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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.
estimates. Jerome McCarthy divided marketing into four general sets of activities. place etc… • Market information: The much desired success of marketing depends on correct and timely decisions. have passed into the language. especially advertising and branding. "marketing" is the promotion of products. However. regarding the market • Standardization: Standardization helps on tackle certain major problems of marketing. opinion. 7P’s of Marketing: In popular usage. It makes the exchange process smooth and acts as lubricating oil to the wheel of marketing. E. for specific customers. Products are often developed to meet the desires of groups of customers or even. • Financing: Finance is the base for all marketing activities. It includes all facts. in professional usage the term has a wider meaning which recognizes that marketing is customer centered. views. in some cases. the Four Ps. His typology has become so universally recognized that his four activity sets. These decisions are based on market information. It is related with the division of commodities into distinct groups standardization involves establishment of certain criteria to which the goods must confirm.3. • 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. Facilitating Functions These are the function that facilitates the process of exchange. 5 .
if the customers are informed in hand about the services and many such things. and how it relates to the end-user's needs and wants. publicity. This fourth P has also sometimes been called Place. It is essential for everyone to realize that the reputation of the brand that you are involved with is in the people's hands.brochures. time. For example. and personal selling. pamphlets etc serve this purpose Physical distribution refers to how the product gets to the customer. point of sale placement or retailing. sales promotion. employees.The four Ps are: • Product: The Product management and Product marketing aspects of marketing deal with the specifications of the actual goods or services. • People: People refer to the customers. including discounts. for example. and refers to the various methods of promoting the product. brand. management and everybody else involved in it. referring to the channel by which a 6 . e.it can simply be what is exchanged for the product or service. • Pricing: This refers to the process of setting a price for a product. • Physical (Evidence): It refers to the experience of using a product or service. • 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. if they are provided in time. or attention. or company.g. it is essential that you help him see what he is buying or not. • Promotion: This includes advertising. When a service goes out to the customer. The price need not be monetary .
business people). is that it unconsciously emphasizes the inside–out view (looking from the company outwards). having made this important caveat. as well as a framework within which these can be used. A marketer can use these variables to craft a marketing plan. etc. in Riding the Waves of Change (Jossey-Bass. Industrial products.product or service is sold (e. retail). These four elements are often referred to as the marketing mix. 1988). adds "Perhaps the most significant criticism of the 4 Ps approach. which you should be aware of. Industrial or B2B marketing must account for the long term contractual agreements that are typical in supply chain transactions. which geographic region or industry. high value consumer products require adjustments to this model. As a counter to this.g. Relationship marketing attempts to do this by looking at marketing from a long term relationship perspective rather than individual transactions. families. Even so. the 4 Ps offer a memorable and quite workable guide to the major categories of marketing activity. Services marketing must account for the unique nature of services. Evolution of Marketing: Marketing has evolved from the time man existed on earth. The four Ps model is most useful when marketing low value consumer products. services. Morgan. Following are the phases of development of marketing 7 . online vs. whereas the essence of marketing should be the outside–in approach". to which segment (young adults.
8 . The selling activity becomes the dominating factor without any efforts for the satisfaction of the consumer needs. 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. instead of buying concerned with customer preference concentrating on the mass production of goods for the purchase of profit. 1 Barter system: The goods are exchanged against goods without any other medium of exchange like money. 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.
a badlymade commercial. social welfare becomes the added dimension to the companies. at least. promotion and distribution.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. rural marketing in India is still about a van campaign. it is heartening to note the increasing awareness of the importance of rural markets . 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. "rural" means different things to different people: from 500. This is grossly inadequate to cover the huge potential for different products in rural markets. Still. Thus. MARKETING STRATEGY OF FMCG PRODUCTS: Barring a few. Management orientation: The marketing function assumes the managerial role to co-ordinate all the interacting business with the objectives of planning. According to estimates by the Rural Marketing Agencies Association of India. of companies wanting to move beyond urban boundaries. to less than 50. a few painted walls and the occasional participation in village haats and melas.000 for fast-moving consumer goods.000 crore (Rs 130 billion) allotted to mass media. But then. 9 . Of course.000 people for consumer durables. compared to the over Rs 13.or. Social orientation: The companies are not only cares for consumers but also for social welfare. notable exceptions. the total budget for rural marketing is only about Rs 500 crore (Rs 5 billion).
most importantly. appealing to the local ethos and aspirations of the targeted area. Meera Herbal Powder. Anchor (100 per cent vegetarian toothpaste). the most enduring example of a brand that began as a regional player and is now a giant. Their communication. 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.The TRPs and NRS/IRS data help you determine the efficacy of TV and press marketing. They all started in small. is imperative . And don't forget Nirma. 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. But only consider the huge successes of some regional brands. People power Total commitment from top leadership. their policies were flexible and they could adopt to fast changing marketing situations. touched a chord in the target audience. Ghadi detergent powder and Power soap are proof that regional brands can become brands to reckon with. which are giving the multinationals a run for their money. be it a simple radio spot or a wall painting or a theatre film. keeping in mind that rural marketing is a long-term relationship. concentrated markets. What should companies do to step up their payback from rural marketing efforts? Here are some steps that should help. especially in the FMCG sector. 10 . Fairever Cream and so on). And. Companies like Cavin Kare (Chik Shampoo. But even more important is the need for a dedicated task force.the successes of Hindustan Lever [ Get Quote ] and ITC are proof of this statement.
in keeping with their companies' policy of shifting and promoting people. Many of these are students from small towns. Recently. And send them out in the field only after thorough training. Pay them well remember. 11 . until the completion of a specific task.Rural marketing efforts need special mindsets. we were involved with two big clients. The best bet is to recruit students from specialised institutes such as the Indian Institute of Rural Management. the fate of many rural marketing initiatives in the country. In both cases. or at least. 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. management graduates who have studied the subject as an elective.. which many of the urban-oriented management graduates who are at the helm of affairs at most organisations do not possess.. were shifted out midway. people with fire in their bellies who want to prove themselves in big companies and have no issues about working in smaller markets.and discuss the path their careers are likely to take in the organisation. The teams that succeeded felt no ownership of the campaigns they had not initiated. you get only monkeys . the teams that briefed us in the initial stages and participated enthusiastically in the campaign. you pay peanuts. Ensure the consistency of the team involved in any project. What started as a great rural marketing initiative has been relegated to the dustbin.
is a must. There is very little effort to tailor whatever communication is made in such efforts. 12 . Know your customers A good place to begin is studying the mindset of your customers. 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. All too often. clients insist their knowledge of their customers (based on studies of urban India) is enough on which to base an action plan. so you can create a customised plan of action. aspirations and fears of rural customers.Goals are good Early on in the campaign. with regard to products and brands. with both short term and long term goals. Most of them have previously appointed vendors who implement the company's ideas blindly. is very different from their urban counterparts. Our experience shows that the attitudes. If you are interested in the second alternative. 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. define your objective: is it a tactical effort to achieve increased sales in specific areas during a specific time. a comprehensive brand building strategy in rural India. to suit the local audience or fit it with the overall campaign efforts in the mass media. be they van campaigns or below-the-line activities.
000 crore (Rs 100 billion) to spurious products. The consumer demands the product from the local shopkeeper. mostly sold through such local haats and bazaars. pressure cookers with two handles and a radio with key-winding mechanism are all the result of research. at least keeping in mind the present goals of marketing companies in rural India. But it's not really as nightmarish as it is made out to be. Ensure availability Most anecdotes about rural marketing centre on the distribution aspect . we recently conducted a survey among some haats in Tamil Nadu. While haats offer opportunities to target consumers from several villages at one place. most of them without motorable roads. How does that happen? It's a direct result of rising aspirations. We've all heard about the shampoo sachets that are available in even the smallest villages. More and more companies turn to the local haats to sell their products. It is estimated that FMCG companies lost more than Rs 10. since they can't afford the real thing. The refrigerator with standby power for 12 hours.the humongous task of physically reaching your product to over 600.Research can give you invaluable ideas for new product development as well as new methods of reaching your target audience.000 villages. and to that extent make your effort cost-effective. ensure that the people who patronise these haats are the kind who will buy your brand. 13 . For instance. The haatswere popular with the poorest agricultural labourers who consciously buy the duplicate. fuelled by television commercials. who then buys the products from the nearest feeder markets. spurious products that are sold in these bazaars. with some interesting results.
000. if your products are in towns with populations of 50. now is focused on product innovation.” he said.” insists Sudhanshu Vats. MARKETING STRATEGY ADOPTED BY HUL “Price cut or hike is not a long-term growth strategy. home care. is now passe. Studies also indicate that rural consumers prefer to shop for durables such as televisions.000.Which means if you can ensure distribution to the feeder markets in towns or villages with populations of 10-15. So. 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.” 14 . category head. “Our strategy for growth. automobiles and appliances in the nearest big town or city. This comes even as Unilever is scouting for a potential buyer for its laundry business in the US. in fact. you're closer to the rural consumer than you would have thought.” “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.” says Vats. you've already taken the first step towards reaching your target customer. Pricing. “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.
” says Unmesh Sharma. the Ahmedabad-based manufacturer. up to a 7. however.908 crore in 2006 and rose 8. HUL doesn’t report its laundry revenues separately but puts them under the soaps and detergent category.6% share. According to Vats.5% in the same period last year. an analyst at Macquarie Securities here. the increase was not at the expense of price war with its multinational rival Procter & Gamble Co. the industry is stabilizing. “Laundry has been an attractive segment in the past and is likely to keep growing in the near future.4% over 2005. a value brand that.7% percentage points to 13. P&G also gained 0. HUL’s soaps and detergents segment contributed around Rs5.HUL’s market share in the laundry segment grew to around 37.5%. according to Vats contributes around 50% of HUL’s laundry segment revenues. The recent price war between companies led to erosion in their profitability but now. this time. In 2006.596 crore to the company’s total sales of Rs12. 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. with a total share of about 18%. increased its market share by 2 percentage points in the same period. According to ACNielsen.8% in the quarter ended June from 35. saw its market share dip by 1. Wheel. according the market research firm ACNielsen. the laundry industry in India was worth Rs7. Nirma Ltd.103 crore. However. 15 .5 percentage points.
“Some of HUL’s recent moves. such as promotional campaigns and advertising. people want to use better and branded products. “Still. with premium quality of clothes.“Consumers today are buying more clothes.” says Macquarie’s Sharma. Also.” Still. it is too early to say what result their new strategies will yield.” OBJECTIVE OF THE STUDY 16 . seem right. analysts remain cautious.” says Vats. “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 .
It would help to analyze the current position of HUL and then to sector marketing channels for the same.This project is applicable on the on the area of FMCG. COMPANY PROFILE 18 . This is widely awaited. This study would be helping HUL to frame its different promotion schemes. in order to frame out marketing strategies for different production this sector. IMPORTANCE To will help in identifying the product of HUL in FMCG sector.
The company’s history dates back to 1931 when Unilever set up its first Indian subsidiary. The company focuses on efficient delivery to consumers with an improved supply chain. In addition to FMCG products it is the country's biggest exporter of tea. 2007 the company has changed the name to Hindustan Unilever Limited. and is also one of the country’s top five exporters. Hindustan Unilever Ltd (HUL) has grown from strength to strength with new technologies being introduced to make the HLL consumer goods business. It is generally acknowledged 19 . Hindustan Unilever Limited (HUL). It is the country's biggest consumer goods company.1 FMCG is able to share with their market insights based upon unparalleled breath of consumer goods experience. These three companies merged to form Hindustan Lever Limited in November 1956. one of the most efficient in the world. HUL inhabits virtually every sector of the consumer goods market. is a fast moving consumer goods (FMCG) company based in India. The Hindustan Unilever Ltd (HLL) is India’s no. Effective July 19. brand building initiatives and innovation. including several not occupied by Unilever in other markets such as preserves and bakery products. Hindustan Unilever is Unilever's main operating business in India. and far and away the leading advertiser. a subsidiary of Unilever.The Hindustan Unilever Ltd’s(HUL) Inc has taken the opportunity to offer us a broader view of FMCG category. Hindustan Vanaspati Manufacturing Company. followed by Lever Brothers India Limited (1933) and United Traders Limited (1935). which has helped the company to sustain its leadership position in the overall FMCG category in India.
000 suppliers & associates 75 Manufacturing Locations 45 C&FAs. may see global revenue growth slow in 2010 as Procter & Gamble Co. Unilever's overall sales growth will slow to 4. helping offset 1. 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.Now Cincinnati.200 managers 2.care products after nearly halving the local prices of Ariel and Tide detergents in 2004. which sells soap to more than 500 million Indians. Hindustan Unilever – A 75 Year Commitment 15. according to the median of five analysts in a Bloomberg survey. Asia and Africa.000 Stockists Total Coverage 6.to be one of India's best-run businesses. prior to restructuring.3 percent in 2007. step up marketing in Asia's third-biggest economy.3 percent in 2007. will see their share of the company's growth fall to 2 percent in 2010 from 3.9 percent growth in Europe and 4. although performance slowed dramatically between 2000 and 2004.2 percent in North and South America. Unilever. Revenue from the two continents rose 11. 4. and ITC Ltd. which make up about a third of Unilever's worldwide sales.9 percent in 2010 from an estimated 5.4 percent in the first nine months of last year.based Procter & Gamble is stocking Indian stores with Olay skin. according to Brusselsbased brokerage Petercam SA.3 Mln Outlets 20 .000 employees 1.
Lipton (1972) and Pond’s (1986). • In 1993. Lakme Limited sold its brands to HUL and divested its 50 per cent stake in the joint venture to the FMCG giant. Lakme Limited. HUL and yet another Tata company. Direct Coverage 1 Mln outlets Population of INDIA: 1027 Mln 5. Unilever set up its first Indian subsidiary.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. followed by Lever Brothers India Limited (1933) and United Traders Limited (1935). Lakme Lever Limited. • Subsequently in 1998. Vanaspati was launched in 1918 and Dalda came to the market in 1937.38. • In 1931. These included Brooke Bond (1984). • A number of prominent companies came into the HUL fold as result of Unilever’s international acquisitions. This was followed by brands like Pears and Vim.000 Villages 5.5 Mln outlets 6. formed a 50:50 joint venture. Hindustan Vanaspati Manufacturing Company. Tata Oil Mills Company (TOMCO) merged with HUL.545 Towns 2. These three companies merged to form HUL in November 1956. 21 . Two years later.
Kimberly-Clark Lever Ltd.350 managers. HUL picked up 74 per cent of the equity of Modern Foods from the Indian government. which markets Huggies diapers and Kotex sanitary pads. Nepal Lever Limited (NLL). including over 1. • HUL has also set up a subsidiary in Nepal. employs 36. In a historic step.• HUL formed a 50:50 joint venture with the US-based Kimberly Clark Corporation in 1994. FMCG major Hindustan Unilever Limited (HUL). and its factory represents the largest manufacturing investment in the Himalayan kingdom. formerly known as Hindustan Lever Limited. It is one of the earliest MNCs to have entered India 22 . HUL acquired the government s remaining stake in Modern Foods. • • In 2002.000 people.
2 23 .ORGANIZATIONAL STRUCTURE Managing Direc tor General Mana ger Vice President Marketing Manufacturin Sales g Finance Distribution FIG.
which incorporates latest technology in all its operations.soaps.and about 250 million rural consumer.000 redistribution stockiest. The mission that inspires HUL's over 15. Brooke Bond. Wheel.55% of the equity. coffee. It is a mission HUL shares with its parent company. and personal care with brands that help people feel good. The operations involve over 2. HUL has traditionally been a company. including over 1. HUL is also one of the country's largest exporters. Surf Excel.10. Lakme. hygiene. HUL's distribution network. covering 6. Kwality Wall's – are household names across the country and span many categories .000 suppliers and associates. Lux. detergents." HUL meets everyday needs for nutrition. Kissan.300 managers. it has been recognised as a Golden Super Star Trading House by the Government of India. The Hindustan Unilever Research Centre (HLRC) was set up in 1958. They are manufactured over 40 factories across India. Fair & Lovely. Pond's. is to "add vitality to life. They endow the company with a scale of combined volumes of about 4 million tonnes and sales of Rs. The rest of the shareholding is distributed among 380. Sunsilk. Rin.PRESENT STATUS 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. look good and get more out of life. tea. Clinic. comprising about 4. personal products.like Lifebuoy.000 individual shareholders and financial institutions.000crore. Pepsodent. HUL's brands . Close-up. Knorr-Annapurna. branded staples. and now has 24 . ice cream and culinary products. Unilever.000 employees. which holds 51.3 million retail outlets reaching the entire urban population .
is now passe.8% in the quarter ended June from 35.” HUL’s market share in the laundry segment grew to around 37.6% share.5 percentage points. “Our strategy for growth. this time. now is focused on product innovation.facilities in Mumbai and Bangalore. Pricing. P&G also gained 0. is now working on a new growth strategy for its laundry business. Nirma Ltd. “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. the 25 . according the market research firm ACNielsen.5% in the same period last year. “Price cut or hike is not a long-term growth strategy. HUL’S NEW GROWTH STRATEGY After having fought a bitter price battle for market share with its rivals. in fact.” “We have done key innovations across the product portfolio and it is working for us. many with post-doctoral experience acquired in the US and Europe. Indian subsidiary of the Anglo-Dutch consumer goods company Unilever Plc. new consumer and retail trends and aggressive marketing and promotions. Hindustan Unilever Ltd (HUL). the increase was not at the expense of price war with its multinational rival Procter & Gamble Co. up to a 7. HLRC and the Global Technology Centres in India have over 200 highly qualified scientists and technologists.” insists Sudhanshu Vats. HUL says it is quite upbeat about the segment and says the laundry segment is one of its “key growth areas.” he said. home care. However. This comes even as Unilever is scouting for a potential buyer for its laundry business in the US.” says Vats. category head.
5%. such as promotional campaigns and advertising. “Consumers today are buying more clothes. the laundry industry in India was worth Rs7. it is too early to say what result their new strategies will yield. saw its market share dip by 1. however.” says Unmesh Sharma. a value brand that. “Some of HUL’s recent moves. Also. the industry is stabilizing. increased its market share by 2 percentage points in the same period. HUL doesn’t report its laundry revenues separately but puts them under the soaps and detergent category.” says Vats.4% over 2005.103 crore. seem right. “Trends suggest that the usage of detergents has gone up as a result. analysts remain cautious. “Still.596 crore to the company’s total sales of Rs12. with premium quality of clothes.908 crore in 2006 and rose 8.Ahmedabad-based manufacturer. people want to use better and branded products.” Still. Wheel. an analyst at Macquarie Securities here. 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. HUL’s soaps and detergents segment contributed around Rs5.” says Macquarie’s Sharma. According to Vats. In 2006. according to Vats contributes around 50% of HUL’s laundry segment revenues. According to ACNielsen.7% percentage points to 13. with a total share of about 18%. “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.” 26 .
Pond’s and Vaseline • Hair care: Sunsilk and Clinic • Oral care: Pepsodent and Close up • Deodorants: 27 . Breeze. Hindustan Unilever Ltd(HUL) offer such product. Rin and Wheel • Skin care: Fair & Lovely. Liril. Pears and Rexona • Laundry items: Surf Excel. Hamam. But delight dazzles the average company will compete for customer by conforming to her expectation consistently. delivering to her door step additional benefits which she would never have imagined possible. Dove. But the winner will surpass them by constantly exceeding her expectation. Lifebuoy.FIVE P’S OF MARKETING Product Satisfaction suffices. The wide variety products offered by the company include: The company’s popular product’s include: • Bathing soaps: Lux.
So every customer segment has different price expectation from the product. 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. Second P of marketing is not another name for blindly lowering prices and relying on this strategy alone to increase sales dramatically. Annapurna and Knorr • Ice cream: Kwality Wall’s . Pricing Make no mistake. Therefore 28 . Hindustan Unilever Ltd(HUL) has launched various products which cater to all customer segments.Axe and Rexona • Colour cosmetics: Lakme • Ayurvedic: Ayush • Tea: Brooke Bond and Lipton • Coffee: Bru • Foods: Kissan.
It takes much more time and effort to build. The cardinal task before the Indian market is managing is to shoe-horn its product on retail shelves.000 suppliers and associates. and the marketer who can get to the to the consumer ahead of competition will give a hard – to – overtake lead. swamp prime television with best Ads. Physical Distribution – “Place” BRAND ISN’T THE ONLY ANY MORE . But getting their means managing wildly 29 . covering 6. hire the hottest strategies on the block. In a product and price parity situation.000 redistribution stockists. but the end of it all. and about 250 million rural consumers. 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.maximizing the returns involves identifying right price level for each segment. Marketers and finance manager need a new term to evaluate their business: Distribution Equity. the brand that sells more is the one that reaches the highest number of customers.3 million retail outlets reaching the entire urban population. HUL's distribution network. distribution equity is much together to erode. The fundamental axiom of Indian consumer market is this: You can set up a state-of –the-art manufacturing facility. comprising about 4. Buyers are paying for distribution equity not brand equity and market shares. India – The operations involve over 2. you would be know of selling your products. but once built.television has already primed and population for consumption.
it has installed visi colors at several outlets. value system. Hindustan Unilever Ltd(HUL) marketing costs. Promotion If an advertisement is to communicate effectively. Hindustan Unilever Ltd(HUL) distributes the product in the manner stated above. The company is looking to reduce this parity level. they believe that selling FMCG is it like selling soft drinks. at 18% of total costs. The other reason is arch rival Procter & Gamble Co. Own distribution network consist of clearing and forwarding (C&F) agents & distribution stockiest. Once the stock product reaches retailers. This network of distribution can either contact wholesalers and which in turn retailers or the distributors can contact to the retailers directly. 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. language. is much higher than Procter & Gamble Co. the prospective customers can have access to the product. At Hindustan Unilever Ltd(HUL). and be prepared too take step toward the sender. reaches more than a million retailers. transport and communication network. life style. To address the issue of product stability. the receiver must at least half want it to. Looking at the low penetration of few products. Hindustan Unilever Ltd(HUL) is also attempting to improve the distribution quality. Hindustan Unilever Ltd(HUL) distribution network has expanded. Beside use of improved logistics. a distribution expansion would itself being incremental volume. And your brand equity isn’t going to help when it comes to tackling these issues.different terrains-climate. This increase in distribution is going to be accompanied by reduction in channel costs. Effective advertising is rarely hectoring or loudly 30 .
that produced just the value vacuum that Hindustan Unilever Ltd(HUL) was looking to fill. pleasure – seeking child within himself – a graft these feeling onto the Ad campaign like “hasso to khul k hasso for close up”. unself conscious. • Finding showed that the adults felt too conscious to be seen consuming a product actually meant for children. It often both attracts and generates arm feelings. communication must first ensure exposure. “cream bathing bar for dove soap” and daag ache hai for surf excel” have been sure shot winner with the audience. 30 catteries in Mumbai have been selected. 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. To penetrate into the inner recesses of her memory. a home water purifier which supplies drinking water without boiling/need of electricity . It has also launched Pureit. More often than not. grab her attention evoke her comprehension. All ICICI’ s ATM a message flashes on the screen as soon as customer insert his ATM card. Thereafter it was the job of the advertising to communicate customer the wonderful feeling that he could experience by re-discoursing the careful.explicit…. a successful campaign has a stronger element of the unexpected a quality that good advertising shares with much worthwhile literature. In cinemas. The strategic response address the emotional appeal of the band to the child within the adult. As well as outdoor and radio ads. Naturally. ad agency contract has created communication for cinemas and even ATM machines for the brand. grab her acceptance and then extract retention competing with thousands of other units of communication trying to do the same. Something familiar is planned for phone-book as well. 31 .
In the 1980s. Ad since any discussion today would be incomplete without mention ‘e’ word. 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. specially targeted during festivals and events such as Valentines day. and luxury goods flourished. today customer uses complicated decision making process to assess the 32 .e. researching and improving the newer products that haven’t taken off. it had also entered into various marketing relationship with other portals. 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. consumers began to demand “more for same”. the management plans to tap this new channel of marketing. supported with high ad – spends that Hindustan Unilever(Ltd) hopes will see it emerges stronger after the current slowdown. and the discounting era grew strong. Today’s consumer demanding “more for less”. www. as well as expand the market. It’s a combination of spiffing up its key brand. etc…. As a variety of competitive claims assails her senses. and the winner will be that super value marketers…. Positioning In the 1970s consumers were ready to pay “more for more”. that the company has launched.com).unilever.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. Beside the company website (i.
which promises a lighter skin tone for many of India’s complexion-conscious consumers.g. Positioning of individual product: 1) Lifebuoy is ‘one of Unilever’s oldest brands’ with more than a hundred-year history. “Lifebuoy has become more than just a red bar of soap – today the brand provides hygiene and health solutions for families 2) Fair & Lovely. gender. a hot-selling “fairness” cream. material states income etc…) The lifestyle of consumers (i.alternative before making a purchase. such as the: Break segment – products which are normally consume as a snatched break and often with tea and coffee. Since Hindustan Unilever(Ltd) is more clearly associated with a particular set of attributes in terms of benefits and prices. the quicker becomes her search process. It targets different segments within the market. each with different needs and wants. as www. their interests and activities) the benefits which consumers look for in a product or on the occasions when the product might be consumed. Hindustan Unilever(Ltd) takes into account all these factors when producing a range of products.unilever.com informs. 33 . HINDUSTAN UNILEVER’S MARKET SEGMENTATION Market place for any product is comprised of many different segments of consumers. Markets segmentation can be defined in a number of ways such as: Demographic variables (e.e. Consumers are groups.
They include product such as close up. Impulse segment – these products are often purchase on impulse. taken home consumed at a later stage. used these and then. 34 . Take home segment – this describes product that are normally purchased in supermarkets.
” HUL’s market share in the laundry segment grew to around 37.” says Vats. category head. Pricing. 35 . HUL doesn’t report its laundry revenues separately but puts them under the soaps and detergent category. now is focused on product innovation.4% over 2005. home care. is now working on a new growth strategy for its laundry business.908 crore in 2006 and rose 8. new consumer and retail trends and aggressive marketing and promotions. In 2006.103 crore. “Our strategy for growth. Hindustan Unilever Ltd (HUL).596 crore to the company’s total sales of Rs12.” he said. This comes even as Unilever is scouting for a potential buyer for its laundry business in the US. is now passe. in fact.” “We have done key innovations across the product portfolio and it is working for us. According to ACNielsen. the laundry industry in India was worth Rs7.” insists Sudhanshu Vats. Indian subsidiary of the Anglo-Dutch consumer goods company Unilever Plc.5% in the same period last year.8% in the quarter ended June from 35.The Real Taste of Rejuvenation After having fought a bitter price battle for market share with its rivals. HUL’s soaps and detergents segment contributed around Rs5. “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. HUL says it is quite upbeat about the segment and says the laundry segment is one of its “key growth areas.
the India hypermarket chain.“Laundry has been an attractive segment in the past and is likely to keep growing in the near future. so the company wants to make sure it’s in with the new marketing crowd. 36 . Baillie. wants to see how his products are stocked. India’s premier consumer-products company. 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. “I can’t imagine any head from Lever House ever visiting other company offices like this. India’s largest retailer and a former manager at Hindustan Unilever. 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. The recent price war between companies led to erosion in their profitability but now. This is quite a change for Hindustan Unilever. Hindustan Unilever has traditionally relied on small traders and mom-and-pop corner stores to retail its products. the industry is stabilizing. the managing director of Hindustan Unilever. It’s primary market research at its most elemental. whose executives used to have emissaries make obeisance at Lever house in downtown Mumbai. and it’s best done incognito. chief executive of innovation and incubation at Pantaloon Retail. That’s how Douglas Baillie likes it. COMPETITIVE STRATEGY As Competition Heats Up. and how shoppers are reacting to competitive brands. But India’s recent retail boom has created large stores and malls. Hence Baillie’s Hypercity visits.” says an amazed Damodar Mall. what consumers are buying.
Finnish handset maker Nokia (NOK) dislodged it as the multinational with the highest revenues in India. These 37 .2% to 24.3%. which is practically synonymous with India.84% now. including the popular Lux. In the last year. Now Hindustan Unilever is under siege from aggressive Indian and foreign competitors such as Procter & Gamble (PG). Hindustan Unilever’s lead in hand soaps.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. and L’Oréal. Nivea. down from 21% a few years ago to just 11. The company. All this has taken a toll on Hindustan Unilever’s operating margins.2% to 54%. is down from 55. sauces and tea. That’s why the company is wooing consumers in big retail stores. and dominates most of those categories. ACNielsen data shows. makes everything from detergents. and shampoos to soups. after ringing up India-based sales of $3. Yet early this year.5 billion. soaps. Hindustan Lever tea brands like Brooke Bond and Lipton have dipped from a combined market share of 29. Favorite detergent brands like Surf Excel and Rin are barely hanging onto their 37% share.
2006. This means that all of Unilever’s brands will be available across global markets. “It is a big game for us.newly affluent shoppers present the best hope for the company’s future in India. became the first foreigner in four decades to head the Indiancompany.5% of India’s total $336 billion retail market. while its subsidiaries will sell the products. According to retail consultant KSA Technopak. not long ago. currently just 3. That dovetails with parent company Unilever’s new global realignment of products. will grow to 28% by 2017.” says D. Hindustan Unilever’s strategy is to market its premium products through the hundreds of megastores springing up across India. Hindustan Unilever’s managers hope their revenues from big retail will increase from 5% today to over 25% in 2012. Sundaram.Parent Unilever will develop the brands and streamline product offerings across the world. when Baillie. organized retail. not a multinational. The takeover of Hindustan Lever by Unilever became evident in March. the crown jewel whose managers had free rein to develop and build brands suitable for the local market. Yet this is still a dramatic change for Hindustan Unilever which. fitting in quite nicely with India’s turn towards more international products being sold in supermarkets. was the most successful and profitable company in the Unilever group. a Zimbabwe-born British national. Hindustan Unilever’s finance director. For many decades most Indians thought Hindustan Lever was a local company. and the cream of India’s management 38 . From Local Player To Multinational Overnight the change sent shock waves through India.
to $274 million in 2004. 2007. 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. where foods bring in half the revenues globally. Nitin Paranjpe.” 39 .5 billion for five years while operating profit plunged 37%. The effect: The company’s sales and operating profits stagnated at $2. Then in February. executive director in charge of the home and personal care business. In India. If India is a great story. the company’s home and personal care businesses account for 80% of revenues and 85% of profits at Hindustan Unilever. Last year operating profits reached $357 million. was rechristened Hindustan Unilever to reflect its parentage. 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. then known as Hindustan Lever. frozen bread—than it has launched. the company. confectionery. And there was some stiff competition from rival Procter & Gamble. Indeed.” He also wants to expand the foods business in conjunction with the parent. But the rich margins of the past have not returned. Baillie first had to sort out some past problems. a 2004 price war with P&G in the detergent business forced Hindustan Unilever to slash prices on its premium brand Surf Excel.graduates made their careers there. thanks to price increases. admits that it’s now “tougher to hold on to market share. it has phased out more food products—wheat flour. Hindustan Unilever executives are realistic about the new era in which it now operates. we aren’t the only ones seeing it. For instance. 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. While the strategy aimed to conserve management energy. while the company’s track record in foods has been dismal.
Tata Tea’s market share increased from 16. compared with the year earlier.7% in March. according to Ali Dibadj. Currently. the world's largest consumer-goods maker. According to ACNielsen. is also making inroads. who rates the stock ``outperform.and Rotterdambased parent. the Tata Group’s beverage company Tata Tea overtook Hindustan Unilever as India’s largest selling tea brand. In June.'' Hindustan Unilever Ltd. 30. Managing Director Percy Siganporia says the gain is “a dream comes true for us. toothpaste and tea in the quarter ended Sept.9% in July. ITC. 52 percent owned by the London.1% to 19.. `Profitable' Cigarettes 40 . It started selling more brands including Fiama Di Wills shampoo and Superia soap last year as the government raised tobacco taxes. will continue to gain share in the next five years in India. the company said. an analyst at Sanford C. while Hindustan Unilever slipped from 26. Its share of the shampoo market declined by more than a percentage point to 47. 80% of Indian shampoo sales come from sachets. the largest Indian cigarette maker and partly owned by British American Tobacco Plc. Tata Tea is exultant.5%.Rivals like P&G and Nivea have also copied Hindustan Unilever’s best innovation: the small shampoo sachets it pioneered in the 1980s. 2006. according to the company. Bernstein in New York. 2007. lost ground in shampoo. which sold for less than 2 cents each and which expanded the market for Hindustan Unilever products among India’s rural masses. to 19. But today even L’Oreal has sachets of its Fructis shampoo. bath soap.7 percent.” FUTURE COMPETITIVE STRATEGY 2010 Expectations P&G.
care portfolio. profitability will continue to be under pressure. bathing soaps and shampoo. The company has a market value of about $11. He expects the stock to drop to 180 rupees ($4. who has an ``underperform'' rating on Hindustan Unilever.8 billion. ``Given the competition. The price of palm oil. 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 . India is Unilever's biggest market in Asia. has surged 70 percent in the past year. It has sold soap in the country since 1888 and controls about half of the sales of products such as skin creams. ``It has the ability to take losses in this segment as long as it grows its sales. generating about 6 percent of annual sales.9 rupees. analyst Unmesh Sharma. an analyst at Angel Broking in Mumbai. used to make soaps and foods.The tobacco maker ``has a very profitable cigarettes business which will help it to invest and expand its personal.'' said Anand Shah.'' Rising prices of raw materials have made it more difficult for consumer-goods makers to pass on higher costs. who has a ``neutral'' rating on the stock.57) in the next year from 190. This strategy will still satisfy investors.'' said Macquarie Securities Ltd.
Grow the bottom line ahead of the top line. Grow ahead of the market by leading market development activities. Leverage positive impact of growing Indian economy on consumer spending. Strong commitment to sustainable development. Competitive Strengths Fig:3.Corporate Social Responsibility-Aiding In The Development Of The Country 42 . Grow a profitable foods and top end business.
Personal Products.Shakti Three shakti initiatives • • • Shakti entrepreneur. Shakti vani: one-to-many communication for category growth ishakti: customized interaction with remote consumers. The Group's principal activities are to manufacture and market consumer products. foods and beverages. The Group operates through seven segments: Soaps and Detergents. 43 . Exports. Impact of community • • business and social impact can go together. Ice Creams and Other. Home and personal care products consists of personal and fabric wash. HINDUSTAN UNILEVER LIMITED . partnerships with diverse stakeholders. Beverages.25000 villages. Foods. currently~44000 women cover 1. The products include home and personal care products. industrial and agricultural products.COMPARATIVE BUSINESS ANALYSIS Hindustan Unilever Limited Formerly known as Hindustan Lever Limited.
atta and rawa. bulk chemicals. bakery fats.employment grants-Rs 40000cr 44 . The company focuses on efficient delivery to consumers with an improved supply chain. seeds.household. deodorants. Government grants and subsidies. cooking fats and oils. yeast. thermometers and plantations. rice. leather. processed-tri-glycerides and agri commodities. skin and hair care. which has helped the company to sustain its leadership position in the overall FMCG category in India. tomato products. perfumery. Hindustan Unilever markets consumer goods throughout India.however rural income are growing faster with 70% population here. The company faces competition from international. animal feeds. marine products and mushrooms.income growth is crucial. fruit and vegetable products.THE BIG INDIAN ROMANCE Rural population larger than europe(800 million) Low growth in agriculture. colour cosmetics and baby care. coffee. RURAL. Structural changes in the economy which are affecting this are: Disintermediation in the agricultural market price discovery mechanism has benefited farmers. This analysis compares Hindustan Unilever Limited with three other companies in closely related industry sectors. oral care. Industrial and agricultural products includes specialty chemicals. fertilisers. Foods and beverages includes tea. Its brands are spread across 20 consumer product categories. footwear and carpets. brand building initiatives and innovation. local and regional players. salt. plant growth nutrients. ice creams.
and relaunched Lifebuoy. the authors of Marketing that Works. The company basically worked with “one agency.” 45 . Howard L. 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.” reads an observation in a chapter titled ‘entrepreneurial advertising that works’. according to the authors. and screened some options to roll out one option that everyone was happy with. A better strategy.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. retargeted.” write Leonard M. Morgan and Shellye Archambeau. Lodish. “HUL missed an opportunity for increased marketing productivity when they repositioned. Ogilvy and Mather (O&M). Though the company was ‘extremely innovative’ the way it handled the rural communications plan was very traditional. they add.
” reads a quote in the book from C. “or the villagers themselves might also be able to generate very effective communications vehicles. a few days ago. Mr D. Prahalad’s The Fortune at the Bottom of the Pyramid . and thus has increased sales of its low-cost. through its innovative communication campaigns. 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 . said: “We have been phasing our advertising spends depending on the launches and relaunches of brands. in a paragraph on innovation.K. mass-market soap. has been able to link the use of soap to a promise of health as a means of creating behavioural change.” The authors are of the view that government workers who have been interacting with villagers might have come up with some excellent ideas.” The advertising spends have not been linear for the company. “Differentiating soap products on the platform of health takes advantage of an opening in the competitive landscape for soap. Sundaram. Director (Finance & IT). Lifebuoy is ‘one of Unilever’s oldest brands’ with more than a hundred-year history. The O&M strategy. Prahalad notes.” says the site. as explained by Mr Lodish et al. “Lifebuoy has become more than just a red bar of soap – today the brand provides hygiene and health solutions for families. The company’s advertising and promotional spends during the quarter fell to Rs 336 crore.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. from the earlier Rs 345 crore.Advertising strategy came for mention when the company reported the second quarter results.” So. he added. HUL. HUL. targeted “10.
47 . 2008. many times it is difficult to change the procedures without creating significant political problems. which is one of the many discussed in the book. logistics for merchandising materials and in store execution. The operations will begin with the existing Modern Trade in-store execution team of HUL moving into HUFS.programs. 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. “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.” wonder the authors.” The HUL example. “As a big company. Smollan Holdings is one of the leading ‘in-store execution and field services’ companies internationally. The strategic tie-up aims to build long term capabilities and bring ‘in-store’ execution focus in servicing the Company’s Modern Trade customers.” 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. 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”. 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. It has leading edge capabilities in servicing Modern Trade focused on shelf filling.
Other Acquisition Hindustan Unilever has acquired several Indian FMCG companies so far. has made the brand a winner. The advertising campaign. That has spawned 48 . It has also launched Pureit. a hot-selling “fairness” cream. Dollops ice cream brand from Cadbury India. Hindustan Unilever launched a high-end range of Pond’s skin care and Dove hair care products from Unilever’s international portfolio. Hindustan Unilever Network is the direct selling channel of the company. tone for many of India’s complexion-conscious consumers. Lakme cosmetics brands from Tata. Hindustan Unilever is also milking one of its top brands—Fair & Lovely. These premium brands retail not in neighborhood small stores but in supermarkets and hypermarkets. NEW INITIATIVE Bringing High-End Dove To India Baillie is fighting back. which suggests that regular use of the cream helps women gain confidence and makes them eligible for marriage. Over the past six months. which promises a lighter skin. all independent entrepreneurs. where Indian customers love to touch and feel products. a home water purifier which supplies drinking water without boiling/need of electricity. trained and guided by HLN's expert managers and trainers. This includes: • • • • Tata Oil Mills Company Brooke Bond Lipton India Modern Foods It acquired Kissan brand from UB group. It has about 350.000 consultants.
soaps. Shakti.6%. It is also involved in education and rehabilitation of special or underprivileged children. and rural development. But Hindustan Unilever’s brand is still tops. and Baillie is pleased with the modest turnaround. and relief & rehabilitation after the Tsunami caused devastation in South India. Baillie is also getting aggressive on foods. and creating access to relevant information 49 . at one-third the price of established Indian brands such as Aqua guard. consumer analyst at Mumbai brokerage First Global Securities. the company’s sales grew 13%. thereby improving their livelihood and the standard of living in rural communities. the company embarked on an ambitious programme.” He points to the demand for safe drinking water in India. most recent being the village built by HUL in earthquake affected Gujarat. Analysts believe the company’s current strategy of concentrating on premium products and marketing them in the large retail stores is a winning one. which Hindustan Unilever exploited with the launch of water purifier Pureit in 2005. Shakti also includes health and hygiene education through the Shakti Vani Programme. In 2001. 2007. care for the destitute and HIV-positive. HUL is focusing on health & hygiene education. In the quarter ended June. Sumeet Budhraja. focusing on the Knorr brand of soups and curry mixes —ideal for the Indian market. HUL has also responded in case of national calamities / adversities and contributes through various welfare measures. SERVICE TO SOCIETY HUL believes that an organisation's worth is also in the service it renders to the community. HUL is creating micro-enterprise opportunities for rural women. women empowerment. says that Hindustan Unilever “could have addressed a lot more categories. with net profit up 29. but they are more focused and regaining their aggressiveness. and sunblock lotions.a host of competitive fairness creams. and water management. These efforts have delivered some promising results. Through Shakti. Reason enough to keep patrolling those store aisles.
By the end of 2010.000 villages and directly reaching to 150 million rural consumers. touching the lives million people. HUL is also running a rural health programme – Lifebuoy Swasthya Chetana. reaching out to 100.000 women entrepreneurs in its fold. PRODUCT PROFILE HUL’s business activities are divided into four broad areas: Home and personal care 50 . The program now covers 15 states in India and has over 31. it is because of being singleminded in identifying itself with Indian aspirations and needs in every walk of life. of over 600 If Hindustan Unilever straddles the Indian corporate world.000 villages.through the iShakti community portal. The programme endeavours to induce adoption of hygienic practices among rural Indians and aims to bring down the incidence of diarrhoea. The vision is to make a billion Indians feel safe and secure. Shakti aims to have 100.000 Shakti entrepreneurs covering 500. It has already touched 70 million people in approximately 15000 villages of 8 states.
fabric wash. ice creams.personal wash. Pond’s and Vaseline • Hair care: Sunsilk and Clinic • Oral care: Pepsodent and Close up • Deodorants: Axe and Rexona • Colour cosmetics: Lakme • Ayurvedic: 51 . Hamam. Pureit water purifiers. branded staples. Exports • HPC. Breeze. skin care. home care. marine products. Sangam. Ayush ayurvedic products and services. deodorants and talcs. Rin and Wheel • Skin care: Fair & Lovely. colour cosmetic Foods tea. culinary products. oral care. coffee. Lifebuoy. Pears and Rexona • Laundry items: Surf Excel. beverages. Liril. rice Bathing soaps: Lux. hair care. Dove. Modern Foods ranges New Ventures Hindustan Lever Network.
52 . Annapurna and Knorr • Ice cream: Kwality Wall’s .Ayush • Tea: Brooke Bond and Lipton • Coffee: Bru • Foods: Kissan.
They include: Lifebuoy. Rin. Lakme. Clinic. Surf Excel. 53 . Sunsilk.BRANDS HUL s brands are household names across the country. Pond s. Brooke Bond. Kissan. Lux. Knorr-Annapurna and Kwality Walls. Wheel. Closeup. Pepsodent. Fair & Lovely.
making that strategy work – implementing it throughout the organization – is even more difficult (Hrebiniak.TOPIC DETAIL Although formulating a consistent strategy is a difficult task for any management team. 1999b). How can we better understand these issues and their importance for successful strategy implementation? In this article. It is thus not surprising that. According to the White Paper of Strategy Implementation of Chinese Corporations in 2006. significant difficulties usually arise during the subsequent implementation process. 2006). rather than a science. A myriad of factors can potentially affect the process by which strategic plans are turned into organizational action. There are many (soft. It is thus obvious that strategy implementation is a key challenge for today ‟s organizations. according to a survey of 276 senior operating executives in 2004 (Allio. Unlike strategy formulation. The survey reported in that white paper indicates that 83 percent of the surveyed companies failed to implement their strategy smoothly. strategy implementation has become “the most significant management challenge which all kinds of corporations face at the moment”. as Noble (1999b) notes. after a comprehensive strategy or single strategic decision has been formulated. 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. strategy implementation is often seen as something of a craft. we try to respond to this 54 . 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. and its research history has previously been described as fragmented and eclectic (Noble. ranging from the people who communicate or implement the strategy to the systems or mechanisms in place for co-ordination and control. 2005). and only 17 percent felt that they had a consistent strategy implementation process.
focusing on the main results of prior studies. We present a conceptual framework that organizes the current research findings. In the fifth section of the article. As the core of our literature review. The next part of the article. to surface current areas of agreement and disagreement. theoretical bases. In that section we present a discussion of nine major factors that affect strategy implementation. 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.question by analyzing existing research on the factors that influence strategy implementation . Our study also examines the ways in which strategy implementation has been researched so far. The structure of this paper is as follows: First. Section four also contains a review of existing models and frameworks of strategy implementation. contains the actual review of literature. their main results. In the sixth and final section. It will consequently also reveal under-exploited methods or contexts. we will review the 60 identified studies and analyze their research context. the results section compiles nine factors that 55 . Then. section 4. the research methods used as well as the analytical techniques employed. in terms of the applied research methods and the examined strategy contexts. we describe the methodology that we have used to conduct our literature review and define its scope (section 3). We have conducted an analysis in the most widely used literature databases to identify key factors influencing the process of strategy implementation. In this section. we discuss the implications of our findings as well as their limitations. we analyze definitions of strategy implementation and compare them with other synonymous and related terms (in section 2). 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. Examined organizational levels and organizational types are two elements of the research context.
The same holds true for functional strategies: We have found eight studies that focus on the implementation of such strategies. whether it is privately held or state-owned and whether its operating scope is regional or rather multinational. 2007). etc. 4.. 1984. Chimhanzi (2004). the research methods and analytical techniques will be reviewed to see which methods are still underutilized in the context of strategy implementation. corporate-SBU-functional levels. while many examine SBU level strategies (Gupta & Govindarajan. Piercy (1998). whether a study focuses on functional strategies (i. Organizational Levels In the context of strategy implementation research. Noble (1999a).influence strategy implementation success. Schaap. Sashittal & Wilemon (1996). Viseras & Baines & Sweeney (2005). They are: corporate level.e. Nilsson & Rapp. Most of these studies. marketing. Surprisingly few researchers focus on the implementation of corporate level strategies. R&D).1 Research Contexts We classify research contexts into two dimensions: the examined organizational levels and the considered organizational types. 1990. 2005. such as Wernham (1985) and Schmidt & Brauer (2006). Waldersee & Sheather. functional level. Govindarajan. 1989. SBU and functional level.. Olson & Slater & Hult. We then briefly discuss the theoretical bases of the reviewed studies. White. Chimhanzi & Morgan. Roth & Schweiger & Morrison. HR. 1991. 1988. Floyd & Wooldridge. as well as several frameworks or models that aggregate or relate relevant factors to each other. 2006.. Noble & Mokwa (1999). Organizational types refer to the kind of organization that is studied. 1991.). i. Govindarajan & Fisher. 1986. 2005. 1992b.e. Brenes & Mena & Molina. inter-functional levels. focus on marketing strategy (such as Sashittal 56 . SBU-level strategies or corporate strategies. Organizational levels designate the locus of strategizing. Finally. Qi (2005). 1996. i. Skivington & Daft. namely Rapert & Lynch & Suter (1996). however.e. strategic business unit (SBU) level. Govindarajan. operational level and mixed levels (such as corporate and SBU level. 1999. five organizational levels can be distinguished.
Baines and Sweeney‟s study (2005) in the context of manufacturing strategies. the last type. This study focuses on the key success factors in the project management for the implementation of strategic manufacturing initiatives. Krohmer & Workman (2004) point out that market orientation plays a key role for the successful implementation of a PPD (premium product differentiation) strategy. functional and process. Consequently. Homburg. and on two aspects of strategic implementation (stakeholder input and employee empowerment). Okumus (2001). Higgins (2005) even focuses on four types of strategies: corporate. normally cut across functions and are aimed at integrating organizational processes across the organization in order to make them more effective and more efficient. There are some studies which cannot be classified into the above categories. Piercy. Noble & Mokwa. Slater and Olson (2001) analyze marketing‟s contribution to the implementation of business strategy. The only other study of functional strategy implementation that we have been able to identify is Viseras. 1998. we classify them into a group called mixed level studies: Gupta (1987).& Wilemon. This study also emphasizes the relationship between product strategy and several strategic implementation variables. focuses on the implementation of a yield 57 . The mixed studies category also includes articles that focus on the role of project management for strategy implementation. Chimhanzi. 1996. Few studies focus on the actual operational level of strategy implementation. such as Bantel (1997). There are few studies dedicated to the implementation of other functional strategies (this is clearly an area of future research). 1999. Process strategies. business. Bantel (1997) analyzes the effects of two key aspects of product strategy (product leadership and product/market focus) on performance. Homburg & Krohmer & Workman (2004). SBU and functional. Beer & Eisenstat (2000) and Hrebiniak (2006) have carried out research on corporate and SBU-level strategy. Walker and Ruekert (1987) analyze three levels of strategy – corporate. 2004). for example.
We can draw multiple conclusions based on our analysis of the treatment of organizational levels in prior studies of strategy implementation.level (8 articles) and mixed levels (9 articles) have received more attention than the other two levels. future strategy implementation research should pay attention to explicitly indicate the level of analysis. We note that – among the five strategy levels – the SBU-level (14 articles). Finally. Second. corporate (2 articles) and operational (2 articles). another finding revealed that marketing is the prevailing domain. accounting etc. Lehner (2004). we can observe that there are very few studies that have examined the inter-relationships of functional and business strategies. Examples of such ambiguous studies are Bourgeois Ш and Brodwin (1984). 1989). compared with other functional areas (such as manufacturing. Grundy (1998) examines the synergies among project management and strategy implementation and reviews strategy tools that may help in project management. Many studies (25 articles) do not even indicate at which level their discussion of strategy implementation is located. Peng and Litteljohn (2001) investigate three hotel chains implementing a strategic initiative on yield management. and Schaap (2006). 2001). which seems a highly relevant area to improve our understanding of strategy 58 . R&D.). 1987. Higgins (2005). Nutt (1986.management project and a key client management project in two hotels. Two calls to action result from these findings. In terms of promising future research on strategy implementation. Another study has examined the mutual influence of functional departments ‟ relationships on strategies. HR. One such study focuses on marketing‟s contribution to the implementation of business strategy (Slater & Olson. First. there are many studies that are not sufficiently explicit regarding their scope concerning strategic 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. the functional. Within the functional level. Noble (1999b). Harrington (2006).
the subjects of strategy implementation studies are not only state-owned corporations. Noble ‟s (1999a) study spans several types of organizations – a national airline. Dell. However.implementation: Chimhanzi (2004) has examined the impact of marketing and HR interactions on marketing strategy implementation. Forman and Argenti (2005) select five multinational companies as samples. there have been no studies comparing similarities and differences of strategy implementation among private corporations and state-owned corporations. 1993) study global strategy. Qi (2005) issues questionnaires to the head offices of 800 private companies in the UK. not only local firms but also multinational firms. or among local firms and multinational firms. while others are multinational corporations. but mostly private corporations. which are members of the American Hospital Association (AHA). Okumus (2001) investigates two international hotel groups. Organizational types Organizational types. a provider of emergency fire and medical services. As far as ownership forms are concerned. Johnson & Johnson. Roth & Schweiger & Morrison (1991) and Kim & Mauborgne (1991. Alexander (1985) surveys 93 private sector firms through a questionnaire. as stated earlier. We thus do not know which specific differences exist regarding strategy implementation in these various forms organizations. and a leading firm in the imaging technology industry. Some of the researched companies focus on their domestic markets. 59 . namely Accenture. British Telecom (BT). In conclusion. nationalized company. for example. local or multinational. Rapert. state-owned and privately held companies. strategy implementation studies discuss both. Wernham (1985). This clearly is another interesting avenue for future research.K. Velliquette and Garretson ‟s (2002) study on strategy implementation takes a nationwide sample of 1000 CEOs of general service hospitals. a leading packaged goods company. Sears. FedEx. refer to the characteristics of organizations: if they are private or state-owned. a major financial services firm. explores the reality of strategy implementation in a U.
dairy products. Pepsi and Believe. cosmetics. bulbs. household care (fabric wash and household cleaners). teeth cleaning products. chocolates. The margin of profit on every individual FMCG product is less. toiletries). detergents. Kleenex. although these are often categorized separately. bakery products) and tobacco. soft drinks. Examples of FMCG brands are Coca-Cola. paper products and plastic goods. soaps. shaving products. consumer electronics and packaged food products and drinks. other non-durables such as glassware. hair care. soaps. Three of the largest and best known examples of Fast Moving Consumer Goods companies are Nestlé. Fast Moving Consumer Goods is a classification that refers to a wide range of frequently purchased consumer products including: toiletries. The category may include pharmaceuticals. However the huge number of goods sold is what makes the difference. and chocolate bars. staples. ‘Fast Moving’ is in opposition to consumer durables such as kitchen appliances that are generally replaced less than once a year. tissue paper. beverages (health beverages. 60 . cosmetics. such as buckets. cereals. Examples of FMCGs are soft drinks. The FMCG sector represents consumer goods required for daily or frequent use The main segments of this sector are personal care (oral care. The term Consumer Packaged Goods (CPG) is used interchangeably with Fast Moving Consumer Goods (FMCG).INDUSTRY PROFILE Fast Moving Consumer Goods(FMCG) FMCG are products that have a quick shelf turnover. Hence profit in FMCG goods always translates to number of goods sold. branded and packaged food. at relatively low cost and don't require a lot of thought. Unilever and Procter & Gamble. time and financial investment to purchase. batteries.
The lower-middle income group accounts for over 60% of the sector's sales. able to charge a premium for their products. the margins were also on the higher side. in reality. In this context. 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. margins have been compromised. much of which is disbursed in small towns and rural India. Unlike the perception that the FMCG sector is a producer of luxury items targeted at the elite. 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. This industry has witnessed strong growth in the past decade. the sector meets the every day needs of the masses. But in the last ten years. therefore. In the process. the boom has also been fuelled by the reduction in excise duties. the unorganized and regional players have witnessed erosion in market share. increase in the disposable incomes and altered lifestyle. As a result.The Indian FMCG sector is an important contributor to the country's GDP. Furthermore. The industry also creates employment for 3 m people in downstream activities. It is the fourth largest sector in the economy and is responsible for 5% of the total factory employment in India. 61 . Rural markets account for 56% of the total domestic FMCG demand. many of the smaller rung Indian FMCG companies have gained in scale. 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). Colgate. more so in the last six years (FMCG sector witnessed decline in demand). HLL. urbanization. This has been due to liberalization. FMCG companies have been forced to fight for a market share. History of FMCG in India In India. These companies were. companies like ITC.
the industry could double in size by 2010). these are still at a relatively nascent stage. Shopper’s Stop and Shoprite. organized retailing results in discounted prices. Currently. companies were unable to grow faster. 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. Aspiration levels in this age group have been fuelled by greater media exposure. unleashing a latent demand with more money and a new mindset. forced-buying by offering many choices and also opens up new avenues for growth for the FMCG sector. It has been ranked second in a Global Retail Development Index of 30 developing countries drawn up by A T Kearney. Rapid urbanization. Although companies like HLL and ITC have dedicated initiatives targeted at the rural market. industry estimates suggest that the industry could triple in value by 2015 (by some estimates. Given the aggressive expansion plans of players like Pantaloon.Current Scenario The growth potential for FMCG companies looks promising over the long. almost 40% and 8% was accounted by groceries and personal care products respectively. 62 . In this backdrop. Due to infrastructure constraints (this influences the cost-effectiveness of the supply chain). As per the Consumer Survey by KSA. In our view.Techno Park. organized retailing accounts for just 3% of total retail sales and is likely to touch 10% over the next 3-5 years. The bottlenecks of the conventional distribution system are likely to be removed once organized retailing gains in scale.term horizon. In our view. increased literacy and rising per capita income are the key growth drivers for the sector. we are confident that the FMCG sector has a bright future India is rated as the fifth most attractive emerging retail market. testing times for the FMCG sector are over and driving rural penetration will be the key going forward. as the per-capita consumption of almost all products in the country is amongst the lowest in the world. Trent. of the total consumption expenditure.
6 billion. The Indian FMCG sector is the fourth largest sector in the economy with a total market size in excess of US$ 13. Kearney has estimated India's total retail market at $202. too. Moreover.4 billion in 2015. hair wash etc in India is low indicating the untapped market potential. particularly the middle class and the rural segments. analysts feel. The growth of imports constitutes another problem area and while so far imports in this sector have 63 .6 billion in 2003 to US$ 33. The FMCG market is set to treble from US$ 11. The outlook in the short term does not appear to be very positive for the sector. toothpaste.1 billion. Burgeoning Indian population. 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. 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. presents an opportunity to makers of branded products to convert consumers to branded products. Poor monsoon in some states. Moreover. 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. skin care. The FMCG sector has traditionally grown at a very fast rate and has generally out performed the rest of the industry.T.000 crore only. 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.A. Penetration level as well as per capita consumption in most product categories like jams. Over the last one year. lower volume of higher value added products reduce scope for export to developing countries. Small-scale sector reservations limit ability to invest in technology and quality up gradation to achieve economies of scale. is unlikely to help matters. is expected to grow at a compounded 30 per cent over the next five years. There is significant potential for increasing exports but there are certain factors inhibiting this.
The high burden of local taxes is another reason attributed for the slowdown in the industry At the same time. Give the large market and the requirement for continuous repurchase of these products. This should yield positive results for them 64 .been confined to the premium segment. the long term outlook for revenue growth is positive. most of the companies are concentrating on cost reduction and supply chain management. FMCG companies should continue to do well in the long run. Moreover. FMCG companies estimate they have already cornered a four to six per cent market share.
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 . used as a guide in collecting and analyzing data.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. Casual Research Design:. Descriptive Research Design:.RESEARCH METHODOLOGY Research Design: Research design is simply the framework or plan for a study.The Descriptive Research Design Study is typically concerned with determining the frequency with which something occurs or the relationship between two variables. There are three types of Research Design:Types of Research: Exploratory Research Design:. For the study.
Types of NonProbability Sampling Convenience Judgement Quota 66 . Researcher must select a sample design. 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. That is each member does not have a known non zero chance of being included. 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. Probability Sampling is of following types: Simple Random Systematic Cluster Stratified Double Non-Probability Sampling: Non probability sampling is non-random and subjective.
journals. In addition to this internet access will make the study more effective and meaningful.Researcher selects the sample as per their convenience. 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: . Magazines.Secondary data is collected from published sources like Journals. various newspapers and published books. newspaper Employment exchange The secondary data would be collected from financial statement. 67 . journal of national repute. For this research work I have chosen Non. 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.
As a result of this shift in spending patterns. Or a consumer buying Surf Excel for her clothes mixed it with a cheaper powder. It is important to understand why this happened. The home ownership market grew exponentially asthe average age of a home loan borrower dropped from 50 in 1999 to 30 in 2004.The rapid opening up of the economy resulted in many new avenues of expenditurefor the consumer’s growing income.Mobile phone ownership and usage exploded due to its amazing lifestyle andconvenience be nefits as well as lower prices. Entertainment. But they did downtradeto lower priced substitutes from higher quality brands.The lure of new avenues of expenditure in products and services led to consumersrestricting their expanse on FMCG. in 2000. 68 . The rest came from severalnon-FMCG businesses which were not profitable.DATA ANALYSIS & INTERPRETATIONS Through the nineties. a consumer buying six tablets of Lux in a month went to buying three of Lux and three cheaper brands. 2000.Suddenly. 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. It is not that they bathed less often or brushedtheir teeth less often or indeed washed their clothes less often. FMCG market growth stalled and then declined for the next four years. 75% of our sales came from FMCG businesses. Leisure and Travelsectors also boomed. and did not offer prospects for long-term leadership. After all. For example. one could drive out of a car showroom in a Maruti 800 with adown payment of only Rs. the FMCG markets grew at almost 15% per annum in value. A sharp drop in interest rates from 18% to 8%led to explosive demand for consumer durables like white goods. two-wheelers andautomobiles.
with higher levels of resource concentration. These will be their main engines of growth. The Foods business will now invest for growth through relevant innovation. Over the last few years they have focused on putting in place the building blocks of a strong Foods business. be ittechnology. Theyrecognized that changing food habits would require considerable investment. They have alsocleared the supply chain of all old stock and geared up for fresh availability on shelf. both interms of resource and focus. there is enormous growth potential in leading the evolution of consumers to branded and processed foods. withsales of Rs. Historically their Foods businesswas fragmented and lacked scale.Besides. whichthe current business simply could not afford.750 crores as in 1999. Building blocks of a strong Foods business In Foods. Nickel Catalyst. Thermometers. They have consolidated theuir portfolio and improved thegross margins by over 13% through product mix and cost reduction. In all.Today they are a focused on FMCG company with our branded business accountingfor over 90% of sales. people talent or media spend. It was often commoditized with low margins. consisting of 35 brands across 20 categories. their Foods business has a healthy gross margin and a supply chain driven byfreshness. They could achieve this by raising the bar and becoming worldclass in what their brands 69 .1. Today. Seeds. Mushrooms etc. Adhesives. SpecialityChemicals. they were a drain on the core FMCG business.They decided to disengage from all non-FMCG or commodity businesses. FMCG still offers enormous potential As the largest FMCG player it was up to them to reverse the downtrading to realize itstrue growth potential. Therefore they divested the non-valueadded parts like Vanaspati. wehave divested and discontinued 15 businesses including Animal Feeds.
000 crores from a current value of Rs. the FMCG market will be over Rs. They could achieve this by raising the bar and becoming worldclass in what their brands offered and how they worked. Over the next 10years.100. Nothing less would do. Six brands – Brooke Bond. Across the world. 70 . In 2000. their Foods business has a healthy gross margin and a supply chain driven byfreshness. the FMCG market will be over Rs. At thoselevels.000 crores. They chose to focus on 35 power brands covering all consumer appeal and price segments. FMCG still offers enormous potential As the largest FMCG player it was up to them to reverse the downtrading to realize itstrue growth potential.000 crores.000 crores from a current value of Rs. The Foods business will now invest for growth through relevant innovation.40. Across the world. This is an opportunity that they have to seize. This is an opportunity that they have to seize.Penetration levels in several of the categories and consumption levels in all of thecategories is low by any comparison. At thoselevels.Penetration levels in several of the categories and consumption levels in all of thecategories is low by any comparison.40. they are seeing a strongcorrelation between income levels and the size of FMCG markets. Over the next 10years. 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. per capita income in India is likely to touch China’s current levels. many undifferentiated and lacking scale. They are already seeing the benefits.offered and how they worked. per capita income in India is likely to touch China’s current levels. Nothing less would do. they are seeing a strongcorrelation between income levels and the size of FMCG markets. they had 110 brands.100. Today.
5 and a branded quality shampoo in a bottle at Rs.They have also launched several low unit size and price packs for single use to makethe brands more accessible to all income groups. Similarly. in the laundry market. Lux.Lifebuoy.400 crores. Better quality and more affordable prices have increased the value to the consumer. Fair & Lovely.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. It moved from being a mere soap to a health essential.In the case of Lifebuoy. in the last three years to upgrade the brands. Imagine the importance of that benefit to consumers in 71 .5. has grown at over 15% for the last three years. How often have we heard someonesay. Rin and Wheel – have emerged as mega brands in the last five years. Surf Excel went well beyond the benefit of ‘greatclean’ by saving two buckets of water with every wash. “A soap is a soap is a soap!” Or indeed. or 5% of sales. they are the first tointroduce a branded toothpaste in a tube at Rs. 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. their oldest brand. Today Lifebuoy. each with sales of more thanRs. 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. For example.In several cases they reduced prices to make the brands more affordable. They had to move from selling a soap or a detergent to something far more important and central to the consumer’s life. “All detergents clean clothes as well”. Theyhave invested over Rs.
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.
Increasing departmental stores concept – impulse @ at cash counters. reason is that. cost pressure is likely due to rising crude and freight costs. Globalization. CONCLUSION 76 . HLL's tea business has declined marginally. Threats 1. 5.4.
Different line of products are offering customers to choose according to their gender.personality.This sector has member of players which altimately shopes the buying decision products like. 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. and of great benefit to the company in furthering its competitive advantage.This company project has demonstrated “HINDUSTAN UNILEVER’S MARKETING STRATEGIES AND POLICIES” that has proved to be extensive through. are some of the main ingredients of FMCG sector.clinic plus.Demography. FMCG secter hold a prime importance as the competition is increasing day by day.lifebuoy. SUGGESTIONS 77 .income and other attributes.Lux.pantene etc.
They need to bring more awareness of the companies name along 78 . They need to take care regarding the competition with in its own with the brand name. HUL They need to enter into lower segments of detergent. They need to promote their companies name along with the brand name. 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.
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.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. 79 .
Ltd. 2001 Page 365. 10th Edition. Kottler Philip.BIBLIOGRAPHY BOOKS: • • • Kothari C. Ltd. . Marketing Management. 80 . 2005 Page 85. 4th Edition 2002 Page 135. Research Methodology. Research Methodology.. Prentice.R. . Thakur Devendra.Hall of India Pvt. Deep & Deep Publication Pvt.
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