CHAPTER-I mechanical pencils and geometry boxes. Classmate

CHAPTER-I

Introduction:

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ITC Limited launched Classmate Brand in the year 2003. Classmate focused on selling notebook products. Over a period of time, the company expanded their inventory by adding pens, pencils, mechanical pencils and geometry boxes. Classmate has become a huge brand in the Fast Moving Consumer Goods Sector. As of now, there are close to 900 distributors who can make Classmate Products available throughout the country in 70,000 outlets.

History of The Brand:

Classmate was launched in 2003 by ITC Limited. But, before doing that, ITC launched Paperkraft in 2002 which was a substantial success. Initially, Classmate focused on selling notebooks. But, later they forayed into other products to expand their inventory. Their product includes pens, pencils, mechanical pencils, art stationary products (wax crayons, plastic crayons, sketch pens and oil pastels) and geometry boxes. By 2007, Classmate became the leader in the notebook business in the country.

History of The Company:

ITC Limited was initially called as Imperial Tobacco Company of India Limited. Over the years, it has gone through several iterations. ITC used to sell cigarettes in the very beginning. But have expanded their portfolio with a wide range of businesses that encompasses Fast Moving Consumer Goods contains Foods, Personal Care, Cigarettes, Premium Apparel, Stationery Products, Natural Incense Sticks and Matches, Hotels, Paperboards & Specialty Papers, Packaging, Agri-Business and Information Technology.

 

CHAPTER-II

Target Segments:

·         Segmentation divides the market into well-defined slices which consist of a group of customers who share a similar set of requirements. Segmentation consists of different variables like Geographic, Demographic, Psycho-graphic, and Behavioral.

·         Targeting is selecting specific segment(s) which company and marketers feel could generate maximum revenue.

Classmate as it is a stationery product hence it targeted the student’s segment. Their main target is school children and other students (graduation and post graduation).

Target Customers: Students (6-25 years)

 

Positioning:

Positioning is the act of designing a company’s offering and image to capture a unique place in the minds of the target group. Their marketing and promotions and IMC marketing mix were always students targeted. Classmate also made sure to win over the influences (parents, elders) of school kids.

“For the Big Ideas in you” made the students feel that they can do great things and hence they were associated with the brand. They positioned themselves as the brand that is made for students with big ideas.

Recently Classmate changed its tagline to “Because you are one of a kind”. In the last decade, there has been a lot of pressure on school students to get into foundation classes, do what top scorer in their class gets. There was no encouragement for their real talent. By changing the tagline to this and conducting an ad campaign, they tried to make every child feel unique and special and also influence the parents.  This has been a hugely successful positioning and campaign.

 

CHAPTER-III

Product:

Classmate has begun its journey with notebooks and has slowly expanded their inventory. The products in their catalog are as follows:

·         Notebooks

·         Pens

·         Mechanical Pencils

·         Art Stationary

·         Mathematical Instruments

·         Puzzles

Pricing Strategy:

The Basic Concept used by ITC is:

“PRICE IS A VALUE WHICH THE CUSTOMER IS READY TO PAY FOR YOUR PRODUCT”

Pricing is an important strategic issue as it is related to positioning of the product. In addition, pricing also affects other marketing mix elements such as product features, channel decisions, and promotion.

ITC followed a different marketing mix. So, their Classmate line of products is priced 5% over their competitor’s products.

 

 

Promotion:

ITC Classmate conducted several events in schools like drawing and painting competition among the students to advertise their products and provide goodies like coupons and vouchers to purchase the classmate products in the market and by distributing them the classmate products such as notebook, pencils, pens and other stationeries.  The classmate followed very smart way to persuade their consumer by giving them exciting win quiz events and providing the most effective means to communicate by every purchase of their product.

ITC Classmate also hired Cricket Player Yuvaraj Singh and Bollywood Actress Soha Ali Khan for advertisements and to promote their products in several Official events.

Distribution:

Classmate’s main manufacturing unit is in Bhadrachalam, Andhra Pradesh. After it is manufactured it is dispatched to various places to make it available for the customers. This is done by intermediaries i.e. distribution channels.

The transportation channel carries the goods carries from main manufacturing to regional and from regional to state warehouses. Here the agent or a jobber is hired to personally go to prescribed locations to deliver the books and transactions are done through the jobber. The jobber gets a certain commission from the company. Initially, Classmate focused only on schools in the rural areas. Over a period of time, they graduated from mom and pop stores to Supermarkets. Now being in the maturity phase classmate tries to maximise the revenue.

 

CHAPTER-IV

Market Share:

Classmate is the market leader in Notebooks segment. From the recent financial earnings, the company claims to have 22-23% of market share, followed by a large gap with Navneet at 6.5-7%.

Sales:

ITC Limited expects close to 1000 crores from its notebook sales. Over 90% of the revenue comes from Classmate brand of products.

Profit:

Profit maximization is the key goal at Classmate. Being the market leader, their profit currently sits at 12-15%.

 

CHAPTER-V

Industry:

According to Business Line, the stationary market is currently pegged at 15,000 crores and increasing gradually at 10% per year.

Competition:

The premium section of the stationary market is growing rapidly. The main competitors of Classmate are as follows:

·         Navneet

·         Bilt

·         Local Vendors

Challenges:

Classmate in the initial stages didn’t suffer a lot to find the right distributors or finding the appropriate market. ITC being the parent company helped a lot in making the transition smooth. Classmate tries to penetrate the market by keeping open contest and conduction events in schools.