SWOT Analysis of Gold Flake

STRENGTHS

1)    The main strength of the company is the brand Image of Gold Flake. In spite of ban on the advertisement the product was at No.1 position in FMCG products in 2003-2004 and its sales were up to Rs 3900 crores.

2)    The attributes of the product is as per the consumer aspirations, specifications and taste. It has high perceived quality; it is affordable by the consumers. This factor has helped the company to keep steady margin of its sales volume.

3)    The company has an excellent distribution channel of network which has enabled the availability of products in different regions as per the consumer demand and supply for the product.

4)    The Gold Flake brand name has been promoted through vacation tours “Gold Flake Golden Getaways”. ITC has also paid Indian tennis stars to endorse Gold Flake cigarettes.

5)    In Mumbai, Goldflake from ITC holds the lion’s share of the market selling 60 million sticks. Four Square special comes second with 55 million sticks and Wills is third

WEAKNESS

1)    The main weakness of the company is that after the ban on advertisement it is not able to promote the product on higher basis as it was promoted before the ban.

2)    The other weakness is the manufacturing process which is very time consuming. Sometimes it is very difficult for the company to supply the cigarettes as per the demand; it is because the demand of Gold Flake is increasing rapidly.

3)    Most the times the consumer prefers the price of the product first and then the quality and other factors. The price of Gold Flake is Rs 34/- therefore as a high price product the quality is ignored by the consumer and then they prefer to buy ‘bidis’ or ‘pan’.

4)    The next weakness is that the company is not able to build a further brand image due to the ban on advertisement. The branding of the company is done on small basis which is hardly ever seen.

5)     ITC not only manufacturers Gold Flake but also Wills Navy Cut, Bristol, Four Square etc. It becomes difficult for the company to differentiate and decide the quality, price and other factors of the cigarettes while manufacturing and distributing.

OPPORTUNITIES

1)    The opportunity of the company (ITC) is to reduce the price of the product and offer the same quality. This will increase the sales volume of the company.

2)    The packaging of the product should be changed and each and every attribute should be mentioned on the packet and also the level of harmless should be mentioned. This will help in ‘Word of Mouth’ marketing.

3)    As ITC is being recognized as World’s Best Big Companies and the World’s Most Reputable Companies by Forbes magazine, the company can launch Gold Flake at international level through collaboration with sports events held at international level and also with other brands.

4)    In India the company can launch the product Gold Flake as mild cigarette and less harmful for consumer attraction.

THREATS

1)    The threats of the company are competition from international companies. The main competitors are Marlboro, Marlboro Lights, and 555 cigarettes. These companies are famous at international level and also as an imported cigarette brand with affordable price; the consumers prefer to buy them.

2)    The promotion done by the company of Gold Flake is through advertisements in magazines and sponsorship, where as the advertisement of the international companies like Marlboro and Camel is done on international level, like sponsorship to Ferrari team in Formula One and also to Super Bike racing. Camel cigarettes give sponsorship to Rally Races in Africa and UK. This is the biggest threat to the brand image of the company at national as well as international level.

3)    The next threat may also be the changing habits of the consumer; they may quit smoking due to its ill effects and hazards. This may affect the sales as well as the brand image of the product

4)    In future the government may completely put ban on advertisement of cigarettes or also put a ban on sponsorship under the consideration that cigarette is harmful for health. This will be the biggest threat for the product as well as the company.

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Tags: Brand, Bristol, Camel, Cigarettes, FMGC, Four Square, Gold Flake, ITC, Marlboro Lights, Opportunities, Strength, SWOT, Threat, Weakness, Wills, Word of Mouth