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About the marketing strategy This strategy sets out how Tourism Tyne and Wear, New castle Gateshead Initiative and the Tyne and Wear local authorities and our partners will work together to attract more leisure visitors – for holidays, short breaks or day trips – to destinations in Tyne and Wear. Introduction to Marketing: Definition of Marketing: Philip Kotler The marketing guru has said “Marketing is a social and managerial process by which individuals and group obtain what they need and want through creating, offering and changing products of value with others”. American marketing association Addressed “marketing is the performance of business activities that direct the flow of goods and services from producer to consumer to user”. Cundiff and still “Marketing is the business process by which products are matched with market and through which transfers of ownership are affected”. In the words of Hansen “Marketing is the process of discovering and translating consumers needs and wants into product and services and specifications, creating demand for these products and services and then in term expanding demand.
By all these definitions we can derive that marketing is compressive term that includes all resource and set of activities necessary to direct and facilitate flow of goods and services from producer to consumer in the process of distribution. Objectives of Marketing: At the end of all marketing activities is the satisfaction of human wants and derive profits from them. The following are the most significant objectives of marketing. • Intelligent and effective application of modern marketing: Today economic changing growth rate, relatively high inflation, high interest rates, rapid technological change and new aggressive rivals challenge marketing firm to adopt and respond to change for survival and prosperity. • To develop the market field: Marketing is the most dynamic field where change rules the roost. Change is continuing pre occupation among marketers. • To develop and implement guiding policies for better results: Innovative marketing guiding policies and their effective implementation to assure better results. • To find sources for further information concerning the market problems: The world of business in moving on the basis of countless decisions, marketing decisions are more complex and intricate having impinging impact on the very fortune of a company. • To take appropriate and opportune action in the course of working. The marketing information system designed by the marketing organization helps in identifying the problem, investigating analyzing it and interpreting the problem for the final decision.
Functions of Marketing: Marketing involves certain activities to make the goods from producers to consumers. It consist of operations and an operation may be performed several times either by a producer, middleman, till the commodity finally reaches in the hand of consumers. 1. Functions of exchange Exchange implies the transfer of goods and services money or money’s worth. Exchange brings about change in the ownership of goods. It is a two-way process invading two separate but supporting activities viz, buying and selling. • Selling: Selling is the sum total of all those activities that push the commodities to the buyers or consumers at a profitable price. It is the process that involves personal and impersonal efforts made in persuading the prospective customers to buy a commodity or service. Product planning and development: Product – planning is the planning or forecasting what consumers want in terms of quantity, quality, time, place, price, where as, product development refers to making available such goods to meet the requirement of consumers as demanded by them. • Demand Creation: It includes such special efforts to induce and persuade the prospective users to purchase the products of the seller only. • Negotiation: Negotiation as to terms of quality, quantity, price of the product time and mode of transport payment etc… are to be made with prospective buyers. • Contractual: Once the terms and conditions are settled between buyers and sellers a final contract would be entered into, where legally, ownership of goods passes on from seller to buyer.
Buying: Buying is another function of exchange that refers to all such activities involves in the assembling of goods under a single ownership and control. Its immediate purpose is to bring commodities together where they are wanted for use in production for final consumption.
This buying function has following four elements: • Planning Assortments: Buyers are to study their own market condition in order know the types quantity and quality of goods that are required by final users. • Contractual: It is clothed with the selection of various sources of supply, keeping in touch with them, to get the goods quickly reasonably and regularly. • Negotiation: Buyers and sellers negotiate the terms and condition of price quantity, quality and time of delivery, transport & payment. • Contractual: It is the last phase that binds the parties of exchange by means of a contract where the titles to the goods more from seller to buyers. 2. Functions of Physical supply These are the functions that are related with creation of place and time utilities, they are: • Transportation: Transportation is the physical means to move the goods and people from a place to another. It is essential spoke in the wheel of market. It is responsible for the creation of time utility • Storage: Storage is equally important that is creates time utility. The products are to be preserved from time of production to the time of consumption. It is the base of consumers to get the goods as and when required.
in professional usage the term has a wider meaning which recognizes that marketing is customer centered. views. E. place etc… • Market information: The much desired success of marketing depends on correct and timely decisions. especially advertising and branding. 5 . • Financing: Finance is the base for all marketing activities. His typology has become so universally recognized that his four activity sets. have passed into the language. the Four Ps. regarding the market • Standardization: Standardization helps on tackle certain major problems of marketing. Products are often developed to meet the desires of groups of customers or even. Jerome McCarthy divided marketing into four general sets of activities. 7P’s of Marketing: In popular usage.3. Facilitating Functions These are the function that facilitates the process of exchange. It makes the exchange process smooth and acts as lubricating oil to the wheel of marketing. estimates. It is related with the division of commodities into distinct groups standardization involves establishment of certain criteria to which the goods must confirm. for specific customers. in some cases. "marketing" is the promotion of products. • 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. However. These decisions are based on market information. opinion. It includes all facts.
and personal selling. sales promotion.brochures. for example.g. • Pricing: This refers to the process of setting a price for a product.The four Ps are: • Product: The Product management and Product marketing aspects of marketing deal with the specifications of the actual goods or services. brand. pamphlets etc serve this purpose Physical distribution refers to how the product gets to the customer. • Physical (Evidence): It refers to the experience of using a product or service. This fourth P has also sometimes been called Place. • People: People refer to the customers. e. it is essential that you help him see what he is buying or not. publicity. and how it relates to the end-user's needs and wants. management and everybody else involved in it. employees. • Process: It refers to the methods and process of providing a service and is hence essential to have a thorough knowledge on whether the services are helpful to the customers. or company.it can simply be what is exchanged for the product or service. The price need not be monetary . if the customers are informed in hand about the services and many such things. referring to the channel by which a 6 . • Promotion: This includes advertising. time. It is essential for everyone to realize that the reputation of the brand that you are involved with is in the people's hands. if they are provided in time. point of sale placement or retailing. including discounts. or attention. For example. When a service goes out to the customer. and refers to the various methods of promoting the product.
whereas the essence of marketing should be the outside–in approach". 1988). which you should be aware of. online vs. The four Ps model is most useful when marketing low value consumer products. the 4 Ps offer a memorable and quite workable guide to the major categories of marketing activity. A marketer can use these variables to craft a marketing plan. in Riding the Waves of Change (Jossey-Bass. services. having made this important caveat. families. is that it unconsciously emphasizes the inside–out view (looking from the company outwards). adds "Perhaps the most significant criticism of the 4 Ps approach.product or service is sold (e. which geographic region or industry. Morgan. As a counter to this. Even so. business people). etc. These four elements are often referred to as the marketing mix.g. Relationship marketing attempts to do this by looking at marketing from a long term relationship perspective rather than individual transactions. high value consumer products require adjustments to this model. Services marketing must account for the unique nature of services. Industrial or B2B marketing must account for the long term contractual agreements that are typical in supply chain transactions. Industrial products. Following are the phases of development of marketing 7 . Evolution of Marketing: Marketing has evolved from the time man existed on earth. retail). to which segment (young adults. as well as a framework within which these can be used.
Barter system Production Orientation Sales Orientation Marketing Orientation Consumer Orientation Management Orientation Social Orientation Fig. The selling activity becomes the dominating factor without any efforts for the satisfaction of the consumer needs. instead of buying concerned with customer preference concentrating on the mass production of goods for the purchase of profit. Marketing orientation: Customer’s importance was satisfied but only as a means of disposing of goods produced competition become more stiffer. Production orientation: This was the stage where producers. Sales orientation: This stage witness major changes in all the spheres of economic life. 1 Barter system: The goods are exchanged against goods without any other medium of exchange like money. 8 .
Management orientation: The marketing function assumes the managerial role to co-ordinate all the interacting business with the objectives of planning. a badlymade commercial. Of course.000 crore (Rs 130 billion) allotted to mass media. Still.000 people for consumer durables. This is grossly inadequate to cover the huge potential for different products in rural markets. Social orientation: The companies are not only cares for consumers but also for social welfare. promotion and distribution. According to estimates by the Rural Marketing Agencies Association of India. rural marketing in India is still about a van campaign. at least.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. of companies wanting to move beyond urban boundaries. Thus. 9 . to less than 50. social welfare becomes the added dimension to the companies.000 for fast-moving consumer goods. MARKETING STRATEGY OF FMCG PRODUCTS: Barring a few. a few painted walls and the occasional participation in village haats and melas. it is heartening to note the increasing awareness of the importance of rural markets . clients' reluctance to spend big money for bigger results in rural markets is because there are no standard performance yardsticks for judging the efficacy of the rural marketing efforts. compared to the over Rs 13.or. notable exceptions. "rural" means different things to different people: from 500. But then. the total budget for rural marketing is only about Rs 500 crore (Rs 5 billion).
And. is imperative . be it a simple radio spot or a wall painting or a theatre film. touched a chord in the target audience. the most enduring example of a brand that began as a regional player and is now a giant.The TRPs and NRS/IRS data help you determine the efficacy of TV and press marketing. Companies like Cavin Kare (Chik Shampoo. But only consider the huge successes of some regional brands. What should companies do to step up their payback from rural marketing efforts? Here are some steps that should help. And don't forget Nirma. appealing to the local ethos and aspirations of the targeted area. But even more important is the need for a dedicated task force. Ghadi detergent powder and Power soap are proof that regional brands can become brands to reckon with. They all started in small. People power Total commitment from top leadership. which are giving the multinationals a run for their money. keeping in mind that rural marketing is a long-term relationship. Their communication. 10 . But there is no study to tell you what is the ideal cost per contact or what is the ideal number of eyeballs or footfalls for different rural activities. most importantly. especially in the FMCG sector.the successes of Hindustan Lever [ Get Quote ] and ITC are proof of this statement. Anchor (100 per cent vegetarian toothpaste). concentrated markets. 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 policies were flexible and they could adopt to fast changing marketing situations. Meera Herbal Powder. Fairever Cream and so on).
In both cases. Many of these are students from small towns. Ensure the consistency of the team involved in any project. What started as a great rural marketing initiative has been relegated to the dustbin.Rural marketing efforts need special mindsets. until the completion of a specific task. you get only monkeys . The best bet is to recruit students from specialised institutes such as the Indian Institute of Rural Management. the teams that briefed us in the initial stages and participated enthusiastically in the campaign. the fate of many rural marketing initiatives in the country. you pay peanuts.and discuss the path their careers are likely to take in the organisation. 11 . management graduates who have studied the subject as an elective. which many of the urban-oriented management graduates who are at the helm of affairs at most organisations do not possess.. Recently. Pay them well remember. The teams that succeeded felt no ownership of the campaigns they had not initiated. were shifted out midway. or at least. people with fire in their bellies who want to prove themselves in big companies and have no issues about working in smaller markets.. 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. in keeping with their companies' policy of shifting and promoting people. And send them out in the field only after thorough training. we were involved with two big clients.
with regard to products and brands. with both short term and long term goals.Goals are good Early on in the campaign. There is very little effort to tailor whatever communication is made in such efforts. Most of them have previously appointed vendors who implement the company's ideas blindly. aspirations and fears of rural customers. so you can create a customised plan of action. define your objective: is it a tactical effort to achieve increased sales in specific areas during a specific time. 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. a comprehensive brand building strategy in rural India. Our experience shows that the attitudes. 12 . This invariably leads to less than satisfactory results in terms of awareness of the brands and longterm impact of the efforts in the targeted markets. All too often. Know your customers A good place to begin is studying the mindset of your customers. is a must. If you are interested in the second alternative. be they van campaigns or below-the-line activities. 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.
fuelled by television commercials. spurious products that are sold in these bazaars. But it's not really as nightmarish as it is made out to be. who then buys the products from the nearest feeder markets. with some interesting results.000 villages.the humongous task of physically reaching your product to over 600. ensure that the people who patronise these haats are the kind who will buy your brand. We've all heard about the shampoo sachets that are available in even the smallest villages. While haats offer opportunities to target consumers from several villages at one place. most of them without motorable roads. mostly sold through such local haats and bazaars. The refrigerator with standby power for 12 hours. pressure cookers with two handles and a radio with key-winding mechanism are all the result of research. and to that extent make your effort cost-effective.000 crore (Rs 100 billion) to spurious products. at least keeping in mind the present goals of marketing companies in rural India. How does that happen? It's a direct result of rising aspirations.Research can give you invaluable ideas for new product development as well as new methods of reaching your target audience. For instance. we recently conducted a survey among some haats in Tamil Nadu. 13 . Ensure availability Most anecdotes about rural marketing centre on the distribution aspect . since they can't afford the real thing. More and more companies turn to the local haats to sell their products. The consumer demands the product from the local shopkeeper. The haatswere popular with the poorest agricultural labourers who consciously buy the duplicate. It is estimated that FMCG companies lost more than Rs 10.
So.” insists Sudhanshu Vats. you've already taken the first step towards reaching your target customer.Which means if you can ensure distribution to the feeder markets in towns or villages with populations of 10-15.” says Vats.000.” he said. Pricing. in fact. MARKETING STRATEGY ADOPTED BY HUL “Price cut or hike is not a long-term growth strategy. is now passe.000. if your products are in towns with populations of 50. automobiles and appliances in the nearest big town or city. Studies also indicate that rural consumers prefer to shop for durables such as televisions. This comes even as Unilever is scouting for a potential buyer for its laundry business in the US. home care. new consumer and retail trends and aggressive marketing and promotions. you're closer to the rural consumer than you would have thought. now is focused on product innovation. “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.” “We have done key innovations across the product portfolio and it is working for us.” 14 . 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. category head. “Our strategy for growth.
up to a 7. However.8% in the quarter ended June from 35.908 crore in 2006 and rose 8. HUL’s soaps and detergents segment contributed around Rs5. HUL doesn’t report its laundry revenues separately but puts them under the soaps and detergent category. According to Vats. an analyst at Macquarie Securities here. the industry is stabilizing. Wheel.7% percentage points to 13.HUL’s market share in the laundry segment grew to around 37. however. with a total share of about 18%. increased its market share by 2 percentage points in the same period. according to Vats contributes around 50% of HUL’s laundry segment revenues. P&G also gained 0. “Laundry has been an attractive segment in the past and is likely to keep growing in the near future.596 crore to the company’s total sales of Rs12. the Ahmedabad-based manufacturer. The recent price war between companies led to erosion in their profitability but now. According to ACNielsen.” says Unmesh Sharma.4% over 2005. 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. a value brand that.6% share.5% in the same period last year. according the market research firm ACNielsen.5%. saw its market share dip by 1.103 crore. In 2006.5 percentage points. this time. Nirma Ltd. the increase was not at the expense of price war with its multinational rival Procter & Gamble Co. the laundry industry in India was worth Rs7. 15 .
it is too early to say what result their new strategies will yield.” Still. “Some of HUL’s recent moves.” says Vats. people want to use better and branded products. “Still. analysts remain cautious.” OBJECTIVE OF THE STUDY 16 . such as promotional campaigns and advertising.“Consumers today are buying more clothes.” says Macquarie’s Sharma. seem right. with premium quality of clothes. Also. “Trends suggest that the usage of detergents has gone up as a result.
To analyze the influence of rival company’s strategies on the performance of Hindustan Unilever Limited To analyze the various strategies adopted by the company to gain competitive advantage To identify the marketing strategies and policies of Hindustan Unilever Limited SCOPE AND IMPORTANCE 17 .
This study would be helping HUL to frame its different promotion schemes. COMPANY PROFILE 18 . in order to frame out marketing strategies for different production this sector. IMPORTANCE To will help in identifying the product of HUL in FMCG sector.This project is applicable on the on the area of FMCG. This is widely awaited. It would help to analyze the current position of HUL and then to sector marketing channels for the same.
These three companies merged to form Hindustan Lever Limited in November 1956. followed by Lever Brothers India Limited (1933) and United Traders Limited (1935). The company’s history dates back to 1931 when Unilever set up its first Indian subsidiary. It is the country's biggest consumer goods company. and far and away the leading advertiser. HUL inhabits virtually every sector of the consumer goods market. which has helped the company to sustain its leadership position in the overall FMCG category in India. and is also one of the country’s top five exporters. In addition to FMCG products it is the country's biggest exporter of tea. one of the most efficient in the world. 2007 the company has changed the name to Hindustan Unilever Limited. a subsidiary of Unilever. including several not occupied by Unilever in other markets such as preserves and bakery products. The Hindustan Unilever Ltd (HLL) is India’s no. Effective July 19.The Hindustan Unilever Ltd’s(HUL) Inc has taken the opportunity to offer us a broader view of FMCG category. brand building initiatives and innovation.1 FMCG is able to share with their market insights based upon unparalleled breath of consumer goods experience. is a fast moving consumer goods (FMCG) company based in India. Hindustan Vanaspati Manufacturing Company. The company focuses on efficient delivery to consumers with an improved supply chain. Hindustan Unilever Limited (HUL). It is generally acknowledged 19 . Hindustan Unilever is Unilever's main operating business in India. Hindustan Unilever Ltd (HUL) has grown from strength to strength with new technologies being introduced to make the HLL consumer goods business.
care products after nearly halving the local prices of Ariel and Tide detergents in 2004.4 percent in the first nine months of last year. prior to restructuring.2 percent in North and South America.9 percent growth in Europe and 4. 4. Unilever's overall sales growth will slow to 4.3 percent in 2007.3 percent in 2007. which make up about a third of Unilever's worldwide sales.9 percent in 2010 from an estimated 5. although performance slowed dramatically between 2000 and 2004.000 suppliers & associates 75 Manufacturing Locations 45 C&FAs.based Procter & Gamble is stocking Indian stores with Olay skin. step up marketing in Asia's third-biggest economy. Revenue from the two continents rose 11. helping offset 1.3 Mln Outlets 20 . Asia and Africa. The world's second-largest consumer products maker has relied on accelerating shipments of Surf Excel detergent in India to make up for sluggish sales in Europe. Hindustan Unilever – A 75 Year Commitment 15. may see global revenue growth slow in 2010 as Procter & Gamble Co.000 Stockists Total Coverage 6.000 employees 1.Now Cincinnati. according to Brusselsbased brokerage Petercam SA. Unilever. and ITC Ltd.200 managers 2. will see their share of the company's growth fall to 2 percent in 2010 from 3.to be one of India's best-run businesses. which sells soap to more than 500 million Indians. according to the median of five analysts in a Bloomberg survey.
• In 1993. These included Brooke Bond (1984).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. Unilever set up its first Indian subsidiary.000 Villages 5. Lakme Limited sold its brands to HUL and divested its 50 per cent stake in the joint venture to the FMCG giant. followed by Lever Brothers India Limited (1933) and United Traders Limited (1935). • Subsequently in 1998. formed a 50:50 joint venture.38. • A number of prominent companies came into the HUL fold as result of Unilever’s international acquisitions. Tata Oil Mills Company (TOMCO) merged with HUL.5 Mln outlets 6. Lipton (1972) and Pond’s (1986). Vanaspati was launched in 1918 and Dalda came to the market in 1937. Lakme Lever Limited. These three companies merged to form HUL in November 1956. Two years later. 21 . HUL and yet another Tata company. Hindustan Vanaspati Manufacturing Company. This was followed by brands like Pears and Vim. Direct Coverage 1 Mln outlets Population of INDIA: 1027 Mln 5.545 Towns 2. • In 1931. Lakme Limited.
and its factory represents the largest manufacturing investment in the Himalayan kingdom.000 people. • • In 2002. including over 1. In a historic step.350 managers. which markets Huggies diapers and Kotex sanitary pads. HUL acquired the government s remaining stake in Modern Foods. employs 36. HUL picked up 74 per cent of the equity of Modern Foods from the Indian government. Nepal Lever Limited (NLL). Kimberly-Clark Lever Ltd. • HUL has also set up a subsidiary in Nepal. formerly known as Hindustan Lever Limited.• HUL formed a 50:50 joint venture with the US-based Kimberly Clark Corporation in 1994. It is one of the earliest MNCs to have entered India 22 . FMCG major Hindustan Unilever Limited (HUL).
ORGANIZATIONAL STRUCTURE Managing Direc tor General Mana ger Vice President Marketing Manufacturin Sales g Finance Distribution FIG.2 23 .
Kwality Wall's – are household names across the country and span many categories . Wheel. touching the lives of two out of three Indians with over 20 distinct categories in Home & Personal Care Products and Foods & Beverages. Kissan. Fair & Lovely.000 individual shareholders and financial institutions.000 suppliers and associates. The Hindustan Unilever Research Centre (HLRC) was set up in 1958. detergents.000 employees.300 managers. Brooke Bond. Pepsodent. Lux. HUL has traditionally been a company." HUL meets everyday needs for nutrition. and personal care with brands that help people feel good. look good and get more out of life. They endow the company with a scale of combined volumes of about 4 million tonnes and sales of Rs. covering 6. The operations involve over 2. is to "add vitality to life. HUL's brands . HUL's distribution network.3 million retail outlets reaching the entire urban population .000crore. The rest of the shareholding is distributed among 380.10. Sunsilk. The mission that inspires HUL's over 15.and about 250 million rural consumer. comprising about 4.like Lifebuoy. Knorr-Annapurna. Unilever.PRESENT STATUS Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods company. coffee. hygiene. ice cream and culinary products. branded staples. tea. personal products. HUL is also one of the country's largest exporters. Surf Excel. They are manufactured over 40 factories across India. which incorporates latest technology in all its operations.000 redistribution stockiest. Lakme.55% of the equity. Pond's. Rin. it has been recognised as a Golden Super Star Trading House by the Government of India.soaps. It is a mission HUL shares with its parent company. and now has 24 . which holds 51. Close-up. Clinic. including over 1.
“Our strategy for growth. new consumer and retail trends and aggressive marketing and promotions. Indian subsidiary of the Anglo-Dutch consumer goods company Unilever Plc. many with post-doctoral experience acquired in the US and Europe. Hindustan Unilever Ltd (HUL). Pricing. “We successfully migrated from Rin Supreme to Surf Excel and Wheel Smart Srimati—which was rolled out in 2006—is also on the right track. However.facilities in Mumbai and Bangalore.” says Vats.6% share.” HUL’s market share in the laundry segment grew to around 37. home care. This comes even as Unilever is scouting for a potential buyer for its laundry business in the US. P&G also gained 0.5% in the same period last year. “Price cut or hike is not a long-term growth strategy.8% in the quarter ended June from 35.” insists Sudhanshu Vats. category head. now is focused on product innovation. the 25 . Nirma Ltd. up to a 7.” he said. is now passe. is now working on a new growth strategy for its laundry business.” “We have done key innovations across the product portfolio and it is working for us. HLRC and the Global Technology Centres in India have over 200 highly qualified scientists and technologists. this time. HUL says it is quite upbeat about the segment and says the laundry segment is one of its “key growth areas. according the market research firm ACNielsen. the increase was not at the expense of price war with its multinational rival Procter & Gamble Co. HUL’S NEW GROWTH STRATEGY After having fought a bitter price battle for market share with its rivals.5 percentage points. in fact.
increased its market share by 2 percentage points in the same period.4% over 2005. it is too early to say what result their new strategies will yield.908 crore in 2006 and rose 8. In 2006. “Trends suggest that the usage of detergents has gone up as a result. an analyst at Macquarie Securities here. HUL’s soaps and detergents segment contributed around Rs5. “Laundry has been an attractive segment in the past and is likely to keep growing in the near future.Ahmedabad-based manufacturer.” Still.596 crore to the company’s total sales of Rs12. with a total share of about 18%. Wheel. with premium quality of clothes. According to Vats. the industry is stabilizing.” says Vats. according to Vats contributes around 50% of HUL’s laundry segment revenues. According to ACNielsen. however. the laundry industry in India was worth Rs7. 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. seem right. analysts remain cautious. The recent price war between companies led to erosion in their profitability but now. “Consumers today are buying more clothes.103 crore.” says Unmesh Sharma. such as promotional campaigns and advertising. people want to use better and branded products.7% percentage points to 13. Also. HUL doesn’t report its laundry revenues separately but puts them under the soaps and detergent category.5%.” says Macquarie’s Sharma. “Still. a value brand that.” 26 . “Some of HUL’s recent moves. saw its market share dip by 1.
Pond’s and Vaseline • Hair care: Sunsilk and Clinic • Oral care: Pepsodent and Close up • Deodorants: 27 . But delight dazzles the average company will compete for customer by conforming to her expectation consistently. Dove.FIVE P’S OF MARKETING Product Satisfaction suffices. The wide variety products offered by the company include: The company’s popular product’s include: • Bathing soaps: Lux. Rin and Wheel • Skin care: Fair & Lovely. Hamam. Hindustan Unilever Ltd(HUL) offer such product. 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. Liril. Lifebuoy. Pears and Rexona • Laundry items: Surf Excel.
Therefore 28 . Annapurna and Knorr • Ice cream: Kwality Wall’s .Axe and Rexona • Colour cosmetics: Lakme • Ayurvedic: Ayush • Tea: Brooke Bond and Lipton • Coffee: Bru • Foods: Kissan. Hindustan Unilever Ltd(HUL) has launched various products which cater to all customer segments. So every customer segment has different price expectation from the product. 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. Second P of marketing is not another name for blindly lowering prices and relying on this strategy alone to increase sales dramatically.
HUL's distribution network. It takes much more time and effort to build. but once built. Marketers and finance manager need a new term to evaluate their business: Distribution Equity. and then progressively moving through them. hire the hottest strategies on the block.maximizing the returns involves identifying right price level for each segment.television has already primed and population for consumption. Buyers are paying for distribution equity not brand equity and market shares. but the end of it all. you would be know of selling your products. covering 6. distribution equity is much together to erode. India – The operations involve over 2. The fundamental axiom of Indian consumer market is this: You can set up a state-of –the-art manufacturing facility. The cardinal task before the Indian market is managing is to shoe-horn its product on retail shelves.000 suppliers and associates. Why does the company need distribution equity more anything in India? With technology and competitive pressure slash in it is becoming increasing difficult for marketers to retain a unique product differentiation for ling period. comprising about 4. swamp prime television with best Ads. and about 250 million rural consumers. But getting their means managing wildly 29 . In a product and price parity situation.3 million retail outlets reaching the entire urban population.000 redistribution stockists. and the marketer who can get to the to the consumer ahead of competition will give a hard – to – overtake lead. Physical Distribution – “Place” BRAND ISN’T THE ONLY ANY MORE . the brand that sells more is the one that reaches the highest number of customers.
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. the prospective customers can have access to the product. value system. This network of distribution can either contact wholesalers and which in turn retailers or the distributors can contact to the retailers directly. reaches more than a million retailers. Beside use of improved logistics.different terrains-climate. Hindustan Unilever Ltd(HUL) distribution network has expanded. At Hindustan Unilever Ltd(HUL). Looking at the low penetration of few products. To address the issue of product stability. and be prepared too take step toward the sender. transport and communication network. life style. Effective advertising is rarely hectoring or loudly 30 . it has installed visi colors at several outlets. Once the stock product reaches retailers. Hindustan Unilever Ltd(HUL) distributes the product in the manner stated above. they believe that selling FMCG is it like selling soft drinks. This increase in distribution is going to be accompanied by reduction in channel costs. Hindustan Unilever Ltd(HUL) is also attempting to improve the distribution quality. Hindustan Unilever Ltd(HUL) marketing costs. The company is looking to reduce this parity level. the receiver must at least half want it to. 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. at 18% of total costs. language. a distribution expansion would itself being incremental volume. is much higher than Procter & Gamble Co. The other reason is arch rival Procter & Gamble Co. Promotion If an advertisement is to communicate effectively.
grab her acceptance and then extract retention competing with thousands of other units of communication trying to do the same. a successful campaign has a stronger element of the unexpected a quality that good advertising shares with much worthwhile literature. It has also launched Pureit. ad agency contract has created communication for cinemas and even ATM machines for the brand. In cinemas. Hindustan Unilever(Ltd)has a message on-screen just before the lights are dimmed to give them a chance to get their product There will also be after dinner sampling in restaurants – to begin with. As well as outdoor and radio ads. pleasure – seeking child within himself – a graft these feeling onto the Ad campaign like “hasso to khul k hasso for close up”. that produced just the value vacuum that Hindustan Unilever Ltd(HUL) was looking to fill. Naturally. To penetrate into the inner recesses of her memory. unself conscious. “cream bathing bar for dove soap” and daag ache hai for surf excel” have been sure shot winner with the audience. communication must first ensure exposure. grab her attention evoke her comprehension. It often both attracts and generates arm feelings. 30 catteries in Mumbai have been selected. Thereafter it was the job of the advertising to communicate customer the wonderful feeling that he could experience by re-discoursing the careful. 31 . More often than not. a home water purifier which supplies drinking water without boiling/need of electricity . All ICICI’ s ATM a message flashes on the screen as soon as customer insert his ATM card. The strategic response address the emotional appeal of the band to the child within the adult.explicit…. • Finding showed that the adults felt too conscious to be seen consuming a product actually meant for children. Something familiar is planned for phone-book as well.
etc…. 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. as well as expand the market. it had also entered into various marketing relationship with other portals. 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. Today’s consumer demanding “more for less”. Positioning In the 1970s consumers were ready to pay “more for more”. that the company has launched. and the winner will be that super value marketers…. Beside the company website (i.e. and the discounting era grew strong. In the 1980s. researching and improving the newer products that haven’t taken off. supported with high ad – spends that Hindustan Unilever(Ltd) hopes will see it emerges stronger after the current slowdown. specially targeted during festivals and events such as Valentines day. the management plans to tap this new channel of marketing.unilever.com). www. today customer uses complicated decision making process to assess the 32 .Ad spend in 2000 was about 14% of sales and the management said that plans to maintain as spend at this level in the current year also. consumers began to demand “more for same”. As a variety of competitive claims assails her senses. It’s a combination of spiffing up its key brand. and luxury goods flourished. Ad since any discussion today would be incomplete without mention ‘e’ word.
33 . such as the: Break segment – products which are normally consume as a snatched break and often with tea and coffee. their interests and activities) the benefits which consumers look for in a product or on the occasions when the product might be consumed.e.com informs. “Lifebuoy has become more than just a red bar of soap – today the brand provides hygiene and health solutions for families 2) Fair & Lovely. Since Hindustan Unilever(Ltd) is more clearly associated with a particular set of attributes in terms of benefits and prices.unilever.g. HINDUSTAN UNILEVER’S MARKET SEGMENTATION Market place for any product is comprised of many different segments of consumers. the quicker becomes her search process. Consumers are groups. which promises a lighter skin tone for many of India’s complexion-conscious consumers. a hot-selling “fairness” cream. as www. each with different needs and wants. Hindustan Unilever(Ltd) takes into account all these factors when producing a range of products. gender. It targets different segments within the market.alternative before making a purchase. material states income etc…) The lifestyle of consumers (i. Markets segmentation can be defined in a number of ways such as: Demographic variables (e. Positioning of individual product: 1) Lifebuoy is ‘one of Unilever’s oldest brands’ with more than a hundred-year history.
taken home consumed at a later stage. Impulse segment – these products are often purchase on impulse. 34 . used these and then. Take home segment – this describes product that are normally purchased in supermarkets. They include product such as close up.
According to ACNielsen. in fact.8% in the quarter ended June from 35. category head. Hindustan Unilever Ltd (HUL).” he said. Indian subsidiary of the Anglo-Dutch consumer goods company Unilever Plc. Pricing. HUL doesn’t report its laundry revenues separately but puts them under the soaps and detergent category.908 crore in 2006 and rose 8.” insists Sudhanshu Vats. is now working on a new growth strategy for its laundry business.596 crore to the company’s total sales of Rs12. “Price cut or hike is not a long-term growth strategy. home care. HUL’s soaps and detergents segment contributed around Rs5.” HUL’s market share in the laundry segment grew to around 37. now is focused on product innovation.5% in the same period last year.The Real Taste of Rejuvenation After having fought a bitter price battle for market share with its rivals. new consumer and retail trends and aggressive marketing and promotions. “We successfully migrated from Rin Supreme to Surf Excel and Wheel Smart Srimati—which was rolled out in 2006—is also on the right track.” says Vats. “Our strategy for growth. This comes even as Unilever is scouting for a potential buyer for its laundry business in the US. In 2006. is now passe. 35 .4% over 2005.103 crore. HUL says it is quite upbeat about the segment and says the laundry segment is one of its “key growth areas.” “We have done key innovations across the product portfolio and it is working for us. the laundry industry in India was worth Rs7.
” says an amazed Damodar Mall. “I can’t imagine any head from Lever House ever visiting other company offices like this. Baillie. chief executive of innovation and incubation at Pantaloon Retail. The recent price war between companies led to erosion in their profitability but now. and it’s best done incognito. what consumers are buying. That’s how Douglas Baillie likes it. India’s premier consumer-products company. the managing director of Hindustan Unilever. and the calls he makes on the headquarters of the big retail chains. 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. 36 . India’s Top Consumer-Products Company Woos Affluent Shoppers With Global Brands Like Dove. Hindustan Unilever has traditionally relied on small traders and mom-and-pop corner stores to retail its products. This is quite a change for Hindustan Unilever. Hence Baillie’s Hypercity visits. India’s largest retailer and a former manager at Hindustan Unilever. wants to see how his products are stocked. so the company wants to make sure it’s in with the new marketing crowd. and how shoppers are reacting to competitive brands. whose executives used to have emissaries make obeisance at Lever house in downtown Mumbai. But India’s recent retail boom has created large stores and malls. the India hypermarket chain.“Laundry has been an attractive segment in the past and is likely to keep growing in the near future. the industry is stabilizing. COMPETITIVE STRATEGY As Competition Heats Up. It’s primary market research at its most elemental.
and shampoos to soups. and dominates most of those categories.2% to 24. In the last year.5 billion. soaps. including the popular Lux. makes everything from detergents. ACNielsen data shows. That’s why the company is wooing consumers in big retail stores. The company. sauces and tea.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. which is practically synonymous with India. These 37 . is down from 55. Hindustan Unilever’s lead in hand soaps. after ringing up India-based sales of $3.84% now. All this has taken a toll on Hindustan Unilever’s operating margins. Now Hindustan Unilever is under siege from aggressive Indian and foreign competitors such as Procter & Gamble (PG).2% to 54%. Hindustan Lever tea brands like Brooke Bond and Lipton have dipped from a combined market share of 29. Nivea. Yet early this year. Finnish handset maker Nokia (NOK) dislodged it as the multinational with the highest revenues in India. down from 21% a few years ago to just 11. and L’Oréal. Favorite detergent brands like Surf Excel and Rin are barely hanging onto their 37% share.3%.
and the cream of India’s management 38 . when Baillie.newly affluent shoppers present the best hope for the company’s future in India. will grow to 28% by 2017. Yet this is still a dramatic change for Hindustan Unilever which. According to retail consultant KSA Technopak. Sundaram. The takeover of Hindustan Lever by Unilever became evident in March. That dovetails with parent company Unilever’s new global realignment of products. From Local Player To Multinational Overnight the change sent shock waves through India. Hindustan Unilever’s finance director.” says D. was the most successful and profitable company in the Unilever group. Hindustan Unilever’s managers hope their revenues from big retail will increase from 5% today to over 25% in 2012. fitting in quite nicely with India’s turn towards more international products being sold in supermarkets.5% of India’s total $336 billion retail market. This means that all of Unilever’s brands will be available across global markets. currently just 3. For many decades most Indians thought Hindustan Lever was a local company. while its subsidiaries will sell the products. “It is a big game for us. organized retail. 2006. not long ago. became the first foreigner in four decades to head the Indiancompany.Parent Unilever will develop the brands and streamline product offerings across the world. Hindustan Unilever’s strategy is to market its premium products through the hundreds of megastores springing up across India. a Zimbabwe-born British national. the crown jewel whose managers had free rein to develop and build brands suitable for the local market. not a multinational.
the company. to $274 million in 2004. But the rich margins of the past have not returned. Indeed. while the company’s track record in foods has been dismal. the company’s home and personal care businesses account for 80% of revenues and 85% of profits at Hindustan Unilever. frozen bread—than it has launched. Hindustan Unilever executives are realistic about the new era in which it now operates.graduates made their careers there. Baillie first had to sort out some past problems. where foods bring in half the revenues globally. The effect: The company’s sales and operating profits stagnated at $2. then known as Hindustan Lever. it has phased out more food products—wheat flour. Last year operating profits reached $357 million. admits that it’s now “tougher to hold on to market share.” 39 . we aren’t the only ones seeing it. In India. executive director in charge of the home and personal care business. 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. While the strategy aimed to conserve management energy. confectionery. And there was some stiff competition from rival Procter & Gamble. thanks to price increases. 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.5 billion for five years while operating profit plunged 37%. Nitin Paranjpe. was rechristened Hindustan Unilever to reflect its parentage. 2007. If India is a great story.” He also wants to expand the foods business in conjunction with the parent. a 2004 price war with P&G in the detergent business forced Hindustan Unilever to slash prices on its premium brand Surf Excel. Then in February. 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. For instance.
5%.7% in March.1% to 19. bath soap. Bernstein in New York. Tata Tea’s market share increased from 16. the world's largest consumer-goods maker.” FUTURE COMPETITIVE STRATEGY 2010 Expectations P&G. 30. according to Ali Dibadj. In June. is also making inroads.9% in July. will continue to gain share in the next five years in India. Currently. ITC. 2006.Rivals like P&G and Nivea have also copied Hindustan Unilever’s best innovation: the small shampoo sachets it pioneered in the 1980s. 2007.7 percent. Tata Tea is exultant. Its share of the shampoo market declined by more than a percentage point to 47. according to the company. Managing Director Percy Siganporia says the gain is “a dream comes true for us. `Profitable' Cigarettes 40 . toothpaste and tea in the quarter ended Sept. 80% of Indian shampoo sales come from sachets.'' Hindustan Unilever Ltd. But today even L’Oreal has sachets of its Fructis shampoo. lost ground in shampoo. the company said. compared with the year earlier. who rates the stock ``outperform. the Tata Group’s beverage company Tata Tea overtook Hindustan Unilever as India’s largest selling tea brand. while Hindustan Unilever slipped from 26. It started selling more brands including Fiama Di Wills shampoo and Superia soap last year as the government raised tobacco taxes. 52 percent owned by the London. an analyst at Sanford C. which sold for less than 2 cents each and which expanded the market for Hindustan Unilever products among India’s rural masses.and Rotterdambased parent. According to ACNielsen. the largest Indian cigarette maker and partly owned by British American Tobacco Plc.. to 19.
HUL-UNIQUELY POSITIONED TO CREATE VALUE Our strategy Competitive strengths Innovation and R&D capabilities to straddle the pyramid Versatile distribution network Strong corporate responsibility and governance Strong local and talent base Strategy 41 . India is Unilever's biggest market in Asia.'' said Anand Shah. an analyst at Angel Broking in Mumbai. analyst Unmesh Sharma.9 rupees. has surged 70 percent in the past year.8 billion. who has a ``neutral'' rating on the stock.The tobacco maker ``has a very profitable cigarettes business which will help it to invest and expand its personal. The price of palm oil.'' Rising prices of raw materials have made it more difficult for consumer-goods makers to pass on higher costs. who has an ``underperform'' rating on Hindustan Unilever. ``It has the ability to take losses in this segment as long as it grows its sales. It has sold soap in the country since 1888 and controls about half of the sales of products such as skin creams. He expects the stock to drop to 180 rupees ($4.care portfolio. generating about 6 percent of annual sales.57) in the next year from 190. This strategy will still satisfy investors. The company has a market value of about $11. used to make soaps and foods. ``Given the competition. profitability will continue to be under pressure. bathing soaps and shampoo.'' said Macquarie Securities Ltd.
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. Leverage positive impact of growing Indian economy on consumer spending. Grow the bottom line ahead of the top line.Corporate Social Responsibility-Aiding In The Development Of The Country 42 .
Home and personal care products consists of personal and fabric wash. Impact of community • • business and social impact can go together. The Group's principal activities are to manufacture and market consumer products. Foods. 43 . currently~44000 women cover 1. Personal Products. The Group operates through seven segments: Soaps and Detergents. foods and beverages. Shakti vani: one-to-many communication for category growth ishakti: customized interaction with remote consumers. partnerships with diverse stakeholders.25000 villages.COMPARATIVE BUSINESS ANALYSIS Hindustan Unilever Limited Formerly known as Hindustan Lever Limited. Exports. Ice Creams and Other. The products include home and personal care products. industrial and agricultural products. HINDUSTAN UNILEVER LIMITED .Shakti Three shakti initiatives • • • Shakti entrepreneur. Beverages.
ice creams.income growth is crucial. Its brands are spread across 20 consumer product categories. Industrial and agricultural products includes specialty chemicals. seeds. fruit and vegetable products. Foods and beverages includes tea. local and regional players. salt.THE BIG INDIAN ROMANCE Rural population larger than europe(800 million) Low growth in agriculture. The company faces competition from international. thermometers and plantations.however rural income are growing faster with 70% population here. footwear and carpets. bulk chemicals. RURAL. brand building initiatives and innovation. animal feeds. bakery fats. oral care. which has helped the company to sustain its leadership position in the overall FMCG category in India. yeast. colour cosmetics and baby care. processed-tri-glycerides and agri commodities. tomato products. marine products and mushrooms. atta and rawa. fertilisers.employment grants-Rs 40000cr 44 . rice. Hindustan Unilever markets consumer goods throughout India.household. Structural changes in the economy which are affecting this are: Disintermediation in the agricultural market price discovery mechanism has benefited farmers. Government grants and subsidies. leather. perfumery. skin and hair care. This analysis compares Hindustan Unilever Limited with three other companies in closely related industry sectors. coffee. The company focuses on efficient delivery to consumers with an improved supply chain. plant growth nutrients. deodorants. cooking fats and oils.
Ogilvy and Mather (O&M). Though the company was ‘extremely innovative’ the way it handled the rural communications plan was very traditional. and relaunched Lifebuoy. the authors of Marketing that Works. according to the authors. Lodish. Howard L. they add. The company basically worked with “one agency.” reads an observation in a chapter titled ‘entrepreneurial advertising that works’. A better strategy.” 45 .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.” write Leonard M. “HUL missed an opportunity for increased marketing productivity when they repositioned. Morgan and Shellye Archambeau. and screened some options to roll out one option that everyone was happy with. retargeted. 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.
” says the site. why didn’t HUL try alternative campaigns when rolling out its initiative? “Probably the biggest reason is that they always did their communications the same way – even for innovative 46 . Sundaram. Lifebuoy is ‘one of Unilever’s oldest brands’ with more than a hundred-year history. HUL.” The authors are of the view that government workers who have been interacting with villagers might have come up with some excellent ideas. a few days ago. as explained by Mr Lodish et al. “Lifebuoy has become more than just a red bar of soap – today the brand provides hygiene and health solutions for families. from the earlier Rs 345 crore. The company’s advertising and promotional spends during the quarter fell to Rs 336 crore. “or the villagers themselves might also be able to generate very effective communications vehicles.” reads a quote in the book from C. Prahalad’s The Fortune at the Bottom of the Pyramid . said: “We have been phasing our advertising spends depending on the launches and relaunches of brands. HUL. in a paragraph on innovation.000 villages in nine states where HUL stood to gain the most market share… They spent a lot of effort in designing low cost ways of communicating with their rural target.K. targeted “10.” The advertising spends have not been linear for the company. mass-market soap. Prahalad notes. has been able to link the use of soap to a promise of health as a means of creating behavioural change. and thus has increased sales of its low-cost. The O&M strategy.” So. through its innovative communication campaigns. Director (Finance & IT). Mr D. he added. “Differentiating soap products on the platform of health takes advantage of an opening in the competitive landscape for soap.Advertising strategy came for mention when the company reported the second quarter results.
“As a big company. “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.programs.” wonder the authors. 2008. many times it is difficult to change the procedures without creating significant political problems. Smollan Holdings is one of the leading ‘in-store execution and field services’ companies internationally. 47 . The strategic tie-up aims to build long term capabilities and bring ‘in-store’ execution focus in servicing the Company’s Modern Trade customers.” JOINT VENTURE Hindustan Unilever Sets Up Joint Venture With Smollan Holdings Hindustan Unilever Limited (HUL) has decided to set up a Joint Venture (JV) with Smollan Holdings of South Africa and the JV will be operational from January 1. which is one of the many discussed in the book.” The HUL example. 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”. It has leading edge capabilities in servicing Modern Trade focused on shelf filling. logistics for merchandising materials and in store execution. concludes by stating that globally very progressive and innovative firms can also benefit from being “more entrepreneurial and less traditional in how they manage their advertising and communication. The new company has been named as Hindustan Unilever Field Services Private Limited (HUFS) and will work exclusively on behalf of HUL in Modern Trade channel only. The operations will begin with the existing Modern Trade in-store execution team of HUL moving into HUFS.
a hot-selling “fairness” cream. where Indian customers love to touch and feel products. Over the past six months. These premium brands retail not in neighborhood small stores but in supermarkets and hypermarkets. which promises a lighter skin. all independent entrepreneurs. has made the brand a winner. Dollops ice cream brand from Cadbury India. trained and guided by HLN's expert managers and trainers. This includes: • • • • Tata Oil Mills Company Brooke Bond Lipton India Modern Foods It acquired Kissan brand from UB group. It has about 350.Other Acquisition Hindustan Unilever has acquired several Indian FMCG companies so far. It has also launched Pureit. The advertising campaign. Hindustan Unilever is also milking one of its top brands—Fair & Lovely.000 consultants. Hindustan Unilever launched a high-end range of Pond’s skin care and Dove hair care products from Unilever’s international portfolio. a home water purifier which supplies drinking water without boiling/need of electricity. tone for many of India’s complexion-conscious consumers. Lakme cosmetics brands from Tata. which suggests that regular use of the cream helps women gain confidence and makes them eligible for marriage. NEW INITIATIVE Bringing High-End Dove To India Baillie is fighting back. Hindustan Unilever Network is the direct selling channel of the company. That has spawned 48 .
” He points to the demand for safe drinking water in India. Analysts believe the company’s current strategy of concentrating on premium products and marketing them in the large retail stores is a winning one. In the quarter ended June. and creating access to relevant information 49 . and Baillie is pleased with the modest turnaround. care for the destitute and HIV-positive. most recent being the village built by HUL in earthquake affected Gujarat. HUL has also responded in case of national calamities / adversities and contributes through various welfare measures. HUL is focusing on health & hygiene education. thereby improving their livelihood and the standard of living in rural communities. and sunblock lotions. which Hindustan Unilever exploited with the launch of water purifier Pureit in 2005. 2007. Baillie is also getting aggressive on foods. the company’s sales grew 13%. focusing on the Knorr brand of soups and curry mixes —ideal for the Indian market.6%. HUL is creating micro-enterprise opportunities for rural women. Through Shakti.a host of competitive fairness creams. Sumeet Budhraja. the company embarked on an ambitious programme. consumer analyst at Mumbai brokerage First Global Securities. But Hindustan Unilever’s brand is still tops. with net profit up 29. It is also involved in education and rehabilitation of special or underprivileged children. Reason enough to keep patrolling those store aisles. at one-third the price of established Indian brands such as Aqua guard. These efforts have delivered some promising results. but they are more focused and regaining their aggressiveness. Shakti also includes health and hygiene education through the Shakti Vani Programme. women empowerment. soaps. SERVICE TO SOCIETY HUL believes that an organisation's worth is also in the service it renders to the community. and rural development. and relief & rehabilitation after the Tsunami caused devastation in South India. says that Hindustan Unilever “could have addressed a lot more categories. In 2001. Shakti. and water management.
000 Shakti entrepreneurs covering 500. The programme endeavours to induce adoption of hygienic practices among rural Indians and aims to bring down the incidence of diarrhoea.000 villages.through the iShakti community portal. reaching out to 100.000 villages and directly reaching to 150 million rural consumers. It has already touched 70 million people in approximately 15000 villages of 8 states. Shakti aims to have 100.000 women entrepreneurs in its fold. it is because of being singleminded in identifying itself with Indian aspirations and needs in every walk of life. By the end of 2010. The program now covers 15 states in India and has over 31. touching the lives million people. The vision is to make a billion Indians feel safe and secure. HUL is also running a rural health programme – Lifebuoy Swasthya Chetana. 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 .
hair care. Ayush ayurvedic products and services. Modern Foods ranges New Ventures Hindustan Lever Network. culinary products. Pears and Rexona • Laundry items: Surf Excel. Lifebuoy. beverages. Rin and Wheel • Skin care: Fair & Lovely. skin care. coffee. Sangam. Exports • HPC.personal wash. Breeze. branded staples. home care. Pond’s and Vaseline • Hair care: Sunsilk and Clinic • Oral care: Pepsodent and Close up • Deodorants: Axe and Rexona • Colour cosmetics: Lakme • Ayurvedic: 51 . ice creams. oral care. Hamam. Dove. fabric wash. deodorants and talcs. Pureit water purifiers. colour cosmetic Foods tea. Liril. rice Bathing soaps: Lux. marine products.
52 . Annapurna and Knorr • Ice cream: Kwality Wall’s .Ayush • Tea: Brooke Bond and Lipton • Coffee: Bru • Foods: Kissan.
Clinic. They include: Lifebuoy.BRANDS HUL s brands are household names across the country. Kissan. Fair & Lovely. Rin. Surf Excel. Knorr-Annapurna and Kwality Walls. Closeup. Pond s. Lakme. Brooke Bond. Wheel. Pepsodent. Sunsilk. Lux. 53 .
making that strategy work – implementing it throughout the organization – is even more difficult (Hrebiniak. ranging from the people who communicate or implement the strategy to the systems or mechanisms in place for co-ordination and control. 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. 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. 2005). strategy implementation has become “the most significant management challenge which all kinds of corporations face at the moment”. The best-formulated strategies may fail to produce superior performance for the firm if they are not successfully implemented. we try to respond to this 54 . The survey reported in that white paper indicates that 83 percent of the surveyed companies failed to implement their strategy smoothly. significant difficulties usually arise during the subsequent implementation process. 2006). There are many (soft. strategy implementation is often seen as something of a craft. It is thus obvious that strategy implementation is a key challenge for today ‟s organizations. A myriad of factors can potentially affect the process by which strategic plans are turned into organizational action. 1999b). rather than a science. and only 17 percent felt that they had a consistent strategy implementation process. Unlike strategy formulation. according to a survey of 276 senior operating executives in 2004 (Allio. after a comprehensive strategy or single strategic decision has been formulated. hard and mixed) factors that influence the success of strategy implementation. and its research history has previously been described as fragmented and eclectic (Noble. as Noble (1999b) notes. According to the White Paper of Strategy Implementation of Chinese Corporations in 2006. It is thus not surprising that.
the results section compiles nine factors that 55 . The next part of the article. We also discuss directions for future research in the domain of strategy implementation and how they may be pursued. In this section.question by analyzing existing research on the factors that influence strategy implementation . to surface current areas of agreement and disagreement. Our study also examines the ways in which strategy implementation has been researched so far. we discuss the implications of our findings as well as their limitations. Section four also contains a review of existing models and frameworks of strategy implementation. It will consequently also reveal under-exploited methods or contexts. As the core of our literature review. we will review the 60 identified studies and analyze their research context. theoretical bases. contains the actual review of literature. the research methods used as well as the analytical techniques employed. In that section we present a discussion of nine major factors that affect strategy implementation. section 4. The structure of this paper is as follows: First. their main results. We present a conceptual framework that organizes the current research findings. Then. as well as missing evidence and resulting future research needs. 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. We have conducted an analysis in the most widely used literature databases to identify key factors influencing the process of strategy implementation. In the fifth section of the article. in terms of the applied research methods and the examined strategy contexts. we describe the methodology that we have used to conduct our literature review and define its scope (section 3). Examined organizational levels and organizational types are two elements of the research context. In the sixth and final section. we analyze definitions of strategy implementation and compare them with other synonymous and related terms (in section 2). focusing on the main results of prior studies.
Waldersee & Sheather.influence strategy implementation success. focus on marketing strategy (such as Sashittal 56 . while many examine SBU level strategies (Gupta & Govindarajan. the research methods and analytical techniques will be reviewed to see which methods are still underutilized in the context of strategy implementation. inter-functional levels. 2005. 1991. 2007). The same holds true for functional strategies: We have found eight studies that focus on the implementation of such strategies. Organizational Levels In the context of strategy implementation research. five organizational levels can be distinguished. whether it is privately held or state-owned and whether its operating scope is regional or rather multinational. corporate-SBU-functional levels.. Skivington & Daft. They are: corporate level. however. HR.).e. such as Wernham (1985) and Schmidt & Brauer (2006).. Organizational types refer to the kind of organization that is studied. Surprisingly few researchers focus on the implementation of corporate level strategies. Roth & Schweiger & Morrison. 1991.e. i. SBU-level strategies or corporate strategies. Govindarajan. Brenes & Mena & Molina. Govindarajan. Most of these studies. Nilsson & Rapp. Viseras & Baines & Sweeney (2005). Noble (1999a). Chimhanzi (2004). operational level and mixed levels (such as corporate and SBU level. Sashittal & Wilemon (1996). 2005. marketing.e. 1988. 4. 1984. whether a study focuses on functional strategies (i.1 Research Contexts We classify research contexts into two dimensions: the examined organizational levels and the considered organizational types. strategic business unit (SBU) level. Schaap. functional level. White. 1999. Piercy (1998). etc. We then briefly discuss the theoretical bases of the reviewed studies. Noble & Mokwa (1999). Finally. Govindarajan & Fisher. SBU and functional level. 2006. Olson & Slater & Hult. Organizational levels designate the locus of strategizing. Qi (2005). 1990. 1996. 1992b. namely Rapert & Lynch & Suter (1996). Chimhanzi & Morgan. as well as several frameworks or models that aggregate or relate relevant factors to each other. i. 1989. R&D). 1986. Floyd & Wooldridge..
There are few studies dedicated to the implementation of other functional strategies (this is clearly an area of future research). Chimhanzi. Piercy. Homburg. normally cut across functions and are aimed at integrating organizational processes across the organization in order to make them more effective and more efficient. Few studies focus on the actual operational level of strategy implementation. Baines and Sweeney‟s study (2005) in the context of manufacturing strategies. Homburg & Krohmer & Workman (2004). Slater and Olson (2001) analyze marketing‟s contribution to the implementation of business strategy. Noble & Mokwa. Consequently. Beer & Eisenstat (2000) and Hrebiniak (2006) have carried out research on corporate and SBU-level strategy. The mixed studies category also includes articles that focus on the role of project management for strategy implementation.& Wilemon. Walker and Ruekert (1987) analyze three levels of strategy – corporate. 1999. for example. Bantel (1997) analyzes the effects of two key aspects of product strategy (product leadership and product/market focus) on performance. 1998. This study also emphasizes the relationship between product strategy and several strategic implementation variables. we classify them into a group called mixed level studies: Gupta (1987). 2004). focuses on the implementation of a yield 57 . Process strategies. and on two aspects of strategic implementation (stakeholder input and employee empowerment). such as Bantel (1997). 1996. This study focuses on the key success factors in the project management for the implementation of strategic manufacturing initiatives. Higgins (2005) even focuses on four types of strategies: corporate. the last type. There are some studies which cannot be classified into the above categories. Krohmer & Workman (2004) point out that market orientation plays a key role for the successful implementation of a PPD (premium product differentiation) strategy. business. Okumus (2001). SBU and functional. functional and process. The only other study of functional strategy implementation that we have been able to identify is Viseras.
In terms of promising future research on strategy implementation. and Schaap (2006).). We can draw multiple conclusions based on our analysis of the treatment of organizational levels in prior studies of strategy implementation. Lehner (2004).management project and a key client management project in two hotels. One such study focuses on marketing‟s contribution to the implementation of business strategy (Slater & Olson. First. Finally. 1987. future strategy implementation research should pay attention to explicitly indicate the level of analysis. the functional. corporate (2 articles) and operational (2 articles). Examples of such ambiguous studies are Bourgeois Ш and Brodwin (1984). Harrington (2006).level (8 articles) and mixed levels (9 articles) have received more attention than the other two levels. Higgins (2005). Second. Noble (1999b). Nutt (1986. Grundy (1998) examines the synergies among project management and strategy implementation and reviews strategy tools that may help in project management. Peng and Litteljohn (2001) investigate three hotel chains implementing a strategic initiative on yield management. accounting etc. 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. Within the functional level. HR. we can observe that there are very few studies that have examined the inter-relationships of functional and business strategies. Many studies (25 articles) do not even indicate at which level their discussion of strategy implementation is located. compared with other functional areas (such as manufacturing. there are many studies that are not sufficiently explicit regarding their scope concerning strategic levels. R&D. 2001). We note that – among the five strategy levels – the SBU-level (14 articles). Another study has examined the mutual influence of functional departments ‟ relationships on strategies. 1989). Two calls to action result from these findings. which seems a highly relevant area to improve our understanding of strategy 58 . another finding revealed that marketing is the prevailing domain.
Sears.K. Roth & Schweiger & Morrison (1991) and Kim & Mauborgne (1991. FedEx. British Telecom (BT). Dell. 1993) study global strategy. for example. namely Accenture. there have been no studies comparing similarities and differences of strategy implementation among private corporations and state-owned corporations. Some of the researched companies focus on their domestic markets. 59 . which are members of the American Hospital Association (AHA). or among local firms and multinational firms. while others are multinational corporations. the subjects of strategy implementation studies are not only state-owned corporations. Johnson & Johnson. Rapert. a provider of emergency fire and medical services. not only local firms but also multinational firms. a major financial services firm. but mostly private corporations. This clearly is another interesting avenue for future research. refer to the characteristics of organizations: if they are private or state-owned. Qi (2005) issues questionnaires to the head offices of 800 private companies in the UK. and a leading firm in the imaging technology industry. local or multinational. strategy implementation studies discuss both. Okumus (2001) investigates two international hotel groups. state-owned and privately held companies. nationalized company. Velliquette and Garretson ‟s (2002) study on strategy implementation takes a nationwide sample of 1000 CEOs of general service hospitals. Noble ‟s (1999a) study spans several types of organizations – a national airline. Wernham (1985). However. as stated earlier.implementation: Chimhanzi (2004) has examined the impact of marketing and HR interactions on marketing strategy implementation. Organizational types Organizational types. In conclusion. a leading packaged goods company. As far as ownership forms are concerned. We thus do not know which specific differences exist regarding strategy implementation in these various forms organizations. explores the reality of strategy implementation in a U. Alexander (1985) surveys 93 private sector firms through a questionnaire. Forman and Argenti (2005) select five multinational companies as samples.
Unilever and Procter & Gamble. hair care. although these are often categorized separately. shaving products. cosmetics. The category may include pharmaceuticals. Examples of FMCG brands are Coca-Cola. Three of the largest and best known examples of Fast Moving Consumer Goods companies are Nestlé. cereals. The FMCG sector represents consumer goods required for daily or frequent use The main segments of this sector are personal care (oral care. bulbs. other non-durables such as glassware. detergents. household care (fabric wash and household cleaners). bakery products) and tobacco.INDUSTRY PROFILE Fast Moving Consumer Goods(FMCG) FMCG are products that have a quick shelf turnover. Pepsi and Believe. branded and packaged food. soaps. dairy products. Examples of FMCGs are soft drinks. The term Consumer Packaged Goods (CPG) is used interchangeably with Fast Moving Consumer Goods (FMCG). staples. Kleenex. at relatively low cost and don't require a lot of thought. beverages (health beverages. Hence profit in FMCG goods always translates to number of goods sold. Fast Moving Consumer Goods is a classification that refers to a wide range of frequently purchased consumer products including: toiletries. such as buckets. ‘Fast Moving’ is in opposition to consumer durables such as kitchen appliances that are generally replaced less than once a year. and chocolate bars. time and financial investment to purchase. tissue paper. The margin of profit on every individual FMCG product is less. cosmetics. toiletries). batteries. However the huge number of goods sold is what makes the difference. consumer electronics and packaged food products and drinks. chocolates. soft drinks. soaps. teeth cleaning products. 60 . paper products and plastic goods.
margins have been compromised. It is the fourth largest sector in the economy and is responsible for 5% of the total factory employment in India. Many of the global FMCG majors have been present in the country for many decades. 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. These companies were. But in the last ten years.The Indian FMCG sector is an important contributor to the country's GDP. able to charge a premium for their products. the margins were also on the higher side. The industry also creates employment for 3 m people in downstream activities. HLL. As a result. The lower-middle income group accounts for over 60% of the sector's sales. This has been due to liberalization. the unorganized and regional players have witnessed erosion in market share. the boom has also been fuelled by the reduction in excise duties. therefore. companies like ITC. In the process. Furthermore. much of which is disbursed in small towns and rural India. In this context. urbanization. in reality. more so in the last six years (FMCG sector witnessed decline in demand). 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 . This industry has witnessed strong growth in the past decade. FMCG companies have been forced to fight for a market share. History of FMCG in India In India. Rural markets account for 56% of the total domestic FMCG demand. With the gradual opening up of the economy over the last decade. increase in the disposable incomes and altered lifestyle. the sector meets the every day needs of the masses. Unlike the perception that the FMCG sector is a producer of luxury items targeted at the elite. Colgate.
Current Scenario The growth potential for FMCG companies looks promising over the long.Techno Park. Currently. companies were unable to grow faster. these are still at a relatively nascent stage. Given the aggressive expansion plans of players like Pantaloon. as the per-capita consumption of almost all products in the country is amongst the lowest in the world. Shopper’s Stop and Shoprite. Rapid urbanization. In our view. we are confident that the FMCG sector has a bright future India is rated as the fifth most attractive emerging retail market. organized retailing accounts for just 3% of total retail sales and is likely to touch 10% over the next 3-5 years. Due to infrastructure constraints (this influences the cost-effectiveness of the supply chain). the industry could double in size by 2010). increased literacy and rising per capita income are the key growth drivers for the sector. The bottlenecks of the conventional distribution system are likely to be removed once organized retailing gains in scale. almost 40% and 8% was accounted by groceries and personal care products respectively. organized retailing results in discounted prices. In this backdrop. testing times for the FMCG sector are over and driving rural penetration will be the key going forward. Trent. It has been ranked second in a Global Retail Development Index of 30 developing countries drawn up by A T Kearney. Although companies like HLL and ITC have dedicated initiatives targeted at the rural market. Aspiration levels in this age group have been fuelled by greater media exposure. forced-buying by offering many choices and also opens up new avenues for growth for the FMCG sector. industry estimates suggest that the industry could triple in value by 2015 (by some estimates. of the total consumption expenditure. 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.term horizon. As per the Consumer Survey by KSA. unleashing a latent demand with more money and a new mindset. 62 . In our view.
particularly the middle class and the rural segments. The share of modern retail is likely to grow from its current 2 per cent to 15-20 percent over the next decade. Moreover. analysts feel.4 billion in 2015.T. is expected to grow at a compounded 30 per cent over the next five years.6 billion in 2003 to US$ 33. Kearney has estimated India's total retail market at $202.6 billion. Over the last one year. There is significant potential for increasing exports but there are certain factors inhibiting this. presents an opportunity to makers of branded products to convert consumers to branded products. The FMCG sector has traditionally grown at a very fast rate and has generally out performed the rest of the industry. too.000 crore only. is unlikely to help matters. Small-scale sector reservations limit ability to invest in technology and quality up gradation to achieve economies of scale. toothpaste. Penetration level as well as per capita consumption in most product categories like jams. however the rate of growth has slowed down and the sector has recorded sales growth of just five per cent in the last four quarters. Burgeoning Indian population. The outlook in the short term does not appear to be very positive for the sector.A. The Indian FMCG sector is the fourth largest sector in the economy with a total market size in excess of US$ 13. The FMCG market is set to treble from US$ 11. 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. The growth of imports constitutes another problem area and while so far imports in this sector have 63 . lower volume of higher value added products reduce scope for export to developing countries. Poor monsoon in some states. skin care. Rural demand is on the decline and the Centre for Monitoring Indian Economy (CMIE) has already downscaled its projection for agriculture growth in the current fiscal. the general slowdown in the economy is also likely to have an adverse impact on disposable income and purchasing power as a whole. Moreover.1 billion. hair wash etc in India is low indicating the untapped market potential.
This should yield positive results for them 64 . FMCG companies estimate they have already cornered a four to six per cent market share. Give the large market and the requirement for continuous repurchase of these products. the long term outlook for revenue growth is positive.been confined to the premium segment. most of the companies are concentrating on cost reduction and supply chain management. FMCG companies should continue to do well in the long run. The high burden of local taxes is another reason attributed for the slowdown in the industry At the same time. Moreover.
A Casual Research Design is concerned With determining cause and effect relationship. used as a guide in collecting and analyzing data. There are three types of Research Design:Types of Research: Exploratory Research Design:.RESEARCH METHODOLOGY Research Design: Research design is simply the framework or plan for a study. Descriptive Research Design was undertaken as it draws the opinion of employees/ workers on a specific aspe Research Objective: To analyse the influence of rival company’s strategies on the performance of Hindustan Unilever Limited To analyze the various strategies adopted by the company to gain competitive advantage To identify the marketing strategies and policies of Hindustan Unilever Limited 65 .The major emphasis in exploratory Research design is on discovery of ideas and insights. For the study.The Descriptive Research Design Study is typically concerned with determining the frequency with which something occurs or the relationship between two variables. Descriptive Research Design:. Casual Research Design:.
That is each member does not have a known non zero chance of being included. SAMPLING METHOD: There are two methods of sampling: Probability Sampling: It is based on the concept of random selection of a controlled procedure that assures that each Population element is gives a non-zero chance of selection. which should be reliable and appropriate for his report. Probability Sampling is of following types: Simple Random Systematic Cluster Stratified Double Non-Probability Sampling: Non probability sampling is non-random and subjective. Researcher must select a sample design. Types of NonProbability Sampling Convenience Judgement Quota 66 .SAMPLE DESIGN A sample design is a definite plan determined before any data is actually collected for obtaining a sample.
Secondary data is collected from published sources like Journals. In addition to this internet access will make the study more effective and meaningful. 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. For this research work I have chosen Non.Researcher selects the sample as per their convenience. Magazines.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. journal of national repute. newspaper Employment exchange The secondary data would be collected from financial statement. DATA COLLECTION METHOD Data for the present study is collected from two sources: Secondary: . books of national and international author as well as the annual report of the company. journals. 67 . various newspapers and published books.
But they did downtradeto lower priced substitutes from higher quality brands. 2000. the FMCG markets grew at almost 15% per annum in value. 75% of our sales came from FMCG businesses. Entertainment. It is important to understand why this happened. one could drive out of a car showroom in a Maruti 800 with adown payment of only Rs. Leisure and Travelsectors also boomed.The rapid opening up of the economy resulted in many new avenues of expenditurefor the consumer’s growing income.The lure of new avenues of expenditure in products and services led to consumersrestricting their expanse on FMCG. The home ownership market grew exponentially asthe average age of a home loan borrower dropped from 50 in 1999 to 30 in 2004. 68 .Suddenly. a consumer buying six tablets of Lux in a month went to buying three of Lux and three cheaper brands. A sharp drop in interest rates from 18% to 8%led to explosive demand for consumer durables like white goods. Or a consumer buying Surf Excel for her clothes mixed it with a cheaper powder. 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. FMCG market growth stalled and then declined for the next four years. two-wheelers andautomobiles. It is not that they bathed less often or brushedtheir teeth less often or indeed washed their clothes less often. After all. and did not offer prospects for long-term leadership. The rest came from severalnon-FMCG businesses which were not profitable. As a result of this shift in spending patterns. For example. in 2000.DATA ANALYSIS & INTERPRETATIONS Through the nineties.Mobile phone ownership and usage exploded due to its amazing lifestyle andconvenience be nefits as well as lower prices.
1. withsales of Rs. Adhesives. These will be their main engines of growth. Building blocks of a strong Foods business In Foods. FMCG still offers enormous potential As the largest FMCG player it was up to them to reverse the downtrading to realize itstrue growth potential. both interms of resource and focus. they were a drain on the core FMCG business. Today. 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. be ittechnology. their Foods business has a healthy gross margin and a supply chain driven byfreshness.Today they are a focused on FMCG company with our branded business accountingfor over 90% of sales. with higher levels of resource concentration.Besides. Seeds. Mushrooms etc.They decided to disengage from all non-FMCG or commodity businesses. SpecialityChemicals. Theyrecognized that changing food habits would require considerable investment. They have alsocleared the supply chain of all old stock and geared up for fresh availability on shelf. consisting of 35 brands across 20 categories. They could achieve this by raising the bar and becoming worldclass in what their brands 69 . The Foods business will now invest for growth through relevant innovation. Historically their Foods businesswas fragmented and lacked scale.750 crores as in 1999. wehave divested and discontinued 15 businesses including Animal Feeds. whichthe current business simply could not afford. people talent or media spend. Thermometers. It was often commoditized with low margins. They have consolidated theuir portfolio and improved thegross margins by over 13% through product mix and cost reduction. In all. Nickel Catalyst. Therefore they divested the non-valueadded parts like Vanaspati.
100. This is an opportunity that they have to seize. Today. per capita income in India is likely to touch China’s current levels. They chose to focus on 35 power brands covering all consumer appeal and price segments. Over the next 10years. Across the world.Penetration levels in several of the categories and consumption levels in all of thecategories is low by any comparison. The Foods business will now invest for growth through relevant innovation. Nothing less would do. their Foods business has a healthy gross margin and a supply chain driven byfreshness. the FMCG market will be over Rs.000 crores from a current value of Rs.40. At thoselevels. Six brands – Brooke Bond. At thoselevels. they are seeing a strongcorrelation between income levels and the size of FMCG markets.100. Across the world.000 crores. they had 110 brands. They are already seeing the benefits.000 crores from a current value of Rs. many undifferentiated and lacking scale. They could achieve this by raising the bar and becoming worldclass in what their brands offered and how they worked.Penetration levels in several of the categories and consumption levels in all of thecategories is low by any comparison. they are seeing a strongcorrelation between income levels and the size of FMCG markets. This is an opportunity that they have to seize. In 2000. 70 . FMCG still offers enormous potential As the largest FMCG player it was up to them to reverse the downtrading to realize itstrue growth potential. per capita income in India is likely to touch China’s current levels. Over the next 10years.offered and how they worked.40. the FMCG market will be over Rs. Nothing less would do.000 crores. 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.
Surf Excel went well beyond the benefit of ‘greatclean’ by saving two buckets of water with every wash. They had to move from selling a soap or a detergent to something far more important and central to the consumer’s life. How often have we heard someonesay. For example. Similarly.500 crores Better Value The first step was to ensure that they offer world class quality and real differentiation backed by technology to give them the advantage over low priced competition. in the last three years to upgrade the brands.5. Fair & Lovely. in the laundry market. Theyhave invested over Rs. they are the first tointroduce a branded toothpaste in a tube at Rs. Today Lifebuoy. It moved from being a mere soap to a health essential.They have also launched several low unit size and price packs for single use to makethe brands more accessible to all income groups. “A soap is a soap is a soap!” Or indeed.400 crores.Lifebuoy. or 5% of sales.In several cases they reduced prices to make the brands more affordable. “All detergents clean clothes as well”. Imagine the importance of that benefit to consumers in 71 . Rin and Wheel – have emerged as mega brands in the last five years. their oldest brand. 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. has grown at over 15% for the last three years. each with sales of more thanRs. Bigger Role in Consumers’ Lives Perhaps the most significant change has been to move the brands beyond merelymaking functional claims to playing a bigger and deeper role in the lives of consumers.In the case of Lifebuoy.5 and a branded quality shampoo in a bottle at Rs. Lux. Better quality and more affordable prices have increased the value to the consumer.
cities, who often get running water for only a couple of hours a day. Surf Excel is one of their fastest growing brands today.Both Lifebuoy and Surf Excel have succeeded because they are relevant to two keyconcerns of the Indian housewife: family health and the scarcity of water.In addition to the growing consciousness of health, consumers today are looking for ways to look good and feel good so that they can get much more out of life. In short,consumers are seeking Vitality in their lives. Their portfolio of 35 power brands isuniquely positioned to offer nutrition, hygiene and personal care benefits and therebydeliver Vitality. Technology, the Key Differentiator Their brands and sound understanding of the local consumer are supported by a worldclass Research and Development capability. They have over 200 of the brightestscientists and technologists based in India.Their recent reorganization leverages the talent pool from across 16 global technologycentres, of which four are in India. In all, they have over 4,000 high quality mindsacross Unilever working relentlessly to provide new benefits that make a realdifference the consumers. Winning with Customers Hindustan Lever has historically had a strong bond with its customers. They havestrengthened this and reinvented the way they manage their distribution channels and their customers. The sales structure has been transformed to leverage scale and buildexpertise in servicing Modern Trade and Rural Markets. They have also de-layeredtheir sales force to improve the response times and service levels.Their customers are serviced on continuous replenishment. This is possible because of IT connectivity across the extended supply chain of about 2,000 suppliers, 80 factoriesand 7,000 stockists. They have also combined backend processes into a commonShared Service
infrastructure, which supports the units across the country. All theseinitiatives together have enhanced operational efficiencies, improved the service to thecustomers and have brought us closer to the marketplace. Our Acorns: Investing in our Future In the pursuit of growth, they have also begun to nurture some acorns for the future.These are both new businesses and new ways of engaging with consumers.Their entry into Water Purifiers, through Pureit, shows great promise. Pureit delivers100% protection against all water-borne diseases. It provides water which is as safe as boiled water, without needing electricity or continuous tap water supply. At 17 paise per litre, it is extremely affordable for the common man. They have launched it inTamil Nadu and are fine-tuning all aspects of the business system before a phasednational launch.In urban India, Hindustan Lever Network (HLN) is their direct selling initiativeselling a special range of products. It already reaches 1,400 towns with over 3 lakhconsultants. Besides reach, HLN enables direct interaction with consumers andcustomises solutions for them to give them a complete brand experience Our People & Organisation They have restructured the company, integrating eight Profit Centres into twoDivisions – Home and Personal Care (HPC) and Foods. The result is a simpler andleaner organisation, less hierarchical with fewer levels and greater empowerment.This has eliminated complexity and speeded up decision making. Today the companyis far more youthful in attitude and spirit. There is greater openness and transparency.
The Transformation: Investment in the Future To ensure that Hindustan Lever remains competitive in the long-term, they
have madesignificant investments in product quality, pricing and marketing. As mentionedearlier, the investment in product quality alone has been in excess of Rs. 400 crores,or 5% of our sales.In addition there has been the cost of defending their market position. Recently aninternational competitor attacked their laundry business led by a price reduction of asmuch as 50%. They acted with speed and determination leveraging all their pastexperience in India and internationally. They have been able to fully protect their market leadership and share, albeit sacrificing shortterm profit. They made thisnecessary trade-off as market share is the best means of sustaining future profit. Over time, their stronger market positions will surely lead to greater long-term profit.Despite these significant investments to strengthen the long-term competitiveness andthe costs of defending the strong market position, they still remain one of the most profitable companies in the country.
Strength 1. Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods company, touching the lives of two out of three Indians with over 20 distinct categories in Home & Personal Care Products and Foods & Beverages.. 2. Due to its long presence in India – has deep penetration – 20 consumer product category, over 15,000 employees, including over 1,300 managers, is to "add vitality
3. The company derives 44.3% of its revenues from soaps and detergents, 26.6% from personal care products, 10.5% from beverages, and the rest from foods, ice creams, exports, and other products. 4. Low cost of production due to economic of scale. That means higher profits and / or more competitioners. Better market penetration. 5. HUL is also one of the country's largest exporters; it has been recognised as a Golden Super Star Trading House by the Government of India. Weakness 1. Continuous threat from other competitors. Opportunities 1. Increasing per capita national income resulting in higher disposable income. 2. Growing middle class and growing urban population. 3. Increasing gifts cultures.
4. Increasing departmental stores concept – impulse @ at cash counters. HLL's tea business has declined marginally. CONCLUSION 76 . cost pressure is likely due to rising crude and freight costs. reason is that. Threats 1. 5. Globalization.
pantene etc. and of great benefit to the company in furthering its competitive advantage. SUGGESTIONS 77 . are some of the main ingredients of FMCG sector.Lux.This sector has member of players which altimately shopes the buying decision products like.Demography.ariel. Different line of products are offering customers to choose according to their gender.lifebuoy.This company project has demonstrated “HINDUSTAN UNILEVER’S MARKETING STRATEGIES AND POLICIES” that has proved to be extensive through. FMCG secter hold a prime importance as the competition is increasing day by day. 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.income and other attributes.personality.clinic plus.
P&G P&G need to make their product affordable in Indian market so as to get quantity of sale benefit P&G should enter into lower and product which has high potential with reference to Indian market segment They need to promote their product Ariel which is loosing market share in its brands. They need to bring more awareness of the companies name along 78 . They need to promote their companies name along with the brand name. They need to take care regarding the competition with in its own with the brand name. HUL They need to enter into lower segments of detergent.
Cost involved in collecting the data was high. To fix an appointment with the dealers was also very difficult task and even after that many time people was not turn up for the appointment. 79 .LIMITATIONS While undertaking my study I was encountered with some limitations: Limited time was provided to complete the study.
80 . Research Methodology. Ltd.R. Marketing Management.. 10th Edition. Ltd. 2005 Page 85.Hall of India Pvt. Kottler Philip. Research Methodology.BIBLIOGRAPHY BOOKS: • • • Kothari C. . 4th Edition 2002 Page 135. Thakur Devendra. . Prentice. Deep & Deep Publication Pvt. 2001 Page 365.
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