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PROJECT REPORT ON Marketing Strategies of Hindustan Unilever Ltd.
Transcript
Page 1: 40173311 1152 Marketing Strategies of Hul 2

PROJECT REPORT

ON

Marketing Strategies

of Hindustan Unilever Ltd.

AT

HINDUSTAN UNILEVER LTD.

PLOT NO.-8, BLOCK-A, SOUTH CITY-I

GURGAON

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Research Supervisor Submitted By:

Mr. Shashank Shekhar Chandra Bhushan Tiwari

Branch Manager, HUL Roll No. 08061234

ACKNOWLEDGEMENT

I wish to express my heartfelt appreciation to many who have contributed to this study. I would like to thank Mr. Shashank Shekhar, Manger, HUL for his valuable guidance. I wish to express my gratitude to my faculty guide, who provided me with constant impetus to complete this project.

CHANDRA BHUSHAN TIWARI

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TABLE OF CONTENTS

Executive Summary

Introduction

Company Profile

Current Market Context

Research & Innovation Centre

Safety & Health Policy

Market Strategies

Hindustan Unilever Ltd.

Competitors

Research Methodology

Scope

Findings, Data Analysis & Conclusion

Recommendations

Suggestions

Limitations

Bibliography

(Annexure) Questionnaire

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EXECUTIVE SUMMARY

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 units and sales of Rs.10, 000 crores.

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. Hence, research aims is that to study the existing marketing practices, emerging marketing plans and understanding companies business strategy with its profile. The main recommendations have been made on the addressing of the advertising message to the customers. An attempt has been made to formulate the communication in a way to build it on a platform of the basic need for buying HUL products. In another recommendation the suggestions towards better dealer interest in HUL products has been given a chance.

The research is based primarily on primary data; however few references to industry figures from secondary data have been made. Data has been collected through in depth interviews and administered questionnaires.

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INTRODUCTION

Over 100 years' link with India. In the summer of 1888, visitors to the Kolkata harbor & noticed crates full of Sunlight soap bars, embossed with the words "Made in England by Lever Brothers". With it, began an era of marketing branded. Fast Moving Consumer Goods (FMCG).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 51.55% equity in the company. The rest of the shareholding is distributed among about 380,000 individual shareholders and financial institutions. 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.The liberalization 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 1995, HUL and yet another Tata company, Lakme Limited, formed a 50:50 joint venture, Lakme Lever 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, Nepal Lever Limited (NLL), and its factory represents the largest manufacturing investment in the Himalayan kingdom. The NLL 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. Then in July 1993, Brooke Bond India and Lipton India merged to form Brooke Bond Lipton India Limited (BBLIL), enabling

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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, Specialty 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.

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COMPANY PROFILE

The mission that inspires HUL's 36,000 employees, including over 1,350 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 in close to 80 factories. The operations involve over 2,000 suppliers and associates. HUL's distribution network, comprising about 7,000 redistribution stockists, directly covers 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 Lever 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 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.Over the last three years the company has 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 programme now covers about 50,000 villages in 12 states. HUL's vision is to take this programme to 100,000 villages impacting the lives of over a 100 million rural Indians.HUL is also running a rural health programme – Lifebuoy Swasthya Chetana. The programme endeavtheirs 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

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PRESENT MARKETING STRATEGY:

Mission:

Hindustan Unilever Limited mission is to add Vitality to life. We meet everyday needs for nutrition, hygiene, and personal care with brands that help people feel good, look good and get more out of life.

Policy:

HUL has earned a reputation for conducting its business with integrity and with respect for the interests of those their activities can affect. This reputation is an asset, just as real as their people and brands.

From HUL Spokesperson “To succeed requires the highest standards of behavior from all of us. The general principles contained in this Code set out those standards. More detailed guidance tailored to the needs of different countries and companies will build on these principles as appropriate, but will not include any standards less rigorous than those contained in this Code.

We want this Code to be more than a collection of high-sounding statements. It must have practical value in their day-to-day business and each one of us must follow these principles in the spirit as well as the letter”.ref: business world magazine.

Obeying the Law

HUL companies and employees are required to comply with the laws and regulations of the countries in which they operate.

Employees

HUL is committed to diversity in a working environment where there is mutual trust and respect and where everyone feels responsible for the performance and reputation of the company. HUL will recruit, employ and promote employees on the sole basis of the qualifications and abilities needed for the work to be performed.

HUL respect the dignity of the individual and the right of employees to freedom of association.

HUL will maintain good communications with employees through company based information and consultation procedures.

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ConsumersHUL is committed to providing branded products and services which consistently offer value in terms of price and quality, and which are safe for their intended use. Products and services will be accurately and properly labelled, advertised and communicated.

The Environment

HUL is committed to making continuous improvements in the management of their environmental impact and to the longer-term goal of developing a sustainable business.

HUL will work in partnership with others to promote environmental care, increase understanding of environmental issues and disseminate good practice.

InnovationIn their scientific innovation to meet consumer needs they will respect the concerns of their consumers and of society. They will work on the basis of sound science, applying rigorous standards of product safety.

Business Integrity

HUL does not give or receive, whether directly or indirectly, bribes or other improper advantages for business or financial gain. No employee may offer, give or receive any gift or payment which is, or may be construed as being, a bribe. Any demand for, or offer of, a bribe must be rejected immediately and reported to management.

HUL accounting records and supporting documents must accurately describe and reflect the nature of the underlying transactions. No undisclosed or unrecorded account, fund or asset will be established or maintained.

Conflicts of Interests

All HUL employees are expected to avoid personal activities and financial interests which could conflict with their responsibilities to the company.

HUL employees must not seek gain for themselves or others through misuse of their positions.

Compliance – Monitoring – Reporting

Compliance with these principles is an essential element in their business success. The Unilever Board is responsible for ensuring these principles are communicated to, and understood and observed by, all employees.

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Day-to-day responsibility is delegated to the senior management of the regions and operating companies. They are responsible for implementing these principles, if necessary through more detailed guidance tailored to local needs.

Assurance of compliance is given and monitored each year. Compliance with the Code is subject to review by the Board supported by the Audit Committee of the Board and the Corporate Risk Committee.

The Board of Unilever expects employees to bring to their attention, or to that of senior management, any breach or suspected breach of these principles.

Provision has been made for employees to be able to report in confidence and no employee will suffer as a consequence of doing so.

In this Code the expressions 'Unilever' and 'Unilever companies' are used for convenience and mean the Unilever Group of companies comprising Unilever N.V., Unilever PLC and their respective subsidiary companies. The Board of Unilever means the Directors of Unilever N.V. and Unilever PLC’.ref:THE NEWS

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FMCG Market (HLL Categories) Growth%

-1.1-2.5 -2.8

0.82.0

6.1

-4

-2

0

2

4

6

8

02 03 Q1 '04 Q2 '04 Q3 '04 Q4 '04

FMCG Market (HLL Categories) Growth%

6.7

3.4

-2.5-1.1

-4

-2

0

2

4

6

8

00 01 02 03

15

FMCG MarketsSlowdown in growth & then 2 years of decline

FMCG Markets2004 - Revival after 2 years of decline

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Investment Behind Brands

Innovation & Superior Quality

Current Market Context

Actions

• Pricing–Laundry : Price Reduction–Shampoos: Value Improvement & Lower Price Points–Toothpaste: Value Corrections & SKU rationalization

• Investments behind brands– Innovations– Quality– Higher A&P

• Corrective actions in processed

Processed Foods

• Corrective actions– Phased stock reduction– Withdrawl of ‘03 innovation– Defocus of Atta in unviable geographies

• Sales decline of 26% arising from above actions• Market shares held / improved

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Sales Growth%

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Research and Innovation Centers

Since most new products and processes are developed in these Units, certain additional responsibilities devolve on them to ensure implementation of the Environment Policy of the company. In addition to the Unit Head's responsibilities outlined above, the heads of these units will:

Ensure that a formal and systematic risk assessment exercise is undertaken during the process/product development stage with specific reference to environmental impact.

Transfer technology to the pilot plant and main production through a properly documented process specification which will clearly define environmental impact and risks associated with processes, products, raw material and finished product handling, transport and storage.

Ensure that treatment techniques are developed for any wastes generated as a result of the new product/process and is incorporated into the process specifications.

QUALITY POLICY:

Hindustan Unilever Limited considers quality as one of the principal strategic objectives to guarantee its growth and leadership in the markets in which it operates.

The company is committed to respond creatively and competitively to the changing needs and aspirations of their consumers through relentless pursuit of technological excellence, innovation and quality management across their businesses, and offer superior quality products and services that are appropriate to the various price points in the market as well as to their commitment to building shareholder value.The company is committed to fulfill its legal and statutory obligations and international standards of product safety and hygiene and will not knowingly sell product that is harmful to consumers or their belongings. It will institute systems and measures to monitor compliance in order to meet its responsibilities to consumers.The company will maintain an open communication channel with its consumers and

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customers and will carefully monitor the feedback to continuously improve its products and services and set quality standards to fulfill them. The company is committed to extend its quality standards to its contract manufacturers, key suppliers and service providers and by entering into alliances with them, to jointly improve the quality of its products and services. This policy is applicable to production from its own facilities as well as to production that is outsourced.The company will periodically review this quality policy for its effectiveness and consistency with business objectives. The company delegates authority and responsibility for dissemination and implementation of this policy to each Business and Unit Head.

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MARKET STRATEGIES

Consumer satisfaction

Indira is 20 years old, a tribal woman at Kondegaon village in Bastar district. She is just back from the nearby jungles, collecting firewood. After attending to her baby son, she will go to the village well to take a quick wash. Yesterday her husband brought her a white soap, with pink petals in it. Indira had requested him to buy one, for the festival later this evening.

Home to over 700 million people, rural India comprises not only over 70% of India's billion-strong population, but also over 12% of the world's population. The rural population already accounts for substantial consumption of Fast Moving Consumer Goods and also consumer durables. About 50% of the sales of soaps & detergents are generated in rural India. Similarly, almost half the demand for black & white television sets, pressure cookers, table fans, sewing machines also comes from there.

Cost management:

But the potential is even larger, both in terms of consumption and penetration. The fact that 70% of the population accounts for only 50% of even relatively well-penetrated categories, like soaps & detergents, indicates the enormous scope of consumption-led growth in these categories. In categories, which are relatively less penetrated, like personal products, rural India offers an even bigger growth opportunity through greater penetration and then consumption. For example only three out of 10 consumers in rural markets use shampoo or skin care products. Therefore growth in such categories will emerge, as more consumers purchase these products, and then continue to use them regularly.

Hindustan Lever has taken many initiatives over the decades to create markets in the rural hinterlands. By marketing relevant products, at affordable prices.

At the same time, if products have to come up the order in the rural purchase hierarchy, they have to be affordable. If rural India today accounts for about half of detergents sales, it is because HUL has developed low-cost value-for-money branded products, like Wheel. The company has also taken initiatives to create markets even for apparently premium products, by offering them in pack sizes, like sachets, whose unit prices are within the reach of rural consumers. For example, initiated in the 1980s, sachets (Rs.2, Re.1, or 50 paise) today constitute about 55% of Hindustan Lever's shampoo sales. With media reach gradually increasing, rural consumers today, where the media has its footprints, share the same aspirations with their urban counterparts. HUL has responded to the trend with low unit price packs of even other products - Lux at Rs.5, Lifebuoy at Rs.2, Surf Excel sachet at Rs.1.50, Pond's Talc at Rs.5, Pepsodent toothpaste at Rs. 5,

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Fair & Lovely Skin Cream at Rs.5, Pond's Cold Cream at Rs.5, Brooke Bond Taaza tea at Rs.5.

Other marketing strategies:

For decades now, Hindustan Lever has also taken initiatives to circumvent the limitation in communication channels, by innovatively leveraging non-conventional media. Among them are wall paintings, cinema vans, weekly markets (haat), fairs and festivals. Given the rural consumer's fascination for cinema, the cinema vans show popular movies, interspersed with products advertisements. Weekly markets, fairs and festivals are parts and parcel of rural life. The occasions are used to demonstrate product benefits and also sell such products. Such demonstrations have played a significant role in creating, for example, the detergents market in rural India. In recent times, such demonstrations are being deployed to illustrate how visible clean is not hygienic clean, and how using soap is essential to prevent easily avoidable infections.

demonstrations. The project has helped eliminate barriers to trial, and has strengthened salience of both particular categories and brands. Similarly in 2002, Hindustan Lever has launched a similar large-scale direct contact, called Lifebuoy Swasthya Chetana, which already covers 70 million people in 18,000 villages of 8 states. The project is intended at generating awareness about good health and hygiene practices, and specifically how a simple habit of washing hands is essential to maintaining good health. The initiative will involve interaction with students and senior citizens, who act as change agents.

Availability of HUL’s Product:

Generating awareness pays dividends only when steps are taken to ensure constant availability of products. In rural India particularly, availability determines volumes and market share, because the consumer usually purchases what is available at the outlet, influenced very largely by the retailer.

Therefore, over the decades, Hindustan Lever has progressively strengthened its distribution reach in rural India, which today has about 33 lakh outlets. Direct rural distribution in Hindustan Lever began with the coverage of villages adjacent to small towns. The company's stockists in these towns were made to use their infrastructure to distribute products to outlets in these villages. But this distribution mode could only be extended to villages connected with motorable roads, and it could cover about 25% of the rural population by 1995..

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HUL has in the recent past established a common distribution system in rural areas for all its products. Given the number of brands and their packs the rural retailer usually requires, one HUL representative can take all the products from the company portfolio that he needs.

Over time, Hindustan Lever will further strengthen its rural distribution through mutually beneficial alliances with rural Self Help Groups (SHGs). Over the last five years, financial institutions, NGOs and government organisations are working closely to establish SHGs, whose objective is to alleviate poverty through sustainable income-generating activities. Since 2001, Hindustan Lever is implementing Project Shakti, whereby SHGs are being offered the option of distributing relevant products of the company as a sustainable income-generating activity.

HUL's vision for Project Shakti is to scale it up across the country by 2005, creating about 25000 Shakti entrepreneurs, covering 100,000 villages, and touching the lives of 100 million rural consumers. Begun with 50 groups in Nalgonda district of Andhra Pradesh, with the support of local authorities, the project has been extended, as of now, to about 50,000 villages in 12 states. A typical Shakti entrepreneur conducts business of around Rs.10,000 - Rs 15,000 per month, which gives her an income of about Rs 700 - Rs.1000 per month on a sustainable basis. As most of these women are from below the poverty line, and live in extremely small villages (less than 2000 population), this earning is very significant, and is almost double of their past household income. The full benefit of Project Shakti will be realised after some years.

HINDUSTAN UNILEVER LIMITED

– DECEMBER QUARTER 2008 RESULTS

Total Sales grow by 14.4%; FMCG Sales growth at 15.8% HPC and Foods grow by 17% and 9% respectively; Broad based growth across

categories PBIT grows 13.5%; Net Profit increases by 56% EPS for 2008 grows 17.6%; Final Dividend Rs 2.50 per share of Re 1/- each; Total

Dividend Rs 5.00 per share for 2008

Mumbai, February 14, 2009: Hindustan Unilever Limited (HUL) announced its results for December Quarter 2008. Growth momentum achieved in the last three quarters has

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been sustained with total sales growing by 14.4%. Domestic FMCG sales were higher by 15.8% with both Home and Personal Care (HPC) and Foods performing well.HPC business grew by 17.3% driven by strong performance in all categories. Significant sales growth was achieved in the highly competitive categories of Laundry and Shampoo. Soaps recorded good growth, with Lux growing handsomely reflecting in market share gains. All the brands in Skin category maintained their strong performance leading to a double digit growth for the category. Consumer relevant innovations continue to drive off-take and key innovations during the quarter include the re-launch of “Thick and Strong” Sunsilk Pink, Lux variants for the 75-year celebrations, and the national launch of “Jasmine Fresh” Rin Advanced Powder.In Foods business, Tea achieved a modest growth despite a declining market and falling commodity prices; Coffee continued to perform well. Processed Foods business grew strongly, albeit on a low base. The Icecream business also achieved a 33% increase in sales, led by the impulse category. Relaunch of Knorr soup with a superior mix and introduction of new variants was the key Foods innovation during the quarter.Mr Harish Manwani, Chairman commented: “We have sustained the growth momentum in December quarter and it continues to be broad based across HPC and Foods categories, particularly, in the competitive categories of Laundry and Shampoo. This was driven by higher investment behind our brands with exciting innovations, excellent activation, new initiatives in Customer Management and with significantly higher levels of A&P spends. The double digit sales growth of over 11% for the year 2005 has been achieved after a gap of six years.Our strategic priority remains unchanged. We will continue to leverage our focused portfolio of powerful brands to sustain market leadership and grow our market position across strategic brands and categories. In a competitive landscape, we shall continue to deliver consumer value and invest behind our brands. We recognize the challenge of inflationary cost pressures driven by crude oil prices and, in the competitive context, achieving cost leadership across the extended supply chain continues to be a key priority.”

HUL TRANSFERS TEA ESTATES INDIA TO MAXWELL GOLDEN TEA PRIVATE LIMITED

Mumbai, March 01, 2006: Hindustan Unilever Limited (HUL) has transferred its entire shareholding in its 100% subsidiary Tea Estates India Limited (TEIL) to Maxwell Golden Tea Private Limited (MGT), a Woodbriar Group company on March 1, 2006. TEIL owns 8 tea estates and 6 factories for processing tea in the high-yielding belt of Tamilnadu with an average annual output of approx. 10,500 metric tons.

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The acquisition of TEIL by Woodbriar Group will provide scale and bring in synergy benefits to Woodbriar Group, as a large portion of TEIL gardens are contiguous to the existing tea gardens of Woodbriar Group. Canara Bank, Madurai Circle has funded the debt component to Woodbriar Group for this acquisition.With this disposal of shareholding in TEIL, HUL has completed its exit from its tea plantations business both in South India and Assam. It may be recalled that HUL had sold its interests in Rossell Industries Limited and Doom Dooma Tea Company Limited in Assam during the last 12 months.About HUL:HUL is India's largest Fast Moving Consumer Goods Company, touching the lives of two out of three Indians. HUL's mission is to "add vitality to life" through its presence in over 20 distinct categories in Home & Personal Care Products and Foods & Beverages. The company meets everyday needs for nutrition, hygiene, and personal care, with brands that help people feel good, look good and get more out of life. For more information visit www.HUL.comCOMPETITORS

The Procter & Gamble Company Company Profile

The Procter & Gamble Company (P&G) is a brand behemoth. The world's #1 maker of household products courts market share and billion-dollar brands. P&G's products fall into three categories: global beauty care; global health, baby, and family care; and global household care. It also makes pet food and water filters and produces soap operas (As the World Turns). More than 20 of P&G's brands are billion-dollar sellers (including Actonel, Always/Whisper, Bounty, Charmin, Crest, Downy/Lenor, Folgers, Iams, Olay, Pampers, Pantene, Pringles, Tide, and Wella). Acquisitive P&G bought Clairol in 2001 and a majority of Wella in 2003. Its purchase of Gillette in late 2005 was its biggest buy in company history.

Financial HighlightsFiscal Year End: JuneRevenue (2005): 56741.00 MRevenue Growth (1 yr): 10.40%Employees (2005): 110,000Employee Growth (1 yr): 0.00% RESEARCH METHODOLOGY

The section includes the overall research design, the sampling procedure, the data collection method, the field method, and analysis and procedure.

RESEARCH DESIGN

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For this research project exploratory method is used

DATA COLLECTION METHOD The data collect for the research can be classified as primary data and secondary data. Primary data is by visiting existing customer and expected customer of Hindustan Unilever Limited and making them fill up the questionnaire. Secondary data is from internet, books, magazine etc.

RESEARCH INSTRUMENT

The instrument use for data collection is structured questionnaire. Question is open and close ended depending upon the information that needed to be elicited. I am also using the scaling technique to assess the attitude of the customer.

SAMPLING PLAN Keeping all the constrains in mind a sample size of 100 people .The sampling procedure is systematic sampling.SCOPE

The Indian FMCG market currently appears to be at a crossroads, and HUL are attempting to change customer perceptions of their brands and where specific buying motivations appear to be replacing generalities.

This meanwhile, is quite unlike the west where buyers consider aesthetics, comfort and safety, not necessarily in that order, before finalising a purchase. “It’s smarter to think about emotions and attitudes, if marketers are to do a better job of marrying what a HUL offers to the consumer’s image of the offerings. Another important outcome of the research is the believability of the claims. Most of the claims are realistic and easy to understand. Most of the people don’t understand the quality claims by HUL.

The mindset of the Indian consumer is such that he is delighted if he buys a pen a little cheaper than his neighbour. Things are, however, slowly changing and customers at the upper end of the market are now ready to pay more for more. I hope that this approach will soon enter the new era, maybe not with the same intensity .

“Success will largely be determined to the extent a company can differentiate itself in terms of intangibles that go with a Product”. Thus, success could well hinge on the best of bundle of services that HUL provides.HUL grew from zero to the 2,268 Million $, mark and the number One FMCG company in India this year. Looking at the present scenario it can be said that though there is lot of competition in the market but

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Factors Percentage Poor quality 10High prices 45No Service 20Others 25

Graph.5

INFERENCEIt was found that 45% of people is not satisfied from high prices and lowest 10 from poor quality.

FINDINGS AND CONCLUSIONS WHEN COMPARED WITH PROCTER AND GAMBLE LTD.

Findings

On the basis of research, we found that there is a nominal difference in the efficiency of Hindustan leaver limited. vis-à-vis Procter and Gamble Ltd. I have reached to this conclusion on the basis of following findings. They are as follows.

Product line

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Hindustan leaver limited

HUL Home & Personnel Care

> In personal Wash they have Lux , Lifebuoy, Liril, Hamam, Breeze, Dove, Pears and

Rexona .

In Laundry they have Surf Excel, Rin and Wheel. In skin care their brands are Fair N Lovely and Ponds.

In hair Care they have Sunsilk Naturals and Clinic All clear.

In Oral Care their brands are Pepsodent and Close-up.

In Deodorants they have Axe and Rexona.

In Colour Cosmetics they have Lakeme.

In Ayurvedic Personal And Health Care they have Ayush.

FOODS

In tea they have the brand name brook bond and lipton. In coffee they have bru.

In foods they have kissan and kinnor annpuran.

In ice creams they have the kwality walls.

WATER

Hindustan Unilever Limited has launched pueit, the most advanced in home water purifier in the world.

Procter and Gamble P&G Hygiene and Health care ltd. markets several leading brands: Whisper sanitary napkins in the Feminine Hygiene category; Health care products such as Vicks VapoRub, vicks action 500, Vicks Cough Drops, Vicks Inhaler; skin care and cosmetic products viz. Old Spice.

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P&G Home Products Ltd. markets several leading brands. In Fabric Care P&G has two of its world leading detergents Tide and Ariel, in Hair Care they have Pantene Pro V, Head & Shoulders and Rejoice. In Baby Care they have Pampers.

CONCLUSION- As Hindustan Unilever Limited has more brands in its basket then Procter and gamble so it is more close to common man and touching his or her daily life in a more comprehensive manner.

DEALERS

Hindustan leaver limited While choosing the dealers HUL mainly emphasizes on the ‘market potential of that area, dealer’s financial position, and dealers back ground (previous business), present business, goodwill and risk taking capabilities ,by the good responsibility of the dealer.

Procter and Gamble there is no difference as such in the process of selection of dealers in Procter and Gamble also. Like HUL, P&G also considers dealer’s financial position; present business, goodwill and risk taking capabilities.

Conclusion: Dealers of HUL are satisfied by the companies support in there sales because the company provides them with various schemes and discounts, whereas satisfaction of P&G dealers lies in good promotional activities, advertisement and the flexibility that the company provides them. According to the senior officials of P&G it was found that it’s a volume based company, hence all the above stated parameters helps the dealer to attract more and more customers.

MODE OF TRANSPORTATION

Hindustan leaver limited; HUL uses modified trucks and rails to deliver the products from various production sites to the dealers. They are using new state of the art technology so that they can even track every single bottle of shampoo. Transportation cost is shared by HUL and the dealer.

Procter and Gamble P&G is also using road and railway transportation system to deliver product from various production sites to the dealers. They are also using latest Information Technology to track there consignment whose backend is managed by infosys. Each dealer has to keep the Good Receipt Note (GRN) number and report of the whole items of delivered products. Transportation cost is paid by P&G.

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Conclusion: Both P&G and HUL uses advanced tracking technology to track the goods and both companies use railways and roadways for transporting there products. In HUL transportation cost is shared by HUL and the dealer, where as at P&G, transportation cost is paid by P&G.

FLEXIBILITY

Hindustan leaver limited As far as flexibility is concerned; our group found that HUL provides more flexibility in terms of delivery of produce. HUL has there own warehouses in every state and if the dealer orders more , he is supplied with the products in time.

Procter and Gamble As far as flexibility is concerned; our group found that P&G does not provides more flexibility in terms of delivery of produce and in taking order from dealers.

Conclusion: our group has found that Dealers of HUL are more satisfied than the dealers of P&G and therefore HUL is a step ahead in terms of flexibility of placing orders and accepting orders from the dealers.

DISTRIBUTION CHANNEL STRUCTURE

Hindustan Unilever limited- Hindustan Unilever Limited channel structures consist of whole seller, mass retailers, rural and modern trade. Their new approach to distribution is holistic and seeks a three way convergence of product availability brand communication and brand experience. They are reinventing distribution—creating new channels and redefining the way current channels are serviced. They are building new capabilities in training the large number of people involved in these initiatives.

Procter and gamble- Procter and gamble’s channel structure also have whole sellers, mass retailers. They are revamping the company’s distribution system using efficient consumer response {E C R} principles. The new distribution system has given the company considerable cost and process efficiencies while significantly availability and visibility of the company’s product in the stores.

Conclusion- Our group has found that H.L.L. has more effective and efficient distribution network as compared to P & G, which increases the availability and presence of HUL product. HUL is also given emphasis on penetrating the rural market as well.

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DEALING WITH UNSOLD & DAMAGED MERCHANDISE

Hindustan Unilever Limited-It depends on the condition and type of the product. If company feels that it is not the fault of the dealer then company would return it, unsold products are mostly taken back by HUL

Procter And Gamble- P & G replaces the damaged product with the new one, it means that the damaged product are replaced by new product.

Conclusion- Our group has found that both the companies take back the unsold product however P & G is more flexible in returning the damaged product as compared to the HUL. Hence P & G is more flexible here.

PERFORMANCE APPRAISAL SYSTEM

Hindustan Unilever Limited- The performance appraisal system in Hindustan Unilever Limited is done under the supervisory of the Appraisal supervisor. The supervisor keep track of the performance of the employees and based on their performance he choose the right method of performance appraisal. The main method of performance appraisal that have been adopted by Hindustan Unilever Limited are 360 degree appraisal and

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supervisory appraisal methods. it is done as an early exercise and performance appraisal parameter is the past performance of the employees.

Procter And Gamble- the performance appraisal system in Procter and gamble is also done under the supervisory officer and almost same method are used as in the Hindustan Unilever Limited .

Conclusion- the conclusion that our group has found that there is hardly any differences is the performance appraisal methods in both the companies .both the companies are taking almost the same measures and same parameters for performance appraisal , however both the company were not willing to disclosed any changes brought in performance appraisal system during the past five years .both of the companies said that there have been change in some areas and which has shown positive results, but not willing to give any reasons and what changes have been brought.

TARGETS

Hindustan Unilever Limited : HUL has different channel members with specified targets and they are intended to increase sales, HUL has also made changes in channel members during 2001-2006 to increase sales of the company. Every channel member has to fulfill there given targets, channel members expect the company of ROI. Every channel member gets credit period of two weeks. There was also change in performance appraisal system during 2001-2006 to improve sales. HUL has also made changes in commercial terms intended to increase the sales in different channels and also to increase profit margins to company.

Procter And Gamble- P&G also has different channel members with specified targets and they are intended to increase sales .P&G also made changes in channel members during 2001-2006 to increase sales of the company. The channel members expect ROI depending on there knowledge and on there performance to. Channel members get credit period of 30 days. Payment terms of P&G are also flexible to the channel members and P&G also has flexible payment terms P&G also offers many discounts to these channel members. P&G has made many changes to there commercial terms during 2001-2006 to increase sales.

Conclusion-Both HUL and P&G are flexible to channel members, but HUL runs some monopoly over the market by offering a credit period of only two weeks where as P&G

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offers credit period of 30 days. HUL also sets targets to there channel members and provides very less margins to dealers compared to P&G.

SALES FUNCTIONING

Hindustan Unilever Limited : HUL is emphasizing on rural areas through project Shakti these days and sales also have been increased and HUL does not have any sales outlets HUL assigns sales territory to there sales persons according to there skill and experience and assigns targets to them. HUL adopts on the job and off the job training system to there sales force it is emphasized on improving skill and experience of the sales personnel. Sales personnel are motivated through incentives and promotions.

Procter And Gamble: P&G has increased the number of outlets in the country and the population in the area also increased and there is no effect on sales. P&G sets targets to there sales force on the basis of increase or decrease in demand and also according to the previous sales , sales territories are assigned according to the capabilities of the sales personnel, responsibility of the sales personnel is to clarify the doubts of the customer and make sales of the product. P&G trains their sales force by on the job training and training process is emphasized on skill and experience, P&G has also brought many changes in the training system that has affected its sales too. P&G motivates their sales force by providing them with targets and incentives.

Conclusion; Both P&G and HUL trains their sales force and has a good performance appraisal system, P&G does appraisal on a monthly basis depending on increase and decrease of sales where as HUL does it once in a year.

RECOMMENDATIONS

Both the companies having good market share in India and it keep on increasing. Both the co. i.e. HUL and P&G should open exclusive shop. HUL is already having exclusive shop in Mumbai called SANGAM STORE. But it is only in India so it should be increased. The employee should be given uniforms in which the name of the company should be printed, by doing this the sales people get motivated. These shops should be opened for 24 hours. They should offer 24 hours free home delivery system. The delivery vehicle should be attractive the name of the company should be printed in that so that it becomes the sources of advertisement.

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The companies should emphasis on its advertisement, there should be BRAND FIT in that. For example when lux launch its advertisement with sharukh khan with girls. It was heavily criticized because it was not fit with the brand. It adversely affect the opinion of the customer and it results in decrease in sales.

Both companies should emphasis their business in areas. They should penetrate their business in the rural areas. 69% of the Indian population lives in rural areas. There is huge market there and very less market has been penetrated. Both these companies should concentrate on rural areas. P&G has been hardly been seen in the rural areas.

They should increase their CSR activities in northern India. At present they are currently doing their CSR in southern India. So they should increase their activities in north India also.

SUGGESTIONS

Key attribute components: Value for money and Customer Care Operational attributes. Physical attributes. Brand Image. Customer Specific Details.

In any correspondence with the customers the message should be sent in these components only to have the maximum benefit from the advertisement. Also these components should be dealt with independently. The basic need of the customer need to be addressed which is actually not much expensive and better quality.

HUL sales growth in june 2004 was decreased due to the problem with promotion and pricing. Although being the most competitive product on the basis of the Market Operating Price (MOP), the shampoos are still not selling much. This is perhaps due to the bargaining stress on the customer and the weak push given by the dealer to the particular item, when actually it should be sold like a high volume product. Another serious suggestion is that HUL must give good attention to their all the products rice and all are not getting much attention. The dealers don’t provide much support to the customers in making them understand the real Quality behind them. Either, the technical details should be presented in a clearer manner or the dealers need to be educated properly. LIMITATIONS

Everything in this world has its own advantages and disadvantages which shows ‘nothing is perfect’.

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Following are the problems faced but it’s a part of game:

1. TIME CONSUMING: It is very much obvious that it is a time consuming process. So much time has been spent for this purpose.

2. LOW PARTICIPATION: Obviously many respondents have not participated in this and have also created some problems which simply shows that they were not interested.

3. BIASNESS: Sometimes interested customers were also biased so the collected figures involve both positive and negative figures.

4. It does not cover all the aspects of the company.

5. SUBJECTIVE: This project only tells you what it is all about.

BIBLIOGRAPHY

1. The Times of India and Hindustan Times

2. The Economic Times

3. Company’s brochure

4. www.google.co.in

5. www.HUL.com

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ANNEXURE

SPECIMEN

CUSTOMER SURVEY QUESTIONNAIRE

NameAge Address

Q1. How many members are there in your family?

Q2. Have you ever heard of HUL (Hindustan Unilever Limited )?

YES ______ NO ______ If Yes, from where? Newspaper Magazines Television Others _______

Q3. Are you using any HUL product?

YES NO

Q4. If Yes, then are you satisfied?

YES NO

Q5. If No, then reason being

Poor quality High prices No services Others

Q6. Which brand do you use in the following categories :

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Personal Wash

Lux __________ Breeze ___________

Dove __________ Others ___________

Laundary

Surf Excel _______ Rin ________ Wheel Others

Skin Care

Fair&Lovely ________ Pond’s ________

Sunslik Naturals ________ Others ________

Oral Care Pepsodent ________ Close-up ________ Others ________

Deodorants Axe ________ Lakme ________ Rexona ________ Colour Cosmetics Lakme ________ Others ________

Q7. What Recommendations or suggestions would you like to give for improvement of our products?

RETAILER SURVEY QUESTIONNAIRE

1. Do you keep products of Parle in your shop? ( please tick mark on the appropriate answer)

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a).Yes b). No .

(If the answer is yes then go to question number: 3 )

2. Why don’t you keep the products of Parle in your shop or why did you stop keeping its products?

Yes No

a). erratic supply b). lack of demandc). low margin d). no suppliere). don’t know about the company

3. Which products of HUL do you keep?

Personal Wash

Lux __________ Breeze ___________

Dove __________ Others ___________

Laundry

Surf Excel Rin ________ Wheel Others

Skin Care

Fair &Lovely ________ Pond’s ________

Sunslik Naturals ________ Others ________ Oral Care Pepsodent ________ Close-up ________ Others ________ Deodorants Axe ________ Lakme ________ Rexona ________

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Colour Cosmetics Lakme ________ Others ________

4. What is the sales/demand of the product?

1. Very High 2. High 3. Average 4. Rarely 5. Very Rarely 6. Never

5. From whom do you purchase your product?

1). Distributor 2). Dealer 3). Agency 4). Wholesaler

6. How do you rate the delivery process by the dealer?

1. Excellent 2. Above Average  3. Average  4. Below Average  5. Extremely Poor 

7. How many dealers are there in the district?

a).One b)Two. c)Three. d)More than three.

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8. Which vehicle do they mainly use for delivery?1). Two wheeler

a). scooters__ , b). motorbike__.2) Three wheeler 3) Four wheeler

a) van__ ,b) truck__,c) others__.

13. What are the other schemes and incentives offered by them?______________________________________________________________________________________________________.

14. What improvements would you like to have in the distribution process?

__________________________________________________________________________________________________

PERSONAL DETAILS:Name: ___________________________________________Address: _________________________________________Cont. No.: ________________________________________Signature: ________________________________________

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