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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.
"marketing" is the promotion of products. It includes all facts. His typology has become so universally recognized that his four activity sets. E. 7P’s of Marketing: In popular usage. • Financing: Finance is the base for all marketing activities. It makes the exchange process smooth and acts as lubricating oil to the wheel of marketing.3. have passed into the language. for specific customers. views. especially advertising and branding. Facilitating Functions These are the function that facilitates the process of exchange. However. regarding the market • Standardization: Standardization helps on tackle certain major problems of marketing. Jerome McCarthy divided marketing into four general sets of activities. in professional usage the term has a wider meaning which recognizes that marketing is customer centered. Products are often developed to meet the desires of groups of customers or even. opinion. 5 . estimates. It is related with the division of commodities into distinct groups standardization involves establishment of certain criteria to which the goods must confirm. place etc… • Market information: The much desired success of marketing depends on correct and timely decisions. the Four Ps. in some cases. These decisions are based on market information. • 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.
g. sales promotion. This fourth P has also sometimes been called Place.it can simply be what is exchanged for the product or service. employees. • Pricing: This refers to the process of setting a price for a product. • Promotion: This includes advertising. and refers to the various methods of promoting the product. or attention. publicity. management and everybody else involved in it. The price need not be monetary . for example. including discounts. • Process: It refers to the methods and process of providing a service and is hence essential to have a thorough knowledge on whether the services are helpful to the customers. brand. or company. • People: People refer to the customers. and how it relates to the end-user's needs and wants. and personal selling. • Physical (Evidence): It refers to the experience of using a product or service. point of sale placement or retailing.brochures. e.The four Ps are: • Product: The Product management and Product marketing aspects of marketing deal with the specifications of the actual goods or services. When a service goes out to the customer. time. if they are provided in 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. pamphlets etc serve this purpose Physical distribution refers to how the product gets to the customer. referring to the channel by which a 6 . it is essential that you help him see what he is buying or not. if the customers are informed in hand about the services and many such things. For example.
is that it unconsciously emphasizes the inside–out view (looking from the company outwards). Even so. to which segment (young adults. in Riding the Waves of Change (Jossey-Bass. As a counter to this. whereas the essence of marketing should be the outside–in approach". business people). the 4 Ps offer a memorable and quite workable guide to the major categories of marketing activity. Following are the phases of development of marketing 7 . Evolution of Marketing: Marketing has evolved from the time man existed on earth. families. adds "Perhaps the most significant criticism of the 4 Ps approach. high value consumer products require adjustments to this model. retail). The four Ps model is most useful when marketing low value consumer products. Industrial products. as well as a framework within which these can be used. These four elements are often referred to as the marketing mix.g. 1988). A marketer can use these variables to craft a marketing plan. online vs.product or service is sold (e. etc. Services marketing must account for the unique nature of services. which geographic region or industry. Morgan. Industrial or B2B marketing must account for the long term contractual agreements that are typical in supply chain transactions. which you should be aware of. services. having made this important caveat. Relationship marketing attempts to do this by looking at marketing from a long term relationship perspective rather than individual transactions.
8 .Barter system Production Orientation Sales Orientation Marketing Orientation Consumer Orientation Management Orientation Social Orientation Fig. Marketing orientation: Customer’s importance was satisfied but only as a means of disposing of goods produced competition become more stiffer. instead of buying concerned with customer preference concentrating on the mass production of goods for the purchase of profit. 1 Barter system: The goods are exchanged against goods without any other medium of exchange like money. Production orientation: This was the stage where producers. The selling activity becomes the dominating factor without any efforts for the satisfaction of the consumer needs. Sales orientation: This stage witness major changes in all the spheres of economic life.
000 crore (Rs 130 billion) allotted to mass media. to less than 50. 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.or. MARKETING STRATEGY OF FMCG PRODUCTS: Barring a few. promotion and distribution. But then. This is grossly inadequate to cover the huge potential for different products in rural markets. 9 . "rural" means different things to different people: from 500. Management orientation: The marketing function assumes the managerial role to co-ordinate all the interacting business with the objectives of planning. rural marketing in India is still about a van campaign. notable exceptions.000 people for consumer durables. it is heartening to note the increasing awareness of the importance of rural markets . Of course. a badlymade commercial.000 for fast-moving consumer goods. a few painted walls and the occasional participation in village haats and melas.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. Thus. social welfare becomes the added dimension to the companies. of companies wanting to move beyond urban boundaries. According to estimates by the Rural Marketing Agencies Association of India. Still. Social orientation: The companies are not only cares for consumers but also for social welfare. compared to the over Rs 13. the total budget for rural marketing is only about Rs 500 crore (Rs 5 billion). at least.
the most enduring example of a brand that began as a regional player and is now a giant. But there is no study to tell you what is the ideal cost per contact or what is the ideal number of eyeballs or footfalls for different rural activities.The TRPs and NRS/IRS data help you determine the efficacy of TV and press marketing. And don't forget Nirma. keeping in mind that rural marketing is a long-term relationship. What did these products do that was so different? Most of them identified a segment that was vacant in terms of product and area of operation. But even more important is the need for a dedicated task force. But only consider the huge successes of some regional brands. touched a chord in the target audience. their policies were flexible and they could adopt to fast changing marketing situations. appealing to the local ethos and aspirations of the targeted area. What should companies do to step up their payback from rural marketing efforts? Here are some steps that should help. Companies like Cavin Kare (Chik Shampoo. most importantly. They all started in small. 10 .the successes of Hindustan Lever [ Get Quote ] and ITC are proof of this statement. especially in the FMCG sector. People power Total commitment from top leadership. Anchor (100 per cent vegetarian toothpaste). Fairever Cream and so on). Ghadi detergent powder and Power soap are proof that regional brands can become brands to reckon with. Meera Herbal Powder. be it a simple radio spot or a wall painting or a theatre film. concentrated markets. Their communication. is imperative . which are giving the multinationals a run for their money. And.
Pay them well remember. the teams that briefed us in the initial stages and participated enthusiastically in the campaign. And send them out in the field only after thorough training. Ensure the consistency of the team involved in any project.and discuss the path their careers are likely to take in the organisation. In both cases. until the completion of a specific task. you pay peanuts. 11 . we were involved with two big clients. or at least. in keeping with their companies' policy of shifting and promoting people. What started as a great rural marketing initiative has been relegated to the dustbin. which many of the urban-oriented management graduates who are at the helm of affairs at most organisations do not possess. Many of these are students from small towns.. the fate of many rural marketing initiatives in the country. 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. The best bet is to recruit students from specialised institutes such as the Indian Institute of Rural Management.Rural marketing efforts need special mindsets. you get only monkeys . The teams that succeeded felt no ownership of the campaigns they had not initiated. were shifted out midway. Recently. management graduates who have studied the subject as an elective.
clients insist their knowledge of their customers (based on studies of urban India) is enough on which to base an action plan. be they van campaigns or below-the-line activities. define your objective: is it a tactical effort to achieve increased sales in specific areas during a specific time. with regard to products and brands. All too often. 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. If you are interested in the second alternative. There is very little effort to tailor whatever communication is made in such efforts. Know your customers A good place to begin is studying the mindset of your customers. Our experience shows that the attitudes. a comprehensive brand building strategy in rural India. so you can create a customised plan of action. with both short term and long term goals. 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. Most of them have previously appointed vendors who implement the company's ideas blindly.Goals are good Early on in the campaign. aspirations and fears of rural customers. is a must. to suit the local audience or fit it with the overall campaign efforts in the mass media. is very different from their urban counterparts.
at least keeping in mind the present goals of marketing companies in rural India. 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.000 crore (Rs 100 billion) to spurious products. How does that happen? It's a direct result of rising aspirations.000 villages. mostly sold through such local haats and bazaars. pressure cookers with two handles and a radio with key-winding mechanism are all the result of research. The haatswere popular with the poorest agricultural labourers who consciously buy the duplicate. 13 . Ensure availability Most anecdotes about rural marketing centre on the distribution aspect . spurious products that are sold in these bazaars. and to that extent make your effort cost-effective. It is estimated that FMCG companies lost more than Rs 10. But it's not really as nightmarish as it is made out to be. most of them without motorable roads. The consumer demands the product from the local shopkeeper. we recently conducted a survey among some haats in Tamil Nadu. fuelled by television commercials. The refrigerator with standby power for 12 hours. with some interesting results. ensure that the people who patronise these haats are the kind who will buy your brand. More and more companies turn to the local haats to sell their products. since they can't afford the real thing.Research can give you invaluable ideas for new product development as well as new methods of reaching your target audience. who then buys the products from the nearest feeder markets. For instance.the humongous task of physically reaching your product to over 600.
000. This comes even as Unilever is scouting for a potential buyer for its laundry business in the US. “Our strategy for growth. new consumer and retail trends and aggressive marketing and promotions. if your products are in towns with populations of 50. MARKETING STRATEGY ADOPTED BY HUL “Price cut or hike is not a long-term growth strategy. in fact.” 14 . category head.” he said. Studies also indicate that rural consumers prefer to shop for durables such as televisions. you're closer to the rural consumer than you would have thought. So. A worker stacks Hindustan Unilever products in a store in Mumbai HUL says it is quite upbeat about the segment and says the laundry segment is one of its “key growth areas. automobiles and appliances in the nearest big town or city.” says Vats. you've already taken the first step towards reaching your target customer.” insists Sudhanshu Vats. is now passe.” “We have done key innovations across the product portfolio and it is working for us. home care.000. now is focused on product innovation. 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.Which means if you can ensure distribution to the feeder markets in towns or villages with populations of 10-15.
596 crore to the company’s total sales of Rs12. an analyst at Macquarie Securities here.5% in the same period last year. HUL’s soaps and detergents segment contributed around Rs5.6% share. 15 . the Ahmedabad-based manufacturer. P&G also gained 0. according to Vats contributes around 50% of HUL’s laundry segment revenues. Wheel. In 2006. the increase was not at the expense of price war with its multinational rival Procter & Gamble Co.908 crore in 2006 and rose 8. up to a 7. with a total share of about 18%. “Laundry has been an attractive segment in the past and is likely to keep growing in the near future. this time. According to ACNielsen. however.7% percentage points to 13. the industry is stabilizing. according the market research firm ACNielsen. HUL doesn’t report its laundry revenues separately but puts them under the soaps and detergent category. The recent price war between companies led to erosion in their profitability but now.4% over 2005. Nirma Ltd. According to Vats.103 crore. saw its market share dip by 1.8% in the quarter ended June from 35.” says Unmesh Sharma. 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.5 percentage points. a value brand that. the laundry industry in India was worth Rs7.5%.HUL’s market share in the laundry segment grew to around 37. increased its market share by 2 percentage points in the same period. However.
analysts remain cautious. it is too early to say what result their new strategies will yield. “Still. with premium quality of clothes. “Trends suggest that the usage of detergents has gone up as a result.” Still. people want to use better and branded products. “Some of HUL’s recent moves.” says Vats.” says Macquarie’s Sharma. seem right. such as promotional campaigns and advertising.“Consumers today are buying more clothes. Also.” OBJECTIVE OF THE STUDY 16 .
To analyze the influence of rival company’s strategies on the performance of Hindustan Unilever Limited To analyze the various strategies adopted by the company to gain competitive advantage To identify the marketing strategies and policies of Hindustan Unilever Limited SCOPE AND IMPORTANCE 17 .
It would help to analyze the current position of HUL and then to sector marketing channels for the same. This is widely awaited. This study would be helping HUL to frame its different promotion schemes. COMPANY PROFILE 18 .This project is applicable on the on the area of FMCG. IMPORTANCE To will help in identifying the product of HUL in FMCG sector. in order to frame out marketing strategies for different production this sector.
It is the country's biggest consumer goods company. Effective July 19. one of the most efficient in the world. followed by Lever Brothers India Limited (1933) and United Traders Limited (1935). which has helped the company to sustain its leadership position in the overall FMCG category in India. and is also one of the country’s top five exporters. Hindustan Unilever is Unilever's main operating business in India. These three companies merged to form Hindustan Lever Limited in November 1956.The Hindustan Unilever Ltd’s(HUL) Inc has taken the opportunity to offer us a broader view of FMCG category.1 FMCG is able to share with their market insights based upon unparalleled breath of consumer goods experience. Hindustan Unilever Limited (HUL). brand building initiatives and innovation. The company focuses on efficient delivery to consumers with an improved supply chain. The company’s history dates back to 1931 when Unilever set up its first Indian subsidiary. Hindustan Vanaspati Manufacturing Company. The Hindustan Unilever Ltd (HLL) is India’s no. HUL inhabits virtually every sector of the consumer goods market. and far and away the leading advertiser. including several not occupied by Unilever in other markets such as preserves and bakery products. It is generally acknowledged 19 . a subsidiary of Unilever. 2007 the company has changed the name to Hindustan Unilever Limited. is a fast moving consumer goods (FMCG) company based in India. In addition to FMCG products it is the country's biggest exporter of tea. Hindustan Unilever Ltd (HUL) has grown from strength to strength with new technologies being introduced to make the HLL consumer goods business.
Unilever's overall sales growth will slow to 4. step up marketing in Asia's third-biggest economy. according to the median of five analysts in a Bloomberg survey.care products after nearly halving the local prices of Ariel and Tide detergents in 2004. 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.4 percent in the first nine months of last year. and ITC Ltd.200 managers 2.000 suppliers & associates 75 Manufacturing Locations 45 C&FAs.based Procter & Gamble is stocking Indian stores with Olay skin. although performance slowed dramatically between 2000 and 2004. will see their share of the company's growth fall to 2 percent in 2010 from 3.000 Stockists Total Coverage 6.3 Mln Outlets 20 . prior to restructuring.3 percent in 2007. helping offset 1. according to Brusselsbased brokerage Petercam SA. Asia and Africa. Revenue from the two continents rose 11.9 percent growth in Europe and 4. 4. Hindustan Unilever – A 75 Year Commitment 15.000 employees 1. may see global revenue growth slow in 2010 as Procter & Gamble Co.Now Cincinnati. Unilever.2 percent in North and South America.9 percent in 2010 from an estimated 5.3 percent in 2007. which make up about a third of Unilever's worldwide sales.to be one of India's best-run businesses. which sells soap to more than 500 million Indians.
formed a 50:50 joint venture. • Subsequently in 1998. 21 . • In 1931. Unilever set up its first Indian subsidiary. These three companies merged to form HUL in November 1956. Lakme Lever Limited. 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). These included Brooke Bond (1984).000 Villages 5. • A number of prominent companies came into the HUL fold as result of Unilever’s international acquisitions. Vanaspati was launched in 1918 and Dalda came to the market in 1937.38. Tata Oil Mills Company (TOMCO) merged with HUL. Direct Coverage 1 Mln outlets Population of INDIA: 1027 Mln 5.0 Mln outlets HISTORY OF HINDUSTAN UNILEVER LTD • It was in the summer of 1888 that Unilever of England first marketed Sunlight soap in India. HUL and yet another Tata company. Lipton (1972) and Pond’s (1986). Two years later. • In 1993.545 Towns 2. Hindustan Vanaspati Manufacturing Company. This was followed by brands like Pears and Vim.5 Mln outlets 6. Lakme Limited.
including over 1. employs 36. Kimberly-Clark Lever Ltd.• HUL formed a 50:50 joint venture with the US-based Kimberly Clark Corporation in 1994. • • In 2002.350 managers. In a historic step. It is one of the earliest MNCs to have entered India 22 . which markets Huggies diapers and Kotex sanitary pads. • HUL has also set up a subsidiary in Nepal. FMCG major Hindustan Unilever Limited (HUL). Nepal Lever Limited (NLL).000 people. HUL acquired the government s remaining stake in Modern Foods. and its factory represents the largest manufacturing investment in the Himalayan kingdom. HUL picked up 74 per cent of the equity of Modern Foods from the Indian government. formerly known as Hindustan Lever Limited.
ORGANIZATIONAL STRUCTURE Managing Direc tor General Mana ger Vice President Marketing Manufacturin Sales g Finance Distribution FIG.2 23 .
3 million retail outlets reaching the entire urban population . They are manufactured over 40 factories across India. Pepsodent. and now has 24 . which holds 51. They endow the company with a scale of combined volumes of about 4 million tonnes and sales of Rs. hygiene. HUL's brands .000 suppliers and associates. Wheel. HUL has traditionally been a company. Unilever. personal products. including over 1. it has been recognised as a Golden Super Star Trading House by the Government of India. Kissan. Clinic.and about 250 million rural consumer.PRESENT STATUS Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods company. The mission that inspires HUL's over 15. Rin.000crore. Sunsilk.000 redistribution stockiest.soaps. It is a mission HUL shares with its parent company. Close-up. HUL's distribution network. Kwality Wall's – are household names across the country and span many categories . touching the lives of two out of three Indians with over 20 distinct categories in Home & Personal Care Products and Foods & Beverages. The rest of the shareholding is distributed among 380. detergents. Pond's. look good and get more out of life. Brooke Bond. Surf Excel. HUL is also one of the country's largest exporters. is to "add vitality to life. and personal care with brands that help people feel good.300 managers.10. coffee." HUL meets everyday needs for nutrition.like Lifebuoy.000 individual shareholders and financial institutions.55% of the equity.000 employees. ice cream and culinary products. tea. Lux. which incorporates latest technology in all its operations. Fair & Lovely. The Hindustan Unilever Research Centre (HLRC) was set up in 1958. The operations involve over 2. Knorr-Annapurna. Lakme. comprising about 4. covering 6. branded staples.
” insists Sudhanshu Vats.8% in the quarter ended June from 35. this time. home care. many with post-doctoral experience acquired in the US and Europe. is now passe. However.facilities in Mumbai and Bangalore. HUL’S NEW GROWTH STRATEGY After having fought a bitter price battle for market share with its rivals. the 25 . HLRC and the Global Technology Centres in India have over 200 highly qualified scientists and technologists. the increase was not at the expense of price war with its multinational rival Procter & Gamble Co.” he said. category head.6% share. P&G also gained 0. Hindustan Unilever Ltd (HUL). according the market research firm ACNielsen. Nirma Ltd. “Price cut or hike is not a long-term growth strategy. is now working on a new growth strategy for its laundry business. up to a 7.5 percentage points. Pricing. HUL says it is quite upbeat about the segment and says the laundry segment is one of its “key growth areas.” says Vats. “Our strategy for growth.5% in the same period last year. in fact. Indian subsidiary of the Anglo-Dutch consumer goods company Unilever Plc.” “We have done key innovations across the product portfolio and it is working for us. new consumer and retail trends and aggressive marketing and promotions. 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.” HUL’s market share in the laundry segment grew to around 37. This comes even as Unilever is scouting for a potential buyer for its laundry business in the US.
“Still. with a total share of about 18%. HUL’s soaps and detergents segment contributed around Rs5. the laundry industry in India was worth Rs7. “Trends suggest that the usage of detergents has gone up as a result. According to ACNielsen.5%.” 26 . such as promotional campaigns and advertising. the laundry business is witnessing a surge in demand from cities and HUL is focusing on Tier I and II cities to tap that demand. HUL doesn’t report its laundry revenues separately but puts them under the soaps and detergent category. Also. In 2006. increased its market share by 2 percentage points in the same period. the industry is stabilizing.7% percentage points to 13. “Consumers today are buying more clothes. a value brand that.” says Unmesh Sharma. The recent price war between companies led to erosion in their profitability but now. with premium quality of clothes. according to Vats contributes around 50% of HUL’s laundry segment revenues. seem right.4% over 2005.596 crore to the company’s total sales of Rs12. however.908 crore in 2006 and rose 8. saw its market share dip by 1.” Still. According to Vats.” says Vats. an analyst at Macquarie Securities here. analysts remain cautious. “Laundry has been an attractive segment in the past and is likely to keep growing in the near future. Wheel.Ahmedabad-based manufacturer.103 crore. people want to use better and branded products.” says Macquarie’s Sharma. “Some of HUL’s recent moves. it is too early to say what result their new strategies will yield.
Liril. But delight dazzles the average company will compete for customer by conforming to her expectation consistently. delivering to her door step additional benefits which she would never have imagined possible. Rin and Wheel • Skin care: Fair & Lovely.FIVE P’S OF MARKETING Product Satisfaction suffices. Breeze. Lifebuoy. Pond’s and Vaseline • Hair care: Sunsilk and Clinic • Oral care: Pepsodent and Close up • Deodorants: 27 . But the winner will surpass them by constantly exceeding her expectation. Hindustan Unilever Ltd(HUL) offer such product. Pears and Rexona • Laundry items: Surf Excel. The wide variety products offered by the company include: The company’s popular product’s include: • Bathing soaps: Lux. Dove. Hamam.
So every customer segment has different price expectation from the product. Pricing Make no mistake.Axe and Rexona • Colour cosmetics: Lakme • Ayurvedic: Ayush • Tea: Brooke Bond and Lipton • Coffee: Bru • Foods: Kissan. The strategy used by Hindustan Unilever Ltd(HUL) is for matching the value that customer pays to buy the product with the expectation they have about what the production is worth to them. Therefore 28 . Annapurna and Knorr • Ice cream: Kwality Wall’s . Hindustan Unilever Ltd(HUL) has launched various products which cater to all customer segments. Second P of marketing is not another name for blindly lowering prices and relying on this strategy alone to increase sales dramatically.
But getting their means managing wildly 29 . distribution equity is much together to erode. and the marketer who can get to the to the consumer ahead of competition will give a hard – to – overtake lead. India – The operations involve over 2. HUL's distribution network. covering 6. Buyers are paying for distribution equity not brand equity and market shares. you would be know of selling your products. the brand that sells more is the one that reaches the highest number of customers. In a product and price parity situation. but once built. Physical Distribution – “Place” BRAND ISN’T THE ONLY ANY MORE . hire the hottest strategies on the block. comprising about 4.3 million retail outlets reaching the entire urban population. Marketers and finance manager need a new term to evaluate their business: Distribution Equity.maximizing the returns involves identifying right price level for each segment. and about 250 million rural consumers.000 suppliers and associates. It takes much more time and effort to build. The fundamental axiom of Indian consumer market is this: You can set up a state-of –the-art manufacturing facility. but the end of it all.000 redistribution stockists. 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. The cardinal task before the Indian market is managing is to shoe-horn its product on retail shelves. swamp prime television with best Ads.television has already primed and population for consumption. and then progressively moving through them.
transport and communication network. Promotion If an advertisement is to communicate effectively. 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. Hindustan Unilever Ltd(HUL) marketing costs. To address the issue of product stability. The other reason is arch rival Procter & Gamble Co. language. value system. This network of distribution can either contact wholesalers and which in turn retailers or the distributors can contact to the retailers directly. the prospective customers can have access to the product. At Hindustan Unilever Ltd(HUL). And your brand equity isn’t going to help when it comes to tackling these issues. This increase in distribution is going to be accompanied by reduction in channel costs. Looking at the low penetration of few products. they believe that selling FMCG is it like selling soft drinks. it has installed visi colors at several outlets. Beside use of improved logistics. Effective advertising is rarely hectoring or loudly 30 . is much higher than Procter & Gamble Co. Hindustan Unilever Ltd(HUL) distribution network has expanded. a distribution expansion would itself being incremental volume.different terrains-climate. Hindustan Unilever Ltd(HUL) is also attempting to improve the distribution quality. Once the stock product reaches retailers. at 18% of total costs. and be prepared too take step toward the sender. The company is looking to reduce this parity level. Own distribution network consist of clearing and forwarding (C&F) agents & distribution stockiest. life style. reaches more than a million retailers. the receiver must at least half want it to. Hindustan Unilever Ltd(HUL) distributes the product in the manner stated above.
31 . The strategic response address the emotional appeal of the band to the child within the adult. communication must first ensure exposure. Something familiar is planned for phone-book as well. ad agency contract has created communication for cinemas and even ATM machines for the brand. a home water purifier which supplies drinking water without boiling/need of electricity . that produced just the value vacuum that Hindustan Unilever Ltd(HUL) was looking to fill. grab her acceptance and then extract retention competing with thousands of other units of communication trying to do the same. Naturally. pleasure – seeking child within himself – a graft these feeling onto the Ad campaign like “hasso to khul k hasso for close up”. More often than not. unself conscious. grab her attention evoke her comprehension. As well as outdoor and radio ads. To penetrate into the inner recesses of her memory. 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. Thereafter it was the job of the advertising to communicate customer the wonderful feeling that he could experience by re-discoursing the careful. It has also launched Pureit. “cream bathing bar for dove soap” and daag ache hai for surf excel” have been sure shot winner with the audience. • Finding showed that the adults felt too conscious to be seen consuming a product actually meant for children. 30 catteries in Mumbai have been selected. In cinemas.explicit…. All ICICI’ s ATM a message flashes on the screen as soon as customer insert his ATM card. a successful campaign has a stronger element of the unexpected a quality that good advertising shares with much worthwhile literature. It often both attracts and generates arm feelings.
Today’s consumer demanding “more for less”. consumers began to demand “more for same”.Ad spend in 2000 was about 14% of sales and the management said that plans to maintain as spend at this level in the current year also. Beside the company website (i. supported with high ad – spends that Hindustan Unilever(Ltd) hopes will see it emerges stronger after the current slowdown. Some of today’s most successful companies recognize those customers are more educated and able to recognize true customer value… Positioning is simply concentrating on an idea – or – even a word defines that company in the mind of the consumer. and luxury goods flourished.unilever.com). as well as expand the market. that the company has launched.e. www. and the winner will be that super value marketers…. researching and improving the newer products that haven’t taken off. today customer uses complicated decision making process to assess the 32 . 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. specially targeted during festivals and events such as Valentines day. etc…. the management plans to tap this new channel of marketing. Ad since any discussion today would be incomplete without mention ‘e’ word. and the discounting era grew strong. It’s a combination of spiffing up its key brand. Positioning In the 1970s consumers were ready to pay “more for more”. As a variety of competitive claims assails her senses. it had also entered into various marketing relationship with other portals. In the 1980s.
a hot-selling “fairness” cream. Since Hindustan Unilever(Ltd) is more clearly associated with a particular set of attributes in terms of benefits and prices. the quicker becomes her search process. gender.unilever. which promises a lighter skin tone for many of India’s complexion-conscious consumers. Hindustan Unilever(Ltd) takes into account all these factors when producing a range of products. 33 . each with different needs and wants. their interests and activities) the benefits which consumers look for in a product or on the occasions when the product might be consumed. such as the: Break segment – products which are normally consume as a snatched break and often with tea and coffee.g. as www.alternative before making a purchase. It targets different segments within the market. Consumers are groups. Positioning of individual product: 1) Lifebuoy is ‘one of Unilever’s oldest brands’ with more than a hundred-year history.e. HINDUSTAN UNILEVER’S MARKET SEGMENTATION Market place for any product is comprised of many different segments of consumers. “Lifebuoy has become more than just a red bar of soap – today the brand provides hygiene and health solutions for families 2) Fair & Lovely. material states income etc…) The lifestyle of consumers (i.com informs. Markets segmentation can be defined in a number of ways such as: Demographic variables (e.
They include product such as close up. taken home consumed at a later stage. Take home segment – this describes product that are normally purchased in supermarkets. 34 . Impulse segment – these products are often purchase on impulse. used these and then.
According to ACNielsen. Pricing. is now passe.596 crore to the company’s total sales of Rs12. Indian subsidiary of the Anglo-Dutch consumer goods company Unilever Plc. “We successfully migrated from Rin Supreme to Surf Excel and Wheel Smart Srimati—which was rolled out in 2006—is also on the right track.The Real Taste of Rejuvenation After having fought a bitter price battle for market share with its rivals. 35 .” “We have done key innovations across the product portfolio and it is working for us.4% over 2005.8% in the quarter ended June from 35. Hindustan Unilever Ltd (HUL).103 crore.908 crore in 2006 and rose 8. HUL says it is quite upbeat about the segment and says the laundry segment is one of its “key growth areas. In 2006. the laundry industry in India was worth Rs7. now is focused on product innovation. This comes even as Unilever is scouting for a potential buyer for its laundry business in the US. HUL doesn’t report its laundry revenues separately but puts them under the soaps and detergent category. home care. category head. “Price cut or hike is not a long-term growth strategy.” he said.” insists Sudhanshu Vats. is now working on a new growth strategy for its laundry business. in fact.” HUL’s market share in the laundry segment grew to around 37. new consumer and retail trends and aggressive marketing and promotions. HUL’s soaps and detergents segment contributed around Rs5. “Our strategy for growth.” says Vats.5% in the same period last year.
It’s primary market research at its most elemental. 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. the India hypermarket chain. The recent price war between companies led to erosion in their profitability but now. India’s Top Consumer-Products Company Woos Affluent Shoppers With Global Brands Like Dove. and the calls he makes on the headquarters of the big retail chains. That’s how Douglas Baillie likes it. “I can’t imagine any head from Lever House ever visiting other company offices like this. chief executive of innovation and incubation at Pantaloon Retail. This is quite a change for Hindustan Unilever. so the company wants to make sure it’s in with the new marketing crowd. India’s premier consumer-products company. 36 . wants to see how his products are stocked. and how shoppers are reacting to competitive brands. India’s largest retailer and a former manager at Hindustan Unilever. what consumers are buying. But India’s recent retail boom has created large stores and malls. the managing director of Hindustan Unilever. COMPETITIVE STRATEGY As Competition Heats Up. the industry is stabilizing.” says an amazed Damodar Mall. Hindustan Unilever has traditionally relied on small traders and mom-and-pop corner stores to retail its products.“Laundry has been an attractive segment in the past and is likely to keep growing in the near future. Baillie. Hence Baillie’s Hypercity visits. and it’s best done incognito. whose executives used to have emissaries make obeisance at Lever house in downtown Mumbai.
5 billion. and shampoos to soups. and dominates most of those categories. soaps. down from 21% a few years ago to just 11.2% to 24. Hindustan Lever tea brands like Brooke Bond and Lipton have dipped from a combined market share of 29.84% now. ACNielsen data shows. Nivea. All this has taken a toll on Hindustan Unilever’s operating margins. Hindustan Unilever’s lead in hand soaps. Finnish handset maker Nokia (NOK) dislodged it as the multinational with the highest revenues in India. and L’Oréal. Favorite detergent brands like Surf Excel and Rin are barely hanging onto their 37% share. These 37 . sauces and tea. Now Hindustan Unilever is under siege from aggressive Indian and foreign competitors such as Procter & Gamble (PG). makes everything from detergents. In the last year. after ringing up India-based sales of $3. which is practically synonymous with India. The company.3%. is down from 55. Yet early this year.Facing Competition From P&G And Others The reason for this new found egalitarianism is that the $3 billion Hindustan Unilever is facing serious competition. including the popular Lux.2% to 54%. That’s why the company is wooing consumers in big retail stores.
was the most successful and profitable company in the Unilever group.newly affluent shoppers present the best hope for the company’s future in India. Hindustan Unilever’s managers hope their revenues from big retail will increase from 5% today to over 25% in 2012. a Zimbabwe-born British national. Hindustan Unilever’s finance director. while its subsidiaries will sell the products.” says D. Sundaram. “It is a big game for us. This means that all of Unilever’s brands will be available across global markets. 2006. became the first foreigner in four decades to head the Indiancompany. The takeover of Hindustan Lever by Unilever became evident in March. For many decades most Indians thought Hindustan Lever was a local company.Parent Unilever will develop the brands and streamline product offerings across the world. currently just 3. not a multinational. Hindustan Unilever’s strategy is to market its premium products through the hundreds of megastores springing up across India. That dovetails with parent company Unilever’s new global realignment of products. not long ago. and the cream of India’s management 38 . According to retail consultant KSA Technopak.5% of India’s total $336 billion retail market. fitting in quite nicely with India’s turn towards more international products being sold in supermarkets. From Local Player To Multinational Overnight the change sent shock waves through India. organized retail. will grow to 28% by 2017. Yet this is still a dramatic change for Hindustan Unilever which. the crown jewel whose managers had free rein to develop and build brands suitable for the local market. when Baillie.
Then in February. 2007. Tougher To Hold On To Market Share Baillie says he intends to get the company back “into the competitive growth zone and do this in a manner that we can consistently deliver. The effect: The company’s sales and operating profits stagnated at $2. to $274 million in 2004. In India. it has phased out more food products—wheat flour. confectionery. For instance. If India is a great story. But the rich margins of the past have not returned. admits that it’s now “tougher to hold on to market share. 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.5 billion for five years while operating profit plunged 37%. the company’s home and personal care businesses account for 80% of revenues and 85% of profits at Hindustan Unilever. Last year operating profits reached $357 million. where foods bring in half the revenues globally. while the company’s track record in foods has been dismal. Baillie first had to sort out some past problems. While the strategy aimed to conserve management energy. the company. frozen bread—than it has launched. And there was some stiff competition from rival Procter & Gamble.” He also wants to expand the foods business in conjunction with the parent. Hindustan Unilever executives are realistic about the new era in which it now operates.graduates made their careers there. thanks to price increases. Nitin Paranjpe. then known as Hindustan Lever. 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. Indeed. executive director in charge of the home and personal care business. was rechristened Hindustan Unilever to reflect its parentage.” 39 . we aren’t the only ones seeing it. a 2004 price war with P&G in the detergent business forced Hindustan Unilever to slash prices on its premium brand Surf Excel.
Tata Tea’s market share increased from 16. In June.'' Hindustan Unilever Ltd. Currently. 30. according to the company. 2007. the Tata Group’s beverage company Tata Tea overtook Hindustan Unilever as India’s largest selling tea brand.7 percent. is also making inroads. `Profitable' Cigarettes 40 . an analyst at Sanford C. Managing Director Percy Siganporia says the gain is “a dream comes true for us. 80% of Indian shampoo sales come from sachets. who rates the stock ``outperform.Rivals like P&G and Nivea have also copied Hindustan Unilever’s best innovation: the small shampoo sachets it pioneered in the 1980s. lost ground in shampoo. the largest Indian cigarette maker and partly owned by British American Tobacco Plc. the world's largest consumer-goods maker. 52 percent owned by the London.” FUTURE COMPETITIVE STRATEGY 2010 Expectations P&G.. while Hindustan Unilever slipped from 26.1% to 19. 2006. which sold for less than 2 cents each and which expanded the market for Hindustan Unilever products among India’s rural masses.9% in July. the company said. But today even L’Oreal has sachets of its Fructis shampoo. According to ACNielsen. Bernstein in New York. Tata Tea is exultant. ITC. to 19.and Rotterdambased parent. It started selling more brands including Fiama Di Wills shampoo and Superia soap last year as the government raised tobacco taxes. Its share of the shampoo market declined by more than a percentage point to 47.5%. bath soap. compared with the year earlier. toothpaste and tea in the quarter ended Sept.7% in March. will continue to gain share in the next five years in India. according to Ali Dibadj.
He expects the stock to drop to 180 rupees ($4. 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 . used to make soaps and foods. generating about 6 percent of annual sales. who has an ``underperform'' rating on Hindustan Unilever. This strategy will still satisfy investors. analyst Unmesh Sharma. profitability will continue to be under pressure. ``Given the competition.'' said Macquarie Securities Ltd.care portfolio. The price of palm oil.The tobacco maker ``has a very profitable cigarettes business which will help it to invest and expand its personal. has surged 70 percent in the past year.'' said Anand Shah. an analyst at Angel Broking in Mumbai.8 billion. India is Unilever's biggest market in Asia.9 rupees.57) in the next year from 190. It has sold soap in the country since 1888 and controls about half of the sales of products such as skin creams.'' Rising prices of raw materials have made it more difficult for consumer-goods makers to pass on higher costs. who has a ``neutral'' rating on the stock. bathing soaps and shampoo. ``It has the ability to take losses in this segment as long as it grows its sales. The company has a market value of about $11.
Corporate Social Responsibility-Aiding In The Development Of The Country 42 . Competitive Strengths Fig:3. Strong commitment to sustainable development. Grow the bottom line ahead of the top line. Leverage positive impact of growing Indian economy on consumer spending. Grow ahead of the market by leading market development activities. Grow a profitable foods and top end business.
Beverages. Impact of community • • business and social impact can go together. partnerships with diverse stakeholders. The Group's principal activities are to manufacture and market consumer products.Shakti Three shakti initiatives • • • Shakti entrepreneur. Ice Creams and Other. Home and personal care products consists of personal and fabric wash. Personal Products. The products include home and personal care products. HINDUSTAN UNILEVER LIMITED . Shakti vani: one-to-many communication for category growth ishakti: customized interaction with remote consumers.COMPARATIVE BUSINESS ANALYSIS Hindustan Unilever Limited Formerly known as Hindustan Lever Limited. foods and beverages. currently~44000 women cover 1. The Group operates through seven segments: Soaps and Detergents. Foods.25000 villages. Exports. industrial and agricultural products. 43 .
which has helped the company to sustain its leadership position in the overall FMCG category in India. bakery fats. perfumery. coffee. ice creams. yeast.household. fruit and vegetable products. atta and rawa. animal feeds. local and regional players.income growth is crucial. thermometers and plantations. salt. tomato products. deodorants. The company focuses on efficient delivery to consumers with an improved supply chain. skin and hair care. This analysis compares Hindustan Unilever Limited with three other companies in closely related industry sectors. fertilisers. rice.however rural income are growing faster with 70% population here. marine products and mushrooms. processed-tri-glycerides and agri commodities. leather. bulk chemicals. Structural changes in the economy which are affecting this are: Disintermediation in the agricultural market price discovery mechanism has benefited farmers. Foods and beverages includes tea. The company faces competition from international. oral care. brand building initiatives and innovation. seeds. colour cosmetics and baby care. footwear and carpets. Industrial and agricultural products includes specialty chemicals. Hindustan Unilever markets consumer goods throughout India. RURAL. cooking fats and oils. Its brands are spread across 20 consumer product categories.THE BIG INDIAN ROMANCE Rural population larger than europe(800 million) Low growth in agriculture. Government grants and subsidies.employment grants-Rs 40000cr 44 . plant growth nutrients.
and screened some options to roll out one option that everyone was happy with. according to the authors.” reads an observation in a chapter titled ‘entrepreneurial advertising that works’.” write Leonard M. Lodish. The company basically worked with “one agency. Howard L. Ogilvy and Mather (O&M). Morgan and Shellye Archambeau. 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. the authors of Marketing that Works. they add. “HUL missed an opportunity for increased marketing productivity when they repositioned. A better strategy.Table: 1 Did Hindustan Unilever Get Its Rural Pitch Right? A new book from Wharton School Publishing is critical of Hindustan Unilever’s advertising strategy in India. retargeted. and relaunched Lifebuoy. Though the company was ‘extremely innovative’ the way it handled the rural communications plan was very traditional.” 45 .
a few days ago.” says the site. The O&M strategy. said: “We have been phasing our advertising spends depending on the launches and relaunches of brands. from the earlier Rs 345 crore. targeted “10.” So. 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. Prahalad’s The Fortune at the Bottom of the Pyramid . HUL. 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 .Advertising strategy came for mention when the company reported the second quarter results. Mr D. mass-market soap. “Lifebuoy has become more than just a red bar of soap – today the brand provides hygiene and health solutions for families. as explained by Mr Lodish et al.” The authors are of the view that government workers who have been interacting with villagers might have come up with some excellent ideas. Director (Finance & IT). “or the villagers themselves might also be able to generate very effective communications vehicles. has been able to link the use of soap to a promise of health as a means of creating behavioural change. Sundaram.” The advertising spends have not been linear for the company.K. through its innovative communication campaigns. Lifebuoy is ‘one of Unilever’s oldest brands’ with more than a hundred-year history. and thus has increased sales of its low-cost. HUL. he added. The company’s advertising and promotional spends during the quarter fell to Rs 336 crore.” reads a quote in the book from C. “Differentiating soap products on the platform of health takes advantage of an opening in the competitive landscape for soap. Prahalad notes.
programs. 47 . “As a big company.” JOINT VENTURE Hindustan Unilever Sets Up Joint Venture With Smollan Holdings Hindustan Unilever Limited (HUL) has decided to set up a Joint Venture (JV) with Smollan Holdings of South Africa and the JV will be operational from January 1. 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”.” wonder the authors. The strategic tie-up aims to build long term capabilities and bring ‘in-store’ execution focus in servicing the Company’s Modern Trade customers. “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. The operations will begin with the existing Modern Trade in-store execution team of HUL moving into HUFS.” The HUL example. which is one of the many discussed in the book. logistics for merchandising materials and in store execution. The new company has been named as Hindustan Unilever Field Services Private Limited (HUFS) and will work exclusively on behalf of HUL in Modern Trade channel only. It has leading edge capabilities in servicing Modern Trade focused on shelf filling. 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. 2008. 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.
Hindustan Unilever Network is the direct selling channel of the company. trained and guided by HLN's expert managers and trainers. Hindustan Unilever is also milking one of its top brands—Fair & Lovely.000 consultants.Other Acquisition Hindustan Unilever has acquired several Indian FMCG companies so far. Over the past six months. where Indian customers love to touch and feel products. has made the brand a winner. This includes: • • • • Tata Oil Mills Company Brooke Bond Lipton India Modern Foods It acquired Kissan brand from UB group. a hot-selling “fairness” cream. tone for many of India’s complexion-conscious consumers. It has about 350. Dollops ice cream brand from Cadbury India. all independent entrepreneurs. These premium brands retail not in neighborhood small stores but in supermarkets and hypermarkets. The advertising campaign. It has also launched Pureit. a home water purifier which supplies drinking water without boiling/need of electricity. That has spawned 48 . NEW INITIATIVE Bringing High-End Dove To India Baillie is fighting back. which promises a lighter skin. which suggests that regular use of the cream helps women gain confidence and makes them eligible for marriage. Lakme cosmetics brands from Tata. Hindustan Unilever launched a high-end range of Pond’s skin care and Dove hair care products from Unilever’s international portfolio.
the company embarked on an ambitious programme. 2007. at one-third the price of established Indian brands such as Aqua guard. and Baillie is pleased with the modest turnaround.6%. These efforts have delivered some promising results. and relief & rehabilitation after the Tsunami caused devastation in South 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 2001. SERVICE TO SOCIETY HUL believes that an organisation's worth is also in the service it renders to the community. the company’s sales grew 13%. consumer analyst at Mumbai brokerage First Global Securities. and rural development. most recent being the village built by HUL in earthquake affected Gujarat. and creating access to relevant information 49 . Reason enough to keep patrolling those store aisles. Through Shakti. thereby improving their livelihood and the standard of living in rural communities. and sunblock lotions. HUL is creating micro-enterprise opportunities for rural women. says that Hindustan Unilever “could have addressed a lot more categories. It is also involved in education and rehabilitation of special or underprivileged children. But Hindustan Unilever’s brand is still tops. women empowerment. which Hindustan Unilever exploited with the launch of water purifier Pureit in 2005. focusing on the Knorr brand of soups and curry mixes —ideal for the Indian market. Shakti also includes health and hygiene education through the Shakti Vani Programme. HUL is focusing on health & hygiene education. with net profit up 29. soaps. care for the destitute and HIV-positive. Sumeet Budhraja.a host of competitive fairness creams. but they are more focused and regaining their aggressiveness.” He points to the demand for safe drinking water in India. In the quarter ended June. and water management. Baillie is also getting aggressive on foods. HUL has also responded in case of national calamities / adversities and contributes through various welfare measures. Shakti.
000 Shakti entrepreneurs covering 500. of over 600 If Hindustan Unilever straddles the Indian corporate world.through the iShakti community portal. By the end of 2010. PRODUCT PROFILE HUL’s business activities are divided into four broad areas: Home and personal care 50 .000 villages and directly reaching to 150 million rural consumers. The vision is to make a billion Indians feel safe and secure. It has already touched 70 million people in approximately 15000 villages of 8 states.000 women entrepreneurs in its fold. The programme endeavours to induce adoption of hygienic practices among rural Indians and aims to bring down the incidence of diarrhoea.000 villages. Shakti aims to have 100. touching the lives million people. The program now covers 15 states in India and has over 31. it is because of being singleminded in identifying itself with Indian aspirations and needs in every walk of life. reaching out to 100. HUL is also running a rural health programme – Lifebuoy Swasthya Chetana.
branded staples. Ayush ayurvedic products and services. marine products. skin care. Dove. fabric wash. Modern Foods ranges New Ventures Hindustan Lever Network. home care. beverages. coffee. Breeze. Sangam. Pears and Rexona • Laundry items: Surf Excel. ice creams. rice Bathing soaps: Lux. Liril. hair care. culinary products. Exports • HPC. oral care. Lifebuoy. Rin and Wheel • Skin care: Fair & Lovely. Pureit water purifiers. deodorants and talcs.personal wash. colour cosmetic Foods tea. Pond’s and Vaseline • Hair care: Sunsilk and Clinic • Oral care: Pepsodent and Close up • Deodorants: Axe and Rexona • Colour cosmetics: Lakme • Ayurvedic: 51 . Hamam.
Ayush • Tea: Brooke Bond and Lipton • Coffee: Bru • Foods: Kissan. 52 . Annapurna and Knorr • Ice cream: Kwality Wall’s .
BRANDS HUL s brands are household names across the country. 53 . Pond s. Closeup. Fair & Lovely. Knorr-Annapurna and Kwality Walls. Sunsilk. Rin. Surf Excel. Lux. Pepsodent. Kissan. Lakme. Wheel. Brooke Bond. They include: Lifebuoy. Clinic.
according to a survey of 276 senior operating executives in 2004 (Allio. 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. There are many (soft. hard and mixed) factors that influence the success of strategy implementation. It is thus not surprising that. Unlike strategy formulation. The best-formulated strategies may fail to produce superior performance for the firm if they are not successfully implemented. The survey reported in that white paper indicates that 83 percent of the surveyed companies failed to implement their strategy smoothly. ranging from the people who communicate or implement the strategy to the systems or mechanisms in place for co-ordination and control. A myriad of factors can potentially affect the process by which strategic plans are turned into organizational action. 2005). 2006). making that strategy work – implementing it throughout the organization – is even more difficult (Hrebiniak. and its research history has previously been described as fragmented and eclectic (Noble.TOPIC DETAIL Although formulating a consistent strategy is a difficult task for any management team. and only 17 percent felt that they had a consistent strategy implementation process. after a comprehensive strategy or single strategic decision has been formulated. It is thus obvious that strategy implementation is a key challenge for today ‟s organizations. According to the White Paper of Strategy Implementation of Chinese Corporations in 2006. as Noble (1999b) notes. we try to respond to this 54 . 1999b). strategy implementation is often seen as something of a craft. rather than a science. strategy implementation has become “the most significant management challenge which all kinds of corporations face at the moment”. significant difficulties usually arise during the subsequent implementation process. How can we better understand these issues and their importance for successful strategy implementation? In this article.
in terms of the applied research methods and the examined strategy contexts. The next part of the article. In this section. It will consequently also reveal under-exploited methods or contexts. the research methods used as well as the analytical techniques employed. In the fifth section of the article. We also discuss directions for future research in the domain of strategy implementation and how they may be pursued. to surface current areas of agreement and disagreement. contains the actual review of literature. theoretical bases. As the core of our literature review. Then. We present a conceptual framework that organizes the current research findings. Our study also examines the ways in which strategy implementation has been researched so far. their main results. The structure of this paper is as follows: First. we analyze definitions of strategy implementation and compare them with other synonymous and related terms (in section 2). as well as missing evidence and resulting future research needs. we describe the methodology that we have used to conduct our literature review and define its scope (section 3).question by analyzing existing research on the factors that influence strategy implementation . Section four also contains a review of existing models and frameworks of strategy implementation. In that section we present a discussion of nine major factors that affect strategy implementation. we discuss the limitations of our own approach and summarize open research questions regarding strategy implementation that have surfaced at various points in our literature analysis. focusing on the main results of prior studies. we will review the 60 identified studies and analyze their research context. we discuss the implications of our findings as well as their limitations. Examined organizational levels and organizational types are two elements of the research context. the results section compiles nine factors that 55 . In the sixth and final section. section 4. We have conducted an analysis in the most widely used literature databases to identify key factors influencing the process of strategy implementation.
Waldersee & Sheather. 1992b. however. Roth & Schweiger & Morrison. Floyd & Wooldridge. 1996. White. Skivington & Daft. 1988. HR.influence strategy implementation success. Brenes & Mena & Molina. 2005. Finally.1 Research Contexts We classify research contexts into two dimensions: the examined organizational levels and the considered organizational types. whether it is privately held or state-owned and whether its operating scope is regional or rather multinational. Piercy (1998). 1991. SBU and functional level. Surprisingly few researchers focus on the implementation of corporate level strategies. Olson & Slater & Hult. as well as several frameworks or models that aggregate or relate relevant factors to each other. marketing. Organizational types refer to the kind of organization that is studied. Schaap. such as Wernham (1985) and Schmidt & Brauer (2006). the research methods and analytical techniques will be reviewed to see which methods are still underutilized in the context of strategy implementation. Noble & Mokwa (1999). strategic business unit (SBU) level. We then briefly discuss the theoretical bases of the reviewed studies. Noble (1999a).e. Govindarajan. Govindarajan.). Chimhanzi (2004). functional level. Qi (2005). corporate-SBU-functional levels. Organizational levels designate the locus of strategizing. whether a study focuses on functional strategies (i. Sashittal & Wilemon (1996). Most of these studies. etc. i. 1999. 2005. Nilsson & Rapp. while many examine SBU level strategies (Gupta & Govindarajan. SBU-level strategies or corporate strategies. 1990. 2007). Chimhanzi & Morgan. i. Organizational Levels In the context of strategy implementation research.. They are: corporate level. Govindarajan & Fisher. R&D). 1986.. 4.. five organizational levels can be distinguished. inter-functional levels. 1989. Viseras & Baines & Sweeney (2005). 2006. operational level and mixed levels (such as corporate and SBU level. 1984. namely Rapert & Lynch & Suter (1996).e.e. focus on marketing strategy (such as Sashittal 56 . The same holds true for functional strategies: We have found eight studies that focus on the implementation of such strategies. 1991.
1996. normally cut across functions and are aimed at integrating organizational processes across the organization in order to make them more effective and more efficient. There are some studies which cannot be classified into the above categories. SBU and functional. Chimhanzi. the last type. Okumus (2001). 1998. Slater and Olson (2001) analyze marketing‟s contribution to the implementation of business strategy. Baines and Sweeney‟s study (2005) in the context of manufacturing strategies. This study focuses on the key success factors in the project management for the implementation of strategic manufacturing initiatives. Consequently. functional and process. Few studies focus on the actual operational level of strategy implementation. and on two aspects of strategic implementation (stakeholder input and employee empowerment). Piercy. Homburg. business. Noble & Mokwa. 1999. Walker and Ruekert (1987) analyze three levels of strategy – corporate. The mixed studies category also includes articles that focus on the role of project management for strategy implementation. Homburg & Krohmer & Workman (2004). The only other study of functional strategy implementation that we have been able to identify is Viseras. such as Bantel (1997). focuses on the implementation of a yield 57 . Higgins (2005) even focuses on four types of strategies: corporate. Krohmer & Workman (2004) point out that market orientation plays a key role for the successful implementation of a PPD (premium product differentiation) strategy. There are few studies dedicated to the implementation of other functional strategies (this is clearly an area of future research). 2004). we classify them into a group called mixed level studies: Gupta (1987). This study also emphasizes the relationship between product strategy and several strategic implementation variables. Process strategies.& Wilemon. Bantel (1997) analyzes the effects of two key aspects of product strategy (product leadership and product/market focus) on performance. for example. Beer & Eisenstat (2000) and Hrebiniak (2006) have carried out research on corporate and SBU-level strategy.
In terms of promising future research on strategy implementation. Peng and Litteljohn (2001) investigate three hotel chains implementing a strategic initiative on yield management. R&D. 1987. and Schaap (2006). accounting etc. Higgins (2005). First. Two calls to action result from these findings. 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. Noble (1999b). future strategy implementation research should pay attention to explicitly indicate the level of analysis. Many studies (25 articles) do not even indicate at which level their discussion of strategy implementation is located. which seems a highly relevant area to improve our understanding of strategy 58 . 1989). there are many studies that are not sufficiently explicit regarding their scope concerning strategic levels.). Finally. compared with other functional areas (such as manufacturing. the functional. corporate (2 articles) and operational (2 articles). We note that – among the five strategy levels – the SBU-level (14 articles). We can draw multiple conclusions based on our analysis of the treatment of organizational levels in prior studies of strategy implementation. HR. 2001). Within the functional level. Harrington (2006). we can observe that there are very few studies that have examined the inter-relationships of functional and business strategies.level (8 articles) and mixed levels (9 articles) have received more attention than the other two levels.management project and a key client management project in two hotels. another finding revealed that marketing is the prevailing domain. Grundy (1998) examines the synergies among project management and strategy implementation and reviews strategy tools that may help in project management. Lehner (2004). Examples of such ambiguous studies are Bourgeois Ш and Brodwin (1984). Nutt (1986. Second. One such study focuses on marketing‟s contribution to the implementation of business strategy (Slater & Olson. Another study has examined the mutual influence of functional departments ‟ relationships on strategies.
implementation: Chimhanzi (2004) has examined the impact of marketing and HR interactions on marketing strategy implementation. FedEx. Qi (2005) issues questionnaires to the head offices of 800 private companies in the UK. explores the reality of strategy implementation in a U. Okumus (2001) investigates two international hotel groups. refer to the characteristics of organizations: if they are private or state-owned. 59 . for example. 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. Forman and Argenti (2005) select five multinational companies as samples. not only local firms but also multinational firms. British Telecom (BT). the subjects of strategy implementation studies are not only state-owned corporations. local or multinational. Roth & Schweiger & Morrison (1991) and Kim & Mauborgne (1991. namely Accenture. as stated earlier. Velliquette and Garretson ‟s (2002) study on strategy implementation takes a nationwide sample of 1000 CEOs of general service hospitals.K. a provider of emergency fire and medical services. This clearly is another interesting avenue for future research. Sears. state-owned and privately held companies. Organizational types Organizational types. Johnson & Johnson. strategy implementation studies discuss both. but mostly private corporations. 1993) study global strategy. which are members of the American Hospital Association (AHA). However. We thus do not know which specific differences exist regarding strategy implementation in these various forms organizations. Dell. a major financial services firm. Rapert. or among local firms and multinational firms. Alexander (1985) surveys 93 private sector firms through a questionnaire. and a leading firm in the imaging technology industry. while others are multinational corporations. nationalized company. Noble ‟s (1999a) study spans several types of organizations – a national airline. Wernham (1985). As far as ownership forms are concerned. a leading packaged goods company. In conclusion.
although these are often categorized separately. dairy products. staples. Examples of FMCGs are soft drinks. Kleenex. The term Consumer Packaged Goods (CPG) is used interchangeably with Fast Moving Consumer Goods (FMCG). Unilever and Procter & Gamble. cereals. time and financial investment to purchase. cosmetics. batteries. toiletries). teeth cleaning products. hair care. chocolates. Three of the largest and best known examples of Fast Moving Consumer Goods companies are Nestlé. ‘Fast Moving’ is in opposition to consumer durables such as kitchen appliances that are generally replaced less than once a year. cosmetics.INDUSTRY PROFILE Fast Moving Consumer Goods(FMCG) FMCG are products that have a quick shelf turnover. consumer electronics and packaged food products and drinks. shaving products. tissue paper. paper products and plastic goods. soaps. The margin of profit on every individual FMCG product is less. detergents. Hence profit in FMCG goods always translates to number of goods sold. Examples of FMCG brands are Coca-Cola. household care (fabric wash and household cleaners). and chocolate bars. The FMCG sector represents consumer goods required for daily or frequent use The main segments of this sector are personal care (oral care. The category may include pharmaceuticals. such as buckets. soaps. soft drinks. Pepsi and Believe. beverages (health beverages. 60 . bulbs. Fast Moving Consumer Goods is a classification that refers to a wide range of frequently purchased consumer products including: toiletries. bakery products) and tobacco. branded and packaged food. other non-durables such as glassware. However the huge number of goods sold is what makes the difference. at relatively low cost and don't require a lot of thought.
the margins were also on the higher side. This has been due to liberalization. FMCG companies have been forced to fight for a market share. 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. more so in the last six years (FMCG sector witnessed decline in demand). 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). able to charge a premium for their products. companies like ITC. the unorganized and regional players have witnessed erosion in market share. HLL. urbanization.The Indian FMCG sector is an important contributor to the country's GDP. Furthermore. therefore. the sector meets the every day needs of the masses. margins have been compromised. But in the last ten years. History of FMCG in India In India. many of the smaller rung Indian FMCG companies have gained in scale. It is the fourth largest sector in the economy and is responsible for 5% of the total factory employment in India. much of which is disbursed in small towns and rural India. In this context. With the gradual opening up of the economy over the last decade. Colgate. Many of the global FMCG majors have been present in the country for many decades. This industry has witnessed strong growth in the past decade. The industry also creates employment for 3 m people in downstream activities. As a result. the boom has also been fuelled by the reduction in excise duties. 61 . The lower-middle income group accounts for over 60% of the sector's sales. in reality. Rural markets account for 56% of the total domestic FMCG demand. These companies were. Unlike the perception that the FMCG sector is a producer of luxury items targeted at the elite. In the process. increase in the disposable incomes and altered lifestyle.
increased literacy and rising per capita income are the key growth drivers for the sector. 62 . the industry could double in size by 2010). almost 40% and 8% was accounted by groceries and personal care products respectively. Aspiration levels in this age group have been fuelled by greater media exposure. these are still at a relatively nascent stage. It has been ranked second in a Global Retail Development Index of 30 developing countries drawn up by A T Kearney. In our view. industry estimates suggest that the industry could triple in value by 2015 (by some estimates.term horizon. as the per-capita consumption of almost all products in the country is amongst the lowest in the world. Trent. In our view. Although companies like HLL and ITC have dedicated initiatives targeted at the rural market.Techno Park. testing times for the FMCG sector are over and driving rural penetration will be the key going forward.Current Scenario The growth potential for FMCG companies looks promising over the long. companies were unable to grow faster. forced-buying by offering many choices and also opens up new avenues for growth for the FMCG sector. The bottlenecks of the conventional distribution system are likely to be removed once organized retailing gains in scale. of the total consumption expenditure. Due to infrastructure constraints (this influences the cost-effectiveness of the supply chain). Currently. 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. Shopper’s Stop and Shoprite. organized retailing accounts for just 3% of total retail sales and is likely to touch 10% over the next 3-5 years. Rapid urbanization. Given the aggressive expansion plans of players like Pantaloon. As per the Consumer Survey by KSA. In this backdrop. unleashing a latent demand with more money and a new mindset. we are confident that the FMCG sector has a bright future India is rated as the fifth most attractive emerging retail market. organized retailing results in discounted prices.
A. toothpaste. Penetration level as well as per capita consumption in most product categories like jams. lower volume of higher value added products reduce scope for export to developing countries. The share of modern retail is likely to grow from its current 2 per cent to 15-20 percent over the next decade. Kearney has estimated India's total retail market at $202. the general slowdown in the economy is also likely to have an adverse impact on disposable income and purchasing power as a whole. Burgeoning Indian population. presents an opportunity to makers of branded products to convert consumers to branded products. is expected to grow at a compounded 30 per cent over the next five years. The growth of imports constitutes another problem area and while so far imports in this sector have 63 . Poor monsoon in some states. The outlook in the short term does not appear to be very positive for the sector. skin care. too. The FMCG market is set to treble from US$ 11. Moreover.4 billion in 2015. The FMCG sector has traditionally grown at a very fast rate and has generally out performed the rest of the industry. There is significant potential for increasing exports but there are certain factors inhibiting this. Over the last one year. 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. however the rate of growth has slowed down and the sector has recorded sales growth of just five per cent in the last four quarters.T.000 crore only. particularly the middle class and the rural segments. hair wash etc in India is low indicating the untapped market potential.6 billion in 2003 to US$ 33.6 billion. Moreover. 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.1 billion. is unlikely to help matters. analysts feel. The Indian FMCG sector is the fourth largest sector in the economy with a total market size in excess of US$ 13. Small-scale sector reservations limit ability to invest in technology and quality up gradation to achieve economies of scale.
Give the large market and the requirement for continuous repurchase of these products. FMCG companies estimate they have already cornered a four to six per cent market share.been confined to the premium segment. most of the companies are concentrating on cost reduction and supply chain management. The high burden of local taxes is another reason attributed for the slowdown in the industry At the same time. FMCG companies should continue to do well in the long run. This should yield positive results for them 64 . Moreover. the long term outlook for revenue growth is positive.
Descriptive 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 . 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. There are three types of Research Design:Types of Research: Exploratory Research Design:. used as a guide in collecting and analyzing data.The major emphasis in exploratory Research design is on discovery of ideas and insights.A Casual Research Design is concerned With determining cause and effect relationship. Casual Research Design:.
That is each member does not have a known non zero chance of being included. Probability Sampling is of following types: Simple Random Systematic Cluster Stratified Double Non-Probability Sampling: Non probability sampling is non-random and subjective. Types of NonProbability Sampling Convenience Judgement Quota 66 . Researcher must select a sample design.SAMPLE DESIGN A sample design is a definite plan determined before any data is actually collected for obtaining a sample. which should be reliable and appropriate for his report. 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.
DATA COLLECTION METHOD Data for the present study is collected from two sources: Secondary: . 67 .Secondary data is collected from published sources like Journals. Magazines. In addition to this internet access will make the study more effective and meaningful. books of national and international author as well as the annual report of the company. various newspapers and published books. 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. journal of national repute.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. For this research work I have chosen Non. newspaper Employment exchange The secondary data would be collected from financial statement.Researcher selects the sample as per their convenience. journals.
A sharp drop in interest rates from 18% to 8%led to explosive demand for consumer durables like white goods.The lure of new avenues of expenditure in products and services led to consumersrestricting their expanse on FMCG. Entertainment.The rapid opening up of the economy resulted in many new avenues of expenditurefor the consumer’s growing income. Leisure and Travelsectors also boomed. After all.DATA ANALYSIS & INTERPRETATIONS Through the nineties. a consumer buying six tablets of Lux in a month went to buying three of Lux and three cheaper brands. one could drive out of a car showroom in a Maruti 800 with adown payment of only Rs.Suddenly. But they did downtradeto lower priced substitutes from higher quality brands. FMCG market growth stalled and then declined for the next four years. and did not offer prospects for long-term leadership. the FMCG market declined invalue in the last four years creating a major challenge for growth The new Hindustan Lever: Focused on FMCG In 2000. It is important to understand why this happened. It is not that they bathed less often or brushedtheir teeth less often or indeed washed their clothes less often. 2000. The home ownership market grew exponentially asthe average age of a home loan borrower dropped from 50 in 1999 to 30 in 2004. two-wheelers andautomobiles. 68 . For example. the FMCG markets grew at almost 15% per annum in value.Mobile phone ownership and usage exploded due to its amazing lifestyle andconvenience be nefits as well as lower prices. Or a consumer buying Surf Excel for her clothes mixed it with a cheaper powder. The rest came from severalnon-FMCG businesses which were not profitable. 75% of our sales came from FMCG businesses. in 2000. As a result of this shift in spending patterns.
Seeds. with higher levels of resource concentration. whichthe current business simply could not afford. In all. be ittechnology.Today they are a focused on FMCG company with our branded business accountingfor over 90% of sales. their Foods business has a healthy gross margin and a supply chain driven byfreshness. FMCG still offers enormous potential As the largest FMCG player it was up to them to reverse the downtrading to realize itstrue growth potential. They have alsocleared the supply chain of all old stock and geared up for fresh availability on shelf. Thermometers. Mushrooms etc. Today. wehave divested and discontinued 15 businesses including Animal Feeds. Historically their Foods businesswas fragmented and lacked scale. consisting of 35 brands across 20 categories. people talent or media spend.750 crores as in 1999. both interms of resource and focus. It was often commoditized with low margins. These will be their main engines of growth. there is enormous growth potential in leading the evolution of consumers to branded and processed foods.1. SpecialityChemicals. They could achieve this by raising the bar and becoming worldclass in what their brands 69 . Theyrecognized that changing food habits would require considerable investment.They decided to disengage from all non-FMCG or commodity businesses. Building blocks of a strong Foods business In Foods. They have consolidated theuir portfolio and improved thegross margins by over 13% through product mix and cost reduction. Over the last few years they have focused on putting in place the building blocks of a strong Foods business. Adhesives. Therefore they divested the non-valueadded parts like Vanaspati.Besides. The Foods business will now invest for growth through relevant innovation. Nickel Catalyst. withsales of Rs. they were a drain on the core FMCG business.
Nothing less would do. the FMCG market will be over Rs.100. Nothing less would do. their Foods business has a healthy gross margin and a supply chain driven byfreshness. They chose to focus on 35 power brands covering all consumer appeal and price segments. At thoselevels.000 crores. FMCG still offers enormous potential As the largest FMCG player it was up to them to reverse the downtrading to realize itstrue growth potential.Penetration levels in several of the categories and consumption levels in all of thecategories is low by any comparison.000 crores from a current value of Rs. per capita income in India is likely to touch China’s current levels.000 crores. Across the world. Six brands – Brooke Bond. They are already seeing the benefits. At thoselevels. Across the world. the FMCG market will be over Rs.100.Penetration levels in several of the categories and consumption levels in all of thecategories is low by any comparison. 70 . many undifferentiated and lacking scale.40. they are seeing a strongcorrelation between income levels and the size of FMCG markets. In 2000. Over the next 10years.000 crores from a current value of Rs.offered and how they worked.40. Today. This is an opportunity that they have to seize. This is an opportunity that they have to seize. They could achieve this by raising the bar and becoming worldclass in what their brands offered and how they worked. 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. Over the next 10years. per capita income in India is likely to touch China’s current levels. they are seeing a strongcorrelation between income levels and the size of FMCG markets. The Foods business will now invest for growth through relevant innovation. they had 110 brands.
each with sales of more thanRs. or 5% of sales. Today Lifebuoy. their oldest brand. in the last three years to upgrade the brands. 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. Lux. Imagine the importance of that benefit to consumers in 71 . Better quality and more affordable prices have increased the value to the consumer. Theyhave invested over Rs.They have also launched several low unit size and price packs for single use to makethe brands more accessible to all income groups. Similarly. they are the first tointroduce a branded toothpaste in a tube at Rs.400 crores.Lifebuoy. “A soap is a soap is a soap!” Or indeed. Surf Excel went well beyond the benefit of ‘greatclean’ by saving two buckets of water with every wash.5 and a branded quality shampoo in a bottle at Rs. “All detergents clean clothes as well”. has grown at over 15% for the last three years. Fair & Lovely. How often have we heard someonesay. in the laundry market.In the case of Lifebuoy. They had to move from selling a soap or a detergent to something far more important and central to the consumer’s life. Rin and Wheel – have emerged as mega brands in the last five years. 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.In several cases they reduced prices to make the brands more affordable. It moved from being a mere soap to a health essential. For example.5.500 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.
cities, who often get running water for only a couple of hours a day. Surf Excel is one of their fastest growing brands today.Both Lifebuoy and Surf Excel have succeeded because they are relevant to two keyconcerns of the Indian housewife: family health and the scarcity of water.In addition to the growing consciousness of health, consumers today are looking for ways to look good and feel good so that they can get much more out of life. In short,consumers are seeking Vitality in their lives. Their portfolio of 35 power brands isuniquely positioned to offer nutrition, hygiene and personal care benefits and therebydeliver Vitality. Technology, the Key Differentiator Their brands and sound understanding of the local consumer are supported by a worldclass Research and Development capability. They have over 200 of the brightestscientists and technologists based in India.Their recent reorganization leverages the talent pool from across 16 global technologycentres, of which four are in India. In all, they have over 4,000 high quality mindsacross Unilever working relentlessly to provide new benefits that make a realdifference the consumers. Winning with Customers Hindustan Lever has historically had a strong bond with its customers. They havestrengthened this and reinvented the way they manage their distribution channels and their customers. The sales structure has been transformed to leverage scale and buildexpertise in servicing Modern Trade and Rural Markets. They have also de-layeredtheir sales force to improve the response times and service levels.Their customers are serviced on continuous replenishment. This is possible because of IT connectivity across the extended supply chain of about 2,000 suppliers, 80 factoriesand 7,000 stockists. They have also combined backend processes into a commonShared Service
infrastructure, which supports the units across the country. All theseinitiatives together have enhanced operational efficiencies, improved the service to thecustomers and have brought us closer to the marketplace. Our Acorns: Investing in our Future In the pursuit of growth, they have also begun to nurture some acorns for the future.These are both new businesses and new ways of engaging with consumers.Their entry into Water Purifiers, through Pureit, shows great promise. Pureit delivers100% protection against all water-borne diseases. It provides water which is as safe as boiled water, without needing electricity or continuous tap water supply. At 17 paise per litre, it is extremely affordable for the common man. They have launched it inTamil Nadu and are fine-tuning all aspects of the business system before a phasednational launch.In urban India, Hindustan Lever Network (HLN) is their direct selling initiativeselling a special range of products. It already reaches 1,400 towns with over 3 lakhconsultants. Besides reach, HLN enables direct interaction with consumers andcustomises solutions for them to give them a complete brand experience Our People & Organisation They have restructured the company, integrating eight Profit Centres into twoDivisions – Home and Personal Care (HPC) and Foods. The result is a simpler andleaner organisation, less hierarchical with fewer levels and greater empowerment.This has eliminated complexity and speeded up decision making. Today the companyis far more youthful in attitude and spirit. There is greater openness and transparency.
The Transformation: Investment in the Future To ensure that Hindustan Lever remains competitive in the long-term, they
have madesignificant investments in product quality, pricing and marketing. As mentionedearlier, the investment in product quality alone has been in excess of Rs. 400 crores,or 5% of our sales.In addition there has been the cost of defending their market position. Recently aninternational competitor attacked their laundry business led by a price reduction of asmuch as 50%. They acted with speed and determination leveraging all their pastexperience in India and internationally. They have been able to fully protect their market leadership and share, albeit sacrificing shortterm profit. They made thisnecessary trade-off as market share is the best means of sustaining future profit. Over time, their stronger market positions will surely lead to greater long-term profit.Despite these significant investments to strengthen the long-term competitiveness andthe costs of defending the strong market position, they still remain one of the most profitable companies in the country.
Strength 1. Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods company, touching the lives of two out of three Indians with over 20 distinct categories in Home & Personal Care Products and Foods & Beverages.. 2. Due to its long presence in India – has deep penetration – 20 consumer product category, over 15,000 employees, including over 1,300 managers, is to "add vitality
3. The company derives 44.3% of its revenues from soaps and detergents, 26.6% from personal care products, 10.5% from beverages, and the rest from foods, ice creams, exports, and other products. 4. Low cost of production due to economic of scale. That means higher profits and / or more competitioners. Better market penetration. 5. HUL is also one of the country's largest exporters; it has been recognised as a Golden Super Star Trading House by the Government of India. Weakness 1. Continuous threat from other competitors. Opportunities 1. Increasing per capita national income resulting in higher disposable income. 2. Growing middle class and growing urban population. 3. Increasing gifts cultures.
cost pressure is likely due to rising crude and freight costs. reason is that.4. Globalization. 5. HLL's tea business has declined marginally. Increasing departmental stores concept – impulse @ at cash counters. Threats 1. CONCLUSION 76 .
ariel.pantene etc.Demography.clinic plus. 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.This company project has demonstrated “HINDUSTAN UNILEVER’S MARKETING STRATEGIES AND POLICIES” that has proved to be extensive through. are some of the main ingredients of FMCG sector. and of great benefit to the company in furthering its competitive advantage.Lux.income and other attributes.lifebuoy. SUGGESTIONS 77 .This sector has member of players which altimately shopes the buying decision products like.personality. FMCG secter hold a prime importance as the competition is increasing day by day. Different line of products are offering customers to choose according to their gender.
They need to take care regarding the competition with in its own with the brand name. P&G P&G need to make their product affordable in Indian market so as to get quantity of sale benefit P&G should enter into lower and product which has high potential with reference to Indian market segment They need to promote their product Ariel which is loosing market share in its brands. They need to promote their companies name along with the brand name. They need to bring more awareness of the companies name along 78 . HUL They need to enter into lower segments of detergent.
LIMITATIONS While undertaking my study I was encountered with some limitations: Limited time was provided to complete the study. Cost involved in collecting the data was high. To fix an appointment with the dealers was also very difficult task and even after that many time people was not turn up for the appointment. 79 .
10th Edition. Marketing Management.BIBLIOGRAPHY BOOKS: • • • Kothari C. Thakur Devendra. Prentice. Kottler Philip. Ltd. Research Methodology. Research Methodology.. 2001 Page 365. 80 . . 4th Edition 2002 Page 135.R. 2005 Page 85. Ltd. .Hall of India Pvt. Deep & Deep Publication Pvt.
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