CHAPTER 1

ADVERTISING ON HINDUSTAN UNILEVER

1.1 INTRODUCTION Advertising is the greatest art form of the 20th the century. It may be described as a science of arresting human intelligence long enough to getmoney from it. It stimulates debate and sometimes controversy. It has a powerful effect on the human consciousness as it is around us on television,radio, cinemas, newspapers and magazines. The way we dress, talk and behave sends a message to other people. It is about manipulating publicopinion and getting a message across to an audience so that they will behavein a particular way.The advertising industry has been in existence since the end of the17th thecentury when newssheets carried printed advertisements for productsand information. Merchants returning from voyages overseas needed togenerate markets for the products they imported and so they had to advertise.By the end of the 19th the century, advertising was big business. Advertisementsdominated the newspapers, posters were commonplace and spawned a wholeart form. But the new communication technology gave the industry its biggest boost. Modern advertising exploits every medium of communication. We tend to think of advertisements in terms of themainstream media but we also have posters, billboards, point of saledisplays, direct selling and cold calling by phone and fax, the internet whichtaps into worldwide audiences.If you work in advertising , you will for sure be part of an influential band of people who can change public attitudes and behaviour.The heart of this industry lies in the advertising agencies. The largeones are multinationals with in such far flung places as Beijing and BuenosAires. If you work in a small agency, you may be expected to doeverything, including account management, client liaison, conceptdevelopment, creative work. In a larger one, job roles will be morestructured. You will have a specific role and a greater chance of more formalcareer development. Advertising agencies vary in the services they offer.The most familiar names are full service agencies but there are also othercompanies that specialize in media services or focus on particular areas ofadvertising, such as recruitment or business to business advertising.Business needs to advertise so that we should learn of the existence of different products.Advertising is aimed at conveying information to potentialcustomers and clients.Advertising is used to persuade the public to buy.At the lowest level people need food, shelter, warmth and sex. Then, people begin to think about personal possessions and finally we move on to egocentricity.The ultimate need is for fulfillment. This would come when we haveall that the advertisers say we so desperately need. For most of us it seemsthat that day will never come!Sometimes advertisements are misleading. Advertisers shouldntmake untrue statements about their products but they so often do it. Theycreate a demand which would not otherwise exist.Advertising goes far beyond T.V.

1.2 Objective Of The Study 1. To Study the Vision and Marketing strategy of Hindustan Unilever LIMITED.

2. To Study the introduction and History of HUL.

3. To Study the Advertising Strategy of HUL.

1.3 Importance Of The StudyAdvertising is about striking the right note on those chords of the brain that most often are in sync with the heart. When this happens, a need is generated and brain directs to buy, be it a product or a service or an idea. Indian advertising too follows this rule but here age-old advertising trends are still thriving along with the latest innovative trends. According to American Marketing Association Advertising is any paid form, non-personal presentation of ideas, products and services by an identified sponsor. According to J.J. Burnett Advertising is the non-personal communication of marketing related information to a target audience, usually paid for by the advertiser and delivered through mass media in order to achieve the specific objectives of the sponsor. In fact the seeming growth of many advertising industries is instructive of the fact that, complex and uncertain business environment has lead many organizations to device multifaceted approaches to market their products and services through various techniques of advertisements. Moreover, the essence of being in business by any business outfits is to produce for sales and make good profits. Therefore, the hallmarks of remaining in business as a profit oriented organization is to generate enough sales from its product or services not only to cover operating cost but also to sustain the future of the organization. Indeed, for many organizations, sales estimates are the starting point in budgeting or profit planning (Ayanwale, Alimi, and Ayanbimipe, 2005).Despite moderate global growth in advertising spending, fast-moving consumer goods (FMCG) companies continued to investand invest moreaccording to Nielsens quarterly Global AdView Pulse report shown in figure-1. The largest sector by ad spend market share, with roughly a quarter of all dollars spent (25.1%), FMCG saw a six percent increase in ad spend in 2012 through September. FMCG was joined by telecom, media and automotive as the top sectors for year-over-year ad growth. Media is the vehicle that is used for the delivery of the message. Some important tools of advertisement are newspapers, magazines, radio, television, direct mail and mail order, outdoor display and transportation. 1.4 Research MethodologyThe main purpose of the present study is To know the Role of Advertisement on the overall growth of the company. Data Collection: data was collected through secondary sources like books , newpaper , magzines , journal and internet.

1.5 Limitations of the studyThis study has certain limitations annual reports of advertising expenses of HUL, Changing pattern in advertising of different products of HUL, etc.

CHAPTER 2

2.1 Vision of Hindustan Unilever limited

Unilever products touch the lives of over 2 billion people every day whether that's through feeling great because they've got shiny hair and a brilliant smile, keeping their homes fresh and clean, or by enjoying a great cup of tea, satisfyingmeal or healthy snack.A c lear directionThe four pillars of our vision set out the long term direction for the company where we want to go and how we are going to get there:

1. We work to create a better future every day

2.We help people feel good, look good and get more out of life with brands andservices that are good for them and good for others.

3.We will inspire people to take small everyday actions that can add up to a bigdifference for the world.

We will develop new ways of doing business that will allow us to double the sizeof our company while reducing our environmental impact. We've always believedin the power of our brands to improve the quality of people s lives and in doing theright thing. As our business grows, so do our responsibilities. We recognise thatglobal challenges such as climate change concern us all. Considering the wider impact of our actions is embedded in our values and is a fundamental part of who we are.2.2 Purpose & principles of HULOur corporate purpose states that to succeed requires "the highest standards of corporate behaviour towards everyone we work with, the communities we touch,and the environment on which we have an impact."Always working with integrityConducting our operations with integrity and with respect for the many people,organisations and environments our business touches has always been at the heartof our corporate responsibility. Positive impactWe aim to make a positive impact in many ways: through our brands, our commercial operations and relationships, through voluntary contributions, andthrough the various other ways in which we engage with society.Continuous commitmentWe're also committed to continuously improving the way we manage our environmental impacts and are working towards our longer-term goal of developing a sustainable business.Setting out our aspirationsOur corporate purpose sets out our aspirations in running our business. It'sunderpinned by our code of business Principles which describes the operationalstandards that everyone at Unilever follows, wherever they are in the world. Thecode also supports our approach to governance and corporate responsibility.Workingwith othersWe want to work with suppliers who have values similar to our own and work tothe same standards we do. Our Business partner code, aligned to our own Code of business principles, comprises ten principles covering business integrity andresponsibilities relating to employees, consumers and the environment.2.3 MARKETING STRATEGY OF HINDUSTAN UNILEVERLIMITED HULS NEW GROWTH STRATEGY:After having fought a bitter price battle for market share with its rivals, HindustanUnilever Ltd (HUL), Indian subsidiary of the Anglo- Dutch consumer goodscompany Unilever Plc, is now working on a new growth strategy for its laundry business. Price cut or hike is not a long-term growth strategy. Pricing, in fact, is now passe, insists Sudhanshu Vats, category head, home care. Our strategy for growth, now is focused on product innovation, new consumer and retail trends andaggressive marketing and promotions, he said.We have done key innovations across the product portfolio and it is working for us, says Vats. We successfully migrated from RinSupreme to Surf Excel and Wheel Smart Srimatiwhich was rolled out in 2006 is also on the right track.HUL's market share in the laundry segment grew to around 37.8% in the quarter ended June from 35.5% in the same period last year, according the market researchfirm ACNielsen. However, this time, the increase was not at the expense of pricewar with its multinational rival Procter & Gamble Co. P&G also gained 0.5 percentage points, up to a 7.6% share. Nirma Ltd, the Ahmedabad- basedmanufacturer, however, saw its market share dip by 1.7% percentage points to13.5%.Wheel, a value brand that, according to Vats contributes around 50% of HUL'slaundry segment revenues, increased its market share by 2 percentage points in thesame period, with a total share of about 18%.According to ACNielsen, the laundry industry in India was worth Rs7,908 crore in2006 and rose 8.4% over 2005. HUL doesn't report its laundry revenues separately but puts them under the soaps and detergent category.

In 2006, HUL's soaps and detergents segment contributed around Rs5,596 crore tothe company's total sales of Rs12,103 crore. Laundry has been an attractivesegment in the past and is likely to keep growing in the near future. The recent price war between companies led to erosion in their profitability but now, theindustry is stabilizing, says Unmesh Sharma, an analyst at Macquarie Securitieshere.According to Vats, the laundry business is witnessing a surge in demand fromcities and HUL is focusing on Tier I and II cities to tap that demand. CHAPTER 3

3.1 Review Of Literature

Hindustan Unilever Limited is the Indian arm of the Anglo-Dutch company Unilever. Both Unilever and HUL have established themselves well in the FastMoving Consumer Goods (FMCG) category. In India, the company offers manyhouseholds brands like, Dove, Lifebuoy, Lipton, Lux, Pepsodent, Ponds, Rexona,Sunsilk, Surf, Vaseline etc. Some of its efforts were also rewarded when four of HUL brands found place in the Top 10 brands list for the year 2008 published in The Economic Times.Unilever was a result of the merger between the Dutch margarine company,Margarine Unie, and the British soap-maker, Lever Brothers, way back in 1930.For 70 years, Unilever was the undisputed market leader but now faces toughcompetition from Proctor & Gamble and Colgate-Palmolive.HUL is also known for its strong distribution network in India. In order to further strengthen its distribution in the rural areas and to empower the local women, HULlaunched a Project Shakti in 2000 in a district in Andhra Pradesh. The idea behindthis project was to create women entrepreneurs and provide them with micro-creditand training in enterprise management, which would enable them to create self-help groups and become direct-to-home distributors of HUL products. TodayProject Shakti is present across 80,000 villages in 15 states and is helping manyunderprivileged women earn their livelihood.As the per-capita income of India is increasing along with the Indian population.So, the future for the FMCG Companies is bright. To analysis the past performance& the future demand of HUL, FMCG products we have considered followingpoints:

We have a listed the different FMCG product lines of HUL.We have done competitor's analysis in which the market share of topFMCG companies are analysed & the market share of HUL'S differentcategories product are analysed with comparison to its competitors.Then performance analysis is made by taking 10 year financial data from1998-2007. The profit & sales growth is analysed We have done SWOTanalysis to know the threat & opportunities of HUL in present market.The future opportunities for FMCG products are taken into consideration byanalyzing the increased per capita income & increased disposable income toforecast the future demand of HUL.

3.2 INTRODUCTION AND BACKGROUND OF HULHindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods Company, touching the lives of two out of three Indians with over 20distinct categories in Home & Personal Care Products and Foods & Beverages.The company's Turnover is Rs. 20, 239 crores (for the 15 month period January1, 2008 to March 31, 2009).Hindustan unilever limited is a subsidiary of Unilever, one of the world's leadingsuppliers of fast moving consumer goods with strong local roots in more than 100countries across the globe with annual sales of 40.5 billion in 2008. Unilever hasabout 52% shareholding in HUL. Hindustan Unilever was recently rated among thetop four companies globally in the list of Global Top Companies for Leaders bya study sponsored by Hewitt Associates, in partnership with Fortune magazine andthe RBL Group. The company was ranked number one in the Asia-Pacific regionand in India.The mission that inspires HUL's more than 15,000 employees, including over 1,400 managers, is to add vitality to life". The company meets everyday needs for nutrition, hygiene, and personal care, with brands that help people feel good, look good and get more out of life. It is a mission HUL shares with its parent company,Unilever, which holds about 52 % of the equity.HeritageHUL's heritage dates back to 1888, when the first Unilever product, Sunlight, wasintroduced in India. Local manufacturing began in the 1930s with theestablishment of subsidiary companies. They merged in 1956 to form HindustanLever Limited (The company was renamed Hindustan Unilever Limited on June25, 2007). The company created history when it offered equity to Indianshareholders, becoming the first foreign subsidiary company to do so. Today, thecompany has more than three lakh resident shareholders.HUL's brands -- like Lifebuoy, Lux, Surf Excel, Rin, Wheel, Fair & Lovely,Sunsilk, Clinic, Close-up, Pepsodent, Lakme, Brooke Bond, Kissan, Knorr,Annapurna, Kwality-Walls - are household names across the country and spanmany categories - soaps, detergents, personal products, tea, coffee, branded staples,ice cream and culinary products. They are manufactured in over 35 factories,several of them in backward areas of the country. The operations involve over 2,000 suppliers and associates. HUL's distribution network covers 6.3 million retailoutlets including direct reach to over 1 million.HUL has traditionally been a company, which incorporates latest technology in allits operations. The Hindustan Lever Research Centre (now Hindustan Unilever Research Centre) was set up in 1958.Doingwell by doing goodHUL believes that an organisation's worth is also in the service it renders to thecommunity. HUL focuses on hygiene, nutrition, enhancement of livelihoods,reduction of greenhouse gases and water footprint.It is also involved in educationand rehabilitation of special or underprivileged children, care for the destitute and HIV-positive, and rural development. HUL has also responded in case of nationalcalamities adversities and contributes through various welfare measures, mostrecent being the relief and rehabilitation of the people affected by the Tsunamidisaster, in India.HUL's Project Shakti is a rural initiative that targets small villages populated byless than 5000 individuals. Through Shakti, HUL is creating micro-enterpriseopportunities for rural women, thereby improving their livelihood and the standardof living in rural communities. Shakti also provides health and hygiene educationthrough the Shakti Vani programme.The program now covers 15 states in Indiaand has over 45,000 women entrepreneurs in its fold, reaching out to 100,000villages and directly reaching to over three million rural consumers.HUL also runs a rural health programme, Lifebuoy Swasthya Chetana. The programme endeavours to induce adoption of hygienic practices among ruralIndians and aims to bring down the incidence of diarrhoea. It has already touched120 million people in approximately 50, 676 villages across India.If Hindustan Unilever straddles the Indian corporate world, it is because of beingsingle-minded in identifying itself with Indian aspirations and needs in every walk of life.3.3 History of HULIn the summer of 1888, visitors to the Kolkata harbour noticed crates full of Sunlight soap bars, embossed with the words "Made inEngland by Lever Brothers". With it, began an era of marketing branded FastMoving Consumer Goods (FMCG).Soon after followed Lifebuoy in 1895 and other famous brands like Pears, Lux andVim. Vanaspati was launched in 1918 and the famous Dalda brand came to themarket in 1937.In 1931, Unilever set up its first Indian subsidiary, Hindustan VanaspatiManufacturing Company, followed by Lever Brothers India Limited (1933) andUnited Traders Limited (1935). These three companies merged to form HUL in November 1956; HUL offered 10% of its equity to the Indian public, being the firstamong the foreign subsidiaries to do so. Unilever now holds 52.10% equity in thecompany. The rest of the shareholding is distributed among about 360,675individual shareholders and financial institutions.The erstwhile Brooke Bond's presence in India dates back to 1900. By 1903, thecompany had launched Red Label tea in the country. In 1912, Brooke Bond & Co.India Limited was formed. Brooke Bond joined the Unilever fold in 1984 throughan international acquisition. The erstwhile Lipton's links with India were forged in1898. Unilever acquired Lipton in 1972 and in 1977 Lipton Tea (India) Limitedwas incorporated.Pond's (India) Limitedhad been present in India since 1947. It joined theUnilever fold through an international acquisition of Chesebrough Pond's USA in1986.Since the very early years, HUL has vigorously responded to the stimulus of economic growth. The growth process has been accompanied by judiciousdiversification, always in line with Indian opinions and aspirations. Theliberalisation of the Indian economy, started in 1991, clearly marked an inflexionin HUL's and the Group's growth curve. Removal of the regulatory framework.Allowed the company to explore every single product and opportunity segment,without any constraints on production capacity.Simultaneously, deregulation permitted alliances, acquisitions and mergers. In oneof the most visible and talked about events of India's corporate history, theerstwhile Tata Oil Mills Company (TOMCO) merged with HUL, effective fromApril 1, 1993. In 1996, HUL and yet another Tata company, Lakme Limited,formed a 50:50 joint venture, Lakme Unilever Limited, to market Lakme's market-leading cosmetics and other appropriate products of both the companies.Subsequently in 1998, Lakme Limited sold its brands to HUL and divested its 50%stake in the joint venture to the company.HUL formed a 50-50 joint venture with the US-based Kimberly Clark Corporationin 1994, Kimberly-Clark Lever Ltd, which markets Huggies Diapers and KotexSanitary Pads. HUL has also set up a subsidiary in Nepal, Unilever Nepal Limited(UNL), and its factory represents the largest manufacturing investment in theHimalayan kingdom. The UNL factory manufactures HUL's products like Soaps,Detergents and Personal Products both for the domestic market and exports toIndia.The 1990s also witnessed a string of crucial mergers, acquisitions and alliances onthe Foods and Beverages front. In 1992, the erstwhile Brooke Bond acquiredKothari General Foods, with significant interests in Instant Coffee. In 1993, itacquired the Kissan business from the UB Group and the Dollops Ice-cream business from Cadbury India.As a measure of backward integration, Tea Estates and Doom Dooma, two plantation companies of Unilever, were merged with Brooke Bond. Then in 1994,Brooke Bond India and Lipton India merged to form Brooke Bond Lipton IndiaLimited (BBLIL), enabling greater focus and ensuring synergy in the traditionalBeverages business. 1994 witnessed BBLIL launching the Wall's range of FrozenDesserts. By the end of the year, the company entered into a strategic alliance withthe Kwality Ice-cream Group families and in 1995 the Milk-food 100% Ice-creammarketing and distribution rights too were acquired.Finally, BBLIL merged with HUL, with effect from January 1, 1996. The internalrestructuring culminated in the merger of Pond's (India) Limited (PIL) with HULin 1998. The two companies had significant overlaps in Personal Products,Speciality Chemicals and Exports businesses, besides a common distributionsystem since 1993 for Personal Products. The two also had a common management pool and a technology base. The amalgamation was done to ensure for the Group, benefits from scale economies both in domestic and export markets and enable itto fund investments required for aggressively building new categories.In January 2000, in a historic step, the government decided to award 74 per centequity in Modern Foods to HUL, thereby beginning the divestment of governmentequity in public sector undertakings (PSU) to private sector partners. HUL's entryinto Bread is a strategic extension of the company's wheat business. In 2002, HULacquired the government's remaining stake in Modern Foods.In 2003, HUL acquired the Cooked Shrimp and Pasteurised Crabmeat business of the Amalgam Group of Companies, a leader in value added Marine Productsexports.HUL

launched a slew of new business initiatives in the early part of 2000's.Project Shakti was started in 2001. It is a rural initiative that targets small villages populated by less than 5000 individuals. It is a unique win-win initiative thatcatalyses rural affluence even as it benefits business. Currently, there are over 45,000 Shakti entrepreneurs covering over 100,000 villages across 15 states andreaching to over 3 million homes.In 2002 In 2002, HUL made its foray into Ayurvedic health & beauty centrecategory with the Ayush product range and Ayush Therapy Centre. HindustanUnilever Network, Direct to home business was launched in 2003 and this wasfollowed by the launch of Pure-it water purifier in 2004.In 2007, the Company name was formally changed to Hindustan Unilever Limitedafter receiving the approval of share holders during the 74th AGM on 18 May2007. Brooke Bond and Surf Excel breached the the Rs 1,000 crore sales mark thesame year followed by Wheel which crossed the Rs.2,000 crore sales milestone in 2008.On 17th October 2008, HUL completed 75 years of corporate existence in India.We will further demonstrate that successful business strategies are driven byresponsible business practices. The key to this approach is developing a CR framework which integrates the social, economic, and environmental agenda withour business priorities growing markets, maintaining the competitive edge,enjoying goodwill in the communities we operate in, and building trust and anexceptional reputation. Hence, in the future, the three cornerstones for CR integration with business at HUL will be:Growing markets responsible: We will address issues related to hygiene and nutrition through productinnovations and awareness. Gathering information about the concerns expressed byconsumers, communities, and stakeholders can help us identify opportunities for innovation at the category, brand, and marketing plan level. We have a very strongand trusted position in India and we can leverage this to our competitiveadvantage.Ensuring sustainable practices in our operations:To secure a thriving future, we need to establish sustainable sources for rawmaterials. Being a company that is heavily dependent on water, agriculture, fuelsand petrochemicals, we must plan now for a future in which water could be scarce,agriculture could be under pressure, and fuels will be expensive. Our consumersadd up to two-thirds of the Indian population, hence addressing sustainabilityissues is a high priority. Building a good reputation through responsible leadership:CR is one of the key components of reputation and trust. A good reputation can bea major competitive advantage and can build employer brand and consumer loyalty.Engaging with our stakeholdersListening to others and learning from our stakeholders informs our decision-making, strengthens our relationships and helps us succeed as a business.Stakeholder engagement for identifying issues that are material to us:We appointed SustainAbility International to conduct stakeholder engagement onour behalf. They analysed and assimilated the expectations of stakeholdersregarding issues that matter to them. These expectations were similar to the areasidentified by us, where HUL's contribution could create a significant impact.Scoping the areas for interventionWhile the issues are many, it is necessary to address them in a systematic manner to make a real difference. Instead of spreading thin across all issues, we havechosen to work on five areas to ensure a deep impact.These areas have been arrived at using the output from our stakeholder engagement process and areas which we are poised to address through our business.Key messages from stakeholders.Target Allocate resources. Achieve those targets. This is more critical thanjust being visible & talking about it.We feel that some Indian companies can be leaders in their respective sectors.HUL has the potential to be such a leader.- Invest for your markets don't do social work, it isn't your ballgame. Please make money out of it. When you make money out of it, things are going to change.Rivalry among Competing Firms:In the FMCG Industry, rivalry amongcompetitors is very fierce. There are scarcecustomers because the industry is highlysaturated and the competitors try to snatchtheir share of market. Market Players useall sorts of tactics and activities fromintensive advertisement campaigns topromotional stuff and price wars etc.Hence the intensity of rivalry is very high.HUL was established in 1933 as Lever Brothers and, in 1956, became known as Hindustan Lever Limited, as a result of a merger between Lever Brothers, Hindustan Vanaspati Mfg. Co. Ltd. and United Traders Ltd. It is headquartered in Mumbai, India and employs over 16,500 workers, whilst also indirectly helping to facilitate the employment of over 65,000 people.The company was renamed in June 2007 as "Hindustan Unilever Limited".Hindustan Unilever's distribution covers over 2 million retail outlets across India directly and its products are available in over 6.4 million outlets in the country. As per Nielsen market research data, two out of three Indians use HUL products. Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods Company with a heritage of over 80 years in India and touches the lives of two out of three Indians.HUL works to create a better future every day and helps people feel good, look good and get more out of life with brands and services that are good for them and good for others.With over 35 brands spanning 20 distinct categories such as soaps, detergents, shampoos, skin care, toothpastes, deodorants, cosmetics, tea, coffee, packaged foods, ice cream, and water purifiers, the Company is a part of the everyday life of millions of consumers across India. Its portfolio includes leading household brands such as Lux, Lifebuoy, Surf Excel, Rin, Wheel, Fair & Lovely, Ponds, Vaseline, Lakm, Dove, Clinic Plus, Sunsilk, Pepsodent, Closeup, Axe, Brooke Bond, Bru, Knorr, Kissan, Kwality Walls and Pureit.The Company has over 16,000 employees and has an annual turnover of INR 27408 crores (financial year 2013 - 2014). HUL is a subsidiary of Unilever, one of the worlds leading suppliers of fast moving consumer goods with strong local roots in more than 100 countries across the globe with annual sales of 49.8 billion in 2013. Unilever has 67.25% shareholding in HUL.Indian FMCG major Hindustan Unilever Limited spent 13 per cent more in Q3-2014 towards advertising and marketing at Rs.929.46 crore as compared to the Rs.822.16 crore , but 2.57 per cent lower than the Rs.954.02crore.The corresponding advertising and marketing spends percentage of overall standalone revenue was slightly higher at 13.55 per cent during the nine month period ended 31 December 2013 at Rs.2773.26 crore as compared to the 12.8 per cent (Rs.2410.75 crore) during the corresponding period of last year. During FY2013, the percentage of standalone revenue that the company spent towards marketing and advertising was 12.82 or Rs.3231.88crore.

Soaps and Detergents deliver a healthy performance

Skin Cleansing delivered another quarter of volume led growth. The category performance was driven by Dove, Pears, Lifebuoy and Breeze. Pears was relaunched during the quarter with a new proposition around younger looking skin. The liquids portfolio saw accelerated growth led by Lifebuoy Handwash.

In Laundry, growth was led by the premium segment. Surf growth was buoyed by the robust performance in Surf Excel Easy Wash and Excel Matic while Rin saw good growth on the bars portfolio. Wheel was re-launched with a superior formulation at the end of the quarter. Comfort fabric conditioners continued to lead market development with sustained high growth. Household Care delivered another strong quarter with both Vim and indoubledigits. 3.4 Personal Products growth steps up

Skin Care grew well in a slowing market. The re-launch of Fair & Lovely, with the new Best Ever Formula and a focused activation plan in the last quarter, is on track. Lakme and Dove grew well and the facial cleansing portfolio registered strong growth, driven by a range of differentiated innovations launched earlier in the year.

Hair Care sustained its strong growth momentum with broad based double digit volume growth. Dove led the category performance with accelerated growth while Sunsilk, Clinic Plus and TRESemm continued to make very good progress.In Oral Care, both Pepsodent and Close Up delivered stepped up double digit growth in a competitive market. Pepsodent GermiCheck which was relaunched in the last quarter with a superior product and proposition did particularly well. A&P investments were significantly stepped up to sustain our competitive position in this category.Colour Cosmetics maintained its strong innovation led growth momentum across both Lakm and Elle 18. Lakm continues to strengthen its position in premium make up driven by a range of exciting and contemporary offerings from Absolute and 9 to 5.

Beverages led by double digit growth in tea

Tea delivered another quarter of broad based growth with Taj Mahal, Red Label, 3 Roses and Taaza growing in double digits, driven by a strengthened mix and focused in-market activities. The sustained thrust on leading market development for tea bags, enabled flavoured and green tea bags more than double sales in the quarter. The Lipton Clear Green Tea portfolio was expanded with the launch of new packs. In a slowing Coffee market, Bru continued to drive category premiumization, led by Bru Gold.

Packaged Foods growth steps up; Kissan, Knorr and Kwality Walls grow

Kissan further accelerated with both Ketchups and Jams delivering strong growth on the back of impactful activation. Knorr had a good quarter particularly on Instant Soups which more than doubled volumes while the growth in Kwality Walls was driven by sharper in-market execution and the robust performance of Cornetto and Creamy Delights. Magnum continues to do well. They have restructured the company, integrating eight Profit Centres into twoDivisions Home and Personal Care (HPC) and Foods. The result is a simpler andleaner organisation, less hierarchical with fewer levels and greater empowerment.This has eliminated complexity and speeded up decision making. Today thecompany is far more youthful in attitude and spirit. There is greater openness andtransparency.

The Transformation: Investment in the FutureTo ensure that Hindustan Lever remains competitive in the long-term, they havemade significant investments in product quality, pricing and marketing. Asmentioned earlier, the investment in product quality alone has been in excess of Rs.400 crores, or 5% of our sales.In addition there has been the cost of defending their market position. Recently aninternational competitor attacked their laundry business led by a price reduction of as much as 50%. They acted with speed and determination leveraging all their pastexperience in India and internationally. They have been able to fully protect their market leadership and share, albeit sacrificing short-term profit. They made thisnecessary trade-off as market share is the best means of sustaining future profit.Over time, their stronger market positions will surely lead to greater long-term profit.Despite these significant investments to strengthen the long-term competitivenessand the costs of defending the

strong market position, they still remain one of themost profitable companies in the country.

DIVERSIFICATION OF HINDUSTAN UNILEVER LIMITEDHOME CARE PRODUCTS:Surf Excel was introduced in 1959. It is apioneer in the Indian detergent powder market, Surf Excel has constantly upgraded itself over the years, to answer theconstantly changing washing needs of the Indian homemaker. Today Surf Exceloffers outstanding stain removal ability on a wide range of stains. Surf Excel quick wash is powered with a path-breaking technology- it reduces water consumptionand time taken for rinsing by 50%. It is a significant benefit, given the acute water scarcity in most of India.

VIM BARCreated in 1885, the Vim brand is still innovating and using the magic of naturalingredients to create unbeatable results over a hundred years later. Vim was the original hand dishwashing brand: so we invented the whole category!

Vim is sold in four continents, is the leading hand dishwashing brand in twentycountries, and is available to more than 2 billion people around the world.

Vim began life as a soap (both in England, and in Thailand, where King Rama Vasked Unilever to supply his household with soap), but is now available as acomplete range of hand dishwashing including bars, powders and liquids.Vim is sold in four continents, is the leading hand dishwashing brand in twentycountries, and is available to more than 2 billion people around the world.

Vim began life as a soap (both in England, and in Thailand, where King Rama Vasked Unilever to supply his household with soap), but is now available as acomplete range of hand dishwashing including bars, powders and liquids.Cif- The Worlds leading cream cleaner which gives you the power to deal withthe toughest dirt is now in India.

Cif is the number 1 cream cleaner in the World. It is the number one cleaner in various countries including France, Germany,Russia. Its a 500 million Euro Brand. Cif is Sold in 51 countries around the globe

Food brandsHUL is one of Indias 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.In the year 1962, Brooke Bond India creates the branded roast and groundcoffee segment launching Deluxe Green Label. 1968 gave birth

to the first instant coffee chicory mix under the brand name Bru.Number 1 Coffee brand in India

Unilever's only Coffee brand

Enjoys a rich heritage, came into existence in 1962 under the brand name DeluxeGreen 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.In the year 1962, Brooke Bond India creates the branded roast and groundcoffee segment launching Deluxe Green Label. 1968 gave birth to the first instant coffee chicory mix under the brand name Bru.

Heartbrand products are sold in more than 40 countries worldwide and has anannual turnover of 5 billion.Also sold as Algida in Italy & Turkey, Langnese in Germany, Kibon in Brazil,Streets in Australia and Ola in the NetherlandsTAJ MAHALTaj Mahal was launched in 1966 by Brooke Bond.

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. Since 2006, Saif Ali Khan is the brand ambassadorPersonal care brandsOur personal care brands, including Axe, Dove, Lux, Pond's, Rexona and Sunsilk,are recognised and love by consumers across India. They help consumers to look good and feel good and in turn get more out of life.Launched first in the US in 1957; is one of the leading brands of Unilever globally. Dove has its footprint in 80 countries worldwide with a range of superior products from bar, lotions, body washes, face care and creams. It is the leading bar brand in UK, US and Canada. Fastest growing hair category brand in India.

New technology We developed a new forming process based around continuous extrusion that allowed us to shape in three dimensions whilst dosing the inclusions. Evolved over a decade by the team at Colworth, this pioneering cold roller technology was set torevolutionise the stick format.Extensive testing included a continuous 3-day production trial. We also had tosecure patents, design registrations and freedom to operate agreements. To deliver this innovation on time and in full required outstanding collaboration betweenR&D, Brand Development, Supply Chain and all support functions. Packaging design Developed through Open Innovation with a strategic partner, the novel and visually attractive packaging is integral to the premium nature of the concept.Smart design struck the right balance of minimal environmental impact throughrenewable material use with effective product protection. What's more, itestablishes a consumer ritual: remove the seal and open the box to reveal the naked product on a soft cellulose inlay, surrounded by the gold inside of the carton.Reminiscent of a jewellery box in function and graphic design, each variant has itsown signature colour within the carton. In-market results In 2007, we launched Magnum Temptation in Italy, Spain and Switzerland. In 2008, we went into the rest of Europe with a dark chocolate variant. In 2009, weexpanded capacity and introduced a fruit variant to cover the range of consumer preference.As a breakthrough innovation Magnum Temptation has achieved the expectedsuccess delivering incremental sales. This means that it did not impact the sales of the core range. The products are now being rolled out across the world. CHAPTER 4

4.1 Go-Rural decision: successful strategies for the India Rural market

As India emerges as a major superpower, more and more growth opportunities come up. A large number of foreign firms wish to do business in India. India is a country with great diversity. It is vast and varied. There are 28 states in India and it is like doing business in 28 different countries. Also, Indians are very sensitive to their history and culture. Businessmen must adapt to local customs. It all depends upon which region and which market the firm wishes to enter. What is likely to succeed in one part may not succeed in the other part. If the venture clicks, the business can reach great heights or it can go into great losses. There are strong cultural norms in India which need to be respected. If these norms are violated, it could prevent great deals from getting struck. HUL:Eighty years of presence in India Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods Company having an experience of eighty years in India. It has almost thirty-five brands spanning diverse categories like detegernts, soaps, tea, coffee ice-cream soups toothpastes and many more. HUL owns some of Indias best brands like Dove, Surf, Bru, Pureit, Lakme, Ponds, Vaseline, Rin, Wheel, Knorr and many more. HUL is a subsidiary of Unilever which has a presence in over a hundred countries all over the world. (Hindustan Unilever, 2013-14). Go-rural decision of HUL HUL has transferred the marketing battlefield from the cities to the rural areas. There are six hundred thousand villages in rural India. This paper considers the National Sample Survey Organization (NSSO) definition of rural India, which is an area with a population density of less than 400 per sq. km., 75 percent of the male working population engaged in agriculture and not having a Municipal Corporation or Board. Based on data from the National Sample Survey Organization, the rural Indian BoP market is defined as households in the bottom four expenditure quintiles that spend less than Rs. 3,453 Indian rupees (US$75) on goods and services per month. This definition represents a market of 114 million households, or 76 solid base in rural areas, no other brand can destroy them. The belief of one family one brand is also rampant and it is assumed that rural households are homogeneous in their consumption. HUL has shattered the myth that solid sales means the brand is secure. Today rural households have many options as television and other media have penetrated into the rural areas. HUL has built a strong rural presence without much advertising support. In effect, there are fewer brand choices in rural India. HUL has made effective use of prevailing infrastructure in the rural areas. It has also used unconventional channels of marketing like hats and shandies which are weekly markets in the villages, where it gets a captive audience. It has followed a policy of consciously setting up small stalls close to public distribution shops where majority of the villagers visit for their daily needs. HUL has given distributorships to the paan beedi outlets (very small kiosks selling beedis a cheap type of cigarattes and the Indian favourite paan which are found in every nook and corner of rural India). In addition to these outlets, men gather daily and chat at the local vegetable and grocery store and buy

products like chocolates soaps, shampoos and similar products spontaneously. India has 50000 melas (fairs) every year where villagers gather in one place for shopping. HUL has taken full advantage of these melas.It has used melas to reiterate its products, expose them to a far wider audience and make people aware and familiar with HUL packaging. The author also feels that these melas are just right for selling FMCGSs. However for durable goods and goods having relatively high prices, such a mode could not be used as people come to these melas for having fun and a good time and would not have the time or the mood to take any kind of heavy information. It has used vans and road shows to popularise its products. Its road show Khushiyo ki Doli (which means bundles of happiness and is some kind of a puppet show) has become very popular. All this has cleverly been done in the local languages and dialects. (In India each region speaks different dialects). Very often the same van is used for advertising and Marketing. The company has used wall hoardings, tin plates on trees and stickers on water pumps as highly cost-effective yet very noticeable avenues of advertising. On the other hand, some of its advertising campaigns which are used for urban India have also been used in rural India. Cricketers enjoy immense popularity in India and HUL has used them effectively for common advertising campaigns in rural and urban India. Using woman power effectively Personal selling through residents of the village has also been promoted. In rural India women are the home makers: they are the ones who influence the buying pattern of rural households. The soap the detergent etc. would be chosen by them. HUL identified some women in the village and trained them to be effective saleswomen for their brands. They have pioneered the concept of Shakti amma. Shakti means strength and amma means elder woman. Earlier these women were sent door-to-door to sell HUL products. But this became a bit of a social stigma in rural India. Later on, these women were stationed near river outlets where all the rural women gather in the evenings to wash their dirty linen. This strategy proved most successful and has become a case study for business schools. Research Findings HUL has seen the rural population not only as value -demanding consumers but as creative entrepreneurs. HUL is a clear case study of rural marketing at its best. It has engaged the rural population at every stage and has always kept rural folk at the centre of its marketing and distribution strategies. Thus, this cultural adaptation done by HUL has stood it in good stead. HUL has developed personal relations with employees and treated them like their own family. HUL has understood this attitude of Indians and not taken it for granted. It has adopted its business policies to Indian requirements only. It has connected to India socially and emotionally.Thus, an attempt to foster relationships has won commitment to HUL.By nurturing these relationships it has created enduring loyalty for itself. This has obviously not developed overnight. Looking at the further opportunities the rural markets would offer, the future appears bright for HUL where the rural Indian market is concerned. Conclusion and the way ahead No doubt so far HUL is the biggest FMCG company in India and has been adopting all the right strategies. In recent times, more and more companies want a share in the growing rural pie. HUL would no doubt have to continue to re-orient its startegies for more sustainale penetration into the rural markets. The author feels that HUL could expand its efforts in finding fresh channel partners While it has followed the right approach in not

treating the rural population as homogeneous, as this paper has observed, it must further understand that this rural ethos is changing even more rapidly in india of late So the speed of the new approach is essential. The author feels HUL would surely reach new heights of performance in the rural Indian market.

Typical characteristics of FMCG products.

Individual items are of small value. But all FMCG products put together account for a significant part of the consumers budget.The consumer keeps limited inventory of these products and prefers to purchase them frequently, as and when required. Many of these products are perishable.The consumer spends little time on the purchase decision. Rarely does he/she look for technical specification (in contrast to industrial goods). Brand loyalties or recommendations of reliable retailer/dealer drive purchase decisions. Trail of a new products i.e. brand switching is often induced by heavy advertisement, recommendation of the retailer or neighbours/friends.These products cater to necessities, comforts as well as luxuries. They meet the demands of the entire cross section of population. Price and income elasticity of demand varies across products and consumers.

INDIAN SOAPS Heat and dust are integral part of Indian climate. This makes Indian as one of the ideal market for soaps and other cleaning products. The penetration of bathing soaps is 98% of all households. The research study shows that the per capita consumption of bathing soap is 513 gm. So there is a very big market for soap in India. The total turnover of soap or market in India is 54 lacs ton per annum and is increasing at the rate of 5% per annum.HULHindustan Lever Limited (HUL) is Indias largest fast moving consumer goods company with leadership in Home and Personal Care Products and Foods & Beverages. HULs brands, spread across 20 distinct consumer categories, touch the lives of two out of three Indians.If Hindustan Lever straddles the Indian corporate world, it is because of being single minded in identifying itself with Indian aspirations and needs in everywalk of life.

HUL is the market leader with 59% of share followed by Godrej. Other major players are Nirma Ltd., Colgate Palmolive Ltd. Henkel Spic India Ltd. small portfolio of products led by Indias best selling healthcare brand Vicks. Advertising Age estimate a local ad spend of $138m in 2004, although the company declared a substantially lower figure.The soap market is not only segmented on the basis of price and benefits but even a range of emotions within that outlining frame work. For simplicity soap market can be divided into four categories.

Awards & recognition These are some highlights of recognition we have received from external bodies onour social, economic and environmental performance during 2009 and 2010. Awarded top Indian company in the 'FMCG' sector for the third consecutive year at Dun & Bradstreet-Rolta Corporate Awards, 2009. HUL ranked fourth in the Top Companies for Leaders, 2009' (Asia Pacific region)and 10th place in the global rankings in a survey carried out by Hewitt Associates. HUL received the Award for Excellence in HR in 2010 from Confederation of Indian Industry (CII). This is a rigorous fact-based assessment which is conducted by a team of external assessors. HUL has won this award for the third consecutiveyear.Awarded Customer and Brand Loyalty Award by Business India & BusinessStandard in 2009.Awarded for Best Corporate Social Responsibility Practice at the Social &Corporate Governance Awards 08-09 by BSE, Nasscom Foundation and TimesFoundation. Awarded in the Category 'FMCG Manufacturing Supply Chain Excellence' at theThird Express, Logistics & Supply Chain Awards by APL Logistics, Indiatimes,Mindscape, Business India Group in 2009. Our Orai unit received the Gold Excellence award and the Khalilabad unit receivedthe Silver Excellence award in the environment category by Greentech Foundationin 2009. HUL's Goa factory won a Gold Trophy at the Greentech Awards in 2009 themanufacturing sector category for their outstanding work in Safety Management. Project Shakti won the Silver Trophy at the EMPI-Indian Express IndianInnovation Awards, 2009. Kwality Wall's Swirl's awarded 'The Franchisor of the year' for the Ice-cream parlour category by Franchise India in 2009.

HUL brands have topped Brand Equity's Indias Most Trusted Brands Survey rankings for 2010. Six HUL brands (Lux, Lifebuoy, Clinic Plus, Pond's, Fair &Lovely and Pepsodent) feature in the top 10 and eight in the top 20. All together there are 17 HUL brands among the 100 most trusted brands in the 2010 survey.Additionally, five HUL brands (Fair & Lovely, Lifebuoy, Lux, Pepsodent and Pond s) featured in the list of ten Hall of Fame brands. This recognition wasaccorded to brands which consistently ranked high in the survey over the last 10years since its inception. In 2009, three HUL brands featured in the top ten, andseven in the top twenty.

4.2 ADVERTISING STRATEGY Higher ad spending to prop up volumes and market share Hindustan Unilevers (HUL) first level of aggression was to increase ad spends from 12.5% in Q1FY10 to 13.5% of sales in Q2FY10. Ad spend in Q3FY10 increased further 60bps Q-o-Q to 14.1% of sales. The company is also trying to improve product/mix with superior high growth margin products (through new product launches, rebranding, etc.) and we believe HUL will be able to deliver volume growth and market share gain through this strategy. Aggressive stance is the right way to go HULs second level of aggression was to cut prices sharply in the soaps and detergents category. In this high inflationary environment, regional players will be under cost pressure as they do not have HULs international sourcing acumen and scale. In the conference call, the company insisted that competitive growth is the No. 1 priority and we believe the companys price cut in Rin (~2% of sales) and other segments will help it record higher volume growth. Higher volumes is trigger; profit growth to remain muted in near term Higher volume growth and likely increase in market share should be the trigger in the near term. However, due to price cuts and higher ad spending (on back of product innovation), profit is likely to be muted in the near term. Favourable base for three quarters going forward As expected by us, HUL delivered 5% volume growth. The companys volumes had declined , and this should provide a favorable base in the coming three quarters. Outlook and valuations: Recent correction overdone; maintain BUY The company is investing heavily in its brands, realigning its sales and distribution strategies, and we believe it will start regaining market share, a trend which has already begun. HUL has underperformed the Sensex and BSEFMCG Index in the past six months by 22% and 19%, respectively. Recent correction has been overdone and we believe these levels provide a good entry for investors looking for defensive names and a likely turnaround in fortune. We maintain BUY recommendation. On relative return basis, the stock is rated Sector Performer.

Analysing the key concerns of investors Price cut, high Ad spending, new product development, input cost, and food inflation are some of the concerns acting as an overhang for the company. We investigate some of these issues a little deeper in this note.

Price cut HULs global management has emphasized the importance of a strong foothold in our own backyard and the recent price cuts indicate the companys strong commitment to continue as market leader in the soaps and detergents segment, while maintaining profitability. As a reminder, the company still holds 45% market share in toilet soaps and 37% in washing powder as per industry data.

After several quarters, HUL has been successful in arresting the loss of market share. Its strategy to rejuvenate brands seems to be paying off as market

share in soaps increased 10bps, while volume share in laundry and bars increased 100bps and 60bps, respectively Q-o-Q. HUL is still seeing deflation in major commodity costs because of forward cover in key commodities. LAB is one of the key inputs in soaps and detergents and constitutes ~40% of the raw material cost for this division. The company has benefitted from overall input cost deflation, recording 210bps, 330bps, and 480bps COGS deflation in Q1FY10, Q2FY10, and Q3FY10, respectively. Rin largely constitutes ~2% of sales and the recently announced price cut of around 30% should have minimal impact.

Although we expect some more price cuts, we do not expect the price war in soaps and detergents this time to be as severe as it was in 2004. Margins have dipped significantly in the past few years from mid-20s to lower teens, making the business less attractive for both regional and global players. This also limits the bandwidth of various players from taking aggressive price cuts.

High investment in ASP Several competitors increased ASP (as % of sales) spending mid-teens. HUL is the biggest FMCG player and has the scale to absorb increased ASP costs. Moreover, increasing brand awareness for new and existing products improves brand equity in the longer run and we believe this is the right strategy at this point of time. This should also enable the company to focus on other high margin business such as personal products.

Focus on product innovation/ relaunches/ development of new markets Successful relaunch of Lux helped volume growth in the soaps segment and market share seems to be stabilising now. Fair & Lovely winter fairness cream was relaunched and the company is seeing good growth. In the hair & oil category, Dove and Clinic Plus grew strongly and the former is now the No. 1 brand in modern retail. Sunsilk was relaunched in November 2009 and growth momentum continues in this category as well. Launch of Cif continues to see good momentum. Brooke Bond Sehatmand was launched to attract down trading customers. The tea also projects additional health benefits and should lead to filling up of the void in the discount tea segment. Knorr soup is registering good growth post relaunch. In the ice cream category, HUL launched the Litchi Zap and 85 swirl parlours are in operation now, recording good growth in the segment. Moreover, there were recent media reports that noodles will be launched soon. Overall, we remain convinced that increased ASP spending is leading to the desired results and the company is focusing on higher margin products, which should be growth drivers in the near term.

Input cost Food, beverages, and ice cream contribute ~ 17% to HULs revenue and the impact is reduced because of forward cover in key commodities. HUL benefits from Unilevers global scale and acumen and in the Q3FY10 conference call, the company reconfirmed that it has sufficient cover for input costs. Hence, we do not see input cost as a major challenge to the company. High food inflation Food inflation was 17.56% for the week ending January 23. Apart from sugar, pulses and edible oils have

added to the strong headline food inflation number. However, as rabi crop is

coming close to harvesting stage, we should see some easing off of these prices. Already, prices of soybean, rape seed and chana have been falling steadily, while tur and urad (primarily kharif crops) are also seeing some decline. Chana prices fell by almost INR 700 (25%) per quintal since the beginning of December 2009 because of supply overhang, government restrictions, and increase in acreage. Soybean prices decline, however, was led by global oversupply situation. The coming off of food inflation is positive for FMCG consumption as the slight slowdown and downtrading in some categories will likely reverse. Premiumisation of consumers Rising income levels and economic recovery have improved consumer sentiment and led to revival in consumer demand, both urban and rural. Premiumisation trend is noticed by several companies under our coverage and we present some anecdotal evidence of it from recent conference calls.

United Breweries Group update in January 2010 On domestic aviation industry: Passenger traffic for the aviation industry increased . This buoyancy in passenger volumes is expected to continue as the Indian economy rebounds from the slowdown of early 2009. Premium traffic has made a comeback with a sharp increase in loads on key sectors. On domestic alcohol market: No evidence of trading down. In fact, consumers are trading up to premium products due to increased spending power and growth in young drinkers. Shoppers Stop in January 2010 The Indian consumer is more confident now and its clearly reflected in their shopping behavior.

Pantaloon Retail in January 2010 Rising incomes, higher working youth population, faster rate of urbanisation, will lead to the change in the nature and composition of PFCE in the new decade. It will move towards value added products, thus giving rise to new consumption categories. In fact, HUL is focused on market development as well as uptrading consumers in certain categories. New product launches (in ice cream and foods) as well as the recent price cut in Rin are possible opportunities to uptrade customers to midsegment from lower price points. Dove grew rapidly across shampoo and conditioners, becoming the No.1 hair care brand in modern trade while Dove sachet has captured ~5% of the market. In skin care, Ponds White Beauty and Fair & Lovelys winter fairness' cream has received good response from the market. Clearly, HUL is benefitting from the premiumisation trend of Indian consumers. Growth and the price for it Though not an exact like-for-like comparison, we look at HULs ASP spending, margins generated, and the valuation and compare it to global companies like LOreal and Reckitt Benckiser. While HULs ASP spending is slightly below Reckitts, it is significantly below what LOreal spends to build its brand equity. On margin basis, Reckitt is able to operate on a much higher level than both HUL and LOreal. But on a valuation basis, Reckitt is not able to command the premium enjoyed by both HUL and LOreal. We attribute the valuation premium to HULs entry into new product development, complete range of portfolio from food to personal care, good brand equity and high growth prospects of the Indian economy. 4.3 Recent HUL performance HUL has underperformed the Sensex and BSEFMCG Index in the past six months by 22% and 19%, respectively. Recent correction has been overdone and we believe these levels provide a good entry for investors looking for defensive names and a likely turnaround in fortunes.

Key takeaways from conference call Volume growth has come back for HUL. HUL has grown at a higher rate/in line than the overall market in almost all categories in terms of volumes. Its volume growth accelerated to 5% in and made a good pullback from the 1% growth seen in due to innovations, massive brand support, and continued focus on market execution. Recent price cut in Rin/ price war in laundry: Currently, the price cut in Rin is just a price promotion/offer over the near term. This will be evaluated again. HUL took a 30% price cut in Rin washing powder (to INR 50 from INR 70). Price cuts could also lead to uptrading to mid segment from lower price points. Growing India opportunity means competition will increase. However, HUL remains focused on leadership. It remains confident of growth over medium and long term. Impact on HUL, if any, depends on cost scenario, competitive intensity. Market share improvement is the key objective over near term: HUL will focus on competitive growth over near term. However, profitable growth remains the key objective over the medium and long term. There is a change in strategy from a competitive and profitable growth to competitive growth over the near term. HUL is focused on speed to market and determined to grow ahead of the market. New products/ innovations which have done well: Fabric conditioner, hair conditioner, OOH consumption of ice creams, water, premium skin lightening. Raw material costs: HUL has forward cover for key commodities and keeps reviewing the time lines. The company will relentlessly drive down costs. Ad spends: The level of ad spends will depend on competitive intensity and product innovations. Launches and relaunches will keep happening. However, over the near term, ad spends are likely to remain high. Ad spends are unlikely to go back to 10% of sales. Value growth: Value growth has come down and should be seen in context of down trading in tea and detergents and price cuts in soaps. Down trading in tea and detergents: HUL has introduced a new variant in low end of tea which is competitively priced with respect to regional players. The new brand is Brooke Bond Sehatmand and has been introduced in UP, Bihar, and MP. Penetration is high in these two segments which partly explains the down trading. Prices of tea as a commodity have shot up so uptrading decreased from packets to lose consumption.

Royalty expenses:

This is applicable only to Unilever brands. Benefits for HUL will far outweigh the higher royalty costs. Launching of Dove, Axe, Knorr, Ponds premium are some of the recent successful launches due to support from the parent, Unilever. The impact is likely to be 60-70bps of sales. FMCG market: Market has grown slower due to price cuts and slower volume

growth in some segments (due to food inflation). HUL is confident of FMCG industry growth and believes market can accommodate new players. intensity: Intensity is increasing across the board. HUL will focus on market development and will maintain leadership position. BTL spends: Promotions have come down as a % of sales Q-o-Q and Y-o-Y.

Company Description HUL, the largest FMCG Company in India, was formed by merging three subsidiaries of Unilever in 1956. At present, Unilever Plc holds a 52.1% stake in the company. HULs portfolio of products covers a wide spectrum including soaps, detergents, skin creams, shampoos, toothpastes, tea, coffee, and branded atta. In FY09 (15 month period), HUL generated net sales of INR 205 bn and a profit of INR 25.4 bn. Powerful brands and an envious distribution network are HULs primary strengths. The company operates through five segmentssoaps & detergents, personal products, beverages, foods, and ice creamsexports, and other operations. While soaps & detergents contributes 45% of net sales, the high margin personal products segment contributes the most to operating profit at 45%. Together personal products and soaps & detergents which constitute the home and personal care (HPC) division contribute 71% of net sales and 82% of operating profit. Investment Theme HUL is a play on consumption growth in India. The company has displayed its ability to effect price hikes and avoid impact of inflation in vegetable oils, which, combined with improved outlook for fabric wash and strong growth in processed foods and beverages, boosts our positive outlook on the stock. The recent moves by the company to dispose of its non core assets including few properties give it a near term upside. We believe the price war in the detergent segment with rival P&G has ended and this is likely to add to the profitability from the segment going forward.

Key Risks A rise in crude oil prices can result in biodiesel demand resurfacing, which in turn could lead to increase in vegetable oil price inflation; in turn deteriorating the companys operating margins. The price war in HULs popular segments with new entrants entering the fray could hit the company hard. Further risks arise from down trending by consumers in response to recent price hikes, which could hurt the companys top line. A substantial part HULs turnover is derived from the rural market. Deficient rainfall could impact agricultural activity which in turn could hit rural demand.

Brands HUL is the market leader in Indian consumer products with presence in over 20 consumer categories such as soaps, tea, detergents and shampoos amongst others with over 700 million Indian consumers using its products. Eighteen of HUL's brands featured in the ACNielsen Brand Equity list of 100 Most Trusted Brands Annual Survey (2012), carried out by Brand Equity, a supplement of The Economic Times.

The "most trusted brands" from HUL in the top 100 list (their rankings in brackets) are: Clinic Plus (4), Lifebuoy (10), Fair & Lovely (11), Rin (12), Surf Excel (13), Lux (14), Pepsodent (17), Closeup (19), Pond's (20),

Sunsilk (26), Dove (37), Vim (43), Pears (79), Lakme (81), Vaseline (86),

Wheel (87), Hamam (95) and Rexona .

The latest launches for Hindustan Unilever include: Surf Excel Easywash; Lakm eyeconic range; Vim Anti Germ bar;Pureit Marvella UV with Advance Alert System; TRESemm: For Salon style hair at home everyday; Clinic Plus: Milk Protein Formula A++; Comfort 1 Rinse; Bru Exotica Guatemala; Closeup: Deep Action; Dove Hair Fall Rescue Treatment; Taaza: Taazgi bhari chaai, dimaag khul jaaye.

Its brands include: Food brands: Annapurna salt and atta

Bru coffee Brooke Bond (3 Roses, Taj Mahal, Taaza, Red Label) tea

Kissan squashes, ketchups, juices and jams Lipton tea Knorr soups & meal makers and soupy noodles Kwality Wall's frozen dessert Modern Bread, ready to eat chapattis and other bakery items Magnum (ice cream)Homecare Brands Active Wheel detergent Cif Cream Cleaner Comfort fabric softeners Domestos disinfectant/toilet cleaner Rin detergents and bleach

Sunlight detergent and colour care Surf Excel detergent and gentle wash Vim dishwash

Magic Water SaverPersonal Care Brands: Aviance Beauty Solutions Axe deodorant and aftershaving lotion and soap

LEVER Ayush Therapy ayurvedic health care and personal care products

Breeze beauty soap

Clear anti-dandruff hair products

Clinic Plus shampoo and oil Close Up toothpaste Dove skin cleansing & hair care range: bar, lotions, creams and anti-perspirant deodorants

Denim shaving products

Fair & Lovely skin-lightening products Hamam Lakm beauty products and salons Lifebuoy soaps and handwash range Liril 2000 soap Lux soap, body wash and deodorant Pears soap Pepsodent toothpaste Pond's talcs and creams Rexona soap Sunsilk shampoo

Sure anti-perspirant Vaseline petroleum jelly, skin care lotions TRESemm TIGI Leadership

HUL has produced many business leaders for corporate India, including Harish Manwani, the non-executive chairman of HUL and currently the chief operating officer of Unilever. He is also a member of Unilever Leadership Executive team (ULE), which comprises the company's top management and is responsible for managing Unilever's profit and loss, and delivering growth across its regions, categories and functions. Sanjiv Mehta was appointed as the Managing Director and Chief Executive Officer of HUL with effect from 10 October 2013. He has also been appointed as Executive vice-president, South Asia, Unilever and is also the executive head of the South Asia cluster for Unilever.

HUL was ranked 4th in the Hewitt Global Leadership Survey 2007 with only GE, P&G and Nokia ranking ahead of HUL in the ability to produce leaders. A study conducted by Aon Hewitt, The RBL Group and Fortune in 2011,

ranked the company number six in the list of 'Top Companies for Leaders 2011 Study Results'.The company was awarded the CII- Prize for Leadership in HR Excellence at the 2nd CII National HR Conclave 2011 held on October 2011.

Hindustan Unilever Limited was recognised as the 'Conscious Capitalist of the Year' at the 2013 Forbes India Leadership Awards.

HUL won 12 awards overall with 4 Golds, 4 Silvers and 4 Bronzes at the 2013 Emvies Awards.

HUL ranks number two on the on Fortune India's 2013 '50 Most Admired Companies list'.

Hindustan Unilever Limited has emerged as the No. 4 'Most Respected Company in India' in a survey conducted by Business World in 2013.

As per the latest Nielsen Campus Track-business school survey released in February 2013, Hindustan Unilever has emerged as the No.1 employer of choice for B-school students who will graduate in 2013, across functions. HUL also retained the 'Dream Employer' status for the 4th year running and continues to be the top company considered for application by B-School student in India.

In 2012, HUL was recognised as one of the world's most innovative companies by Forbes. With a ranking of number 6, it was the highest ranked FMCG company.

Hindustan Unilever Limited (HUL) won the first prize at FICCI Water Awards 2012 under the category of 'community initiatives by industry' for Gundar Basin Project, a water conservation initiative.

Hindustan Unilever Limited won 13 awards at the Emvies 2012 Media Awards organised by the Advertising Club Bombay in September 2012.

The company bagged four awards at the Spikes Asia Awards 2012, held in September. The awards included one Grand Prix one Gold Award and two Silver Awards.

HUL's Chhindwara Unit won the National Safety Award for outstanding performance in Industrial Safety. These awards were instituted by the Union Ministry of Labour and Employment in 1965.

HUL was one of the eight Indian companies to be featured on the Forbes list of World's Most Reputed companies in 2007.

In July 2012 Hindustan Unilever Limited won the Golden Peacock Occupational Health and Safety Award for 2012 in the FMCG category for its safety and health initiatives and continuous improvement on key metrics.

Pond's Talcum Powder's packaging innovation has bagged a Silver Award at the prestigious 24th DuPont Global Packaging Award, in May 2012.The brand was recognised for cost and waste reduction.

In May 2012, HUL & Star Bazaar bagged the silver award for 'Creating Consumer Value through Joint Promotional and Event Forecasting' at the 13th ECR Efficient Consumer Response Asia Pacific Conference.

In 2011, HUL was named the most innovative company in India by Forbes and ranked 6th in the top 10 list of most innovative companies in the world. Hindustan Unilever Ltd received the National Award for Excellence in Corporate Governance 2011 of the Institute of Company Secretaries of India (ICSI) for excellence in corporate governance. In 2012, Hindustan Unilever emerged as the No. 1 employer of choice for B-School students who will graduate in 2012. In addition, HUL also retained the 'Dream Employer' status for the 3rd year running.Hindustan Unilever ranked No. 2 in Fortune India's Most Admired Companies list, which was released by Fortune India in partnership with the Hay Group. The company received the highest scores for endurance and financial soundness. HUL was ranked 47th in The Brand Trust Report 2014 published by Trust Research Advisory. 36 HUL brands also featured in the list including Lux, Dove, Lipton, Vim, Kissan, Bru, Rexona, Close Up, Clinic Plus, Pond's, Knorr, and Pepsodent among others.

HUL emerged as the top 'Dream Employer' as well as the top company considered for application in the annual B-School Survey conducted by Nielsen in November 2010. This was the second successive year that HUL has been rated as the top 'Dream Employer' in India. HUL has also emerged as the top employer of choice among the top six Indian Institutes of Management (IIMA).

HUL won three awards at the 'CNBC Awaaz Storyboard Consumer Awards' in 2011 Most Recommended FMCG Company of the Year; Most Consumer Conscious Company of the Year and Digital Marketer of the Year.

The company was felicitated in April 2010 for receiving the highest number of patents in the year 2009 at Annual Intellectual Property Awards 2010.

In 2007, Hindustan Unilever was rated as the most respected company in India for the past 25 years by Businessworld, one of India's leading business magazines. The rating was based on a compilation of the magazine's annual survey of India's most reputed companies over the past 25 years.

HUL is one of the country's largest exporters; it has been recognised as a Golden Super Star Trading House by the Government of India. Headquarters Hindustan Unilever's corporate headquarters are located at Andheri (E), Mumbai. The campus is spread over 12.5 acres of land and houses over 1,600 employees. Some of the facilities available for the employees include a convenience store, a food court, an occupational health centre, a gym, a sports & recreation centre and a day care centre.

The campus received a certification from LEED (Leadership in Energy and Environmental Design) Gold in 'New Construction' category, by Indian Green Building Council(IGBC), Hyderabad, under license from the United States Green Building Council (USGBC)

The company's previous headquarters was located at Backbay Reclamation, Mumbai at the Lever House, where it was housed for over 46 years.

Direct Selling Division

HUL also runs Hindustan Unilever Network (HULN), a direct selling business arm. Under HULN, health products are marketed by Ayush Therapy in collaboration with Arya Vaidya Pharmacy, Coimbatore; beauty products by Aviance; home products by Lever Home; and male grooming by D.I.Y. There are also premium products for beauty salons and others. Skin lightening creams Hindustan Unilever's "Fair and Lovely" is the leading skin-lightening cream for women in India.The company had to cease television advertisements for the product in 2007. Advertisements depicted depressed, dark-complexioned women, who had been ignored by employers and men, suddenly finding new boyfriends and glamorous careers after the cream had lightened their skin. In 2008 Hindustan Unilever made former Miss World Priyanka Chopra a brand ambassador for Pond's, and she then appeared in a mini-series of television commercials for another skin lightening product, 'White Beauty', alongside Saif Ali Khan and Neha Dhupia; these advertisements, showing Priyanka's face with a clearly darker complexion against the visibly fairer Neha Dhupia, were widely criticised for perpetuating racism and lowering the self-esteem of women and girls throughout India who were misled by HUNL to believe that they needed to be white to be beautiful.

Conclusion In comparative advertising a company shows how its product or service is superior to that of its competitors by comparing the benefits and costs within the advertisement itself. While interpreting, the content and manner of the advertisement shows the intent behind the advertisement. Therefore, the seller must ensure that no designs applied to the advertisement result in a breach of the threshold of permissible competitive/comparative advertising. In other words, in judging the overall effect of the advertisement, the Court may have to look into the question of what caught or catches the eye or attention of the audience. As far as the Colgate-Pepsodent case is concerned, it has created a buzz for both the brands and experts feel it will create publicity for Pepsodent as well as Colgate.

HUL's up-and-running business model is atreat for investors seeking exposure in theFMCG segment. The company hasdelivered in the past and has the potentialto do better in future. In short term. HULsgrowth story is evolving.ITC is eyeing the pie which HUL andother FMCG players currently enjoy.Though risky, the company's businessmodel will pay off in the long run. ITC hasproved its expertise in the cigarettes,hotels, paper and agri-businesses. Investorswho want to bank on its execution abilityin FMCG can consider the stock with along-term horizon.According to us the companies shouldcontinue with their CSR and also continuewith their strategies. The thing that needsto be changed is that, ITC should go formore diversification in Non cigarettesegment (FMCG) while HUL should comeup with the new strategies that could takethe new product forward to create a newsegment. A recommendation For HUL isthat it should focus on rural area more.

BIBLOGRAPHYBOOKS1. Rural Marketing on HUL - Mumbai: Himalaya publication

2. Shah.c, Desai R.,(2013),The 4As of Rural Marketing Mix,Volume2, No1, January- .-13

3. Gopalaswamy T (2011) - Rural Marketing Environment, Problmes & Strategies of HUL .

4.Vikas Publishing House : The Rise of Indias Consumer Market, 2007 Gupta S. (2006).

5. Wisdom Publication - Ramaswamy V., Namakumari S. (2009). Marketing Management- Global Persepective, Indian Context. Macmillan Pulbicatioin. WEBSITES http://transformationallogistics.wordpress.com ,

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JOURNALAnalysis of Hair Care Products with Reference to Shampoo Market in India, Abhinav National Monthly Refereed Journal of Reserach in Commerce & Management, Volume1, Issue11 - Dey S., Dr.Rafat S., Agarwal P. (2012).