A STUDY ON EXTERNAL COMMUNICATION

IN ITC LIMITED

Submitted by:

Rupjilika Timungpi

2020SMF6613

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ACKNOWLEDGEMENT:
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I would like to extend my gratitude to Prof. Anita Tripathy Lal for her valued support and
guidance in completing this project. Her suggestions and instructions have been highly
contributed in making this project a success.

I would like to convey my gratitude to my family who have been extremely supportive
throughout the course of completion of this project.

Last but not the least, I would also like to thank my classmates who have helped me with

valuable suggestions.

Letter of transmittal:
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30th September, 2020

Arnab Goswami,

CEO,

ITC Limited,

Kolkata, West Bengal

Sub: Study on external communications in ITC Limited, Kolkata

Dear Sir,

With due respect I would like to state that this study has been conducted to assess the external
communications of ITC.I believe that this project would be highly advantageous in
understanding the importance and the role that external communications play in the growth of
a business. Moreover, it would be really helpful in bringing up more structured and effective
ways to fight with the challenges that arise due to gaps in external communication.

Therefore, I would be highly obliged if you kindly check the project report which has been
enclosed here. I will be waiting for your response. You can reach out to me if you have any
queries or recommendations.

Yours faithfully,

Rupjilika Timungpi,

Mobile- 9957566869

TABLE OF CONTENTS:

1. Introduction 1

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1.1. Relevance 1
1.2. Gaps of Literature Review 1
1.3. Purpose of study 2
1.4. Objectives 2
1.5. Brief Outline of the chapter 2
2. Methodology 3
2.1. Universe of the study 3
2.2. Branch of the company 3
2.3. Sample size 3
2.4. Data collection 3
2.5. Data analysis 4
2.6. Project Experience/Field Experience 4
3. Literature review 4
3.1. Brief of literature review 4
3.2. History and growth of the company 5
4. Topic Analysis 7
5. Competitor’s Analysis 8
6. Conclusions 9
7. Executive summary 10
References 11

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1. Introduction:
ITC Limited is an Indian conglomerate giant which was established in the year 1910 as
Imperial Tobacco Company of India Limited . It was renamed later as the India Tobacco
Company Limited in 1970 and acquired the name ITC Limited in 1974.It is currently
headquartered in Kolkata, West Bengal. Its product portfolio is diverse in the truest sense which
includes FMCG, Hotels, Packaging, Paperboards and specialty papers and agri-business. The
company had an annual turonover of USD $8.31 billion and a market capitalization of US $45
billion.
Today ITC has scaled up its presence in the country as well as in the market scenario with the
extremely strong base that it has laid with its cutting-edge research on customer demands,
focusing on insights received from them, creation of new ideas for product development, efficient
supply distribution systems and marketing network, coupled with the strong support of the
employees working in the organisation. The growing potential of FMCG industries to provide
services and products to the rural masses has also been on the rise due to the increase in disposable
income of the people in the rural areas. Also, the success of ITC can be credited to the manner in
which the organisation engages its stakeholders. It has beautifully created an institutionalised
structured system to review stakeholder’s expectations from them.
1.1. Relevance:
ITC has a large market base amongst the urban and semi-urban customers owing its ability to
deliver messages and information regarding its products and services effectively. This has
been possible with the help of the extensive advertisements and promotional strategies in
social media platforms. However, penetrating in the rural areas has been slightly difficult
owing to the population demographics. There is no denying the fact that the fruits of
technological development has reached the people residing in rural areas as well, with a few
of them having access to electronic devices and gadgets. However, they have not been able to
utilise the advantages fully that these technological tools to gain access to information about
their products and services. Hence, it creates a void and a hinderance in developing a healthy
relationship with the customers. Moreover, the language of delivery is another major factor
which needs to be considered while planning to take products to these potential customers
since most of them are acquainted only with their vernacular languages. These factors, if not
addressed properly, might lead to unacceptance of their products and services.
In addition to the relationship with customers, ITC also makes endeavours for the proper
disclosure of information relating to a myriad of activities such as its financial performance,
Environment, Health and Safety (EHS) and its other social initiatives, amongst which e-
choupal is the most prominent one. ITC constantly strives hard to keep up to the stakeholders’
expectations as it is expected to bring them a lot of goodwill.

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 Hence, it can be concluded that the establishment of a robust external communication
between ITC and its various stakeholders is of utmost necessity for the fulfilment and
successful implementation of their objectives and for carving its niche amongst them. In this
way, the relevance of this particular subject can be established.
1.2. Gaps of literature review:
Since very few studies have been conducted to study the relationship of ITC with its
stakeholders, not many information is available in our hands to analyse the external
communication of the organisation with that particular segment of customers. Insights gain
from a few studies show that there is a strong need of the evaluation of an efficient
communication system in order to ensure smooth external communication with its
stakeholders.
However, these studies have just highlighted the issues to be resolved. It is of prime
importance to come up with solutions in order to resolve those issues which have been
inherent all the while. The organization needs to focus on approaching customers, listen to
their expectations, understand and analyse them properly.

1.3. Purpose of Study:

The main purpose of the study is to identify ways to bridge the gaps in the processes of external
communication undertaken by ITC. One of the main problems which has been identified is the
struggle in delivering the meaning of its messages to the rural customers, who constitute a great
potential market for its FMCG products. This issue can be resolved by planting a seed of
understanding in their minds by implementing various techniques to get in close touch with them.
Also, intensive care has to be taken of the satisfaction of the customers both in the rural and urban
areas. The rules mentioned in the already structured communication system has to be abided by
and new ideas have to be developed to cope up with the changing times to keep it relevant and
competent.
1.4. Objective:
The objectives of the study are as follows:
a. To understand the various divisions of the working of the ITC
b. To analyse the aspects of external communications at ITC
c. To analyse the competitors of the ITC
d. To provide suggestions to improve the external communication of the ITC
1.5. Brief outline of the chapter:
This paper endeavours to give a vivid picture of the various research focused on the external
communication of the ITC. Basically, only the help of secondary sources have been taken to
frame this paper due to the difficulties in procuring information from primary sources due to the
current situation. The different methodologies involved will be studied, followed by the analysis

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 of the collected data from the secondary sources. Furthermore, literature review, topic analysis,
competitor’s analysis and conclusion have also been included.

2. Methodology
The methodologies pertaining to the development of external communication of ITC with the
rural customers have been shed light upon. Various methods have been undertaken in completing
the research. Hereby, in this section it is aimed to give a detailed discussion of those through the
analysis of the data that had been collected, most of which consists of secondary data.
2.1. Universe of study
ITC primarily has its headquarters in Kolkata, West Bengal and also has branches of its various
units in several locations of the country. Given below are few such collective locations,
irrespective of the units:
Panchkula, Haryana
Pune, Maharashtra
Chennai, Tamil Nadu
Lucknow, Uttar Pradesh
Coimbatore, Tamil Nadu
Guntur, Andhra Pradesh
Bengaluru, Karnataka
Secunderabad, Telangana
Kochi, Kerala
As of 2019, ITC employs a total number of 27,279 people all over its business divisions.
2.2. Branch of the company:
The branch of the company which has been considered for the purpose of the study is Kolkata in
West Bengal, India. It is India’s fastest growing FMCG marketer, leading social initiatives with
empowerment of farmers, has a vast range of luxury hotel chain, market leader in Indian
Paperboard and Packaging Industry etc. It also owns a specialized global digital solutions
provider, called ITC Infotech.
2.3. Sample size:
Normally, for such purposes involving sampling from a population, simple random sampling,
systematic sampling, stratified sampling, clustered sampling, convenience sampling etc. are used.
However, in this case, no such sampling technique has been adopted to arrive at the suitable
sample size. The data derived from secondary sources like company websites, has been used for
the purpose
2.4. Data collection:
Normally, data collection is done by interviews, questionnaires, surveys, focus group discussions
and many more. As mentioned earlier, due to the difficulties involved in carrying out data

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 collection from primary sources, only secondary sources like research papers, news articles etc.
have been taken as a reference for writing this paper.
2.5. Data Analysis:
Data Analysis includes the structuring of the collected data in forms such as tabular or graphical
and the derivation and interpretation of information from these data which are then analysed to
study the subject matter inquisitively. Generally, qualitative and quantitative analysis are carried
out depending on the scale of the research field and the data-type. However, since no primary
survey has been conducted, no such data is available for analysis. Almost all the information
provided here has been stated from various secondary sources including company’s website,
research papers and news articles.
2.6. Project Experience/Field Experience:
The collection of data for the purpose of this study has been tough due to the lack of availability
of the desired kind of information in the internet. It has been all the more tough due to the absence
of primary data in our hands. Had there been primary data, a clearer picture of the problems
involved could have been obtained. Not many articles have been published about the ways
adopted to tackle the problem of external communication by ITC as a whole to facilitate smooth
flow of information the people inhabiting in the rural areas.

3. Literature Review:
This section gives a brief summary of the various literature and secondary sources which have
been referred to for writing this.
3.1. Brief literature review:
E-choupal has been the most significant initiative that ITC Limited has undertaken for the
empowerment of farmers, one of their most important stakeholders, wherein they linked directly
with them by providing them with internet facilities set up in a few centres of their villages.
Through this, they could access the internet and gather information about the latest advancements
in farming techniques, weather, types of soil, seeds etc. Hubs were also opened where they could
sell their produce and were paid a certain amount as per the computerized weighbridge. The
involvement of middlemen was eliminated and the supply chain became efficient and transparent.
The farmers also received their proper dues then on. However, the main issue that ITC had to
tackle in the process was the illiteracy and the inability of the farmers to operate the computers.
Hence, along with, a person who was later referred to as the Sanchalak was properly trained to
render help to them while accessing the internet. Also, a lead farmer was selected amongst them
for the purpose of facilitating communication and taking forward the concerns and expectations of
the farmers to the organisation.
Also, it has been stated in the website www.itcportal.com that the company engages in regular
communications and interactions with the farmer community by arrangement of annual meets of

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farmers, and by participating in the community events at the village level. A lot of exchange of
knowledge occurs in such meets.
Another important stakeholder includes the suppliers who constitute a very dominant part of
ITC’s value chain. They are frequently engaged by the company in the design and development of
products and services. Also, formal and informal interactions are arranged with them on a
periodic basis. This process ensures the sharing of constant feedback which ultimately results in
the improvement of the company’s products and services.
ITC also shows concerns towards the communities thriving in and around their areas of
operations. They hold formal meetings and awareness programs to educate the communities
regarding certain diseases and the ways they can adopt to prevent them. Also, certain interaction
sessions in collaboration with NGOs are organised to understand their concerns and resolve those.
For communication with the government, ITC often takes up written methods and meetings. The
organisation frequently reports the parameters relevant to the regulatory agencies.
Thakur and Singh in their studies (A study of service quality and customer satisfaction with
special reference to fast moving consumable goods of ITC Limited, 2012) states that “there is a
very important relationship between the quality of service and the satisfaction of customers, hence
they should focus on bringing improvements in the serviceability and reliability of the products.”
This is possible only by resorting to interactions with customers and in-depth analysis of their
perceptions.
Dogra and Ghuman in their book (Rural Marketing) states that “there are 4As which are necessary
for organisations to take care to capture a large portion of the rural market share. This 4As include
affordability, availability, awareness and acceptability.” All of these factors are extremely
important from the external communication point of view since affordability means designing the
products in a way such that it can satisfy the needs of the customers properly; availability refers to
the logistics portion; awareness refers to the means adopted by the organisation in delivering its
message in a way such that the potential customers can understand; acceptability means the
comfort of the customer in purchasing the products. Therefore, it is evident that starting from the
creation of the product, to delivering it with the help of distributors and eventually making the
customers understand your message, communication plays an indispensable role.
Shukla and Baigiranjan in their studies (The Base of Pyramid Distribution Challenge, 2011) states
that “there are many challenges which organisations face in distributing their goods and services
to the 114 million BoP households which constitute almost 76% of the Indian rural market. The
main factors include the literacy, languages, preferences of customers and many more.” Hence, it
can be inferred from this that the language of communication plays an important role in satisfying
the needs and demands of customers.

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 Arpita Sharma in her studies (ITC E-Choupal: Empowering Rural India, 2011) states that “the
recent revolution brought in by mobile phones and computers has contributed a lot to the
penetration of ITC in the rural scenario.”
3.2. History and Growth of the organisation:
With the steady Indianisation of the organisation and the diversification of its products, it was
permanently rechristened as ITC Limited.

The Packaging & Printing Business of ITC was set up in the year 1925 and it is one of the best
packaging houses of India.
1975:
the seventies, the organisation started its Hostel business after acquiring a hotel, situated in Chennai,
which is now known as My Fortune and is located in Chennai. The primary objective of launching
this business was the creation of infrastructure for tourism, generation of employment opportunities
and earning foreign exchange. Today, ITC owns a number of properties across the country under the
names of 4 brands, viz. WelcomHeritage, WelcomHotels, Luxury Collection and Fortune Hotels.

1979: Paperboards
In the year 1979, ITC ventured into the Paperboards business by promotion of ITC Bhadrachalam
Paperboards Limited. Later, Bhadrachalam Paperboards merged with the Company on March 13,
2002 and became known as, Bhadrachalam Paperboards Division. Further, it amalgamated with the
Company's Tribeni Tissues Division and became known as Paperboards & Specialty Papers Division.
This division of ITC is highly renowned for its highly advanced manufacturing process and the
appreciable contribution it has given for the development of communities, education and the
environment.

1985: Nepal Chapter

In the year 1985, the Surya Tobacco Co. was set up in Nepal as a joint venture between Indo-Nepal
and British. In 2002, it was renamed as Surya Nepal Private Limited (Surya Nepal) after becoming
a subsidiary of ITC. Today the company manufactures and exports garments.

1990: Paperboards & Specialty Papers- Expansion

The Tribeni Tissues Division (TTD ) was amalgamated with the Bhadrachalam Paperboards Division
and the Paperboards & Specialty Papers Division  was formed in 2002.

1990: Agri Business

In the year 1990, ITC established the Agri Business Division and leveraged its competency of
sourcing agricultural produce for export of such commodities. It is one of India’s largest exporters
today. Also, it began the highly acclaimed e-choupal initiative in 2000 for strengthening and
supporting the Indian farmers. This initiative has also deepened its ties with the farmers.

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2002: Stationery Products
In 2002, Paperkraft, the premium range of notebooks, was launched by ITC. Classmate, which was
launched in 2003, has become the largest brand of notebook in India today. From notebooks,
Classmate extended its portfolio to pens, pencils and geometry boxes.

2000: Premium Offerings in Lifestyle Retailing

ITC ventured into the business of lifestyle retailing with the launch of Wills Sport range in 2000. It
consists of premium quality wear for both men and women. In 2006, Wills Lifestyle India Fashion
Week , made Wills Lifestyle its title partner. 'Wills Signature' was launched later to familiarise the
consumers with this event.

2000: Information Technology

In 2000, ITC introduced its new subsidiary, ITC Infotech India Limited, for providing business
friendly solutions. Today ITC Infotech has established itself as India’s leading companies in
information technology.

2001: Branded Packaged Foods

ITC forayed into the Foods business in August 2001 with 'Kitchens of India' ready-to-eat Indian
gourmet dishes. In the subsequent years, it expanded its products more ranging from confectionary,
staples, fruit juices, beverages, flour, milk, snacks etc. They include- Candyman, Aashirvaad
Atta , Sunfeast biscuits, Sunfeast Yippee! , GumOn, B Natural, Aashirvaad Svasti,
Sunbean Gourmet Coffee,  ITC Master Chef Frozen Snacks,etc
.
2002: Safety Matches and Agarbattis
ITC ventured into the Safety Matches initiative in 2002 and the agarbattis in 2003.This has found
expression in popular brands like Mangaldeep, Aim. Mangaldeep is a well established brand and
provides a wide range of fragrances which includes rose, jasmine, sandalwood etc.

2005: Personal Care Products

In 2005, ITC forayed into the Personal Care Business. The portfolio consists of brands like 'Fiama',
'Vivel', 'Essenza Di Wills', 'Superia'.The product portfolio was further expanded by launching
Engage deodorants. ITC acquired brands like Shower to Shower and Savlon in 2015 and entered into
the health space..

2010: Expansion of the Tobacco Portfolio

ITC introduce, Armenteros, its handrolled cigar. These are exclusively available at select hotels,
exclusive clubs and fine dining restaurants.

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 Vision of ITC:
Sustain ITC’s position as one of India’s most valuable corporations through world class
performance, creating growing value for the Indian economy and the Company’s stakeholders
Mission of ITC:
To enhance the wealth generating capability of the enterprise in a globalising environment,
delivering superior and sustainable stakeholder value

4. Topic Analysis:
The Indian conglomerate, ITC Limited, has been quite successful in delivering service to the
citizens attached with its core values. The company has seen a massive growth since the last
decade. This success can be attributed to the extensive research and development activities,
excellent distribution channels, the flexibility it gives its employees, interaction with customers
and so on. It maintains a good relationship with all of its stakeholders. This paper has talked about
all these factors at length.
The various aspects which it has talked about includes the gaps which can be seen in the process.
All of the gaps are necessary to be filled in order to ensure fruitful delivery of messages and
eliminate the repercussions due to those.

5. Competitor Analysis of ITC Limited:

ITC has been hailed as one of the world’s largest creators of the consumer goods industry. Its
main competitors include HUL, Nestle, Dabur and many more. In this section, the SWOT analysis
of ITC Limited has been done.
S ( Strengths): W (Weaknesses):
1. Diversified business portfolio 1. Largely dependent on Tobacco
2. Excellent brand image and presence Products
3. High focus on R&D. Also 2. Hotel Industry has not been able to
possesses strong R&D facilities. gain considerable part of market
4. CSR activities and sustainability share.
initiatives.
O (Opportunities): T (Threats):
1. Increasing of penetration into the 1. Growing base of competitions from
rural market. reputed brands.
2. E-choupal has improved 2. Regulations and policies imposed
connectivity with farmers on cigarettes by the government
3. Increasing purchasing power of 3. Advent of international brands due
people to FDI in retail

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 Now, Hindustan Unilever Limited (HUL), one of its competitors, is analysed on the basis of the
parameters listed above:
Unlike ITC, HUL is a pureplay FMCG company with its diversity thriving mainly in FMCG
products itself. ITC however consists of several ranges of products and services and is
diversifying into a non-tobacco company.
HUL has invested towards launch of new products, extension of brands and has also streamlined
its various business operations to drive the growth of its brand. However, ITC, with its already
existing distribution network from the years of selling cigarettes, has directly integrated its supply
chain with the farmers thereby decreasing the costs. Hence, this along with the rich product mix
can add to its growth.
HUL earlier ventured into an initiative called “Khushiyon ki Doli” in Uttar Pradesh to strengthen
their reach in villages and increase the distribution. They stated that over 14 million customers
would be contacted through this initiative in 35000 villages. However, ITC has revamped its rural
distribution with the e-choupal network and recorded an increase of 44% in the year 2009-10.
With the already existing system of e-choupal, it has become a little easier for ITC to reach out to
the rural masses for selling their products and services. However, HUL have had to introduce new
initiatives.
However, due to the increase of local brands, HUL is also facing a huge threat in the FMCG
Sector.

6. Conclusions:
From the observations obtained from the secondary sources consisting of company website,
research papers and online articles, it can be said that ITC is one of the leading FMCG
industry in the country. Also, from the various studies it can be said that external
communication has a significant role to play in taking ITC to the place where it is today. It
can also be inferred that top notch solutions have not been found out to fight with the voids in
the communication gaps that might occur between the organisation and its stakeholders.
However, there is no denying that they have devised methods like formal/informal meetings,
discussions, feedback etc.
Hence, the following suggestions can be given:
A. Increase in frequency of such meetings and discussions.
B. It should utilise more awareness meets and collab more with NGOs to increase its reach in
rural areas.
C. It can send volunteers to the urban, semi-urban and rural areas to understand the
expectations of the customers.

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7. Executive Summary:
a. Objectives:
 To understand the various divisions of the working of the ITC
 To analyse the aspects of external communications at ITC
 To analyse the competitors of the ITC
 To provide suggestions to improve the external communication of the ITC
b. Methodology used:
Generally, qualitative and quantitative analysis is performed on the data obtained from
primary data collection. However, due to the challenges in the current scenario as well as
the paucity of time, no such data collection could be done. Therefore, several secondary
sources including company website, online articles and research papers have been
referred for carrying out a study on the external communication systems of ITC. Data
derived from these throws light on the various aspects of communication that the
company has.
c. Suggestions:
A. Increase in frequency of such meetings and discussions.
B. It should utilise more awareness meets and collab more with NGOs to increase its
reach in rural areas.
C. It can send volunteers to the urban, semi-urban and rural areas to understand the
expectations of the customers

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References:
1. www.itcportal.com
2. https://en.wikipedia.org/wiki/ITC_Limited
3. https://www.financialexpress.com/archive/hul-itc-take-battle-to-villages/658713/
4. https://m.economictimes.com/comparison-of-two-fmcg-majors-hul-
itc/articleshow/3375041.cms
5. https://www.itforchange.net/sites/default/files/ITfC/e-Choupal.pdf
6. https://www.youthkiawaaz.com/2011/08/itc-e-choupal-empowering-rural-india-research/
7. https://relivingmbadays.wordpress.com/2012/11/15/challenges-of-rural-marketing/amp/
8. https://www.slideshare.net/mobile/SaurabhShukla21/itc-vs-hul-ltd

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