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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.
in professional usage the term has a wider meaning which recognizes that marketing is customer centered. It is related with the division of commodities into distinct groups standardization involves establishment of certain criteria to which the goods must confirm. "marketing" is the promotion of products. Jerome McCarthy divided marketing into four general sets of activities. in some cases. 5 . It makes the exchange process smooth and acts as lubricating oil to the wheel of marketing. regarding the market • Standardization: Standardization helps on tackle certain major problems of marketing. These decisions are based on market information.3. His typology has become so universally recognized that his four activity sets. • Financing: Finance is the base for all marketing activities. opinion. However. • 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. the Four Ps. Facilitating Functions These are the function that facilitates the process of exchange. It includes all facts. 7P’s of Marketing: In popular usage. especially advertising and branding. have passed into the language. place etc… • Market information: The much desired success of marketing depends on correct and timely decisions. views. E. estimates. Products are often developed to meet the desires of groups of customers or even. for specific customers.
point of sale placement or retailing. • Pricing: This refers to the process of setting a price for a product. e. • Promotion: This includes advertising. or attention. if the customers are informed in hand about the services and many such things. time. and how it relates to the end-user's needs and wants. This fourth P has also sometimes been called Place. When a service goes out to the customer. pamphlets etc serve this purpose Physical distribution refers to how the product gets to the customer.g. management and everybody else involved in it.brochures. • 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. • People: People refer to the customers. It is essential for everyone to realize that the reputation of the brand that you are involved with is in the people's hands. brand. • Physical (Evidence): It refers to the experience of using a product or service. sales promotion. or company. including discounts. it is essential that you help him see what he is buying or not. and personal selling. publicity. for example. The price need not be monetary . referring to the channel by which a 6 . if they are provided in time.it can simply be what is exchanged for the product or service. For example. and refers to the various methods of promoting the product. 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.
Relationship marketing attempts to do this by looking at marketing from a long term relationship perspective rather than individual transactions. Services marketing must account for the unique nature of services. 1988). Morgan. adds "Perhaps the most significant criticism of the 4 Ps approach. whereas the essence of marketing should be the outside–in approach". Following are the phases of development of marketing 7 . As a counter to this. high value consumer products require adjustments to this model. A marketer can use these variables to craft a marketing plan. to which segment (young adults. the 4 Ps offer a memorable and quite workable guide to the major categories of marketing activity. is that it unconsciously emphasizes the inside–out view (looking from the company outwards). retail). etc. Even so. which geographic region or industry. as well as a framework within which these can be used. Industrial or B2B marketing must account for the long term contractual agreements that are typical in supply chain transactions. having made this important caveat. in Riding the Waves of Change (Jossey-Bass. services. online vs. families.g.product or service is sold (e. which you should be aware of. Industrial products. These four elements are often referred to as the marketing mix. business people). 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.
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. The selling activity becomes the dominating factor without any efforts for the satisfaction of the consumer needs. 1 Barter system: The goods are exchanged against goods without any other medium of exchange like money. Sales orientation: This stage witness major changes in all the spheres of economic life. 8 . Production orientation: This was the stage where producers. Marketing orientation: Customer’s importance was satisfied but only as a means of disposing of goods produced competition become more stiffer.
Management orientation: The marketing function assumes the managerial role to co-ordinate all the interacting business with the objectives of planning. the total budget for rural marketing is only about Rs 500 crore (Rs 5 billion).000 for fast-moving consumer goods. rural marketing in India is still about a van campaign.000 people for consumer durables. MARKETING STRATEGY OF FMCG PRODUCTS: Barring a few. of companies wanting to move beyond urban boundaries. notable exceptions. compared to the over Rs 13. 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. it is heartening to note the increasing awareness of the importance of rural markets . Social orientation: The companies are not only cares for consumers but also for social welfare.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. a few painted walls and the occasional participation in village haats and melas. But then. social welfare becomes the added dimension to the companies. According to estimates by the Rural Marketing Agencies Association of India. 9 . Thus. promotion and distribution. "rural" means different things to different people: from 500. Still.or. a badlymade commercial. This is grossly inadequate to cover the huge potential for different products in rural markets. Of course. to less than 50.000 crore (Rs 130 billion) allotted to mass media. at least.
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. Meera Herbal Powder. is imperative . Companies like Cavin Kare (Chik Shampoo. But even more important is the need for a dedicated task force. keeping in mind that rural marketing is a long-term relationship. 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. And. touched a chord in the target audience. be it a simple radio spot or a wall painting or a theatre film. Fairever Cream and so on). Anchor (100 per cent vegetarian toothpaste). People power Total commitment from top leadership. Ghadi detergent powder and Power soap are proof that regional brands can become brands to reckon with. concentrated markets. appealing to the local ethos and aspirations of the targeted area. which are giving the multinationals a run for their money. especially in the FMCG sector. their policies were flexible and they could adopt to fast changing marketing situations. the most enduring example of a brand that began as a regional player and is now a giant. 10 . They all started in small. But only consider the huge successes of some regional brands.The TRPs and NRS/IRS data help you determine the efficacy of TV and press marketing. most importantly.the successes of Hindustan Lever [ Get Quote ] and ITC are proof of this statement. And don't forget Nirma. What should companies do to step up their payback from rural marketing efforts? Here are some steps that should help.
you get only monkeys .and discuss the path their careers are likely to take in the organisation. Ensure the consistency of the team involved in any project.. people with fire in their bellies who want to prove themselves in big companies and have no issues about working in smaller markets. until the completion of a specific task. And send them out in the field only after thorough training.. the teams that briefed us in the initial stages and participated enthusiastically in the campaign. in keeping with their companies' policy of shifting and promoting people. Pay them well remember. What started as a great rural marketing initiative has been relegated to the dustbin. The teams that succeeded felt no ownership of the campaigns they had not initiated. In both cases.Rural marketing efforts need special mindsets. were shifted out midway. 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. or at least. Many of these are students from small towns. you pay peanuts. 11 . the fate of many rural marketing initiatives in the country. we were involved with two big clients. 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. The best bet is to recruit students from specialised institutes such as the Indian Institute of Rural Management. Recently.
to suit the local audience or fit it with the overall campaign efforts in the mass media. define your objective: is it a tactical effort to achieve increased sales in specific areas during a specific time. aspirations and fears of rural customers. Most of them have previously appointed vendors who implement the company's ideas blindly. Know your customers A good place to begin is studying the mindset of your customers. 12 . Our experience shows that the attitudes. 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. If you are interested in the second alternative. All too often. There is very little effort to tailor whatever communication is made in such efforts. is very different from their urban counterparts. is a must. so you can create a customised plan of action. 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. a comprehensive brand building strategy in rural India. be they van campaigns or below-the-line activities. with regard to products and brands. clients insist their knowledge of their customers (based on studies of urban India) is enough on which to base an action plan. with both short term and long term goals.Goals are good Early on in the campaign.
The consumer demands the product from the local shopkeeper. For instance.Research can give you invaluable ideas for new product development as well as new methods of reaching your target audience. ensure that the people who patronise these haats are the kind who will buy your brand. and to that extent make your effort cost-effective.000 villages. It is estimated that FMCG companies lost more than Rs 10. who then buys the products from the nearest feeder markets. 13 . pressure cookers with two handles and a radio with key-winding mechanism are all the result of research. fuelled by television commercials. spurious products that are sold in these bazaars. mostly sold through such local haats and bazaars. While haats offer opportunities to target consumers from several villages at one place. We've all heard about the shampoo sachets that are available in even the smallest villages. most of them without motorable roads.000 crore (Rs 100 billion) to spurious products. Ensure availability Most anecdotes about rural marketing centre on the distribution aspect . since they can't afford the real thing. How does that happen? It's a direct result of rising aspirations. with some interesting results. The refrigerator with standby power for 12 hours.the humongous task of physically reaching your product to over 600. But it's not really as nightmarish as it is made out to be. More and more companies turn to the local haats to sell their products. The haatswere popular with the poorest agricultural labourers who consciously buy the duplicate. we recently conducted a survey among some haats in Tamil Nadu. at least keeping in mind the present goals of marketing companies in rural India.
” insists Sudhanshu Vats. This comes even as Unilever is scouting for a potential buyer for its laundry business in the US. 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. in fact. automobiles and appliances in the nearest big town or city. Studies also indicate that rural consumers prefer to shop for durables such as televisions.” 14 . Pricing.Which means if you can ensure distribution to the feeder markets in towns or villages with populations of 10-15.000. So.” “We have done key innovations across the product portfolio and it is working for us. if your products are in towns with populations of 50. now is focused on product innovation. is now passe. you're closer to the rural consumer than you would have thought. home care. category head.” he said.000.” says Vats. “Our strategy for growth. new consumer and retail trends and aggressive marketing and promotions. “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. you've already taken the first step towards reaching your target customer. MARKETING STRATEGY ADOPTED BY HUL “Price cut or hike is not a long-term growth strategy.
103 crore. Nirma Ltd. however. saw its market share dip by 1.4% over 2005.5 percentage points.” says Unmesh Sharma.8% in the quarter ended June from 35.6% share. Wheel. According to Vats.7% percentage points to 13. 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. increased its market share by 2 percentage points in the same period. The recent price war between companies led to erosion in their profitability but now. HUL’s soaps and detergents segment contributed around Rs5. “Laundry has been an attractive segment in the past and is likely to keep growing in the near future. the Ahmedabad-based manufacturer.HUL’s market share in the laundry segment grew to around 37.5%. the increase was not at the expense of price war with its multinational rival Procter & Gamble Co. a value brand that. In 2006.5% in the same period last year. this time. the laundry industry in India was worth Rs7. the industry is stabilizing. with a total share of about 18%.596 crore to the company’s total sales of Rs12. 15 . up to a 7. However. HUL doesn’t report its laundry revenues separately but puts them under the soaps and detergent category. according the market research firm ACNielsen. P&G also gained 0.908 crore in 2006 and rose 8. according to Vats contributes around 50% of HUL’s laundry segment revenues. an analyst at Macquarie Securities here. According to ACNielsen.
“Some of HUL’s recent moves.” says Vats. such as promotional campaigns and advertising. people want to use better and branded products. “Trends suggest that the usage of detergents has gone up as a result. with premium quality of clothes. analysts remain cautious. seem right. it is too early to say what result their new strategies will yield. “Still.” says Macquarie’s Sharma.” OBJECTIVE OF THE STUDY 16 . Also.“Consumers today are buying more clothes.” Still.
To analyze the influence of rival company’s strategies on the performance of Hindustan Unilever Limited To analyze the various strategies adopted by the company to gain competitive advantage To identify the marketing strategies and policies of Hindustan Unilever Limited SCOPE AND IMPORTANCE 17 .
This project is applicable on the on the area of FMCG. It would help to analyze the current position of HUL and then to sector marketing channels for the same. IMPORTANCE To will help in identifying the product of HUL in FMCG sector. in order to frame out marketing strategies for different production this sector. This study would be helping HUL to frame its different promotion schemes. COMPANY PROFILE 18 . This is widely awaited.
In addition to FMCG products it is the country's biggest exporter of tea. The company’s history dates back to 1931 when Unilever set up its first Indian subsidiary. Hindustan Unilever Ltd (HUL) has grown from strength to strength with new technologies being introduced to make the HLL consumer goods business. 2007 the company has changed the name to Hindustan Unilever Limited. and far and away the leading advertiser. brand building initiatives and innovation. one of the most efficient in the world.The Hindustan Unilever Ltd’s(HUL) Inc has taken the opportunity to offer us a broader view of FMCG category. Hindustan Unilever is Unilever's main operating business in India. The company focuses on efficient delivery to consumers with an improved supply chain.1 FMCG is able to share with their market insights based upon unparalleled breath of consumer goods experience. Hindustan Unilever Limited (HUL). It is the country's biggest consumer goods company. is a fast moving consumer goods (FMCG) company based in India. It is generally acknowledged 19 . The Hindustan Unilever Ltd (HLL) is India’s no. and is also one of the country’s top five exporters. Hindustan Vanaspati Manufacturing Company. HUL inhabits virtually every sector of the consumer goods market. These three companies merged to form Hindustan Lever Limited in November 1956. Effective July 19. a subsidiary of Unilever. 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. including several not occupied by Unilever in other markets such as preserves and bakery products.
and ITC Ltd.to be one of India's best-run businesses. which make up about a third of Unilever's worldwide sales. step up marketing in Asia's third-biggest economy.000 Stockists Total Coverage 6. will see their share of the company's growth fall to 2 percent in 2010 from 3.3 Mln Outlets 20 . 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. Hindustan Unilever – A 75 Year Commitment 15.Now Cincinnati.000 suppliers & associates 75 Manufacturing Locations 45 C&FAs. although performance slowed dramatically between 2000 and 2004. Unilever's overall sales growth will slow to 4.3 percent in 2007. Unilever.3 percent in 2007. which sells soap to more than 500 million Indians. Asia and Africa.based Procter & Gamble is stocking Indian stores with Olay skin.200 managers 2. Revenue from the two continents rose 11. may see global revenue growth slow in 2010 as Procter & Gamble Co. prior to restructuring. according to Brusselsbased brokerage Petercam SA.4 percent in the first nine months of last year. 4.2 percent in North and South America. helping offset 1.care products after nearly halving the local prices of Ariel and Tide detergents in 2004.9 percent in 2010 from an estimated 5.9 percent growth in Europe and 4. according to the median of five analysts in a Bloomberg survey.000 employees 1.
• A number of prominent companies came into the HUL fold as result of Unilever’s international acquisitions. Unilever set up its first Indian subsidiary. This was followed by brands like Pears and Vim. These three companies merged to form HUL in November 1956. 21 . Lakme Limited sold its brands to HUL and divested its 50 per cent stake in the joint venture to the FMCG giant.000 Villages 5. Direct Coverage 1 Mln outlets Population of INDIA: 1027 Mln 5. Lakme Lever Limited. Lakme Limited. Hindustan Vanaspati Manufacturing Company. • In 1931.38. • Subsequently in 1998. Vanaspati was launched in 1918 and Dalda came to the market in 1937. • In 1993.5 Mln outlets 6. followed by Lever Brothers India Limited (1933) and United Traders Limited (1935).545 Towns 2.0 Mln outlets HISTORY OF HINDUSTAN UNILEVER LTD • It was in the summer of 1888 that Unilever of England first marketed Sunlight soap in India. Tata Oil Mills Company (TOMCO) merged with HUL. These included Brooke Bond (1984). formed a 50:50 joint venture. Lipton (1972) and Pond’s (1986). Two years later. HUL and yet another Tata company.
• HUL formed a 50:50 joint venture with the US-based Kimberly Clark Corporation in 1994. In a historic step. Nepal Lever Limited (NLL). • HUL has also set up a subsidiary in Nepal. HUL picked up 74 per cent of the equity of Modern Foods from the Indian government. Kimberly-Clark Lever Ltd. formerly known as Hindustan Lever Limited. FMCG major Hindustan Unilever Limited (HUL). which markets Huggies diapers and Kotex sanitary pads. HUL acquired the government s remaining stake in Modern Foods. and its factory represents the largest manufacturing investment in the Himalayan kingdom. • • In 2002.350 managers. It is one of the earliest MNCs to have entered India 22 . including over 1.000 people. employs 36.
ORGANIZATIONAL STRUCTURE Managing Direc tor General Mana ger Vice President Marketing Manufacturin Sales g Finance Distribution FIG.2 23 .
Sunsilk.000 employees. and now has 24 . Pepsodent. HUL has traditionally been a company. HUL is also one of the country's largest exporters.10. personal products. which holds 51.like Lifebuoy.3 million retail outlets reaching the entire urban population . They endow the company with a scale of combined volumes of about 4 million tonnes and sales of Rs. Lakme.000 suppliers and associates. Kwality Wall's – are household names across the country and span many categories . branded staples. The operations involve over 2.000crore. Lux.000 redistribution stockiest. including over 1.300 managers. Clinic. HUL's brands . Surf Excel. The mission that inspires HUL's over 15. Wheel.PRESENT STATUS Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods company. The Hindustan Unilever Research Centre (HLRC) was set up in 1958. which incorporates latest technology in all its operations. coffee. It is a mission HUL shares with its parent company. Brooke Bond. HUL's distribution network. ice cream and culinary products. look good and get more out of life. it has been recognised as a Golden Super Star Trading House by the Government of India. is to "add vitality to life.soaps. The rest of the shareholding is distributed among 380. Close-up. Rin. tea. touching the lives of two out of three Indians with over 20 distinct categories in Home & Personal Care Products and Foods & Beverages. covering 6.000 individual shareholders and financial institutions." HUL meets everyday needs for nutrition.and about 250 million rural consumer. Pond's. detergents.55% of the equity. hygiene. and personal care with brands that help people feel good. They are manufactured over 40 factories across India. Fair & Lovely. Unilever. Kissan. comprising about 4. Knorr-Annapurna.
“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. category head.” “We have done key innovations across the product portfolio and it is working for us. “Our strategy for growth.facilities in Mumbai and Bangalore. However. this time.” HUL’s market share in the laundry segment grew to around 37. Nirma Ltd. “Price cut or hike is not a long-term growth strategy.5% in the same period last year. the 25 .” says Vats. Indian subsidiary of the Anglo-Dutch consumer goods company Unilever Plc. is now passe. now is focused on product innovation.5 percentage points. HUL’S NEW GROWTH STRATEGY After having fought a bitter price battle for market share with its rivals. HLRC and the Global Technology Centres in India have over 200 highly qualified scientists and technologists. HUL says it is quite upbeat about the segment and says the laundry segment is one of its “key growth areas. the increase was not at the expense of price war with its multinational rival Procter & Gamble Co.” he said. Pricing. This comes even as Unilever is scouting for a potential buyer for its laundry business in the US. in fact.” insists Sudhanshu Vats. Hindustan Unilever Ltd (HUL). new consumer and retail trends and aggressive marketing and promotions. many with post-doctoral experience acquired in the US and Europe. P&G also gained 0.6% share.8% in the quarter ended June from 35. up to a 7. is now working on a new growth strategy for its laundry business. home care. according the market research firm ACNielsen.
according to Vats contributes around 50% of HUL’s laundry segment revenues. a value brand that. an analyst at Macquarie Securities here. seem right.” says Vats. with a total share of about 18%. the laundry industry in India was worth Rs7. In 2006.908 crore in 2006 and rose 8. people want to use better and branded products. “Still.596 crore to the company’s total sales of Rs12. “Consumers today are buying more clothes.4% over 2005. According to Vats. it is too early to say what result their new strategies will yield. Wheel.Ahmedabad-based manufacturer.7% percentage points to 13. analysts remain cautious. the industry is stabilizing. “Some of HUL’s recent moves. HUL’s soaps and detergents segment contributed around Rs5. “Laundry has been an attractive segment in the past and is likely to keep growing in the near future.” says Unmesh Sharma.” Still. such as promotional campaigns and advertising. According to ACNielsen. saw its market share dip by 1. increased its market share by 2 percentage points in the same period.” says Macquarie’s Sharma. however. “Trends suggest that the usage of detergents has gone up as a result. The recent price war between companies led to erosion in their profitability but now. HUL doesn’t report its laundry revenues separately but puts them under the soaps and detergent category.” 26 . with premium quality of clothes. Also. 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.103 crore.5%.
But the winner will surpass them by constantly exceeding her expectation. The wide variety products offered by the company include: The company’s popular product’s include: • Bathing soaps: Lux.FIVE P’S OF MARKETING Product Satisfaction suffices. Hindustan Unilever Ltd(HUL) offer such product. Lifebuoy. Pond’s and Vaseline • Hair care: Sunsilk and Clinic • Oral care: Pepsodent and Close up • Deodorants: 27 . Rin and Wheel • Skin care: Fair & Lovely. But delight dazzles the average company will compete for customer by conforming to her expectation consistently. Liril. Dove. Hamam. Pears and Rexona • Laundry items: Surf Excel. Breeze. delivering to her door step additional benefits which she would never have imagined possible.
Second P of marketing is not another name for blindly lowering prices and relying on this strategy alone to increase sales dramatically.Axe and Rexona • Colour cosmetics: Lakme • Ayurvedic: Ayush • Tea: Brooke Bond and Lipton • Coffee: Bru • Foods: Kissan. 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. Pricing Make no mistake. Hindustan Unilever Ltd(HUL) has launched various products which cater to all customer segments. So every customer segment has different price expectation from the product. Therefore 28 . Annapurna and Knorr • Ice cream: Kwality Wall’s .
Physical Distribution – “Place” BRAND ISN’T THE ONLY ANY MORE . swamp prime television with best Ads. but the end of it all. Marketers and finance manager need a new term to evaluate their business: Distribution Equity. you would be know of selling your products.maximizing the returns involves identifying right price level for each segment. covering 6. HUL's distribution network. But getting their means managing wildly 29 . The fundamental axiom of Indian consumer market is this: You can set up a state-of –the-art manufacturing facility. but once built. and the marketer who can get to the to the consumer ahead of competition will give a hard – to – overtake lead. India – The operations involve over 2. Buyers are paying for distribution equity not brand equity and market shares. distribution equity is much together to erode.3 million retail outlets reaching the entire urban population.000 redistribution stockists.000 suppliers and associates.television has already primed and population for consumption. 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. comprising about 4. hire the hottest strategies on the block. 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. the brand that sells more is the one that reaches the highest number of customers. In a product and price parity situation. and then progressively moving through them. and about 250 million rural consumers.
Hindustan Unilever Ltd(HUL) is also attempting to improve the distribution quality. Hindustan Unilever Ltd(HUL) marketing costs. To address the issue of product stability. Beside use of improved logistics. At Hindustan Unilever Ltd(HUL). reaches more than a million retailers. the receiver must at least half want it to. and be prepared too take step toward the sender. This increase in distribution is going to be accompanied by reduction in channel costs. value system. at 18% of total costs. And your brand equity isn’t going to help when it comes to tackling these issues. Hindustan Unilever Ltd(HUL) distribution network has expanded. Hindustan Unilever Ltd(HUL) distributes the product in the manner stated above. This network of distribution can either contact wholesalers and which in turn retailers or the distributors can contact to the retailers directly. Effective advertising is rarely hectoring or loudly 30 . a distribution expansion would itself being incremental volume. the prospective customers can have access to the product. it has installed visi colors at several outlets. The other reason is arch rival Procter & Gamble Co. language. The company is looking to reduce this parity level.different terrains-climate. is much higher than Procter & Gamble Co. Looking at the low penetration of few products. 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. transport and communication network. life style. Promotion If an advertisement is to communicate effectively. Once the stock product reaches retailers. Own distribution network consist of clearing and forwarding (C&F) agents & distribution stockiest. they believe that selling FMCG is it like selling soft drinks.
30 catteries in Mumbai have been selected. grab her attention evoke her comprehension. unself conscious. As well as outdoor and radio ads. communication must first ensure exposure. that produced just the value vacuum that Hindustan Unilever Ltd(HUL) was looking to fill. 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. • Finding showed that the adults felt too conscious to be seen consuming a product actually meant for children. “cream bathing bar for dove soap” and daag ache hai for surf excel” have been sure shot winner with the audience. 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. 31 . All ICICI’ s ATM a message flashes on the screen as soon as customer insert his ATM card. Naturally. pleasure – seeking child within himself – a graft these feeling onto the Ad campaign like “hasso to khul k hasso for close up”. The strategic response address the emotional appeal of the band to the child within the adult. a home water purifier which supplies drinking water without boiling/need of electricity . In cinemas. To penetrate into the inner recesses of her memory. a successful campaign has a stronger element of the unexpected a quality that good advertising shares with much worthwhile literature.explicit…. More often than not. Thereafter it was the job of the advertising to communicate customer the wonderful feeling that he could experience by re-discoursing the careful. It has also launched Pureit. It often both attracts and generates arm feelings.
com). supported with high ad – spends that Hindustan Unilever(Ltd) hopes will see it emerges stronger after the current slowdown. Beside the company website (i. It’s a combination of spiffing up its key brand. Positioning In the 1970s consumers were ready to pay “more for more”. Ad since any discussion today would be incomplete without mention ‘e’ word. as well as expand the market. researching and improving the newer products that haven’t taken off. it had also entered into various marketing relationship with other portals. and luxury goods flourished. 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. etc…. 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. and the discounting era grew strong. today customer uses complicated decision making process to assess the 32 . Today’s consumer demanding “more for less”.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. consumers began to demand “more for same”.e.unilever. As a variety of competitive claims assails her senses. specially targeted during festivals and events such as Valentines day. www. and the winner will be that super value marketers…. In the 1980s. that the company has launched. the management plans to tap this new channel of marketing.
33 . “Lifebuoy has become more than just a red bar of soap – today the brand provides hygiene and health solutions for families 2) Fair & Lovely.g. as www. Hindustan Unilever(Ltd) takes into account all these factors when producing a range of products. each with different needs and wants. a hot-selling “fairness” cream. which promises a lighter skin tone for many of India’s complexion-conscious consumers. Markets segmentation can be defined in a number of ways such as: Demographic variables (e. their interests and activities) the benefits which consumers look for in a product or on the occasions when the product might be consumed.e.com informs.alternative before making a purchase. gender. Since Hindustan Unilever(Ltd) is more clearly associated with a particular set of attributes in terms of benefits and prices. HINDUSTAN UNILEVER’S MARKET SEGMENTATION Market place for any product is comprised of many different segments of consumers. the quicker becomes her search process. material states income etc…) The lifestyle of consumers (i. It targets different segments within the market. Positioning of individual product: 1) Lifebuoy is ‘one of Unilever’s oldest brands’ with more than a hundred-year history.unilever. Consumers are groups. such as the: Break segment – products which are normally consume as a snatched break and often with tea and coffee.
Impulse segment – these products are often purchase on impulse. 34 . They include product such as close up. Take home segment – this describes product that are normally purchased in supermarkets. used these and then. taken home consumed at a later stage.
HUL says it is quite upbeat about the segment and says the laundry segment is one of its “key growth areas.8% in the quarter ended June from 35.” he said. HUL’s soaps and detergents segment contributed around Rs5. Indian subsidiary of the Anglo-Dutch consumer goods company Unilever Plc. is now passe.The Real Taste of Rejuvenation After having fought a bitter price battle for market share with its rivals. According to ACNielsen.5% in the same period last year. the laundry industry in India was worth Rs7. “Our strategy for growth. “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. category head.” “We have done key innovations across the product portfolio and it is working for us. is now working on a new growth strategy for its laundry business.596 crore to the company’s total sales of Rs12.” HUL’s market share in the laundry segment grew to around 37. now is focused on product innovation.4% over 2005. Hindustan Unilever Ltd (HUL). Pricing.908 crore in 2006 and rose 8. in fact. home care. In 2006. HUL doesn’t report its laundry revenues separately but puts them under the soaps and detergent category.” says Vats. This comes even as Unilever is scouting for a potential buyer for its laundry business in the US.103 crore. new consumer and retail trends and aggressive marketing and promotions. 35 .” insists Sudhanshu Vats.
and it’s best done incognito. But India’s recent retail boom has created large stores and malls. India’s Top Consumer-Products Company Woos Affluent Shoppers With Global Brands Like Dove. That’s how Douglas Baillie likes it. This is quite a change for Hindustan Unilever. 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. whose executives used to have emissaries make obeisance at Lever house in downtown Mumbai. wants to see how his products are stocked. It’s primary market research at its most elemental. chief executive of innovation and incubation at Pantaloon Retail. the India hypermarket chain. 36 . Baillie. Hindustan Unilever has traditionally relied on small traders and mom-and-pop corner stores to retail its products. so the company wants to make sure it’s in with the new marketing crowd. what consumers are buying. “I can’t imagine any head from Lever House ever visiting other company offices like this. COMPETITIVE STRATEGY As Competition Heats Up.“Laundry has been an attractive segment in the past and is likely to keep growing in the near future. the industry is stabilizing. India’s largest retailer and a former manager at Hindustan Unilever. Hence Baillie’s Hypercity visits. India’s premier consumer-products company. and the calls he makes on the headquarters of the big retail chains.” says an amazed Damodar Mall. and how shoppers are reacting to competitive brands. The recent price war between companies led to erosion in their profitability but now. the managing director of Hindustan Unilever.
after ringing up India-based sales of $3. Now Hindustan Unilever is under siege from aggressive Indian and foreign competitors such as Procter & Gamble (PG). sauces and tea. Finnish handset maker Nokia (NOK) dislodged it as the multinational with the highest revenues in India. Favorite detergent brands like Surf Excel and Rin are barely hanging onto their 37% share.2% to 24. All this has taken a toll on Hindustan Unilever’s operating margins. down from 21% a few years ago to just 11. soaps.84% now. Nivea. and shampoos to soups. including the popular Lux. In the last year.2% to 54%. is down from 55.3%. which is practically synonymous with India. and L’Oréal. and dominates most of those categories.5 billion. That’s why the company is wooing consumers in big retail stores. Hindustan Lever tea brands like Brooke Bond and Lipton have dipped from a combined market share of 29. ACNielsen data shows.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. Yet early this year. The company. makes everything from detergents. Hindustan Unilever’s lead in hand soaps. These 37 .
” says D. the crown jewel whose managers had free rein to develop and build brands suitable for the local market. 2006. fitting in quite nicely with India’s turn towards more international products being sold in supermarkets. This means that all of Unilever’s brands will be available across global markets.Parent Unilever will develop the brands and streamline product offerings across the world. will grow to 28% by 2017.newly affluent shoppers present the best hope for the company’s future in India. was the most successful and profitable company in the Unilever group. became the first foreigner in four decades to head the Indiancompany. not long ago. not a multinational. Sundaram. and the cream of India’s management 38 . “It is a big game for us.5% of India’s total $336 billion retail market. The takeover of Hindustan Lever by Unilever became evident in March. Hindustan Unilever’s managers hope their revenues from big retail will increase from 5% today to over 25% in 2012. Hindustan Unilever’s finance director. a Zimbabwe-born British national. Hindustan Unilever’s strategy is to market its premium products through the hundreds of megastores springing up across India. Yet this is still a dramatic change for Hindustan Unilever which. According to retail consultant KSA Technopak. currently just 3. organized retail. For many decades most Indians thought Hindustan Lever was a local company. when Baillie. while its subsidiaries will sell the products. From Local Player To Multinational Overnight the change sent shock waves through India. That dovetails with parent company Unilever’s new global realignment of products.
While the strategy aimed to conserve management energy. 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 in February. we aren’t the only ones seeing it. thanks to price increases. 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. the company. where foods bring in half the revenues globally. frozen bread—than it has launched. the company’s home and personal care businesses account for 80% of revenues and 85% of profits at Hindustan Unilever. Baillie first had to sort out some past problems. Nitin Paranjpe.5 billion for five years while operating profit plunged 37%.” 39 . If India is a great story. But the rich margins of the past have not returned. it has phased out more food products—wheat flour. admits that it’s now “tougher to hold on to market share. For instance. 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. Last year operating profits reached $357 million. confectionery.” He also wants to expand the foods business in conjunction with the parent. to $274 million in 2004. Hindustan Unilever executives are realistic about the new era in which it now operates. The effect: The company’s sales and operating profits stagnated at $2. while the company’s track record in foods has been dismal. 2007. In India.graduates made their careers there. was rechristened Hindustan Unilever to reflect its parentage. executive director in charge of the home and personal care business. then known as Hindustan Lever. Indeed. a 2004 price war with P&G in the detergent business forced Hindustan Unilever to slash prices on its premium brand Surf Excel. And there was some stiff competition from rival Procter & Gamble.
But today even L’Oreal has sachets of its Fructis shampoo. the largest Indian cigarette maker and partly owned by British American Tobacco Plc.Rivals like P&G and Nivea have also copied Hindustan Unilever’s best innovation: the small shampoo sachets it pioneered in the 1980s. 2007. Currently. toothpaste and tea in the quarter ended Sept.” FUTURE COMPETITIVE STRATEGY 2010 Expectations P&G. will continue to gain share in the next five years in India.9% in July. `Profitable' Cigarettes 40 ..and Rotterdambased parent. Tata Tea is exultant. is also making inroads. bath soap. lost ground in shampoo. Bernstein in New York. according to Ali Dibadj.5%.7 percent. which sold for less than 2 cents each and which expanded the market for Hindustan Unilever products among India’s rural masses. who rates the stock ``outperform. 80% of Indian shampoo sales come from sachets. according to the company. compared with the year earlier. It started selling more brands including Fiama Di Wills shampoo and Superia soap last year as the government raised tobacco taxes. the Tata Group’s beverage company Tata Tea overtook Hindustan Unilever as India’s largest selling tea brand. Tata Tea’s market share increased from 16. 52 percent owned by the London. Managing Director Percy Siganporia says the gain is “a dream comes true for us. the world's largest consumer-goods maker.7% in March. an analyst at Sanford C. According to ACNielsen. 2006. In June. while Hindustan Unilever slipped from 26. ITC. the company said.1% to 19. to 19. 30. Its share of the shampoo market declined by more than a percentage point to 47.'' Hindustan Unilever Ltd.
generating about 6 percent of annual sales. who has an ``underperform'' rating on Hindustan Unilever.care portfolio.9 rupees.8 billion. The price of palm oil.57) in the next year from 190. The company has a market value of about $11. ``Given the competition.'' said Anand Shah.'' said Macquarie Securities Ltd. analyst Unmesh Sharma. bathing soaps and shampoo. profitability will continue to be under pressure. has surged 70 percent in the past year. 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 . an analyst at Angel Broking in Mumbai. used to make soaps and foods. It has sold soap in the country since 1888 and controls about half of the sales of products such as skin creams.The tobacco maker ``has a very profitable cigarettes business which will help it to invest and expand its personal. This strategy will still satisfy investors. India is Unilever's biggest market in Asia. ``It has the ability to take losses in this segment as long as it grows its sales.'' Rising prices of raw materials have made it more difficult for consumer-goods makers to pass on higher costs. He expects the stock to drop to 180 rupees ($4. who has a ``neutral'' rating on the stock.
Leverage positive impact of growing Indian economy on consumer spending. Competitive Strengths Fig:3. Grow a profitable foods and top end business.Corporate Social Responsibility-Aiding In The Development Of The Country 42 . Strong commitment to sustainable development. Grow ahead of the market by leading market development activities. Grow the bottom line ahead of the top line.
COMPARATIVE BUSINESS ANALYSIS Hindustan Unilever Limited Formerly known as Hindustan Lever Limited. Ice Creams and Other. partnerships with diverse stakeholders. HINDUSTAN UNILEVER LIMITED . Impact of community • • business and social impact can go together. currently~44000 women cover 1. Foods. The products include home and personal care products. The Group's principal activities are to manufacture and market consumer products. Exports. Shakti vani: one-to-many communication for category growth ishakti: customized interaction with remote consumers. Personal Products.Shakti Three shakti initiatives • • • Shakti entrepreneur. Beverages.25000 villages. The Group operates through seven segments: Soaps and Detergents. foods and beverages. industrial and agricultural products. Home and personal care products consists of personal and fabric wash. 43 .
plant growth nutrients. bakery fats.THE BIG INDIAN ROMANCE Rural population larger than europe(800 million) Low growth in agriculture. rice. fruit and vegetable products. This analysis compares Hindustan Unilever Limited with three other companies in closely related industry sectors.income growth is crucial. coffee. marine products and mushrooms. The company faces competition from international. brand building initiatives and innovation. seeds. ice creams. Its brands are spread across 20 consumer product categories. leather. Government grants and subsidies.however rural income are growing faster with 70% population here. salt. cooking fats and oils. Structural changes in the economy which are affecting this are: Disintermediation in the agricultural market price discovery mechanism has benefited farmers. footwear and carpets. Industrial and agricultural products includes specialty chemicals. Hindustan Unilever markets consumer goods throughout India. fertilisers. perfumery. The company focuses on efficient delivery to consumers with an improved supply chain. bulk chemicals. atta and rawa. Foods and beverages includes tea. deodorants. processed-tri-glycerides and agri commodities.employment grants-Rs 40000cr 44 . yeast. thermometers and plantations. oral care. skin and hair care. colour cosmetics and baby care. local and regional players.household. RURAL. which has helped the company to sustain its leadership position in the overall FMCG category in India. animal feeds. tomato products.
“HUL missed an opportunity for increased marketing productivity when they repositioned.” write Leonard M.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. Morgan and Shellye Archambeau.” reads an observation in a chapter titled ‘entrepreneurial advertising that works’. The company basically worked with “one agency. and relaunched Lifebuoy. Ogilvy and Mather (O&M). Though the company was ‘extremely innovative’ the way it handled the rural communications plan was very traditional. and screened some options to roll out one option that everyone was happy with. A better strategy. 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. Howard L. they add. according to the authors.” 45 . the authors of Marketing that Works. retargeted. Lodish.
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. from the earlier Rs 345 crore. The company’s advertising and promotional spends during the quarter fell to Rs 336 crore.Advertising strategy came for mention when the company reported the second quarter results. “or the villagers themselves might also be able to generate very effective communications vehicles. targeted “10. in a paragraph on innovation.” reads a quote in the book from C.000 villages in nine states where HUL stood to gain the most market share… They spent a lot of effort in designing low cost ways of communicating with their rural target. Director (Finance & IT).K. Prahalad notes. a few days ago. The O&M strategy. Sundaram. and thus has increased sales of its low-cost. Mr D. Prahalad’s The Fortune at the Bottom of the Pyramid .” The advertising spends have not been linear for the company.” says the site.” So. mass-market soap. “Lifebuoy has become more than just a red bar of soap – today the brand provides hygiene and health solutions for families. HUL. HUL. through its innovative communication campaigns. Lifebuoy is ‘one of Unilever’s oldest brands’ with more than a hundred-year history. as explained by Mr Lodish et al. “Differentiating soap products on the platform of health takes advantage of an opening in the competitive landscape for soap. said: “We have been phasing our advertising spends depending on the launches and relaunches of brands. 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 . he added.
“As a big company.” 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. “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. logistics for merchandising materials and in store execution. 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. 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. It has leading edge capabilities in servicing Modern Trade focused on shelf filling.” The HUL example. The strategic tie-up aims to build long term capabilities and bring ‘in-store’ execution focus in servicing the Company’s Modern Trade customers. 47 . 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.” wonder the authors. This JV will bring in world class execution excellence in the market and build the right capabilities to deliver the company’s marketing strategy in Modern Trade”. Smollan Holdings is one of the leading ‘in-store execution and field services’ companies internationally. The operations will begin with the existing Modern Trade in-store execution team of HUL moving into HUFS.programs.
Hindustan Unilever Network is the direct selling channel of the company. a hot-selling “fairness” cream. which promises a lighter skin. has made the brand a winner. Hindustan Unilever launched a high-end range of Pond’s skin care and Dove hair care products from Unilever’s international portfolio.000 consultants. It has about 350. Over the past six months. which suggests that regular use of the cream helps women gain confidence and makes them eligible for marriage. Dollops ice cream brand from Cadbury India. where Indian customers love to touch and feel products. These premium brands retail not in neighborhood small stores but in supermarkets and hypermarkets. This includes: • • • • Tata Oil Mills Company Brooke Bond Lipton India Modern Foods It acquired Kissan brand from UB group. trained and guided by HLN's expert managers and trainers. It has also launched Pureit. The advertising campaign. all independent entrepreneurs. Lakme cosmetics brands from Tata. That has spawned 48 . Hindustan Unilever is also milking one of its top brands—Fair & Lovely. a home water purifier which supplies drinking water without boiling/need of electricity.Other Acquisition Hindustan Unilever has acquired several Indian FMCG companies so far. tone for many of India’s complexion-conscious consumers. NEW INITIATIVE Bringing High-End Dove To India Baillie is fighting back.
and creating access to relevant information 49 .6%. women empowerment. HUL is focusing on health & hygiene education. which Hindustan Unilever exploited with the launch of water purifier Pureit in 2005. and relief & rehabilitation after the Tsunami caused devastation in South India. and sunblock lotions. Baillie is also getting aggressive on foods. Through Shakti. These efforts have delivered some promising results. HUL has also responded in case of national calamities / adversities and contributes through various welfare measures. But Hindustan Unilever’s brand is still tops. care for the destitute and HIV-positive. the company embarked on an ambitious programme. Shakti also includes health and hygiene education through the Shakti Vani Programme. focusing on the Knorr brand of soups and curry mixes —ideal for the Indian market. and rural development.” He points to the demand for safe drinking water in India. Sumeet Budhraja. In the quarter ended June. 2007. It is also involved in education and rehabilitation of special or underprivileged children. SERVICE TO SOCIETY HUL believes that an organisation's worth is also in the service it renders to the community. says that Hindustan Unilever “could have addressed a lot more categories. Reason enough to keep patrolling those store aisles. and water management. HUL is creating micro-enterprise opportunities for rural women. Analysts believe the company’s current strategy of concentrating on premium products and marketing them in the large retail stores is a winning one. with net profit up 29. and Baillie is pleased with the modest turnaround. the company’s sales grew 13%. soaps. Shakti. at one-third the price of established Indian brands such as Aqua guard. but they are more focused and regaining their aggressiveness. In 2001. consumer analyst at Mumbai brokerage First Global Securities. most recent being the village built by HUL in earthquake affected Gujarat. thereby improving their livelihood and the standard of living in rural communities.a host of competitive fairness creams.
it is because of being singleminded in identifying itself with Indian aspirations and needs in every walk of life. Shakti aims to have 100.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.000 women entrepreneurs in its fold. touching the lives million people. reaching out to 100. of over 600 If Hindustan Unilever straddles the Indian corporate world. By the end of 2010. The program now covers 15 states in India and has over 31.000 Shakti entrepreneurs covering 500. It has already touched 70 million people in approximately 15000 villages of 8 states.000 villages and directly reaching to 150 million rural consumers.000 villages. PRODUCT PROFILE HUL’s business activities are divided into four broad areas: Home and personal care 50 . HUL is also running a rural health programme – Lifebuoy Swasthya Chetana.
Rin and Wheel • Skin care: Fair & Lovely. Liril.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 . Lifebuoy. ice creams. rice Bathing soaps: Lux. deodorants and talcs. beverages. Pears and Rexona • Laundry items: Surf Excel. skin care. Hamam. branded staples. hair care. oral care. Exports • HPC. marine products. culinary products. Breeze. Ayush ayurvedic products and services. Sangam. fabric wash. Modern Foods ranges New Ventures Hindustan Lever Network. Dove. colour cosmetic Foods tea. coffee. home care. Pureit water purifiers.
Ayush • Tea: Brooke Bond and Lipton • Coffee: Bru • Foods: Kissan. Annapurna and Knorr • Ice cream: Kwality Wall’s . 52 .
Fair & Lovely. Sunsilk. 53 . Rin. Lakme.BRANDS HUL s brands are household names across the country. Pond s. Clinic. Surf Excel. Wheel. Kissan. Knorr-Annapurna and Kwality Walls. They include: Lifebuoy. Closeup. Brooke Bond. Lux. Pepsodent.
How can we better understand these issues and their importance for successful strategy implementation? In this article. The best-formulated strategies may fail to produce superior performance for the firm if they are not successfully implemented. It is thus obvious that strategy implementation is a key challenge for today ‟s organizations. A myriad of factors can potentially affect the process by which strategic plans are turned into organizational action. we try to respond to this 54 . ranging from the people who communicate or implement the strategy to the systems or mechanisms in place for co-ordination and control. strategy implementation is often seen as something of a craft. and only 17 percent felt that they had a consistent strategy implementation process. making that strategy work – implementing it throughout the organization – is even more difficult (Hrebiniak. hard and mixed) factors that influence the success of strategy implementation. 2005). and its research history has previously been described as fragmented and eclectic (Noble. after a comprehensive strategy or single strategic decision has been formulated.TOPIC DETAIL Although formulating a consistent strategy is a difficult task for any management team. strategy implementation has become “the most significant management challenge which all kinds of corporations face at the moment”. 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. The survey reported in that white paper indicates that 83 percent of the surveyed companies failed to implement their strategy smoothly. rather than a science. There are many (soft. 2006). It is thus not surprising that. Unlike strategy formulation. according to a survey of 276 senior operating executives in 2004 (Allio. significant difficulties usually arise during the subsequent implementation process. 1999b). as Noble (1999b) notes. According to the White Paper of Strategy Implementation of Chinese Corporations in 2006.
their main results. we describe the methodology that we have used to conduct our literature review and define its scope (section 3). Examined organizational levels and organizational types are two elements of the research context. section 4. 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. Section four also contains a review of existing models and frameworks of strategy implementation. focusing on the main results of prior studies. The next part of the article. It will consequently also reveal under-exploited methods or contexts. we analyze definitions of strategy implementation and compare them with other synonymous and related terms (in section 2). In the fifth section of the article. the results section compiles nine factors that 55 . We also discuss directions for future research in the domain of strategy implementation and how they may be pursued. The structure of this paper is as follows: First. to surface current areas of agreement and disagreement. We have conducted an analysis in the most widely used literature databases to identify key factors influencing the process of strategy implementation. we discuss the implications of our findings as well as their limitations. we will review the 60 identified studies and analyze their research context. Then. Our study also examines the ways in which strategy implementation has been researched so far. In the sixth and final section. In this section. theoretical bases.question by analyzing existing research on the factors that influence strategy implementation . contains the actual review of literature. As the core of our literature review. in terms of the applied research methods and the examined strategy contexts. In that section we present a discussion of nine major factors that affect strategy implementation. We present a conceptual framework that organizes the current research findings. the research methods used as well as the analytical techniques employed. as well as missing evidence and resulting future research needs.
etc. SBU and functional level. 1990. however. Most of these studies. The same holds true for functional strategies: We have found eight studies that focus on the implementation of such strategies. 1991. functional level. Skivington & Daft. inter-functional levels. Organizational types refer to the kind of organization that is studied. Sashittal & Wilemon (1996). Piercy (1998). Chimhanzi & Morgan. focus on marketing strategy (such as Sashittal 56 .. Organizational levels designate the locus of strategizing. Olson & Slater & Hult. 1984. i. operational level and mixed levels (such as corporate and SBU level. corporate-SBU-functional levels.. whether it is privately held or state-owned and whether its operating scope is regional or rather multinational. SBU-level strategies or corporate strategies. 1989. 1996. R&D). marketing. 2005. Noble & Mokwa (1999). as well as several frameworks or models that aggregate or relate relevant factors to each other. Govindarajan. 4. Nilsson & Rapp. while many examine SBU level strategies (Gupta & Govindarajan. We then briefly discuss the theoretical bases of the reviewed studies. White. Govindarajan & Fisher. Govindarajan. whether a study focuses on functional strategies (i. strategic business unit (SBU) level. 2006. HR. 2005. Chimhanzi (2004). Viseras & Baines & Sweeney (2005).1 Research Contexts We classify research contexts into two dimensions: the examined organizational levels and the considered organizational types. five organizational levels can be distinguished.e. 1988. Finally. 1999.influence strategy implementation success. Brenes & Mena & Molina. 1991. i. Noble (1999a). They are: corporate level. 2007). Organizational Levels In the context of strategy implementation research. Roth & Schweiger & Morrison. 1986. Surprisingly few researchers focus on the implementation of corporate level strategies.). the research methods and analytical techniques will be reviewed to see which methods are still underutilized in the context of strategy implementation.e. Qi (2005).. namely Rapert & Lynch & Suter (1996). Schaap.e. Waldersee & Sheather. 1992b. Floyd & Wooldridge. such as Wernham (1985) and Schmidt & Brauer (2006).
Baines and Sweeney‟s study (2005) in the context of manufacturing strategies. 1999. Bantel (1997) analyzes the effects of two key aspects of product strategy (product leadership and product/market focus) on performance. 1998. Homburg & Krohmer & Workman (2004). Consequently. There are few studies dedicated to the implementation of other functional strategies (this is clearly an area of future research). 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. Walker and Ruekert (1987) analyze three levels of strategy – corporate. Process strategies. such as Bantel (1997). Noble & Mokwa. focuses on the implementation of a yield 57 . SBU and functional. 2004). and on two aspects of strategic implementation (stakeholder input and employee empowerment). Few studies focus on the actual operational level of strategy implementation. This study also emphasizes the relationship between product strategy and several strategic implementation variables. for example. functional and process. normally cut across functions and are aimed at integrating organizational processes across the organization in order to make them more effective and more efficient. 1996. Homburg. There are some studies which cannot be classified into the above categories.& Wilemon. Okumus (2001). business. The mixed studies category also includes articles that focus on the role of project management for strategy implementation. Chimhanzi. we classify them into a group called mixed level studies: Gupta (1987). Krohmer & Workman (2004) point out that market orientation plays a key role for the successful implementation of a PPD (premium product differentiation) strategy. Piercy. This study focuses on the key success factors in the project management for the implementation of strategic manufacturing initiatives. Beer & Eisenstat (2000) and Hrebiniak (2006) have carried out research on corporate and SBU-level strategy. the last type. Higgins (2005) even focuses on four types of strategies: corporate.
level (8 articles) and mixed levels (9 articles) have received more attention than the other two levels. One such study focuses on marketing‟s contribution to the implementation of business strategy (Slater & Olson. Harrington (2006). the functional. there are many studies that are not sufficiently explicit regarding their scope concerning strategic levels. which seems a highly relevant area to improve our understanding of strategy 58 . 1987. another finding revealed that marketing is the prevailing domain. We note that – among the five strategy levels – the SBU-level (14 articles). First. accounting etc. corporate (2 articles) and operational (2 articles). 1989). Within the functional level. Peng and Litteljohn (2001) investigate three hotel chains implementing a strategic initiative on yield management. R&D. We can draw multiple conclusions based on our analysis of the treatment of organizational levels in prior studies of strategy implementation. we can observe that there are very few studies that have examined the inter-relationships of functional and business strategies. compared with other functional areas (such as manufacturing. the implementation of corporate strategies is an under-researched area (perhaps with the exception of post-merger integration research that we have excluded in our review) and should be given more research attention. Two calls to action result from these findings.management project and a key client management project in two hotels. and Schaap (2006).). Many studies (25 articles) do not even indicate at which level their discussion of strategy implementation is located. Examples of such ambiguous studies are Bourgeois Ш and Brodwin (1984). Nutt (1986. Second. Another study has examined the mutual influence of functional departments ‟ relationships on strategies. In terms of promising future research on strategy implementation. Higgins (2005). HR. Noble (1999b). Grundy (1998) examines the synergies among project management and strategy implementation and reviews strategy tools that may help in project management. future strategy implementation research should pay attention to explicitly indicate the level of analysis. Finally. Lehner (2004). 2001).
Noble ‟s (1999a) study spans several types of organizations – a national airline. Some of the researched companies focus on their domestic markets. a provider of emergency fire and medical services. Qi (2005) issues questionnaires to the head offices of 800 private companies in the UK. Wernham (1985). In conclusion. or among local firms and multinational firms. Forman and Argenti (2005) select five multinational companies as samples. Roth & Schweiger & Morrison (1991) and Kim & Mauborgne (1991. FedEx. Alexander (1985) surveys 93 private sector firms through a questionnaire. Velliquette and Garretson ‟s (2002) study on strategy implementation takes a nationwide sample of 1000 CEOs of general service hospitals. As far as ownership forms are concerned. but mostly private corporations.implementation: Chimhanzi (2004) has examined the impact of marketing and HR interactions on marketing strategy implementation. a major financial services firm. there have been no studies comparing similarities and differences of strategy implementation among private corporations and state-owned corporations. 59 . local or multinational. British Telecom (BT). which are members of the American Hospital Association (AHA). Okumus (2001) investigates two international hotel groups. However. 1993) study global strategy. as stated earlier. Dell. for example. explores the reality of strategy implementation in a U. Rapert. not only local firms but also multinational firms. Sears. Organizational types Organizational types. the subjects of strategy implementation studies are not only state-owned corporations. and a leading firm in the imaging technology industry. namely Accenture. nationalized company. state-owned and privately held companies. refer to the characteristics of organizations: if they are private or state-owned.K. while others are multinational corporations. strategy implementation studies discuss both. This clearly is another interesting avenue for future research. a leading packaged goods company. We thus do not know which specific differences exist regarding strategy implementation in these various forms organizations. Johnson & Johnson.
teeth cleaning products. bakery products) and tobacco. such as buckets. Fast Moving Consumer Goods is a classification that refers to a wide range of frequently purchased consumer products including: toiletries. cosmetics. detergents. soft drinks. 60 . shaving products. However the huge number of goods sold is what makes the difference. dairy products. other non-durables such as glassware. Unilever and Procter & Gamble. branded and packaged food. Examples of FMCGs are soft drinks. bulbs. The term Consumer Packaged Goods (CPG) is used interchangeably with Fast Moving Consumer Goods (FMCG). and chocolate bars. consumer electronics and packaged food products and drinks. household care (fabric wash and household cleaners). cereals. The margin of profit on every individual FMCG product is less. Examples of FMCG brands are Coca-Cola.INDUSTRY PROFILE Fast Moving Consumer Goods(FMCG) FMCG are products that have a quick shelf turnover. toiletries). Hence profit in FMCG goods always translates to number of goods sold. Kleenex. Pepsi and Believe. chocolates. The FMCG sector represents consumer goods required for daily or frequent use The main segments of this sector are personal care (oral care. although these are often categorized separately. ‘Fast Moving’ is in opposition to consumer durables such as kitchen appliances that are generally replaced less than once a year. cosmetics. beverages (health beverages. time and financial investment to purchase. batteries. paper products and plastic goods. soaps. hair care. soaps. Three of the largest and best known examples of Fast Moving Consumer Goods companies are Nestlé. tissue paper. at relatively low cost and don't require a lot of thought. The category may include pharmaceuticals. staples.
HLL. It is the fourth largest sector in the economy and is responsible for 5% of the total factory employment in India. more so in the last six years (FMCG sector witnessed decline in demand). These companies were. able to charge a premium for their products. therefore.The Indian FMCG sector is an important contributor to the country's GDP. With the gradual opening up of the economy over the last decade. margins have been compromised. the sector meets the every day needs of the masses. Colgate. increase in the disposable incomes and altered lifestyle. companies like ITC. the margins were also on the higher side. This industry has witnessed strong growth in the past decade. History of FMCG in India In India. the boom has also been fuelled by the reduction in excise duties. 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). But in the last ten years. The lower-middle income group accounts for over 60% of the sector's sales. In the process. FMCG companies have been forced to fight for a market share. urbanization. Many of the global FMCG majors have been present in the country for many decades. As a result. Furthermore. The industry also creates employment for 3 m people in downstream activities. many of the smaller rung Indian FMCG companies have gained in scale. the unorganized and regional players have witnessed erosion in market share. 61 . In this context. This has been due to liberalization. much of which is disbursed in small towns and rural India. Rural markets account for 56% of the total domestic FMCG demand. in reality. Unlike the perception that the FMCG sector is a producer of luxury items targeted at the elite. 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.
the industry could double in size by 2010). The bottlenecks of the conventional distribution system are likely to be removed once organized retailing gains in scale.term horizon. In our view. these are still at a relatively nascent stage. companies were unable to grow faster. Rapid urbanization. unleashing a latent demand with more money and a new mindset. of the total consumption expenditure. Given the aggressive expansion plans of players like Pantaloon. industry estimates suggest that the industry could triple in value by 2015 (by some estimates. Shopper’s Stop and Shoprite. organized retailing accounts for just 3% of total retail sales and is likely to touch 10% over the next 3-5 years. Trent. It has been ranked second in a Global Retail Development Index of 30 developing countries drawn up by A T Kearney. In this backdrop. increased literacy and rising per capita income are the key growth drivers for the sector. Currently. as the per-capita consumption of almost all products in the country is amongst the lowest in the world. Due to infrastructure constraints (this influences the cost-effectiveness of the supply chain). almost 40% and 8% was accounted by groceries and personal care products respectively. Aspiration levels in this age group have been fuelled by greater media exposure. we are confident that the FMCG sector has a bright future India is rated as the fifth most attractive emerging retail market. 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. forced-buying by offering many choices and also opens up new avenues for growth for the FMCG sector.Techno Park.Current Scenario The growth potential for FMCG companies looks promising over the long. As per the Consumer Survey by KSA. Although companies like HLL and ITC have dedicated initiatives targeted at the rural market. organized retailing results in discounted prices. In our view. testing times for the FMCG sector are over and driving rural penetration will be the key going forward. 62 .
Burgeoning Indian population. lower volume of higher value added products reduce scope for export to developing countries. presents an opportunity to makers of branded products to convert consumers to branded products.1 billion. Poor monsoon in some states. hair wash etc in India is low indicating the untapped market potential. toothpaste. Moreover.4 billion in 2015. Over the last one year.000 crore only. The FMCG market is set to treble from US$ 11. 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. The FMCG sector has traditionally grown at a very fast rate and has generally out performed the rest of the industry. Small-scale sector reservations limit ability to invest in technology and quality up gradation to achieve economies of scale. 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.T. is expected to grow at a compounded 30 per cent over the next five years. The outlook in the short term does not appear to be very positive for the sector.6 billion in 2003 to US$ 33. Kearney has estimated India's total retail market at $202. The Indian FMCG sector is the fourth largest sector in the economy with a total market size in excess of US$ 13. the general slowdown in the economy is also likely to have an adverse impact on disposable income and purchasing power as a whole. There is significant potential for increasing exports but there are certain factors inhibiting this.6 billion. particularly the middle class and the rural segments. Moreover. The growth of imports constitutes another problem area and while so far imports in this sector have 63 .A. Penetration level as well as per capita consumption in most product categories like jams. 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. analysts feel. too. is unlikely to help matters. 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.
Give the large market and the requirement for continuous repurchase of these products.been confined to the premium segment. the long term outlook for revenue growth is positive. This should yield positive results for them 64 . FMCG companies estimate they have already cornered a four to six per cent market share. The high burden of local taxes is another reason attributed for the slowdown in the industry At the same time. Moreover. FMCG companies should continue to do well in the long run. most of the companies are concentrating on cost reduction and supply chain management.
used as a guide in collecting and analyzing data.A Casual Research Design is concerned With determining cause and effect relationship.The major emphasis in exploratory Research design is on discovery of ideas and insights. 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 . There are three types of Research Design:Types of Research: Exploratory Research Design:. Casual Research Design:.The Descriptive Research Design Study is typically concerned with determining the frequency with which something occurs or the relationship between two variables. Descriptive Research Design:. For the study.RESEARCH METHODOLOGY Research Design: Research design is simply the framework or plan for a study.
Probability Sampling is of following types: Simple Random Systematic Cluster Stratified Double Non-Probability Sampling: Non probability sampling is non-random and subjective. which should be reliable and appropriate for his report. Types of NonProbability Sampling Convenience Judgement Quota 66 . That is each member does not have a known non zero chance of being included.SAMPLE DESIGN A sample design is a definite plan determined before any data is actually collected for obtaining a sample. 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. Researcher must select a sample design.
various newspapers and published books. 67 . 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. Magazines. DATA COLLECTION METHOD Data for the present study is collected from two sources: Secondary: .Secondary data is collected from published sources like Journals.Researcher selects the sample as per their convenience. For this research work I have chosen Non. In addition to this internet access will make the study more effective and meaningful. books of national and international author as well as the annual report of the company. journal of national repute. newspaper Employment exchange The secondary data would be collected from financial statement. journals.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.
Or a consumer buying Surf Excel for her clothes mixed it with a cheaper powder.The lure of new avenues of expenditure in products and services led to consumersrestricting their expanse on FMCG. After all. As a result of this shift in spending patterns. The rest came from severalnon-FMCG businesses which were not profitable.Mobile phone ownership and usage exploded due to its amazing lifestyle andconvenience be nefits as well as lower prices. It is important to understand why this happened. in 2000.The rapid opening up of the economy resulted in many new avenues of expenditurefor the consumer’s growing income. 68 . The home ownership market grew exponentially asthe average age of a home loan borrower dropped from 50 in 1999 to 30 in 2004. one could drive out of a car showroom in a Maruti 800 with adown payment of only Rs.DATA ANALYSIS & INTERPRETATIONS Through the nineties. 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. the FMCG markets grew at almost 15% per annum in value. Leisure and Travelsectors also boomed. Entertainment. 75% of our sales came from FMCG businesses.Suddenly. FMCG market growth stalled and then declined for the next four years. a consumer buying six tablets of Lux in a month went to buying three of Lux and three cheaper brands. For example. and did not offer prospects for long-term leadership. 2000. But they did downtradeto lower priced substitutes from higher quality brands. A sharp drop in interest rates from 18% to 8%led to explosive demand for consumer durables like white goods. two-wheelers andautomobiles.
FMCG still offers enormous potential As the largest FMCG player it was up to them to reverse the downtrading to realize itstrue growth potential. Over the last few years they have focused on putting in place the building blocks of a strong Foods business. Building blocks of a strong Foods business In Foods.Besides. These will be their main engines of growth. wehave divested and discontinued 15 businesses including Animal Feeds. The Foods business will now invest for growth through relevant innovation. SpecialityChemicals. Mushrooms etc.1.Today they are a focused on FMCG company with our branded business accountingfor over 90% of sales. Nickel Catalyst.750 crores as in 1999. In all. whichthe current business simply could not afford. their Foods business has a healthy gross margin and a supply chain driven byfreshness. consisting of 35 brands across 20 categories. Adhesives. Seeds. It was often commoditized with low margins. Today. Historically their Foods businesswas fragmented and lacked scale. be ittechnology. They could achieve this by raising the bar and becoming worldclass in what their brands 69 . with higher levels of resource concentration. both interms of resource and focus. people talent or media spend. They have alsocleared the supply chain of all old stock and geared up for fresh availability on shelf.They decided to disengage from all non-FMCG or commodity businesses. they were a drain on the core FMCG business. Thermometers. Therefore they divested the non-valueadded parts like Vanaspati. withsales of Rs. there is enormous growth potential in leading the evolution of consumers to branded and processed foods. Theyrecognized that changing food habits would require considerable investment. They have consolidated theuir portfolio and improved thegross margins by over 13% through product mix and cost reduction.
70 . they are seeing a strongcorrelation between income levels and the size of FMCG markets.Penetration levels in several of the categories and consumption levels in all of thecategories is low by any comparison. The Foods business will now invest for growth through relevant innovation. per capita income in India is likely to touch China’s current levels. 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. Nothing less would do. many undifferentiated and lacking scale. the FMCG market will be over Rs. Across the world. Across the world. per capita income in India is likely to touch China’s current levels. FMCG still offers enormous potential As the largest FMCG player it was up to them to reverse the downtrading to realize itstrue growth potential. Nothing less would do.100. they are seeing a strongcorrelation between income levels and the size of FMCG markets.100.000 crores from a current value of Rs.000 crores. This is an opportunity that they have to seize.000 crores from a current value of Rs. They are already seeing the benefits.offered and how they worked. At thoselevels. This is an opportunity that they have to seize.40. They chose to focus on 35 power brands covering all consumer appeal and price segments. they had 110 brands. Over the next 10years. In 2000. They could achieve this by raising the bar and becoming worldclass in what their brands offered and how they worked. Six brands – Brooke Bond.000 crores.Penetration levels in several of the categories and consumption levels in all of thecategories is low by any comparison. the FMCG market will be over Rs. Today. At thoselevels.40. Over the next 10years. their Foods business has a healthy gross margin and a supply chain driven byfreshness.
They have also launched several low unit size and price packs for single use to makethe brands more accessible to all income groups. 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. Lux. they are the first tointroduce a branded toothpaste in a tube at Rs.In several cases they reduced prices to make the brands more affordable.Lifebuoy. 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. Better quality and more affordable prices have increased the value to the consumer.In the case of Lifebuoy.5 and a branded quality shampoo in a bottle at Rs. Imagine the importance of that benefit to consumers in 71 . in the last three years to upgrade the brands. For example. Theyhave invested over Rs. Fair & Lovely. How often have we heard someonesay. 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”. 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. has grown at over 15% for the last three years.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. in the laundry market. Today Lifebuoy. Similarly. Rin and Wheel – have emerged as mega brands in the last five years.5. or 5% of sales. each with sales of more thanRs.400 crores. It moved from being a mere soap to a health essential.
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.
cost pressure is likely due to rising crude and freight costs. 5. Increasing departmental stores concept – impulse @ at cash counters. CONCLUSION 76 . Threats 1. Globalization. HLL's tea business has declined marginally. reason is that.4.
are some of the main ingredients of FMCG sector.personality. and of great benefit to the company in furthering its competitive advantage. Different line of products are offering customers to choose according to their gender. 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.lifebuoy. SUGGESTIONS 77 . FMCG secter hold a prime importance as the competition is increasing day by day.ariel.Demography.Lux.pantene etc.clinic plus.income and other attributes.This company project has demonstrated “HINDUSTAN UNILEVER’S MARKETING STRATEGIES AND POLICIES” that has proved to be extensive through.This sector has member of players which altimately shopes the buying decision products like.
They need to bring more awareness of the companies name along 78 . HUL They need to enter into lower segments of detergent. They need to take care regarding the competition with in its own 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. They need to promote their companies name along with the brand name.
LIMITATIONS While undertaking my study I was encountered with some limitations: Limited time was provided to complete the study. Cost involved in collecting the data was high. To fix an appointment with the dealers was also very difficult task and even after that many time people was not turn up for the appointment. 79 .
Ltd.BIBLIOGRAPHY BOOKS: • • • Kothari C. Thakur Devendra. 2005 Page 85. 4th Edition 2002 Page 135. Research Methodology.Hall of India Pvt. Ltd. Prentice. .R. Deep & Deep Publication Pvt. Marketing Management. Kottler Philip. . 80 .. 10th Edition. Research Methodology. 2001 Page 365.
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