VISION OF THE COMPANY
Identification of Problem
High cost structure of HLL
Unable to tap much of market in economy and popular segment of the detergent market
Doesn’t pay much importance to its ice cream and beverages business
Small growth in soaps and detergent market on YoY basis
Understanding of Problem
HLL cost structure is high due to high overheads and stringent
quality parameters.
HLL is leader in Premium brand detergents which constitutes
only 2% of the total detergent market volume, remaining market
( popular and economy segment) which constitutes 98% of total
detergent market is being tapped mostly by Nirma and unorganised sector.
Solutions to problem• Do market research to know the reasons of lesser sale of
its product in ice cream and beverage market
• To know reasons of small growth in its soaps and detergent market on YoY basis.
• To produce more products for economy and popular segment of the society.
• Upgrading consumers through innovation to new levels of quality and performance
Merits
Consumer understanding and systems for building consumer insight.
Distribution structure with wide reach, high quality coverage and ability to leverage scale
Integrated supply chain and well spread manufacturing units
Use of RSNet Penetrating into rural areas Giving employment to SHG Its well organised workforce
Demerits
• Competitors focusing on a particular product and eating up HLL’s share, like Nirma focusingon soaps and detergents
Innovative Thinking
• To enter untapped market in branded Ayurvedic medicines and other such consumer products.
• Emerging Modern Trade can be effectively used for introduction of more upscale Personal Care products
• Opportunity in Food sector: changing consumer tastes
1.What kind of sales organization should HLL design for the current market
2.What factors should be taken into account while evaluating the performance of the distribution channel in providing support through sales
force?
• Transportation Railways, Roads ,Waterways, Animals• Communication ITC using internet, Mobile users• Warehousing Central/State Warehousing , Cooperatives , Rural
Godowns• Market factors- competitors, geography, Economy.• Product factors- life cycle, size & weight, product value, consumer
perceptions, product complexity.• Manufacturer factors- company objective & Resources, Desire for
control,Breadth of product life.• Organization objectives mass appeal and rapid marketing.• buying habit of customers- Understanding consumer needs and criteria
for buying • Channel Availability - Channels may not be available
DISTRIBUTION DECISION
Activities involved in making products available to customers when and
where they want to purchase them.
DISTRIBUTION Elements
Institutional
Physical
Salesman Salesman Salesman
3.What kind of Sales organization HUL should develop for Rural India
MARKETING STRATEGIES OF HULFOR RURAL INDIA
• Direct Coverage: HUL appointed a common stockist to service all outlets within a town and sell a limited selection of the brand portfolio. Towns consisted of populations of under 50,000 people.
• Indirect Coverage: HUL targeted retailers in accessible villages close to larger urban markets. Retail stockists were assigned a permanent route to ensure that all accessible villages in the vicinity were served at least once a fortnight.
• Streamline: Streamline leveraged the rural wholesale channel to reach markets inaccessible by road. Star Sellers were appointed among wholesalers in a particular village. Star Sellers would purchase stock from a local distributor and then distribute stock to retailers in smaller villages using local means of transport (e.g. motorcycles, rickshaws).
• Project Shakti: Project Shakti targeted the very small villages (<2,000) and tapped into pre-existing women’s self help groups (SHG). Underprivileged rural women were invited to become direct-to-consumer sales distributors for HUL products
4.Should HUL follow the same organizational design with current business strategy ?
CONTD..
• The current strategy is to straddle the pyramid —portfolio of brands to cater to consumers across income ,classes, meeting both needs and aspirations.
• As income levels rise, the number of affluent homes will also increase rapidly, and so HUL have to augment their portfolio to address these consumers.
• In that case HUL has to come up with new organizational structure to serve huge market of INDIA
Thank you