PLANS AND STRATEGIES

HUL's performance in the past two years has been below expectations, when Asia, Africa and central and eastern Europe have contributed 36 per cent to Unilever's global revenues, and 3 8 per cent of the profits. HUL has lost market share across categories year on year. The decline has been visible in all its businesses: soaps and detergents, which account for 48 per cent of revenues, personal care products, beverages, food and ice creams, though there are signs that the fall has hit a plateau. A number of factors contributed to the loss. 1. First, there were price cuts taken in the battle for market share with Procter & Gamble (P&G). 2. Second, there was the commodity price inflation of 2008. In response, HUL raised prices relatively steeply on soaps and detergents. Inflation-conscious consumers turned to cheaper products from Godrej Consumer Products, Wipro and other players whose price hikes were much smaller. Sure enough, commodity prices softened again. "But HUL was unable to drop its prices immediately, as it had contracted a large part of its raw material for 5-6 months," 3. Third, analysts say HUL ignored its strong local soap and detergent brands (Rexona, Liril and Hamam, for example). It lost market share to self-help groups targeting rural markets that made and sold much cheaper brands such as Akhruti and Winner Turbo. 4. Finally, there is the story of high food inflation (16 per cent plus in January). It impacts HUL's food and beverages business, which accounts for 17 per cent of its revenues. In the past decade, owing to constant changes in the environment, HUL has adopted new strategies as per the environment.

PLANS AND STRATEGIES
IN THE PAST 10 YEARS , HUL HAS MADE FOUR SHIFTS IN ITS BUSINESS STRATEGY, TARGETED AT BOOSTING GROWTH AND REACH POWER BRANDS: Strategy in 2000. Focusing on fewer brands, 30 of them, and showering marketing attention on them MASSTIGE: Strategy in 2005-06. Making premium brands (prestige) attainable for a larger section of consumers (mass) ONE UNILEVER: Strategy in 2007. Building leadership position in fast-growing markets PUMP UP THE VOLUMES: Strategy in 2010. Global CEO Paul Polman is pushing the Indian operations chasing value growth to deliver on the volumes as well

Pumping up the volumes: strategy 2010
1. HUL has hiked its advertising-to-sales ratio in the past three quarters; it is at a time when the number of brands advertising on television has gone up by 82 per cent in the past decade. HUL tried advertising innovations with advertising roadblocks (only HUL brands advertising on a given channel on a particular day) or having five personal care brands starring in a single advert (LUX). 2. HUL sent its bright stars to Wal-Mart for training in managing modern trade. 3. So, from a strategy based on power brands, HUL is going back to straddling the entire pyramid in search of adding market share. In

PLANS AND STRATEGIES
other words, a brand at every price point for every consumer. Start with food. In the tea segment, HUL launched Brooke Bond Sehatmand in Uttar Pradesh, Bihar, Jharkhand and Chhattisgarh, positioning it as a healthy drink for masses. "It (Brooke Bond Sehatmand tea) gives 50 per cent recommended daily allowance for micronutrients through three cups of tea. It contains vitamin B, B12, A and others. 4. In soaps, t he prices of frontline brands such as Lux, Wheel and Lifebuoy have been slashed, by 5-20 per cent, and other brands are being relaunched in new avatars, often regionally focused. So, Breeze will take on Godrej No. 1 in the north, Rexona and Hamam will lock horns with Wipro's Santoor in t he south.

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