preface

Hindustan Unilever Limited (formerly Hindustan Lever Limited) is India’s

largest Fast Moving Consumer Goods company with a sales turnover of

more than Rs.10,000 crores. At least one of its products reaches two thirds of Indian

households. It has 35 brands and employs more than 15,000 people. Its promoter company

Unilever, a fortune 500 multinational, holds 51.42% equity. Unilever has presence in more

than 100 countries worldwide in FMCG sector.

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 has helped the

company to sustain its leadership position in the overall FMCG category in India.

This project is a sincere effort to look for the market potential in FMCG industry. A

descriptive research procedure had been applied to come to the conclusions of the project. A

detailed questionnaire had been prepared and the responses of the concerned people had

been collected for the analysis.

ACKNOWLEDGEMENT:- I am grateful to many people who have contribution to this project. In particular I would like to thank my faculty, MS.MEENU ARORA, who have helped me through this project in their own special & affordable way.My project has been a successful task because of cheerful devotion of always lend the support, I needed of. I have been getting all the guidance, Dr. NARENDRA MOHAN, the director of our college and my faculty members who possibly could get through out the making of this project from them.They always been ready & also have to clarify all my queries from time to time.Last but not least I would also like to thank the library members and computer laboratory members who also have been supportive during the making of this project by providing adequate books as & when required for.Finally I extend my sincere thanks to all those who have given me encouragement throughout, without whose generosity this project would have been difficult for me to complete.

INTRODUCTION

The Hindustan Unilever Ltd’s(HUL) Inc has taken the opportunity to offer us a broader view

of FMCG category. The Hindustan Unilever Ltd (HLL) is India’s no.1 FMCG is able to share with

their market insights based upon unparalleled breath of consumer goods 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 has helped 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

other markets such as preserves and bakery products, and is also one of the country’s top

five exporters. In addition to FMCG products it is the country's biggest exporter of tea. It is

generally acknowledged to be one of India's best-run businesses, although performance

slowed dramatically between 2000 and 2004, prior to restructuring.

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 halving

the local prices of Ariel and Tide detergents in 2004.

Asia and 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 brokerage 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 a Bloomberg survey.

Hindustan Unilever – A 75 Year Commitment

15,000 employees

1,200 managers

2,000 suppliers & associates

75 Manufacturing Locations

45 C&FAs, 4,000 Stockists

Total Coverage 6.3 Mln Outlets

Direct Coverage 1 Mln outlets

Population of INDIA: 1027 Mln

5,545 Towns

2.5 Mln outlets

6,38,000 Villages

5.0 Mln outlets

HISTORY OF HINDUSTAN UNILEVER LTD

It was in the summer of 1888 that Unilever of England first marketed Sunlight soap in

India. This was followed by brands like Pears and Vim. Vanaspati was launched in 1918

and Dalda 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.

A number of prominent companies came into the HUL fold as result of Unilever’s

international acquisitions. These included Brooke Bond (1984), Lipton (1972) and

Pond’s (1986).

In 1993, Tata Oil Mills Company (TOMCO) merged with HUL. Two years later, HUL and

yet another Tata company, Lakme Limited, formed a 50:50 joint venture, Lakme Lever

Limited.

Subsequently in 1998, Lakme Limited sold its brands to HUL and divested its 50 per

cent stake in the joint venture to the FMCG giant.

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, Nepal Lever Limited (NLL), and its factory

represents the largest manufacturing investment in the Himalayan kingdom. In a

historic step, HUL picked up 74 per cent of the equity of Modern Foods from the Indian

government.

In 2002, HUL acquired the government s remaining stake in Modern Foods.

FMCG major Hindustan Unilever Limited (HUL), formerly known as Hindustan Lever

Limited, employs 36,000 people, including over 1,350 managers. It is one of the

earliest MNCs to have entered India

ORGANIZATIONAL STRUCTURE

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

Managing Director

General Manager

Vice President

Marketing Manufacturing

Sales Finance Distribution

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 tonnes

and sales of Rs.10,000crore.

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.

The mission that inspires HUL's over 15,000 employees, including over 1,300

managers, is to "add vitality to life." HUL meets everyday 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,

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 and 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 consumer.

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 and 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 and Europe.

HUL’S NEW GROWTH STRATEGY

After having fought a bitter price battle for market share with its rivals, Hindustan Unilever

Ltd (HUL), Indian subsidiary of the Anglo-Dutch consumer goods company Unilever Plc, is now

working on a new growth strategy for its laundry business.

“Price cut or hike is not a long-term growth strategy. Pricing, in fact, is now passe,” insists

Sudhanshu Vats, category head, home care.

“Our strategy for growth, now is focused on product innovation, new consumer and retail

trends and aggressive marketing and promotions,” he said.

This comes even as Unilever is scouting for a potential buyer for its laundry business in the

US.

HUL says it is quite upbeat about the segment and says the laundry segment is one of its

“key growth areas.”

“We have done key innovations across the product portfolio and it is working for us,” says

Vats. “We successfully migrated from Rin Supreme to Surf Excel and Wheel Smart Srimati—

which was rolled out in 2006—is also on the right track.”

HUL’s market share in the laundry segment grew to around 37.8% in the quarter ended June

from 35.5% in the same period last year, according the market research firm ACNielsen.

However, this time, the increase was not at the expense of price war with its multinational

rival Procter & Gamble Co. P&G also gained 0.5 percentage points, up to a 7.6% share. Nirma

Ltd, the Ahmedabad-based manufacturer, however, saw its market share dip by 1.7%

percentage points to 13.5%.

Wheel, a value brand that, according to Vats contributes around 50% of HUL’s laundry

segment revenues, increased its market share by 2 percentage points in the same period,

with a total share of about 18%.

According to ACNielsen, the laundry industry in India was worth Rs7,908 crore in 2006 and

rose 8.4% over 2005. HUL doesn’t report its laundry revenues separately but puts them under

the soaps and detergent category.

In 2006, HUL’s soaps and detergents segment contributed around Rs5,596 crore to the

company’s total sales of Rs12,103 crore.

“Laundry has been an attractive segment in the past and is likely to keep growing in the near

future. The recent price war between companies led to erosion in their profitability but now,

the industry is stabilizing,” says Unmesh Sharma, an analyst at Macquarie Securities here.

According to Vats, 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.

“Consumers today are buying more clothes,” says Vats. “Trends suggest that the usage of

detergents has gone up as a result. Also, with premium quality of clothes, people want to use

better and branded products.”

Still, analysts remain cautious. “Some of HUL’s recent moves, such as promotional campaigns

and advertising, seem right,” says Macquarie’s Sharma. “Still, it is too early to say what result

their new strategies will yiel.

PRODUCT PROFILE

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

Home and personal care

personal wash, fabric wash, home care, oral care, skin care, hair care, deodorants and

talcs, colour cosmetic

Foods

tea, coffee, branded staples, culinary products, ice creams, Modern Foods ranges

New Ventures

Hindustan Lever Network, Ayush ayurvedic products and services, Sangam, Pureit

water purifiers.

Exports

HPC, beverages, marine products, rice

BRANDS

HUL s brands are household names across the country. They include:

Lifebuoy, Lux, Surf Excel, Rin, Wheel, Fair & Lovely, Pond s, Sunsilk, Clinic, Pepsodent, Close-

up, Lakme, Brooke Bond, Kissan, Knorr-Annapurna and Kwality Walls.

SWOT ANALYSIS

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

to life."

3. The company derives 44.3% of its revenues from soaps and detergents, 26.6% from

personal care products, 10.5% from beverages, and the rest from foods, ice creams,

exports, and other products.

4. Low cost of production due to economic of scale. That means higher profits and / or

more competitioners. Better market penetration.

5. HUL is also one of the country's largest exporters; it has been recognised as a

Golden Super Star Trading House by the Government of India.

Weakness

1. Continuous threat from other competitors.

Opportunities

1. Increasing per capita national income resulting in higher disposable income.

2. Growing middle class and growing urban population.

3. Increasing gifts cultures.

4. Increasing departmental stores concept – impulse @ at cash counters.

5. Globalization.

Threats

1. HLL's tea business has declined marginally, reason is that, cost pressure is

likely due to rising crude and freight costs.

2. PEST ANALYSIS

P: since the budget range is decontrolled, no political effects are envisaged.

E: 1) increasing per capita income resulting in higher

Disposable income

2) Growing middle class/urban population – increase in

Demand

3) Low cost of production – better penetration

S: 1) Per capita consumption expected to increase – fashion

2) Increasing gifts culture – increase in demand

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

conforming 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

never have imagined possible. Hindustan Unilever Ltd(HUL) offer such product. 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

Oral care :

Pepsodent and Close up

Deodorants :

Axe and Rexona

Colour cosmetics :

Lakme

Ayurvedic:

Ayush

Tea :

Brooke Bond and 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 buy the product with the

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

Hindustan Unilever Ltd(HUL) has launched various products which cater to all customer

segments. 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 ANY MORE. Marketers and finance manager need a new term to

evaluate their business:

Distribution Equity. It takes much more time and effort to build, but once built, distribution

equity is much together to erode.

The fundamental axiom of Indian consumer market is this:

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 be know of

selling your 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 ling period. In a product and price parity situation, the

brand that sells more is the one that reaches the highest number of customers.

India – The operations involve over 2,000 suppliers and associates. HUL's distribution

network, comprising about 4,000 redistribution stockists, 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 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.

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.

Once the stock product reaches retailers, the prospective customers can have access to the

product.

Hindustan Unilever Ltd(HUL) distributes the product in the manner stated above.

Hindustan Unilever Ltd(HUL) distribution network has expanded. Beside use of improved

logistics, Hindustan Unilever Ltd(HUL) is also attempting to improve the distribution quality.

To address the issue of product stability, it has installed visi colors at several outlets. 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.

Looking at the low penetration of few products, a distribution expansion would itself being

incremental volume. The other reason is arch rival Procter & Gamble Co. reaches more than a

million retailers.

This increase in distribution is going to be accompanied by reduction in channel costs.

Hindustan Unilever Ltd(HUL) marketing costs, at 18% of total costs, is much higher than

Procter & Gamble Co. The company is looking to reduce this parity level. At Hindustan

Unilever Ltd(HUL), they believe that selling FMCG is it like selling soft drinks.

Promotion

If an advertisement is to communicate effectively, the receiver must at least half want it to,

and be prepared too 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.

To penetrate into the inner recesses of her memory, communication must first ensure

exposure, grab her attention evoke her comprehension, grab her acceptance and then extract

retention competing with thousands of other units of communication trying to do the same.

Finding showed that the adults felt too conscious to be seen consuming a product actually

meant for children. The strategic response address the emotional appeal of the band 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 to khul k hasso for close up”, “cream bathing bar for

dove soap” and daag ache hai for surf excel” have been sure shot winner with the

audience.

It has also launched Pureit, a home water purifier which supplies drinking water without

boiling/need of electricity , As well as outdoor and radio ads, ad agency contract has created

communication for cinemas and even ATM machines for the brand.

All ICICI’ s ATM a message flashes on the screen as soon as customer insert his ATM card.

Something familiar is planned for phone-book as well. In cinemas, 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, 30 catteries in

Mumbai have been selected.

Ad spend in 2000 was about 14% of sales and the management said that plans to maintain as

spend at this level in the current year also.

Ad since any discussion today would be incomplete without mention ‘e’ word, the

management plans to tap this new channel of marketing. Beside the company website (i.e.

www.unilever.com), that the company has launched, it had also entered into various

marketing relationship with other portals, specially targeted during festivals and events such

as Valentines day, etc….

It’s a combination of spiffing up its key brand, 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 well as expand the market.

Positioning

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

the 1980s, 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 consumer. 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 a variety of competitive

claims assails her senses, today customer uses complicated decision making process to

assess the alternative before making a purchase. Since Hindustan Unilever(Ltd) is more

clearly associated with a particular set of attributes in terms of benefits and prices, the

quicker becomes her search process.

Positioning of individual product:

1) Lifebuoy is ‘one of Unilever’s oldest brands’ with more than a hundred-year history, as

www.unilever.com informs. “Lifebuoy has become more than just a red bar of soap –

today the brand provides hygiene and health solutions for families

2) 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

Market place for any product is comprised of many different segments of consumers, each

with different needs and wants. Markets segmentation can be defined in a number of ways

such as:

Demographic variables (e.g. Consumers are groups, gender, material states income

etc…)

The lifestyle of consumers (i.e. their interests and activities) the benefits which

consumers look for in a product or on the occasions when the product might be

consumed.

Hindustan Unilever(Ltd) takes into account all these factors when producing a range of

products. It targets different segments within the market, such as the:

Break segment – products which are normally consume as a snatched break and often

with tea and coffee.

Impulse segment – these products are often purchase on impulse, used these and then.

They include product such as close up.

Take home segment – this describes product that are normally purchased in

supermarkets, taken home consumed at a later stage.

The Real Taste of Rejuvenation

After having fought a bitter price battle for market share with its rivals, Hindustan Unilever

Ltd (HUL), Indian subsidiary of the Anglo-Dutch consumer goods company Unilever Plc, is now

working on a new growth strategy for its laundry business.

“Price cut or hike is not a long-term growth strategy. Pricing, in fact, is now passe,” insists

Sudhanshu Vats, category head, home care.

“Our strategy for growth, now is focused on product innovation, new consumer and retail

trends and aggressive marketing and promotions,” he said.

This comes even as Unilever is scouting for a potential buyer for its laundry business in the

US.

HUL says it is quite upbeat about the segment and says the laundry segment is one of its

“key growth areas.”

“We have done key innovations across the product portfolio and it is working for us,” says

Vats. “We successfully migrated from Rin Supreme to Surf Excel and Wheel Smart Srimati—

which was rolled out in 2006—is also on the right track.”

HUL’s market share in the laundry segment grew to around 37.8% in the quarter ended June

from 35.5% in the same period last year.

According to ACNielsen, the laundry industry in India was worth Rs7,908 crore in 2006 and

rose 8.4% over 2005. HUL doesn’t report its laundry revenues separately but puts them under

the soaps and detergent category.

In 2006, HUL’s soaps and detergents segment contributed around Rs5,596 crore to the

company’s total sales of Rs12,103 crore.

“Laundry has been an attractive segment in the past and is likely to keep growing in the near

future. The recent price war between companies led to erosion in their profitability but now,

the industry is stabilizing.

OMPETITIVE STRATEGY

As Competition Heats Up, India’s Top Consumer-Products Company Woos Affluent Shoppers With Global Brands Like

Dove, While Cooking Up Its Foods Biz

The middle-aged Briton strolling the aisles and checking out the products doesn’t attract

much notice from other shoppers in Mumbai’s Hypercity, the India hypermarket chain. That’s

how Douglas Baillie likes it. Baillie, the managing director of Hindustan Unilever, India’s

premier consumer-products company, wants to see how his products are stocked, what

consumers are buying, and how shoppers are reacting to competitive brands. It’s primary

market research at its most elemental, and it’s best done incognito.

Hindustan Unilever has traditionally relied on small traders and mom-and-pop corner stores to

retail its products. But India’s recent retail boom has created large stores and malls, so the

company wants to make sure it’s in with the new marketing crowd. Hence Baillie’s Hypercity

visits, and the calls he makes on the headquarters of the big retail chains.

This is quite a change for Hindustan Unilever, whose executives used to have emissaries

make obeisance at Lever house in downtown Mumbai. “I can’t imagine any head from Lever

House ever visiting other company offices like this,” says an amazed Damodar Mall, chief

executive of innovation and incubation at Pantaloon Retail, India’s largest retailer and a

former manager at Hindustan Unilever.

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. The company, which is practically synonymous with India, makes

everything from detergents, soaps, and shampoos to soups, sauces and tea, and dominates

most of those categories. Yet early this year, Finnish handset maker Nokia (NOK) dislodged it

as the multinational with the highest revenues in India, after ringing up India-based sales of

$3.5 billion.

Now Hindustan Unilever is under siege from aggressive Indian and foreign competitors such

as Procter & Gamble (PG), Nivea, and L’Oréal. In the last year, ACNielsen data shows,

Hindustan Unilever’s lead in hand soaps, including the popular Lux, is down from 55.2% to

54%. 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 24.3%.

All this has taken a toll on Hindustan Unilever’s operating margins, down from 21% a few

years ago to just 11.84% now. That’s why the company is wooing consumers in big retail

stores. These newly affluent shoppers present the best hope for the company’s future in

India. According to retail consultant KSA Technopak, organized retail, currently just 3.5% of

India’s total $336 billion retail market, will grow to 28% by 2017.

Hindustan Unilever’s managers hope their revenues from big retail will increase from 5%

today to over 25% in 2012. “It is a big game for us,” says D. Sundaram, Hindustan Unilever’s

finance director. Hindustan Unilever’s strategy is to market its premium products through the

hundreds of megastores springing up across India.

That dovetails with parent company Unilever’s new global realignment of products.Parent

Unilever will develop the brands and streamline product offerings across the world, while its

subsidiaries will sell the products.

This means that all of Unilever’s brands will be available across global markets, fitting in quite

nicely with India’s turn towards more international products being sold in supermarkets.

Yet this is still a dramatic change for Hindustan Unilever which, not long ago, was the most

successful and profitable company in the Unilever group, the crown jewel whose managers

had free rein to develop and build brands suitable for the local market. The takeover of

Hindustan Lever by Unilever became evident in March, 2006, when Baillie, a Zimbabwe-born

British national, became the first foreigner in four decades to head the Indiancompany.

From Local Player To Multinational

Overnight the change sent shock waves through India. For many decades most Indians

thought Hindustan Lever was a local company, not a multinational, and the cream of India’s

management graduates made their careers there. Then in February, 2007, the company, then

known as Hindustan Lever, was rechristened Hindustan Unilever to reflect its parentage.

Baillie first had to sort out some past problems. 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. While the strategy aimed to conserve management energy, it also left

the field wide open for competitors to attack Hindustan Unilever in the niche soap and

detergent markets where its smaller brands held sway.

And there was some stiff competition from rival Procter & Gamble; a 2004 price war with P&G

in the detergent business forced Hindustan Unilever to slash prices on its premium brand Surf

Excel. The effect: The company’s sales and operating profits stagnated at $2.5 billion for five

years while operating profit plunged 37%, to $274 million in 2004. Last year operating profits

reached $357 million, thanks to price increases. But the rich margins of the past have not

returned.

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.” He also wants to expand the foods business in

conjunction with the parent, where foods bring in half the revenues globally. In India, the

company’s home and personal care businesses account for 80% of revenues and 85% of

profits at Hindustan Unilever, while the company’s track record in foods has been dismal.

Indeed, it has phased out more food products—wheat flour, confectionery, frozen bread—than

it has launched.

Hindustan Unilever executives are realistic about the new era in which it now operates. Nitin

Paranjpe, executive director in charge of the home and personal care business, admits that

it’s now “tougher to hold on to market share. If India is a great story, we aren’t the only ones

seeing it.” 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.

Currently, 80% of Indian shampoo sales come from sachets. But today even L’Oreal has

sachets of its Fructis shampoo.

In June, the Tata Group’s beverage company Tata Tea overtook Hindustan Unilever as India’s

largest selling tea brand. According to ACNielsen, Tata Tea’s market share increased from

16.7% in March, 2006, to 19.9% in July, 2007, while Hindustan Unilever slipped from 26.1% to

19.5%. Tata Tea is exultant. Managing Director Percy Siganporia says the gain is “a dream

comes true for us.”

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 soap, toothpaste and tea in the

quarter ended Sept. 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 partly 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 of 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 soap in the country since 1888 and controls about half of the sales of products such as

skin creams, bathing soaps and shampoo.

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

Grow ahead of the market by leading market development activities.

Leverage positive impact of growing Indian economy on consumer spending.

Grow a profitable foods and top end business.

Grow the bottom line ahead of the top line.

Strong commitment to sustainable development.

Competitive Strengths

Corporate Social Responsibility-Aiding In The Development Of The Country

Shakti

Three shakti initiatives

Shakti entrepreneur; currently~44000 women cover

1,25000 villages.

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.

HINDUSTAN UNILEVER LIMITED - COMPARATIVE BUSINESS ANALYSIS

Hindustan Unilever Limited Formerly known as Hindustan Lever Limited. The Group's

principal activities are to manufacture and market consumer products. The Group operates

through seven segments: Soaps and Detergents, Personal Products, Exports, Beverages,

Foods, Ice Creams and Other. The products include home and personal care products, foods

and beverages, industrial and agricultural products. Home and personal care products

consists of personal and fabric wash, household, oral care, skin and hair care, deodorants,

perfumery, colour cosmetics and baby care. Foods and beverages includes tea, coffee,

cooking fats and oils, bakery fats, ice creams, tomato products, fruit and vegetable products,

rice, salt, atta and rawa, marine products and mushrooms. Industrial and agricultural

products includes specialty chemicals, bulk chemicals, fertilisers, animal feeds, seeds, plant

growth nutrients, processed-tri-glycerides and agri commodities, yeast, leather, footwear and

carpets, thermometers and plantations.

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,

brand building initiatives and innovation, which has helped the company to sustain its

leadership position in the overall FMCG category in India.

Its brands are spread across 20 consumer product categories. Hindustan Unilever markets

consumer goods throughout India. The company faces competition from international, local

and regional players.

RURAL- THE BIG INDIAN ROMANCE

Rural population larger than europe(800 million)

Low growth in agriculture;however rural income are growing faster with 70%

population here,income growth is crucial.

Structural changes in the economy which are affecting this are:

Disintermediation in the agricultural market price discovery mechanism

has benefited farmers.

Government grants and subsidies.employment grants-Rs 40000cr

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.

“HUL missed an opportunity for increased marketing productivity when they repositioned,

retargeted, and relaunched Lifebuoy,” write Leonard M. Lodish, Howard L. Morgan and Shellye

Archambeau, the authors of Marketing that Works. Though the company was ‘extremely

innovative’ the way it handled the rural communications plan was very traditional, they add.

The company basically worked with “one agency, Ogilvy and Mather (O&M), and screened

some options to roll out one option that everyone was happy with,” reads an observation in a

chapter titled ‘entrepreneurial advertising that works’.

A better strategy, according to the authors, 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.”

Advertising strategy came for mention when the company reported the second quarter

results, a few days ago. Mr D. Sundaram, Director (Finance & IT), HUL, said: “We have been

phasing our advertising spends depending on the launches and relaunches of brands.” The

advertising spends have not been linear for the company, he added. The company’s

advertising and promotional spends during the quarter fell to Rs 336 crore, from the earlier Rs

345 crore.

Lifebuoy is ‘one of Unilever’s oldest brands’ with more than a hundred-year history. “Lifebuoy

has become more than just a red bar of soap – today the brand provides hygiene and health

solutions for families,” says the site, in a paragraph on innovation.

“Differentiating soap products on the platform of health takes advantage of an opening in the

competitive landscape for soap,” reads a quote in the book from C.K. Prahalad’s The Fortune

at the Bottom of the Pyramid .

HUL, through its innovative communication campaigns, has been able to link the use of soap

to a promise of health as a means of creating behavioural change, and thus has increased

sales of its low-cost, mass-market soap, Prahalad notes.

The O&M strategy, as explained by Mr Lodish et al, targeted “10,000 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.”

The authors are of the view that government workers who have been interacting with

villagers might have come up with some excellent ideas; “or the villagers themselves might

also be able to generate very effective communications vehicles.”

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 programs,” wonder the authors. “As a big company, many times it is difficult to

change the procedures without creating significant political problems.”

The HUL example, which is one of the many discussed in the book, 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.”

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, 2008.  The strategic

tie-up aims to build long term capabilities and bring ‘in-store’ execution focus in servicing the

Company’s Modern Trade customers.

The 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. 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. It has leading edge capabilities in servicing Modern Trade focused on shelf

filling, logistics for merchandising materials and in store execution.

“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-in-class 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”.

Other Acquisition

Hindustan Unilever has acquired several Indian FMCG companies so far. This includes:

Tata Oil Mills Company

Brooke Bond

Lipton India

Modern Foods

It acquired Kissan brand from UB group; Dollops ice cream brand from Cadbury India; Lakme

cosmetics brands from Tata. It has also launched Pureit, a home water purifier which supplies

drinking water without boiling/need of electricity.

Hindustan Unilever Network is the direct selling channel of the company. It has about 350,000

consultants, all independent entrepreneurs, trained and guided by HLN's expert managers

and trainers.

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 not in neighborhood small stores but in supermarkets and

hypermarkets, where Indian customers love to touch and feel 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.

Baillie 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 brokerage 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 Pureit in 2005,

at one-third the price of established Indian brands such as Aqua guard.

These efforts have delivered some promising results, and Baillie is pleased with the modest

turnaround. In the quarter ended June, 2007, the company’s sales grew 13%, with net profit

up 29.6%. Reason enough to keep patrolling those store aisles.

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 Gujarat, and

relief & rehabilitation after the Tsunami caused devastation in South India.

In 2001, the company embarked on an ambitious programme, Shakti. Through Shakti, HUL is

creating micro-enterprise opportunities for rural women, thereby improving their livelihood

and the standard of living in rural communities. Shakti also includes health and hygiene

education through the Shakti Vani Programme, and creating access to relevant information

through the iShakti community portal. The program now covers 15 states in India and has

over 31,000 women entrepreneurs in its fold, reaching out to 100,000 villages and directly

reaching to 150 million rural consumers. By the end of 2010, Shakti aims to have 100,000

Shakti entrepreneurs covering 500,000 villages, touching the lives of over 600

million people.

HUL is also running a rural health programme – Lifebuoy Swasthya Chetana. The programme

endeavours to induce adoption of hygienic practices among rural Indians and aims to bring

down the incidence of diarrhoea. It has already touched 70 million people in approximately

15000 villages of 8 states. The vision is to make a billion Indians feel safe and secure.

If Hindustan Unilever straddles the Indian corporate world, it is because of being single-

minded in identifying itself with Indian aspirations and needs in every walk of life.

PERFORMANCE REVIEW

Leadership Across Diverse Fmcg Category

Record Performance

Financial Overview -2007

*FIGURES BASED ON FY 2007 AUDITED RESULTS

OBJECTIVE OF THE STUDY

To identify the marketing strategies and policies of Hindustan Unilever Limited

To analyse the influence of rival company’s strategies on the performance of

Hindustan Unilever Limited

To analyse the various strategies adopted by the company to gain competitive

advantage

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’s(HUL) with the existing

competitors in the market and the impact of Procter & Gamble (PG), Nivea, and L’Oréal 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 area 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 questionnaires were filled was between three week.

# 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 area 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 yearof accelerated growth in FMCG portfilio.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 and CSR.

CONCLUSION

This company project has demonstrated “HINDUSTAN UNILEVER’S MARKETING STRATEGIES

AND POLICIES” that has proved to be extensive through, and of great benefit to the company

in furthering its competitive advantage.

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.

Market segmentation is a concept in economics and marketing. A market segment is a sub-set of a market made up of people or organizations with one or more characteristics that cause them to demand similar

product and/or services based on qualities of those products such as price or function. A true market segment meets all of the following criteria: it is distinct from other segments (different segments have different needs), it is homogeneous within the segment (exhibits common needs); it responds similarly to a market stimulus, and it can be reached by a market intervention. The term is also used when consumers with identical product and/or service needs are divided up into groups so they can be charged different amounts for the services. The people in a given segment are supposed to be similar in terms of criteria by which they are segmented and different from other segments in terms of these criteria. These can be broadly viewed as 'positive' and 'negative' applications of the same idea, splitting up the market into smaller groups.

Examples:

Gender Price

Interests

Location

Religion

Income

Size of Household

While there may be theoretically 'ideal' market segments, in reality every organization engaged in a market will develop different ways of imagining market segments, and create Product differentiation strategies to exploit these segments. The market segmentation and corresponding product differentiation strategy can give a firm a temporary commercial advantage

Bases for segmenting consumer markets Geographic segmentation Demographic segmentation

Psychographic segmentation

Behavioral segmentation

[edit] Geographic segmentation

The market is segmented according to geographic criteria- nations, states, regions, counties, cities, neigborhoods, or zip codes. Geo-cluster approach combines demographic data with geographic data to create a more accurate profile of specific geographic areas. Kotler, Philip hilip, and Kevin Kevin Lane Keller. Marketing Management. Prentice Hall, 2006. ISBN 9780131457577</ref>

[edit] Psychographic Segmentation

psychographics is the science of using psychology and demographics to better undertand consumers.Psychographic segmention: consumer are divided according to their lifestyle, personality, values. People within the same demographic group can exhibit very different psychographic profiles.3

[edit] "Positive" market segmentation

Market segmenting is dividing the market into groups of individual markets with similar wants or needs that a company divides into distinct groups which have distinct needs, wants, behavior or which might want different products & services. Broadly, markets can be divided according to a number of general criteria, such as by industry or public versus private. Although industrial market segmentation is quite different from consumer market segmentation, both have similar objectives. All of these methods of segmentation are merely proxies for true segments, which don't always fit into convenient demographic boundaries.

Consumer-based market segmentation can be performed on a product specific basis, to provide a close match between specific products and individuals. However, a number of generic market segment systems also exist, e.g. the system provides a broad segmentation of the population of the United States based on the statistical analysis of household and geodemographic data.

The process of segmentation is distinct from positioning (designing an appropriate marketing mix for each segment). The overall intent is to identify groups of similar customers and potential customers; to prioritize the groups to address; to understand their behavior; and to respond with appropriate marketing strategies that satisfy the different preferences of each chosen segment. Revenues are thus improved.

Improved segmentation can lead to significantly improved marketing effectiveness. Distinct segments can have different industry structures and thus have higher or lower attractiveness

Once a market segment has been identified (via segmentation), and targeted (in which the viability of servicing the market intended), the segment is then subject to positioning. Positioning involves ascertaining how a product or a company is perceived in the minds of consumers.

This part of the segmentation process consists of drawing up a perceptual map, which highlights rival goods within one's industry according to perceived quality and price. After the perceptual map has been devised, a firm would consider the marketing communications mix best suited to the product in question.

[edit] Behavioral Segmentationln behavioral segmentation, consumers are divided into groups according to their knowledge of, attitude towards, use of or response to a product.

[ EDIT ] OCCASIONS

segmentation according to occasions.

[ EDIT ] BENEFITS

segmentations according to benefits sought bt the consumer.

[ EDIT ] USERS STATUS

nonusers, ex-users, first time users, etc.

[edit] Using Segmentation in Customer Retention

The basic approach to retention-based segmentation is that a company tags each of its active customers with 3 values:

Tag #1: Is this customer at high risk of canceling the company's service? One of the most common indicators of high-risk customers is a drop off in usage of the company's service. For example, in the credit card industry this could be signaled through a customer's decline in spending on his or her card.

Tag #2: Is this customer worth retaining? This determination boils down to whether the post-retention profit generated from the customer is predicted to be greater than the cost incurred to retain the customer. Managing Customers as Investments. [1] [2]

Tag #3: What retention tactics should be used to retain this customer? For customers who are deemed “save-worthy”, it’s essential for the company to know which save tactics are most likely to be successful. Tactics commonly used range from providing “special” customer discounts to sending customers communications that reinforce the value proposition of the given service.

[ EDIT ] PROCESS FOR TAGGING CUSTOMERS

The basic approach to tagging customers is to utilize historical retention data to make predictions about active customers regarding:

Whether they are at high risk of canceling their service Whether they are profitable to retain

What retention tactics are likely to be most effective

The idea is to match up active customers with customers from historic retention data who share similar attributes. Using the theory that “birds of a feather flock together”, the approach is based on the assumption that active customers will have similar retention outcomes as those of their comparable predecessor.

[ EDIT ] NICHE MARKETING

A niche is a more narrowly defined customer group who seek a distinct set of benefits. İdentified by dividing a segment into subsegments,distinct and unique set of needs,requires speciallization and is not likely to attract too many competitors,price premium.

[ EDIT ] LOCAL MARKETING

Marketing programs tailored to the needs of local customer groups.

[edit] Price Discrimination

Where a monopoly exists, the price of a product is likely to be higher than in a competitive market and the quantity sold less, generating monopoly profits for the seller. These profits can be increased further if the market can be segmented with different prices charged to different segments charging higher prices to those segments willing and able to pay more and charging less to those whose demand is price elastic. The

price discriminator might need to create rate fences that will prevent members of a higher price segment from purchasing at the prices available to members of a lower price segment. This behavior is rational on the part of the monopolist, but is often seen by competition authorities as an abuse of a monopoly position, whether or not the monopoly itself is sanctioned. Examples of this exist in the transport industry (a plane or train journey to a particular destination at a particular time is a practical monopoly) where business class customers who can afford to pay may be charged prices many times higher than economy class customers for essentially the same service

Dhoni

People in every workplace talk about building the team, working as a team, and my team, but few understand how to create the experience of team work or how to develop an effective team. Belonging to a team, in the broadest sense, is a result of feeling part of something larger than yourself. It has a lot to do with your understanding of the mission or objectives of your organization. In a team-oriented environment, you contribute to the overall success of the organization. You work with fellow members of the organization to produce these results. Even though you have a specific job function and you belong to a specific department, you are unified with other organization members to accomplish the overall objectives. The bigger picture drives your actions; your function exists to serve the bigger picture.

You need to differentiate this overall sense of teamwork from the task of developing an effective intact team that is formed to accomplish a specific goal. People confuse the two team building objectives. This is why so many team building seminars, meetings, retreats and activities are deemed failures by their participants. Leaders failed to define the team they wanted to build. Developing an overall sense of team work is different from building an effective, focused work team when you consider team building approaches.

Twelve Cs for Team Building

Executives, managers and organization staff members universally explore ways to improve business results and profitability. Many view team-based, horizontal, organization structures as the best design for involving all employees in creating business success.

No matter what you call your team-based improvement effort: continuous improvement, total quality, lean manufacturing or self-directed work teams, you are striving to improve results for customers. Few organizations, however, are totally pleased with the results their team improvement efforts produce. If your team improvement efforts are not living up to your expectations, this self-diagnosing checklist may tell you why. Successful team building, that creates effective, focused work teams, requires attention to each of the following.

Clear Expectations: Has executive leadership clearly communicated its expectations for the team’s performance and expected outcomes? Do team members understand why the team was created? Is the organization demonstrating constancy of purpose in supporting the team with resources of people, time and money? Does the work of the team receive sufficient emphasis as a priority in terms of the time, discussion, attention and interest directed its way by executive leaders?Read more about Clear Performance Expectations.

Context: Do team members understand why they are participating on the team? Do they understand how the strategy of using teams will help the organization attain its communicated business goals? Can team members define their team’s importance to the accomplishment of corporate goals? Does the team understand where its work fits in the total context of the organization’s goals, principles, vision and values?Read more about Team Culture and Context.

Commitment: Do team members want to participate on the team? Do team members feel the team mission is important? Are members committed to accomplishing the team mission and expected outcomes? Do team members perceive their service as valuable to the organization and to their own careers? Do team members anticipate recognition for their contributions? Do team members expect their skills to grow and develop on the team? Are team members excited and challenged by the team opportunity?Read more about Commitment in Team Building.

Six more tips for team building. Three final tips for team building

In the first part of this article, three tips for effective team building were presented. Here are six more tips for effective team building.

Competence: Does the team feel that it has the appropriate people participating? (As an example, in a process improvement, is each step of the process represented on the team?) Does the team feel that its members have the knowledge, skill and capability to address the issues for which the team was formed? If not, does the team have access to the help it needs? Does the team feel it has the resources, strategies and support needed to accomplish its mission?

Charter: Has the team taken its assigned area of responsibility and designed its own mission, vision and strategies to accomplish the mission. Has the team defined and communicated its goals; its anticipated outcomes and contributions; its timelines; and how it will measure both the outcomes of its work and the process the team followed to accomplish their task? Does the leadership team or other coordinating group support what the team has designed?

Control: Does the team have enough freedom and empowerment to feel the ownership necessary to accomplish its charter? At the same time, do team members clearly understand their boundaries? How far may members go in pursuit of solutions? Are limitations (i.e. monetary and time resources) defined at the beginning of the project before the team experiences barriers and rework?

Is the team’s reporting relationship and accountability understood by all members of the organization? Has the organization defined the team’s authority? To make recommendations? To implement its plan? Is there a defined review process so both the team and the organization are consistently aligned in direction and purpose? Do team members hold each other accountable for project timelines, commitments and results? Does the organization have a plan to increase opportunities for self-management among organization members?

Collaboration: Does the team understand team and group process? Do members understand the stages of group development? Are team members working together effectively interpersonally? Do all team members understand the roles and responsibilities of team members? team leaders? team recorders? Can the team approach problem solving, process improvement, goal setting and measurement jointly? Do team members cooperate to accomplish the team charter? Has the team established group norms or rules of conduct in areas such as conflict resolution, consensus decision making and meeting management? Is the team using an appropriate strategy to accomplish its action plan?

Communication: Are team members clear about the priority of their tasks? Is there an established method for the teams to give feedback and receive honest performance feedback? Does the organization provide important business information regularly? Do the teams understand the complete context for their existence? Do team members communicate clearly and honestly with each other? Do team members bring diverse opinions to the table? Are necessary conflicts raised and addressed?

Creative Innovation: Is the organization really interested in change? Does it value creative thinking, unique solutions, and new ideas? Does it reward people who take reasonable risks to make improvements? Or does it reward the people who fit in and maintain the status quo? Does it provide the training, education, access to books and films, and field trips necessary to stimulate new thinking?

Three more tips for team building. Previous three tips for team building

In the first part of this article, three tips for effective team building were presented. In the second, six tips for team building were provided. Here are three more tips for effective team building.

Consequences: Do team members feel responsible and accountable for team achievements? Are rewards and recognition supplied when teams are successful? Is reasonable risk respected and encouraged in the organization? Do team members fear reprisal? Do team members spend their time finger pointing rather than resolving problems? Is the organization designing reward systems that recognize both team and individual performance? Is the organization planning to share gains and increased profitability with team and individual contributors? Can contributors see their impact on increased organization success?

Coordination: Are teams coordinated by a central leadership team that assists the groups to obtain what they need for success? Have priorities and resource allocation been planned across departments? Do teams understand the concept of the internal customer—the next process, anyone to whom they provide a product or a service? Are cross-functional and multi-department teams common and working together effectively? Is the organization developing a customer-focused process-focused orientation and moving away from traditional departmental thinking?

Cultural Change: Does the organization recognize that the team-based, collaborative, empowering, enabling organizational culture of the future is different than the traditional, hierarchical organization it may currently be? Is the organization planning to or in the process of

changing how it rewards, recognizes, appraises, hires, develops, plans with, motivates and manages the people it employs?

Does the organization plan to use failures for learning and support reasonable risk? Does the organization recognize that the more it can change its climate to support teams, the more it will receive in pay back from the work of the teams?Read more about culture change.

Spend time and attention on each of these twelve tips to ensure your work teams contribute most effectively to your business success. Your team members will love you, your business will soar, and empowered people will "own" and be responsible for their work processes. Can your work life get any better than this?

Decoding Dhoni’s Leadership Style: Lessons For Entrepreneurs04/04/201

Today India’s favourite leader is undoubtedly the captain of our cricket team, M.S. Dhoni. Dhoni is an exemplar of leadership who has helped lift the World Cup Trophy for India after 28 years! He has clearly proven his grit in the short span of seven years in the Indian cricket team. He was made the captain in 2007 where he led his team to victory in T20 match series. T20 series was the first of its kind which was introduced by ICC in 2007. Dhoni won the T20 trophy when he had no precedence to it where he could rely on any past proven strategies. Moreover, it was his first time ever as a captain! Surely there are entrepreneurial leadership skills that Dhoni exuberates.

Source: espncricinfo.com

What can Entrepreneurs learn from his leadership style?

There are many aspects in the team that Dhoni has had to address. He had to manage team-mates who were senior to him in terms of age and experience. He had to build a congenial atmosphere so as not to disturb the egos of his senior team players. He had to build confidence among his team members so that they can trust his decisions and put in their best to achieve their goals. He had to continuously revise his strategies for every match depending upon the strengths and weaknesses of the opponent team.

This situation is so much like what you may most probably face as an entrepreneur while building your own team of employees. You will have to understand how to address the soft issues of human capital management when you are going to recruit people with higher experience than yours. You will also have to understand their strengths and weaknesses and utilize them as and when necessary.

As your start-up grows you need to expand the team and delegate tasks. But to make sure that the employees are motivated and put in their best effort to achieve common goals, your leadership has to be strong. Once you start recruiting, you will have to consider your employees as a team and hone your skills towards team leadership. As an entrepreneur, your team leadership qualities need to be in place. Some of the team leadership traits which are exemplified by Dhoni and that you could implement are:

Lead from the front and shoulder the responsibility during crises

When Dhoni played after the fall of third wicket, it was clearly visible that this strategy was to shoulder the responsibility himself during the immense pressure. He took the pressure off the team members and did not buckle under pressure. India had already lost three key wickets. He helped increase the score and create a psychological pressure on the opponent team by keeping the later key wickets in hand. Instead of expecting other team players to perform under the stress, he himself took on the crisis head-on and batted at the fourth position. He proved to be a leader who commands by example. The remarkable equilibrium that Dhoni had demonstrated in such an overheated atmosphere is one quality to awe-inspire an entrepreneur. As an entrepreneur you should not let the unfavourable situations stress you. If you get stressed the negative emotions spawned because of it will percolate very fast in the company. You will also very quickly lose the trust of your employees. And leadership without trust usually does not lead to achieving goals. It is very important to have the endurance and clear thinking during crisis situations, which will be many for a start-up.

Motivate to bring out the best from your team

Ability to motivate your team members is also extremely critical for you as an entrepreneur. It is not only during the crisis situations that you need to keep the morale of your employees high, but in the day-to-day activities too you need to keep the motivation levels high. This is because usually the start-ups have very few perks and luxuries to offer to their employees [teams] as compared to the bigger and more established organizations. It is difficult to cut down on many comforts when you know that you can get better somewhere else. So you should identify the key motivating factors with every employee carefully and you must nurture these factors so as to maintain good motivation level in your start-up. At the same time it is equally important for you as an entrepreneur to keep the team focused on the ultimate goals and not let them get carried away by smaller achieved goals. You have to make sure that the employees do not get distracted. This key behaviour was seen in Dhoni’s leadership when India won the crucial semi-finals against Pakistan – the match which the media called as the mother of all clashes. Among all the frenzy of

celebrations, Dhoni cautioned his team that that was not the goal and that they still needed to play good cricket to win the World Cup the ultimate goal.

See what others do not see and accept mistakes

Many of Dhoni’s decisions are questioned, whether it is the shuffling of batsmen or choosing the bowlers. But every time the team has faced a crisis, Dhoni has made spot decisions which have paid-off. This is clear from the series of victories that came in India’s lap during Dhoni’s captaincy. India won the maiden ICC World Twenty20 series in 2007, the Border-Gavaskar Trophy in 2008 as well as IPL 2010 by Chennai Super Kings. It is Dhoni’s keen ability to judge the situation in real time and take spot decisions best suitable for the situation. He has the ability to turn the weaknesses of his players into their strengths. Some of his decisions could be risky but Dhoni dares to take those risks. As an entrepreneur you must understand the situations and be able to take risks if you are convinced. Such risks may or may not pay off. But at the same time have the grace to accept the mistakes and learn from them. Dhoni has always accepted his mistakes even if the team has won a match. This type of leadership builds the trust within the team and it is only the superb team work which has helped win the World Cup. And for an entrepreneur, there is nothing better than the superb team leadership to achieve short-term and long-term goals