PRODUCT AND BRAND MANAGEMENT

PROJECT
ON

Company study of
Hindustan Unilever Limited (HUL)
Submitted to-
Prof. Pitamber Dwivedi
Submitted by-
Anish Bhattacharyya [FT-09-720]

Anurag Kumar Mishra [FT-09-729]

Durgesh Tiwari [FT -09-748]

Jagat Singh Nagar [FT -09-754]

Shwetank Kumar [FT-09-856]

Sourav Mukherjee [FT- 09-862]

Ravi Kumar Sinha [ FT- 09-813]

IILM-GSM-09-11_PBM_SEC-A_ 1|Page
 ACKNOWLEDGEMENT
We take this opportunity to convey our sincere thanks and gratitude to all those

who have directly or indirectly helped and contributed towards the completion

of this project.

First and foremost, we would like to thank Prof. Pitamber Dwivedi

for her constant guidance and support throughout this project. During the

project, we realized that the degree of relevance of the learning being imparted

in the class is very high. The learning enabled us to get a better understanding

of the nitty-gritty of the subject which we studied.

We would also like to thank our batch mates for the discussions that we had

with them. All these have resulted in the enrichment of our knowledge and their

inputs have helped us to incorporate relevant issues into our project.

Last but not the least we would like to thank God and our parents for their

cooperation and help.

IILM-GSM-09-11_PBM_SEC-A_ 2|Page
 TABLE OF CONTENTS
TOPICS PAGE

1. Introduction to FMCG/HUL 4

2. FMCG industry analysis 5

3. Key players of FMCG industry and their brief 7

introduction
4. HUL 9
Organization Structure
Distribution Channel
Market segment wise penetration
Products of HUL
Category wise Sales growth
BCG analysis
5. Corporate Social Responsibility 14
Project Shakti
6. Competition In the FMCG market 16
HUL and ITC
HUL and P&G
7. Strategic growth and Strategic market entry 25
(Kissan Annapurna Iodized Salt)
8. Strategic Shifts 26

9. Financial Analysis 27

10. Brand Management 29

11. Conclusion and Recommendation 31

12. Bibliography 32

IILM-GSM-09-11_PBM_SEC-A_ 3|Page
INTRODUCTION OF 360675 individual shareholders and

FMCG INDUSTRY financial institutions

Brooke bond is present in India
AND HUL IN INDIA back to 1900 and its Red Label
FMCG is the 4th largest sector in Indian
band was launched in 1903. In
economy with a market size of more than
1912 it joined with lever brothers.
$13.1 bn. And expected to become $33.4bn in
Unilever acquired LIPTON in 1972
2015.200 million people are expected to shift
Ponds India ltd is working in India
towards processed food. India needs Rs 28bn
since 1947 and it is acquired by
investment in food sector. In the recession/
slowdown period FMCG industry recorded a HUL in 1986 by an international
growth of 14.5%. Growth of FMCG sector and acquisition.
Growth of HUL in India is as follows Tata oil Mills Company merged
with HUL in 1993.
FMCG came into in existence in
In 1996 Tata made 50-50% joint
1888 when Sun Light soap was
venture for LAKME with HUL and
firstly seen at KOLKATA harbor.
in 1998 it was completely sold to
It was made by Lever brothers in
HUL.
England.
HUL made 50-50% joint venture
After that in 1895 Lifebuoy and
with Kimberley Clark corp. in
after that Lux, Pears and Vim bar.
1994 as Kimberley clark lever ltd
In 1918 Vanaspati was launched.
which makes haggis diapers and
Dalda was launched in 1937.
kotex sanitary pads.
In 1931 Lever brothers made 1st
Unilever established its subsidiary
subsidiary in India
in Nepal as NEPAL UNILEVER
In 1933 they joint with Hindustan
LTD.
Vanaspati manufacturing company
In 2002 HUL launched AYUSH
In 1935 they joint with united
ayurvedic soap.
traders limited
In 2004 it came into the water
All these 3 players mixed together
purifier segment and launched
and form HUL in 1957.
PURE-it
HUL offers 10% of its equity to
In 2007 it formally formed as HUL
Indian public
from HUL that is HINDUSTAN
Unilever holds 52.10% shares and
UNILEVER LIMITED.
rest is distributed amongst about

IILM-GSM-09-11_PBM_SEC-A_ 4|Page
 FMCG industry analysis

SUPPLIER POWER
Supplier concentration
Importance of volume to supplier
Low Differentiation of inputs
Impact of inputs on cost or differentiation
Switching costs of firms in the industry
Presence of substitute inputs
Threat of forward integration
Cost relative to total purchases in industry

.
OTHER
STAKEHOLDERS

High
Low to medium
Relative power of High
unions, govt DEGREE OF
RIVALRY
-Exit barriers
-Industry concentration
-Fixed costs/Value THREAT OF
added SUBSTITUTES
BARRIERS TO ENTRY -Industry growth -Switching costs
Absolute cost -Intermittent -Buyer inclination to
advantages overcapacity Substitute
Proprietary learning -Product differences -Price-performance
curve -Switching costs Trade-off of
Access to inputs -Brand identity substitutes
Government policy -Diversity of rivals
Economies of scale -Corporate stakes
Capital requirements
Brand identity
Switching costs
Access to distribution
Expected retaliation
Proprietary products

BUYER POWER
Bargaining leverage
Buyer volume
Buyer information
Brand identity
Low

Price sensitivity
Threat of backward integration
Product differentiation
High
Buyer concentration vs. industry
Substitutes available
Buyers' incentives

IILM-GSM-09-11_PBM_SEC-A_ 5|Page
Rivalry among Competing Firms:
In the FMCG Industry, rivalry among
competitors is very fierce. There are scarce
customers because the industry is highly
saturated and the competitors try to snatch
their share of market. Market Players use
all sorts of tactics and activities from
intensive advertisement campaigns to
promotional stuff and price wars etc.
Hence the intensity of rivalry is very high.
Potential Entry of New Competitors:
FMCG Industry does not have any
measures which can control the entry of
new firms. The resistance is very low and
the structure of the industry is so complex
that new firms can easily enter and also
offer tough competition due to cost
effectiveness. Hence potential entry of new
firms is highly viable.
Potential Development of Substitute
Products:
There are complex and never ending
consumer needs and no firm can satisfy all
sorts of needs alone. There are plenty of
substitute goods available in the market
that can be re-placed if consumers are not
satisfied with one. The wide range of
IILM-GSM-09-11_PBM_SEC-A_
choices and needs give a sufficient room
for new product development that can
replace existing goods. This leads to
higher consumers expectation.
Bargaining Power of Suppliers:
The bargaining power of suppliers of raw
materials and intermediate goods is not
very high. There is ample number of
substitute suppliers available and the raw
materials are also readily available and
most of the raw materials are
homogeneous. There is no monopoly
situation in the supplier side because the
suppliers are also competing among
themselves.
Bargaining Power of Consumers:
Bargaining power of consumers is also
very high. This is because in FMCG
industry the switching costs of most of the
goods is very low and there is no threat of
buying one product over other. Customers
are never reluctant to buy or try new things
off the shelf.
6|Page
Key players of capture a market share of 10 per cent of
the Rs. 1,900 Crores malted food drink
FMCG industry market over the next two years.

According to the market survey done by

Dabur has acquired 72.15 per cent of
BUSINESS TODAY the top 10 companies of
Fem Care Pharma Ltd (FCPL), a leading
FMCG sector are given below.
player in the womens skin care products
1. Hindustan Unilever Ltd. market, for Rs 203.7 Crores in an all-cash
deal. The Company is expected to create
2. ITC synergy by this deal.
Dabur got approval from Government of
3. Nestl India
Himachal Pradesh to set up another
4. GCMMF (AMUL) medicine manufacturing unit. The project
has an expected investment of Rs. 130
5. Dabur India
Crores.
6. Asian Paints (India)
Colgate-Palmolive (India)
7. Cadbury India
Limited
8. Britannia Industries Colgate Palmolive (India) Ltd, which is
currently holding 75 per cent of the share
9. Procter & Gamble
capital of SS Oral Hygiene Products
10. Marico Industries Private Ltd, Hyderabad, has acquired the
remaining 25 per cent share capital from
the local shareholders at an aggregate price
of Rs 77.70 lakh. Consequently, SS
A brief introduction about Oral Hygiene Products has become a
major FMCG companies in wholly owned subsidiary of the company.
India
Dabur India Limited (Dabur) Nestle India Limited

Dabur has entered into the malted food Nestle is planning to invest Rs 6 billion

drink market with the launch of a new in India in 2009 for expansion of its

health drink Dabur Chyawan Junior. business in the country.The company

According to the company, they expect to which has allotted an investment of Rs 3

billion in the Indian market in 2008, would

IILM-GSM-09-11_PBM_SEC-A_ 7|Page
be doubling the investment in 2009 as part
of its business strategy. Nestle
International is reinvesting and expanding
in India and Nestle India will have all the
financial resources to expand and grow
from the parent company.
Nestle India reported a good increase in
its standalone net profit for the second
quarter.During the quarter, the profit of the
company rose 26.54% to Rs 1,210.90
IILM-GSM-09-11_PBM_SEC-A_
million from Rs 956.90 million in the
same quarter, last year. The company
posted earnings of Rs 12.56 a share during
the quarter, registering 26.61% growth
over prior year period. Net sales for the
quarter rose 23.45% to Rs 10,356.30
million, while total income for the quarter
rose 23.78% to Rs 10,423.40 million,
when compared with the prior year period.
8|Page
 HUL: Hindustan Unilever Limited
COMPANY - HUL
INDUSTRY - FMCG
MARKET CAP - 48571 Cr
BETA - 0.4
52 Week Hi/Lo - 306/215
Average daily volume - 431633
Face Value - Rs 1
ORGANIZATION STRUCTURE

VP

GM

Sr sales manager

Area sales manager

Territory sales manager

Team Leader

Sales executive

IILM-GSM-09-11_PBM_SEC-A_ 9|Page
 Distribution Channel of HUL

HUL

C&F Agents

Redistribution Stockiest

Whole sellers

Rural Retailer Urban Retailer

CUSTOMERS

Market Penetration of HUL

SKINKARE:
10%

SOAPS:
SAMPOOS: 43%
21%

TOOTHPASTE:
26%
Penetration

IILM-GSM-09-11_PBM_SEC-A_ 10 | P a g e
 HUL products in India

Personal wash:- Laundry:-

Lux. Surf Excel,
Lifebuoy, sun light,
Liril , Rin
Hamam, Wheel
Breeze, Ala bleech
Moti , Beauty Products:-
Dove, Fair & Lovely,
Pears Lakme,
Rexona Ponds,
Foods:- Vaseline
-Kissan(Jam,Ketchup,Squashes), Aviance
Annapurna (Aata and salt), Hair-Care:-
Knorr Soups, Sunsilk naturals,
Modern Bread Clinic ,
Ice-cream:- Dove
Kwality Wall's Oral-Care:-
Bewerages:- Pepsodent
Tea:- Close-up
Brooke bond, Deo spray:-
Lipton, Axe
taj mahal Rexona
Coffee:- Water Purifier:-
Brooke bond bru Pureit
Disinfectants:- Dishwasher :-
Domex Vim
cif

IILM-GSM-09-11_PBM_SEC-A_ 11 | P a g e
 Category wise sales growth of HUL in India:

Particulars Key Market Market Rank

Brands Size (in Rs Share
Cr.)
Fabric wash Surf 8988 37.5% 1
Excel,
Wheel
Personal Dove, 6632 54.3% 1
Wash Lux,
Lifebuoy
Dish wash 57.3% 1

Skin Ponds 2792 54.5% 1

Shampoo Sunsilk, 2168 47.8% 1

Clinic
plus
Talcum Powder 59.7% 1

Packet Tea Red 4452 22.7% 1

Label
Coffee Bru 708 44.0% 1

Jams 67.5% 1

Toothpaste Pepsoden 2764 29.5% 2

t,
Closeup
Ketchups 28.1% 2

IILM-GSM-09-11_PBM_SEC-A_ 12 | P a g e
 BCG ANALYSIS OF HUL

Soap & Detergent and Tea are CASH COW Only food is a segment which is a
for the company. It has high relative market QUESTION MARK for the company. The
share and low growth rate. Personal Products company have a low relative market share
and Coffee are STARS for the company as it where as it is under high market growth rate.
have high relative market share as well as high
HUL is taking several steps to capture more
market growth rate.
market share so that food segment can also be
a part of Star.

IILM-GSM-09-11_PBM_SEC-A_ 13 | P a g e
 Corporate Social called project SHAKTI which will serve the
Responsibility following purpose:

HUL shows more interest in CSR also A) To Reach:

as-
Small, scattered settlements and poor
From 2004 to 2008 it has reduced the infrastructure make distribution
emission of Carbon di-oxide by more difficult.
than 25% in the manufacturing. Over 500,000 villages not reached
directly by HUL.
HUL follows 5 R strategies to deal
B) To Communicate:
with the Green House Gases (GHG):
Low literacy hampers effectiveness of
print media.
Reduce
Poor media-reach: 500 million Indians
Re-Use
lack TV& radio.
Recycle
C) To Influence:
Recover
Low category penetration,
Renew
consumption.
HUL uses Agriculture wastages as the C) Awareness:
fuel (Ground nut shells, bagasse, saw Per capita consumption in Unilever
dust, Coconut shells, cashew etc) categories is 33% of urban level.
DOMEX, a product of HUL is Project Shakti
planning to sponsor the world toilet
HUL soon realized that although it was
day on the 19th November every year.
enjoying a greater penetration in the rural
PROJECT SHAKTI market when compared with its
competitor such as Nirma and ITC, its
(www.HULshakti.com)
direct reach was restricted to only 16%.
ICICI bank is the financial partner of The FMCG giant was desperate to
HUL in the project Shakti increase this share. HUL saw its dream
fulfillment in the vast Indian rural market.
As competition is increasing day by
The company was already engaged in
day, its difficult to maintain the leader
rural development with the launch of the
position & to further strengthen the
Integrated Rural Development Programme
distribution network HUL made a project
in 1976 in the Etah district of Uttar

IILM-GSM-09-11_PBM_SEC-A_ 14 | P a g e
Pradesh. This program was in tandem
with HUL's dairy operations and covered
500 villages in Etah. Subsequently, the
company introduced similar programs in
adjacent villages. These activities mainly
aimed at training farmers, animal
husbandry, generating alternative income,
health & hygiene and infrastructure
development. The main issue in rural
development was to create income-
generating prospects for the
villagers. Such initiatives, linked with the
company's core business, became
successful and sustainable and proved to
be mutually beneficial to both the
company ant its rural customers. However
much more remained to be done.
Project Shakti was conceived following
the pioneering work carried out by
Grameen Bank of Bangladesh , Self
Help Groups (SHGs) of rural women
were formed by several institutions,
NGOs and government bodies in villages
across India. This group of usually 15
members contributed a small amount of
money to a common pool and then offered
a micro-credit to a member of the group to
invest in a commonly approved economic
activity. Partnering with these SHGs,
HUL started its Project Shakti
Nalgonda district of Andhra Pradesh in 50
villages in the year 2000. The social side
IILM-GSM-09-11_PBM_SEC-A_
of the Project Shakti was that it was aimed
to create income-generating capabilities
for underprivileged rural women, by
providing a sustainable micro enterprise
opportunity, and to improve rural living
standards through health and hygiene
awareness. Most SHG women viewed
Project Shakti as a powerful business
proposition and are keen participants in it.
There after it was extended in other states
poor with the total strength of over 40,000
Shakti Entrepreneurs.
HUL offered a wide range of products
to the SHGs, which were relevant to
rural customers. HUL invested
significantly in resources who work
with the women on the field and
provide them with on-the-job training
and support. HUL provided the
necessary training to these groups on
the basics of enterprise management,
which the women need to manage their
enterprises. For the SHG women, this
translated into a much-needed,
sustainable income contributing
towards better living and prosperity.
Armed with micro-credit, women from
SHGs become direct-to-home
distributors in rural markets.
in
15 | P a g e
COMPETITION IN THE
FMCG MARKET
Five main competitive strategies are:
Overall low cost leadership strategy
Best cost provider's strategy
Broad differentiation strategy
Focused low cost strategy
Focused differentiation strategy
Here competitive strategy varies from
sector to sector and company to company.
Thus, it is not easy to predict a single or to
find a single strategy for the whole sector.
When we come on to FMCG Sector main
strategies lay behind market strategies, cost,
and quality strategies. Here in this report
you are going to get information about such
type of strategies of FMCG giants.
Competitive Strategies
and Comparison with
ITC
HUL (Hindustan Unilever Ltd.)
This Company is earlier known as Hindustan
Lever Ltd. This is India's largest FMCG sector
company with all type of household products
available with it. It has Home & Personal Care
products, and also food and Water Purifier
available with it. According to Brand Equity,
IILM-GSM-09-11_PBM_SEC-A_
HUL has largest no of brands in most trusted
brands list
16 of HUL's brands featured in AC-Nielson
Brand Equity list of 100 most trusted brands in
2008 in an annual survey. For the entire year
ending March - 2009 net turnover of company
is Rs. 20'239.33 Crore which is 47.99% higher
than 31st December 2007's Rs. 13675.43 Crore
driven mainly by domestic FMCG's with net
profit stood at Rs. 2'496.45 Crore.
Products of HUL are: Annapurna; Ayush;
Axe; Breeze; Bru; Brooke bond; Clinic; Dove;
Fair & Lovely; Hamam; Liril; Lux; Pears;
Ponds; Pepsodent; Pureit; Rexona; Rin;
Sunlight; Surfexcel; Vaseline; Wheel.
ITC Limited
This Company was earlier known as Imperial
Tobacco Company of India Ltd. It is Currently
headed by Yogesh Chander Deveshwar.
Company mainly operates in the industry like
Tobacco, Foods, Hotels, Stationary and
Greeting Cards with the major products
constitutes Cigarettes, packed foods, hotels,
and apparels. For the entire year ending Mar-
2009 the turnover of company is at Rs. 15388
Crore which is 10.3% higher than previous
year's Rs. 13947.53 Crore, driven mainly by
robust 20% growth in non cigarette FMCG
business with net profit stood at Rs. 3324
Crore.
16 | P a g e
Analysis of Both Companies
HUL & ITC are major companies in FMCG
market in India. When we compare both
companies on the basis of their strategies i.e. ,
their competitive strategies in the present
market. When we look at the present segment
breakup for both of the companies then we
came to know that their different products vary
too much in the market.
Now let us take a comparative analysis of both
the companies under some heads:
HUL
Hindustan Unilever (HUL) is the largest pure-
play FMCG Company in the country and has
one of the widest portfolio of products sold via
a strong distribution channel. It owns and
markets some of the most popular brands in
the country across various categories,
including soaps, detergents, shampoos, tea and
face creams.
ITC
ITC is not a pure-play FMCG company, since
cigarettes is its primary business. It is
diversifying into non-tobacco. FMCG
segments like foods, personal care, paper
products, hotels and agri-business to reduce its
exposure to cigarettes.
IILM-GSM-09-11_PBM_SEC-A_
Performance
After stagnating between 1999 and '04, the
company is back on the growth track. In the
past three years, till 2008 HUL's net sales have
witnessed a CAGR of 11%, while net profit
has posted a CAGR of 17%.
Despite diversification, ITC's reliance on
cigarettes is still huge. The tobacco business
contributes 40% to its revenues, and accounts
for over 80% of its profit. This cash-generating
business has enabled it to take ambitious, but
expensive bets in new segments and deliver
modest profit growth.
Overall Strategy:
HUL always believes in customer friendly
products with major emphasis on low cost
overall without compromising on the quality
of the product. They are leveraging the
capabilities and scale of the parent company
and focusing on the value of execution. The
entire product portfolio is also being tweaked
to include premium offerings such as Pond's
Age Miracle and dove shampoo in skin and
hair care. HUL introduced Project Shakti to
penetrate the rural market.
ITC is focusing on delivering value at
competitive prices. Its tremendous reach
through extensive distribution chain has been a
competitive advantage. Additionally, the
company's e-choupal model for direct
17 | P a g e
procurement is well known under which ITC
partners with over 100,000 farmers for spices
and wheat procurement and an even larger
number for oilseeds. This kind of rural
pedigree is hard to beat.
Growth Drivers
HUL has been launching new products and
brand extensions, with investments being
made towards brand-building and increasing
its market share. HUL is also streamlining its
various business operations, in line with the
One Unilever' philosophy adopted by the
Unilever group worldwide. Introduction of
premium products and addition of new
consumers via market expansion will be
HUL's growth drivers.
ITC's backward integration to ensure that its
products pass efficiently from the farms to
consumers has helped it to cut down supply
and procurement costs. ITC's non-cigarette
FMCG business leverages the large
distribution network the company
developed by selling cigarettes over the years.
A rich product mix, along with ramp-up of
investments in its new sectors, will be
instrumental in charting ITC's growth path.
Being an MNC operating in India, HUL is
more conservative in its strategies than its
Indian counterparts. Moreover, given
increasing competition, it faces the risk of
being overtaken by domestic players in various
categories. Prolonged inflation may lead to
margin contraction, in case HUL is not able to
pass on this burden to consumers. The
company's large size also poses a problem,
since it does not give HUL the agility to
address the competition it faces from national
and regional players.
For ITC
Increased regulatory clamps on tobacco, along
with rising tax burden, pose a business risk for
ITC. So, it has started an ambitious
diversification plan, which has its own set of
risks. With its foray into the conventional
FMCG space, ITC has entered the high-clutter
branded products market. This will burden its
resources in terms of ad spend and brand-
building. Creating brand recall and building
has
market share in new products are ITC's key
challenges. Export ban and rising crop prices
pose a threat for its agri-business, taxing its
margins.

Risk for both the companies

For HUL

IILM-GSM-09-11_PBM_SEC-A_ 18 | P a g e
 HUL AND P&G
Procter & Gamble was founded in 1837 by
William Procter, a British citizen who
immigrated to the United States. The company
first sold candles. Procter & Gamble Co.
(P&G, NYSE: PG) is a Fortune 500 American
multinational corporation headquartered in
Downtown Cincinnati, Ohio that manufactures
a wide range of consumer goods. As of mid
2010, P&G is the 6th most profitable
corporation in the world, and the 5th largest
corporation in the United States by market
capitalization, surpassed only by Apple, Exxon
Mobil, Microsoft, and Wal-Mart. It is 6th in
Fortune's Most Admired Companies 2010 list.
P&G is credited with many business
innovations including brand management and
the soap opera.
IILM-GSM-09-11_PBM_SEC-A_
According to the Nielsen Company, in 2007
P&G spent more on U.S. advertising than any
other company; the $2.62 billion spent by
P&G is almost twice as much as that spent by
General Motors, the next company on the
Nielsen list.
P&G was named 2008 Advertiser of the Year
by Cannes International Advertising Festival.
Proctor & Gamble is a leading member of the
U.S. Global Leadership Coalition, a
Washington D.C.-based coalition of over 400
major companies and NGOs that advocates for
a larger International Affairs Budget, which
funds American diplomatic and development
efforts abroad.
19 | P a g e
 Major products of P&G

Coconut-based cleaning and food Laundry and personal cleansing products

products
Purico Tide
Star DariCreme
Perla Primex
Sunshine Safeguard
Camay Ariel
Mayon Gain
PMC Bonus
Victor Daz
Ola Lava
Agro Mr. Clean
Fresco Prell
Health care Crest
Vicks Zest
Fibresure Moncler
Thermacare Ivory
Pepto Bismol Laundry, personal care and hair care
Hair care and laundry categories Secret
Pampers Safeguard
Whisper Ascend
Rejoice Ariel
Tide Old Spice
Max Factor Zest
Vidal Sassoon Clairol
Ivory Nice n Easy
Pantene Wella
Dishwashing, fabric care and food Camay
categories
Joy
Mr. Clean
Downy
Alldays
Pringles

IILM-GSM-09-11_PBM_SEC-A_ 20 | P a g e
 STRATEGIES OF P&G industry. We are designed to lead in each
of these areas.
P&G focuses on five core strengths
required to win in the consumer products

Innovation
Consumer Understanding

P&G is the innovation leader in this

No company in the world has invested
industry. Virtually all the organic sales
more in consumer and market research
growth delivered in the past nine years has
than P&G. We interact with more than five
come from new brands and new or
million consumers each year in nearly 60
improved product innovation. We
countries around the world. P&G invest
continually strengthen our innovation
more than $350 million a year in consumer
capability and pipeline by investing two
understanding. This results in insights that
times more, on average, than our major
tell us where the innovation opportunities
competitors. In addition, we multiply our
are and how to serve and communicate
internal innovation capability with a global
with consumers.
network of innovation partners outside
P&G. More than half of all product

IILM-GSM-09-11_PBM_SEC-A_ 21 | P a g e
innovation coming from P&G today
includes at least one major component
from an external partner. The IRI New
Product Pacesetter Report ranks the best-
selling new products in our industry in the
U.S. every year. Over the past 14 years,
P&G has had 114 top 25 Pacesetters
more than our six largest competitors
combined. In the last year alone, P&G had
five of the top 10 new product launches in
the U.S. and 10 of the top 25.
Brand-Building
P&G is the brand-building leader of this
industry. It has built the strongest portfolio
of brands in the industry with 22 billion-
dollar brands and 20 half-billion-dollar
brands. Eleven of the billion-dollar brands
are the #1 global market share leaders of
their categories. The majority of the
balances are #2.
Go-to-Market Capabilities
It has established industry-leading go-to-
market capabilities. P&G is consistently
IILM-GSM-09-11_PBM_SEC-A_
ranked by leading retailers in industry
surveys as a preferred supplier and as the
industry leader in a wide range of
capabilities including clearest company
strategy, brands most important to
retailers, strong business fundamentals and
innovative marketing programs.
Scale
Over the decades, we have also established
significant scale advantages as a total
company and in individual categories,
countries and retail channels. P&Gs scale
advantage is driven as much by
knowledge-sharing, common systems and
processes, and best practices as it is by size
and scope. These scale benefits enable us
to deliver consistently superior consumer
and shareholder value.
P&G follows Connect + Develop strategy
which enables to bring innovations to life
faster, more economically and more
sustainably.
22 | P a g e
HUL AND P&G ADVERTIESMENT 7. Lady 1 gets astonished by the
WAR whiteness seen.
8. Lady 2s kid reacts by asking he
The new campaign started by Rin, a
mother, as to why is the other lady so
product of Hindustan Unilever Limited. It
observant and amazed
is a direct attack on the Tide
9. There is a disclaimer during the ad
Naturals product by Procter & Gamble.
that the analysis has been done by an
Note that when It is said a direct attack it
independent agency
means an uncensored visual shows the
10. Its then claimed that now there is
competitor product and then highlights
promotional price of Rs. 25 on Rin as
how the other product is better then the
opposed to the earlier Rs. 35.
former. The sequence of the ad is as
As it can be noticed, there is a direct
follows
mention of the competitor product along
1. Two ladies are standing on a bus stop,
with the visuals. This one seems to be an
waiting to pick their kids from the
absolute direct attack. It is difficult to say
school bus.
if the ad will continue on TV. Tide would
2. Both are carrying their shopping
definitely come out with a protest.
basket/bag with them.
However, I think the damage is already
3. Lady 1 has Tide Naturals in her bag.
done. The main point about the reduced
4. Lady 2 has Rin in her bag
price of Rin would definitely catch the
5. Both ladies have a look at each others
consumers eye benefiting HUL.
bag and Lady 1 boasts that Tide has a
good fragrance and provide better
whiteness/brightness to the clothes
6. In the meantime, the school bus
arrives and its shown that the white
shirt of Lady 2s kid is strikingly
brighter and whiter then the Lady 1s
kid.

IILM-GSM-09-11_PBM_SEC-A_ 23 | P a g e
 PRICE WAR BETWEEN HUL AND P&G

HUL increase the grammage for wheel

P&G increase the grammage of Tide by 25%

P&G cut the price of ARIEL

HUL reduces the price of surf exel in comparision to Ariel

In the year 2010 HUL has reduced 11-17% Due to which P&G reacts by cutting 20%
price in detergents, 7-17% in toilet soaps indirect price (25% grammage hike) in
and 6-7% in the toothpastes. TIDE.

HUL cut the price of RIN by 30% (price

war with P&G).

IILM-GSM-09-11_PBM_SEC-A_ 24 | P a g e
Strategic growth Strategies - market
summary of HUL entry:
HUL prioritized opportunities (Kissan Annapurna
which build upon the existing iodized salt)
assets and capabilities. It avoided
In 1995 HUL launched Kissan
spreading their management thinly.
Annapurna iodized salt at that time
For example: HUL first made its
only 10% of 6.5 million ton of salts
sales and distribution channel &
were branded and refined HUL
supply chain management in
identified it and launched the
manufacturing and selling wheat
KISSAN ANNAPURNA SALT.
flour and utilized it into the selling
Firstly it launched in the few cities
breads produced by wheat flour.
of the country for test marketing
HUL is more focused on the
and then for all.
innovations Example: In 1995
Shifted from purity- a product
launched KISSAN ANNAPURNA
attribute to Health consumer
staple foods with the message
benefit (As a positioning strategy)
staple food including iodized salt
Tried to shift the consumers from
Serving Rural population: In 2000
unbranded to brand.
the 32% of the sales were from
Started Using IODINE as a
rural sector but in 2010 it is more
marketing strategy as there were
than 50%.
other salts including iodine but no
It follows direct communication
one was focused on that. HUL
from the customers.
started it.
It believes in expanding the
Started endorsement through
portfolio.
trusted government agencies.
Each category has a different set of
In 2002 it has made iodine patented
supply chain, production and
in 80 countries.
consumer decision making process
issuing associated with it.

IILM-GSM-09-11_PBM_SEC-A_ 25 | P a g e
 Strategic Shifts attainable for a larger section of
consumers (mass).

In the past 10 years, HUL has made four

shifts in its business strategy, targeted at
ONE UNILEVER: Strategy in
boosting growth and reach
2007. Building leadership position
in fast-growing markets.
POWER BRANDS: Strategy in
2000. Focusing on fewer brands,
30 of them, and showering
marketing attention on them. PUMP UP THE VOLUMES:
Strategy in 2010. Global CEO Paul
Polman is pushing the Indian
operations chasing value growth to
deliver on the volumes as well.
MASSTIGE: Strategy in 2005-06.
Making premium brands (prestige)

IILM-GSM-09-11_PBM_SEC-A_ 26 | P a g e
Financial analysis of HUL
INCOME STATEMENT (RS MILLION)
Y/E MARCH 07 FY09 FY10 FY11E FY12E
Net Sales 136,754 202,393 173,844 190,848 213,504
Other Operating
Income 1,937 3,622 1,838 3,298 3,608
Total Revenue 138,691 206,016 175,683 194,147 2 17,112
Change (%) 13.0 48.5 -14.7 10.5 11.8
COGS 72,685 108,379 88,498 101,159 112,531
Gross Profit 66,006 97,636 87,185 92,987 104,581
Operating Exp 45,281 67,235 60,612 66,314 73,424
EBIDTA 20,724 30,402 26,573 26,673 31,157
Change (%) 13.7 46.7 -12.6 0.4 16.8
Margin (%) 14.9 14.8 15.1 13.7 14.4
Depreciation 1,384 1,953 1,814 2,006 2,132
Int. and Fin.
Charges 255 253 75 112 91
Other Income
Recurring 2,379 2,056 1,692 1,457 1,623
Pro fit before
T axes 21,464 30,251 26,376 26,013 30,557
Change (%) 15.3 40.9 -12.8 -1.4 17.5
Margin (%) 15.7 14.9 15.2 13.6 14.3
Tax 3,643 5,244 5,644 5,463 6,417
Deferred Tax 389 0 475 468 550
Tax Rate (%) 18.8 17.3 23.2 22.8 22.8
Profit after Taxes 17,432 25,007 20,256 20,082 23,590
Change (%) 13.2 43.5 -19.0 -0.9 17.5
Margin (%) 12.7 12.4 11.7 10.5 11.0
Non-rec.
(Exp)/Income 1,824 -43 -144 0 0
Reported P AT 19,256 24,965 20,112 20,082 23,590

IILM-GSM-09-11_PBM_SEC-A_ 27 | P a g e
If we analyze this financial statement we
can see that the performance of HUL has
decreased over the last two years and the
possible reasons for that are-
Higher expenses on the
advertisement part.
HUL is the king of distribution
channel in India but now it is
IILM-GSM-09-11_PBM_SEC-A_
getting full competition from the
P&G and others like ITC,
AMUL,DABUR,NESTLE etc
One of most important factors is
the power branding strategy of
HUL due to which it has ignored
most of the brands and just
focusing only on the power brands.
28 | P a g e
Brand Management
at HUL
HUL has a large brand portfolio consisting
of nearly 110 bands. In every product line,
it has built a number of brands over a
period of time. Quite a few brands have
come to its fold from the parent company.
It has also acquired several ongoing brands
from the market. HUL also vigorously
pursues brand extension strategy. And
concurrently, HUL undertakes line pruning
and brand restructuring and consolidation,
based on marketing compulsions. HUL is
also playing the rejuvenation and re-launch
game. With great benefit the corporate-
level endeavors at business expansion and
diversification are also throwing new
challenges on the brand strategy front.
HUL lends itself for a proper
understanding of the complexity of the
brand management task. We shall examine
how HUL handles the complex demands
in brand management. Such an array of
brands is the outcome of a conscious
corporate strategy by HUL. As a corporate,
HUL wants to be a leader in every one of
its businesses and the strategy is to fight
on the strength of the competitive
advantage arising from the possession of
strong brands. It is this strategy that is
getting reflected in the development of a
multitude of strong brands. If we take the
business of bathing soaps, as an example,
IILM-GSM-09-11_PBM_SEC-A_
HUL has the objective of being a national
player (not a niche or a regional marketer)
and the leader therein. HUL also wants
about 30 per cent of the corporate income
to come from this line.
So, HUL opted for the strategy of
developing quite a few strong brands in
this line, and among them they cover
different market segments and price points.
Dove, Lux, Liril, Rexona, Pears and
Lifebuoy are the outcome of such a well
planned brand strategy implemented over
time. Lifebuoy is 100 years old and Liril
15 years old. In fact, HUL has about 10
brands of toilet soaps each having good
volume of sale to its credit . The point is
that decisions on brand portfolio are a
fundamental expression of the companys
objectives and strategy governing a given
business.
HUL Locates Positioning Opportunities:
HUL methodically goes about the task of
developing a brand portfolio across a
product category. It first identifies the
various positioning opportunities across
benefits, target groups and price points.
Existing brads are mapped across these
positioning opportunities, and gaps for
possible new offers are explored.The
company then estimates the likely volumes
for each of the possible opportunity and
the financial viability and sustainability of
29 | P a g e
the propositions in the long term. If some
of these gaps look promising, HUL goes
ahead with the plans. It examines the
existing set of brands with the company,
the product technologies available, the
benefits that can be provided and other
considerations that have a bearing on the
companys long term interests in the
business. Finally, if the company decides
to go in for the new offer, a decision has to
be taken as to whether new brands should
be created or extensions if existing brands
should be preferred or ongoing brands
from the market acquired.
HUL hires brands to capture new
opportunities: Towards the close of the
1990s, HUL found that the germicide
segment of the soap market was growing
fast, with RCIs Dettol antiseptic soap
leading it. HUL did not have suitable offer
in its stable to capture a share of this
segment. Lifebuoy was not strictly
meeting the particular benefit. HUL knew
that launching and developing a new brand
would take a lot of time and resources, and
the company would miss the market if it
chose this route. HUL did not have the
product formula either to enter this
segment. It was in this background that
HUL decided to hire the Savlon brand
from J&J. Savlon was a successful
antiseptic lotion, a competitor to Dettol
lotion. Just as the Dettol soap owed its
IILM-GSM-09-11_PBM_SEC-A_
origin to the success of the Dettol lotion,
HUL assessed that a Savlon antiseptic
soap could be successfully extended from
the Savlon lotion. It entered into an
agreement with J&J for the use of Savlon
brand name and the product formula, and
launched the Savlon antiseptic soap. HUL
very deftly managed successfully new
brand launch and merged as a challenger
to Dettol soap. J&J secures a good royalty
from HUL for lending the brand. It is a
potentially win-win arrangement for both
companies.
Repositioning and rebranding
HUL has done the process of repositioning
the brands. Few of them as follows;
SUNSILK: Sunsilk co-creations ,
collaboration with 7 pioneer global
hair experts
BREEZE: New fragrances over the
world, new look more colors,
packaging
Rexona: relaunched it with the
coconut moistening
Lifebuoy hand sanitizer: kills
99.99% germs in 15 seconds
Fairness cream: Fair & lovely
multivitamin
Close-up: peppermint splash
Pepsodent toothbrush: 25%
flexibility.
30 | P a g e
Conclusion & hotels, paper and agri-businesses. Investors
Recommendations
HUL's up-and-running business model is a
treat for investors seeking exposure in the
FMCG segment. The company has
delivered in the past and has the potential
to do better in future. In short term. HULs
growth story is evolving.
ITC is eyeing the pie which HUL and
other FMCG players currently enjoy.
Though risky, the company's business
model will pay off in the long run. ITC has
proved its expertise in the cigarettes,
IILM-GSM-09-11_PBM_SEC-A_
who want to bank on its execution ability
in FMCG can consider the stock with a
long-term horizon.
According to us the companies should
continue with their CSR and also continue
with their strategies. The thing that needs
to be changed is that, ITC should go for
more diversification in Non cigarette
segment (FMCG) while HUL should come
up with the new strategies that could take
the new product forward to create a new
segment. A recommendation For HUL is
that it should focus on rural area more.
31 | P a g e
Bibilography

www.google.com

www.hul.com

www.projectshakti.com

www.wikipedia.com

www.youtube.com

IILM-GSM-09-11_PBM_SEC-A_ 32 | P a g e