Professional Documents
Culture Documents
ON
A Project undertaken at
A PROJECT FOR
PARTIAL FULFILMENT
Nitin Sharma
MBA 2009-2011
TABLE OF CONTENTS
1. STUDENT CERTIFICATE
2. ACKNOWLEDGEMENT
3. PREFACE
4. EXECUTIVE SUMMARY
5. INTRODUCTION TO INDUSTRY
6. COMPANY PROFILE
7. COMPETITOR PRODUCTS
9. RESEARCH METHODOLOGY
10.SWOT ANALYSIS
11.BUSINESS OPPORTUNITY
13.APPENDIX ( QUESTIONNAIRE)
ACKNOWLEDGEMENT
I whole heartly thank Mr. Aneet Mishra, Sales Executive, HUL-OOH and Mr.
Shiv Mohan Bharadwaj, Territory Sales Officer, HUL-OOH who not only
guided me in the making of the project but also gave me the in-depth
knowledge about the sales branch of marketing.
I have benefited a lot from the constructive criticism and suggestions given to
me by my colleagues with whom I discussed the project. I would also like to
extend my gratitude to all the faculty and lab staff for indirectly helping me to
complete this project.
Nitin Sharma
LSM 2009-2011
CERTIFICATE
Analyzing the competitor factor and boosting up sales in gurgaon region 4
This is to certify that the report titled, “Analyzing The
Competitor Factor And Boosting Up Sales In Gurgaon
Region” submitted by Mr. Nitin Sharma, Roll Number
RS1903B30, for the partial fulfillment of the requirements PGDM
embodies the work done by him during the summer internship at
Hindustan Unilever Ltd. under the supervision of Mr. Vishwas,
faculty LSM and Mr. Shiv Mohan Bharadwaj, Territory Sales
Officer, HUL.
Nitin Sharma
Student, LSM
This project is a part of the academic curriculum required for the fulfillment of the two
years full time programme, pursuing Post Graduate Programme in “Birla Institute of
Management Technology, Greater Noida. “
The study was carried out interacting closely with the sales team as well as
distributors and dealers of GURGAON REGION. It also involved face to face interaction
between different customers and corporate individuals.
The project has shown a significant light on the market share of different products
under vending division (Lipton Tea, Bru coffee, Taj Mahal Tea Bags and some other
products) with respect to its competitors like Nestle and Georgia.
This project gives a comprehensive idea about the SALES AND DISTRIBUTION
MANAGEMENT of one of the most important business sector in India, the FAST
MOVING CONSUMER DURABLES (FMCG) sector. The project was an endeavor to
study the existing Vending Business and the Lipton’s presence in it. It also tries to
analyze Lipton’s pricing, promotion, the distribution channel and alternatives.
1. Cold calling
The task of installing a vending machine gets accomplice after several rounds of
negotiations the respective company representative is made acquainted with the
benefit his organization will get with Lipton. For this, a comprehensive cost-benefit
has to be presented to him to convert the prospect into key account of HUL.
Once an order is placed, the Lipton crew along with the distributor installs the Lipton
Vending Machine. Proper and regular technical support is provided for machine
3) All electrical, plumbing and water requirement are addressed before actual
installation.
4) After all the necessary checks are made, qualified technicians install the Lipton
Vending Machine.
Through the vending machines Hindustan Unilever Ltd. promotes the following
three products:
Tea :
The packet tea market continued to be extremely competitive with national, regional
and local players vying for increased share and volumes Prices of garden tea
remained stable during the year, but have begun to firm up towards the later part of
the year. The strategy of investing in building Brooke Bond as a mega brand to
consolidate and strengthen the Company's leadership in the packet tea market
helped Brooke Bond maintain its leadership during the year. In 2009, Taj Mahal and
Lipton were successfully re-launched. Aggressive Brand building support behind
Lipton Natural Care has established Natural Care as a significant variant within the
portfolio. The focus on brand building, and innovation has helped the Company to
sustain its leadership position in the overall category and exit the year with a growth
momentum. Lipton continued to grow strongly in the Out-of-Home, Vending Channel
through acquisition of some major regional and national clients, and by strong
activation at key consumer points. The business continued to record sustained
Analyzing the competitor factor and boosting up sales in gurgaon region 8
profitability through its focused brand portfolio and highly streamlined supply chain
and cost management.
Coffee:
The Coffee business had another excellent year, led by strong growth in Instant
Coffee. The strategy to strengthen the brand equity of Bru through clutter breaking
and highly visible communication, coupled with world class activation led to
significant share gain further consolidating its leadership position within the branded
coffee market. Bru Cappuccino continues to help Bru recruit new consumers into its
franchise and consolidate Bru's channel leadership particularly in Modern Trade. The
Re. 1 and Rs. 3 low unit price packs continue to contribute significantly to the brand's
growth and drive category expansion. The coffee category, particularly Instant Coffee,
continued to be extremely competitive with national players securing growth in
volumes and market share. Ground and Roasted coffee; predominantly confined to
South India, faced competition from local and regional players. There is a perceptible
trend of increasing number, of consumers migrating to instant coffee from roasted
and ground coffee due to its inherent convenience.
Soups:
Knorr Soups enjoy a large share in the nascent and small soup market and held that
position during 2008. A new range of international quality soups were introduced
during the Foods business delivered a robust performance during 2008. This was on
the back of a good 2007, reflecting sustained momentum in the Kissan, Knorr and
Annapurna brands Kissan was relaunched with a new strategic positioning, improved
packaging and a superior formulation, which significantly enhanced the quality of the
Analyzing the competitor factor and boosting up sales in gurgaon region 9
product. Simultaneously, the Company focused on improving delivered freshness of
processed foods to consumers with an improved supply year. Simultaneously, a new
campaign to encourage soup consumption at various moments in the day has been
well received by consumers and customers. This will help the business to build
volumes through higher consumption.
• Personal Care, Oral Care, Hair Care, Skin Care, Personal Wash (soaps);
Sector Outlook
FMCG is the fourth largest sector in the Indian Economy with a total market size of Rs.
60,000 crores. FMCG sector generates 5% of total factory employment in the country
and is creating employment for three million people, especially in small towns and
rural India.
Strengths:
1. Low operational costs
2. Presence of established distribution networks in both urban and rural areas
3. Presence of well-known brands in FMCG sector
Weaknesses:
1. Lower scope of investing in technology and achieving economies of scale,
especially in small sectors
2. Low exports levels
3. “Me-too” products, which illegally mimic the labels of the established brands. These
products narrow the scope of FMCG products in rural and semi-urban market.
Opportunities:
1. Untapped rural market
2. Rising income levels i.e. increase in purchasing power of consumers
3. Large domestic market
4. Export potential
Analyzing the competitor factor and boosting up sales in gurgaon region 12
5. High consumer goods spending
Threats:
1. Removal of import restrictions resulting in replacing of domestic brands
2. Slowdown in rural demand
3. Tax and regulatory structure
Future Scenario
The Indian FMCG sector with a market size of US$13.1 billion is the fourth largest
sector in the economy. A well-established distribution network, intense competition
between the organized and unorganized segments characterizes the sector. FMCG
Sector is expected to grow by over 60% by 2010. That will translate into an annual
growth of 10% over a 5-year period. It has been estimated that FMCG sector will rise
from around Rs 56,500 crores in 2005 to Rs 92,100 crores in 2010. Hair care,
household care, male grooming, female hygiene, and the chocolates and
confectionery categories are estimated to be the fastest growing segments.
Growth Prospect
With the presence of 16.5% of the world population in the villages of India, the Indian
rural FMCG market is something no one can overlook. Increased focus on farm sector
will boost rural incomes, hence providing better growth prospects to the FMCG
companies. Better infrastructure facilities will improve their supply chain. FMCG sector
is also likely to benefit from growing demand in the market.
Because of the low per capita consumption for almost all the products in the country,
FMCG companies have immense possibilities for growth. And if the companies are
able to change the mindset of the consumers, i.e. if they are able to take the
consumers to branded products and offer new generation products, they would be
able to generate higher growth in the near future. It is expected that the rural income
will rise in 2007, boosting purchasing power in the countryside. However, the demand
in urban areas would be the key growth driver over the long term. Also, increase in
the urban population, along with increase in income levels and the availability of new
categories, would help the urban areas maintain their position in terms of
consumption. At present, urban India accounts for 66% of total FMCG consumption,
with rural India accounting for the remaining 34%. However, rural India accounts for
more than 40% consumption in major FMCG categories such as personal care, fabric
3. Nestle India
4. GCMMF ( AMUL)
5. Dabur India
7. Cadbury Industries
8. Britania Industries
10.Marico Industries
A number of prominent companies came into the HUL fold as result of Unilever’s
international acquisitions. These included Brooke Bond (1984), Lipton (1972) and
Pond’s (1986). In 1993, Tata Oil Mills Company (TOMCO) merged with HUL. Five years
later, HUL and yet another Tata company, Lakme Limited, formed a 50:50 joint
venture, Lakme Lever Limited. Subsequently in 1998, Lakme Limited sold its brands
to HUL and divested its 50 per cent stake in the joint venture to the FMCG giant.
The leading business magazine, Forbes Global, has rated Hindustan Lever as the best
consumer household products company. Far Eastern Economic Review has rated HUL
as India’s most respected company. Asia money has rated HUL as one of India’s best
managed companies.
• Personal Wash
• Fabric Wash
• Home Care
• Oral Care
• Skin Care
• Hair Care
• Deodorants & Talcs
• Color Cosmetics
Foods
• Tea
• Coffee
• Branded Staples
• Culinary Products
• Ice Creams
• Modern Foods ranges
New Ventures
Exports
• HPC
• Beverages
• Marine Products
• Rice
• Castor
Analyzing the competitor factor and boosting up sales in gurgaon region 16
Brands
HUL s brands are household names across the country. They include Lifebuoy, Lux,
Surf Excel, Rin, and Wheel, Fair & Lovely, and Ponds, Sunsilk, Clinic, Pepsodent, Close-
up, Lakme, Brooke Bond, Kissan, Knorr-Annapurna and Kwality Wall’s.
LOCATION
HUL products are manufactured in 80 factories. The operations involve over 2,000
suppliers and associates. HUL s distribution network, comprising about 7,000
redistribution stockiest, directly covers the entire urban population, and about 250
million rural consumers.
Past Milestones
In the summer of 1888, visitors to the Kolkata harbor noticed crates full of Sunlight
soap bars, embossed with the words "Made in England by Lever Brothers". With it
began an era of marketing branded Fast Moving Consumer Goods (FMCG).
Soon after followed Lifebuoy in 1895; other famous brands like Pears, Lux and Vim.
Vanaspati were launched in 1918 and the famous Dalda brand came to the market in
1937.
In 1931, Unilever set up its first Indian subsidiary, Hindustan Vanaspati Manufacturing
Company, followed by Lever Brothers India Limited (1933) and United Traders Limited
(1935). These three companies merged to form HUL in November 1956; HUL offered
10% of its equity to the Indian public, being the first among the foreign subsidiaries to
do so. Unilever now holds 51.55% equity in the company. The rest of the shareholding
is distributed among about 380,000 individual shareholders and financial institutions.
The erstwhile Brooke Bond's presence in India dates back to 1900. By 1903, the
company had launched Red Label tea in the country. In 1912, Brooke Bond & Co.
India Limited was formed. Brooke Bond joined the Unilever fold in 1984 through an
international acquisition. The erstwhile Lipton's links with India were forged in 1898.
Pond's (India) Limited had been present in India since 1947. It joined the Unilever fold
through an international acquisition of Chesebrough Pond's USA in 1986.Since the
very early years, HUL has vigorously responded to the stimulus of economic growth.
The growth process has been accompanied by judicious diversification, always in line
with Indian opinions and aspirations.
The liberalization of the Indian economy, started in 1991, clearly marked an inflexion
in HUL's and the Group's growth curve. Removal of the regulatory framework allowed
the company to explore every single product and opportunity segment, without any
constraints on production capacity.
HUL formed a 50:50 partnership joint venture with the US-based Kimberly Clark
Corporation in 1994. Kimberly-Clark Lever Ltd, which markets Huggies Diapers and
Kotex Sanitary Pads. HUL has also set up a subsidiary in Nepal, Nepal Lever Limited
(NLL), and its factory represents the largest manufacturing investment in the
Himalayan kingdom. The NLL factory manufactures HUL's products like Soaps,
Detergents and Personal Products both for the domestic market and exports to India.
The 1990s also witnessed a string of crucial mergers, acquisitions and alliances on
the Foods and Beverages front. In 1992, the erstwhile Brooke Bond acquired Kothari
General Foods, with significant interests in Instant Coffee. In 1993, it acquired the
Kissan business from the UB Group and the Dollops Ice-cream business from Cadbury
India.
As a measure of backward integration, Tea Estates and Doom Dooma, two plantation
companies of Unilever, were merged with Brooke Bond. Then in July 1993, Brooke
Analyzing the competitor factor and boosting up sales in gurgaon region 18
Bond India and Lipton India merged to form Brooke Bond Lipton India Limited (BBLIL),
enabling greater focus and ensuring synergy in the traditional Beverages business.
1994 witnessed BBLIL launching the Wall's range of Frozen Desserts. By the end of
the year, the company entered into a strategic alliance with the Kwality Ice-cream
Group families and in 1995 the Milk food 100% Ice-cream marketing and distribution
rights too were acquired.
Finally, BBLIL merged with HUL, with effect from January 1, 1996. The internal
restructuring culminated in the merger of Pond's (India) Limited (PIL) with HUL in
1998. The two companies had significant overlaps in Personal Products, Specialty
Chemicals and Exports businesses, besides a common distribution system since 1993
for Personal Products. The two also had a common management pool and a
technology base. The amalgamation was done to ensure for the Group, benefits from
scale economies both in domestic and export markets and enable it to fund
investments required for aggressively building new categories.
In January 2000, in a historic step, the government decided to award 74 per cent
equity in Modern Foods to HUL, thereby beginning the divestment of government
equity in public sector undertakings (PSU) to private sector partners. HUL's entry into
Bread is a strategic extension of the company's wheat business. In 2002, HUL
acquired the government's remaining stake in Modern Foods.
In 2003, HUL acquired the Cooked Shrimp and Pasteurized Crabmeat business of the
Amalgam Group of Companies, a leader in value added Marine Products exports.
CHRONOLOGY
YEA MILESTONES
R
189 Lifebuoy soap launched; Lever Brothers appoints agents in Mumbai, Chennai,
5 Kolkata, and Karachi.
191 Vanaspati introduced by Dutch margarine manufacturers like Van den Berghs,
8 Jurgens, Verschure Creameries, and Hartogs.
192 Lever Brothers gets full control of North West Soap Company.
5
193 Application made for setting up soap factory next to the Vanaspati factory at
3 Sewri; Lever Brothers India Limited incorporated on October 17.
193 Soap manufacture begins at Sewri factory in October; North West Soap
4 Company's Garden Reach Factory, Kolkata rented and expanded to produce
Lever brands.
193 Mr. Prakash Tandon, one of the first Indian covenanted managers, joins HVM.
7
194 Agencies in Mumbai, Chennai, Kolkata and Karachi taken over; company
1 acquires own sales force.
194 Unilever takes firm decision to "train Indians to take over junior and senior
2 management positions instead of Europeans".
195 Mr. Prakash Tandon becomes first Indian Director. Shamnagar, Tiruchy, and
1 Ghaziabad Vanaspati factories bought.
195 Three companies merge to form Hindustan Lever Limited, with 10% Indian
6 equity participation.
196 Mr. Prakash Tandon takes over as the first Indian Chairman; 191 of the 205
1 managers are Indians.
196 Etah dairy set up, Anik ghee launched; Animal feeds plant at Ghaziabad;
4 Sunsilk shampoo launched.
196 Lever's baby food, more new foods introduced; Nickel catalyst production
6 begins; Indian shareholding increases to 15%. Statutory price control on
196 Mr. V. G. Rajadhyaksha takes over as Chairman from Mr. Prakash Tandon; Fine
8 Chemicals Unit commissioned at Andheri; informal price control on soap
begins.
196 Rin bar launched; Fine Chemicals Unit starts production; Bru coffee launched
9
197 Pilot plant for industrial chemicals at Taloja; informal price control on soaps
4 withdrawn; Liril marketed.
197 Ten-year modernization plan for soaps and detergent plants; Jammu project
5 work begins; statutory price control on Vanaspati and baby foods withdrawn;
Close-up toothpaste launched.
197 Construction work of Haldia chemicals complex begins; Taloja chemicals unit
6 begins functioning.
197 Indian shareholding increases to 34%; Fair & Lovely skin cream launched.
8
198 Dr. A. S. Ganguly takes over as Chairman from Mr. T. Thomas; Unilever
0 shareholding in the company comes down to 51%.
198 Agri-products unit at Hyderabad starts functioning - first range of hybrid seeds
6 comes out; Khamgaon Soaps unit and Yavatmal Personal Products unit start
production.
199 HUL's largest competitor, Tata Oil Mills Company (TOMCO), merges with the
3 company with effect from April 1, 1993, the biggest such in Indian industry till
that time. Merger ultimately accomplished in December 1994; Launch of Vim
bar; Kissan acquired from the UB Group.
199 HUL forms Nepal Lever Limited, HUL and US-based Kimberley-Clark
4 Corporation form 50:50 joint venture - Kimberley-Clark Lever Ltd. - to market
Huggies diapers and Kotex feminine care products. Factory set up at Pune in
1995; HLL acquires Kwality and Milkfood 100% brand names and distribution
assets. HLL introduces Wall's.
199 HUL and Indian cosmetics major, Lakme Ltd., form 50:50 joint venture -
5 Lakme Lever Ltd.; HUL enters branded staples business with salt; HLL
recognized as Super Star Trading House.
199 Mr. K. B. Dadiseth takes over as Chairman from Mr. S. M. Datta; Merger of
6 Group company, Brooke Bond Lipton India Limited, with HLL, with effect from
January 1; HUL introduces branded aatta; Surf Excel launched.
199 Group company, Pond's India Ltd., merges with HUL with effect from January
8 1, 1998. HUL acquires Lakme brand, factories and Lakme Ltd.'s 50% equity in
Lakme Lever Ltd.
200 Mr. M. S. Banga takes over as Chairman from Mr. K. B. Dadiseth, who joins the
0 Unilever Board; HUL acquires 74% stake in Modern Food Industries Ltd., the
first public sector company to be disinvested by the Government of India.
200 HUL enters Ayurvedic health & beauty centre category with the Ayush range
2 and Ayush Therapy Centers.
Board
Divisions
Central functions
Businesses
PBIT Break-up:
(Values in crores)
(Source: www.hul.com)
Logo of Hindustan Unilever is contaning the legacy of their parent company Unilever.
Logo of Hindustan Unilever has also been changed with company name. This logo
coincides with the announcement of new corporate identity. Name HUL was approved
by shareholder at the year annual meeting on May 18 & new identity was officially
announced on 25 June following government approval.
New identity provides optimum balance between maintaining the heritage of the
company & synergies of global alignment with the corporate name of Unilever. Most
importantly it retains “Hindustan” as the first word in its name to reflect the
company’s continued commitment to local economy, consumers, partners, &
employers .
New logo symbolizes the company mission of “Adding Vitality to life” & play a very
strongly in our vision of “Earning the love & respect of India by making a real
difference to every Indian”. It comprises 25 different icons representing organization,
its brands & idea of vitality.
SUN : Our primary natural resource. All life begin with this
DNA : Double helix, the genetic blueprint of life & a symbol of bioscience. It is
the key to a healthy life. While the sun is the biggest source of life,dna is the
smallest
BEE : Representing creation , pollination, hard work & bio diversity’s bee
symbolizes both environmental challenges and opportunities.
HAND & FLOWER : Hand symbolizes sensitivity care & need .it represent skin &
touch. & flowers , fragrance .when seen with hand , it represents moisture or
cream.
HAIR : A symbol of beauty & good looking. Placed next to the flower it evokes
cleanliness & fragrance ; placed near the hand it suggest softness.
PALM TREE : A nurtured resources. It produces palm oil as well as many fruits –
coconuts, bananas & dates and symbolizes paradise.
TEA : A plant or extract of a plant ,such as tea. Also a symbol of growing & farming.
Out-of-home branding is the new buzzword sweeping Indian shores. Brands that
stubbornly remain indoors through their positioning and segmentation strategies are
in for a jolt!
Consider the facts. The Indian population is a young population. Life expectation is
longer than before. Income standards are up. Except for a year of aberration, the
Indian monsoon has largely behaved! Good monsoons mean a good crop. Large parts
of the rural economy are a non tax-paying economy. Good rains spell good crops and
good crops in turn spell a good amount of disposable income!
The metro is a happening place. We have five big ones and a whole host of 29 one
million plus population towns that are buzzing with activity. The man works. The
woman works as well.
The average Indian is spending a lot more time out of home than before. Eight hours
at work, two hours on travel and two hours of outdoor entertainment and eating out,
gobbles up half his day. And that's a lot of time spent out of home! The brand in his
life has to appeal to his senses more out-of-home than when in home.
Tea and coffee have always been very popular beverages among people. It is beyond
the class boundaries. People of all age groups relish them. With globalization and
expansion of retail business, markets etc the ready to serve food items and
beverages have gained lot of demand. One can spot the coffee tea vending machines
almost everywhere- be it Hospitals, Airports, Commercial complexes, offices, big
markets and even local colony markets. Its popularity can be judged from the fact
that in places like Pragati Maidan one can find ready to serve tea, coffee almost
They sell like hot cakes especially in markets and shopping places. Nowadays people
are conscious about hygiene. Many people go in for these ready to serve tea/coffee
and of course their good taste is a major drawing factor.
Lipton Yellow Label has painted many a town and cities yellow! Many a restaurant,
many a bus stop, and many a signage potential is today all yellow Lipton seems to
run out of home and focus on consumption that is outdoor while Sister Brooke Bond
seems to focus on what is happening inside the home!
“Happy people are productive people”. This is the basic rule of any company. Big or
small, every employer tries at keeping his employees, customers and clients happy.
Imagine if an organization has a wide range of refreshments to grab, at fingertips; if
they could enjoy getting a whole load of refreshments as and when they wished for it.
Lever foods service gives them this freedom in form of vending machines. Available in
hot and cold formats, they are the complete vending solutions for an organization. So,
everyone is happy at the push of a button.
Geographically, tea is widely consumed in the North, East and West of India, and is
popular with a wide variety of social classes and consumer age groups. Black
standard tea constitutes nearly 80% of value sales. In the south, coffee is bigger as a
proportion of total hot drinks than in the rest of the country though green tea has
seen its popularity rise.
It accounts for 90% of the total beverage consumption in the country. In 2007,
tea co9nstituted 70% of retail volume sales, compared to coffee and other hot drinks
with 4.4% and 26% shares respectively.
(Source: www.answers.com)
India accounts for 26% of the total production of world’s tea and 4.6% of that of
world’s coffee.
Popular or economy
category
(Rs 120-140 per kg) A-1 and Tiger Agni Sholay
Consumers in different parts of the country have heterogeneous taste. Dust tea is
very popular in the south. In the western states, good quality loose tea is preferred in
Gujarat, whereas in Maharashtra, consumers provide a large market to packet as well
as unbranded tea.. The eastern states of West Bengal and Orissa consume CTC
broken. Among the northern states, CTC fanning is liked in Rajasthan and CTC broken
in others states of the North. The Central India is predominantly a dust market
CTC = Cut, Tear, Curl. CTC production is a shortened, machine automated production
process. Importance is put on a uniform leaf and a quickly colored infusion.
Hindustan Unilever Limited’s (HUL) packet tea business has strengthened its position
in the market in 2004, led by its two mega brands, Brooke Bond and Lipton.
Analyzing the competitor factor and boosting up sales in gurgaon region 32
Simultaneously HUL continues to post strong growth in coffee.
HUL has further consolidated on the successful relaunched of Brooke Bond in the
second half of 2003. The three Brooke Bond sub-brands, Taj Mahal, Red Label and
Taaza, with their distinct positioning, have expanded their presence to cover new
geographies. This has helped strengthen marketplace position.
Appropriately priced packs have been introduced to make the Brooke Bond offerings
more accessible. Coupled with high-impact market activation, these packs have
increased Brooke Bond’s market share and sustained its strong growth.
The Lipton brand, targeted at young consumers, has been appropriately expanded in
the Out-of-Home segment. Lipton Ice Tea has been successfully test-marketed in
Bangalore and Chennai. The consumer test proven mix will now be taken national,
leveraging the alliance between HUL and Pepsi.
HUL has already identified Out-of-Home as a growth driver. The channel, which has
posted strong growth in the last two years, will be used for the entire HUL Beverages
and Foods categories.
In the Instant Coffee segment, HUL continues to post strong growth. Bru Instant
Coffee has been re-launched, with a new identity, communication and modern pack
formats. Superior activation, penetration building activities and investment in
strategic channels, like Out-of-Home, is contributing to the growth. Bru, as a
franchise, has been strengthened with the filter coffee brand, Deluxe Green Label, re-
launched as Bru Roast & Ground.
(www.indiacoffee.org)
• In the Rural areas (South India) instant coffee has a higher level of penetration
than filter coffee.
• Yesterday's consumption is the highest among the 15-24 and 35-44 age group.
• Coffee is consumed as a first cup only by 23% of coffee drinkers even in the
traditional market of the South.
• Per capita consumption of coffee (among all respondents - both drinkers and non
drinkers) is 0.33 cups against 1.77 cups for tea. However, coffee consumption
among drinkers at 1.76 cups compares favorably with that of tea at 2.1 cups..
• The proportion of non-drinkers is the highest in the oldest age group of 55+ years.
Amongst coffee consumers in the rural areas, a majority (43% of all adults) is light
drinkers, consuming 1-2 cups everyday. About a fifth of rural consumers consume
coffee occasionally.
Vending Details
Timeline
1930s Bottled soft drink machines, cooled with ice, appear on market.
An international brand with a winning formulation, with the assurance of total hygiene
and top class quality, Lipton Tea and Coffee comes in a range of mouth-watering
flavoring:-
TEA: -
COFFEE: -
Bru Plain Coffee, Choco Almond, Bru Diet Coffee, Cappuccino Special Coffee.
COLD RANGE: -
Lipton Vending Machines have been specially designed and are being introduced
keeping our market realities and interests in mind. Following are the variants of
Vending machines:
3. Temperature interlocking.
4. Auto cleaning
5. Auto Cleaning
6. Temperature Interlocking
2. Dispensing Rate:
3. Auto cleaning
3. Option of cappuccino.
5. Dispensing rate:
6. Auto cleaning.
7. Temperature inter-locking
3. Dispensing rate :
4. Temperature interlocking
WATER MANAGEMENT
The HUL Company has been known for remarkable consistency in quality for over a
hundred years. To ensure that quality beverage is served consistently, cup after cup,
the Lipton Vending Machine is fitted with any of four different types of filters :-
SINGLE, DOUBLE, TRIPLE AND RESIN filter. This makes sure that the best and safest
quality of water goes into the vended Lipton cup. The filter thus enhances the quality
of water, taste of the beverage and also increases equipment life.
SERVICE SUPPORT
For the Lipton vending machine, there shall be an authorized service center with a
vast network to cater to the needs of the customer. Three basic steps shall be
undertaken to ensure long life and smooth functioning of your Lipton Vending
Machine.
3) Breakdown and Repairs: - In case of breakdown, the Lipton crew shall address
the problem promptly and effectively. Also, a regular dispatch plan for the pre-
mixes shall be regularly communicated to you, for you to maintain an
appropriate stock inventory. An exclusive customer care phone no. is provided
for any queries and assistance on the Lipton Vending Machine.
DISTRIBUTION CHANNEL
FACTORY
DEPOT DEPOT
COMPETITOR PRODUCTS
The three chief competitors of Hindustan Unilever Ltd in tea and coffee vending
business are Nescafe, Tata, Georgia and Café Coffee Day which have their presence
in the market with following products:
Headquartered in Bangalore, a majority of its cafes are also located in Bangalore. The
cafe chain has had much success riding, and to some extent creating, the cafe culture
wave that swept across metropolitan
Coffee Day sources coffee from 10000 acres of coffee estates, the 2nd largest in Asia,
that is owned by a sister concern and from 11,000 small growers. It is one of India’s
leading coffee exporters, with clients across the USA, Middle East Europe and Japan.
MULTIPLE OPTION-HOT— Provision for mineral water bubble top, auto flushing,
temperature interlocking, digital counter.
(4) NESTLE
Nestlé is committed to the following Business Principles in all countries, taking into
account local legislation, cultural and religious practices:
Nestlé does not favor short-term profit at the expense of successful long-term
business development.
Nestlé believes that, as a general rule, legislation is the most effective safeguard of
responsible conduct, although in certain areas, additional guidance to staff in the
form of voluntary business principles is beneficial in order to ensure that the highest
standards are met throughout the organization.
Nestlé is conscious of the fact that the success of a corporation is a reflection of the
professionalism, conduct and the responsible attitude of its management and
employees. Therefore recruitment of the right people and ongoing training and
development are crucial.
Nestlé continues to maintain its commitment to follow and respect all applicable local
laws in each of its markets.
TEA
Tea Premix (Plain Tea), Lemon Tea, Dairy Whitener, Everyday Sugar Free
COFFEE
COMPETITOR’S PRICES
GEORGIA
NESTLE
(i) Finding new opportunities for the vending services of the company by
making organizations acquainted with concept.
(ii) Handling marketing and sales operations for achieving increased growth &
profitability.
(iii) Generating leads and converts them into sales for product.
(i) Understanding the nerve of competition in the market with major players
namely Café Coffee Day, Nestle, Georgia etc.
(ii) Understanding the pulse of the market & accordingly plan the course of
action.
(iii) Interacting with clients for understanding their need and the information
required by them.
(iv) Finding the major factors that led the customers to decide on which
tea/coffee they choose.
RESEARCH METHODOLOGY
Analyzing the competitor factor and boosting up sales in gurgaon region 49
RESEARCH DESIGN
A Sample Design is definite plan for obtaining a sample from given population. it refer
to technique or procedure the research would adopt in selecting item for the sample.
1. INFINITY TOWERS
2. SECTOR 56
3. SECTOR 32
1. PRIMARY SOURCES
Primary data are gathered for a specific purpose or for a specific research project.
In this project, the data I have collected is regarding the use of vending machines
by having interactions with the HR person, ADMIN. HEAD, and the purchase
manager that which machine they are using whether it is nestle, Georgia, Lipton
and with the help of which market share of each company is calculated.
2. SECONDARY SOURCES
In this purpose secondary Data is useful to collecting the various information about
companies like telephone no. addresses etc. so I have consulted telephone directory
& Informative websites.
Customer interaction was done at canopy, door step and in the market
and other public places.
2) FACTORY: The 5-10% of business is coming from factories, govt. offices etc.
Company supply premixes in bulk. In factories blue collar people work they can’t
handle machine properly.
4) EATING & DRNKING: In E&L company is getting only 1-2-% business. In this part
company works only work on visibility.
6) TRAVEL: In travel part we deal in Airport, Railway station, Bus stand, Taxi stand.
Company has ties up with Delhi Metro Corporation.
There is no other part where you find footfall of the consumer & you don’t find the
product of Lipton.
Lipton
From which company do you buy the beverage vending machine services?
1
6 6
%
Nestle 1 29%
1
Fresh n Honest 3 8%
Georgia 7 18%
Costa Coffee 2 5%
Coffee Day Express 9 24%
Have you ever faced any problems with your service provider?
Bad Good
Bad Good
There is cut-throat competition among the leading players in the packaged tea
market and HUL is the market leader with a share of around 30 per cent, followed by
Nestle at 20 per cent.
But in out-of-home business of hot beverages, HUL and Nestle have got into this
segment in a big way. They jostle for space with players such as Tata Tea and Tata
Analyzing the competitor factor and boosting up sales in gurgaon region 55
Coffee, the Coffee Day group, which has two brands including Coffee Day Takeaway
and Coffee Day Bean to Cup, Sterling InfoTech group’s Fresh & Honest (promoted by
NRI businessman C Sivasankaran, who also controls the coffee retail chain Barista),
Coca-Cola’s Georgia Tea and Coffee and Fountain Consumer Appliances.
Accordingly, Nescafe leads in the market as shown by the collected data and, hence,
becomes the strongest competitor for Lipton.
The reasons for which the corporate houses prefer vending machines to manual
methods of preparing tea and coffee:
• Time saving
• Diet, low sugar, without sugar options available for concerned groups
An activity that is closely tied to sales is distribution. You have a factory and you
have your customers in different locations, which different purchasing patterns and
demands. What is the best way to take your product to the customers so that it
remains profitable for the firm too? That is a question answered by distribution. In
FMCG, generally we deal in indirect selling, i.e., we sell to someone who then sells it
to someone else.
There are various reasons for which the company operates this chain through
distributor sales management which can be summarized as follows:
• There can be some business that is too small for you to handle, or too much
trouble because of its location. A distributor network will take this burden and
change it into on opportunity. Because the distributor is service oriented, he
makes it a point to work with business regardless of size or scope.
Financial Aspects:
Deal is confirmed and negotiation ends at the point where both the parties are
assured of their benefits. HUL tries to ensure a return of at least 12% on
consumerables to its distributors. So, I tried to analyze the account in the following 2
ways:
Now, the customer doesn’t enter into deal unless he is made acquainted with
the benefit available to him.
Let us consider a firm ‘A’ having 60 employees and consumption is 120 cups per
day (say, 60 cups of tea and coffee each).
TEA: 60 * 3 = Rs 180
COFFEE: 60 * 5 = Rs 300
Total = Rs 480
Total = Rs 13100
Now, with Lipton vending machine this cost will minimized as follows:
Total = Rs 9225
Frequencies
Statistics
How many times Brand Wate of Time
N Valid 100 100 100
Missing 0 0 0
Mean 2.50 2.23 3.03
Median 2.00 2.00 3.00
Mode 2 2 2
Frequency Table
Analyzing the competitor factor and boosting up sales in gurgaon region 58
How many times
Cumulative
Frequency Percent Valid Percent Percent
Valid 1-2 20 20.0 20.0 20.0
2-3 31 31.0 31.0 51.0
3-4 28 28.0 28.0 79.0
more than 4 21 21.0 21.0 100.0
Total 100 100.0 100.0
Brand
Cumulative
Frequency Percent Valid Percent Percent
Valid Lipton 28 28.0 28.0 28.0
Nestle 37 37.0 37.0 65.0
Coffee Day Express 19 19.0 19.0 84.0
Georgia 16 16.0 16.0 100.0
Total 100 100.0 100.0
Waste of Time
Cumulative
Frequency Percent Valid Percent Percent
Valid Strongly Disagree 15 15.0 15.0 15.0
Disagree 24 24.0 24.0 39.0
Neutral 21 21.0 21.0 60.0
Agree 23 23.0 23.0 83.0
Strongly Agree 17 17.0 17.0 100.0
Total 100 100.0 100.0
df 36
Sig. .000
Also the Kaiser test shows that the variables are related as the value is
0.516. On the basis of these two tests we can say that we can proceed with
the Factor Analysis on this data.
Communalities
Initial Extraction
Communalities indicate the amount of variance in each variable that is accounted for.
Initial communalities are estimates of the variance in each variable accounted for by
all components or factors. For principal components analysis, this is always equal to
1.0 (for correlation analyses) or the variance of the variable (for covariance analyses).
Extraction communalities are estimates of the variance in each variable accounted for
by the factors (or components) in the factor solution. Small values indicate variables
that do not fit well with the factor solution, and should possibly be dropped from the
analysis.
In our analysis, we have dropped variables whose extraction value is less than 0.5. In
the above table, there is one value below 0.5; service quality therefore, we
remove this variable from our further analysis.
dimension0
5 .999 11.105 78.260
This table gives Eigen-values, variance explained, and cumulative variance explained
for your factor solution. The first panel gives values based on initial eigen-values. The
"Total" column gives the amount of variance in the observed variables accounted for
by each component or factor. The "% of Variance" column gives the percent of
variance accounted for by each specific factor or component, relative to the total
variance in all the variables. The "Cumulative %" column gives the percent of
variance accounted for by all factors or components up to and including the current
one. In a good factor analysis, there are a few factors that explain a lot of the
variance. For principal components extraction, these values will be the same as those
reported under Initial Eigen-values
The last big drop occurs between the eighth and the ninth components, so we
use the first eight components.
Component
1 2 3 4
Now we need to find those eight factors that determine the choice. So we repeat the process by
applying factor analysis on the data. The data in all iteration is smaller in size than the previous one.
To eliminate the unwanted factors we see the rotated component matrix. We eliminate those
questions wherein the difference between the highest and the second highest value is less. We
continue this process till we can’t eliminate any factor. So writing all the iterations we get the
following results:
Factor Analysis
df 28
Sig. .000
Initial Extraction
5. The choice of coffee and tea also depends on the weather i.e. hot or cold.
6. The price of the cup of tea/ coffee is also an important determinant of the choice.
8. The customers prefer a variety in the drinks like or those who drink 3-4 cups a day want
Now eliminating the negative questions we get the final factors. These are :
1. The service quality of the brand doesn’t make much of a difference to the customers.
STRENGTHS
• High quality and safe products, endorsed by the Hindustan Unilever Limited Seal of
Guarantee at affordable prices.
• Strong R&D capability well linked with business ensuring better controls on the
quality and consistency of product.
• Integrated and efficient supply chain and well spread manufacturing units.
• Distribution structure with wide reach, high quality coverage and ability to
leverage scale.
• Tie up with other leading chains –DMRC, PVR, Airtel, HCL Technology, Reliance
Energy, Ansal Plaza to name a few.
• Excellent range of tea and coffee premixes providing flexibility of sweetness and
diet option for concerned people.
WEAKNESSES
• Much higher machine prices with lesser flexibility vis-à-vis competition which
leads to higher rentals/EMIs.
• .Absence of ginger flavor in the premix range of tea and this is the most
preferred flavor in northern India especially during winters
• Vending machine having customization like token system are highly priced
making it unviable for many corporate clients in a need to record/control
consumption.
OPPORTUNITIES
• Changing lifestyles.
• Involving DSAs and courier companies for lead generation on commission basis
as have access to administration department of the corporate houses.
THREATS
• Spurious/counterfeit products.
• Seasonality.
• Heavy competition with new entrants offering me-too products or with very
little variation with all kinds of attractive offers for getting edge in market.
BUSINESS OPPORTUNITIES
Apart from corporate world and public places like metro stations, airports and
railways stations there are some other places as well where the use of tea/ coffee
machines is prevalent. These are hospitals and educational institutions.
A short research was conducted in 5 major hospitals in the area of Karol Bagh.
Machin
e Approxim
Name of Install ate Contract Contracto
Hospital Address ed Footfall or r Details
100 cups
Shankar Road, Karol each of tea
Kolmet Hospital Nestle and coffee NA NA
Pusa Road, New Delhi Nestle 500 cups of Sanjay 92123246
Analyzing the competitor factor and boosting up sales in gurgaon region 73
tea; 300-
B.L Kapur 400 cups of
Hospital 110005 (3) coffee Pancholi 01
Mahesh
Aram Bagh, Kumar
Delhi Heart and Jhandewalan, New Rs.30,000 (Sodexo 99903341
Lung Institute Delhi Lipton per month Facility) 61
No
Jessa ram Gurudwara Road, Machin Sh. 98184573
Hospital Karol Bagh e 0 Nagesh 09
500 cups of
Sir Ganga Ram East Patel Nagar, New tea and Mr. 99539580
Hospital Delhi Lipton coffee Uttam 76
A similar research was conducted for educational institutions in the Dwarka area:
Machin
e Name of
Name of Install No of the Contracto
Institution Address ed students Contractor r Details
N.K Bagrodia Sector-4, Dwarka, Mrs. Geeta 98688144
Public School New Delhi-110075 Georgia 2300 Vaid 32
Netaji Subhas
Institute of Azad Hind Fauj
Technoogy Marg, Sec-3, Dwarka Nestle 2500 Mr. Rakesh NA
Bhaskarachar
ya College of
Applied
Sciences Sector-2, Dwarka Nestle 700 NA NA
Delhi Public Sector-4, Dwarka,
School New Delhi-110075 Nestle 2500 NA NA
Sri
Ventakateswa
ra
international Ms. Preeti
School Sector-10, Dwarka Nestle 2500 Bali NA
Dwarka being an upcoming sub-city in the south-west region of Delhi has many
upcoming projects in terms of institutions and offices which give full scope for the
installation of HUL’s tea/ coffee vending machine.
These are
Functional but no
DPC Institute of management Sectof-10, Dwarka machine
of this presentation.
www.google.com
www.yahoo.com
www.hll.com
www.answers.com
www.indiainfoline.com
www.naukrihub.com
www.wikipedia.com
www.businessworldindia.com
www.financialexpress.com
www.indiacoffee.org
The data sheet for the same is also enclosed along with the questionnaire.
This questionnaire will identify the tea/coffee machine used by companies in Gurgaon
and its related information
Contact Information *
Analyzing the competitor factor and boosting up sales in gurgaon region 77
From which company do you buy the beverage vending machine services? *
Lipton
Nestle
Fresh n Honest
Georgia
Costa Coffee
100-200
200-300
300-400
400-500
500-700
700-1000
1000-1500
1500-2000
2000-3000
above 3000
Have you ever faced any problems with your service provider? machine *
No Complaints
Is there any company executive who pays regular visits for a monthly check up of machines? *
Yes
No
Bad Good
1 2 3 4 5
Bad Good
Q1. Name :
Q2. How many times do you take tea/ coffee from vending machine in a day?
1. 1-2
2. 2-3
3. 3-4
Q3. Do you have specific brand preference when you take tea/coffee from
vending machines?
1. Strongly Disagree
2. Disagree
3. Neutral
4. Agree
5. Strongly Agree
1. Lipton
2. Nescafe
4. Georgia
Q5. Is taste an important factor when you have tea/coffee outside your homes
through vending machines?
1. Strongly Disagree
2. Disagree
3. Neutral
4. Agree
Q6. Do you rate freshness as important feature when you take tea/coffee
through vending machines?
1. Strongly Disagree
2. Disagree
3. Neutral
4. Agree
5. Strongly Agree
Q7. Is the availability of the brand an important factor when you make your
choice for tea and coffee?
1. Strongly Disagree
2. Disagree
3. Neutral
4. Agree
5. Strongly Agree
1. Strongly Disagree
2. Disagree
3. Neutral
4. Agree
5. Strongly Agree
Q9. Is the level of sweetness an important factor when you select your
tea/coffee from the vending machine?
1. Strongly Disagree
2. Disagree
3. Neutral
4. Agree
5. Strongly Agree
1. Strongly Disagree
2. Disagree
3. Neutral
4. Agree
5. Strongly Agree
1. Strongly Disagree
2. Disagree
3. Neutral
4. Agree
5. Strongly Agree
1. Strongly Disagree
2. Disagree
3. Neutral
4. Agree
5. Strongly Agree