Hindustan Lever’s foray into network

marketingThe Journey from HLL to HLN

IntroductionUnilever is a Worldwide Leader in Consumer GoodsHindustan Lever Limited - Unilever’s Branch in IndiaHLL is Now Known As Hindustan Unilever Limited (HUL)We will Discuss the Foray of HLL Into Network MarketingHindustan Unilever Network is HLL’s Network Marketing BranchComparisons with Other Multi-level Marketing Brands as Well

HLL & HLNIndia's Largest Fast Moving Consumer Goods CompanyHLL is also One of the Country's Largest ExportersThe Mission that Inspires HLL's Over 15,000 Employees, including Over 1,300 Managers, is to “Add Vitality to Life“Meets Everyday Needs for Nutrition, Hygiene, and Personal Care with Brands that Help People Feel Good, Look Good and Get More Out of Life.HLL Made its Foray into Direct Marketing in 1996

The simplest explanation of NETWORK MARKETING is that it is a method of marketing that utilizes independent representatives to reach potential customers that a company otherwise would not reach with traditional online or offline marketing methods.

Network marketing is also known as Multi Level Marketing,Direct Selling, Referral Marketing, and Pyramid Selling.

Direct selling is a home based business with almostnegligible investment and one can earn income just by investing few hours.

Examples of Network Marketing in India

What is Network Marketing

•Tupperware• Amway• Avon• Oriflame

Aviance is a beauty brand, primarily aimed at women, produced by the Unilever group.

Aviance is sold under a variety of different markets around the world including Asia, Latin America and the Middle East and is also sold via Hindustan Unilever's Multi-level marketing division Hindustan Unilever Network in India, Bangladesh, Sri Lanka.

Network Marketing IN INDIA•Direct Marketing Industry - Estimated to Be Worth More Than Rs.15 Billion as of Early 2003•Direct Marketing Industry in India - Growth Rate of 25%•Some of the Direct-Selling Companies in India are Eureka Forbes, Tupperware, Amway India, etc.•Direct Selling Companies Generally Deal in Daily-Use Products Ranging From Cosmetics, Personal Hygiene ,HealthCare and Kitchenware.

AMWAYThe only real upside to this particular MLM is that there is

no joining fee to become a member – simply a screening process to make sure that you’re the "right type" of candidate is carried out.

BUT to become the member of Aviance one has to purchase from HULN's wide range of products for a minimum of Rs 600 and then fill the application form provided.

TUPPERWARETupperware gives dicount(20-30%) on the market price

which Aviance does not gives.

Comparison of AVIANCE with

AYUSH The ayurvedic power brand ayush was initially

marketed through the traditional dealer network.The company had targeted annual sales of over

2bn in 1st two years of its inception in 2000 but the brand faild to achieve its targets. Later on it tried to target its customer through HLN and HLN believd that it can be done trough lowering its adv. expenditure through push strategy.

HINDUSTAN LEVER NETWORK•HLL Entered the Direct Marketing Scene in 1999 under the Brand Name “Aviance”•Aviance Focused On Personal Care Products•Women Acted as Consultants For It•Though Aviance was was not a roaring success in absolute sales In number it layed the foundation for HLN which was launched on January 27th 2003.

• “Lever Home” Was Another Direct Marketing Brand of HLN which included kitchen care, home care & laundry care products.

• Through Value Added Services like Expert Advice and Home Delivery ,HLN Aimed to be the Most Preferred Network Company

• HLL Entered Into Direct Marketing When It Faced a Lot of Competition From Other Companies

• HLN Formed in 2003 to Boost Sales

REASONS TO JOIN HINDUSTAN LEVER NETWORK

1. The Hindustan Unilever AdvantageHindustan Unilever Network gets its unmatched strength from Hindustan Unilever Limited (HUL) is India's No. 1 Fast Moving Consumer Goods (FMCG) company, with a turnover of about Rs.20,239 crores. HUL touches the lives of 2 out of every 3 Indians. Like its parent Company, Unilever, the mission that inspires the 40,000 employees of HUL and its group companies is to add vitality to life. To meet the everyday needs for nutrition, hygiene and personal care with brands that help people feel good, look good and get more out of life.

The company has invested millions in R&D with 1000 scientists working round the clock at over 70 Innovation Centres

worlwide.

Over 50 crore satisfied enjoy the diverse product range of HUL, manufactured in 100 factories and involve more than 2000 suppliers and associates. HUL products are distributed through a network of over 7500 redistribution stockists to an astronomical number of towns and villages in India.

2. Unmatched Earning OpportunityHULN's Unique, Break-through Compensation Plan HULN's revolutionary Compensation Plan is the very foundation of success in network marketing. It takes into account today's realities and the latest trends in compensation planning across the globe. At HULN it is said that, employee are trained to succeed, rewarded for their performance, and recognised for their achievements. HULN's unique Compensation Plan ensures:

. A steady and growing source of income.

. Rewards like car, house and more!

. National and International travel.

3. Unmatched Product Range:Hindustan Unilever Network offers a wide range of high-quality, high-performance products, available exclusively through trained HULN Consultants and not to be sold in the retail market. These products reflect HUL's understanding of evolving customer needs and Unilever's huge investments in technology worldwide. Each product available in the Hindustan Unilever Network is a symbol of global trust and assurance.

Lever Home - Home Care, Laundry Care & Oral Care Aviance - Skin Care, Cosmetics & Hair Care RangeDIY - Premium Personal Care Range for MenAyush Therapy - Health Care & Personal CareAviance Prestige - Age Defense, Absolute White and Men's Solutions

4. Unbeatable Value-for-moneyUnlike with other Networking Companies, HULN's range includes products that have been customised to Indian needs - Products that everyone needs, uses and most importantly, can afford! No other Direct Selling company offers such a wide range of value-for-money products.

5. Unparalleled Physical PresenceIn barely 5 years since inception, HULN has grown to a strength of over 5 lakh Consultants across 500 towns and cities in India. Backed by many offices and service centres across the nation ensure that HULN products and services are always within your reach. What's more, HULN's on-line transaction system can help you track your network performance every minute, every hour.

6. Personal Transformation & EnrichmentJoining the Network does not change just your professional life - it enriches your personal life as well. Better social contacts, better lifestyle, quality time to devote to friends and family, etc. HULN hones your confidence levels and leadership skills to help you evolve into a finer personality.

Marketing MIX – THE 4P’S

PRODUCT – •175-200 High-Quality, High-Performance Products Were Sold•Started Out With Personal Care Products•Later Forayed Into Kitchen Care, Home Care, and Laundry Care Products Under the Brand Lever Home and Value-Added Food Products Like Sauce, Tea, Coffee Under the Name of Nutrium Plus

PLACE – From a coverage of 400 Cities in the Initial Year, HLN

Targeted Reaching 1500 Cities in Two Years Targeted the Urban Market in the Initial Phase

PRICE – Consultants Could Buy Products at 20% Lesser Rates

Than the Original Prices The Prices Were Justified For All the Strata of the

Society

PROMOTION – Less Of Advertising Branding and Advertising Done By Consultants Who

Acted as Brand Ambassadors as Well as Salespersons

SWOT ANALYSIS OF HLN

Strengths –•HLN Model Focused on Building Male and Female Entrepreneurs Through Active Partnership•New Products In Different Categories Every Two Months•Extensive Training Programs For Its Consultants•Less Budget on Advertising as Consultants Acted as Brand Ambassadors•Gained a Lot of Popularity Amongst the Woman Consumers

Weaknesses –• No or Less Job Security For the Consultants• Minimal Advertising• The Name “Aviance” Did Not Lead To Expected Success

so was Changed to HLN to Utilise the Brand’s Popularity

• Aviance Range of Products Were Meant For the Premium Section of Society and Were Being Sold by the Middle-Class Population

Opportunities –•To Extend Its Reach Amongst the Masses (Even to the Men in the Society)•The Freedom to Launch New Products Apart From Those Being Sold e.g. – LeverHome (for kitchencare, laundrycare), Nutrium Plus (Tea, Sauces, Value-Added Food Items)Threats –•Other Direct Marketing Firms Like Amway, Modicare, Avon Beauty Products

Threats• Other MLM strategic firms looking to invade the

market place.

Industry analysis shows that the period between the late 1990s and early 2000s witnessed rapid growth in the direct selling industry, which followed more than 25% year on year growth. Analysts said that this favourable growth rate came from immense success of few major players like Amway and the industry itself did not offer many opportunities. In this atmosphere it’s an open question whether HLN will succeed in direct selling. A number of companies entered the direct sellimg segment to cash in on the growing opportunity but the industry has its own share of problems.

Will Hindustan Lever Network become a success story

1. Being a distributor or a salesperson in a multi-level marketing organisation did not translate into job security. A significant percentage who joined in the initial frenzy returned the product kits within the first few months

2. Problem of minimal advertising strategies‘ that most MLM companies followed. This made buying decision more complex

3. The issue of distributers buying product only for self consumption, the rate was 50-60% of total volume traded.

Problems are:-

The failure of aviance raised many doubts about HLL’s competence but company sources are optimistic. They believed that the networking venture will leverage the goodwill that the parent company has established in India for more than hundred years. They also feel that once the market is aware that the products come from Hindustan Lever separate marketing efforts will not be required to attain high sales. Company sources also say that HLN has learnt from the experience of avianceand is now better equipped to make strategically more sound decisions than in the past.

CONCLUSION•HLN is the Leading Player Amongst All the FMCG Brands and Has Done Better Than Other MLM Brands•Although Aviance Failed to Succeed, HLL Has Learned From This Experience and Launched HLN and succeeded in the Network Marketing Sphere•The sub-brands of HLL Like Lux or Lakme are More Popular Than HLL Itself•HLL Needs to Use its Knowledge of So Many Years in the Indian Market to Be the Leader in Both the Direct Selling Market as Well as the Retail Market

Thank YOU•Sana Ejaz Khan•Simran Johar•Shweta Singh• Surbhi Rajpal