About the marketing strategy This strategy sets out how Tourism Tyne and Wear, New castle Gateshead Initiative and the Tyne and Wear local authorities and our partners will work together to attract more leisure visitors – for holidays, short breaks or day trips – to destinations in Tyne and Wear. Introduction to Marketing: Definition of Marketing: Philip Kotler The marketing guru has said “Marketing is a social and managerial process by which individuals and group obtain what they need and want through creating, offering and changing products of value with others”. American marketing association Addressed “marketing is the performance of business activities that direct the flow of goods and services from producer to consumer to user”. Cundiff and still “Marketing is the business process by which products are matched with market and through which transfers of ownership are affected”. In the words of Hansen “Marketing is the process of discovering and translating consumers needs and wants into product and services and specifications, creating demand for these products and services and then in term expanding demand.

By all these definitions we can derive that marketing is compressive term that includes all resource and set of activities necessary to direct and facilitate flow of goods and services from producer to consumer in the process of distribution. Objectives of Marketing: At the end of all marketing activities is the satisfaction of human wants and derive profits from them. The following are the most significant objectives of marketing. • Intelligent and effective application of modern marketing: Today economic changing growth rate, relatively high inflation, high interest rates, rapid technological change and new aggressive rivals challenge marketing firm to adopt and respond to change for survival and prosperity. • To develop the market field: Marketing is the most dynamic field where change rules the roost. Change is continuing pre occupation among marketers. • To develop and implement guiding policies for better results: Innovative marketing guiding policies and their effective implementation to assure better results. • To find sources for further information concerning the market problems: The world of business in moving on the basis of countless decisions, marketing decisions are more complex and intricate having impinging impact on the very fortune of a company. • To take appropriate and opportune action in the course of working. The marketing information system designed by the marketing organization helps in identifying the problem, investigating analyzing it and interpreting the problem for the final decision.

Functions of Marketing: Marketing involves certain activities to make the goods from producers to consumers. It consist of operations and an operation may be performed several times either by a producer, middleman, till the commodity finally reaches in the hand of consumers. 1. Functions of exchange Exchange implies the transfer of goods and services money or money’s worth. Exchange brings about change in the ownership of goods. It is a two-way process invading two separate but supporting activities viz, buying and selling. • Selling: Selling is the sum total of all those activities that push the commodities to the buyers or consumers at a profitable price. It is the process that involves personal and impersonal efforts made in persuading the prospective customers to buy a commodity or service. Product planning and development: Product – planning is the planning or forecasting what consumers want in terms of quantity, quality, time, place, price, where as, product development refers to making available such goods to meet the requirement of consumers as demanded by them. • Demand Creation: It includes such special efforts to induce and persuade the prospective users to purchase the products of the seller only. • Negotiation: Negotiation as to terms of quality, quantity, price of the product time and mode of transport payment etc… are to be made with prospective buyers. • Contractual: Once the terms and conditions are settled between buyers and sellers a final contract would be entered into, where legally, ownership of goods passes on from seller to buyer.


Buying: Buying is another function of exchange that refers to all such activities involves in the assembling of goods under a single ownership and control. Its immediate purpose is to bring commodities together where they are wanted for use in production for final consumption.

This buying function has following four elements: • Planning Assortments: Buyers are to study their own market condition in order know the types quantity and quality of goods that are required by final users. • Contractual: It is clothed with the selection of various sources of supply, keeping in touch with them, to get the goods quickly reasonably and regularly. • Negotiation: Buyers and sellers negotiate the terms and condition of price quantity, quality and time of delivery, transport & payment. • Contractual: It is the last phase that binds the parties of exchange by means of a contract where the titles to the goods more from seller to buyers. 2. Functions of Physical supply These are the functions that are related with creation of place and time utilities, they are: • Transportation: Transportation is the physical means to move the goods and people from a place to another. It is essential spoke in the wheel of market. It is responsible for the creation of time utility • Storage: Storage is equally important that is creates time utility. The products are to be preserved from time of production to the time of consumption. It is the base of consumers to get the goods as and when required.


in some cases.3. for specific customers. in professional usage the term has a wider meaning which recognizes that marketing is customer centered. His typology has become so universally recognized that his four activity sets. the Four Ps. Jerome McCarthy divided marketing into four general sets of activities. These decisions are based on market information. However. regarding the market • Standardization: Standardization helps on tackle certain major problems of marketing. estimates. Products are often developed to meet the desires of groups of customers or even. E. • Financing: Finance is the base for all marketing activities. "marketing" is the promotion of products. 5 . It makes the exchange process smooth and acts as lubricating oil to the wheel of marketing. especially advertising and branding. 7P’s of Marketing: In popular usage. place etc… • Market information: The much desired success of marketing depends on correct and timely decisions. • 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. have passed into the language. It includes all facts. views. It is related with the division of commodities into distinct groups standardization involves establishment of certain criteria to which the goods must confirm. opinion. Facilitating Functions These are the function that facilitates the process of exchange.

• Physical (Evidence): It refers to the experience of using a product or service. for example. • Promotion: This includes advertising. time. publicity. or company.The four Ps are: • Product: The Product management and Product marketing aspects of marketing deal with the specifications of the actual goods or services. and how it relates to the end-user's needs and wants. employees. if they are provided in time. if the customers are informed in hand about the services and many such things. sales promotion. and personal selling. • People: People refer to the customers.g. including discounts. When a service goes out to the customer. 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. pamphlets etc serve this purpose Physical distribution refers to how the product gets to the customer. For example. point of sale placement or retailing. or attention. • Pricing: This refers to the process of setting a price for a product. This fourth P has also sometimes been called Place.brochures. referring to the channel by which a 6 . • 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. management and everybody else involved in it. it is essential that you help him see what he is buying or can simply be what is exchanged for the product or service. The price need not be monetary . brand. e.

Following are the phases of development of marketing 7 . retail). Services marketing must account for the unique nature of services. The four Ps model is most useful when marketing low value consumer products. online vs. to which segment (young adults. Industrial products. etc. the 4 Ps offer a memorable and quite workable guide to the major categories of marketing activity. adds "Perhaps the most significant criticism of the 4 Ps approach. whereas the essence of marketing should be the outside–in approach". families. Relationship marketing attempts to do this by looking at marketing from a long term relationship perspective rather than individual transactions. Morgan. A marketer can use these variables to craft a marketing plan. 1988). As a counter to this. Industrial or B2B marketing must account for the long term contractual agreements that are typical in supply chain transactions. services. as well as a framework within which these can be used. business people). in Riding the Waves of Change (Jossey-Bass. which geographic region or industry. Even so. Evolution of Marketing: Marketing has evolved from the time man existed on earth.product or service is sold (e. is that it unconsciously emphasizes the inside–out view (looking from the company outwards). having made this important caveat. high value consumer products require adjustments to this model. These four elements are often referred to as the marketing mix.g. which you should be aware of.

instead of buying concerned with customer preference concentrating on the mass production of goods for the purchase of profit. Marketing orientation: Customer’s importance was satisfied but only as a means of disposing of goods produced competition become more stiffer. Production orientation: This was the stage where producers. 8 . Sales orientation: This stage witness major changes in all the spheres of economic life.Barter system Production Orientation Sales Orientation Marketing Orientation Consumer Orientation Management Orientation Social Orientation Fig. 1 Barter system: The goods are exchanged against goods without any other medium of exchange like money. The selling activity becomes the dominating factor without any efforts for the satisfaction of the consumer needs.

"rural" means different things to different people: from 500. But then. social welfare becomes the added dimension to the companies. compared to the over Rs 13.000 crore (Rs 130 billion) allotted to mass media.000 for fast-moving consumer goods. promotion and distribution.000 people for consumer durables. to less than 50. According to estimates by the Rural Marketing Agencies Association of India.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. at least. notable exceptions. Of course. MARKETING STRATEGY OF FMCG PRODUCTS: Barring a few. a badlymade commercial. 9 . of companies wanting to move beyond urban boundaries.or. it is heartening to note the increasing awareness of the importance of rural markets . Social orientation: The companies are not only cares for consumers but also for social welfare. Management orientation: The marketing function assumes the managerial role to co-ordinate all the interacting business with the objectives of planning. Still. the total budget for rural marketing is only about Rs 500 crore (Rs 5 billion). a few painted walls and the occasional participation in village haats and melas. rural marketing in India is still about a van campaign. This is grossly inadequate to cover the huge potential for different products in rural markets. clients' reluctance to spend big money for bigger results in rural markets is because there are no standard performance yardsticks for judging the efficacy of the rural marketing efforts. Thus.

But even more important is the need for a dedicated task force. Companies like Cavin Kare (Chik Shampoo. But only consider the huge successes of some regional brands. especially in the FMCG sector. is imperative . 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. keeping in mind that rural marketing is a long-term relationship. Ghadi detergent powder and Power soap are proof that regional brands can become brands to reckon with. which are giving the multinationals a run for their money.The TRPs and NRS/IRS data help you determine the efficacy of TV and press marketing. be it a simple radio spot or a wall painting or a theatre film. Meera Herbal Powder. And. They all started in small. the most enduring example of a brand that began as a regional player and is now a giant. Anchor (100 per cent vegetarian toothpaste). What should companies do to step up their payback from rural marketing efforts? Here are some steps that should help. Fairever Cream and so on). 10 .the successes of Hindustan Lever [ Get Quote ] and ITC are proof of this statement. 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. Their communication. appealing to the local ethos and aspirations of the targeted area. People power Total commitment from top leadership. concentrated markets. And don't forget Nirma. most importantly. touched a chord in the target audience. their policies were flexible and they could adopt to fast changing marketing situations.

. were shifted out midway. 11 . What started as a great rural marketing initiative has been relegated to the dustbin. which many of the urban-oriented management graduates who are at the helm of affairs at most organisations do not possess. And send them out in the field only after thorough training.and discuss the path their careers are likely to take in the organisation. the teams that briefed us in the initial stages and participated enthusiastically in the campaign. Pay them well remember. 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.. people with fire in their bellies who want to prove themselves in big companies and have no issues about working in smaller markets. or at least. Recently. The teams that succeeded felt no ownership of the campaigns they had not initiated. Many of these are students from small towns. you pay peanuts. management graduates who have studied the subject as an elective. you get only monkeys . until the completion of a specific task. Ensure the consistency of the team involved in any project. we were involved with two big clients. The best bet is to recruit students from specialised institutes such as the Indian Institute of Rural Management. in keeping with their companies' policy of shifting and promoting people. the fate of many rural marketing initiatives in the country. In both cases.Rural marketing efforts need special mindsets.

be they van campaigns or below-the-line activities. There is very little effort to tailor whatever communication is made in such efforts. a comprehensive brand building strategy in rural India. aspirations and fears of rural customers. with both short term and long term goals. Most of them have previously appointed vendors who implement the company's ideas blindly.Goals are good Early on in the campaign. so you can create a customised plan of action. Know your customers A good place to begin is studying the mindset of your customers. Our experience shows that the attitudes. If you are interested in the second alternative. 12 . All too often. with regard to products and brands. define your objective: is it a tactical effort to achieve increased sales in specific areas during a specific time. 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. 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. to suit the local audience or fit it with the overall campaign efforts in the mass media. is a must. is very different from their urban counterparts. clients insist their knowledge of their customers (based on studies of urban India) is enough on which to base an action plan.

More and more companies turn to the local haats to sell their products. pressure cookers with two handles and a radio with key-winding mechanism are all the result of research. at least keeping in mind the present goals of marketing companies in rural India. The refrigerator with standby power for 12 hours.000 villages. and to that extent make your effort cost-effective.the humongous task of physically reaching your product to over 600. It is estimated that FMCG companies lost more than Rs 10. Ensure availability Most anecdotes about rural marketing centre on the distribution aspect . For instance. We've all heard about the shampoo sachets that are available in even the smallest villages. ensure that the people who patronise these haats are the kind who will buy your brand.000 crore (Rs 100 billion) to spurious products. who then buys the products from the nearest feeder markets. But it's not really as nightmarish as it is made out to be. we recently conducted a survey among some haats in Tamil Nadu. with some interesting results. since they can't afford the real thing. spurious products that are sold in these bazaars. 13 . The consumer demands the product from the local shopkeeper. most of them without motorable roads. The haatswere popular with the poorest agricultural labourers who consciously buy the duplicate.Research can give you invaluable ideas for new product development as well as new methods of reaching your target audience. mostly sold through such local haats and bazaars. How does that happen? It's a direct result of rising aspirations. fuelled by television commercials. While haats offer opportunities to target consumers from several villages at one place.

new consumer and retail trends and aggressive marketing and promotions. is now passe. you're closer to the rural consumer than you would have thought. MARKETING STRATEGY ADOPTED BY HUL “Price cut or hike is not a long-term growth strategy.000.” says Vats. if your products are in towns with populations of 50.” he said.Which means if you can ensure distribution to the feeder markets in towns or villages with populations of 10-15. So. home care. “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. Studies also indicate that rural consumers prefer to shop for durables such as televisions. now is focused on product innovation. category head. This comes even as Unilever is scouting for a potential buyer for its laundry business in the US. Pricing. 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. automobiles and appliances in the nearest big town or city. you've already taken the first step towards reaching your target customer.000.” 14 . in fact. “Our strategy for growth.” insists Sudhanshu Vats.” “We have done key innovations across the product portfolio and it is working for us.

5%. up to a 7. saw its market share dip by 1.” says Unmesh Sharma.596 crore to the company’s total sales of Rs12. an analyst at Macquarie Securities here. according to Vats contributes around 50% of HUL’s laundry segment revenues. HUL’s soaps and detergents segment contributed around Rs5. However. P&G also gained 0. 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.908 crore in 2006 and rose 8. HUL doesn’t report its laundry revenues separately but puts them under the soaps and detergent category. the industry is stabilizing. According to ACNielsen. with a total share of about 18%. The recent price war between companies led to erosion in their profitability but now. “Laundry has been an attractive segment in the past and is likely to keep growing in the near future. this time. according the market research firm ACNielsen.6% share. the Ahmedabad-based manufacturer.8% in the quarter ended June from 35.5 percentage points. 15 . increased its market share by 2 percentage points in the same period.HUL’s market share in the laundry segment grew to around 37. the laundry industry in India was worth Rs7.7% percentage points to 13. a value brand that.103 crore. Nirma Ltd.4% over 2005. According to Vats. the increase was not at the expense of price war with its multinational rival Procter & Gamble Co.5% in the same period last year. In 2006. Wheel. however.

” Still. “Trends suggest that the usage of detergents has gone up as a result. with premium quality of clothes. it is too early to say what result their new strategies will yield.” says Macquarie’s Sharma. “Still.” says Vats.” OBJECTIVE OF THE STUDY 16 . “Some of HUL’s recent moves. such as promotional campaigns and advertising. Also. analysts remain cautious.“Consumers today are buying more clothes. seem right. people want to use better and branded products.

 To analyze the influence of rival company’s strategies on the performance of Hindustan Unilever Limited  To analyze the various strategies adopted by the company to gain competitive advantage  To identify the marketing strategies and policies of Hindustan Unilever Limited SCOPE AND IMPORTANCE 17 .

 It would help to analyze the current position of HUL and then to sector marketing channels for the same. IMPORTANCE  To will help in identifying the product of HUL in FMCG sector.This project is applicable on the on the area of FMCG. COMPANY PROFILE 18 .  This study would be helping HUL to frame its different promotion schemes. in order to frame out marketing strategies for different production this sector. This is widely awaited.

brand building initiatives and innovation. and is also one of the country’s top five exporters. Hindustan Unilever is Unilever's main operating business in India. Hindustan Unilever Limited (HUL). 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. one of the most efficient in the world. These three companies merged to form Hindustan Lever Limited in November 1956. Hindustan Vanaspati Manufacturing Company. and far and away the leading advertiser. The Hindustan Unilever Ltd (HLL) is India’s no. 2007 the company has changed the name to Hindustan Unilever Limited. The company focuses on efficient delivery to consumers with an improved supply chain. It is generally acknowledged 19 . It is the country's biggest consumer goods company. Effective July 19. Hindustan Unilever Ltd (HUL) has grown from strength to strength with new technologies being introduced to make the HLL consumer goods business. The company’s history dates back to 1931 when Unilever set up its first Indian subsidiary.The Hindustan Unilever Ltd’s(HUL) Inc has taken the opportunity to offer us a broader view of FMCG category. which has helped the company to sustain its leadership position in the overall FMCG category in India.1 FMCG is able to share with their market insights based upon unparalleled breath of consumer goods experience. followed by Lever Brothers India Limited (1933) and United Traders Limited (1935). In addition to FMCG products it is the country's biggest exporter of tea. a subsidiary of Unilever. is a fast moving consumer goods (FMCG) company based in India.

3 percent in 2007. helping offset 1. and ITC Ltd.000 Stockists  Total Coverage 6.based Procter & Gamble is stocking Indian stores with Olay products after nearly halving the local prices of Ariel and Tide detergents in 2004. although performance slowed dramatically between 2000 and 2004.Now Cincinnati.000 suppliers & associates  75 Manufacturing Locations  45 C&FAs. which make up about a third of Unilever's worldwide sales.9 percent growth in Europe and 4.200 managers  2. may see global revenue growth slow in 2010 as Procter & Gamble Co. Asia and Africa. which sells soap to more than 500 million Indians. Unilever.3 percent in 2007. according to Brusselsbased brokerage Petercam SA. will see their share of the company's growth fall to 2 percent in 2010 from be one of India's best-run businesses. according to the median of five analysts in a Bloomberg survey.2 percent in North and South America. Hindustan Unilever – A 75 Year Commitment  15. 4.4 percent in the first nine months of last year. step up marketing in Asia's third-biggest economy.3 Mln Outlets 20 . Unilever's overall sales growth will slow to 4.9 percent in 2010 from an estimated 5. 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. Revenue from the two continents rose 11. prior to restructuring.000 employees  1.

Lakme Limited. Lakme Lever Limited. Two years later. HUL and yet another Tata company. • Subsequently in 1998. followed by Lever Brothers India Limited (1933) and United Traders Limited (1935). These included Brooke Bond (1984). formed a 50:50 joint venture. Tata Oil Mills Company (TOMCO) merged with HUL. These three companies merged to form HUL in November 1956.5 Mln outlets  6. Direct Coverage 1 Mln outlets Population of INDIA: 1027 Mln  5.000 Villages  5. Hindustan Vanaspati Manufacturing Company. Vanaspati was launched in 1918 and Dalda came to the market in 1937. Lipton (1972) and Pond’s (1986).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.38. Unilever set up its first Indian subsidiary. 21 . • In 1993. This was followed by brands like Pears and Vim. Lakme Limited sold its brands to HUL and divested its 50 per cent stake in the joint venture to the FMCG giant. • A number of prominent companies came into the HUL fold as result of Unilever’s international acquisitions. • In 1931.545 Towns  2.

HUL picked up 74 per cent of the equity of Modern Foods from the Indian government. • HUL has also set up a subsidiary in Nepal. which markets Huggies diapers and Kotex sanitary pads. In a historic step. employs 36. FMCG major Hindustan Unilever Limited (HUL). It is one of the earliest MNCs to have entered India 22 . • • In 2002. formerly known as Hindustan Lever Limited. Nepal Lever Limited (NLL). and its factory represents the largest manufacturing investment in the Himalayan kingdom.350 managers. HUL acquired the government s remaining stake in Modern Foods.000 people. Kimberly-Clark Lever Ltd.• HUL formed a 50:50 joint venture with the US-based Kimberly Clark Corporation in 1994. including over 1.

2 23 .ORGANIZATIONAL STRUCTURE Managing Direc tor General Mana ger Vice President Marketing Manufacturin Sales g Finance Distribution FIG.

which holds 51. HUL has traditionally been a company.10. HUL's distribution network. Brooke Bond. Clinic.soaps. HUL is also one of the country's largest exporters. They endow the company with a scale of combined volumes of about 4 million tonnes and sales of Rs. look good and get more out of life. hygiene. tea. and personal care with brands that help people feel good. it has been recognised as a Golden Super Star Trading House by the Government of India.000 redistribution stockiest. Pond's.000 individual shareholders and financial institutions. covering 6." HUL meets everyday needs for nutrition. Lakme.PRESENT STATUS Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods company. Close-up. They are manufactured over 40 factories across India.3 million retail outlets reaching the entire urban population . Surf Excel. It is a mission HUL shares with its parent company. and now has 24 . personal products. The mission that inspires HUL's over 15.55% of the equity. Knorr-Annapurna.300 managers. Kissan.000 suppliers and associates.000 Lifebuoy. ice cream and culinary products. including over 1. Fair & Lovely. detergents. Rin. is to "add vitality to life. branded staples. Wheel. Pepsodent.and about 250 million rural consumer. Lux. Unilever. Kwality Wall's – are household names across the country and span many categories . touching the lives of two out of three Indians with over 20 distinct categories in Home & Personal Care Products and Foods & Beverages. coffee. The operations involve over 2. Sunsilk. HUL's brands .000crore. The rest of the shareholding is distributed among 380. The Hindustan Unilever Research Centre (HLRC) was set up in 1958. comprising about 4. which incorporates latest technology in all its operations.

” HUL’s market share in the laundry segment grew to around 37.facilities in Mumbai and Bangalore.” he said. Pricing. HUL’S NEW GROWTH STRATEGY After having fought a bitter price battle for market share with its rivals. However. is now passe. is now working on a new growth strategy for its laundry business. many with post-doctoral experience acquired in the US and Europe. Indian subsidiary of the Anglo-Dutch consumer goods company Unilever Plc. the 25 . new consumer and retail trends and aggressive marketing and promotions.” “We have done key innovations across the product portfolio and it is working for us. category head. P&G also gained 0.5 percentage points.6% share. “Our strategy for growth. “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.” insists Sudhanshu Vats. the increase was not at the expense of price war with its multinational rival Procter & Gamble Co. “Price cut or hike is not a long-term growth strategy.” says Vats.8% in the quarter ended June from 35. This comes even as Unilever is scouting for a potential buyer for its laundry business in the US. HUL says it is quite upbeat about the segment and says the laundry segment is one of its “key growth areas. this time.5% in the same period last year. now is focused on product innovation. in fact. home care. Hindustan Unilever Ltd (HUL). up to a 7. according the market research firm ACNielsen. HLRC and the Global Technology Centres in India have over 200 highly qualified scientists and technologists. Nirma Ltd.

“Still. According to ACNielsen. increased its market share by 2 percentage points in the same period. 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. “Some of HUL’s recent moves. according to Vats contributes around 50% of HUL’s laundry segment revenues. however. it is too early to say what result their new strategies will yield. HUL’s soaps and detergents segment contributed around Rs5. a value brand that. analysts remain cautious. “Trends suggest that the usage of detergents has gone up as a result.7% percentage points to 13. people want to use better and branded products.596 crore to the company’s total sales of Rs12. the industry is stabilizing. the laundry industry in India was worth Rs7.” says Unmesh Sharma.” Still.5%.908 crore in 2006 and rose 8.” says Macquarie’s Sharma. Wheel. “Laundry has been an attractive segment in the past and is likely to keep growing in the near future.Ahmedabad-based manufacturer. with premium quality of clothes.103 crore. HUL doesn’t report its laundry revenues separately but puts them under the soaps and detergent category. “Consumers today are buying more clothes.4% over 2005. with a total share of about 18%.” 26 . such as promotional campaigns and advertising. an analyst at Macquarie Securities here.” says Vats. The recent price war between companies led to erosion in their profitability but now. seem right. Also. In 2006. saw its market share dip by 1. According to Vats.

Pond’s and Vaseline • Hair care: Sunsilk and Clinic • Oral care: Pepsodent and Close up • Deodorants: 27 . Hamam. delivering to her door step additional benefits which she would never have imagined possible. But the winner will surpass them by constantly exceeding her expectation. Breeze. Pears and Rexona • Laundry items: Surf Excel. Hindustan Unilever Ltd(HUL) offer such product. But delight dazzles the average company will compete for customer by conforming to her expectation consistently. The wide variety products offered by the company include: The company’s popular product’s include: • Bathing soaps: Lux. Dove. Rin and Wheel • Skin care: Fair & Lovely.FIVE P’S OF MARKETING Product Satisfaction suffices. Lifebuoy. Liril.

The strategy used by Hindustan Unilever Ltd(HUL) is for matching the value that customer pays to buy the product with the expectation they have about what the production is worth to them. Pricing Make no mistake. Therefore 28 . Second P of marketing is not another name for blindly lowering prices and relying on this strategy alone to increase sales dramatically.Axe and Rexona • Colour cosmetics: Lakme • Ayurvedic: Ayush • Tea: Brooke Bond and Lipton • Coffee: Bru • Foods: Kissan. So every customer segment has different price expectation from the product. Annapurna and Knorr • Ice cream: Kwality Wall’s . Hindustan Unilever Ltd(HUL) has launched various products which cater to all customer segments.

India – The operations involve over 2. you would be know of selling your products.television has already primed and population for consumption. It takes much more time and effort to build. In a product and price parity situation. HUL's distribution network. but the end of it all.3 million retail outlets reaching the entire urban population. comprising about 4.maximizing the returns involves identifying right price level for each segment.000 suppliers and associates. Marketers and finance manager need a new term to evaluate their business: Distribution Equity. Physical Distribution – “Place” BRAND ISN’T THE ONLY ANY MORE . but once built.000 redistribution stockists. and the marketer who can get to the to the consumer ahead of competition will give a hard – to – overtake lead. The fundamental axiom of Indian consumer market is this: You can set up a state-of –the-art manufacturing facility. swamp prime television with best Ads. The cardinal task before the Indian market is managing is to shoe-horn its product on retail shelves. covering 6. Why does the company need distribution equity more anything in India? With technology and competitive pressure slash in it is becoming increasing difficult for marketers to retain a unique product differentiation for ling period. and then progressively moving through them. and about 250 million rural consumers. But getting their means managing wildly 29 . hire the hottest strategies on the block. Buyers are paying for distribution equity not brand equity and market shares. distribution equity is much together to erode. the brand that sells more is the one that reaches the highest number of customers.

and be prepared too take step toward the sender. life style. The other reason is arch rival Procter & Gamble Co. This network of distribution can either contact wholesalers and which in turn retailers or the distributors can contact to the retailers directly. it has installed visi colors at several outlets. At Hindustan Unilever Ltd(HUL). Once the stock product reaches retailers. The company is looking to reduce this parity level. Promotion If an advertisement is to communicate effectively. they believe that selling FMCG is it like selling soft drinks. Looking at the low penetration of few products. This helps in maintaining consumption in summer when sales usually drops due to the fact that the heal effects product quality and thereby off takes. Own distribution network consist of clearing and forwarding (C&F) agents & distribution stockiest. And your brand equity isn’t going to help when it comes to tackling these issues. the receiver must at least half want it to. a distribution expansion would itself being incremental volume. Hindustan Unilever Ltd(HUL) distribution network has expanded.different terrains-climate. Hindustan Unilever Ltd(HUL) distributes the product in the manner stated above. To address the issue of product stability. Effective advertising is rarely hectoring or loudly 30 . Beside use of improved logistics. value system. language. the prospective customers can have access to the product. reaches more than a million retailers. is much higher than Procter & Gamble Co. transport and communication network. This increase in distribution is going to be accompanied by reduction in channel costs. Hindustan Unilever Ltd(HUL) marketing costs. at 18% of total costs. Hindustan Unilever Ltd(HUL) is also attempting to improve the distribution quality.

30 catteries in Mumbai have been selected. It has also launched Pureit. unself conscious. The strategic response address the emotional appeal of the band to the child within the adult. a home water purifier which supplies drinking water without boiling/need of electricity . communication must first ensure exposure. Something familiar is planned for phone-book as well. To penetrate into the inner recesses of her memory. grab her attention evoke her comprehension. pleasure – seeking child within himself – a graft these feeling onto the Ad campaign like “hasso to khul k hasso for close up”. It often both attracts and generates arm feelings. In cinemas. All ICICI’ s ATM a message flashes on the screen as soon as customer insert his ATM card. Naturally. ad agency contract has created communication for cinemas and even ATM machines for the brand. that produced just the value vacuum that Hindustan Unilever Ltd(HUL) was looking to fill. More often than not.explicit…. grab her acceptance and then extract retention competing with thousands of other units of communication trying to do the same. As well as outdoor and radio ads. a successful campaign has a stronger element of the unexpected a quality that good advertising shares with much worthwhile literature. 31 . • Finding showed that the adults felt too conscious to be seen consuming a product actually meant for children. Thereafter it was the job of the advertising to communicate customer the wonderful feeling that he could experience by re-discoursing the careful. 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. “cream bathing bar for dove soap” and daag ache hai for surf excel” have been sure shot winner with the audience.

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. that the company has launched. the management plans to tap this new channel of marketing. and the discounting era grew strong. it had also entered into various marketing relationship with other portals. and luxury goods flourished. etc…. It’s a combination of spiffing up its key brand. researching and improving the newer products that haven’t taken off.unilever. today customer uses complicated decision making process to assess the 32 . As a variety of competitive claims assails her senses. Positioning In the 1970s consumers were ready to pay “more for more”. Ad since any discussion today would be incomplete without mention ‘e’ Some of today’s most successful companies recognize those customers are more educated and able to recognize true customer value… Positioning is simply concentrating on an idea – or – even a word defines that company in the mind of the consumer. Beside the company website (i. as well as expand the market. In the 1980s. consumers began to demand “more for same”.e.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. supported with high ad – spends that Hindustan Unilever(Ltd) hopes will see it emerges stronger after the current slowdown. Today’s consumer demanding “more for less”. specially targeted during festivals and events such as Valentines day. www. and the winner will be that super value marketers….

“Lifebuoy has become more than just a red bar of soap – today the brand provides hygiene and health solutions for families 2) Fair & Lovely. gender. Since Hindustan Unilever(Ltd) is more clearly associated with a particular set of attributes in terms of benefits and informs. Consumers are groups. a hot-selling “fairness” cream. the quicker becomes her search process.  Hindustan Unilever(Ltd) takes into account all these factors when producing a range of products. such as the:  Break segment – products which are normally consume as a snatched break and often with tea and coffee. It targets different segments within the market.e. Markets segmentation can be defined in a number of ways such as:  Demographic variables (e. their interests and activities) the benefits which consumers look for in a product or on the occasions when the product might be consumed.unilever. HINDUSTAN UNILEVER’S MARKET SEGMENTATION Market place for any product is comprised of many different segments of consumers.alternative before making a purchase. as www. each with different needs and wants. material states income etc…)  The lifestyle of consumers (i. Positioning of individual product: 1) Lifebuoy is ‘one of Unilever’s oldest brands’ with more than a hundred-year history. 33 . which promises a lighter skin tone for many of India’s complexion-conscious consumers.

taken home consumed at a later stage. They include product such as close up. Impulse segment – these products are often purchase on impulse.  Take home segment – this describes product that are normally purchased in supermarkets. used these and then. 34 .

8% in the quarter ended June from 35.596 crore to the company’s total sales of Rs12.” HUL’s market share in the laundry segment grew to around 37. is now working on a new growth strategy for its laundry business. “Our strategy for growth. now is focused on product innovation. category head. HUL says it is quite upbeat about the segment and says the laundry segment is one of its “key growth areas.908 crore in 2006 and rose 8.” says Vats. is now passe. “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. Hindustan Unilever Ltd (HUL).” he said. HUL doesn’t report its laundry revenues separately but puts them under the soaps and detergent category. new consumer and retail trends and aggressive marketing and promotions. the laundry industry in India was worth Rs7. Indian subsidiary of the Anglo-Dutch consumer goods company Unilever Plc.5% in the same period last year. Pricing. in fact. home care. In 2006.The Real Taste of Rejuvenation After having fought a bitter price battle for market share with its rivals. 35 .” insists Sudhanshu Vats. “Price cut or hike is not a long-term growth strategy.4% over 2005. HUL’s soaps and detergents segment contributed around Rs5. According to ACNielsen.103 crore. This comes even as Unilever is scouting for a potential buyer for its laundry business in the US.” “We have done key innovations across the product portfolio and it is working for us.

the managing director of Hindustan Unilever. This is quite a change for Hindustan Unilever. It’s primary market research at its most elemental. 36 . India’s Top Consumer-Products Company Woos Affluent Shoppers With Global Brands Like Dove. wants to see how his products are stocked. what consumers are buying. chief executive of innovation and incubation at Pantaloon Retail.” says an amazed Damodar Mall.“Laundry has been an attractive segment in the past and is likely to keep growing in the near future. whose executives used to have emissaries make obeisance at Lever house in downtown Mumbai. COMPETITIVE STRATEGY As Competition Heats Up. so the company wants to make sure it’s in with the new marketing crowd. Hindustan Unilever has traditionally relied on small traders and mom-and-pop corner stores to retail its products. the India hypermarket chain. and it’s best done incognito. India’s premier consumer-products company. That’s how Douglas Baillie likes it. and how shoppers are reacting to competitive brands. and the calls he makes on the headquarters of the big retail chains. But India’s recent retail boom has created large stores and malls. the industry is stabilizing. Hence Baillie’s Hypercity visits. The recent price war between companies led to erosion in their profitability but now. “I can’t imagine any head from Lever House ever visiting other company offices like this. While Cooking Up Its Foods Biz The middle-aged Briton strolling the aisles and checking out the products doesn’t attract much notice from other shoppers in Mumbai’s Hypercity. India’s largest retailer and a former manager at Hindustan Unilever. Baillie.

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.3%. Yet early this year.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. sauces and tea. soaps. Hindustan Unilever’s lead in hand soaps. makes everything from detergents. and L’Oréal. including the popular Lux. after ringing up India-based sales of $3. and shampoos to soups. Now Hindustan Unilever is under siege from aggressive Indian and foreign competitors such as Procter & Gamble (PG). These 37 . The company. down from 21% a few years ago to just 11. Hindustan Lever tea brands like Brooke Bond and Lipton have dipped from a combined market share of 29. which is practically synonymous with India.5 billion. is down from 55. Favorite detergent brands like Surf Excel and Rin are barely hanging onto their 37% share. In the last year. and dominates most of those categories. Nivea.2% to 24. That’s why the company is wooing consumers in big retail stores.84% now.2% to 54%. ACNielsen data shows.

will grow to 28% by 2017. a Zimbabwe-born British national. That dovetails with parent company Unilever’s new global realignment of products. 2006. not a multinational. For many decades most Indians thought Hindustan Lever was a local company.” says D. Hindustan Unilever’s strategy is to market its premium products through the hundreds of megastores springing up across India.Parent Unilever will develop the brands and streamline product offerings across the world. fitting in quite nicely with India’s turn towards more international products being sold in supermarkets. The takeover of Hindustan Lever by Unilever became evident in March. the crown jewel whose managers had free rein to develop and build brands suitable for the local market.5% of India’s total $336 billion retail market. when Baillie. According to retail consultant KSA Technopak. Hindustan Unilever’s managers hope their revenues from big retail will increase from 5% today to over 25% in 2012. Hindustan Unilever’s finance director. This means that all of Unilever’s brands will be available across global markets. was the most successful and profitable company in the Unilever group. currently just 3. not long ago. “It is a big game for us.newly affluent shoppers present the best hope for the company’s future in India. Sundaram. Yet this is still a dramatic change for Hindustan Unilever which. while its subsidiaries will sell the products. became the first foreigner in four decades to head the Indiancompany. and the cream of India’s management 38 . From Local Player To Multinational Overnight the change sent shock waves through India. organized retail.

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. executive director in charge of the home and personal care business. to $274 million in 2004. Nitin Paranjpe. while the company’s track record in foods has been dismal. Indeed. Then in February. confectionery. For instance. the company’s home and personal care businesses account for 80% of revenues and 85% of profits at Hindustan Unilever.” 39 . was rechristened Hindustan Unilever to reflect its parentage. And there was some stiff competition from rival Procter & Gamble. then known as Hindustan Lever. thanks to price increases.” He also wants to expand the foods business in conjunction with the parent. it has phased out more food products—wheat flour. 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. a 2004 price war with P&G in the detergent business forced Hindustan Unilever to slash prices on its premium brand Surf Excel.5 billion for five years while operating profit plunged 37%. While the strategy aimed to conserve management energy.graduates made their careers there. If India is a great story. Baillie first had to sort out some past problems. frozen bread—than it has launched. Last year operating profits reached $357 million. In India. But the rich margins of the past have not returned. The effect: The company’s sales and operating profits stagnated at $2. 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. Hindustan Unilever executives are realistic about the new era in which it now operates. 2007. the company. where foods bring in half the revenues globally. we aren’t the only ones seeing it. admits that it’s now “tougher to hold on to market share.

ITC. Tata Tea’s market share increased from 16. while Hindustan Unilever slipped from 26. an analyst at Sanford C. In June.5%.9% in July. According to ACNielsen. which sold for less than 2 cents each and which expanded the market for Hindustan Unilever products among India’s rural masses.Rivals like P&G and Nivea have also copied Hindustan Unilever’s best innovation: the small shampoo sachets it pioneered in the 1980s. `Profitable' Cigarettes 40 . toothpaste and tea in the quarter ended Sept. But today even L’Oreal has sachets of its Fructis shampoo.and Rotterdambased parent. Its share of the shampoo market declined by more than a percentage point to 47.1% to 19. 52 percent owned by the London. lost ground in shampoo.7% in March. 80% of Indian shampoo sales come from sachets.7 percent. compared with the year earlier. to 19. the world's largest consumer-goods maker. Tata Tea is exultant. bath soap. 2006. according to the company. according to Ali Dibadj. the company said. 2007. It started selling more brands including Fiama Di Wills shampoo and Superia soap last year as the government raised tobacco taxes. who rates the stock ``outperform. Currently.” FUTURE COMPETITIVE STRATEGY 2010 Expectations P&G..'' Hindustan Unilever Ltd. Managing Director Percy Siganporia says the gain is “a dream comes true for us. will continue to gain share in the next five years in India. the Tata Group’s beverage company Tata Tea overtook Hindustan Unilever as India’s largest selling tea brand. is also making inroads. Bernstein in New York. 30. the largest Indian cigarette maker and partly owned by British American Tobacco Plc.

analyst Unmesh Sharma.'' Rising prices of raw materials have made it more difficult for consumer-goods makers to pass on higher costs. profitability will continue to be under pressure. has surged 70 percent in the past year. bathing soaps and shampoo. The company has a market value of about $11. ``It has the ability to take losses in this segment as long as it grows its sales. who has a ``neutral'' rating on the stock. This strategy will still satisfy portfolio. ``Given the competition.'' said Anand Shah. India is Unilever's biggest market in Asia.8 billion. It has sold soap in the country since 1888 and controls about half of the sales of products such as skin creams.9 rupees.57) in the next year from 190.'' said Macquarie Securities Ltd. an analyst at Angel Broking in Mumbai.The tobacco maker ``has a very profitable cigarettes business which will help it to invest and expand its personal. who has an ``underperform'' rating on Hindustan Unilever. HUL-UNIQUELY POSITIONED TO CREATE VALUE  Our strategy  Competitive strengths  Innovation and R&D capabilities to straddle the pyramid  Versatile distribution network  Strong corporate responsibility and governance  Strong local and talent base Strategy 41 . The price of palm oil. He expects the stock to drop to 180 rupees ($4. generating about 6 percent of annual sales. used to make soaps and foods.

Corporate Social Responsibility-Aiding In The Development Of The Country 42 .  Leverage positive impact of growing Indian economy on consumer spending.  Grow the bottom line ahead of the top line.  Grow a profitable foods and top end business. Grow ahead of the market by leading market development activities.  Strong commitment to sustainable development. Competitive Strengths Fig:3.

The Group operates through seven segments: Soaps and Detergents. industrial and agricultural products. Beverages. The products include home and personal care products. HINDUSTAN UNILEVER LIMITED . Ice Creams and Other.25000 villages. Home and personal care products consists of personal and fabric wash. Foods. partnerships with diverse stakeholders. 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. 43 . foods and beverages. Exports. Personal Products.Shakti Three shakti initiatives • • • Shakti entrepreneur. The Group's principal activities are to manufacture and market consumer products. Impact of community • • business and social impact can go together. currently~44000 women cover 1.

seeds.  Government grants and subsidies.THE BIG INDIAN ROMANCE  Rural population larger than europe(800 million)  Low growth in agriculture. animal feeds. Hindustan Unilever markets consumer goods throughout India. processed-tri-glycerides and agri commodities. plant growth nutrients. Foods and beverages includes tea. cooking fats and oils. skin and hair care. This analysis compares Hindustan Unilever Limited with three other companies in closely related industry sectors.employment grants-Rs 40000cr 44 . atta and rawa. Industrial and agricultural products includes specialty chemicals. yeast. bulk chemicals. brand building initiatives and innovation. RURAL. footwear and carpets. salt. marine products and mushrooms. ice creams. rice. The company focuses on efficient delivery to consumers with an improved supply chain. Its brands are spread across 20 consumer product categories. perfumery. which has helped the company to sustain its leadership position in the overall FMCG category in India. The company faces competition from international. thermometers and plantations. leather. deodorants. tomato products.  Structural changes in the economy which are affecting this are:  Disintermediation in the agricultural market price discovery mechanism has benefited farmers.income growth is crucial.however rural income are growing faster with 70% population here. bakery fats. local and regional players. oral care.household. fertilisers. fruit and vegetable products. colour cosmetics and baby care. coffee.

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. and relaunched Lifebuoy. A better strategy. retargeted. and screened some options to roll out one option that everyone was happy with. according to the authors.” reads an observation in a chapter titled ‘entrepreneurial advertising that works’. they add.” write Leonard M.Table: 1 Did Hindustan Unilever Get Its Rural Pitch Right? A new book from Wharton School Publishing is critical of Hindustan Unilever’s advertising strategy in India.” 45 . the authors of Marketing that Works. The company basically worked with “one agency. Howard L. “HUL missed an opportunity for increased marketing productivity when they repositioned. Morgan and Shellye Archambeau. Ogilvy and Mather (O&M). Lodish. Though the company was ‘extremely innovative’ the way it handled the rural communications plan was very traditional.

The company’s advertising and promotional spends during the quarter fell to Rs 336 crore. targeted “10. “Lifebuoy has become more than just a red bar of soap – today the brand provides hygiene and health solutions for families. Prahalad’s The Fortune at the Bottom of the Pyramid .” The authors are of the view that government workers who have been interacting with villagers might have come up with some excellent ideas. Prahalad notes. through its innovative communication campaigns. The O&M strategy. as explained by Mr Lodish et al. in a paragraph on innovation. has been able to link the use of soap to a promise of health as a means of creating behavioural change. Director (Finance & IT). Sundaram.” says the site. “Differentiating soap products on the platform of health takes advantage of an opening in the competitive landscape for soap.000 villages in nine states where HUL stood to gain the most market share… They spent a lot of effort in designing low cost ways of communicating with their rural target. “or the villagers themselves might also be able to generate very effective communications vehicles. from the earlier Rs 345 crore.” The advertising spends have not been linear for the company. and thus has increased sales of its low-cost. said: “We have been phasing our advertising spends depending on the launches and relaunches of brands. HUL. he added.” reads a quote in the book from C.” So.Advertising strategy came for mention when the company reported the second quarter results. Lifebuoy is ‘one of Unilever’s oldest brands’ with more than a hundred-year history. Mr D. mass-market soap. why didn’t HUL try alternative campaigns when rolling out its initiative? “Probably the biggest reason is that they always did their communications the same way – even for innovative 46 . a few days ago.K. HUL.

which is one of the many discussed in the book. It has leading edge capabilities in servicing Modern Trade focused on shelf filling. “As a big company. 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. 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. 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.programs. many times it is difficult to change the procedures without creating significant political problems. The operations will begin with the existing Modern Trade in-store execution team of HUL moving into HUFS.” The HUL example. logistics for merchandising materials and in store execution. 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”. “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. 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. 2008.

It has also launched Pureit. These premium brands retail not in neighborhood small stores but in supermarkets and hypermarkets. It has about 350. Hindustan Unilever Network is the direct selling channel of the company. NEW INITIATIVE Bringing High-End Dove To India Baillie is fighting back. Lakme cosmetics brands from Tata. Dollops ice cream brand from Cadbury India. Hindustan Unilever launched a high-end range of Pond’s skin care and Dove hair care products from Unilever’s international portfolio. The advertising campaign. where Indian customers love to touch and feel products. a home water purifier which supplies drinking water without boiling/need of electricity. Over the past six months.Other Acquisition Hindustan Unilever has acquired several Indian FMCG companies so far. trained and guided by HLN's expert managers and trainers. This includes: • • • • Tata Oil Mills Company Brooke Bond Lipton India Modern Foods It acquired Kissan brand from UB group.000 consultants. which promises a lighter skin. all independent entrepreneurs. which suggests that regular use of the cream helps women gain confidence and makes them eligible for marriage. tone for many of India’s complexion-conscious consumers. Hindustan Unilever is also milking one of its top brands—Fair & Lovely. has made the brand a winner. That has spawned 48 . a hot-selling “fairness” cream.

Analysts believe the company’s current strategy of concentrating on premium products and marketing them in the large retail stores is a winning one. with net profit up 29. and sunblock lotions.6%. soaps. Baillie is also getting aggressive on foods. It is also involved in education and rehabilitation of special or underprivileged children. 2007. thereby improving their livelihood and the standard of living in rural communities. HUL is focusing on health & hygiene education. and rural development. but they are more focused and regaining their aggressiveness. women empowerment. But Hindustan Unilever’s brand is still tops. Through Shakti. and Baillie is pleased with the modest turnaround. HUL is creating micro-enterprise opportunities for rural women. and relief & rehabilitation after the Tsunami caused devastation in South India.a host of competitive fairness creams. and creating access to relevant information 49 . focusing on the Knorr brand of soups and curry mixes —ideal for the Indian market. These efforts have delivered some promising results. which Hindustan Unilever exploited with the launch of water purifier Pureit in 2005. In the quarter ended June. at one-third the price of established Indian brands such as Aqua guard. consumer analyst at Mumbai brokerage First Global Securities. SERVICE TO SOCIETY HUL believes that an organisation's worth is also in the service it renders to the community. In 2001. care for the destitute and HIV-positive. the company’s sales grew 13%. the company embarked on an ambitious programme. says that Hindustan Unilever “could have addressed a lot more categories. Shakti.” He points to the demand for safe drinking water in India. and water management. HUL has also responded in case of national calamities / adversities and contributes through various welfare measures. Shakti also includes health and hygiene education through the Shakti Vani Programme. Reason enough to keep patrolling those store aisles. Sumeet Budhraja. most recent being the village built by HUL in earthquake affected Gujarat.

HUL is also running a rural health programme – Lifebuoy Swasthya Chetana.000 villages. The program now covers 15 states in India and has over 31. The vision is to make a billion Indians feel safe and secure. The programme endeavours to induce adoption of hygienic practices among rural Indians and aims to bring down the incidence of diarrhoea.000 villages and directly reaching to 150 million rural consumers. reaching out to 100. touching the lives million people. of over 600 If Hindustan Unilever straddles the Indian corporate world. PRODUCT PROFILE HUL’s business activities are divided into four broad areas:  Home and personal care 50 .000 women entrepreneurs in its fold.through the iShakti community portal. it is because of being singleminded in identifying itself with Indian aspirations and needs in every walk of life. It has already touched 70 million people in approximately 15000 villages of 8 states. By the end of 2010. Shakti aims to have 100.000 Shakti entrepreneurs covering 500.

beverages. hair care. branded staples. Lifebuoy. ice creams. rice Bathing soaps: Lux. Sangam. Pureit water purifiers. Hamam. Liril. Dove. Breeze. colour cosmetic  Foods tea. skin care. culinary products. Rin and Wheel • Skin care: Fair & Lovely. fabric wash. oral care. marine products. Pond’s and Vaseline • Hair care: Sunsilk and Clinic • Oral care: Pepsodent and Close up • Deodorants: Axe and Rexona • Colour cosmetics: Lakme • Ayurvedic: 51 . Modern Foods ranges  New Ventures Hindustan Lever Network.  Exports • HPC. coffee. Ayush ayurvedic products and services.personal wash. home care. deodorants and talcs. Pears and Rexona • Laundry items: Surf Excel.

52 .Ayush • Tea: Brooke Bond and Lipton • Coffee: Bru • Foods: Kissan. Annapurna and Knorr • Ice cream: Kwality Wall’s .

Fair & Lovely. Pepsodent. Sunsilk. Brooke Bond. Lux. Lakme. 53 . Rin. Pond s. They include: Lifebuoy. Kissan. Closeup. Surf Excel.BRANDS HUL s brands are household names across the country. Clinic. Wheel. Knorr-Annapurna and Kwality Walls.

It is thus obvious that strategy implementation is a key challenge for today ‟s organizations. ranging from the people who communicate or implement the strategy to the systems or mechanisms in place for co-ordination and control. The survey reported in that white paper indicates that 83 percent of the surveyed companies failed to implement their strategy smoothly. rather than a science. we try to respond to this 54 . 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. According to the White Paper of Strategy Implementation of Chinese Corporations in 2006. It is thus not surprising that. according to a survey of 276 senior operating executives in 2004 (Allio. The best-formulated strategies may fail to produce superior performance for the firm if they are not successfully implemented. strategy implementation is often seen as something of a craft. after a comprehensive strategy or single strategic decision has been formulated. and only 17 percent felt that they had a consistent strategy implementation process. significant difficulties usually arise during the subsequent implementation process. as Noble (1999b) notes. 2005). Unlike strategy formulation. How can we better understand these issues and their importance for successful strategy implementation? In this article.TOPIC DETAIL Although formulating a consistent strategy is a difficult task for any management team. and its research history has previously been described as fragmented and eclectic (Noble. hard and mixed) factors that influence the success of strategy implementation. 1999b). A myriad of factors can potentially affect the process by which strategic plans are turned into organizational action. 2006). making that strategy work – implementing it throughout the organization – is even more difficult (Hrebiniak. There are many (soft. strategy implementation has become “the most significant management challenge which all kinds of corporations face at the moment”.

In this section. in terms of the applied research methods and the examined strategy contexts. the research methods used as well as the analytical techniques employed. the results section compiles nine factors that 55 . We have conducted an analysis in the most widely used literature databases to identify key factors influencing the process of strategy implementation. we analyze definitions of strategy implementation and compare them with other synonymous and related terms (in section 2). We also discuss directions for future research in the domain of strategy implementation and how they may be pursued. In the fifth section of the article. contains the actual review of literature. to surface current areas of agreement and disagreement. we describe the methodology that we have used to conduct our literature review and define its scope (section 3). We present a conceptual framework that organizes the current research findings. Our study also examines the ways in which strategy implementation has been researched so far. we will review the 60 identified studies and analyze their research context. their main results. Section four also contains a review of existing models and frameworks of strategy implementation. as well as missing evidence and resulting future research needs. section 4. In the sixth and final section. As the core of our literature review. focusing on the main results of prior studies. In that section we present a discussion of nine major factors that affect strategy implementation. Examined organizational levels and organizational types are two elements of the research context.question by analyzing existing research on the factors that influence strategy implementation . It will consequently also reveal under-exploited methods or contexts. The next part of the article. theoretical bases. we discuss the implications of our findings as well as their limitations. The structure of this paper is as follows: First. 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. Then.

whether it is privately held or state-owned and whether its operating scope is regional or rather multinational. Olson & Slater & Hult. Surprisingly few researchers focus on the implementation of corporate level strategies. inter-functional levels.influence strategy implementation success.e. 1991. corporate-SBU-functional levels. Noble (1999a). Organizational types refer to the kind of organization that is studied. five organizational levels can be distinguished. Floyd & Wooldridge. We then briefly discuss the theoretical bases of the reviewed studies. Chimhanzi & Morgan. 4.. 1990.e. Chimhanzi (2004). Nilsson & Rapp. Waldersee & Sheather. Piercy (1998). Viseras & Baines & Sweeney (2005). strategic business unit (SBU) level.e. 1986. Govindarajan & Fisher. Schaap. marketing. 2006. 1991. operational level and mixed levels (such as corporate and SBU level. SBU and functional level. Most of these studies. The same holds true for functional strategies: We have found eight studies that focus on the implementation of such strategies. 1989. Organizational Levels In the context of strategy implementation research. while many examine SBU level strategies (Gupta & Govindarajan. R&D). Qi (2005). Govindarajan. 1999. 2007). Govindarajan. namely Rapert & Lynch & Suter (1996). 1988. i. functional level. Noble & Mokwa (1999). 2005. HR. etc. Sashittal & Wilemon (1996). such as Wernham (1985) and Schmidt & Brauer (2006).1 Research Contexts We classify research contexts into two dimensions: the examined organizational levels and the considered organizational types. i.. White. whether a study focuses on functional strategies (i. Organizational levels designate the locus of strategizing. 1996. as well as several frameworks or models that aggregate or relate relevant factors to each other. focus on marketing strategy (such as Sashittal 56 . They are: corporate level. Skivington & Daft. Finally. 1984. the research methods and analytical techniques will be reviewed to see which methods are still underutilized in the context of strategy implementation. SBU-level strategies or corporate strategies. Brenes & Mena & Molina. Roth & Schweiger & Morrison. 2005. 1992b.).. however.

1996. Homburg. This study focuses on the key success factors in the project management for the implementation of strategic manufacturing initiatives. Process strategies. Okumus (2001). we classify them into a group called mixed level studies: Gupta (1987). business. such as Bantel (1997). Consequently. There are some studies which cannot be classified into the above categories. Baines and Sweeney‟s study (2005) in the context of manufacturing strategies. There are few studies dedicated to the implementation of other functional strategies (this is clearly an area of future research). Few studies focus on the actual operational level of strategy implementation. focuses on the implementation of a yield 57 . Chimhanzi. Homburg & Krohmer & Workman (2004). This study also emphasizes the relationship between product strategy and several strategic implementation variables. the last type. 2004). for example. Krohmer & Workman (2004) point out that market orientation plays a key role for the successful implementation of a PPD (premium product differentiation) strategy. normally cut across functions and are aimed at integrating organizational processes across the organization in order to make them more effective and more efficient. 1998. The mixed studies category also includes articles that focus on the role of project management for strategy implementation. Walker and Ruekert (1987) analyze three levels of strategy – corporate. Noble & Mokwa. Higgins (2005) even focuses on four types of strategies: corporate. functional and process. The only other study of functional strategy implementation that we have been able to identify is Viseras. Bantel (1997) analyzes the effects of two key aspects of product strategy (product leadership and product/market focus) on performance. Beer & Eisenstat (2000) and Hrebiniak (2006) have carried out research on corporate and SBU-level strategy. and on two aspects of strategic implementation (stakeholder input and employee empowerment). Piercy.& Wilemon. 1999. SBU and functional. Slater and Olson (2001) analyze marketing‟s contribution to the implementation of business strategy.

Harrington (2006). corporate (2 articles) and operational (2 articles).level (8 articles) and mixed levels (9 articles) have received more attention than the other two levels. Nutt (1986. 1987. the functional. Many studies (25 articles) do not even indicate at which level their discussion of strategy implementation is located. HR. 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. and Schaap (2006). Another study has examined the mutual influence of functional departments ‟ relationships on strategies. compared with other functional areas (such as manufacturing. we can observe that there are very few studies that have examined the inter-relationships of functional and business strategies. Peng and Litteljohn (2001) investigate three hotel chains implementing a strategic initiative on yield management. Noble (1999b). Second. First. Two calls to action result from these findings. Finally. We note that – among the five strategy levels – the SBU-level (14 articles). 2001).management project and a key client management project in two hotels. In terms of promising future research on strategy implementation. One such study focuses on marketing‟s contribution to the implementation of business strategy (Slater & Olson. accounting etc. future strategy implementation research should pay attention to explicitly indicate the level of analysis. another finding revealed that marketing is the prevailing domain. which seems a highly relevant area to improve our understanding of strategy 58 . there are many studies that are not sufficiently explicit regarding their scope concerning strategic levels. We can draw multiple conclusions based on our analysis of the treatment of organizational levels in prior studies of strategy implementation. Higgins (2005). Grundy (1998) examines the synergies among project management and strategy implementation and reviews strategy tools that may help in project management. R&D.). Lehner (2004). Within the functional level. 1989). Examples of such ambiguous studies are Bourgeois Ш and Brodwin (1984).

However. In conclusion. a major financial services firm. not only local firms but also multinational firms. strategy implementation studies discuss both. or among local firms and multinational firms. and a leading firm in the imaging technology industry. nationalized company. there have been no studies comparing similarities and differences of strategy implementation among private corporations and state-owned corporations. a provider of emergency fire and medical services. explores the reality of strategy implementation in a U. while others are multinational corporations. Rapert. which are members of the American Hospital Association (AHA). Noble ‟s (1999a) study spans several types of organizations – a national airline. refer to the characteristics of organizations: if they are private or state-owned. local or multinational. We thus do not know which specific differences exist regarding strategy implementation in these various forms organizations. As far as ownership forms are concerned. Some of the researched companies focus on their domestic markets. Sears. Forman and Argenti (2005) select five multinational companies as samples. This clearly is another interesting avenue for future research. Roth & Schweiger & Morrison (1991) and Kim & Mauborgne (1991. a leading packaged goods company. Velliquette and Garretson ‟s (2002) study on strategy implementation takes a nationwide sample of 1000 CEOs of general service hospitals. state-owned and privately held companies.implementation: Chimhanzi (2004) has examined the impact of marketing and HR interactions on marketing strategy implementation. Dell.K. FedEx. British Telecom (BT). the subjects of strategy implementation studies are not only state-owned corporations. for example. namely Accenture. Wernham (1985). 59 . Organizational types Organizational types. as stated earlier. 1993) study global strategy. Johnson & Johnson. Qi (2005) issues questionnaires to the head offices of 800 private companies in the UK. but mostly private corporations. Okumus (2001) investigates two international hotel groups. Alexander (1985) surveys 93 private sector firms through a questionnaire.

toiletries). Three of the largest and best known examples of Fast Moving Consumer Goods companies are Nestlé. branded and packaged food. tissue paper. such as buckets. staples. batteries. although these are often categorized separately. beverages (health beverages. 60 . Pepsi and Believe. hair care. chocolates. However the huge number of goods sold is what makes the difference. The category may include pharmaceuticals. consumer electronics and packaged food products and drinks.INDUSTRY PROFILE Fast Moving Consumer Goods(FMCG) FMCG are products that have a quick shelf turnover. time and financial investment to purchase. cosmetics. shaving products. soft drinks. at relatively low cost and don't require a lot of thought. bulbs. Examples of FMCG brands are Coca-Cola. teeth cleaning products. paper products and plastic goods. The term Consumer Packaged Goods (CPG) is used interchangeably with Fast Moving Consumer Goods (FMCG). Fast Moving Consumer Goods is a classification that refers to a wide range of frequently purchased consumer products including: toiletries. ‘Fast Moving’ is in opposition to consumer durables such as kitchen appliances that are generally replaced less than once a year. The FMCG sector represents consumer goods required for daily or frequent use The main segments of this sector are personal care (oral care. soaps. cosmetics. The margin of profit on every individual FMCG product is less. Examples of FMCGs are soft drinks. other non-durables such as glassware. detergents. Unilever and Procter & Gamble. household care (fabric wash and household cleaners). cereals. bakery products) and tobacco. Hence profit in FMCG goods always translates to number of goods sold. dairy products. and chocolate bars. soaps. Kleenex.

companies like ITC. margins have been compromised. much of which is disbursed in small towns and rural India. in reality. the unorganized and regional players have witnessed erosion in market share. This industry has witnessed strong growth in the past decade. able to charge a premium for their products. But in the last ten years. In this context. the sector meets the every day needs of the masses. History of FMCG in India In India. This has been due to liberalization. FMCG companies have been forced to fight for a market share. Furthermore. Many of the global FMCG majors have been present in the country for many decades. In the process. the margins were also on the higher side.The Indian FMCG sector is an important contributor to the country's GDP. The lower-middle income group accounts for over 60% of the sector's sales. increase in the disposable incomes and altered lifestyle. 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). many of the smaller rung Indian FMCG companies have gained in scale. urbanization. more so in the last six years (FMCG sector witnessed decline in demand). Colgate. Unlike the perception that the FMCG sector is a producer of luxury items targeted at the elite. With the gradual opening up of the economy over the last decade. These companies were. It is the fourth largest sector in the economy and is responsible for 5% of the total factory employment in India. The industry also creates employment for 3 m people in downstream activities. Rural markets account for 56% of the total domestic FMCG demand. therefore. HLL. As a result. the boom has also been fuelled by the reduction in excise duties. 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. 61 .

Techno Park. In this backdrop. industry estimates suggest that the industry could triple in value by 2015 (by some estimates. almost 40% and 8% was accounted by groceries and personal care products respectively.term horizon. we are confident that the FMCG sector has a bright future India is rated as the fifth most attractive emerging retail market. as the per-capita consumption of almost all products in the country is amongst the lowest in the world. Aspiration levels in this age group have been fuelled by greater media exposure. testing times for the FMCG sector are over and driving rural penetration will be the key going forward. 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. companies were unable to grow faster. In our view. Trent. Due to infrastructure constraints (this influences the cost-effectiveness of the supply chain). Given the aggressive expansion plans of players like Pantaloon. It has been ranked second in a Global Retail Development Index of 30 developing countries drawn up by A T Kearney. these are still at a relatively nascent stage. Shopper’s Stop and Shoprite. As per the Consumer Survey by KSA. Rapid urbanization. Although companies like HLL and ITC have dedicated initiatives targeted at the rural market. the industry could double in size by 2010). Currently. 62 . organized retailing results in discounted prices. In our view. organized retailing accounts for just 3% of total retail sales and is likely to touch 10% over the next 3-5 years. unleashing a latent demand with more money and a new mindset. The bottlenecks of the conventional distribution system are likely to be removed once organized retailing gains in scale. forced-buying by offering many choices and also opens up new avenues for growth for the FMCG sector. increased literacy and rising per capita income are the key growth drivers for the sector.Current Scenario The growth potential for FMCG companies looks promising over the long. of the total consumption expenditure.

1 billion. 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.4 billion in 2015. toothpaste. Moreover. The growth of imports constitutes another problem area and while so far imports in this sector have 63 .A. too.000 crore only. is unlikely to help matters. Moreover. The Indian FMCG sector is the fourth largest sector in the economy with a total market size in excess of US$ 13. The outlook in the short term does not appear to be very positive for the sector. lower volume of higher value added products reduce scope for export to developing countries. The share of modern retail is likely to grow from its current 2 per cent to 15-20 percent over the next decade. 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. Burgeoning Indian population. Kearney has estimated India's total retail market at $202. Small-scale sector reservations limit ability to invest in technology and quality up gradation to achieve economies of scale. presents an opportunity to makers of branded products to convert consumers to branded products. The FMCG sector has traditionally grown at a very fast rate and has generally out performed the rest of the industry.T. Over the last one year.6 billion. Poor monsoon in some states. The FMCG market is set to treble from US$ 11. the general slowdown in the economy is also likely to have an adverse impact on disposable income and purchasing power as a whole. particularly the middle class and the rural segments.6 billion in 2003 to US$ 33. 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. analysts feel. is expected to grow at a compounded 30 per cent over the next five years. skin care. Penetration level as well as per capita consumption in most product categories like jams. hair wash etc in India is low indicating the untapped market potential. There is significant potential for increasing exports but there are certain factors inhibiting this.

the long term outlook for revenue growth is positive. FMCG companies estimate they have already cornered a four to six per cent market share. The high burden of local taxes is another reason attributed for the slowdown in the industry At the same time. Give the large market and the requirement for continuous repurchase of these products. FMCG companies should continue to do well in the long run. most of the companies are concentrating on cost reduction and supply chain management.been confined to the premium segment. This should yield positive results for them 64 . Moreover.

RESEARCH METHODOLOGY Research Design: Research design is simply the framework or plan for a study. There are three types of Research Design:Types of Research:  Exploratory Research Design:.  Descriptive Research Design:. Descriptive Research Design was undertaken as it draws the opinion of employees/ workers on a specific aspe Research Objective:  To analyse the influence of rival company’s strategies on the performance of Hindustan Unilever Limited  To analyze the various strategies adopted by the company to gain competitive advantage  To identify the marketing strategies and policies of Hindustan Unilever Limited 65 .A Casual Research Design is concerned With determining cause and effect relationship.The major emphasis in exploratory Research design is on discovery of ideas and insights. For the study. used as a guide in collecting and analyzing data.The Descriptive Research Design Study is typically concerned with determining the frequency with which something occurs or the relationship between two variables.  Casual Research Design:.

That is each member does not have a known non zero chance of being included. which should be reliable and appropriate for his report. Types of NonProbability Sampling  Convenience  Judgement  Quota 66 . Researcher must select a sample design. SAMPLING METHOD: There are two methods of sampling: Probability Sampling: It is based on the concept of random selection of a controlled procedure that assures that each Population element is gives a non-zero chance of selection.SAMPLE DESIGN A sample design is a definite plan determined before any data is actually collected for obtaining a sample. Probability Sampling is of following types:  Simple Random  Systematic  Cluster  Stratified  Double  Non-Probability Sampling: Non probability sampling is non-random and subjective.

Magazines. 67 . DATA COLLECTION METHOD Data for the present study is collected from two sources: Secondary: .Secondary data is collected from published sources like Journals. 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. newspaper  Employment exchange The secondary data would be collected from financial statement. journals.Probability Convenience Sampling because time limit for the completion of the work is limited and also managers and employees are not available all the time. In addition to this internet access will make the study more effective and meaningful. journal of national repute. various newspapers and published books. books of national and international author as well as the annual report of the company. For this research work I have chosen Non.Researcher selects the sample as per their convenience.

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. in 2000. FMCG market growth stalled and then declined for the next four years. the FMCG markets grew at almost 15% per annum in value. Entertainment. Or a consumer buying Surf Excel for her clothes mixed it with a cheaper powder.DATA ANALYSIS & INTERPRETATIONS Through the nineties. The home ownership market grew exponentially asthe average age of a home loan borrower dropped from 50 in 1999 to 30 in 2004. As a result of this shift in spending patterns. 68 . a consumer buying six tablets of Lux in a month went to buying three of Lux and three cheaper brands.The rapid opening up of the economy resulted in many new avenues of expenditurefor the consumer’s growing income. two-wheelers andautomobiles.Mobile phone ownership and usage exploded due to its amazing lifestyle andconvenience be nefits as well as lower prices. 2000. one could drive out of a car showroom in a Maruti 800 with adown payment of only Rs. 75% of our sales came from FMCG businesses. It is not that they bathed less often or brushedtheir teeth less often or indeed washed their clothes less often. and did not offer prospects for long-term leadership.Suddenly. Leisure and Travelsectors also boomed. A sharp drop in interest rates from 18% to 8%led to explosive demand for consumer durables like white goods. After all. For example. But they did downtradeto lower priced substitutes from higher quality brands. It is important to understand why this happened.The lure of new avenues of expenditure in products and services led to consumersrestricting their expanse on FMCG. The rest came from severalnon-FMCG businesses which were not profitable.

They have alsocleared the supply chain of all old stock and geared up for fresh availability on shelf. Over the last few years they have focused on putting in place the building blocks of a strong Foods business. there is enormous growth potential in leading the evolution of consumers to branded and processed foods. their Foods business has a healthy gross margin and a supply chain driven byfreshness.1. be ittechnology.Today they are a focused on FMCG company with our branded business accountingfor over 90% of sales. Today. It was often commoditized with low margins. they were a drain on the core FMCG business. with higher levels of resource concentration. The Foods business will now invest for growth through relevant innovation. Theyrecognized that changing food habits would require considerable investment. whichthe current business simply could not afford. Historically their Foods businesswas fragmented and lacked scale. people talent or media spend. They have consolidated theuir portfolio and improved thegross margins by over 13% through product mix and cost reduction. These will be their main engines of growth. Nickel Catalyst. Adhesives.They decided to disengage from all non-FMCG or commodity businesses.750 crores as in 1999. both interms of resource and focus. Building blocks of a strong Foods business In Foods. withsales of Rs. 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 could achieve this by raising the bar and becoming worldclass in what their brands 69 . In all. Thermometers. Mushrooms etc. Therefore they divested the non-valueadded parts like Vanaspati. Seeds. SpecialityChemicals. consisting of 35 brands across 20 categories. wehave divested and discontinued 15 businesses including Animal Feeds.Besides.

many undifferentiated and lacking scale.offered and how they worked.100. This is an opportunity that they have to seize. Over the next 10years. This is an opportunity that they have to seize. They chose to focus on 35 power brands covering all consumer appeal and price segments. Across the world. At thoselevels. they had 110 brands.000 crores. 70 . Six brands – Brooke Bond. their Foods business has a healthy gross margin and a supply chain driven byfreshness. They are already seeing the benefits. Today.40. they are seeing a strongcorrelation between income levels and the size of FMCG markets.000 crores from a current value of Rs. Nothing less would do.100.Penetration levels in several of the categories and consumption levels in all of thecategories is low by any comparison. Nothing less would do. 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.Penetration levels in several of the categories and consumption levels in all of thecategories is low by any comparison. In 2000. the FMCG market will be over Rs. Over the next 10years. the FMCG market will be over Rs. per capita income in India is likely to touch China’s current levels. per capita income in India is likely to touch China’s current levels. They could achieve this by raising the bar and becoming worldclass in what their brands offered and how they worked.000 crores from a current value of Rs. The Foods business will now invest for growth through relevant innovation.40. FMCG still offers enormous potential As the largest FMCG player it was up to them to reverse the downtrading to realize itstrue growth potential. Across the world. they are seeing a strongcorrelation between income levels and the size of FMCG markets.000 crores. At thoselevels.

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. Rin and Wheel – have emerged as mega brands in the last five years. in the last three years to upgrade the brands. How often have we heard someonesay.5 and a branded quality shampoo in a bottle at Rs. Today Lifebuoy. Better quality and more affordable prices have increased the value to the consumer. It moved from being a mere soap to a health essential.Lifebuoy.In the case of Lifebuoy. in the laundry market. their oldest brand.400 crores.5. Fair & Lovely. each with sales of more thanRs. 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. Theyhave invested over Rs. Imagine the importance of that benefit to consumers in 71 . “A soap is a soap is a soap!” Or indeed. For example. Lux. Similarly.In several cases they reduced prices to make the brands more affordable. They had to move from selling a soap or a detergent to something far more important and central to the consumer’s life. they are the first tointroduce a branded toothpaste in a tube at Rs. has grown at over 15% for the last three years. 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.They have also launched several low unit size and price packs for single use to makethe brands more accessible to all income groups. or 5% of sales. Surf Excel went well beyond the benefit of ‘greatclean’ by saving two buckets of water with every wash. “All detergents clean clothes as well”.

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
to life."

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.

reason is that. Globalization. cost pressure is likely due to rising crude and freight costs. HLL's tea business has declined marginally.4. Threats 1. Increasing departmental stores concept – impulse @ at cash counters. CONCLUSION 76 . 5.

income and other attributes. In this project it possible to see the success of Hindustan Unilever’s in it’s indorse its strong potential to continue to do well.lifebuoy. are some of the main ingredients of FMCG plus.ariel.This sector has member of players which altimately shopes the buying decision products like.This company project has demonstrated “HINDUSTAN UNILEVER’S MARKETING STRATEGIES AND POLICIES” that has proved to be extensive through. Different line of products are offering customers to choose according to their gender. SUGGESTIONS 77 .pantene etc. FMCG secter hold a prime importance as the competition is increasing day by day.Demography. and of great benefit to the company in furthering its competitive advantage.Lux.personality.

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. 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.

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.

Marketing Management. Deep & Deep Publication Pvt.. Kottler Philip. Ltd. Ltd. . 80 . 4th Edition 2002 Page 135. Thakur Devendra.BIBLIOGRAPHY BOOKS: • • • Kothari C. Research Methodology.R. Research Methodology. 2005 Page 85. Prentice. 2001 Page 365. .Hall of India Pvt. 10th Edition.

81 .

Sign up to vote on this title
UsefulNot useful