A

RESEARCH PROJECT REPORT

ON

“COMPARATIVE STUDY AND DISTRIBUTION CHANNEL

OF HUL & ITC”
FOR THE PARTIAL FULFILLMENT FOR THE AWARD OF
DEGREE OF
MASTER OF BUSINESS ADMINISTRATION
Submitted To
UPTU, LUCKNOW
Session :- (2014-2015)

Submitted To: Submitted By:

Ms. Preeti Singh VASEEM ANSARI
(Faculty of Management) Roll No. 1328870035
MBA IV Sem

VENKATESHWARA INSTITUTE OF TECHNOLOGY MEERUT

(Affiliated To: UPTU Lucknow)

1
 DECLARATION

.
I VASEEM ANSARI Student of MBA- IV Sem hereby declare that the

dissertation entitled “COMPARATIVE STUDY AND DISTRIBUTION CHANNEL

OF HINDUSTAN UNILEVER (HUL) AND IMPERIAL TOBACCO COMPANY

(ITC)” that is being submitted by me in partial fulfillment of the requirements for the

award of the degree of MBA from U.P.T.U, Lucknow is a record of bonafied work

carried out by me.

Date: VASEEM ANSARI

Place:
(Signature of the student)

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 ACKNOWLEDGEMENT

Firstly, I am grateful to Ms. Preeti Singh, Asst Professor, VIT, Meerut , for his
continuous and deliberate discussion on the topic and indeterminable burden taken by him
in helping me during the research report.

Last, but not least I am thankful to my parents & my brothers who motivated me
throughout this work, the preparation of this report would not have been an easy task
without the help and support of my parents & my brothers.

I am pleased to say that the whole report is just the presentation of the facts that have
been found during the research through different sources and its each sentence is an exact
representation of the information obtained thereof.

I hope that I have manifested my sincere attempts to represent all the information and
other things to the best of ability.

(VASEEM ANSARI)

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 TABLE OF CONTENT

CONTENTS:- PAGE NO:-

EXECUTIVE SUMMARY 5

INTRODUCTION 6-10

COMPANY AND ITS PRODUCT OVERVIEW 11-50

DISTRIBUTION SEGMENTS 51-65

RESEARCH METHODOLOGY 66-69

DATA ANALYSIS AND ITS INTERPRETATION 70-79

DESCRIPTIVE WORK 80-95

FINDING 96-97

LIMITATION 98-99

CONCLUSION AND SUGGESTION 100-102

BIBLIOGRAPHY 103

ANNEXURE 104-105

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 EXECUTIVE SUMMRY

The main objective of the research is to get the full knowledge of the distribution
network of the products of the Hindustan Uni Lever (HUL) and Imperial Tobacco
Company(ITC) and how they are using the distribution network as a key differentiating
factor from its competitors. This is also to find the preferences of customer towards the
food products of both the company, there market knowledge, product information,
Information about the presence of the rivals of HUL and ITC and all the other options
they have in the market. HUL and ITC are also looking to tap the market in rural sector,
so they also taking into consideration the needs and wants of the people there. Also to
study the different promotional tools used by them to attract the new customer and to
keep using the product by the existing customer.

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INTRODUCTION

6
 About Distribution Channel:

Distribution is all about getting your product/service to the right people at the
right time with special consideration for profit and effectiveness. Successful
marketing does not end when a business has developed a product/service and has
found its appropriate target audience with a view to selling it at the 'right price'.
The next issue that needs to be faced is how they are going to distribute and sell
this product/service to these people- the consumers.
When a product/service is purchased by a consumer, it may have been
bought directly from the business, or it may have been through a number of
intermediaries (wholesaler, retailer, etc): these are known as distribution channels.
Small businesses need to acknowledge the different types of distribution channels
to utilize sales potential. After reading the article, you may learn that you could
increase sales or profit by using a different distribution channel to the one that you
currently use.
Distribution Channel are influenced largely by size and type of the business. I am
doing Dissertation on the Topic “Comparative Study on Distribution Channel
in HUL and ITC”.

Activities involved in the channel are wide and varied though the basic activities revolve
around these general tasks:

 Ordering
 Handling and shipping
 Storage
 Display
 Promotion
 Selling
 Information feedback

Factors influencing Distribution Strategy are:-

 Market Factor
 Producer Factor
 Product Factor

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 NEED OF THE STUDY

Distribution is all about getting the product/services to the right people at right
time. How the distribution channel is working in FMCG sector. In FMCG sector
work of distribution channel is not an easy job. How major players like HUL and
ITC maintain good supply of its product/services to its different channel.

It is very much required to make available of the product to its final consumers.
Sound distribution channel help any organization to grow very fast .Factory is the
place where any product is manufactured, but without help of a good distribution
channel it is useless to produce.

To understand bathing soap and shampoo industry, classification listing of

companies with their brands, & SKU’s, margin calculation offers. Top brands,
retail/WD buying pattern & stocking, Supply chain, Order capture-Delivery
model, types of outlets-convenience & Grocery, Key accounts, Visibility solutions
of different companies.

Distribution-activities that make products available to customers when and where

they need them.

A channel of distribution or marketing channel is a group of individuals and

organizations that directs the flow of products from producers and customers.

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 OBJECTIVE OF REPORT:
 To study the different food product of both the company.

 To find out the distribution strategy of HUL and ITC.

 To find out the demand and supply relation in HUL and ITC.

 To Know the Comparative position of HUL in comparison to ITC.

 To study the satisfaction level of users.

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 SCOPE OF THE STUDY

Hindustan Unilever Limited (HUL) and Imperial Tobacco Co.(ITC) is India's

largest fast moving consumer goods company, with leadership in Home &
Personal Care Products and Foods & Beverages. HUL's brands, spread across 20
distinct consumer categories, touch the lives of two out of three Indians.
FMCG is the fourth largest sector in the Indian Economy with a total market size
of Rs. 60,000 crore. FMCG sector generates 5% of total factory employment in
the country and is creating employment for three million people, especially in
small towns and rural India.

With the help of my study company may be able to know in which area they are
lacking behind to give tough competition to Hindustan Unilever Limited in the
segment of Food Products.

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 COMPANY &
IT’S PRODUCTS
OVERVIEW

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 HUL (HINDUSTAN UNILEVER)

Hindustan Unilever Limited is India's largest Fast Moving Consumer Goods (FMCG)
Company. It is present in Home & Personal Care and Foods & Beverages categories.
HUL has about 15,000 employees, including over 1400 managers

The fundamental principle determining the organization structure is to infuse speed and
flexibility in decision-making and implementation, with empowered managers across the
company’s nationwide operations.

Our mission

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

Enthused with Vitality

Products," Vitality has been at the heart of our business

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.

PERFORMANCE:
After stagnating between 1999 and ’04, the company is back on the growth track. In the
past three years, HUL’s net sales have witnessed a CAGR of 11%, while net profit has

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posted a CAGR of 17%. The company is set to gain further momentum, given the revival
of consumer spending. HUL sells products at different price points straddled between the
entire value chains. In the past few years, it has diversified into processed foods, ice-
creams, water purifiers and specialized chemicals. But home and personal care (HPC)
continues to remain the bread & butter segment for the company. This division accounted
for 72% of HUL’s revenue and 91% of its profit (before interest and tax) during the year
ended December ’07. So, it won’t be wrong to call HUL a personal care major.

GROWTH DRIVERS:
The Company 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.

FINANCIALS:
HUL’s net sales have recorded a CAGR of more than 11% over the past three years, while
its net profit has posted a CAGR of 17% during the same period. While its sales have
maintained a secular growth trend, profit margins have shown an erratic trend during the
period. High dividend yield, steady growth and strong market standing in its product
categories have enabled HUL to command premium valuations, compared to other
FMCG companies.

RISKS:
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.

TO SUM IT UP:
HUL’s up-and-running business model is a treat for investors seeking exposure in the

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FMCG segment. The company has delivered in the past and has the potential to do better
in future. In the small and medium term, HUL is a better bet than ITC.

HUL food PRODUCTS…………

HUL is one of India’s leading food companies. Our passion for understanding what
people want and need from their food - and what they love about it - makes our brands a
popular choice

3 Roses

To keep a relationship going, every young couple needs a little time to talk.

The perfect colour, strength and aroma of 3 Roses create that perfect tea moment where
couples can spend time talking about the everyday issues that matter to them.

Whether it is playful banter, a little mischief or serious conversation, in the final

reckoning, it’s these little moments and conversations that make relationships stronger.

Key facts
 3 Roses is a 30 year old regional brand and is the market leader in Tamil Nadu.
 It is one of the largest FMCG brands in Tamil Nadu across categories.
 It has a strong presence in both in home and out of home segments.
 It has two functionally differentiated variants - 3 Roses Natural Care and 3 Roses
Mind Sharp.

From our range

3 Roses Regular 3 Roses Natural Care 3 Roses Mind Sharp

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Annapurna

Annapurna Atta is aimed at helping the homemaker provide wholesome, tasty nutrition to
her family.

Launched nationally in 1998, Annapurna Atta is aimed at helping the homemaker provide
wholesome, tasty nutrition to her family.

Annapurna Farm Fresh Whole Wheat atta is made from premium quality wheat grains.
These grains are ground using advanced technology so that the Atta absorbs more water
while kneading, makes rotis stay soft for a longer time and retains the nutrition of
vitamins and minerals of the wheat grains.

Annapurna was awarded the prestigious ‘Awaaz Consumer Award” for the most preferred
brand of atta for two successive years in 2006 and 2007

From our range

Annapurna Atta Anna Pack3

Red Label

The brew that bonds.

The taste of Red Label brings alive the little moments that bring us closer to people we
love. It is the simple act of sharing a cup of Red Label that often adds magic to everyday
moments, strengthening the relationships that matter most to us.

Life is lived in those moments, one sip at a time.

Key facts
 Red Label is a 105 year old brand and has tremendous equity and heritage in the
Indian market.

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  It is the second largest tea brand in the country.
 It has both leaf and dust variants, as well as a health and immunity variant -
Red Label Natural Care.
 It is now proven that regular consumption of 3 cups of Red Label Natural Care
every day can enhance one's immunity and help one fall ill less often.
 Red Label holds the Guinness Record for the worlds largest tea party.

From our range

Red Label Red Label Natural Care

Taaza

The great refreshment of Taaza inspires women to have an identity beyond their homes
and to refresh their lives.

Many young women in emerging India live life bound within their roles as a mother, wife
and daughter in law. In the process, they lose their own identity. However, a changing
India and examples of women achievers as portrayed by media, is leading to an
awakening of her desire to carve out an identity for herself. She is however limited by her
own inhibitions and a sense of inertia.

Taaza recognizes this latent need and also believes that every woman has innate talent.
The fresh green leaves in Taaza give her amazing refreshment that inspires her to realize
her talent. Taaza is her ally and confidant.

Key facts
 Taaza is a 20 year old brand with strong presence in North & West India.
 It is the 3rd largest tea brand in the country with a portfolio spanning in both leaf
and dust segments.
 It has a strong presence in the out of home segment in South India.

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From our range

Taaza Taaza Thanda

Taj Mahal

A taste for the finer things in life.

Crafted from carefully selected tender leaves from India’s finest tea gardens, the lingering
aroma of Taj Mahal always has an impact. When a cup of Taj is served, compliments
follow.

Taj Mahal is not just a cup of tea, it is a sensory experience.

Key facts
 Taj Mahal was launched in 1966 by Brooke Bond.
 Ustad Zakir Hussain, the tabla maestro was the brands ambassador for almost two
decades, exemplifying both discernment as well as the pursuit of excellence.
 Taj Mahal since 2007 has Saif Ali Khan as its ambassador, a relevant choce for
today’s Indian
 Taj Mahal is the most premium brand of tea in the Indian market.
 It was the first brand to launch tea bags and is the only tea brand in India to be
sold in vacuum sealed packs.

From our range

Taj Mahal Taj Mahal Tea B Taj Mahal Flavored Tea Bags

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Bru

Some moments in life are special and close to the heart. Bru makes these moments with
loved ones even more magical…Its India’s largest coffee brand that offers a range of
products in Instant coffee, Conventional coffee and premixes....Its rich aroma and unique
blend makes every moment come alive…

In the year 1962 Brooke Bond India creates the branded roast and ground coffee segment
launching Deluxe green label. 1968 gave birth to the first Instant coffee chicory mix
under the brand name Bru…Ever since its inception, Bru has been on a constant endevour
to bring better products and formats to the consumer with every passing year. With the
launch of cappuccino in 2007 Bru was a pioneer to launch instant coffee premixes in
India for the youth. Bru’s specially selected and freshly roasted coffee beans offer a great
cup of aromatic coffee that makes those moments of genuine warmth and happiness even
more special…

Key Facts
 Number 1 coffee brand in India
 Unilever’s only coffee brand
 Enjoys a rich heritage, came into existence in 1962 under the brand name Deluxe
green label
 Consistently offering better and newer products to the consumer through
improved packaging solutions and innovative product formats
 Enjoys a strong presence at various out of home locations

Bru Roast and Ground Bru Instant now with even more aroma

Bru Ice cappuccino. Bru hot cappuccino

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Kissan

Kissan acts as a catalyst, easing stressful moments at the dining table. With Kissan, good
food is loved not shoved!

Kissan wants to be the brand which will help dissolve tension between mother and the
family during informal good food moments. Kissan acts as a catalyst, easing stressful
moments at the dining table. With Kissan, good food is loved not shoved!

Key facts

 Kissan is in its 62nd year of its existence in India.

 Category leaders in Jams with an All India Share of 65%.

Kissan Jam Kissan Juice Kissan Tomato Ketchup Kissan Tomato Ketchup

Kissan Jam Squeeze Green Apple Kissan Jam Squeeze Mango

Kissan Jam Squeeze Pineapple Kissan Jam Squeeze Strawberry

Kissan Amaze Brain food

Good nutrition is the key for developing children’s’ brains and bodies to their full
potential. Kissan Amaze Brain food helps moms contribute to their kid’s brighter future
by helping their mental development.

Kissan Amaze Brain food is a range of nutritious products specifically designed to

provide 33% of key brain nutrients children need daily for mental development. Amaze

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fits in a healthy diet and has a nutritional composition in line with international
recommended dietary intakes for balanced nutrition for school children. The “bad
nutrients” like sugars, salt, trans fat and saturated fat are kept as low as possible and
adequate quantities of all the key nutrients which support the development of the brain
(like Iodine, Zinc and Omega 3 fatty Acids and B Vitamins), in particular are added. The
products are also available in formats which would easily fit into the normal meal
moments of a child and could replace the unhealthy snacks.

Key facts
 Specifically designed for the mental development of children
 Provides 33% of key brain nutrients.
 Available in Smart Mix & Brainy Bites.
 Available in the state of Tamil Nadu, Andhra Pradesh & Karnataka.

From our range

Smart Mix in Chocolate & Vanilla Flavors Brainy Bars in Chocolate Flavor

Knorr

Knorr helps families make meal times special, nutritious, tasty and healthy.

It is not wrong to say that the category of soups was launched by Knorr in India. The
Knorr range of soups is available in a number of tasty and exciting varieties. There is a
flavour to literally suit every taste palate; the Classic range of soups with flavors like
Thick Tomato, Mixed Vegetable and Chicken Delite, the Oriental range with flavours like
Sweet Corn Vegetable, Sweet Corn Chicken and Hot n Sour and the Snacky range
(pasta /noodles in soup) with innovative flavours like Masala Twisty Pasta soup and Thai
Curry Noodle soup.

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This year has also seen the addition of the Indian soup range with lip smacking flavours
inspired by Indian cuisine; these include soups like Tomato Chatpata, Corn Mast Masala,
Veg Hara Bhara, etc.

Whether it is giving the Indian consumer a choice of 17 delicious varieties of soups or

helping her make restaurant like Chinese food at home Knorr has always been at the
forefront in taking the lead and in partnering with the Indian housewife.

The Knorr portfolio has now expanded with yet another launch; the launch of the Indian
Ready to Cook range. Knorr Indian Ready to Cook helps the consumer make her family's
favourite dishes at home and helps her get restaurant like taste at home itself.

Knorr as a brand has always set out to empower homemakers and enable them to make
healthy, wholesome and delicious food options. All Knorr products are healthy,
completely preservative free and low on sodium and cholesterol content.

The brand has also played a key role in helping the Indian housewife in more ways than
one- whether it is through the launch of books like Soups and More, through on ground
events, soup demonstrations and sampling or through its latest venture – a website
www.CookitUp.in.

www.CookitUp.in is a one stop shop for every single cooking need and a recipe site to
discover and befriend for life! Whether it is authentic recipes for every occasion, a
powerful search engine that helps you churn out any recipe need with ingredients within
your reach or ideas for resourceful and tasteful use of leftovers in the fridge.

Key facts
 Knorr in India is generic to soups.
 Knorr is the largest soup brand in India and has a lion’s share of the soup market
in India – 70%
 All Knorr products have no added preservatives and are a healthy choice option.

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From our range

Classic Thick Tomato Soup Sweet Corn Veg Soup Hot n Sour Veg soup

Tomato Twisty Pasta Soup Tomato Chatpata Soup Chinese Manchurian

Paneer Butter Masala Punjabi Chana Masala

Kwality Wall's

Kwality Wall’s, the brand with a big heart, offers a range of delightful frozen desserts that
bring smiles to the faces of millions of Indians – kids, teens and adults. We do so with
our very popular brands - Cornetto, Feast, Paddle Pop, Selection & our award winning
parlour concept, Swirl’s.

In a world of stress, denial and restraint, providing moments of daily pleasure to

consumers, through our delightfully delicious products, is our passion. We believe in
spreading happiness and smiles through every cone, cup, stick and tub we sell. Our
biggest satisfaction comes from the look of bliss and happiness of our consumers faces, as
they devour our products.

Our passion is inspired by our love for simple ingredients like Milk, Fruit and Chocolate,
which make our products the best “Pleasure Food” there is.

Mention ice cream, and most people in India think of Kwality Wall’s and the big heart.
The brand with the big heart logo is behind many much-loved ice cream classics - from

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indulgent treats like Cornetto & Feast (for teens and young adults), to Moo & Paddle Pop
(for kids), to family favourites like our Selection range of Red Tubs, Italian Gelato and
Viennetta.

Key facts
 Unilever is the world's largest ice cream manufacturer with an annual turnover of
more than €5 billion.
 Heart brand products are sold in more than 40 countries worldwide
 Also sold as Algida in Italy & Turkey, Langnese in Germany, Kibon in Brazil,
Streets in Australia and Ola in the Netherlands
 Kwality Wall’s turnover has doubled in the last 3 years. We strive to keep driving
the business at growth rates significantly ahead of market, and become the number
one frozen dessert/ Ice Cream player in India.

From our range

Cornetto Feast Paddle Pop Selection

Lipton

World’s #1 tea brand

Lipton Yellow Label is a premium, full-bodied tea, made out of the finest teas, perfect for
the ‘healthy’ Indian .Lipton Yellow Label has a unique blend that has high levels of
natural Thiamine, which along with other goodness of tea can help you clear your mind.

The range also contains, Lipton Clear Green tea, which combines the goodness of
antioxidants and purifying effect of water to help cleanse your body naturally.

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Key facts

Lipton is the #1 tea brand in the world

Lipton Yellow Label Lipton Clear Green Tea Lipton Darjeeling Tea

ITC

ITC is one of India's foremost private sector companies with a market capitalization of
nearly US $ 18 billion and a turnover of over US $ 4.75 billion.
ITC is rated among the World's Best Big Companies, Asia's 'Feb. 50' and the World's Most
Reputable Companies by Forbes magazine, among India's Most Respected Companies by
Business World and among India's Most Valuable Companies by Business Today. ITC
also ranks among India's top 10 `Most Valuable (Company) Brands', in a study
conducted by Brand Finance and published by the Economic Times.
ITC employs over 21,000 people at more than 60 locations across India. The
Company continuously endeavors to enhance its wealth generating capabilities in a
globalizing environment to consistently reward more than 3,72,000 shareholders,
fulfill the aspirations of its stakeholders and meet societal expectations. This over-
arching vision of the company is expressively captured in its corporate positioning
statement: "Enduring Value. For the nation. For the Shareholder."
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.

PERFORMANCE:
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.

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ITC’s non-cigarette FMCG business — which contributes 15% of its revenues — eroded
close to 8% of ITC’s profit last year. Its other businesses like hotels and paper together
account for over 20% of ITC’s profit. Agri-business, which is its second-largest revenue
earner, contributes one fourth to its revenues, but only 3-4% to its PBIT.
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 has 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.
FINANCIALS:
During the past three fiscals, ITC’s consolidated revenue has seen a CAGR of 22%. Its
profit has grown at just 12% during the same period. ITC’s sales and profits have
displayed a secular growth trend. But the pressure of sustaining its new businesses, as
well as higher tax burden on the cigarette business, is straining its profits. After
undeterred growth spanning eight quarters, ITC witnessed a marginal de-growth in net
profit for the trailing four quarters ended June ’08.

RISKS:
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 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.

TO SUM IT UP:
ITC’s growth story is still 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, hotels, paper and agri-businesses.
Investors who want to bank on its execution ability in FMCG can consider the stock with
a long-term horizon.

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FOOD PRODUCT OF ITC ARE -

ITC made its entry into the branded & packaged Foods business in August 2001
with the launch of the Kitchens of India brand. A more broad-based entry has been
made since June 2002 with brand launches in the Confectionery, Staples and Snack
Foods segments.
The packaged foods business is an ideal avenue to leverage ITC's proven strengths
in the areas of hospitality and branded cuisine, contemporary packaging and
sourcing of agricultural commodities. ITC's world famous restaurants like
the Bukhara and the Dum Pukht, nurtured by the Company's Hotels business,
demonstrate that ITC has a deep understanding of the Indian palate and the
expertise required to translate this knowledge into delightful dining experiences for
the consumer. ITC has stood for quality products for over 98 years to the Indian
consumer and several of its brands are today internationally benchmarked for
quality.
The Foods business carries forward this proud tradition to deliver quality food
products to the consumer. All products of ITC's Foods business available in the
market today have been crafted based on consumer insights developed through
extensive market research. Apart from the current portfolio of products, several new
and innovative products are under development in ITC's state-of-the-art Product
Development facility located at Bengaluru.
Leadership in the Foods business requires a keen understanding of the supply chain
for agricultural produce. ITC has over the last 98 years established a very close
business relationship with the farming community in India and is currently in the
process of enhancing the Indian farmer's ability to link to global markets, through
the e-Choupal initiative, and produce the quality demanded by its customers. This
long-standing relationship is being leveraged in sourcing best quality agricultural
produce for ITC's Foods business.

The Foods business is today represented in 4 categories in the market. These are:

 Ready To Eat Foods

 Staples

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  Confectionery
 Snack Foods

In order to assure consumers of the highest standards of food safety and hygiene,
ITC is engaged in assisting outsourced manufacturers in implementing world-class
hygiene standards through HACCP certification. The unwavering commitment to
internationally benchmarked quality standards enabled ITC to rapidly gain market
standing in all its 6 brands:

 Kitchens of India
 Aashirvaad
 Sunfeast
 mint-o
 Candyman
 Bingo!

:: ‘Ready To Eat’ Products from ‘Kitchens of India’

Keeping alive long forgotten culinary traditions, ‘Kitchens of India’ presents its
range of ready-to-eat cuisines. Each one of these legendary delicacies has been
created by the Master Chefs of ITC Hotels, following rare, closely guarded recipes,
handed down through the ages, from one generation to the next. These delicacies are
now available in imported 4-layer retort pouches that keep them fresh for as long as
24 months (Vegetarian) & 12 months (Non Vegetarian and Desserts) from the date of
packaging.

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 Bukhara

Bukhara, a village in Uzbekistan, was a meeting place for the traders from Asia and
Europe. It was also a spot on the fabled Silk Route, a passage commonly used by traders,
scholars and nomads. It was on this route that the unique Bukhara style of cooking was
born.
The Master Chefs of ITC Hotels have whipped up the delectable bite into history with
this cuisine from the North-West Frontier Province with a masterpiece
like Dal Bukhara.

Dal Bukhara

Dal Bukhara is an exquisite culinary treat made from Whole Black

Lentils simmered with prized Indian Spices over a coal fire, for long
hours on end.

Dum Pukht

The art of ‘Dum’ cooking (cooked in its own juices) traces its origin to the times of the
‘Nawabs of Awadh’ who ruled the Northern Provinces of India during the 18th century.
‘Kitchens of India’ has currently introduced ‘Mirch Ka Salan’ in this
range.

Mirch Ka Salan

An extravagant delicacy made from succulent green chillies, delicately

cooked in thick gravy of roasted peanuts, almonds and sesame seeds.

Mughlai Paneer

Fresh cubes of Paneer prepared with khus-khus, ground watermelon seeds

and fine onion paste, spiced with coriander leaves and cardamom powder.

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 Dakshin

This cuisine reflects the tradition and culture of the southern Indian peninsula. ‘Kitchens
of India’ offers you Chicken Chettinad and Chicken Stew:

Chicken Chettinad

Succulent chunks of tender chicken in a dark, spicy paste of curry

leaves and freshly ground pepper. Showcasing the distinctive tastes and
fragrances of the South.

Malabari Chicken Stew

Tender nuggets of chicken in a mild, coconut gravy.

Gharana

A pan-Indian cuisine specially created by ITC’s Hotels Master Chefs.

Paneer Darbari

Soft, fresh and juicy cubes of cottage cheese simmered in an aromatic tomato gravy to
create an unforgettable delicacy.

Chicken Darbari

A superb blend of juicy and tender chicken chunks in an aromatic tomato gravy, laced
with butter.

Murgh Methi

29
Discover the delights of Nawabi cuisine in
every serving of Murgh Methi. Tender chunks
of chicken, spiced mildly, and simmered for
long hours in a gravy of green coriander and
fenugreek.

Paneer Malai

Fresh chunks of Paneer, sautéed with onions and green peppers,

immersed in a creamy tomato sauce.

:: ‘Kitchens of India’ Conserves

‘Kitchens of India’ Fruit & Spice Conserves have been skillfully blended
by ITC’s Master Chefs to create unique, delectable flavours by combining
the succulent chunks of fresh fruit with an expert selection of exotic
spices. A truly irresistible treat.

Strawberry & Mint Conserve

This exotic Fruit & Spice Conserve merges the tangy flavours of fresh strawberries with a
pure, refreshing touch of mint. An ineffably enjoyable experience.

Pineapple & Green Pepper Conserve

This exotic Fruit & Spice Conserve adds the pleasant and moderate pungency of Kerala
green pepper to the sweetness of fresh, juicy pineapples. An incredible combination.

30
 Apple & Cinnamon

This exotic Fruit & Spice Conserve skillfully combines the flavours of
fresh Himachal apples with the compelling piquancy of cinnamon. A treat
for the adventurous.

Mango & Saffron Conserve

This exotic Fruit & Spice Conserve is a special jam that boasts of all the
sweetness of ripe Alphonso Mangoes imbued with the exotic essence of
hand picked Kashmiri Saffron. Surely an experience to remember.

:: ‘Kitchens of India’ Chutneys

‘Kitchens of India’ Chutneys have been created by ITC’s

Master Chefs. Made from the finest ingredients and
spices, this collection of popular mealtime
accompaniments, is truly a feast for the senses.

Shredded Mango Chutney

Finely shredded raw mango, in a tangy, spiced, delicious

thick syrup. An authentic rich accompaniment with any
meal.

Tamarind & Date Chutney

Delicious Dates in a delightful tangy tamarind base. A

31
piquant dip for fried snacks.

Mango & Jeera Chutney

Cubes of raw mango in a thick, aromatic syrup flavoured with cumin seeds.

Mango & Garlic Chutney

Chunks of raw mango mixed with slivers of fresh garlic. A delicious accompaniment with
any meal.

Carrot & Black Pepper Chutney:

Tangy chutney made up of choice carrot slices flavoured with aniseed and
black pepper.

Papaya & Raisin Chutney:

This sweet chutney is made from Papaya slices and papaya pulp with raisins,
kalonji and aniseeds.

Hot Mango Chutney:

Hot and tangy chutney consists of pieces and pulp of mango with chilly slices and chilly
flakes.

Tomato Chilli Chutney:

This hot and spicy chutney consists of pieces and pulp of tomato, mixed with ground
garlic, amchur and green chilli paste.

::: ‘Kitchens of India’ Biryanis

By far, one of the most popular delights from the Kitchens of India spectrum, these have
been masterfully blended by the Master Chefs following ancient and authentic recipes.
These absolutely irresistible dishes have been skillfully cooked under precision and a

32
knack of adding just the right amount of fragrant spices in just the right proportions, so
that you can savour the Biryanis exactly as they were meant to be.

Noormahal Biryani
Minced tender chicken koftas slow-cooked
with saffron flavoured Basmati Rice. From the
Royal kitchens of India.

Bohri Biryani
Delicately spiced chicken layered in Basmati
Rice, enhanced with exotic dry fruits. A feast
fit for the kings.

Yakhni Pulao
Succulent chicken chunks marinated in
creamy yogurt and cooked in saffron
flavoured Basmati rice.

Hyderabadi Mutton Biryani

Delicious mutton pieces cooked to perfection
with cinnamon flavoured Basmati rice form
this Nawabi extravaganza.

:: ‘Kitchens of India’ Desserts

Kitchens of India royal, authentic Indian Desserts is the perfect way to make any
occasion a celebration. A grand finale to a perfect meal. The Master Chefs of Kitchens of
India bring to you a uniquely packaged range of royal desserts prepared from the finest
of ingredients. Go ahead, re-live the royal experiences.

33
 Jodhpuri Moong Dal Halwa
This Rajasthani delicacy made from
split Moong Dal and a generous mix
of dry fruits, is served only during
the choicest of occasions. Each
ingredient is blended with the other
in the right proportions by our
Master Chefs, to give your taste
buds a royal treat after a gourmet
meal.

Hazoori Petha Halwa

This dessert, perfected in the royal
kitchens of Agra is prepared with
fresh, grated petha cooked in ghee.
Simmered to perfection with milk and
khoya, and garnished with raisins, the
distinctive flavours of this halwa make
it the perfect dessert for any occasion.

The Ready-To-Eat range also comprises eleven more dishes

and two Combo packs. The dishes on offer currently are
Rajma Masala, Navratan Korma, Dal Makhani, Aloo
Mutter, Palak Paneer, Pindi Chana, Pav Bhaji, Mutter
Paneer, Yellow Dal Tadka, Pongal and Gajar Ka Halwa.
Rajma Masala & Basmati Rice and Yellow Dal Tadka &
Basmati Rice are available in Combo packs.The unique
packaging form, using a retort process, ensures that the
original freshness and taste of the recipes is protected without the use of preservatives.
The Retort Process
The pioneering introduction of retorting technology is what has made the sale of 'Ready-
to-Eat' food products commercially viable.

34
The need of frontline military soldiers for light but nutritious food, with an assured long
shelf life was the impulse and the inspiration for the development and fine-tuning of the
retorting process.
Retorting technology was used by the US in its Apollo Space missions. Today it is the
mainstay of US military rations. Retorting is also widely used in packaged foods in
Japan and Europe.
The efficacy and effectiveness of the retorting process depends on the sterilization
process and the retorting pouch.

Sterilization Process

The sterilization process ensures the stability of the Ready-to-Eat foods in retort
pouches, on the shelf and at room temperature. The application of sterilization
technology completely destroys all potentially harmful micro-organisms, thereby
making sure that the food product has a very long shelf life. However, in the current
commercial context, the shelf life is limited to one year.

Retort Pouches
Retort pouches are flexible packages made from multi-layered plastic films, with or
without aluminum foil as one of the layers. Their most important feature is that they are
made of heat-resistant plastics, unlike the usual flexible pouches. This makes the retort
pouches uniquely suitable for the processing of their food contents at temperatures
around 120 degrees Celsius. That is the kind of ambient temperature prevalent in the
thermal sterilization of foods.
The 3-ply laminate consisting of PET/ Al oil / PP is the most common material used in
retort pouches and is the only one used in India. ITC uses 4-layered pouches. The use of
PET or polyester as the outer layer gives the required strength to the pouch. The
aluminum foil serves as a barrier layer ensuring a shelf life of more than one year. The
Nylon layer provides strength to the pouch, reassuring additional shelf life. The
innermost layer of Polypropylene provides the critical seal integrity, flexibility, strength
and taste and odour compatibility with a variety of food products.

35
:: Staples

ITC entered the branded Atta market with the launch of Aashirvaad Atta in Jaipur and
Chandigarh on 26th May 2002. The product is now available all over India. Aashirvaad
atta has further built on its leadership position among the National Branded Players with a
market share of 55%.

‘Aashirvaad’ promises the Indian housewife the joy of

providing her family with the most delightful home-made
rotis, made from the finest quality atta. ITC uses the
sourcing strength of its e-Choupals to buy wheat directly
from the farmers to deliver happiness to the Indian
consumer – Khushiyaan Chun Chun ke (Happiness
handpicked). ‘Aashirvaad’ is made from finest quality wheat
that ITC has the unique capability to source through its e-Choupal network. Premium
quality atta, made from 100% MP 'sharbati' wheat is also available as Aashirvaad Select
Atta . The wheat for Aashirvaad Superior MP Wheat Atta comes from the plush, fertile
soil of Madhya Pradesh and then blended using the traditional 'chakki-grinding' method to
give the superior, discerning taste.

ITC Foods also aims to delight the consumer through superior and
innovative packaging. The Aashirvaad package is PET Poly, with
the design showcasing the farming process undertaken in the rural
heartland of India in the form of a Madhubani painting. ‘Aashirvaad
Select’ Atta (5 kg pack) was awarded the World Star Award for
Excellence in Packaging in the Consumer Pack Category. This is
one of the most prestigious awards in the world for Packaging.

ashirvaad Salt

ITC launched branded packaged salt under the brand name ‘Aashirvaad Salt’ on 26th

36
 March, 2003. The product is available in grocery stores around the
country.

:: Spices

ITC forayed into the branded spices market with the launch of
Aashirvaad Spices in May 2005. The offering currently consists of
Chilli, Turmeric and Coriander powder in SKUs of 50g, 100g,
200g and 500g each. Aashirvaad Spices, operating in selected
markets of south and east, have spread to a large consumer base
and have emerged as a major player in basic spices in most regional markets.

Aashirvaad Pickle Mirch Powder

In March 2008, Aashirvaad added a unique variant to its Spices range with the launch of
Pickle Mirch Powder in Andhra Pradesh, a state known for its variety of spicy pickles.
The Pickle Mirch Powder uses the finest of Warangal Bamboo Chillies, which are sourced
directly from the farmers and selected by experts to ensure the right aroma, pungency and
colour.

:: Instant Mixes

Convenience and authentic taste now has a new

name with the Aashirvaad Instant Mix range. This
range, launched in March '06, now includes Gulab

37
Jamun, Rava Idli, Rice Idli and Rice Dosa. Aashirvaad Instant Mixes promise the
discerning Indian homemaker perfect tasting dishes, consistently. The Rava idli Mix is
available in 500g pack and rests of the products are available in 200g packs.

: Snack foods

Sunfeast

In July 2003, ITC forayed into the Biscuits market with the Sunfeast range of Glucose,
Marie and Cream Biscuits. Sunfeast’s brand essence, "Spread the Smile" connotes
happiness, contentment, satisfaction and pleasure. The mascot Sunny reinforces the
emotional aspects of the brand. In a span of 6 years Sunfeast has launched many new
varieties and has its presence in almost all types of biscuit categories.

Sunfeast Milky Magic

Packed with goodness of milk these deliciously

nutritious crisp and crunchy biscuits are a favorite
among mothers and kids. Milky Magic has the
‘Magic of 2’ - A perfect balance of energy that aids
physical strength and mental ability. These biscuits
strike the right balance of milk and wheat which
helps in an all round development and nurturing of
the child.

Sunfeast Marie Light

Sunfeast Marie Light Original:

This ideal teatime biscuit is made from the finest quality wheat
high in fibre and keeps one light and healthy through the day.
Sunfeast Marie Light Orange:
It has the distinction of being one of the most successful

38
innovative Marie biscuits and is liked by one and all.

Sunfeast Golden Bakery

Sunfeast Golden Bakery is a premium cookie on an

innovative and differentiated platform. Launched
nationally in March 2008, these cookies are made from
the recipes crafted by the master bakers of ITC Hotels
and are slowly baked in the traditional way till they are
golden brown and develop the crispy broken crust
texture.
The Sunfeast Golden Bakery cookies are available in
three distinct flavours - Butter-Nut,
Butterscotch and Chocó-Nut cookies. These products
are designed to give consumers a rich & truly indulgent
experience.

Sunfeast Dark Fantasy

Inspired by the Master Chefs of ITC hotels, it is the richest of

chocolate vanilla biscuits. These biscuits are created using
carefully chosen premium ingredients for a sensory
experience unlike any other. Dark Fantasy is more than a
biscuit; it’s a luxurious mix of aromatic cocoa and vanilla.

Sunfeast Glucose

For those light hunger pangs, a wholesome & nutritious choice

as these golden brown biscuits are made from the best quality
wheat. Sunfeast Glucose biscuits are ideal not just for kids but
for adults too.

Sunfeast Dream Cream

A truly scrumptious range of cream biscuits that have become an instant hit with children.
ITC’s chefs have put their legendary skills into these biscuits to deliver truly tasty cream
biscuits. Special Flavor Crystals in the Strawberry variant keeps the creamy flavors

39
linger on.

Strawberry Cream
The first of its kind cream biscuit Bourbon

with special strawberry flavor A special delight for all those

crystals that will keep the creamy chocolate lovers.

flavor linger on.

Butterscotch Cream
Orange Cream
Another first, the taste of butterscotch
Experience a tangy twist in
ice-cream in cream biscuits.
biscuits with every Orange cream.

Confectionery

ITC currently has two brands in the confectionery segment - 'mint-o' and 'Candyman'.
'mint-o' was acquired by ITC from Candico in March 2002. ITC re-launched the
compressed mint offering, across all major markets in India, with new and improved
product and packaging. It is available in mint flavour with added blue specks to enhance
consumer experience. mint-o Cool Blue - a single mint in a pillow-pack was launched In
November 2007. 'mint-o' is available in 3 sizes – rolls of 20 and 6 and singles, capturing
the international essence of ‘youthful cool’.

ITC launched 'mint-o Fresh' in October 2004. An ‘active’ mint deposited candy, mint-o
Fresh is available in a refreshing mint flavour - mint-o Fresh Eucalyptus. Its launch
extended the footprint of the 'mint-o' brand in line with the strategy of adding excitement
and contributing to the growth of the confectionery category. 'mint-o Fresh' is especially
targeted at the adult consumer creating a basket of mint-based products across price

40
points.
The latest offering in the adult mint confectionery segment is mint-o GOL, in the
`Chews' sub-segment. A brand for young adults, mint-o GOL appeals to both men and
women, offering a never before "refreshing indulgence".
ITC launched the 'Candyman' range of confectioneries in August 2002. Led by
the'Candyman Fruitee Fun' range of assorted fruit flavours ('Wild Banana',
'Pineapple Punch', 'Orange Josh' and 'Mango Delite'), the 'Candyman' portfolio now
includes deposited candy products like 'Candyman Butterscotch
Licks' and 'Candyman Éclairs'(Choco flavoured as well as Vanilla Cream centre inside
a Butterscotch outer shell). The coffee toffee segment also saw the successful launch
of 'Candyman Cofitino' in November 2005.

The brand was further strengthened with the launch of 'Candyman Natkhat Mango' and
'Candyman Maha Mango'. In line with the strategy to provide innovative flavours and
formats to consumers, Candyman Mango Licks was launched in June 2007, Candyman
Lacto Creme Centre in June 2008 and Candyman Toffichoo Strawberry in early
2009.Candyman Lacto Creme Center is the only Lacto with a yummy cream filled
center, and Candyman Toffichoo is a luscious fruit flavored soft and chewy toffee.
The 'Candyman' range of confectionery is targeted at ‘fun-filled, naughty kids’ who seek
a delightful candy experience through a range of candy types and flavours.

www.mycandymanclub.com was launched in July 2004 and now

has a loyal, young user-base. Targeted at young children, the
website is populated with games, quizzes, downloads and other
fun activities.

41
Snack foods

Bingo!
The launch of Bingo! in March 2007 marked ITC's foray into the
fast growing branded snack foods segment. Bingo’s portfolio
includes an array of products in both Potato Chips & Finger
Snacks segment.
Bingo! is positioned as a youthful and innovative
snack, offering the consumers a choice of
flavours that are fast becoming popular.
The Potato Chips offerings comprise the ever-
popular Salted, Masala and Tomato flavours, as
well as some innovative variants inspired by the snacking habits of different parts of the
country like Chatkila Nimbu Achaar.

Bingo! – International Cream & Onion is the brand’s latest addition to

its existing unique and exciting range. Keeping in sync with the
Bingo! philosophy, this variant brings with it a unique combination of cheese, cream and
spring onions, giving it a truly international flavour.

The Finger Snacks segment, the innovative 'khakra inspired' Mad Angles has become an
instant hit among consumers and is available in 3 flavours - Tomato Mischief, Chilli
Dhamaka and Achaari Masti.

42
Finger Snack ‘Hatke Jhatke’, appropriately shaped like a wave, takes Bingo!’s philosophy
of ‘combinations’ forward with two exciting flavours - Funky Masala & Tomato Twist.

43
DISTRIBUTION SYSTEM

44
HUL (HINDUSTAN UNILEVER):-

45
EVOLUTION OF HUL’S DISTRIBUTION MODEL:-

To meet the ever-changing needs of the consumer, HUL has set up a distribution network
that ensures availability of all their products, in all outlets, at all items. This includes,
maintaining favorable trade relations, providing, innovative incentives to retailers and
organizing demand generation activities among host of other things.

HUL has followed a strategy of building its distribution channels in a transitional manner;
and in different successive phases of the evolution of its distribution system, has
penetrated well into the rural market.

Phase I
The first phase of the HUL distribution network had wholesalers placing bulk orders
directly with the company. Large retailers also place direct orders, which comprised
almost 30 percent of the total orders collected.
• The company salesman grouped all these orders and placed an indent with the
Head Office. Goods were sent to these markets, with the company salesman as the

46
 consignee. The salesman then collected and distributed the products to the
respective wholesalers, against cash payment, and the money was remitted to the
company.

Phase II
• The focus of the second phase, which spanned the decades of the 40s, was to
provide desired products and quality service to the company’s customers. In order
to achieve this, one wholesaler in each market was appointed as a “Registered
Wholesaler,” a stock point for the company’s products in that market. The
company salesman still covered the market, canvassing for orders from the rest of
the trade. He would then distribute stocks from the Registered Wholesaler through
distribution units maintained by the company. The Registered Wholesaler was
given a margin of 1 per cent to cover the cost of warehousing and financing the
stocks held by him. The Registered Wholesaler system, therefore, increased the
distribution reach of the company to a larger number of customers.

Phase III
• The highlight of the third phase was the concept of “Redistribution Stockiest”
(RS) who replaced the REGISTERED WHOLESALERSs. The
REDISTRIBUTION STOCKIST was required to provide the distribution units to
the company salesman. The REDISTRIBUTION STOCKIST financed hisstocks
and provided warehousing facilities to store them. The REDISTRIBUTION
STOCKIST also undertook demand stimulation activities on behalf of the
company.
• The second characteristic of this period was the changes brought in as the
company realised that the REDISTRIBUTION STOCKIST would be able to
provide customer service only if he was serviced well. This knowledge led to the
establishment of the “Company Depots” system. This system helped in
transshipment, bulk breaking, and acted as a stock point to minimize stock-outs at
the REDISTRIBUTION STOCKIST level.
• In the recent past, .significant change has been the replacement of the Company
Depot by a system of third party; the Carrying and Forwarding Agents (C&FAs).
The C&FAs act as buffer stock-points to ensure that stock-outs did not take place.
The C&FA system has also resulted in cost savings in terms of direct

47
 transportation and reduced time lag in delivery. The most important benefit has
been improved customer service to the REDISTRIBUTION STOCKIST.

Operation Bharat — HUL’s Rural Distribution Effort:-

• HLL implemented a major direct consumer programme called Project Bharat,

which covered 2.2 crore homes. Each home was given a box, at a special price of
Rs.15, comprising a low unit-price pack of hair-care (Clinic shampoo), dental
(Pepsodent toothpaste), skin-care (Fair & Lovely) and body-care (Pond’s Dream
flower talc) products along with educational leaflets , audio-visual
demonstrations, film songs and mythological serials interspersed with ads of
Lever product. Close to 160 vans and over thousand promoters (sales staff of the
distributors or some other private operators) were pressed into Operation. The cost
came upto roughly Rs.13 crore. Each van, equipped with a TV arid VCR, had six
‘promoters’. The project helped eliminate barriers to trial, and strengthened
salience of both particular categories and brands.

Indirect Coverage :-

• Under the Indirect Coverage (IDC) method, company vans were replaced by vans
belonging to distribution Stockiest, which serviced a select group of neighbouring
markets.

Operation Harvest:-

• The reach of conventional media and, therefore, awareness of different products in

rural markets in weak. It was also not always feasible for the distribution Stockiest
to cover all these markets due to high costs involved. Yet, these markets are
important since growth opportunities are high. The company decided to initiate
mobile van operations in a focused manner to create both awareness and point of
purchase access. Operation harvest endeavored to supplement the role of
conventional media in rural India and, in the process, forge relationships and
loyalty with rural consumers. Operation Harvest also involved conducting product
awareness programmes on vans. There are 1.2 million urban retail outlets, and

48
 another 3.6 million shops in rural areas. Depending on their business objectives,
marketer’s use varying definitions for what is rural. Whatever be the case, to
extend their reach, marketers begin by ‘seeding’ the new territory, mostly through
a brand awareness exercise. As HUL demonstrated with Operation Harvest, this
exercise is best done through van operations. During this exercise, vans from HUL
and its distributors did the rounds of 30,000 villages giving promotional packs,
showing products ads and identifying key retail and distribution points.

Cinema Van Operations:-

• The Redistribution Stockiest typically funds these. Cinema Van Operations have
films and audio cassettes with song and dance sequences from popular films, also
comprising advertisements of HUL products. But over a period of time, van
operations (usually run by the distributor or a third party) have also been used to
regularly service retailers in these smaller markets rather than only making
contract with the end consumer. These successive ‘Operations’ have enabled the
company far deeper penetration levels than other companies. HUL recognized
early in its rural distribution initiative that market share would be created only
when demand is built up through awareness, trial and consistent availability. The
company literally had to build up’ the market village by village in its rural
initiative. Cost-effective distribution solutions were as first attempted by HUL,
and many other companies are veering around to that option today. It has been
working well for HUL, so others are beginning to experiment with it.

Project “Shakti” :-

 Rural India is spread across 627,000 villages and possesses a serious distribution
challenge for FMCG Cos.
 HLL has come up with a unique and successful initiative 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, the initiative also creates brand awareness amongst the
lower strata of society.

Project Streamline :-

49
 HUL initiated a Streamline initiative in 1997- cater to the needs of the inaccessible
market
 Focuses on extending distribution to villages with less than 2000 people

Rs Initiative :-

 Launched in 2001
 Connecting Redistribution Stockiest (RSs) through an internet based system
 Account for about 80% of the company's turnover
 RS Net is one of the largest B2B ecommerce initiatives ever undertaken in India.
 The powered system has been implemented to supply stocks to redistribution stockiest
on a continuous replenishment basis.

FOOD DISTRIBUTION CHANNEL PLAYERS:-

The food system encompasses many activities, from harvest to processing, retailing, and

consuming.   This   system   is   called   by   many   names:   marketing   channel,   distribution

channel/chain, or supply chain. In this publication, we use the term distribution channel.

The main middlemen in the distribution channel are as follows.

 Food distributors purchase products from a manufacturer or from another distributor

and sell and distribute the products to retailers, food­service companies, and other

distributors.

 Direct Store Delivery: Manufacturers deliver products directly to the retailer.

 Food brokers act as food manufacturers’ representatives and facilitate sales between

manufacturers and retailers. They do not take ownership possession of products.

 Food wholesale distributors are very similar to distributors, but they do not perform

as many services, such as stocking and managing retail shelves.

50
 Foodservice distributors and brokers are similar to retail brokers and distributors,

except that they focus on servicing foodservice customers.

 Self­distributing   retailers are   large   retailers,   such   as   Albertsons,   Wal­Mart,   who

have their own distribution centers. Manufacturers deliver directly to these centers.

The retailer then distributes the product to individual retail stores. 

THE PRODUCT DISTRIBUTION PATHWAY:-

A new food product can take one of several paths to reach the consumer. Distribution

options   depend   on   the   product,   the   market,   the   type   of   retail   establishment,   and   the

manufacturer’s sales skills. Some manufacturers reach the consumer directly by selling

products at farmers’ markets. Others use elaborate distribution methods involving several

brokers   and   distributors.   Many   manufacturers   do   not   have   the   skills   or   the   time   to

promote and sell their new product. For them, the use of food distributors and brokers is

the only way to obtain distribution. Most foods go through a distribution channel to reach

the end consumer, whether that consumer is a shopper in a retail grocery store or a diner

at a fine restaurant. The conventional distribution path for a packaged food product is

from   manufacturer   to   broker   to   distributor   to   retailer.   This   path   can   vary   greatly

depending on the product, the target markets, and the manufacturer. In general, more

perishable   foods,   such   as   fresh   seafood,   have   fewer   handling   exchanges   from   the

producer to the consumer, than, say, a packaged product such as jams and jellies.

Many   requirements,   such   as   UPC   codes,   nutritional   labeling,   and   product   packaging,

must be satisfied before distributing a product. One of the first activities is to determine

your   product’s   target   market.   This   includes   identifying   the   geographic   area,   retail

markets, and consumers that will make up your core market.

51
 ITC’S DISTRIBUTION CHANNEL:

Distribution system used by ITC

 ITC uses FIFO method to reduce the wastage of goods due to expiry.

52
 They also keep the good on constant move from low sales area to high sales area.

 The company collects all the expired goods four times a year, and destroys them.

 Retailers must return expired or damaged products within six months after the
date of expire.

 Adjustment for them is done in three months time.

 ITC provides their retailers with racks, hangers, etc to display the products.

 The benefits received by the retailers depend upon their sales volume and also the
location of their shops.

 ITC has hired IMRB to do the market research.

 ITC Foods utilizes distribution network efficiently

 Distributes products to more than a million outlets across the country

 Distribution centers located in the major states

 e- choupals - distribution channel where the farmers are linked to the company

 Help retailers manage their stock better

 ERP based logistics link-Distributers-Warehouses-Marketing branches to

its head offices and factories

 Developed a companywide hybrid network called Project Infoben

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 SWOT ANALYSIS
HUL:-
STRENGTHS:

 Strong brand portfolio, price quantity & variety.

 Innovative Aspects.
 Presence of Established distribution networks in both urban and rural areas.
 Solid Base of the company.
 Corporate Social Responsibility(CSR)

WEAKNESSES:
 "Me-too" products which illegally mimic the labels and brands of the established
brands.
 Strong Competitors & availability of substitute products.
 Low exports levels.
 High price of some products.
 High Advertising Costs.

OPPORTUNITIES:

 Large domestic market – over a billion populations .

 Untapped rural market.
 Changing Lifestyles & Rising income levels, i.e. increasing per capita income of
consumers.
 Export potential and tax & duty benefits for setting exports units.
THREATS

 Tax and regulatory structure.

 Mimic of brands
 Removal of import restrictions resulting in replacing of domestic brands.

54
  Temporary Slowdown in Economy can have an impact on FMCG Industry.
ITC
STRENGTHS:

 ITC is one of India's foremost private sector companies.

 ITC leveraged it traditional businesses to develop new brands for new segments.
 .ITC ranks among India's top 10 Most Valuable (Company) Brands.
 ITC has market capitalization of nearly US $ 18 billion.
 ITC has a diversified presence in Cigarettes, Hotels, Paperboards & Specialty Papers,
Packaging, Agri-Business, Packaged Foods & Confectionery, Information
Technology, Branded Apparel, Personal Care, Stationery, Safety Matches and other
FMCG products.
 ITC's Agri-Business is one of India's largest exporters of agricultural products.

WEAKNESSES:

 The company's original business was traded in tobacco. ITC stands for Imperial
Tobacco Company of India Limited. It is interesting that a business that is now so
involved in branding continues to use its original name, despite the negative
connection of tobacco with poor health and premature death.

 To fund its cash guzzling FMCG start-up, the company is still dependant upon its
tobacco revenues. Cigarettes account for 47 per cent of the company's turnover, and
that in itself is responsible for 80% of its profits. So there is an argument that ITC's
move into FMCG (Fast Moving Consumer Goods) is being subsidized by its
tobacco operations. Its Gold Flake tobacco brand is the largest FMCG brand in
India - and this single brand alone holds 70% of the tobacco market.
OPPORTUNITIES:
 Core brands such as Aashirvaad, Mint-o, Bingo! And Sun Feast (and others) can
be developed using strategies of market development, product development and
marketing penetration.
 ITC is moving into new and emerging sectors including Information Technology,
supporting business solutions.

55
  E-Choupal is a community of practice that links rural Indian farmers using the
Internet. This is an original and well thought of initiative that could be used in other
sectors in many other parts of the world. It is also an ambitious project that has a
goal of reaching 10 million farmers in 100,000 villages.
 The company researched the tastes of consumers in the North, West and East of
India of atta (a popular type of wheat flour), then used the network to source and
create the raw materials from farmers and then blend them for consumers under
purposeful brand names such as Aashirvaad Select in the Northern market,
Aashirvaad MP Chakki in the Western market and Aashirvaad in the Eastern market.
This concept is tremendously difficult for competitors to emulate.
 Chairman Yogi Deveshwar's strategic vision is to turn his Indian conglomerate into
the country's premier FMCG business..

THREATS:
 The obvious threat is from competition, both domestic and international.
 ITC's opportunities are likely to be opportunities for other companies as well.
Therefore the dynamic of competition will alter in the medium-term. Then ITC will
need to decide whether being a diversified conglomerate is the most competitive
strategic formation for a secure future.
 The laws of economics dictate that if competitors see that there is a solid profit to be
made in an emerging consumer society that ultimately new products and services
will be made available. Western companies will see India as an exciting opportunity
for themselves to find new market segments for their own offerings.
 Duplicate items are available in abundance at much lesser rates. This affects the
Company financially and adversely affects its goodwill.

56
 RESEARCH
METHODOLOGY

57
 Research Methodology:

The final project is mainly based on Primary as well as Secondary data. The project was
based on the research to study and assess the best Distribution practices for HUL or ITC
and to make comparison in food products of both the company from the customer
prospective.
The types of research used are: -

1. Exploratory Research:-

In well establish field’s of study, hypothesis usually are drawn from ideas developed or
glimpsed in previous research studies or derived from theory.

Research could be used to determine if the hypothesis was correct. Too little is
known however, about consumer reaction to marketing \ stimulate to permit the
formulation of sound hypothesis in many specific situations.

As a result, much marketing research is of an exploratory nature; is placed on

finding hypothesis relative to new products or marketing practices that can be changed
profitably.

Research type - Descriptive Research

Data source - Secondary Data

Research Approach - Survey Method

58
DATA COLLECTION

In this research study I used both type of data:-

 Primary data
 Secondary data

PRIMARY DATA:

The primary data was collected by approaching the individuals with a Questionnaire and
was filled after making them understand the use of the information. This was done to
make sure that the information provided is true and unbiased.
The Techniques which I used to collect these data are as follows:-
 Questionnaire

QUESTIONNAIRE MATHOD: - In this method, a questionnaire was prepared which

was a close ended one. The questionnaire is sent(usually by post) to the persons
concerned with a request of answer the questions and return the questionnaire consists of
a number of questions printed or typed in a defined order on a form or set of forms.

SECONDARY DATA:-
Secondary data are those data which are printed and which already been collected by
someone else and which have already been passed through the statistical process.
The secondary resources used in the study are:
 Books ,
 Journals
 Magazine Articles
 Internet Website

POPULATION: The population for the survey was taken to be the current and potential
customer of both the company. Only those individuals were taken under consideration
those are using the products of any of this two company. I selected the area like
Sahibabad, Raj Nagar, Mohan Nagar in Ghaziabad and Okhla and Dwarika in New Delhi.

SAMPLE SIZE: Since the targeted population were individuals it was not possible to
segregate the population and take the specific sample from it, hence random sampling
was done and then the collected data was regrouped as per requirements. The data was
collected from the random sample of 250 people in order to get the accurate results.

59
 In my research I used the method of probability sampling. Probability sampling is
based on random selection concept. It gives equal probability of getting in to sample.

Research Design:

“A research design is the arrangement of conditions for collection and analysis of in a

manner that aims to combine relevance to the research purpose with economy in
procedure”.
The research design have been based on the sampling design and observational Design.
Research design is needed because it facilitates the smooth sailing of the various
research operations.
The dissertation is prepared with the help of exploratory research design.

60
DATA ANALYSIS AND
INTERPRETATION

61
1) YOU USE THE FOODS PRODUCT OF WHICH COMPANY ?

INTERPRETATION:
The survey shows that the number of respondent who use the Hindustan Uni Lever
(HUL) product were 44 % and the number of respondent who use the Imperial Tobacco
Company (ITC) Product were 36 % and rest were only 20 %. Thus the majority of
Respondent were the user of HUL. This can be due to several reasons like, because of Its
Large Portfolio, Brand Name, Quality or Rice of the Products.

62
Q2) QUALITY OF FOODS PRODUCT SATISFY YOUR FUNCTIONAL AND
EMOTIONAL NEED?

INTERPRETATION:
The survey shows hat the majority of Respondent was satisfied with the quality of the
Food Products of both the Company (HUL and ITC).
Only 11% of the Respondent does not responded about the quality of the products while
18% of respondent were disagree with the quality of the product .So, Company should
focus on the quality and should bring about the changes in order to make the existing
consumer use the product also to attract the new customers.

Q3) PRICE OF FOODS PRODUCT IS COMPERATIVE IN MARKET?

63
INTERPRETATION:
The survey shows that the majority of respondent were satisfied with the Price of the
Food Products of both the Company (HUL and ITC) i.e. about 62%.
Only 9% of the respondent does not responded about the Price of the products which
shows that they are not giving much importance to price, while 13% of respondent were
strongly disagree with the price of the product .So, Company should set the price of the
product as such that the Consumer should be satisfy with it.

64
Q4) ADVERTISEMENT OF PRODUCT INFLUENCES YOUR ‘S PURCHASING
DECESION?

INTERPRETATION:
The survey show that most of the respondent purchasing of product depends on the
advertisement which means the Company has to advertise its product regularly, In order
to keep the product update in their customer minds and to make them aware about the
change in the products. Only about 32 % respondents were not agree that the
advertisement does affect the purchasing power to them. The number of respondent who
does not responded to this question was only 9 %.

65
Q5) THE SOURCE OF PROMOTION BY THE COMPANY YOU HAVE
RECOGNISE TILL KNOW? (Television, Newspaper, Hoardings)

INTERPRETATION:
The survey shows that majority of respondent had got the knowledge about the product of
the Company through the different tools like Television, Newspaper and Hoarding, used
by the Company. So, the Company should regularly promote its product through these
tools to make them aware about the product. Thus promotion is playing role in selling the
products of the Company.

66
Q6) IF OTHER COMPANY WILL PROVIDE YOU SAME QUALITY OF FOODS
AT THE COMPERATIVE PRICE THEN YOU WILL SWITCH?

INTERPRETATION:
The survey shows that majority of customer of both the Company are not ready to switch
to other Company product if they are provided with the same quality of product by the
other Company. Only about 26 % of the respondent agrees that they will switch to other
Company if the products are provided with the same quality at low price.

67
Q7) BRAND PLAYS AN IMPORTANT ROLE IN PURCHASING THE
PRODUCTS.

INTERPRETATION:
The survey shows that brand plays an important role in selling the product. As we know
the name sale’s so if the Company has good name among its customer then customer
make less effort in taking decision to purchase the product. Also it shows that customer is
loyal to its brands in purchasing the product. Only about 28% of the respondents were
giving less importance to the brands but about 50% of the respondents were giving
importance to the brands.

68
Q8) YOU PURCHASE THE FOOD PRODUCT OF SAME BRAND ON
REGULAR BASIS?

INTERPRETATION:
The survey shows that highest percentage of the respondent use the product of same
Company (HUL or ITC) on the regular basis. Only 28 % of the respondent said that they
sometime use the product of other Company which is good for the Company also the
number of respondent who does not reply to this was very less i.e. 6%.

69
Q9) YOU RECOGNIZE THE PRODUCT AVAILABLABILITY IN THE GIVEN
AREAS?

INTERPRETATION:
The survey shows that the products were available in different area like Malls, Grocery
Shop, and Confectionary. Which shows that the respondent do not get shortage of product
in this area results that the Company is taking much care regarding the availability of its
product. Only few respondents were not agreeing with the availability of product in this
area and feels that there was shortage of products. So, Company should check regularly
that there should not be any shortage of product in this area.

70
DESCRIPTIVE WORK

71
 Distribution Model of HUL

OUTLET TYPE

WS : WHOLESALE

SS : SELF SERVICE/MODERN TRADE eg: Big Bazaar, Good Bakery

CH : CHEMIST

FA : FANCY STORE

GM : GENERAL MERCHANT

KR : KIRANA/GROCER

OTH: OTHERS

CHANNEL SEGMENT

BA : BEAUTY ADVISER

DBA : DISTRIBUTOR BEAUTY ADVISER

WS : WHOLESALE

MR : MASS RETAIL

CH : CHEMIST

FG : FAMILY GROCER

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LOCATION OF THE GODOWN:-

HUL

The godown should be located in such a place that the markets can be covered in
the shortest possible time. The company’s godown is situated in many areas.

ITC
ITC has a godown at the transport Nagar on road from there is no problem for the
company in transportation.

WHOLESALE DISTRIBUTOR (W.D)

ITC’s distributor is termed as Wholesale Distributor. They have to distribute the

products all over the city. The company appoints a number of distributors in a
town. It appoints the distributor according to the market coverage.

REDISTRIBUTION STOCKIST (RS)

Hindustan Unilever’s distributor is termed as Redistribution Stockiest. They play a

major role in the distribution system. The company appoints a number of
distributors in a town. It appoints the distributor according to the market coverage.
A Redistribution Stockiest is selected to know the proper role or functioning of a
distributor.

Super Value Stores - Modern Retail Format

This is the most effective and widely used form of merchandising practices
adopted by HUL to enhance their visibility in the form of window paid displays.

The visibility aids for Super Value Stores

 Glow sign boards
 Boards should be cleaned and maintained on each visit

73
 Boards should be lit
 Board backing sheet

Criteria for visibility

 The uppermost display window must not be 8 ft above the ground level of the
outlet.
 Ideally all the display windows should be between 4-8 ft from the floor.
 Criteria for an outlet to qualify for SVS is must have 8 window displays.
 Out of 8 windows 6 windows signify product portfolio and 2 windows denote
news corner
 News corner windows are hired and changed every 21-30 of the month and
give information about new product inventions and offerings
 News corner windows should be ideally 1-2 ft above the counter top of the
outlet.
 3.5 % CD is given to SVS on fulfillment of all the criteria desired and
accordingly points are given after a comprehensive survey of the existing SVS
by the supervisors and the company personnel on a monthly basis
 Glow sign should be lit
 A table top listing offers and new product introductions should be there on the
counter tops
 Four hanger displays of shampoo and detergents should be ideally there
 Backing sheet must be present
 Presence of POP, Danglers need to there
 Shelf strips to support the displays
 Cut outs to enhance the effectiveness of window displays (Girl cut outs,

Products are displayed according to the templates designed by the brand

team every month and a copy of the same is sent to the respective distributors and
merchandisers accordingly. From 1-20 of each month windows across the territory
are maintained and supervised by the merchandisers and the company personnel.

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 Supply Chain

The primary objective of supply chain management is to fulfill customer demands

through the most efficient use of resources, including distribution capacity,
inventory and labor
Activities/Functions

Supply chain management is a cross-functional approach to managing the

movement of raw materials into an organization and the movement of finished
goods out of the organization toward the end-consumer. As corporations strive to
focus on core competencies and become more flexible, they have reduced their
ownership of raw materials sources and distribution channels. These functions are
increasingly being outsourced to other corporations that can perform the activities
better or more cost effectively. The effect has been to increase the number of
companies involved in satisfying consumer demand, while reducing management
control of daily logistics operations. Less control and more supply chain partners
led to the creation of supply chain management concepts. The purpose of supply
chain management is to improve trust and collaboration among supply chain
partners, thus improving inventory visibility and improving inventory velocity.
Several models have been proposed for understanding the activities required to
manage material movements across organizational and functional boundaries.
SCOR is a supply chain management model promoted by the Supply-Chain
Council. Another model is the SCM Model proposed by the Global Supply Chain
Forum (GSCF). Supply chain activities can be grouped into strategic, tactical, and
operational levels of activities.

Strategic
 Strategic network optimization, including the number, location, and size of
warehouses, distribution centers and facilities.
 Strategic partnership with suppliers, distributors, and customers, creating
communication channels for critical information and operational
improvements such as cross docking, direct shipping, and third-party logistics.

75
 Product designs coordination, so that new and existing products can be
optimally integrated into the supply chain.
 Information Technology infrastructure, to support supply chain operations.
 Where to make and what to make or buy decisions

Tactical
 Sourcing contracts and other purchasing decisions.
 Production decisions, including contracting, locations, scheduling, and
planning process definition.
 Inventory decisions, including quantity, location, and quality of inventory.
 Transportation strategy, including frequency, routes, and contracting.
 Benchmarking of all operations against competitors and implementation of
best practices throughout the enterprise.
 Milestone Payments

Operational
 Daily production and distribution planning, including all nodes in the supply
chain.
 Production scheduling for each manufacturing facility in the supply chain
(minute by minute).
 Demand planning and forecasting, coordinating the demand forecast of all
customers and sharing the forecast with all suppliers.
 Sourcing planning, including current inventory and forecast demand, in
collaboration with all suppliers.
 Inbound operations, including transportation from suppliers and receiving
inventory.
 Production operations, including the consumption of materials and flow of
finished goods.
 Outbound operations, including all fulfillment activities and transportation to
customers.
 Order promising, accounting for all constraints in the supply chain, including
all suppliers, manufacturing facilities, distribution centers, and other
customers.

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 Performance tracking of all activities

Distribution

'Distribution' is one of the four aspects of marketing. A distributor is the

middleman between the manufacturer and retailer. After a product is manufactured
by a supplier/factory, it is typically stored in the distributor's warehouse. The
product is then sold to retailers or customers. The other three parts of the
marketing mix are product management, pricing, and promotion
 Traditionally, distribution has been seen as dealing with logistics: how to get
the product or service to the customer.

The distribution channel

Frequently there may be a chain of intermediaries; each passing the product down
the chain to the next organization, before it finally reaches the consumer or end-
user. This process is known as the 'distribution chain' or, rather more exotically, as
the 'channel'. Each of the elements in these chains will have their own specific
needs; which the producer must take into account, along with those of the all-
important end-user.
Channels
A number of alternative `channels' of distribution may be available:
 Selling direct
 Mail order (including Internet and telephone sales)
 Retailer
 Wholesaler
 Agent (who acts on behalf of the producer)
Distribution channels may not be restricted to physical products. They may be just
as important for moving a service from `producer' to consumer in certain sectors;
since both direct and indirect channels may be used. Hotels, for example, may sell
their services (typically rooms) direct or through travel agents, tour operators,
airlines, tourist boards, centralized reservation systems, and so on.
There have also been some innovations in the distribution of services. For
example, there has been an increase in franchising and in rental services - the

77
latter offering anything from televisions through to DIY tools. There has also been
some evidence of service integration, with services linking together, particularly
in the travel and tourism sector: for example, links now exist between airlines,
hotels and car rental services. In addition, there has been a significant increase in
retail outlets for the service sector; outlets such as estate agencies (real estate
agents) and building society offices, for example, are crowding out the traditional
grocers and greengrocers from the high street (major shopping areas).

Channel members
Distribution channels can thus have a number of levels. Kotler defined the
simplest level that of direct contact with no intermediaries involved, as the 'zero-
level' channel.
The next level, the 'one-level' channel, features just one intermediary; in consumer
goods a retailer, for industrial goods a distributor, say. In recent years this has been
the level which, together with the zero-level, has accounted for the greatest
percentage of the overall volumes distributed in, say, the UK; although the very
elaborate distribution systems in Japan are at the other end of the spectrum, with
many levels being encountered even for the simplest of consumer goods.
In the UK, a second level, a wholesaler for example, is now mainly used to extend
distribution to the large number of small, neighbourhood retailers.

Channel structure
To the various `levels' of distribution, which they refer to as the `channel length',
Lancaster and Massingham also added another structural element, the relationship
between its members:
 'Conventional or free-flow - This is the usual, widely recognized, channel with
a range of `middle-men' passing the goods on to the end-user.
 Single transaction - A temporary `channel' may be set up for one transaction;
for example, the sale of property or a specific civil engineering project. This
does not share many characteristics with other channel transactions, each one
being unique.
 Vertical marketing system (VMS) - In this form, the elements of distribution
are integrated.

78
The internal market
Many of the marketing principles and techniques which are applied to the external
customers of an organization can be just as effectively applied to each
subsidiary's, or each department's, 'internal' customers.
In some parts of certain organizations this may in fact be formalized, as goods are
transferred between separate parts of the organization at a `transfer price'. To all
intents and purposes, with the possible exception of the pricing mechanism itself,
this process can and should be viewed as a normal buyer-seller relationship. The
fact that this is a captive market, resulting in a `monopoly price', should not
discourage the participants from employing marketing techniques.

Less obvious, but just as practical, is the use of `marketing' by service and
administrative departments; to optimize their contribution to their `customers' (the
rest of the organization in general, and those parts of it which deal directly with
them in particular). In all of this, the lessons of the non-profit organizations, in
dealing with their clients, offer a very useful parallel.

Channel Decisions
 Overall strategy
 Channel strategy
 Product (or service)<>Cost<>Consumer location

Channel management
The channel decision is very important. In theory at least, there is a form of trade-
off: the cost of using intermediaries to achieve wider distribution is supposedly
lower. Indeed, most consumer goods manufacturers could never justify the cost of
selling direct to their consumers, except by mail order. In practice, if the producer
is large enough, the use of intermediaries (particularly at the agent and wholesaler
level) can sometimes cost more than going direct.
However, many suppliers seem to assume that once their product has been sold
into the channel, into the beginning of the distribution chain, their job is finished.
Yet that distribution chain is merely assuming a part of the supplier's
responsibility; and, if he has any aspirations to be market-oriented, his job should
really be extended to managing, albeit very indirectly, all the processes involved

79
in that chain, until the product or service arrives with the end-user. This may
involve a number of decisions on the part of the supplier:
 Channel membership
 Channel motivation
 Monitoring and managing channels

Channel membership
1. Intensive distribution - Where the majority of resellers stock the `product'
(with convenience products, for example, and particularly the brand leaders in
consumer goods markets) price competition may be evident.
2. Selective distribution - This is the normal pattern (in both consumer and
industrial markets) where `suitable' resellers stock the product.
3. Exclusive distribution - Only specially selected resellers (typically only one
per geographical area) are allowed to sell the `product'.

Channel motivation
It is difficult enough to motivate direct employees to provide the necessary sales
and service support. Motivating the owners and employees of the independent
organizations in a distribution chain requires even greater effort. There are many
devices for achieving such motivation. Perhaps the most usual is `bribery': the
supplier offers a better margin, to tempt the owners in the channel to push the
product rather than its competitors; or a competition is offered to the distributors'
sales personnel, so that they are tempted to push the product. At the other end of
the spectrum is the almost symbiotic relationship that the all too rare supplier in
the computer field develops with its agents; where the agent's personnel, support
as well as sales, are trained to almost the same standard as the supplier's own staff.

80
Trade marketing practice

An effective tactics to maximize sales through a distribution channel

Maximizing sales opportunities, reducing costs, expediting time to market,

creating competitive differentiation have made Channel partners and distributors
the backbone of the sales framework for many organizations. Managing the
relationship's complexity, accelerating their partner's success while preserving and
maximising the revenue and profit of their own organization are part of the daily
challenges faced by channel managers. This programme examines the nature,
scope and benefits of channel partnerships, and gives guidelines for ensuring the
success of the relationship.

Who should attend it:

Marketing or sales professionals with products or services that are taken to market
through a distribution channel.

Objective

 To build successful channel relationships (vendor to partner)

 To assess the critical success factors when selling through distributors
 To outline terms and conditions for establishing partnerships
 To integrate sales and marketing objectives
 To create and understand a channel plan.
 To ensure that products has availability, visibility and freshness across all
serviced outlets
 To capture and supply accurate order.
 To promote confidence and trust among sales force and maximize motivation
and commitment
 To provide coaching and incentives for the distributor's sales force

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Merchandising & Visibility

Merchandising can be done in several ways

Shelf space Booking-
 Shelf space in prime areas of the shop for exclusive use.
 There can be separate shelves for soap and shampoo and they can be
arranged as per the various brands.
Paid displays-
 This tool can be used extensively in departmental stores.
 The location should be prime and a very significant amount can be
paid to the outlets, so that maintenance is positively ensured.
Unpaid displays-
 Danglers and posters can be given to the retail outlets.
 These are also the eye catchers.
Enhance merchandising and visibility following steps can be taken………
 Lottery schemes or surprise gifts can be given with the POP’s.
 Wall painting for the new product in the upcountry areas.
 Display can be held between various outlets.

Initiatives taken to Improve the Distribution Network (HUL)

 Setting up of a full‐scale sales organization comprising key account management

and activation to impact, fully engage and service modern retailers as they
emerge.
 Servicing Channel partners and customers with continuous daily replenishment.
 Leveraging scale and building expertise to service Modern Trade and Rural
Markets.
 Delayering of sales force to improve response times and service levels.

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 Revamping of its sales organisation in the rural markets to fully meet the
emerging needs and increased purchasing power of the rural population
 Implementation of supply chain system that connects stockists across the country,
and also includes a back‐end system connecting suppliers, all company sites and
stretching right up to stockists. IT tools have been deployed for connectivity
across the extended supply chains. Backend processes have been combined into a
common Shared Service infrastructure.
 Launching of Project Shakti through which the company is able to extend its
operations in villages. HUL has also included several NGOs and state
governments as the initiative helps rural women to improve their financial
position.
 Launching of HUL Network to leverage the channel of direct selling by presenting
customised offerings in 11 home and personal care and food categories. Started in
2003, it already has a base of 300,000 consultants across the country.
 Finding out Innovative ways to reach out to its consumers, particularly in rural
areas by leveraging non‐conventional media like wall paintings, cinema vans,
weekly markets (haats), fairs and festivals. .
 Launching the Unicare scheme with upmarket pharmacies and retailers to sale its
premium brands.
 Undertaking several initiatives for traditional channels in order to improve its
capabilities at the front‐end by developing skills for stockists' sales force. Under
'Project Dronacharya', the FMCG major continuously imparted training to over
10,000 stockist salesmen.
 Launching of several promotional schemes for existing wholesalers and
distributors. For instance, it has started the ‘Vijeta ‐ Rishta Jeet Ka’ scheme last
year to provide a platform for the wholesaler and HUL to grow the business by
earning points and redeeming them.
o .

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 HUL V/S ITC (DIFFERENCE):-

HUL ITC
Deflationary cycle
Margin myopia Business Model Growth cycle
ITC ITC 3Cs impact
A mere price taker
Seen in recent price wars Calling the shots
Ability to call Not a single brand has ever seen a
shots price decline
Absence of growth drivers
• 50% of revenues from Multiple growth drivers
highly stagnated markets • Core business of cigarettes
• Personal product - the Growth drivers - far from saturation point
only growth driver • All businesses highly
• Virtual absence in foods Scalable
• As businesses scale up,
Profitability to increase

APPETITE AND WILLINGNESS TO TAKE RISK:-

ITC: play where others fear to tread

HUL: Play in known territory
 Has not made successful entry in any
newer business
 Quick returns or move out – not
willing to add businesses making loss
in short run
 Moved out of businesses like Bakery,
Confectionery, RTE,
Healthcare, Services, etc within two
years of launch
 Willingness and appetite to forego
short-term profits for long-term gains
 Entered capital intensive, low margin
and long gestation businesses (e-
Choupal, Agri, Hotels)
 Market leader or significant player in
the businesses that HUL exited from

84
FINDINGS

85
FINDINGS
The findings of this report are:-

 HUL has a large portfolio in food products than that of ITC.

 The distribution channel of HUL is better than that of ITC
 Both the company are following different project to target the rural customer
 Majority of the respondent use the product of HUL as compare to that of ITC.
 Customers of HUL are much more loyal to the product and only few respondents
were ready to switch to other company’s product if they are provided with the
same quality of product at low price.
 Customer of HUL and ITC are satisfied with their product, product quality and
product price .
 Most of the respondents were aware about the food product of both the company.
 Advertisement and other promotional tool play an important role in increasing the
sale of products.
 ITC salesmen carry an order book, while HUL salesmen carry HHT (hand held
terminals).

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LIMITATIONS

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 LIMITATIONS

Limitations which found by me during the research:-

 The sample size under study was relatively large.

 Respondents were not ready to disclose the details.
 A more extended geographical sample may show greater difference in perceptions.
 Secondary data collected from various website are not updated.

 The data collected cannot be considered as 100% accurate.

 Limitation of time to complete the report.
 The analysis so done cannot be regarded as the final as change is the only constant
thing which happens.

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CONCLUSION AND
SUGGESTIONS

CONCLUSION

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 Both the company are strong player in the FMCG sector, and has different foods
productin there portfolio . The main food product of HUL are like tea- 3 rose, red
lebel,taaza, taj mahal lipton,coffe- bru, kissan ketup,jams and kissan amaze brainfood,
knorr,ice cream- kawality wall’s , anupurna salt .where as the food product of ITC are like
kitchen of india-chutneys , biryani,desserts etc, Ashirvaad - atta, salt, sun feast biscuit-
milk magic, marie light, golden bakery, dark fantasy, dream cream, sweet n salt etc, mint-
o, Candyman, bingo!.
Doing this work also help me to understand the different distribution
channel used by both the company HUL and ITC and the different intermediaries which
are present in the distribution channel. also explain the strategy they have made to target
the rural customer.HUL has started the project like Shakti, operation Bharat, Operation
harvest etc and ITC has started the project like e- Choupal,etc to target the rural people
because this area is a untapped market and is a very good market to increase the sale by
the company.
This report also helped me to understand the demand and supply
relation in order to overcome the shortage of product in the market and to control the
extra flow of product in the market when should the order of the product should be made
and at what quantity .
This report also help to understand the position of both the company
in the market, as we know that HUL is the market leader in FMCG product and ITC is the
growing company in this sector. But because of the large number of the product in its
portfolio HUL is in much stronger position than that of ITC . HUL is not present in the
snack foods but ITC is present in that, similarly HUL is the market leader in tea and
coffee but ITC is not present in that sector. Thus there are some sector in food product
where anyone is missing but as HUL is mainly involved in the FMCG sector for the last
many years so it’s position is better than that of ITC.
The study also says that consumer of both the company are satisfied with the
product of each company but consumer of HUL are much more brand loyal than that of
consumers of ITC.

Hence, working on this topic help me to learn a lot about the distribution channel , food
product of HUL and ITC , and was a good learning platform for me.

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 SUGGESTIONS

According to my research, companies have to do following:-

 Company should make their distribution system better.

 Distributional system can be improved by proper supply according to

demand.

 Company should provide different benefits in products to their customer.

 Company should promote its product through different tools to make

consumer aware about the product and its update.

 Company should engage in doing some of social responsibility work

towards the society.

 Company should bring continuous change in its product with the change in
time.

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 BIBLIOGRAPHY

Books:

 Dr S L Gupta (2005) - Sales and Distribution Management.

 Kothari C.R. (2009) - Research Methodology, New Age International Publishers, New
Delhi.

 Luck & Kotler Philip (2008)- Marketing Management, Prentice Hall Publication

 Rubin- Marketing Research.

WEBSITES:

 www.itcportal.com
 www.hul.com
 www.thehindubusinessline.com
 www.kitchensofindia.com
 www.aashirvaad.com
 www.bingeonbingo.com
 www.mycandymanclub.com
 www.sunfeastharabanao.co
 www.samsmba.blogspot.com/2007/10/case-study-hindustan-unilever.html
 www.business-standard.com/india/storypage.php?autono=338610&chkFlg=
 www.thebetterindia.com/tags/hindustan-unilever-limited/

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 ANNEXURE

QUESTIONAIRE:
NAME:
GENDER: AGE: INCOME:
DEAR SIR,
I AM CONDUCTING A SURVEY ON THE FOODS PRODUCTS OF HUL AND ITC. KINDLY SPARE
SOME OF YOUR VALUABLE TIME TO GO THROUGH QUESTIONNAIRE. THE INFORMATION
PROVIDED BY YOU WILL BE KEPT CONFIDENTIAL AND ONLY BE USED FOR ACADEMIC
PURPOSES.
PLEASE MARK THE FOLLOWING STATEMENT ON THE FOLLOWING SCALE
A). STRONGLY DISAGREE B).DISAGREE C).CAN’T SAY D).AGREE E).STRONGLY
AGREE

OVERALL MEASURES
1)YOU USE THE FOODS PRODUCT OF WHICH COMPANY ?
A ) HUL B ) ITC C ) OTHERS

Q2) QUALITY OF FOODS PRODUCT SATISFY YOUR FUNCTIONAL AND

EMOTIONAL NEED?
A B C D E

Q4) PRICE OF FOODS PRODUCT IS COMPERATIVE IN MARKET?

A B C D E

Q5) ADVERTISEMENT OF PRODUCT INFLUENCES YOUR ‘S PURCHASING

DECESION?
A B C D E

Q6) THE SOURCE OF PROMOTION BY THE COMPANY YOU HAVE RECOGNISE

TILL KNOW?

TELIVISION: A B C D E

NEWSPAPER/MAZAGINES: A B C D E

HOARDINGS: A B C D E

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PACKAGING A B C D E

Q7) IF OTHER COMPANY WILL PROVIDE YOU SAME QUALITY OF FOODS AT

THE COMPERATIVE PRICE THEN YOU WILL SWITCH?
A B C D E

Q8) BRAND PLAYS AN IMPORTANT ROLE IN PURCHASING THE PRODUCTS.

A B C D E

Q9) YOU PURCHASE THE FOOD PRODUCT OF SAME BRAND ON REGULAR

BASIS?
A B C D E

Q10) YOU RECOGNIZE THE PRODUCT AVAILABLABILITY IN THE GIVEN

AREAS?
MALLS: A B C D E
GROCERRY SHOP: A B C D E
CONFETIORRY: A B C D E

THANK YOU ….

94