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MAJOR CONCURRENT PROJECT

ON

EMERGENCE OF ALTERNATE CHANNEL


IN

HINDUSTAN UNILEVER LIMITED


BY

Athar N Ankalgi(MBA09001002)

FMCG INDUSTRY
As the name suggests, products of daily usage under the heads of personal care, fabric care, household care, packaged foods, beverages come in his category. Supply chain Sales & Distribution system must. Ensures product availability At the right place In the right quantity Ensures product replenishment Ensures profit for all intermediaries At a minimal cost

Typical Margins in Supply Chain are:Distributor 5% Retailer 7-15% Wholesaler 1-1.5% Stockiest 2%-5%

COMPANY PROFILE

Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods Company, touching the lives of two out of three Indians. In 1931, Unilever set up its first Indian subsidiary, Hindustan Vanaspati Manufacturing Company, followed by Lever Brothers India Limited (1933) and United Traders Limited (1935). These three companies merged to form HUL in November 1956.

In 1993, it acquired the Kissan business from the UB Group and the Dollops Ice cream business from Cadbury India.
HUL formed a 50:50 joint venture with the US-based Kimberly Clark Corporation in 1994, Kimberly-Clark Lever Ltd, which markets Huggies diapers

PRODUCTS
Soaps and Detergents Lux Breeze Lifebuoy Pears Surf Excel Rin Wheel Foods Kissan Knorr Annapurna Brooke bond Lipton COFFEE Bru coffee

Personal Care Sunsilk Natural shampoo Clinic plus shampoo Pepsodent toothpaste Axe deodorants

U2 Colour/Non colour Lakme Eyeliner Fair and Lovely Ponds Elle 18 nail polish

PROBLEM
Under Cut? This is a situation where the wholesalers and semiwholesalers are purchasing some goods from 3rd Party apart from distributor, and these products are sold to the Retailers and consumers, which eventually increases the profit margin of the Wholesalers and Semi-wholesalers

OBJECTIVES

To understand the role of distributor in distribution network. To study challenges faced by the Distributors. Understanding the problem Under cut Reasons for under cut Benefits to the wholesalers/semi wholesalers from Undercut

METHODOLOGY

Qualitative research It involves word association i.e., asking respondents to indicate their first responses to stimulus words and depth interviews i.e., one-on-one interviews which probe the respondents' thoughts in detail. Quantitative method which includes Questionnaire where in respondents were asked to answer the questions. Here the respondents were wholesalers/semiwholesalers.

LIMITATION OF THE STUDY

Since it precisely focuses on distributors, numbers of samples were less. The problem Under Cut was faced by distributors, but not all wholesalers/semi wholesalers were giving their opinions courageously or rather in an open mind set. The biggest drawback is the company as a whole knows about Under Cut but is not rectifying the problem, as they do not have any problem with sale of their good and products.

Purchase made apart from distributor


Purchase made apart from distributor
8 7

6
5 4 3 2 1 0 Bigbazaar MORE METRO 3rd party

FINDINGS

The wholesalers/semi wholesalers are getting more discounts from the third party as compared to the distributor. On purchase of a product the wholesalers/semi wholesalers get 10% discount on the MRP. Whereas he gets 13-15% when purchased from third party. The 3rd Party is the person who purchases goods from the company at higher discounts and sells it to the wholesalers/semi wholesalers at less discount rate.

Wholesalers/semi wholesalers have problems with the sales promotion activities. They are not getting proper incentives, which promised on bonus points system. Few wholesalers/semi wholesalers who were sent for trips from company are yet to get their cash reimbursement, which can result in conflicts between the two parties.

SUGGESTIONS

The distributor should make an agreement with the wholesalers/semi wholesalers that the purchase of products should be done only through them. The TSOs should visit each outlet once in a week to check the sales of the outlets and also to discuss on the products which they are willing to purchase from 3rd party. Area Sales Managers must have a monthly meeting with the wholesalers/semi wholesalers in order to discuss their problems and get a feasible solution to it.

Intervention from the company is needed to solve the problem of UnderCut. Company should reach out to the 3rd party and take measures to supply goods to the wholesalers/semi wholesalers. Proper implementation of incentive system must be done. So as to keep wholesalers/semi wholesalers in high spirits. Proper recovery of amount must be done. Distributor should not give credit facility for long duration of time.

BIBLIOGRAPHY
Marketing Management by Philip Kotler. Marketing Research by Aaker, Kumar, Day www.hul.com www.hll.com/channel structure http. /list_6806480_pricing-methods-influencecompetitive-behavior A report by PricewaterhouseCoopers for IBEF www.flexlink.com

THANK YOU