WELCOME TO SALES MARKETING REVIEW.

AMUL STORY-- FROM KURIEN TO BMV

BMV, as he is commonly called in Federation, after an illustrious career in AMUL, finally called it a day, amidst high level of politics. My point of discussion is very different from what the scenario is, whether, it is right or wrong, or whether the politics is right or wrong and the larger question who is on right side or wrong side. No doubt, RS Sodhi who has taken the baton, whether permanently or temporarily is equally capable leader, with his own strengths, and no doubt, even if it is not now, but at later stage, it would have been him(RS Sodhi), who would have been natural choice.

The pertinent question at this, with 8000 crore turnover and built over foundation which is in co-operative, BMV should not have left in this unceremonious fashion. To support my point, we have history of AMUL where in BMV has driven Federation to half the size of HUL turnover. And if you dwell inside, it does not have half the expenses which HUL makes in terms of Branding, Employee salaries etc etc.

The structure of federation has withstood all the competition and changes in environment only because of three things, first is Dr Kurien, who has given it birth, Second is the brand AMUL, which has, no doubt created a niche impregnable and last but not the least, BMV, who has driven the organisation thru all these times.

The exit of Kurien(I do not want to dwell into the circumstances, under which he had exit) did not have much of effect because the leadership it had left has no flaws but it was exact carbon copy of his style of functioning, authoritative and visionary, in form of BMV.  And thus Federation was able to absorb the jolt, but this second jolt would shake the structure of federation, which may now go into the hands of people greedy for power and votebank, and the position with which RS Sodhi would veil his flag would also be weakened.

My only point is no such jolt or tremor should have occurred to federation at the time when it is going for next level. It would be no time when it can be 10000 cr organisation.

2. INDIAN RETAIL SECTOR-- FROM BOOM TO DOOM

Once, not long back, it was the blue eyed boy. The number of jobs created in this sector was more than anywhere else. Likes of Walmart were bullish on it. No corporate house in India was lagging behind to catch the bandwagon. As of now many retail stores are getting closed. The chain Subhiksha is on the brink of closure. What ails this sector. Has the Economic Recession taken the toll or the basics were not right. (Read Full Analysis)

THE LEARNING POINT

ONLY THE PARANOID SURVIVE (VIVA BOOKS)

INTEL INSIDE, this is what I would say about the book. Andrew S Groove, President CEO of Intel has worked on crisis management strategy in this book, which he calls "Inflection Point". To me he has been not very lucid in bringing in front what can be an inflection point. He has touched upon the Michel porter's - Forces model to illustrate how forces would effect business and would bring about an inflection point, which if not managed successfully would lead to devastation.

While reading this book, I strongly feel that Groove has taken much of pages in reaching to make reader understand Inflection Point. I would have expected more of strategy kind of bulk reading in the book.

Frankly even after reading book I am not able to relate the title to the whole story Groove has taken us thru. You would not believe but I still went inside my dictionary to see if Groove has some other meaning of paranoid.

He has taken the illustrations of Wal-Mart, shipping, privatisation, as instances of Infection points. I completely agree with him, but I would have expected him to analyse how the persecutory beliefs concerning perceived threats by these changes should have been dealt. And a deep more analysis of what has happened, which I think he has done only in case of bringing Intel story of exiting the memory business in front of readers.

Some Positives: definitely Groove has taken the readers thru the mental stage of the top management during time of crisis. At this time of recession this book is a must read as would give some thing to ponder to top management that whether this is or not a point of inflection for them.

Thats why I said it is INTEL INSIDE.

In all 1.4 STARS

ROLE OF TRADE MARKETING AND ACTIVATIONS

Sales & Marketing, in the context of today and yesterday have undergone lots of changes. In between a Sales and Marketing a new domain has caught its attention and that is Trade Marketing. Known by Many names -- Activations, Business Development, Promotions, etc etc, but I would always love to call it Trade Marketing and would like to keep this domain as a separate entity, though in today's context all three domains have much of intercept.

What is Trade Marketing:

Of all the definitions I liked the definition of "Wiki", it says:

Trade marketing is a discipline of marketing that relates to increasing the demand at wholesaler, retailer, or distributor level rather than at the consumer level. However, you need to continue with your Brand Management strategies to sustain the need at the consumer end. A consumer is the one who identifies and purchases a product from a retailer. To ensure that a retailer promotes your product against competitors', you must market your product to the retailers, also. Trade marketing might also include offering various tangible/intangible benefits to retailers. The alignment of sales and marketing discipline to profitability. It is used to satisfy the needs and wants of the consumers.

Why I was surprised and what made me write on this domain is, even Wiki has only definition and nothing more. And there is not much of material and bibles (Kotler) on this.

Expanding and Explaining the definition

Let us say a company is going to launch a product "XYZ", Marketing would start from whether there is a demand for this, latent demand, blue ocean, brand architecture would be compared to various competitors etc etc. Then once a product is conceptualised, the quality department would generate proto-types and will come up with final product. In the mean time marketing would develop packaging ideas, STP ideas, branding, media etc. And final product with brand architecture and Marketing launch plan would be ready.

In the present scenario unlike past, the brand/new product would be handed over to sales by a domain called trade marketing. Trade marketing would pitch from devising Launch Norms, launch schemes (trade loads or consumer promos), displays, activation programs (channel specific incentives, collateral) and consumer contact programs. Therefore, trade marketing should provide sales outlets with customer & shopper-based value creation plans.

Tools with Trade Marketing

Basic method of trade marketing is focusing on sales fundamentals, such as Distribution, Display, Promotion and Price. With data and knowledge of sales fundamentals, trade marketing develops market strategy aligned with brand strategy. In order to deliver sales volume and value, trade marketing support sales forces with well-designed fundamental enhancement plans.

In today's scenario the companies are focusing more on Weighted distribution rather than Numeric Distribution. And thus, the concept of channel specific approach has been implemented by almost all major companies. By channel specific approach, i mean is considering and catering to different distribution channels as separately with channel need based servicing and activation programs. Modern Trade is one channel considered as separate entity, another is wholesale, then cosmetic, then Hi-value outlets, mass outlets, different channels as per the industry.

Trade marketing plays major role in devising strategy to focus on different channels. Today, companies have separate trade marketing managers for separate channels and some of the companies have separate managers even with in a brand fro separate channels. Let us now discuss different programs/activations which companies are using for various channels.

1. Wholesale channel, which majorly thrives on loyalty has been put under point system by many companies (HUL, COlPAL, Marico, P & G to name a few). The wholesaler purchases from the company and he earns certain points which he can redeem as per company policy.

2. Hi-value outlets, in retail are given some %age extra on target based purchase and may be they are offered some permanent displays.

3. Chemist outlets would have assortment based purchase incentives.

4. Modern Trade has maximum of promos in package, from displays to consumer promos, to incentives etc etc.

How Trade Marketing has changed the scenario:

Previously it used to be Marketing Battles-- Branding, advertising, etc etc. Then sales people used to fight for placement and visibility of product. The advent of Trade Marketing has added ammunition to whole scenario, more ammunition you have more chances of success are there.

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Retail Sector-- What went wrong?

I was going thru an article "Lights dim in retail sector", this made me ponder what went right with Pantaloon and what did not go right with likes of Subhiksha and Reliance, though it is too early to compare Subhiksha and Reliance.

Let us start with, where the story begun.

Industry parlance uses term, Modern Trade for Organised Retail and General Trade for un-organised retail. Of-late the open format outlets, say a single self service outlet in a city with a sq ft area of 2000 would also be counted in Modern Trade or generally referred as MT. It was late 2001 that MT picked up and in major cities of south India it was rampant in year 2003-04, where as in Northern India and Western part of India it was still at nascent stage. At that time companies started taking MT as a seperate division with different sales force, different modus operandi of supply chain (from distribution catered to direct catering) and different payment terms.

Where a distributor would buy products from company on cash basis and limited credit days, MT started enjoying prolonged credit days and greater margins. More than margins, MT became a tool for various consumer offers, to increase impulse purchase. These consumer offers may differ from price offs to freebies. In early 2007 arrival of Reliance into retail and carpet bombing by Subhiksha changed the whole scenario. Retail was the new sunrise industry along with Telecom. Apart from chains like Relaince, Pantaloon, Spencers, owned by big corporate houses, middle sized chains like subhiksha, Trinetra, Vishal also started boming. Local Businessmen were not behind in grabbing the oppertunity and odd single stores and local chains also started business.

Major push was obtained by this sector with the Bharti - Walmart alliance and Birla take over of Trinetra. In between many changes occured, Adani's sold off there stores in Gujarat to Reliance, Tata's coming into supply chain of F & V thru Tata-chem-JV-Total Produce, Adani opening up supply chain venture - Adani Agrifresh etc etc. Foreign retailers were also showing more interest in Indian MT business. Metro came with its cash and carry business, French giant Carrefour scouting for partners etc etc.

Over all by begining of year 2008 the sector was no-looking back. 800 stores of Reliance, 1500 from subhiksha and many more to come. It was believed that those corporates who did not entered the business had missed the bus. REI Agro, Mahindra's, India-bulls, Cholamandalam group etc etc and who so ever not, just made an entry from wher ever possible.

Back to Basics

All this story seems very bright and beatiful till the global recession caught the air in September 2008. And the windtalkers started blown away by the wind per-se. It was not that the global slow down and liquidity crunch opened the doors abruptly. The effect was felt by most in the middle of year 2008 itself, but the over-optimism and huge plans in forefront made it ignore the giant fall.

Basically if we see, MT is nothing but another "Kirana and Sabji outlet", difference being former is run by a professionals hired by big wigs and later by a "baniya or similar". Both employee people, both bargain with companies, both anticipate more margin, and so on. But, basics, totally differ for both of them. Where the local baniya wins and professional loose is in "Costs". Where Big Bazaar won and others lost (Pantaloon’s revenue jumped 52% to Rs5,052 crore for the financial year ended June, while net profit was up by 5.1% (year-on-year) at Rs126 crore.), was in basic model.

A neighbourhood store like Subhiksha and Reliance is no different from local "Baniya or Kirana" store, both are selling same FMCG or Fresh items. Though a MT outlet used to get 5 times the turnover of local kirana at same location, its cost of operation was 50 times more than that single outlet. Some MT stores tried to give consumers more than FMCG and Fresh by putting Mobiles and Consumer Durables etc etc but they forgot the habits of Indian Consumers. The consumer would still go for buying Premium products and hi-value products from speciality store or big discount store, which the neighbourhood MT was not at all.

So on one hand pressure of Costs and then declining sales (in comparison to business model with break-even atleast), these MT outlets were unviable and here it was the liquidity crunch which hit them to completely ransack the expectations.

It is where the Big-Bazaar won, it for once clearly targetted the middle class, who would love to go to big malls and do shopping on sunday's. To increase impulse purchase it gave extreme offers and discounts (though got from Companies only) and it more than FMCG and Fresh, relied on apparels and Consumer Durables. Because, what ever one may do, FMCG margins are very thin and Fresh products ask for too much wastage costs.

Now let us just summarize the Waterloo of Retail, though it may be early to say whether it is waterloo or "just a battle lost but war to begin".

1. The supply chain or the back end built was in view of 2010 with over optimism and that increased costs to huge extent.
2. The management of these stores was lead by highly paid professionals, though it was another kirana shop.
3. Fresh fruits and vegetable were thought to be boon of this industry, but no one was able to judge the wastages and model of business(which is still with commission agents dealt thru mandis)
4. FMCG always works on thin margins.
5. Money was never in the system, it was just rotation and credit, which liquidity crunch tok to its nemisis.
6. It forgot the habits of middle class, who would still purchase kirana from "baniya" and premium and consumer durables from speciality and big stores with discounts and offers.
7. It was a like bubble of IT which crashed, both were built on over optimism rather than sound basics.

My agenda to deal with 7th point of IT-big bubble was to raise an optimism that after the crash the way IT and ITES have built them on sound basics Retail can be another comeback.

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FREE SAMPLES -- IN FMCG

One fine Morning you open the front page of your paper and you find a shampoo satchet stuck on it. Another day, while travelling you get a can of "Red bull".
All these free sampling techniques are used by companies to generate trials of their products. Mostly during the launch phase the companies use such techniques. Reason-de-etre, simple, so many shampoo's, which one to buy and big question "why?".
To go a bit deeper, one needs to give a look at two concepts:
1. Experience goods and post-experience goods.
2. Involvement level.
In economics, an experience good is a product or service where product characteristics such as quality or price are difficult to observe in advance, but these characteristics can be ascertained upon consumption. The concept is originally due to Philip Nelson, who contrasted an experience good with a search good.
Post-experience goods, also called credence goods, are goods for which it is difficult for consumers to ascertain the quality even after they have consumed them, such as vitamin supplements. Potential consumers of these goods may require third-party information, provided by private rating agencies or government bodies.
Why I am mixing Economics and Marketing. But it is true. What would a sample delivered to you will do if you after its consumption you are not able to conclude. Say, a sample of Vitamin C tablet delivered to you free of cost, would you purchase it after consuming.
Here my definition of consuming would include not only taste buds, but also hearing, smelling and seeing.
A consumer’s buying task is affected significantly by the level of purchase involvement. The level of involvement describes how important the decision is to the consumer; high involvement is usually associated with purchases that are expensive, infrequent, or risky. Buying also is affected by the degree of difference between brands in the product category. The buying task can be grouped into four categories based on whether involvement is high or low and whether brand differences are great or small.
For example, toothpaste is a high involvement category for mothers' and any decision on which toothpaste to use would depend on many factors and one factor can be a "trial".
Based on above two factors I personally feel that sampling is best suited for Experience goods of high involvement category products.

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Reviewing--ITC -- Soap Category Entry

Vivel, Superia, Fiama di wills, is'nt it so confusing. Karina and then Deepika, what are they trying to say. Is the Indian consumer comprehending what they are saying. Where, in the mind have this soap range positioned itself in the minds of consumer.
Yes, here my point to write this is to pin-point that whether the soap range which ITC has launched able to create a clear positioning in the mind of the consumers.
We peep back and see lux -- a beauty soap---yes, Hamam and life boy--- health and hygiene---yes.
Let us go deep into the soap category in India.
Brand Positioning in past targeted their products to the lowest income strata in urban as well as rural areas, positioning their brands as a way to remove dirt and clean the body. For some brands, that positioning persists even today with a focus on removal of body odor and keeping the user healthy. However, soap positionings are moving towards skin care as a value-added benefit. And not only this, now, present tense is for the lifestyle, fragrances, skin care, freshness and aspirations.

So where does, the ITC bandwagon stands of now. At least I am not able to find which part of my brain has this positioned.

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Satyam -- The Story

Satyam—The Scandal

The begining of the present crisis which shook the confidence of investors began with Satyam board’s decision on December 16 to acquire Maytas (Satyam spelt backwards) by paying $1.6 billion. On the day following the announcement, the prices of Satyam shares fell abnormally. The uproar created by the announcement led to immediate withdrawal of the proposal by the Satyam board. In order to support the price of Satyam shares, Mr Ramalinga Raju, chairman of the board of Satyam and promoter of the company announced that the considerable cash available with the company would be used to aggressively buy back shares of the company. But later on, the disclosures made by Mr Ramalinga Raju, to the Satyam board added a new twist to the story. The explanation provided in the communication by Mr Raju for absence of cash with the company is that Satyam’s profits had been artificially inflated. Mr Raju claims that the margin earned by Satyam in the quarter ended September 2008 was just 3% and not 24% as reported in the results. The communication also implies that Satyam’s margins had always been much lower than what had been reported for years. This mis-reporting had resulted in hugely inflated accumulated profits over time and the resulting large fictitious cash balance. This explanation appears far too facile and unbelievable. Here though one question arises which will have answer once the whole issue is resolved. While all IT companies (top) enjoyed high margins (about 25%), but Satyam reported much lower and those too were inflated.
As per the letter of Raju to board following are the misappropriations in Satyam:
1. The Balance Sheet carries as of September 30, 2008, a) Inflated (non-existent) cash and bank balances of Rs 5,040 crore (as against Rs 5,361 crore reflected in the books); b) An accrued interest of Rs 376 crore, which is non-existent c) An understated liability of Rs 1,230 crore on account of funds arranged by Raju; d) An overstated debtors' position of Rs 490 crore (as against Rs 2,651 reflected in the books)
2. For the September quarter(Q2) we reported a revenue of Rs 2,700 crore and an operating margin of Rs 649 crore(24 per cent of revenue) as against the actual revenues of Rs 2,112 crore and an actual operating margin of Rs 61 crore (3 per cent of revenues). This has resulted in artificial cash and bank balances going up by Rs 588 crore in Q2 alone.

What Next:

Now that the new board is constituted and new CEO at the helm of affairs, they would rather sell Satyam. But why should one buy Satyam, one does not know the internal of financials?
A few reasons,
1. Satyam has one of the best of IT brains and best service practices.
2. The ballparks in industry about the margins are clear hence post deal those would be there.
3. Satyam assets are still unpledged.
4. At this time of slow down and with Satyam at its low (range bound at rs 45), would be a good buy for the ones to pitch into the IT stream.
But Still, investors and clients are going to want answers. For instance, they're demanding to know how Satyam's auditor, PricewaterhouseCoopers, endorsed the company's accounts. And to regain the confidence of Investors, something should be done and it should be in Hurry. The competition sure is trying. Already, Satyam customers are getting calls from other Indian IT providers offering their services. And life could get tough for Satyam's thousands of engineers and employees. Despite their valuable skills, IT companies are hiring fresh college grads over the more expensive, experienced hands. Still, with the IT business already suffering from the global downturn, a large competitor out of the way could mean more deals for Satyam's rivals—if they can overcome new doubts about the reliability of the country's IT industry.

FMCG INDUSTRY

FMCG:

Products which have a quick turnover, and relatively low cost are known as Fast Moving Consumer Goods (FMCG). FMCG products are those that get replaced within a year. Items in this category include all consumables (other than groceries/pulses) people buy at regular intervals. The most common in the list are toilet soaps, detergents, shampoos, toothpaste, shaving products, shoe polish, packaged foodstuff, household accessories and extends to certain electronic goods. These items are meant for daily of frequent consumption and have a high return. FMCG companies maintain intense distribution network. Companies spend a large portion of their budget on maintaining distribution networks. A recent phenomenon in the sector was entry of multinationals and cheaper imports. Also the market is more pressurized with presence of local players in rural areas and state brands.

INDIAN FMCG SECTOR:

The Indian FMCG sector is the fourth largest in the economy and has a market size of US$13.1 billion. The FMCG market has been exhibiting more than 10 per cent growth since 2005 and is expected to grow at a CAGR of 10-12 per cent over the next few years. FMCG in India has a strong and competitive MNC presence across the entire value chain and home grown players like Marico, Dabur and ITC. It has been predicted that the FMCG market will reach to US$ 33.4 billion in 2015 from US $ billion 11.6 in 2003. The middle class and the rural segments of the Indian population are the most promising market for FMCG, and give brand makers the opportunity to convert them to branded products.

FMCG -- OPPERTUNITY
• More than 1 Billion Consumers
• Growing Disposable Income
• Young age profile : 45% less than 20 years*
• Low levels of Per Capita Consumption
• Growing aspirations fuelled by media

From 46 mn households in 2003, to 124 Mn Households in 2015, would be in consuming class. Per Capita income would be 1150 $US pa from somewhere around 600 now. And FMCG market size would be 33.4 Bn by 2015. This makes it industry to watch by next 5 years.

Low penetrations in the key segments also give a brighter picture for future.
Toothpaste -43.5%
Skin- 24.7%
Hair Wash-23.3%
Talcum Powder-45.1%
Dishwash-24.4 %
Ketchups-4.2%
Source : Indian Readership Survey 2002
FMCG SECTOR CHALLENGES AND GROWTH:

2001 to 2003 saw a major shakeup for the sector, with negative growth. But oflate it has been growing at a faster pace. Year 2005-06 saw 11.5% growth and 2007-08 saw growth of around 14.5% and the with constraints of current economic recession, it is predicted to grow at a pace of about 16%, though with some dent in bottomline. Significantly, several Indian FMCG companies have also been aggressively exploring global markets through both acquisitions and alliances. In the past three years, they have acquired about 15 companies and have spread their presence to more than a dozen countries. With the presence of 12.2% of the world population in the villages of India, the Indian rural FMCG market is something no one can overlook. Increased focus on farm sector will boost rural incomes, hence providing better growth prospects to the FMCG companies. Also, increase in the urban population, along with increase in income levels and the availability of new categories, would help the urban areas maintain their position in terms of consumption. At present, urban India accounts for 66% of total FMCG consumption, with rural India accounting for the remaining 34%. However, rural India accounts for more than 40% consumption in major FMCG categories such as personal care, fabric care, and hot beverages. In urban areas, home and personal care category, including skin care, household care and feminine hygiene, will keep growing at relatively attractive rates. Within the foods segment, it is estimated that processed foods, bakery, and dairy are long-term growth categories in both rural and urban areas.

Major Players:
Hindustan Unilever Ltd.
ITC (Indian Tobacco Company)
Nestlé India
GCMMF (AMUL)
Dabur India
Cadbury India

ITC Ltd

Perfetti Van Melle
Britannia Industries
Procter & Gamble Hygiene and Health Care
Marico Industries

Indian companies have their presence across the value chain of FMCG sector, right from the supply of raw materials to packaged goods in the food-processing sector. The foods category in FMCG is lead by HLL, ITC, Godrej, and Nestle and Amul. Amul, India's largest foods company, has a good presence in the food category with its ice-creams, curd, milk, butter, cheese, and so on. Britannia also, dominates the biscuits category and oflate ITC has been a tough competitor. In the household care category (like mosquito repellents), Godrej, Dabur and Reckitt are major players. In the shampoo category, HLL's Clinic and Sunsilk make it to the top 100, although P&G's Head and Shoulders and Pantene are also trying hard to be positioned on top. ITC has also forayed into Shampoo category and plans to have major dent in market share. Dabur with its Vatika range is already the highest growing player in shampoo category. Dabur is among the top five FMCG companies in India and is a herbal specialist. Dabur has brands like Dabur Amla, Dabur Chyawanprash, Vatika, Hajmola and Real. Marico is a leading Indian group in consumer products and services in the Global Beauty and Wellness space.

Cadbury India and Perfetti are the market leaders in the chocolate and confectionery market. Pepsi - Fritolays has made major gains in branded foods and ITC with launch of Bingo is already in counting.

WHAT WORK FOR PERFETTI IN MEDIA

"Perfetti had the distinction of being perhaps the first company to win at the Abbys and the Effies for five consecutive years. Perfetti Van Melle India was declared Advertiser of the Year on TV, Radio and the Internet last year and was the first company from India to win two metals at Cannes for the widely acclaimed Happydent White commercial"

"The Effies, held in Mumbai today (24 October), witnessed O&M romp away with the most number of Effies (four) - a Gold for Titan Watches (What's your style) in the consumer durables category, two slivers - one for Perfetti Van Melle (Air Action Centre Fresh)"

One Company, whose ad campaigns, I have seen seldom failing and definitely this reflects in the results, may be financial year 2009-10, would see it touching 4 digit mark in T/O (India). Whether it is ATM campaign or crocodile with kajole, or white teeth as lights in happydent, all campaigns make you stop your channel swap.

Suneja, all of 36 years old, is one of the youngest and most successful marketers in the country has definitely given Perfetti an edge over other confi giants thru its media campaigns.

In ads, when all is said and done, most people don't believe, don't remember, don't even notice, most advertising. The vast majority of advertising is ineffective and inefficient. Then how does something so unimportant and benign impact my consumption patterns and habits and that too in a product which is just 50 paisa.
Take the road less traveled -- this is what was the strategy of Perfetti, whereas melody said "melody khao sab bhool jao", Perfetti never asked anyone to eat centrefresh or Alpenlibe. It rather went away from the point of rationality and introduced wackyness in advertisements.

I do not remember any child in the ads of Alpenlibe, Centrefresh or happydent. Perfetti just turned the tables around in the STP game. The segment which consumes the toffees most- the children- not in advertisements. Instead we saw Kajole saying us eat the toffee. And here is where it won the game. Wherein in normal life your adults would say to children not to consume confi, but the ads totally potrayed opposite.

MERGE OF NOT

In any sales organisation, distribution and channel sales are the core of the business. The distribution set up and model are very strategic to how the company proposes to reach its customers and how the strategy would effect the bottomline of the company. Retail outlets provide a platform to sell company's products to the end consumers. These retail outlets are in turn supplied thru distributors.

Each company choses its distribution strategy on the basis of what clientle it wants to reach and what is the product portfolio it is dealing with. My point of analysing the business merger or de-merger will be with a point of view of Distribution and sales structure. When I talk about distribution structure, it includes, distributors, Salesmen, supply units and sales structure means the Sales Force which manages this business.

HUL merged its Foods and Personal and Home care business. Cadbury's operates still two business divisions Mass and Main, Perfetti Van Melle operates four divisions, AMUL has three lines of business, Milk, Ice-cream and dairy, Brittannia operates two distribution highways - Buiscuits and Dairy products, Godrej has also two lines-saralee and soaps.

What are the consideration to have same or different distribution and sales structures?

ITC LTD

PROFILE: ITC is one of India's foremost private sector companies with a market capitalisation of nearly US $ 19 billion* and a turnover of over US $ 5.1 Billion. ITC has a diversified presence in Cigarettes, Hotels, Paperboards & Specialty Papers, Packaging, Agri-Business, Packaged Foods & Confectionery, Information Technology, Branded Apparel, Personal Care, Stationery, Safety Matches and other FMCG products. While ITC is an market leader in its traditional businesses of Cigarettes, Hotels, Paperboards, Packaging and Agri-Exports, it is rapidly gaining market share even in its nascent businesses of Packaged Foods & Confectionery, Branded Apparel, Personal Care and Stationery.
Chairman Y C Deveshwar provides leadership to the organisation. ITC's diversified status originates from its corporate strategy aimed at creating multiple drivers of growth anchored on its time-tested core competencies: unmatched distribution reach, superior brand-building capabilities, effective supply chain management and acknowledged service skills in hoteliering. Over time, the strategic forays into new businesses are expected to garner a significant share of these emerging high-growth markets in India.

HISTORY: ITC was incorporated on August 24, 1910 under the name of 'Imperial Tobacco Company of India Limited'. A leased office on Radha Bazar Lane, Kolkata, was the centre of the Company's existence. The Company's ownership progressively Indianised, and the name of the Company was changed to I.T.C. Limited in 1974. In recognition of the Company's multi-business portfolio encompassing a wide range of businesses - Cigarettes & Tobacco, Hotels, Information Technology, Packaging, Paperboards & Specialty Papers, Agri-Exports, Foods, Lifestyle Retailing and Greeting Gifting & Stationery - the full stops in the Company's name were removed effective September 18, 2001.

BUSINESS: ITC's Packaging & Printing Business was set up in 1925 as a strategic backward integration for ITC's Cigarettes business. It is today India's most sophisticated packaging house.
In 1975 the Company launched its Hotels business with the acquisition of a hotel in Chennai which was rechristened 'ITC-Welcomgroup Hotel Chola'.

In 1979, ITC entered the Paperboards business by promoting ITC Bhadrachalam Paperboards Limited, which today has become the market leader in India. Bhadrachalam Paperboards amalgamated with the Company effective March 13, 2002 and became a Division of the Company, Bhadrachalam Paperboards Division. In November 2002, this division merged with the Company's Tribeni Tissues Division to form the Paperboards & Specialty Papers Division. In 2004, ITC acquired the paperboard manufacturing facility of BILT Industrial Packaging Co. Ltd (BIPCO), near Coimbatore, Tamil Nadu. In 1985, ITC set up Surya Tobacco Co. in Nepal as an Indo-Nepal and British joint venture. Since inception, its shares have been held by ITC, British American Tobacco and various independent shareholders in Nepal. In August 2002, Surya Tobacco became a subsidiary of ITC Limited and its name was changed to Surya Nepal Private Limited (Surya Nepal).
In 1990, ITC acquired Tribeni Tissues Limited, a Specialty paper manufacturing company and a major supplier of tissue paper to the cigarette industry. The merged entity was named the Tribeni Tissues Division (TTD). To harness strategic and operational synergies, TTD was merged with the Bhadrachalam Paperboards Division to form the Paperboards & Specialty Papers Division in November 2002.
Also in 1990, leveraging its agri-sourcing competency, ITC set up the Agri Business Division for export of agri-commodities. The Division is today one of India's largest exporters. ITC's unique and now widely acknowledged e-Choupal initiative began in 2000 with soya farmers in Madhya Pradesh. Now it extends to 10 states covering over 4 million farmers. ITC's first rural mall, christened 'Choupal Saagar' was inaugurated in August 2004 at Sehore. On the rural retail front, 24 'Choupal Saagars' are now operatonal in the 3 states of Madhya Pradesh, Maharashtra and Uttar Pradesh.
In 2000, ITC launched greeting cards under the brand name 'Expressions'. In 2002, the product range was enlarged with the introduction of Gift wrappers, Autograph books and Slam books. In the same year, ITC also launched 'Expressions Matrubhasha', a vernacular range of greeting cards in eight languages and 'Expressions Paperkraft', a range of premium stationery products. In 2003, the company rolled out 'Classmate', a range of notebooks in the school stationery segment.
ITC also entered the Lifestyle Retailing business with the Wills Sport range of international quality relaxed wear for men and women in 2000. The Wills Lifestyle chain of exclusive stores later expanded its range to include Wills Classic formal wear (2002) and Wills Clublife evening wear (2003). ITC also initiated a foray into the popular segment with its men's wear brand, John Players, in 2002. In 2006, Wills Lifestyle became title partner of the country's most premier fashion event - Wills Lifestyle India Fashion Week - that has gained recognition from buyers and retailers as the single largest B-2-B platform for the Fashion Design industry. In 2000, ITC spun off its information technology business into a wholly owned subsidiary, ITC Infotech India Limited, to more aggressively pursue emerging opportunities in this area. Today ITC Infotech is one of India’s fastest growing global IT and IT-enabled services companies and has established itself as a key player in offshore outsourcing, providing outsourced IT solutions and services to leading global customers across key focus verticals - Manufacturing, BFSI (Banking, Financial Services & Insurance), CPG&R (Consumer Packaged Goods & Retail), THT (Travel, Hospitality and Transportation) and Media & Entertainment.
ITC's foray into the Foods began in August 2001 with the introduction of 'Kitchens of India' ready-to-eat Indian gourmet dishes. In 2002, ITC entered the confectionery and staples segments with the launch of the brands mint-o and Candyman confectionery and Aashirvaad atta (wheat flour). 2003 witnessed the introduction of Sunfeast as the Company entered the biscuits segment. ITC's entered the fast growing branded snacks category with Bingo! in 2007. In 2002, ITC entered yet another category in the Safety Matches initiative. ITC now markets popular safety matches brands like iKno, Mangaldeep, Aim, Aim Mega and Aim Metro.
ITC's forayed into the marketing of Agarbattis (incense sticks) in 2003 with popular agarbattis brands include Spriha and Mangaldeep across a range of fragrances like Rose, Jasmine, Bouquet, Sandalwood, Madhur, Sambrani and Nagchampa.
ITC introduced Essenza Di Wills, an exclusive range of fine fragrances and bath & body care products for men and women in July 2005. Inizio, the signature range under Essenza Di Wills provides a comprehensive grooming regimen with distinct lines for men (Inizio Homme) and women (Inizio Femme). Continuing with its tradition of bringing world class products to Indian consumers the Company launched 'Fiama Di Wills', a premium range of Shampoos, Shower Gels and Soaps in September, October and December 2007 respectively. The Company also launched the 'Superia' range of Soaps and Shampoos in the mass-market segment at select markets in October 2007 and Vivel De Wills & Vivel range of soaps in February and Vivel range of shampoos in June 2008.

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