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About the marketing strategy This strategy sets out how Tourism Tyne and Wear, New castle Gateshead Initiative and the Tyne and Wear local authorities and our partners will work together to attract more leisure visitors – for holidays, short breaks or day trips – to destinations in Tyne and Wear. Introduction to Marketing: Definition of Marketing: Philip Kotler The marketing guru has said “Marketing is a social and managerial process by which individuals and group obtain what they need and want through creating, offering and changing products of value with others”. American marketing association Addressed “marketing is the performance of business activities that direct the flow of goods and services from producer to consumer to user”. Cundiff and still “Marketing is the business process by which products are matched with market and through which transfers of ownership are affected”. In the words of Hansen “Marketing is the process of discovering and translating consumers needs and wants into product and services and specifications, creating demand for these products and services and then in term expanding demand.
By all these definitions we can derive that marketing is compressive term that includes all resource and set of activities necessary to direct and facilitate flow of goods and services from producer to consumer in the process of distribution. Objectives of Marketing: At the end of all marketing activities is the satisfaction of human wants and derive profits from them. The following are the most significant objectives of marketing. • Intelligent and effective application of modern marketing: Today economic changing growth rate, relatively high inflation, high interest rates, rapid technological change and new aggressive rivals challenge marketing firm to adopt and respond to change for survival and prosperity. • To develop the market field: Marketing is the most dynamic field where change rules the roost. Change is continuing pre occupation among marketers. • To develop and implement guiding policies for better results: Innovative marketing guiding policies and their effective implementation to assure better results. • To find sources for further information concerning the market problems: The world of business in moving on the basis of countless decisions, marketing decisions are more complex and intricate having impinging impact on the very fortune of a company. • To take appropriate and opportune action in the course of working. The marketing information system designed by the marketing organization helps in identifying the problem, investigating analyzing it and interpreting the problem for the final decision.
Functions of Marketing: Marketing involves certain activities to make the goods from producers to consumers. It consist of operations and an operation may be performed several times either by a producer, middleman, till the commodity finally reaches in the hand of consumers. 1. Functions of exchange Exchange implies the transfer of goods and services money or money’s worth. Exchange brings about change in the ownership of goods. It is a two-way process invading two separate but supporting activities viz, buying and selling. • Selling: Selling is the sum total of all those activities that push the commodities to the buyers or consumers at a profitable price. It is the process that involves personal and impersonal efforts made in persuading the prospective customers to buy a commodity or service. Product planning and development: Product – planning is the planning or forecasting what consumers want in terms of quantity, quality, time, place, price, where as, product development refers to making available such goods to meet the requirement of consumers as demanded by them. • Demand Creation: It includes such special efforts to induce and persuade the prospective users to purchase the products of the seller only. • Negotiation: Negotiation as to terms of quality, quantity, price of the product time and mode of transport payment etc… are to be made with prospective buyers. • Contractual: Once the terms and conditions are settled between buyers and sellers a final contract would be entered into, where legally, ownership of goods passes on from seller to buyer.
Buying: Buying is another function of exchange that refers to all such activities involves in the assembling of goods under a single ownership and control. Its immediate purpose is to bring commodities together where they are wanted for use in production for final consumption.
This buying function has following four elements: • Planning Assortments: Buyers are to study their own market condition in order know the types quantity and quality of goods that are required by final users. • Contractual: It is clothed with the selection of various sources of supply, keeping in touch with them, to get the goods quickly reasonably and regularly. • Negotiation: Buyers and sellers negotiate the terms and condition of price quantity, quality and time of delivery, transport & payment. • Contractual: It is the last phase that binds the parties of exchange by means of a contract where the titles to the goods more from seller to buyers. 2. Functions of Physical supply These are the functions that are related with creation of place and time utilities, they are: • Transportation: Transportation is the physical means to move the goods and people from a place to another. It is essential spoke in the wheel of market. It is responsible for the creation of time utility • Storage: Storage is equally important that is creates time utility. The products are to be preserved from time of production to the time of consumption. It is the base of consumers to get the goods as and when required.
However. in some cases. regarding the market • Standardization: Standardization helps on tackle certain major problems of marketing. "marketing" is the promotion of products. place etc… • Market information: The much desired success of marketing depends on correct and timely decisions. estimates. Facilitating Functions These are the function that facilitates the process of exchange. have passed into the language. the Four Ps. His typology has become so universally recognized that his four activity sets. opinion. It includes all facts.3. E. 7P’s of Marketing: In popular usage. especially advertising and branding. views. Products are often developed to meet the desires of groups of customers or even. 5 . It makes the exchange process smooth and acts as lubricating oil to the wheel of marketing. It is related with the division of commodities into distinct groups standardization involves establishment of certain criteria to which the goods must confirm. • Risk-bearing: Market risk are inherent so long the process of exchange continues many risks are involved in marketing which brings about changes in ownership. Jerome McCarthy divided marketing into four general sets of activities. in professional usage the term has a wider meaning which recognizes that marketing is customer centered. for specific customers. These decisions are based on market information. • Financing: Finance is the base for all marketing activities.
it is essential that you help him see what he is buying or not.brochures. and refers to the various methods of promoting the product. • People: People refer to the customers. employees. if they are provided in time. and how it relates to the end-user's needs and wants. or company.g. if the customers are informed in hand about the services and many such things. This fourth P has also sometimes been called Place. referring to the channel by which a 6 . publicity.The four Ps are: • Product: The Product management and Product marketing aspects of marketing deal with the specifications of the actual goods or services. When a service goes out to the customer. sales promotion. time. e. • Promotion: This includes advertising. • Physical (Evidence): It refers to the experience of using a product or service. It is essential for everyone to realize that the reputation of the brand that you are involved with is in the people's hands. The price need not be monetary . For example. • Pricing: This refers to the process of setting a price for a product. management and everybody else involved in it. brand. for example. and personal selling. pamphlets etc serve this purpose Physical distribution refers to how the product gets to the customer. • Process: It refers to the methods and process of providing a service and is hence essential to have a thorough knowledge on whether the services are helpful to the customers. or attention.it can simply be what is exchanged for the product or service. point of sale placement or retailing. including discounts.
Evolution of Marketing: Marketing has evolved from the time man existed on earth. These four elements are often referred to as the marketing mix. 1988). families. Following are the phases of development of marketing 7 . services. adds "Perhaps the most significant criticism of the 4 Ps approach. whereas the essence of marketing should be the outside–in approach". Even so. retail). Relationship marketing attempts to do this by looking at marketing from a long term relationship perspective rather than individual transactions. A marketer can use these variables to craft a marketing plan. As a counter to this.g. business people). The four Ps model is most useful when marketing low value consumer products. Industrial products. Morgan. which you should be aware of. the 4 Ps offer a memorable and quite workable guide to the major categories of marketing activity. having made this important caveat. Industrial or B2B marketing must account for the long term contractual agreements that are typical in supply chain transactions. in Riding the Waves of Change (Jossey-Bass. online vs. is that it unconsciously emphasizes the inside–out view (looking from the company outwards).product or service is sold (e. to which segment (young adults. Services marketing must account for the unique nature of services. which geographic region or industry. as well as a framework within which these can be used. high value consumer products require adjustments to this model. etc.
1 Barter system: The goods are exchanged against goods without any other medium of exchange like money. The selling activity becomes the dominating factor without any efforts for the satisfaction of the consumer needs. instead of buying concerned with customer preference concentrating on the mass production of goods for the purchase of profit. Marketing orientation: Customer’s importance was satisfied but only as a means of disposing of goods produced competition become more stiffer. Production orientation: This was the stage where producers. Sales orientation: This stage witness major changes in all the spheres of economic life.Barter system Production Orientation Sales Orientation Marketing Orientation Consumer Orientation Management Orientation Social Orientation Fig. 8 .
"rural" means different things to different people: from 500.Consumer orientation: Under this stage only such products are bought forward to the markets which are capable of satisfying of taste and expectation of consumer satisfaction. promotion and distribution. According to estimates by the Rural Marketing Agencies Association of India. a badlymade commercial. it is heartening to note the increasing awareness of the importance of rural markets . This is grossly inadequate to cover the huge potential for different products in rural markets. Management orientation: The marketing function assumes the managerial role to co-ordinate all the interacting business with the objectives of planning. clients' reluctance to spend big money for bigger results in rural markets is because there are no standard performance yardsticks for judging the efficacy of the rural marketing efforts. 9 . Thus. Social orientation: The companies are not only cares for consumers but also for social welfare.or. a few painted walls and the occasional participation in village haats and melas. the total budget for rural marketing is only about Rs 500 crore (Rs 5 billion).000 for fast-moving consumer goods. Of course.000 crore (Rs 130 billion) allotted to mass media. compared to the over Rs 13. social welfare becomes the added dimension to the companies. of companies wanting to move beyond urban boundaries. Still. at least.000 people for consumer durables. to less than 50. But then. notable exceptions. MARKETING STRATEGY OF FMCG PRODUCTS: Barring a few. rural marketing in India is still about a van campaign.
10 . concentrated markets.The TRPs and NRS/IRS data help you determine the efficacy of TV and press marketing. But even more important is the need for a dedicated task force. is imperative . Anchor (100 per cent vegetarian toothpaste). And don't forget Nirma. They all started in small. appealing to the local ethos and aspirations of the targeted area. And. But only consider the huge successes of some regional brands. Their communication. their policies were flexible and they could adopt to fast changing marketing situations. Fairever Cream and so on). People power Total commitment from top leadership.the successes of Hindustan Lever [ Get Quote ] and ITC are proof of this statement. keeping in mind that rural marketing is a long-term relationship. Ghadi detergent powder and Power soap are proof that regional brands can become brands to reckon with. the most enduring example of a brand that began as a regional player and is now a giant. be it a simple radio spot or a wall painting or a theatre film. Meera Herbal Powder. What should companies do to step up their payback from rural marketing efforts? Here are some steps that should help. which are giving the multinationals a run for their money. touched a chord in the target audience. What did these products do that was so different? Most of them identified a segment that was vacant in terms of product and area of operation. Companies like Cavin Kare (Chik Shampoo. especially in the FMCG sector. But there is no study to tell you what is the ideal cost per contact or what is the ideal number of eyeballs or footfalls for different rural activities. most importantly.
you get only monkeys . you pay peanuts. were shifted out midway. Ensure the consistency of the team involved in any project. In both cases. in keeping with their companies' policy of shifting and promoting people. A separate marketing and sales vertical headed by people with passion and commitment to rural marketing and supported by a field team that can face the rough and tough of the vast country-side with courage and conviction is a must. The best bet is to recruit students from specialised institutes such as the Indian Institute of Rural Management. management graduates who have studied the subject as an elective... or at least. Many of these are students from small towns. people with fire in their bellies who want to prove themselves in big companies and have no issues about working in smaller markets. which many of the urban-oriented management graduates who are at the helm of affairs at most organisations do not possess.and discuss the path their careers are likely to take in the organisation.Rural marketing efforts need special mindsets. we were involved with two big clients. And send them out in the field only after thorough training. until the completion of a specific task. What started as a great rural marketing initiative has been relegated to the dustbin. the teams that briefed us in the initial stages and participated enthusiastically in the campaign. The teams that succeeded felt no ownership of the campaigns they had not initiated. the fate of many rural marketing initiatives in the country. Pay them well remember. 11 . Recently.
Know your customers A good place to begin is studying the mindset of your customers. Most of them have previously appointed vendors who implement the company's ideas blindly. with regard to products and brands. All too often. is very different from their urban counterparts. define your objective: is it a tactical effort to achieve increased sales in specific areas during a specific time.Goals are good Early on in the campaign. or do you want to build a strong equity for your brand in rural India? Our experience with FMCG companies is that they are more interested in the first choice. 12 . This invariably leads to less than satisfactory results in terms of awareness of the brands and longterm impact of the efforts in the targeted markets. with both short term and long term goals. a comprehensive brand building strategy in rural India. aspirations and fears of rural customers. If you are interested in the second alternative. so you can create a customised plan of action. be they van campaigns or below-the-line activities. Our experience shows that the attitudes. There is very little effort to tailor whatever communication is made in such efforts. is a must. to suit the local audience or fit it with the overall campaign efforts in the mass media. clients insist their knowledge of their customers (based on studies of urban India) is enough on which to base an action plan.
13 . We've all heard about the shampoo sachets that are available in even the smallest villages. who then buys the products from the nearest feeder markets. most of them without motorable roads. ensure that the people who patronise these haats are the kind who will buy your brand. While haats offer opportunities to target consumers from several villages at one place.000 villages. mostly sold through such local haats and bazaars. and to that extent make your effort cost-effective. at least keeping in mind the present goals of marketing companies in rural India. spurious products that are sold in these bazaars.the humongous task of physically reaching your product to over 600. Ensure availability Most anecdotes about rural marketing centre on the distribution aspect . The haatswere popular with the poorest agricultural labourers who consciously buy the duplicate. with some interesting results.000 crore (Rs 100 billion) to spurious products. The refrigerator with standby power for 12 hours. we recently conducted a survey among some haats in Tamil Nadu. For instance.Research can give you invaluable ideas for new product development as well as new methods of reaching your target audience. How does that happen? It's a direct result of rising aspirations. pressure cookers with two handles and a radio with key-winding mechanism are all the result of research. More and more companies turn to the local haats to sell their products. But it's not really as nightmarish as it is made out to be. The consumer demands the product from the local shopkeeper. fuelled by television commercials. It is estimated that FMCG companies lost more than Rs 10. since they can't afford the real thing.
A worker stacks Hindustan Unilever products in a store in Mumbai HUL says it is quite upbeat about the segment and says the laundry segment is one of its “key growth areas.” he said.000. if your products are in towns with populations of 50.Which means if you can ensure distribution to the feeder markets in towns or villages with populations of 10-15.” says Vats.” 14 . Pricing. you've already taken the first step towards reaching your target customer. This comes even as Unilever is scouting for a potential buyer for its laundry business in the US. automobiles and appliances in the nearest big town or city. you're closer to the rural consumer than you would have thought. home care. is now passe.000. Studies also indicate that rural consumers prefer to shop for durables such as televisions. in fact. now is focused on product innovation.” “We have done key innovations across the product portfolio and it is working for us. “Our strategy for growth. So. new consumer and retail trends and aggressive marketing and promotions. category head.” insists Sudhanshu Vats. MARKETING STRATEGY ADOPTED BY HUL “Price cut or hike is not a long-term growth strategy. “We successfully migrated from Rin Supreme to Surf Excel and Wheel Smart Srimati—which was rolled out in 2006—is also on the right track.
“Laundry has been an attractive segment 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.103 crore.8% in the quarter ended June from 35. However. increased its market share by 2 percentage points in the same period.5%. P&G also gained 0.4% over 2005. 15 . HUL doesn’t report its laundry revenues separately but puts them under the soaps and detergent category. the increase was not at the expense of price war with its multinational rival Procter & Gamble Co.908 crore in 2006 and rose 8.” says Unmesh Sharma. an analyst at Macquarie Securities here. up to a 7. Nirma Ltd. with a total share of about 18%. the industry is stabilizing. Wheel. according the market research firm ACNielsen.7% percentage points to 13. according to Vats contributes around 50% of HUL’s laundry segment revenues. According to Vats. a value brand that. however. the laundry business is witnessing a surge in demand from cities and HUL is focusing on Tier I and II cities to tap that demand. the Ahmedabad-based manufacturer. In 2006. this time.HUL’s market share in the laundry segment grew to around 37.596 crore to the company’s total sales of Rs12.5 percentage points. saw its market share dip by 1. the laundry industry in India was worth Rs7. According to ACNielsen.6% share.5% in the same period last year. HUL’s soaps and detergents segment contributed around Rs5.
“Consumers today are buying more clothes. people want to use better and branded products.” OBJECTIVE OF THE STUDY 16 . it is too early to say what result their new strategies will yield.” says Vats.” Still. Also. with premium quality of clothes. such as promotional campaigns and advertising. analysts remain cautious. “Still. seem right. “Some of HUL’s recent moves.” says Macquarie’s Sharma. “Trends suggest that the usage of detergents has gone up as a result.
To analyze the influence of rival company’s strategies on the performance of Hindustan Unilever Limited To analyze the various strategies adopted by the company to gain competitive advantage To identify the marketing strategies and policies of Hindustan Unilever Limited SCOPE AND IMPORTANCE 17 .
This is widely awaited. It would help to analyze the current position of HUL and then to sector marketing channels for the same. COMPANY PROFILE 18 . IMPORTANCE To will help in identifying the product of HUL in FMCG sector.This project is applicable on the on the area of FMCG. in order to frame out marketing strategies for different production this sector. This study would be helping HUL to frame its different promotion schemes.
The Hindustan Unilever Ltd’s(HUL) Inc has taken the opportunity to offer us a broader view of FMCG category. and far and away the leading advertiser. and is also one of the country’s top five exporters. The company focuses on efficient delivery to consumers with an improved supply chain. It is the country's biggest consumer goods company. The company’s history dates back to 1931 when Unilever set up its first Indian subsidiary. Hindustan Unilever Ltd (HUL) has grown from strength to strength with new technologies being introduced to make the HLL consumer goods business. including several not occupied by Unilever in other markets such as preserves and bakery products. The Hindustan Unilever Ltd (HLL) is India’s no. a subsidiary of Unilever.1 FMCG is able to share with their market insights based upon unparalleled breath of consumer goods experience. is a fast moving consumer goods (FMCG) company based in India. Hindustan Unilever is Unilever's main operating business in India. Effective July 19. brand building initiatives and innovation. followed by Lever Brothers India Limited (1933) and United Traders Limited (1935). one of the most efficient in the world. These three companies merged to form Hindustan Lever Limited in November 1956. which has helped the company to sustain its leadership position in the overall FMCG category in India. HUL inhabits virtually every sector of the consumer goods market. In addition to FMCG products it is the country's biggest exporter of tea. Hindustan Vanaspati Manufacturing Company. It is generally acknowledged 19 . 2007 the company has changed the name to Hindustan Unilever Limited. Hindustan Unilever Limited (HUL).
may see global revenue growth slow in 2010 as Procter & Gamble Co. Revenue from the two continents rose 11. Unilever's overall sales growth will slow to 4. according to the median of five analysts in a Bloomberg survey.000 Stockists Total Coverage 6. although performance slowed dramatically between 2000 and 2004.4 percent in the first nine months of last year. Hindustan Unilever – A 75 Year Commitment 15.2 percent in North and South America.based Procter & Gamble is stocking Indian stores with Olay skin. Asia and Africa.000 employees 1. which make up about a third of Unilever's worldwide sales.3 percent in 2007.9 percent in 2010 from an estimated 5. Unilever. which sells soap to more than 500 million Indians.9 percent growth in Europe and 4. step up marketing in Asia's third-biggest economy.3 Mln Outlets 20 . will see their share of the company's growth fall to 2 percent in 2010 from 3.200 managers 2. and ITC Ltd. helping offset 1. according to Brusselsbased brokerage Petercam SA.Now Cincinnati. prior to restructuring.000 suppliers & associates 75 Manufacturing Locations 45 C&FAs. The world's second-largest consumer products maker has relied on accelerating shipments of Surf Excel detergent in India to make up for sluggish sales in Europe.3 percent in 2007.to be one of India's best-run businesses. 4.care products after nearly halving the local prices of Ariel and Tide detergents in 2004.
5 Mln outlets 6. Lakme Limited. Lakme Limited sold its brands to HUL and divested its 50 per cent stake in the joint venture to the FMCG giant. These included Brooke Bond (1984). Hindustan Vanaspati Manufacturing Company. • Subsequently in 1998. Two years later.38.000 Villages 5. formed a 50:50 joint venture. Lakme Lever Limited. Unilever set up its first Indian subsidiary. Lipton (1972) and Pond’s (1986). • In 1931. • A number of prominent companies came into the HUL fold as result of Unilever’s international acquisitions. followed by Lever Brothers India Limited (1933) and United Traders Limited (1935).545 Towns 2. • In 1993. HUL and yet another Tata company.0 Mln outlets HISTORY OF HINDUSTAN UNILEVER LTD • It was in the summer of 1888 that Unilever of England first marketed Sunlight soap in India. Direct Coverage 1 Mln outlets Population of INDIA: 1027 Mln 5. These three companies merged to form HUL in November 1956. This was followed by brands like Pears and Vim. 21 . Vanaspati was launched in 1918 and Dalda came to the market in 1937. Tata Oil Mills Company (TOMCO) merged with HUL.
It is one of the earliest MNCs to have entered India 22 .350 managers. formerly known as Hindustan Lever Limited. HUL acquired the government s remaining stake in Modern Foods. • HUL has also set up a subsidiary in Nepal. FMCG major Hindustan Unilever Limited (HUL). which markets Huggies diapers and Kotex sanitary pads. employs 36. In a historic step.000 people. HUL picked up 74 per cent of the equity of Modern Foods from the Indian government. including over 1. • • In 2002. Nepal Lever Limited (NLL).• HUL formed a 50:50 joint venture with the US-based Kimberly Clark Corporation in 1994. Kimberly-Clark Lever Ltd. and its factory represents the largest manufacturing investment in the Himalayan kingdom.
2 23 .ORGANIZATIONAL STRUCTURE Managing Direc tor General Mana ger Vice President Marketing Manufacturin Sales g Finance Distribution FIG.
look good and get more out of life. branded staples. Knorr-Annapurna. Fair & Lovely. It is a mission HUL shares with its parent company. HUL's distribution network.000 suppliers and associates.PRESENT STATUS Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods company. HUL has traditionally been a company. comprising about 4. The Hindustan Unilever Research Centre (HLRC) was set up in 1958. Lux. ice cream and culinary products. personal products. detergents.000 individual shareholders and financial institutions. The operations involve over 2. Close-up. HUL's brands . it has been recognised as a Golden Super Star Trading House by the Government of India.300 managers. Lakme. is to "add vitality to life.and about 250 million rural consumer.000 employees.000 redistribution stockiest. touching the lives of two out of three Indians with over 20 distinct categories in Home & Personal Care Products and Foods & Beverages. Pepsodent. including over 1.3 million retail outlets reaching the entire urban population . HUL is also one of the country's largest exporters. Wheel. Kwality Wall's – are household names across the country and span many categories . which incorporates latest technology in all its operations. Clinic. Rin. Brooke Bond. tea. Pond's. Surf Excel. Kissan. They endow the company with a scale of combined volumes of about 4 million tonnes and sales of Rs.10.like Lifebuoy. Sunsilk. and now has 24 . and personal care with brands that help people feel good. coffee.000crore. hygiene." HUL meets everyday needs for nutrition. The rest of the shareholding is distributed among 380. covering 6. The mission that inspires HUL's over 15. which holds 51. Unilever. They are manufactured over 40 factories across India.soaps.55% of the equity.
many with post-doctoral experience acquired in the US and Europe. category head.” insists Sudhanshu Vats. the 25 . in fact. is now passe.” HUL’s market share in the laundry segment grew to around 37.5% in the same period last year.6% share. Nirma Ltd. Indian subsidiary of the Anglo-Dutch consumer goods company Unilever Plc. according the market research firm ACNielsen. the increase was not at the expense of price war with its multinational rival Procter & Gamble Co. home care.” says Vats. this time. Hindustan Unilever Ltd (HUL). up to a 7. now is focused on product innovation. P&G also gained 0. However.8% in the quarter ended June from 35. This comes even as Unilever is scouting for a potential buyer for its laundry business in the US. is now working on a new growth strategy for its laundry business. HLRC and the Global Technology Centres in India have over 200 highly qualified scientists and technologists. “We successfully migrated from Rin Supreme to Surf Excel and Wheel Smart Srimati—which was rolled out in 2006—is also on the right track.5 percentage points. HUL says it is quite upbeat about the segment and says the laundry segment is one of its “key growth areas.” he said. Pricing.facilities in Mumbai and Bangalore.” “We have done key innovations across the product portfolio and it is working for us. new consumer and retail trends and aggressive marketing and promotions. “Price cut or hike is not a long-term growth strategy. “Our strategy for growth. HUL’S NEW GROWTH STRATEGY After having fought a bitter price battle for market share with its rivals.
Wheel. “Consumers today are buying more clothes. the laundry industry in India was worth Rs7. the industry is stabilizing. “Some of HUL’s recent moves. “Still. people want to use better and branded products. “Laundry has been an attractive segment in the past and is likely to keep growing in the near future. such as promotional campaigns and advertising.103 crore. according to Vats contributes around 50% of HUL’s laundry segment revenues. however. HUL doesn’t report its laundry revenues separately but puts them under the soaps and detergent category. with premium quality of clothes. According to ACNielsen. it is too early to say what result their new strategies will yield. The recent price war between companies led to erosion in their profitability but now.Ahmedabad-based manufacturer.908 crore in 2006 and rose 8.” says Vats. the laundry business is witnessing a surge in demand from cities and HUL is focusing on Tier I and II cities to tap that demand. In 2006. According to Vats. increased its market share by 2 percentage points in the same period.596 crore to the company’s total sales of Rs12.5%. saw its market share dip by 1. HUL’s soaps and detergents segment contributed around Rs5. a value brand that.” Still.” 26 . with a total share of about 18%. analysts remain cautious.” says Unmesh Sharma. Also.7% percentage points to 13. “Trends suggest that the usage of detergents has gone up as a result.4% over 2005. an analyst at Macquarie Securities here.” says Macquarie’s Sharma. seem right.
Breeze.FIVE P’S OF MARKETING Product Satisfaction suffices. Dove. The wide variety products offered by the company include: The company’s popular product’s include: • Bathing soaps: Lux. But the winner will surpass them by constantly exceeding her expectation. Pears and Rexona • Laundry items: Surf Excel. delivering to her door step additional benefits which she would never have imagined possible. Rin and Wheel • Skin care: Fair & Lovely. Lifebuoy. But delight dazzles the average company will compete for customer by conforming to her expectation consistently. Liril. Hamam. Hindustan Unilever Ltd(HUL) offer such product. Pond’s and Vaseline • Hair care: Sunsilk and Clinic • Oral care: Pepsodent and Close up • Deodorants: 27 .
Pricing Make no mistake. So every customer segment has different price expectation from the product. Hindustan Unilever Ltd(HUL) has launched various products which cater to all customer segments. Therefore 28 . Second P of marketing is not another name for blindly lowering prices and relying on this strategy alone to increase sales dramatically. The strategy used by Hindustan Unilever Ltd(HUL) is for matching the value that customer pays to buy the product with the expectation they have about what the production is worth to them.Axe and Rexona • Colour cosmetics: Lakme • Ayurvedic: Ayush • Tea: Brooke Bond and Lipton • Coffee: Bru • Foods: Kissan. Annapurna and Knorr • Ice cream: Kwality Wall’s .
swamp prime television with best Ads.000 suppliers and associates. But getting their means managing wildly 29 . It takes much more time and effort to build. hire the hottest strategies on the block. comprising about 4. India – The operations involve over 2. Marketers and finance manager need a new term to evaluate their business: Distribution Equity.3 million retail outlets reaching the entire urban population.000 redistribution stockists. The fundamental axiom of Indian consumer market is this: You can set up a state-of –the-art manufacturing facility. Why does the company need distribution equity more anything in India? With technology and competitive pressure slash in it is becoming increasing difficult for marketers to retain a unique product differentiation for ling period. and then progressively moving through them.television has already primed and population for consumption. but once built. and the marketer who can get to the to the consumer ahead of competition will give a hard – to – overtake lead. the brand that sells more is the one that reaches the highest number of customers. HUL's distribution network. Physical Distribution – “Place” BRAND ISN’T THE ONLY ANY MORE . In a product and price parity situation. Buyers are paying for distribution equity not brand equity and market shares. you would be know of selling your products. distribution equity is much together to erode. covering 6. but the end of it all.maximizing the returns involves identifying right price level for each segment. and about 250 million rural consumers. The cardinal task before the Indian market is managing is to shoe-horn its product on retail shelves.
transport and communication network. Hindustan Unilever Ltd(HUL) distribution network has expanded. a distribution expansion would itself being incremental volume. Hindustan Unilever Ltd(HUL) is also attempting to improve the distribution quality. the prospective customers can have access to the product. Own distribution network consist of clearing and forwarding (C&F) agents & distribution stockiest. The company is looking to reduce this parity level. Hindustan Unilever Ltd(HUL) distributes the product in the manner stated above. language. is much higher than Procter & Gamble Co. reaches more than a million retailers. And your brand equity isn’t going to help when it comes to tackling these issues.different terrains-climate. Effective advertising is rarely hectoring or loudly 30 . they believe that selling FMCG is it like selling soft drinks. the receiver must at least half want it to. Once the stock product reaches retailers. This helps in maintaining consumption in summer when sales usually drops due to the fact that the heal effects product quality and thereby off takes. To address the issue of product stability. and be prepared too take step toward the sender. At Hindustan Unilever Ltd(HUL). Promotion If an advertisement is to communicate effectively. Hindustan Unilever Ltd(HUL) marketing costs. at 18% of total costs. Beside use of improved logistics. Looking at the low penetration of few products. value system. it has installed visi colors at several outlets. This increase in distribution is going to be accompanied by reduction in channel costs. This network of distribution can either contact wholesalers and which in turn retailers or the distributors can contact to the retailers directly. The other reason is arch rival Procter & Gamble Co. life style.
It often both attracts and generates arm feelings. a home water purifier which supplies drinking water without boiling/need of electricity . To penetrate into the inner recesses of her memory. pleasure – seeking child within himself – a graft these feeling onto the Ad campaign like “hasso to khul k hasso for close up”. In cinemas. Hindustan Unilever(Ltd)has a message on-screen just before the lights are dimmed to give them a chance to get their product There will also be after dinner sampling in restaurants – to begin with. a successful campaign has a stronger element of the unexpected a quality that good advertising shares with much worthwhile literature. ad agency contract has created communication for cinemas and even ATM machines for the brand. grab her attention evoke her comprehension. 31 . All ICICI’ s ATM a message flashes on the screen as soon as customer insert his ATM card. communication must first ensure exposure. Thereafter it was the job of the advertising to communicate customer the wonderful feeling that he could experience by re-discoursing the careful. As well as outdoor and radio ads. Something familiar is planned for phone-book as well. unself conscious. • Finding showed that the adults felt too conscious to be seen consuming a product actually meant for children. More often than not. grab her acceptance and then extract retention competing with thousands of other units of communication trying to do the same. that produced just the value vacuum that Hindustan Unilever Ltd(HUL) was looking to fill. 30 catteries in Mumbai have been selected.explicit…. “cream bathing bar for dove soap” and daag ache hai for surf excel” have been sure shot winner with the audience. It has also launched Pureit. Naturally. The strategic response address the emotional appeal of the band to the child within the adult.
researching and improving the newer products that haven’t taken off. as well as expand the market. the management plans to tap this new channel of marketing. Positioning In the 1970s consumers were ready to pay “more for more”. Ad since any discussion today would be incomplete without mention ‘e’ word. Today’s consumer demanding “more for less”.unilever.e. and the discounting era grew strong. today customer uses complicated decision making process to assess the 32 . In the 1980s. It is more efficient to market one successful concept to one large group of people than 50 product or service ideas to 50 separate group… repositioning is a must when customer attitude have changed and product have strayed away from the consumer’s long standing perception of them… Hindustan Unilever(Ltd) is an anchor in sea of consumer products.com). etc…. and luxury goods flourished. supported with high ad – spends that Hindustan Unilever(Ltd) hopes will see it emerges stronger after the current slowdown. it had also entered into various marketing relationship with other portals.Ad spend in 2000 was about 14% of sales and the management said that plans to maintain as spend at this level in the current year also. It’s a combination of spiffing up its key brand. As a variety of competitive claims assails her senses. www. specially targeted during festivals and events such as Valentines day. that the company has launched. consumers began to demand “more for same”. Some of today’s most successful companies recognize those customers are more educated and able to recognize true customer value… Positioning is simply concentrating on an idea – or – even a word defines that company in the mind of the consumer. Beside the company website (i. and the winner will be that super value marketers….
It targets different segments within the market. 33 . as www. Markets segmentation can be defined in a number of ways such as: Demographic variables (e.unilever. Since Hindustan Unilever(Ltd) is more clearly associated with a particular set of attributes in terms of benefits and prices. such as the: Break segment – products which are normally consume as a snatched break and often with tea and coffee. HINDUSTAN UNILEVER’S MARKET SEGMENTATION Market place for any product is comprised of many different segments of consumers. their interests and activities) the benefits which consumers look for in a product or on the occasions when the product might be consumed. “Lifebuoy has become more than just a red bar of soap – today the brand provides hygiene and health solutions for families 2) Fair & Lovely. the quicker becomes her search process.g.e. each with different needs and wants.alternative before making a purchase. material states income etc…) The lifestyle of consumers (i. Consumers are groups. Positioning of individual product: 1) Lifebuoy is ‘one of Unilever’s oldest brands’ with more than a hundred-year history. Hindustan Unilever(Ltd) takes into account all these factors when producing a range of products. gender. which promises a lighter skin tone for many of India’s complexion-conscious consumers. a hot-selling “fairness” cream.com informs.
Impulse segment – these products are often purchase on impulse. Take home segment – this describes product that are normally purchased in supermarkets. 34 . used these and then. taken home consumed at a later stage. They include product such as close up.
“Our strategy for growth.8% in the quarter ended June from 35.908 crore in 2006 and rose 8. home care.” “We have done key innovations across the product portfolio and it is working for us. “We successfully migrated from Rin Supreme to Surf Excel and Wheel Smart Srimati—which was rolled out in 2006—is also on the right track. 35 .” says Vats. According to ACNielsen. In 2006. HUL says it is quite upbeat about the segment and says the laundry segment is one of its “key growth areas. in fact. This comes even as Unilever is scouting for a potential buyer for its laundry business in the US. “Price cut or hike is not a long-term growth strategy. category head. now is focused on product innovation.The Real Taste of Rejuvenation After having fought a bitter price battle for market share with its rivals. Pricing. is now working on a new growth strategy for its laundry business.5% in the same period last year. HUL doesn’t report its laundry revenues separately but puts them under the soaps and detergent category.” HUL’s market share in the laundry segment grew to around 37.” insists Sudhanshu Vats.103 crore. is now passe. the laundry industry in India was worth Rs7.4% over 2005.” he said. Hindustan Unilever Ltd (HUL). HUL’s soaps and detergents segment contributed around Rs5. Indian subsidiary of the Anglo-Dutch consumer goods company Unilever Plc. new consumer and retail trends and aggressive marketing and promotions.596 crore to the company’s total sales of Rs12.
India’s premier consumer-products company. That’s how Douglas Baillie likes it. Baillie. the India hypermarket chain. India’s largest retailer and a former manager at Hindustan Unilever. chief executive of innovation and incubation at Pantaloon Retail.” says an amazed Damodar Mall. so the company wants to make sure it’s in with the new marketing crowd. The recent price war between companies led to erosion in their profitability but now. It’s primary market research at its most elemental. and it’s best done incognito. whose executives used to have emissaries make obeisance at Lever house in downtown Mumbai. 36 . what consumers are buying. the industry is stabilizing. COMPETITIVE STRATEGY As Competition Heats Up.“Laundry has been an attractive segment in the past and is likely to keep growing in the near future. Hindustan Unilever has traditionally relied on small traders and mom-and-pop corner stores to retail its products. wants to see how his products are stocked. Hence Baillie’s Hypercity visits. and how shoppers are reacting to competitive brands. “I can’t imagine any head from Lever House ever visiting other company offices like this. the managing director of Hindustan Unilever. But India’s recent retail boom has created large stores and malls. While Cooking Up Its Foods Biz The middle-aged Briton strolling the aisles and checking out the products doesn’t attract much notice from other shoppers in Mumbai’s Hypercity. India’s Top Consumer-Products Company Woos Affluent Shoppers With Global Brands Like Dove. and the calls he makes on the headquarters of the big retail chains. This is quite a change for Hindustan Unilever.
and L’Oréal. These 37 .Facing Competition From P&G And Others The reason for this new found egalitarianism is that the $3 billion Hindustan Unilever is facing serious competition. makes everything from detergents.3%. That’s why the company is wooing consumers in big retail stores. The company.2% to 24. Yet early this year. All this has taken a toll on Hindustan Unilever’s operating margins. after ringing up India-based sales of $3.5 billion. sauces and tea. and dominates most of those categories. including the popular Lux. soaps.84% now. is down from 55.2% to 54%. Hindustan Unilever’s lead in hand soaps. Finnish handset maker Nokia (NOK) dislodged it as the multinational with the highest revenues in India. which is practically synonymous with India. ACNielsen data shows. Favorite detergent brands like Surf Excel and Rin are barely hanging onto their 37% share. down from 21% a few years ago to just 11. Now Hindustan Unilever is under siege from aggressive Indian and foreign competitors such as Procter & Gamble (PG). Nivea. Hindustan Lever tea brands like Brooke Bond and Lipton have dipped from a combined market share of 29. In the last year. and shampoos to soups.
That dovetails with parent company Unilever’s new global realignment of products. This means that all of Unilever’s brands will be available across global markets. not a multinational. became the first foreigner in four decades to head the Indiancompany. Hindustan Unilever’s strategy is to market its premium products through the hundreds of megastores springing up across India. fitting in quite nicely with India’s turn towards more international products being sold in supermarkets. 2006. Sundaram. “It is a big game for us. Hindustan Unilever’s finance director.5% of India’s total $336 billion retail market.” says D. the crown jewel whose managers had free rein to develop and build brands suitable for the local market.newly affluent shoppers present the best hope for the company’s future in India. The takeover of Hindustan Lever by Unilever became evident in March. will grow to 28% by 2017. while its subsidiaries will sell the products. According to retail consultant KSA Technopak. not long ago. when Baillie. was the most successful and profitable company in the Unilever group. a Zimbabwe-born British national. Hindustan Unilever’s managers hope their revenues from big retail will increase from 5% today to over 25% in 2012.Parent Unilever will develop the brands and streamline product offerings across the world. organized retail. Yet this is still a dramatic change for Hindustan Unilever which. currently just 3. For many decades most Indians thought Hindustan Lever was a local company. From Local Player To Multinational Overnight the change sent shock waves through India. and the cream of India’s management 38 .
admits that it’s now “tougher to hold on to market share. executive director in charge of the home and personal care business. And there was some stiff competition from rival Procter & Gamble. where foods bring in half the revenues globally. in 2002 the company adopted Unilever’s global strategy of focusing on just 30 power brands instead of the total basket of 110 more local brands. If India is a great story. a 2004 price war with P&G in the detergent business forced Hindustan Unilever to slash prices on its premium brand Surf Excel. But the rich margins of the past have not returned.” 39 . it has phased out more food products—wheat flour. to $274 million in 2004. For instance. the company’s home and personal care businesses account for 80% of revenues and 85% of profits at Hindustan Unilever. the company.graduates made their careers there. Indeed. then known as Hindustan Lever. In India. Last year operating profits reached $357 million. 2007. while the company’s track record in foods has been dismal. Nitin Paranjpe.” He also wants to expand the foods business in conjunction with the parent. it also left the field wide open for competitors to attack Hindustan Unilever in the niche soap and detergent markets where its smaller brands held sway. frozen bread—than it has launched. thanks to price increases. we aren’t the only ones seeing it. was rechristened Hindustan Unilever to reflect its parentage. Tougher To Hold On To Market Share Baillie says he intends to get the company back “into the competitive growth zone and do this in a manner that we can consistently deliver. confectionery. Then in February. While the strategy aimed to conserve management energy. Baillie first had to sort out some past problems. The effect: The company’s sales and operating profits stagnated at $2.5 billion for five years while operating profit plunged 37%. Hindustan Unilever executives are realistic about the new era in which it now operates.
Managing Director Percy Siganporia says the gain is “a dream comes true for us. who rates the stock ``outperform. Its share of the shampoo market declined by more than a percentage point to 47.” FUTURE COMPETITIVE STRATEGY 2010 Expectations P&G. 30.9% in July.5%. It started selling more brands including Fiama Di Wills shampoo and Superia soap last year as the government raised tobacco taxes. which sold for less than 2 cents each and which expanded the market for Hindustan Unilever products among India’s rural masses. is also making inroads. the Tata Group’s beverage company Tata Tea overtook Hindustan Unilever as India’s largest selling tea brand. Tata Tea is exultant. to 19.Rivals like P&G and Nivea have also copied Hindustan Unilever’s best innovation: the small shampoo sachets it pioneered in the 1980s.1% to 19. toothpaste and tea in the quarter ended Sept. an analyst at Sanford C. According to ACNielsen.and Rotterdambased parent. compared with the year earlier. 2007. ITC.7 percent. 52 percent owned by the London. Bernstein in New York.. the largest Indian cigarette maker and partly owned by British American Tobacco Plc. the company said. 80% of Indian shampoo sales come from sachets. Tata Tea’s market share increased from 16. `Profitable' Cigarettes 40 . 2006.7% in March. the world's largest consumer-goods maker. lost ground in shampoo. But today even L’Oreal has sachets of its Fructis shampoo. In June.'' Hindustan Unilever Ltd. will continue to gain share in the next five years in India. Currently. while Hindustan Unilever slipped from 26. bath soap. according to Ali Dibadj. according to the company.
an analyst at Angel Broking in Mumbai. It has sold soap in the country since 1888 and controls about half of the sales of products such as skin creams. who has an ``underperform'' rating on Hindustan Unilever. The price of palm oil. ``It has the ability to take losses in this segment as long as it grows its sales. He expects the stock to drop to 180 rupees ($4.'' Rising prices of raw materials have made it more difficult for consumer-goods makers to pass on higher costs. has surged 70 percent in the past year.8 billion.'' said Anand Shah.care portfolio. This strategy will still satisfy investors. ``Given the competition.57) in the next year from 190. generating about 6 percent of annual sales. India is Unilever's biggest market in Asia. who has a ``neutral'' rating on the stock.'' said Macquarie Securities Ltd.The tobacco maker ``has a very profitable cigarettes business which will help it to invest and expand its personal. profitability will continue to be under pressure. HUL-UNIQUELY POSITIONED TO CREATE VALUE Our strategy Competitive strengths Innovation and R&D capabilities to straddle the pyramid Versatile distribution network Strong corporate responsibility and governance Strong local and talent base Strategy 41 . The company has a market value of about $11.9 rupees. used to make soaps and foods. bathing soaps and shampoo. analyst Unmesh Sharma.
Corporate Social Responsibility-Aiding In The Development Of The Country 42 . Grow ahead of the market by leading market development activities. Strong commitment to sustainable development. Grow the bottom line ahead of the top line. Leverage positive impact of growing Indian economy on consumer spending. Competitive Strengths Fig:3. Grow a profitable foods and top end business.
foods and beverages. The products include home and personal care products.25000 villages. Impact of community • • business and social impact can go together. The Group's principal activities are to manufacture and market consumer products. HINDUSTAN UNILEVER LIMITED . Personal Products. The Group operates through seven segments: Soaps and Detergents.COMPARATIVE BUSINESS ANALYSIS Hindustan Unilever Limited Formerly known as Hindustan Lever Limited. Ice Creams and Other. Beverages. currently~44000 women cover 1. Foods. partnerships with diverse stakeholders.Shakti Three shakti initiatives • • • Shakti entrepreneur. 43 . Shakti vani: one-to-many communication for category growth ishakti: customized interaction with remote consumers. Home and personal care products consists of personal and fabric wash. industrial and agricultural products. Exports.
rice. Industrial and agricultural products includes specialty chemicals. ice creams. colour cosmetics and baby care. footwear and carpets.employment grants-Rs 40000cr 44 . cooking fats and oils.THE BIG INDIAN ROMANCE Rural population larger than europe(800 million) Low growth in agriculture. Structural changes in the economy which are affecting this are: Disintermediation in the agricultural market price discovery mechanism has benefited farmers. Government grants and subsidies. deodorants. The company focuses on efficient delivery to consumers with an improved supply chain.household. bakery fats. marine products and mushrooms. salt. fruit and vegetable products. local and regional players. This analysis compares Hindustan Unilever Limited with three other companies in closely related industry sectors. brand building initiatives and innovation. yeast. Hindustan Unilever markets consumer goods throughout India. The company faces competition from international. oral care. leather. bulk chemicals. seeds.however rural income are growing faster with 70% population here. which has helped the company to sustain its leadership position in the overall FMCG category in India. atta and rawa.income growth is crucial. plant growth nutrients. Its brands are spread across 20 consumer product categories. Foods and beverages includes tea. coffee. thermometers and plantations. skin and hair care. fertilisers. tomato products. animal feeds. perfumery. processed-tri-glycerides and agri commodities. RURAL.
Ogilvy and Mather (O&M). would have been to develop “a number of different communications executions using different creative sources and then testing them as part of the early rollout. the authors of Marketing that Works. retargeted.Table: 1 Did Hindustan Unilever Get Its Rural Pitch Right? A new book from Wharton School Publishing is critical of Hindustan Unilever’s advertising strategy in India. and screened some options to roll out one option that everyone was happy with. Morgan and Shellye Archambeau. A better strategy. “HUL missed an opportunity for increased marketing productivity when they repositioned.” 45 . Howard L.” reads an observation in a chapter titled ‘entrepreneurial advertising that works’. Lodish. they add. Though the company was ‘extremely innovative’ the way it handled the rural communications plan was very traditional. The company basically worked with “one agency. according to the authors.” write Leonard M. and relaunched Lifebuoy.
Prahalad’s The Fortune at the Bottom of the Pyramid . as explained by Mr Lodish et al. mass-market soap. Mr D. has been able to link the use of soap to a promise of health as a means of creating behavioural change. HUL.Advertising strategy came for mention when the company reported the second quarter results. “Differentiating soap products on the platform of health takes advantage of an opening in the competitive landscape for soap. why didn’t HUL try alternative campaigns when rolling out its initiative? “Probably the biggest reason is that they always did their communications the same way – even for innovative 46 . Sundaram. The O&M strategy.” So. Director (Finance & IT). “Lifebuoy has become more than just a red bar of soap – today the brand provides hygiene and health solutions for families. targeted “10. from the earlier Rs 345 crore. and thus has increased sales of its low-cost.” says the site.” reads a quote in the book from C.000 villages in nine states where HUL stood to gain the most market share… They spent a lot of effort in designing low cost ways of communicating with their rural target. “or the villagers themselves might also be able to generate very effective communications vehicles. a few days ago.” The advertising spends have not been linear for the company. Lifebuoy is ‘one of Unilever’s oldest brands’ with more than a hundred-year history. Prahalad notes.K. said: “We have been phasing our advertising spends depending on the launches and relaunches of brands. HUL. in a paragraph on innovation.” The authors are of the view that government workers who have been interacting with villagers might have come up with some excellent ideas. he added. through its innovative communication campaigns. The company’s advertising and promotional spends during the quarter fell to Rs 336 crore.
“Modern Trade in India is growing and evolving very rapidly and our strategy for winning in this growing retail market is to win at point-of-purchase with our shoppers & by delivering best-inclass service to our Modern Trade customers. Smollan Holdings is one of the leading ‘in-store execution and field services’ companies internationally.” JOINT VENTURE Hindustan Unilever Sets Up Joint Venture With Smollan Holdings Hindustan Unilever Limited (HUL) has decided to set up a Joint Venture (JV) with Smollan Holdings of South Africa and the JV will be operational from January 1. concludes by stating that globally very progressive and innovative firms can also benefit from being “more entrepreneurial and less traditional in how they manage their advertising and communication. “As a big company. 47 .” wonder the authors. This JV will bring in world class execution excellence in the market and build the right capabilities to deliver the company’s marketing strategy in Modern Trade”. 2008. The new company has been named as Hindustan Unilever Field Services Private Limited (HUFS) and will work exclusively on behalf of HUL in Modern Trade channel only. which is one of the many discussed in the book.” The HUL example. The strategic tie-up aims to build long term capabilities and bring ‘in-store’ execution focus in servicing the Company’s Modern Trade customers. It has leading edge capabilities in servicing Modern Trade focused on shelf filling. The operations will begin with the existing Modern Trade in-store execution team of HUL moving into HUFS.programs. logistics for merchandising materials and in store execution. many times it is difficult to change the procedures without creating significant political problems.
Hindustan Unilever launched a high-end range of Pond’s skin care and Dove hair care products from Unilever’s international portfolio. trained and guided by HLN's expert managers and trainers. all independent entrepreneurs. Hindustan Unilever is also milking one of its top brands—Fair & Lovely. NEW INITIATIVE Bringing High-End Dove To India Baillie is fighting back. a hot-selling “fairness” cream.000 consultants. That has spawned 48 . Lakme cosmetics brands from Tata. These premium brands retail not in neighborhood small stores but in supermarkets and hypermarkets. The advertising campaign. tone for many of India’s complexion-conscious consumers. which suggests that regular use of the cream helps women gain confidence and makes them eligible for marriage. Hindustan Unilever Network is the direct selling channel of the company. which promises a lighter skin. where Indian customers love to touch and feel products. has made the brand a winner.Other Acquisition Hindustan Unilever has acquired several Indian FMCG companies so far. a home water purifier which supplies drinking water without boiling/need of electricity. This includes: • • • • Tata Oil Mills Company Brooke Bond Lipton India Modern Foods It acquired Kissan brand from UB group. It has also launched Pureit. It has about 350. Over the past six months. Dollops ice cream brand from Cadbury India.
Baillie is also getting aggressive on foods. HUL is creating micro-enterprise opportunities for rural women. Sumeet Budhraja. Through Shakti. most recent being the village built by HUL in earthquake affected Gujarat. women empowerment.a host of competitive fairness creams. the company’s sales grew 13%. HUL is focusing on health & hygiene education. which Hindustan Unilever exploited with the launch of water purifier Pureit in 2005. and water management. but they are more focused and regaining their aggressiveness. Shakti also includes health and hygiene education through the Shakti Vani Programme. and Baillie is pleased with the modest turnaround.” He points to the demand for safe drinking water in India. focusing on the Knorr brand of soups and curry mixes —ideal for the Indian market. with net profit up 29. In 2001. at one-third the price of established Indian brands such as Aqua guard.6%. Reason enough to keep patrolling those store aisles. thereby improving their livelihood and the standard of living in rural communities. says that Hindustan Unilever “could have addressed a lot more categories. the company embarked on an ambitious programme. It is also involved in education and rehabilitation of special or underprivileged children. In the quarter ended June. These efforts have delivered some promising results. and creating access to relevant information 49 . HUL has also responded in case of national calamities / adversities and contributes through various welfare measures. care for the destitute and HIV-positive. soaps. SERVICE TO SOCIETY HUL believes that an organisation's worth is also in the service it renders to the community. Shakti. and rural development. Analysts believe the company’s current strategy of concentrating on premium products and marketing them in the large retail stores is a winning one. and sunblock lotions. consumer analyst at Mumbai brokerage First Global Securities. 2007. and relief & rehabilitation after the Tsunami caused devastation in South India. But Hindustan Unilever’s brand is still tops.
000 Shakti entrepreneurs covering 500. touching the lives million people. It has already touched 70 million people in approximately 15000 villages of 8 states.000 women entrepreneurs in its fold. The vision is to make a billion Indians feel safe and secure. By the end of 2010.through the iShakti community portal. Shakti aims to have 100. The program now covers 15 states in India and has over 31. The programme endeavours to induce adoption of hygienic practices among rural Indians and aims to bring down the incidence of diarrhoea. of over 600 If Hindustan Unilever straddles the Indian corporate world. reaching out to 100.000 villages. PRODUCT PROFILE HUL’s business activities are divided into four broad areas: Home and personal care 50 .000 villages and directly reaching to 150 million rural consumers. HUL is also running a rural health programme – Lifebuoy Swasthya Chetana. it is because of being singleminded in identifying itself with Indian aspirations and needs in every walk of life.
Exports • HPC. Pears and Rexona • Laundry items: Surf Excel. culinary products. deodorants and talcs. oral care. marine products. fabric wash. skin care. Sangam. Breeze. ice creams. Pond’s and Vaseline • Hair care: Sunsilk and Clinic • Oral care: Pepsodent and Close up • Deodorants: Axe and Rexona • Colour cosmetics: Lakme • Ayurvedic: 51 . Pureit water purifiers. coffee. Liril.personal wash. branded staples. beverages. Rin and Wheel • Skin care: Fair & Lovely. Hamam. colour cosmetic Foods tea. hair care. Lifebuoy. Ayush ayurvedic products and services. home care. Modern Foods ranges New Ventures Hindustan Lever Network. rice Bathing soaps: Lux. Dove.
52 .Ayush • Tea: Brooke Bond and Lipton • Coffee: Bru • Foods: Kissan. Annapurna and Knorr • Ice cream: Kwality Wall’s .
Fair & Lovely. Surf Excel. Closeup. Wheel. They include: Lifebuoy. Sunsilk. Clinic. 53 . Lux. Pepsodent. Pond s. Kissan. Brooke Bond. Lakme.BRANDS HUL s brands are household names across the country. Knorr-Annapurna and Kwality Walls. Rin.
according to a survey of 276 senior operating executives in 2004 (Allio. rather than a science. strategy implementation is often seen as something of a craft. The best-formulated strategies may fail to produce superior performance for the firm if they are not successfully implemented. hard and mixed) factors that influence the success of strategy implementation. Results from several surveys have confirmed this view: An Economist survey found that a discouraging 57 percent of firms were unsuccessful at executing strategic initiatives over the past three years. A myriad of factors can potentially affect the process by which strategic plans are turned into organizational action. making that strategy work – implementing it throughout the organization – is even more difficult (Hrebiniak. after a comprehensive strategy or single strategic decision has been formulated. How can we better understand these issues and their importance for successful strategy implementation? In this article. and only 17 percent felt that they had a consistent strategy implementation process. Unlike strategy formulation. It is thus not surprising that. ranging from the people who communicate or implement the strategy to the systems or mechanisms in place for co-ordination and control. we try to respond to this 54 . 2005). 1999b). According to the White Paper of Strategy Implementation of Chinese Corporations in 2006. 2006). significant difficulties usually arise during the subsequent implementation process. as Noble (1999b) notes. The survey reported in that white paper indicates that 83 percent of the surveyed companies failed to implement their strategy smoothly. and its research history has previously been described as fragmented and eclectic (Noble. It is thus obvious that strategy implementation is a key challenge for today ‟s organizations. There are many (soft.TOPIC DETAIL Although formulating a consistent strategy is a difficult task for any management team. strategy implementation has become “the most significant management challenge which all kinds of corporations face at the moment”.
The structure of this paper is as follows: First. we will review the 60 identified studies and analyze their research context. In the sixth and final section. to surface current areas of agreement and disagreement. we analyze definitions of strategy implementation and compare them with other synonymous and related terms (in section 2). In the fifth section of the article. The next part of the article. the research methods used as well as the analytical techniques employed. As the core of our literature review. theoretical bases. we discuss the implications of our findings as well as their limitations. Then. we describe the methodology that we have used to conduct our literature review and define its scope (section 3). in terms of the applied research methods and the examined strategy contexts. contains the actual review of literature. section 4. In that section we present a discussion of nine major factors that affect strategy implementation. Our study also examines the ways in which strategy implementation has been researched so far. Examined organizational levels and organizational types are two elements of the research context. We also discuss directions for future research in the domain of strategy implementation and how they may be pursued. as well as missing evidence and resulting future research needs. focusing on the main results of prior studies. We present a conceptual framework that organizes the current research findings. we discuss the limitations of our own approach and summarize open research questions regarding strategy implementation that have surfaced at various points in our literature analysis. In this section. their main results.question by analyzing existing research on the factors that influence strategy implementation . It will consequently also reveal under-exploited methods or contexts. the results section compiles nine factors that 55 . Section four also contains a review of existing models and frameworks of strategy implementation. We have conducted an analysis in the most widely used literature databases to identify key factors influencing the process of strategy implementation.
five organizational levels can be distinguished. SBU-level strategies or corporate strategies. 2007). Chimhanzi (2004). focus on marketing strategy (such as Sashittal 56 . Schaap. Govindarajan. Organizational levels designate the locus of strategizing. Noble & Mokwa (1999). Finally.e. Organizational types refer to the kind of organization that is studied.. Piercy (1998). 2005. 1996. 1986. inter-functional levels. 1988. 1990. while many examine SBU level strategies (Gupta & Govindarajan. 1991.e. Sashittal & Wilemon (1996). 2006. i. Waldersee & Sheather. whether a study focuses on functional strategies (i. etc. They are: corporate level. R&D). The same holds true for functional strategies: We have found eight studies that focus on the implementation of such strategies. Roth & Schweiger & Morrison. as well as several frameworks or models that aggregate or relate relevant factors to each other.e. however. 1989. the research methods and analytical techniques will be reviewed to see which methods are still underutilized in the context of strategy implementation. 1992b. 1984. Govindarajan & Fisher. operational level and mixed levels (such as corporate and SBU level. Chimhanzi & Morgan. 4. i. Govindarajan. namely Rapert & Lynch & Suter (1996). marketing. Surprisingly few researchers focus on the implementation of corporate level strategies. Skivington & Daft. whether it is privately held or state-owned and whether its operating scope is regional or rather multinational. Olson & Slater & Hult. We then briefly discuss the theoretical bases of the reviewed studies. SBU and functional level.. HR. Floyd & Wooldridge.influence strategy implementation success. Qi (2005). strategic business unit (SBU) level. Most of these studies. Brenes & Mena & Molina. Noble (1999a).). 2005. functional level. 1999. corporate-SBU-functional levels.1 Research Contexts We classify research contexts into two dimensions: the examined organizational levels and the considered organizational types. Organizational Levels In the context of strategy implementation research.. Nilsson & Rapp. White. 1991. such as Wernham (1985) and Schmidt & Brauer (2006). Viseras & Baines & Sweeney (2005).
2004). such as Bantel (1997). Okumus (2001). SBU and functional. Noble & Mokwa. Homburg. and on two aspects of strategic implementation (stakeholder input and employee empowerment). 1996. Homburg & Krohmer & Workman (2004).& Wilemon. normally cut across functions and are aimed at integrating organizational processes across the organization in order to make them more effective and more efficient. focuses on the implementation of a yield 57 . for example. the last type. functional and process. Piercy. Beer & Eisenstat (2000) and Hrebiniak (2006) have carried out research on corporate and SBU-level strategy. Process strategies. Baines and Sweeney‟s study (2005) in the context of manufacturing strategies. Slater and Olson (2001) analyze marketing‟s contribution to the implementation of business strategy. Few studies focus on the actual operational level of strategy implementation. business. Krohmer & Workman (2004) point out that market orientation plays a key role for the successful implementation of a PPD (premium product differentiation) strategy. we classify them into a group called mixed level studies: Gupta (1987). 1998. There are few studies dedicated to the implementation of other functional strategies (this is clearly an area of future research). This study focuses on the key success factors in the project management for the implementation of strategic manufacturing initiatives. There are some studies which cannot be classified into the above categories. Consequently. 1999. Bantel (1997) analyzes the effects of two key aspects of product strategy (product leadership and product/market focus) on performance. The mixed studies category also includes articles that focus on the role of project management for strategy implementation. Higgins (2005) even focuses on four types of strategies: corporate. This study also emphasizes the relationship between product strategy and several strategic implementation variables. Chimhanzi. Walker and Ruekert (1987) analyze three levels of strategy – corporate. The only other study of functional strategy implementation that we have been able to identify is Viseras.
Nutt (1986. Finally. 1987. 2001). Peng and Litteljohn (2001) investigate three hotel chains implementing a strategic initiative on yield management. Higgins (2005). corporate (2 articles) and operational (2 articles). we can observe that there are very few studies that have examined the inter-relationships of functional and business strategies. First. the functional. Examples of such ambiguous studies are Bourgeois Ш and Brodwin (1984).). another finding revealed that marketing is the prevailing domain.management project and a key client management project in two hotels. 1989). Harrington (2006). Lehner (2004). In terms of promising future research on strategy implementation. which seems a highly relevant area to improve our understanding of strategy 58 . Many studies (25 articles) do not even indicate at which level their discussion of strategy implementation is located. accounting etc.level (8 articles) and mixed levels (9 articles) have received more attention than the other two levels. the implementation of corporate strategies is an under-researched area (perhaps with the exception of post-merger integration research that we have excluded in our review) and should be given more research attention. Two calls to action result from these findings. We can draw multiple conclusions based on our analysis of the treatment of organizational levels in prior studies of strategy implementation. Another study has examined the mutual influence of functional departments ‟ relationships on strategies. We note that – among the five strategy levels – the SBU-level (14 articles). Grundy (1998) examines the synergies among project management and strategy implementation and reviews strategy tools that may help in project management. Noble (1999b). HR. future strategy implementation research should pay attention to explicitly indicate the level of analysis. Second. Within the functional level. R&D. One such study focuses on marketing‟s contribution to the implementation of business strategy (Slater & Olson. there are many studies that are not sufficiently explicit regarding their scope concerning strategic levels. and Schaap (2006). compared with other functional areas (such as manufacturing.
state-owned and privately held companies. Rapert. Johnson & Johnson. Velliquette and Garretson ‟s (2002) study on strategy implementation takes a nationwide sample of 1000 CEOs of general service hospitals. 59 . Okumus (2001) investigates two international hotel groups. not only local firms but also multinational firms. Some of the researched companies focus on their domestic markets. Organizational types Organizational types. and a leading firm in the imaging technology industry. local or multinational. British Telecom (BT).implementation: Chimhanzi (2004) has examined the impact of marketing and HR interactions on marketing strategy implementation. Qi (2005) issues questionnaires to the head offices of 800 private companies in the UK. a major financial services firm. Sears. but mostly private corporations. 1993) study global strategy. while others are multinational corporations. Noble ‟s (1999a) study spans several types of organizations – a national airline. FedEx. or among local firms and multinational firms. Roth & Schweiger & Morrison (1991) and Kim & Mauborgne (1991. We thus do not know which specific differences exist regarding strategy implementation in these various forms organizations. explores the reality of strategy implementation in a U. nationalized company. a provider of emergency fire and medical services. namely Accenture. as stated earlier. Alexander (1985) surveys 93 private sector firms through a questionnaire. In conclusion. Wernham (1985). refer to the characteristics of organizations: if they are private or state-owned. strategy implementation studies discuss both. Dell. for example. there have been no studies comparing similarities and differences of strategy implementation among private corporations and state-owned corporations. This clearly is another interesting avenue for future research. Forman and Argenti (2005) select five multinational companies as samples. a leading packaged goods company. However.K. As far as ownership forms are concerned. the subjects of strategy implementation studies are not only state-owned corporations. which are members of the American Hospital Association (AHA).
soaps. The margin of profit on every individual FMCG product is less. The FMCG sector represents consumer goods required for daily or frequent use The main segments of this sector are personal care (oral care. beverages (health beverages. and chocolate bars. Unilever and Procter & Gamble. cereals. chocolates. at relatively low cost and don't require a lot of thought. other non-durables such as glassware. The term Consumer Packaged Goods (CPG) is used interchangeably with Fast Moving Consumer Goods (FMCG). consumer electronics and packaged food products and drinks. hair care. soft drinks. The category may include pharmaceuticals. toiletries). shaving products. detergents. 60 . cosmetics. although these are often categorized separately. soaps. ‘Fast Moving’ is in opposition to consumer durables such as kitchen appliances that are generally replaced less than once a year. time and financial investment to purchase. staples. teeth cleaning products. paper products and plastic goods. Hence profit in FMCG goods always translates to number of goods sold. Fast Moving Consumer Goods is a classification that refers to a wide range of frequently purchased consumer products including: toiletries. However the huge number of goods sold is what makes the difference. bulbs. bakery products) and tobacco. household care (fabric wash and household cleaners). branded and packaged food. dairy products. Examples of FMCGs are soft drinks. such as buckets. Pepsi and Believe. Examples of FMCG brands are Coca-Cola. Three of the largest and best known examples of Fast Moving Consumer Goods companies are Nestlé. batteries. Kleenex.INDUSTRY PROFILE Fast Moving Consumer Goods(FMCG) FMCG are products that have a quick shelf turnover. tissue paper. cosmetics.
Unlike the perception that the FMCG sector is a producer of luxury items targeted at the elite.The Indian FMCG sector is an important contributor to the country's GDP. many of the smaller rung Indian FMCG companies have gained in scale. the margins were also on the higher side. These companies were. urbanization. 61 . therefore. more so in the last six years (FMCG sector witnessed decline in demand). margins have been compromised. the unorganized and regional players have witnessed erosion in market share. Colgate. able to charge a premium for their products. FMCG companies have been forced to fight for a market share. The lower-middle income group accounts for over 60% of the sector's sales. It is the fourth largest sector in the economy and is responsible for 5% of the total factory employment in India. the sector meets the every day needs of the masses. much of which is disbursed in small towns and rural India. Furthermore. increase in the disposable incomes and altered lifestyle. This industry has witnessed strong growth in the past decade. The industry also creates employment for 3 m people in downstream activities. In the process. But in the last ten years. de-reservation from the small-scale sector and the concerted efforts of personal care companies to attract the burgeoning affluent segment in the middle-class through product and packaging innovations. In this context. This has been due to liberalization. Rural markets account for 56% of the total domestic FMCG demand. History of FMCG in India In India. the boom has also been fuelled by the reduction in excise duties. With the gradual opening up of the economy over the last decade. Many of the global FMCG majors have been present in the country for many decades. companies like ITC. As a result. in reality. HLL. Cadbury and Nestle have been a dominant force in the FMCG sector well supported by relatively less competition and high entry barriers (import duty was high).
testing times for the FMCG sector are over and driving rural penetration will be the key going forward. In this backdrop. Given the aggressive expansion plans of players like Pantaloon. we are confident that the FMCG sector has a bright future India is rated as the fifth most attractive emerging retail market. unleashing a latent demand with more money and a new mindset. industry estimates suggest that the industry could triple in value by 2015 (by some estimates. companies were unable to grow faster. In our view. increased literacy and rising per capita income are the key growth drivers for the sector. The bottlenecks of the conventional distribution system are likely to be removed once organized retailing gains in scale. As per the Consumer Survey by KSA. 62 .term horizon.Current Scenario The growth potential for FMCG companies looks promising over the long. Trent. as the per-capita consumption of almost all products in the country is amongst the lowest in the world. almost 40% and 8% was accounted by groceries and personal care products respectively.Techno Park. organized retailing accounts for just 3% of total retail sales and is likely to touch 10% over the next 3-5 years. organized retailing results in discounted prices. of the total consumption expenditure. forced-buying by offering many choices and also opens up new avenues for growth for the FMCG sector. these are still at a relatively nascent stage. Around 45% of the population in India is below 20 years of age and the proportion of the young population is expected to increase in the next five years. Shopper’s Stop and Shoprite. It has been ranked second in a Global Retail Development Index of 30 developing countries drawn up by A T Kearney. Currently. Aspiration levels in this age group have been fuelled by greater media exposure. Although companies like HLL and ITC have dedicated initiatives targeted at the rural market. Rapid urbanization. In our view. Due to infrastructure constraints (this influences the cost-effectiveness of the supply chain). the industry could double in size by 2010).
4 billion in 2015. lower volume of higher value added products reduce scope for export to developing countries. Over the last one year.T. Moreover.A. Rural demand is on the decline and the Centre for Monitoring Indian Economy (CMIE) has already downscaled its projection for agriculture growth in the current fiscal. Burgeoning Indian population. The outlook in the short term does not appear to be very positive for the sector. particularly the middle class and the rural segments.1 billion. is expected to grow at a compounded 30 per cent over the next five years. The growth of imports constitutes another problem area and while so far imports in this sector have 63 . The FMCG sector has traditionally grown at a very fast rate and has generally out performed the rest of the industry. The Indian FMCG sector is the fourth largest sector in the economy with a total market size in excess of US$ 13.6 billion. the general slowdown in the economy is also likely to have an adverse impact on disposable income and purchasing power as a whole. The share of modern retail is likely to grow from its current 2 per cent to 15-20 percent over the next decade. analysts feel. Penetration level as well as per capita consumption in most product categories like jams. hair wash etc in India is low indicating the untapped market potential. toothpaste. India is one of the world’s largest producers for a number of FMCG products but its FMCG exports are languishing at around Rs 1. Moreover. Small-scale sector reservations limit ability to invest in technology and quality up gradation to achieve economies of scale. is unlikely to help matters.000 crore only. presents an opportunity to makers of branded products to convert consumers to branded products. too. There is significant potential for increasing exports but there are certain factors inhibiting this. Poor monsoon in some states. however the rate of growth has slowed down and the sector has recorded sales growth of just five per cent in the last four quarters.6 billion in 2003 to US$ 33. Kearney has estimated India's total retail market at $202. The FMCG market is set to treble from US$ 11. skin care.
most of the companies are concentrating on cost reduction and supply chain management. the long term outlook for revenue growth is positive. Moreover. Give the large market and the requirement for continuous repurchase of these products. The high burden of local taxes is another reason attributed for the slowdown in the industry At the same time. This should yield positive results for them 64 . FMCG companies estimate they have already cornered a four to six per cent market share.been confined to the premium segment. FMCG companies should continue to do well in the long run.
used as a guide in collecting and analyzing data.The Descriptive Research Design Study is typically concerned with determining the frequency with which something occurs or the relationship between two variables.The major emphasis in exploratory Research design is on discovery of ideas and insights.A Casual Research Design is concerned With determining cause and effect relationship. Descriptive Research Design:. There are three types of Research Design:Types of Research: Exploratory Research Design:. Casual Research Design:. Descriptive Research Design was undertaken as it draws the opinion of employees/ workers on a specific aspe Research Objective: To analyse the influence of rival company’s strategies on the performance of Hindustan Unilever Limited To analyze the various strategies adopted by the company to gain competitive advantage To identify the marketing strategies and policies of Hindustan Unilever Limited 65 . For the study.RESEARCH METHODOLOGY Research Design: Research design is simply the framework or plan for a study.
Probability Sampling is of following types: Simple Random Systematic Cluster Stratified Double Non-Probability Sampling: Non probability sampling is non-random and subjective. That is each member does not have a known non zero chance of being included. Types of NonProbability Sampling Convenience Judgement Quota 66 . SAMPLING METHOD: There are two methods of sampling: Probability Sampling: It is based on the concept of random selection of a controlled procedure that assures that each Population element is gives a non-zero chance of selection. which should be reliable and appropriate for his report.SAMPLE DESIGN A sample design is a definite plan determined before any data is actually collected for obtaining a sample. Researcher must select a sample design.
journals. Magazines. 67 . journal of national repute. In addition to this internet access will make the study more effective and meaningful.Researcher selects the sample as per their convenience. various newspapers and published books. Secondary Data Secondary data are the data that are already collected and are only analyzed by different sources these sources are as follows: Corporate magazine Manuals of various companies Books.Probability Convenience Sampling because time limit for the completion of the work is limited and also managers and employees are not available all the time. books of national and international author as well as the annual report of the company. DATA COLLECTION METHOD Data for the present study is collected from two sources: Secondary: .Secondary data is collected from published sources like Journals. newspaper Employment exchange The secondary data would be collected from financial statement. For this research work I have chosen Non.
Or a consumer buying Surf Excel for her clothes mixed it with a cheaper powder. the FMCG markets grew at almost 15% per annum in value. 75% of our sales came from FMCG businesses. a consumer buying six tablets of Lux in a month went to buying three of Lux and three cheaper brands. A sharp drop in interest rates from 18% to 8%led to explosive demand for consumer durables like white goods. FMCG market growth stalled and then declined for the next four years. After all.Suddenly. It is important to understand why this happened. the FMCG market declined invalue in the last four years creating a major challenge for growth The new Hindustan Lever: Focused on FMCG In 2000. Leisure and Travelsectors also boomed. 2000.DATA ANALYSIS & INTERPRETATIONS Through the nineties.Mobile phone ownership and usage exploded due to its amazing lifestyle andconvenience be nefits as well as lower prices. As a result of this shift in spending patterns. one could drive out of a car showroom in a Maruti 800 with adown payment of only Rs.The lure of new avenues of expenditure in products and services led to consumersrestricting their expanse on FMCG. For example. and did not offer prospects for long-term leadership. in 2000. But they did downtradeto lower priced substitutes from higher quality brands. The home ownership market grew exponentially asthe average age of a home loan borrower dropped from 50 in 1999 to 30 in 2004. It is not that they bathed less often or brushedtheir teeth less often or indeed washed their clothes less often. 68 . two-wheelers andautomobiles. Entertainment. The rest came from severalnon-FMCG businesses which were not profitable.The rapid opening up of the economy resulted in many new avenues of expenditurefor the consumer’s growing income.
Thermometers.750 crores as in 1999. Adhesives. with higher levels of resource concentration. Therefore they divested the non-valueadded parts like Vanaspati. In all. be ittechnology. people talent or media spend. Over the last few years they have focused on putting in place the building blocks of a strong Foods business.Today they are a focused on FMCG company with our branded business accountingfor over 90% of sales.Besides. They have consolidated theuir portfolio and improved thegross margins by over 13% through product mix and cost reduction. Nickel Catalyst. Today. They have alsocleared the supply chain of all old stock and geared up for fresh availability on shelf. The Foods business will now invest for growth through relevant innovation.They decided to disengage from all non-FMCG or commodity businesses. Theyrecognized that changing food habits would require considerable investment. wehave divested and discontinued 15 businesses including Animal Feeds. These will be their main engines of growth. their Foods business has a healthy gross margin and a supply chain driven byfreshness. Historically their Foods businesswas fragmented and lacked scale. SpecialityChemicals. they were a drain on the core FMCG business. FMCG still offers enormous potential As the largest FMCG player it was up to them to reverse the downtrading to realize itstrue growth potential. consisting of 35 brands across 20 categories. withsales of Rs. Building blocks of a strong Foods business In Foods. both interms of resource and focus. It was often commoditized with low margins. whichthe current business simply could not afford. Mushrooms etc. there is enormous growth potential in leading the evolution of consumers to branded and processed foods.1. Seeds. They could achieve this by raising the bar and becoming worldclass in what their brands 69 .
the FMCG market will be over Rs. per capita income in India is likely to touch China’s current levels. Today. they are seeing a strongcorrelation between income levels and the size of FMCG markets.Penetration levels in several of the categories and consumption levels in all of thecategories is low by any comparison. In 2000. The Foods business will now invest for growth through relevant innovation. Over the next 10years.100.Penetration levels in several of the categories and consumption levels in all of thecategories is low by any comparison.offered and how they worked. Across the world. Six brands – Brooke Bond.40. They are already seeing the benefits.100. they are seeing a strongcorrelation between income levels and the size of FMCG markets. Over the next 10years. many undifferentiated and lacking scale. they had 110 brands. the FMCG market will be over Rs. their Foods business has a healthy gross margin and a supply chain driven byfreshness. They chose to focus on 35 power brands covering all consumer appeal and price segments. Portfolio of Strong Brands Their main challenge was to reverse the downtrading in the categories and re-establishthe relevance of their brands in the mind of the consumer.000 crores. Nothing less would do. FMCG still offers enormous potential As the largest FMCG player it was up to them to reverse the downtrading to realize itstrue growth potential. Nothing less would do. Across the world. They could achieve this by raising the bar and becoming worldclass in what their brands offered and how they worked.000 crores from a current value of Rs. 70 .40.000 crores. At thoselevels. per capita income in India is likely to touch China’s current levels. This is an opportunity that they have to seize. This is an opportunity that they have to seize. At thoselevels.000 crores from a current value of Rs.
It moved from being a mere soap to a health essential. They had to move from selling a soap or a detergent to something far more important and central to the consumer’s life.In several cases they reduced prices to make the brands more affordable.In the case of Lifebuoy. Rin and Wheel – have emerged as mega brands in the last five years.400 crores. Theyhave invested over Rs. Surf Excel went well beyond the benefit of ‘greatclean’ by saving two buckets of water with every wash. their oldest brand. Lux. has grown at over 15% for the last three years. it was only when they associated it with the promise of health and protection against disease that it claimed a larger space in the consumer’smind. “All detergents clean clothes as well”. How often have we heard someonesay. Fair & Lovely.Lifebuoy.500 crores Better Value The first step was to ensure that they offer world class quality and real differentiation backed by technology to give them the advantage over low priced competition.5 and a branded quality shampoo in a bottle at Rs. Imagine the importance of that benefit to consumers in 71 .5. in the laundry market.They have also launched several low unit size and price packs for single use to makethe brands more accessible to all income groups. they are the first tointroduce a branded toothpaste in a tube at Rs. each with sales of more thanRs. Today Lifebuoy. in the last three years to upgrade the brands. Bigger Role in Consumers’ Lives Perhaps the most significant change has been to move the brands beyond merelymaking functional claims to playing a bigger and deeper role in the lives of consumers. Similarly. Better quality and more affordable prices have increased the value to the consumer. For example. or 5% of sales. “A soap is a soap is a soap!” Or indeed.
cities, who often get running water for only a couple of hours a day. Surf Excel is one of their fastest growing brands today.Both Lifebuoy and Surf Excel have succeeded because they are relevant to two keyconcerns of the Indian housewife: family health and the scarcity of water.In addition to the growing consciousness of health, consumers today are looking for ways to look good and feel good so that they can get much more out of life. In short,consumers are seeking Vitality in their lives. Their portfolio of 35 power brands isuniquely positioned to offer nutrition, hygiene and personal care benefits and therebydeliver Vitality. Technology, the Key Differentiator Their brands and sound understanding of the local consumer are supported by a worldclass Research and Development capability. They have over 200 of the brightestscientists and technologists based in India.Their recent reorganization leverages the talent pool from across 16 global technologycentres, of which four are in India. In all, they have over 4,000 high quality mindsacross Unilever working relentlessly to provide new benefits that make a realdifference the consumers. Winning with Customers Hindustan Lever has historically had a strong bond with its customers. They havestrengthened this and reinvented the way they manage their distribution channels and their customers. The sales structure has been transformed to leverage scale and buildexpertise in servicing Modern Trade and Rural Markets. They have also de-layeredtheir sales force to improve the response times and service levels.Their customers are serviced on continuous replenishment. This is possible because of IT connectivity across the extended supply chain of about 2,000 suppliers, 80 factoriesand 7,000 stockists. They have also combined backend processes into a commonShared Service
infrastructure, which supports the units across the country. All theseinitiatives together have enhanced operational efficiencies, improved the service to thecustomers and have brought us closer to the marketplace. Our Acorns: Investing in our Future In the pursuit of growth, they have also begun to nurture some acorns for the future.These are both new businesses and new ways of engaging with consumers.Their entry into Water Purifiers, through Pureit, shows great promise. Pureit delivers100% protection against all water-borne diseases. It provides water which is as safe as boiled water, without needing electricity or continuous tap water supply. At 17 paise per litre, it is extremely affordable for the common man. They have launched it inTamil Nadu and are fine-tuning all aspects of the business system before a phasednational launch.In urban India, Hindustan Lever Network (HLN) is their direct selling initiativeselling a special range of products. It already reaches 1,400 towns with over 3 lakhconsultants. Besides reach, HLN enables direct interaction with consumers andcustomises solutions for them to give them a complete brand experience Our People & Organisation 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 the companyis far more youthful in attitude and spirit. There is greater openness and transparency.
The Transformation: Investment in the Future To ensure that Hindustan Lever remains competitive in the long-term, they
have madesignificant investments in product quality, pricing and marketing. As mentionedearlier, 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 asmuch 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 shortterm 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 competitiveness andthe costs of defending the strong market position, they still remain one of the most profitable companies in the country.
Strength 1. Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods company, touching the lives of two out of three Indians with over 20 distinct categories in Home & Personal Care Products and Foods & Beverages.. 2. Due to its long presence in India – has deep penetration – 20 consumer product category, over 15,000 employees, including over 1,300 managers, is to "add vitality
3. The company derives 44.3% of its revenues from soaps and detergents, 26.6% from personal care products, 10.5% from beverages, and the rest from foods, ice creams, exports, and other products. 4. Low cost of production due to economic of scale. That means higher profits and / or more competitioners. Better market penetration. 5. HUL is also one of the country's largest exporters; it has been recognised as a Golden Super Star Trading House by the Government of India. Weakness 1. Continuous threat from other competitors. Opportunities 1. Increasing per capita national income resulting in higher disposable income. 2. Growing middle class and growing urban population. 3. Increasing gifts cultures.
4. Globalization. Threats 1. 5. CONCLUSION 76 . reason is that. HLL's tea business has declined marginally. Increasing departmental stores concept – impulse @ at cash counters. cost pressure is likely due to rising crude and freight costs.
are some of the main ingredients of FMCG sector.Demography.This sector has member of players which altimately shopes the buying decision products like. FMCG secter hold a prime importance as the competition is increasing day by day.pantene etc.income and other attributes. In this project it possible to see the success of Hindustan Unilever’s in it’s indorse its strong potential to continue to do well.ariel. Different line of products are offering customers to choose according to their gender.lifebuoy.Lux.personality.clinic plus.This company project has demonstrated “HINDUSTAN UNILEVER’S MARKETING STRATEGIES AND POLICIES” that has proved to be extensive through. and of great benefit to the company in furthering its competitive advantage. SUGGESTIONS 77 .
They need to promote their companies name along with the brand name. HUL They need to enter into lower segments of detergent. P&G P&G need to make their product affordable in Indian market so as to get quantity of sale benefit P&G should enter into lower and product which has high potential with reference to Indian market segment They need to promote their product Ariel which is loosing market share in its brands. They need to take care regarding the competition with in its own with the brand name. They need to bring more awareness of the companies name along 78 .
79 .LIMITATIONS While undertaking my study I was encountered with some limitations: Limited time was provided to complete the study. Cost involved in collecting the data was high. To fix an appointment with the dealers was also very difficult task and even after that many time people was not turn up for the appointment.
Prentice. Research Methodology. . 2001 Page 365. Marketing Management. 4th Edition 2002 Page 135. Research Methodology. Thakur Devendra. Ltd. 10th Edition. 2005 Page 85.R.. . 80 . Kottler Philip. Deep & Deep Publication Pvt. Ltd.BIBLIOGRAPHY BOOKS: • • • Kothari C.Hall of India Pvt.
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