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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.
It includes all facts. • 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. E. in professional usage the term has a wider meaning which recognizes that marketing is customer centered. Jerome McCarthy divided marketing into four general sets of activities. Facilitating Functions These are the function that facilitates the process of exchange. 5 . His typology has become so universally recognized that his four activity sets. the Four Ps. opinion. • Financing: Finance is the base for all marketing activities. in some cases. However. especially advertising and branding. views. estimates. regarding the market • Standardization: Standardization helps on tackle certain major problems of marketing. "marketing" is the promotion of products. have passed into the language. These decisions are based on market information. for specific customers. Products are often developed to meet the desires of groups of customers or even. place etc… • Market information: The much desired success of marketing depends on correct and timely decisions. It makes the exchange process smooth and acts as lubricating oil to the wheel of marketing.3. 7P’s of Marketing: In popular usage. It is related with the division of commodities into distinct groups standardization involves establishment of certain criteria to which the goods must confirm.
if they are provided in time. and how it relates to the end-user's needs and wants.g. e. • Promotion: This includes advertising. for example. or company. • 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. and personal selling. sales promotion. • People: People refer to the customers. It is essential for everyone to realize that the reputation of the brand that you are involved with is in the people's hands. The price need not be monetary . • Physical (Evidence): It refers to the experience of using a product or service. pamphlets etc serve this purpose Physical distribution refers to how the product gets to the customer. referring to the channel by which a 6 . point of sale placement or retailing.brochures. • Pricing: This refers to the process of setting a price for a product. it is essential that you help him see what he is buying or not. publicity. time.The four Ps are: • Product: The Product management and Product marketing aspects of marketing deal with the specifications of the actual goods or services. For example. management and everybody else involved in it. including discounts. if the customers are informed in hand about the services and many such things. This fourth P has also sometimes been called Place. or attention. When a service goes out to the customer. brand.it can simply be what is exchanged for the product or service. employees. and refers to the various methods of promoting the product.
Following are the phases of development of marketing 7 .g. which you should be aware of. A marketer can use these variables to craft a marketing plan. online vs. to which segment (young adults. having made this important caveat. 1988). is that it unconsciously emphasizes the inside–out view (looking from the company outwards). high value consumer products require adjustments to this model. whereas the essence of marketing should be the outside–in approach". Relationship marketing attempts to do this by looking at marketing from a long term relationship perspective rather than individual transactions. Evolution of Marketing: Marketing has evolved from the time man existed on earth. in Riding the Waves of Change (Jossey-Bass. Industrial products. These four elements are often referred to as the marketing mix. The four Ps model is most useful when marketing low value consumer products. business people). etc. the 4 Ps offer a memorable and quite workable guide to the major categories of marketing activity. Even so. adds "Perhaps the most significant criticism of the 4 Ps approach. Services marketing must account for the unique nature of services.product or service is sold (e. Morgan. retail). as well as a framework within which these can be used. families. services. As a counter to this. which geographic region or industry. Industrial or B2B marketing must account for the long term contractual agreements that are typical in supply chain transactions.
The selling activity becomes the dominating factor without any efforts for the satisfaction of the consumer needs. instead of buying concerned with customer preference concentrating on the mass production of goods for the purchase of profit. 8 . Sales orientation: This stage witness major changes in all the spheres of economic life. Production orientation: This was the stage where producers.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. 1 Barter system: The goods are exchanged against goods without any other medium of exchange like money.
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. 9 . rural marketing in India is still about a van campaign. Of course. social welfare becomes the added dimension to the companies.000 for fast-moving consumer goods. at least. Still. This is grossly inadequate to cover the huge potential for different products in rural markets. Management orientation: The marketing function assumes the managerial role to co-ordinate all the interacting business with the objectives of planning. According to estimates by the Rural Marketing Agencies Association of India. a badlymade commercial. Social orientation: The companies are not only cares for consumers but also for social welfare. notable exceptions. "rural" means different things to different people: from 500.000 people for consumer durables. to less than 50. a few painted walls and the occasional participation in village haats and melas. it is heartening to note the increasing awareness of the importance of rural markets .000 crore (Rs 130 billion) allotted to mass media. compared to the over Rs 13. the total budget for rural marketing is only about Rs 500 crore (Rs 5 billion).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. MARKETING STRATEGY OF FMCG PRODUCTS: Barring a few. But then. Thus.or. of companies wanting to move beyond urban boundaries. promotion and distribution.
Ghadi detergent powder and Power soap are proof that regional brands can become brands to reckon with. be it a simple radio spot or a wall painting or a theatre film. appealing to the local ethos and aspirations of the targeted area. Fairever Cream and so on). And don't forget Nirma. which are giving the multinationals a run for their money. most importantly. is imperative . 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. touched a chord in the target audience. 10 . They all started in small. What should companies do to step up their payback from rural marketing efforts? Here are some steps that should help. concentrated markets. And. But only consider the huge successes of some regional brands. the most enduring example of a brand that began as a regional player and is now a giant. their policies were flexible and they could adopt to fast changing marketing situations.The TRPs and NRS/IRS data help you determine the efficacy of TV and press marketing. Companies like Cavin Kare (Chik Shampoo. keeping in mind that rural marketing is a long-term relationship. Meera Herbal Powder. People power Total commitment from top leadership. 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. Their communication. especially in the FMCG sector.the successes of Hindustan Lever [ Get Quote ] and ITC are proof of this statement. Anchor (100 per cent vegetarian toothpaste). But even more important is the need for a dedicated task force.
until the completion of a specific task. In both cases. And send them out in the field only after thorough training.. management graduates who have studied the subject as an elective. the teams that briefed us in the initial stages and participated enthusiastically in the campaign. Many of these are students from small towns. 11 .and discuss the path their careers are likely to take in the organisation. we were involved with two big clients. you get only monkeys . which many of the urban-oriented management graduates who are at the helm of affairs at most organisations do not possess. The teams that succeeded felt no ownership of the campaigns they had not initiated. The best bet is to recruit students from specialised institutes such as the Indian Institute of Rural Management. were shifted out midway. What started as a great rural marketing initiative has been relegated to the dustbin. in keeping with their companies' policy of shifting and promoting people.. Recently. Pay them well remember. 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. Ensure the consistency of the team involved in any project. or at least.Rural marketing efforts need special mindsets. you pay peanuts. the fate of many rural marketing initiatives in the country.
is very different from their urban counterparts. 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. is a must. Most of them have previously appointed vendors who implement the company's ideas blindly. with both short term and long term goals. If you are interested in the second alternative. to suit the local audience or fit it with the overall campaign efforts in the mass media. so you can create a customised plan of action. 12 . a comprehensive brand building strategy in rural India. Know your customers A good place to begin is studying the mindset of your customers. 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. aspirations and fears of rural customers. with regard to products and brands. Our experience shows that the attitudes. This invariably leads to less than satisfactory results in terms of awareness of the brands and longterm impact of the efforts in the targeted markets. There is very little effort to tailor whatever communication is made in such efforts.Goals are good Early on in the campaign. define your objective: is it a tactical effort to achieve increased sales in specific areas during a specific time.
pressure cookers with two handles and a radio with key-winding mechanism are all the result of research. Ensure availability Most anecdotes about rural marketing centre on the distribution aspect .000 crore (Rs 100 billion) to spurious products. we recently conducted a survey among some haats in Tamil Nadu. mostly sold through such local haats and bazaars. We've all heard about the shampoo sachets that are available in even the smallest villages. The consumer demands the product from the local shopkeeper. and to that extent make your effort cost-effective.the humongous task of physically reaching your product to over 600. most of them without motorable roads. who then buys the products from the nearest feeder markets. But it's not really as nightmarish as it is made out to be. spurious products that are sold in these bazaars. at least keeping in mind the present goals of marketing companies in rural India. For instance. with some interesting results. since they can't afford the real thing. ensure that the people who patronise these haats are the kind who will buy your brand. How does that happen? It's a direct result of rising aspirations. More and more companies turn to the local haats to sell their products.Research can give you invaluable ideas for new product development as well as new methods of reaching your target audience. It is estimated that FMCG companies lost more than Rs 10. The haatswere popular with the poorest agricultural labourers who consciously buy the duplicate. 13 . fuelled by television commercials. The refrigerator with standby power for 12 hours. While haats offer opportunities to target consumers from several villages at one place.000 villages.
you're closer to the rural consumer than you would have thought. home care. if your products are in towns with populations of 50.” insists Sudhanshu Vats. So. now is focused on product innovation. category head.Which means if you can ensure distribution to the feeder markets in towns or villages with populations of 10-15.” “We have done key innovations across the product portfolio and it is working for us. Pricing. MARKETING STRATEGY ADOPTED BY HUL “Price cut or hike is not a long-term growth strategy. This comes even as Unilever is scouting for a potential buyer for its laundry business in the US. you've already taken the first step towards reaching your target customer. is now passe.” 14 .000. new consumer and retail trends and aggressive marketing and promotions. Studies also indicate that rural consumers prefer to shop for durables such as televisions. “Our strategy for growth. 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. “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.” he said. in fact.” says Vats.000. automobiles and appliances in the nearest big town or city.
according the market research firm ACNielsen. the laundry industry in India was worth Rs7. According to Vats.” says Unmesh Sharma. the industry is stabilizing.4% over 2005. HUL doesn’t report its laundry revenues separately but puts them under the soaps and detergent category. up to a 7.596 crore to the company’s total sales of Rs12. the laundry business is witnessing a surge in demand from cities and HUL is focusing on Tier I and II cities to tap that demand. According to ACNielsen. “Laundry has been an attractive segment in the past and is likely to keep growing in the near future. according to Vats contributes around 50% of HUL’s laundry segment revenues. a value brand that. an analyst at Macquarie Securities here.6% share. The recent price war between companies led to erosion in their profitability but now. saw its market share dip by 1. this time.7% percentage points to 13. Nirma Ltd. however. the Ahmedabad-based manufacturer. However.103 crore.5 percentage points.5%. 15 . increased its market share by 2 percentage points in the same period.5% in the same period last year. with a total share of about 18%. P&G also gained 0. HUL’s soaps and detergents segment contributed around Rs5. the increase was not at the expense of price war with its multinational rival Procter & Gamble Co.908 crore in 2006 and rose 8.8% in the quarter ended June from 35.HUL’s market share in the laundry segment grew to around 37. In 2006. Wheel.
“Still.” OBJECTIVE OF THE STUDY 16 . people want to use better and branded products.“Consumers today are buying more clothes. “Some of HUL’s recent moves. such as promotional campaigns and advertising.” Still.” says Macquarie’s Sharma.” says Vats. it is too early to say what result their new strategies will yield. “Trends suggest that the usage of detergents has gone up as a result. Also. seem right. analysts remain cautious. with premium quality of clothes.
To analyze the influence of rival company’s strategies on the performance of Hindustan Unilever Limited To analyze the various strategies adopted by the company to gain competitive advantage To identify the marketing strategies and policies of Hindustan Unilever Limited SCOPE AND IMPORTANCE 17 .
This project is applicable on the on the area of FMCG. IMPORTANCE To will help in identifying the product of HUL in FMCG sector. This is widely awaited. It would help to analyze the current position of HUL and then to sector marketing channels for the same. in order to frame out marketing strategies for different production this sector. This study would be helping HUL to frame its different promotion schemes. COMPANY PROFILE 18 .
including several not occupied by Unilever in other markets such as preserves and bakery products. These three companies merged to form Hindustan Lever Limited in November 1956. The Hindustan Unilever Ltd (HLL) is India’s no. The company’s history dates back to 1931 when Unilever set up its first Indian subsidiary. one of the most efficient in the world. which has helped the company to sustain its leadership position in the overall FMCG category in India.1 FMCG is able to share with their market insights based upon unparalleled breath of consumer goods experience. Hindustan Unilever is Unilever's main operating business in India. HUL inhabits virtually every sector of the consumer goods market. a subsidiary of Unilever. It is generally acknowledged 19 . The company focuses on efficient delivery to consumers with an improved supply chain. Hindustan Vanaspati Manufacturing Company. brand building initiatives and innovation. In addition to FMCG products it is the country's biggest exporter of tea. Effective July 19. Hindustan Unilever Ltd (HUL) has grown from strength to strength with new technologies being introduced to make the HLL consumer goods business. is a fast moving consumer goods (FMCG) company based in India. 2007 the company has changed the name to Hindustan Unilever Limited. It is the country's biggest consumer goods company.The Hindustan Unilever Ltd’s(HUL) Inc has taken the opportunity to offer us a broader view of FMCG category. and far and away the leading advertiser. and is also one of the country’s top five exporters. Hindustan Unilever Limited (HUL). followed by Lever Brothers India Limited (1933) and United Traders Limited (1935).
will see their share of the company's growth fall to 2 percent in 2010 from 3. Asia and Africa. step up marketing in Asia's third-biggest economy. Revenue from the two continents rose 11.based Procter & Gamble is stocking Indian stores with Olay skin. although performance slowed dramatically between 2000 and 2004.3 percent in 2007.200 managers 2.9 percent in 2010 from an estimated 5. according to Brusselsbased brokerage Petercam SA.to be one of India's best-run businesses.3 Mln Outlets 20 .care products after nearly halving the local prices of Ariel and Tide detergents in 2004. helping offset 1. 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.2 percent in North and South America. 4.9 percent growth in Europe and 4. which sells soap to more than 500 million Indians.000 suppliers & associates 75 Manufacturing Locations 45 C&FAs.3 percent in 2007. and ITC Ltd.Now Cincinnati.4 percent in the first nine months of last year. prior to restructuring. according to the median of five analysts in a Bloomberg survey. Hindustan Unilever – A 75 Year Commitment 15. Unilever's overall sales growth will slow to 4. may see global revenue growth slow in 2010 as Procter & Gamble Co. which make up about a third of Unilever's worldwide sales.000 employees 1.000 Stockists Total Coverage 6. Unilever.
• In 1931.545 Towns 2. • In 1993. Lipton (1972) and Pond’s (1986). Vanaspati was launched in 1918 and Dalda came to the market in 1937.38. 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).5 Mln outlets 6. Hindustan Vanaspati Manufacturing Company. Direct Coverage 1 Mln outlets Population of INDIA: 1027 Mln 5. formed a 50:50 joint venture. HUL and yet another Tata company. Tata Oil Mills Company (TOMCO) merged with HUL. • Subsequently in 1998. These three companies merged to form HUL in November 1956. Two years later. Unilever set up its first Indian subsidiary.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.000 Villages 5. 21 . • A number of prominent companies came into the HUL fold as result of Unilever’s international acquisitions. These included Brooke Bond (1984). This was followed by brands like Pears and Vim. Lakme Limited.
• HUL has also set up a subsidiary in Nepal. It is one of the earliest MNCs to have entered India 22 . • • In 2002.• HUL formed a 50:50 joint venture with the US-based Kimberly Clark Corporation in 1994. employs 36. which markets Huggies diapers and Kotex sanitary pads. In a historic step. including over 1. HUL picked up 74 per cent of the equity of Modern Foods from the Indian government. formerly known as Hindustan Lever Limited. Kimberly-Clark Lever Ltd. and its factory represents the largest manufacturing investment in the Himalayan kingdom. FMCG major Hindustan Unilever Limited (HUL).350 managers. Nepal Lever Limited (NLL). HUL acquired the government s remaining stake in Modern Foods.000 people.
ORGANIZATIONAL STRUCTURE Managing Direc tor General Mana ger Vice President Marketing Manufacturin Sales g Finance Distribution FIG.2 23 .
HUL's distribution network. branded staples. including over 1. HUL is also one of the country's largest exporters. The mission that inspires HUL's over 15. ice cream and culinary products. It is a mission HUL shares with its parent company.000 employees. Unilever.like Lifebuoy. and personal care with brands that help people feel good. Wheel.300 managers. it has been recognised as a Golden Super Star Trading House by the Government of India. Rin. and now has 24 . Pepsodent. tea. is to "add vitality to life. Pond's. Knorr-Annapurna. They endow the company with a scale of combined volumes of about 4 million tonnes and sales of Rs. Clinic.soaps.000crore. Fair & Lovely. comprising about 4. The operations involve over 2. coffee. hygiene. Close-up. Lux.PRESENT STATUS Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods company. 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.000 suppliers and associates.and about 250 million rural consumer.10. HUL's brands . Sunsilk. personal products. Surf Excel. detergents.3 million retail outlets reaching the entire urban population . Lakme. HUL has traditionally been a company. which incorporates latest technology in all its operations. The rest of the shareholding is distributed among 380. look good and get more out of life.55% of the equity." HUL meets everyday needs for nutrition. They are manufactured over 40 factories across India.000 redistribution stockiest.000 individual shareholders and financial institutions. The Hindustan Unilever Research Centre (HLRC) was set up in 1958. Brooke Bond. covering 6. which holds 51. Kissan.
“We successfully migrated from Rin Supreme to Surf Excel and Wheel Smart Srimati—which was rolled out in 2006—is also on the right track. home care. “Our strategy for growth. HLRC and the Global Technology Centres in India have over 200 highly qualified scientists and technologists.8% in the quarter ended June from 35. HUL says it is quite upbeat about the segment and says the laundry segment is one of its “key growth areas. is now passe.” insists Sudhanshu Vats. “Price cut or hike is not a long-term growth strategy. the increase was not at the expense of price war with its multinational rival Procter & Gamble Co.” says Vats. is now working on a new growth strategy for its laundry business. Nirma Ltd. now is focused on product innovation. P&G also gained 0.5% in the same period last year. new consumer and retail trends and aggressive marketing and promotions. However.5 percentage points. Pricing.” he said. up to a 7. HUL’S NEW GROWTH STRATEGY After having fought a bitter price battle for market share with its rivals. many with post-doctoral experience acquired in the US and Europe. according the market research firm ACNielsen. This comes even as Unilever is scouting for a potential buyer for its laundry business in the US. Hindustan Unilever Ltd (HUL). this time.6% share. in fact. the 25 . Indian subsidiary of the Anglo-Dutch consumer goods company Unilever Plc.facilities in Mumbai and Bangalore.” “We have done key innovations across the product portfolio and it is working for us.” HUL’s market share in the laundry segment grew to around 37. category head.
increased its market share by 2 percentage points in the same period. “Laundry has been an attractive segment in the past and is likely to keep growing in the near future. 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. such as promotional campaigns and advertising. an analyst at Macquarie Securities here. HUL’s soaps and detergents segment contributed around Rs5. “Still. “Some of HUL’s recent moves. it is too early to say what result their new strategies will yield.” says Macquarie’s Sharma. “Consumers today are buying more clothes. “Trends suggest that the usage of detergents has gone up as a result. HUL doesn’t report its laundry revenues separately but puts them under the soaps and detergent category. a value brand that.4% over 2005.Ahmedabad-based manufacturer.103 crore. people want to use better and branded products.5%. seem right.” says Unmesh Sharma. however. the industry is stabilizing.7% percentage points to 13. analysts remain cautious.908 crore in 2006 and rose 8. with premium quality of clothes. saw its market share dip by 1.” 26 . according to Vats contributes around 50% of HUL’s laundry segment revenues. with a total share of about 18%. Wheel. According to ACNielsen. Also. The recent price war between companies led to erosion in their profitability but now.” says Vats.” Still. In 2006.596 crore to the company’s total sales of Rs12. According to Vats. the laundry industry in India was worth Rs7.
Breeze. Hindustan Unilever Ltd(HUL) offer such product. delivering to her door step additional benefits which she would never have imagined possible. Hamam. The wide variety products offered by the company include: The company’s popular product’s include: • Bathing soaps: Lux.FIVE P’S OF MARKETING Product Satisfaction suffices. Rin and Wheel • Skin care: Fair & Lovely. Lifebuoy. Pond’s and Vaseline • Hair care: Sunsilk and Clinic • Oral care: Pepsodent and Close up • Deodorants: 27 . But delight dazzles the average company will compete for customer by conforming to her expectation consistently. Pears and Rexona • Laundry items: Surf Excel. But the winner will surpass them by constantly exceeding her expectation. Liril. Dove.
Pricing Make no mistake. Annapurna and Knorr • Ice cream: Kwality Wall’s . The strategy used by Hindustan Unilever Ltd(HUL) is for matching the value that customer pays to buy the product with the expectation they have about what the production is worth to them. Hindustan Unilever Ltd(HUL) has launched various products which cater to all customer segments. Second P of marketing is not another name for blindly lowering prices and relying on this strategy alone to increase sales dramatically. Therefore 28 . So every customer segment has different price expectation from the product.Axe and Rexona • Colour cosmetics: Lakme • Ayurvedic: Ayush • Tea: Brooke Bond and Lipton • Coffee: Bru • Foods: Kissan.
3 million retail outlets reaching the entire urban population. The fundamental axiom of Indian consumer market is this: You can set up a state-of –the-art manufacturing facility.maximizing the returns involves identifying right price level for each segment. and the marketer who can get to the to the consumer ahead of competition will give a hard – to – overtake lead. but once built. HUL's distribution network.000 redistribution stockists. distribution equity is much together to erode. you would be know of selling your products.television has already primed and population for consumption. swamp prime television with best Ads. In a product and price parity situation. comprising about 4. but the end of it all. The cardinal task before the Indian market is managing is to shoe-horn its product on retail shelves. Physical Distribution – “Place” BRAND ISN’T THE ONLY ANY MORE . It takes much more time and effort to build. and about 250 million rural consumers. the brand that sells more is the one that reaches the highest number of customers. hire the hottest strategies on the block. India – The operations involve over 2.000 suppliers and associates. and then progressively moving through them. Buyers are paying for distribution equity not brand equity and market shares. Marketers and finance manager need a new term to evaluate their business: Distribution Equity. 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. But getting their means managing wildly 29 . covering 6.
they believe that selling FMCG is it like selling soft drinks. Hindustan Unilever Ltd(HUL) distribution network has expanded. at 18% of total costs. At Hindustan Unilever Ltd(HUL). Own distribution network consist of clearing and forwarding (C&F) agents & distribution stockiest. life style. Once the stock product reaches retailers. Hindustan Unilever Ltd(HUL) marketing costs. Hindustan Unilever Ltd(HUL) is also attempting to improve the distribution quality. Promotion If an advertisement is to communicate effectively. a distribution expansion would itself being incremental volume.different terrains-climate. the prospective customers can have access to the product. 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. 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. Beside use of improved logistics. The company is looking to reduce this parity level. To address the issue of product stability. and be prepared too take step toward the sender. transport and communication network. the receiver must at least half want it to. Hindustan Unilever Ltd(HUL) distributes the product in the manner stated above. Effective advertising is rarely hectoring or loudly 30 . is much higher than Procter & Gamble Co. reaches more than a million retailers. 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. it has installed visi colors at several outlets. The other reason is arch rival Procter & Gamble Co.
To penetrate into the inner recesses of her memory. Thereafter it was the job of the advertising to communicate customer the wonderful feeling that he could experience by re-discoursing the careful. It often both attracts and generates arm feelings. communication must first ensure exposure. 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. More often than not. grab her attention evoke her comprehension. “cream bathing bar for dove soap” and daag ache hai for surf excel” have been sure shot winner with the audience. a successful campaign has a stronger element of the unexpected a quality that good advertising shares with much worthwhile literature. ad agency contract has created communication for cinemas and even ATM machines for the brand. It has also launched Pureit. In cinemas. Naturally. The strategic response address the emotional appeal of the band to the child within the adult. 31 . All ICICI’ s ATM a message flashes on the screen as soon as customer insert his ATM card. As well as outdoor and radio ads. unself conscious. Something familiar is planned for phone-book as well. that produced just the value vacuum that Hindustan Unilever Ltd(HUL) was looking to fill.explicit…. pleasure – seeking child within himself – a graft these feeling onto the Ad campaign like “hasso to khul k hasso for close up”. 30 catteries in Mumbai have been selected. • Finding showed that the adults felt too conscious to be seen consuming a product actually meant for children. grab her acceptance and then extract retention competing with thousands of other units of communication trying to do the same. a home water purifier which supplies drinking water without boiling/need of electricity .
unilever. specially targeted during festivals and events such as Valentines day. and the discounting era grew strong.e. researching and improving the newer products that haven’t taken off.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. Ad since any discussion today would be incomplete without mention ‘e’ word. consumers began to demand “more for same”. etc…. www. supported with high ad – spends that Hindustan Unilever(Ltd) hopes will see it emerges stronger after the current slowdown. Today’s consumer demanding “more for less”. today customer uses complicated decision making process to assess the 32 . and luxury goods flourished. that the company has launched. and the winner will be that super value marketers…. As a variety of competitive claims assails her senses.com). it had also entered into various marketing relationship with other portals. It’s a combination of spiffing up its key brand. 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. the management plans to tap this new channel of marketing. 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. In the 1980s. as well as expand the market. Positioning In the 1970s consumers were ready to pay “more for more”. Beside the company website (i.
33 . Positioning of individual product: 1) Lifebuoy is ‘one of Unilever’s oldest brands’ with more than a hundred-year history. Since Hindustan Unilever(Ltd) is more clearly associated with a particular set of attributes in terms of benefits and prices.g. as www.com informs. a hot-selling “fairness” cream. gender. each with different needs and wants. Markets segmentation can be defined in a number of ways such as: Demographic variables (e. HINDUSTAN UNILEVER’S MARKET SEGMENTATION Market place for any product is comprised of many different segments of consumers.e. It targets different segments within the market. material states income etc…) The lifestyle of consumers (i.unilever. Hindustan Unilever(Ltd) takes into account all these factors when producing a range of products.alternative before making a purchase. which promises a lighter skin tone for many of India’s complexion-conscious consumers. Consumers are groups. “Lifebuoy has become more than just a red bar of soap – today the brand provides hygiene and health solutions for families 2) Fair & Lovely. 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. the quicker becomes her search process.
Impulse segment – these products are often purchase on impulse. used these and then. Take home segment – this describes product that are normally purchased in supermarkets. taken home consumed at a later stage. 34 . They include product such as close up.
home care.4% over 2005. Pricing.” “We have done key innovations across the product portfolio and it is working for us. 35 .” he said. HUL’s soaps and detergents segment contributed around Rs5.8% in the quarter ended June from 35. This comes even as Unilever is scouting for a potential buyer for its laundry business in the US.” HUL’s market share in the laundry segment grew to around 37. Indian subsidiary of the Anglo-Dutch consumer goods company Unilever Plc. is now passe. “Our strategy for growth.The Real Taste of Rejuvenation After having fought a bitter price battle for market share with its rivals.596 crore to the company’s total sales of Rs12.” insists Sudhanshu Vats. HUL says it is quite upbeat about the segment and says the laundry segment is one of its “key growth areas. now is focused on product innovation.908 crore in 2006 and rose 8. “We successfully migrated from Rin Supreme to Surf Excel and Wheel Smart Srimati—which was rolled out in 2006—is also on the right track. new consumer and retail trends and aggressive marketing and promotions. is now working on a new growth strategy for its laundry business. in fact. the laundry industry in India was worth Rs7. Hindustan Unilever Ltd (HUL). “Price cut or hike is not a long-term growth strategy. category head.103 crore. According to ACNielsen. In 2006.” says Vats. HUL doesn’t report its laundry revenues separately but puts them under the soaps and detergent category.5% in the same period last year.
36 . COMPETITIVE STRATEGY As Competition Heats Up. “I can’t imagine any head from Lever House ever visiting other company offices like this. the managing director of Hindustan Unilever. While Cooking Up Its Foods Biz The middle-aged Briton strolling the aisles and checking out the products doesn’t attract much notice from other shoppers in Mumbai’s Hypercity. The recent price war between companies led to erosion in their profitability but now. But India’s recent retail boom has created large stores and malls. India’s Top Consumer-Products Company Woos Affluent Shoppers With Global Brands Like Dove. chief executive of innovation and incubation at Pantaloon Retail. Hence Baillie’s Hypercity visits. wants to see how his products are stocked. what consumers are buying. Baillie. It’s primary market research at its most elemental. India’s premier consumer-products company. so the company wants to make sure it’s in with the new marketing crowd. India’s largest retailer and a former manager at Hindustan Unilever. This is quite a change for Hindustan Unilever. and the calls he makes on the headquarters of the big retail chains. the India hypermarket chain. whose executives used to have emissaries make obeisance at Lever house in downtown Mumbai. and how shoppers are reacting to competitive brands. That’s how Douglas Baillie likes it. 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. and it’s best done incognito.“Laundry has been an attractive segment in the past and is likely to keep growing in the near future.
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. is down from 55. All this has taken a toll on Hindustan Unilever’s operating margins. soaps.2% to 54%. ACNielsen data shows.2% to 24. Hindustan Lever tea brands like Brooke Bond and Lipton have dipped from a combined market share of 29. which is practically synonymous with India.3%.5 billion. and L’Oréal. down from 21% a few years ago to just 11. In the last year. These 37 . That’s why the company is wooing consumers in big retail stores. after ringing up India-based sales of $3. Yet early this year. Hindustan Unilever’s lead in hand soaps. The company.84% now. Finnish handset maker Nokia (NOK) dislodged it as the multinational with the highest revenues in India. sauces and tea. Nivea. makes everything from detergents. Favorite detergent brands like Surf Excel and Rin are barely hanging onto their 37% share. and dominates most of those categories. including the popular Lux. and shampoos to soups. Now Hindustan Unilever is under siege from aggressive Indian and foreign competitors such as Procter & Gamble (PG).
will grow to 28% by 2017. currently just 3. Sundaram. 2006.” says D. Yet this is still a dramatic change for Hindustan Unilever which. and the cream of India’s management 38 . The takeover of Hindustan Lever by Unilever became evident in March. From Local Player To Multinational Overnight the change sent shock waves through India. Hindustan Unilever’s managers hope their revenues from big retail will increase from 5% today to over 25% in 2012. was the most successful and profitable company in the Unilever group. “It is a big game for us.Parent Unilever will develop the brands and streamline product offerings across the world. Hindustan Unilever’s strategy is to market its premium products through the hundreds of megastores springing up across India. not a multinational. a Zimbabwe-born British national. For many decades most Indians thought Hindustan Lever was a local company. while its subsidiaries will sell the products.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. not long ago. That dovetails with parent company Unilever’s new global realignment of products. became the first foreigner in four decades to head the Indiancompany.newly affluent shoppers present the best hope for the company’s future in India. the crown jewel whose managers had free rein to develop and build brands suitable for the local market. organized retail. This means that all of Unilever’s brands will be available across global markets. when Baillie. Hindustan Unilever’s finance director. According to retail consultant KSA Technopak.
it has phased out more food products—wheat flour. Then in February. we aren’t the only ones seeing it.graduates made their careers there. The effect: The company’s sales and operating profits stagnated at $2. to $274 million in 2004. 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. While the strategy aimed to conserve management energy. 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. Nitin Paranjpe.” He also wants to expand the foods business in conjunction with the parent. while the company’s track record in foods has been dismal. a 2004 price war with P&G in the detergent business forced Hindustan Unilever to slash prices on its premium brand Surf Excel. 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. frozen bread—than it has launched. was rechristened Hindustan Unilever to reflect its parentage. executive director in charge of the home and personal care business. where foods bring in half the revenues globally. But the rich margins of the past have not returned. Indeed. thanks to price increases. the company.5 billion for five years while operating profit plunged 37%. And there was some stiff competition from rival Procter & Gamble. 2007. then known as Hindustan Lever. confectionery. Hindustan Unilever executives are realistic about the new era in which it now operates. the company’s home and personal care businesses account for 80% of revenues and 85% of profits at Hindustan Unilever. admits that it’s now “tougher to hold on to market share. Last year operating profits reached $357 million. Baillie first had to sort out some past problems. For instance. In India.” 39 . If India is a great story.
5%. is also making inroads. Tata Tea’s market share increased from 16. But today even L’Oreal has sachets of its Fructis shampoo. 30.” FUTURE COMPETITIVE STRATEGY 2010 Expectations P&G.'' Hindustan Unilever Ltd. compared with the year earlier. will continue to gain share in the next five years in India. an analyst at Sanford C. It started selling more brands including Fiama Di Wills shampoo and Superia soap last year as the government raised tobacco taxes. to 19. ITC. 52 percent owned by the London. Tata Tea is exultant. Managing Director Percy Siganporia says the gain is “a dream comes true for us. toothpaste and tea in the quarter ended Sept. 80% of Indian shampoo sales come from sachets. 2007. the largest Indian cigarette maker and partly owned by British American Tobacco Plc. 2006. the Tata Group’s beverage company Tata Tea overtook Hindustan Unilever as India’s largest selling tea brand. the world's largest consumer-goods maker. according to the company. Its share of the shampoo market declined by more than a percentage point to 47.1% to 19.9% in July. Bernstein in New York.Rivals like P&G and Nivea have also copied Hindustan Unilever’s best innovation: the small shampoo sachets it pioneered in the 1980s. according to Ali Dibadj.. which sold for less than 2 cents each and which expanded the market for Hindustan Unilever products among India’s rural masses. According to ACNielsen.7 percent.7% in March. bath soap. who rates the stock ``outperform. lost ground in shampoo. Currently. while Hindustan Unilever slipped from 26. In June.and Rotterdambased parent. the company said. `Profitable' Cigarettes 40 .
The company has a market value of about $11. analyst Unmesh Sharma.'' said Macquarie Securities Ltd.'' 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. 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 .57) in the next year from 190.The tobacco maker ``has a very profitable cigarettes business which will help it to invest and expand its personal. profitability will continue to be under pressure. who has an ``underperform'' rating on Hindustan Unilever.'' said Anand Shah. He expects the stock to drop to 180 rupees ($4. ``Given the competition.care portfolio. bathing soaps and shampoo.9 rupees.8 billion. India is Unilever's biggest market in Asia. has surged 70 percent in the past year. The price of palm oil. an analyst at Angel Broking in Mumbai. ``It has the ability to take losses in this segment as long as it grows its sales. generating about 6 percent of annual sales. It has sold soap in the country since 1888 and controls about half of the sales of products such as skin creams. used to make soaps and foods. This strategy will still satisfy investors.
Strong commitment to sustainable development.Corporate Social Responsibility-Aiding In The Development Of The Country 42 . Competitive Strengths Fig:3. Grow a profitable foods and top end business. Grow ahead of the market by leading market development activities. Grow the bottom line ahead of the top line. Leverage positive impact of growing Indian economy on consumer spending.
Home and personal care products consists of personal and fabric wash. Personal Products. Shakti vani: one-to-many communication for category growth ishakti: customized interaction with remote consumers. The products include home and personal care products.COMPARATIVE BUSINESS ANALYSIS Hindustan Unilever Limited Formerly known as Hindustan Lever Limited. Beverages. industrial and agricultural products. currently~44000 women cover 1. The Group operates through seven segments: Soaps and Detergents. The Group's principal activities are to manufacture and market consumer products.Shakti Three shakti initiatives • • • Shakti entrepreneur. HINDUSTAN UNILEVER LIMITED . Ice Creams and Other. Exports. Impact of community • • business and social impact can go together. 43 . Foods. foods and beverages. partnerships with diverse stakeholders.25000 villages.
Hindustan Unilever markets consumer goods throughout India. leather. The company focuses on efficient delivery to consumers with an improved supply chain. Industrial and agricultural products includes specialty chemicals. fertilisers. coffee. rice. RURAL. Structural changes in the economy which are affecting this are: Disintermediation in the agricultural market price discovery mechanism has benefited farmers. fruit and vegetable products. Foods and beverages includes tea. This analysis compares Hindustan Unilever Limited with three other companies in closely related industry sectors. which has helped the company to sustain its leadership position in the overall FMCG category in India. local and regional players. brand building initiatives and innovation. bulk chemicals.household. Government grants and subsidies. animal feeds. processed-tri-glycerides and agri commodities. seeds. salt. The company faces competition from international. ice creams. tomato products. perfumery. oral care.however rural income are growing faster with 70% population here.income growth is crucial. bakery fats. footwear and carpets. plant growth nutrients. marine products and mushrooms. thermometers and plantations. colour cosmetics and baby care. cooking fats and oils.THE BIG INDIAN ROMANCE Rural population larger than europe(800 million) Low growth in agriculture.employment grants-Rs 40000cr 44 . yeast. atta and rawa. deodorants. skin and hair care. Its brands are spread across 20 consumer product categories.
they add. retargeted. the authors of Marketing that Works. Lodish. according to the authors.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. Howard L. and screened some options to roll out one option that everyone was happy with.” reads an observation in a chapter titled ‘entrepreneurial advertising that works’. 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. Though the company was ‘extremely innovative’ the way it handled the rural communications plan was very traditional. A better strategy.” write Leonard M. The company basically worked with “one agency.” 45 . “HUL missed an opportunity for increased marketing productivity when they repositioned. and relaunched Lifebuoy. Ogilvy and Mather (O&M). Morgan and Shellye Archambeau.
targeted “10. mass-market soap.Advertising strategy came for mention when the company reported the second quarter results. said: “We have been phasing our advertising spends depending on the launches and relaunches of brands. HUL.” The authors are of the view that government workers who have been interacting with villagers might have come up with some excellent ideas. Sundaram.” The advertising spends have not been linear for the company. in a paragraph on innovation. The company’s advertising and promotional spends during the quarter fell to Rs 336 crore. through its innovative communication campaigns. 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 .” So.” reads a quote in the book from C.000 villages in nine states where HUL stood to gain the most market share… They spent a lot of effort in designing low cost ways of communicating with their rural target.K. a few days ago. Mr D. Director (Finance & IT). The O&M strategy. he added. Prahalad notes. “or the villagers themselves might also be able to generate very effective communications vehicles. Prahalad’s The Fortune at the Bottom of the Pyramid . has been able to link the use of soap to a promise of health as a means of creating behavioural change. HUL. as explained by Mr Lodish et al. “Differentiating soap products on the platform of health takes advantage of an opening in the competitive landscape for soap. “Lifebuoy has become more than just a red bar of soap – today the brand provides hygiene and health solutions for families. and thus has increased sales of its low-cost. Lifebuoy is ‘one of Unilever’s oldest brands’ with more than a hundred-year history. from the earlier Rs 345 crore.” says the site.
many times it is difficult to change the procedures without creating significant political problems. It has leading edge capabilities in servicing Modern Trade focused on shelf filling.” wonder the authors. which is one of the many discussed in the book. 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. “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. 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. 47 .programs. The operations will begin with the existing Modern Trade in-store execution team of HUL moving into HUFS. 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”. logistics for merchandising materials and in store execution. Smollan Holdings is one of the leading ‘in-store execution and field services’ companies internationally. 2008.” 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. “As a big company. The strategic tie-up aims to build long term capabilities and bring ‘in-store’ execution focus in servicing the Company’s Modern Trade customers.” The HUL example.
NEW INITIATIVE Bringing High-End Dove To India Baillie is fighting back.Other Acquisition Hindustan Unilever has acquired several Indian FMCG companies so far. That has spawned 48 .000 consultants. It has about 350. This includes: • • • • Tata Oil Mills Company Brooke Bond Lipton India Modern Foods It acquired Kissan brand from UB group. Dollops ice cream brand from Cadbury India. These premium brands retail not in neighborhood small stores but in supermarkets and hypermarkets. a home water purifier which supplies drinking water without boiling/need of electricity. where Indian customers love to touch and feel products. has made the brand a winner. Hindustan Unilever Network is the direct selling channel of the company. which promises a lighter skin. tone for many of India’s complexion-conscious consumers. which suggests that regular use of the cream helps women gain confidence and makes them eligible for marriage. It has also launched Pureit. Over the past six months. all independent entrepreneurs. The advertising campaign. Hindustan Unilever launched a high-end range of Pond’s skin care and Dove hair care products from Unilever’s international portfolio. a hot-selling “fairness” cream. trained and guided by HLN's expert managers and trainers. Hindustan Unilever is also milking one of its top brands—Fair & Lovely. Lakme cosmetics brands from Tata.
and creating access to relevant information 49 .a host of competitive fairness creams. most recent being the village built by HUL in earthquake affected Gujarat. says that Hindustan Unilever “could have addressed a lot more categories.” He points to the demand for safe drinking water in India. 2007. Analysts believe the company’s current strategy of concentrating on premium products and marketing them in the large retail stores is a winning one. soaps. HUL is creating micro-enterprise opportunities for rural women. the company’s sales grew 13%.6%. Shakti also includes health and hygiene education through the Shakti Vani Programme. These efforts have delivered some promising results. In the quarter ended June. focusing on the Knorr brand of soups and curry mixes —ideal for the Indian market. with net profit up 29. but they are more focused and regaining their aggressiveness. at one-third the price of established Indian brands such as Aqua guard. and sunblock lotions. Shakti. and water management. women empowerment. care for the destitute and HIV-positive. thereby improving their livelihood and the standard of living in rural communities. which Hindustan Unilever exploited with the launch of water purifier Pureit in 2005. HUL has also responded in case of national calamities / adversities and contributes through various welfare measures. consumer analyst at Mumbai brokerage First Global Securities. Reason enough to keep patrolling those store aisles. and relief & rehabilitation after the Tsunami caused devastation in South India. But Hindustan Unilever’s brand is still tops. and Baillie is pleased with the modest turnaround. In 2001. Sumeet Budhraja. Through Shakti. and rural development. Baillie is also getting aggressive on foods. HUL is focusing on health & hygiene education. SERVICE TO SOCIETY HUL believes that an organisation's worth is also in the service it renders to the community. the company embarked on an ambitious programme. It is also involved in education and rehabilitation of special or underprivileged children.
000 Shakti entrepreneurs covering 500. HUL is also running a rural health programme – Lifebuoy Swasthya Chetana. The programme endeavours to induce adoption of hygienic practices among rural Indians and aims to bring down the incidence of diarrhoea. it is because of being singleminded in identifying itself with Indian aspirations and needs in every walk of life. It has already touched 70 million people in approximately 15000 villages of 8 states. touching the lives million people.000 women entrepreneurs in its fold. By the end of 2010. reaching out to 100.through the iShakti community portal. The vision is to make a billion Indians feel safe and secure.000 villages. The program now covers 15 states in India and has over 31. Shakti aims to have 100. PRODUCT PROFILE HUL’s business activities are divided into four broad areas: Home and personal care 50 . of over 600 If Hindustan Unilever straddles the Indian corporate world.000 villages and directly reaching to 150 million rural consumers.
home care. Hamam. Dove. branded staples. Lifebuoy. beverages. Breeze. oral care. culinary products. skin care. ice creams.personal wash. Sangam. Pond’s and Vaseline • Hair care: Sunsilk and Clinic • Oral care: Pepsodent and Close up • Deodorants: Axe and Rexona • Colour cosmetics: Lakme • Ayurvedic: 51 . fabric wash. Pureit water purifiers. coffee. colour cosmetic Foods tea. Pears and Rexona • Laundry items: Surf Excel. Rin and Wheel • Skin care: Fair & Lovely. Ayush ayurvedic products and services. hair care. rice Bathing soaps: Lux. marine products. Liril. Modern Foods ranges New Ventures Hindustan Lever Network. deodorants and talcs. Exports • HPC.
52 . Annapurna and Knorr • Ice cream: Kwality Wall’s .Ayush • Tea: Brooke Bond and Lipton • Coffee: Bru • Foods: Kissan.
Clinic. Lux. Pond s. Sunsilk. Knorr-Annapurna and Kwality Walls. Pepsodent. They include: Lifebuoy. Surf Excel. Brooke Bond. Kissan. Fair & Lovely.BRANDS HUL s brands are household names across the country. 53 . Wheel. Lakme. Closeup. Rin.
The best-formulated strategies may fail to produce superior performance for the firm if they are not successfully implemented. How can we better understand these issues and their importance for successful strategy implementation? In this article. A myriad of factors can potentially affect the process by which strategic plans are turned into organizational action. strategy implementation is often seen as something of a craft. and only 17 percent felt that they had a consistent strategy implementation process. There are many (soft. significant difficulties usually arise during the subsequent implementation process. we try to respond to this 54 . ranging from the people who communicate or implement the strategy to the systems or mechanisms in place for co-ordination and control. hard and mixed) factors that influence the success of strategy implementation. According to the White Paper of Strategy Implementation of Chinese Corporations in 2006. 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. and its research history has previously been described as fragmented and eclectic (Noble. Unlike strategy formulation. 2005).TOPIC DETAIL Although formulating a consistent strategy is a difficult task for any management team. 2006). making that strategy work – implementing it throughout the organization – is even more difficult (Hrebiniak. The survey reported in that white paper indicates that 83 percent of the surveyed companies failed to implement their strategy smoothly. It is thus not surprising that. 1999b). rather than a science. as Noble (1999b) notes. according to a survey of 276 senior operating executives in 2004 (Allio. 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. strategy implementation has become “the most significant management challenge which all kinds of corporations face at the moment”.
We have conducted an analysis in the most widely used literature databases to identify key factors influencing the process of strategy implementation. contains the actual review of literature. Then. In the fifth section of the article. the research methods used as well as the analytical techniques employed. We present a conceptual framework that organizes the current research findings. In that section we present a discussion of nine major factors that affect strategy implementation. we analyze definitions of strategy implementation and compare them with other synonymous and related terms (in section 2). Section four also contains a review of existing models and frameworks of strategy implementation. As the core of our literature review. their main results. focusing on the main results of prior studies. The structure of this paper is as follows: First. The next part of the article. to surface current areas of agreement and disagreement. theoretical bases. section 4. Examined organizational levels and organizational types are two elements of the research context. We also discuss directions for future research in the domain of strategy implementation and how they may be pursued. we will review the 60 identified studies and analyze their research context. In the sixth and final section. we discuss the limitations of our own approach and summarize open research questions regarding strategy implementation that have surfaced at various points in our literature analysis. we discuss the implications of our findings as well as their limitations. in terms of the applied research methods and the examined strategy contexts. the results section compiles nine factors that 55 . In this section. Our study also examines the ways in which strategy implementation has been researched so far. as well as missing evidence and resulting future research needs. It will consequently also reveal under-exploited methods or contexts.question by analyzing existing research on the factors that influence strategy implementation . we describe the methodology that we have used to conduct our literature review and define its scope (section 3).
e.e. namely Rapert & Lynch & Suter (1996). however.e. whether a study focuses on functional strategies (i. while many examine SBU level strategies (Gupta & Govindarajan. operational level and mixed levels (such as corporate and SBU level. The same holds true for functional strategies: We have found eight studies that focus on the implementation of such strategies. 2007). SBU-level strategies or corporate strategies. 2005. 1992b. whether it is privately held or state-owned and whether its operating scope is regional or rather multinational. Surprisingly few researchers focus on the implementation of corporate level strategies.influence strategy implementation success. five organizational levels can be distinguished. 1996. Schaap. i. 4. 2005. 1989. Nilsson & Rapp. Finally. Organizational types refer to the kind of organization that is studied. 2006. We then briefly discuss the theoretical bases of the reviewed studies...). strategic business unit (SBU) level. Roth & Schweiger & Morrison. Organizational Levels In the context of strategy implementation research. functional level. Olson & Slater & Hult. They are: corporate level. Govindarajan. Chimhanzi (2004). 1984. Brenes & Mena & Molina. focus on marketing strategy (such as Sashittal 56 . marketing. Skivington & Daft. R&D). Floyd & Wooldridge. Qi (2005). the research methods and analytical techniques will be reviewed to see which methods are still underutilized in the context of strategy implementation. 1990. Chimhanzi & Morgan. Viseras & Baines & Sweeney (2005). etc. such as Wernham (1985) and Schmidt & Brauer (2006). 1986. White. Sashittal & Wilemon (1996). 1991. Piercy (1998).. Organizational levels designate the locus of strategizing. corporate-SBU-functional levels. Noble (1999a).1 Research Contexts We classify research contexts into two dimensions: the examined organizational levels and the considered organizational types. Waldersee & Sheather. Govindarajan & Fisher. Most of these studies. 1988. 1999. HR. Noble & Mokwa (1999). SBU and functional level. inter-functional levels. as well as several frameworks or models that aggregate or relate relevant factors to each other. 1991. i. Govindarajan.
the last type. Noble & Mokwa. 1998. Process strategies. for example. normally cut across functions and are aimed at integrating organizational processes across the organization in order to make them more effective and more efficient. and on two aspects of strategic implementation (stakeholder input and employee empowerment). Few studies focus on the actual operational level of strategy implementation. Slater and Olson (2001) analyze marketing‟s contribution to the implementation of business strategy.& Wilemon. Piercy. Consequently. SBU and functional. Higgins (2005) even focuses on four types of strategies: corporate. This study also emphasizes the relationship between product strategy and several strategic implementation variables. Homburg. such as Bantel (1997). There are few studies dedicated to the implementation of other functional strategies (this is clearly an area of future research). There are some studies which cannot be classified into the above categories. Beer & Eisenstat (2000) and Hrebiniak (2006) have carried out research on corporate and SBU-level strategy. Baines and Sweeney‟s study (2005) in the context of manufacturing strategies. Krohmer & Workman (2004) point out that market orientation plays a key role for the successful implementation of a PPD (premium product differentiation) strategy. business. Bantel (1997) analyzes the effects of two key aspects of product strategy (product leadership and product/market focus) on performance. Chimhanzi. The mixed studies category also includes articles that focus on the role of project management for strategy implementation. Walker and Ruekert (1987) analyze three levels of strategy – corporate. 1996. focuses on the implementation of a yield 57 . 2004). Homburg & Krohmer & Workman (2004). functional and process. 1999. The only other study of functional strategy implementation that we have been able to identify is Viseras. This study focuses on the key success factors in the project management for the implementation of strategic manufacturing initiatives. Okumus (2001). we classify them into a group called mixed level studies: Gupta (1987).
Within the functional level. Another study has examined the mutual influence of functional departments ‟ relationships on strategies.management project and a key client management project in two hotels. First. Examples of such ambiguous studies are Bourgeois Ш and Brodwin (1984). 2001). 1987. Two calls to action result from these findings. 1989). R&D. future strategy implementation research should pay attention to explicitly indicate the level of analysis. which seems a highly relevant area to improve our understanding of strategy 58 . Grundy (1998) examines the synergies among project management and strategy implementation and reviews strategy tools that may help in project management. Finally. Lehner (2004). Second. One such study focuses on marketing‟s contribution to the implementation of business strategy (Slater & Olson. 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. We note that – among the five strategy levels – the SBU-level (14 articles). Noble (1999b). the functional. Nutt (1986.). Higgins (2005). HR. compared with other functional areas (such as manufacturing. Harrington (2006). we can observe that there are very few studies that have examined the inter-relationships of functional and business strategies. In terms of promising future research on strategy implementation. We can draw multiple conclusions based on our analysis of the treatment of organizational levels in prior studies of strategy implementation. corporate (2 articles) and operational (2 articles). Peng and Litteljohn (2001) investigate three hotel chains implementing a strategic initiative on yield management. and Schaap (2006). Many studies (25 articles) do not even indicate at which level their discussion of strategy implementation is located. accounting etc. another finding revealed that marketing is the prevailing domain.level (8 articles) and mixed levels (9 articles) have received more attention than the other two levels. there are many studies that are not sufficiently explicit regarding their scope concerning strategic levels.
Velliquette and Garretson ‟s (2002) study on strategy implementation takes a nationwide sample of 1000 CEOs of general service hospitals. As far as ownership forms are concerned.K. Rapert. Wernham (1985). and a leading firm in the imaging technology industry. British Telecom (BT). However. there have been no studies comparing similarities and differences of strategy implementation among private corporations and state-owned corporations. Alexander (1985) surveys 93 private sector firms through a questionnaire. Qi (2005) issues questionnaires to the head offices of 800 private companies in the UK. FedEx. We thus do not know which specific differences exist regarding strategy implementation in these various forms organizations. as stated earlier. 1993) study global strategy. Roth & Schweiger & Morrison (1991) and Kim & Mauborgne (1991. not only local firms but also multinational firms. Noble ‟s (1999a) study spans several types of organizations – a national airline. explores the reality of strategy implementation in a U. This clearly is another interesting avenue for future research. Some of the researched companies focus on their domestic markets. Organizational types Organizational types. the subjects of strategy implementation studies are not only state-owned corporations. Okumus (2001) investigates two international hotel groups.implementation: Chimhanzi (2004) has examined the impact of marketing and HR interactions on marketing strategy implementation. nationalized company. Forman and Argenti (2005) select five multinational companies as samples. or among local firms and multinational firms. namely Accenture. while others are multinational corporations. which are members of the American Hospital Association (AHA). In conclusion. refer to the characteristics of organizations: if they are private or state-owned. Johnson & Johnson. strategy implementation studies discuss both. a provider of emergency fire and medical services. a leading packaged goods company. 59 . but mostly private corporations. local or multinational. for example. Dell. Sears. state-owned and privately held companies. a major financial services firm.
bakery products) and tobacco. consumer electronics and packaged food products and drinks. beverages (health beverages. paper products and plastic goods. chocolates. although these are often categorized separately.INDUSTRY PROFILE Fast Moving Consumer Goods(FMCG) FMCG are products that have a quick shelf turnover. Hence profit in FMCG goods always translates to number of goods sold. cosmetics. Pepsi and Believe. Kleenex. detergents. soaps. soaps. The term Consumer Packaged Goods (CPG) is used interchangeably with Fast Moving Consumer Goods (FMCG). Examples of FMCG brands are Coca-Cola. other non-durables such as glassware. cosmetics. batteries. household care (fabric wash and household cleaners). Fast Moving Consumer Goods is a classification that refers to a wide range of frequently purchased consumer products including: toiletries. Three of the largest and best known examples of Fast Moving Consumer Goods companies are Nestlé. tissue paper. Examples of FMCGs are soft drinks. The margin of profit on every individual FMCG product is less. ‘Fast Moving’ is in opposition to consumer durables such as kitchen appliances that are generally replaced less than once a year. hair care. at relatively low cost and don't require a lot of thought. The category may include pharmaceuticals. toiletries). However the huge number of goods sold is what makes the difference. Unilever and Procter & Gamble. branded and packaged food. bulbs. staples. soft drinks. The FMCG sector represents consumer goods required for daily or frequent use The main segments of this sector are personal care (oral care. cereals. such as buckets. and chocolate bars. 60 . time and financial investment to purchase. teeth cleaning products. shaving products. dairy products.
With the gradual opening up of the economy over the last decade. Rural markets account for 56% of the total domestic FMCG demand. In the process. more so in the last six years (FMCG sector witnessed decline in demand). de-reservation from the small-scale sector and the concerted efforts of personal care companies to attract the burgeoning affluent segment in the middle-class through product and packaging innovations. In this context. Many of the global FMCG majors have been present in the country for many decades. This has been due to liberalization. Colgate. But in the last ten years. The industry also creates employment for 3 m people in downstream activities. History of FMCG in India In India.The Indian FMCG sector is an important contributor to the country's GDP. margins have been compromised. in reality. HLL. therefore. the boom has also been fuelled by the reduction in excise duties. These companies were. the margins were also on the higher side. companies like ITC. much of which is disbursed in small towns and rural India. able to charge a premium for their products. FMCG companies have been forced to fight for a market share. many of the smaller rung Indian FMCG companies have gained in scale. 61 . the unorganized and regional players have witnessed erosion in market share. the sector meets the every day needs of the masses. urbanization. Unlike the perception that the FMCG sector is a producer of luxury items targeted at the elite. increase in the disposable incomes and altered lifestyle. This industry has witnessed strong growth in the past decade. Furthermore. It is the fourth largest sector in the economy and is responsible for 5% of the total factory employment in India. 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). As a result. The lower-middle income group accounts for over 60% of the sector's sales.
Shopper’s Stop and Shoprite. as the per-capita consumption of almost all products in the country is amongst the lowest in the world.term horizon. unleashing a latent demand with more money and a new mindset. In our view. the industry could double in size by 2010). increased literacy and rising per capita income are the key growth drivers for the sector. 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. organized retailing accounts for just 3% of total retail sales and is likely to touch 10% over the next 3-5 years. Due to infrastructure constraints (this influences the cost-effectiveness of the supply chain). Given the aggressive expansion plans of players like Pantaloon. In our view. Currently. forced-buying by offering many choices and also opens up new avenues for growth for the FMCG sector. organized retailing results in discounted prices. 62 . testing times for the FMCG sector are over and driving rural penetration will be the key going forward. In this backdrop. industry estimates suggest that the industry could triple in value by 2015 (by some estimates. Trent. Aspiration levels in this age group have been fuelled by greater media exposure. Rapid urbanization.Techno Park. companies were unable to grow faster. these are still at a relatively nascent stage. As per the Consumer Survey by KSA. The bottlenecks of the conventional distribution system are likely to be removed once organized retailing gains in scale. It has been ranked second in a Global Retail Development Index of 30 developing countries drawn up by A T Kearney. we are confident that the FMCG sector has a bright future India is rated as the fifth most attractive emerging retail market. Although companies like HLL and ITC have dedicated initiatives targeted at the rural market.Current Scenario The growth potential for FMCG companies looks promising over the long. almost 40% and 8% was accounted by groceries and personal care products respectively. of the total consumption expenditure.
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. Moreover.000 crore only. The FMCG market is set to treble from US$ 11.T. Small-scale sector reservations limit ability to invest in technology and quality up gradation to achieve economies of scale. The growth of imports constitutes another problem area and while so far imports in this sector have 63 . 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. is unlikely to help matters. There is significant potential for increasing exports but there are certain factors inhibiting this. Penetration level as well as per capita consumption in most product categories like jams. 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. hair wash etc in India is low indicating the untapped market potential. Moreover. toothpaste. the general slowdown in the economy is also likely to have an adverse impact on disposable income and purchasing power as a whole. skin care. Poor monsoon in some states.A. presents an opportunity to makers of branded products to convert consumers to branded products. too. particularly the middle class and the rural segments.4 billion in 2015. Burgeoning Indian population. Over the last one year. Kearney has estimated India's total retail market at $202. analysts feel. The outlook in the short term does not appear to be very positive for the sector.1 billion. The share of modern retail is likely to grow from its current 2 per cent to 15-20 percent over the next decade.6 billion in 2003 to US$ 33.6 billion. is expected to grow at a compounded 30 per cent over the next five years. The FMCG sector has traditionally grown at a very fast rate and has generally out performed the rest of the industry. lower volume of higher value added products reduce scope for export to developing countries. The Indian FMCG sector is the fourth largest sector in the economy with a total market size in excess of US$ 13.
This should yield positive results for them 64 . The high burden of local taxes is another reason attributed for the slowdown in the industry At the same time. Give the large market and the requirement for continuous repurchase of these products. most of the companies are concentrating on cost reduction and supply chain management. Moreover. the long term outlook for revenue growth is positive. FMCG companies should continue to do well in the long run.been confined to the premium segment. FMCG companies estimate they have already cornered a four to six per cent market share.
The Descriptive Research Design Study is typically concerned with determining the frequency with which something occurs or the relationship between two variables.A Casual Research Design is concerned With determining cause and effect relationship.RESEARCH METHODOLOGY Research Design: Research design is simply the framework or plan for a study. used as a guide in collecting and analyzing data. Casual Research Design:. Descriptive Research Design:. For the study.The major emphasis in exploratory Research design is on discovery of ideas and insights. There are three types of Research Design:Types of Research: Exploratory Research Design:. 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 .
Types of NonProbability Sampling Convenience Judgement Quota 66 . SAMPLING METHOD: There are two methods of sampling: Probability Sampling: It is based on the concept of random selection of a controlled procedure that assures that each Population element is gives a non-zero chance of selection. Researcher must select a sample design.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. 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.
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. Magazines. journal of national repute. books of national and international author as well as the annual report of the company. various newspapers and published books. DATA COLLECTION METHOD Data for the present study is collected from two sources: Secondary: . 67 .Researcher selects the sample as per their convenience. Secondary Data Secondary data are the data that are already collected and are only analyzed by different sources these sources are as follows: Corporate magazine Manuals of various companies Books. For this research work I have chosen Non. In addition to this internet access will make the study more effective and meaningful. newspaper Employment exchange The secondary data would be collected from financial statement. journals.Secondary data is collected from published sources like Journals.
FMCG market growth stalled and then declined for the next four years.The rapid opening up of the economy resulted in many new avenues of expenditurefor the consumer’s growing income. But they did downtradeto lower priced substitutes from higher quality brands. one could drive out of a car showroom in a Maruti 800 with adown payment of only Rs. Leisure and Travelsectors also boomed. 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.The lure of new avenues of expenditure in products and services led to consumersrestricting their expanse on FMCG. Or a consumer buying Surf Excel for her clothes mixed it with a cheaper powder. A sharp drop in interest rates from 18% to 8%led to explosive demand for consumer durables like white goods. As a result of this shift in spending patterns. Entertainment. 68 . It is important to understand why this happened.Suddenly.Mobile phone ownership and usage exploded due to its amazing lifestyle andconvenience be nefits as well as lower prices. two-wheelers andautomobiles. 75% of our sales came from FMCG businesses. a consumer buying six tablets of Lux in a month went to buying three of Lux and three cheaper brands. the FMCG markets grew at almost 15% per annum in value. The rest came from severalnon-FMCG businesses which were not profitable. 2000.DATA ANALYSIS & INTERPRETATIONS Through the nineties. It is not that they bathed less often or brushedtheir teeth less often or indeed washed their clothes less often. After all. in 2000. The home ownership market grew exponentially asthe average age of a home loan borrower dropped from 50 in 1999 to 30 in 2004. and did not offer prospects for long-term leadership. For example.
Thermometers. there is enormous growth potential in leading the evolution of consumers to branded and processed foods. SpecialityChemicals. Over the last few years they have focused on putting in place the building blocks of a strong Foods business. be ittechnology. Building blocks of a strong Foods business In Foods. with higher levels of resource concentration.Today they are a focused on FMCG company with our branded business accountingfor over 90% of sales. they were a drain on the core FMCG business. Historically their Foods businesswas fragmented and lacked scale.They decided to disengage from all non-FMCG or commodity businesses. people talent or media spend. Theyrecognized that changing food habits would require considerable investment. Mushrooms etc. wehave divested and discontinued 15 businesses including Animal Feeds. withsales of Rs. They have consolidated theuir portfolio and improved thegross margins by over 13% through product mix and cost reduction.750 crores as in 1999. both interms of resource and focus. They could achieve this by raising the bar and becoming worldclass in what their brands 69 . They have alsocleared the supply chain of all old stock and geared up for fresh availability on shelf.Besides. their Foods business has a healthy gross margin and a supply chain driven byfreshness. Therefore they divested the non-valueadded parts like Vanaspati. Today. consisting of 35 brands across 20 categories. Seeds. Adhesives. These will be their main engines of growth. The Foods business will now invest for growth through relevant innovation. whichthe current business simply could not afford.1. FMCG still offers enormous potential As the largest FMCG player it was up to them to reverse the downtrading to realize itstrue growth potential. It was often commoditized with low margins. In all. Nickel Catalyst.
000 crores.100.Penetration levels in several of the categories and consumption levels in all of thecategories is low by any comparison.000 crores. 70 . Nothing less would do. They are already seeing the benefits. Over the next 10years. This is an opportunity that they have to seize. Over the next 10years. Today.000 crores from a current value of Rs. At thoselevels. many undifferentiated and lacking scale. per capita income in India is likely to touch China’s current levels. The Foods business will now invest for growth through relevant innovation.100.offered and how they worked. Across the world. Across the world.Penetration levels in several of the categories and consumption levels in all of thecategories is low by any comparison. 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. In 2000. Six brands – Brooke Bond. they are seeing a strongcorrelation between income levels and the size of FMCG markets. They could achieve this by raising the bar and becoming worldclass in what their brands offered and how they worked.40. This is an opportunity that they have to seize. Nothing less would do. they had 110 brands. FMCG still offers enormous potential As the largest FMCG player it was up to them to reverse the downtrading to realize itstrue growth potential. the FMCG market will be over Rs.000 crores from a current value of Rs. their Foods business has a healthy gross margin and a supply chain driven byfreshness. they are seeing a strongcorrelation between income levels and the size of FMCG markets. At thoselevels. They chose to focus on 35 power brands covering all consumer appeal and price segments.40. per capita income in India is likely to touch China’s current levels. the FMCG market will be over Rs.
400 crores. Imagine the importance of that benefit to consumers in 71 . their oldest brand. they are the first tointroduce a branded toothpaste in a tube at Rs. 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. For example. Fair & Lovely. They had to move from selling a soap or a detergent to something far more important and central to the consumer’s life.5 and a branded quality shampoo in a bottle at Rs. each with sales of more thanRs.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.Lifebuoy. 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.In several cases they reduced prices to make the brands more affordable. Similarly. “A soap is a soap is a soap!” Or indeed.In the case of Lifebuoy. It moved from being a mere soap to a health essential. has grown at over 15% for the last three years. Bigger Role in Consumers’ Lives Perhaps the most significant change has been to move the brands beyond merelymaking functional claims to playing a bigger and deeper role in the lives of consumers. Today Lifebuoy. How often have we heard someonesay. “All detergents clean clothes as well”. in the laundry market.5. Rin and Wheel – have emerged as mega brands in the last five years. or 5% of sales. Surf Excel went well beyond the benefit of ‘greatclean’ by saving two buckets of water with every wash. Better quality and more affordable prices have increased the value to the consumer. in the last three years to upgrade the brands. Lux.
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.
CONCLUSION 76 . Globalization. Threats 1. HLL's tea business has declined marginally. reason is that.4. 5. cost pressure is likely due to rising crude and freight costs. Increasing departmental stores concept – impulse @ at cash counters.
clinic plus.ariel.personality.pantene etc.This company project has demonstrated “HINDUSTAN UNILEVER’S MARKETING STRATEGIES AND POLICIES” that has proved to be extensive through. Different line of products are offering customers to choose according to their gender.Demography. FMCG secter hold a prime importance as the competition is increasing day by day.income and other attributes. In this project it possible to see the success of Hindustan Unilever’s in it’s indorse its strong potential to continue to do well. are some of the main ingredients of FMCG sector.This sector has member of players which altimately shopes the buying decision products like.lifebuoy.Lux. and of great benefit to the company in furthering its competitive advantage. SUGGESTIONS 77 .
They need to bring more awareness of the companies name along 78 . They need to take care regarding the competition with in its own with the brand name. They need to promote their companies name along 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. HUL They need to enter into lower segments of detergent.
Cost involved in collecting the data was high. 79 . 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.LIMITATIONS While undertaking my study I was encountered with some limitations: Limited time was provided to complete the study.
4th Edition 2002 Page 135.BIBLIOGRAPHY BOOKS: • • • Kothari C. Marketing Management. Kottler Philip. 80 . . . Prentice. Research Methodology. Research Methodology. Deep & Deep Publication Pvt..R. Ltd. 10th Edition. 2001 Page 365. Thakur Devendra. Ltd. 2005 Page 85.Hall of India Pvt.
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