A SUMMER TRAINING PROJECT REPORT

ON

MARKETING STRATEGIES IN

HINDUSTAN UNILEVER LIMITED

Submitted in the partial fulfillment for the award of Degree of Bachelor in Business Administration(CAM) 2010-2013

UNDER THE GUIDANCE: SUBMITTED BY:

Ms. Sonia Chawla gagan mehra

Enrollment no.-

02224501910

Batch: 2010-2013

CHANDERPRABHU JAIN COLLEGE OF HIGHER STUDIES & SCHOOL OF LAW

An ISO 9001:2008 Certified Institute (Approved by the Govt of NCT of Delhi

Affiliated to Guru Gobind Singh Indraprastha University,Delhi)

Plot No OCF Sector A-8, Narela New Delhi-40

DECLARATION

This is to certify that Report entitled “MARKETING STRATEGIES IN HINDUSTAN UNILEVER LIMITED” which is submitted by me in partial fulfillment of the requirement for the award of degree BBA(cam) to GGSIP University, Dwarka, Delhi comprises only my original work and due acknowledgement has been made in the text to all other material used.

Date: Name Of Student :

Gagan mehra

APPROVED BY: Name of the Subject Teacher/Guide: Ms. Sonia Chawla

ACKNOWLEDGEMENT

We think if any of us honestly reflects on who we are, how we got here, what we think we might do well, and so forth, we discover a debt to others that spans written history. The work of some unknown person makes our lives easier every day. We believe it’s appropriate to acknowledge all of those people we know have directly shaped our lives and our work.

First of all I would like to thank my Teacher Ms. Sonia Chawla for their guidance throughout the semester.

TABLE OF CONTENTS

1. CHAPTER 1 Page no.

1.1) Introduction 1-3

1.2) History of Hindustan Unilever Limited 4-5

1.3) Organisational Structure 6

1.4) Present Status 9

1.5) HUL’s New Growth Strategy 10-11

1.6) Product Profile 12

1.7) SWOT Analysis 15

1.8) PEST Analysis 16

1.9) Five P’s of Marketing 17,18,19,20,21,22

1.10) Hindustan Unilever’s Market Segmentation 23-24

2. CHAPTER 2

2.1) Competitive Strategy 25-26

2.2) Future Competitive Strategy 27

3. CHAPTER 3

3.1) Joint Venture 29

3.2) New Initiative 30 3.3) Research Methodology 33

3.4) Limitations 34

3.5) Analysis & Interpretation 36

CHAPTER 4

4.1) Conclusion 37

LIST OF FIGURES

1. Organizational Structure 7-8

2. Brands 13-14

3. Competitive Strength 28

4.Performance Review 29-30

5.Financial Overview 31-32

ABSTRACT

Hindustan Unilever Limited (HUL) (BSE: 500696) is India's largest fast moving consumer goods company owned by the European company Unilever. The Anglo-Dutch company Unilever owns a 52% majority stake.

HUL was formed in 1933 as Lever Brothers India Limited and came into being in 1956 as Hindustan Lever Limited through a merger of Lever Brothers, Hindustan Vanaspati Mfg. Co. Ltd. and United Traders Ltd. It is headquartered in Mumbai, India and has an employee strength of over 15,000 employees and contributes to indirect employment of over 52,000 people. The company was renamed in June 2007 as “Hindustan Unilever Limited”.

Lever Brothers started its actual operations in India in the summer of 1888, when crates full of Sunlight soap bars, embossed with the words "Made in England by Lever Brothers" were shipped to the Kolkata harbour and it began an era of marketing branded Fast Moving Consumer Goods (FMCG). 

Hindustan Unilever's distribution covers over 1 million retail outlets across India directly and its products are available in over 6.3 million outlets in the country, nearly 80% of all retail outlets in India. The company claims that two out of three Indians use its many home and personal care products, food and beverages

HUL is the market leader in Indian consumer products with presence in over 20 consumer categories such as soaps, tea, detergents and shampoos amongst others with over 700 million Indian consumers using its products. Sixteen of HUL’s brands featured in the ACNielsen Brand Equity list of 100 Most Trusted Brands Annual Survey (2008). According to Brand Equity, HUL has the largest number of brands in the Most Trusted Brands List. It has consistently had the largest number of brands in the Top 50, and in the Top 10 (with 4 brands).

The company has a distribution channel of 6.3 million outlets and owns 35 major Indian brands.Its brands include Kwality Wall's ice cream, Knorr soups & meal makers, Lifebuoy, Lux, Pears, Breeze, Liril, Rexona, Hamam and Moti soaps, Pureit water purifier, Lipton tea, Brooke Bond (3 Roses, Taj Mahal, Taaza, Red Label) tea, Bru coffee, Pepsodent and Close Up toothpaste and brushes, and Surf, Rin and Wheel laundry detergents, Kissan squashes and jams, Annapurna salt and atta, Pond's talcs and creams, Vaseline lotions, Fair and Lovely creams, Lakmé beauty products, Clear, Clinic Plus, Clinic All Clear,Sunsilk and Dove shampoos, Vim dishwash, Ala bleach, Domex disinfectant, Modern Bread, Axe deosprays and Comfort fabric softeners.

INTRODUCTION

The Hindustan Unilever Ltd’s (HUL) has taken the opportunity to offer us a broader view of FMCG category. The Hindustan Unilever Ltd (HLL) is India’s number one FMCG is able to share with their market insights based upon unparalleled breath of consumer good experience.

Hindustan Unilever Ltd (HUL) has grown from strength to strength with new technologies being introduced to make the HLL consumer goods business, one of the most efficient in the world. The company’s history dates back to 1931 when Unilever set up its first Indian subsidiary, Hindustan Vanaspati Manufacturing Company, followed by Lever Brothers India Limited (1933) and United Traders Limited (1935). These three companies merged to form Hindustan Lever Limited in November 1956. Effective July 19, 2007, The Company has changed the name to Hindustan Unilever Limited.

Hindustan Unilever Limited (HUL), a subsidiary of Unilever, is a fast moving consumer goods (FMCG) company based in India. The company focuses on efficient delivery to consumers with an improved supply chain, brand building initiatives and innovation, which was helped by the company to sustain its leadership position in the overall FMCG category in India.

Hindustan Unilever is Unilever’s main operating business in India. It is the country’s biggest consumer goods company, and far and away the leading advertiser. HUL inhabits virtually every sector of the consumer goods market, including several not occupied by Unilever in the other markets such as preserves and bakery products, and is also one of the country’s top five exporters. In addition to generally acknowledged to be one of India’s best-run businesses, although performance slowed dramatically between 2000 and 2004, prior to restricting.

Unilever, which sells soap to more than 500 million Indians, may see global revenue growth slow in 2010 as Procter & Gamble Co. and ITC Ltd. Step up marketing in Asia’s third biggest economy.

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. Now Cincinnati based Procter & Gamble is stocking Indian stores with Olay skin-care products after nearly having the local prices of Ariel and Tide detergents in 2004.

Asia & Africa, which make up about a third of Unilever’s worldwide sales, will see their share of the company’s growth fall to 2 percent in 2010 from 3.3 percent in 2007, according to Brussels based brokage Petercam SA. Revenue from the two continents rose 11.4 percent in the first nine

months of last year, helping offset 1.9 percent growth in Europe and 4.2 percent in North and South America.

Unilever’s overall sales growth will slow to 4.9 percent in 2010 from an estimated 5.3 percent in 2007, according to the median of five analysts in Bloomberg survey.

HUL is one of the country's largest exporters; it has been recognised as a Golden Super Star Trading House by the Government of India.

In 2007, Hindustan Unilever was rated as the most respected company in India for the past 25 years by Business world, one of India’s leading business magazines. The rating was based on a compilation of the magazine's annual survey of India’s most reputed companies over the past 25 years.

HUL was one of the eight Indian companies to be featured on the Forbes list of World’s Most Reputed companies in 2007.

HUL is the most innovative company in India by Forbes list and 6th in the top 10 list of most innovative companies in the world. 

HUL was ranked 39th in The Brand Trust Report (2011) published by Trust Research Advisory. Fair and Lovely creams also was listed in the same report.

HUL also renders services to the community, focusing on health & hygiene education, empowerment of women, and water management. It is also involved in education and rehabilitation of underprivileged children, care for the destitute and HIV-positive, and rural development. HUL has also responded to national calamities, for instance with relief and rehabilitation after the 2004 tsunami caused devastation in South India.

Project Shakti

In 2001, the company embarked on a programme called Shakti. It collaborated with the rural self-help groups in order to educate rural women and make them a part of the company's marketing network as direct-to-home distributors. The major objective of this initiave as a whole remains to create livelihood opportunities for underprivileged rural women. The programme is broadly divided into three components:

Shakti Entrepreneur

This is a sales and distributive initiative which recruites village women as sales persons called Shakti Amma and trains them to communicate and sell HUL products in villages. The idea is to be able to reach those villages which do not have good road connectivity and where the penetration of media is poor. Shakti Vani now covers 15 states in India with over 45,000 women entrepreneurs covering over 100,000 villages and 3 million households every month.[15] On an average, a Shakti Amma sells Rs 10,000–15,000 worth of HUL products providing her a regular income of Rs 700-1,000 every month. Shakti distributors now account for 15 percent of the company's sales in rural India.

Shakti Vani

This is a social awareness program where rural women work as 'Vanis' and communicate with the village people by delivering lectures on health, hygiene and education. These are conducted in schools, SHG meetings, village gatherings, etc. Shakti Vani also includes awareness programmes on health and hygiene, education, etc.

IShakti

This is a community portal launched in November 2004, first in Andhra Pradesh. It has set up interactive kiosks in villages with internet-linked computers which provide all forms of information to village people. Villagers register as users and surf the internet. HUL has worked with Tata Consultancy Services to enable this programme.

HISTORY OF HINDUSTAN UNILEVER LIMITED

Soon after followed Lifebuoy in 1895 and other famous brands like Pears, Lux and Vim. Vanaspati was launched in 1918 and the famous Dalda brand came to the market in 1937.

In 1931, Unilever set up its first Indian subsidiary, Hindustan Vanaspati Manufacturing Company, followed by Lever Brothers India Limited (1933) and United Traders Limited (1935). These three companies merged to form HUL in November 1956; HUL offered 10% of its equity to the Indian public, being the first among the foreign subsidiaries to do so. Unilever now holds 52.10% equity in the company. The rest of the shareholding is distributed among about 360,675 individual shareholders and financial institutions.

The erstwhile Brooke Bond’s presence in India dates back to 1900. By 1903, the company had launched Red Label tea in the country. In 1912, Brooke Bond & Co. India Limited was formed. Brooke Bond joined the Unilever fold in 1984 through an international acquisition. The erstwhile Lipton’s links with India were forged in 1898. Unilever acquired Lipton in 1972, and in 1977 Lipton Tea (India) Limited was incorporated.

Pond’s (India) Limited had been present in India since 1947. It joined the Unilever fold through an international acquisition of Chesebrough Pond’s USA in 1986.

Since the very early years, HUL has vigorously responded to the stimulus of economic growth. The growth process has been accompanied by judicious diversification, always in line with Indian opinions and aspirations.

The rganizationi of the Indian economy, started in 1991, clearly marked an inflexion in HUL’s and the Group’s growth curve. Removal of the regulatory framework allowed the company to explore every single product and opportunity segment, without any constraints on production capacity.

Simultaneously, deregulation permitted alliances, acquisitions and mergers. In one of the most visible and talked about events of India’s corporate history, the erstwhile Tata Oil Mills Company (TOMCO) merged with HUL, effective from April 1, 1993. In 1996, HUL and yet another Tata company, Lakme Limited, formed a 50:50 joint venture, Lakme Unilever Limited, to market Lakme’s market-leading cosmetics and other appropriate products of both the companies. Subsequently in 1998, Lakme Limited sold its brands to HUL and divested its 50% stake in the joint venture to the company.

HUL formed a 50:50 joint venture with the US-based Kimberly Clark Corporation in 1994, Kimberly-Clark Lever Ltd, which markets Huggies Diapers and Kotex Sanitary Pads. HUL has also set up a subsidiary in Nepal, Unilever Nepal Limited (UNL), and its factory represents the

largest manufacturing investment in the Himalayan kingdom. The UNL factory manufactures HUL’s products like Soaps, Detergents and Personal Products both for the domestic market and exports to India.

The 1990s also witnessed a string of crucial mergers, acquisitions and alliances on the Foods and Beverages front. In 1992, the erstwhile Brooke Bond acquired Kothari General Foods, with significant interests in Instant Coffee. In 1993, it acquired the Kissan business from the UB Group and the Dollops Icecream business from Cadbury India.

As a measure of backward integration, Tea Estates and Doom Dooma, two plantation companies of Unilever, were merged with Brooke Bond. Then in 1994, Brooke Bond India and Lipton India merged to form Brooke Bond Lipton India Limited (BBLIL), enabling greater focus and ensuring synergy in the traditional Beverages business. 1994 witnessed BBLIL launching the Wall’s range of Frozen Desserts. By the end of the year, the company entered into a strategic alliance with the Kwality Icecream Group families and in 1995 the Milkfood 100% Icecream marketing and distribution rights too were acquired.

Finally, BBLIL merged with HUL, with effect from January 1, 1996. The internal restructuring culminated in the merger of Pond’s (India) Limited (PIL) with HUL in 1998. The two companies had significant overlaps in Personal Products, Speciality Chemicals and Exports businesses, besides a common distribution system since 1993 for Personal Products. The two also had a common management pool and a technology base. The amalgamation was done to ensure for the Group, benefits from scale economies both in domestic and export markets and enable it to fund investments required for aggressively building new categories.

In January 2000, in a historic step, the government decided to award 74 per cent equity in Modern Foods to HUL, thereby beginning the divestment of government equity in public sector undertakings (PSU) to private sector partners. HUL’s entry into Bread is a strategic extension of the company’s wheat business. In 2002, HUL acquired the government’s remaining stake in Modern Foods.

In 2003, HUL acquired the Cooked Shrimp and Pasteurised Crabmeat business of the Amalgam Group of Companies, a leader in value added Marine Products exports.

HUL launched a slew of new business initiatives in the early part of 2000’s. Project Shakti was started in 2001. It is a rural initiative that targets small villages populated by less than 5000 individuals. It is a unique win-win initiative that catalyses rural affluence even as it benefits business. Currently, there are over 45,000 Shakti entrepreneurs covering over 100,000 villages across 15 states and reaching to over 3 million homes.

In 2002, HUL made its foray into Ayurvedic health & beauty centre category with the Ayush product range and Ayush Therapy Centres. Hindustan Unilever Network, Direct to home business was launched in 2003 and this was followed by the launch of ‘Pureit’ water purifier in 2004.

ORGANISATIONAL STRUCTURE

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. The company’s Turnover is Rs. 20, 239 crores (for the 15 month period – January 1, 2008 to March 31, 2009).

Hindustan Unilever was recently rated among the top four companies globally in the list of “Global Top Companies for Leaders” by a study sponsored by Hewitt Associates, in partnership with Fortune magazine and the RBL Group. The company was ranked number one in the Asia-Pacific region and in India.

Major corporate events (Milestone)Year Events

1888 William Hesketh Lever launches Sunlight Soap in England. His newly-found company, Lever Brothers, starts exporting the laundry soap to India

1918 Launches Vanaspati(hydrogenated edible fat) imports to India

1930 Unilever created with the merger of Lever Brothers and Margarine Unie, Netherlands

1931 Unilever registers Hindustan Vanaspati Manufacturing Company (HVM) to manufacture Vanaspati domestically

1933 Lever Brothers India Limited (LBIL) incorporated in India to manufacture soaps

1935 United Traders Limited (UTL) incorporated in India to market personal care products

1956 Three subsidiaries, HVM, LBIL and UTL, merge to form Hindustan Lever Ltd (HLL)

1958 Opnes Hindustan Lever Research Centre

1979 Commissions chemical complex in Haldia, West Bengal

1993 HLL merges with its largest competitor, Tata Oil Mills Company (TOMCO). The erstwhile Brooke Bond India acquires the Kissan business from the UB Group and Cadbury’s Dollops ice-cream business. Doom Dooma and tea estates divisions merge with Brooke Bond. Brooke Bond and erstwhile Lipton India merge to form Brooke Bond Lipton India Limited

1995 HLL and Indian cosmetics major, Lakme Ltd, form 50:50 joint venture, Lakme Lever Ltd. HLL acquires the Ravi Ghai Group’s Kwality and Milkfood brands and distribution assets

1996 HLL and associate company, Brooke Bond Lipton India, became among the top two food and beverage companies in India

1998 Group company, Pond’s India Ltd, merges with HLL. HLL acquires the Lakme brand, factories and Lakme Ltd’s 50% equity in Lakme Lever Ltd. HLL acquires manufacturing rights of Kwality ice cream

Managing Director

General Manager

Vice President

Marketing Manufacturing Sales Finance Distribution

PRESENT STATUS

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. They endow the company with a scale of combined volumes of about 4 million tones and sales of Rs. 10,000crore.

HUL is also one of the country’s largest exporters; it has been recognized as a golden super star trading house by the Government of India.

The mission that inspires HUL’s over 15,000 employees, including over 1,300 managers, is to “add validity to life.” HUL meets every day needs for nutrition, hygiene, and personal care with brands that help people feel good, look good and get more out of life. It is a mission, HUL shares with its parent Company, Unilever which holds 51.55% of the equity. The rest of the shareholding is distributed among 380,000 individual shareholders and financial institutions.

HUL’s brands-like Lifebuoy, Lux, Surf Excel, Rin, Wheel, Fair & Lovely, Pond’s, Sunsilk, Clinic Plus, Pepsodent, Close-up, Lakme, Brooke Bond, Kissan, Knorr-Annapurna, Kwality wall’s- are household names across the country and span many categories- soaps, detergents, personal products, tea, coffee, branded staples, ice cream & culinary products. They are manufactured over 40 factories across India. The operations involve over 2,000 suppliers and associates. HUL’s distribution network comprising about 4,000 redistribution stockiest, covering 6.3 million retail outlets reaching the entire urban population, and about 250 million rural consumers. HUL has traditionally been a company, which incorporates latest technology in all its operations. The Hindustan Unilever Research Centre (HLRC) was set up in 1958, and now has facilities in Mumbai & Bangalore. HLRC and the global technology centres in India have over 200 highly qualified scientists and technologists, many with post doctoral experience acquired in the US & Europe.

HUL’s NEW GROWTH STRATEGY

Mr. K.B. Dadiseth, who passes on the baton of Chairmanship to Mr. M.S. Banga at the end of this month, unveiled the new growth blueprint today in his last AGM address. Implementation of the strategy, an outcome of the yearlong ‘Project Millennium’ exercise, has already begun.

Mr. Dadiseth said, “Our new growth engines will become thriving businesses of significant size over the next 6 to 8 years. They will help us accelerate new demand at the lower end of the market spectrum and also capture value from shifts in the nature of demand at the upper end. Significantly, Hindustan Lever will make rapid strides in the New Economy, by leveraging the power of Internet technologies in the web-enablement of its existing infrastructure and in launching several new e-businesses.”

Recalling the launch of Project Millennium, he said, “HLL’s vision is to create a self-sustaining virtuous cycle of business growth through people growth. The better we leverage the capabilities of our excellent people, the more certain we are that Hindustan Lever will grow. And the faster the company grows, the more opportunities we can create to attract and retain high rganiz people.” The blueprint therefore will sustain HLL’s position as an employer of choice. Equally, it ensures that HLL enables growth through consumer-focussed business structures, appropriate knowledge management and continuing focus on better management of costs.

Among the growth engines, being incubated under the direct oversight of the Board and staffed with handpicked teams, is a specific rural business system, and Internet-based initiatives.

Rural Business System:HLL will develop appropriate products for rural India. It will deploy communication and information technology to establish connectivity in the distribution system at a scale never attempted before. Finally, in a win-win partnership, it will join hands with rural self-help groups; the initiative will create critically needed sustainable jobs for thousands of villagers, while for the company it will translate into extending its distribution into hitherto unexplored territory.

The Internet Opportunity:HLL has developed a 3-pronged strategy to leverage the Internet. First, the company will Connect. The web-enabled extended supply chain of stockists, suppliers, banks and even potentially top retailers will create the most capital-efficient supply chain rganizat for handling product, cash and information flow. Second, HLL will Attract consumers, and further strengthen relationships by becoming the preferred online provider of information, products and services on health, beauty and nutritional needs.

Finally, HLL will Transact, supported by its extensive physical infrastructure. The company is uniquely positioned to create India’s most widespread, robust and efficient ‘click and brick’ business model.

HLL’s aspiration is to leverage its existing infrastructure to build India’s premier web-enabled supply chain that becomes the preferred rganizatio engine for e-commerce products and services. Concurrently, it will build market-leading B2B and B2C businesses in high-potential areas.

Mr. Dadiseth said, “Long-term success depends on winning the ‘war for talent’ – attracting, developing and retaining the highest quality talent. Historically, we have been an employer of choice. Today, we face a real challenge in sustaining our position and to do this we need to fulfil the expectations of India’s top talent.” HLL has developed a relevant new value proposition, along the dimensions of velocity, meritocracy, flexibility, transparency, and equity in the professional careers of all current and future employees.

Mr. Dadiseth said, “To develop and retain top talent, we have put in place a process which will help identify potential business leaders much earlier in their careers than we did before. They will be placed on a fast track of personal growth. We will also create substantially more opportunities for entrepreneurial leadership for our managers. Already, a number of them are taking charge of the multiple growth engines Project Millennium has spawned.” HLL is also changing its rganization structure, disaggregating into smaller yet independent business units for greater focus. This will provide further business leadership opportunities for managers as and when they are ready, as opposed to when they reach a certain seniority.

HLL is introducing a stock grant scheme this year. “We see it as a powerful motivator for our people and a fundamental driver for rganizationizing a growth-seeking culture,” Mr. Dadiseth said.

But, he declared, “We are planning to go a step further by giving people a stake in the wealth they create through their ideas. Our people no longer need to choose between being an employee or being an entrepreneur. If anyone in the company has an idea that is exciting and has business potential, we have established a mechanism — rather like a venture capital fund — which can make that idea a reality. They have to put together a business proposal and present it to the Board. If it sounds promising, the company will be happy to play the midwife by deploying its resources. And the person who conceived the idea will participate in building it and share in its wealth creation. We have already begun to fund projects in this way.”

Mr. Dadiseth said, “Project Millennium will unleash a tidal wave of entrepreneurial energy at Hindustan Lever. The 9 new growth engines are only a beginning. With the growth enablers in place, many others will come to the fore. As our managers get a taste of the various independent leadership opportunities Hindustan Lever can provide, their commitment to the company’s growth will only increase.

“This is my vision for the Hindustan Lever of the new millennium as I hand over the baton at the end of this month. I have enjoyed every day that I have spent in Hindustan Lever. I will depart with the knowledge that the new blueprint for business growth through people growth is well established. I am confident that Hindustan Lever, with its high rganiz people under the able

Chairmanship of Vindi Banga, the Board and the Management Committee, is on the threshold of a future that is even more glorious than its past,” he concluded.

PRODUCT PROFILE

HUL’s business activities are divided into four broad areas:

HOME & PERSONAL CARE:

Personal wash, fabric wash, home care, oral care, skin care, hair care, deodorants, and talcs, color cosmetics.

FOODS

Tea, coffee, branded staples, culinary products, ice creams, modern food ranges

New Ventures

Hindustan Lever Network, Ayush Ayurvedic products and services, sangam, pure it water purifiers.

EXPORTS

HPC, Beverages, Marine products, rice.

BRANDS

SWOT ANALYSIS

STRENGTH:

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.

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 validity to life.”

The Company derives 44.3% of its revenue 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.

Low cost of production due to economies of scale that means higher profits and/or more competitioners. Better market penetration.

HUL is also one of the country’s largest exporters; it has been recognized as a Golden Super Trading House by the Government of India.

WEAKNESS:

Continuous threat from other competitors.

OPPORTUNITIES:

Increasing per capita national income resulting in higher disposable income. Growing middle class and growing urban population. Increasing gifts cultures. Increasing departmental stores concept-impulse@ at cash counters. Globalization.

THREATS:

HUL’s tea business has declined marginally, reason is that, cost pressure is likely due to rising crude & freight cost.

PEST ANALYSIS

P:

Since the budget range is decontrolled, no political effects are envisaged.

E:

Increasing per capita income resulting in higher disposable income. Growing middle class/urban population-increase in demand. Low cost of production-better penetration.

S:

Per capita consumption expected to increase-fashion. Increasing gifts culture.

T:

Will have to reinforce technology to international levels. Once India is a “Fully Free” economy.

FIVE P’s OF MARKETING

PRODUCT:

Satisfaction suffices, but delight dazzles. The average company will compete for customer by confirming to her expectation consistently. But the winner will surpass them by constantly exceeding her expectation, delivering to her door step additional benefits which she would have never have imagined possible. The wide variety products offered by the company include:

The company’s popular product’s include:

BATHING SOAPS

Lux, Lifebuoy, Liril, Hamam, Breeze, Dove, Pears and Rexona.

LAUNDRY ITEMS

Surf Excel, Rin and Wheel.

SKIN CARE

Fair & Lovely, Pond’s and Vaseline.

HAIR CARE

Sunsilk and Clinic Plus.

ORAL CARE

Pepsodent and Close up.

DEODORANTS

Axe and Rexona.

COLOUR COSMETICS

Lakme.

AYURVEDIC

Ayush.

TEA

Brooke bond & Lipton.

COFFEE

Bru.

FOODS

Kissan, Annapurna and Knorr.

ICE CREAM

Kwality Wall’s

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 but the product with the expectation they have about what the production is worth to them.

Hindustan Unilever Ltd(HUL) has launched various products which cater to all customer segments. So, every customer segment has different price expectation from the product. Therefore maximizing the returns involves identifying right price level for each segment, and then progressively moving through them.

PHYSICAL DISTRIBUTION- “PLACE”

Brand isn’t the only anymore. Marketers and finance manager need a new turn to evaluate their business:

DISTRIBUTION EQUITY:

It takes much more time and effort to build, nut once built, distribution equity is much together to erode.

THE FUNDAMENTAL AXIOM OF INDIAN CONSUMER MARKET IS THE:

You can set up a state of the art manufacturing facility, hire the hottest strategies on the block, swamp prime television with best Ads, but the end of it all you would know selling of the products. The cardinal task before the Indian market is managing is to shoe-horn its product on retail shelves. Buyers are paying for distribution equity not brand equity and market shares.

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 long period. In a product and price parity situation, the brand that sells more is the one that reduces the highest number of customers.

India- The operation involves over 2,000 suppliers & associates. HUL’s distribution network, comprising about 4,000 redistribution stockiest, covering 6.3 million retail outlets reaching the entire urban population, and about 250 million rural consumers.

Television has already primed and population for consumption, and the marketer who can get to the consumer ahead of competition will give a hard to overtake lead. But getting their means managing wildly different terrains-climate, language, value system, life style, transport and communication network. And your brand equity isn’t going to help when it comes to tackling these issues.

PROMOTION

If an advertisement is to communicate effectively, the receiver must at least half want it to, and prepared to take step toward the sender. Effective advertising is rarely hectoring or loudly explicit. It often both attracts and generates arm feelings. More often than not, a successful campaign has a stronger element of the unexpected a quality that good advertising shares with much worthwhile literature.

Finding showed that the adults felt too conscious to be seen consuming a product actually meant for children. The strategic response addresses the emotional appeal of the brand to the child within the adult. Naturally, that produced just the value vacuum that Hindustan Unilever Ltd(HUL) was looking to fill. Thereafter, it was the job of the advertising to communicate customer the wonderful feeling that he could experience by re-discoursing the careful, unself conscious, pleasure-seeking child within himself- a graft these feeling onto the Ad campaign like “Hasso toh khul ke hasso for Close Up”, “Cream bathing bar for Dove soap” and “Daag acche hai for Surf Excel” have been sure shot winner with the audience.

It has also launched Pure-It, a home water purifier which supplies drinking water without boiling/need for electricity. As well as outdoor and radio-ads, Ad-agency contract has created communication for cinemas and even ATM machines for the brand.

POSITIONING

In the 1970’s consumers were ready to pay “more for more”, and luxury goods

flourished. In the 1980’s consumers began to demand “more for same”, and the discounting era grew strong. Today’s consumer demanding “more for less”, and the winner will be that super value marketers. 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 customer. It is more efficient to the market one successful concept to one large group of people than 50 product or service ideas to 50 separate groups, repositioning is a must when customer attitude have changed and product have strayed away from the consumer’s long standing perception for them.

Positioning of Individual Product:

Lifebuoy is “one of Unilever’s older brands” with more than a hundred year history, as www.unilever.com informs. “Lifebuoy has become more than just a red bar of a soap-today the brand provides hygiene and health solutions for families.

Fair & Lovely, a hot selling “fairness” cream, which promises a lighter skin tone for many of India’s complexion conscious consumers.

HINDUSTAN UNILEVER’s MARKET SEGMENTATION

Hindustan Unilever Ltd (HUL), the country’s largest fast moving consumer goods (FMCG) company, is losing market share in most key segments in which it is present.

In the quarter ended June 2007, the FMCG behemoth’s sales grew 13% year-on-year to Rs3,481 crore and net profit 30% to Rs493 crore. Yet, the

company’s market share declined in several categories.

According to the data provided by market research firm ACNielsen, in the quarter ended June 2007, HUL’s soaps business, which accounts for more than a quarter of its total revenues, grew 7%. While the industry grew at 8%, HUL’s closest rival Godrej Consumer Products Ltd’s (GCPL) grew its soaps business by a whopping 24.3%. Though, HUL still dominates the Rs5,500 crore soap market in India with a 53% market share, its share went down by 2.6% in terms of units sold and 2.4% in terms of value over the 15-month period from April 2006 to June 2007. HUL did not respond to an email query from Mint.

“GCPL is emerging as a strong player in the value-for-money products category (products that are not priced too steeply) and it is constantly eating into HUL’s market share – especially its (HUL’s) mass brand Lifebuoy,” said Anand Shah, an analyst at Angel Broking, a Mumbai-based brokerage firm. In the oral care category, HUL is feeling the heat from competitors both at the top and the lower end of the market. The company’s oral care portfolio that includes brands such as Pepsodent and CloseUp, grew at 11% with Pepsodent growing by only 4.5%, according to ACNielsen.

Against this, Colgate-Palmolive (India) Ltd’s Colgate brand grew at 14% and the toothpaste business of Dabur India Ltd, which owns brands such as Babool and Meswak, grew at an impressive 32%.

The primary reason for HUL losing market share, say analysts, is that while the company has a varied brand portfolio, its rivals, big and small, have focused on certain niches and are pushing growth aggressively in these categories. “While the top-end players such as Procter & Gamble or Colgate-Palmolive are getting aggressive in premium categories, mid-rung players such as Dabur, Marico and Godrej are muscling in with their value-for-money strategy,” said an executive with a telecom company, who was until recently at HUL. The executive didn’t want to be identified.

HUL’s market share in the detergents category also fell by 2.5% to 35% in the quarter to June compared to the year-ago period. “HUL’s low-priced brand, Wheel, dominates the laundry segment, but with rising incomes, consumers are now shifting to mid-level brands from rivals such as P&G and Nirma,” said Sameer Deshmukh, analyst, IL&FS Investsmart Securities Ltd.

The company’s skin care business also registered a marginal decline, with its brands such as Fair & Lovely and Ponds losing 0.4% market share in the quarter to June. While announcing its quarterly results, HUL had said that the segment had been impacted by planned reduction of inventory in the distribution pipeline in preparation for a relaunch of Fair & Lovely in July 2007.

In the branded tea segment (an Rs5, 000 crore market), Tata Tea Ltd recently displaced HUL from the top slot. HUL’s market share dropped to 18.6% in volume terms while Tata Tea’s was 19.2%. In value terms, however, HUL remains ahead with a 24% market share as against Tata Tea’s share of 21%. “We are focusing on the wallet of the consumers rather than only increasing the volume,” Harish Manwani, chairman, HUL, had said at a recent press meet.

COMPETITIVE STRATEGY

In Hindustan Unilever Limited (HUL), the principle of Corporate Responsibility (CR) is an integral part of our commitment to all our stakeholders – consumers, customers, employees, the environment and the society that we operate in. 

Today, India is battling multiple issues like water scarcity, poverty, and problems arising out of low awareness of health, hygiene, and nutrition. If these issues are not addressed soon, they will create insurmountable barriers to business growth. We believe that helping society prosper and ensuring a sustainable future for the planet goes hand in hand with our goal of ensuring growth that is competitive, profitable, and sustainable for our rganization.

Our contributions have to be substantial and sustainable, which is why we are not just banking on our philanthropic programmes, but are transforming our core business practices as well. Even the seemingly small innovations in our brands and business processes can lead to a big difference in society as we touch the lives of two out of every three Indians.* 

For example, if one household uses Surf Excel detergent, it can conserve two buckets of water per wash. A million Indian households using Surf Excel can save enough water for meeting the basic hygiene needs of many Indians. Thus, small individual actions multiplied with our large consumer base will make a big difference in combating the issues society faces.

We will further demonstrate that successful business strategies are driven by responsible business practices. The key to this approach is developing a CR framework which integrates the social, economic, and environmental agenda with our business priorities – growing markets, maintaining the competitive edge, enjoying goodwill in the communities we operate in, and building trust and an exceptional reputation. Hence, in the future, the three cornerstones for CR integration with business at HUL will be:

- Growing markets responsibly: We will address issues related to hygiene and nutrition through product innovations and awareness. Gathering information about the concerns expressed by consumers, communities, and stakeholders can help us identify opportunities for innovation at the category, brand, and marketing plan level. We have a very strong and trusted position in India and we can leverage this to our competitive advantage.

- Ensuring sustainable practices in our operations: To secure a thriving future, we need to establish sustainable sources for raw materials. Being a company that is heavily dependent on water, agriculture, fuels and petrochemicals, we must plan now for a future in which water could be scarce, agriculture could be under pressure, and fuels will be expensive. Our consumers add up to two-thirds of the Indian population; hence addressing sustainability issues is a high priority.

- Building a good reputation through responsible leadership: CR is one of the key components of reputation and trust. A good reputation can be a major competitive advantage and can build employer brand and consumer loyalty. 

FUTURE COMPETITIVE STRATEGY

2010 EXPECTATIONS

P & G, the world’s largest consumer goods maker, will continue to gain share in the next five years in India, according to Ali Dibadj, an analyst at Sanford C. Bernstein in New York, who rates the stock “outperform.” Hindustan Unilever Ltd., 52 percent owned by the London and Rotterdam based parent, lost ground in shampoo, bath soaps, toothpaste and tea in the quarter ended September 30, compared with the year earlier, according to the company. Its share of the shampoo market declined by more than a percentage point to 47.7 percent, the company said.

ITC, the largest Indian cigarette maker and party owned by British American Tobacco Plc, is also making inroads. It started selling more brands including Fiama Di Wills shampoo and Superia soap last year as the government raised tobacco taxes.

PROFITABLE CIGARETTES

The tobacco maker “has a very profitable cigarettes business which will help it to invest and expand its personal care portfolio.” Said Anand Shah, an analyst at Angel Broking in Mumbai, who has a neutral rating on the stock. It has the ability to take losses in this segment as long as it grows its sales. This strategy will still satisfy investors.

Rising prices of raw materials have made it more difficult for consumer goods makers to pass on higher costs. The price if palm oil, used to make soaps and foods, has surged 70 percent in the past year.

“Given the competition, profitability will continue to be under pressure.” Said Macquarie Securities ltd. Analyst Unmesh Sharma, who has an “underperform” rating on Hindustan Unilever. He expects the stock to drop to 180 rupees ($4.57) in the next year from 190.9 rupees. The company has a market value of about $11.8 billion.

India is Unilever’s biggest market in Asia, generating about 6 percent of annual sales. It has sold soaps in the country since 1888 and controls about half of the sales of the products such as skin creams, bathing soaps and shampoo.

COMPETITIVE STRENGTHS

Particulars Laundry Soaps Shampoo Skin Toothpaste Tea Coffee

Market size-$ min 2247 1658 542 698 691 1113 177

HUL share 37.5% 54.3% 47.8% 54.5% 29.5% 22.7% 44.0%

Nearest Competitor 13.6% 9.7% 23.7% 7.4% 48.8% 20.8% 39.1%

JOINT VENTURE

A joint venture is a business agreement in which parties agree to develop, for a finite time, a new entity and new assets by contributing equity. They exercise control over the enterprise and

consequently share revenues, expenses and assets. There are other types of companies such as JV limited by guarantee, joint ventures limited by guarantee with partners holding shares.

In European law, the term 'joint-venture' (or joint undertaking) is an elusive legal concept, better defined under the rules of company law. In France, the term 'joint venture' is variously translated as 'association d'entreprises', 'entreprise conjointe', 'coentreprise' and 'entreprise commune'. But generally, the term societe anonyme loosely covers all foreign collaborations. In Germany, 'joint venture' is better represented as a 'combination of companies' (Konzern)[1]

On the other hand, when two or more persons come together to form a temporary partnership for the purpose of carrying out a particular project, such partnership can also be called a joint venture where the parties are "co-venturers".

The venture can be for one specific project only - when the JV is referred to more correctly as a consortium (as the building of the Channel Tunnel) - or a continuing business relationship. The consortium JV (also known as a cooperative agreement) is formed where one party seeks technological expertise or technical service arrangements, franchise and brand use agreements, management contracts, rental agreements, for ‘‘one-time’’ contracts. The JV is dissolved when that goal is reached.

Some major joint ventures include Dow Corning, MillerCoors, Sony Ericsson and Penske Truck Leasing.

A joint venture takes place when two parties come together to take on one project. In a joint venture, both parties are equally invested in the project in terms of money, time, and effort to build on the original concept. While joint ventures are generally small projects, major corporations also use this method in order to diversify. A joint venture can ensure the success of smaller projects for those that are just starting in the business world or for established corporations. Since the cost of starting new projects is generally high, a joint venture allows both parties to share the burden of the project, as well as the resulting profits.

A joint venture is not to be taken lightly. For a businessperson to embark on a joint venture, he or she needs to be committed and willing to work cooperatively with the other party involved. A person involved in a joint venture can no longer make all of the decisions for the business alone. For it to be truly a “joint venture,” there has to be 100% commitment from both sides. [2]

When determining whether or not to embark on a joint venture, it is important to ensure both parties are a match with the projected client base. In a joint venture, each party must complement the other in business. Sometimes, a misunderstanding or a lack of communication can destroy a joint venture. Therefore, it is necessary for both parties to be capable of communicating what they are able to offer to the project and what their expectations are.

NEW INITIATIVE

BRINGING HIGH-END DOVE TO INDIA

Baillie is fighting back. Over the past six months, Hindustan Unilever launched a high end range of Pond’s skin care and Dove hair care products from Unilever’s international portfolio. These premium brands retail no in neighborhood small stores but in supermarkets and hypermarkets, where Indian customers love to touch & feel the products.

Hindustan Unilever is also milking one of its top brands-fair & lovely, a hot selling “fairness” cream, which promises a lighter skin tone for many of India’s complexion conscious consumers. The advertising campaign, which suggests that regular use of the cream helps women gain confidence and makes them eligible for marriage, has made the brand a winner. That has spawned a host of competitive fairness creams, soaps, and sunblock lotions. But Hindustan Unilever’s brand is still tops.

Baille is also getting aggressive on foods, focusing on the Knorr brand of soups and curry mixes-ideal for the Indian market. Analysts believe the company’s current strategy of concentrating on premium products and marketing them in the large retail stores is a winning one. Sumeet Budhraja, consumer analyst at Mumbai brokage First Global Securities, says that Hindustan Unilever “could have addressed a lot more categories, but they are more focused and regaining their aggressiveness.” He points to the demand for safe drinking water in India, which Hindustan Unilever exploited with the launch of water purifier Pure-It in 2005, at one-third price of establishes Indian brands such as Aqua guard.

These efforts have delivered some promising results, and Baille is pleased with the modest turnaround. In the quarter ended June, 2007, the company’s sales grew 13% with net profit up 29.6%.

SERVICE TO SOCIETY

HUL believes that an organisation’s worth is also in the service it renders to the community. HUL is focusing on health & hygiene education, women empowerment, and water management. It is also involved in education and rehabilitation of special or underprivileged children, care for the destitute and HIV-positive, and rural development. HUL has also responded in case of national calamities/adversities and contributes through various welfare measures, most recent being the village built by HUL in earthquake affected Gujrat, and relief & rehabilitation after the Tsunami caused devastation in South India.

PERFORMANCE REVIEW

FINANCIAL OVERVIEW

(Rs crore)

Balance sheet

Mar ' 11 Mar ' 10 Mar ' 09 Dec ' 07 Dec ' 06

Sources of funds

Owner's fund

Equity share capital 215.95 218.17 217.99 217.75 220.68

Share application money - - - - -

Preference share capital - - - - -

Reserves & surplus 2,417.30 2,364.68 1,842.85 1,220.82 2,502.14

Loan funds

Secured loans - - 144.65 25.52 37.13

Unsecured loans - - 277.30 63.01 35.47

Total 2,633.25 2,582.85 2,482.79 1,527.10 2,795.42

Uses of funds

Fixed assets

Gross block 3,759.62 3,581.96 2,881.73 2,669.08 2,462.69

Less : revaluation reserve 0.67 0.67 0.67 0.67 0.67

Less : accumulated depreciation 1,590.46 1,419.85 1,274.95 1,146.57 1,061.94

Net block 2,168.49 2,161.44 1,606.11 1,521.84 1,400.08

Capital work-in-progress 299.08 273.96 472.07 185.64 110.26

Investments 1,260.68 1,264.08 332.62 1,440.81 2,522.22

Mar ' 11 Mar ' 10 Mar ' 09 Dec ' 07 Dec ' 06

Net current assets

Current assets, loans & advances 6,494.19 5,818.89 6,040.04 3,681.12 3,555.08

Less : current liabilities & provisions 7,589.19 6,935.52 5,968.06 5,302.30 4,792.23

Total net current assets-

1,095.00-

1,116.63 71.98-

1,621.18-

1,237.15

Miscellaneous expenses not written - - - - -

Total 2,633.25 2,582.85 2,482.79 1,527.10 2,795.42

Notes:

Book value of unquoted investments 108.93 466.46 317.30 1,364.36 2,346.08

Market value of quoted investments 1,279.49 953.58 71.09 287.83 170.29

Contingent liabilities 663.00 468.49 417.26 494.46 476.40

Number of equity sharesoutstanding (Lacs) 21594.72 21816.87 21798.76 21774.63 22067.76

RESEARCH METHODOLOGY

Achieving accuracy in any research requires in depth study regarding the subject. As the prime objective of the project is to compare Hindustan Unilever Ltd. (HUL) with the existing competitors in the market and the impact of Procter & Gamble (P&G), Nivea, and L’Oreal on HLL, the research methodology adopted is basically based on primary data via which the most recent and accurate piece of first hand information could be collected.

Primary data was collected by the

Questionnaire &

Personal Interview Method.

Sources of secondary data:

Used to obtain information on, HUL and its competitor history, current issues, policies, procedures etc, wherever required.

# Internet – www.unilever.com, www.google.com

# Magazines- Business Today

# Newspapers- The Economic Times

Procedure of research methodology

# Target geographic areas was Delhi.

# To these geographical area questionnaire was given, the questionnaire was a combination of both open ended and closed ended questions.

#The date during which questionnaire were filled was between three weeks.

# Some dealers were also interviewed to know their prospective. Interviews with the honour of retailer of HUL were also conducted.

# Finally the collected data and information was analysed and compiled to arrive at the conclusion and recommendations given.

LIMITATIONS

While undertaking my study I was encountered with some limitations:

Limited time was provided to complete the study.

Cost involved in collecting the data was high.

Target geographic areas was limited to Delhi.

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.

ANALYSIS AND INTERPRETATION

3rd consecutive year of accelerated growth in FMCG portfolio. Growth broad based and across all categories.

FMCG market expected to maintain current growth levels. Successfully implement the food strategy. Build momentum to the water business. Build on competitive capabilities across the business system. Manage cost inflation effectively to improve margin through pricing, cost saving and

better mix. Strong commitment to governance & CSR/

CONCLUSION

This company project has demonstrated “Hindustan Unilever’s Marketing Strategies and Policies” that has proved to be extensive and of great benefit to the company in furthering its competitive advantage.

In this project it is possible to see the success of Hindustan Unilever’s in to endorse its strong potential to continue to do well.

REFRENCES

A L Ries (1996), “Focus” Harper Collins Publishers Ltd.

David A. Aaker(1991), “Managing Brand Equity”, The free Press.

David A. Aaker(1996) “Building Strong Brands ”, The free Press.

Phillip Kotler (Eighth Edition) “Marketing Management”, Prentice Hall of India Ltd.

The Economic Times- “Brand Equity”

Market Survey and Questionnaires.

www.unilever.com