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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
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: Date: Candidate’s signature Name: Enrol.no.:
Countersigned Name: Supervisor Delhi college Of Advanced Studies
Hindustan Unilever Limited (formerly Hindustan Lever Limited) is India’s 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.
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. .
1 FMCG is able to share with their market insights based upon unparalleled breath of consumer goods experience. The company’s history dates back to 1931 when Unilever set up its first Indian subsidiary. a subsidiary of Unilever. These three companies merged to form Hindustan Lever Limited in November 1956. 2007 the company has changed the name to Hindustan Unilever Limited. Hindustan Unilever Limited (HUL). Effective July 19. The company focuses on efficient delivery to consumers with an improved supply chain. . brand building initiatives and innovation. The Hindustan Unilever Ltd (HLL) is India’s no. one of the most efficient in the world.INTRODUCTION The Hindustan Unilever Ltd’s(HUL) Inc has taken the opportunity to offer us a broader view of FMCG category. followed by Lever Brothers India Limited (1933) and United Traders Limited (1935). Hindustan Vanaspati Manufacturing Company. Hindustan Unilever Ltd (HUL) has grown from strength to strength with new technologies being introduced to make the HLL consumer goods business. is a fast moving consumer goods (FMCG) company based in India.
Unilever. which sells soap to more than 500 million Indians.which has helped the company to sustain its leadership position in the overall FMCG category in India. although performance slowed dramatically between 2000 and 2004.Now Cincinnati. In addition to FMCG products it is the country's biggest exporter of tea. and far and away the leading advertiser. 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. and ITC Ltd. Hindustan Unilever is Unilever's main operating business in India. prior to restructuring. and is also one of the country’s top five exporters.based Procter & . It is generally acknowledged to be one of India's best-run businesses. may see global revenue growth slow in 2010 as Procter & Gamble Co. It is the country's biggest consumer goods company. HUL inhabits virtually every sector of the consumer goods market. step up marketing in Asia's third-biggest economy. including several not occupied by Unilever in other markets such as preserves and bakery products.
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 Brusselsbased 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 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. 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,
350 managers. It is one of the earliest MNCs to have entered India ORGANIZATIONAL STRUCTURE Managing Direc tor General Mana ger Vice President Marketing Manufacturin Sales g Finance Distribution .including over 1.
PRESENT STATUS Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods company. HUL is also one of the country's largest exporters. They endow the company with a scale of combined volumes of about 4 million tonnes and of Rs." HUL meets everyday needs for nutrition.000crore. including over 1. is to "add vitality to life. it has been recognised as a Golden Super Star Trading House by the Government of India. hygiene. It is a mission HUL shares with its parent company.000 employees. look good and get more out of life.10. and personal care with brands that help people feel good. touching the lives of two out of three Indians with over 20 distinct categories in Home & Personal Care Products and Foods & Beverages. Unilever. .300 managers. sales The mission that inspires HUL's over 15.
000 individual shareholders and financial institutions. .000 suppliers and associates. Kissan. Fair & Lovely. Knorr-Annapurna. covering 6. The rest of the shareholding is distributed among 380.soaps. HUL has traditionally been a company. which incorporates latest technology in all its operations. Close-up.000 redistribution stockiest. Surf Excel. Pepsodent. Wheel. detergents. Rin.like Lifebuoy.55% of the equity. ice cream and culinary products. Brooke Bond. The operations involve over 2. HLRC and the Global Technology Centres in India have over 200 highly qualified scientists and technologists. Pond's. comprising about 4.3 million retail outlets reaching the entire urban population . and now has facilities in Mumbai and Bangalore.and about 250 million rural consumer. Kwality Wall's – are household names across the country and span many categories . branded staples. HUL's brands .which holds 51. Sunsilk. HUL's distribution network. personal products. Lux. many with post-doctoral experience acquired in the US and Europe. The Hindustan Unilever Research Centre (HLRC) was set up in 1958. They are manufactured over 40 factories across India. tea. Clinic. coffee. Lakme.
home care. Pricing.” insists Sudhanshu Vats. Indian subsidiary of the AngloDutch consumer goods company Unilever Plc. is now passe. “Price cut or hike is not a long-term growth strategy. in fact. new consumer and retail trends and aggressive marketing and promotions. This comes even as Unilever is scouting for a potential buyer for its laundry business in the US. now is focused on product innovation. “Our strategy for growth.HUL’S NEW GROWTH STRATEGY After having fought a bitter price battle for market share with its rivals. HUL says it is quite upbeat about the segment and says the laundry segment is one of its “key growth areas. Hindustan Unilever Ltd (HUL). is now working on a new growth strategy for its laundry business.” he said. category head.” .
saw its market share dip by 1. Nirma Ltd. according to Vats contributes around 50% of HUL’s laundry segment revenues. However.5 percentage points.” says Vats. however. According to ACNielsen.4% over 2005.908 crore in 2006 and rose 8. the increase was not at the expense of price war with its multinational rival Procter & Gamble Co. according the market research firm ACNielsen.7% percentage points to 13. HUL doesn’t . Wheel. up to a 7. the Ahmedabadbased manufacturer.5%. this time. the laundry industry in India was worth Rs7.” HUL’s market share in the laundry segment grew to around 37. “We successfully migrated from Rin Supreme to Surf Excel and Wheel Smart Srimati—which was rolled out in 2006—is also on the right track. a value brand that. with a total share of about 18%. P&G also gained 0. increased its market share by 2 percentage points in the same period.8% in the quarter ended June from 35.“We have done key innovations across the product portfolio and it is working for us.6% share.5% in the same period last year.
HUL’s soaps and detergents segment contributed around Rs5.103 crore.” says Unmesh Sharma. The recent price war between companies led to erosion in their profitability but now. the industry is stabilizing.596 crore to the company’s total sales of Rs12. an analyst at Macquarie Securities here. .report its laundry revenues separately but puts them under the soaps and detergent category. 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. According to Vats. “Laundry has been an attractive segment in the past and is likely to keep growing in the near future. In 2006.
.“Consumers today are buying more clothes. “Trends suggest that the usage of detergents has gone up as a result. Also.” says Vats.
people want to use better and branded products. branded staples. analysts remain cautious.with premium quality of clothes. oral care. it is too early to say what result their new strategies will yield. skin care. “Some of HUL’s recent moves. such as promotional campaigns and advertising. fabric wash. Modern Foods ranges . culinary products. hair care. “Still. deodorants and talcs.” Still. ice creams. coffee. seem right.” PRODUCT PROFILE HUL’s business activities are divided into four broad areas: Home and personal care personal wash. colour cosmetic Foods tea.” says Macquarie’s Sharma. home care.
Ayush ayurvedic products and services. New Ventures Hindustan Lever Network. marine products. Sangam. Exports HPC. beverages. rice BRANDS . Pureit water purifiers.
Pond s. Close-up. Lakme. Brooke Bond. They include: Lifebuoy. Fair & Lovely. Kissan. Clinic. Lux. Rin. Wheel. KnorrAnnapurna and Kwality Walls.HUL s brands are household names across the country. Sunsilk. Surf Excel. Pepsodent. SWOT ANALYSIS Strength .
ice creams. 10. 2.5% from beverages. That means higher profits and / or more competitioners. is to "add vitality to life. 5. HUL is also one of the country's largest exporters. Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods company. 26. it has been recognised as a Golden Super Star Trading House by the Government of India. Due to its long presence in India – has deep penetration – 20 consumer product category. including over 1.6% from personal care products.1. Better market penetration.000 employees.. The company derives 44. touching the lives of two out of three Indians with over 20 distinct categories in Home & Personal Care Products and Foods & Beverages.300 managers. exports. Continuous threat from other competitors. and other products. and the rest from foods." 3. Low cost of production due to economic of scale.3% of its revenues from soaps and detergents. 4. over 15. . Weakness 1.
cost pressure is likely due to rising crude and freight costs. 3. . Increasing departmental stores concept – impulse @ at cash counters. 5. Increasing per capita national income resulting in higher disposable income. Growing middle class and growing urban population. reason is that. Increasing gifts cultures.Opportunities 1. HLL's tea business has declined marginally. 4. Threats 1. Globalization. 2.
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. .PEST ANALYSIS P: since the budget range is decontrolled.
Hindustan Unilever Ltd(HUL) offer such product. Dove. Rin and Wheel • Skin care: Fair & Lovely. delivering to her door step additional benefits which she would never have imagined possible. Lifebuoy. Liril. The wide variety products offered by the company include: The company’s popular product’s include: • Bathing soaps: Lux. But delight dazzles the average company will compete for customer by conforming to her expectation consistently. Breeze. Pears and Rexona • Laundry items: Surf Excel. Pond’s and Vaseline .FIVE P’S OF MARKETING Product Satisfaction suffices. Hamam. But the winner will surpass them by constantly exceeding her expectation.
Annapurna and Knorr • Ice cream: .• 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.
So every customer segment has different price expectation from the product. . and then progressively moving through them. 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.Kwality Wall’s . 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. Therefore maximizing the returns involves identifying right price level for each segment. Hindustan Unilever Ltd(HUL) has launched various products which cater to all customer segments.
Marketers and finance manager need a new term to evaluate their business: Distribution Equity. but the end of it all.Physical Distribution – “Place” BRAND ISN’T THE ONLY ANY MORE. 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. but once built. It takes much more time and effort to build. . hire the hottest strategies on the block. swamp prime television with best Ads. In a product and price parity situation. you would be know of selling your products. Buyers are paying for distribution equity not brand equity and market shares. 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. the brand that sells more is the one that reaches the highest number of customers. The cardinal task before the Indian market is managing is to shoe-horn its product on retail shelves.
covering 6.3 million retail outlets reaching the entire urban population. life style. This network of distribution can either contact wholesalers and which in turn retailers or the distributors can contact to the retailers directly. Hindustan Unilever Ltd(HUL) distributes the product in the manner stated above. transport and communication network. value system.000 suppliers and associates. comprising about 4.television has already primed and population for consumption. But getting their means managing wildly different terrains-climate.India – The operations involve over 2. And your brand equity isn’t going to help when it comes to tackling these issues. and about 250 million rural consumers.000 redistribution stockists. and the marketer who can get to the to the consumer ahead of competition will give a hard – to – overtake lead. HUL's distribution network. Once the stock product reaches retailers. Own distribution network consist of clearing and forwarding (C&F) agents & distribution stockiest. . language. the prospective customers can have access to the product.
at 18% of total costs. .Hindustan Unilever Ltd(HUL) distribution network has expanded. At Hindustan Unilever Ltd(HUL). To address the issue of product stability. 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. This increase in distribution is going to be accompanied by reduction in channel costs. Looking at the low penetration of few products. The other reason is arch rival Procter & Gamble Co. it has installed visi colors at several outlets. Hindustan Unilever Ltd(HUL) marketing costs. a distribution expansion would itself being incremental volume. reaches more than a million retailers. they believe that selling FMCG is it like selling soft drinks. is much higher than Procter & Gamble Co. The company is looking to reduce this parity level. Hindustan Unilever Ltd(HUL) is also attempting to improve the distribution quality. Beside use of improved logistics.
and be prepared too take step toward the sender. grab her attention evoke her comprehension. unself conscious. Effective advertising is rarely hectoring or loudly explicit…. Naturally. the receiver must at least half want it to.Promotion If an advertisement is to communicate effectively. The strategic response address the emotional appeal of the band to the child within the adult. pleasure – seeking child within himself – a graft these feeling onto the Ad campaign like “hasso to khul k hasso for close up”. Thereafter it was the job of the advertising to communicate customer the wonderful feeling that he could experience by re-discoursing the careful. a successful campaign has a stronger element of the unexpected a quality that good advertising shares with much worthwhile literature. Finding showed that the adults felt too conscious to be seen consuming a product actually meant for children. More often than not. grab her acceptance and then extract retention competing with thousands of other units of communication trying to do the same. It often both attracts and generates arm feelings. communication must first ensure exposure. that produced just the value vacuum that Hindustan Unilever Ltd(HUL) was looking to fill. To penetrate into the inner recesses of her memory. “cream bathing bar for dove soap” and .
that the company has launched. It has also launched Pureit. a home water purifier which supplies drinking water without boiling/need of electricity . It’s a combination of spiffing up its key brand. In cinemas. it had also entered into various marketing relationship with other portals. supported . 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. the management plans to tap this new channel of marketing. ad agency contract has created communication for cinemas and even ATM machines for the brand. etc…. Ad since any discussion today would be incomplete without mention ‘e’ word. Beside the company website (i.com). Something familiar is planned for phone-book as well. All ICICI’ s ATM a message flashes on the screen as soon as customer insert his ATM card. researching and improving the newer products that haven’t taken off. 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.unilever.e. specially targeted during festivals and events such as Valentines day.daag ache hai for surf excel” have been sure shot winner with the audience. www. As well as outdoor and radio ads. 30 catteries in Mumbai have been selected.
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 . and the winner will be that super value marketers…. Today’s consumer demanding “more for less”.with high ad – spends that Hindustan Unilever(Ltd) hopes will see it emerges stronger after the current slowdown. In the 1980s. and the discounting era grew strong. Positioning In the 1970s consumers were ready to pay “more for more”. consumers began to demand “more for same”. as well as expand the market. Some of today’s 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. and luxury goods flourished.
com informs. the quicker becomes her search process. a hot-selling “fairness” cream. As a variety of competitive claims assails her senses. today customer uses complicated decision making process to assess the alternative before making a purchase. “Lifebuoy has become more than just a red bar of soap – today the brand provides hygiene and health solutions for families 2) Fair & Lovely. Positioning of individual product: 1) Lifebuoy is ‘one of Unilever’s oldest brands’ with more than a hundred-year history. which promises a lighter skin tone for many of India’s complexion-conscious consumers .product have strayed away from the consumer’s long standing perception of them… Hindustan Unilever(Ltd) is an anchor in sea of consumer products. .unilever. as www. Since Hindustan Unilever(Ltd) is more clearly associated with a particular set of attributes in terms of benefits and prices.
e. Markets segmentation can be defined in a number of ways such as: Demographic variables (e. gender. their interests and activities) the benefits which consumers look for in a product or on the occasions when the product might be consumed. It targets different segments within the market. material states income etc…) The lifestyle of consumers (i. such as the: .HINDUSTAN UNILEVER’S MARKET SEGMENTATION Market place for any product is comprised of many different segments of consumers. each with different needs and wants.g. Hindustan Unilever(Ltd) takes into account all these factors when producing a range of products. Consumers are groups.
Take home segment – this describes product that are normally purchased in supermarkets. Impulse segment – these products are often purchase on impulse. used these and then. taken home consumed at a later stage. . They include product such as close up. Break segment – products which are normally consume as a snatched break and often with tea and coffee.
Hindustan Unilever Ltd (HUL). is now passe. category head. Indian subsidiary of the AngloDutch consumer goods company Unilever Plc. Pricing. is now working on a new growth strategy for its laundry business. in fact.The Real Taste of Rejuvenation After having fought a bitter price battle for market share with its rivals.” insists Sudhanshu Vats. . home care. “Price cut or hike is not a long-term growth strategy.
8% in the quarter ended June from 35.“Our strategy for growth.” he said. HUL says it is quite upbeat about the segment and says the laundry segment is one of its “key growth areas. “We successfully migrated from Rin Supreme to Surf Excel and Wheel Smart Srimati—which was rolled out in 2006—is also on the right track. .4% over 2005.” says Vats.” “We have done key innovations across the product portfolio and it is working for us.103 crore. This comes even as Unilever is scouting for a potential buyer for its laundry business in the US. new consumer and retail trends and aggressive marketing and promotions.5% in the same period last year. the laundry industry in India was worth Rs7. HUL’s soaps and detergents segment contributed around Rs5. In 2006.596 crore to the company’s total sales of Rs12. now is focused on product innovation.” HUL’s market share in the laundry segment grew to around 37.908 crore in 2006 and rose 8. According to ACNielsen. HUL doesn’t report its laundry revenues separately but puts them under the soaps and detergent category.
COMPETITIVE STRATEGY As Competition Heats Up. While Cooking Up Its Foods Biz The middle-aged Briton strolling the aisles and checking out the products doesn’t attract much notice from other shoppers in Mumbai’s Hypercity. the industry is stabilizing. Baillie. India’s premier consumer-products company. India’s Top Consumer-Products Company Woos Affluent Shoppers With Global Brands Like Dove. the managing director of Hindustan Unilever. The recent price war between companies led to erosion in their profitability but now.“Laundry has been an attractive segment in the past and is likely to keep growing in the near future. the India hypermarket chain. That’s how Douglas Baillie likes it. wants to .
and it’s best done incognito.” says an amazed Damodar Mall. what consumers are buying.see how his products are stocked. and the calls he makes on the headquarters of the big retail chains. Hence Baillie’s Hypercity visits. It’s primary market research at its most elemental. and how shoppers are reacting to competitive brands. . “I can’t imagine any head from Lever House ever visiting other company offices like this. chief executive of innovation and incubation at Pantaloon Retail. But India’s recent retail boom has created large stores and malls. Hindustan Unilever has traditionally relied on small traders and mom-and-pop corner stores to retail its products. India’s largest retailer and a former manager at Hindustan Unilever. This is quite a change for Hindustan Unilever. so the company wants to make sure it’s in with the new marketing crowd. whose executives used to have emissaries make obeisance at Lever house in downtown Mumbai.
The company. Finnish . and dominates most of those categories.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. Yet early this year. sauces and tea. makes everything from detergents. and shampoos to soups. which is practically synonymous with India. soaps.
All this has taken a toll on Hindustan Unilever’s operating margins. and L’Oréal.84% now. after ringing up India-based sales of $3.handset maker Nokia (NOK) dislodged it as the multinational with the highest revenues in India. Nivea. Hindustan Unilever’s lead in hand soaps. currently just 3. including the popular Lux.5% of India’s total $336 billion retail market. Now Hindustan Unilever is under siege from aggressive Indian and foreign competitors such as Procter & Gamble (PG). ACNielsen data shows. In the last year.3%.5 billion. is down from 55. Favorite detergent brands like Surf Excel and Rin are barely hanging onto their 37% share. According to retail consultant KSA Technopak. down from 21% a few years ago to just 11. “It is a big game .2% to 54%. Hindustan Unilever’s managers hope their revenues from big retail will increase from 5% today to over 25% in 2012. These newly affluent shoppers present the best hope for the company’s future in India. organized retail. Hindustan Lever tea brands like Brooke Bond and Lipton have dipped from a combined market share of 29.2% to 24. will grow to 28% by 2017. That’s why the company is wooing consumers in big retail stores.
while its subsidiaries will sell the products. That dovetails with parent company Unilever’s new global realignment of products. This means that all of Unilever’s brands will be available across global markets. . The takeover of Hindustan Lever by Unilever became evident in March. was the most successful and profitable company in the Unilever group. 2006. not long ago. a Zimbabwe-born British national. Hindustan Unilever’s finance director.Parent Unilever will develop the brands and streamline product offerings across the world. Yet this is still a dramatic change for Hindustan Unilever which.for us. Sundaram. Hindustan Unilever’s strategy is to market its premium products through the hundreds of megastores springing up across India.” says D. became the first foreigner in four decades to head the Indiancompany. fitting in quite nicely with India’s turn towards more international products being sold in supermarkets. when Baillie. the crown jewel whose managers had free rein to develop and build brands suitable for the local market.
of India’s Then in management graduates made their careers February. and the cream there. 2007. not a multinational.From Local Player To Multinational Overnight the change sent shock waves through India. then known as Hindustan Lever. . was rechristened Hindustan Unilever to reflect its parentage. For many decades most Indians thought Hindustan Lever was a local company. the company.
in 2002 the company adopted Unilever’s 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. a 2004 price war with P&G in the detergent business forced Hindustan Unilever to slash prices on its premium brand Surf Excel. Last year operating profits reached $357 million.Baillie first had to sort out some past problems. 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. For instance. But the rich margins of the past have not returned. thanks to price increases. to $274 million in 2004. And there was some stiff competition from rival Procter & Gamble. . The effect: The company’s sales and operating profits stagnated at $2.5 billion for five years while operating profit plunged 37%.
” He also wants to expand the foods business in conjunction with the parent.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. the company’s home and personal care businesses account for 80% of revenues and 85% of profits at . where foods bring in half the revenues globally. In India.
admits that it’s now “tougher to hold on to market share.Hindustan Unilever.” Rivals like P&G and Nivea have also copied Hindustan Unilever’s best innovation: the small shampoo sachets it pioneered in the 1980s. to 19. If India is a great story. confectionery. while the company’s track record in foods has been dismal. Tata Tea’s market share increased from 16. Tata Tea is exultant. which sold for less than 2 cents each and which expanded the market for Hindustan Unilever products among India’s rural masses. frozen bread—than it has launched.9% in July. Hindustan Unilever executives are realistic about the new era in which it now operates. 80% of Indian shampoo sales come from sachets.7% in March. Currently. we aren’t the only ones seeing it.1% to 19. executive director in charge of the home and personal care business. But today even L’Oreal has sachets of its Fructis shampoo. 2007. while Hindustan Unilever slipped from 26. According to ACNielsen.5%. 2006. Managing . In June. Indeed. the Tata Group’s beverage company Tata Tea overtook Hindustan Unilever as India’s largest selling tea brand. Nitin Paranjpe. it has phased out more food products—wheat flour.
Bernstein in New York. 52 percent owned by the London.. an analyst at Sanford C. according to Ali Dibadj.and Rotterdam-based parent. the world's largest consumer-goods maker. . lost ground in shampoo. who rates the stock ``outperform. will continue to gain share in the next five years in India.” FUTURE COMPETITIVE STRATEGY 2010 Expectations P&G.'' Hindustan Unilever Ltd.Director Percy Siganporia says the gain is “a dream comes true for us.
ITC.'' Rising prices of raw materials have made it more difficult for consumer-goods makers to pass on higher costs. used to make soaps and foods.'' said Anand Shah. ``It has the ability to take losses in this segment as long as it grows its sales. the largest Indian cigarette maker and partly owned by British American Tobacco Plc. . This strategy will still satisfy investors. compared with the year earlier.bath soap. Its share of the shampoo market declined by more than a percentage point to 47. has surged 70 percent in the past year. `Profitable' Cigarettes The tobacco maker ``has a very profitable cigarettes business which will help it to invest and expand its personal. an analyst at Angel Broking in Mumbai. toothpaste and tea in the quarter ended Sept. is also making inroads. who has a ``neutral'' rating on the stock.7 percent. the company said. It started selling more brands including Fiama Di Wills shampoo and Superia soap last year as the government raised tobacco taxes. according to the company.care portfolio. The price of palm oil. 30.
analyst Unmesh Sharma.8 billion. generating about 6 percent of annual sales. India is Unilever's biggest market in Asia. HUL-UNIQUELY CREATE VALUE Our strategy POSITIONED TO Competitive strengths . who has an ``underperform'' rating on Hindustan Unilever. It has sold soap in the country since 1888 and controls about half of the sales of products such as skin creams.``Given the competition.'' said Macquarie Securities Ltd. bathing soaps and shampoo. The company has a market value of about $11.57) in the next year from 190. He expects the stock to drop to 180 rupees ($4. profitability will continue to be under pressure.9 rupees.
Grow a profitable foods and top end business. Leverage positive impact of growing Indian economy on consumer spending. Innovation pyramid and R&D capabilities to straddle the Versatile distribution network Strong corporate responsibility and governance Strong local and talent base Strategy Grow ahead of the market by leading market development activities. . Grow the bottom line ahead of the top line.
Competitive Strengths Corporate Social Responsibility-Aiding In The Development Of The Country . Strong commitment to sustainable development.
• partnerships with diverse stakeholders. HINDUSTAN UNILEVER LIMITED COMPARATIVE BUSINESS ANALYSIS Hindustan Unilever Limited Formerly known as Hindustan Lever Limited. currently~44000 women cover 1. foods and beverages. The products include home and personal care products. Ice Creams and Other.25000 villages. The Group's principal activities are to manufacture and market consumer products. • 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. Beverages.Shakti Three shakti initiatives • Shakti entrepreneur. industrial . Exports. Personal Products. Foods. The Group operates through seven segments: Soaps and Detergents.
fertilisers. which has helped the company to sustain its leadership position in the overall FMCG category in India. The . processed-tri-glycerides and agri commodities. seeds. ice creams. Industrial and agricultural products includes specialty chemicals. plant growth nutrients. This analysis compares Hindustan Unilever Limited with three other companies in closely related industry sectors. household. thermometers and plantations. Foods and beverages includes tea. footwear and carpets. Home and personal care products consists of personal and fabric wash. brand building initiatives and innovation. bakery fats. marine products and mushrooms. coffee.and agricultural products. fruit and vegetable products. bulk chemicals. rice. salt. perfumery. leather. cooking fats and oils. animal feeds. colour cosmetics and baby care. Its brands are spread across 20 consumer product categories. The company focuses on efficient delivery to consumers with an improved supply chain. tomato products. yeast. Hindustan Unilever markets consumer goods throughout India. deodorants. atta and rawa. skin and hair care. oral care.
THE BIG INDIAN ROMANCE Rural population larger than europe(800 million) Low growth in agriculture. RURAL.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. local and regional players. .however rural income are growing faster with 70% population here.company faces competition from international.
retargeted.” write Leonard M. Government grants and subsidies. Morgan and Shellye Archambeau. . Howard L. the authors of Marketing that Works. Lodish. Though the company was ‘extremely innovative’ the way it handled the rural communications plan was very traditional. and relaunched Lifebuoy.employment grants-Rs 40000cr Did Hindustan Unilever Get Its Rural Pitch Right? A new book from Wharton School Publishing is critical of Hindustan Unilever’s advertising strategy in India. they add. “HUL missed an opportunity for increased marketing productivity when they repositioned.
he added. Lifebuoy is ‘one of Unilever’s oldest brands’ with more than a hundred-year history. 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. and screened some options to roll out one option that everyone was happy with. A better strategy. Sundaram. HUL.” reads an observation in a chapter titled ‘entrepreneurial advertising that works’. according to the authors.” Advertising strategy came for mention when the company reported the second quarter results.” The advertising spends have not been linear for the company. Director (Finance & IT). “Lifebuoy has become more than just a red . said: “We have been phasing our advertising spends depending on the launches and relaunches of brands. a few days ago. The company’s advertising and promotional spends during the quarter fell to Rs 336 crore. Ogilvy and Mather (O&M). from the earlier Rs 345 crore.The company basically worked with “one agency. Mr D.
targeted “10. “Differentiating soap products on the platform of health takes advantage of an opening in the competitive landscape for soap. and thus has increased sales of its low-cost. “or the villagers themselves might also be able to generate very effective communications vehicles.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. Prahalad notes. HUL. The O&M strategy. Prahalad’s The Fortune at the Bottom of the Pyramid .” reads a quote in the book from C. has been able to link the use of soap to a promise of health as a means of creating behavioural change.” The authors are of the view that government workers who have been interacting with villagers might have come up with some excellent ideas.” says the site. through its innovative communication campaigns.” . in a paragraph on innovation. mass-market soap.bar of soap – today the brand provides hygiene and health solutions for families. as explained by Mr Lodish et al.K.
why didn’t 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.” 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. 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. . “As a big company.” The HUL example.So. which is one of the many discussed in the book. many times it is difficult to change the procedures without creating significant political problems. The strategic tie-up aims to build long term capabilities and bring ‘in-store’ execution focus in servicing the Company’s Modern Trade customers.
The operations will begin with the existing Modern Trade in-store execution team of HUL moving into HUFS. It has leading edge capabilities in servicing Modern Trade focused on shelf filling. This includes: . Other Acquisition Hindustan Unilever has acquired several Indian FMCG companies so far.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. “Modern Trade in India is growing and evolving very rapidly and our strategy for winning in this growing retail market is to win at point-of-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 company’s marketing strategy in Modern Trade”. Smollan Holdings is one of the leading ‘in-store execution and field services’ companies internationally. logistics for merchandising materials and in store execution.
trained and guided by HLN's expert managers and trainers.000 consultants. Hindustan Unilever Network is the direct selling channel of the company. all independent entrepreneurs.• • • • Tata Oil Mills Company Brooke Bond Lipton India Modern Foods It acquired Kissan brand from UB group. Dollops ice cream brand from Cadbury India. It has about 350. a home water purifier which supplies drinking water without boiling/need of electricity. . Lakme cosmetics brands from Tata. It has also launched Pureit.
Over the past six months. These premium brands retail not in neighborhood small stores but in supermarkets and hypermarkets. where Indian customers love to touch and feel products.NEW INITIATIVE Bringing High-End Dove To India Baillie is fighting back. Hindustan Unilever launched a high-end range of Pond’s skin care and Dove hair care products from Unilever’s international portfolio. .
Analysts believe the company’s current strategy of concentrating on premium products and marketing them in the large retail stores is a winning one. But Hindustan Unilever’s brand is still tops. . Sumeet Budhraja. focusing on the Knorr brand of soups and curry mixes—ideal for the Indian market. That has spawned a host of competitive fairness creams. has made the brand a winner. Baillie is also getting aggressive on foods. at onethird the price of established Indian brands such as Aqua guard. consumer analyst at Mumbai brokerage First Global Securities. says that Hindustan Unilever “could have addressed a lot more categories. which Hindustan Unilever exploited with the launch of water purifier Pureit in 2005. and sunblock lotions.Hindustan Unilever is also milking one of its top brands—Fair & Lovely. The advertising campaign. soaps. tone for many of India’s complexion-conscious consumers. a hot-selling “fairness” cream. which promises a lighter skin. but they are more focused and regaining their aggressiveness. which suggests that regular use of the cream helps women gain confidence and makes them eligible for marriage.” He points to the demand for safe drinking water in India.
2007. and rural development. the company’s sales grew 13%. care for the destitute and HIV-positive. most recent being the village built by HUL in earthquake . Reason enough to keep patrolling those store aisles. women empowerment. In the quarter ended June. SERVICE TO SOCIETY HUL believes that an organisation's worth is also in the service it renders to the community. and Baillie is pleased with the modest turnaround.These efforts have delivered some promising results.6%. and water management. It is also involved in education and rehabilitation of special or underprivileged children. HUL has also responded in case of national calamities / adversities and contributes through various welfare measures. HUL is focusing on health & hygiene education. with net profit up 29.
affected Gujarat. reaching out to 100. In 2001. Shakti aims to have 100. The program now covers 15 states in India and has over 31. Shakti also includes health and hygiene education through the Shakti Vani Programme. HUL is creating micro-enterprise opportunities for rural women.000 women entrepreneurs in its fold. . thereby improving their livelihood and the standard of living in rural communities. The programme endeavours to induce adoption of hygienic practices among rural Indians and aims to bring down the incidence of diarrhoea.000 villages. the company embarked on an ambitious programme. By the end of 2010. and creating access to relevant information through the iShakti community portal. and relief & rehabilitation after the Tsunami caused devastation in South India. Shakti. HUL is also running a rural health programme – Lifebuoy Swasthya Chetana.000 villages and directly reaching to 150 million rural consumers. The vision is to make a billion Indians feel safe and secure. touching the lives of over 600 million people. Through Shakti. It has already touched 70 million people in approximately 15000 villages of 8 states.000 Shakti entrepreneurs covering 500.
PERFORMANCE REVIEW Leadership Across Diverse Fmcg Category .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.
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 company’s 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. policies. Primary data was collected by the Questionnaire & Personal Interview Method Sources of secondary data : Used to obtain information on. HUL and its competitor history.com # Magazines-Business Today # Newspapers-The Economic Times .Google. As the prime objective of the project is to compare Hindustan Unilever Ltd’s(HUL) with the existing competitors in the market and the impact of Procter & Gamble (PG). 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. Nivea.unilever. wherever required. www. and L’Oréal on HLL. procedures etc. # Internet-www.com. current issues.
# To these geographical area questionnaire was given.Procedure of research methodology # Target geographic area was Delhi. the questionnaire was a combination of both open ended and closed ended questions. . # Some dealers were also interviewed to know their prospective. # Finally the collected data and information was analysed and compiled to arrive at the conclusion and recommendations given. Interviews with the honour of retailer of HUL were also conducted. # The date during which questionnaires were filled was between three week.
Cost involved in collecting the data was high. .LIMITATIONS While undertaking my study I was encountered with some limitations: Limited time was provided to complete the study. 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. Target geographic area was limited to Delhi.
ANALYSIS INTERPRETATION AND 3rd consecutive yearof accelerated growth in FMCG portfilio. Build momentum to the water business. Strong commitment to governance and CSR. Manage cost inflation effectively to improve margin through pricing. Build on competitive capabilities across the business system.Growth broad based and across all categories. Successfully implement the food strategy. . FMCG market expected to maintain current growth levels.cost saving and better mix.
In this project it possible to see the success of Hindustan Unilever’s in it’s indorse its strong potential to continue to do well. . and of great benefit to the company in furthering its competitive advantage.CONCLUSION This company project has demonstrated “HINDUSTAN UNILEVER’S MARKETING STRATEGIES AND POLICIES” that has proved to be extensive through.
“Managing Brand Equity”. “Focus” Harper Collins Publishers Ltd.com . Prentice Hall of India Ltd. David A.BIBLIOGRAPHY • • • • • • • A L Ries (1996). The Free Press. The Free Press.unilever. Philip Kotler (Eighth Edition) “Marketing Management”. David A. The Economic Times – “Brand Equity” Market survey and questionnaires www. Aaker (1996) “Building Strong Brands”. Aaker (1991).
QUESTIONNAIRE 1. Which brand of FMCG products do you use? Hindustan Unilever P&G Nivea Others 3. Do you use FMCG products? Yes No 2. Are you aware of any campaign of the above brands? . Where do you buy FMCG products from? Super stores Retail Stores Others 4.
Describe Hindustan Unilever in one word? 8. Do you think Hindustan Unilever’s product is easily available in market ? Yes No 7. Your comments on Hindustan Unilever’s product? _______________________________________________ . Which Hindustan Unilever’s product do you usually prefer or use? Bathing soaps Foods others Skin care Deodorants 6. Yes No 5.
PARTICULARS PAGE NO.CONTENTS S NO. 1 2 Introduction History Limited 3 4 5 6 7 8 9 10 Oganisational Structure Present status HUL’s new growth strategy Product profile SWOT analysis PEST analysis Future competitive strategy HUL-comparitive business analysis of Hindustan Unilever .
11 12 13 14 15 16 17 Joint Ventures New initiatives Research Methodology Analysis Conclusion Bibliography Questionnaire .