MARKETING STRATEGIES AND POLICIES

OF HINDUSTAN UNILEVER LIMITED

A major project report

Submitted in partial fulfillment of the requirements for BBA(GEN)

semester VI programme of Guru Gobind Singh Indraprastha
University,Delhi

By:
Mitesh Kumar Verma
Enrl.no.:0551221705
BBA(General)

Delhi College Of Advanced Studies

B-7, Shankar Garden ,Vikaspuri
New Delhi-110018

Declaration
I here declare that the major project, entitle marketing strategies
and policies of Hindustan Unilever Limited, is based on my original
study and has not been submitted earlier for any degree or diploma
of an institution/university.
The work of author(s), wherever used has been acknowledged at
appropriate places.
Place:

Candidates signature

Date:

Name:
Enrol.no.:

Countersigned
Name:
Supervisor

Delhi college Of Advanced Studies

PREFACE
Hindustan Unilever Limited (formerly Hindustan
Lever Limited) is Indias largest Fast Moving Consumer Goods
company with a sales turnover of more than Rs.10,000 crores. At
least one of its products reaches two thirds of Indian households. It
has 35 brands and employs more than 15,000 people. Its promoter
company Unilever, a fortune 500 multinational, holds 51.42% equity.
Unilever has presence in more than 100 countries worldwide in
FMCG sector.
Hindustan Unilever Limited (HUL), a subsidiary of Unilever, is a fast
moving consumer goods (FMCG) company based in India. The
company focuses on efficient delivery to consumers with an improved
supply chain, brand building initiatives and innovation, which has

helped the company to sustain its leadership position in the overall

FMCG category in India.
This project is a sincere effort to look for the market potential in
FMCG industry. A descriptive research procedure had been applied
to come to the conclusions of the project. A detailed questionnaire
had been prepared and the responses of the concerned people had
been collected for the analysis.

ACKNOWLEDGEMENT

I am grateful to many people who have contribution to this project. In

particular I would like to thank my faculty, MS.MEENU ARORA,
who have helped me through this project in their own special &
affordable way.
My project has been a successful task because of cheerful devotion of
always lend the support, I needed of. I have been getting all the
guidance, Dr.

NARENDRA MOHAN, the director of our college

and my faculty members who possibly could get through out the
making of this project from them.They always been ready & also
have to clarify all my queries from time to time.
Last but not least I would also like to thank the library members and
computer laboratory members who also have been supportive during
the making of this project by providing adequate books as & when
required for.

Finally I extend my sincere thanks to all those who have given me

encouragement throughout, without whose generosity this project
would have been difficult for me to complete.

INTRODUCTION
The Hindustan Unilever Ltds(HUL) Inc has taken the opportunity to
offer us a broader view of FMCG category. The Hindustan Unilever
Ltd (HLL) is Indias no.1 FMCG is able to share with their market
insights based upon unparalleled breath

of consumer goods

experience.
Hindustan Unilever Ltd (HUL) has grown from strength to strength
with new technologies being introduced to make the HLL consumer
goods business, one of the most efficient in the world. The companys
history dates back to 1931 when 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 Hindustan Lever

Limited in November 1956. Effective July 19, 2007 the company has
changed the name to Hindustan Unilever Limited.
Hindustan Unilever Limited (HUL), a subsidiary of Unilever, is a fast
moving consumer goods (FMCG) company based in India. The
company focuses on efficient delivery to consumers with an improved
supply chain, brand building initiatives and innovation, which has
helped the company to sustain its leadership position in the overall
FMCG category in India.
Hindustan Unilever is Unilever's main operating business in India. It
is the country's biggest consumer goods company, and far and away
the leading advertiser. HUL inhabits virtually every sector of the
consumer goods market, including several not occupied by Unilever
in other markets such as preserves and bakery products, and is also
one of the countrys top five exporters. In addition to FMCG products
it is the country's biggest exporter of tea. It is generally acknowledged
to be one of India's best-run businesses, although performance
slowed dramatically between 2000 and 2004, prior to restructuring.

Unilever, which sells soap to more than 500 million Indians, may see
global revenue growth slow in 2010 as Procter & Gamble Co. and ITC
Ltd. step up marketing in Asia's third-biggest economy.
The world's second-largest consumer products maker has relied on
accelerating shipments of Surf Excel detergent in India to make up
for sluggish sales in Europe.Now Cincinnati- based Procter & Gamble
is stocking Indian stores with Olay skin- care products after nearly
halving the local prices of Ariel and Tide detergents in 2004.
Asia and Africa, which make up about a third of Unilever's worldwide
sales, will see their share of the company's growth fall to 2 percent in
2010 from 3.3 percent in 2007, according to Brussels-based
brokerage Petercam SA. Revenue from the two continents rose 11.4
percent in the first nine months of last year, helping offset 1.9
percent growth in Europe and 4.2 percent in North and South
America.

Unilever's overall sales growth will slow to 4.9 percent in 2010 from
an estimated 5.3 percent in 2007, according to the median of five
analysts in a Bloomberg survey.

Hindustan Unilever A 75 Year Commitment

15,000 employees
1,200 managers
2,000 suppliers & associates

 75 Manufacturing Locations
45 C&FAs, 4,000 Stockists
Total Coverage 6.3 Mln Outlets
Direct Coverage 1 Mln outlets

Population of INDIA: 1027 Mln

5,545 Towns
2.5 Mln outlets
6,38,000 Villages
5.0 Mln outlets

HISTORY
OF
HINDUSTAN UNILEVER LTD

 It was in the summer of 1888 that Unilever of England first

marketed Sunlight soap in India. This was followed by brands
like Pears and Vim. Vanaspati was launched in 1918 and Dalda
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.
A number of prominent companies came into the HUL fold as
result of Unilevers international acquisitions. These included
Brooke Bond (1984), Lipton (1972) and Ponds (1986).
In 1993, Tata Oil Mills Company (TOMCO) merged with HUL.
Two 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.

 HUL formed a 50:50 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. In a historic step, HUL
picked up 74 per cent of the equity of Modern Foods from the
Indian government.
In 2002, HUL acquired the government s remaining stake in
Modern Foods.
FMCG major Hindustan Unilever Limited (HUL), formerly known
as Hindustan Lever Limited, employs 36,000 people, including
over 1,350 managers. It is one of the earliest MNCs to have
entered India

ORGANIZATIONAL STRUCTURE

Managing
Direc
tor

General Manager

Vice President

Marketing

Manufacturing

Sales

Finance

Distribution

PRESENT STATUS
Hindustan Unilever Limited (HUL) is India's largest Fast Moving
Consumer Goods company, touching the lives of two out of three
Indians with over 20 distinct categories in Home & Personal Care
Products and Foods & Beverages. They endow the company with a
scale of combined volumes of about 4 million tonnes and sales

of

Rs.10,000crore.
HUL is also one of the country's largest exporters; it has been
recognised as a Golden Super Star Trading House by the Government
of

India.

The mission that inspires HUL's over 15,000 employees, including

over 1,300 managers, is to "add vitality to life." HUL meets everyday
needs for nutrition, hygiene, and personal care with brands that help
people feel good, look good and get more out of life. It is a mission
HUL shares with its parent company, Unilever, which holds 51.55%

of the equity. The rest of the shareholding is distributed among

380,000

individual

shareholders

and

financial

institutions.

HUL's brands - like Lifebuoy, Lux, Surf Excel, Rin, Wheel, Fair &
Lovely, Pond's, Sunsilk, Clinic, Pepsodent, Close-up, Lakme, Brooke
Bond, Kissan, Knorr-Annapurna, Kwality Wall's are household
names across the country and span many categories - soaps,
detergents, personal products, tea, coffee, branded staples, ice cream
and culinary products. They are manufactured over 40 factories
across India. The operations involve over 2,000 suppliers and
associates. HUL's distribution network, comprising about 4,000
redistribution stockiest, covering 6.3 million retail outlets reaching
the entire urban population ,and about 250 million rural consumer.
HUL has traditionally been a company, which incorporates latest
technology in all its operations. The Hindustan Unilever Research
Centre (HLRC) was set up in 1958, and now has facilities in Mumbai
and Bangalore. HLRC and the Global Technology Centres in India

have over 200 highly qualified scientists and technologists, many

with post-doctoral experience acquired in the US and Europe.

HULS NEW GROWTH STRATEGY

After having fought a bitter price battle for market share with its
rivals, Hindustan Unilever Ltd (HUL), Indian subsidiary of the AngloDutch consumer goods company Unilever Plc, is now working on a
new growth strategy for its laundry business.
Price cut or hike is not a long-term growth strategy. Pricing, in fact,
is now passe, insists Sudhanshu Vats, category head, home care.
Our strategy for growth, now is focused on product innovation, new
consumer

and

retail

promotions, he said.

trends

and

aggressive

marketing

and

This comes even as Unilever is scouting for a potential buyer for its
laundry business in the US.
HUL says it is quite upbeat about the segment and says the laundry
segment is one of its key growth areas.
We have done key innovations across the product portfolio and it is
working for us, says Vats. We successfully migrated from Rin
Supreme to Surf Excel and Wheel Smart Srimatiwhich was rolled
out in 2006is also on the right track.
HULs market share in the laundry segment grew to around 37.8% in
the quarter ended June from 35.5% in the same period last year,
according the market research firm ACNielsen. However, this time,
the increase was not at the expense of price war with its
multinational rival Procter & Gamble Co. P&G also gained 0.5
percentage points, up to a 7.6% share. Nirma Ltd, the Ahmedabadbased manufacturer, however, saw its market share dip by 1.7%
percentage points to 13.5%.

Wheel, a value brand that, according to Vats contributes around 50%

of HULs laundry segment revenues, increased its market share by 2
percentage points in the same period, with a total share of about
18%.
According to ACNielsen, the laundry industry in India was worth
Rs7,908 crore in 2006 and rose 8.4% over 2005. HUL doesnt report
its laundry revenues separately but puts them under the soaps and
detergent category.
In 2006, HULs soaps and detergents segment contributed around
Rs5,596 crore to the companys total sales of Rs12,103 crore.
Laundry has been an attractive segment in the past and is likely to
keep growing in the near future. The recent price war between
companies led to erosion in their profitability but now, the industry is
stabilizing,

says

Securities here.

Unmesh

Sharma,

an

analyst

at

Macquarie

According to Vats, the laundry business is witnessing a surge in

demand from cities and HUL is focusing on Tier I and II cities to tap
that demand.

Consumers today are buying more clothes, says Vats. Trends

suggest that the usage of detergents has gone up as a result. Also,
with premium quality of clothes, people want to use better and
branded products.
Still, analysts remain cautious. Some of HULs recent moves, such
as promotional campaigns and advertising, seem right, says
Macquaries Sharma. Still, it is too early to say what result their new
strategies will yield.

PRODUCT PROFILE
HULs business activities are divided into four broad areas:
Home and personal care
personal wash, fabric wash, home care, oral care, skin care,
hair care, deodorants and talcs, colour cosmetic
Foods
tea, coffee, branded staples, culinary products, ice creams,
Modern Foods ranges
New Ventures
Hindustan Lever Network, Ayush ayurvedic products and
services, Sangam, Pureit water purifiers.
Exports
HPC, beverages, marine products, rice

BRANDS

HUL s brands are household names across the country. They

include:

Lifebuoy, Lux, Surf Excel, Rin, Wheel, Fair & Lovely, Pond s, Sunsilk,
Clinic, Pepsodent, Close-up, Lakme, Brooke Bond, Kissan, KnorrAnnapurna and Kwality Walls.

SWOT ANALYSIS
Strength
1. Hindustan Unilever Limited (HUL) is India's largest Fast
Moving Consumer Goods company, touching the lives of two
out of three Indians with over 20 distinct categories in Home
& Personal Care Products and Foods & Beverages..
2. Due to its long presence in India has deep penetration 20
consumer product category, over 15,000 employees, including
over 1,300 managers, is to "add vitality to life."
3. The company derives 44.3% of its revenues from soaps and
detergents, 26.6% from personal care products, 10.5% from

beverages, and the rest from foods, ice creams, exports, and
other products.
4. Low cost of production due to economic of scale. That means
higher profits and / or more competitioners. Better market
penetration.
5. HUL is also one of the country's largest exporters; it has been
recognised as a Golden Super Star Trading House by the
Government of India.
Weakness
1. Continuous threat from other competitors.

Opportunities
1. Increasing per capita national income resulting in
higher disposable income.
2. Growing middle class and growing urban population.
3. Increasing gifts cultures.
4. Increasing departmental stores concept impulse @ at
cash counters.

5. Globalization.

Threats
1. HLL's tea business has declined marginally, reason is
that, cost pressure is likely due to rising crude and
freight costs.

PEST ANALYSIS
P: since the budget range is decontrolled, no political effects are
envisaged.
E:

1) increasing per capita income resulting in higher

Disposable income
2) Growing middle class/urban population increase in

Demand
3) Low cost of production better penetration
S:

1) Per capita consumption expected to increase fashion

2) Increasing gifts culture increase in demand

T:

Will have to reinforce technology to international levels

Once India is a fully free economy.

FIVE PS OF MARKETING
Product

Satisfaction suffices. But delight dazzles the average company will

compete for customer by conforming to her expectation consistently.
But the winner will surpass them by constantly exceeding her
expectation, delivering to her door step additional benefits which she
would never have imagined possible. Hindustan Unilever Ltd(HUL)
offer such product. The wide variety products offered by the company
include:
The companys popular products include:

Bathing soaps:
Lux, Lifebuoy, Liril, Hamam, Breeze, Dove, Pears and Rexona

Laundry items:
Surf Excel, Rin and Wheel

Skin care:
Fair & Lovely, Ponds and Vaseline

Hair care:
Sunsilk and Clinic

Oral care:
Pepsodent and Close up

Deodorants:
Axe and Rexona

Colour cosmetics:
Lakme

Ayurvedic:
Ayush

Tea:
Brooke Bond and Lipton

Coffee:
Bru

Foods:
Kissan, Annapurna and Knorr

Ice cream:

Kwality Walls .

Pricing
Make no mistake. Second P of marketing is not another name for
blindly lowering prices and relying on this strategy alone to increase
sales dramatically. The strategy used by Hindustan Unilever Ltd(HUL)
is for matching the value that customer pays to buy the product with
the expectation they have about what the production is worth to
them.
Hindustan Unilever Ltd(HUL) has launched various products which
cater to all customer segments. So every customer segment has
different price expectation from the product. Therefore maximizing
the returns involves identifying right price level for each segment,
and then progressively moving through them.

Physical Distribution Place

BRAND ISNT THE ONLY ANY MORE. Marketers and finance
manager need a new term to evaluate their business:
Distribution Equity. It takes much more time and effort to build,
but once built, distribution equity is much together to erode.
The fundamental axiom of Indian consumer market is this:
You can set up a state-of the-art manufacturing facility, hire the
hottest strategies on the block, swamp prime television with best Ads,
but the end of it all, you would be know of selling your products. The
cardinal task before the Indian market is managing is to shoe-horn
its product on retail shelves. Buyers are paying for distribution equity
not brand equity and market shares.

Why does the company need distribution equity more anything in

India? With technology and competitive pressure slash in it is
becoming increasing difficult for marketers to retain a unique
product differentiation for ling period. In a product and price parity
situation, the brand that sells more is the one that reaches the
highest number of customers.
India The operations involve over 2,000 suppliers and associates.
HUL's distribution network, comprising about 4,000 redistribution
stockists, covering 6.3 million retail outlets reaching the entire urban
population, and about 250 million rural consumers.television has
already primed and population for consumption, and the marketer
who can get to the to the consumer ahead of competition will give a
hard to overtake lead. But getting their means managing wildly
different terrains-climate, language, value system, life style, transport
and communication network. And your brand equity isnt going to
help when it comes to tackling these issues.

Own distribution network consist of clearing and forwarding (C&F)

agents & distribution stockiest. This network of distribution can
either contact wholesalers and which in turn retailers or the
distributors can contact to the retailers directly.
Once the stock product reaches retailers, the prospective customers
can have access to the product.
Hindustan Unilever Ltd(HUL) distributes the product in the manner
stated above.
Hindustan Unilever Ltd(HUL) distribution network has expanded.
Beside use of improved logistics, Hindustan Unilever Ltd(HUL) is also
attempting to improve the distribution quality. To address the issue of
product stability, it has installed visi colors at several outlets. This
helps in maintaining consumption in summer when sales usually
drops due to the fact that the heal effects product quality and
thereby off takes.
Looking at the low penetration of few products, a distribution
expansion would itself being incremental volume. The other reason is

arch rival Procter & Gamble Co. reaches more than a million
retailers.
This increase in distribution is going to be accompanied by reduction
in channel costs. Hindustan Unilever Ltd(HUL) marketing costs, at
18% of total costs, is much higher than Procter & Gamble Co. The
company is looking to reduce this parity level. At Hindustan Unilever
Ltd(HUL), they believe that selling FMCG is it like selling soft drinks.

Promotion
If an advertisement is to communicate effectively, the receiver must
at least half want it to, and be prepared too take step toward the
sender. Effective advertising is rarely hectoring or loudly explicit. It
often both attracts and generates arm feelings. More often than not,
a successful campaign has a stronger element of the unexpected a
quality that good advertising shares with much worthwhile literature.

To penetrate into the inner recesses of her memory, communication

must

first

ensure

exposure,

grab

her

attention

evoke

her

comprehension, grab her acceptance and then extract retention

competing with thousands of other units of communication trying to
do the same.
Finding showed that the adults felt too conscious to be seen
consuming a product actually meant for children. The strategic
response address the emotional appeal of the band to the child
within the adult.

Naturally, that produced just the value vacuum

that Hindustan Unilever Ltd(HUL) was looking to fill. Thereafter it

was the job of the advertising to communicate customer the
wonderful feeling that he could experience by re-discoursing the
careful, unself conscious, pleasure seeking child within himself a
graft these feeling onto the Ad campaign like hasso to khul k hasso
for close up, cream bathing bar for dove soap and daag ache
hai for surf excel have been sure shot winner with the audience.
It has also launched Pureit, a home water purifier which supplies
drinking water without boiling/need of electricity , As well as outdoor
and radio ads, ad agency contract has created communication for
cinemas and even ATM machines for the brand.
All ICICI s ATM a message flashes on the screen as soon as customer
insert his ATM card. Something familiar is planned for phone-book

as well. In cinemas, Hindustan Unilever(Ltd)has a message on-screen

just before the lights are dimmed to give them a chance to get their
product There will also be after dinner sampling in restaurants to
begin with, 30 catteries in Mumbai have been selected.
Ad spend in 2000 was about 14% of sales and the management said
that plans to maintain as spend at this level in the current year also.
Ad since any discussion today would be incomplete without mention
e word, the management plans to tap this new channel of
marketing. Beside the company website (i.e. www.unilever.com),
that the company has launched, it had also entered into various
marketing relationship with other portals, specially targeted during
festivals and events such as Valentines day, etc.
Its a combination of spiffing up its key brand, researching and
improving the newer products that havent taken off, supported with
high ad spends that Hindustan Unilever(Ltd) hopes will see it
emerges stronger after the current slowdown, as well as expand the
market.

Positioning
In the 1970s consumers were ready to pay more for more, and
luxury goods flourished. In the 1980s, consumers began to demand
more for same, and the discounting era grew strong. Todays
consumer demanding more for less, and the winner will be that
super value marketers. Some of todays most successful companies
recognize those customers are more educated and able to recognize
true customer value
Positioning is simply concentrating on an idea or even a word
defines that company in the mind of the consumer. It is more
efficient to market one successful concept to one large group of
people than 50 product or service ideas to 50 separate group
repositioning is a must when customer attitude have changed and
product have strayed away from the consumers long standing
perception of them
Hindustan Unilever(Ltd) is an anchor in sea of consumer products.
As a variety of competitive claims assails her senses, today customer

uses complicated decision making process to assess the alternative

before making a purchase. Since Hindustan Unilever(Ltd) is more
clearly associated with a particular set of attributes in terms of
benefits and prices, the quicker becomes her search process.
Positioning of individual product:
1) Lifebuoy is one of Unilevers oldest brands with more than a
hundred-year history, as www.unilever.com informs. Lifebuoy
has become more than just a red bar of soap today the brand
provides hygiene and health solutions for families
2) Fair & Lovely, a hot-selling fairness cream, which promises a
lighter skin tone for many of Indias complexion-conscious
consumers
.

HINDUSTAN UNILEVERS MARKET

SEGMENTATION
Market place for any product is comprised of many different
segments of consumers, each with different needs and wants.
Markets segmentation can be defined in a number of ways such as:
Demographic variables (e.g. Consumers are groups, gender,
material states income etc)
The lifestyle of consumers (i.e. their interests and activities) the
benefits which consumers look for in a product or on the
occasions when the product might be consumed.
Hindustan Unilever(Ltd) takes into account all these factors
when producing a range of products. It targets different
segments within the market, such as the:
Break segment products which are normally consume as a
snatched break and often with tea and coffee.

 Impulse segment these products are often purchase on

impulse, used these and then. They include product such as
close up.
Take home segment this describes product that are normally
purchased in supermarkets, taken home consumed at a later
stage.

The Real Taste of Rejuvenation

After having fought a bitter price battle for market share with its
rivals, Hindustan Unilever Ltd (HUL), Indian subsidiary of the AngloDutch consumer goods company Unilever Plc, is now working on a
new growth strategy for its laundry business.
Price cut or hike is not a long-term growth strategy. Pricing, in fact,
is now passe, insists Sudhanshu Vats, category head, home care.
Our strategy for growth, now is focused on product innovation, new
consumer

and

retail

trends

and

aggressive

marketing

and

promotions, he said.
This comes even as Unilever is scouting for a potential buyer for its
laundry business in the US.

HUL says it is quite upbeat about the segment and says the laundry
segment is one of its key growth areas.
We have done key innovations across the product portfolio and it is
working for us, says Vats. We successfully migrated from Rin
Supreme to Surf Excel and Wheel Smart Srimatiwhich was rolled
out in 2006is also on the right track.
HULs market share in the laundry segment grew to around 37.8% in
the quarter ended June from 35.5% in the same period last year.
According to ACNielsen, the laundry industry in India was worth
Rs7,908 crore in 2006 and rose 8.4% over 2005. HUL doesnt report
its laundry revenues separately but puts them under the soaps and
detergent category.
In 2006, HULs soaps and detergents segment contributed around
Rs5,596 crore to the companys total sales of Rs12,103 crore.
Laundry has been an attractive segment in the past and is likely to
keep growing in the near future. The recent price war between

companies led to erosion in their profitability but now, the industry is

stabilizing.

COMPETITIVE STRATEGY
As Competition Heats Up, Indias Top Consumer-Products Company
Woos Affluent Shoppers With Global Brands Like Dove, While
Cooking Up Its Foods Biz
The middle-aged Briton strolling the aisles and checking out the
products doesnt attract much notice from other shoppers in
Mumbais Hypercity, the India hypermarket chain. Thats how
Douglas Baillie likes it. Baillie, the managing director of Hindustan
Unilever, Indias premier consumer-products company, wants to see
how his products are stocked, what consumers are buying, and how

shoppers are reacting to competitive brands. Its primary market

research at its most elemental, and its best done incognito.
Hindustan Unilever has traditionally relied on small traders and
mom-and-pop corner stores to retail its products. But Indias recent
retail boom has created large stores and malls, so the company wants
to make sure its in with the new marketing crowd. Hence Baillies
Hypercity visits, and the calls he makes on the headquarters of the
big retail chains.
This is quite a change for Hindustan Unilever, whose executives used
to have emissaries make obeisance at Lever house in downtown
Mumbai. I cant imagine any head from Lever House ever visiting
other company offices like this, says an amazed Damodar Mall, chief
executive of innovation and incubation at Pantaloon Retail, Indias
largest retailer and a former manager at Hindustan Unilever.

Facing Competition From P&G And Others

The reason for this new found egalitarianism is that the $3 billion
Hindustan Unilever is facing serious competition. The company,
which is practically synonymous with India, makes everything from
detergents, soaps, and shampoos to soups, sauces and tea, and

dominates most of those categories. Yet early this year, Finnish

handset maker Nokia (NOK) dislodged it as the multinational with
the highest revenues in India, after ringing up India-based sales of
$3.5 billion.
Now Hindustan Unilever is under siege from aggressive Indian and
foreign competitors such as Procter & Gamble (PG), Nivea, and
LOral. In the last year, ACNielsen data shows, Hindustan Unilevers
lead in hand soaps, including the popular Lux, is down from 55.2%
to 54%. Favorite detergent brands like Surf Excel and Rin are barely
hanging onto their 37% share. Hindustan Lever tea brands like
Brooke Bond and Lipton have dipped from a combined market share
of 29.2% to 24.3%.
All this has taken a toll on Hindustan Unilevers operating margins,
down from 21% a few years ago to just 11.84% now. Thats why the
company is wooing consumers in big retail stores. These newly
affluent shoppers present the best hope for the companys future in
India. According to retail consultant KSA Technopak, organized retail,

currently just 3.5% of Indias total $336 billion retail

will grow to 28% by

market,

2017.

Hindustan Unilevers managers hope their revenues from big retail

will increase from 5% today to over 25% in 2012. It is a big game for
us, says D. Sundaram, Hindustan Unilevers finance director.
Hindustan Unilevers strategy is to market its premium products
through the hundreds of megastores springing up across India.
That

dovetails

with

parent

company

Unilevers

new

global

realignment of products.Parent Unilever will develop the brands and

streamline product offerings across the world, while its subsidiaries
will sell the

products.

This means that all of Unilevers brands will be available across

global markets, fitting in quite nicely with Indias turn towards more
international products being sold in supermarkets.
Yet this is still a dramatic change for Hindustan Unilever which, not
long ago, was the most successful and profitable company in the
Unilever group, the crown jewel whose managers had free rein to

develop and build brands suitable for the local market. The takeover
of Hindustan Lever by Unilever became evident in March, 2006, when
Baillie, a Zimbabwe-born British national, became the first foreigner
in

four

decades

to

head

the

From Local Player To Multinational

Indiancompany.

Overnight the change sent shock waves through India. For many
decades most Indians thought Hindustan Lever was a local company,
not a multinational, and the cream of Indias management graduates
made their careers there. Then in February, 2007, the company, then
known as Hindustan Lever, was rechristened Hindustan Unilever to
reflect its parentage.
Baillie first had to sort out some past problems. For instance, in
2002 the company adopted Unilevers global strategy of focusing on
just 30 power brands instead of the total basket of 110 more local
brands. While the strategy aimed to conserve management energy, it
also left the field wide open for competitors to attack Hindustan
Unilever in the niche soap and detergent markets where its smaller
brands held sway.
And there was some stiff competition from rival Procter & Gamble; a
2004 price war with P&G in the detergent business forced Hindustan
Unilever to slash prices on its premium brand Surf Excel. The effect:
The companys sales and operating profits stagnated at $2.5 billion

for five years while operating profit plunged 37%, to $274 million in
2004. Last year operating profits reached $357 million, thanks to
price increases. But the rich margins of the past have not returned.

Tougher To Hold On To Market Share

Baillie says he intends to get the company back into the competitive
growth zone and do this in a manner that we can consistently
deliver. He also wants to expand the foods business in conjunction
with the parent, where foods bring in half the revenues globally. In
India, the companys home and personal care businesses account for
80% of revenues and 85% of profits at Hindustan Unilever, while the
companys track record in foods has been dismal. Indeed, it has
phased out more food productswheat flour, confectionery, frozen
breadthan it has launched.
Hindustan Unilever executives are realistic about the new era in
which it now operates. Nitin Paranjpe, executive director in charge of
the home and personal care business, admits that its now tougher
to hold on to market share. If India is a great story, we arent the only
ones seeing it. Rivals like P&G and Nivea have also copied
Hindustan Unilevers best innovation: the small shampoo sachets it

pioneered in the 1980s, which sold for less than 2 cents each and
which expanded the market for Hindustan Unilever products among
Indias rural masses. Currently, 80% of Indian shampoo sales come
from sachets. But today even LOreal has sachets of its Fructis
shampoo.
In June, the Tata Groups beverage company Tata Tea overtook
Hindustan Unilever as Indias largest selling tea brand. According to
ACNielsen, Tata Teas market share increased from 16.7% in March,
2006, to 19.9% in July, 2007, while Hindustan Unilever slipped from
26.1% to 19.5%. Tata Tea is exultant. Managing Director Percy
Siganporia says the gain is a dream comes true for us.

FUTURE COMPETITIVE STRATEGY

2010 Expectations
P&G, the world's largest consumer-goods maker, will continue to gain
share in the next five years in India, according to Ali Dibadj, an
analyst at Sanford C. Bernstein in New York, who rates the stock
``outperform.'' Hindustan Unilever Ltd., 52 percent owned by the
London- and Rotterdam-based parent, lost ground in shampoo, bath
soap, toothpaste and tea in the quarter ended Sept. 30, compared
with the year earlier, according to the company. Its share of the
shampoo market declined by more than a percentage point to 47.7
percent, the company said.
ITC, the largest Indian cigarette maker and partly owned by British
American Tobacco Plc, is also making inroads. It started selling more

brands including Fiama Di Wills shampoo and Superia soap last year
as the government raised tobacco taxes.
`Profitable' Cigarettes
The tobacco maker ``has a very profitable cigarettes business which
will help it to invest and expand its personal- care portfolio,'' said
Anand Shah, an analyst at Angel Broking in Mumbai, who has a
``neutral'' rating on the stock. ``It has the ability to take losses in this
segment as long as it grows its sales. This strategy will still satisfy
investors.''
Rising prices of raw materials have made it more difficult for
consumer-goods makers to pass on higher costs. The price of palm
oil, used to make soaps and foods, has surged 70 percent in the past
year.
``Given the competition, profitability will continue to be under
pressure,'' said Macquarie Securities Ltd. analyst Unmesh Sharma,
who has an ``underperform'' rating on Hindustan Unilever. He
expects the stock to drop to 180 rupees ($4.57) in the next year from

190.9 rupees. The company has a market value of about $11.8

billion.
India is Unilever's biggest market in Asia, generating about 6 percent
of annual sales. It has sold soap in the country since 1888 and
controls about half of the sales of products such as skin creams,
bathing soaps and shampoo.

HUL-UNIQUELY POSITIONED TO CREATE

VALUE
Our strategy

Competitive strengths

Innovation and R&D capabilities to straddle the pyramid

 Versatile distribution network

Strong corporate responsibility and governance

Strong local and talent base

Strategy
Grow ahead of the market by leading market development
activities.
Leverage positive impact of growing Indian economy
consumer spending.
Grow a profitable foods and top end business.
Grow the bottom line ahead of the top line.
Strong commitment to sustainable development.

on

Competitive Strengths

Corporate Social Responsibility-Aiding

Development Of The Country

In

The

Shakti
Three shakti initiatives
Shakti

entrepreneur;

currently~44000

women

cover

1,25000 villages.
Shakti vani: one-to-many communication for category
growth
ishakti: customized interaction with remote consumers.

Impact of community
business and social impact can go together.
partnerships with diverse stakeholders.

HINDUSTAN UNILEVER LIMITED COMPARATIVE BUSINESS ANALYSIS

Hindustan Unilever Limited Formerly known as Hindustan Lever
Limited. The Group's principal activities are to manufacture and
market consumer products. The Group operates through seven
segments: Soaps and Detergents, Personal Products, Exports,

Beverages, Foods, Ice Creams and Other. The products include home
and personal care products, foods and beverages, industrial and
agricultural products. Home and personal care products consists of
personal and fabric wash, household, oral care, skin and hair care,
deodorants, perfumery, colour cosmetics and baby care. Foods and
beverages includes tea, coffee, cooking fats and oils, bakery fats, ice
creams, tomato products, fruit and vegetable products, rice, salt, atta
and

rawa,

marine

products

and

mushrooms.

Industrial

and

agricultural products includes specialty chemicals, bulk chemicals,

fertilisers, animal feeds, seeds, plant growth nutrients, processed-triglycerides and agri commodities, yeast, leather, footwear and carpets,
thermometers and plantations.
This analysis compares Hindustan Unilever Limited with three other
companies in closely related industry sectors.
The company focuses on efficient delivery to consumers with an
improved supply chain, brand building initiatives and innovation,

which has helped the company to sustain its leadership position in

the overall FMCG category in India.
Its brands are spread across 20 consumer product categories.
Hindustan Unilever markets consumer goods throughout India. The
company faces competition from international, local and regional
players.

RURAL- THE BIG INDIAN ROMANCE

Rural population larger than europe(800 million)

 Low growth in agriculture;however rural income are growing

faster with 70% population here,income growth is crucial.
Structural changes in the economy which are affecting this are:
Disintermediation in the agricultural market price
discovery mechanism has benefited farmers.
Government

grants

and

subsidies.employment

grants-Rs 40000cr

Did Hindustan Unilever Get Its Rural Pitch

Right?

A new book from Wharton School Publishing is critical of Hindustan

Unilevers advertising strategy in India.
HUL missed an opportunity for increased marketing productivity
when they repositioned, retargeted, and relaunched Lifebuoy, write
Leonard M. Lodish, Howard L. Morgan and Shellye Archambeau, the
authors of Marketing that Works. Though the company was
extremely innovative the way it handled the rural communications
plan was very traditional, they add.
The company basically worked with one agency, Ogilvy and Mather
(O&M), and screened some options to roll out one option that
everyone was happy with, reads an observation in a chapter titled
entrepreneurial advertising that works.
A better strategy, according to the authors, would have been to
develop a number of different communications executions using
different creative sources and then testing them as part of the early
rollout.

Advertising strategy came for mention when the company reported

the second quarter results, a few days ago. Mr D. Sundaram,
Director (Finance & IT), HUL, said: We have been phasing our
advertising spends depending on the launches and relaunches of
brands. The advertising spends have not been linear for the
company, he added. The companys advertising and promotional
spends during the quarter fell to Rs 336 crore, from the earlier Rs
345 crore.
Lifebuoy is one of Unilevers oldest brands with more than a
hundred-year history. Lifebuoy has become more than just a red bar
of soap today the brand provides hygiene and health solutions for
families, says the site, in a paragraph on innovation.
Differentiating soap products on the platform of health takes
advantage of an opening in the competitive landscape for soap, reads
a quote in the book from C.K. Prahalads The Fortune at the Bottom
of the Pyramid .

HUL, through its innovative communication campaigns, has been

able to link the use of soap to a promise of health as a means of
creating behavioural change, and thus has increased sales of its lowcost, mass-market soap, Prahalad notes.
The O&M strategy, as explained by Mr Lodish et al, targeted 10,000
villages in nine states where HUL stood to gain the most market
share They spent a lot of effort in designing low cost ways of
communicating with their rural target.
The authors are of the view that government workers who have been
interacting with villagers might have come up with some excellent
ideas; or the villagers themselves might also be able to generate very
effective communications vehicles.
So, why didnt HUL try alternative campaigns when rolling out its
initiative? Probably the biggest reason is that they always did their
communications the same way even for innovative programs,
wonder the authors. As a big company, many times it is difficult to

change

the

procedures

without

creating

significant

political

problems.
The HUL example, which is one of the many discussed in the book,
concludes by stating that globally very progressive and innovative
firms can also benefit from being more entrepreneurial and less
traditional

in

how

they

manage

their

advertising

and

communication.

JOINT VENTURE
Hindustan Unilever Sets Up Joint Venture With
Smollan Holdings
Hindustan Unilever Limited (HUL) has decided to set up a Joint
Venture (JV) with Smollan Holdings of South Africa and the JV will
be operational from January 1, 2008. The strategic tie-up aims to
build long term capabilities and bring in-store execution focus in
servicing the Companys Modern Trade customers.
The new company has been named as Hindustan Unilever Field
Services Private Limited (HUFS) and will work exclusively on behalf of

HUL in Modern Trade channel only. The operations will begin with
the existing Modern Trade in-store execution team of HUL moving
into HUFS.
Smollan Holdings is one of the leading in-store execution and field
services companies internationally. It has leading edge capabilities in
servicing Modern Trade focused on shelf filling, logistics for
merchandising materials and in store execution.
Modern Trade in India is growing and evolving very rapidly and our
strategy for winning in this growing retail market is to win at pointof-purchase with our shoppers & by delivering best-in-class service
to our Modern Trade customers. This JV will bring in world class
execution excellence in the market and build the right capabilities to
deliver the companys marketing strategy in Modern Trade.

Other Acquisition
Hindustan Unilever has acquired several Indian FMCG companies so
far. This includes:

Tata Oil Mills Company

Brooke Bond

Lipton India

Modern Foods

It acquired Kissan brand from UB group; Dollops ice cream brand

from Cadbury India; Lakme cosmetics brands from Tata. It has also
launched Pureit, a home water purifier which supplies drinking
water without boiling/need of electricity.
Hindustan Unilever Network is the direct selling channel of the
company. It has about 350,000 consultants, all independent
entrepreneurs, trained and guided by HLN's expert managers and
trainers.

NEW INITIATIVE
Bringing High-End Dove To India
Baillie is fighting back. Over the past six months, Hindustan Unilever
launched a high-end range of Ponds skin care and Dove hair care
products from Unilevers international portfolio. These premium
brands retail not in neighborhood small stores but in supermarkets

and hypermarkets, where Indian customers love to touch and feel

products.
Hindustan Unilever is also milking one of its top brandsFair &
Lovely, a hot-selling fairness cream, which promises a lighter skin,
tone for many of Indias complexion-conscious consumers. The
advertising campaign, which suggests that regular use of the cream
helps women gain confidence and makes them eligible for marriage,
has made the brand a winner. That has spawned a host of
competitive fairness creams, soaps, and sunblock lotions. But
Hindustan Unilevers brand is still tops.
Baillie is also getting aggressive on foods, focusing on the Knorr
brand of soups and curry mixesideal for the Indian market.
Analysts believe the companys current strategy of concentrating on
premium products and marketing them in the large retail stores is a
winning one. Sumeet Budhraja, consumer analyst at Mumbai
brokerage First Global Securities, says that Hindustan Unilever
could have addressed a lot more categories, but they are more

focused and regaining their aggressiveness. He points to the demand

for safe drinking water in India, which Hindustan Unilever exploited
with the launch of water purifier Pureit in 2005, at one-third the
price of established Indian brands such as Aqua guard.
These efforts have delivered some promising results, and Baillie is
pleased with the modest turnaround. In the quarter ended June,
2007, the companys sales grew 13%, with net profit up 29.6%.
Reason enough to keep patrolling those store aisles.

SERVICE TO SOCIETY
HUL believes that an organisation's worth is also in the service it
renders to the community. HUL is focusing on health & hygiene

education, women empowerment, and water management. It is also

involved in education and rehabilitation of special or underprivileged
children,

care

development.

for

the

destitute

HUL

has

also

and

HIV-positive,

responded

in

case

and
of

rural

national

calamities / adversities and contributes through various welfare

measures, most recent being the village built by HUL in earthquake
affected Gujarat, and relief & rehabilitation after the Tsunami caused
devastation in South India.
In 2001, the company embarked on an ambitious programme,
Shakti.

Through

Shakti,

HUL

is

creating

micro-enterprise

opportunities for rural women, thereby improving their livelihood and

the standard of living in rural communities. Shakti also includes
health and hygiene education through the Shakti Vani Programme,
and creating access to relevant information through the iShakti
community portal. The program now covers 15 states in India and
has over 31,000 women entrepreneurs in its fold, reaching out to
100,000

villages

and

directly

reaching

to

150

million

rural

consumers. By the end of 2010, Shakti aims to have 100,000 Shakti

entrepreneurs covering 500,000 villages, touching the lives
over 600 million

of

people.

HUL is also running a rural health programme Lifebuoy Swasthya

Chetana. The programme endeavours to induce adoption of hygienic
practices among rural Indians and aims to bring down the incidence
of

diarrhoea.

It

has

already

touched

70

million

people

in

approximately 15000 villages of 8 states. The vision is to make a

billion Indians feel safe and

secure.

If Hindustan Unilever straddles the Indian corporate world, it is

because of being single-minded in identifying itself with Indian
aspirations and needs in every walk of life.

PERFORMANCE REVIEW
Leadership Across Diverse Fmcg Category

Record Performance

Financial Overview -2007

*FIGURES BASED ON FY 2007 AUDITED RESULTS

OBJECTIVE OF THE STUDY

To identify the marketing strategies and policies of
Hindustan Unilever Limited
To analyse the influence of rival companys strategies on
the performance of Hindustan Unilever Limited
To analyse the various strategies adopted by the company
to gain competitive advantage

RESEARCH METHODOLOGY
Achieving accuracy in any research requires in depth study regarding
the subject. As the prime objective of the project is to compare
Hindustan Unilever Ltds(HUL) with the existing competitors in the
market and the impact of Procter & Gamble (PG), Nivea, and LOral
on HLL, the research methodology adopted is basically based on
primary data via which the most recent and accurate piece of first
hand information could be collected.
Primary data was collected by the
Questionnaire &
Personal Interview Method
Sources of secondary data :
Used to obtain information on, HUL and its competitor history,
current issues, policies, procedures etc, wherever required.

# Internet-www.unilever.com, www.Google.com
# Magazines-Business Today
# Newspapers-The Economic Times

Procedure of research methodology

# Target geographic area was Delhi.
#

To

these

geographical

area

questionnaire

was

given,

the

questionnaire was a combination of both open ended and closed

ended questions.
# The date during which questionnaires were filled was between
three week.
# Some dealers were also interviewed to know their prospective.
Interviews with the honour of retailer of HUL were also conducted.
# Finally the collected data and information was analysed and
compiled to arrive at the conclusion and recommendations given.

LIMITATIONS
While undertaking my study I was encountered with some
limitations:
Limited time was provided to complete the study.
Cost involved in collecting the data was high.
Target geographic area was limited to Delhi.

 To fix an appointment with the dealers was also very

difficult task and even after that many time people was not
turn up for the appointment.

ANALYSIS AND INTERPRETATION

3rd

consecutive

yearof

accelerated

growth

in

FMCG

portfilio.Growth broad based and across all categories.

FMCG market expected to maintain current growth levels.
Successfully implement the food strategy.
Build momentum to the water business.
Build on competitive capabilities across the business system.

 Manage cost inflation effectively to improve margin through

pricing,cost saving and better mix.
Strong commitment to governance and CSR.

CONCLUSION
This company project has demonstrated HINDUSTAN UNILEVERS
MARKETING STRATEGIES AND POLICIES that has proved to be
extensive through, and of great benefit to the company in furthering
its competitive advantage.

In this project it possible to see the success of Hindustan Unilevers

in its indorse its strong potential to continue to do well.

BIBLIOGRAPHY

A L Ries (1996), Focus Harper Collins Publishers Ltd.

David A. Aaker (1991), Managing Brand Equity, The Free

Press.

David A. Aaker (1996) Building Strong Brands, The Free

Press.

Philip Kotler (Eighth Edition) Marketing Management, Prentice

Hall of India Ltd.

The Economic Times Brand Equity

Market survey and questionnaires

www.unilever.com

QUESTIONNAIRE

1. Do you use FMCG products?

Yes

No

2. Which brand of FMCG products do you use?

Hindustan Unilever
P&G
Nivea
Others

3. Where do you buy FMCG products from?

Super stores
Retail Stores
Others
4. Are you aware of any campaign of the above brands?
Yes

No

5. Which Hindustan Unilevers product do you usually prefer or use?

Bathing soaps

Skin care

Foods

Deodorants

others

6. Do you think Hindustan Unilevers product is easily available in

market ?
Yes

No

7. Describe Hindustan Unilever in one word?

8. Your comments on Hindustan Unilevers product?

_______________________________________________

CONTENTS
S NO. PARTICULARS

PAGE
NO.

Introduction

History of Hindustan Unilever Limited

Oganisational Structure

Present status

HULs new growth strategy

Product profile

SWOT analysis

PEST analysis

Future competitive strategy

10

HUL-comparitive business analysis

11

Joint Ventures

12

New initiatives

13

Research Methodology

14

Analysis

15

Conclusion

16

Bibliography

17

Questionnaire