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About the marketing strategy This strategy sets out how Tourism Tyne and Wear, New castle Gateshead Initiative and the Tyne and Wear local authorities and our partners will work together to attract more leisure visitors – for holidays, short breaks or day trips – to destinations in Tyne and Wear. Introduction to Marketing: Definition of Marketing: Philip Kotler The marketing guru has said “Marketing is a social and managerial process by which individuals and group obtain what they need and want through creating, offering and changing products of value with others”. American marketing association Addressed “marketing is the performance of business activities that direct the flow of goods and services from producer to consumer to user”. Cundiff and still “Marketing is the business process by which products are matched with market and through which transfers of ownership are affected”. In the words of Hansen “Marketing is the process of discovering and translating consumers needs and wants into product and services and specifications, creating demand for these products and services and then in term expanding demand.
By all these definitions we can derive that marketing is compressive term that includes all resource and set of activities necessary to direct and facilitate flow of goods and services from producer to consumer in the process of distribution. Objectives of Marketing: At the end of all marketing activities is the satisfaction of human wants and derive profits from them. The following are the most significant objectives of marketing. • Intelligent and effective application of modern marketing: Today economic changing growth rate, relatively high inflation, high interest rates, rapid technological change and new aggressive rivals challenge marketing firm to adopt and respond to change for survival and prosperity. • To develop the market field: Marketing is the most dynamic field where change rules the roost. Change is continuing pre occupation among marketers. • To develop and implement guiding policies for better results: Innovative marketing guiding policies and their effective implementation to assure better results. • To find sources for further information concerning the market problems: The world of business in moving on the basis of countless decisions, marketing decisions are more complex and intricate having impinging impact on the very fortune of a company. • To take appropriate and opportune action in the course of working. The marketing information system designed by the marketing organization helps in identifying the problem, investigating analyzing it and interpreting the problem for the final decision.
Functions of Marketing: Marketing involves certain activities to make the goods from producers to consumers. It consist of operations and an operation may be performed several times either by a producer, middleman, till the commodity finally reaches in the hand of consumers. 1. Functions of exchange Exchange implies the transfer of goods and services money or money’s worth. Exchange brings about change in the ownership of goods. It is a two-way process invading two separate but supporting activities viz, buying and selling. • Selling: Selling is the sum total of all those activities that push the commodities to the buyers or consumers at a profitable price. It is the process that involves personal and impersonal efforts made in persuading the prospective customers to buy a commodity or service. Product planning and development: Product – planning is the planning or forecasting what consumers want in terms of quantity, quality, time, place, price, where as, product development refers to making available such goods to meet the requirement of consumers as demanded by them. • Demand Creation: It includes such special efforts to induce and persuade the prospective users to purchase the products of the seller only. • Negotiation: Negotiation as to terms of quality, quantity, price of the product time and mode of transport payment etc… are to be made with prospective buyers. • Contractual: Once the terms and conditions are settled between buyers and sellers a final contract would be entered into, where legally, ownership of goods passes on from seller to buyer.
Buying: Buying is another function of exchange that refers to all such activities involves in the assembling of goods under a single ownership and control. Its immediate purpose is to bring commodities together where they are wanted for use in production for final consumption.
This buying function has following four elements: • Planning Assortments: Buyers are to study their own market condition in order know the types quantity and quality of goods that are required by final users. • Contractual: It is clothed with the selection of various sources of supply, keeping in touch with them, to get the goods quickly reasonably and regularly. • Negotiation: Buyers and sellers negotiate the terms and condition of price quantity, quality and time of delivery, transport & payment. • Contractual: It is the last phase that binds the parties of exchange by means of a contract where the titles to the goods more from seller to buyers. 2. Functions of Physical supply These are the functions that are related with creation of place and time utilities, they are: • Transportation: Transportation is the physical means to move the goods and people from a place to another. It is essential spoke in the wheel of market. It is responsible for the creation of time utility • Storage: Storage is equally important that is creates time utility. The products are to be preserved from time of production to the time of consumption. It is the base of consumers to get the goods as and when required.
in some cases. • 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. the Four Ps. regarding the market • Standardization: Standardization helps on tackle certain major problems of marketing. Jerome McCarthy divided marketing into four general sets of activities. Facilitating Functions These are the function that facilitates the process of exchange. It makes the exchange process smooth and acts as lubricating oil to the wheel of marketing. Products are often developed to meet the desires of groups of customers or even. especially advertising and branding. estimates. It includes all facts. opinion. views.3. 7P’s of Marketing: In popular usage. have passed into the language. His typology has become so universally recognized that his four activity sets. These decisions are based on market information. in professional usage the term has a wider meaning which recognizes that marketing is customer centered. "marketing" is the promotion of products. place etc… • Market information: The much desired success of marketing depends on correct and timely decisions. 5 . E. However. It is related with the division of commodities into distinct groups standardization involves establishment of certain criteria to which the goods must confirm. • Financing: Finance is the base for all marketing activities. for specific customers.
employees. referring to the channel by which a 6 . and how it relates to the end-user's needs and wants.brochures. including discounts. for example. • People: People refer to the customers. it is essential that you help him see what he is buying or not. e. The price need not be monetary . or company.it can simply be what is exchanged for the product or service. • 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. time. if the customers are informed in hand about the services and many such things. When a service goes out to the customer.The four Ps are: • Product: The Product management and Product marketing aspects of marketing deal with the specifications of the actual goods or services. This fourth P has also sometimes been called Place. point of sale placement or retailing. and personal selling. • Physical (Evidence): It refers to the experience of using a product or service. pamphlets etc serve this purpose Physical distribution refers to how the product gets to the customer. For example.g. publicity. management and everybody else involved in it. and refers to the various methods of promoting the product. It is essential for everyone to realize that the reputation of the brand that you are involved with is in the people's hands. • Pricing: This refers to the process of setting a price for a product. brand. • Promotion: This includes advertising. if they are provided in time. sales promotion. or attention.
adds "Perhaps the most significant criticism of the 4 Ps approach. Services marketing must account for the unique nature of services. Following are the phases of development of marketing 7 . Industrial products. services. whereas the essence of marketing should be the outside–in approach". online vs. The four Ps model is most useful when marketing low value consumer products. which geographic region or industry. high value consumer products require adjustments to this model. 1988). 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. Evolution of Marketing: Marketing has evolved from the time man existed on earth.g. These four elements are often referred to as the marketing mix. to which segment (young adults. families. Relationship marketing attempts to do this by looking at marketing from a long term relationship perspective rather than individual transactions. Even so. as well as a framework within which these can be used. retail). having made this important caveat. etc. As a counter to this. business people). A marketer can use these variables to craft a marketing plan. in Riding the Waves of Change (Jossey-Bass.product or service is sold (e. which you should be aware of. is that it unconsciously emphasizes the inside–out view (looking from the company outwards). Morgan.
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. Sales orientation: This stage witness major changes in all the spheres of economic life. Production orientation: This was the stage where producers.Barter system Production Orientation Sales Orientation Marketing Orientation Consumer Orientation Management Orientation Social Orientation Fig. The selling activity becomes the dominating factor without any efforts for the satisfaction of the consumer needs. 8 . 1 Barter system: The goods are exchanged against goods without any other medium of exchange like money.
000 crore (Rs 130 billion) allotted to mass media.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. to less than 50. But then. rural marketing in India is still about a van campaign. at least. notable exceptions. of companies wanting to move beyond urban boundaries.000 people for consumer durables.or. MARKETING STRATEGY OF FMCG PRODUCTS: Barring a few. Still. Thus. the total budget for rural marketing is only about Rs 500 crore (Rs 5 billion). a badlymade commercial.000 for fast-moving consumer goods. it is heartening to note the increasing awareness of the importance of rural markets . compared to the over Rs 13. According to estimates by the Rural Marketing Agencies Association of India. 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. 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. Of course. "rural" means different things to different people: from 500. promotion and distribution. a few painted walls and the occasional participation in village haats and melas. 9 . Management orientation: The marketing function assumes the managerial role to co-ordinate all the interacting business with the objectives of planning. social welfare becomes the added dimension to the companies.
They all started in small. concentrated markets. is imperative . the most enduring example of a brand that began as a regional player and is now a giant. And don't forget Nirma. But only consider the huge successes of some regional brands. 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. People power Total commitment from top leadership. Their communication. especially in the FMCG sector. touched a chord in the target audience. 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. Fairever Cream and so on). Anchor (100 per cent vegetarian toothpaste). be it a simple radio spot or a wall painting or a theatre film. Meera Herbal Powder. appealing to the local ethos and aspirations of the targeted area. But even more important is the need for a dedicated task force.The TRPs and NRS/IRS data help you determine the efficacy of TV and press marketing. 10 . Companies like Cavin Kare (Chik Shampoo. their policies were flexible and they could adopt to fast changing marketing situations. What should companies do to step up their payback from rural marketing efforts? Here are some steps that should help. 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. most importantly. And.the successes of Hindustan Lever [ Get Quote ] and ITC are proof of this statement. which are giving the multinationals a run for their money.
What started as a great rural marketing initiative has been relegated to the dustbin. we were involved with two big clients.. you get only monkeys . In both cases. the fate of many rural marketing initiatives in the country. management graduates who have studied the subject as an elective. in keeping with their companies' policy of shifting and promoting people. you pay peanuts. And send them out in the field only after thorough training. Many of these are students from small towns. until the completion of a specific task. which many of the urban-oriented management graduates who are at the helm of affairs at most organisations do not possess. were shifted out midway. Pay them well remember.. Recently. The best bet is to recruit students from specialised institutes such as the Indian Institute of Rural Management. The teams that succeeded felt no ownership of the campaigns they had not initiated. the teams that briefed us in the initial stages and participated enthusiastically in the campaign. 11 . or at least. people with fire in their bellies who want to prove themselves in big companies and have no issues about working in smaller markets.and discuss the path their careers are likely to take in the organisation. A separate marketing and sales vertical headed by people with passion and commitment to rural marketing and supported by a field team that can face the rough and tough of the vast country-side with courage and conviction is a must. Ensure the consistency of the team involved in any project.Rural marketing efforts need special mindsets.
Most of them have previously appointed vendors who implement the company's ideas blindly. with regard to products and brands. aspirations and fears of rural customers. If you are interested in the second alternative. Know your customers A good place to begin is studying the mindset of your customers. All too often. 12 . Our experience shows that the attitudes. with both short term and long term goals. clients insist their knowledge of their customers (based on studies of urban India) is enough on which to base an action plan. be they van campaigns or below-the-line activities. is very different from their urban counterparts. define your objective: is it a tactical effort to achieve increased sales in specific areas during a specific time. a comprehensive brand building strategy in rural India. There is very little effort to tailor whatever communication is made in such efforts.Goals are good Early on in the campaign. is a must. 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. to suit the local audience or fit it with the overall campaign efforts in the mass media. 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. so you can create a customised plan of action.
000 villages. and to that extent make your effort cost-effective. 13 . The refrigerator with standby power for 12 hours. pressure cookers with two handles and a radio with key-winding mechanism are all the result of research. The haatswere popular with the poorest agricultural labourers who consciously buy the duplicate. fuelled by television commercials. How does that happen? It's a direct result of rising aspirations. mostly sold through such local haats and bazaars. spurious products that are sold in these bazaars. But it's not really as nightmarish as it is made out to be.the humongous task of physically reaching your product to over 600. since they can't afford the real thing. For instance.000 crore (Rs 100 billion) to spurious products. More and more companies turn to the local haats to sell their products.Research can give you invaluable ideas for new product development as well as new methods of reaching your target audience. ensure that the people who patronise these haats are the kind who will buy your brand. who then buys the products from the nearest feeder markets. The consumer demands the product from the local shopkeeper. Ensure availability Most anecdotes about rural marketing centre on the distribution aspect . at least keeping in mind the present goals of marketing companies in rural India. most of them without motorable roads. we recently conducted a survey among some haats in Tamil Nadu. While haats offer opportunities to target consumers from several villages at one place. It is estimated that FMCG companies lost more than Rs 10. We've all heard about the shampoo sachets that are available in even the smallest villages. with some interesting results.
000. in fact.” says Vats. So. Studies also indicate that rural consumers prefer to shop for durables such as televisions.Which means if you can ensure distribution to the feeder markets in towns or villages with populations of 10-15. if your products are in towns with populations of 50. “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. This comes even as Unilever is scouting for a potential buyer for its laundry business in the US.000. “Our strategy for growth. A worker stacks Hindustan Unilever products in a store in Mumbai HUL says it is quite upbeat about the segment and says the laundry segment is one of its “key growth areas.” insists Sudhanshu Vats. is now passe. MARKETING STRATEGY ADOPTED BY HUL “Price cut or hike is not a long-term growth strategy.” he said.” 14 . category head. new consumer and retail trends and aggressive marketing and promotions. Pricing. you're closer to the rural consumer than you would have thought. now is focused on product innovation. automobiles and appliances in the nearest big town or city. home care. you've already taken the first step towards reaching your target customer.” “We have done key innovations across the product portfolio and it is working for us.
7% percentage points to 13. up to a 7. HUL’s soaps and detergents segment contributed around Rs5.8% in the quarter ended June from 35. 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.4% over 2005. saw its market share dip by 1. the Ahmedabad-based manufacturer. the industry is stabilizing.HUL’s market share in the laundry segment grew to around 37.” says Unmesh Sharma. however. The recent price war between companies led to erosion in their profitability but now. the increase was not at the expense of price war with its multinational rival Procter & Gamble Co. this time.5% in the same period last year. a value brand that. According to ACNielsen. according the market research firm ACNielsen.908 crore in 2006 and rose 8. Wheel. according to Vats contributes around 50% of HUL’s laundry segment revenues. However. increased its market share by 2 percentage points in the same period.596 crore to the company’s total sales of Rs12. the laundry industry in India was worth Rs7. Nirma Ltd. P&G also gained 0.6% share.5%. an analyst at Macquarie Securities here. In 2006. “Laundry has been an attractive segment in the past and is likely to keep growing in the near future.103 crore. with a total share of about 18%. According to Vats. 15 .5 percentage points.
“Still.“Consumers today are buying more clothes. it is too early to say what result their new strategies will yield. such as promotional campaigns and advertising. “Some of HUL’s recent moves.” says Vats.” Still. “Trends suggest that the usage of detergents has gone up as a result. seem right.” says Macquarie’s Sharma.” OBJECTIVE OF THE STUDY 16 . people want to use better and branded products. Also. with premium quality of clothes. analysts remain cautious.
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. This is widely awaited. It would help to analyze the current position of HUL and then to sector marketing channels for the same.This project is applicable on the on the area of FMCG. 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. COMPANY PROFILE 18 .
Hindustan Unilever Ltd (HUL) has grown from strength to strength with new technologies being introduced to make the HLL consumer goods business. In addition to FMCG products it is the country's biggest exporter of tea. The company focuses on efficient delivery to consumers with an improved supply chain. a subsidiary of Unilever. 2007 the company has changed the name to Hindustan Unilever Limited. including several not occupied by Unilever in other markets such as preserves and bakery products. It is the country's biggest consumer goods company. one of the most efficient in the world. The Hindustan Unilever Ltd (HLL) is India’s no. It is generally acknowledged 19 . Hindustan Unilever Limited (HUL). is a fast moving consumer goods (FMCG) company based in India.The Hindustan Unilever Ltd’s(HUL) Inc has taken the opportunity to offer us a broader view of FMCG category. These three companies merged to form Hindustan Lever Limited in November 1956. HUL inhabits virtually every sector of the consumer goods market. Hindustan Vanaspati Manufacturing Company. Effective July 19. The company’s history dates back to 1931 when Unilever set up its first Indian subsidiary.1 FMCG is able to share with their market insights based upon unparalleled breath of consumer goods experience. Hindustan Unilever is Unilever's main operating business in India. brand building initiatives and innovation. and far and away the leading advertiser. followed by Lever Brothers India Limited (1933) and United Traders Limited (1935). which has helped the company to sustain its leadership position in the overall FMCG category in India. and is also one of the country’s top five exporters.
Asia and Africa. although performance slowed dramatically between 2000 and 2004.9 percent growth in Europe and 4.200 managers 2. 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.000 suppliers & associates 75 Manufacturing Locations 45 C&FAs. Unilever.3 percent in 2007. and ITC Ltd.based Procter & Gamble is stocking Indian stores with Olay skin. will see their share of the company's growth fall to 2 percent in 2010 from 3. Unilever's overall sales growth will slow to 4.9 percent in 2010 from an estimated 5.care products after nearly halving the local prices of Ariel and Tide detergents in 2004. Hindustan Unilever – A 75 Year Commitment 15. which make up about a third of Unilever's worldwide sales. helping offset 1. step up marketing in Asia's third-biggest economy.to be one of India's best-run businesses. may see global revenue growth slow in 2010 as Procter & Gamble Co.Now Cincinnati.3 percent in 2007. prior to restructuring. 4.000 Stockists Total Coverage 6.000 employees 1. Revenue from the two continents rose 11. according to the median of five analysts in a Bloomberg survey. which sells soap to more than 500 million Indians.3 Mln Outlets 20 .2 percent in North and South America. according to Brusselsbased brokerage Petercam SA.4 percent in the first nine months of last year.
545 Towns 2. HUL and yet another Tata company. Lakme Limited. Lakme Lever Limited. Unilever set up its first Indian subsidiary. Tata Oil Mills Company (TOMCO) merged with HUL. These included Brooke Bond (1984). These three companies merged to form HUL in November 1956. Direct Coverage 1 Mln outlets Population of INDIA: 1027 Mln 5. Lipton (1972) and Pond’s (1986). Hindustan Vanaspati Manufacturing Company. formed a 50:50 joint venture.38.5 Mln outlets 6. • In 1993.0 Mln outlets HISTORY OF HINDUSTAN UNILEVER LTD • It was in the summer of 1888 that Unilever of England first marketed Sunlight soap in India. Vanaspati was launched in 1918 and Dalda came to the market in 1937. Lakme Limited sold its brands to HUL and divested its 50 per cent stake in the joint venture to the FMCG giant. followed by Lever Brothers India Limited (1933) and United Traders Limited (1935). Two years later.000 Villages 5. • In 1931. 21 . • Subsequently in 1998. • A number of prominent companies came into the HUL fold as result of Unilever’s international acquisitions. This was followed by brands like Pears and Vim.
which markets Huggies diapers and Kotex sanitary pads. employs 36. In a historic step.• HUL formed a 50:50 joint venture with the US-based Kimberly Clark Corporation in 1994. It is one of the earliest MNCs to have entered India 22 .000 people. • • In 2002. Kimberly-Clark Lever Ltd. including over 1. HUL acquired the government s remaining stake in Modern Foods. HUL picked up 74 per cent of the equity of Modern Foods from the Indian government. and its factory represents the largest manufacturing investment in the Himalayan kingdom. • HUL has also set up a subsidiary in Nepal.350 managers. formerly known as Hindustan Lever Limited. Nepal Lever Limited (NLL). FMCG major Hindustan Unilever Limited (HUL).
ORGANIZATIONAL STRUCTURE Managing Direc tor General Mana ger Vice President Marketing Manufacturin Sales g Finance Distribution FIG.2 23 .
touching the lives of two out of three Indians with over 20 distinct categories in Home & Personal Care Products and Foods & Beverages.000 employees. Surf Excel. coffee. which holds 51. Close-up. and now has 24 . detergents.like Lifebuoy. They endow the company with a scale of combined volumes of about 4 million tonnes and sales of Rs. Knorr-Annapurna. personal products. tea. Lux. hygiene. it has been recognised as a Golden Super Star Trading House by the Government of India. comprising about 4. Pepsodent. Lakme. The Hindustan Unilever Research Centre (HLRC) was set up in 1958. HUL's distribution network.soaps. Wheel. HUL's brands .3 million retail outlets reaching the entire urban population .PRESENT STATUS Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods company. which incorporates latest technology in all its operations. Kwality Wall's – are household names across the country and span many categories . The rest of the shareholding is distributed among 380. The operations involve over 2. It is a mission HUL shares with its parent company. The mission that inspires HUL's over 15.55% of the equity.000 individual shareholders and financial institutions. is to "add vitality to life. HUL is also one of the country's largest exporters. Sunsilk. ice cream and culinary products.10. Fair & Lovely. look good and get more out of life. Unilever. Brooke Bond.000 suppliers and associates. Pond's. HUL has traditionally been a company. Kissan.300 managers.000crore.and about 250 million rural consumer.000 redistribution stockiest. and personal care with brands that help people feel good. Rin. including over 1. branded staples. They are manufactured over 40 factories across India. covering 6." HUL meets everyday needs for nutrition. Clinic.
HUL says it is quite upbeat about the segment and says the laundry segment is one of its “key growth areas.facilities in Mumbai and Bangalore. is now passe. home care. Pricing.” HUL’s market share in the laundry segment grew to around 37. This comes even as Unilever is scouting for a potential buyer for its laundry business in the US.” says Vats. the increase was not at the expense of price war with its multinational rival Procter & Gamble Co. P&G also gained 0. Hindustan Unilever Ltd (HUL).5 percentage points. Indian subsidiary of the Anglo-Dutch consumer goods company Unilever Plc. according the market research firm ACNielsen. new consumer and retail trends and aggressive marketing and promotions. now is focused on product innovation.6% share.” insists Sudhanshu Vats. the 25 .8% in the quarter ended June from 35.” “We have done key innovations across the product portfolio and it is working for us. HLRC and the Global Technology Centres in India have over 200 highly qualified scientists and technologists. is now working on a new growth strategy for its laundry business. in fact. category head. many with post-doctoral experience acquired in the US and Europe.5% in the same period last year. HUL’S NEW GROWTH STRATEGY After having fought a bitter price battle for market share with its rivals. Nirma Ltd. “Price cut or hike is not a long-term growth strategy. “We successfully migrated from Rin Supreme to Surf Excel and Wheel Smart Srimati—which was rolled out in 2006—is also on the right track. However.” he said. up to a 7. this time. “Our strategy for growth.
4% over 2005. analysts remain cautious. an analyst at Macquarie Securities here. According to ACNielsen. saw its market share dip by 1.” says Unmesh Sharma.7% percentage points to 13. it is too early to say what result their new strategies will yield. 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. people want to use better and branded products. The recent price war between companies led to erosion in their profitability but now. “Some of HUL’s recent moves. seem right.” Still.5%. the laundry industry in India was worth Rs7. HUL doesn’t report its laundry revenues separately but puts them under the soaps and detergent category. however. with premium quality of clothes. Also.103 crore. increased its market share by 2 percentage points in the same period. a value brand that.” says Vats. “Consumers today are buying more clothes. Wheel.908 crore in 2006 and rose 8.” 26 .596 crore to the company’s total sales of Rs12. according to Vats contributes around 50% of HUL’s laundry segment revenues.” says Macquarie’s Sharma. According to Vats. such as promotional campaigns and advertising. “Laundry has been an attractive segment in the past and is likely to keep growing in the near future. HUL’s soaps and detergents segment contributed around Rs5. with a total share of about 18%.Ahmedabad-based manufacturer. In 2006. the industry is stabilizing. “Trends suggest that the usage of detergents has gone up as a result. “Still.
Liril.FIVE P’S OF MARKETING Product Satisfaction suffices. But delight dazzles the average company will compete for customer by conforming to her expectation consistently. Dove. Pears and Rexona • Laundry items: Surf Excel. Pond’s and Vaseline • Hair care: Sunsilk and Clinic • Oral care: Pepsodent and Close up • Deodorants: 27 . Lifebuoy. The wide variety products offered by the company include: The company’s popular product’s include: • Bathing soaps: Lux. Hindustan Unilever Ltd(HUL) offer such product. But the winner will surpass them by constantly exceeding her expectation. Hamam. Rin and Wheel • Skin care: Fair & Lovely. delivering to her door step additional benefits which she would never have imagined possible. Breeze.
So every customer segment has different price expectation from the product. Therefore 28 . Pricing Make no mistake. Second P of marketing is not another name for blindly lowering prices and relying on this strategy alone to increase sales dramatically. 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.Axe and Rexona • Colour cosmetics: Lakme • Ayurvedic: Ayush • Tea: Brooke Bond and Lipton • Coffee: Bru • Foods: Kissan. Hindustan Unilever Ltd(HUL) has launched various products which cater to all customer segments. Annapurna and Knorr • Ice cream: Kwality Wall’s .
India – The operations involve over 2. and then progressively moving through them. the brand that sells more is the one that reaches the highest number of customers. and about 250 million rural consumers. hire the hottest strategies on the block. Marketers and finance manager need a new term to evaluate their business: Distribution Equity. In a product and price parity situation. It takes much more time and effort to build. Buyers are paying for distribution equity not brand equity and market shares. But getting their means managing wildly 29 . and the marketer who can get to the to the consumer ahead of competition will give a hard – to – overtake lead.maximizing the returns involves identifying right price level for each segment. but the end of it all. you would be know of selling your products. swamp prime television with best Ads. HUL's distribution network. The fundamental axiom of Indian consumer market is this: You can set up a state-of –the-art manufacturing facility. comprising about 4.000 suppliers and associates.000 redistribution stockists. distribution equity is much together to erode. The cardinal task before the Indian market is managing is to shoe-horn its product on retail shelves.television has already primed and population for consumption. Physical Distribution – “Place” BRAND ISN’T THE ONLY ANY MORE . but once built. 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. covering 6.3 million retail outlets reaching the entire urban population.
Own distribution network consist of clearing and forwarding (C&F) agents & distribution stockiest. This network of distribution can either contact wholesalers and which in turn retailers or the distributors can contact to the retailers directly. Beside use of improved logistics. This increase in distribution is going to be accompanied by reduction in channel costs. the receiver must at least half want it to. it has installed visi colors at several outlets. The company is looking to reduce this parity level. Hindustan Unilever Ltd(HUL) distribution network has expanded. And your brand equity isn’t going to help when it comes to tackling these issues. at 18% of total costs. At Hindustan Unilever Ltd(HUL). value system. Looking at the low penetration of few products. Hindustan Unilever Ltd(HUL) marketing costs. The other reason is arch rival Procter & Gamble Co. To address the issue of product stability. life style. This helps in maintaining consumption in summer when sales usually drops due to the fact that the heal effects product quality and thereby off takes. Hindustan Unilever Ltd(HUL) distributes the product in the manner stated above. Effective advertising is rarely hectoring or loudly 30 . they believe that selling FMCG is it like selling soft drinks. transport and communication network. reaches more than a million retailers. a distribution expansion would itself being incremental volume.different terrains-climate. Promotion If an advertisement is to communicate effectively. Hindustan Unilever Ltd(HUL) is also attempting to improve the distribution quality. Once the stock product reaches retailers. is much higher than Procter & Gamble Co. language. the prospective customers can have access to the product. and be prepared too take step toward the sender.
Something familiar is planned for phone-book as well. More often than not. grab her attention evoke her comprehension. 31 .explicit…. It often both attracts and generates arm feelings. “cream bathing bar for dove soap” and daag ache hai for surf excel” have been sure shot winner with the audience. grab her acceptance and then extract retention competing with thousands of other units of communication trying to do the same. As well as outdoor and radio ads. a successful campaign has a stronger element of the unexpected a quality that good advertising shares with much worthwhile literature. To penetrate into the inner recesses of her memory. a home water purifier which supplies drinking water without boiling/need of electricity . It has also launched Pureit. Naturally. In cinemas. All ICICI’ s ATM a message flashes on the screen as soon as customer insert his ATM card. that produced just the value vacuum that Hindustan Unilever Ltd(HUL) was looking to fill. 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. • Finding showed that the adults felt too conscious to be seen consuming a product actually meant for children. Thereafter it was the job of the advertising to communicate customer the wonderful feeling that he could experience by re-discoursing the careful. The strategic response address the emotional appeal of the band to the child within the adult. pleasure – seeking child within himself – a graft these feeling onto the Ad campaign like “hasso to khul k hasso for close up”. ad agency contract has created communication for cinemas and even ATM machines for the brand. 30 catteries in Mumbai have been selected. communication must first ensure exposure. unself conscious.
and the winner will be that super value marketers…. specially targeted during festivals and events such as Valentines day. In the 1980s.unilever. and luxury goods flourished.e.com). and the discounting era grew strong. It’s a combination of spiffing up its key brand. etc…. Some of today’s most successful companies recognize those customers are more educated and able to recognize true customer value… Positioning is simply concentrating on an idea – or – even a word defines that company in the mind of the consumer. Beside the company website (i. today customer uses complicated decision making process to assess the 32 . researching and improving the newer products that haven’t taken off. supported with high ad – spends that Hindustan Unilever(Ltd) hopes will see it emerges stronger after the current slowdown. As a variety of competitive claims assails her senses. It is more efficient to market one successful concept to one large group of people than 50 product or service ideas to 50 separate group… repositioning is a must when customer attitude have changed and product have strayed away from the consumer’s long standing perception of them… Hindustan Unilever(Ltd) is an anchor in sea of consumer products. as well as expand the market. Ad since any discussion today would be incomplete without mention ‘e’ word. the management plans to tap this new channel of marketing. Today’s consumer demanding “more for less”. consumers began to demand “more for same”.Ad spend in 2000 was about 14% of sales and the management said that plans to maintain as spend at this level in the current year also. that the company has launched. Positioning In the 1970s consumers were ready to pay “more for more”. it had also entered into various marketing relationship with other portals. www.
the quicker becomes her search process.unilever. their interests and activities) the benefits which consumers look for in a product or on the occasions when the product might be consumed. 33 . Since Hindustan Unilever(Ltd) is more clearly associated with a particular set of attributes in terms of benefits and prices. Consumers are groups. each with different needs and wants. Hindustan Unilever(Ltd) takes into account all these factors when producing a range of products. such as the: Break segment – products which are normally consume as a snatched break and often with tea and coffee. HINDUSTAN UNILEVER’S MARKET SEGMENTATION Market place for any product is comprised of many different segments of consumers. material states income etc…) The lifestyle of consumers (i. “Lifebuoy has become more than just a red bar of soap – today the brand provides hygiene and health solutions for families 2) Fair & Lovely. It targets different segments within the market.alternative before making a purchase. as www. Markets segmentation can be defined in a number of ways such as: Demographic variables (e. which promises a lighter skin tone for many of India’s complexion-conscious consumers.g. a hot-selling “fairness” cream. gender. Positioning of individual product: 1) Lifebuoy is ‘one of Unilever’s oldest brands’ with more than a hundred-year history.e.com informs.
Impulse segment – these products are often purchase on impulse. used these and then. They include product such as close up. 34 . taken home consumed at a later stage. Take home segment – this describes product that are normally purchased in supermarkets.
In 2006.908 crore in 2006 and rose 8. This comes even as Unilever is scouting for a potential buyer for its laundry business in the US.103 crore. new consumer and retail trends and aggressive marketing and promotions. According to ACNielsen. category head. Pricing. home care. in fact.8% in the quarter ended June from 35.” HUL’s market share in the laundry segment grew to around 37. 35 .” insists Sudhanshu Vats. “Price cut or hike is not a long-term growth strategy. HUL’s soaps and detergents segment contributed around Rs5. is now working on a new growth strategy for its laundry business. Indian subsidiary of the Anglo-Dutch consumer goods company Unilever Plc. now is focused on product innovation.” he said. HUL doesn’t report its laundry revenues separately but puts them under the soaps and detergent category. Hindustan Unilever Ltd (HUL). HUL says it is quite upbeat about the segment and says the laundry segment is one of its “key growth areas. is now passe.596 crore to the company’s total sales of Rs12.4% over 2005.5% in the same period last year.” says Vats.The Real Taste of Rejuvenation After having fought a bitter price battle for market share with its rivals.” “We have done key innovations across the product portfolio and it is working for us. the laundry industry in India was worth Rs7. “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. “Our strategy for growth.
India’s Top Consumer-Products Company Woos Affluent Shoppers With Global Brands Like Dove. and how shoppers are reacting to competitive brands. the India hypermarket chain. But India’s recent retail boom has created large stores and malls. chief executive of innovation and incubation at Pantaloon Retail. so the company wants to make sure it’s in with the new marketing crowd. whose executives used to have emissaries make obeisance at Lever house in downtown Mumbai.“Laundry has been an attractive segment in the past and is likely to keep growing in the near future. It’s primary market research at its most elemental. India’s largest retailer and a former manager at Hindustan Unilever. and it’s best done incognito. and the calls he makes on the headquarters of the big retail chains. what consumers are buying. the managing director of Hindustan Unilever. Baillie. the industry is stabilizing. wants to see how his products are stocked.” says an amazed Damodar Mall. 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. Hence Baillie’s Hypercity visits. That’s how Douglas Baillie likes it. This is quite a change for Hindustan Unilever. COMPETITIVE STRATEGY As Competition Heats Up. 36 . Hindustan Unilever has traditionally relied on small traders and mom-and-pop corner stores to retail its products. The recent price war between companies led to erosion in their profitability but now. “I can’t imagine any head from Lever House ever visiting other company offices like this. India’s premier consumer-products company.
That’s why the company is wooing consumers in big retail stores. These 37 .3%. The company. ACNielsen data shows. is down from 55. which is practically synonymous with India. and L’Oréal. and shampoos to soups. sauces and tea. including the popular Lux. soaps. and dominates most of those categories. makes everything from detergents.2% to 54%. In the last year. Yet early this year.Facing Competition From P&G And Others The reason for this new found egalitarianism is that the $3 billion Hindustan Unilever is facing serious competition. down from 21% a few years ago to just 11. Nivea.5 billion. All this has taken a toll on Hindustan Unilever’s operating margins. Finnish handset maker Nokia (NOK) dislodged it as the multinational with the highest revenues in India. Now Hindustan Unilever is under siege from aggressive Indian and foreign competitors such as Procter & Gamble (PG). Favorite detergent brands like Surf Excel and Rin are barely hanging onto their 37% share. Hindustan Lever tea brands like Brooke Bond and Lipton have dipped from a combined market share of 29.2% to 24.84% now. after ringing up India-based sales of $3. Hindustan Unilever’s lead in hand soaps.
2006. fitting in quite nicely with India’s turn towards more international products being sold in supermarkets. became the first foreigner in four decades to head the Indiancompany. the crown jewel whose managers had free rein to develop and build brands suitable for the local market. when Baillie. Sundaram. Yet this is still a dramatic change for Hindustan Unilever which. not long ago.” says D. Hindustan Unilever’s managers hope their revenues from big retail will increase from 5% today to over 25% in 2012. will grow to 28% by 2017. The takeover of Hindustan Lever by Unilever became evident in March. currently just 3. For many decades most Indians thought Hindustan Lever was a local company. From Local Player To Multinational Overnight the change sent shock waves through India. This means that all of Unilever’s brands will be available across global markets. organized retail. not a multinational. Hindustan Unilever’s finance director. and the cream of India’s management 38 . was the most successful and profitable company in the Unilever group.Parent Unilever will develop the brands and streamline product offerings across the world. Hindustan Unilever’s strategy is to market its premium products through the hundreds of megastores springing up across India. while its subsidiaries will sell the products.newly affluent shoppers present the best hope for the company’s future in India. a Zimbabwe-born British national. According to retail consultant KSA Technopak. That dovetails with parent company Unilever’s new global realignment of products. “It is a big game for us.5% of India’s total $336 billion retail market.
graduates made their careers there. If India is a great story.5 billion for five years while operating profit plunged 37%. Nitin Paranjpe. thanks to price increases. while the company’s track record in foods has been dismal. In India. 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.” He also wants to expand the foods business in conjunction with the parent.” 39 . admits that it’s now “tougher to hold on to market share. it has phased out more food products—wheat flour. Tougher To Hold On To Market Share Baillie says he intends to get the company back “into the competitive growth zone and do this in a manner that we can consistently deliver. For instance. in 2002 the company adopted Unilever’s global strategy of focusing on just 30 power brands instead of the total basket of 110 more local brands. frozen bread—than it has launched. Indeed. Then in February. to $274 million in 2004. executive director in charge of the home and personal care business. Last year operating profits reached $357 million. But the rich margins of the past have not returned. Hindustan Unilever executives are realistic about the new era in which it now operates. While the strategy aimed to conserve management energy. then known as Hindustan Lever. And there was some stiff competition from rival Procter & Gamble. where foods bring in half the revenues globally. was rechristened Hindustan Unilever to reflect its parentage. we aren’t the only ones seeing it. 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. The effect: The company’s sales and operating profits stagnated at $2. confectionery. the company’s home and personal care businesses account for 80% of revenues and 85% of profits at Hindustan Unilever. Baillie first had to sort out some past problems. 2007.
2007. according to the company.'' Hindustan Unilever Ltd. 30. toothpaste and tea in the quarter ended Sept. In June. is also making inroads. 2006. Its share of the shampoo market declined by more than a percentage point to 47. Currently. will continue to gain share in the next five years in India. `Profitable' Cigarettes 40 . Tata Tea’s market share increased from 16.. lost ground in shampoo. who rates the stock ``outperform. according to Ali Dibadj.1% to 19. the company said. compared with the year earlier. But today even L’Oreal has sachets of its Fructis shampoo. the Tata Group’s beverage company Tata Tea overtook Hindustan Unilever as India’s largest selling tea brand. ITC. It started selling more brands including Fiama Di Wills shampoo and Superia soap last year as the government raised tobacco taxes. the world's largest consumer-goods maker.7% in March. to 19. 52 percent owned by the London.5%.” FUTURE COMPETITIVE STRATEGY 2010 Expectations P&G. Bernstein in New York.Rivals like P&G and Nivea have also copied Hindustan Unilever’s best innovation: the small shampoo sachets it pioneered in the 1980s. which sold for less than 2 cents each and which expanded the market for Hindustan Unilever products among India’s rural masses. the largest Indian cigarette maker and partly owned by British American Tobacco Plc. bath soap. According to ACNielsen. 80% of Indian shampoo sales come from sachets. Managing Director Percy Siganporia says the gain is “a dream comes true for us. Tata Tea is exultant. while Hindustan Unilever slipped from 26.and Rotterdambased parent. an analyst at Sanford C.9% in July.7 percent.
It has sold soap in the country since 1888 and controls about half of the sales of products such as skin creams. generating about 6 percent of annual sales. This strategy will still satisfy investors.'' said Macquarie Securities Ltd.57) in the next year from 190.'' Rising prices of raw materials have made it more difficult for consumer-goods makers to pass on higher costs. ``It has the ability to take losses in this segment as long as it grows its sales. He expects the stock to drop to 180 rupees ($4. who has a ``neutral'' rating on the stock. an analyst at Angel Broking in Mumbai.9 rupees. bathing soaps and shampoo. who has an ``underperform'' rating on Hindustan Unilever.'' said Anand Shah. 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 .care portfolio. used to make soaps and foods. analyst Unmesh Sharma. The company has a market value of about $11. The price of palm oil.The tobacco maker ``has a very profitable cigarettes business which will help it to invest and expand its personal. ``Given the competition.8 billion. India is Unilever's biggest market in Asia. profitability will continue to be under pressure. has surged 70 percent in the past year.
Corporate Social Responsibility-Aiding In The Development Of The Country 42 . Grow a profitable foods and top end business. Grow ahead of the market by leading market development activities. Competitive Strengths Fig:3. Grow the bottom line ahead of the top line. Leverage positive impact of growing Indian economy on consumer spending. Strong commitment to sustainable development.
Shakti Three shakti initiatives • • • Shakti entrepreneur. Home and personal care products consists of personal and fabric wash. Exports. Personal Products. The Group's principal activities are to manufacture and market consumer products. Shakti vani: one-to-many communication for category growth ishakti: customized interaction with remote consumers. Impact of community • • business and social impact can go together. partnerships with diverse stakeholders. 43 .25000 villages. The products include home and personal care products. Ice Creams and Other. currently~44000 women cover 1. The Group operates through seven segments: Soaps and Detergents. foods and beverages. HINDUSTAN UNILEVER LIMITED .COMPARATIVE BUSINESS ANALYSIS Hindustan Unilever Limited Formerly known as Hindustan Lever Limited. Foods. industrial and agricultural products. Beverages.
which has helped the company to sustain its leadership position in the overall FMCG category in India. The company faces competition from international. marine products and mushrooms.employment grants-Rs 40000cr 44 . thermometers and plantations.THE BIG INDIAN ROMANCE Rural population larger than europe(800 million) Low growth in agriculture. This analysis compares Hindustan Unilever Limited with three other companies in closely related industry sectors. The company focuses on efficient delivery to consumers with an improved supply chain. Structural changes in the economy which are affecting this are: Disintermediation in the agricultural market price discovery mechanism has benefited farmers. bulk chemicals. fertilisers. skin and hair care. brand building initiatives and innovation. cooking fats and oils. yeast. Foods and beverages includes tea. local and regional players. ice creams. coffee. perfumery. fruit and vegetable products. Industrial and agricultural products includes specialty chemicals. seeds. atta and rawa. processed-tri-glycerides and agri commodities.household.income growth is crucial. oral care. rice. RURAL. salt. animal feeds. bakery fats. Its brands are spread across 20 consumer product categories. plant growth nutrients. Government grants and subsidies. deodorants. colour cosmetics and baby care.however rural income are growing faster with 70% population here. Hindustan Unilever markets consumer goods throughout India. leather. tomato products. footwear and carpets.
and screened some options to roll out one option that everyone was happy with. Howard L. Morgan and Shellye Archambeau. and relaunched Lifebuoy. “HUL missed an opportunity for increased marketing productivity when they repositioned. The company basically worked with “one agency. they add. Lodish. Though the company was ‘extremely innovative’ the way it handled the rural communications plan was very traditional. according to the authors.” reads an observation in a chapter titled ‘entrepreneurial advertising that works’. retargeted.” 45 .” write Leonard M.Table: 1 Did Hindustan Unilever Get Its Rural Pitch Right? A new book from Wharton School Publishing is critical of Hindustan Unilever’s advertising strategy in India. Ogilvy and Mather (O&M). 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. A better strategy. the authors of Marketing that Works.
Sundaram.” says the site.” The authors are of the view that government workers who have been interacting with villagers might have come up with some excellent ideas. Mr D. as explained by Mr Lodish et al. HUL. a few days ago.” The advertising spends have not been linear for the company. The company’s advertising and promotional spends during the quarter fell to Rs 336 crore. said: “We have been phasing our advertising spends depending on the launches and relaunches of brands. targeted “10. Prahalad’s The Fortune at the Bottom of the Pyramid . The O&M strategy.” So. 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 .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. and thus has increased sales of its low-cost. “or the villagers themselves might also be able to generate very effective communications vehicles. he added. Director (Finance & IT).” reads a quote in the book from C.Advertising strategy came for mention when the company reported the second quarter results. Lifebuoy is ‘one of Unilever’s oldest brands’ with more than a hundred-year history. “Differentiating soap products on the platform of health takes advantage of an opening in the competitive landscape for soap. from the earlier Rs 345 crore. HUL. mass-market soap. Prahalad notes. has been able to link the use of soap to a promise of health as a means of creating behavioural change. in a paragraph on innovation. through its innovative communication campaigns. “Lifebuoy has become more than just a red bar of soap – today the brand provides hygiene and health solutions for families.K.
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. concludes by stating that globally very progressive and innovative firms can also benefit from being “more entrepreneurial and less traditional in how they manage their advertising and communication. The strategic tie-up aims to build long term capabilities and bring ‘in-store’ execution focus in servicing the Company’s Modern Trade customers. which is one of the many discussed in the book. It has leading edge capabilities in servicing Modern Trade focused on shelf filling. 47 .” The HUL example. 2008. 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.” 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. “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. This JV will bring in world class execution excellence in the market and build the right capabilities to deliver the company’s marketing strategy in Modern Trade”.” wonder the authors. “As a big company. logistics for merchandising materials and in store execution.programs. many times it is difficult to change the procedures without creating significant political problems.
Dollops ice cream brand from Cadbury India. Lakme cosmetics brands from Tata. which promises a lighter skin. a hot-selling “fairness” cream. trained and guided by HLN's expert managers and trainers. The advertising campaign.Other Acquisition Hindustan Unilever has acquired several Indian FMCG companies so far. Hindustan Unilever Network is the direct selling channel of the company. These premium brands retail not in neighborhood small stores but in supermarkets and hypermarkets. It has about 350. where Indian customers love to touch and feel products. Hindustan Unilever is also milking one of its top brands—Fair & Lovely.000 consultants. has made the brand a winner. a home water purifier which supplies drinking water without boiling/need of electricity. NEW INITIATIVE Bringing High-End Dove To India Baillie is fighting back. tone for many of India’s complexion-conscious consumers. which suggests that regular use of the cream helps women gain confidence and makes them eligible for marriage. Over the past six months. It has also launched Pureit. This includes: • • • • Tata Oil Mills Company Brooke Bond Lipton India Modern Foods It acquired Kissan brand from UB group. Hindustan Unilever launched a high-end range of Pond’s skin care and Dove hair care products from Unilever’s international portfolio. all independent entrepreneurs. That has spawned 48 .
and creating access to relevant information 49 . Through Shakti. HUL has also responded in case of national calamities / adversities and contributes through various welfare measures. In the quarter ended June. HUL is creating micro-enterprise opportunities for rural women. These efforts have delivered some promising results. and sunblock lotions. but they are more focused and regaining their aggressiveness. women empowerment. thereby improving their livelihood and the standard of living in rural communities. But Hindustan Unilever’s brand is still tops. Analysts believe the company’s current strategy of concentrating on premium products and marketing them in the large retail stores is a winning one. with net profit up 29. consumer analyst at Mumbai brokerage First Global Securities. Baillie is also getting aggressive on foods. and rural development. In 2001. says that Hindustan Unilever “could have addressed a lot more categories. It is also involved in education and rehabilitation of special or underprivileged children. focusing on the Knorr brand of soups and curry mixes —ideal for the Indian market. at one-third the price of established Indian brands such as Aqua guard. which Hindustan Unilever exploited with the launch of water purifier Pureit in 2005. and relief & rehabilitation after the Tsunami caused devastation in South India. and water management.a host of competitive fairness creams. SERVICE TO SOCIETY HUL believes that an organisation's worth is also in the service it renders to the community. the company’s sales grew 13%. care for the destitute and HIV-positive. and Baillie is pleased with the modest turnaround. Shakti. Sumeet Budhraja. Reason enough to keep patrolling those store aisles. most recent being the village built by HUL in earthquake affected Gujarat.6%. Shakti also includes health and hygiene education through the Shakti Vani Programme. 2007.” He points to the demand for safe drinking water in India. the company embarked on an ambitious programme. HUL is focusing on health & hygiene education. soaps.
000 villages.through the iShakti community portal.000 women entrepreneurs in its fold. it is because of being singleminded in identifying itself with Indian aspirations and needs in every walk of life. The programme endeavours to induce adoption of hygienic practices among rural Indians and aims to bring down the incidence of diarrhoea. The program now covers 15 states in India and has over 31. By the end of 2010. PRODUCT PROFILE HUL’s business activities are divided into four broad areas: Home and personal care 50 . It has already touched 70 million people in approximately 15000 villages of 8 states. reaching out to 100. HUL is also running a rural health programme – Lifebuoy Swasthya Chetana. of over 600 If Hindustan Unilever straddles the Indian corporate world. Shakti aims to have 100. touching the lives million people.000 villages and directly reaching to 150 million rural consumers.000 Shakti entrepreneurs covering 500. The vision is to make a billion Indians feel safe and secure.
Modern Foods ranges New Ventures Hindustan Lever Network. culinary products. ice creams. Dove. Breeze. Pond’s and Vaseline • Hair care: Sunsilk and Clinic • Oral care: Pepsodent and Close up • Deodorants: Axe and Rexona • Colour cosmetics: Lakme • Ayurvedic: 51 . Liril. branded staples. Pureit water purifiers. beverages. Hamam. colour cosmetic Foods tea. Lifebuoy. Exports • HPC. skin care. home care.personal wash. oral care. rice Bathing soaps: Lux. hair care. Rin and Wheel • Skin care: Fair & Lovely. marine products. fabric wash. deodorants and talcs. coffee. Sangam. Pears and Rexona • Laundry items: Surf Excel. Ayush ayurvedic products and services.
Annapurna and Knorr • Ice cream: Kwality Wall’s .Ayush • Tea: Brooke Bond and Lipton • Coffee: Bru • Foods: Kissan. 52 .
Rin.BRANDS HUL s brands are household names across the country. Surf Excel. They include: Lifebuoy. Fair & Lovely. Wheel. Knorr-Annapurna and Kwality Walls. Lux. Pond s. 53 . Closeup. Brooke Bond. Lakme. Sunsilk. Kissan. Clinic. Pepsodent.
TOPIC DETAIL Although formulating a consistent strategy is a difficult task for any management team. It is thus not surprising that. rather than a science. ranging from the people who communicate or implement the strategy to the systems or mechanisms in place for co-ordination and control. as Noble (1999b) notes. hard and mixed) factors that influence the success of strategy implementation. It is thus obvious that strategy implementation is a key challenge for today ‟s organizations. Results from several surveys have confirmed this view: An Economist survey found that a discouraging 57 percent of firms were unsuccessful at executing strategic initiatives over the past three years. 2005). after a comprehensive strategy or single strategic decision has been formulated. strategy implementation is often seen as something of a craft. according to a survey of 276 senior operating executives in 2004 (Allio. How can we better understand these issues and their importance for successful strategy implementation? In this article. 1999b). The best-formulated strategies may fail to produce superior performance for the firm if they are not successfully implemented. we try to respond to this 54 . and its research history has previously been described as fragmented and eclectic (Noble. There are many (soft. strategy implementation has become “the most significant management challenge which all kinds of corporations face at the moment”. and only 17 percent felt that they had a consistent strategy implementation process. significant difficulties usually arise during the subsequent implementation process. Unlike strategy formulation. A myriad of factors can potentially affect the process by which strategic plans are turned into organizational action. The survey reported in that white paper indicates that 83 percent of the surveyed companies failed to implement their strategy smoothly. 2006). According to the White Paper of Strategy Implementation of Chinese Corporations in 2006. making that strategy work – implementing it throughout the organization – is even more difficult (Hrebiniak.
Examined organizational levels and organizational types are two elements of the research context. focusing on the main results of prior studies. Then. In that section we present a discussion of nine major factors that affect strategy implementation. their main results. section 4. In the fifth section of the article. The structure of this paper is as follows: First. We present a conceptual framework that organizes the current research findings. theoretical bases. the results section compiles nine factors that 55 . the research methods used as well as the analytical techniques employed. we describe the methodology that we have used to conduct our literature review and define its scope (section 3). we will review the 60 identified studies and analyze their research context. 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. We also discuss directions for future research in the domain of strategy implementation and how they may be pursued. 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. in terms of the applied research methods and the examined strategy contexts. as well as missing evidence and resulting future research needs. Section four also contains a review of existing models and frameworks of strategy implementation. In the sixth and final section. we discuss the implications of our findings as well as their limitations. we analyze definitions of strategy implementation and compare them with other synonymous and related terms (in section 2). to surface current areas of agreement and disagreement. We have conducted an analysis in the most widely used literature databases to identify key factors influencing the process of strategy implementation. As the core of our literature review. The next part of the article.question by analyzing existing research on the factors that influence strategy implementation . contains the actual review of literature. In this section.
. whether it is privately held or state-owned and whether its operating scope is regional or rather multinational. 1999. while many examine SBU level strategies (Gupta & Govindarajan. such as Wernham (1985) and Schmidt & Brauer (2006).e. Finally. 1991. 1992b.1 Research Contexts We classify research contexts into two dimensions: the examined organizational levels and the considered organizational types. Sashittal & Wilemon (1996). the research methods and analytical techniques will be reviewed to see which methods are still underutilized in the context of strategy implementation. Brenes & Mena & Molina. 1991. marketing. whether a study focuses on functional strategies (i. inter-functional levels. Skivington & Daft. Organizational types refer to the kind of organization that is studied.. SBU-level strategies or corporate strategies. Chimhanzi & Morgan. Waldersee & Sheather. five organizational levels can be distinguished. Organizational Levels In the context of strategy implementation research. 1984. 4. They are: corporate level. namely Rapert & Lynch & Suter (1996). We then briefly discuss the theoretical bases of the reviewed studies. 2005. Govindarajan & Fisher. i.). strategic business unit (SBU) level. as well as several frameworks or models that aggregate or relate relevant factors to each other. R&D). Govindarajan. 1996. 1988. Viseras & Baines & Sweeney (2005). Noble & Mokwa (1999). however.influence strategy implementation success. functional level. 1989. Chimhanzi (2004). Piercy (1998). 2007). White. Most of these studies. operational level and mixed levels (such as corporate and SBU level. Roth & Schweiger & Morrison. Schaap. etc. focus on marketing strategy (such as Sashittal 56 . 2006. Olson & Slater & Hult. Floyd & Wooldridge.e..e. Nilsson & Rapp. The same holds true for functional strategies: We have found eight studies that focus on the implementation of such strategies. 2005. corporate-SBU-functional levels. Govindarajan. Surprisingly few researchers focus on the implementation of corporate level strategies. HR. i. 1986. Organizational levels designate the locus of strategizing. SBU and functional level. Noble (1999a). Qi (2005). 1990.
This study also emphasizes the relationship between product strategy and several strategic implementation variables. 1996. business. 1999. Noble & Mokwa. focuses on the implementation of a yield 57 . Walker and Ruekert (1987) analyze three levels of strategy – corporate. Homburg. Baines and Sweeney‟s study (2005) in the context of manufacturing strategies. normally cut across functions and are aimed at integrating organizational processes across the organization in order to make them more effective and more efficient. Bantel (1997) analyzes the effects of two key aspects of product strategy (product leadership and product/market focus) on performance. Piercy. Homburg & Krohmer & Workman (2004). Chimhanzi. such as Bantel (1997). There are few studies dedicated to the implementation of other functional strategies (this is clearly an area of future research). 2004). for example. SBU and functional. This study focuses on the key success factors in the project management for the implementation of strategic manufacturing initiatives. Krohmer & Workman (2004) point out that market orientation plays a key role for the successful implementation of a PPD (premium product differentiation) strategy. 1998. The only other study of functional strategy implementation that we have been able to identify is Viseras. Slater and Olson (2001) analyze marketing‟s contribution to the implementation of business strategy. The mixed studies category also includes articles that focus on the role of project management for strategy implementation. Higgins (2005) even focuses on four types of strategies: corporate. and on two aspects of strategic implementation (stakeholder input and employee empowerment). Process strategies.& Wilemon. There are some studies which cannot be classified into the above categories. functional and process. Okumus (2001). the last type. we classify them into a group called mixed level studies: Gupta (1987). Few studies focus on the actual operational level of strategy implementation. Beer & Eisenstat (2000) and Hrebiniak (2006) have carried out research on corporate and SBU-level strategy. Consequently.
compared with other functional areas (such as manufacturing. 2001). future strategy implementation research should pay attention to explicitly indicate the level of analysis. another finding revealed that marketing is the prevailing domain. and Schaap (2006).level (8 articles) and mixed levels (9 articles) have received more attention than the other two levels. which seems a highly relevant area to improve our understanding of strategy 58 . R&D. there are many studies that are not sufficiently explicit regarding their scope concerning strategic levels. We note that – among the five strategy levels – the SBU-level (14 articles). Lehner (2004). Peng and Litteljohn (2001) investigate three hotel chains implementing a strategic initiative on yield management. 1987. Higgins (2005). In terms of promising future research on strategy implementation. Second. First. Finally. 1989). Within the functional level. Noble (1999b).management project and a key client management project in two hotels. 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. the functional. We can draw multiple conclusions based on our analysis of the treatment of organizational levels in prior studies of strategy implementation.). HR. Grundy (1998) examines the synergies among project management and strategy implementation and reviews strategy tools that may help in project management. accounting etc. we can observe that there are very few studies that have examined the inter-relationships of functional and business strategies. Nutt (1986. corporate (2 articles) and operational (2 articles). Two calls to action result from these findings. Many studies (25 articles) do not even indicate at which level their discussion of strategy implementation is located. One such study focuses on marketing‟s contribution to the implementation of business strategy (Slater & Olson. Another study has examined the mutual influence of functional departments ‟ relationships on strategies. Examples of such ambiguous studies are Bourgeois Ш and Brodwin (1984). Harrington (2006).
refer to the characteristics of organizations: if they are private or state-owned. As far as ownership forms are concerned. for example. namely Accenture. 1993) study global strategy.implementation: Chimhanzi (2004) has examined the impact of marketing and HR interactions on marketing strategy implementation.K. Rapert. while others are multinational corporations. Forman and Argenti (2005) select five multinational companies as samples. strategy implementation studies discuss both. the subjects of strategy implementation studies are not only state-owned corporations. Alexander (1985) surveys 93 private sector firms through a questionnaire. Noble ‟s (1999a) study spans several types of organizations – a national airline. or among local firms and multinational firms. explores the reality of strategy implementation in a U. which are members of the American Hospital Association (AHA). Sears. and a leading firm in the imaging technology industry. Organizational types Organizational types. However. nationalized company. Wernham (1985). a leading packaged goods company. Johnson & Johnson. This clearly is another interesting avenue for future research. Velliquette and Garretson ‟s (2002) study on strategy implementation takes a nationwide sample of 1000 CEOs of general service hospitals. as stated earlier. Okumus (2001) investigates two international hotel groups. a major financial services firm. Some of the researched companies focus on their domestic markets. not only local firms but also multinational firms. but mostly private corporations. state-owned and privately held companies. 59 . We thus do not know which specific differences exist regarding strategy implementation in these various forms organizations. Dell. Roth & Schweiger & Morrison (1991) and Kim & Mauborgne (1991. FedEx. a provider of emergency fire and medical services. Qi (2005) issues questionnaires to the head offices of 800 private companies in the UK. In conclusion. there have been no studies comparing similarities and differences of strategy implementation among private corporations and state-owned corporations. local or multinational. British Telecom (BT).
batteries. The term Consumer Packaged Goods (CPG) is used interchangeably with Fast Moving Consumer Goods (FMCG). 60 . The margin of profit on every individual FMCG product is less. branded and packaged food. household care (fabric wash and household cleaners). shaving products. Three of the largest and best known examples of Fast Moving Consumer Goods companies are Nestlé. ‘Fast Moving’ is in opposition to consumer durables such as kitchen appliances that are generally replaced less than once a year. Hence profit in FMCG goods always translates to number of goods sold. Examples of FMCG brands are Coca-Cola. Pepsi and Believe.INDUSTRY PROFILE Fast Moving Consumer Goods(FMCG) FMCG are products that have a quick shelf turnover. chocolates. and chocolate bars. other non-durables such as glassware. teeth cleaning products. tissue paper. Fast Moving Consumer Goods is a classification that refers to a wide range of frequently purchased consumer products including: toiletries. cosmetics. Kleenex. staples. time and financial investment to purchase. Unilever and Procter & Gamble. However the huge number of goods sold is what makes the difference. toiletries). soaps. The category may include pharmaceuticals. hair care. beverages (health beverages. although these are often categorized separately. Examples of FMCGs are soft drinks. soft drinks. dairy products. at relatively low cost and don't require a lot of thought. such as buckets. detergents. bakery products) and tobacco. cereals. soaps. paper products and plastic goods. The FMCG sector represents consumer goods required for daily or frequent use The main segments of this sector are personal care (oral care. consumer electronics and packaged food products and drinks. bulbs. cosmetics.
With the gradual opening up of the economy over the last decade. therefore. In the process. more so in the last six years (FMCG sector witnessed decline in demand).The Indian FMCG sector is an important contributor to the country's GDP. Many of the global FMCG majors have been present in the country for many decades. the margins were also on the higher side. 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. As a result. This has been due to liberalization. HLL. margins have been compromised. companies like ITC. The lower-middle income group accounts for over 60% of the sector's sales. These companies were. Unlike the perception that the FMCG sector is a producer of luxury items targeted at the elite. in reality. much of which is disbursed in small towns and rural India. But in the last ten years. 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). Colgate. History of FMCG in India In India. Rural markets account for 56% of the total domestic FMCG demand. This industry has witnessed strong growth in the past decade. the boom has also been fuelled by the reduction in excise duties. urbanization. many of the smaller rung Indian FMCG companies have gained in scale. the sector meets the every day needs of the masses. Furthermore. able to charge a premium for their products. the unorganized and regional players have witnessed erosion in market share. It is the fourth largest sector in the economy and is responsible for 5% of the total factory employment in India. increase in the disposable incomes and altered lifestyle. 61 . In this context. The industry also creates employment for 3 m people in downstream activities. FMCG companies have been forced to fight for a market share.
In our view. industry estimates suggest that the industry could triple in value by 2015 (by some estimates.Current Scenario The growth potential for FMCG companies looks promising over the long. we are confident that the FMCG sector has a bright future India is rated as the fifth most attractive emerging retail market. of the total consumption expenditure.term horizon. 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. Given the aggressive expansion plans of players like Pantaloon. In this backdrop. In our view. these are still at a relatively nascent stage. Rapid urbanization. Trent. almost 40% and 8% was accounted by groceries and personal care products respectively. It has been ranked second in a Global Retail Development Index of 30 developing countries drawn up by A T Kearney. the industry could double in size by 2010). testing times for the FMCG sector are over and driving rural penetration will be the key going forward. The bottlenecks of the conventional distribution system are likely to be removed once organized retailing gains in scale. companies were unable to grow faster. Due to infrastructure constraints (this influences the cost-effectiveness of the supply chain). As per the Consumer Survey by KSA. Although companies like HLL and ITC have dedicated initiatives targeted at the rural market. increased literacy and rising per capita income are the key growth drivers for the sector. forced-buying by offering many choices and also opens up new avenues for growth for the FMCG sector. Currently. organized retailing results in discounted prices. Shopper’s Stop and Shoprite. organized retailing accounts for just 3% of total retail sales and is likely to touch 10% over the next 3-5 years.Techno Park. as the per-capita consumption of almost all products in the country is amongst the lowest in the world. unleashing a latent demand with more money and a new mindset. Aspiration levels in this age group have been fuelled by greater media exposure. 62 .
6 billion. The FMCG sector has traditionally grown at a very fast rate and has generally out performed the rest of the industry. The Indian FMCG sector is the fourth largest sector in the economy with a total market size in excess of US$ 13.1 billion. particularly the middle class and the rural segments. 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. Burgeoning Indian population.A. skin care.T. Small-scale sector reservations limit ability to invest in technology and quality up gradation to achieve economies of scale. the general slowdown in the economy is also likely to have an adverse impact on disposable income and purchasing power as a whole. The outlook in the short term does not appear to be very positive for the sector. too. Over the last one year. Moreover.6 billion in 2003 to US$ 33. Penetration level as well as per capita consumption in most product categories like jams. hair wash etc in India is low indicating the untapped market potential. The growth of imports constitutes another problem area and while so far imports in this sector have 63 . India is one of the world’s largest producers for a number of FMCG products but its FMCG exports are languishing at around Rs 1. is expected to grow at a compounded 30 per cent over the next five years. Poor monsoon in some states. Moreover. presents an opportunity to makers of branded products to convert consumers to branded products. analysts feel. toothpaste.000 crore only. Kearney has estimated India's total retail market at $202.4 billion in 2015. lower volume of higher value added products reduce scope for export to developing countries. The share of modern retail is likely to grow from its current 2 per cent to 15-20 percent over the next decade. however the rate of growth has slowed down and the sector has recorded sales growth of just five per cent in the last four quarters. is unlikely to help matters. There is significant potential for increasing exports but there are certain factors inhibiting this. The FMCG market is set to treble from US$ 11.
FMCG companies estimate they have already cornered a four to six per cent market share. Moreover. most of the companies are concentrating on cost reduction and supply chain management. FMCG companies should continue to do well in the long run. This should yield positive results for them 64 . Give the large market and the requirement for continuous repurchase of these products. The high burden of local taxes is another reason attributed for the slowdown in the industry At the same time.been confined to the premium segment. the long term outlook for revenue growth is positive.
The major emphasis in exploratory Research design is on discovery of ideas and insights.RESEARCH METHODOLOGY Research Design: Research design is simply the framework or plan for a study.A Casual Research Design is concerned With determining cause and effect relationship. Descriptive Research Design:. Casual Research Design:. Descriptive Research Design was undertaken as it draws the opinion of employees/ workers on a specific aspe Research Objective: To analyse the influence of rival company’s strategies on the performance of Hindustan Unilever Limited To analyze the various strategies adopted by the company to gain competitive advantage To identify the marketing strategies and policies of Hindustan Unilever Limited 65 . used as a guide in collecting and analyzing data.The Descriptive Research Design Study is typically concerned with determining the frequency with which something occurs or the relationship between two variables. There are three types of Research Design:Types of Research: Exploratory Research Design:. For the study.
That is each member does not have a known non zero chance of being included. Researcher must select a sample design. SAMPLING METHOD: There are two methods of sampling: Probability Sampling: It is based on the concept of random selection of a controlled procedure that assures that each Population element is gives a non-zero chance of selection. which should be reliable and appropriate for his report. Probability Sampling is of following types: Simple Random Systematic Cluster Stratified Double Non-Probability Sampling: Non probability sampling is non-random and subjective.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 .
DATA COLLECTION METHOD Data for the present study is collected from two sources: Secondary: . For this research work I have chosen Non.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.Researcher selects the sample as per their convenience. journal of national repute. Magazines. 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. books of national and international author as well as the annual report of the company. various newspapers and published books. journals.Secondary data is collected from published sources like Journals. newspaper Employment exchange The secondary data would be collected from financial statement. 67 . In addition to this internet access will make the study more effective and meaningful.
68 . two-wheelers andautomobiles. It is not that they bathed less often or brushedtheir teeth less often or indeed washed their clothes less often.Mobile phone ownership and usage exploded due to its amazing lifestyle andconvenience be nefits as well as lower prices. a consumer buying six tablets of Lux in a month went to buying three of Lux and three cheaper brands. But they did downtradeto lower priced substitutes from higher quality brands. one could drive out of a car showroom in a Maruti 800 with adown payment of only Rs.The lure of new avenues of expenditure in products and services led to consumersrestricting their expanse on FMCG. For example.DATA ANALYSIS & INTERPRETATIONS Through the nineties.The rapid opening up of the economy resulted in many new avenues of expenditurefor the consumer’s growing income. Or a consumer buying Surf Excel for her clothes mixed it with a cheaper powder. The home ownership market grew exponentially asthe average age of a home loan borrower dropped from 50 in 1999 to 30 in 2004. Entertainment. As a result of this shift in spending patterns. FMCG market growth stalled and then declined for the next four years. The rest came from severalnon-FMCG businesses which were not profitable. 2000. in 2000. After all. It is important to understand why this happened. A sharp drop in interest rates from 18% to 8%led to explosive demand for consumer durables like white goods. and did not offer prospects for long-term leadership.Suddenly. 75% of our sales came from FMCG businesses. Leisure and Travelsectors also boomed. the FMCG market declined invalue in the last four years creating a major challenge for growth The new Hindustan Lever: Focused on FMCG In 2000. the FMCG markets grew at almost 15% per annum in value.
Besides. Adhesives. SpecialityChemicals. FMCG still offers enormous potential As the largest FMCG player it was up to them to reverse the downtrading to realize itstrue growth potential. They have alsocleared the supply chain of all old stock and geared up for fresh availability on shelf. both interms of resource and focus. Building blocks of a strong Foods business In Foods. Therefore they divested the non-valueadded parts like Vanaspati. wehave divested and discontinued 15 businesses including Animal Feeds. their Foods business has a healthy gross margin and a supply chain driven byfreshness. It was often commoditized with low margins. In all. with higher levels of resource concentration. Today. Theyrecognized that changing food habits would require considerable investment. Historically their Foods businesswas fragmented and lacked scale.Today they are a focused on FMCG company with our branded business accountingfor over 90% of sales. They could achieve this by raising the bar and becoming worldclass in what their brands 69 . They have consolidated theuir portfolio and improved thegross margins by over 13% through product mix and cost reduction. they were a drain on the core FMCG business. Nickel Catalyst. withsales of Rs. Mushrooms etc. Over the last few years they have focused on putting in place the building blocks of a strong Foods business. Thermometers.1. there is enormous growth potential in leading the evolution of consumers to branded and processed foods. Seeds. The Foods business will now invest for growth through relevant innovation. people talent or media spend. whichthe current business simply could not afford. consisting of 35 brands across 20 categories. These will be their main engines of growth.They decided to disengage from all non-FMCG or commodity businesses. be ittechnology.750 crores as in 1999.
They chose to focus on 35 power brands covering all consumer appeal and price segments. 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. Today.000 crores from a current value of Rs. The Foods business will now invest for growth through relevant innovation. their Foods business has a healthy gross margin and a supply chain driven byfreshness. they had 110 brands. they are seeing a strongcorrelation between income levels and the size of FMCG markets. per capita income in India is likely to touch China’s current levels. Nothing less would do.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. 70 . they are seeing a strongcorrelation between income levels and the size of FMCG markets.offered and how they worked. They are already seeing the benefits. At thoselevels. per capita income in India is likely to touch China’s current levels.40.000 crores. They could achieve this by raising the bar and becoming worldclass in what their brands offered and how they worked. many undifferentiated and lacking scale. Over the next 10years. This is an opportunity that they have to seize.Penetration levels in several of the categories and consumption levels in all of thecategories is low by any comparison. Nothing less would do. This is an opportunity that they have to seize. Over the next 10years. Six brands – Brooke Bond. the FMCG market will be over Rs.000 crores.100.Penetration levels in several of the categories and consumption levels in all of thecategories is low by any comparison. In 2000. At thoselevels.000 crores from a current value of Rs. Across the world. the FMCG market will be over Rs.100. Across the world.
They have also launched several low unit size and price packs for single use to makethe brands more accessible to all income groups.5. Better quality and more affordable prices have increased the value to the consumer. Today Lifebuoy.500 crores Better Value The first step was to ensure that they offer world class quality and real differentiation backed by technology to give them the advantage over low priced competition.Lifebuoy. Rin and Wheel – have emerged as mega brands in the last five years.In several cases they reduced prices to make the brands more affordable. “All detergents clean clothes as well”. “A soap is a soap is a soap!” Or indeed. in the last three years to upgrade the brands. in the laundry market. It moved from being a mere soap to a health essential. Lux.In the case of Lifebuoy. has grown at over 15% for the last three years. They had to move from selling a soap or a detergent to something far more important and central to the consumer’s life. they are the first tointroduce a branded toothpaste in a tube at Rs. 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. or 5% of sales. Similarly.400 crores. each with sales of more thanRs. Fair & Lovely. Imagine the importance of that benefit to consumers in 71 .5 and a branded quality shampoo in a bottle at Rs. 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. For example. How often have we heard someonesay. Theyhave invested over Rs. Surf Excel went well beyond the benefit of ‘greatclean’ by saving two buckets of water with every wash. their oldest brand.
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.
Threats 1. HLL's tea business has declined marginally. CONCLUSION 76 . Increasing departmental stores concept – impulse @ at cash counters. 5. Globalization. reason is that.4. cost pressure is likely due to rising crude and freight costs.
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. FMCG secter hold a prime importance as the competition is increasing day by day.Demography.pantene etc.This company project has demonstrated “HINDUSTAN UNILEVER’S MARKETING STRATEGIES AND POLICIES” that has proved to be extensive through.clinic plus. Different line of products are offering customers to choose according to their gender. SUGGESTIONS 77 .personality.lifebuoy.income and other attributes. and of great benefit to the company in furthering its competitive advantage.This sector has member of players which altimately shopes the buying decision products like.Lux. are some of the main ingredients of FMCG sector.ariel.
HUL They need to enter into lower segments of detergent. They need to promote their companies name along with the brand name. 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. 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.
Cost involved in collecting the data was high.LIMITATIONS While undertaking my study I was encountered with some limitations: Limited time was provided to complete the study. 79 . To fix an appointment with the dealers was also very difficult task and even after that many time people was not turn up for the appointment.
R. Kottler Philip.Hall of India Pvt. Deep & Deep Publication Pvt. Research Methodology. 4th Edition 2002 Page 135. . 2001 Page 365. Ltd. Prentice. Marketing Management. 2005 Page 85. 80 . 10th Edition. . Thakur Devendra. Research Methodology.. Ltd.BIBLIOGRAPHY BOOKS: • • • Kothari C.
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