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8/8/2019 Hul Loses Ground
1/17
HUL LOSES GROUND
Mid-sized fast-moving consumer goods
companies ,riding on rural volumes,have stolen a march on the big guns.
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INTRODUCTION HLL England based company 'William
Hesketh Lever,' established in 1885 byLever Brothers
HLL entered India in 1888 through theexport of its laundry soap 'Sunlight.' In
1930, merged with the Netherlands-based Margarine Unie, to form UnileverLtd.
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Initially, a majority of revenue comesfrom -soaps and vanaspati
In 1961, HLL introduced 'Lux' soapAndseries of new products.
Traditionally, HLL used both holesalersand retailers to penetrate the rural
markets
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A fleet ofmotor vans covered smalltowns and villages. These vans inducedretailers to stock HLL products anddisplay advertising material in theirshops
There were some 7,000 redistributionstockists who served over a millionretail outlets
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HLL launched a massive rural campaignto reposition one of its leading brands,Lifebuoy, in 2002.
Lifebuoy was the single largest soapbrand in rural India (20 lakh soaps sold
every.) biggest and comprehensive re-launch of any of its brands
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HLL's strategy remained focused oncreating power brands and earninghigher margins .
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OPPORTUNITY opportunity in the top- and bottom-
end of the hair care.
Untapped rural market.
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THREATSThe category is getting crowded and
bigger players such as ITC could be athreat for the market leader in the nearfuture
Mid sized companies dabur ,
godrej,marico..,
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PROBLEM DECREASE IN MARKET SHARE IN RURAL MARKET
MARKET SHARE OF HUL IN RURAL MARKET
46.3
29.9
38.9
53.4
44.7
28
36.8
47.5
0
10
20
30
40
50
60
detergent tooth
paste
shampoos soap
P
ERCETNA
2008
2009
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Primary issues In the end of 2008,raw materail,packaging
prices decreased as oil prices starts sliding
dipped.
Price Inflation and deflation happened so
rapidly
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In case of soaps, the company hikedprices much before and more than thecompetition.
Some ofHULs rivals such as GodrejConsumer Products Ltd, Dabur India Ltd
and Wipro Ltd did not resort to anyprice increases.
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consumers were trading its brands infavour ofcheaper products
As consumers taste changes rapidly ,companies with larger distribution gethit harder.
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Strategy adopted HUL working on reducing its
streamlining its distribution networking
Sticking to a fewer big distribution
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Through the use of technology ,seeksto reduce inventory levels.
Try to reduce the its execution cycles soas to better responds to marketing
changes
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SUGESTIONS Re-working on distribution( two-edged
knife) (in short-term as they have tounwind stock positions)
Right pricing at right time
Promotion like initial stage(in 2002)
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THANK YOU