Hindustan 2

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A

Project study report

On

Training Undertaken

At

HINDUSTAN UNILEVER LIITED

AR!ETIN" STRATE"IES AND POLI#IES

Submitted in partial fulfillment of the requirements for MBA (Master of

Business Administration

Submitted By: Submitted To :

Saddam Hussain Dr. Manish Jain

MBA 3rd Semester HOD

AR$A INSTITUTE O% EN"INEERIN" & TE#HNOLO"$

'AIPUR

PREFACE

Hindustan Unilever imited (formerl! Hindustan ever imited" is #ndia$s lar%est FastMovin% Consumer &oods 'ompan! ith a sales turnover of more than Rs)*+,+++ 'rores) At

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least one of its produ'ts rea'hes to thirds of #ndian households) #t has -. brands and

emplo!s more than *.,+++ people) #ts promoter 'ompan! Unilever, a fortune .++

multinational, holds .*)/01 equit!) Unilever has presen'e in more than *++ 'ountries

orldide in FMC& se'tor)

Hindustan Unilever imited (HU", a subsidiar! of Unilever, is a fast movin% 'onsumer

%oods (FMC&" 'ompan! based in #ndia) 2he 'ompan! fo'uses on effi'ient deliver! to

'onsumers ith an improved suppl! 'hain, brand buildin% initiatives and innovation, hi'h

has helped the 'ompan! to sustain its leadership position in the overall FMC& 'ate%or! in

#ndia)

2his pro3e't is a sin'ere effort to loo4 for the mar4et potential in FMC& industr!) A

des'riptive resear'h pro'edure had been applied to 'ome to the 'on'lusions of the pro3e't)

A detailed questionnaire had been prepared and the responses of the 'on'erned people

had been 'olle'ted for the anal!sis)

Ackno()edge*ent

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# e5press m! armest than4s 6 deep sense of %ratitude to the individuals for their %enerous

help in dis'ussin% the pro3e't and %ivin% their valuable time in su''essful 'ompletion of this

pro3e't) 2ime to time # %ot 'onstru'tive su%%estions, %uidan'e and en'oura%ement)

# ould li4e to e5press m! deep than4s to Dr+ Ar,ind Agar(a)- President- Arya "roup o. #o))eges and Pro.+ + L+ "upta- Principa)- Arya Institute o. Engineering & Tec/no)ogy-

'aipur for e5tendin% me the opportunit! of presentin% the pro3e't and providin% all the

ne'essar! resour'es for this purpose)

7ith mu'h pride and deli%ht # ould li4e to e5press m! sin'ere than4s to Dr+ anis/ 'ain

0Head o. t/e depart*ent1 for his e5'ellent %uidan'e and valuable su%%estions throu%hout

the pro3e't or4) # e5press heartfelt than4s to r+ Ans/u) *at/ur (Pro3e't &uide" for her

onderful support and for %ivin% me an opportunit! to present pro3e't report on

2AR!ETIN" STRATE"IES AND POLI#IES3+

# also ant to %ive m! humble re%ards to rs+Pad*a s/ar*a-r+Par*od s/ar*a-rs+

Nis/a goya)-r+Ans/u) at/ur-rs Ankita Pareek-rs+Anc/a) and rs+Priyanka for

their valuable support and believe in m! or4) 7ithout their sustained interest and

en'oura%ement, this or4 'ould not have been possible to rea'h the state of 'ompletion

ith satisfa'tion) #n fa't it is their real devotion to the development or4, hi'h instilled in

me, the need of a passionate 'ommitment to pursue this pro3e't)

# am also %rateful to all m! friends for providin% 'riti'al feedba'4 and support henever

required) 2here are times in su'h pro3e'ts hen the 'lo'4 beats !ou time and a%ain and

!ou run out of ener%!, !ou 3ust ant to finish it on'e and forever) Parents made me endure

su'h times ith their unfailin% humour and arm ishes)

# re%ret for an! inadvertent omissions)

SADDA HUSSAINMBA ###rd SEM)

E4E#UTIVE SUAR$

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2he Hindustan Unilever td$s(HU" #n' has ta4en the opportunit! to offer us a broader

vie of FMC& 'ate%or!) 2he Hindustan Unilever td (H" is #ndia$s no)* FMC& is able to

share ith their mar4et insi%hts based upon unparalleled breath of 'onsumer %oods

e5perien'e)

Hindustan Unilever td (HU" has %ron from stren%th to stren%th ith ne te'hnolo%ies

bein% introdu'ed to ma4e the H 'onsumer %oods business, one of the most effi'ient in

the orld) 2he 'ompan!$s histor! dates ba'4 to *8-* hen Unilever set up its first #ndian

subsidiar!, Hindustan 9anaspati Manufa'turin% Compan!, folloed b! ever Brothers #ndia

imited (*8--" and United 2raders imited (*8-.") 2hese three 'ompanies mer%ed to form

Hindustan ever imited in :ovember *8.;) Effe'tive s bi%%est

'onsumer %oods 'ompan!, and far and aa! the leadin% advertiser) HU inhabits virtuall!

ever! se'tor of the 'onsumer %oods mar4et, in'ludin% several not o''upied b! Unilever in

other mar4ets su'h as preserves and ba4er! produ'ts, and is also one of the 'ountr!$s top

five e5porters) #n addition to FMC& produ'ts it is the 'ountr!>s bi%%est e5porter of tea) #t is

%enerall! a'4noled%ed to be one of #ndia>s best?run businesses, althou%h performan'e

sloed dramati'all! beteen 0+++ and 0++/, prior to restru'turin%)

Unilever, hi'h sells soap to more than .++ million #ndians, ma! see %lobal revenue %roth

slo in 0+*+ as Pro'ter 6 &amble Co) and #2C td) step up mar4etin% in Asia>s third?

bi%%est e'onom!)

2he orld>s se'ond?lar%est 'onsumer produ'ts ma4er has relied on a''eleratin% shipments

of Surf E5'el deter%ent in #ndia to ma4e up for slu%%ish sales in Europe):o Cin'innati?

based Pro'ter 6 &amble is sto'4in% #ndian stores ith @la! s4in? 'are produ'ts after nearl!

halvin% the lo'al pri'es of Ariel and 2ide deter%ents in 0++/)

Asia and Afri'a, hi'h ma4e up about a third of Unilever>s orldide sales, ill see their

share of the 'ompan!>s %roth fall to 0 per'ent in 0+*+ from -)- per'ent in 0++=, a''ordin%

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to Brussels?based bro4era%e Peter'am SA) Revenue from the to 'ontinents rose **)/

per'ent in the first nine months of last !ear, helpin% offset *)8 per'ent %roth in Europe and

/)0 per'ent in :orth and South Ameri'a)

Unilever>s overall sales %roth ill slo to /)8 per'ent in 0+*+ from an estimated .)-per'ent in 0++=, a''ordin% to the median of five anal!sts in a Bloomber% surve!)

#ONTENTS

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#ntrodu'tion to the #ndustr!

#ntrodu'tion to the or%aniation

Resear'h Methodolo%!

o 2itle of the stud!

o uration of the pro3e't

o @b3e'tive of the stud!

o 2!pes of Resear'h

o Sample sie 6 2e'hniques

o S'ope of stud!

o imitation of Stud!

Fa'ts and Findin%s

ata Anal!sis 6 #nterpretation

S7@2 Anal!sis

Re'ommendation 6 Su%%estions

uestionnaire

Biblio%raph!

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INTRODU#TION TO THE INDUSTR$

Produ'ts hi'h have a qui'4 turnover, and relativel! lo 'ost are 4non as Fast Movin%

Consumer &oods (FMC&") FMC& produ'ts are those that %et repla'ed ithin a !ear)

E5amples of FMC& %enerall! in'lude a ide ran%e of frequentl! pur'hased 'onsumer

produ'ts su'h as toiletries, soap, 'osmeti's, tooth 'leanin% produ'ts, shavin% produ'ts and

deter%ents, as ell as other non?durables su'h as %lassare, bulbs, batteries, paper

produ'ts, and plasti' %oods) FMC& ma! also in'lude pharma'euti'als, 'onsumer

ele'troni's, pa'4a%ed food produ'ts, soft drin4s, tissue paper, and 'ho'olate bars)

A subset of Produ'ts hi'h have a qui'4 turnover, and relativel! lo 'ost are 4non as Fast

Movin% Consumer &oods (FMC&") and aptops) 2hese are repla'ed more frequentl! than

other ele'troni' produ'ts) 7hite %oods in FMC& refer to household ele'troni' items su'h

as Refri%erators, 2)9s, Musi' S!stems, et')

#n 0++=, the Rs) /D,+++?'rore FMC& se%ment as one of the fast %roin% industries in

#ndia) A''ordin% to the AC :ielsen #ndia stud!, the industr! %re .)-1 in value beteen

0++; and 0++=)

Indian %#" Sector

2he #ndian FMC& se'tor is the fourth lar%est in the e'onom! and has a mar4et sie of

US*-)* billion) 7ell?established distribution netor4s, as ell as intense 'ompetition

beteen the or%anised and unor%anised se%ments are the 'hara'teristi's of this se'tor)

FMC& in #ndia has a stron% and 'ompetitive M:C presen'e a'ross the entire value 'hain) #t

has been predi'ted that the FMC& mar4et ill rea'h to US --)/ billion in 0+*. from US

billion **); in 0++;) 2he middle 'lass and the rural se%ments of the #ndian population are

the most promisin% mar4et for FMC&, and %ive brand ma4ers the opportunit! to 'onvert

them to branded produ'ts) Most of the produ't 'ate%ories li4e 3ams, toothpaste, s4in 'are,

shampoos, et', in #ndia, have lo per 'apita 'onsumption as ell as lo penetration level,

but the potential for %roth is hu%e)

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2he #ndian E'onom! is sur%in% ahead b! leaps and bounds, 4eepin% pa'e ith rapid

urbaniation, in'reased litera'! levels, and risin% per 'apita in'ome)

2he bi% firms are %roin% bi%%er and small?time 'ompanies are 'at'hin% up as ell)

A''ordin% to the stud! 'ondu'ted b! AC :ielsen, ;0 of the top *++ brands are oned b!

M:Cs, and the balan'e b! #ndian 'ompanies) Fifteen 'ompanies on these ;0 brands, and

0= of these are oned b! Hindustan ever) Pepsi is at number three folloed b! 2hums Up)

Britannia ta4es the fifth pla'e, folloed b! Col%ate (;", :irma (=", Co'a?Cola (D" and Parle

(8") 2hese are fi%ures the soft drin4 and 'i%arette 'ompanies have ala!s shied aa! from

revealin%) Personal 'are, 'i%arettes, and soft drin4s are the three bi%%est 'ate%ories in

FMC&) Beteen them, the! a''ount for -. of the top *++ brands)

THE TOP 56 #OPANIES IN %#" SE#TOR

*) Hindustan Unilever td)

0) #2C (#ndian 2oba''o Compan!"

-) :estl #ndia

/) &CMMF (AMU"

.) abur #ndia

;) Asian Paints (#ndia"

=) Cadbur! #ndia

D) Britannia #ndustries

8) Pro'ter 6 &amble H!%iene and Health Care

*+) Mari'o #ndustries

2he 'ompanies mentioned are the leaders in their respe'tive se'tors) 2he personal 'are

'ate%or! has the lar%est number of brands, i)e), 0*, in'lusive of u5, ifebuo!, Fair and

ovel!, 9i'4s, and Ponds) 2here are ** H brands in the 0*, a%%re%atin% Rs) -,=88 'rore

or ./1 of the personal 'are 'ate%or!) Ci%arettes a''ount for *=1 of the top *++ FMC&

sales, and 3ust belo the personal 'are 'ate%or!) #2C alone a''ounts for ;+1 volume

mar4et share and =+1 b! value of all filter 'i%arettes in #ndia)

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2he foods 'ate%or! in FMC& is %ainin% popularit! ith a sin% of laun'hes b! H, #2C,

&odre3, and others) 2his 'ate%or! has *D ma3or brands, a%%re%atin% Rs) /,;-= 'rore) :estle

and Amul slu% it out in the poders se%ment) 2he food 'ate%or! has also seen innovations

li4e softies in i'e 'reams, 'hapattis b! H, read! to eat ri'e b! H and pias b! both

&CMMF and &odre3 Pillsbur!) 2his 'ate%or! seems to have faster development than the

sta%natin% personal 'are 'ate%or!) Amul, #ndia>s lar%est foods 'ompan!, has a %ood

presen'e in the food 'ate%or! ith its i'e?'reams, 'urd, mil4, butter, 'heese, and so on)

Britannia also ran4s in the top *++ FMC& brands, dominates the bis'uits 'ate%or! and has

laun'hed a series of produ'ts at various pri'es)

#n the household 'are 'ate%or! (li4e mosquito repellents", &odre3 and Re'4itt are topla!ers) &ood4ni%ht from &odre3, is orth above Rs 0*= 'rore, folloed b! Re'4itt>s

Mortein at Rs */8 'rore) #n the shampoo 'ate%or!, H>s Clini' and Sunsil4 ma4e it to the

top *++, althou%h P6&>s Head and Shoulders and Pantene are also tr!in% hard to be

positioned on top) Clini' is nearl! double the sie of Sunsil4)

abur is amon% the top five FMC& 'ompanies in #ndia and is a herbal spe'ialist) 7ith a

turnover of Rs) *8 billion (appro5) US /0+ million" in 0++;?0++=, abur has brands li4e

abur Amla, abur Ch!aanprash, 9ati4a, Ha3mola and Real) Asian Paints is en3o!in% a

formidable presen'e in the #ndian sub?'ontinent, Southeast Asia, Far East, Middle East,

South Pa'ifi', Caribbean, Afri'a and Europe) Asian Paints is #ndia>s lar%est paint 'ompan!,

ith a turnover of Rs)00); billion (around US .*- million") Forbes &lobal ma%aine, USA,

ran4ed Asian Paints amon% the 0++ Best Small Companies in the 7orld )

Cadbur! #ndia is the mar4et leader in the 'ho'olate 'onfe'tioner! mar4et ith a =+1

mar4et share and is ran4ed number to in the total food drin4s mar4et) #ts popular brands

in'lude Cadbur!>s air! Mil4, . Star, E'lairs, and &ems) 2he Rs)*.); billion (US -D+

Million" Mari'o is a leadin% #ndian %roup in 'onsumer produ'ts and servi'es in the &lobal

Beaut! and 7ellness spa'e)

Out)ook

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2here is a hu%e %roth potential for all the FMC& 'ompanies as the per 'apita

'onsumption of almost all produ'ts in the 'ountr! is amon%st the loest in the orld) A%ain

the demand or prospe't 'ould be in'reased further if these 'ompanies 'an 'han%e the

'onsumer>s mindset and offer ne %eneration produ'ts) Earlier, #ndian 'onsumers ere

usin% non?branded apparel, but toda!, 'lothes of different brands are available and the

same 'onsumers are illin% to pa! more for branded qualit! 'lothes) #t>s the qualit!,

promotion and innovation of produ'ts, hi'h 'an drive man! se'tors)

INTRODU#TION TO THE OR"ANI7ATION

Hindustan Uni)e,er 8 A 9: $ear #o**it*ent

*.,+++ emplo!ees

*,0++ mana%ers

0,+++ suppliers 6 asso'iates

=. Manufa'turin% o'ations

/. C6FAs, /,+++ Sto'4ists

2otal Covera%e ;)- Mln @utlets

ire't Covera%e * Mln outlets

Popu)ation o. INDIA; 56


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0). Mln outlets

;,-D,+++ 9illa%es

.)+ Mln outlets

HISTOR$ O% HINDUSTAN UNILEVER LTD

• #t as in the summer of *DDD that Unilever of En%land first mar4eted Sunli%ht soap in

#ndia) 2his as folloed b! brands li4e Pears and 9im) 9anaspati as laun'hed in*8*D and alda 'ame to the mar4et in *8-=)

• #n *8-*, Unilever set up its first #ndian subsidiar!, Hindustan 9anaspati

Manufa'turin% Compan!, folloed b! ever Brothers #ndia imited (*8--" and United

2raders imited (*8-.") 2hese three 'ompanies mer%ed to form HU in :ovember

*8.;)

• A number of prominent 'ompanies 'ame into the HU fold as result of Unilever$s

international a'quisitions) 2hese in'luded Broo4e Bond (*8D/", ipton (*8=0" and

Pond$s (*8D;")

• #n *88-, 2ata @il Mills Compan! (2@MC@" mer%ed ith HU) 2o !ears later, HU

and !et another 2ata 'ompan!, a4me imited, formed a .+G.+ 3oint venture, a4me

ever imited)

• Subsequentl! in *88D, a4me imited sold its brands to HU and divested its .+ per

'ent sta4e in the 3oint venture to the FMC& %iant)

• HU formed a .+G.+ 3oint venture ith the US?based imberl! Clar4 Corporation in

*88/, imberl!?Clar4 ever td, hi'h mar4ets Hu%%ies diapers and ote5 sanitar!

pads)

• HU has also set up a subsidiar! in :epal, :epal ever imited (:", and its fa'tor!

represents the lar%est manufa'turin% investment in the Himala!an 4in%dom) #n a

histori' step, HU pi'4ed up =/ per 'ent of the equit! of Modern Foods from the

#ndian %overnment)

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• #n 0++0, HU a'quired the %overnment s remainin% sta4e in Modern Foods)

• FMC& ma3or Hindustan Unilever imited (HU", formerl! 4non as Hindustan ever

imited, emplo!s -;,+++ people, in'ludin% over *,-.+ mana%ers) #t is one of the

earliest M:Cs to have entered #ndia

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organi=ationa) structure

PRESENT STATUS

Hindustan Unilever imited (HU" is #ndia>s lar%est Fast Movin% Consumer &oods

'ompan!, tou'hin% the lives of to out of three #ndians ith over 0+ distin't 'ate%ories in

Home 6 Personal Care Produ'ts and Foods 6 Bevera%es) 2he! endo the 'ompan! ith a

s'ale of 'ombined volumes of about / million tonnes and sales of Rs)*+,+++'rore)

HU is also one of the 'ountr!>s lar%est e5portersI it has been re'o%nised as a &olden

Super Star 2radin% House b! the &overnment of #ndia)

2he mission that inspires HU>s over *.,+++ emplo!ees, in'ludin% over *,-++ mana%ers, is

to Jadd vitalit! to life)J HU meets ever!da! needs for nutrition, h!%iene, and personal 'are

ith brands that help people feel %ood, loo4 %ood and %et more out of life) #t is a mission

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Managing

Direc

tor

General Manager

Vice President

Marketing Manufacturing Sales Finance Distribution


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HU shares ith its parent 'ompan!, Unilever, hi'h holds .*)..1 of the equit!) 2he rest of

the shareholdin% is distributed amon% -D+,+++ individual shareholders and finan'ial

institutions)

HU>s brands ? li4e ifebuo!, u5, Surf E5'el, Rin, 7heel, Fair 6 ovel!, Pond>s, Sunsil4,

Clini', Pepsodent, Close?up, a4me, Broo4e Bond, issan, norr?Annapurna, alit!

7all>s K are household names a'ross the 'ountr! and span man! 'ate%ories ? soaps,

deter%ents, personal produ'ts, tea, 'offee, branded staples, i'e 'ream and 'ulinar!

produ'ts) 2he! are manufa'tured over /+ fa'tories a'ross #ndia) 2he operations involve

over 0,+++ suppliers and asso'iates) HU>s distribution netor4, 'omprisin% about /,+++

redistribution sto'4iest, 'overin% ;)- million retail outlets rea'hin% the entire urbanpopulation ,and about 0.+ million rural 'onsumer)

HU has traditionall! been a 'ompan!, hi'h in'orporates latest te'hnolo%! in all its

operations) 2he Hindustan Unilever Resear'h Centre (HRC" as set up in *8.D, and no

has fa'ilities in Mumbai and Ban%alore) HRC and the &lobal 2e'hnolo%! Centres in #ndia

have over 0++ hi%hl! qualified s'ientists and te'hnolo%ists, man! ith post?do'toral

e5perien'e a'quired in the US and Europe)

HUL>S NE? "RO?TH STRATE"$

After havin% fou%ht a bitter pri'e battle for mar4et share ith its rivals, Hindustan Unilever

td (HU", #ndian subsidiar! of the An%lo?ut'h 'onsumer %oods 'ompan! Unilever Pl', is

no or4in% on a ne %roth strate%! for its laundr! business)

LPri'e 'ut or hi4e is not a lon%?term %roth strate%!) Pri'in%, in fa't, is no passe, insists

Sudhanshu 9ats, 'ate%or! head, home 'are)

L@ur strate%! for %roth, no is fo'used on produ't innovation, ne 'onsumer and retail

trends and a%%ressive mar4etin% and promotions, he said)2his 'omes even as Unilever is

s'outin% for a potential bu!er for its laundr! business in the US)

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HU sa!s it is quite upbeat about the se%ment and sa!s the laundr! se%ment is one of its

L4e! %roth areas)

L7e have done 4e! innovations a'ross the produ't portfolio and it is or4in% for us, sa!s

9ats) L7e su''essfull! mi%rated from Rin Supreme to Surf E5'el and 7heel Smart SrimatiNhi'h as rolled out in 0++;Nis also on the ri%ht tra'4)

HU$s mar4et share in the laundr! se%ment %re to around -=)D1 in the quarter ended


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LConsumers toda! are bu!in% more 'lothes, sa!s 9ats) L2rends su%%est that the usa%e of

deter%ents has %one up as a result) Also, ith premium qualit! of 'lothes, people ant to

use better and branded produ'ts)

Still, anal!sts remain 'autious) LSome of HU$s re'ent moves, su'h as promotional

'ampai%ns and advertisin%, seem ri%ht, sa!s Ma'quarie$s Sharma) LStill, it is too earl! to

sa! hat result their ne strate%ies)

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PRODU#T PRO%ILE

HUL>s @usiness acti,ities are di,ided into .our @road areas;

Ho*e and persona) care

personal ash, fabri' ash, home 'are, oral 'are, s4in 'are, hair 'are, deodorants

and tal's, 'olour 'osmeti'

%oods

tea, 'offee, branded staples, 'ulinar! produ'ts, i'e 'reams, Modern Foods ran%es

Ne( Ventures

Hindustan ever :etor4, A!ush a!urvedi' produ'ts and servi'es, San%am, Pureitater purifiers)

Eports

HPC, bevera%es, marine produ'ts, ri'e

BRANDS

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HU s brands are household names a'ross the 'ountr!) 2he! in'ludeG

Oifebuo!, u5, Surf E5'el, Rin, 7heel, Fair 6 ovel!, Pond s, Sunsil4, Clini', Pepsodent,

Close?up, a4me, Broo4e Bond, issan, norr?Annapurna and alit! 7alls)

Researc/ et/odo)ogy

Tit)e

MARE2#:& S2RA2EES A: P@#C#ES

(Anal!sis and S'ope of Mar4etin% of FMC& Produ'ts"

(ith spe'ial referen'e to Hindustan Unilever"

Duration o. t/e Project

/. a!s

'usti.ication o. t/e Tit)e

2he title is self e5planator! as it is 'lear that the stud! is all about the finan'ial servi'es in

#ndia and the %roth and aareness of insuran'e servi'es) #t also studies the aareness of

Hindustan Unilever Co) td) and its produ'ts amon% the people)

OB'E#TIVE O% THE STUD$

2o identif! the mar4etin% strate%ies and poli'ies of Hindustan Unilever imited

2o anal!se the influen'e of rival 'ompan!$s strate%ies on the performan'e of

Hindustan Unilever imited

2o anal!se the various strate%ies adopted b! the 'ompan! to %ain 'ompetitive

advanta%e

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Type o. Researc/

Researc/ (as o. Ep)oratory and Descripti,e Nature+

• Ep)oratory Researc/; E5plorator! resear'h is a t!pe of resear'h 'ondu'ted for a

problem that has not been 'learl! defined)E5plorator! resear'h helps determine the

best resear'h desi%n,data 'olle'tion method and sele'tion of sub3e'ts)

• Descripti,e Nature; es'riptive resear'h also 4non as statisti'al resear'h

des'ribes data and 'hara'teristi's about the population or phenomenon bein%

studied)hoever it does not anser questions about hohenh! the'hara'tersti'es o''urred hi'h is done under anal!ti' resear'h)

Sa*p)e Si=e and Tec/niCue

Sample SieG *++ samples

Samplin% 2e'hniqueG Convenient Samplin%

Samplin% AreaG


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ata as 'olle'ted from both primar! as ell as se'ondar! sour'esG

Primar! ata Colle'tionG

Q Sample questionnaire as prepared and the same as as4ed to fill in hands

Q Personal intervies ere 'ondu'ted)

Se'ondar! ata Colle'tionG

Q Se'ondar! data as 'olle'ted b! the information %iven

? throu%h the material provided b! Hindustan Unilever Co) td)

? ma%aines

? ebsites

Scope o. t/e Study

A bi% boom has been itnessed in FMC& #ndustr! in re'ent times) A lar%e number of ne

pla!ers have entered the mar4et and are v!in% to %ain mar4et share in this rapidl!

improvin% mar4et) 2he stud! deals ith Hindustan Unilever Co) td) in fo'us and the

various se%ments that it 'aters to) 2he stud! then %oes on to evaluate and anal!e the

findin%s so as to present a 'lear pi'ture of trends in the #nsuran'e se'tor)

Li*itations o. t/e Study

• 2he trainin% as for a ver! short period of time) 2hus it as diffi'ult to anal!e the

mar4et thorou%hl! and 'ome to an! 'on'lusion in su'h a short span of time)

•2he mar4et stud! as to a limited area)

• Some samples i)e) the respondents ere relu'tant to anser)

• Errors ma! o''ur durin% data 'olle'tion)

• Errors ma! o''ur durin% anal!sis of data)

20


21/60

%A#TS & %INDIN"S

2he primar! business of the 'ompan! is for FMC& use) 2he 'ompan! also produ'es oilmeal, food produ't from so!a 6 value added produ'ts from donstream pro'essin% of

'ommodities)

2he sie of #ndian FMC& industr! is estimated around D.,+++ 'rore)

2he domesti' FMC& 'onsumption has been steadil! %roin% 6 is estimated to be over *0).

million M2 in the 'urrentl! !ear ith fm'% produ'ts in hi'h the 'ompan! has a dominant

presen'e 'ontributin% over .+1)

#n vie of the demand K suppl! %ap, about -.?/+1 of the domesti' FMC& 'onsumption is

met b! imports, ith this a''ountin% of over 8.1 of the imported volume)

2he Hindustan Unilever$s produ't 0+*+ of 8 million M)2 as the hi%hest ever in #ndia)

#URRENT AR!ET S#ENARIO AND TRENDS

• 2he 'ate%or! usa%e is universal and the mar4et is quite d!nami' and 'omple5)

• 2his mar4et has been itnessin% to several 'han%es latel!, hi'h in'ludes both G

#ONSUER RELATED

#n'rease in disposable in'ome 6 pur'hase poer

• Chan%in% so'ietal norms 6 health! 6 qualit! fa'tor in all the produ't se%ments

• Risin% desire for 'onvenien'e 6 # ant more$ attitude

AR!ET RELATED

&roin% poer of modern retail tradeI has %iven ne 'hallen%es and opportunities to

the mar4eters

• #n'reasin% influen'e of dieti'ians and do'tors in the 'ate%or! 'ausin% loer usa%e,

frequent 'han%e of the oil spe'ies and loo4in% for health! option

21


22/60

Hindustan Unilever an established 6 4e! pla!er in the #ndian FMC& mar4et, ants to

enhan'e its footprints in the %roin% modern retail industr!

DATA ANAL$SIS

PES2 A:ATS#S

P; sin'e the bud%et ran%e is de'ontrolled, no politi'al effe'ts are envisa%ed)

E; *" in'reasin% per 'apita in'ome resultin% in hi%her

isposable in'ome

0" &roin% middle 'lassurban population K in'rease in

emand

-" o 'ost of produ'tion K better penetration

S; *" Per 'apita 'onsumption e5pe'ted to in'rease K fashion

0" #n'reasin% %ifts 'ulture K in'rease in demand

T; 7ill have to reinfor'e te'hnolo%! to international levels

@n'e #ndia is a Lfull! free e'onom!)

22


23/60

%IVE P>S O% AR!ETIN"

Product

Satisfa'tion suffi'es) But deli%ht dales the avera%e 'ompan! ill 'ompete for 'ustomer

b! 'onformin% to her e5pe'tation 'onsistentl!) But the inner ill surpass them b!

'onstantl! e5'eedin% her e5pe'tation, deliverin% to her door step additional benefits hi'h

she ould never have ima%ined possible) Hindustan Unilever td(HU" offer su'h produ't)

2he ide variet! produ'ts offered b! the 'ompan! in'ludeG

2he 'ompan!$s popular produ't$s in'ludeG

• Bathin% soapsG

u5, ifebuo!, iril, Hamam, Breee, ove, Pears and Re5ona

• aundr! itemsG

Surf E5'el, Rin and 7heel

• S4in 'areG

Fair 6 ovel!, Pond$s and 9aseline

• Hair 'areG

Sunsil4 and Clini'

• @ral 'areG

Pepsodent and Close up

• eodorantsG

A5e and Re5ona

• Colour 'osmeti'sG

a4me

• A!urvedi'G

A!ush

•

2eaG

Broo4e Bond and ipton

23


24/60

• CoffeeG

Bru

• FoodsG

issan, Annapurna and norr

• #'e 'reamG

alit! 7all$s )

Pricing

Ma4e no mista4e) Se'ond P of mar4etin% is not another name for blindl! loerin% pri'es

and rel!in% on this strate%! alone to in'rease sales dramati'all!) 2he strate%! used b!Hindustan Unilever td(HU" is for mat'hin% the value that 'ustomer pa!s to bu! the

produ't ith the e5pe'tation the! have about hat the produ'tion is orth to them)

Hindustan Unilever td(HU" has laun'hed various produ'ts hi'h 'ater to all 'ustomer

se%ments) So ever! 'ustomer se%ment has different pri'e e5pe'tation from the produ't)

2herefore ma5imiin% the returns involves identif!in% ri%ht pri'e level for ea'h se%ment, and

then pro%ressivel! movin% throu%h them)

P/ysica) Distri@ution 8 2P)ace3

BRAND ISN>T THE ONL$ AN$ ORE+ Mar4eters and finan'e mana%er need a ne term

to evaluate their businessG

Distri@ution ECuity) #t ta4es mu'h more time and effort to build, but on'e built, distribution

equit! is mu'h to%ether to erode)

T/e .unda*enta) aio* o. Indian consu*er *arket is t/is;

Tou 'an set up a state?of Kthe?art manufa'turin% fa'ilit!, hire the hottest strate%ies on the

blo'4, samp prime television ith best Ads, but the end of it all, !ou ould be 4no of

sellin% !our produ'ts) 2he 'ardinal tas4 before the #ndian mar4et is mana%in% is to shoe?

horn its produ't on retail shelves) Bu!ers are pa!in% for distribution equit! not brand equit!

and mar4et shares)

7h! does the 'ompan! need distribution equit! more an!thin% in #ndia 7ith te'hnolo%!

and 'ompetitive pressure slash in it is be'omin% in'reasin% diffi'ult for mar4eters to retain a

24


25/60

unique produ't differentiation for lin% period) #n a produ't and pri'e parit! situation, the

brand that sells more is the one that rea'hes the hi%hest number of 'ustomers)

#ndia K 2he operations involve over 0,+++ suppliers and asso'iates) HU>s distribution

netor4, 'omprisin% about /,+++ redistribution sto'4ists, 'overin% ;)- million retail outletsrea'hin% the entire urban population, and about 0.+ million rural 'onsumers)television has

alread! primed and population for 'onsumption, and the mar4eter ho 'an %et to the to the

'onsumer ahead of 'ompetition ill %ive a hard K to K overta4e lead) But %ettin% their

means mana%in% ildl! different terrains?'limate, lan%ua%e, value s!stem, life st!le,

transport and 'ommuni'ation netor4) And !our brand equit! isn$t %oin% to help hen it

'omes to ta'4lin% these issues)

@n distribution netor4 'onsist of 'learin% and forardin% (C6F" a%ents 6 distribution

sto'4iest) 2his netor4 of distribution 'an either 'onta't holesalers and hi'h in turn

retailers or the distributors 'an 'onta't to the retailers dire'tl!)

@n'e the sto'4 produ't rea'hes retailers, the prospe'tive 'ustomers 'an have a''ess to

the produ't)

Hindustan Unilever td(HU" distributes the produ't in the manner stated above)

Hindustan Unilever td(HU" distribution netor4 has e5panded) Beside use of improvedlo%isti's, Hindustan Unilever td(HU" is also attemptin% to improve the distribution qualit!)

2o address the issue of produ't stabilit!, it has installed visi 'olors at several outlets) 2his

helps in maintainin% 'onsumption in summer hen sales usuall! drops due to the fa't that

the heal effe'ts produ't qualit! and thereb! off ta4es)

oo4in% at the lo penetration of fe produ'ts, a distribution e5pansion ould itself bein%

in'remental volume) 2he other reason is ar'h rival Pro'ter 6 &amble Co) rea'hes more

than a million retailers)

2his in'rease in distribution is %oin% to be a''ompanied b! redu'tion in 'hannel 'osts)

Hindustan Unilever td(HU" mar4etin% 'osts, at *D1 of total 'osts, is mu'h hi%her than

Pro'ter 6 &amble Co) 2he 'ompan! is loo4in% to redu'e this parit! level) At Hindustan

Unilever td(HU", the! believe that sellin% FMC& is it li4e sellin% soft drin4s)

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26/60

Pro*otion

#f an advertisement is to 'ommuni'ate effe'tivel!, the re'eiver must at least half ant it to,

and be prepared too ta4e step toard the sender) Effe'tive advertisin% is rarel! he'torin% or

loudl! e5pli'itV) #t often both attra'ts and %enerates arm feelin%s) More often than not, a

su''essful 'ampai%n has a stron%er element of the une5pe'ted a qualit! that %ood

advertisin% shares ith mu'h orthhile literature)

2o penetrate into the inner re'esses of her memor!, 'ommuni'ation must first ensure

e5posure, %rab her attention evo4e her 'omprehension, %rab her a''eptan'e and then

e5tra't retention 'ompetin% ith thousands of other units of 'ommuni'ation tr!in% to do the

same)

Findin% shoed that the adults felt too 'ons'ious to be seen 'onsumin% a produ't a'tuall!

meant for 'hildren) 2he strate%i' response address the emotional appeal of the band to the

'hild ithin the adult) :aturall!, that produ'ed 3ust the value va'uum that Hindustan

Unilever td(HU" as loo4in% to fill) 2hereafter it as the 3ob of the advertisin% to

'ommuni'ate 'ustomer the onderful feelin% that he 'ould e5perien'e b! re?dis'oursin% the

'areful, unself 'ons'ious, pleasure K see4in% 'hild ithin himself K a %raft these feelin%

onto the Ad 'ampai%n li4e 2/asso to k/u) k /asso .or c)ose up3- 2crea* @at/ing @ar .or

do,e soap3 and daag ac/e /ai .or sur. ece)3 have been sure shot inner ith the

audien'e)

#t has also laun'hed Pureit, a home ater purifier hi'h supplies drin4in% ater ithout

boilin%need of ele'tri'it! , As ell as outdoor and radio ads, ad a%en'! 'ontra't has

'reated 'ommuni'ation for 'inemas and even A2M ma'hines for the brand)

All #C#C#$ s A2M a messa%e flashes on the s'reen as soon as 'ustomer insert his A2M 'ard)

Somethin% familiar is planned for phone?boo4 as ell) #n 'inemas, HindustanUnilever(td"has a messa%e on?s'reen 3ust before the li%hts are dimmed to %ive them a

'han'e to %et their produ't 2here ill also be after dinner samplin% in restaurants K to be%in

ith, -+ 'atteries in Mumbai have been sele'ted)

Ad spend in 0+++ as about */1 of sales and the mana%ement said that plans to maintain

as spend at this level in the 'urrent !ear also)

Ad sin'e an! dis'ussion toda! ould be in'omplete ithout mention e$ ord, the

mana%ement plans to tap this ne 'hannel of mar4etin%) Beside the 'ompan! ebsite (i)e)

26


27/60

www.unilever.com), that the 'ompan! has laun'hed, it had also entered into various

mar4etin% relationship ith other portals, spe'iall! tar%eted durin% festivals and events su'h

as 9alentines da!, et'V)

#t$s a 'ombination of spiffin% up its 4e! brand, resear'hin% and improvin% the neer produ'ts that haven$t ta4en off, supported ith hi%h ad K spends that Hindustan

Unilever(td" hopes ill see it emer%es stron%er after the 'urrent slodon, as ell as

e5pand the mar4et)

Positioning

#n the *8=+s 'onsumers ere read! to pa! Lmore for more, and lu5ur! %oods flourished) #n

the *8D+s, 'onsumers be%an to demand Lmore for same, and the dis'ountin% era %re

stron%) 2oda!$s 'onsumer demandin% Lmore for less, and the inner ill be that super

value mar4etersV) Some of toda!$s most su''essful 'ompanies re'o%nie those 'ustomers

are more edu'ated and able to re'o%nie true 'ustomer valueV

Positionin% is simpl! 'on'entratin% on an idea K or K even a ord defines that 'ompan! in

the mind of the 'onsumer) #t is more effi'ient to mar4et one su''essful 'on'ept to one lar%e

%roup of people than .+ produ't or servi'e ideas to .+ separate %roupV repositionin% is a

must hen 'ustomer attitude have 'han%ed and produ't have stra!ed aa! from the

'onsumer$s lon% standin% per'eption of themV

Hindustan Unilever(td" is an an'hor in sea of 'onsumer produ'ts) As a variet! of

'ompetitive 'laims assails her senses, toda! 'ustomer uses 'ompli'ated de'ision ma4in%

pro'ess to assess the alternative before ma4in% a pur'hase) Sin'e Hindustan Unilever(td"

is more 'learl! asso'iated ith a parti'ular set of attributes in terms of benefits and pri'es,

the qui'4er be'omes her sear'h pro'ess)

Positionin% of individual produ'tG

51 ifebuo! is one of Unilever$s oldest brands$ ith more than a hundred?!ear histor!,

as )unilever)'om informs) Lifebuo! has be'ome more than 3ust a red bar of

soap K toda! the brand provides h!%iene and health solutions for families


28/60

Mar4et pla'e for an! produ't is 'omprised of man! different se%ments of 'onsumers, ea'h

ith different needs and ants) Mar4ets se%mentation 'an be defined in a number of a!s

su'h asG

emo%raphi' variables (e)%) Consumers are %roups, %ender, material states in'ome

et'V"

2he lifest!le of 'onsumers (i)e) their interests and a'tivities" the benefits hi'h

'onsumers loo4 for in a produ't or on the o''asions hen the produ't mi%ht be

'onsumed)

Hindustan Unilever(td" ta4es into a''ount all these fa'tors hen produ'in% a ran%eof produ'ts) #t tar%ets different se%ments ithin the mar4et, su'h as theG

Brea4 se%ment K produ'ts hi'h are normall! 'onsume as a snat'hed brea4 and

often ith tea and 'offee)

#mpulse se%ment K these produ'ts are often pur'hase on impulse, used these and

then) 2he! in'lude produ't su'h as 'lose up)

2a4e home se%ment K this des'ribes produ't that are normall! pur'hased in

supermar4ets, ta4en home 'onsumed at a later sta%e)

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29/60

T/e Rea) Taste o. Reju,enation

After havin% fou%ht a bitter pri'e battle for mar4et share ith its rivals, Hindustan Unilever

td (HU", #ndian subsidiar! of the An%lo?ut'h 'onsumer %oods 'ompan! Unilever Pl', is

no or4in% on a ne %roth strate%! for its laundr! business)LPri'e 'ut or hi4e is not a lon%?term %roth strate%!) Pri'in%, in fa't, is no passe, insists

Sudhanshu 9ats, 'ate%or! head, home 'are)

L@ur strate%! for %roth, no is fo'used on produ't innovation, ne 'onsumer and retail

trends and a%%ressive mar4etin% and promotions, he said)

2his 'omes even as Unilever is s'outin% for a potential bu!er for its laundr! business in the

US)

HU sa!s it is quite upbeat about the se%ment and sa!s the laundr! se%ment is one of its

L4e! %roth areas)

L7e have done 4e! innovations a'ross the produ't portfolio and it is or4in% for us, sa!s

9ats) L7e su''essfull! mi%rated from Rin Supreme to Surf E5'el and 7heel Smart Srimati

Nhi'h as rolled out in 0++;Nis also on the ri%ht tra'4)

HU$s mar4et share in the laundr! se%ment %re to around -=)D1 in the quarter ended


30/60

Laundr! has been an attra'tive se%ment in the past and is li4el! to 4eep %roin% in the

near future) 2he re'ent pri'e ar beteen 'ompanies led to erosion in their profitabilit! but

no, the industr! is stabiliin%)

#OPETITIVE STRATE"$

As #o*petition Heats Up- India>s Top #onsu*erProducts #o*pany ?oos A..)uent

S/oppers ?it/ ")o@a) Brands Like Do,e- ?/i)e #ooking Up Its %oods Bi=

2he middle?a%ed Briton strollin% the aisles and 'he'4in% out the produ'ts doesn$t attra't

mu'h noti'e from other shoppers in Mumbai$s H!per'it!, the #ndia h!permar4et 'hain)

2hat$s ho ou%las Baillie li4es it) Baillie, the mana%in% dire'tor of Hindustan Unilever,

#ndia$s premier 'onsumer?produ'ts 'ompan!, ants to see ho his produ'ts are sto'4ed,

hat 'onsumers are bu!in%, and ho shoppers are rea'tin% to 'ompetitive brands) #t$s

primar! mar4et resear'h at its most elemental, and it$s best done in'o%nito)

Hindustan Unilever has traditionall! relied on small traders and mom?and?pop 'orner stores

to retail its produ'ts) But #ndia$s re'ent retail boom has 'reated lar%e stores and malls, so

the 'ompan! ants to ma4e sure it$s in ith the ne mar4etin% 'rod) Hen'e Baillie$s

H!per'it! visits, and the 'alls he ma4es on the headquarters of the bi% retail 'hains)

2his is quite a 'han%e for Hindustan Unilever, hose e5e'utives used to have emissaries

ma4e obeisan'e at ever house in donton Mumbai) L# 'an$t ima%ine an! head from

ever House ever visitin% other 'ompan! offi'es li4e this, sa!s an amaed amodar Mall,

'hief e5e'utive of innovation and in'ubation at Pantaloon Retail, #ndia$s lar%est retailer and

a former mana%er at Hindustan Unilever)

30


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%acing #o*petition %ro* P&" And Ot/ers

2he reason for this ne found e%alitarianism is that the - billion Hindustan Unilever is

fa'in% serious 'ompetition) 2he 'ompan!, hi'h is pra'ti'all! s!non!mous ith #ndia,

ma4es ever!thin% from deter%ents, soaps, and shampoos to soups, sau'es and tea, and

dominates most of those 'ate%ories) Tet earl! this !ear, Finnish handset ma4er :o4ia

(:@" dislod%ed it as the multinational ith the hi%hest revenues in #ndia, after rin%in% up

#ndia?based sales of -). billion)

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:o Hindustan Unilever is under sie%e from a%%ressive #ndian and forei%n 'ompetitors

su'h as Pro'ter 6 &amble (P&", :ivea, and $@ral) #n the last !ear, AC:ielsen data

shos, Hindustan Unilever$s lead in hand soaps, in'ludin% the popular u5, is don from

..)01 to ./1) Favorite deter%ent brands li4e Surf E5'el and Rin are barel! han%in% onto

their -=1 share) Hindustan ever tea brands li4e Broo4e Bond and ipton have dipped

from a 'ombined mar4et share of 08)01 to 0/)-1)

All this has ta4en a toll on Hindustan Unilever$s operatin% mar%ins, don from 0*1 a fe

!ears a%o to 3ust **)D/1 no) 2hat$s h! the 'ompan! is ooin% 'onsumers in bi% retail

stores) 2hese nel! affluent shoppers present the best hope for the 'ompan!$s future in

#ndia) A''ordin% to retail 'onsultant SA 2e'hnopa4, or%anied retail, 'urrentl! 3ust -).1 of

#ndia$s total --; billion retail mar4et, ill %ro to 0D1 b! 0+*=)Hindustan Unilever$s mana%ers hope their revenues from bi% retail ill in'rease from .1

toda! to over 0.1 in 0+*0) L#t is a bi% %ame for us, sa!s ) Sundaram, Hindustan

Unilever$s finan'e dire'tor) Hindustan Unilever$s strate%! is to mar4et its premium produ'ts

throu%h the hundreds of me%astores sprin%in% up a'ross #ndia)

2hat dovetails ith parent 'ompan! Unilever$s ne %lobal reali%nment of produ'ts)Parent

Unilever ill develop the brands and streamline produ't offerin%s a'ross the orld, hile its

subsidiaries ill sell the produ'ts)2his means that all of Unilever$s brands ill be available a'ross %lobal mar4ets, fittin% in

quite ni'el! ith #ndia$s turn toards more international produ'ts bein% sold in

supermar4ets)

Tet this is still a dramati' 'han%e for Hindustan Unilever hi'h, not lon% a%o, as the most

su''essful and profitable 'ompan! in the Unilever %roup, the 'ron 3eel hose mana%ers

had free rein to develop and build brands suitable for the lo'al mar4et) 2he ta4eover of

Hindustan ever b! Unilever be'ame evident in Mar'h, 0++;, hen Baillie, a Wimbabe?born British national, be'ame the first forei%ner in four de'ades to head the #ndian'ompan!)

%ro* Loca) P)ayer To u)tinationa)

@verni%ht the 'han%e sent sho'4 aves throu%h #ndia) For man! de'ades most #ndians

thou%ht Hindustan ever as a lo'al 'ompan!, not a multinational, and the 'ream of #ndia$s

mana%ement %raduates made their 'areers there) 2hen in Februar!, 0++=, the 'ompan!,

32


33/60

then 4non as Hindustan ever, as re'hristened Hindustan Unilever to refle't its

parenta%e)

Baillie first had to sort out some past problems) For instan'e, in 0++0 the 'ompan! adopted

Unilever$s %lobal strate%! of fo'usin% on 3ust -+ poer brands instead of the total bas4et of **+ more lo'al brands) 7hile the strate%! aimed to 'onserve mana%ement ener%!, it also

left the field ide open for 'ompetitors to atta'4 Hindustan Unilever in the ni'he soap and

deter%ent mar4ets here its smaller brands held sa!)

And there as some stiff 'ompetition from rival Pro'ter 6 &ambleI a 0++/ pri'e ar ith

P6& in the deter%ent business for'ed Hindustan Unilever to slash pri'es on its premium

brand Surf E5'el) 2he effe'tG 2he 'ompan!$s sales and operatin% profits sta%nated at 0).

billion for five !ears hile operatin% profit plun%ed -=1, to 0=/ million in 0++/) ast !ear operatin% profits rea'hed -.= million, than4s to pri'e in'reases) But the ri'h mar%ins of the

past have not returned)

Toug/er To Ho)d On To arket S/are

Baillie sa!s he intends to %et the 'ompan! ba'4 Linto the 'ompetitive %roth one and do

this in a manner that e 'an 'onsistentl! deliver) He also ants to e5pand the foods

business in 'on3un'tion ith the parent, here foods brin% in half the revenues %loball!) #n

#ndia, the 'ompan!$s home and personal 'are businesses a''ount for D+1 of revenues and

D.1 of profits at Hindustan Unilever, hile the 'ompan!$s tra'4 re'ord in foods has been

dismal) #ndeed, it has phased out more food produ'tsNheat flour, 'onfe'tioner!, froen

breadNthan it has laun'hed)

Hindustan Unilever e5e'utives are realisti' about the ne era in hi'h it no operates)

:itin Paran3pe, e5e'utive dire'tor in 'har%e of the home and personal 'are business,

admits that it$s no Ltou%her to hold on to mar4et share) #f #ndia is a %reat stor!, e aren$t

the onl! ones seein% it) Rivals li4e P6& and :ivea have also 'opied Hindustan Unilever$s

best innovationG the small shampoo sa'hets it pioneered in the *8D+s, hi'h sold for less

than 0 'ents ea'h and hi'h e5panded the mar4et for Hindustan Unilever produ'ts amon%

#ndia$s rural masses) Currentl!, D+1 of #ndian shampoo sales 'ome from sa'hets) But toda!

even $@real has sa'hets of its Fru'tis shampoo)

#n


34/60

from *;)=1 in Mar'h, 0++;, to *8)81 in > Hindustan Unilever td), .0 per'ent oned b! the ondon?

and Rotterdam?based parent, lost %round in shampoo, bath soap, toothpaste and tea in the

quarter ended Sept) -+, 'ompared ith the !ear earlier, a''ordin% to the 'ompan!) #ts share

of the shampoo mar4et de'lined b! more than a per'enta%e point to /=)= per'ent, the

'ompan! said)

#2C, the lar%est #ndian 'i%arette ma4er and partl! oned b! British Ameri'an 2oba''o Pl',

is also ma4in% inroads) #t started sellin% more brands in'ludin% Fiama i 7ills shampoo and

Superia soap last !ear as the %overnment raised toba''o ta5es)

Pro.ita@)eF #igarettes

2he toba''o ma4er XXhas a ver! profitable 'i%arettes business hi'h ill help it to invest

and e5pand its personal? 'are portfolio,>> said Anand Shah, an anal!st at An%el Bro4in% in

Mumbai, ho has a XXneutral>> ratin% on the sto'4) XX#t has the abilit! to ta4e losses in this

se%ment as lon% as it %ros its sales) 2his strate%! ill still satisf! investors)>>

Risin% pri'es of ra materials have made it more diffi'ult for 'onsumer?%oods ma4ers to

pass on hi%her 'osts) 2he pri'e of palm oil, used to ma4e soaps and foods, has sur%ed =+

per'ent in the past !ear)

XX&iven the 'ompetition, profitabilit! ill 'ontinue to be under pressure,>> said Ma'quarie

Se'urities td) anal!st Unmesh Sharma, ho has an XXunderperform>> ratin% on Hindustan

Unilever) He e5pe'ts the sto'4 to drop to *D+ rupees (/).=" in the ne5t !ear from *8+)8

rupees) 2he 'ompan! has a mar4et value of about **)D billion)

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#ndia is Unilever>s bi%%est mar4et in Asia, %eneratin% about ; per'ent of annual sales) #t has

sold soap in the 'ountr! sin'e *DDD and 'ontrols about half of the sales of produ'ts su'h as

s4in 'reams, bathin% soaps and shampoo)

HULUNIGUEL$ POSITIONED TO #REATE VALUE

Our strategy

#o*petiti,e strengt/s

Inno,ation and R&D capa@i)ities to stradd)e t/e pyra*id

Versati)e distri@ution net(ork

Strong corporate responsi@i)ity and go,ernance

Strong )oca) and ta)ent @ase

Strategy

&ro ahead of the mar4et b! leadin% mar4et development a'tivities)

evera%e positive impa't of %roin% #ndian e'onom! on 'onsumer spendin%)

&ro a profitable foods and top end business)

&ro the bottom line ahead of the top line)

Stron% 'ommitment to sustainable development)

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#o*petiti,e Strengt/s

#orporate Socia) Responsi@i)ityAiding In T/e De,e)op*ent O. T/e

#ountry

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S/akti

T/ree s/akti initiati,es

• S/akti entrepreneur current)yJJ666 (o*en co,er 5-s

prin'ipal a'tivities are to manufa'ture and mar4et 'onsumer produ'ts) 2he &roup operates

throu%h seven se%mentsG Soaps and eter%ents, Personal Produ'ts, E5ports, Bevera%es,Foods, #'e Creams and @ther) 2he produ'ts in'lude home and personal 'are produ'ts,

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foods and bevera%es, industrial and a%ri'ultural produ'ts) Home and personal 'are

produ'ts 'onsists of personal and fabri' ash, household, oral 'are, s4in and hair 'are,

deodorants, perfumer!, 'olour 'osmeti's and bab! 'are) Foods and bevera%es in'ludes

tea, 'offee, 'oo4in% fats and oils, ba4er! fats, i'e 'reams, tomato produ'ts, fruit and

ve%etable produ'ts, ri'e, salt, atta and raa, marine produ'ts and mushrooms) #ndustrial

and a%ri'ultural produ'ts in'ludes spe'ialt! 'hemi'als, bul4 'hemi'als, fertilisers, animal

feeds, seeds, plant %roth nutrients, pro'essed?tri?%l!'erides and a%ri 'ommodities, !east,

leather, footear and 'arpets, thermometers and plantations)

2his anal!sis 'ompares Hindustan Unilever imited ith three other 'ompanies in 'losel!

related industr! se'tors)

2he 'ompan! fo'uses on effi'ient deliver! to 'onsumers ith an improved suppl! 'hain,brand buildin% initiatives and innovation, hi'h has helped the 'ompan! to sustain its

leadership position in the overall FMC& 'ate%or! in #ndia)

#ts brands are spread a'ross 0+ 'onsumer produ't 'ate%ories) Hindustan Unilever mar4ets

'onsumer %oods throu%hout #ndia) 2he 'ompan! fa'es 'ompetition from international, lo'al

and re%ional pla!ers)

RURAL THE BI" INDIAN ROAN#E

Rural population lar%er than europe(D++ million"

o %roth in a%ri'ultureIhoever rural in'ome are %roin% faster ith =+1

population here,in'ome %roth is 'ru'ial)

Stru'tural 'han%es in the e'onom! hi'h are affe'tin% this areG

isintermediation in the a%ri'ultural mar4et pri'e dis'over! me'hanismhas benefited farmers)

&overnment %rants and subsidies)emplo!ment %rants?Rs /++++'r

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Did Hindustan Uni)e,er "et Its Rura) Pitc/ Rig/tK

A ne boo4 from 7harton S'hool Publishin% is 'riti'al of Hindustan Unilever$s advertisin%

strate%! in #ndia)

LHU missed an opportunit! for in'reased mar4etin% produ'tivit! hen the! repositioned,

retar%eted, and relaun'hed ifebuo!, rite eonard M) odish, Hoard ) Mor%an and

Shell!e Ar'hambeau, the authors of Mar4etin% that 7or4s) 2hou%h the 'ompan! as

e5tremel! innovative$ the a! it handled the rural 'ommuni'ations plan as ver! traditional,

the! add)

2he 'ompan! basi'all! or4ed ith Lone a%en'!, @%ilv! and Mather (@6M", and s'reened

some options to roll out one option that ever!one as happ! ith, reads an observation in

a 'hapter titled entrepreneurial advertisin% that or4s$)

A better strate%!, a''ordin% to the authors, ould have been to develop La number of

different 'ommuni'ations e5e'utions usin% different 'reative sour'es and then testin% themas part of the earl! rollout)

Advertisin% strate%! 'ame for mention hen the 'ompan! reported the se'ond quarter

results, a fe da!s a%o) Mr ) Sundaram, ire'tor (Finan'e 6 #2", HU, saidG L7e have

been phasin% our advertisin% spends dependin% on the laun'hes and relaun'hes of

brands) 2he advertisin% spends have not been linear for the 'ompan!, he added) 2he

'ompan!$s advertisin% and promotional spends durin% the quarter fell to Rs --; 'rore, from

the earlier Rs -/. 'rore)

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ifebuo! is one of Unilever$s oldest brands$ ith more than a hundred?!ear histor!)

Lifebuo! has be'ome more than 3ust a red bar of soap K toda! the brand provides h!%iene

and health solutions for families, sa!s the site, in a para%raph on innovation)

Lifferentiatin% soap produ'ts on the platform of health ta4es advanta%e of an openin% inthe 'ompetitive lands'ape for soap, reads a quote in the boo4 from C)) Prahalad$s 2he

Fortune at the Bottom of the P!ramid )

HU, throu%h its innovative 'ommuni'ation 'ampai%ns, has been able to lin4 the use of

soap to a promise of health as a means of 'reatin% behavioural 'han%e, and thus has

in'reased sales of its lo?'ost, mass?mar4et soap, Prahalad notes)

2he @6M strate%!, as e5plained b! Mr odish et al, tar%eted L*+,+++ villa%es in nine states

here HU stood to %ain the most mar4et shareV 2he! spent a lot of effort in desi%nin%

lo 'ost a!s of 'ommuni'atin% ith their rural tar%et)

2he authors are of the vie that %overnment or4ers ho have been intera'tin% ith

villa%ers mi%ht have 'ome up ith some e5'ellent ideasI Lor the villa%ers themselves mi%ht

also be able to %enerate ver! effe'tive 'ommuni'ations vehi'les)

So, h! didn$t HU tr! alternative 'ampai%ns hen rollin% out its initiative LProbabl! the

bi%%est reason is that the! ala!s did their 'ommuni'ations the same a! K even for

innovative pro%rams, onder the authors) LAs a bi% 'ompan!, man! times it is diffi'ult to

'han%e the pro'edures ithout 'reatin% si%nifi'ant politi'al problems)

2he HU e5ample, hi'h is one of the man! dis'ussed in the boo4, 'on'ludes b! statin%

that %loball! ver! pro%ressive and innovative firms 'an also benefit from bein% Lmore

entrepreneurial and less traditional in ho the! mana%e their advertisin% and

'ommuni'ation)

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'OINT VENTURE

Hindustan Uni)e,er Sets Up 'oint Venture ?it/ S*o))an Ho)dings

Hindustan Unilever imited (HU" has de'ided to set up a


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• 2ata @il Mills Compan!

• Broo4e Bond

• ipton #ndia

• Modern Foods

#t a'quired issan brand from UB %roupI ollops i'e 'ream brand from Cadbur! #ndiaI

a4me 'osmeti's brands from 2ata) #t has also laun'hed Pureit, a home ater purifier

hi'h supplies drin4in% ater ithout boilin%need of ele'tri'it!)

Hindustan Unilever :etor4 is the dire't sellin% 'hannel of the 'ompan!) #t has about

-.+,+++ 'onsultants, all independent entrepreneurs, trained and %uided b! H:>s e5pert

mana%ers and trainers)

NE? INITIATIVE

Bringing Hig/End Do,e To India

Baillie is fi%htin% ba'4) @ver the past si5 months, Hindustan Unilever laun'hed a hi%h?end

ran%e of Pond$s s4in 'are and ove hair 'are produ'ts from Unilever$s international

portfolio) 2hese premium brands retail not in nei%hborhood small stores but in

supermar4ets and h!permar4ets, here #ndian 'ustomers love to tou'h and feel produ'ts)

Hindustan Unilever is also mil4in% one of its top brandsNFair 6 ovel!, a hot?sellin%

Lfairness 'ream, hi'h promises a li%hter s4in, tone for man! of #ndia$s 'omple5ion?

'ons'ious 'onsumers) 2he advertisin% 'ampai%n, hi'h su%%ests that re%ular use of the

'ream helps omen %ain 'onfiden'e and ma4es them eli%ible for marria%e, has made thebrand a inner) 2hat has spaned a host of 'ompetitive fairness 'reams, soaps, and

sunblo'4 lotions) But Hindustan Unilever$s brand is still tops)

Baillie is also %ettin% a%%ressive on foods, fo'usin% on the norr brand of soups and 'urr!

mi5esNideal for the #ndian mar4et) Anal!sts believe the 'ompan!$s 'urrent strate%! of

'on'entratin% on premium produ'ts and mar4etin% them in the lar%e retail stores is a

innin% one) Sumeet Budhra3a, 'onsumer anal!st at Mumbai bro4era%e First &lobal

Se'urities, sa!s that Hindustan Unilever L'ould have addressed a lot more 'ate%ories, butthe! are more fo'used and re%ainin% their a%%ressiveness) He points to the demand for

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safe drin4in% ater in #ndia, hi'h Hindustan Unilever e5ploited ith the laun'h of ater

purifier Pureit in 0++., at one?third the pri'e of established #ndian brands su'h as Aqua

%uard)

2hese efforts have delivered some promisin% results, and Baillie is pleased ith the modestturnaround) #n the quarter ended


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PER%ORAN#E REVIE?

Leaders/ip Across Di,erse %*cg #ategory

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%inancia) O,er,ie(


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Y%I"URES BASED ON %$


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Ana)ysis ;

s/o(s t/at *ost o. t/e @usiness is generated .ro* t/e (/o)e se))er (/ose *ont/)y

turno,er is )ess t/an : )acs+

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ajor se))ing category

Ana)ysis ;s/o(s t/at t/e *ajor se))ing category o. in t/e *arket is To@acco and t/e

second seat is occupied @y Biscuits a.ter t/at t/ere are *any categories @ut to@acco

occupies t/e *ajor *arket s/are t/at is J6M+

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T/e @rands in (/ic/ t/e (/o)e se))ers dea) in con.ectionary

ANAL$SIS;

as per t/e .igure and ana)ysis par)e )eads t/e *arket - (it/ in years o. ti*e itc

*anaged to capture 56M o. t/e *arket

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Ana)ysis ;

it is c)ear t/at t/e de*and o. sun .east g)ucose @iscuit is *ore in t/e *arket (/ic/

*eans t/at g)ucose @iscuit is t/e @est se))er in t/e sun .east .a*i)y t/en is cookies-

crea*- coconut

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ANAL$SIS;

S/o(s t/at consu*er sc/e*e are pre.erred in t/e *arket @y t/e (/o)e se))ers due to

/ig/er de*and o. t/at product+

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S

ANAL$SIS;

s/o(s t/at percentage o. /ig/)y satis.ied retai)ers (as /ig/est

52

+

.+

*++

*.+

0++

0.+

-++

SERVI#E SATIS%A#TION LEVEL

Series* -++ *8. *=+ D.

H#&HT

SA2#SF#ESA2#SF#E

ESS

SA2#SF#E

:@2

SA2#SF#E


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ANAL$SIS;

s/o(s t/at Cua)ity o. Uni)e,er products (ere .ound ece))ent

53

00

8+

0;-

-=.

+

.+

*++

*.+

0++

0.+

-++

-.+

/++

P@@R &@@ BE22ER EZCEE:2

GUALIT$ SATIS%A#TION


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S?OT ANAL$SIS

Strengt/

Best Cua)ity o. *ateria) used+

Has co*p)ete ,ariety+

Has strong @rand a(areness+

Has a ,ery strong distri@ution net(ork+

?eakness

I t/ink so*e product is no good .or /ea)t/+

Opportunity

A ,ariety o. ne( products cou)d @e added to touc/ t/e ra( *arket+

Rura) *arket can @e co,ered ,ery easi)y+

T/reats

As t/e co*pany is ne( in t/e industry it .aces co*petition @y t/e o)der p)ayer

(/o o..ers etra discount to t/e *arket+

%aces co*petition .ro* t/e )oca) p)ayer+

Increasing cost due to in.)ation+

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#ON#LUSION

Uni)e,er /o)ds second position in t/e @randed %#" seg*ent in 'aipur+

TA'A TEA is t/e @est se))er in TEA seg*ent o. Uni)e,er products+

#onsu*er sc/e*es are *ore pre.erred in t/e *arket t/en retai)er sc/e*es+

Being .res/er in t/e con.ectionary *arket Uni)e,er *anaged to capture around

56 M o. *arket s/are in t/e @randed con.ectionary+

c)airs is t/e @est se))er in Uni)e,er con.ectionary @usiness+

ost o. t/e retai)ers and (/o)e se))ers (ere satis.ied @y t/e co*pany>s

ser,ices+

Gua)ity o. Uni)e,er %ood products are /ig/)y accepted in t/e *arket+

Uni)e,er /as a ,ery strong distri@ution c/anne)+

2his 'ompan! pro3e't has demonstrated LH#:US2A: U:#E9ER$S MARE2#:&

S2RA2EES A: P@#C#ES that has proved to be e5tensive throu%h, and of %reat

benefit to the 'ompan! in furtherin% its 'ompetitive advanta%e)

#n this pro3e't it possible to see the su''ess of Hindustan Unilever$s in it$s indorse its

stron% potential to 'ontinue to do ell)

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RE#OENDATIONS & SU""ESTION

In re.erence to *y researc/ I ca*e to .ind out t/at *erc/andising /e)ps in

@uying decision+ Reco**endations on t/e @asis o. custo*er are;

*) ifferent S'hemes should be introdu'ed b! hi'h their sale ill in'rease)

0) Some &ifts should be %iven to the retailers on %ivin% the lar%e orders so as to

motivate

-) 2he repla'ement of the defe'tive produ'ts should be done effe'tivel! on the time)

/) 2he! re%ularl! 'he'4 the sto'4 of retailers)

.) #f the 'ompan! ant to in'rease the sales in off season should in'rease the more

and more s'hemes in 'omparison to other produ'ts li4e 2A


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GUESTION NAIRE

*) o !ou use FMC& produ'ts

Tes :o

0) 7hi'h brand of FMC& produ'ts do !ou use

Hindustan Unilever

P6&

:ivea

@thers

-) 7here do !ou bu! FMC& produ'ts from

Super stores

Retail Stores

@thers

/) Are !ou aare of an! 'ampai%n of the above brands

Tes :o

.) 7hi'h Hindustan Unilever$s produ't do !ou usuall! prefer or use

Bathin% soaps S4in 'are

Foods eodorants

others

;) o !ou thin4 Hindustan Unilever$s produ't is easil! available in mar4et

Tes :o

=) es'ribe Hindustan Unilever in one ord

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D) Tour 'omments on Hindustan Unilever$s produ't

[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[

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BIBLIOGRAPHY

• A L Ries (1!"# $%o&us' Harer )o**ins +ub*ishers Ltd.

• Da,id A. Aa-er (11"# $Manain Brand /0uity'# The %ree +ress.

• Da,id A. Aa-er (1!" $Bui*din Stron Brands'# The %ree +ress.

•+hi*i ot*er (/ihth /dition" $Mar-etin Manaement'# +renti&e Ha** o2 ndia

Ltd.

• The /&onomi& Times 4 $Brand /0uity'

• Mar-et sur,ey and 0uestionnaires

• 555.uni*e,er.&om

Documents

Hindustan 2