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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.
7P’s of Marketing: In popular usage. Jerome McCarthy divided marketing into four general sets of activities. have passed into the language. It includes all facts. especially advertising and branding. "marketing" is the promotion of products. His typology has become so universally recognized that his four activity sets. for specific customers. estimates. 5 . place etc… • Market information: The much desired success of marketing depends on correct and timely decisions. in professional usage the term has a wider meaning which recognizes that marketing is customer centered. in some cases. It is related with the division of commodities into distinct groups standardization involves establishment of certain criteria to which the goods must confirm. Facilitating Functions These are the function that facilitates the process of exchange. the Four Ps. However. It makes the exchange process smooth and acts as lubricating oil to the wheel of marketing. • Financing: Finance is the base for all marketing activities. regarding the market • Standardization: Standardization helps on tackle certain major problems of marketing. E. Products are often developed to meet the desires of groups of customers or even. views. These decisions are based on market information. • Risk-bearing: Market risk are inherent so long the process of exchange continues many risks are involved in marketing which brings about changes in ownership. opinion.3.
g. This fourth P has also sometimes been called Place.it can simply be what is exchanged for the product or service. for example. pamphlets etc serve this purpose Physical distribution refers to how the product gets to the customer. and personal selling. publicity. employees. • Process: It refers to the methods and process of providing a service and is hence essential to have a thorough knowledge on whether the services are helpful to the customers. point of sale placement or retailing.The four Ps are: • Product: The Product management and Product marketing aspects of marketing deal with the specifications of the actual goods or services. The price need not be monetary . • 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. • Physical (Evidence): It refers to the experience of using a product or service. • People: People refer to the customers. management and everybody else involved in it. including discounts. referring to the channel by which a 6 . and how it relates to the end-user's needs and wants. and refers to the various methods of promoting the product. • Promotion: This includes advertising. e.brochures. or attention. It is essential for everyone to realize that the reputation of the brand that you are involved with is in the people's hands. or company. sales promotion. if they are provided in time. time. When a service goes out to the customer. For example. if the customers are informed in hand about the services and many such things. brand.
in Riding the Waves of Change (Jossey-Bass. business people). etc. having made this important caveat. Following are the phases of development of marketing 7 .product or service is sold (e. 1988). Industrial products. adds "Perhaps the most significant criticism of the 4 Ps approach. high value consumer products require adjustments to this model. families. Services marketing must account for the unique nature of services. which you should be aware of. Even so.g. Relationship marketing attempts to do this by looking at marketing from a long term relationship perspective rather than individual transactions. online vs. Morgan. the 4 Ps offer a memorable and quite workable guide to the major categories of marketing activity. Industrial or B2B marketing must account for the long term contractual agreements that are typical in supply chain transactions. which geographic region or industry. is that it unconsciously emphasizes the inside–out view (looking from the company outwards). As a counter to this. services. A marketer can use these variables to craft a marketing plan. The four Ps model is most useful when marketing low value consumer products. as well as a framework within which these can be used. retail). to which segment (young adults. These four elements are often referred to as the marketing mix. whereas the essence of marketing should be the outside–in approach". Evolution of Marketing: Marketing has evolved from the time man existed on earth.
8 .Barter system Production Orientation Sales Orientation Marketing Orientation Consumer Orientation Management Orientation Social Orientation Fig. instead of buying concerned with customer preference concentrating on the mass production of goods for the purchase of profit. Marketing orientation: Customer’s importance was satisfied but only as a means of disposing of goods produced competition become more stiffer. Production orientation: This was the stage where producers. The selling activity becomes the dominating factor without any efforts for the satisfaction of the consumer needs. 1 Barter system: The goods are exchanged against goods without any other medium of exchange like money. Sales orientation: This stage witness major changes in all the spheres of economic life.
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. a few painted walls and the occasional participation in village haats and melas. of companies wanting to move beyond urban boundaries. Thus. MARKETING STRATEGY OF FMCG PRODUCTS: Barring a few. "rural" means different things to different people: from 500.000 crore (Rs 130 billion) allotted to mass media. Of course. at least. 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. to less than 50. a badlymade commercial. social welfare becomes the added dimension to the companies. Social orientation: The companies are not only cares for consumers but also for social welfare. This is grossly inadequate to cover the huge potential for different products in rural markets. 9 . it is heartening to note the increasing awareness of the importance of rural markets . rural marketing in India is still about a van campaign. the total budget for rural marketing is only about Rs 500 crore (Rs 5 billion). Still. But then.000 for fast-moving consumer goods. According to estimates by the Rural Marketing Agencies Association of India. Management orientation: The marketing function assumes the managerial role to co-ordinate all the interacting business with the objectives of planning.or. notable exceptions. compared to the over Rs 13.000 people for consumer durables. promotion and distribution.
touched a chord in the target audience. most importantly. 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. be it a simple radio spot or a wall painting or a theatre film. And. 10 . appealing to the local ethos and aspirations of the targeted area. Meera Herbal Powder. especially in the FMCG sector. 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. People power Total commitment from top leadership.The TRPs and NRS/IRS data help you determine the efficacy of TV and press marketing. What should companies do to step up their payback from rural marketing efforts? Here are some steps that should help. They all started in small. which are giving the multinationals a run for their money. the most enduring example of a brand that began as a regional player and is now a giant. Fairever Cream and so on). But even more important is the need for a dedicated task force. And don't forget Nirma. concentrated markets. keeping in mind that rural marketing is a long-term relationship. Ghadi detergent powder and Power soap are proof that regional brands can become brands to reckon with. their policies were flexible and they could adopt to fast changing marketing situations.the successes of Hindustan Lever [ Get Quote ] and ITC are proof of this statement. Companies like Cavin Kare (Chik Shampoo. is imperative . Their communication. Anchor (100 per cent vegetarian toothpaste). But only consider the huge successes of some regional brands.
management graduates who have studied the subject as an elective. In both cases. What started as a great rural marketing initiative has been relegated to the dustbin. or at least. The teams that succeeded felt no ownership of the campaigns they had not initiated. were shifted out midway.. The best bet is to recruit students from specialised institutes such as the Indian Institute of Rural Management. the teams that briefed us in the initial stages and participated enthusiastically in the campaign.and discuss the path their careers are likely to take in the organisation. we were involved with two big clients. 11 . Many of these are students from small towns. Ensure the consistency of the team involved in any project. the fate of many rural marketing initiatives in the country. in keeping with their companies' policy of shifting and promoting people.Rural marketing efforts need special mindsets. which many of the urban-oriented management graduates who are at the helm of affairs at most organisations do not possess. you pay peanuts. people with fire in their bellies who want to prove themselves in big companies and have no issues about working in smaller markets. Pay them well remember. A separate marketing and sales vertical headed by people with passion and commitment to rural marketing and supported by a field team that can face the rough and tough of the vast country-side with courage and conviction is a must.. until the completion of a specific task. Recently. you get only monkeys . And send them out in the field only after thorough training.
so you can create a customised plan of action. with regard to products and brands. clients insist their knowledge of their customers (based on studies of urban India) is enough on which to base an action plan. a comprehensive brand building strategy in rural India. 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. be they van campaigns or below-the-line activities. with both short term and long term goals. If you are interested in the second alternative. is a must. Most of them have previously appointed vendors who implement the company's ideas blindly. 12 .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. There is very little effort to tailor whatever communication is made in such efforts. to suit the local audience or fit it with the overall campaign efforts in the mass media. Know your customers A good place to begin is studying the mindset of your customers. Our experience shows that the attitudes. aspirations and fears of rural customers. is very different from their urban counterparts. All too often. This invariably leads to less than satisfactory results in terms of awareness of the brands and longterm impact of the efforts in the targeted markets.
we recently conducted a survey among some haats in Tamil Nadu. The refrigerator with standby power for 12 hours. spurious products that are sold in these bazaars. since they can't afford the real thing. at least keeping in mind the present goals of marketing companies in rural India. We've all heard about the shampoo sachets that are available in even the smallest villages.the humongous task of physically reaching your product to over 600. The haatswere popular with the poorest agricultural labourers who consciously buy the duplicate. and to that extent make your effort cost-effective. mostly sold through such local haats and bazaars.Research can give you invaluable ideas for new product development as well as new methods of reaching your target audience. who then buys the products from the nearest feeder markets. ensure that the people who patronise these haats are the kind who will buy your brand. most of them without motorable roads.000 villages. It is estimated that FMCG companies lost more than Rs 10. 13 . The consumer demands the product from the local shopkeeper. But it's not really as nightmarish as it is made out to be. While haats offer opportunities to target consumers from several villages at one place. 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.000 crore (Rs 100 billion) to spurious products. with some interesting results. pressure cookers with two handles and a radio with key-winding mechanism are all the result of research. fuelled by television commercials. Ensure availability Most anecdotes about rural marketing centre on the distribution aspect . For instance.
A worker stacks Hindustan Unilever products in a store in Mumbai HUL says it is quite upbeat about the segment and says the laundry segment is one of its “key growth areas. Pricing. if your products are in towns with populations of 50.000. now is focused on product innovation. This comes even as Unilever is scouting for a potential buyer for its laundry business in the US. you're closer to the rural consumer than you would have thought. is now passe. in fact. So. you've already taken the first step towards reaching your target customer. home care. automobiles and appliances in the nearest big town or city.000. new consumer and retail trends and aggressive marketing and promotions. MARKETING STRATEGY ADOPTED BY HUL “Price cut or hike is not a long-term growth strategy.” says Vats.Which means if you can ensure distribution to the feeder markets in towns or villages with populations of 10-15. “We successfully migrated from Rin Supreme to Surf Excel and Wheel Smart Srimati—which was rolled out in 2006—is also on the right track.” insists Sudhanshu Vats.” he said. Studies also indicate that rural consumers prefer to shop for durables such as televisions. “Our strategy for growth.” “We have done key innovations across the product portfolio and it is working for us.” 14 . category head.
5% in the same period last year.4% over 2005. up to a 7. In 2006.8% in the quarter ended June from 35.596 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.HUL’s market share in the laundry segment grew to around 37. Nirma Ltd.103 crore. Wheel. a value brand that. the industry is stabilizing. however. the Ahmedabad-based manufacturer.7% percentage points to 13. increased its market share by 2 percentage points in the same period. 15 . According to ACNielsen.5%. saw its market share dip by 1. However. The recent price war between companies led to erosion in their profitability but now.6% share. according the market research firm ACNielsen. HUL doesn’t report its laundry revenues separately but puts them under the soaps and detergent category. according to Vats contributes around 50% of HUL’s laundry segment revenues.908 crore in 2006 and rose 8.5 percentage points. the laundry industry in India was worth Rs7. with a total share of about 18%.” says Unmesh Sharma. this time. P&G also gained 0. the increase was not at the expense of price war with its multinational rival Procter & Gamble Co. an analyst at Macquarie Securities here. According to Vats. HUL’s soaps and detergents segment contributed around Rs5. “Laundry has been an attractive segment in the past and is likely to keep growing in the near future.
it is too early to say what result their new strategies will yield.“Consumers today are buying more clothes. such as promotional campaigns and advertising. with premium quality of clothes.” says Vats. Also. analysts remain cautious. “Some of HUL’s recent moves. seem right.” OBJECTIVE OF THE STUDY 16 .” Still. “Trends suggest that the usage of detergents has gone up as a result. “Still.” says Macquarie’s Sharma. people want to use better and branded products.
To analyze the influence of rival company’s strategies on the performance of Hindustan Unilever Limited To analyze the various strategies adopted by the company to gain competitive advantage To identify the marketing strategies and policies of Hindustan Unilever Limited SCOPE AND IMPORTANCE 17 .
in order to frame out marketing strategies for different production this sector. It would help to analyze the current position of HUL and then to sector marketing channels for the same. COMPANY PROFILE 18 . This study would be helping HUL to frame its different promotion schemes. IMPORTANCE To will help in identifying the product of HUL in FMCG sector.This project is applicable on the on the area of FMCG. This is widely awaited.
is a fast moving consumer goods (FMCG) company based in India. a subsidiary of Unilever. The company focuses on efficient delivery to consumers with an improved supply chain. These three companies merged to form Hindustan Lever Limited in November 1956. It is the country's biggest consumer goods company. brand building initiatives and innovation. one of the most efficient in the world. The Hindustan Unilever Ltd (HLL) is India’s no. and far and away the leading advertiser. Hindustan Vanaspati Manufacturing Company. 2007 the company has changed the name to Hindustan Unilever Limited.1 FMCG is able to share with their market insights based upon unparalleled breath of consumer goods experience. Effective July 19. Hindustan Unilever is Unilever's main operating business in India. In addition to FMCG products it is the country's biggest exporter of tea. HUL inhabits virtually every sector of the consumer goods market. including several not occupied by Unilever in other markets such as preserves and bakery products. It is generally acknowledged 19 .The Hindustan Unilever Ltd’s(HUL) Inc has taken the opportunity to offer us a broader view of FMCG category. Hindustan Unilever Ltd (HUL) has grown from strength to strength with new technologies being introduced to make the HLL consumer goods business. followed by Lever Brothers India Limited (1933) and United Traders Limited (1935). The company’s history dates back to 1931 when Unilever set up its first Indian subsidiary. which has helped the company to sustain its leadership position in the overall FMCG category in India. and is also one of the country’s top five exporters. Hindustan Unilever Limited (HUL).
000 Stockists Total Coverage 6.9 percent in 2010 from an estimated 5.3 percent in 2007. which sells soap to more than 500 million Indians.care products after nearly halving the local prices of Ariel and Tide detergents in 2004. and ITC Ltd. Asia and Africa. prior to restructuring.000 employees 1.4 percent in the first nine months of last year. may see global revenue growth slow in 2010 as Procter & Gamble Co.2 percent in North and South America. according to the median of five analysts in a Bloomberg survey. helping offset 1. Unilever's overall sales growth will slow to 4.200 managers 2. according to Brusselsbased brokerage Petercam SA. 4. Unilever. will see their share of the company's growth fall to 2 percent in 2010 from 3. which make up about a third of Unilever's worldwide sales. although performance slowed dramatically between 2000 and 2004. The world's second-largest consumer products maker has relied on accelerating shipments of Surf Excel detergent in India to make up for sluggish sales in Europe.based Procter & Gamble is stocking Indian stores with Olay skin.Now Cincinnati.to be one of India's best-run businesses.9 percent growth in Europe and 4. Revenue from the two continents rose 11.000 suppliers & associates 75 Manufacturing Locations 45 C&FAs. step up marketing in Asia's third-biggest economy.3 percent in 2007.3 Mln Outlets 20 . Hindustan Unilever – A 75 Year Commitment 15.
Two years later. 21 . • In 1993. Lipton (1972) and Pond’s (1986). Direct Coverage 1 Mln outlets Population of INDIA: 1027 Mln 5. These three companies merged to form HUL in November 1956. 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. Lakme Limited. Vanaspati was launched in 1918 and Dalda came to the market in 1937.38. HUL and yet another Tata company. This was followed by brands like Pears and Vim. Lakme Limited sold its brands to HUL and divested its 50 per cent stake in the joint venture to the FMCG giant. These included Brooke Bond (1984). Tata Oil Mills Company (TOMCO) merged with HUL. • In 1931.545 Towns 2. • A number of prominent companies came into the HUL fold as result of Unilever’s international acquisitions. Lakme Lever Limited. formed a 50:50 joint venture.5 Mln outlets 6.000 Villages 5. Hindustan Vanaspati Manufacturing Company. followed by Lever Brothers India Limited (1933) and United Traders Limited (1935). • Subsequently in 1998.
HUL acquired the government s remaining stake in Modern Foods. • HUL has also set up a subsidiary in Nepal. FMCG major Hindustan Unilever Limited (HUL). which markets Huggies diapers and Kotex sanitary pads. and its factory represents the largest manufacturing investment in the Himalayan kingdom. • • In 2002.• HUL formed a 50:50 joint venture with the US-based Kimberly Clark Corporation in 1994.000 people. formerly known as Hindustan Lever Limited.350 managers. It is one of the earliest MNCs to have entered India 22 . Kimberly-Clark Lever Ltd. Nepal Lever Limited (NLL). In a historic step. including over 1. employs 36. HUL picked up 74 per cent of the equity of Modern Foods from the Indian government.
2 23 .ORGANIZATIONAL STRUCTURE Managing Direc tor General Mana ger Vice President Marketing Manufacturin Sales g Finance Distribution FIG.
Kwality Wall's – are household names across the country and span many categories .55% of the equity. personal products.10.000 redistribution stockiest. branded staples. HUL is also one of the country's largest exporters. coffee. Lux. Pond's. Surf Excel. is to "add vitality to life.300 managers.3 million retail outlets reaching the entire urban population . The mission that inspires HUL's over 15. It is a mission HUL shares with its parent company.000 suppliers and associates. The operations involve over 2. look good and get more out of life. detergents. and now has 24 . comprising about 4. Close-up. it has been recognised as a Golden Super Star Trading House by the Government of India. HUL's distribution network. Clinic. which holds 51. They are manufactured over 40 factories across India.like Lifebuoy. Brooke Bond. Wheel. Pepsodent. The Hindustan Unilever Research Centre (HLRC) was set up in 1958. HUL has traditionally been a company. They endow the company with a scale of combined volumes of about 4 million tonnes and sales of Rs. The rest of the shareholding is distributed among 380. ice cream and culinary products. Knorr-Annapurna.and about 250 million rural consumer. covering 6.000 individual shareholders and financial institutions. Fair & Lovely. hygiene.soaps. Unilever. Kissan. including over 1.000crore. Rin. touching the lives of two out of three Indians with over 20 distinct categories in Home & Personal Care Products and Foods & Beverages.PRESENT STATUS Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods company. and personal care with brands that help people feel good. HUL's brands .000 employees. Sunsilk. Lakme. which incorporates latest technology in all its operations." HUL meets everyday needs for nutrition. tea.
HUL says it is quite upbeat about the segment and says the laundry segment is one of its “key growth areas. P&G also gained 0. “Our strategy for growth.” says Vats.” “We have done key innovations across the product portfolio and it is working for us. this time. “Price cut or hike is not a long-term growth strategy. up to a 7. is now working on a new growth strategy for its laundry business. Pricing.8% in the quarter ended June from 35. according the market research firm ACNielsen. category head. many with post-doctoral experience acquired in the US and Europe.” he said. Hindustan Unilever Ltd (HUL).5 percentage points. “We successfully migrated from Rin Supreme to Surf Excel and Wheel Smart Srimati—which was rolled out in 2006—is also on the right track. the 25 . is now passe. home care.” HUL’s market share in the laundry segment grew to around 37.” insists Sudhanshu Vats. HLRC and the Global Technology Centres in India have over 200 highly qualified scientists and technologists. This comes even as Unilever is scouting for a potential buyer for its laundry business in the US.6% share.facilities in Mumbai and Bangalore. new consumer and retail trends and aggressive marketing and promotions. in fact. HUL’S NEW GROWTH STRATEGY After having fought a bitter price battle for market share with its rivals. Nirma Ltd. now is focused on product innovation. Indian subsidiary of the Anglo-Dutch consumer goods company Unilever Plc. However.5% in the same period last year. the increase was not at the expense of price war with its multinational rival Procter & Gamble Co.
with a total share of about 18%. the laundry business is witnessing a surge in demand from cities and HUL is focusing on Tier I and II cities to tap that demand. HUL doesn’t report its laundry revenues separately but puts them under the soaps and detergent category. “Laundry has been an attractive segment in the past and is likely to keep growing in the near future.Ahmedabad-based manufacturer. “Still. it is too early to say what result their new strategies will yield.” Still.4% over 2005. The recent price war between companies led to erosion in their profitability but now. with premium quality of clothes. Wheel.” says Vats. the laundry industry in India was worth Rs7.” 26 . according to Vats contributes around 50% of HUL’s laundry segment revenues. HUL’s soaps and detergents segment contributed around Rs5.” says Macquarie’s Sharma. analysts remain cautious.596 crore to the company’s total sales of Rs12. the industry is stabilizing.908 crore in 2006 and rose 8. In 2006. According to ACNielsen. saw its market share dip by 1.5%. increased its market share by 2 percentage points in the same period. seem right. however. According to Vats.103 crore. such as promotional campaigns and advertising. “Trends suggest that the usage of detergents has gone up as a result.” says Unmesh Sharma. people want to use better and branded products. “Consumers today are buying more clothes.7% percentage points to 13. a value brand that. “Some of HUL’s recent moves. an analyst at Macquarie Securities here. Also.
FIVE P’S OF MARKETING Product Satisfaction suffices. But delight dazzles the average company will compete for customer by conforming to her expectation consistently. Breeze. Pears and Rexona • Laundry items: Surf Excel. Hindustan Unilever Ltd(HUL) offer such product. Dove. Rin and Wheel • Skin care: Fair & Lovely. delivering to her door step additional benefits which she would never have imagined possible. Pond’s and Vaseline • Hair care: Sunsilk and Clinic • Oral care: Pepsodent and Close up • Deodorants: 27 . Hamam. Liril. But the winner will surpass them by constantly exceeding her expectation. The wide variety products offered by the company include: The company’s popular product’s include: • Bathing soaps: Lux. Lifebuoy.
Hindustan Unilever Ltd(HUL) has launched various products which cater to all customer segments.Axe and Rexona • Colour cosmetics: Lakme • Ayurvedic: Ayush • Tea: Brooke Bond and Lipton • Coffee: Bru • Foods: Kissan. Therefore 28 . Second P of marketing is not another name for blindly lowering prices and relying on this strategy alone to increase sales dramatically. The strategy used by Hindustan Unilever Ltd(HUL) is for matching the value that customer pays to buy the product with the expectation they have about what the production is worth to them. Pricing Make no mistake. Annapurna and Knorr • Ice cream: Kwality Wall’s . So every customer segment has different price expectation from the product.
HUL's distribution network. Physical Distribution – “Place” BRAND ISN’T THE ONLY ANY MORE . and then progressively moving through them. covering 6. and the marketer who can get to the to the consumer ahead of competition will give a hard – to – overtake lead. The cardinal task before the Indian market is managing is to shoe-horn its product on retail shelves. The fundamental axiom of Indian consumer market is this: You can set up a state-of –the-art manufacturing facility.000 suppliers and associates. Why does the company need distribution equity more anything in India? With technology and competitive pressure slash in it is becoming increasing difficult for marketers to retain a unique product differentiation for ling period. But getting their means managing wildly 29 . Buyers are paying for distribution equity not brand equity and market shares. distribution equity is much together to erode. India – The operations involve over 2.maximizing the returns involves identifying right price level for each segment. Marketers and finance manager need a new term to evaluate their business: Distribution Equity. the brand that sells more is the one that reaches the highest number of customers. comprising about 4. swamp prime television with best Ads.000 redistribution stockists. you would be know of selling your products.television has already primed and population for consumption.3 million retail outlets reaching the entire urban population. but the end of it all. hire the hottest strategies on the block. but once built. and about 250 million rural consumers. It takes much more time and effort to build. In a product and price parity situation.
The company is looking to reduce this parity level. reaches more than a million retailers. Hindustan Unilever Ltd(HUL) distributes the product in the manner stated above. it has installed visi colors at several outlets. This network of distribution can either contact wholesalers and which in turn retailers or the distributors can contact to the retailers directly. they believe that selling FMCG is it like selling soft drinks. Once the stock product reaches retailers. To address the issue of product stability. Looking at the low penetration of few products. a distribution expansion would itself being incremental volume. Beside use of improved logistics. Hindustan Unilever Ltd(HUL) distribution network has expanded. value system. At Hindustan Unilever Ltd(HUL). Promotion If an advertisement is to communicate effectively. This helps in maintaining consumption in summer when sales usually drops due to the fact that the heal effects product quality and thereby off takes. And your brand equity isn’t going to help when it comes to tackling these issues. is much higher than Procter & Gamble Co. The other reason is arch rival Procter & Gamble Co. Hindustan Unilever Ltd(HUL) is also attempting to improve the distribution quality.different terrains-climate. transport and communication network. life style. language. the receiver must at least half want it to. This increase in distribution is going to be accompanied by reduction in channel costs. Own distribution network consist of clearing and forwarding (C&F) agents & distribution stockiest. the prospective customers can have access to the product. at 18% of total costs. Hindustan Unilever Ltd(HUL) marketing costs. Effective advertising is rarely hectoring or loudly 30 . and be prepared too take step toward the sender.
unself conscious. pleasure – seeking child within himself – a graft these feeling onto the Ad campaign like “hasso to khul k hasso for close up”. Thereafter it was the job of the advertising to communicate customer the wonderful feeling that he could experience by re-discoursing the careful. “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. The strategic response address the emotional appeal of the band to the child within the adult. To penetrate into the inner recesses of her memory. communication must first ensure exposure. Something familiar is planned for phone-book as well. In cinemas. 30 catteries in Mumbai have been selected. that produced just the value vacuum that Hindustan Unilever Ltd(HUL) was looking to fill. ad agency contract has created communication for cinemas and even ATM machines for the brand. All ICICI’ s ATM a message flashes on the screen as soon as customer insert his ATM card. • Finding showed that the adults felt too conscious to be seen consuming a product actually meant for children. 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.explicit…. grab her acceptance and then extract retention competing with thousands of other units of communication trying to do the same. It has also launched Pureit. 31 . a home water purifier which supplies drinking water without boiling/need of electricity . As well as outdoor and radio ads. Naturally. More often than not. It often both attracts and generates arm feelings. grab her attention evoke her comprehension.
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. 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.unilever. researching and improving the newer products that haven’t taken off. In the 1980s. Some of today’s most successful companies recognize those customers are more educated and able to recognize true customer value… Positioning is simply concentrating on an idea – or – even a word defines that company in the mind of the consumer. and the discounting era grew strong. supported with high ad – spends that Hindustan Unilever(Ltd) hopes will see it emerges stronger after the current slowdown. that the company has launched. Beside the company website (i. the management plans to tap this new channel of marketing. Positioning In the 1970s consumers were ready to pay “more for more”. Ad since any discussion today would be incomplete without mention ‘e’ word. www. specially targeted during festivals and events such as Valentines day. today customer uses complicated decision making process to assess the 32 .com). it had also entered into various marketing relationship with other portals. It’s a combination of spiffing up its key brand. and luxury goods flourished. Today’s consumer demanding “more for less”. consumers began to demand “more for same”.e. as well as expand the market. As a variety of competitive claims assails her senses. etc…. and the winner will be that super value marketers….
a hot-selling “fairness” cream. HINDUSTAN UNILEVER’S MARKET SEGMENTATION Market place for any product is comprised of many different segments of consumers. Since Hindustan Unilever(Ltd) is more clearly associated with a particular set of attributes in terms of benefits and prices. Hindustan Unilever(Ltd) takes into account all these factors when producing a range of products.unilever.e. the quicker becomes her search process. their interests and activities) the benefits which consumers look for in a product or on the occasions when the product might be consumed. which promises a lighter skin tone for many of India’s complexion-conscious consumers. “Lifebuoy has become more than just a red bar of soap – today the brand provides hygiene and health solutions for families 2) Fair & Lovely. gender. Consumers are groups. such as the: Break segment – products which are normally consume as a snatched break and often with tea and coffee. each with different needs and wants. It targets different segments within the market. as www.g. 33 . Positioning of individual product: 1) Lifebuoy is ‘one of Unilever’s oldest brands’ with more than a hundred-year history.alternative before making a purchase.com informs. Markets segmentation can be defined in a number of ways such as: Demographic variables (e. material states income etc…) The lifestyle of consumers (i.
used these and then. taken home consumed at a later stage. They include product such as close up. Take home segment – this describes product that are normally purchased in supermarkets. Impulse segment – these products are often purchase on impulse. 34 .
According to ACNielsen. Pricing. new consumer and retail trends and aggressive marketing and promotions.908 crore in 2006 and rose 8.” says Vats.The Real Taste of Rejuvenation After having fought a bitter price battle for market share with its rivals. home care. is now passe.” insists Sudhanshu Vats. is now working on a new growth strategy for its laundry business. “Our strategy for growth.103 crore. Indian subsidiary of the Anglo-Dutch consumer goods company Unilever Plc. “We successfully migrated from Rin Supreme to Surf Excel and Wheel Smart Srimati—which was rolled out in 2006—is also on the right track. HUL’s soaps and detergents segment contributed around Rs5. This comes even as Unilever is scouting for a potential buyer for its laundry business in the US.596 crore to the company’s total sales of Rs12.” “We have done key innovations across the product portfolio and it is working for us.8% in the quarter ended June from 35. 35 . now is focused on product innovation. category head.4% over 2005. Hindustan Unilever Ltd (HUL). the laundry industry in India was worth Rs7.” he said.” HUL’s market share in the laundry segment grew to around 37. “Price cut or hike is not a long-term growth strategy.5% in the same period last year. in fact. HUL says it is quite upbeat about the segment and says the laundry segment is one of its “key growth areas. In 2006. HUL doesn’t report its laundry revenues separately but puts them under the soaps and detergent category.
“I can’t imagine any head from Lever House ever visiting other company offices like this. and how shoppers are reacting to competitive brands. Baillie. COMPETITIVE STRATEGY As Competition Heats Up. wants to see how his products are stocked.“Laundry has been an attractive segment in the past and is likely to keep growing in the near future. India’s premier consumer-products company. That’s how Douglas Baillie likes it.” says an amazed Damodar Mall. the managing director of Hindustan Unilever. the India hypermarket chain. 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. and it’s best done incognito. so the company wants to make sure it’s in with the new marketing crowd. The recent price war between companies led to erosion in their profitability but now. Hindustan Unilever has traditionally relied on small traders and mom-and-pop corner stores to retail its products. chief executive of innovation and incubation at Pantaloon Retail. what consumers are buying. This is quite a change for Hindustan Unilever. India’s largest retailer and a former manager at Hindustan Unilever. It’s primary market research at its most elemental. Hence Baillie’s Hypercity visits. 36 . and the calls he makes on the headquarters of the big retail chains. the industry is stabilizing. But India’s recent retail boom has created large stores and malls. whose executives used to have emissaries make obeisance at Lever house in downtown Mumbai. India’s Top Consumer-Products Company Woos Affluent Shoppers With Global Brands Like Dove.
That’s why the company is wooing consumers in big retail stores. The company.5 billion. Hindustan Lever tea brands like Brooke Bond and Lipton have dipped from a combined market share of 29.84% now.3%. Favorite detergent brands like Surf Excel and Rin are barely hanging onto their 37% share. is down from 55. and shampoos to soups. In the last year. and L’Oréal. Now Hindustan Unilever is under siege from aggressive Indian and foreign competitors such as Procter & Gamble (PG). Finnish handset maker Nokia (NOK) dislodged it as the multinational with the highest revenues in India. after ringing up India-based sales of $3. soaps.2% to 24. which is practically synonymous with India.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. ACNielsen data shows. These 37 . including the popular Lux. down from 21% a few years ago to just 11.2% to 54%. makes everything from detergents. sauces and tea. Yet early this year. All this has taken a toll on Hindustan Unilever’s operating margins. Hindustan Unilever’s lead in hand soaps. and dominates most of those categories. Nivea.
5% of India’s total $336 billion retail market.Parent Unilever will develop the brands and streamline product offerings across the world. will grow to 28% by 2017. Sundaram. From Local Player To Multinational Overnight the change sent shock waves through India. fitting in quite nicely with India’s turn towards more international products being sold in supermarkets. According to retail consultant KSA Technopak. not long ago.newly affluent shoppers present the best hope for the company’s future in India. This means that all of Unilever’s brands will be available across global markets. That dovetails with parent company Unilever’s new global realignment of products. and the cream of India’s management 38 .” says D. became the first foreigner in four decades to head the Indiancompany. while its subsidiaries will sell the products. currently just 3. 2006. Hindustan Unilever’s finance director. a Zimbabwe-born British national. not a multinational. was the most successful and profitable company in the Unilever group. The takeover of Hindustan Lever by Unilever became evident in March. “It is a big game for us. the crown jewel whose managers had free rein to develop and build brands suitable for the local market. Hindustan Unilever’s managers hope their revenues from big retail will increase from 5% today to over 25% in 2012. Yet this is still a dramatic change for Hindustan Unilever which. For many decades most Indians thought Hindustan Lever was a local company. organized retail. Hindustan Unilever’s strategy is to market its premium products through the hundreds of megastores springing up across India. when Baillie.
graduates made their careers there. executive director in charge of the home and personal care business. in 2002 the company adopted Unilever’s global strategy of focusing on just 30 power brands instead of the total basket of 110 more local brands. then known as Hindustan Lever. If India is a great story. In India. confectionery. Then in February.” He also wants to expand the foods business in conjunction with the parent. a 2004 price war with P&G in the detergent business forced Hindustan Unilever to slash prices on its premium brand Surf Excel. the company. Hindustan Unilever executives are realistic about the new era in which it now operates. 2007.” 39 . the company’s home and personal care businesses account for 80% of revenues and 85% of profits at Hindustan Unilever. we aren’t the only ones seeing it. while the company’s track record in foods has been dismal. frozen bread—than it has launched. Last year operating profits reached $357 million. was rechristened Hindustan Unilever to reflect its parentage. For instance. 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. And there was some stiff competition from rival Procter & Gamble. 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. where foods bring in half the revenues globally. But the rich margins of the past have not returned. admits that it’s now “tougher to hold on to market share. Baillie first had to sort out some past problems. Nitin Paranjpe. it has phased out more food products—wheat flour. While the strategy aimed to conserve management energy. Indeed. thanks to price increases. to $274 million in 2004.5 billion for five years while operating profit plunged 37%. The effect: The company’s sales and operating profits stagnated at $2.
which sold for less than 2 cents each and which expanded the market for Hindustan Unilever products among India’s rural masses. will continue to gain share in the next five years in India. who rates the stock ``outperform. Bernstein in New York. according to the company..1% to 19. According to ACNielsen. Tata Tea is exultant.” FUTURE COMPETITIVE STRATEGY 2010 Expectations P&G. to 19. 80% of Indian shampoo sales come from sachets.5%. ITC. 2006. the largest Indian cigarette maker and partly owned by British American Tobacco Plc. compared with the year earlier.and Rotterdambased parent. But today even L’Oreal has sachets of its Fructis shampoo. `Profitable' Cigarettes 40 . an analyst at Sanford C. the company said. according to Ali Dibadj. lost ground in shampoo. Managing Director Percy Siganporia says the gain is “a dream comes true for us.9% in July. It started selling more brands including Fiama Di Wills shampoo and Superia soap last year as the government raised tobacco taxes.7% in March. the world's largest consumer-goods maker. In June. Currently. while Hindustan Unilever slipped from 26. Its share of the shampoo market declined by more than a percentage point to 47. 52 percent owned by the London. Tata Tea’s market share increased from 16. toothpaste and tea in the quarter ended Sept. 2007. bath soap. is also making inroads.Rivals like P&G and Nivea have also copied Hindustan Unilever’s best innovation: the small shampoo sachets it pioneered in the 1980s. the Tata Group’s beverage company Tata Tea overtook Hindustan Unilever as India’s largest selling tea brand.'' Hindustan Unilever Ltd.7 percent. 30.
He expects the stock to drop to 180 rupees ($4. who has a ``neutral'' rating on the stock.57) in the next year from 190. who has an ``underperform'' rating on Hindustan Unilever.'' Rising prices of raw materials have made it more difficult for consumer-goods makers to pass on higher costs. generating about 6 percent of annual sales. The price of palm oil. ``It has the ability to take losses in this segment as long as it grows its sales. The company has a market value of about $11. has surged 70 percent in the past year.'' said Anand Shah.9 rupees. This strategy will still satisfy investors. It has sold soap in the country since 1888 and controls about half of the sales of products such as skin creams. profitability will continue to be under pressure. an analyst at Angel Broking in Mumbai. bathing soaps and shampoo.The tobacco maker ``has a very profitable cigarettes business which will help it to invest and expand its personal. used to make soaps and foods. India is Unilever's biggest market in Asia.'' said Macquarie Securities Ltd.8 billion. ``Given the competition. 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 . analyst Unmesh Sharma.care portfolio.
Leverage positive impact of growing Indian economy on consumer spending. Grow ahead of the market by leading market development activities. Strong commitment to sustainable development. Grow the bottom line ahead of the top line. Competitive Strengths Fig:3.Corporate Social Responsibility-Aiding In The Development Of The Country 42 . Grow a profitable foods and top end business.
Personal Products. The Group's principal activities are to manufacture and market consumer products. The Group operates through seven segments: Soaps and Detergents. Foods. currently~44000 women cover 1.COMPARATIVE BUSINESS ANALYSIS Hindustan Unilever Limited Formerly known as Hindustan Lever Limited. 43 . Impact of community • • business and social impact can go together. Exports. Ice Creams and Other. HINDUSTAN UNILEVER LIMITED . Beverages. industrial and agricultural products. Shakti vani: one-to-many communication for category growth ishakti: customized interaction with remote consumers.Shakti Three shakti initiatives • • • Shakti entrepreneur. Home and personal care products consists of personal and fabric wash. foods and beverages. The products include home and personal care products.25000 villages. partnerships with diverse stakeholders.
animal feeds. salt.THE BIG INDIAN ROMANCE Rural population larger than europe(800 million) Low growth in agriculture. oral care. Structural changes in the economy which are affecting this are: Disintermediation in the agricultural market price discovery mechanism has benefited farmers. fertilisers. deodorants. footwear and carpets. yeast. perfumery.household.however rural income are growing faster with 70% population here.employment grants-Rs 40000cr 44 . brand building initiatives and innovation. cooking fats and oils. ice creams. This analysis compares Hindustan Unilever Limited with three other companies in closely related industry sectors. seeds. bakery fats. The company focuses on efficient delivery to consumers with an improved supply chain. Government grants and subsidies. Its brands are spread across 20 consumer product categories. plant growth nutrients. thermometers and plantations. colour cosmetics and baby care. Foods and beverages includes tea. Hindustan Unilever markets consumer goods throughout India. tomato products. bulk chemicals. coffee. rice. skin and hair care. atta and rawa. leather. The company faces competition from international. fruit and vegetable products. Industrial and agricultural products includes specialty chemicals. RURAL. processed-tri-glycerides and agri commodities. marine products and mushrooms. which has helped the company to sustain its leadership position in the overall FMCG category in India. local and regional players.income growth is crucial.
” reads an observation in a chapter titled ‘entrepreneurial advertising that works’. and relaunched Lifebuoy. Morgan and Shellye Archambeau.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. Lodish. The company basically worked with “one agency. “HUL missed an opportunity for increased marketing productivity when they repositioned. they add. would have been to develop “a number of different communications executions using different creative sources and then testing them as part of the early rollout. and screened some options to roll out one option that everyone was happy with. A better strategy. retargeted. the authors of Marketing that Works. Ogilvy and Mather (O&M). Though the company was ‘extremely innovative’ the way it handled the rural communications plan was very traditional.” 45 .” write Leonard M. according to the authors.
Mr D. Director (Finance & IT). The company’s advertising and promotional spends during the quarter fell to Rs 336 crore. he added. HUL. a few days ago.” So. Sundaram. as explained by Mr Lodish et al. targeted “10.K. “Differentiating soap products on the platform of health takes advantage of an opening in the competitive landscape for soap. and thus has increased sales of its low-cost.” The advertising spends have not been linear for the company. HUL. Lifebuoy is ‘one of Unilever’s oldest brands’ with more than a hundred-year history.” reads a quote in the book from C. Prahalad notes. Prahalad’s The Fortune at the Bottom of the Pyramid .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. in a paragraph on innovation. has been able to link the use of soap to a promise of health as a means of creating behavioural change.” The authors are of the view that government workers who have been interacting with villagers might have come up with some excellent ideas. said: “We have been phasing our advertising spends depending on the launches and relaunches of brands. The O&M strategy. mass-market soap. through its innovative communication campaigns.” says the site. “or the villagers themselves might also be able to generate very effective communications vehicles. 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 . from the earlier Rs 345 crore.Advertising strategy came for mention when the company reported the second quarter results. “Lifebuoy has become more than just a red bar of soap – today the brand provides hygiene and health solutions for families.
2008. It has leading edge capabilities in servicing Modern Trade focused on shelf filling. “As a big company.” wonder the authors.programs.” The HUL example. This JV will bring in world class execution excellence in the market and build the right capabilities to deliver the company’s marketing strategy in Modern Trade”. 47 . “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.” 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. The strategic tie-up aims to build long term capabilities and bring ‘in-store’ execution focus in servicing the Company’s Modern Trade customers. logistics for merchandising materials and in store execution. which is one of the many discussed in the book. The operations will begin with the existing Modern Trade in-store execution team of HUL moving into HUFS. Smollan Holdings is one of the leading ‘in-store execution and field services’ companies internationally. 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. many times it is difficult to change the procedures without creating significant political problems. 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.
Hindustan Unilever is also milking one of its top brands—Fair & Lovely. The advertising campaign. a hot-selling “fairness” cream.Other Acquisition Hindustan Unilever has acquired several Indian FMCG companies so far. a home water purifier which supplies drinking water without boiling/need of electricity. which suggests that regular use of the cream helps women gain confidence and makes them eligible for marriage. where Indian customers love to touch and feel products. all independent entrepreneurs.000 consultants. Over the past six months. NEW INITIATIVE Bringing High-End Dove To India Baillie is fighting back. Hindustan Unilever Network is the direct selling channel of the company. trained and guided by HLN's expert managers and trainers. It has about 350. Hindustan Unilever launched a high-end range of Pond’s skin care and Dove hair care products from Unilever’s international portfolio. These premium brands retail not in neighborhood small stores but in supermarkets and hypermarkets. has made the brand a winner. It has also launched Pureit. which promises a lighter skin. That has spawned 48 . 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. Lakme cosmetics brands from Tata. tone for many of India’s complexion-conscious consumers.
HUL is focusing on health & hygiene education. consumer analyst at Mumbai brokerage First Global Securities. SERVICE TO SOCIETY HUL believes that an organisation's worth is also in the service it renders to the community.a host of competitive fairness creams. women empowerment. the company’s sales grew 13%. with net profit up 29. at one-third the price of established Indian brands such as Aqua guard.6%. Shakti. the company embarked on an ambitious programme. It is also involved in education and rehabilitation of special or underprivileged children. most recent being the village built by HUL in earthquake affected Gujarat. and sunblock lotions. and creating access to relevant information 49 . Sumeet Budhraja. and relief & rehabilitation after the Tsunami caused devastation in South India. These efforts have delivered some promising results. HUL has also responded in case of national calamities / adversities and contributes through various welfare measures. and water management. But Hindustan Unilever’s brand is still tops. focusing on the Knorr brand of soups and curry mixes —ideal for the Indian market. but they are more focused and regaining their aggressiveness. HUL is creating micro-enterprise opportunities for rural women. In 2001.” He points to the demand for safe drinking water in India. Baillie is also getting aggressive on foods. Through Shakti. and rural development. In the quarter ended June. soaps. thereby improving their livelihood and the standard of living in rural communities. 2007. and Baillie is pleased with the modest turnaround. care for the destitute and HIV-positive. Analysts believe the company’s current strategy of concentrating on premium products and marketing them in the large retail stores is a winning one. Shakti also includes health and hygiene education through the Shakti Vani Programme. which Hindustan Unilever exploited with the launch of water purifier Pureit in 2005. Reason enough to keep patrolling those store aisles. says that Hindustan Unilever “could have addressed a lot more categories.
The vision is to make a billion Indians feel safe and secure.000 women entrepreneurs in its fold. HUL is also running a rural health programme – Lifebuoy Swasthya Chetana.through the iShakti community portal.000 villages and directly reaching to 150 million rural consumers. Shakti aims to have 100. It has already touched 70 million people in approximately 15000 villages of 8 states. it is because of being singleminded in identifying itself with Indian aspirations and needs in every walk of life. of over 600 If Hindustan Unilever straddles the Indian corporate world. The program now covers 15 states in India and has over 31. By the end of 2010.000 villages. touching the lives million people. reaching out to 100. PRODUCT PROFILE HUL’s business activities are divided into four broad areas: Home and personal care 50 .000 Shakti entrepreneurs covering 500. The programme endeavours to induce adoption of hygienic practices among rural Indians and aims to bring down the incidence of diarrhoea.
culinary products. Dove. Pureit water purifiers. Modern Foods ranges New Ventures Hindustan Lever Network. branded staples. Lifebuoy. hair care. fabric wash. marine products.personal wash. home care. Exports • HPC. Pears and Rexona • Laundry items: Surf Excel. beverages. coffee. colour cosmetic Foods tea. Sangam. Rin and Wheel • Skin care: Fair & Lovely. ice creams. oral care. Pond’s and Vaseline • Hair care: Sunsilk and Clinic • Oral care: Pepsodent and Close up • Deodorants: Axe and Rexona • Colour cosmetics: Lakme • Ayurvedic: 51 . Breeze. Liril. skin care. Ayush ayurvedic products and services. Hamam. rice Bathing soaps: Lux. deodorants and talcs.
Ayush • Tea: Brooke Bond and Lipton • Coffee: Bru • Foods: Kissan. Annapurna and Knorr • Ice cream: Kwality Wall’s . 52 .
Knorr-Annapurna and Kwality Walls. Kissan. They include: Lifebuoy. Wheel. Lux. Brooke Bond. Pond s. Fair & Lovely. Rin. Closeup. Clinic. Sunsilk. Surf Excel. Lakme.BRANDS HUL s brands are household names across the country. 53 . Pepsodent.
and its research history has previously been described as fragmented and eclectic (Noble. and only 17 percent felt that they had a consistent strategy implementation process. 2006). 1999b). making that strategy work – implementing it throughout the organization – is even more difficult (Hrebiniak. It is thus obvious that strategy implementation is a key challenge for today ‟s organizations. after a comprehensive strategy or single strategic decision has been formulated. rather than a science. It is thus not surprising that. strategy implementation is often seen as something of a craft. There are many (soft. The best-formulated strategies may fail to produce superior performance for the firm if they are not successfully implemented. hard and mixed) factors that influence the success of strategy implementation. According to the White Paper of Strategy Implementation of Chinese Corporations in 2006. The survey reported in that white paper indicates that 83 percent of the surveyed companies failed to implement their strategy smoothly. How can we better understand these issues and their importance for successful strategy implementation? In this article.TOPIC DETAIL Although formulating a consistent strategy is a difficult task for any management team. 2005). A myriad of factors can potentially affect the process by which strategic plans are turned into organizational action. as Noble (1999b) notes. we try to respond to this 54 . according to a survey of 276 senior operating executives in 2004 (Allio. ranging from the people who communicate or implement the strategy to the systems or mechanisms in place for co-ordination and control. Unlike strategy formulation. strategy implementation has become “the most significant management challenge which all kinds of corporations face at the moment”. 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. significant difficulties usually arise during the subsequent implementation process.
their main results. In that section we present a discussion of nine major factors that affect strategy implementation. In the sixth and final section. The next part of the article. we discuss the implications of our findings as well as their limitations. to surface current areas of agreement and disagreement. We also discuss directions for future research in the domain of strategy implementation and how they may be pursued. In the fifth section of the article. we discuss the limitations of our own approach and summarize open research questions regarding strategy implementation that have surfaced at various points in our literature analysis. We have conducted an analysis in the most widely used literature databases to identify key factors influencing the process of strategy implementation. in terms of the applied research methods and the examined strategy contexts.question by analyzing existing research on the factors that influence strategy implementation . contains the actual review of literature. we analyze definitions of strategy implementation and compare them with other synonymous and related terms (in section 2). Then. as well as missing evidence and resulting future research needs. Examined organizational levels and organizational types are two elements of the research context. As the core of our literature review. The structure of this paper is as follows: First. Our study also examines the ways in which strategy implementation has been researched so far. It will consequently also reveal under-exploited methods or contexts. the results section compiles nine factors that 55 . In this section. focusing on the main results of prior studies. we will review the 60 identified studies and analyze their research context. We present a conceptual framework that organizes the current research findings. theoretical bases. the research methods used as well as the analytical techniques employed. section 4. we describe the methodology that we have used to conduct our literature review and define its scope (section 3). Section four also contains a review of existing models and frameworks of strategy implementation.
Piercy (1998). White. inter-functional levels. focus on marketing strategy (such as Sashittal 56 . 1996. as well as several frameworks or models that aggregate or relate relevant factors to each other. Sashittal & Wilemon (1996). Surprisingly few researchers focus on the implementation of corporate level strategies. i. functional level. whether a study focuses on functional strategies (i. the research methods and analytical techniques will be reviewed to see which methods are still underutilized in the context of strategy implementation.. The same holds true for functional strategies: We have found eight studies that focus on the implementation of such strategies. Olson & Slater & Hult. whether it is privately held or state-owned and whether its operating scope is regional or rather multinational. HR. i. 1990. 2007).e. Govindarajan. Chimhanzi (2004). Organizational levels designate the locus of strategizing. Roth & Schweiger & Morrison. Qi (2005). SBU and functional level. 2005. 1992b. such as Wernham (1985) and Schmidt & Brauer (2006). 1988. strategic business unit (SBU) level. Waldersee & Sheather. marketing. Viseras & Baines & Sweeney (2005). Schaap. namely Rapert & Lynch & Suter (1996).1 Research Contexts We classify research contexts into two dimensions: the examined organizational levels and the considered organizational types. however. 2005. operational level and mixed levels (such as corporate and SBU level. 4. R&D).e. Govindarajan & Fisher. 1991. 1989. Govindarajan. Floyd & Wooldridge. etc. Finally.e. Chimhanzi & Morgan. five organizational levels can be distinguished. SBU-level strategies or corporate strategies. Nilsson & Rapp. 1991. Noble (1999a). 1999. while many examine SBU level strategies (Gupta & Govindarajan. They are: corporate level. 2006. Skivington & Daft. Organizational types refer to the kind of organization that is studied. corporate-SBU-functional levels... 1984. Brenes & Mena & Molina. Organizational Levels In the context of strategy implementation research. 1986.). Most of these studies.influence strategy implementation success. We then briefly discuss the theoretical bases of the reviewed studies. Noble & Mokwa (1999).
Piercy. Beer & Eisenstat (2000) and Hrebiniak (2006) have carried out research on corporate and SBU-level strategy. The mixed studies category also includes articles that focus on the role of project management for strategy implementation. 1999. Walker and Ruekert (1987) analyze three levels of strategy – corporate. SBU and functional. business. for example. Higgins (2005) even focuses on four types of strategies: corporate. There are some studies which cannot be classified into the above categories.& Wilemon. Noble & Mokwa. such as Bantel (1997). Homburg & Krohmer & Workman (2004). functional and process. we classify them into a group called mixed level studies: Gupta (1987). and on two aspects of strategic implementation (stakeholder input and employee empowerment). This study focuses on the key success factors in the project management for the implementation of strategic manufacturing initiatives. normally cut across functions and are aimed at integrating organizational processes across the organization in order to make them more effective and more efficient. The only other study of functional strategy implementation that we have been able to identify is Viseras. There are few studies dedicated to the implementation of other functional strategies (this is clearly an area of future research). Bantel (1997) analyzes the effects of two key aspects of product strategy (product leadership and product/market focus) on performance. Process strategies. focuses on the implementation of a yield 57 . Okumus (2001). the last type. Krohmer & Workman (2004) point out that market orientation plays a key role for the successful implementation of a PPD (premium product differentiation) strategy. 1996. Consequently. This study also emphasizes the relationship between product strategy and several strategic implementation variables. Chimhanzi. Homburg. Few studies focus on the actual operational level of strategy implementation. 1998. Baines and Sweeney‟s study (2005) in the context of manufacturing strategies. Slater and Olson (2001) analyze marketing‟s contribution to the implementation of business strategy. 2004).
the functional. Peng and Litteljohn (2001) investigate three hotel chains implementing a strategic initiative on yield management. Many studies (25 articles) do not even indicate at which level their discussion of strategy implementation is located. Two calls to action result from these findings. corporate (2 articles) and operational (2 articles). Another study has examined the mutual influence of functional departments ‟ relationships on strategies. First. we can observe that there are very few studies that have examined the inter-relationships of functional and business strategies. there are many studies that are not sufficiently explicit regarding their scope concerning strategic levels. accounting etc. 1989). Within the functional level. future strategy implementation research should pay attention to explicitly indicate the level of analysis. R&D. 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. Grundy (1998) examines the synergies among project management and strategy implementation and reviews strategy tools that may help in project management. Nutt (1986. which seems a highly relevant area to improve our understanding of strategy 58 . Finally. One such study focuses on marketing‟s contribution to the implementation of business strategy (Slater & Olson.management project and a key client management project in two hotels.). Harrington (2006). HR. Noble (1999b). another finding revealed that marketing is the prevailing domain. 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. 2001). 1987. and Schaap (2006). Second. Examples of such ambiguous studies are Bourgeois Ш and Brodwin (1984). We note that – among the five strategy levels – the SBU-level (14 articles). compared with other functional areas (such as manufacturing. Lehner (2004).level (8 articles) and mixed levels (9 articles) have received more attention than the other two levels. Higgins (2005).
implementation: Chimhanzi (2004) has examined the impact of marketing and HR interactions on marketing strategy implementation. a provider of emergency fire and medical services. state-owned and privately held companies. Some of the researched companies focus on their domestic markets. As far as ownership forms are concerned. 59 . and a leading firm in the imaging technology industry. as stated earlier. a leading packaged goods company. explores the reality of strategy implementation in a U. Roth & Schweiger & Morrison (1991) and Kim & Mauborgne (1991. refer to the characteristics of organizations: if they are private or state-owned. Johnson & Johnson. FedEx. strategy implementation studies discuss both. Qi (2005) issues questionnaires to the head offices of 800 private companies in the UK. a major financial services firm. This clearly is another interesting avenue for future research. namely Accenture. while others are multinational corporations. which are members of the American Hospital Association (AHA). 1993) study global strategy. Forman and Argenti (2005) select five multinational companies as samples. Dell.K. Okumus (2001) investigates two international hotel groups. or among local firms and multinational firms. Sears. British Telecom (BT). there have been no studies comparing similarities and differences of strategy implementation among private corporations and state-owned corporations. local or multinational. the subjects of strategy implementation studies are not only state-owned corporations. nationalized company. Noble ‟s (1999a) study spans several types of organizations – a national airline. Rapert. In conclusion. Velliquette and Garretson ‟s (2002) study on strategy implementation takes a nationwide sample of 1000 CEOs of general service hospitals. We thus do not know which specific differences exist regarding strategy implementation in these various forms organizations. However. not only local firms but also multinational firms. for example. Wernham (1985). but mostly private corporations. Alexander (1985) surveys 93 private sector firms through a questionnaire. Organizational types Organizational types.
However the huge number of goods sold is what makes the difference. hair care. bakery products) and tobacco. soaps. branded and packaged food. cosmetics. and chocolate bars. 60 . 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. teeth cleaning products. shaving products. such as buckets.INDUSTRY PROFILE Fast Moving Consumer Goods(FMCG) FMCG are products that have a quick shelf turnover. at relatively low cost and don't require a lot of thought. The margin of profit on every individual FMCG product is less. Unilever and Procter & Gamble. toiletries). paper products and plastic goods. Examples of FMCG brands are Coca-Cola. batteries. beverages (health beverages. cereals. detergents. ‘Fast Moving’ is in opposition to consumer durables such as kitchen appliances that are generally replaced less than once a year. Pepsi and Believe. soaps. cosmetics. staples. Hence profit in FMCG goods always translates to number of goods sold. although these are often categorized separately. The category may include pharmaceuticals. other non-durables such as glassware. The term Consumer Packaged Goods (CPG) is used interchangeably with Fast Moving Consumer Goods (FMCG). The FMCG sector represents consumer goods required for daily or frequent use The main segments of this sector are personal care (oral care. soft drinks. Kleenex. time and financial investment to purchase. Examples of FMCGs are soft drinks. bulbs. tissue paper. household care (fabric wash and household cleaners). chocolates. dairy products. consumer electronics and packaged food products and drinks.
The lower-middle income group accounts for over 60% of the sector's sales. in reality. These companies were. the boom has also been fuelled by the reduction in excise duties. therefore. urbanization. History of FMCG in India In India. HLL. But in the last ten years. much of which is disbursed in small towns and rural India. companies like ITC. The industry also creates employment for 3 m people in downstream activities. FMCG companies have been forced to fight for a market share. Unlike the perception that the FMCG sector is a producer of luxury items targeted at the elite. It is the fourth largest sector in the economy and is responsible for 5% of the total factory employment in India. the unorganized and regional players have witnessed erosion in market share. margins have been compromised. Rural markets account for 56% of the total domestic FMCG demand. Cadbury and Nestle have been a dominant force in the FMCG sector well supported by relatively less competition and high entry barriers (import duty was high). In the process. Many of the global FMCG majors have been present in the country for many decades. Colgate.The Indian FMCG sector is an important contributor to the country's GDP. In this context. more so in the last six years (FMCG sector witnessed decline in demand). increase in the disposable incomes and altered lifestyle. This industry has witnessed strong growth in the past decade. able to charge a premium for their products. With the gradual opening up of the economy over the last decade. This has been due to liberalization. the sector meets the every day needs of the masses. the margins were also on the higher side. many of the smaller rung Indian FMCG companies have gained in scale. As a result. Furthermore. 61 . 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.
the industry could double in size by 2010). Although companies like HLL and ITC have dedicated initiatives targeted at the rural market. of the total consumption expenditure. The bottlenecks of the conventional distribution system are likely to be removed once organized retailing gains in scale. Currently. Trent. organized retailing accounts for just 3% of total retail sales and is likely to touch 10% over the next 3-5 years. unleashing a latent demand with more money and a new mindset. as the per-capita consumption of almost all products in the country is amongst the lowest in the world. In our view. forced-buying by offering many choices and also opens up new avenues for growth for the FMCG sector. companies were unable to grow faster. Rapid urbanization. Shopper’s Stop and Shoprite. organized retailing results in discounted prices.Techno Park.term horizon. industry estimates suggest that the industry could triple in value by 2015 (by some estimates. Given the aggressive expansion plans of players like Pantaloon.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. 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. As per the Consumer Survey by KSA. testing times for the FMCG sector are over and driving rural penetration will be the key going forward. 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. Due to infrastructure constraints (this influences the cost-effectiveness of the supply chain). In our view. Aspiration levels in this age group have been fuelled by greater media exposure. these are still at a relatively nascent stage. 62 . In this backdrop.
The Indian FMCG sector is the fourth largest sector in the economy with a total market size in excess of US$ 13.A. Kearney has estimated India's total retail market at $202. Rural demand is on the decline and the Centre for Monitoring Indian Economy (CMIE) has already downscaled its projection for agriculture growth in the current fiscal. is unlikely to help matters. The growth of imports constitutes another problem area and while so far imports in this sector have 63 . skin care. hair wash etc in India is low indicating the untapped market potential.4 billion in 2015. too. Poor monsoon in some states. the general slowdown in the economy is also likely to have an adverse impact on disposable income and purchasing power as a whole.000 crore only. particularly the middle class and the rural segments. Burgeoning Indian population. analysts feel. Moreover. Over the last one year. The share of modern retail is likely to grow from its current 2 per cent to 15-20 percent over the next decade.1 billion.6 billion in 2003 to US$ 33. presents an opportunity to makers of branded products to convert consumers to branded products. Moreover. lower volume of higher value added products reduce scope for export to developing countries.6 billion. The FMCG sector has traditionally grown at a very fast rate and has generally out performed the rest of the industry. 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. is expected to grow at a compounded 30 per cent over the next five years. 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.T. Penetration level as well as per capita consumption in most product categories like jams. toothpaste. The outlook in the short term does not appear to be very positive for the sector. There is significant potential for increasing exports but there are certain factors inhibiting this. Small-scale sector reservations limit ability to invest in technology and quality up gradation to achieve economies of scale. The FMCG market is set to treble from US$ 11.
Moreover.been confined to the premium segment. FMCG companies should continue to do well in the long run. The high burden of local taxes is another reason attributed for the slowdown in the industry At the same time. most of the companies are concentrating on cost reduction and supply chain management. the long term outlook for revenue growth is positive. Give the large market and the requirement for continuous repurchase of these products. FMCG companies estimate they have already cornered a four to six per cent market share. This should yield positive results for them 64 .
Descriptive Research Design:. used as a guide in collecting and analyzing data.RESEARCH METHODOLOGY Research Design: Research design is simply the framework or plan for a 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:. For the study. Descriptive Research Design was undertaken as it draws the opinion of employees/ workers on a specific aspe Research Objective: To analyse the influence of rival company’s strategies on the performance of Hindustan Unilever Limited To analyze the various strategies adopted by the company to gain competitive advantage To identify the marketing strategies and policies of Hindustan Unilever Limited 65 .A Casual Research Design is concerned With determining cause and effect relationship. Casual Research Design:.The Descriptive Research Design Study is typically concerned with determining the frequency with which something occurs or the relationship between two variables.
which should be reliable and appropriate for his report. Researcher must select a sample design. Probability Sampling is of following types: Simple Random Systematic Cluster Stratified Double Non-Probability Sampling: Non probability sampling is non-random and subjective.SAMPLE DESIGN A sample design is a definite plan determined before any data is actually collected for obtaining a sample. Types of NonProbability Sampling Convenience Judgement Quota 66 . That is each member does not have a known non zero chance of being included. SAMPLING METHOD: There are two methods of sampling: Probability Sampling: It is based on the concept of random selection of a controlled procedure that assures that each Population element is gives a non-zero chance of selection.
books of national and international author as well as the annual report of the company. Magazines.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. DATA COLLECTION METHOD Data for the present study is collected from two sources: Secondary: . journals. In addition to this internet access will make the study more effective and meaningful.Secondary data is collected from published sources like Journals. newspaper Employment exchange The secondary data would be collected from financial statement. journal of national repute. various newspapers and published books.Probability Convenience Sampling because time limit for the completion of the work is limited and also managers and employees are not available all the time. For this research work I have chosen Non. 67 .
2000. FMCG market growth stalled and then declined for the next four years. The home ownership market grew exponentially asthe average age of a home loan borrower dropped from 50 in 1999 to 30 in 2004. As a result of this shift in spending patterns. A sharp drop in interest rates from 18% to 8%led to explosive demand for consumer durables like white goods. The rest came from severalnon-FMCG businesses which were not profitable. It is important to understand why this happened. the FMCG markets grew at almost 15% per annum in value. Leisure and Travelsectors also boomed.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. 75% of our sales came from FMCG businesses. After all.The lure of new avenues of expenditure in products and services led to consumersrestricting their expanse on FMCG. one could drive out of a car showroom in a Maruti 800 with adown payment of only Rs. 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.Mobile phone ownership and usage exploded due to its amazing lifestyle andconvenience be nefits as well as lower prices. two-wheelers andautomobiles. in 2000.DATA ANALYSIS & INTERPRETATIONS Through the nineties. Or a consumer buying Surf Excel for her clothes mixed it with a cheaper powder. For example. Entertainment. 68 . and did not offer prospects for long-term leadership.Suddenly. a consumer buying six tablets of Lux in a month went to buying three of Lux and three cheaper brands. It is not that they bathed less often or brushedtheir teeth less often or indeed washed their clothes less often.
there is enormous growth potential in leading the evolution of consumers to branded and processed foods.750 crores as in 1999. Mushrooms etc. both interms of resource and focus. whichthe current business simply could not afford. Over the last few years they have focused on putting in place the building blocks of a strong Foods business. Today. They could achieve this by raising the bar and becoming worldclass in what their brands 69 . SpecialityChemicals. people talent or media spend.Besides. Nickel Catalyst. They have consolidated theuir portfolio and improved thegross margins by over 13% through product mix and cost reduction. Historically their Foods businesswas fragmented and lacked scale. Therefore they divested the non-valueadded parts like Vanaspati. Thermometers. FMCG still offers enormous potential As the largest FMCG player it was up to them to reverse the downtrading to realize itstrue growth potential. Building blocks of a strong Foods business In Foods. with higher levels of resource concentration.They decided to disengage from all non-FMCG or commodity businesses.1. withsales of Rs. Adhesives. The Foods business will now invest for growth through relevant innovation. be ittechnology. wehave divested and discontinued 15 businesses including Animal Feeds. They have alsocleared the supply chain of all old stock and geared up for fresh availability on shelf. Theyrecognized that changing food habits would require considerable investment. These will be their main engines of growth. Seeds. In all.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. consisting of 35 brands across 20 categories. their Foods business has a healthy gross margin and a supply chain driven byfreshness. It was often commoditized with low margins.
Across the world. In 2000.40. FMCG still offers enormous potential As the largest FMCG player it was up to them to reverse the downtrading to realize itstrue growth potential. the FMCG market will be over Rs. 70 .000 crores from a current value of Rs. Six brands – Brooke Bond. Across the world. Over the next 10years. They could achieve this by raising the bar and becoming worldclass in what their brands offered and how they worked.40.000 crores from a current value of Rs. 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. This is an opportunity that they have to seize. the FMCG market will be over Rs. At thoselevels. per capita income in India is likely to touch China’s current levels. Nothing less would do.100. their Foods business has a healthy gross margin and a supply chain driven byfreshness. per capita income in India is likely to touch China’s current levels.000 crores. They chose to focus on 35 power brands covering all consumer appeal and price segments. At thoselevels.000 crores. they are seeing a strongcorrelation between income levels and the size of FMCG markets. The Foods business will now invest for growth through relevant innovation. They are already seeing the benefits. Today. Over the next 10years. This is an opportunity that they have to seize. they had 110 brands. they are seeing a strongcorrelation between income levels and the size of FMCG markets. Nothing less would do.100.offered and how they worked.Penetration levels in several of the categories and consumption levels in all of thecategories is low by any comparison.Penetration levels in several of the categories and consumption levels in all of thecategories is low by any comparison. many undifferentiated and lacking scale.
“A soap is a soap is a soap!” Or indeed. “All detergents clean clothes as well”. It moved from being a mere soap to a health essential.400 crores. How often have we heard someonesay. They had to move from selling a soap or a detergent to something far more important and central to the consumer’s life.In the case of Lifebuoy. Rin and Wheel – have emerged as mega brands in the last five years. each with sales of more thanRs. in the laundry market.They have also launched several low unit size and price packs for single use to makethe brands more accessible to all income groups. they are the first tointroduce a branded toothpaste in a tube at Rs. Today Lifebuoy.Lifebuoy. Fair & Lovely. Lux. For example. in the last three years to upgrade the brands. Similarly. or 5% of sales.In several cases they reduced prices to make the brands more affordable. Theyhave invested over Rs. Imagine the importance of that benefit to consumers in 71 .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.5. has grown at over 15% for the last three years.5 and a branded quality shampoo in a bottle at Rs. Surf Excel went well beyond the benefit of ‘greatclean’ by saving two buckets of water with every wash. their oldest brand. it was only when they associated it with the promise of health and protection against disease that it claimed a larger space in the consumer’smind. 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. Better quality and more affordable prices have increased the value to the consumer.
cities, who often get running water for only a couple of hours a day. Surf Excel is one of their fastest growing brands today.Both Lifebuoy and Surf Excel have succeeded because they are relevant to two keyconcerns of the Indian housewife: family health and the scarcity of water.In addition to the growing consciousness of health, consumers today are looking for ways to look good and feel good so that they can get much more out of life. In short,consumers are seeking Vitality in their lives. Their portfolio of 35 power brands isuniquely positioned to offer nutrition, hygiene and personal care benefits and therebydeliver Vitality. Technology, the Key Differentiator Their brands and sound understanding of the local consumer are supported by a worldclass Research and Development capability. They have over 200 of the brightestscientists and technologists based in India.Their recent reorganization leverages the talent pool from across 16 global technologycentres, of which four are in India. In all, they have over 4,000 high quality mindsacross Unilever working relentlessly to provide new benefits that make a realdifference the consumers. Winning with Customers Hindustan Lever has historically had a strong bond with its customers. They havestrengthened this and reinvented the way they manage their distribution channels and their customers. The sales structure has been transformed to leverage scale and buildexpertise in servicing Modern Trade and Rural Markets. They have also de-layeredtheir sales force to improve the response times and service levels.Their customers are serviced on continuous replenishment. This is possible because of IT connectivity across the extended supply chain of about 2,000 suppliers, 80 factoriesand 7,000 stockists. They have also combined backend processes into a commonShared Service
infrastructure, which supports the units across the country. All theseinitiatives together have enhanced operational efficiencies, improved the service to thecustomers and have brought us closer to the marketplace. Our Acorns: Investing in our Future In the pursuit of growth, they have also begun to nurture some acorns for the future.These are both new businesses and new ways of engaging with consumers.Their entry into Water Purifiers, through Pureit, shows great promise. Pureit delivers100% protection against all water-borne diseases. It provides water which is as safe as boiled water, without needing electricity or continuous tap water supply. At 17 paise per litre, it is extremely affordable for the common man. They have launched it inTamil Nadu and are fine-tuning all aspects of the business system before a phasednational launch.In urban India, Hindustan Lever Network (HLN) is their direct selling initiativeselling a special range of products. It already reaches 1,400 towns with over 3 lakhconsultants. Besides reach, HLN enables direct interaction with consumers andcustomises solutions for them to give them a complete brand experience Our People & Organisation They have restructured the company, integrating eight Profit Centres into twoDivisions – Home and Personal Care (HPC) and Foods. The result is a simpler andleaner organisation, less hierarchical with fewer levels and greater empowerment.This has eliminated complexity and speeded up decision making. Today the companyis far more youthful in attitude and spirit. There is greater openness and transparency.
The Transformation: Investment in the Future To ensure that Hindustan Lever remains competitive in the long-term, they
have madesignificant investments in product quality, pricing and marketing. As mentionedearlier, the investment in product quality alone has been in excess of Rs. 400 crores,or 5% of our sales.In addition there has been the cost of defending their market position. Recently aninternational competitor attacked their laundry business led by a price reduction of asmuch as 50%. They acted with speed and determination leveraging all their pastexperience in India and internationally. They have been able to fully protect their market leadership and share, albeit sacrificing shortterm profit. They made thisnecessary trade-off as market share is the best means of sustaining future profit. Over time, their stronger market positions will surely lead to greater long-term profit.Despite these significant investments to strengthen the long-term competitiveness andthe costs of defending the strong market position, they still remain one of the most profitable companies in the country.
Strength 1. Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods company, touching the lives of two out of three Indians with over 20 distinct categories in Home & Personal Care Products and Foods & Beverages.. 2. Due to its long presence in India – has deep penetration – 20 consumer product category, over 15,000 employees, including over 1,300 managers, is to "add vitality
3. The company derives 44.3% of its revenues from soaps and detergents, 26.6% from personal care products, 10.5% from beverages, and the rest from foods, ice creams, exports, and other products. 4. Low cost of production due to economic of scale. That means higher profits and / or more competitioners. Better market penetration. 5. HUL is also one of the country's largest exporters; it has been recognised as a Golden Super Star Trading House by the Government of India. Weakness 1. Continuous threat from other competitors. Opportunities 1. Increasing per capita national income resulting in higher disposable income. 2. Growing middle class and growing urban population. 3. Increasing gifts cultures.
4. cost pressure is likely due to rising crude and freight costs. Threats 1. Increasing departmental stores concept – impulse @ at cash counters. 5. CONCLUSION 76 . reason is that. Globalization. HLL's tea business has declined marginally.
ariel.income and other attributes.This company project has demonstrated “HINDUSTAN UNILEVER’S MARKETING STRATEGIES AND POLICIES” that has proved to be extensive through. In this project it possible to see the success of Hindustan Unilever’s in it’s indorse its strong potential to continue to do well.lifebuoy.This sector has member of players which altimately shopes the buying decision products like. are some of the main ingredients of FMCG sector.personality.Lux.pantene etc.Demography. Different line of products are offering customers to choose according to their gender. FMCG secter hold a prime importance as the competition is increasing day by day. SUGGESTIONS 77 .clinic plus. and of great benefit to the company in furthering its competitive advantage.
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. HUL They need to enter into lower segments of detergent. 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.
LIMITATIONS While undertaking my study I was encountered with some limitations: Limited time was provided to complete the study. Cost involved in collecting the data was high. To fix an appointment with the dealers was also very difficult task and even after that many time people was not turn up for the appointment. 79 .
. 4th Edition 2002 Page 135. Thakur Devendra. 2005 Page 85. Research Methodology.Hall of India Pvt. Prentice. Ltd.. Marketing Management. . 2001 Page 365. 10th Edition. Deep & Deep Publication Pvt.BIBLIOGRAPHY BOOKS: • • • Kothari C. 80 . Kottler Philip. Ltd.R. Research Methodology.