HINDUSTAN UNILEVER LIMITED

BEAUTY & PERSONAL CARE

INDIAN INSTITUTE OF MANAGEMENT, TIRUCHIRAPALLI

GROUP-C7
MAYUKH MUKHOPADHYAY
AHANA BHATTACHARJEE
DHEERAJ SINGH
SONAL SINGH
ANIRBAN BHOWMICK
Situational Analysis
MACROECONOMIC OVERVIEW
➢ FMCG industry size of ~$ 82 bn & is expected to grow at 12-13% CAGR.
➢ FMCG is fourth largest sector in Indian economy.
➢ Indian Economy is growing at a healthy rate of 6.8% & is expected to grow at nearly
same GST led to reduction in taxes on products like hair oil & soaps reduced from 22-
24% to 18%

OVERVIEW OF HUL
➢ HUL has a historical presence of more than 8 decades in India.
➢ Nine out of ten households use one or more of HUL brands.
➢ HUL has a basket of 40 brands across 12 distinct categories.
➢ Products touch lives of more than million people daily.
➢ More than 1000 suppliers & 3500 distributors & several thousand across the value
chain viz., farmers & distribution partners.
➢ Net sales have grown 2.3x over the last decade & 23% CAGR in capital appreciation in
the same time period.

PORTER’S FIVE FORCES

THREAT OF NEW ENTRANTS

➢ FDA approvals needed to enter the industry
➢ Quality standards set by existing players
➢ Brand perception among the consumers
➢ Capital requirement for entering into the varied sectors of FMCG
➢ Low differentiation among products
➢ Establishing wide distribution network

INDUSTRY RIVALRY
➢ Products lack high differentiation
➢ New players entering certain segments creating fierce rivalry
➢ Deep pockets by major firms
➢ Difficulty is setting up extensive supply chains to compete with existing players

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BARGAINING POWER OF SUPPLIERS
➢ Switching cost is low as inputs to FMCG products are fairly commoditized
➢ Forward integration is not possible as products and processes are IP protected
➢ Suppliers are not concentrated and companies collaborate with numerous vendors
➢ Suppliers depend heavily as major FMCG players contribute to bulk of the purchases

BARGAINING POWER OF BUYERS

➢ Buyers are distributed and the industry is concentrated among the major players
➢ Switching cost is low
➢ No foreseeable threat of backward integration as brand names matter more than the
underlying product among the end users
➢ Profit margins are governed by the industry players than the buyers

BARGAINING POWER OF BUYERS

➢ Buyers are distributed and the industry is concentrated among the major players
➢ Switching cost is low
➢ No foreseeable threat of backward integration as brand names matter more than the
underlying product among the end users
➢ Profit margins are governed by the industry players than the buyers

MARKETING MIX- 4 Ps

PRODUCT
Being one of the leading FMCG brands in India, Hindustan Unilever caters to a wide range of
consumer’s needs from personal care to foods and refreshment and home care. A quick
analysis of its different products under each of the above mentioned categories would lead to
the following observations:
➢ Under the Foods and Refreshments, it has brands like Kissan, Lipton Green tea,
Cornetto, Magnum among others.
➢ Under the Personal Care segment, some of its brands are Dove, Lux, Sunsilk,
Pond’s, Pepsodent, Pears, Toni&Guy, Vaseline among others.
➢ And, under the Home Care segment, its brands are Comfort, Domex, Surf Excel,
Rin, Vim, Sunlight and others.
With over 35 different brands spread under twenty different categories such as water purifiers,
shampoos, cosmetics, deodorants, Hindustan Unilever has made a unique place in the hearts
and minds of millions of customers across the country. Its customer base is not just the urban
Indians but through its products like Clinic Plus, Rin, Kissan, Pepsodent, it is widely popular
among the rural Indians as well.

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PRICE
Given its diverse products that caters to a wide range of income groups. HUL maintains a
competitive pricing policy to beat the market shares of its competitors. For the same categories
of products, it offers both low cost and high end brands. For example, Lux is a low cost product
and Dove is a high end brand. For its professional brand, Toni&Guy, it follows a high premium
pricing strategy as compared to its another brand, Lakme. Also, for the more popular
household goods like Rin, Vim, Pepsodent and others, it follows a product bundle pricing
strategy.

PROMOTION
HUL uses both the print and digital media to heavily advertise for its products. Advertisements
in the newspapers and in the form of TV commercials roping in popular Bollywood celebrities is
one of its conventional promotional strategies. Off-late, HUL’s various campaigns such as ‘Dirt
is Good’ campaign, Dove campaign for Real Beauty has helped it to create platforms to
increase awareness on significant social issues and build emotional connections with millions
of its customers.

PLACE
The wide distribution networks involving the high-end retail outlets in the cities to the small
kirana stores in the rural landscapes, attributes to the company’s wide consumer base.

REFERENCES

➢ Euromonitor
➢ Crisil Research
➢ HUL Annual Report 2018-19

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