...Case Analysis of ban of tobacco advertising in India Here is the brief background information. On Feb 6, 2001 Indian government announced they were going to enforce a ban regarding tobacco advertising in their country. Banning included barring tobacco industries from advertising their products, sponsoring sport or cultural events. The ban was aimed to discourage young mind in India to take part in smoking. The ban, however, heated a debate between the supporters of tobacco companies and the opposition parties. In this paper, I will summarize the arguments that support the ban on tobacco advertising in India and the arguments that oppose the ban. In addition, I will discuss the conflict of interest issue pertaining to Indian government as well as I will describe my opinion on what governments should do in regards to tobacco advertising. 1. Summarize the arguments in favor of the ban on tobacco advertising in India To begin with, the advocates of the ban argued that this action of government was nothing unconstitutional. The government, in fact, has the right to interfere since their main concern was their citizen well-being. They gave this example. We know that guns are bad, so every nation has banned the public advertisement against guns so why tobacco should has a special privilege? Secondly, they used statistic from World Health Organization (WHO). They pointed out that over 3 million were killed by consuming tobacco products in 1990 and the death rate increased to 4.023...
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...and a solution is required. The kind of the solution has a very important role, that's why is being discussed for years which is the appropriate way and the key for a successful outcome. The government in India wants to provide a bill banning advertisements of Tobacco Companies. There are some arguments in favor of the ban, analyzing the positive points in this situation. About the question if this action of government has the right to intrude into...
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...global leader in tobacco products, is currently experiencing risks to its profitability and future operations, particularly from increasing taxes and prohibitive public policy. PMI must balance strategies which address the heightening involvement of western governments in the tobacco industry with the growth opportunities in developing markets. The following outlines the three most significant risks facing PMI and identifies existing strategies in comparison to competitors. The first significant risk facing PMI is government restrictions on advertising. Governments globally are increasingly restricting the means by which PMI can actively market to consumers. As a result, the branded tobacco industry has been limited to select sponsorship and online marketing efforts. The latest restriction involves mandating plain packaging. Australia is set to become the first country to introduce plain packaging for cigarettes in December 2012, thereby eliminating a critical brand marketing vehicle for the industry, a precedent that will have worldwide repercussions. Such measures are anticipated to expand to other regions, which restrict PMI’s ability to launch new (and differentiated) brands and to command a premium price. In the event that the tobacco product industry becomes a commodity market, with no way to differentiate other than price, production cost-reduction initiatives will serve to partially mitigate against the risk to profitability. In response to advertising restrictions, the...
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...The government of India tried to ban and discourage adolescents from consuming tobacco products 15 years ago and also arm the Government with powers to launch an anti-Tobacco Program. This is despite the fact that the tobacco Industry was a major contributor to the State Exchequer. Advocates of free choice opposed to these bans, saying these amounted to unwarranted intrusion by the state in the private lives of its citizens. But, others pointed out that the state had the right to intervene in the overall interest of the citizens. They cited the example of drugs like cocaine, which was, banned the world over. The ban seemed to be a great move because, according to the World Health Organisation (WHO), tobacco accounted for over three million deaths in 1990, the figure rising to 4.023 million deaths in 1998. It was estimated that tobacco related deaths would rise to 8.4 million in 2020 and to 10 million in about 2030. There was an increasing fear that tobacco companies were inducing children and young people to begin experimenting with tobacco products, and in this way initiate regular smoking, as this held the key for the industry to flourish. Another accusation was that the slick, colourful advertisements (using an animated camel) appealed to the children and...
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...ECONOMICS ASSIGNMENT Topic :TAXATION OF TOBACCO IN INDIA By- Group 3 Q1.Interpret table 3.1 and 3.5.The team is asked to evaluate the future prospects of ITC's tobacco products in the rural areas based on the numbers in these two tables. Write a brief report explaining ITC's rural market potential based on the numbers in the case According to the table 3.1, there is a minimal increase in the excise duty of unfiltered cigarettes in the years 2006-07 and 2007-08 and large increase can be seen in the year 2008-09. In the case of filtered cigarette, there has been a minimal increase or rather we can say that excise duty has been constant for 2007-08 and 2008-09. In the case of bidis, the excise duty is constant for 2006-07 and 2007-08 while decreases in 2008-09. So we can make out from this given table that by increasing the cost of unfiltered cigarette the government wants people to shift from unfiltered to filtered cigarette which will eventually lead to betterment of public health. Secondly, it also helps the Government in the generation of revenue. According to table 3.5, there has been an increase in consumption of bidis and less in cigarettes from 2000-01 to 2005-06. While due to the increase in price of bidis in the year 2006-07, the cigarette consumption of brands likeGold flake, Navy cut, Gold flake small and Wills flake has increased. As the price is increased there would be less consumption of cigarette while on the other side the revenue generated would still...
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...ITC Cigarettes Over the years, ITC has evolved from a single product company to a multi-business corporation. Its businesses are spread over a wide spectrum, ranging from cigarettes and tobacco to hotels, packaging, paper and paperboards and international commodities trading. Each of these businesses is vastly different from the others in its type, the state of its evolution and the basic nature of its activity, all of which influence the choice of the form of governance. The challenge of governance for ITC therefore lies in fashioning a model that addresses the uniqueness of each of its businesses and yet strengthens the unity of purpose of the Company as a whole. Globalization will not only significantly heighten business risks, but will also compel Indian companies to adopt international norms of transparency and good governance. ITC's governance policy recognizes the challenge of this new business reality in India. ITC was incorporated on August 24, 1910 under the name of 'Imperial Tobacco Company of India Limited'. Its beginnings were humble. A leased office on Radha Bazar Lane, Kolkata, was the centre of the Company's existence. The Company celebrated its 16th birthday on August 24, 1926, by purchasing the plot of land situated at 37, Chowringhee, (now renamed J.L. Nehru Road) Kolkata, for the sum of Rs 310,000. This decision of the Company was historic in more ways than one. It was to mark the beginning of a long and eventful journey into India's future. The Company's...
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...Dheeraj Suri(060) Table of Contents Introduction 3 Cigarettes: 3 The Global Tobacco Market 3 ITC 4 MARKETING MIX 5 Product 5 Price 5 Promotion 5 Place 5 VISION AND MISSION (/www.itcportal.co) 6 VISION 6 MISSION 6 PEST ANALYSIS 6 POLITICAL ANALYSIS 6 SOCIAL ANALYSIS 6 SWOT ANALYSIS (itc-hikes-gold-flake-prices) 8 SEGMENTATION 9 FUTURE GROWTH PROSPECTS 9 Bibliography 11 APPENDIX 12 Introduction Cigarettes: Cigarette is a product consumed via smoking and manufactured out of cured and finely cut tobacco leaves and reconstituted tobacco, combined with other additives, then rolled or stuffed into a paper-wrapped cylinder (generally less than 120 mm in length and 10 mm in diameter). The cigarette is ignited at one end and allowed to smolder for the purpose of inhalation of its smoke from the other (usually filtered) end, which is inserted in the mouth. They are sometimes smoked with a cigarette holder. The term cigarette, as commonly used, refers to a tobacco cigarette but can apply to similar devices containing other herbs, such as cannabis. Approximately 5.5 trillion cigarettes are produced globally each year by the tobacco industry, smoked by over 1.1 billion people, which is more than one-sixth of the world’s total population (financialexpress.com). The Global Tobacco Market There has been a widely held perception that there is a decline in tobacco industry which is actually not the right view. There has been a continuous and steady...
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...LIFECYCLE OF CORPORATE IDENTITIES Executive Summary The research attempts to explore the need for a change in corporate identity by organizations and to figure-out a pattern, if any, associated with such a change across organizations. As the introduction to the paper we have defined ‘Corporate Identity’, its purpose and elements. In this paper we have limited our case studies to corporate identities that have reflected some kind of a visual change apart from changes in any other element. We have analyzed ten inflexion points ranging from mergers and acquisitions to business re-orientation to changes in organizational culture and how these factors necessitate changes in corporate identity. Based on this we have proposed a model which showcases the growing impact of these factors over time and how the occurrence of World events has intensified the ‘change factors’ which in turn are putting all the more pressure on corporations globally to reconsider their identity. The intensity of these factors would vary from industry to industry, with each industry having a different lifecycle. The model brings out the paradox of shortened lifecycle of corporate identities which itself poses an extraordinary challenge to companies for effectively elongating and managing their identities. Changing ones corporate identity is not only an expensive affair but can also create dissonance in the minds of the stakeholders, if not managed and communicated properly. In order to succeed companies will...
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...Ethics in marketing and advertising Ethics is a branch of philosophy which seeks to address questions about morality; i.e. about concepts, such as good and bad, justice and virtue, right and wrong. In other word, we can say that Ethics are moral principles that govern the actions and decisions of an individual group. It is governed by a set of principles of morality at a given time, at a given place and in a given society. Ethics is closely related to group behavior in ultimate analysis, thus norms for an individual to follow should be set in consistence with the group norms. The mixing of art and facts in advertising communication are submissive to ethical principles. In today’s competitive market, an advertisement has to be truthful and ethical. The credibility of an organization is lost If an advertisement is misleading. To view the truth in advertisement, it has to be seen from the consumer’s point of view and not from the legal point. The advertising industry has been frequently criticized for putting out misleading or exaggerated claims in respect of products, goods and services. It is also alleged as guilty of glorifying certain habits or tendencies regarded as undesirable and encouraging consume rest culture. However, it is very difficult to draw a clear line of difference between what is true and what is untrue. The advertisement is judged by its impact and its acceptance by the consumers. The product must fulfill the claims it’s advertised...
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...case deals with the ethical dilemma that Tobacco manufactures face when selling tobacco products in third world countries. First, there is the ethical dilemma of business versus health. The opening and development of the tobacco business in Third World countries like China, Malaysia, Indonesia, India and Africa, is considered against the health consequences of tobacco use which according to an Oxford University epidemiologist, has estimated to cost 3 million lives annually rising to 10 million by 2050 without effective tobacco control program A second ethical dilemma is employment versus impoverishment, where the opportunities for work in the tobacco industry are considered against a background of malnutrition. This is a problem that is certainly worth consideration, but with those who have the power to change things reaping huge profits, I am not sure if anything will be done. 1. Use the model in Exhibit 1 as a guide and assess the ethical and social responsibility implications of the situation described Exhibit 1 is a decision tree. A model for incorporating ethical and social responsibility issues into multinational business decisions. The decisions are decided by the users’ responses to a number of relevant questions regarding the matter at hand. The first question the model asks is whether the decision efficiently optimizes the common good or benefits of the business firm, society, the economy, and the individual. From the tobacco business standpoint, the answer is yes...
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...Indian Institute of Management, Lucknow ITC Ltd: A Strategic Analysis Submitted to: Prof. Arun K Jain In partial fulfillment of the requirements of the course Strategic Management I Submitted by Saurav Goswami (ABM08012) Anuj Saraf (PGP27204) Kaushal Mathur (PGP27219) Sudhanshu Chawla (PGP27255) Section “D” Group 1 Letter of Transmission TO: Prof. Arun K. Jain, Strategy Group Indian Institute of Management, Lucknow FROM: Group 1, Section D Strategic Management Class DATE: March 23, 2012 SUBJECT: Strategic Analysis of ITC Ltd. Dear Sir, You had entrusted us with a project to analyze the strategy of any company of our choice using the frameworks given in the prescribed textbook. We chose ITC Ltd. for this project as it is one of India’s oldest and most diversified companies. This report begins with analyzing the strategic direction of the company which emanates from its vision & mission statements. It then looks at the decisions that the company has taken to achieve its vision by analyzing the environment it operates, the value chain and the core competencies that it has developed over the years and the key factors instrumental in its success. We end by commenting on its future prospects based on our analysis. We are grateful to you for providing us this opportunity to learn the strategic issues in contemporary businesses and giving us the necessary guidance in completing the project. We would also like to thank the entire...
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...PART II INSTRUCTOR’S NOTES ON TEXT CASES CASE GUIDE CHAPTER CASE | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13 | 14 | 15 | 16 | 17 | 18 | 19 | 1–1 Starbucks – Going Global Fast | X | X | | X | X | | | | | | X | X | | | | | | | | 1–2 Nestlé – The Infant Formula Incident | | X | X | X | X | | | X | | | X | X | | | | | | | | 1–3 Coke and Pepsi Learn to Compete in India | | | | X | X | X | | | | | X | X | | | | | | | | 1-4 Marketing Microwave Ovens to a New Market Segment | | | | X | X | | | | | | X | X | | | | | | X | | 2–1 The Not-So-Wonderful World of EuroDisney | | | | X | | X | X | X | | | X | | | | | | | X | | 2-2 Cultural Norms, Fair and Lovely, and Advertising | | | | X | X | | | X | | | X | X | | | | | | | | 2–3 Starnes-Brenner Machine Tool Company – To Bribe or Not to Bribe | | | | | X | | X | | | | | | | | | | X | | | 2-4 Ethics and Airbus* | | | | X | X | X | X | | | | | | X | | | | | | | 2–5 Coping with Corruption in Trading with China | | | | | X | X | X | | | | | | | | | | | | | 2–6 When International Buyers and Sellers Disagree | | | | | | | X | | | | | | | | X | | | | | 2-7 McDonald’s and Obesity | ...
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...Explanatory Synthesis: Advertisings Fifteen Basic Appeals Jib Fowles, creates a basic system to navigate the American advertising industry. By creating a basic appeal list, Fowles narrows down the psychological side of advertisement. Elaborating on his list he covers the need to escape, the need for dominance, as well as thirteen other basic needs. Over the course of several decades’ advertisement has changed along with the era to catch the attention of the general public. With each passing decade the general public appeals to different ideals. Depicting a mother, and child together in the 1940’s ad at a doctor’s office a mother exclaims “I’m going to grow a hundred years old!” (Camels 1940’s ad- Pg.578) The ad goes into detail about doctors,...
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...impact of the slowing economy on your FMCG business? FMCG businesses do not easily get impacted by economic issues. Consumers usually postpone large buying decision such as cars and televisions. The only possible impact in the FMCG industry is an increase in downtrading. But as of now, there are no such signs. In the rural market too, the business is not impacted. Bad monsoon can impact farmers, but farm labourers remain unaffected...a lot of factors today impact rural economy such as roll out of programmes like the national rural employment guarantee scheme. Why have you launched so many new cigarettes brands at the same time? It is basically to take on illegal cigarettes. The illegal cigarette industry started off in India in 2002. Independent research in India has shown that while there is a fall in volume of duty paid cigarettes by more than 4% between 2005 and 2010, the duty-not-paid volumes grew by 49% during the same period. Attractive tax arbitrage...
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...give it a competitive advantage over its rivals. 1. Strong Financial Performance: On 31st march, 2010, ITC’s market cap was Rs. 114000 crores with a Gross income of Rs. 26,863 crores and Profit after tax of Rs. 4061 crores. The company continues its impressive record of financial performance. 2. Products Portfolio: ITC’s portfolio of products and services is represented by over 50 energetic Brands in a range of more than 650 stock keeping units (SKUs). 3. Distribution Network: ITC’S products are available in over 6 million retail outlets in the country. Its formidable Distribution organisation directly services more than 2 million of these retail outlets. It used its experience of transporting and distributing tobacco products to remote and distant parts of India to the advantage of its FMCG products. 4. Environmental Friendly: ITC has a status of being ‘Water Positive’ for the 8th consecutive year, ‘Carbon Positive’ for the 5th year in succession and ‘solid waste recycling positive’ for 3 years in a row. ITC is the only enterprise in the world of its size to have achieved and sustained these three global environmental distinctions. As consumers and investors become more environment friendly, these considerations will provide the organisation an opportunity to create USPs and stronger brand loyalty and brand equity. 5. Research & Development: ITC recognises that cutting edge R&D can foster breakthrough innovation and create powerful sources of sustainable competitive...
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