Limited, specifically targeting wholesalers, particularly in rural markets. This initiative aims to enhance
the company's sales footprint and market presence by incentivizing wholesalers to actively promote and
distribute ITC’s extensive range of products. By creating a performance-based rewards system, the
ShubhLaabh Scheme seeks to motivate distributors to increase their engagement with the brand, thereby
improving overall product availability, visibility, and sales.

Target Audience: The primary audience for the ShubhLaabh Scheme comprises wholesalers operating
in rural markets. These wholesalers often face unique challenges, such as price sensitivity and
competition from local and unbranded products. The scheme aims to address these challenges by:

•Empowering Wholesalers: Providing them with the necessary support and incentives to become key
players in their markets.

•Enhancing Product Knowledge: Training and equipping wholesalers with information about ITC’s
product range, enabling them to promote these products effectively to retailers and consumers.

•Building Relationships: Fostering strong partnerships between ITC and wholesalers to ensure a
sustainable distribution network that can adapt to market changes.

18
Objective: The main objectives of the ShubhLaabh Scheme include:

•Improving Product Availability: Ensuring that ITC products are readily available in rural markets
through a robust distribution network. This is achieved by encouraging wholesalers to stock a more
comprehensive range of ITC products.

•Enhancing Visibility: Promoting greater visibility of ITC products in retail outlets. This involves
implementing in-store promotional strategies and providing merchandising support to wholesalers.

•Driving Sales Growth: Encouraging wholesalers to increase their sales volume through targeted
incentives. By linking rewards to sales performance, the scheme aims to push wholesalers to actively
market ITC products within their territories.

Sales Targets: To facilitate a structured approach to sales improvement, the ShubhLaabh Scheme sets
specific sales targets for wholesalers and retailers. These targets are designed to be realistic yet
challenging, motivating participants to push for greater sales figures. The key components of the sales
target framework include:

•Target Setting: Wholesalers and retailers are assigned monthly or quarterly sales targets based on
historical sales data, market potential, and product availability.

•Performance Tracking: ITC regularly monitors the performance of wholesalers to assess their
progress towards these targets. This data-driven approach allows ITC to provide timely support and
resources to wholesalers who may need additional assistance to meet their goals.

•Incentives: Incentives are directly linked to sales performance. Wholesalers who meet or exceed their
targets receive rewards, which can include financial bonuses, product discounts, or exclusive
promotional support.

19
20
1.6 UNNATI APP

The Unnati App, developed by ITC Limited, is a transformative digital tool designed to streamline and
optimize the distribution and supply chain process in the FMCG sector. It primarily targets Onboarding
Local Stores (OLS) and wholesalers, facilitating efficient management of orders, tracking inventory,
and real-time communication with ITC. The app is integral to ITC's broader initiative—the ShubhLaabh
Project—which focuses on enhancing operational efficiency, boosting sales, and expanding the
company's footprint in both urban and rural markets.

Features of the Unnati App:

● Real-time Order Management: Wholesalers can easily place, track, and manage orders, reducing
turnaround times.
● Inventory Tracking: The app provides wholesalers with a clear view of their stock levels, helping
them maintain optimal inventory and avoid stockouts.
● Incentives and Notifications: ITC can offer real-time promotional incentives, updates, and
reminders to engage wholesalers.
● Customer Relationship Management (CRM): The app facilitates better communication between
wholesalers and ITC, ensuring feedback loops and issue resolution.

App's Impact on FMCG Distribution:

● Operational Efficiency: By digitizing a traditionally manual process, the Unnati App reduces
paperwork and delays associated with order management.
● Sales Growth: The app's seamless user interface, along with promotional schemes, encourages
wholesalers to order more frequently and efficiently.

21
 ● Market Expansion: By reaching remote and rural wholesalers, ITC can expand its market
coverage, making its products more accessible.

Impact of Digitalization on FMCG Distribution: The distribution networks in the FMCG sector,
especially in emerging markets like India, are evolving. Traditional models that rely on physical
interactions between suppliers and retailers are being replaced by digitally enabled models that offer
more agility, better data, and faster responses.

Key impacts include:

● Reduced Distribution Costs: Digital tools, such as the Unnati App, help companies reduce
logistics costs and middlemen, leading to more direct connections with wholesalers and retailers.
● Improved Stock Management: Apps and digital systems enable real-time inventory management,
reducing the risk of overstocking or understocking.
● Enhanced Data Analytics: Digital tools provide valuable insights into consumer and market
behaviour, allowing companies to fine-tune their strategies.

Competitor Analysis:

Other major FMCG players, such as Hindustan Unilever (HUL), Nestlé, and Procter & Gamble
(P&G), have also been investing heavily in digital tools to optimize their supply chain operations.

● HUL: Developed the Shikhar App, which digitizes retailer orders and offers loyalty programs
and real-time stock management.
● Nestlé: Implemented an AI-driven supply chain solution to enhance logistics planning and
demand forecasting.
● P&G: Rolled out a suite of digital tools focused on direct-to-consumer (D2C) strategies and
retail analytics.

Comparing these competitors, ITC's Unnati App stands out for its focus on both urban and rural
markets, creating a more inclusive solution that allows small-scale wholesalers to leverage the power
of digitization.

22
 CHAPTER 2

LITERATURE REVIEW

23
The literature review for the report on ITC Limited's approach to rural and urban distribution, particularly
focusing on the ShubhLaabh Project and the Unnati App, aims to provide a comprehensive understanding
of the relevant theories, frameworks, and previous research in the fields of distribution management,
supply chain optimization, and the role of technology in enhancing business operations.

2.1 DISTRIBUTION MANAGEMENT IN THE FMCG SECTOR

Distribution management plays a crucial role in the Fast-Moving Consumer Goods (FMCG) sector,
where the ability to efficiently deliver products to consumers is essential for competitive advantage.
According to Bowersox et al. (2013), effective distribution strategies involve optimizing logistics,
reducing costs, and improving service levels. The authors emphasize the significance of developing
robust distribution networks that can adapt to changing market dynamics, particularly in diverse
markets such as India.

Kotler and Keller (2016) also highlight that understanding consumer behaviour in both urban and
rural settings is vital for designing effective distribution strategies. They suggest that tailoring
approaches to meet the unique needs of different market segments can enhance product availability and
visibility.

2.2 THE ROLE OF INCENTIVE PROGRAMS IN DISTRIBUTION

Incentive programs like the ShubhLaabh Scheme have been widely studied in the context of enhancing
distributor performance and sales growth. Ingram et al. (2015) indicate that performance-based
incentives can motivate wholesalers and retailers to increase their efforts in promoting products, leading
to improved sales figures. The authors point out that such schemes can foster loyalty among
distributors, thereby strengthening the overall distribution network.

Rao and Gupta (2016) discuss the impact of incentive programs on rural markets, noting that well-
structured incentives can significantly enhance product distribution in areas where competition is
intense, and price sensitivity is high. They argue that incentives aligned with local market conditions
can empower small retailers and wholesalers to participate actively in the supply chain.

24
2.3 TECHNOLOGY IN SUPPLY CHAIN OPTIMIZATION

The adoption of technology, particularly digital tools, has transformed traditional distribution models.
Chopra and Meindl (2016) emphasize that technology enables companies to improve visibility across
the supply chain, facilitate real-time communication, and enhance decision-making processes. The
implementation of digital platforms, such as the Unnati App, is critical in bridging gaps between
manufacturers and distributors, allowing for more effective management of inventory and sales.

Kumar and Singh (2018) explore the role of mobile applications in supply chain management,
highlighting their effectiveness in enabling real-time data sharing and improving operational
efficiencies. They argue that mobile technology empowers distributors by providing them with access
to crucial information, which helps in making informed business decisions.

2.4 SUSTAINABILITY AND CORPORATE SOCIAL RESPONSIBILITY (CSR)

Sustainability has become an essential consideration in distribution and supply chain strategies.
Elkington (1998) introduced the concept of the Triple Bottom Line, which emphasizes the importance
of balancing economic, environmental, and social performance. In the context of ITC's distribution
approach, sustainable practices not only enhance operational efficiencies but also contribute to
community welfare.

Porter and Kramer (2011) discuss the role of CSR in creating shared value, asserting that companies
that engage with local communities and adopt sustainable practices can achieve long-term success.
Their research indicates that socially responsible initiatives can lead to improved brand reputation,
customer loyalty, and enhanced business performance.

2.5 CHALLENGES IN RURAL DISTRIBUTION

Despite the potential for growth in rural markets, companies often face significant challenges in
reaching these consumers. Venkatesh and Chawla (2017) highlight logistical challenges, such as
inadequate infrastructure and distribution networks, which hinder access to rural markets. They also

25
discuss the importance of understanding local market dynamics, consumer preferences, and the role of
informal distribution channels in successfully penetrating these markets. Kumar et al. (2019)
emphasizes the need for customized strategies to effectively engage rural consumers, arguing that
traditional urban-centric approaches may not yield the desired results in rural settings.

FMCG’s touch every aspect of human life Jain and Sharma, (2012) emphasises on it as an integral
part of a consumer dominated market and a corner stone of the Indian Economy. FMCG’s give many
opportunities to the marketer to give choices and comparative Advantage to the consumers as well as
their own venture.

FMCG’s are consumer packaged goods including Consumable items by consumers at regular intervals
Kumar, et al., (2012); these items are frequently used by the Consumers and are yielding high returns
to marketers. This paper also says that preferences is a Choice between alternatives based on
satisfaction and utility they provide, the study of consumer Preferences not only focuses on how and
why the consumers make buying decisions but also How and why the consumer make the choice of
goods they buy and their evaluation of these Goods and FMCG’s are based on 4 A’s awareness,
availability, adoptability, and affordability.

Sales are more volume based. The organized FMCG retailing in India is a new concept and is fast
Catching up in urban and semi-urban Nagarajan & Khaja (2013).

Manepatil (2013) has mentioned that Change in shopping behaviour in urban India over the past Few
years with consumer looking for convenience. That is, they want everything under one roof and a bigger
choice of products with an increase in double income, household, people don’t have Much leisure to
make the best use of their time. As malls and supermarket offer the Option of entertainment along with
shopping, younger couples prefer to shop there No of people Are attracting towards retail market.

26
 CHAPTER 3

RESEARCH
METHODOLOGY

27
The research methodology section outlines the approach and processes followed to investigate the
effectiveness of ITC Limited's distribution strategies, focusing on its ShubhLaabh Project and Unnati
App. This section aims to explain the research objectives, scope, and significance, providing a structured
framework for collecting and analysing data on ITC’s rural and urban distribution model. Each
component helps frame the study's purpose and establishes the rationale behind its approach.

3.1 OBJECTIVE OF THE STUDY

The objectives of this study are aimed at understanding how ITC’s strategic distribution efforts impact
its business operations, market growth, and community development. The specific objectives include:

1. To Evaluate ITC's Distribution Strategies:

o The study aims to assess the distribution strategies ITC employs, particularly through the
ShubhLaabh Project and the Unnati App, in both rural and urban markets. This evaluation
includes examining the role of technology, incentives, and partnerships with wholesalers and
retailers to boost business performance.
o The effectiveness of these strategies will be analysed in terms of their ability to reach a broad
market base, drive product visibility, and ensure the efficient delivery of goods across India’s
diverse geography.
2. To Analyse the Impact of Technology on Supply Chain Optimization:
oA core objective is to investigate the role of digital tools like the Unnati App in transforming
traditional supply chains. The research will assess how these tools help wholesalers track
inventory, process orders, and access real-time data for decision-making.
o The study will also explore how the app enhances the relationship between ITC and its
distribution partners, facilitating improved communication and timely decision-making that
benefits overall sales performance.
3. To Understand ITC’s Community Engagement and Sustainability Efforts:
o ITC’s distribution strategy goes beyond merely moving goods from point A to point B. This
research will focus on understanding how ITC integrates community development and
sustainability into its operations.
o The study will assess how ITC's sustainability initiatives, such as eco-friendly logistics practices

and community-oriented programs, contribute to long-term partnerships with wholesalers and

retailers and benefit local communities through employment and business opportunities.

28
 4. To Identify Challenges and Opportunities in Rural Distribution:
o Rural markets pose unique challenges, such as limited infrastructure, logistical barriers, and
price-sensitive consumers. This study will identify these challenges and analyse how ITC
navigates them to optimize its rural distribution.
o Conversely, the research will highlight emerging opportunities in rural markets, including
increasing purchasing power, the rise of digital literacy, and how companies like ITC can further
capitalize on these opportunities to enhance market penetration and growth.

3.2 SCOPE OF THE STUDY

The scope of this study defines the areas of focus, ensuring the research remains targeted and relevant.
By outlining the geographical, technological, and market-based elements, the study is positioned to
provide a comprehensive view of ITC’s distribution strategy across various markets.

1. Geographical Coverage:
o The research focuses on both rural and urban markets across India, highlighting the unique
dynamics in each. This broad geographical focus is crucial for understanding how ITC tailors
its distribution strategies to meet the diverse needs of different regions.
o The study will also emphasize the differences between Tier 1 and Tier 2 cities versus rural
villages, and how distribution strategies differ in these environments in terms of logistical
planning, inventory management, and sales tactics.
2. Stakeholder Analysis:
o The research covers various stakeholders within ITC’s supply chain, including wholesalers,
retailers, and ITC's internal management team. This multi-stakeholder approach allows for
a deeper understanding of how these players interact with each other within ITC’s distribution
framework.
o The study will collect data on how these stakeholders perceive the effectiveness of the
ShubhLaabh Project and the Unnati App, and how these initiatives influence their sales
operations and partnerships with ITC.

29
3. Technological Framework:
o A significant portion of the study focuses on the use of technology in distribution, particularly

the Unnati App. The research will examine how this app is used to manage inventory, monitor
sales targets, and facilitate communication between ITC and its wholesalers.
o Additionally, the study will assess how digitalization is reshaping supply chain operations in
the FMCG sector, offering insights into the future potential of such tools in distribution
management.
4. Incentive Structures and Business Growth:
o The study will investigate how ITC’s incentive programs, particularly the ShubhLaabh
Scheme, drive sales growth and market penetration. It will assess how these incentives
motivate wholesalers to increase their stock of ITC products, achieve sales targets, and
strengthen their long-term relationships with ITC.
o The tiered system of incentives (Platinum, Gold, and silver tiers) will also be analysed to
understand its effectiveness in fostering competition among wholesalers.
5. Time Frame:
o The research focuses on data from the past few years, specifically tracking the implementation

and outcomes of the ShubhLaabh Project and Unnati App since their inception. This time
frame allows for the analysis of trends, challenges, and successes over a defined period,
providing meaningful insights into how the program has evolved.

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3.3 SIGNIFICANCE OF THE STUDY

The significance of this study lies in its ability to contribute valuable insights to various stakeholders,
including businesses, academia, and policymakers, offering practical and theoretical contributions to
the field of distribution management.

1. For ITC Limited:

o This study will provide ITC with a critical assessment of its distribution strategies, offering
actionable insights into how it can further optimize its supply chain and leverage technology
to enhance business outcomes.
o ITC can also use the findings to refine the ShubhLaabh Project and the Unnati App,
identifying areas where they can improve communication with wholesalers, streamline
operations, or introduce new incentives.
2. For the FMCG Sector:
o The research contributes to the broader body of knowledge regarding distribution
management and supply chain optimization in the FMCG sector, offering case study
evidence on the role of technology and incentive-based distribution models.
o The findings will also be relevant to other FMCG companies operating in diverse and complex

markets like India, providing a model that can be adapted to different business environments.
3. For Academic Research:
o This study offers a detailed examination of distribution strategies, community engagement,
and sustainability in the FMCG sector. It provides a valuable resource for academic research,
particularly in the areas of supply chain management, distribution networks, and digital
transformation in business operations.
o The theoretical frameworks employed in this study, such as the Triple Bottom Line and
Supply Chain Optimization, offer a foundation for future research in similar industries.
4. For Policymakers:
o Policymakers can gain insights into the unique challenges of rural distribution and
community engagement in India's growing economy. The study highlights key areas where
policy interventions could support the development of infrastructure, digital literacy, and
business growth in rural areas.

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 o By understanding how companies like ITC are successfully navigating these challenges,
policymakers can shape regulations and initiatives that foster a more inclusive and sustainable
business environment.
5. For Local Communities and Wholesalers:
o The study sheds light on how wholesalers in rural and urban areas are impacted by ITC’s
strategies, especially with the use of technology. The findings can encourage other local
businesses to adopt digital tools to improve their business operations.
o The focus on sustainability and community engagement also showcases how large companies
can positively influence the socioeconomic landscape of the regions in which they operate.

6. Increase In Business Roi:

o It doesn’t matter what kind of process/technology you adopt, if the initiative is not providing
you with any revenue, it’s of no use. Many companies have realized this. This is the obvious
reason why most FMCG-based companies are insisting on digital transformation solutions
like file force apps to streamline processes and collaborate better to improve revenue.
o Field sales applications have significantly improved the performance of businesses over the
years due to its ability to scale and improve operations significantly. The field force
automation market size was.
o $1,196.9 million in 2019, and it is projected to record a CAGR of 20.9% during 2020–2030.
The strongest growth drivers for this market include the increasing smart phone and mobile
internet penetration, surging focus on leveraging advanced technologies, such as cloud
computing, the internet of things (IOT), and artificial intelligence (AI), in field force
automation solutions, and soaring requirement for automating repetitive activities.

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3.4 SOURCES OF DATA

For this research, collecting data is crucial for assessing the ShubhLaabh Project by ITC and the Unnati
App's effectiveness in enhancing distribution efficiency in both rural and urban areas. The study
primarily relies on primary data, which offers direct insights from individuals actively participating in
the project, including wholesalers, retailers, and distribution managers. This section will detail the
methods and techniques utilized to obtain this vital data.

Primary Data serves as the main source of information for this research. It is acquired straight from
individuals who are involved in the ShubhLaabh Project, and the Unnati App. Primary data is essential
as it delivers fresh, pertinent, and direct insights from the stakeholders within the distribution network,
making it particularly trustworthy for evaluation.

1. Data Collection Instrument: Structured Questionnaire

The primary data for this research is collected through a structured questionnaire. This questionnaire is
carefully crafted to ensure that the gathered information is relevant to the research goals and can be
quantified for analysis.

o Structured Questionnaire: The questionnaire follows a predetermined sequence of

questions arranged in a specific order. This method guarantees that each respondent is
presented with the same questions, ensuring consistency in the data collected. The
structured approach minimizes the risk of interviewer bias and facilitates comparison of
responses across a broad sample.

o Close-Ended Questions: Most of the questionnaire comprises close-ended questions,

which limit the responses to specific options, such as Yes/No, Agree/Disagree, or
multiple-choice responses. Close-ended questions are chosen to:

o Promote swift responses: Respondents can reply quickly without needing to provide
extensive justifications, which increases the response rate and simplifies the process of
gathering large samples.

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 o Allow for statistical analysis: These responses can be easily converted into numerical
data, enabling analysis through statistical tools to uncover patterns, trends, and
correlations.

Examples of questions might include:

● "Do you use the Unnati App to track your stock levels?"
● "Has the ShubhLaabh Project positively impacted your sales volume?"
● "Which incentives under the ShubhLaabh Scheme do you find most motivating?"

By structuring the questionnaire in this manner, the study aims to gather comprehensive data on how
these programs influence distribution efficiency, wholesaler engagement, and overall sales performance.

2. Data Collection Process:

The process of gathering data for this research involves direct interactions with stakeholders, mainly
through in-person interviews or online surveys. This approach allows participants to provide precise
answers based on their immediate experiences with ITC's distribution strategy.

● In-Person Interviews: Conducting face-to-face interviews enables clarification of questions,

ensuring that respondents fully grasp each inquiry before responding. This method is especially
beneficial in rural regions where digital literacy may be lower and personal interaction is
necessary to obtain high-quality responses.

● Online Surveys: For those who are more adept with technology, digital surveys are shared
through forms or directly via the Unnati App. This approach facilitates efficient data collection,
particularly among urban wholesalers and retailers who might have limited availability for in-
person interviews.

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Data Collection Technique: Sampling

Given the impracticality of collecting data from every wholesaler, retailer, and distribution manager
involved in the ShubhLaabh Project and Unnati App, the research employs sampling techniques to
choose a representative group of participants. Sampling guarantees that the collected data accurately
reflects the larger population without requiring extensive data gathering from all individuals in ITC's
distribution network.

1. Sampling Methodology

To ensure that the sample accurately reflects the population under study, a combination of random
sampling and stratified sampling methods is employed. These methods ensure that the sample is both
representative and diverse, covering all relevant stakeholders in ITC's distribution system.

● Random Sampling:
o This method is used to randomly choose participants from ITC's distribution chain,
providing every wholesaler or retailer an equal opportunity to be selected for the study.
By using random sampling, the risk of bias is reduced, allowing the findings to be
applicable to the wider population.
o Example: Selecting wholesalers randomly from various geographical areas (both urban
and rural) guarantees a broad range of experiences and levels of engagement with the
ShubhLaabh Project.

● Stratified Sampling:
o Stratified sampling involves categorizing the population into various subgroups (strata)
based on characteristics such as location (urban or rural), size of business (small, medium,
large wholesalers), or their level of involvement with ITC's initiatives (participants of
ShubhLaabh versus non-participants).
o This ensures that each subgroup is adequately represented in the final sample, leading to
more accurate insights. For instance, rural wholesalers might face different challenges
compared to their urban counterparts, and stratified sampling allows these differences to
be captured in the data.

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 o Example: The study could segment wholesalers based on their sales turnover (Platinum,
Gold, and silver tiers) to ensure that each group is represented, allowing the research to
compare their performance and satisfaction levels with the ShubhLaabh program.

2. Sample Size

The sample size is determined by the scope of the study and the population size. Given the wide reach
of ITC’s distribution network, a statistically significant number of respondents is selected to ensure the
reliability of the findings.

● Large Sample Size: To cover ITC’s extensive rural and urban distribution networks, a large
sample size is needed. A sample of 200 to 300 wholesalers and retailers is ideal to ensure that all
strata (geographic location, business size, engagement level) are properly represented.
● Sampling Tools: Tools such as Microsoft Excel or SPSS are used for selecting the sample,
ensuring randomness and reducing any potential bias in the sampling process.

Data Analysis Techniques

Once the data is collected, it is analysed using various statistical tools and qualitative methods. The
close-ended questions provide quantifiable data that can be analysed.

using:

● Descriptive Statistics: This includes calculating means, medians, and percentages to summarize
the data. For instance, the average sales increase for wholesalers participating in the ShubhLaabh
scheme can be calculated and compared across different regions.
● Comparative Analysis: The study compares the performance and satisfaction levels of
wholesalers using the Unnati App versus those not using the app, or rural versus urban
participants, to highlight differences and areas for improvement.
● Graphical Representation: Charts, graphs, and tables are used to visually represent the data,
making it easier to identify trends and patterns. For example, a bar chart could depict the
performance of wholesalers across Platinum, Gold, and silver tiers in terms of sales growth.

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 CHAPTER 4

DATA ANALYSIS
&
DISCUSSION

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4.1 MARKET ANALYSIS FOR ITC PRODUCTS WITH CONSUMER AND
WHOLESALER BEHAVIOR

1. VIKAS NAGAR / HERBERTPUR

● Market Presence: ITC has established a robust presence in Vikas Nagar and Herbertpur,
indicating effective market penetration.

● Wholesaler Behaviour: Wholesalers in the area respond favourably to ITC products,

supported by a strong relationship with the distributor. The distributor provides competitive
Market Operating Prices (MOP) and favourable credit terms, making ITC a preferred option.

● Consumer Behaviour: Consumers in this region are well-acquainted with ITC products and
show loyalty to popular items such as Tedhe Medhe, Bingo, Savlon Antiseptic, and Fiama
Body Wash. Nonetheless, there is a willingness among consumers to try new products introduced
by trusted wholesalers.

● Average Sales: ₹20,000 to ₹35,000.

● Prospective Wholesaler: Ghai Store has significant growth potential, with current ITC sales
surpassing ₹75,000, indicating promising future opportunities.

2. DOIWALA

● Market Overview: ITC products experience strong sales with the wholesaler and retailer
network playing a crucial role in sustaining the brand's presence.
● Wholesaler Behaviour: Wholesalers are attentive to ITC’s offers but require more consistent
engagement from the sales team. Infrequent updates on promotions and offers have constrained
overall sales potential.
● Consumer Behaviour: Consumers are largely driven by availability and familiarity. Popular
products like Tedhe Medhe, Bingo, and Savlon Antiseptic have seen consistent demand.
Consumers in Doiwala also prefer cost-effective options, making affordable snacks and hygiene
products a strong performer in this market.
● Average Sales: ₹12,000 to ₹30,000.

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 ● Challenges: The sales force in the area needs to better engage wholesalers by providing more
timely information on new products and offers to boost product rotation.

3. DEHRADUN

● Market Performance: ITC products are highly regarded in Dehradun, with strong brand loyalty
and frequent purchases of major product lines.
● Wholesaler Behaviour: Wholesalers are well-engaged and informed about ITC’s portfolio, and
they frequently replenish stocks. The Nacho Dips product was notably well-received,
demonstrating that consumers in Dehradun are willing to try new, innovative products.
● Consumer Behaviour: Brand awareness is high, and consumers have shown a strong
preference for specific ITC products like Tedhe Medhe, Bingo, Savlon Antiseptic, yippie,
Fiama Body Wash, and Engage Deodorants. Dehradun consumers, being more brand-
conscious, are more inclined towards premium products and are open to experimenting with new
offerings.
● Average Sales: ₹45,000 to ₹70,000.
● Strengths: The sales force frequently visits wholesalers, ensuring that ITC’s product availability
is consistent, and consumer preferences are well met.

4. HARIDWAR

● Market Overview: The Haridwar market experiences consistent sales in different categories of
ITC products.
● Wholesaler Behaviour: Wholesalers are receptive to ITC’s offerings, however, enhancing brand
visibility and promotional strategies could help boost sales even more.
● Consumer Behaviour: Consumer preferences are strongly influenced by brand familiarity and
trust. Religious and cultural factors play a role, making them loyal to products they trust.
Consumers are more price-sensitive, and their buying decisions often align with known and
trusted brands like Savlon Antiseptic, Tedhe Medhe, and Yippee.
● Average Sales: ₹35,000 to ₹60,000.
● Prospective Wholesaler: Rajeev Confectionery, with ITC sales above ₹75,000, presents a
significant growth opportunity to increase product variety and sales.

5. MANGLAUR

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 ● Distributor’s Role: The distributor has strong control over the market, contributing to high sales
of ITC products. Offering goods on credit strengthens the relationship with wholesalers.
● Wholesaler Behaviour: Wholesalers are highly engaged, particularly with the sales of ₹5
products like Yippee packs, which have strong demand among the labour-class consumers.
● Consumer Behaviour: Consumers in Manglaur are extremely price sensitive. They tend to
gravitate towards smaller, lower-priced product offerings, making the ₹5 pack a popular choice.
Brand loyalty is low, with consumers prioritizing cost over brand preference.
● Average Sales: ₹30,000 to ₹45,000.
● Challenges: To improve market penetration, ITC should focus on offering more affordable
products that align with consumer price sensitivity.

6. SAHARANPUR

● Distributor’s Influence: The distributor in Saharanpur holds a strong position, ensuring a

steady supply and competitive pricing for ITC products.
● Wholesaler Behaviour: The ₹5 product range performs exceptionally well among wholesalers,
as these products cater to a highly price-conscious market. Wholesalers benefit from the
consistent sales of Yippee ₹5 packs and other affordable snack items.
● Consumer Behaviour: Like Manglaur, Saharanpur’s consumer base is highly price-driven, with
a strong preference for low-cost, high-frequency purchase products. The high turnover of ₹5
products is a key factor in maintaining strong sales.
● Average Sales: ₹35,000 to ₹50,000.
● Opportunities: Introducing more small-pack affordable products can further strengthen ITC’s
position in this market.

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4.2 CHALLENGES FACED BY SL/SLROU

Expanding into rural markets offers significant potential for ITC, given the growing demand for FMCG
products. However, these markets also present unique challenges that must be navigated to ensure
successful penetration and sustained growth. Below is a detailed exploration of the primary challenges
ITC faces in its rural expansion efforts.

1. Distribution and Supply Chain Issues

● Geographical Barriers: Rural areas, particularly those in hilly or remote regions, pose
logistical challenges due to underdeveloped infrastructure. Poor road conditions and the lack of
efficient transportation networks often result in delays in product delivery, hindering ITC’s
ability to maintain consistent product availability. This is particularly prevalent in hilly regions,
where accessing retailers can be especially difficult.
● Inventory Management: Another key issue in rural markets is inconsistent inventory
management. Retailers and distributors often face challenges in accurately tracking stock levels,
which can lead to either stock shortages of high-demand products or overstocking of less
popular items. This inconsistency affects product availability, creating gaps in the supply chain
that can lead to dissatisfied consumers and missed sales opportunities.

2. Market Penetration

● Reaching Remote Markets: Despite the growing demand for FMCG products in rural India,
reaching remote areas remains a considerable challenge. Many rural markets are isolated, with
poor infrastructure and transportation making it difficult for distributors to cover these areas
regularly. This results in lower availability of products in these regions and difficulty in
maintaining regular stock replenishment.
● Low Brand Awareness: In many rural markets, consumers have limited exposure to ITC’s
products and their benefits. This is particularly true for premium or relatively new product lines
that have not yet established a foothold in these regions. Without sufficient awareness, consumers
are more likely to stick to known, local brands, limiting ITC’s ability to expand its rural market
share.

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3. Price Sensitivity

● High Price Sensitivity: Rural consumers tend to be highly price-sensitive, meaning that even
small price increases can significantly impact demand. This sensitivity is especially pronounced
for premium products or those priced above local competitors. In these markets, affordability
often takes precedence over brand loyalty or perceived product quality, making it difficult for
ITC to maintain competitive pricing while protecting margins.
● Balancing Affordability and Quality: There is an ongoing challenge in balancing the
affordability of products with their quality, especially for ₹5 products and other small-pack
offerings. While these low-cost products cater to the rural consumer’s need for affordability,
maintaining product quality without sacrificing profitability remains a significant challenge.

4. Localized Competition

● Strong Presence of Local Brands: In many rural areas, local brands dominate the FMCG
landscape. These brands often have a long-standing presence in the community, having earned
the trust and loyalty of consumers. This creates a significant barrier for ITC, as consumers may
be reluctant to switch to a new or less familiar brand, even if ITC’s products offer superior quality
or value.
● Brand Loyalty: ITC faces difficulties in building brand loyalty in rural markets where trust in
local, homegrown products is strong. Consumers in these regions tend to Favor familiar brands
that have been part of their daily lives for years, and establishing ITC as a trusted alternative takes
time and effort.

5. Communication Gaps

● Limited Communication Reach: Reaching consumers in rural areas with marketing messages
is often challenging due to limited communication channels. Many rural regions lack access to
television, radio, and internet, which makes it difficult for ITC to promote its products effectively.
This limits brand visibility and hampers the company’s ability to educate consumers about
product benefits or promotional offers.
● Lack of Localized Advertising: Another key challenge is the lack of localized advertising
strategies that resonate with rural audiences. Traditional advertising methods like posters,
billboards, and in-person promotions are not being fully utilized, and there is often a disconnect

42
 between the messaging used and the needs or preferences of rural consumers. Without targeted,
localized campaigns, ITC’s marketing efforts may fail to capture the attention of this audience.

6. Digital Adoption

● Slow Digital Adoption: While ITC has made efforts to streamline its supply chain and retailer
engagement through digital tools like the Unnati app, digital adoption in rural areas has been
slow. Many retailers and distributors in these regions are unfamiliar with digital tools or do not
have the infrastructure (such as smartphones or reliable internet) to take full advantage of them.
As a result, ITC’s digital initiatives often fail to reach their full potential in rural markets.
● Limited Internet Access and Digital Literacy: The lack of internet access in many rural areas
and low levels of digital literacy among retailers and consumers further complicate ITC’s digital
efforts. Without reliable access to the internet, many rural retailers are unable to use apps or
online portals to place orders, check stock levels, or access promotions. Additionally, consumers
in these regions are less likely to engage with digital marketing or e-commerce platforms, limiting
the reach of ITC’s digital campaigns.

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4.3 PRICE DISCREPANCIES IN MOP (MARKET OPERATING PRICE) OF
FMCG PRODUCTS

Understanding why Market Operating Price (MOP) in certain markets or regions may be lower than
standard retail pricing is crucial in identifying factors contributing to price discrepancies, particularly in
FMCG markets like those ITC operates in. Below are the key reasons that lead to these issues in terms
of MOP:

1. No Bill, Tax Evasion

● Undocumented Sales: In rural and unorganized markets, products are frequently sold without
providing an official bill. This helps distributors, wholesalers, and retailers evade taxes such as
GST. By avoiding these statutory taxes, sellers can offer lower prices to customers since they are
not paying the government-imposed levies.
● Reduction in Costs: By not issuing a bill, sellers reduce their operational and legal
compliance costs, giving them room to undercut competitors who follow legal taxation norms.
This practice creates price imbalances and leads to market distortion, making it hard for
companies like ITC to maintain standardized pricing.

2. Bulk Purchases & Unofficial Sources

● Informal Supply Chains: Many rural retailers or wholesalers purchase products in bulk from
informal or grey markets, where products are sold without the same oversight or quality checks.
These purchases typically bypass official channels and distributors, which results in cheaper
acquisition costs due to the lack of formal documentation and regulatory fees.
● Lower Procurement Costs: These products are often sold at significantly lower prices because
they do not go through the typical supply chain that includes authorized distributors. These
alternative channels can sometimes offer lower quality or expired products, but the retailers
benefit from the reduced price, which they pass on to consumers.

3. Skipping Regulatory Fees

● Non-Compliance with Regulations: Certain retailers may avoid regulatory fees such as
licensing, storage regulations, or safety requirements. These include not adhering to the FDA or

44
 FSSAI regulations for product safety and storage, particularly for consumables or healthcare
products like antiseptics.
● Cost Savings: By ignoring these standards, sellers save on the costs associated with ensuring
products are stored or handled according to government regulations. This, in turn, enables them
to offer products at a lower price compared to those who comply with the guidelines, impacting
MOP levels for certain products.

4. Looser Standards for Handling/Storage

● Substandard Storage Conditions: Products in rural or unorganized markets are often stored in
less controlled environments—no temperature regulation, improper hygiene, and exposure to
elements like moisture. This practice reduces the overhead costs for wholesalers and retailers
but also jeopardizes product quality.
● Impact on Pricing: Since proper handling and storage protocols (e.g., refrigeration for
perishables) requires significant investment, sellers cutting corners can offer cheaper products.
These cost-saving measures result in lower MOP, though they compromise on quality and safety.

5. Negotiation & Discounting

● Price Bargaining: In rural markets, consumers tend to negotiate prices more aggressively,
especially in small-scale retail settings where there is more room for negotiation. Retailers may
offer discounts, especially for bulk purchases or loyal customers, leading to a reduced MOP.
● Flexible Pricing Models: Unlike in urban or more organized markets, rural sellers often do not
have fixed pricing. Retailers may offer personalized discounts based on the customer
relationship, resulting in variations in pricing for the same product within the same region.

6. Seasonal and Demand-based Discounts

● Seasonal Pricing Strategies: In certain regions, FMCG products may be discounted seasonally.
For example, products like snacks or beverages may see lower prices during festival seasons or
periods of high demand due to increased competition among sellers. This helps clear stock or
capitalize on seasonal demand, reducing the MOP.

45
 ● Demand Fluctuations: Similarly, prices may be adjusted based on market demand. In times
of high supply but low demand, sellers may drop prices to ensure that perishable products don’t
go to waste, affecting overall market pricing and further contributing to MOP variances.

4.4 SCOPE OF IMPROVEMENT FOR ITC FMCG PRODUCTS

The following areas present significant opportunities for improvement in the distribution, marketing, and
overall performance of ITC’s FMCG products, particularly in relation to the ShubhLaabh initiative:

1. Visibility of Product

● The current visibility of ITC products in retail outlets is insufficient, which may hinder consumer
purchasing decisions.

2. Awareness About Schemes/App

● There is a notable lack of awareness regarding the company's schemes and the functionalities of
the Unnati app among wholesalers and retailers, limiting their engagement with these resources.

3. Rack for Bingo and Tedhe Medhe

46
 ● The absence of dedicated display racks for high-demand products like Bingo and Tedhe Medhe
reduces their visibility and may negatively impact sales performance.

4. B Natural Poor Sales

● B Natural products are experiencing poor sales, indicating a need for further investigation into
consumer preferences and market competition.

5. Decreased Frequency of Salespersons' Visits

● A decrease in the frequency of salespersons' visits to wholesalers and retailers may lead to
weakened relationships and missed opportunities for sales growth.

6. Distributor's Hold in His Area

● The effectiveness of distributors in their respective areas can significantly influence market
penetration and product availability.

7. MOP Difference

● Variability in Market Operating Price (MOP) across different regions can lead to confusion
among wholesalers and consumers, impacting sales consistency.

8. Credit Management

● Ineffective credit management practices can strain relationships with wholesalers and limit their
ability to stock products in larger quantities.

9. Good Influence Against METOO Products (Lacy)

● The presence of local METOO products, such as Lacy, poses a challenge in building brand loyalty
and market share for ITC products.

10. Packaging

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 ● Packaging for ITC products may not effectively communicate the brand's value and benefits,
potentially limiting consumer appeal.

4.5 ITC VS. COMPETITORS

1. Product Quality

ITC Products: ITC is renowned for its commitment to high-quality products across diverse
categories, including FMCG (foods, personal care, cigarettes), paperboards, and hospitality. In the
FMCG sector, ITC enforces stringent quality checks, ensuring compliance with both national and
international standards. Their emphasis on premium ingredients, superior packaging, and state-of-the-
art technology translates to high consumer value. For example, the Aashirvaad Atta range is crafted
from select wheat grains and marketed as a healthy option with minimal processing, reinforcing ITC’s
focus on quality.

Competitor Products: Competitors such as Hindustan Unilever (HUL), Nestlé, and Parle also
maintain a reputation for quality but often target mass-market consumers, which can lead to a
perception of compromised quality in lower-tier offerings. Their strategies include providing a wider
price range to cater to various income groups, resulting in a significant variation in product quality.

2. Brand Positioning

ITC: ITC positions its brands in the premium and mid-market segments, focusing on aspirational yet
affordable products. Brands like Aashirvaad, Sunfeast, Bingo, Fiama, and Vivel emphasize quality,
health, and sustainability, appealing to consumers who value locally produced items and strong Indian
roots.

Competitors: Competitors like HUL adopt a broader focus, offering both premium brands (e.g.,
Dove, TRES Emme) and mass-market options (e.g., Lifebuoy, Clinic Plus). Multinational players
highlight their global heritage and scale, marketing themselves as trusted international brands.
However, their regional adaptations can sometimes lack the authenticity and depth that ITC’s entirely
Indian identity offers.

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3. Product Portfolio & Innovation

ITC: ITC boasts a highly diversified product portfolio encompassing food (snacks, staples, ready-to-
eat), personal care, education & stationery, and lifestyle retailing. The company invests significantly
in research and development, focusing on health and wellness trends. They have launched innovative
products such as gluten-free biscuits, low-sugar snacks, and fortified flour to cater to health-conscious
consumers. For example, B Natural juices are positioned as “Not from concentrate,” showcasing
ITC’s commitment to healthy food innovation.

Competitors: Companies like Nestlé and HUL also prioritize innovation, introducing products that
address changing consumer needs. Nestlé excels in food science innovations, particularly in dairy
products and infant nutrition, while HUL continuously innovates in beauty and personal care,
evidenced by eco-friendly packaging initiatives and nutrient-rich personal care items.

4. Sustainability

ITC: ITC is a leader in sustainability, implementing initiatives focused on water conservation, carbon
reduction, and plastic waste management. Their “Triple Bottom Line” philosophy aims to generate
economic, environmental, and social value. ITC’s products are often marketed as environmentally
responsible, with extensive eco-friendly packaging solutions. For instance, Paperkraft notebooks are
made from sustainable forests, aligning with ITC’s sustainability goals.

Competitors: While competitors like HUL and Procter & Gamble (P&G) also emphasize
sustainability, their initiatives are typically more global in nature, often highlighting large-scale efforts
such as reducing plastic waste and utilizing renewable energy. The impact of their sustainability
initiatives in India may not be as pronounced as ITC’s localized approaches.

5. Distribution Network

ITC: ITC maintains a vast and robust distribution network that penetrates both urban and rural
markets throughout India. Utilizing a hub-and-spoke model enables ITC to achieve deep market
penetration, especially in semi-urban and rural areas. Initiatives like e-Choupal and the Unnati App
provide ITC with a competitive advantage in reaching a broad consumer base, including those in
remote locations.

49
 Competitors: Competitors like HUL, Nestlé, and Dabur also boast strong distribution networks,
although their strengths lie more in urban and semi-urban markets. HUL’s Project Shakti and Nestlé’s
rural expansion efforts aim to enhance their presence in rural areas, but ITC’s established connections
with local farmers grant it a unique advantage.

6. Customer Engagement & Advertising

ITC: ITC employs “Made for India” marketing strategies, focusing on both emotional and functional
aspects to engage consumers. The marketing emphasizes Indian heritage, product quality, and health
benefits. Digital platforms, such as the Unnati App for farmers, and various social media campaigns
for products like Fiama and Sunfeast, enhance consumer engagement.

Competitors: Competitors such as HUL and Nestlé heavily rely on mass media advertising, featuring
celebrity endorsements and high-profile campaigns. HUL is known for purpose-driven campaigns
(e.g., Dove’s Real Beauty), while Nestlé focuses on themes of family and wellness in their marketing.
Their global reach allows for extensive consumer engagement across various media channels.

7. Pricing Strategy

ITC: ITC adopts a value-based pricing strategy, particularly in the FMCG segment. The company
offers premium quality at competitive prices, balancing affordability and quality to attract both
middle-class and premium market consumers. Additionally, ITC caters to rural markets with
affordable alternatives.

Competitors: Competitors like HUL, Nestlé, and Britannia serve both ends of the pricing spectrum.
HUL offers premium products (e.g., Dove, Lipton) alongside value-for-money offerings (e.g.,
Lifebuoy, Brooke Bond). Britannia and Nestlé are known for their competitive pricing strategies,
especially in the biscuit and dairy categories.

50
8. Local Relevance

ITC: ITC’s deep understanding of the Indian market allows it to cater effectively to regional tastes.
From region-specific Flavors in snacks to products tailored for Indian cooking habits, ITC aligns its
product development with local consumer preferences. For instance, Sunfeast biscuits come in Flavors
that resonate with Indian palates, such as elaichi and choco-chip.

Competitors: Multinational competitors often rely on global formulations with localized adaptations.
For example, Nestlé's Maggi noodles are tailored to Indian spices, while HUL’s personal care products
are specifically designed for Indian skin and hair types. Despite this, ITC’s entirely Indian identity
resonates more closely with local consumers, particularly in rural regions.

4.6 Schemes and Offers

1. Trade Schemes

ITC:

● Volume-based Incentives: ITC provides slab-based discounts based on order quantities to

encourage bulk purchases from wholesalers and distributors.
● Target Achievement Bonuses: Retailers and distributors who meet or exceed sales targets can
earn bonuses in the form of cash rebates or additional products.
● Unnati App Schemes: ITC promotes digital engagement through its Unnati app, allowing
stockists to track their achievements, place orders, and access exclusive digital discounts.

Competitors:

● HUL: Offers similar volume-based schemes with promotional offers tied to product bundles
(e.g., free products with large orders).
● Nestlé: Provides target-based incentives to wholesalers, focusing on bulk buyers in the food
segment.
● Patanjali: Promotes high-volume purchases with substantial cash discounts, often leveraging
cultural motivations.

51
2. Consumer Offers

ITC:

● Bingo! and Sunfeast: Frequently run consumer promotions, including "Buy 1 Get 1 Free" and
price reductions to enhance retail footfall.
● Aashirvaad Atta: Implements consumer loyalty programs and festival-based discounts to
maximize engagement during peak seasons.
● Savlon and Fiama: Offers discounts on hygiene products with combo packs, promoting multiple
product sales in one transaction.

Competitors:

● HUL: Regularly introduces "Buy More, Save More" schemes, focusing particularly on personal
care brands like Dove and Lifebuoy.
● Nestlé: Utilizes seasonal promotions in the food and beverage sector, with brands like Maggi and
KitKat offering back-to-school and festive offers.
● Patanjali: Bundles traditional products with modern FMCG offerings, often promoting wellness
narratives through discounts on Ayurvedic and health products.

3. Wholesaler & Retailer Schemes

ITC:

● Scheme for SL and SLROU (Sales Linked Reward): Wholesalers are incentivized for
achieving sales targets, receiving bonuses, discounts, or product stock rewards.
● Display and Visibility Programs: ITC supplies retailers with racks, shelves, and display
materials to enhance product visibility, often tied to performance metrics.

Competitors:

● HUL: Offers significant discounts for premium shelf space and attractive displays for product
promotions, especially during new launches.
● Nestlé: Like ITC and HUL, provides display bonuses and rewards for maintaining premium
product placement and achieving sales targets.

52
 ● Patanjali: Offers incentives for selling a combination of products, providing bonuses and shelf
space rewards tied to specific SKUs.

4. Distributor/Wholesaler Schemes

ITC:

● DND (Direct Non-Delivery) Discounts: ITC offers a 2% reimbursement for distributors

operating under a delivery model, promoting efficient logistics.
● Extra Margin Schemes: Distributors can earn margins on various product categories, with
specific rates set for personal care (3%), food products (up to 2.85%), and cigarettes (1.45%).

Competitors:

● HUL: Provides distributors margin-based schemes that are generally higher for personal care and
hygiene products, with seasonal margins tied to festivals.
● Nestlé: Encourages bulk orders with higher distributor margins based on order size and product
mix.
● Patanjali: Offers higher.

53
 CHAPTER 5

CONCLUSION
&
SUGGESTIONS

54
5.1 ITC FMCG MARKET INSIGHTS 2024

1. Market Overview

The Fast-Moving Consumer Goods (FMCG) sector in India continues to be a dynamic landscape
characterized by rapid growth and evolving consumer preferences. In 2024, the FMCG market is
projected to expand at a compounded annual growth rate (CAGR) of approximately 10-12%, driven by
increasing disposable incomes, urbanization, and changing lifestyles. The COVID-19 pandemic has
further accelerated shifts towards e-commerce and digital shopping channels, reshaping consumer
buying behaviour.

1.1 Key Segments

● Food and Beverages: The food segment remains a critical driver for ITC, with staples, snacks,
and health-oriented products witnessing increased demand. Products like Aashirvaad Atta and
Bingo snacks are popular among health-conscious consumers.
● Personal Care: The personal care category is experiencing significant growth, fuelled by rising
awareness of hygiene and grooming products, particularly among the urban population. ITC's
brands such as Fiama and Vivel are well-positioned to capture this demand.
● Health and Wellness Products: There is a growing trend towards health and wellness,
prompting ITC to innovate with fortified and organic products. Items like B Natural juices and
gluten-free offerings are gaining traction among health-conscious consumers.

2. Consumer Behaviour Insights

2.1 Changing Preferences

Consumers in 2024 are increasingly looking for:

● Quality and Health: A marked shift towards premium quality and health-oriented products is
evident. Consumers are willing to pay a premium for products that offer health benefits and
superior quality.

55
 ● Sustainability: There is a rising demand for environmentally friendly products. ITC's
commitment to sustainability resonates well with consumers, particularly millennials and Gen Z,
who prioritize eco-friendly practices.
● Convenience: With the hectic pace of life, there is a growing preference for convenience
products, such as ready-to-eat meals and snacks that require minimal preparation.

2.2 Digital Influence

The digital transformation has influenced consumer behaviour significantly:

● E-commerce Growth: Online grocery shopping is becoming the norm, especially post-
pandemic. ITC needs to strengthen its online presence and engage in digital marketing strategies
to reach a broader audience.
● Social Media Engagement: Consumers are increasingly influenced by social media and digital
marketing campaigns. ITC's focus on digital platforms for marketing initiatives can enhance
brand visibility and engagement.

3. Competitive Landscape

3.1 Major Competitors

ITC faces stiff competition from various FMCG giants:

● Hindustan Unilever (HUL): Known for its broad portfolio, HUL emphasizes both premium and
mass-market products, making it a formidable competitor in the personal care and home care
segments.
● Nestlé: Focused on nutrition, health, and wellness, Nestlé's extensive product range poses a
challenge to ITC's food and beverage segment, particularly in dairy and instant food categories.
● Patanjali: With a strong emphasis on Ayurvedic and natural products, Patanjali has gained a
substantial market share, especially among health-conscious consumers.

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 3.2 Competitive Strategies

To maintain its competitive edge, ITC must focus on:

● Innovation: Continuous product innovation is essential to meet evolving consumer preferences

and trends. Investing in R&D to develop new health-oriented products can help ITC capture
market share.
● Brand Differentiation: Emphasizing unique selling propositions, such as the quality of
ingredients and sustainability initiatives, can help ITC differentiate its brands in a crowded
market.

4. Growth Opportunities

4.1 Expanding Rural Presence

With rural markets showing significant growth potential, ITC should enhance its focus on:

● Market Penetration: Expanding distribution networks and improving supply chain efficiencies
can facilitate better market penetration in rural areas.
● Local Marketing Strategies: Tailoring products and marketing campaigns to resonate with local
cultures and preferences will help build brand loyalty in these markets.

4.2 Digital Transformation

Embracing digital transformation can provide substantial growth opportunities:

● E-commerce Integration: Strengthening partnerships with online retailers and enhancing direct-
to-consumer channels can boost sales.
● Data Analytics: Leveraging data analytics to understand consumer behaviour and preferences
can inform product development and marketing strategies.

4.3 Sustainability Initiatives

As sustainability becomes a priority for consumers, ITC can capitalize on this trend by:

57
 ● Eco-Friendly Products: Expanding the range of eco-friendly and sustainable products to attract
environmentally conscious consumers.
● Sustainable Practices: Continuously improving sustainability practices within operations and
supply chains will strengthen ITC's brand image.

5.2 MY INITIATIVE

1. Brand Awareness Initiatives

a. Shubh Labh Scheme Promotion

● Goal: Enhance awareness of the Shubh Labh Scheme among wholesalers and distributors to drive
engagement and utilization.
● Tactics:
o Targeted Workshops: Organize regional workshops for wholesalers and distributors
focusing on the benefits and processes of the Shubh Labh Scheme. Use interactive
sessions to discuss real-life case studies and success stories.
o Informational Material: Develop comprehensive brochures and digital content that
outline the scheme's features, benefits, and case studies to distribute during sales visits
and via email.
o Engagement Metrics: Implement tracking mechanisms to measure engagement levels
(e.g., surveys, feedback forms) to assess the effectiveness of promotional efforts and
refine strategies accordingly.

b. Unnati App Awareness

● Goal: Educate wholesalers about the Unnati App to drive registrations and increase participation
in digital initiatives.
● Tactics:
o Training Sessions: Conduct hands-on training sessions for wholesalers to navigate the
app effectively, highlighting features like order tracking, scheme management, and sales
reporting.
o Incentivized Registration: Introduce incentives for wholesalers who register on the app
and complete their first order through it, fostering early adoption.

58
 o Digital Marketing Campaign: Leverage social media and email newsletters to share
tips, best practices, and user testimonials regarding the Unnati App, promoting its benefits
for efficiency and profitability.

2. Consumer & Market Insights

a. Market Dynamics

● Goal: Understand consumer behaviour and the factors that influence buying decisions across
different demographics.
● Tactics:
o Consumer Surveys: Conduct surveys targeting urban and rural consumers to gather data
on purchasing preferences, brand perceptions, and price sensitivity. Analyse findings to
identify trends and preferences specific to ITC’s product lines.
o Focus Groups: Organize focus groups to explore consumer attitudes towards ITC and its
competitors, gathering qualitative insights that can inform product development and
marketing strategies.
o Behavioural Analysis: Utilize point-of-sale data to analyse buying patterns and
seasonality trends, tailoring promotional efforts to peak buying times.

b. Competitive Analysis

● Goal: Identify and analyse competitors’ strategies to leverage opportunities for ITC.
● Tactics:
o SWOT Analysis: Conduct a comprehensive SWOT analysis of key competitors,
examining their strengths, weaknesses, opportunities, and threats in the market.
o Benchmarking: Compare ITC’s product offerings, pricing strategies, and marketing
efforts with those of competitors to identify gaps and potential areas for innovation.
o Strategic Recommendations: Develop actionable recommendations for ITC to
counteract competitor moves, such as targeted marketing campaigns or product line
expansions that address unmet consumer needs.

59
3. Feedback Loop Development

a. Wholesaler & Distributor Feedback

● Goal: Gather actionable feedback from wholesalers and distributors to identify challenges and
areas for improvement.
● Tactics:
o Feedback Sessions: Hold regular feedback sessions with wholesalers to discuss their
experiences with the Shubh Labh Scheme and the Unnati App, ensuring an open dialogue
for insights.
o Surveys & Polls: Create and distribute surveys to collect quantitative feedback on
specific aspects of the schemes, such as ease of use, perceived value, and support received.
o Feedback Repository: Establish a centralized repository to collate and analyse feedback,
allowing for tracking trends over time and making it easier to identify recurring issues.

b. Scheme Optimization

● Goal: Enhance the Shubh Labh Scheme based on feedback received from wholesalers.
● Tactics:
o Iterative Improvements: Based on the feedback, implement iterative changes to the
scheme, such as adjusting incentive structures or providing more accessible training
resources.
o Pilot Programs: Test new scheme features or adjustments in select regions before a
broader rollout to assess impact and gather additional feedback.
o Communication Plan: Develop a communication plan to inform wholesalers about
changes made based on their feedback, reinforcing the value of their input and fostering
a sense of partnership with ITC.

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5.3 CONCLUSION

The analysis of ITC’s current position in the FMCG market highlights both its strengths and areas
requiring attention. ITC’s commitment to high product quality, robust distribution networks, and
innovative marketing strategies has positioned it as a formidable player in the industry. The insights into
brand awareness initiatives, consumer behaviour, and competitive dynamics reveal significant
opportunities for ITC to enhance its market presence and address existing challenges.

Brand awareness initiatives such as the promotion of the Shubh Labh Scheme and the Unnati App have
shown potential in engaging wholesalers and distributors, yet further efforts are necessary to drive higher
participation rates. Understanding market dynamics and consumer behaviour provides valuable insights
into the purchasing decisions of both urban and rural consumers, allowing ITC to tailor its offerings more
effectively. The competitive analysis underscores the need for ITC to remain vigilant against established
rivals, while the development of a feedback loop facilitates continuous improvement in schemes and
product offerings based on stakeholder input.

However, challenges such as distribution inefficiencies, consumer price sensitivity, and communication
gaps with wholesalers hinder ITC’s full potential. Moreover, the significant influence of local
competitors like Lacy on market dynamics calls for an enhanced focus on localized marketing and
consumer engagement strategies.

The comprehensive analysis of ITC's FMCG market landscape reveals significant opportunities for
improvement within the Shubh Labh and Unnati programs. By leveraging insights gathered from
wholesalers, consumers, and market dynamics, ITC can effectively enhance its brand visibility,
strengthen its distribution network, and foster stronger relationships with retail partners.

The following key areas are essential for the successful implementation of improvements:

1. Realistic Targets: Establishing achievable goals for wholesalers is crucial. By setting realistic
sales targets, ITC can mitigate undue pressure on wholesalers, fostering a more collaborative
environment. This approach encourages wholesalers to participate actively without feeling
overwhelmed.
2. Build Trust: It is vital for ITC to provide timely and tangible benefits to its partners. Maintaining
effective communication with shopkeepers ensures that they feel valued and informed about the

61
 latest schemes and product offerings. Regular engagement will help build long-lasting
relationships, increasing loyalty to the ITC brand.
3. Effective Promotions: Running impactful seasonal and event-based promotions can
significantly enhance consumer engagement. ITC should implement regular reminders and
communication strategies to ensure that wholesalers are well-informed about ongoing
promotions, which will help drive sales during peak times.
4. Clear Incentives: Transparent communication of product-specific incentives is essential for
motivating wholesalers. By clearly outlining the benefits associated with various products, ITC
can encourage wholesalers to focus on promoting key items, thus maximizing sales potential.
5. Pricing Consistency: Addressing MOP issues by ensuring uniform pricing across states will help
eliminate confusion among wholesalers and retailers. Consistent pricing strengthens trust and
encourages retailers to stock ITC products without fear of losing competitive pricing advantages.
6. Optimize Distribution: Enhancing supply chain logistics is critical to improving product
availability in both urban and rural markets. ITC should focus on refining its distribution
strategies to ensure timely delivery and efficient inventory management, thus reducing stockouts
and improving sales performance.
7. Localized Products: By offering affordable, high-margin products tailored to regional
preferences, ITC can better connect with local markets. Participating in community events and
leveraging local branding strategies will further enhance product relevance and consumer loyalty.

In summary, by implementing these strategies, ITC can maximize the potential of the Shubh Labh and
Unnati programs, leading to increased brand loyalty, enhanced market presence, and improved sales
performance across its FMCG portfolio.

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Target Achievement (August)

The performance metrics for the month of August have provided valuable insights into the effectiveness
of ITC’s strategies in engaging wholesalers through the Shubh Labh Scheme and the Unnati App.

● Saharanpur Branch (SL Foods): The Saharanpur branch reached 53% of its monthly sales
target. This achievement, while indicating room for improvement, demonstrates a solid
engagement with local wholesalers. The level of participation suggests that the Shubh Labh
Scheme's incentives are gaining traction, but there is still potential to further increase awareness
and motivation among the wholesalers. Efforts should be concentrated on enhancing
communication about the benefits of the scheme, thereby driving wholesalers to strive for their
targets more diligently.
● SLROU Foods: In contrast, SLROU Foods exceeded expectations by achieving 84% of their
target. This strong performance highlights the effectiveness of the Unnati App in streamlining
operations and enhancing engagement with wholesalers. The successful adoption of the app
among the wholesaler network has resulted in improved order tracking and inventory
management, enabling them to respond swiftly to consumer demand. This performance indicates
that when wholesalers are equipped with the right tools and support, they can significantly
enhance their sales efforts.

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5.4 SUGGESTIONS FOR FUTURE GROWTH

The focused efforts on wholesaler acquisition and engagement through these two programs have laid a
robust foundation for future growth. Here are the key implications:

1. Enhanced Wholesaler Engagement: The positive outcomes at SLROU Foods suggest that
continuous engagement with wholesalers through tailored support and resources is crucial.
Regular training sessions and updates on product launches and promotional schemes will keep
wholesalers informed and motivated.
2. Strengthening Relationships: Building stronger relationships with existing wholesalers is
essential. ITC should prioritize face-to-face interactions, providing them with insights into market
trends and consumer preferences. By fostering these connections, ITC can create a sense of
partnership, encouraging wholesalers to promote ITC products more vigorously.
3. Data-Driven Decisions: The insights gathered from the Shubh Labh Scheme and Unnati App
can be used to analyse consumer behaviour and purchasing patterns. By understanding which
products are performing well in specific regions, ITC can tailor its marketing strategies and
product offerings to better meet the needs of wholesalers and consumers alike.
4. Feedback Loop Creation: Implementing a structured feedback mechanism will allow
wholesalers to share their experiences and challenges with the Shubh Labh Scheme and Unnati
App. Gathering this information will help ITC optimize these programs, making necessary
adjustments to enhance participation and overall effectiveness.
5. Future Initiatives: The current achievements serve as a launching pad for future initiatives. ITC
should explore new promotional strategies, seasonal campaigns, and incentives that can further
boost wholesaler engagement and drive sales.

In conclusion, the strong performance in August, particularly the outstanding results from SLROU
Foods, underscores the importance of maintaining momentum in the Shubh Labh and Unnati programs.
By strengthening relationships with wholesalers, leveraging data insights, and continuously optimizing
these initiatives, ITC can significantly enhance its market presence and achieve sustainable growth in the
coming months.

64
REFERENCE
&
ANNEXURE

65
1. ITC Annual Report 2023-2024: Comprehensive report covering ITC’s financial performance,
marketing strategies, and operational highlights, including detailed insights on FMCG, Shubh
Labh, and Unnati programs.

2. FMCG Marketing Strategy Reports: Articles and reports analysing ITC’s competitive
positioning, brand strategies, and consumer engagement in the FMCG sector.

3. Rural Market Insights (2023): Data-driven report providing insights into rural consumer
behaviour, distribution challenges, and market penetration relevant to ITC’s expansion efforts.

4. Digital Transformation in FMCG: Resources on the role of mobile apps and digital tools (like
Unnati) in streamlining supply chains and enhancing trade engagement.

5. Wholesaler & Retailer Engagement Practices: Documentation on best practices for wholesaler
and retailer engagement strategies, focusing on incentivization and relationship-building.

6. ITC Portal. (n.d.). Retrieved from [Link]

7. ITC Sustainability Integrated Report 2022. (2022). Retrieved from
[Link]
[Link]
8. ITC Quarterly Result Presentation Q2 FY2023. (2023). Retrieved from
[Link]
9. BizFluent. (n.d.). Retail Marketing Objectives. Retrieved from
[Link]
10. Shodhganga Literature Review. (n.d.). Retrieved from
[Link] [Link]
11. Google Scholar. (n.d.). Digital FMCG. Retrieved from
[Link]
d=gs_qabs&t=1674751705647&u=%23p%3DO66NbmfhyOYJ

66
Some of the Shops visited and their owner contact –
● Ghai Gen store [PROSPECITVE WHOLESALER]
● Bansal Provision store [Mudit Bansal-9756608215]
● Aapurti Mart [Saurabh-8126101016]
● Bharat Traders [Bharat Sharma-8630012326]
● Gupta Provision store [Vinod gupta-8923592332]
● Bhatt general store [Dipesh Batt -9760905558]
● Kandwal provision store [Rajesh kandwal-9411169267]
● Nitin general store [Anshul Gupta- 9012225354]
● Anjali Traders [Mahesh Mittal-9412991153]
● Kadir Enterprises [Kadir Ahmed-8439225298]
● Kunal Traders [Kunal-9997343698]
● Anshul Traders [Anshul-8630422356]
● Chadda Bakers [Rajesh Chadda-9897227600]
● Himanshu Lakhi Bagh [ Himanshu-8279343247]

Bills of competitors
1-Britania: 2-Haldiram:

3-Maggie: 4-Lays and Kurkure:

67
 Questionnaire

Q1- Which companies are the main competitors of ITC in Food and Beverages?

Competitor
s

Britannia Nestle Haldiram Parle

Lays

Q2- What Type of trade scheme does ITC offer to its distributors?

Q3- What Trade Scheme are offered by ITC’s competitors?

68
Q4- Does ITC offer any brand specific schemes or deals?

Brands with
schemes

Bingo and Sunfeast Ashirvad Savlon

69
Q5- what brand specific schemes or deals are offered by ITC’S competitors?

Brands with
Schemes

Hul Nestle
Patanjali

Q6- What strategies does ITC use to enhance loyalty among its distributors and wholesalers?

ITC
schemes

SL/SLROU FC
Stockist

70