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: Date: Candidate’s signature Name: Enrol.no.:

Countersigned Name: Supervisor Delhi college Of Advanced Studies

PREFACE
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.

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.

without whose generosity this project would have been difficult for me to complete. .Finally I extend my sincere thanks to all those who have given me encouragement throughout.

The company focuses on efficient delivery to consumers with an improved supply chain. The company’s history dates back to 1931 when Unilever set up its first Indian subsidiary. is a fast moving consumer goods (FMCG) company based in India. followed by Lever Brothers India Limited (1933) and United Traders Limited (1935). Hindustan Unilever Ltd (HUL) has grown from strength to strength with new technologies being introduced to make the HLL consumer goods business.1 FMCG is able to share with their market insights based upon unparalleled breath of consumer goods experience. Effective July 19. 2007 the company has changed the name to Hindustan Unilever Limited. Hindustan Vanaspati Manufacturing Company. a subsidiary of Unilever. one of the most efficient in the world. The Hindustan Unilever Ltd (HLL) is India’s no. These three companies merged to form Hindustan Lever Limited in November 1956. Hindustan Unilever Limited (HUL). brand building initiatives and innovation.INTRODUCTION The Hindustan Unilever Ltd’s(HUL) Inc has taken the opportunity to offer us a broader view of FMCG category. .

Hindustan Unilever is Unilever's main operating business in India. In addition to FMCG products it is the country's biggest exporter of tea. including several not occupied by Unilever in other markets such as preserves and bakery products. which sells soap to more than 500 million Indians.based Procter & . may see global revenue growth slow in 2010 as Procter & Gamble Co.Now Cincinnati. It is the country's biggest consumer goods company. and far and away the leading advertiser. Unilever.which has helped the company to sustain its leadership position in the overall FMCG category in India. and is also one of the country’s top five exporters. prior to restructuring. although performance slowed dramatically between 2000 and 2004. HUL inhabits virtually every sector of the consumer goods market. 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. and ITC Ltd. It is generally acknowledged to be one of India's best-run businesses.

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.including over 1. 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 .

300 managers." HUL meets everyday needs for nutrition. it has been recognised as a Golden Super Star Trading House by the Government of India.PRESENT STATUS Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods company. sales The mission that inspires HUL's over 15. . They endow the company with a scale of combined volumes of about 4 million tonnes and of Rs. and personal care with brands that help people feel good.000 employees. including over 1. It is a mission HUL shares with its parent company. Unilever.000crore. hygiene. look good and get more out of life. HUL is also one of the country's largest exporters. touching the lives of two out of three Indians with over 20 distinct categories in Home & Personal Care Products and Foods & Beverages.10. is to "add vitality to life.

and about 250 million rural consumer. The operations involve over 2. branded staples. HUL has traditionally been a company. Fair & Lovely. Rin.soaps. ice cream and culinary products.000 suppliers and associates. HUL's distribution network.like Lifebuoy. Clinic. Surf Excel. many with post-doctoral experience acquired in the US and Europe.000 individual shareholders and financial institutions. The Hindustan Unilever Research Centre (HLRC) was set up in 1958. Close-up. detergents. Lux. Kwality Wall's – are household names across the country and span many categories . Pond's. HUL's brands .000 redistribution stockiest. covering 6. coffee. Kissan. tea.3 million retail outlets reaching the entire urban population . comprising about 4. which incorporates latest technology in all its operations. Pepsodent. Lakme. Brooke Bond. HLRC and the Global Technology Centres in India have over 200 highly qualified scientists and technologists. Wheel. Knorr-Annapurna. and now has facilities in Mumbai and Bangalore. They are manufactured over 40 factories across India. .which holds 51. Sunsilk.55% of the equity. The rest of the shareholding is distributed among 380. personal products.

is now passe.” insists Sudhanshu Vats. now is focused on product innovation. “Price cut or hike is not a long-term growth strategy.” he said. category head.” . Pricing. 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. home care. Hindustan Unilever Ltd (HUL). in fact. “Our strategy for growth.HUL’S NEW GROWTH STRATEGY After having fought a bitter price battle for market share with its rivals. Indian subsidiary of the AngloDutch consumer goods company Unilever Plc. is now working on a new growth strategy for its laundry business. HUL says it is quite upbeat about the segment and says the laundry segment is one of its “key growth areas.

with a total share of about 18%. However. according the market research firm ACNielsen. increased its market share by 2 percentage points in the same period. According to ACNielsen.5%.“We have done key innovations across the product portfolio and it is working for us. P&G also gained 0. the laundry industry in India was worth Rs7. HUL doesn’t .8% in the quarter ended June from 35.908 crore in 2006 and rose 8.7% percentage points to 13. “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. the Ahmedabadbased manufacturer.5 percentage points. up to a 7. this time.4% over 2005. Nirma Ltd.” HUL’s market share in the laundry segment grew to around 37.6% share. the increase was not at the expense of price war with its multinational rival Procter & Gamble Co. a value brand that. however.5% in the same period last year. Wheel.” says Vats. according to Vats contributes around 50% of HUL’s laundry segment revenues. saw its market share dip by 1.

report its laundry revenues separately but puts them under the soaps and detergent category. . HUL’s soaps and detergents segment contributed around Rs5. 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.” says Unmesh Sharma. the industry is stabilizing. 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.596 crore to the company’s total sales of Rs12.103 crore. an analyst at Macquarie Securities here. In 2006.

“Trends suggest that the usage of detergents has gone up as a result. Also. .“Consumers today are buying more clothes.” says Vats.

colour cosmetic  Foods tea. culinary products. oral care. fabric wash. coffee. “Still. home care. Modern Foods ranges .” PRODUCT PROFILE HUL’s business activities are divided into four broad areas:  Home and personal care personal wash. deodorants and talcs. it is too early to say what result their new strategies will yield. seem right. such as promotional campaigns and advertising. hair care. branded staples.” Still. analysts remain cautious.” says Macquarie’s Sharma. people want to use better and branded products.with premium quality of clothes. ice creams. skin care. “Some of HUL’s recent moves.

rice BRANDS . marine products. New Ventures Hindustan Lever Network.  Exports HPC. Ayush ayurvedic products and services. Pureit water purifiers. Sangam. beverages.

SWOT ANALYSIS Strength . Lux. Surf Excel. Pond s. Brooke Bond. Lakme. They include: Lifebuoy. Wheel. Fair & Lovely. Sunsilk. KnorrAnnapurna and Kwality Walls. Rin.HUL s brands are household names across the country. Kissan. Close-up. Pepsodent. Clinic.

6% from personal care products. over 15. 4." 3. is to "add vitality to life. it has been recognised as a Golden Super Star Trading House by the Government of India. ice creams.. 10. . and other products. Weakness 1.1.5% from beverages.300 managers. Low cost of production due to economic of scale. Continuous threat from other competitors. Due to its long presence in India – has deep penetration – 20 consumer product category. exports. Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods company.000 employees. including over 1. Better market penetration. 2. The company derives 44. HUL is also one of the country's largest exporters. That means higher profits and / or more competitioners.3% of its revenues from soaps and detergents. 26. touching the lives of two out of three Indians with over 20 distinct categories in Home & Personal Care Products and Foods & Beverages. and the rest from foods. 5.

5. HLL's tea business has declined marginally. 3. Increasing per capita national income resulting in higher disposable income. Increasing gifts cultures. . 2. Globalization. cost pressure is likely due to rising crude and freight costs. 4. Growing middle class and growing urban population.Opportunities 1. Threats 1. Increasing departmental stores concept – impulse @ at cash counters. reason is that.

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.

Pears and Rexona • Laundry items: Surf Excel. Pond’s and Vaseline . Rin and Wheel • Skin care: Fair & Lovely. Hamam. Hindustan Unilever Ltd(HUL) offer such product. The wide variety products offered by the company include: The company’s popular product’s include: • Bathing soaps: Lux. Breeze.FIVE P’S OF MARKETING Product Satisfaction suffices. Liril. But the winner will surpass them by constantly exceeding her expectation. Lifebuoy. delivering to her door step additional benefits which she would never have imagined possible. But delight dazzles the average company will compete for customer by conforming to her expectation consistently. Dove.

• 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: .

So every customer segment has different price expectation from the product. and then progressively moving through them. 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 . Therefore maximizing the returns involves identifying right price level for each segment. 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. . Pricing Make no mistake.

Physical Distribution – “Place” BRAND ISN’T THE ONLY ANY MORE. In a product and price parity situation. swamp prime television with best Ads. 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. 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. It takes much more time and effort to build. . but once built. The fundamental axiom of Indian consumer market is this: You can set up a state-of –the-art manufacturing facility. Buyers are paying for distribution equity not brand equity and market shares. distribution equity is much together to erode. Marketers and finance manager need a new term to evaluate their business: Distribution Equity. you would be know of selling your products. hire the hottest strategies on the block. but the end of it all.

language.3 million retail outlets reaching the entire urban population.000 suppliers and associates.television has already primed and population for consumption. Hindustan Unilever Ltd(HUL) distributes the product in the manner stated above. and the marketer who can get to the to the consumer ahead of competition will give a hard – to – overtake lead. life style.India – The operations involve over 2. and about 250 million rural consumers. covering 6.000 redistribution stockists. But getting their means managing wildly different terrains-climate. Once the stock product reaches retailers. transport and communication network. value system. And your brand equity isn’t going to help when it comes to tackling these issues. comprising about 4. the prospective customers can have access to the product. HUL's distribution network. 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.

reaches more than a million retailers. Hindustan Unilever Ltd(HUL) marketing costs. Beside use of improved logistics. . This increase in distribution is going to be accompanied by reduction in channel costs. they believe that selling FMCG is it like selling soft drinks. The other reason is arch rival Procter & Gamble Co. it has installed visi colors at several outlets. Looking at the low penetration of few products. is much higher than Procter & Gamble Co. To address the issue of product stability. a distribution expansion would itself being incremental volume.Hindustan Unilever Ltd(HUL) distribution network has expanded. The company is looking to reduce this parity level. at 18% of total costs. At Hindustan Unilever Ltd(HUL). Hindustan Unilever Ltd(HUL) is also attempting to improve the distribution quality. 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.

It often both attracts and generates arm feelings. that produced just the value vacuum that Hindustan Unilever Ltd(HUL) was looking to fill. 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 . The strategic response address the emotional appeal of the band to the child within the adult. More often than not. a successful campaign has a stronger element of the unexpected a quality that good advertising shares with much worthwhile literature. Effective advertising is rarely hectoring or loudly explicit…. Naturally. 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. To penetrate into the inner recesses of her memory. the receiver must at least half want it to. grab her acceptance and then extract retention competing with thousands of other units of communication trying to do the same. communication must first ensure exposure. and be prepared too take step toward the sender. grab her attention evoke her comprehension. Finding showed that the adults felt too conscious to be seen consuming a product actually meant for children.Promotion If an advertisement is to communicate effectively.

supported . Ad since any discussion today would be incomplete without mention ‘e’ word. As well as outdoor and radio ads. 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. 30 catteries in Mumbai have been selected. researching and improving the newer products that haven’t taken off. Beside the company website (i. specially targeted during festivals and events such as Valentines day. etc…. that the company has launched.com). a home water purifier which supplies drinking water without boiling/need of electricity . 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.e. it had also entered into various marketing relationship with other portals. the management plans to tap this new channel of marketing. It’s a combination of spiffing up its key brand. All ICICI’ s ATM a message flashes on the screen as soon as customer insert his ATM card.unilever. In cinemas. Something familiar is planned for phone-book as well.daag ache hai for surf excel” have been sure shot winner with the audience. It has also launched Pureit. ad agency contract has created communication for cinemas and even ATM machines for the brand. www.

and the winner will be that super value marketers…. and the discounting era grew strong. Today’s consumer demanding “more for less”. Positioning In the 1970s consumers were ready to pay “more for more”. consumers began to demand “more for same”. and luxury goods flourished. In the 1980s.with high ad – spends that Hindustan Unilever(Ltd) hopes will see it emerges stronger after the current slowdown. 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. as well as expand the market. 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 consumer’s long standing perception of them… Hindustan Unilever(Ltd) is an anchor in sea of consumer products. as www. Positioning of individual product: 1) Lifebuoy is ‘one of Unilever’s oldest brands’ with more than a hundred-year history.com informs. Since Hindustan Unilever(Ltd) is more clearly associated with a particular set of attributes in terms of benefits and prices. today customer uses complicated decision making process to assess the alternative before making a purchase. As a variety of competitive claims assails her senses. a hot-selling “fairness” cream. “Lifebuoy has become more than just a red bar of soap – today the brand provides hygiene and health solutions for families 2) Fair & Lovely. . which promises a lighter skin tone for many of India’s complexion-conscious consumers . the quicker becomes her search process.unilever.

HINDUSTAN UNILEVER’S MARKET SEGMENTATION Market place for any product is comprised of many different segments of consumers. Markets segmentation can be defined in a number of ways such as:  Demographic variables (e. 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. gender. Consumers are groups. material states income etc…)  The lifestyle of consumers (i.g. each with different needs and wants.  Hindustan Unilever(Ltd) takes into account all these factors when producing a range of products.e. such as the: .

 Impulse segment – these products are often purchase on impulse. . They include product such as close up. Break segment – products which are normally consume as a snatched break and often with tea and coffee. taken home consumed at a later stage.  Take home segment – this describes product that are normally purchased in supermarkets. used these and then.

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

“Our strategy for growth.” says Vats. new consumer and retail trends and aggressive marketing and promotions. HUL doesn’t report its laundry revenues separately but puts them under the soaps and detergent category. the laundry industry in India was worth Rs7. now is focused on product innovation.596 crore to the company’s total sales of Rs12.8% in the quarter ended June from 35. HUL says it is quite upbeat about the segment and says the laundry segment is one of its “key growth areas. HUL’s soaps and detergents segment contributed around Rs5. This comes even as Unilever is scouting for a potential buyer for its laundry business in the US.5% in the same period last year.103 crore. . In 2006.4% over 2005.” “We have done key innovations across the product portfolio and it is working for us. According to ACNielsen.908 crore in 2006 and rose 8.” he said. “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.” HUL’s market share in the laundry segment grew to around 37.

the India hypermarket chain. COMPETITIVE STRATEGY As Competition Heats Up. the industry is stabilizing. 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.“Laundry has been an attractive segment in the past and is likely to keep growing in the near future. the managing director of Hindustan Unilever. The recent price war between companies led to erosion in their profitability but now. India’s premier consumer-products company. India’s Top Consumer-Products Company Woos Affluent Shoppers With Global Brands Like Dove. Baillie. wants to . That’s how Douglas Baillie likes it.

It’s primary market research at its most elemental. But India’s recent retail boom has created large stores and malls. and the calls he makes on the headquarters of the big retail chains. Hindustan Unilever has traditionally relied on small traders and mom-and-pop corner stores to retail its products. and how shoppers are reacting to competitive brands. .” says an amazed Damodar Mall. India’s largest retailer and a former manager at Hindustan Unilever.see how his products are stocked. “I can’t imagine any head from Lever House ever visiting other company offices like this. whose executives used to have emissaries make obeisance at Lever house in downtown Mumbai. chief executive of innovation and incubation at Pantaloon Retail. so the company wants to make sure it’s in with the new marketing crowd. and it’s best done incognito. This is quite a change for Hindustan Unilever. what consumers are buying. Hence Baillie’s Hypercity visits.

The company. sauces and tea. soaps. and shampoos to soups. Finnish . which is practically synonymous with India. makes everything from detergents. Yet early this year. 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.

All this has taken a toll on Hindustan Unilever’s operating margins. “It is a big game .2% to 24. and L’Oréal. including the popular Lux. Nivea. is down from 55.3%. Hindustan Unilever’s managers hope their revenues from big retail will increase from 5% today to over 25% in 2012. In the last year.5% of India’s total $336 billion retail market. currently just 3. will grow to 28% by 2017. Now Hindustan Unilever is under siege from aggressive Indian and foreign competitors such as Procter & Gamble (PG). after ringing up India-based sales of $3.5 billion. Hindustan Lever tea brands like Brooke Bond and Lipton have dipped from a combined market share of 29.2% to 54%. These newly affluent shoppers present the best hope for the company’s future in India. organized retail. ACNielsen data shows. According to retail consultant KSA Technopak.84% now. That’s why the company is wooing consumers in big retail stores. down from 21% a few years ago to just 11. Favorite detergent brands like Surf Excel and Rin are barely hanging onto their 37% share. Hindustan Unilever’s lead in hand soaps.handset maker Nokia (NOK) dislodged it as the multinational with the highest revenues in India.

the crown jewel whose managers had free rein to develop and build brands suitable for the local market. Yet this is still a dramatic change for Hindustan Unilever which. The takeover of Hindustan Lever by Unilever became evident in March. 2006. a Zimbabwe-born British national. while its subsidiaries will sell the products. fitting in quite nicely with India’s turn towards more international products being sold in supermarkets. This means that all of Unilever’s brands will be available across global markets. .for us. Hindustan Unilever’s strategy is to market its premium products through the hundreds of megastores springing up across India. Sundaram.Parent Unilever will develop the brands and streamline product offerings across the world. became the first foreigner in four decades to head the Indiancompany. not long ago. when Baillie. was the most successful and profitable company in the Unilever group.” says D. That dovetails with parent company Unilever’s new global realignment of products. Hindustan Unilever’s finance director.

then known as Hindustan Lever. 2007. not a multinational. of India’s Then in management graduates made their careers February.From Local Player To Multinational Overnight the change sent shock waves through India. and the cream there. For many decades most Indians thought Hindustan Lever was a local company. was rechristened Hindustan Unilever to reflect its parentage. . the company.

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. And there was some stiff competition from rival Procter & Gamble. 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. For instance.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. But the rich margins of the past have not returned.5 billion for five years while operating profit plunged 37%. The effect: The company’s sales and operating profits stagnated at $2. thanks to price increases. to $274 million in 2004. . While the strategy aimed to conserve management energy.

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. the company’s home and personal care businesses account for 80% of revenues and 85% of profits at . In India.

5%. Hindustan Unilever executives are realistic about the new era in which it now operates. According to ACNielsen.7% in March. we aren’t the only ones seeing it. the Tata Group’s beverage company Tata Tea overtook Hindustan Unilever as India’s largest selling tea brand. it has phased out more food products—wheat flour. executive director in charge of the home and personal care business. admits that it’s now “tougher to hold on to market share.1% to 19. If India is a great story. to 19. frozen bread—than it has launched. But today even L’Oreal has sachets of its Fructis shampoo.Hindustan Unilever. Tata Tea is exultant.” Rivals like P&G and Nivea have also copied Hindustan Unilever’s best innovation: the small shampoo sachets it pioneered in the 1980s. confectionery. Indeed. while Hindustan Unilever slipped from 26. 2007. Managing . 2006. Currently. 80% of Indian shampoo sales come from sachets. which sold for less than 2 cents each and which expanded the market for Hindustan Unilever products among India’s rural masses.9% in July. Tata Tea’s market share increased from 16. Nitin Paranjpe. while the company’s track record in foods has been dismal. In June.

Director Percy Siganporia says the gain is “a dream comes true for us. Bernstein in New York. an analyst at Sanford C.'' Hindustan Unilever Ltd. the world's largest consumer-goods maker. according to Ali Dibadj. will continue to gain share in the next five years in India. who rates the stock ``outperform. lost ground in shampoo.” FUTURE COMPETITIVE STRATEGY 2010 Expectations P&G. 52 percent owned by the London..and Rotterdam-based parent. .

Its share of the shampoo market declined by more than a percentage point to 47.'' said Anand Shah. who has a ``neutral'' rating on the stock. an analyst at Angel Broking in Mumbai. toothpaste and tea in the quarter ended Sept. ``It has the ability to take losses in this segment as long as it grows its sales.bath soap.7 percent. the largest Indian cigarette maker and partly owned by British American Tobacco Plc. according to the company. the company said. compared with the year earlier. The price of palm oil. 30. used to make soaps and foods. has surged 70 percent in the past year.care portfolio. It started selling more brands including Fiama Di Wills shampoo and Superia soap last year as the government raised tobacco taxes. is also making inroads. `Profitable' Cigarettes The tobacco maker ``has a very profitable cigarettes business which will help it to invest and expand its personal. . 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. ITC.

India is Unilever's biggest market in Asia. He expects the stock to drop to 180 rupees ($4. profitability will continue to be under pressure. analyst Unmesh Sharma. The company has a market value of about $11.``Given the competition. generating about 6 percent of annual sales.57) in the next year from 190. who has an ``underperform'' rating on Hindustan Unilever. HUL-UNIQUELY CREATE VALUE  Our strategy POSITIONED TO  Competitive strengths .9 rupees.8 billion. 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.'' said Macquarie Securities Ltd.

 Leverage positive impact of growing Indian economy on consumer spending.  Grow a profitable foods and top end business.  Grow the bottom line ahead of the top line. 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. .

 Strong commitment to sustainable development. Competitive Strengths Corporate Social Responsibility-Aiding In The Development Of The Country .

HINDUSTAN UNILEVER LIMITED COMPARATIVE BUSINESS ANALYSIS Hindustan Unilever Limited Formerly known as Hindustan Lever Limited. Ice Creams and Other. industrial . Impact of community • business and social impact can go together. • Shakti vani: one-to-many communication for category growth • ishakti: customized interaction with remote consumers. Beverages.Shakti Three shakti initiatives • Shakti entrepreneur. Exports. currently~44000 women cover 1. The Group operates through seven segments: Soaps and Detergents. The products include home and personal care products. foods and beverages. Personal Products.25000 villages. Foods. The Group's principal activities are to manufacture and market consumer products. • partnerships with diverse stakeholders.

which has helped the company to sustain its leadership position in the overall FMCG category in India. footwear and carpets. bulk chemicals. Foods and beverages includes tea. marine products and mushrooms. perfumery. yeast. ice creams. Hindustan Unilever markets consumer goods throughout India. fruit and vegetable products. Home and personal care products consists of personal and fabric wash. animal feeds. fertilisers. Its brands are spread across 20 consumer product categories. cooking fats and oils. atta and rawa. thermometers and plantations. seeds. oral care. brand building initiatives and innovation. plant growth nutrients. salt. household. Industrial and agricultural products includes specialty chemicals. processed-tri-glycerides and agri commodities. rice. tomato products. coffee. skin and hair care. The company focuses on efficient delivery to consumers with an improved supply chain. This analysis compares Hindustan Unilever Limited with three other companies in closely related industry sectors. deodorants. colour cosmetics and baby care. leather. The . bakery fats.and agricultural products.

company faces competition from international. local and regional players.  Structural changes in the economy which are affecting this are:  Disintermediation in the agricultural market price discovery mechanism has benefited farmers. .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. RURAL.

“HUL missed an opportunity for increased marketing productivity when they repositioned. the authors of Marketing that Works. Government grants and subsidies. Howard L.” write Leonard M. and relaunched Lifebuoy. they add. Though the company was ‘extremely innovative’ the way it handled the rural communications plan was very traditional. . retargeted. Lodish. Morgan and Shellye Archambeau.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.

HUL. from the earlier Rs 345 crore. Mr D. The company’s advertising and promotional spends during the quarter fell to Rs 336 crore. he added. and screened some options to roll out one option that everyone was happy with. a few days ago. Ogilvy and Mather (O&M).The company basically worked with “one agency. said: “We have been phasing our advertising spends depending on the launches and relaunches of brands.” reads an observation in a chapter titled ‘entrepreneurial advertising that works’.” Advertising strategy came for mention when the company reported the second quarter results. A better strategy. 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. “Lifebuoy has become more than just a red . Lifebuoy is ‘one of Unilever’s oldest brands’ with more than a hundred-year history. Sundaram. according to the authors.” The advertising spends have not been linear for the company. Director (Finance & IT).

Prahalad notes. Prahalad’s The Fortune at the Bottom of the Pyramid . mass-market soap.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. has been able to link the use of soap to a promise of health as a means of creating behavioural change.” reads a quote in the book from C. in a paragraph on innovation. as explained by Mr Lodish et al.K. The O&M strategy. “or the villagers themselves might also be able to generate very effective communications vehicles.” says the site. and thus has increased sales of its low-cost. targeted “10. through its innovative communication campaigns.bar of soap – today the brand provides hygiene and health solutions for families. HUL.” The authors are of the view that government workers who have been interacting with villagers might have come up with some excellent ideas.” . “Differentiating soap products on the platform of health takes advantage of an opening in the competitive landscape for soap.

2008. The strategic tie-up aims to build long term capabilities and bring ‘in-store’ execution focus in servicing the Company’s Modern Trade customers. 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.” The HUL example. which is one of the many discussed in the book.” 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. . 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. many times it is difficult to change the procedures without creating significant political problems.So.

This includes: . logistics for merchandising materials and in store execution. 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. The operations will begin with the existing Modern Trade in-store execution team of HUL moving into HUFS. “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. It has leading edge capabilities in servicing Modern Trade focused on shelf filling.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. Other Acquisition Hindustan Unilever has acquired several Indian FMCG companies so far.

trained and guided by HLN's expert managers and trainers. Hindustan Unilever Network is the direct selling channel of the company. all independent entrepreneurs.000 consultants.• • • • Tata Oil Mills Company Brooke Bond Lipton India Modern Foods It acquired Kissan brand from UB group. a home water purifier which supplies drinking water without boiling/need of electricity. . It has also launched Pureit. It has about 350. Dollops ice cream brand from Cadbury India. Lakme cosmetics brands from Tata.

NEW INITIATIVE Bringing High-End Dove To India Baillie is fighting back. These premium brands retail not in neighborhood small stores but in supermarkets and hypermarkets. Over the past six months. Hindustan Unilever launched a high-end range of Pond’s skin care and Dove hair care products from Unilever’s international portfolio. where Indian customers love to touch and feel products. .

Baillie is also getting aggressive on foods. which Hindustan Unilever exploited with the launch of water purifier Pureit in 2005. has made the brand a winner.Hindustan Unilever is also milking one of its top brands—Fair & Lovely. but they are more focused and regaining their aggressiveness.” He points to the demand for safe drinking water in India. soaps. But Hindustan Unilever’s brand is still tops. a hot-selling “fairness” cream. which suggests that regular use of the cream helps women gain confidence and makes them eligible for marriage. says that Hindustan Unilever “could have addressed a lot more categories. at onethird the price of established Indian brands such as Aqua guard. Analysts believe the company’s current strategy of concentrating on premium products and marketing them in the large retail stores is a winning one. That has spawned a host of competitive fairness creams. consumer analyst at Mumbai brokerage First Global Securities. Sumeet Budhraja. which promises a lighter skin. tone for many of India’s complexion-conscious consumers. and sunblock lotions. . focusing on the Knorr brand of soups and curry mixes—ideal for the Indian market. The advertising campaign.

These efforts have delivered some promising results. 2007. care for the destitute and HIV-positive. most recent being the village built by HUL in earthquake . and Baillie is pleased with the modest turnaround. with net profit up 29.6%. HUL has also responded in case of national calamities / adversities and contributes through various welfare measures. the company’s sales grew 13%. It is also involved in education and rehabilitation of special or underprivileged children. and rural development. In the quarter ended June. HUL is focusing on health & hygiene education. SERVICE TO SOCIETY HUL believes that an organisation's worth is also in the service it renders to the community. women empowerment. and water management. Reason enough to keep patrolling those store aisles.

The programme endeavours to induce adoption of hygienic practices among rural Indians and aims to bring down the incidence of diarrhoea.000 women entrepreneurs in its fold. In 2001. touching the lives of over 600 million people.000 villages. Through Shakti.000 villages and directly reaching to 150 million rural consumers. . and creating access to relevant information through the iShakti community portal. and relief & rehabilitation after the Tsunami caused devastation in South India. Shakti also includes health and hygiene education through the Shakti Vani Programme. thereby improving their livelihood and the standard of living in rural communities.affected Gujarat. By the end of 2010. HUL is creating micro-enterprise opportunities for rural women.000 Shakti entrepreneurs covering 500. HUL is also running a rural health programme – Lifebuoy Swasthya Chetana. The program now covers 15 states in India and has over 31. It has already touched 70 million people in approximately 15000 villages of 8 states. reaching out to 100. Shakti aims to have 100. the company embarked on an ambitious programme. Shakti. The vision is to make a billion Indians feel safe and secure.

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 .If Hindustan Unilever straddles the Indian corporate world.

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 .

Google.unilever. 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. procedures etc.com.com # Magazines-Business Today # Newspapers-The Economic Times . wherever required. www. and L’Oréal on HLL. Nivea. HUL and its competitor history. policies. Primary data was collected by the Questionnaire & Personal Interview Method Sources of secondary data : Used to obtain information on. # Internet-www. 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).RESEARCH METHODOLOGY Achieving accuracy in any research requires in depth study regarding the subject. current issues.

. the questionnaire was a combination of both open ended and closed ended questions. # Some dealers were also interviewed to know their prospective. Interviews with the honour of retailer of HUL were also conducted. # The date during which questionnaires were filled was between three week. # To these geographical area questionnaire was given.Procedure of research methodology # Target geographic area was Delhi. # Finally the collected data and information was analysed and compiled to arrive at the conclusion and recommendations given.

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

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 Manage cost inflation effectively to improve margin through pricing.  Successfully implement the food strategy.ANALYSIS INTERPRETATION  AND 3rd consecutive yearof accelerated growth in FMCG portfilio.cost saving and better mix.Growth broad based and across all categories. .  Strong commitment to governance and CSR.  Build on competitive capabilities across the business system.  Build momentum to the water business.  FMCG market expected to maintain current growth levels.

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. . 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.

The Free Press. Prentice Hall of India Ltd. David A. David A. Aaker (1991). “Focus” Harper Collins Publishers Ltd.BIBLIOGRAPHY • • • • • • • A L Ries (1996). Aaker (1996) “Building Strong Brands”. The Free Press. “Managing Brand Equity”. The Economic Times – “Brand Equity” Market survey and questionnaires www.com . Philip Kotler (Eighth Edition) “Marketing Management”.unilever.

Are you aware of any campaign of the above brands? . Which brand of FMCG products do you use?  Hindustan Unilever  P&G  Nivea  Others 3. Do you use FMCG products?  Yes  No 2.QUESTIONNAIRE 1. Where do you buy FMCG products from?  Super stores  Retail Stores  Others 4.

Do you think Hindustan Unilever’s product is easily available in market ?  Yes  No 7. Which Hindustan Unilever’s product do you usually prefer or use?  Bathing soaps  Foods  others  Skin care  Deodorants 6. Yes  No 5. Describe Hindustan Unilever in one word? 8. Your comments on Hindustan Unilever’s product? _______________________________________________ .

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 . PARTICULARS PAGE NO.

11 12 13 14 15 16 17 Joint Ventures New initiatives Research Methodology Analysis Conclusion Bibliography Questionnaire .

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