Internship Report on

SALES AND DISTRIBUTION MANAGEMENT IN (HUL)

BY

AMIT KUMAR

ID- ASM12PGDM006

Submitted to

ACHARYA SCHOOL OF MANAGEMENT, BANGALORE

In partial fulfillment of the requirements for the award of the degree of

POST GRADUATE DIPLOMA IN MANAGEMENT

Under the guidance of

INTERNAL GUIDE EXTERNAL GUIDE

Prof: RAVI KUMAR SANJAY GUPTA

ACHARYA SCHOOL OF MANAGEMENT

Department of PGDM (2012-2014)

Dr Sarvepalli Radhakrishnan Road

Soldevanahalli, Hesarghatta Main Road, Bangalore -560090

1
 CERTIFICATE

This is to certify that AMIT KUMAR bearing Roll Number ASM1204003, is a bonafide

Student of Post Graduate Diploma In Management, Acharya School of Management

(Batch 2012-14), Approved by AICTE, Ministry of HRD, New Delhi. Internship report on

“SALES AND DISTRIBUTION MANAGEN (C.G)” is prepared by him/her under the

guidance of Prof: RAVI KUMAR, in partial fulfillment of the requirements for the award

of Post Graduate Diploma in Management.

Signature of Internal Guide Signature of Head & Mgmt Studies

Prof: RAVI KUMAR

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 Internship Completion Certificate

It is here by certified that Mr. /Ms. _AMIT KUMAR , student of the Acharya School of
Management has completed the Internship at our organization _TRIMURTI
ENTERPRISES BHILAI from_27-OCT-2013_ to _04-01-2014 successfully.

Mr. AMIT KUMAR during his/her stay at our organization has performed the assigned
worked satisfactorily and conduct was good. The student has attended all days for
completing his/her internship.

Reporting Officer
(With Name, Designation
Contact Number & Seal)

3
 DECLARATION

I AMIT KUMAR, hereby declare that the Internship report entitled “SALES AND
DISTRIBUTION MANAGEMENT IN (C.G) ”with reference to “TRIMURTI
ENTERPRISES BHILAI” prepared by me under the guidance of (Prof: RAVI KUMAR) ,
faculty of the Acharya School of Management.

I also declare that this Internship project is towards the partial fulfillment of the
curriculum requirements of PGDM Program at the Acharya School of Management.

I have undertaken this project for a period of 10 weeks. I further declare that this
project is based on the original study undertaken by me and has not been submitted
for the award of any degree/diploma from any other University/Institution.

Place: Bangalore Signature of the student

Date: 22-Jan-2014

TABLE OF CONTENTS

4
CONTENTS Page No

Chapter 1: Executive Summary 06

Chapter 2: Objective of the Study 08

Chapter 3: Industry Profile 10

12

Chapter 4: Company Profile 35

Chapter 5: SWOT Analysis 43

Chapter 6: Methodology of data collection 46

Chapter 7: Analysis and Findings 55

Chapter 8: Recommendations 64

Chapter 9: Conclusion 68

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 CHAPTER 1

EXECUTIVE SUMMARY

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 Executive Summary

The main objective of the project is to get the full

knowledge of the distribution network of the products of the
HUL and how they are using the distribution network as a
key diff erentiating factor from its competitors. This is also to
find the preferences of customer and there market knowledge
and product information, information about the presence of the
rivals of HUL and all the other options they have in the market.
HUL are also looking to tap the market in rural sector, so
they also taking into consideration the needs and wants of the
people there. The study was done with reference to many
products of HUL and there distribution channel in DURG, BHILAI of
(C.G).
It was a useful learning to understand the working of HUL.

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 CHAPTER 2

OBJECTIVE OF THE STUDY

8
 Objective of the Study

 To understand the distribution network of Hindustan Unilever Ltd.

 To find the ways to use the distribution network as the key differentiating
factor from its competitors.

Scope of the study

 The scope of the study is confined to distribution networks in DURG,

BHILAI only, as the project duration is short time.

Limitayion of study

 The distributors showed lack of interest due to time constraint or some other
personal issues.

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 CHAPTER 3

INDUSTRY PROFILE

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 Industry Profile

Fast Moving Consumer Goods (FMCG) goods are popularly named as consumer

packaged goods. Items in this category include all consumables (other than

groceries/pulses) people buy at regular intervals. The most common in the list are toilet

soaps, detergents, shampoos, toothpaste, shaving products, shoe polish, packaged

foodstuff, and household accessories and extends to certain electronic goods. These

items are meant for daily of frequent consumption and have a high return.

The Indian FMCG sector with a market size of US$14.8 billion is the fourth largest

sector in the economy. The FMCG market is set to double from USD 14.7 billion in

2008-09 to USD 30 billion in 2012. FMCG sector will witness more than 60 per cent

growth in rural and semi-urban India by 2010. Indian consumer goods market is

expected to reach $400 billion by 2010.Hair care, household care, male grooming,

female hygiene, and the chocolates and confectionery categories are estimated to be

the fastest growing segments. At present, urban India accounts for 66% of total FMCG

consumption, with rural India accounting for the remaining 34%. However, rural India

accounts for more than 40% consumption in major FMCG categories such as personal

care, fabric care, and hot beverages. In urban areas, home and personal care category,

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including skin care, household care and feminine hygiene, will keep growing at relatively

attractive rates. Within the foods segment, it is estimated that processed foods, bakery,

and dairy are long-term growth categories in both rural and urban areas.The growing

incline of rural and semi-urban folks for FMCG products will be mainly responsible for

the growth in this sector, as manufacturers will have to deepen their concentration for

higher sales volumes.

Major Players in this sector include Hindustan Unilever Ltd., ITC (Indian Tobacco

Company), and Nestlé India, GCMMF (AMUL), Dabur India, Asian Paints (India),

Cadbury India, Britannia Industries, Procter & Gamble Hygiene and Health Care, Marico

Industries, Nirma, Coca-Cola, Pepsi and others. As per the analysis by ASSOCHAM,

Companies Hindustan Unilever Ltd, Dabur India originates half of their sales from rural

India. While Colgate Palmolive India and Marico constitutes nearly 37% respectively,

however Nestle India Ltd and GSK Consumer drive 25 per cent of sales from rural India.

A rapid urbanization, increase in demands, presence of large number of young

population, a large number of opportunities is available in the FMCG sector. The

Finance Minister has proposed to introduce an integrated Goods and Service Tax by

April 2010.This is an exceptionally good move because the growth of consumption,

production, and employment is directly proportionate to reduction in indirect taxes which

constitute no less than 35% of the total cost of consumer products - the highest in Asia..

The bottom line is that Indian market is changing rapidly and is showing unprecedented

consumer business opportunity.

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 CHAPTER 4

COMPANY PROFILE

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 Company Profile

In the summer of 1888, visitors to the Kolkata harbour noticed crates full of

Sunlight soap bars, embossed with the words "Made in England by Lever Brothers".

with it, began an era of marketing branded Fast Moving Consumer Goods (FMCG).

Soon after followed Lifebuoy in 1895 and other famous brands like Pears, Lux

and Vim. Vanaspati was launched in 1918 and the famous ‘Dalda’ brand 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; HUL offered 10% of its equity to the Indian public, being the first among the

foreign subsidiaries to do so. Unilever now holds 52.10% equity in the company. The

rest of the shareholding is distributed among about 360,675 individual shareholders and

financial institutions.

The erstwhile Brooke Bond's presence in India dates back to 1900. By 1903, the

company had launched Red Label tea in the country. In 1912, Brooke Bond & Co. India

Limited was formed. Brooke Bond joined the Unilever fold in 1984 through an

international acquisition. The erstwhile Lipton's links with India were forged in 1898.

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Unilever acquired Lipton in 1972 and in 1977 Lipton Tea (India) Limited was

incorporated.

Pond's (India) Limited had been present in India since 1947. It joined the Unilever

fold through an international acquisition of Chesebrough Pond's USA in 1986.

Since the very early years, HUL has vigorously responded to the stimulus of

economic growth. The growth process has been accompanied by judicious

diversification, always in line with Indian opinions and aspirations.

The liberalization of the Indian economy, started in 1991, clearly marked an

inflexion in HUL's and the Group's growth curve. Removal of the regulatory framework

allowed the company to explore every single product and opportunity segment, without

any constraints on production capacity.

Simultaneously, deregulation permitted alliances, acquisitions and mergers. In

one of the most visible and talked about events of India's corporate history, the erstwhile

Tata Oil Mills Company (TOMCO) merged with HUL, effective from April 1, 1993. In

1996, HUL and yet another Tata company, Lakme Limited, formed a 50:50 joint venture,

Lakme Unilever Limited, to market Lakme's market-leading cosmetics and other

appropriate products of both the companies. Subsequently in 1998, Lakme Limited sold

its brands to HUL and divested its 50% stake in the joint venture to the company.

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, Unilever Nepal Limited (UNL), and its

15
factory represents the largest manufacturing investment in the Himalayan kingdom. The

UNL factory manufactures HUL's products like Soaps, Detergents and Personal

Products both for the domestic market and exports to India.

The 1990s also witnessed a string of crucial mergers, acquisitions and alliances

on the Foods and Beverages front. In 1992, the erstwhile Brooke Bond acquired Kothari

General Foods, with significant interests in Instant Coffee. In 1993, it acquired the

Kissan business from the UB Group and the Dollops Ice-cream business from Cadbury

India.

HUL launched a slew of new business initiatives in the early part of 2000’s.

Project Shakti was started in 2001. It is a rural initiative that targets small villages

populated by less than 5000 individuals. It is a unique win-win initiative that catalyses

rural affluence even as it benefits business. Currently, there are over 45,000 Shakti

entrepreneurs covering over 100,000 villages across 15 states and reaching to over 3

million homes.

In 2002, HUL made its foray into Ayurvedic health & beauty center category with

the Ayush product range and Ayush Therapy Centers. Hindustan Unilever Network,

Direct to home business was launched in 2003 and this was followed by the launch of

‘Pure-it’ water purifier in 2004.

In 2007, the Company name was formally changed to Hindustan Unilever Limited

after receiving the approval of shareholders during the 74th AGM on 18 May 2007.

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Brooke Bond and Surf Excel breached the Rs. 1,000 crore sales mark the same year

followed by Wheel which crossed the Rs. 2,000 crore sales milestones in 2008.

On 17th October 2008, HUL completed 75 years of corporate existence in India.

BRANDS

HUL is the market leader in Indian consumer products with presence in over 20

consumer categories such as soaps, tea, detergents and shampoos amongst others

with over 700 million Indian consumers using its products. Sixteen of HUL’s brands

featured in the ACNielsen Brand Equity list of 100 Most Trusted Brands Annual Survey

(2008). According to Brand Equity, HUL has the largest number of brands in the Most

Trusted Brands List. It has consistently had the largest number of brands in the Top 50,

and in the Top 10 (with 4 brands).

The company has a distribution channel of 6.3 million outlets and owns 35 major

Indian brands. Its brands include Kwality Wall's ice-cream, Knorr soups & meal

makers, Lifebuoy, Lux, Pears, Breeze, Liril, Rexona, Hamam and Moti soaps, Pure-

it water purifier, Lipton tea, Brooke Bond (Roses, Taj Mahal, Taaza, Red Label)

tea, Bru coffee, Pepsodent and Close Up toothpaste and brushes,

and Surf, Rin and Wheel laundry detergents, Kissan squashes and jams, Annapurna

salt and atta, Pond's talcs and creams, Vaseline lotions, Fair and Lovely creams, Lakme

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beauty products, Clear, Clinic Plus, Clinic All Clear, Sunsilk and Dove shampoos, VIM

dishwash, Ala bleach, Domex disinfectant, Modern bread, Axe deo sprays and Comfort

fabric softeners.

MILESTONE ACHEIVED

 Five of HUL's leading brands – Lux, Dove, Pears, Clinic Plus and Sunsilk – won

the Reader's Digest Trusted Brand 2008 Awards.

 Four HUL brands featured in the top 10 list of the Economic Times Brand Equity's

Most Trusted Brands 2008 survey

 HUL was awarded the Bombay Chamber Civic Award 2007 in the category of

Sustainable Environmental Initiatives.

 HUL was selected as the top Indian company in the FMCG sector for the Dun &

Bradstreet - American Express Corporate Awards 2007.

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HINDUSTAN UNILEVER LIMITED INDIA’S LARGEST FMCG COMPANY

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 HUL DISTRIBUTION NETWORK
MANUFACTITS ALL ACROSS INDIA

C&F 1 C&F 2 C&F 3 C&F 4 C&F 5 C&F 6 C&F 7

STOCKISTS STOCKISTS STOCKISTS STOCKISTS STOCKISTS STOCKISTS STOCKISTS

WHOLESALERS

RETAILERS

CUSTOMERS

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This is the whole Distribution Chain of HUL to cover the rural market. The company
have remarkably worked upon to make the supply chain from manufacturers to retailers
simple with very few number of mediators and jobbers. It has helped them to maintain
the transparency in the cycle and also have let them established a prompt delivery
process. The products are manufactured in the factories all across India and then is
supplied from there to the various Carriage and Forwarding (C&F) units which are 5-10
per state depending on the area they have to cover and are established by the
company. These C&F units then supply the products to the various Wholesalers
confined to their area only and according to the wholesalers demand. The wholesalers
then supply the products to the semi-wholesalers and the retailers as per the volume of
their order. Then the semi-wholesalers deliver the products to the retailers and
customers.

MANUFACTURER

STAGE 1-

C&F

In this stage the products reach to the Carriage and Forwarding unit from various
manufacturing units established all across India. The volume of the delivery depends
upon the quantity required/ordered by the C&F unit. The depot sends the request of the
volume of the products to the Head Office, which then order the various factories to
supply the products to the mentioned depot. The supply is met within a week. HUL has
45 C&F’s with 7000 stockists and 2000+ suppliers and associates to target the market.

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 C&F

WHOLESALERS
STAGE 2-

The C&F then supplies the products according to the demand of various wholesalers.
Each of the depot cover a region assigned to them.

Each C&F acquires 5-7 trucks and hire 4-5 more trucks to supply products everyday.

They work on the concept of advance payment by DD by the wholesalers and deposit
them in the bank which is transferred to the head office.

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 HUL DISTRIBUTION NETWORK IN RURAL MARKET
ALL ACROSS INDIA

C&F 1 C&F 2 C&F 3 C&F 4 C&F 5 C&F 6 C&F 7

STOCKISTS STOCKISTS STOCKISTS STOCKISTS STOCKISTS STOCKISTS STOCKISTS

WHOLESALERS

AGENTS

RETAILERS

CUSTOMERS

IN Rural Geographic Regions of India the product which should be made by the
manufactures can be delivered through by C & F unit and these unit provide stock in the
hand of the merchant wholesalers. Wholesaler delivers the product or stock to the
different retailers (who sales stock in breaking bulk) through by agents. The main
difference in urban and rural areas distribution networks are the agent who made
relation between merchant wholesalers to retailers. Retailers can sell stock in small
quantity to the ultimate consumers.

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\

24
 CHAPTER 5

SWOT ANALYSIS

SWOT ANALYSIS

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Strengths

H L L e n j o ys a f o r m i d a b l e d i s t r i b u t i o n n e t w o r k c o v e r i n g o v e r 3 4 0 0

d i s t r i b u t o r s a n d 1 6 million outlets. This helps them maintain heavy volumes,

and hence, fill the shelves of most outlets. The new sales organization named 'One

HLL' brings "Household and Personal Care “and foods distribution networks

together, thereby aligning all the units towards the common g o a l of

achieving success. HLL has been continuously able to grow at a rate

m o r e t h a n growth rate for FMCG Sector, thereby reaffirming its future

stronghold in Indian market. Project Shakti

Rral India is spread across 627,000 villages and possesses a

s e r i o u s distribution challenge for FMCG Cos. HLL has come up with

a u n i q u e a n d s u c c e s s f u l i nitiative wherein the women from the rural sector

market HLL products, and hence, are able to reach the same wavelength as of the

common man in village. Apart from product reach, t h e i n i t i a t i v e a l s o

c r e a t e s b r a n d a w a r e n e s s a m o n g s t t h e l o w e r s t r a t a o f s o c i e t y. T h i s

h a s brought about phenomenal results.

Weakness

26
HLL's market dominance, originating from its extensive reach and strong brand

presence, allowed it to raise the prices even as raw materials were getting cheaper.

Hence, though the volumes decreased, t h e m a r g i n s g r e w, a n d c o m p a n y w a s

a b l e t o e a r n m o r e p r o f i t s . B u t h i g h e r m a r g i n s a t t r a c t e d competition in

areas of operations. HLL's strategy remained focused on creating power

brands and earning higher margins. It was not left with any other option but to try

cutting down the costs in order to protect volumes, if not increase it. As shown in above

figure, the key differentiators for an FMCG player are ability to call shots and

pricing power, and HLL has shown weakness over both the re factors. HLL's

weakness was its inability to transform its strategies at the right time. They continued

with the same old strateg y which helped them gain profits but was

n o t g e n u i n e i n t h i s c h a n g e e nvironment. HLL's risk aversion and market

myopia led to stagnation of business, and ferocity of competition forced it into a

defensive mode. Lack of pricing power in core business and absence of growth drivers

have put HLL on a deflationary mode.

Opportunities

India is one of the world's largest producer of FMCG goods but its exports are miniscule

as compared t o p r o d u c t i o n . T h o u g h Indian Cos. have been going

g l o b a l , t h e i r f o c u s i s m o r e t o w a r d s As i a n countries because of the

similar preferences. HLL is one of the top companies exporting FMCG goods

from India. An expansion of horizons towards more and more countries would help HLL

27
grow its consumer base and henceforth the revenues. Opportunity in Food Sector - The

advent of modern trade has opened up greater opportunities for HLL to diversify its

brand and strength its food division. It could look at introducing products from its

parents stable like margarines and could also look at expanding its Knorr range

of products. Well-placed to take advantage of future FMCG Growth – HUL reach out

80% of 207 million households in the country through various brands. It has a

very well-defined product portfolio spread across many product categories.

Penetration levels for some major

Categories like skin-cream (22%), shampoo (38%), toothpaste (48%) and processed

foods, continue to remain low offerings but great growth opportunities products.

Threats

ITC has reduced its dependence on the cigarettes business - Contribution of

the core business in revenues has come down from 87% in FY99 to 70% in

FY05. Over a period of five years, ITC has extended its presence into areas

like foods, retailing, hotels, greetings, agro, paper, etc. These are businesses

that can give it growth impetus in the long run. With ITC gaining momentum

in each of these businesses, it is turning into a consumer monolith, and

hence, the greatest threat to HLL's Business. SSKI India has gone on to say, "they

28
maintain Out performer on ITC with a price target of Rs. 2200, while our under

performer call on HLL remains unaltered (price target of Rs. 160)."

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 CHAPTER 6

METHODOLOGY OF DATA COLLECTION

Methodology of Data Collection

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The Data for this project was collected through Primary and Secondary sources.

PRIMARY DATA:

 It is essential to collect PRIMARY DATA to make sample survey. A successful and

the most popular technique of data collection is through a questionnaire, thus a

questionnaire was framed and distributed manually among different people who are

residing in the CHATTISGARH region.

SECONDARY DATA:

 This Report is dedicated to Secondary information about company profile and

various decisions taken by the company regarding product line expansion,

product line pruning and various other matters related to product line. I have

collected this information with the help of internet and journals. This report gives

you relevant information about various activities taken by Hindustan Unilever

limited.

DATA COLLECTION TOOL:

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  I have collected all the information with the help of Internet, Journals and

Secondary source.

SAMPLE PLAN

 Units- People residing in the Chhattisgarh region.

 Size- 43 respondents.

ANALYSIS OF DATA

Three preliminaries should be followed for analyzing the data:-

1. Editing

2. Classifying

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 CHAPTER 7

ANALYSIS AND FINDINGS

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1. Do you keep products of HUL in your outlet/shop?

a).Yes 88 b). No 12 .

2. Why don’t you keep the products of HUL in your shop or why did you stop
keeping its products?

a). erratic supply 4

b). lack of demand 2

c). low margin 2

d). no supplier 3

e). don’t know about the company 1

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2. From whom do you purchase your product?

1). Distributor 25

2). Dealer/ Agent 40

3). Agency 18

4). Wholesaler 17

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3. How do you rate the delivery process of the distributor/dealer?

a Excellent 25
b Above Average 33
c Average 38
d Below Average 4
e Extremely Poor 0

36
37
4. Are you satisfied with the distributor/dealer behavior?

Yes 68

No 32

38
5. Are you satisfied with the delivery of the goods supplied by distributor/ dealer?

Yes 71

No 2

39
6 Are they providing you adequate supply of goods?
Yes 76
No 24

7 Is the distributor taking the damages/ compensation regularly?

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Yes 78

No 22

41
8 What is the mode of payment to the distributor/ Dealer by Retailer?

Cash 62

Credit 24

Cheque 14

42
9. Are they providing you any discount on cash payment?

Yes 52

No 48

Are they providing you any discount on cash payment?

53
52
52

51

50 Yes No

49
48
48

47

46
1
1
0. Any extra benefit for the increment of the sales given by them?

43
Windows Display 75

Long term sales plan 20

Canopy 5

Any extra benefit for the increment of the sales given by them?

20
Windows Display Long term sales plan Canopy

75

44
1. Can agents regularly make aware you about the new products of HUL regular or
not?

Yes 72

No 28

45
 FINDINGS

1. 88% of distributer keep HUL product in their outlet.

2. 25% of retailor purchase our product from distribute.
40% of retailor purchase our product from dealer or agents.

46
 18% of retailor purchase our product from agencies.
17% of retailor purchase our product from wholesaler
3. 68% of retailor are satisfied with our distributer or dealer behavior.
4. 71% of retailor satisfied with the delivery of goods supply by distributer /dealer.
5. 76% of dealer providing adequate supply if goods
6. 52% of dealer providing cash discount.
7. 72% of distributer provide information about new launch of HUL products.
8. Majority of 33% of retailor do not keep the stocks due to low margins.

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 CHAPTER 8
RECOMMENDATIONS

Recommendations

 HUL should serve channel partners and customers by replacing damaged

products continuously.
 HUL should improve the response time and try to deliver products on time.
 HUL should encourage to the dealer to provide cash discount.

48
 HUL should increase the quality of packaging of their product to decrease the

damages.
 Launching for several sales promotional schemes for existing wholesaler and

distributors instance, it has started the ‘Vijeta – Rista jeet ka’ scheme last year to

provide a platform for the wholesaler and HUL to grow the business by earning

points and redeem them.

CHAPTER 9

49
 CONCLUSION

Conculaction

With the study of the topic we can know about the distributor relationship with the

retailers of the largest firm in retail Sector are:

HINDUSTAN UNILEVER LIMITED.

With the study it can be easily known how the retailers are been selected HINDUSTAN

UNILEVER LIMITED (Super value store) and what the terms and conditions regarding

the selection of the retailers and what are the benefits being provided to the retailers

and what are the various benefits being provided to the retailers in order to increase

their sales.

50
The company is making there strategies regarding the customer and the various

product assortment being provided to the retailers and whether the distributor is helping

the retailers in managing the demand of the retailers and also the sales agent behavior

and delivery man behavior affects the sale of the retailers as well as the distributor.

So, my study is visualize the distribution channel of the HINDUSTAN UNILEVER

LIMITED in rural areas and they say that retailers liked

ARTICLES:
WEBLIOGRAPHY

Books:-

C R Kothari (Research Methodology)

Websites:-

www.hul.com

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www.google.com

Magazines & Newspapers:-

Business World
Economic Times
The Times of India

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