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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.
place etc… • Market information: The much desired success of marketing depends on correct and timely decisions. 5 . • 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. It makes the exchange process smooth and acts as lubricating oil to the wheel of marketing. especially advertising and branding. However. Products are often developed to meet the desires of groups of customers or even. Facilitating Functions These are the function that facilitates the process of exchange. These decisions are based on market information. "marketing" is the promotion of products. in professional usage the term has a wider meaning which recognizes that marketing is customer centered. It includes all facts. have passed into the language. 7P’s of Marketing: In popular usage. opinion. estimates. for specific customers. the Four Ps. Jerome McCarthy divided marketing into four general sets of activities. views. in some cases. • Financing: Finance is the base for all marketing activities. It is related with the division of commodities into distinct groups standardization involves establishment of certain criteria to which the goods must confirm. E. His typology has become so universally recognized that his four activity sets. regarding the market • Standardization: Standardization helps on tackle certain major problems of marketing.3.
The price need not be monetary . it is essential that you help him see what he is buying or not. When a service goes out to the customer. e. referring to the channel by which a 6 . and how it relates to the end-user's needs and wants. sales promotion.brochures. time. or attention. • People: People refer to the customers. • Promotion: This includes advertising. For example. point of sale placement or retailing. • Pricing: This refers to the process of setting a price for a product.The four Ps are: • Product: The Product management and Product marketing aspects of marketing deal with the specifications of the actual goods or services.g. employees. management and everybody else involved in it. and personal selling. if they are provided in time. or company. pamphlets etc serve this purpose Physical distribution refers to how the product gets to the customer. publicity. This fourth P has also sometimes been called Place. and refers to the various methods of promoting the product. It is essential for everyone to realize that the reputation of the brand that you are involved with is in the people's hands. for example. • 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. brand. if the customers are informed in hand about the services and many such things. including discounts.it can simply be what is exchanged for the product or service. • Physical (Evidence): It refers to the experience of using a product or service.
online vs. which you should be aware of. Evolution of Marketing: Marketing has evolved from the time man existed on earth. Industrial or B2B marketing must account for the long term contractual agreements that are typical in supply chain transactions. whereas the essence of marketing should be the outside–in approach". Services marketing must account for the unique nature of services. which geographic region or industry. to which segment (young adults. etc. families. Industrial products. As a counter to this.product or service is sold (e. in Riding the Waves of Change (Jossey-Bass. Morgan. Relationship marketing attempts to do this by looking at marketing from a long term relationship perspective rather than individual transactions. Following are the phases of development of marketing 7 . These four elements are often referred to as the marketing mix. services. high value consumer products require adjustments to this model. 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). The four Ps model is most useful when marketing low value consumer products. as well as a framework within which these can be used. having made this important caveat. 1988). A marketer can use these variables to craft a marketing plan. business people). adds "Perhaps the most significant criticism of the 4 Ps approach.g. Even so. retail).
Barter system Production Orientation Sales Orientation Marketing Orientation Consumer Orientation Management Orientation Social Orientation Fig. Marketing orientation: Customer’s importance was satisfied but only as a means of disposing of goods produced competition become more stiffer. Production orientation: This was the stage where producers. 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. instead of buying concerned with customer preference concentrating on the mass production of goods for the purchase of profit. 8 . Sales orientation: This stage witness major changes in all the spheres of economic life.
rural marketing in India is still about a van campaign. Still. 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. This is grossly inadequate to cover the huge potential for different products in rural markets. at least. MARKETING STRATEGY OF FMCG PRODUCTS: Barring a few. promotion and distribution. 9 .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.000 crore (Rs 130 billion) allotted to mass media. compared to the over Rs 13.000 people for consumer durables. to less than 50. Social orientation: The companies are not only cares for consumers but also for social welfare. a few painted walls and the occasional participation in village haats and melas. a badlymade commercial.000 for fast-moving consumer goods. the total budget for rural marketing is only about Rs 500 crore (Rs 5 billion). "rural" means different things to different people: from 500. Of course. social welfare becomes the added dimension to the companies. of companies wanting to move beyond urban boundaries.or. Thus. According to estimates by the Rural Marketing Agencies Association of India. it is heartening to note the increasing awareness of the importance of rural markets . Management orientation: The marketing function assumes the managerial role to co-ordinate all the interacting business with the objectives of planning. notable exceptions. But then.
Companies like Cavin Kare (Chik Shampoo. concentrated markets. But there is no study to tell you what is the ideal cost per contact or what is the ideal number of eyeballs or footfalls for different rural activities. the most enduring example of a brand that began as a regional player and is now a giant. They all started in small. But even more important is the need for a dedicated task force. be it a simple radio spot or a wall painting or a theatre film. 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. What should companies do to step up their payback from rural marketing efforts? Here are some steps that should help. Ghadi detergent powder and Power soap are proof that regional brands can become brands to reckon with. But only consider the huge successes of some regional brands.the successes of Hindustan Lever [ Get Quote ] and ITC are proof of this statement. People power Total commitment from top leadership. is imperative . 10 . touched a chord in the target audience. especially in the FMCG sector. appealing to the local ethos and aspirations of the targeted area. Meera Herbal Powder.The TRPs and NRS/IRS data help you determine the efficacy of TV and press marketing. And. Their communication. Fairever Cream and so on). most importantly. their policies were flexible and they could adopt to fast changing marketing situations. keeping in mind that rural marketing is a long-term relationship. which are giving the multinationals a run for their money. Anchor (100 per cent vegetarian toothpaste). And don't forget Nirma.
until the completion of a specific task. Recently. The teams that succeeded felt no ownership of the campaigns they had not initiated. management graduates who have studied the subject as an elective. or at least.Rural marketing efforts need special mindsets. people with fire in their bellies who want to prove themselves in big companies and have no issues about working in smaller markets. the teams that briefed us in the initial stages and participated enthusiastically in the campaign. which many of the urban-oriented management graduates who are at the helm of affairs at most organisations do not possess.. you pay peanuts. The best bet is to recruit students from specialised institutes such as the Indian Institute of Rural Management. 11 . A separate marketing and sales vertical headed by people with passion and commitment to rural marketing and supported by a field team that can face the rough and tough of the vast country-side with courage and conviction is a must. the fate of many rural marketing initiatives in the country. you get only monkeys . What started as a great rural marketing initiative has been relegated to the dustbin. Ensure the consistency of the team involved in any project. we were involved with two big clients. In both cases. in keeping with their companies' policy of shifting and promoting people. were shifted out midway. Many of these are students from small towns.and discuss the path their careers are likely to take in the organisation. And send them out in the field only after thorough training.. Pay them well remember.
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.Goals are good Early on in the campaign. with regard to products and brands. is very different from their urban counterparts. with both short term and long term goals. There is very little effort to tailor whatever communication is made in such efforts. Our experience shows that the attitudes. 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. If you are interested in the second alternative. aspirations and fears of rural customers. is a must. be they van campaigns or below-the-line activities. All too often. 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. 12 . Most of them have previously appointed vendors who implement the company's ideas blindly. clients insist their knowledge of their customers (based on studies of urban India) is enough on which to base an action plan. Know your customers A good place to begin is studying the mindset of your customers. a comprehensive brand building strategy in rural India. so you can create a customised plan of action.
we recently conducted a survey among some haats in Tamil Nadu. and to that extent make your effort cost-effective.the humongous task of physically reaching your product to over 600. For instance. mostly sold through such local haats and bazaars. at least keeping in mind the present goals of marketing companies in rural India. since they can't afford the real thing. most of them without motorable roads.Research can give you invaluable ideas for new product development as well as new methods of reaching your target audience. But it's not really as nightmarish as it is made out to be. How does that happen? It's a direct result of rising aspirations. 13 . spurious products that are sold in these bazaars. It is estimated that FMCG companies lost more than Rs 10. The haatswere popular with the poorest agricultural labourers who consciously buy the duplicate.000 crore (Rs 100 billion) to spurious products. While haats offer opportunities to target consumers from several villages at one place. who then buys the products from the nearest feeder markets.000 villages. Ensure availability Most anecdotes about rural marketing centre on the distribution aspect . ensure that the people who patronise these haats are the kind who will buy your brand. pressure cookers with two handles and a radio with key-winding mechanism are all the result of research. We've all heard about the shampoo sachets that are available in even the smallest villages. fuelled by television commercials. The refrigerator with standby power for 12 hours. with some interesting results. The consumer demands the product from the local shopkeeper. More and more companies turn to the local haats to sell their products.
Studies also indicate that rural consumers prefer to shop for durables such as televisions. is now passe.” says Vats. new consumer and retail trends and aggressive marketing and promotions.” insists Sudhanshu Vats. 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. Pricing.” 14 . automobiles and appliances in the nearest big town or city. “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. home care. in fact.” “We have done key innovations across the product portfolio and it is working for us.000.” he said.000. now is focused on product innovation. “Our strategy for growth. you're closer to the rural consumer than you would have thought. So. This comes even as Unilever is scouting for a potential buyer for its laundry business in the US. category head.Which means if you can ensure distribution to the feeder markets in towns or villages with populations of 10-15. MARKETING STRATEGY ADOPTED BY HUL “Price cut or hike is not a long-term growth strategy. if your products are in towns with populations of 50. you've already taken the first step towards reaching your target customer.
5%. the industry is stabilizing. an analyst at Macquarie Securities here.HUL’s market share in the laundry segment grew to around 37.8% in the quarter ended June from 35. The recent price war between companies led to erosion in their profitability but now.908 crore in 2006 and rose 8.5 percentage points. However. the laundry business is witnessing a surge in demand from cities and HUL is focusing on Tier I and II cities to tap that demand. this time. the laundry industry in India was worth Rs7. In 2006. however.7% percentage points to 13. the Ahmedabad-based manufacturer. Wheel. increased its market share by 2 percentage points in the same period. up to a 7.596 crore to the company’s total sales of Rs12. According to Vats. HUL’s soaps and detergents segment contributed around Rs5. a value brand that. saw its market share dip by 1.5% in the same period last year.6% share.103 crore. According to ACNielsen.” says Unmesh Sharma. “Laundry has been an attractive segment in the past and is likely to keep growing in the near future. according the market research firm ACNielsen. the increase was not at the expense of price war with its multinational rival Procter & Gamble Co. according to Vats contributes around 50% of HUL’s laundry segment revenues. P&G also gained 0. with a total share of about 18%. 15 . Nirma Ltd. HUL doesn’t report its laundry revenues separately but puts them under the soaps and detergent category.4% over 2005.
“Still. “Some of HUL’s recent moves. Also. analysts remain cautious. such as promotional campaigns and advertising. seem right.” says Vats. “Trends suggest that the usage of detergents has gone up as a result. people want to use better and branded products.” says Macquarie’s Sharma. with premium quality of clothes. it is too early to say what result their new strategies will yield.“Consumers today are buying more clothes.” Still.” OBJECTIVE OF THE STUDY 16 .
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 study would be helping HUL to frame its different promotion schemes.This project is applicable on the on the area of FMCG. This is widely awaited. 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. COMPANY PROFILE 18 .
It is generally acknowledged 19 . Hindustan Unilever is Unilever's main operating business in India. 2007 the company has changed the name to Hindustan Unilever Limited. The company focuses on efficient delivery to consumers with an improved supply chain. In addition to FMCG products it is the country's biggest exporter of tea. and is also one of the country’s top five exporters. These three companies merged to form Hindustan Lever Limited in November 1956. It is the country's biggest consumer goods company. followed by Lever Brothers India Limited (1933) and United Traders Limited (1935). Hindustan Unilever Ltd (HUL) has grown from strength to strength with new technologies being introduced to make the HLL consumer goods business. Hindustan Vanaspati Manufacturing Company. brand building initiatives and innovation. Effective July 19. HUL inhabits virtually every sector of the consumer goods market. including several not occupied by Unilever in other markets such as preserves and bakery products. a subsidiary of Unilever. one of the most efficient in the world. is a fast moving consumer goods (FMCG) company based in India. The company’s history dates back to 1931 when Unilever set up its first Indian subsidiary. The Hindustan Unilever Ltd (HLL) is India’s no. which has helped the company to sustain its leadership position in the overall FMCG category in India.The Hindustan Unilever Ltd’s(HUL) Inc has taken the opportunity to offer us a broader view of FMCG category. Hindustan Unilever Limited (HUL). and far and away the leading advertiser.1 FMCG is able to share with their market insights based upon unparalleled breath of consumer goods experience.
200 managers 2.000 employees 1. will see their share of the company's growth fall to 2 percent in 2010 from 3.3 percent in 2007. which sells soap to more than 500 million Indians. Hindustan Unilever – A 75 Year Commitment 15. Unilever's overall sales growth will slow to 4. and ITC Ltd.Now Cincinnati. which make up about a third of Unilever's worldwide sales. Asia and Africa.000 suppliers & associates 75 Manufacturing Locations 45 C&FAs.000 Stockists Total Coverage 6.2 percent in North and South America. step up marketing in Asia's third-biggest economy.to be one of India's best-run businesses.3 percent in 2007. according to Brusselsbased brokerage Petercam SA. prior to restructuring. 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. helping offset 1.3 Mln Outlets 20 . 4. Unilever.9 percent in 2010 from an estimated 5. Revenue from the two continents rose 11.9 percent growth in Europe and 4.based Procter & Gamble is stocking Indian stores with Olay skin. may see global revenue growth slow in 2010 as Procter & Gamble Co.4 percent in the first nine months of last year.care products after nearly halving the local prices of Ariel and Tide detergents in 2004. according to the median of five analysts in a Bloomberg survey. although performance slowed dramatically between 2000 and 2004.
Tata Oil Mills Company (TOMCO) merged with HUL. HUL and yet another Tata company. • In 1931. Lakme Limited. Vanaspati was launched in 1918 and Dalda came to the market in 1937.545 Towns 2. These three companies merged to form HUL in November 1956. These included Brooke Bond (1984).5 Mln outlets 6. • In 1993. Lakme Limited sold its brands to HUL and divested its 50 per cent stake in the joint venture to the FMCG giant. Lipton (1972) and Pond’s (1986). Lakme Lever Limited. 21 . • Subsequently in 1998. formed a 50:50 joint venture. followed by Lever Brothers India Limited (1933) and United Traders Limited (1935). Unilever set up its first Indian subsidiary. Hindustan Vanaspati Manufacturing Company. Direct Coverage 1 Mln outlets Population of INDIA: 1027 Mln 5. This was followed by brands like Pears and Vim. • A number of prominent companies came into the HUL fold as result of Unilever’s international acquisitions.000 Villages 5.38. Two years later.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.
350 managers.000 people. In a historic step. formerly known as Hindustan Lever Limited. HUL picked up 74 per cent of the equity of Modern Foods from the Indian government. • • In 2002. employs 36. FMCG major Hindustan Unilever Limited (HUL). including over 1. and its factory represents the largest manufacturing investment in the Himalayan kingdom. Kimberly-Clark Lever Ltd. Nepal Lever Limited (NLL). which markets Huggies diapers and Kotex sanitary pads. • HUL has also set up a subsidiary in Nepal. It is one of the earliest MNCs to have entered India 22 .• HUL formed a 50:50 joint venture with the US-based Kimberly Clark Corporation in 1994. HUL acquired the government s remaining stake in Modern Foods.
ORGANIZATIONAL STRUCTURE Managing Direc tor General Mana ger Vice President Marketing Manufacturin Sales g Finance Distribution FIG.2 23 .
000 individual shareholders and financial institutions." HUL meets everyday needs for nutrition. touching the lives of two out of three Indians with over 20 distinct categories in Home & Personal Care Products and Foods & Beverages. Sunsilk. The Hindustan Unilever Research Centre (HLRC) was set up in 1958. Rin. HUL's brands .PRESENT STATUS Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods company.and about 250 million rural consumer. and now has 24 . Unilever. personal products. HUL has traditionally been a company. Clinic. Pepsodent. detergents. Pond's. Knorr-Annapurna. ice cream and culinary products. is to "add vitality to life. Brooke Bond. Close-up. Wheel. covering 6. Surf Excel.like Lifebuoy. It is a mission HUL shares with its parent company.000 redistribution stockiest. which holds 51. hygiene. including over 1. coffee. The operations involve over 2.000crore. tea. Lakme. HUL is also one of the country's largest exporters. branded staples. The rest of the shareholding is distributed among 380.000 employees. it has been recognised as a Golden Super Star Trading House by the Government of India. comprising about 4. Lux. The mission that inspires HUL's over 15.3 million retail outlets reaching the entire urban population . Kissan. They endow the company with a scale of combined volumes of about 4 million tonnes and sales of Rs.soaps.300 managers. and personal care with brands that help people feel good. Kwality Wall's – are household names across the country and span many categories . HUL's distribution network. Fair & Lovely. They are manufactured over 40 factories across India. which incorporates latest technology in all its operations.000 suppliers and associates.10.55% of the equity. look good and get more out of life.
8% in the quarter ended June from 35. the 25 .” he said.” insists Sudhanshu Vats.” says Vats. P&G also gained 0. new consumer and retail trends and aggressive marketing and promotions. Pricing. Nirma Ltd. according the market research firm ACNielsen.6% share. is now working on a new growth strategy for its laundry business. “Our strategy for growth. this time. Indian subsidiary of the Anglo-Dutch consumer goods company Unilever Plc. HLRC and the Global Technology Centres in India have over 200 highly qualified scientists and technologists. However.5% in the same period last year.” HUL’s market share in the laundry segment grew to around 37. up to a 7. many with post-doctoral experience acquired in the US and Europe. HUL says it is quite upbeat about the segment and says the laundry segment is one of its “key growth areas.” “We have done key innovations across the product portfolio and it is working for us. “We successfully migrated from Rin Supreme to Surf Excel and Wheel Smart Srimati—which was rolled out in 2006—is also on the right track. home care. is now passe. category head. This comes even as Unilever is scouting for a potential buyer for its laundry business in the US. now is focused on product innovation. the increase was not at the expense of price war with its multinational rival Procter & Gamble Co.facilities in Mumbai and Bangalore.5 percentage points. in fact. “Price cut or hike is not a long-term growth strategy. Hindustan Unilever Ltd (HUL). HUL’S NEW GROWTH STRATEGY After having fought a bitter price battle for market share with its rivals.
HUL doesn’t report its laundry revenues separately but puts them under the soaps and detergent category. “Consumers today are buying more clothes.103 crore.4% over 2005. with premium quality of clothes.” 26 .” says Vats. according to Vats contributes around 50% of HUL’s laundry segment revenues. increased its market share by 2 percentage points in the same period.” says Macquarie’s Sharma. The recent price war between companies led to erosion in their profitability but now. with a total share of about 18%. Wheel. analysts remain cautious. 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. According to Vats. such as promotional campaigns and advertising. In 2006. According to ACNielsen. “Laundry has been an attractive segment in the past and is likely to keep growing in the near future.” says Unmesh Sharma. people want to use better and branded products. HUL’s soaps and detergents segment contributed around Rs5.Ahmedabad-based manufacturer.596 crore to the company’s total sales of Rs12. “Some of HUL’s recent moves. however. the industry is stabilizing. an analyst at Macquarie Securities here. a value brand that.5%. seem right. “Trends suggest that the usage of detergents has gone up as a result. the laundry industry in India was worth Rs7.7% percentage points to 13. it is too early to say what result their new strategies will yield. “Still. saw its market share dip by 1.908 crore in 2006 and rose 8.” Still.
But delight dazzles the average company will compete for customer by conforming to her expectation consistently. Breeze. Lifebuoy. Pears and Rexona • Laundry items: Surf Excel. Hindustan Unilever Ltd(HUL) offer such product. The wide variety products offered by the company include: The company’s popular product’s include: • Bathing soaps: Lux. Rin and Wheel • Skin care: Fair & Lovely. But the winner will surpass them by constantly exceeding her expectation. Liril.FIVE P’S OF MARKETING Product Satisfaction suffices. delivering to her door step additional benefits which she would never have imagined possible. Dove. Pond’s and Vaseline • Hair care: Sunsilk and Clinic • Oral care: Pepsodent and Close up • Deodorants: 27 . Hamam.
Axe and Rexona • Colour cosmetics: Lakme • Ayurvedic: Ayush • Tea: Brooke Bond and Lipton • Coffee: Bru • Foods: Kissan. Pricing Make no mistake. 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. Hindustan Unilever Ltd(HUL) has launched various products which cater to all customer segments. Second P of marketing is not another name for blindly lowering prices and relying on this strategy alone to increase sales dramatically. Annapurna and Knorr • Ice cream: Kwality Wall’s . So every customer segment has different price expectation from the product. Therefore 28 .
hire the hottest strategies on the block. But getting their means managing wildly 29 . In a product and price parity situation. distribution equity is much together to erode. and then progressively moving through them. the brand that sells more is the one that reaches the highest number of customers.000 suppliers and associates. 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. India – The operations involve over 2.maximizing the returns involves identifying right price level for each segment. and the marketer who can get to the to the consumer ahead of competition will give a hard – to – overtake lead. Marketers and finance manager need a new term to evaluate their business: Distribution Equity. The cardinal task before the Indian market is managing is to shoe-horn its product on retail shelves. It takes much more time and effort to build. you would be know of selling your products. HUL's distribution network. comprising about 4. covering 6.television has already primed and population for consumption. but the end of it all. Buyers are paying for distribution equity not brand equity and market shares.000 redistribution stockists. swamp prime television with best Ads. Physical Distribution – “Place” BRAND ISN’T THE ONLY ANY MORE . The fundamental axiom of Indian consumer market is this: You can set up a state-of –the-art manufacturing facility. and about 250 million rural consumers. but once built.3 million retail outlets reaching the entire urban population.
To address the issue of product stability. Hindustan Unilever Ltd(HUL) marketing costs. Promotion If an advertisement is to communicate effectively. Hindustan Unilever Ltd(HUL) is also attempting to improve the distribution quality.different terrains-climate. This network of distribution can either contact wholesalers and which in turn retailers or the distributors can contact to the retailers directly. reaches more than a million retailers. and be prepared too take step toward the sender. the receiver must at least half want it to. Hindustan Unilever Ltd(HUL) distributes the product in the manner stated above. The other reason is arch rival Procter & Gamble Co. value system. life style. a distribution expansion would itself being incremental volume. at 18% of total costs. Beside use of improved logistics. they believe that selling FMCG is it like selling soft drinks. At Hindustan Unilever Ltd(HUL). 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. Once the stock product reaches retailers. the prospective customers can have access to the product. This increase in distribution is going to be accompanied by reduction in channel costs. transport and communication network. The company is looking to reduce this parity level. language. And your brand equity isn’t going to help when it comes to tackling these issues. Own distribution network consist of clearing and forwarding (C&F) agents & distribution stockiest. Looking at the low penetration of few products. Hindustan Unilever Ltd(HUL) distribution network has expanded. is much higher than Procter & Gamble Co. Effective advertising is rarely hectoring or loudly 30 . it has installed visi colors at several outlets.
To penetrate into the inner recesses of her memory. All ICICI’ s ATM a message flashes on the screen as soon as customer insert his ATM card. Hindustan Unilever(Ltd)has a message on-screen just before the lights are dimmed to give them a chance to get their product There will also be after dinner sampling in restaurants – to begin with. a home water purifier which supplies drinking water without boiling/need of electricity . grab her acceptance and then extract retention competing with thousands of other units of communication trying to do the same. It often both attracts and generates arm feelings. In cinemas. • Finding showed that the adults felt too conscious to be seen consuming a product actually meant for children. 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. More often than not. grab her attention evoke her comprehension. “cream bathing bar for dove soap” and daag ache hai for surf excel” have been sure shot winner with the audience. communication must first ensure exposure. Something familiar is planned for phone-book as well. ad agency contract has created communication for cinemas and even ATM machines for the brand. a successful campaign has a stronger element of the unexpected a quality that good advertising shares with much worthwhile literature. unself conscious. 30 catteries in Mumbai have been selected. As well as outdoor and radio ads. 31 .explicit…. that produced just the value vacuum that Hindustan Unilever Ltd(HUL) was looking to fill. Thereafter it was the job of the advertising to communicate customer the wonderful feeling that he could experience by re-discoursing the careful. Naturally. It has also launched Pureit.
consumers began to demand “more for same”.e. it had also entered into various marketing relationship with other portals. and the winner will be that super value marketers…. supported with high ad – spends that Hindustan Unilever(Ltd) hopes will see it emerges stronger after the current slowdown. 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. Beside the company website (i. As a variety of competitive claims assails her senses. In the 1980s. www.com). specially targeted during festivals and events such as Valentines day. the management plans to tap this new channel of marketing. etc…. and the discounting era grew strong. and luxury goods flourished. as well as expand the market. Today’s consumer demanding “more for less”.unilever. It’s a combination of spiffing up its key brand.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. Positioning In the 1970s consumers were ready to pay “more for more”. that the company has launched. today customer uses complicated decision making process to assess the 32 . researching and improving the newer products that haven’t taken off. Ad since any discussion today would be incomplete without mention ‘e’ word. Some of today’s most successful companies recognize those customers are more educated and able to recognize true customer value… Positioning is simply concentrating on an idea – or – even a word defines that company in the mind of the consumer.
a hot-selling “fairness” cream. “Lifebuoy has become more than just a red bar of soap – today the brand provides hygiene and health solutions for families 2) Fair & Lovely. material states income etc…) The lifestyle of consumers (i. It targets different segments within the market. which promises a lighter skin tone for many of India’s complexion-conscious consumers.com informs.alternative before making a purchase. the quicker becomes her search process. such as the: Break segment – products which are normally consume as a snatched break and often with tea and coffee. their interests and activities) the benefits which consumers look for in a product or on the occasions when the product might be consumed. Positioning of individual product: 1) Lifebuoy is ‘one of Unilever’s oldest brands’ with more than a hundred-year history. each with different needs and wants. Hindustan Unilever(Ltd) takes into account all these factors when producing a range of products. Consumers are groups. Since Hindustan Unilever(Ltd) is more clearly associated with a particular set of attributes in terms of benefits and prices. 33 .g. HINDUSTAN UNILEVER’S MARKET SEGMENTATION Market place for any product is comprised of many different segments of consumers.e. Markets segmentation can be defined in a number of ways such as: Demographic variables (e. as www.unilever. gender.
They include product such as close up. used these and then. taken home consumed at a later stage. Take home segment – this describes product that are normally purchased in supermarkets. 34 . Impulse segment – these products are often purchase on impulse.
908 crore in 2006 and rose 8. “Our strategy for growth. in fact. “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. new consumer and retail trends and aggressive marketing and promotions. HUL’s soaps and detergents segment contributed around Rs5. Hindustan Unilever Ltd (HUL).4% over 2005. This comes even as Unilever is scouting for a potential buyer for its laundry business in the US.” insists Sudhanshu Vats. HUL says it is quite upbeat about the segment and says the laundry segment is one of its “key growth areas. Pricing.8% in the quarter ended June from 35.” “We have done key innovations across the product portfolio and it is working for us. According to ACNielsen.” he said.5% in the same period last year. “Price cut or hike is not a long-term growth strategy.The Real Taste of Rejuvenation After having fought a bitter price battle for market share with its rivals. category head.596 crore to the company’s total sales of Rs12. now is focused on product innovation. In 2006. is now passe. the laundry industry in India was worth Rs7. home care.” HUL’s market share in the laundry segment grew to around 37.” says Vats. Indian subsidiary of the Anglo-Dutch consumer goods company Unilever Plc. is now working on a new growth strategy for its laundry business. 35 . HUL doesn’t report its laundry revenues separately but puts them under the soaps and detergent category.103 crore.
But India’s recent retail boom has created large stores and malls. the industry is stabilizing. the managing director of Hindustan Unilever. Hindustan Unilever has traditionally relied on small traders and mom-and-pop corner stores to retail its products. That’s how Douglas Baillie likes it. whose executives used to have emissaries make obeisance at Lever house in downtown Mumbai. India’s premier consumer-products company. and how shoppers are reacting to competitive brands. wants to see how his products are stocked. It’s primary market research at its most elemental. “I can’t imagine any head from Lever House ever visiting other company offices like this. so the company wants to make sure it’s in with the new marketing crowd. This is quite a change for Hindustan Unilever. COMPETITIVE STRATEGY As Competition Heats Up. and the calls he makes on the headquarters of the big retail chains. India’s Top Consumer-Products Company Woos Affluent Shoppers With Global Brands Like Dove.“Laundry has been an attractive segment in the past and is likely to keep growing in the near future. the India hypermarket chain. chief executive of innovation and incubation at Pantaloon Retail. 36 . The recent price war between companies led to erosion in their profitability but now. 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. what consumers are buying. India’s largest retailer and a former manager at Hindustan Unilever.” says an amazed Damodar Mall. Hence Baillie’s Hypercity visits. Baillie. and it’s best done incognito.
and L’Oréal. after ringing up India-based sales of $3.2% to 24. Hindustan Unilever’s lead in hand soaps.Facing Competition From P&G And Others The reason for this new found egalitarianism is that the $3 billion Hindustan Unilever is facing serious competition. These 37 . Now Hindustan Unilever is under siege from aggressive Indian and foreign competitors such as Procter & Gamble (PG). soaps. sauces and tea. and shampoos to soups. including the popular Lux. makes everything from detergents. All this has taken a toll on Hindustan Unilever’s operating margins. Finnish handset maker Nokia (NOK) dislodged it as the multinational with the highest revenues in India. down from 21% a few years ago to just 11. That’s why the company is wooing consumers in big retail stores.2% to 54%. Yet early this year. Favorite detergent brands like Surf Excel and Rin are barely hanging onto their 37% share. Hindustan Lever tea brands like Brooke Bond and Lipton have dipped from a combined market share of 29. Nivea.5 billion.3%. which is practically synonymous with India. In the last year. ACNielsen data shows.84% now. is down from 55. The company. and dominates most of those categories.
For many decades most Indians thought Hindustan Lever was a local company. organized retail.Parent Unilever will develop the brands and streamline product offerings across the world. Hindustan Unilever’s managers hope their revenues from big retail will increase from 5% today to over 25% in 2012. not long ago. while its subsidiaries will sell the products. became the first foreigner in four decades to head the Indiancompany. The takeover of Hindustan Lever by Unilever became evident in March. Hindustan Unilever’s finance director. will grow to 28% by 2017.” says D. when Baillie. That dovetails with parent company Unilever’s new global realignment of products. Sundaram. fitting in quite nicely with India’s turn towards more international products being sold in supermarkets.newly affluent shoppers present the best hope for the company’s future in India. Yet this is still a dramatic change for Hindustan Unilever which. 2006. the crown jewel whose managers had free rein to develop and build brands suitable for the local market. From Local Player To Multinational Overnight the change sent shock waves through India. a Zimbabwe-born British national. According to retail consultant KSA Technopak. “It is a big game for us. was the most successful and profitable company in the Unilever group.5% of India’s total $336 billion retail market. This means that all of Unilever’s brands will be available across global markets. currently just 3. and the cream of India’s management 38 . Hindustan Unilever’s strategy is to market its premium products through the hundreds of megastores springing up across India. not a multinational.
the company. where foods bring in half the revenues globally. 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. it has phased out more food products—wheat flour. then known as Hindustan Lever. In India. confectionery. frozen bread—than it has launched. Last year operating profits reached $357 million. Nitin Paranjpe. 2007. 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. we aren’t the only ones seeing it. But the rich margins of the past have not returned. admits that it’s now “tougher to hold on to market share. And there was some stiff competition from rival Procter & Gamble. thanks to price increases. Indeed. the company’s home and personal care businesses account for 80% of revenues and 85% of profits at Hindustan Unilever.graduates made their careers there. was rechristened Hindustan Unilever to reflect its parentage. a 2004 price war with P&G in the detergent business forced Hindustan Unilever to slash prices on its premium brand Surf Excel. executive director in charge of the home and personal care business. to $274 million in 2004. 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. Then in February. For instance. while the company’s track record in foods has been dismal. Baillie first had to sort out some past problems. 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.” 39 . If India is a great story.” He also wants to expand the foods business in conjunction with the parent.5 billion for five years while operating profit plunged 37%. While the strategy aimed to conserve management energy.
. ITC. according to Ali Dibadj. 2006. is also making inroads.'' Hindustan Unilever Ltd. to 19. It started selling more brands including Fiama Di Wills shampoo and Superia soap last year as the government raised tobacco taxes. Its share of the shampoo market declined by more than a percentage point to 47. an analyst at Sanford C. But today even L’Oreal has sachets of its Fructis shampoo.Rivals like P&G and Nivea have also copied Hindustan Unilever’s best innovation: the small shampoo sachets it pioneered in the 1980s. the company said. the world's largest consumer-goods maker. Bernstein in New York. Tata Tea’s market share increased from 16.1% to 19. In June.7 percent. will continue to gain share in the next five years in India. According to ACNielsen. who rates the stock ``outperform.9% in July. Managing Director Percy Siganporia says the gain is “a dream comes true for us. 52 percent owned by the London.5%. Currently. 80% of Indian shampoo sales come from sachets. bath soap. toothpaste and tea in the quarter ended Sept. compared with the year earlier. the Tata Group’s beverage company Tata Tea overtook Hindustan Unilever as India’s largest selling tea brand. which sold for less than 2 cents each and which expanded the market for Hindustan Unilever products among India’s rural masses. 2007. 30.and Rotterdambased parent. the largest Indian cigarette maker and partly owned by British American Tobacco Plc.” FUTURE COMPETITIVE STRATEGY 2010 Expectations P&G. lost ground in shampoo. `Profitable' Cigarettes 40 . Tata Tea is exultant.7% in March. while Hindustan Unilever slipped from 26. according to the company.
'' said Anand Shah. India is Unilever's biggest market in Asia. analyst Unmesh Sharma.care portfolio.'' said Macquarie Securities Ltd. It has sold soap in the country since 1888 and controls about half of the sales of products such as skin creams. used to make soaps and foods. ``Given the competition.8 billion. generating about 6 percent of annual sales. The price of palm oil.The tobacco maker ``has a very profitable cigarettes business which will help it to invest and expand its personal. bathing soaps and shampoo.'' Rising prices of raw materials have made it more difficult for consumer-goods makers to pass on higher costs. an analyst at Angel Broking in Mumbai. ``It has the ability to take losses in this segment as long as it grows its sales. The company has a market value of about $11. profitability will continue to be under pressure. He expects the stock to drop to 180 rupees ($4. who has an ``underperform'' rating on Hindustan Unilever.9 rupees. This strategy will still satisfy investors. 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 . who has a ``neutral'' rating on the stock.57) in the next year from 190.
Competitive Strengths Fig:3. Grow the bottom line ahead of the top line. Leverage positive impact of growing Indian economy on consumer spending. Grow ahead of the market by leading market development activities. Grow a profitable foods and top end business. Strong commitment to sustainable development.Corporate Social Responsibility-Aiding In The Development Of The Country 42 .
partnerships with diverse stakeholders. Beverages. Home and personal care products consists of personal and fabric wash.25000 villages. Impact of community • • business and social impact can go together. The products include home and personal care products. Personal Products. The Group operates through seven segments: Soaps and Detergents. Exports. 43 . foods and beverages. HINDUSTAN UNILEVER LIMITED . The Group's principal activities are to manufacture and market consumer products. Shakti vani: one-to-many communication for category growth ishakti: customized interaction with remote consumers.COMPARATIVE BUSINESS ANALYSIS Hindustan Unilever Limited Formerly known as Hindustan Lever Limited. Ice Creams and Other. industrial and agricultural products. Foods. currently~44000 women cover 1.Shakti Three shakti initiatives • • • Shakti entrepreneur.
fruit and vegetable products. which has helped the company to sustain its leadership position in the overall FMCG category in India. plant growth nutrients.income growth is crucial. thermometers and plantations. Its brands are spread across 20 consumer product categories. processed-tri-glycerides and agri commodities.however rural income are growing faster with 70% population here. Structural changes in the economy which are affecting this are: Disintermediation in the agricultural market price discovery mechanism has benefited farmers. RURAL. coffee. Industrial and agricultural products includes specialty chemicals. local and regional players. oral care. Foods and beverages includes tea. bulk chemicals. ice creams. leather. The company focuses on efficient delivery to consumers with an improved supply chain. skin and hair care. salt. perfumery. deodorants. animal feeds.employment grants-Rs 40000cr 44 .THE BIG INDIAN ROMANCE Rural population larger than europe(800 million) Low growth in agriculture. colour cosmetics and baby care.household. rice. brand building initiatives and innovation. The company faces competition from international. bakery fats. tomato products. marine products and mushrooms. footwear and carpets. cooking fats and oils. atta and rawa. fertilisers. seeds. Government grants and subsidies. yeast. This analysis compares Hindustan Unilever Limited with three other companies in closely related industry sectors. Hindustan Unilever markets consumer goods throughout India.
” reads an observation in a chapter titled ‘entrepreneurial advertising that works’. and relaunched Lifebuoy. and screened some options to roll out one option that everyone was happy with. they add. The company basically worked with “one agency.” write Leonard M.” 45 . 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. “HUL missed an opportunity for increased marketing productivity when they repositioned. Though the company was ‘extremely innovative’ the way it handled the rural communications plan was very traditional.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. Lodish. Howard L. Morgan and Shellye Archambeau. retargeted. Ogilvy and Mather (O&M). according to the authors. the authors of Marketing that Works.
” says the site. Director (Finance & IT).” reads a quote in the book from C. 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 . a few days ago. The company’s advertising and promotional spends during the quarter fell to Rs 336 crore. The O&M strategy.” The advertising spends have not been linear for the company. Prahalad’s The Fortune at the Bottom of the Pyramid . “or the villagers themselves might also be able to generate very effective communications vehicles. Sundaram. as explained by Mr Lodish et al.K. Prahalad notes. HUL. targeted “10.Advertising strategy came for mention when the company reported the second quarter results. and thus has increased sales of its low-cost.” The authors are of the view that government workers who have been interacting with villagers might have come up with some excellent ideas. “Lifebuoy has become more than just a red bar of soap – today the brand provides hygiene and health solutions for families. Mr D. HUL. from the earlier Rs 345 crore. he added. Lifebuoy is ‘one of Unilever’s oldest brands’ with more than a hundred-year history.” So. mass-market soap. said: “We have been phasing our advertising spends depending on the launches and relaunches of brands. “Differentiating soap products on the platform of health takes advantage of an opening in the competitive landscape for soap. through its innovative communication campaigns. has been able to link the use of soap to a promise of health as a means of creating behavioural change. in a paragraph on innovation.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.
It has leading edge capabilities in servicing Modern Trade focused on shelf filling. “Modern Trade in India is growing and evolving very rapidly and our strategy for winning in this growing retail market is to win at point-of-purchase with our shoppers & by delivering best-inclass service to our Modern Trade customers. Smollan Holdings is one of the leading ‘in-store execution and field services’ companies internationally. This JV will bring in world class execution excellence in the market and build the right capabilities to deliver the company’s marketing strategy in Modern Trade”.” The HUL example. 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. The operations will begin with the existing Modern Trade in-store execution team of HUL moving into HUFS. concludes by stating that globally very progressive and innovative firms can also benefit from being “more entrepreneurial and less traditional in how they manage their advertising and communication. “As a big company. The strategic tie-up aims to build long term capabilities and bring ‘in-store’ execution focus in servicing the Company’s Modern Trade customers.” wonder the authors. 2008. 47 .” 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.programs. which is one of the many discussed in the book. logistics for merchandising materials and in store execution. many times it is difficult to change the procedures without creating significant political problems.
That has spawned 48 . tone for many of India’s complexion-conscious consumers. Hindustan Unilever launched a high-end range of Pond’s skin care and Dove hair care products from Unilever’s international portfolio. a home water purifier which supplies drinking water without boiling/need of electricity. where Indian customers love to touch and feel products. These premium brands retail not in neighborhood small stores but in supermarkets and hypermarkets. trained and guided by HLN's expert managers and trainers. It has also launched Pureit. NEW INITIATIVE Bringing High-End Dove To India Baillie is fighting back. The advertising campaign. all independent entrepreneurs. which promises a lighter skin. Hindustan Unilever Network is the direct selling channel of the company. has made the brand a winner. Hindustan Unilever is also milking one of its top brands—Fair & Lovely. Over the past six months. Lakme cosmetics brands from Tata.Other Acquisition Hindustan Unilever has acquired several Indian FMCG companies so far. a hot-selling “fairness” cream. Dollops ice cream brand from Cadbury India. which suggests that regular use of the cream helps women gain confidence and makes them eligible for marriage. It has about 350. This includes: • • • • Tata Oil Mills Company Brooke Bond Lipton India Modern Foods It acquired Kissan brand from UB group.000 consultants.
the company’s sales grew 13%. and creating access to relevant information 49 . with net profit up 29.6%. but they are more focused and regaining their aggressiveness. HUL has also responded in case of national calamities / adversities and contributes through various welfare measures. soaps. care for the destitute and HIV-positive. Shakti. SERVICE TO SOCIETY HUL believes that an organisation's worth is also in the service it renders to the community. Shakti also includes health and hygiene education through the Shakti Vani Programme. at one-third the price of established Indian brands such as Aqua guard. consumer analyst at Mumbai brokerage First Global Securities. the company embarked on an ambitious programme. But Hindustan Unilever’s brand is still tops. Baillie is also getting aggressive on foods. Sumeet Budhraja. and water management. says that Hindustan Unilever “could have addressed a lot more categories. women empowerment. and relief & rehabilitation after the Tsunami caused devastation in South India. and Baillie is pleased with the modest turnaround. It is also involved in education and rehabilitation of special or underprivileged children. Through Shakti.a host of competitive fairness creams. focusing on the Knorr brand of soups and curry mixes —ideal for the Indian market.” He points to the demand for safe drinking water in India. Reason enough to keep patrolling those store aisles. These efforts have delivered some promising results. which Hindustan Unilever exploited with the launch of water purifier Pureit in 2005. Analysts believe the company’s current strategy of concentrating on premium products and marketing them in the large retail stores is a winning one. and rural development. thereby improving their livelihood and the standard of living in rural communities. and sunblock lotions. HUL is creating micro-enterprise opportunities for rural women. HUL is focusing on health & hygiene education. In 2001. In the quarter ended June. most recent being the village built by HUL in earthquake affected Gujarat. 2007.
it is because of being singleminded in identifying itself with Indian aspirations and needs in every walk of life. The vision is to make a billion Indians feel safe and secure. HUL is also running a rural health programme – Lifebuoy Swasthya Chetana. reaching out to 100. The programme endeavours to induce adoption of hygienic practices among rural Indians and aims to bring down the incidence of diarrhoea. of over 600 If Hindustan Unilever straddles the Indian corporate world. Shakti aims to have 100.through the iShakti community portal. It has already touched 70 million people in approximately 15000 villages of 8 states.000 women entrepreneurs in its fold.000 villages. touching the lives million people.000 Shakti entrepreneurs covering 500.000 villages and directly reaching to 150 million rural consumers. The program now covers 15 states in India and has over 31. PRODUCT PROFILE HUL’s business activities are divided into four broad areas: Home and personal care 50 . By the end of 2010.
rice Bathing soaps: Lux. Ayush ayurvedic products and services. Lifebuoy. Sangam. beverages. Breeze. fabric wash. Pears and Rexona • Laundry items: Surf Excel. ice creams. coffee. skin care. marine products. Modern Foods ranges New Ventures Hindustan Lever Network. home care. Liril. colour cosmetic Foods tea. Rin and Wheel • Skin care: Fair & Lovely. Hamam. deodorants and talcs.personal wash. Exports • HPC. Pond’s and Vaseline • Hair care: Sunsilk and Clinic • Oral care: Pepsodent and Close up • Deodorants: Axe and Rexona • Colour cosmetics: Lakme • Ayurvedic: 51 . culinary products. oral care. branded staples. hair care. Pureit water purifiers. Dove.
Annapurna and Knorr • Ice cream: Kwality Wall’s .Ayush • Tea: Brooke Bond and Lipton • Coffee: Bru • Foods: Kissan. 52 .
Sunsilk. Surf Excel. Pond s. 53 . They include: Lifebuoy. Brooke Bond. Fair & Lovely. Rin. Lux. Kissan. Pepsodent. Closeup. Knorr-Annapurna and Kwality Walls.BRANDS HUL s brands are household names across the country. Wheel. Clinic. Lakme.
1999b). according to a survey of 276 senior operating executives in 2004 (Allio. strategy implementation is often seen as something of a craft. we try to respond to this 54 . How can we better understand these issues and their importance for successful strategy implementation? In this article. after a comprehensive strategy or single strategic decision has been formulated. The survey reported in that white paper indicates that 83 percent of the surveyed companies failed to implement their strategy smoothly. It is thus not surprising that. making that strategy work – implementing it throughout the organization – is even more difficult (Hrebiniak. The best-formulated strategies may fail to produce superior performance for the firm if they are not successfully implemented. and only 17 percent felt that they had a consistent strategy implementation process. A myriad of factors can potentially affect the process by which strategic plans are turned into organizational action. According to the White Paper of Strategy Implementation of Chinese Corporations in 2006. There are many (soft. rather than a science. 2006). It is thus obvious that strategy implementation is a key challenge for today ‟s organizations. strategy implementation has become “the most significant management challenge which all kinds of corporations face at the moment”. hard and mixed) factors that influence the success of strategy implementation. and its research history has previously been described as fragmented and eclectic (Noble.TOPIC DETAIL Although formulating a consistent strategy is a difficult task for any management team. 2005). Unlike strategy formulation. as Noble (1999b) notes. 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. ranging from the people who communicate or implement the strategy to the systems or mechanisms in place for co-ordination and control. significant difficulties usually arise during the subsequent implementation process.
In this section. In the fifth section of the article. In that section we present a discussion of nine major factors that affect strategy implementation. as well as missing evidence and resulting future research needs. Our study also examines the ways in which strategy implementation has been researched so far. In the sixth and final section. focusing on the main results of prior studies. We also discuss directions for future research in the domain of strategy implementation and how they may be pursued.question by analyzing existing research on the factors that influence strategy implementation . the research methods used as well as the analytical techniques employed. we will review the 60 identified studies and analyze their research context. We have conducted an analysis in the most widely used literature databases to identify key factors influencing the process of strategy implementation. contains the actual review of literature. It will consequently also reveal under-exploited methods or contexts. As the core of our literature review. section 4. Then. The next part of the article. theoretical bases. we analyze definitions of strategy implementation and compare them with other synonymous and related terms (in section 2). we discuss the implications of our findings as well as their limitations. Section four also contains a review of existing models and frameworks of strategy implementation. we describe the methodology that we have used to conduct our literature review and define its scope (section 3). their main results. to surface current areas of agreement and disagreement. the results section compiles nine factors that 55 . in terms of the applied research methods and the examined strategy contexts. We present a conceptual framework that organizes the current research findings. we discuss the limitations of our own approach and summarize open research questions regarding strategy implementation that have surfaced at various points in our literature analysis. Examined organizational levels and organizational types are two elements of the research context. The structure of this paper is as follows: First.
however. i. Govindarajan. whether a study focuses on functional strategies (i. Floyd & Wooldridge. Chimhanzi & Morgan. Qi (2005). We then briefly discuss the theoretical bases of the reviewed studies. whether it is privately held or state-owned and whether its operating scope is regional or rather multinational. 2007). Most of these studies.e. as well as several frameworks or models that aggregate or relate relevant factors to each other. Organizational types refer to the kind of organization that is studied. Organizational Levels In the context of strategy implementation research. Chimhanzi (2004). namely Rapert & Lynch & Suter (1996). 4.e. inter-functional levels. functional level. Viseras & Baines & Sweeney (2005). five organizational levels can be distinguished. 1999. Piercy (1998). White. They are: corporate level. Surprisingly few researchers focus on the implementation of corporate level strategies. 1986. Skivington & Daft. 1988. 1991. HR. strategic business unit (SBU) level. Finally. Brenes & Mena & Molina. Noble & Mokwa (1999). Sashittal & Wilemon (1996). Govindarajan & Fisher. Roth & Schweiger & Morrison. SBU and functional level. 2006. marketing. R&D).e. the research methods and analytical techniques will be reviewed to see which methods are still underutilized in the context of strategy implementation. 1991. 1989. Schaap... such as Wernham (1985) and Schmidt & Brauer (2006). etc. Waldersee & Sheather.1 Research Contexts We classify research contexts into two dimensions: the examined organizational levels and the considered organizational types..influence strategy implementation success. Govindarajan. while many examine SBU level strategies (Gupta & Govindarajan. The same holds true for functional strategies: We have found eight studies that focus on the implementation of such strategies. corporate-SBU-functional levels. 1992b. focus on marketing strategy (such as Sashittal 56 . Olson & Slater & Hult. Organizational levels designate the locus of strategizing. 1984. operational level and mixed levels (such as corporate and SBU level. 2005.). 2005. SBU-level strategies or corporate strategies. Nilsson & Rapp. Noble (1999a). 1996. i. 1990.
Process strategies. 1996. Beer & Eisenstat (2000) and Hrebiniak (2006) have carried out research on corporate and SBU-level strategy. functional and process. Piercy. and on two aspects of strategic implementation (stakeholder input and employee empowerment). There are some studies which cannot be classified into the above categories. such as Bantel (1997). There are few studies dedicated to the implementation of other functional strategies (this is clearly an area of future research). The only other study of functional strategy implementation that we have been able to identify is Viseras. focuses on the implementation of a yield 57 . The mixed studies category also includes articles that focus on the role of project management for strategy implementation. Krohmer & Workman (2004) point out that market orientation plays a key role for the successful implementation of a PPD (premium product differentiation) strategy. 2004). Homburg & Krohmer & Workman (2004). the last type. business. normally cut across functions and are aimed at integrating organizational processes across the organization in order to make them more effective and more efficient. we classify them into a group called mixed level studies: Gupta (1987). for example.& Wilemon. Few studies focus on the actual operational level of strategy implementation. Walker and Ruekert (1987) analyze three levels of strategy – corporate. Bantel (1997) analyzes the effects of two key aspects of product strategy (product leadership and product/market focus) on performance. 1999. Baines and Sweeney‟s study (2005) in the context of manufacturing strategies. Consequently. Chimhanzi. Okumus (2001). This study also emphasizes the relationship between product strategy and several strategic implementation variables. Homburg. Noble & Mokwa. Higgins (2005) even focuses on four types of strategies: corporate. SBU and functional. Slater and Olson (2001) analyze marketing‟s contribution to the implementation of business strategy. 1998. This study focuses on the key success factors in the project management for the implementation of strategic manufacturing initiatives.
and Schaap (2006). which seems a highly relevant area to improve our understanding of strategy 58 . Examples of such ambiguous studies are Bourgeois Ш and Brodwin (1984). Nutt (1986. First.management project and a key client management project in two hotels. 1989). We can draw multiple conclusions based on our analysis of the treatment of organizational levels in prior studies of strategy implementation. Many studies (25 articles) do not even indicate at which level their discussion of strategy implementation is located. R&D. Another study has examined the mutual influence of functional departments ‟ relationships on strategies.). Within the functional level. 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. One such study focuses on marketing‟s contribution to the implementation of business strategy (Slater & Olson. the functional. 2001).level (8 articles) and mixed levels (9 articles) have received more attention than the other two levels. Harrington (2006). Higgins (2005). Two calls to action result from these findings. Lehner (2004). another finding revealed that marketing is the prevailing domain. corporate (2 articles) and operational (2 articles). Grundy (1998) examines the synergies among project management and strategy implementation and reviews strategy tools that may help in project management. accounting etc. 1987. future strategy implementation research should pay attention to explicitly indicate the level of analysis. In terms of promising future research on strategy implementation. Peng and Litteljohn (2001) investigate three hotel chains implementing a strategic initiative on yield management. there are many studies that are not sufficiently explicit regarding their scope concerning strategic levels. Second. we can observe that there are very few studies that have examined the inter-relationships of functional and business strategies. Noble (1999b). HR. We note that – among the five strategy levels – the SBU-level (14 articles). Finally. compared with other functional areas (such as manufacturing.
However. Johnson & Johnson. Rapert. refer to the characteristics of organizations: if they are private or state-owned. Roth & Schweiger & Morrison (1991) and Kim & Mauborgne (1991. Sears. 59 . state-owned and privately held companies. FedEx. We thus do not know which specific differences exist regarding strategy implementation in these various forms organizations. Wernham (1985). Organizational types Organizational types. a major financial services firm.K. In conclusion. Alexander (1985) surveys 93 private sector firms through a questionnaire. a provider of emergency fire and medical services. not only local firms but also multinational firms. there have been no studies comparing similarities and differences of strategy implementation among private corporations and state-owned corporations. Noble ‟s (1999a) study spans several types of organizations – a national airline. the subjects of strategy implementation studies are not only state-owned corporations. as stated earlier. which are members of the American Hospital Association (AHA). or among local firms and multinational firms. namely Accenture. explores the reality of strategy implementation in a U. Velliquette and Garretson ‟s (2002) study on strategy implementation takes a nationwide sample of 1000 CEOs of general service hospitals. 1993) study global strategy. and a leading firm in the imaging technology industry. a leading packaged goods company. British Telecom (BT). Okumus (2001) investigates two international hotel groups. As far as ownership forms are concerned. This clearly is another interesting avenue for future research. while others are multinational corporations. but mostly private corporations. for example.implementation: Chimhanzi (2004) has examined the impact of marketing and HR interactions on marketing strategy implementation. local or multinational. Qi (2005) issues questionnaires to the head offices of 800 private companies in the UK. Forman and Argenti (2005) select five multinational companies as samples. Dell. nationalized company. Some of the researched companies focus on their domestic markets. strategy implementation studies discuss both.
dairy products. although these are often categorized separately. beverages (health beverages. branded and packaged food. cereals. staples. ‘Fast Moving’ is in opposition to consumer durables such as kitchen appliances that are generally replaced less than once a year. The term Consumer Packaged Goods (CPG) is used interchangeably with Fast Moving Consumer Goods (FMCG). detergents. Hence profit in FMCG goods always translates to number of goods sold. hair care. cosmetics. Fast Moving Consumer Goods is a classification that refers to a wide range of frequently purchased consumer products including: toiletries. chocolates. paper products and plastic goods. The category may include pharmaceuticals. shaving products. time and financial investment to purchase.INDUSTRY PROFILE Fast Moving Consumer Goods(FMCG) FMCG are products that have a quick shelf turnover. household care (fabric wash and household cleaners). Examples of FMCG brands are Coca-Cola. toiletries). However the huge number of goods sold is what makes the difference. Kleenex. The FMCG sector represents consumer goods required for daily or frequent use The main segments of this sector are personal care (oral care. Examples of FMCGs are soft drinks. soft drinks. bakery products) and tobacco. The margin of profit on every individual FMCG product is less. 60 . tissue paper. Pepsi and Believe. soaps. cosmetics. Three of the largest and best known examples of Fast Moving Consumer Goods companies are Nestlé. and chocolate bars. soaps. such as buckets. other non-durables such as glassware. consumer electronics and packaged food products and drinks. teeth cleaning products. at relatively low cost and don't require a lot of thought. batteries. bulbs. Unilever and Procter & Gamble.
Furthermore. the sector meets the every day needs of the masses. 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. As a result. more so in the last six years (FMCG sector witnessed decline in demand). History of FMCG in India In India. Many of the global FMCG majors have been present in the country for many decades. Unlike the perception that the FMCG sector is a producer of luxury items targeted at the elite. increase in the disposable incomes and altered lifestyle. It is the fourth largest sector in the economy and is responsible for 5% of the total factory employment in India. FMCG companies have been forced to fight for a market share. In this context. in reality. With the gradual opening up of the economy over the last decade. Colgate. the unorganized and regional players have witnessed erosion in market share. The industry also creates employment for 3 m people in downstream activities. much of which is disbursed in small towns and rural India. companies like ITC.The Indian FMCG sector is an important contributor to the country's GDP. In the process. many of the smaller rung Indian FMCG companies have gained in scale. These companies were. able to charge a premium for their products. Rural markets account for 56% of the total domestic FMCG demand. This has been due to liberalization. But in the last ten years. HLL. the margins were also on the higher side. 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). 61 . margins have been compromised. the boom has also been fuelled by the reduction in excise duties. The lower-middle income group accounts for over 60% of the sector's sales. This industry has witnessed strong growth in the past decade. urbanization. therefore.
forced-buying by offering many choices and also opens up new avenues for growth for the FMCG sector. Although companies like HLL and ITC have dedicated initiatives targeted at the rural market.Techno Park. As per the Consumer Survey by KSA. 62 . testing times for the FMCG sector are over and driving rural penetration will be the key going forward. as the per-capita consumption of almost all products in the country is amongst the lowest in the world. In our view. 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. Given the aggressive expansion plans of players like Pantaloon. Currently. of the total consumption expenditure. Shopper’s Stop and Shoprite. organized retailing results in discounted prices. In our view. It has been ranked second in a Global Retail Development Index of 30 developing countries drawn up by A T Kearney. Due to infrastructure constraints (this influences the cost-effectiveness of the supply chain). we are confident that the FMCG sector has a bright future India is rated as the fifth most attractive emerging retail market. these are still at a relatively nascent stage. industry estimates suggest that the industry could triple in value by 2015 (by some estimates. Rapid urbanization. companies were unable to grow faster. the industry could double in size by 2010). increased literacy and rising per capita income are the key growth drivers for the sector. Aspiration levels in this age group have been fuelled by greater media exposure.Current Scenario The growth potential for FMCG companies looks promising over the long. Trent. In this backdrop. almost 40% and 8% was accounted by groceries and personal care products respectively. organized retailing accounts for just 3% of total retail sales and is likely to touch 10% over the next 3-5 years. The bottlenecks of the conventional distribution system are likely to be removed once organized retailing gains in scale. unleashing a latent demand with more money and a new mindset.term horizon.
Burgeoning Indian population. Small-scale sector reservations limit ability to invest in technology and quality up gradation to achieve economies of scale. the general slowdown in the economy is also likely to have an adverse impact on disposable income and purchasing power as a whole. 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. 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. Poor monsoon in some states.6 billion. Moreover. Moreover. The share of modern retail is likely to grow from its current 2 per cent to 15-20 percent over the next decade. The outlook in the short term does not appear to be very positive for the sector. is unlikely to help matters. hair wash etc in India is low indicating the untapped market potential. particularly the middle class and the rural segments. skin care. presents an opportunity to makers of branded products to convert consumers to branded products. The FMCG market is set to treble from US$ 11.4 billion in 2015. Over the last one year. Kearney has estimated India's total retail market at $202.6 billion in 2003 to US$ 33.1 billion.T. is expected to grow at a compounded 30 per cent over the next five years. too.A. The growth of imports constitutes another problem area and while so far imports in this sector have 63 . There is significant potential for increasing exports but there are certain factors inhibiting this. Penetration level as well as per capita consumption in most product categories like jams.000 crore only. The Indian FMCG sector is the fourth largest sector in the economy with a total market size in excess of US$ 13. analysts feel. 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. lower volume of higher value added products reduce scope for export to developing countries. toothpaste.
most of the companies are concentrating on cost reduction and supply chain management. The high burden of local taxes is another reason attributed for the slowdown in the industry At the same time.been confined to the premium segment. FMCG companies estimate they have already cornered a four to six per cent market share. Give the large market and the requirement for continuous repurchase of these products. the long term outlook for revenue growth is positive. FMCG companies should continue to do well in the long run. This should yield positive results for them 64 . Moreover.
Descriptive Research Design:.A Casual Research Design is concerned With determining cause and effect relationship. For the study. Descriptive Research Design was undertaken as it draws the opinion of employees/ workers on a specific aspe Research Objective: To analyse the influence of rival company’s strategies on the performance of Hindustan Unilever Limited To analyze the various strategies adopted by the company to gain competitive advantage To identify the marketing strategies and policies of Hindustan Unilever Limited 65 . used as a guide in collecting and analyzing data.The major emphasis in exploratory Research design is on discovery of ideas and insights. There are three types of Research Design:Types of Research: Exploratory Research Design:.The Descriptive Research Design Study is typically concerned with determining the frequency with which something occurs or the relationship between two variables.RESEARCH METHODOLOGY Research Design: Research design is simply the framework or plan for a study. Casual Research Design:.
SAMPLE DESIGN A sample design is a definite plan determined before any data is actually collected for obtaining a sample. Researcher must select a sample design. That is each member does not have a known non zero chance of being included. 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. Types of NonProbability Sampling Convenience Judgement Quota 66 . 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.
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. newspaper Employment exchange The secondary data would be collected from financial statement. 67 . For this research work I have chosen Non. journal of national repute. Magazines. DATA COLLECTION METHOD Data for the present study is collected from two sources: Secondary: . 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. books of national and international author as well as the annual report of the company. various newspapers and published books. In addition to this internet access will make the study more effective and meaningful.Secondary data is collected from published sources like Journals.Researcher selects the sample as per their convenience. journals.
The rapid opening up of the economy resulted in many new avenues of expenditurefor the consumer’s growing income. Entertainment. Leisure and Travelsectors also boomed. 68 . The rest came from severalnon-FMCG businesses which were not profitable.Suddenly.DATA ANALYSIS & INTERPRETATIONS Through the nineties. It is not that they bathed less often or brushedtheir teeth less often or indeed washed their clothes less often. 2000. As a result of this shift in spending patterns. one could drive out of a car showroom in a Maruti 800 with adown payment of only Rs. a consumer buying six tablets of Lux in a month went to buying three of Lux and three cheaper brands. 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. But they did downtradeto lower priced substitutes from higher quality brands.The lure of new avenues of expenditure in products and services led to consumersrestricting their expanse on FMCG. in 2000. For example. 75% of our sales came from FMCG businesses. It is important to understand why this happened. After all. two-wheelers andautomobiles. and did not offer prospects for long-term leadership. A sharp drop in interest rates from 18% to 8%led to explosive demand for consumer durables like white goods. Or a consumer buying Surf Excel for her clothes mixed it with a cheaper powder.Mobile phone ownership and usage exploded due to its amazing lifestyle andconvenience be nefits as well as lower prices. The home ownership market grew exponentially asthe average age of a home loan borrower dropped from 50 in 1999 to 30 in 2004. FMCG market growth stalled and then declined for the next four years. the FMCG markets grew at almost 15% per annum in value.
Nickel Catalyst. They have consolidated theuir portfolio and improved thegross margins by over 13% through product mix and cost reduction. Building blocks of a strong Foods business In Foods.They decided to disengage from all non-FMCG or commodity businesses.Besides. both interms of resource and focus. consisting of 35 brands across 20 categories. Seeds. there is enormous growth potential in leading the evolution of consumers to branded and processed foods. They have alsocleared the supply chain of all old stock and geared up for fresh availability on shelf. They could achieve this by raising the bar and becoming worldclass in what their brands 69 . FMCG still offers enormous potential As the largest FMCG player it was up to them to reverse the downtrading to realize itstrue growth potential. The Foods business will now invest for growth through relevant innovation. Adhesives. with higher levels of resource concentration. These will be their main engines of growth. they were a drain on the core FMCG business. Historically their Foods businesswas fragmented and lacked scale. wehave divested and discontinued 15 businesses including Animal Feeds. Theyrecognized that changing food habits would require considerable investment. SpecialityChemicals. In all. whichthe current business simply could not afford. people talent or media spend. Mushrooms etc. Today. It was often commoditized with low margins.1. Over the last few years they have focused on putting in place the building blocks of a strong Foods business. Therefore they divested the non-valueadded parts like Vanaspati. their Foods business has a healthy gross margin and a supply chain driven byfreshness. withsales of Rs. be ittechnology.Today they are a focused on FMCG company with our branded business accountingfor over 90% of sales. Thermometers.750 crores as in 1999.
000 crores from a current value of Rs.offered and how they worked.40. They chose to focus on 35 power brands covering all consumer appeal and price segments. Across the world. Nothing less would do. This is an opportunity that they have to seize. 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. many undifferentiated and lacking scale. Over the next 10years. Six brands – Brooke Bond. In 2000. the FMCG market will be over Rs. 70 . their Foods business has a healthy gross margin and a supply chain driven byfreshness.100. they are seeing a strongcorrelation between income levels and the size of FMCG markets. FMCG still offers enormous potential As the largest FMCG player it was up to them to reverse the downtrading to realize itstrue growth potential. they are seeing a strongcorrelation between income levels and the size of FMCG markets. They are already seeing the benefits.000 crores from a current value of Rs. The Foods business will now invest for growth through relevant innovation. they had 110 brands. At thoselevels. the FMCG market will be over Rs.100. They could achieve this by raising the bar and becoming worldclass in what their brands offered and how they worked. Across the world.40. This is an opportunity that they have to seize. At thoselevels. Today. per capita income in India is likely to touch China’s current levels.Penetration levels in several of the categories and consumption levels in all of thecategories is low by any comparison.000 crores.000 crores. Over the next 10years. Nothing less would do.Penetration levels in several of the categories and consumption levels in all of thecategories is low by any comparison.
Lifebuoy. Imagine the importance of that benefit to consumers in 71 . has grown at over 15% for the last three years. “A soap is a soap is a soap!” Or indeed.400 crores. in the last three years to upgrade the brands. Lux.5. or 5% of sales. in the laundry market. Today Lifebuoy. Fair & Lovely.500 crores Better Value The first step was to ensure that they offer world class quality and real differentiation backed by technology to give them the advantage over low priced competition. Surf Excel went well beyond the benefit of ‘greatclean’ by saving two buckets of water with every wash. 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. Rin and Wheel – have emerged as mega brands in the last five years. Similarly. How often have we heard someonesay. 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. 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. “All detergents clean clothes as well”.They have also launched several low unit size and price packs for single use to makethe brands more accessible to all income groups. Better quality and more affordable prices have increased the value to the consumer.5 and a branded quality shampoo in a bottle at Rs. They had to move from selling a soap or a detergent to something far more important and central to the consumer’s life. their oldest brand. Theyhave invested over Rs.In the case of Lifebuoy. It moved from being a mere soap to a health essential. each with sales of more thanRs. For example.
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.
Globalization. 5.4. cost pressure is likely due to rising crude and freight costs. Threats 1. CONCLUSION 76 . HLL's tea business has declined marginally. reason is that. Increasing departmental stores concept – impulse @ at cash counters.
are some of the main ingredients of FMCG sector.Demography. SUGGESTIONS 77 .This company project has demonstrated “HINDUSTAN UNILEVER’S MARKETING STRATEGIES AND POLICIES” that has proved to be extensive through. FMCG secter hold a prime importance as the competition is increasing day by day.Lux.lifebuoy.personality.pantene etc.This sector has member of players which altimately shopes the buying decision products like. Different line of products are offering customers to choose according to their gender.income and other attributes.ariel.clinic plus. and of great benefit to the company in furthering its competitive advantage. 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.
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 bring more awareness of the companies name along 78 . They need to promote their companies name along with the brand name. HUL They need to enter into lower segments of detergent.
79 .LIMITATIONS While undertaking my study I was encountered with some limitations: Limited time was provided to complete the study. Cost involved in collecting the data was high. To fix an appointment with the dealers was also very difficult task and even after that many time people was not turn up for the appointment.
Prentice. 4th Edition 2002 Page 135. Ltd.R.. 2005 Page 85.Hall of India Pvt. . Research Methodology. Research Methodology. 10th Edition.BIBLIOGRAPHY BOOKS: • • • Kothari C. 2001 Page 365. Deep & Deep Publication Pvt. Kottler Philip. Marketing Management. . Ltd. Thakur Devendra. 80 .
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