Project Management

Assignment

Launch of Sunfeast Yippee Noodles by ITC

Submitted to: Dr. Vinay Joshi

Submitted by: Amit Borse (PGDM 2010-12)

Introduction
ITC Limited (BSE: 500875) public conglomerate company headquartered in Kolkata, India. Its turnover is $6 billion and a market capitalization of over $30 Billion. The company has its registered office in Kolkata. It started off as the Imperial Tobacco Company, and shares ancestry with Imperial Tobacco of the United Kingdom, but it is now fully independent, and was rechristened to Indian Tobacco Company in 1970 and then to I.T.C. Limited in 1974 The company is currently headed by Yogesh Chander Deveshwar. It employs over 26,000 people at more than 60 locations across India and is listed on Forbes 2000. ITC Limited completed 100 years on 24 August 2010. 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 outstanding 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. ITC's aspiration to be an exemplar in sustainability practices is manifest in its status as the only company in the world of its size and diversity to be 'carbon positive', 'water positive' and 'solid waste recycling positive.' In addition, ITC's businesses have created sustainable livelihoods for more than 5 million people, a majority of whom represent the poorest in rural India.

Rural Initiatives
ITC's Agri-Business is India's second largest exporter of agricultural products. ITC is one of the India's biggest foreign exchange earners (US $ 2 billion in the last decade). The Company's 'e-Choupal' initiative is enabling Indian agriculture significantly enhance its competitiveness by empowering Indian farmers through the power of the Internet. This transformational strategy, which has already become the subject matter of a case study at Harvard Business School, is expected to progressively create for ITC a huge rural distribution infrastructure, significantly enhancing the Company's marketing reach. The company places computers with Internet access in rural farming villages; the e-Choupals serve as both a social gathering place for exchange of information (choupal means gathering place in Hindi) and an e-commerce hub. What began as an effort to re-engineer the procurement process for soy, tobacco, wheat, shrimp, and other cropping systems in rural India has also created a highly profitable distribution and product design channel for the companyan e-commerce platform that is also a low-cost fulfillment system focused on the needs of rural India. The e-Choupal system has also catalyzed rural transformation that is helping to alleviate rural isolation, create more transparency for farmers, and improve their productivity and incomes. Corporate philanthropy

ITC Echoupal creatively leverages information technology to set up a meta-market in favour of India's small and poor farmers, who would otherwise continue to operate and transact in 'un-evolved' markets. As of July 2010, services through 6500 Echoupal across 10 states, reach more than 4 million farmers in about 40,000 villages. Free access to Internet is also opening windows of rural India to the world at large. ITC eChoupal e-choupal is now being regarded as a reliable delivery mechanism for resource development initiatives. Its potential is being tested through pilot projects in healthcare, educational services, water management and cattle health management with the help of several service providers including non-governmental organizations. When Classmate notebooks were launched, it came up with the initiative of contributing 1 rupee towards the education of poor children,from every single notebook it sold. Classmate, has launched a programme called Classmate Ideas for India challenge. The programme would be a part of the company's centenary initiative. The nation-wide programme would invite ideas of the youth, who have the potential to transform India. Classmate Ideas for India challenge plans to reach out to 25 lakh students across 30 cities, 500 schools and 200 colleges across the country.

Forbes Ranking
ITC features on the Forbes Global 2000 rankings for 2007 at position 1256. ITC is the only Indian FMCG company that features on the Forbes Global 2000 rankings for 2009 at position 987 ITC also featured on the Forbes World's Most reputable Companies List at position 95.

Products
ITC has a strong presence in tobacco, Foods, Apparel, Personal care, Stationary, Safety matches and Agarbattis, and Hotels. Food category consists of Aashirvaad, Minto, Sunfeast, Candyman, Bingo, Yippee, Sunfeast Pasata brands in Ready to Eat, Staples, Biscuits, Confectionary, Noodles, and Snack foods.

Noodles Industry in India

The largest category within noodles in India is instant noodles. Due to high retail sales growth during the review period, new players have entered instant noodles. A national level player GlaxoSmithKline Consumer Health has entered instant noodles with Horlicks Foodles. In early 2009, Capital Foods introduced Smith & Jones Instant Noodles in two flavors: Masala and Curry. The latest national player to introduce products in instant noodles is Hindustan Unilever, which extended its Knorr brand with Knorr Soupy Noodles. Meanwhile, the leading player Nestl India expanded its offering under Maggi, introducing Maggi Rasile Chow, targeting low-income consumers. Thus, the instant noodles industry has witnessed a high level of activity in 2009 with new brand innovations.

Present Market Scenario

1. The current market for noodles in India is estimated at a staggering Rs. 1300 cr. 2. The noodles market in India is growing at a rate of around 17% to 20% annually. 3. The projections state that the corresponding industry is expected to grow from Rs. 1300 cr. to Rs 3500 cr. by 2015. 4. The major players are: Maggi (from Nestle India Ltd.) around 70% market share and Top Ramen (from Nissin India Ltd.). 5. Other well-known brands in the market include Horlicks Foodles (from Glaxo Smithkline Ltd.), Knorr soupy noodles (from Hindustan Unilever), and Sunfeast Yippee (from ITC). 6. Some others are: Chings secret & Smith n Jones (from Capital Foods Ltd.), Wai-Wai by CG Foods Pvt Ltd., & Tasty Treat by Future Group. The situation audit thus performed shows that the category is very attractive. The category analysis proves that there is huge market potential which is still not over the capacity and the chances of penetration are very high. Consequently the chances of deriving a healthy ROI is ripe and owing to the success of the product in general (as demonstrated by the aforesaid facts and figures), it is clear as to why the major houses in the Indian FMCG industry are coming up with their own noodle brands. Evidently, the last couple of years have seen some serious exercises in innovations and communication in product and brand placement in the Noodles industry from various renowned houses in the country.

Sunfeast Yippee Noodles

ITC has also taken the same approach by focusing its noodles brand, Sunfeast Yippee, as a brand using the benefit positioning concept in which they tried to position the product as a better alternative to Maggi on the basis of following three differentiating criteria :1. The first point used by Yippee to position itself as a better alternative over Maggi was that it was telling the customers that they should have the choice of variety of masala with two variants in their product portfolio Classic and Magic. The stress was made upon the point that we want choices in each and everything in life so why not have a choice while having instant noodles. 2. The second point focused on the shape of the contents within the pack. The contents in other options available are in rectangular shape which has to be broken which leads to short pieces of noodles, whereas in Yippee noodle pack the cake is in round shape which keeps the noodles intact and long and smooth. 3. Then third thing that it focuses upon is the fact that Maggi must be had immediately after it is cooked as after sometime the taste deteriorates and you cannot have it, whereas Yippee noodles promises that they can even be had after some time. Thus it has tried to give itself a totally different positioning from the other competitors present in the market and it is the only competitor to Maggi, which has decided to take it head on while competing with it.

The biggest advantages available with the Sunfeast Yippee noodles brand are as follows: 1. The deeper penetration provided by the already well-established and penetrative distribution channel provided to ITC by its channel member in the tobacco business which provides it the most penetrative distribution network both in rural and urban India. 2. Then it used the Sunfeast brand, thereby using the Umbrella branding strategy, which had already become a well-known name in the Indian households because of the equity that the brand had gained in the minds of the consumers. 3. The financial muscle of the ITC conglomerate to back the company to tackle all the competitive moves in an efficient manner. The Marketing Mix for Sunfeast Yippee Brand: Product It is a product that is different in terms of package (red and yellow contents), contents (which was round cake instead of the rectangular cakes as used by other brands), labeling, 90 gram pack (where as the biggest competitor Maggi is offering 85 gm pack), with two variants available and many more lined up for launch in the coming months. Price Available at the price tag of Rs. 10 to match the competitive prices that the other competitors are offering. Place The distribution reach is the biggest asset that ITC has got and Yippee is also using this biggest advantage of ITC to penetrate especially into the rural market at a rapid pace. Promotion The company is focusing very heavily on the benefit positioning concept in their ads focusing on the benefits or the advantages it has over Maggi as a competitor.

Sunfeast Yippee Noodles

Logo

Parent Company Category Sector Tagline/ Slogan USP

ITC Food Products Food Products The better noodles; Spread the smile Instant noodles with different tastes

STP Segment Target Group People looking for a healthy snack when hungry Young people and children from upper and middle class Sunfeast Yippee noodles do not lump even 30 minutes after cooking SWOT Analysis 1.Good and visibility 2.Good product distribution and availability Strength 3.Lots of flavors and varieties available 1.Media generated news about health issues Weakness 2.Brand loyalty of Maggi is tremendous 1.Untapped rural markets 2.DINKS, single professionals Opportunity Threats 3.Newer tastes 1.Price wars with other noodle brands Competition Competitors 1.Maggi

Positioning

Conclusion
ITC has always taken a very aggressive approach from the day it entered the FMCG sector and has been giving a very tough fight to the already established players because of the financial muscle that it has and the wider and deeper reach that ITC has got even in the rural markets because of its tobacco business. This always provides it an edge even over the established players in the market as not many players in India have got such a deep and a wider reach for making the products available to customers in almost every nook and corner in India. Thus, in all ITC has come up with an alternative, which seems to be a bit different from all options that have tried to compete with Maggi and the only alternative that has decided to take the market leader head on through its television commercials, which are making direct comparisons with Maggi thought without naming it and showing how Sunfeast Yippee Noodles is a better option than Maggi. Competition in the instant noodles market is increasing exponentially as new entrants are coming in to the market. Maggi, the market leader, has to come out with some new and innovative product every time to stay ahead in the competition. These players have been fighting out the competitive battles to get the most of the instant noodles market of the around Rs. 1300 cr. and which is growing continuously at around 17% to 20% growth rate. All these players are giving Maggi a tough fight and are eating out into the almost 70% market share that Maggi has got in this market (Source Business Standard).