Hindustan Unilever Limited

FMCG Industry
‡ FMCG products are products that have quick shelf turnover, at relatively low cost and don¶t require a lot of thought, time and financial investment to purchase ‡ FMCG Industry mainly deals with production, distribution & marketing of packaged goods to all consumers

FMCG Industry in India
‡ Present Fourth largest sector in the economy Size - US$13.1 billion Strong MNC Presence Well established distribution network Competition between organized and unorganized sector Low Costs of labour and Easy availability of key raw materials

NCAER .FMCG Industry in India ‡ Future Set to reach a size US$ 33.4 billion in 2015 Penetration levels in several products categories low India one of the largest economies in terms of purchasing power with a middle class of 300mn Rural India a huge market still to be tapped Urban Population 2001-02 (mn) Population 2009 -10 (mn) % Distribution Markets (Towns/ Villages) 53 69 28 3768 Rural 135 153 72 627000 Source: SOI.

FMCG ² Major Domestic Players ‡ Domestic Players Britannia India Ltd (BIL) Dabur India Ltd Indian Tobacco Corporation Ltd (ITCL) Marico Nirma Limited .

FMCG ² Major Foreign Players ‡ Foreign Players Cadbury India Ltd (CIL) Cargill Coca Cola Colgate-Palmolive India H J Heinz Co Hindustan Unilever Ltd (HUL) Nestle India Ltd (NIL) PepsiCo Procter & Gamble Hygiene and Health Care Limited .

Hindustan Unilever Ltd ‡ HUL touches the lives of two out of every three Indians everyday ‡ Part of the ¼40 billion Unilever Group.000 people worldwide ‡ The Company was incorporated in 1933 but its products have been sold in India since 1888 . personal care and food products ‡ Presence in over 100 countries and employs more than 174. The Group has more than 400 brands spanning 14 categories of home.

Hindustan Unilever Ltd ‡ ‡ ‡ ‡ India¶s largest FMCG Company Headquartered in Mumbai Over 700 million consumers More than 15.000 employees.500696) and NSE (Stock code ± HINDUNILVR) ‡ Shareholder base of over 3.5 lakh .300 managers ‡ More than 200 highly qualified scientists and technologists ‡ Shares listed at BSE (Stock code . including 1.

We meet everyday needs for nutrition. look good and get more out of life.HUL ² Mission Mission Unilever's mission is to add Vitality to life. and personal care with brands that help people feel good. hygiene. .

HUL ² The Journey so far« 1931: HUL set up its first subsidiary 1956: HUL offered 10% of its equity to the Indian public 1972: Lipton Acquisition 1984: Brooke Bond Acquisition 1986: Pond¶s Acquisition 2000: Modern Foods Acquisition A little bit of the History of HUL formation .

Uttaranchal. with major hubs being Assam. Pondicherry and Dadra & Nagar Haveli ‡ Marketing ± All States in India.HUL ² Geographic Presence ‡ Production More than 35 manufacturing locations across India. Himachal Pradesh. Project Shakti .

design.Differentiation . symbol) that together identify and distinguish the brand in the consumers' mind) ‡ Market Reach ± Estimated number of the potential customers it is possible to reach through a an advertising medium or a promotional campaign ‡ Tangible and intangible benefits of the brand ‡ Unique Selling Proposition .Critical Success Factors ‡ Clear Brand Identity ±Visible elements of a brand (colours. logotype. name.

Right time. Right quality @ Right cost Innovate aggressively: Innovate. Innovate Ensure the future of business .Critical Success Factors Operational Effectiveness ‡ Contain low cost competition: Focus on achieving cost competitiveness to counter low cost competition ‡ Right goods. Growth. Mature.

Critical Success Factors Winning Through People ‡ Attract and retain top quality talent: Business leadership programme or new category organisation structure ‡ Success will only be achieved through highly motivated and effective people Customer and Supplier Management ‡ Satisfying customers ‡ Management of the total supply chain .

Critical Success Factors Commitment at all levels ‡ Allowing each unit to develop initiatives ‡ Providing Budgetary Support to sub groups Strategic Level ‡ Successful implementation of the strategic objectives ‡ Power brand to expand profitably to grow the business (eg: Restructure in HLL 2001) IT Systems ‡ Excellence in IT systems .

HUL ² Product Portfolio .

Kerala Fabric Wash Largest Selling Indian detergent Market Share: 38% Wheel Dish Wash First & largest selling dish washer bar Market Share: 58% Vim Surface Cleaning Domex Lifebuoy World¶s largest selling Soap Lux Global brand Dove Global Brand: Premium. Monopoly in Indian Petro-Jelly Personal Skincare Products Market Share: 52% Aviance Customized Personal care Solutions Sub-Segment HUL ² Product Portfolio . first brand WB. Skin friendly Pears Premium Segment Breeze Basic Segment Focuses on young female population Household Personal Wash Liril Care South Indian Regional Brand ± TN Market Share: 52% Hamam Clinic Shampoo India¶s largest selling shampoo (D.Doing well in South India Market Share: 47% Ayush Ponds Global brand. Hair friendly Sunsilk Largest beauty shampoo brand Hair care Herbal .ND) Dove Global Brand: Premium.Segment Brand Comment Surf Patented Technology. Salon Business Vaseline Global brand. Asian brand Lakme Skin Care Bought from Tatas. First mover (1947) Fair & Lovely Patented Formulation. Premium Segment Rin Largest Selling detergent bar Sunlight Unilever¶s oldest.

Youth brand Second largest selling toothpaste Clear leader in deodorant segment Natural Colorants Late entrant . Quality Walls Amaze Lakme Beauty Salons Ayush Therapy Centres Beauty and Wellness Demographic advantage of India Creating new markets Moving from products to Services in Premium segments Moving from products to Services in Premium segments . Taj. Rexona Colour Cosmetics Lakme Infant Care Huggies Feminine Care Kortex Kissan Knorr Processed Foods Annapurna Tea Coffee Beverages Ice Cream & Bakery Products Brain Food Comment India¶s first Gel. Brooke Bond. Lipton Bru Market Share: 23% Market Share: 45% Food & Beverages Pure-it Gelato. Ketchup Soups & Ready to Cook Salt.Segment Sub-Segment Toothpaste HUL ² Product Portfolio Personal Products Brand Close-up Market Share: 30% Pepsodent Toothbrush Deodorants Market Share: 32% Axe.Smaller Player Jam Squeeze. Flour 3 Roses Mindsharp.

HUL ² Product Portfolio Revenue Share Other Operations 8% Foods (Bakery) 1% Exports 4% Beverages 11% Personal Products 26% Ice Creams 2% Soaps and Detergents Personal Products Beverages Soaps and Detergents 48% Exports Foods (Bakery) Other Operations ( Water etc.) Ice Creams .

HUL ² Financials .

HUL ² Financials .

HUL ² Porter·s Five Forces Porter's Five Forces Buyer Power 5 4 3 2 1 0 Degree of Rivalry Supplier Power Substitutes New Entrants .

HUL ² Porter·s Five Forces Buyer Power Buyer Size 5 Product« 4 Oligopsony Threat 3 2 Buyer« Cost of Switching 1 0 Backward« Financial Muscle Differentiated« Product Loyalty Price Sensitivity .

HUL ² Porter·s Five Forces Supplier Power Supplier Size 5 Forward Oligopoly Threat 4 Integration 3 2 Differentiated 1 Switching Costs Input 0 Importance of Quality/Cost No Substitute Inputs Player Independence Player Dispensability .

HUL ² Porter·s Five Forces New Entrants Low-cost Switching 5 Undifferentiated Market Growth 4 Product 3 2 Weak Brands Scale Unimportant 1 0 Little IP Involved Suppliers Accessible Distribution Accessible Low fixed costs Little Regulation .

HUL ² Porter·s Five Forces Substitutes Low-cost Switching 5 4 3 2 1 0 Beneficial Alternative Cheap Alternative .

HUL ² Porter·s Five Forces Degree of Rivalry Competitor Size 5 Zero-sum Game Number of Players 4 3 Storages Cost Low-cost Switching 2 1 0 Similarity of Undifferentiated Players Lack of Diversity Hard to Exit Products Low fixed costs Easy to expand .

a must to cater rural markets Presence across price points to straddle across entire income pyramid Healthy Shareholder Returns in the form of RoE and dividend yield Native Know How STRENGTHS . healthy cash coffers to support innovation Strong position in most of the categories of its presence Unmatched distribution network .SWOT Analysis Strong parentage and R&D.

SWOT Analysis 49% of HUVR's sales come from detergents and personal wash WEAKNESSES Increase in Ad Spending. which may affect the margins .

14%(g) ‡ Modern retailing gaining coverage Growing opportunitie s in Rural India Consumer sector on a secular growth trend Opportunity in Food Sector .SWOT Analysis OPPORTUNITIES ‡ Change in Rural India¶s source of income ‡ Government Focus ‡ Futures Market ‡ Increase in MSP ‡ Massive Election Spending ‡ Favorable Demographics ‡ Increasing Consumer aspirations ‡ Buoyant topline for FMCG companies ‡ Consumer expenditure in food sector rose by 13% ‡ Valued at USD240mn ± packaged foods ± 5%.

as MNC players Matured and Growing THREATS Receding pricing power .SWOT Analysis Losing market Stiff competition share in most of from local as well the categories .Rural income is yet dependant on agriculture and in turn monsoon .Spurious Products .

Sunsilk. Dove. Rexona.Ansoff matrix: Products & Brand Strategic Framework Existing Products New Products PRODUCT DEVELOPMENT Knorr. Annapurna. Hamam. Wheel. Lifebuoy. Liril Existing markets New markets PENETRATION Sunlight . Ponds MARKET DEVELOPMENT DIVERSIFICATION . Clinic all clear. Fair & Lovely. Close Up. Rin. Kisan . Lux. Pepsodent. Peers. Breeze . Vaseline. Lakme. Lipton . Surf Excel.

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BCG Matrix-HUL Hair Care Skin Care Premium Soaps & Laundry Deodorants Water (PureIt) Processed foods Colour Cosmetics Mass Soaps Beverages Oral care Laundry Sea-food exports .

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and manufacturing.Sales. . Each category and each function . Commercial. comprising 5 whole time Directors and 5 independent non-executive Directors.Structure Board at the apex-Headed by Chairman. marketing.is headed by a Vice President. Divisions: Each division is self-sufficient with dedicated resources and assets in sales. Manufacturing . commercial.

Kolkata. HUL divides the country into four regions. with each factory peopled by teams of Production.For managing sales operations. with regional branches in Delhi. In Marketing. Quality Assurance. . Each Division has a nationwide manufacturing base. Chennai and Mumbai. each category has a Marketing Manager who heads a team of Brand Managers dedicated to each or a group of brands. Commercial and Personnel Managers. Engineering.

.Systems ‡ Substantial investments in IT-based sales system ‡ Every salesman now books orders on a palmtop ‡ All orders are fed into a central database from the distributor point.500 distributor points²which makes for accurate onthe-fly demand projections and helps avoid stockout losses. ‡ This extensive network is installed at all 3.

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typically three people competed. ‡ The system was designed to identify fast-trackers. .Style ‡ Nitin Paranjpe. who were called the Lever listers and groom them for handling greater responsibilities.Youngest CEO & MD ‡ 'CEO Factory¶-Produced many business leaders ‡ HUL's leadership development model has groomed managers by providing a well-rounded view of the business through job rotation and various new assignments. For every position.

‡ It has strategically introduced new products on ³think global and act local´ concept ‡ Deep roots in local cultures and markets around the world give it a strong relationship with consumers. We meet everyday needs for nutrition. look good and get more out of life. ‡ Unilever has earned a reputation for conducting its business with integrity and with respect for all those whom our activities affect.Shared values ‡ Unilever's mission is to add Vitality to life. . ‡ Singular belief that µwhat is good for India is ‡ good for HUL¶. hygiene. and personal care with brands that help people feel good.

‡ At HUL. IT. sales & marketing. HR ‡ The objective of each path is however the same: to give the employee a strong foundation so that she would be in a position to take on complete ownership for a brand or a unit. including 1200 managers. ‡ HUL has a strong management bandwidth having a team of professionals for each SBU. 200 scientists. Employees would start from a managerial level in any of the following functions: commercial . career paths are designed such that they will build employees into business leaders. .Staff ‡ 15. technical.000 employees.

Skills ‡ Has in-house manufacturing as well as outsourcing ‡ R&D support from parent company ‡ Large distribution network ‡ Strong management ‡ Has the best marketing talent in the industry .

channels. Drive increased execution rigour 4. Integrate economic. environment & social objectives with business agenda . segments/markets of tomorrow ‡ Straddling the pyramid & deploying full portfolio ‡ Driving consumption & penetration opportunity ‡ Build markets and capabilities for the future ‡ Leverage Unilever scale and know how 3. Step-up in cost efficiency initiatives 5. Leverage brand portfolio and consumer understanding by 2.HUL Strategy 1. Winning with consumers.

Leverage brand portfolio and consumer understanding by Changing Pyramid ± Changing Income Pattern .

Leverage brand portfolio and consumer understanding by .

. its loosing its market share.Identifying the opportunity and filling it is important Although HUL is market leader in most of the category.

‡ Campaign Impact ‡Awareness of germs .52% to 83% ‡Association of germs with disease 35% to 57% Context ‡ Barriers to Soap Usage very high ‡ Insight : ³Visible clean is safe clean´ Method ‡ Raise concern on the consequence of invisible germs Challenge ‡ Low literacy ‡ Low reach of conventional media .Increasing consumption: Lifebuoy Hand wash Programme ‡ Since 2002. the project has touched 50.676 villages and 120 million people.

Consumers of tomorrow: Dove

Lipton Tea & Taj Mahal Tea Bags

Channels of Tomorrow

it was than implemented across all towns and cities with a population above eight lakh. all the products would be sold by the same distributor in any one area. enabling them to focus on the front-end to deliver better services to end-retail. More importantly. thus removing significant costs from the system. starting with Chennai. Now.Pioneering new channels ‡ In March 2009.´ . ‡ Earlier. ‡ The Go-to-Market model also helps to remove the enormous logistics hitherto faced by the distributors in their back-end operations. HUL had different distributors for its home and personal care division and food division in the same area. HUL adapted µgo-to-market¶ programme ‡ First tried out in Mumbai.

± Vending machine for hot beverages like tea and coffee. Ayush Therapy Centres easy access to authentic Ayurvedic treatments and products. ‡ Hindustan Unilever Network (HUN): Direct Selling Channel .Pioneering new channels ‡ Project Shakti : HUL's partnership with Self Help Groups of rural women.Home & Personal Care and Foods. ‡ Health and Beauty services : Lakme Salons provide specialised beauty services and solutions. ‡ Out-of-Home : Alliance with Pepsi Co. .

kiosks and general stores. wholesale.HUL·s distribution system ‡ 7. . ‡ HUL is using the point of purchase method for much higher level of direct contact. ‡ The general trade comprises grocery stores. sampling. ‡ Hindustan Unilever provide tailor made services to each of its channel partners.000 redistribution stockists covering about one million retail outlets. through in-store facilitators. education and experience. chemists.

HUL's end-to-end supply chain. ‡ For this. .Distribution Strategy . called RS Net. stockists have been connected through an Internet-based network. ‡ The objective is to make the product available at the right place and right time in the most cost effective manner.Harnessing Information Technology ‡ An IT-powered system has been implemented to supply stocks to redistribution stockists. for online interaction. ‡ RS Net is part of Project Leap.

through 6000 sub-stockists. the network directly covers about 50. for this channel to serve modern retailing outlets. ‡ Product tests and in-store sampling is provided to consumers. ‡ The team focuses on building superior availability of products. . Distribution at the Supermarkets ‡ HUL has set up a full-scale sales organisation.000 under one rural sales organisation. ‡ In rural India.000 villages. ‡ The team comprises an exclusive sales force and exclusive redistribution stockists. reaching 250 million consumers.Distribution Strategy Distribution at the Villages ‡ The company has brought all markets with populations of below 50.

Segments of tomorrow: Hair Conditioners .

Building New Market : Pure it ‡ Progress Volume market leadership in South India >700 towns. 20 states covered Increasing penetration through retail presence in <10 L population towns More than 400 safe water zones established Growing consistently @ > 50% More than 7 million lives protected ‡ Complete protection «`as safe as boiled water¶ ‡ Meets US EPA standards ‡ Works without electricity. pressurized piped water ‡ Affordable: Device Rs 2000 ( $40) Germkill Battery Rs 350 ($7) Rs 0. initial price) Unique Promotional Campaign .35 per litre ( < 1 $ cent) (incl.

India Fabric Wash. Beverages. Skin Care. Beverages. Fabric Wash. US Port Sunlight. etc. Fabric Wash. Water etc. Skin Care. Deos. Processed Foods. etc. Processed Foods. Beverages. Ice Creams. Shampoos. Oral Care. NL Shanghai. Beverages. Hair Care. Processed Foods. etc. Deos. etc. Ice Creams. Processed Foods. Shampoos. Surface Cleaners. China Bangalore. UK Expertise Skin Care.Unilever Research and Development Strengths Location Trumbull. . Vlaardingen. etc.

Drive increased execution rigor .

Enhanced Customer Service .

Driving cost efficiencies .

Integrate economic. environment & social objectives with business agenda .

Thank You .

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