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.

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

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

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,

including over 1.350 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 .

000 employees. look good and get more out of life. It is a mission HUL shares with its parent company. hygiene. . Unilever. touching the lives of two out of three Indians with over 20 distinct categories in Home & Personal Care Products and Foods & Beverages. sales The mission that inspires HUL's over 15.10. and personal care with brands that help people feel good.000crore. They endow the company with a scale of combined volumes of about 4 million tonnes and of Rs.PRESENT STATUS Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods company. is to "add vitality to life. HUL is also one of the country's largest exporters. including over 1.300 managers. it has been recognised as a Golden Super Star Trading House by the Government of India." HUL meets everyday needs for nutrition.

55% of the equity. ice cream and culinary products.000 individual shareholders and financial institutions. coffee. They are manufactured over 40 factories across India. HUL's brands . tea. Close-up. Lux. detergents. Fair & Lovely. covering 6. Knorr-Annapurna. comprising about 4.3 million retail outlets reaching the entire urban population . The rest of the shareholding is distributed among 380. branded staples. which incorporates latest technology in all its operations. The operations involve over 2. Pond's. Sunsilk. . Wheel. Surf Excel.000 suppliers and associates. personal products. and now has facilities in Mumbai and Bangalore.and about 250 million rural consumer. Clinic. Kissan.000 redistribution stockiest. Pepsodent. HUL has traditionally been a company. many with post-doctoral experience acquired in the US and Europe. Lakme. The Hindustan Unilever Research Centre (HLRC) was set up in 1958. Rin. HLRC and the Global Technology Centres in India have over 200 highly qualified scientists and technologists. Brooke Bond.like Lifebuoy.which holds 51. HUL's distribution network. Kwality Wall's – are household names across the country and span many categories .soaps.

home care. now is focused on product innovation. is now working on a new growth strategy for its laundry business. category head.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 passe. This comes even as Unilever is scouting for a potential buyer for its laundry business in the US.” he said.” insists Sudhanshu Vats. “Price cut or hike is not a long-term growth strategy. new consumer and retail trends and aggressive marketing and promotions. Hindustan Unilever Ltd (HUL). Pricing. HUL says it is quite upbeat about the segment and says the laundry segment is one of its “key growth areas. “Our strategy for growth. in fact.

however. the laundry industry in India was worth Rs7.5%. Wheel. this time. according to Vats contributes around 50% of HUL’s laundry segment revenues.908 crore in 2006 and rose 8.4% over 2005.” says Vats. a value brand that. the Ahmedabadbased manufacturer. according the market research firm ACNielsen.5% in the same period last year.5 percentage points. “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. However.7% percentage points to 13.6% share. Nirma Ltd. increased its market share by 2 percentage points in the same period. saw its market share dip by 1. up to a 7.8% in the quarter ended June from 35. with a total share of about 18%.“We have done key innovations across the product portfolio and it is working for us. HUL doesn’t . According to ACNielsen. P&G also gained 0.” HUL’s market share in the laundry segment grew to around 37. the increase was not at the expense of price war with its multinational rival Procter & Gamble Co.

According to Vats. .” says Unmesh Sharma. the industry is stabilizing. In 2006.103 crore. 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. “Laundry has been an attractive segment in the past and is likely to keep growing in the near future. The recent price war between companies led to erosion in their profitability but now. HUL’s soaps and detergents segment contributed around Rs5.596 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.

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

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

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

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

over 15.1.300 managers. 5. including over 1. ice creams. 2. HUL is also one of the country's largest exporters. Better market penetration. That means higher profits and / or more competitioners. 10. Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods company. Due to its long presence in India – has deep penetration – 20 consumer product category. 26. and the rest from foods. 4. is to "add vitality to life. touching the lives of two out of three Indians with over 20 distinct categories in Home & Personal Care Products and Foods & Beverages.5% from beverages.3% of its revenues from soaps and detergents.000 employees.6% from personal care products. exports. and other products. . The company derives 44.." 3. Continuous threat from other competitors. Low cost of production due to economic of scale. Weakness 1. it has been recognised as a Golden Super Star Trading House by the Government of India.

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

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.

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

• 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: .

Hindustan Unilever Ltd(HUL) has launched various products which cater to all customer segments.Kwality Wall’s . Second P of marketing is not another name for blindly lowering prices and relying on this strategy alone to increase sales dramatically. Pricing Make no mistake. So every customer segment has different price expectation from the product. Therefore maximizing the returns involves identifying right price level for each segment. . and then progressively moving through them. 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.

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

Once the stock product reaches retailers. HUL's distribution network. covering 6.3 million retail outlets reaching the entire urban population. But getting their means managing wildly different terrains-climate.television has already primed and population for consumption.India – The operations involve over 2. comprising about 4.000 redistribution stockists.000 suppliers and associates. and the marketer who can get to the to the consumer ahead of competition will give a hard – to – overtake lead. . This network of distribution can either contact wholesalers and which in turn retailers or the distributors can contact to the retailers directly. value system. life style. Hindustan Unilever Ltd(HUL) distributes the product in the manner stated above. Own distribution network consist of clearing and forwarding (C&F) agents & distribution stockiest. And your brand equity isn’t going to help when it comes to tackling these issues. language. and about 250 million rural consumers. the prospective customers can have access to the product. transport and communication network.

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

Thereafter it was the job of the advertising to communicate customer the wonderful feeling that he could experience by re-discoursing the careful. The strategic response address the emotional appeal of the band to the child within the adult.Promotion If an advertisement is to communicate effectively. communication must first ensure exposure. More often than not. the receiver must at least half want it to. To penetrate into the inner recesses of her memory. It often both attracts and generates arm feelings. a successful campaign has a stronger element of the unexpected a quality that good advertising shares with much worthwhile literature. pleasure – seeking child within himself – a graft these feeling onto the Ad campaign like “hasso to khul k hasso for close up”. grab her acceptance and then extract retention competing with thousands of other units of communication trying to do the same. unself conscious. and be prepared too take step toward the sender. Effective advertising is rarely hectoring or loudly explicit…. that produced just the value vacuum that Hindustan Unilever Ltd(HUL) was looking to fill. “cream bathing bar for dove soap” and . Finding showed that the adults felt too conscious to be seen consuming a product actually meant for children. grab her attention evoke her comprehension. Naturally.

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

and luxury goods flourished. In the 1980s. 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 . consumers began to demand “more for same”. and the discounting era grew strong.with high ad – spends that Hindustan Unilever(Ltd) hopes will see it emerges stronger after the current slowdown. Today’s consumer demanding “more for less”. as well as expand the market. and the winner will be that super value marketers…. 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. Positioning In the 1970s consumers were ready to pay “more for more”.

product have strayed away from the consumer’s long standing perception of them… Hindustan Unilever(Ltd) is an anchor in sea of consumer products. the quicker becomes her search process. “Lifebuoy has become more than just a red bar of soap – today the brand provides hygiene and health solutions for families 2) Fair & Lovely. as www. Since Hindustan Unilever(Ltd) is more clearly associated with a particular set of attributes in terms of benefits and prices. As a variety of competitive claims assails her senses.unilever. a hot-selling “fairness” cream. .com informs. which promises a lighter skin tone for many of India’s complexion-conscious consumers . Positioning of individual product: 1) Lifebuoy is ‘one of Unilever’s oldest brands’ with more than a hundred-year history. today customer uses complicated decision making process to assess the alternative before making a purchase.

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

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

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

5% in the same period last year.596 crore to the company’s total sales of Rs12.4% over 2005. HUL doesn’t report its laundry revenues separately but puts them under the soaps and detergent category.” “We have done key innovations across the product portfolio and it is working for us. . new consumer and retail trends and aggressive marketing and promotions.908 crore in 2006 and rose 8.8% in the quarter ended June from 35. This comes even as Unilever is scouting for a potential buyer for its laundry business in the US.“Our strategy for growth. “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.” says Vats.103 crore. HUL’s soaps and detergents segment contributed around Rs5.” HUL’s market share in the laundry segment grew to around 37. HUL says it is quite upbeat about the segment and says the laundry segment is one of its “key growth areas. According to ACNielsen. the laundry industry in India was worth Rs7. In 2006. now is focused on product innovation.” he said.

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

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

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

84% now.3%. That’s why the company is wooing consumers in big retail stores. currently just 3.5 billion. Hindustan Lever tea brands like Brooke Bond and Lipton have dipped from a combined market share of 29. Now Hindustan Unilever is under siege from aggressive Indian and foreign competitors such as Procter & Gamble (PG). In the last year. is down from 55.5% of India’s total $336 billion retail market.2% to 24. will grow to 28% by 2017. Nivea. All this has taken a toll on Hindustan Unilever’s operating margins. Hindustan Unilever’s managers hope their revenues from big retail will increase from 5% today to over 25% in 2012. down from 21% a few years ago to just 11. including the popular Lux. ACNielsen data shows. Hindustan Unilever’s lead in hand soaps.2% to 54%. These newly affluent shoppers present the best hope for the company’s future in India.handset maker Nokia (NOK) dislodged it as the multinational with the highest revenues in India. “It is a big game . Favorite detergent brands like Surf Excel and Rin are barely hanging onto their 37% share. organized retail. According to retail consultant KSA Technopak. and L’Oréal. after ringing up India-based sales of $3.

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

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

Last year operating profits reached $357 million. a 2004 price war with P&G in the detergent business forced Hindustan Unilever to slash prices on its premium brand Surf Excel. to $274 million in 2004. For instance. The effect: The company’s sales and operating profits stagnated at $2. 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. 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. . But the rich margins of the past have not returned.Baillie first had to sort out some past problems. thanks to price increases. And there was some stiff competition from rival Procter & Gamble.5 billion for five years while operating profit plunged 37%.

” He also wants to expand the foods business in conjunction with the parent. where foods bring in half the revenues globally. In India.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 .

we aren’t the only ones seeing it. Hindustan Unilever executives are realistic about the new era in which it now operates. it has phased out more food products—wheat flour.Hindustan Unilever. which sold for less than 2 cents each and which expanded the market for Hindustan Unilever products among India’s rural masses. Currently. Nitin Paranjpe. Tata Tea is exultant.7% in March. the Tata Group’s beverage company Tata Tea overtook Hindustan Unilever as India’s largest selling tea brand. In June. According to ACNielsen. 2007. to 19.1% to 19.” Rivals like P&G and Nivea have also copied Hindustan Unilever’s best innovation: the small shampoo sachets it pioneered in the 1980s. If India is a great story. confectionery. while the company’s track record in foods has been dismal. admits that it’s now “tougher to hold on to market share.5%. 2006. Tata Tea’s market share increased from 16. But today even L’Oreal has sachets of its Fructis shampoo. while Hindustan Unilever slipped from 26.9% in July. Managing . executive director in charge of the home and personal care business. Indeed. 80% of Indian shampoo sales come from sachets. frozen bread—than it has launched.

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

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

bathing soaps and shampoo.57) in the next year from 190. analyst Unmesh Sharma. He expects the stock to drop to 180 rupees ($4.9 rupees. India is Unilever's biggest market in Asia. generating about 6 percent of annual sales. The company has a market value of about $11. profitability will continue to be under pressure.8 billion. HUL-UNIQUELY CREATE VALUE  Our strategy POSITIONED TO  Competitive strengths . It has sold soap in the country since 1888 and controls about half of the sales of products such as skin creams. who has an ``underperform'' rating on Hindustan Unilever.``Given the competition.'' said Macquarie Securities Ltd.

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

Beverages. HINDUSTAN UNILEVER LIMITED COMPARATIVE BUSINESS ANALYSIS Hindustan Unilever Limited Formerly known as Hindustan Lever Limited. industrial . currently~44000 women cover 1.25000 villages. • partnerships with diverse stakeholders. Exports. Personal Products. foods and beverages. The Group operates through seven segments: Soaps and Detergents. Impact of community • business and social impact can go together. The Group's principal activities are to manufacture and market consumer products.Shakti Three shakti initiatives • Shakti entrepreneur. Ice Creams and Other. • Shakti vani: one-to-many communication for category growth • ishakti: customized interaction with remote consumers. Foods. The products include home and personal care products.

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

however rural income are growing faster with 70% population here. local and regional players. .company faces competition from international.  Structural changes in the economy which are affecting this are:  Disintermediation in the agricultural market price discovery mechanism has benefited farmers. RURAL.income growth is crucial.THE BIG INDIAN ROMANCE  Rural population larger than europe(800 million)  Low growth in agriculture.

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

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

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

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

logistics for merchandising materials and in store execution.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. The operations will begin with the existing Modern Trade in-store execution team of HUL moving into HUFS. Smollan Holdings is one of the leading ‘in-store execution and field services’ companies internationally. This includes: . “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. 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”.

a home water purifier which supplies drinking water without boiling/need of electricity. Dollops ice cream brand from Cadbury India. It has about 350.000 consultants.• • • • Tata Oil Mills Company Brooke Bond Lipton India Modern Foods It acquired Kissan brand from UB group. Hindustan Unilever Network is the direct selling channel of the company. trained and guided by HLN's expert managers and trainers. all independent entrepreneurs. It has also launched Pureit. . Lakme cosmetics brands from Tata.

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. 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. .

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

6%. HUL has also responded in case of national calamities / adversities and contributes through various welfare measures. It is also involved in education and rehabilitation of special or underprivileged children. 2007. with net profit up 29. and Baillie is pleased with the modest turnaround. and water management. Reason enough to keep patrolling those store aisles.These efforts have delivered some promising results. HUL is focusing on health & hygiene education. In the quarter ended June. and rural development. SERVICE TO SOCIETY HUL believes that an organisation's worth is also in the service it renders to the community. care for the destitute and HIV-positive. most recent being the village built by HUL in earthquake . women empowerment. the company’s sales grew 13%.

Through Shakti. The programme endeavours to induce adoption of hygienic practices among rural Indians and aims to bring down the incidence of diarrhoea. HUL is creating micro-enterprise opportunities for rural women. . Shakti aims to have 100.000 women entrepreneurs in its fold.000 Shakti entrepreneurs covering 500. reaching out to 100. and creating access to relevant information through the iShakti community portal. In 2001. Shakti. thereby improving their livelihood and the standard of living in rural communities. HUL is also running a rural health programme – Lifebuoy Swasthya Chetana.000 villages and directly reaching to 150 million rural consumers. the company embarked on an ambitious programme. touching the lives of over 600 million people. The vision is to make a billion Indians feel safe and secure. The program now covers 15 states in India and has over 31.affected Gujarat. It has already touched 70 million people in approximately 15000 villages of 8 states. By the end of 2010.000 villages. and relief & rehabilitation after the Tsunami caused devastation in South India. Shakti also includes health and hygiene education through the Shakti Vani Programme.

If Hindustan Unilever straddles the Indian corporate world. PERFORMANCE REVIEW Leadership Across Diverse Fmcg Category . 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 .

wherever required. Nivea. and L’Oréal on HLL. www.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).com # Magazines-Business Today # Newspapers-The Economic Times . policies. HUL and its competitor history.com.unilever.RESEARCH METHODOLOGY Achieving accuracy in any research requires in depth study regarding the subject. # Internet-www. the research methodology adopted is basically based on primary data via which the most recent and accurate piece of first hand information could be collected. Primary data was collected by the Questionnaire & Personal Interview Method Sources of secondary data : Used to obtain information on. procedures etc. current issues.

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

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

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

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. and of great benefit to the company in furthering its competitive advantage.

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

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

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

CONTENTS S NO. PARTICULARS PAGE 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 .

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