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INTRODUCTION
About the marketing strategy
This strategy sets out how Tourism Tyne and Wear, NewcastleGateshead Initiative and the Tyne
and Wear local authorities and our partners will work together to attract more leisure visitors – for
holidays, short breaks or day trips – to destinations in Tyne and Wear.
Introduction to Marketing:
Definition of Marketing:
Philip Kotler
The marketing guru has said “Marketing is a social and managerial process by which
individuals and group obtain what they need and want through creating, offering and changing
products of value with others”.
American marketing association
Addressed “marketing is the performance of business activities that direct the flow of
goods and services from producer to consumer to user”.
Cundiff and still
“Marketing is the business process by which products are matched with market and through
which transfers of ownership are affected”.
In the words of Hansen
“Marketing is the process of discovering and translating consumers needs and wants into
product and services and specifications, creating demand for these products and services and then
in term expanding demand.
1
By all these definitions we can derive that marketing is compressive term that includes all
resource and set of activities necessary to direct and facilitate flow of goods and services from
producer to consumer in the process of distribution.
Objectives of Marketing:
At the end of all marketing activities is the satisfaction of human wants and derive profits
from them.
The following are the most significant objectives of marketing.
Intelligent and effective application of modern marketing: Today economic changing
growth rate, relatively high inflation, high interest rates, rapid technological change and
new aggressive rivals challenge marketing firm to adopt and respond to change for survival
and prosperity.
To develop the market field: Marketing is the most dynamic field where change rules the
roost. Change is continuing pre occupation among marketers.
To develop and implement guiding policies for better results: Innovative marketing guiding
policies and their effective implementation to assure better results.
To find sources for further information concerning the market problems: The world of
business in moving on the basis of countless decisions, marketing decisions are more
complex and intricate having impinging impact on the very fortune of a company.
To take appropriate and opportune action in the course of working. The marketing
information system designed by the marketing organization helps in identifying the
problem, investigating analyzing it and interpreting the problem for the final decision.
2
Functions of Marketing:
Marketing involves certain activities to make the goods from producers to consumers. It
consist of operations and an operation may be performed several times either by a producer,
middleman, till the commodity finally reaches in the hand of consumers.
1. Functions of exchange
Exchange implies the transfer of goods and services money or money’s worth. Exchange
brings about change in the ownership of goods. It is a two-way process invading two separate but
supporting activities viz, buying and selling.
Selling: Selling is the sum total of all those activities that push the commodities to the
buyers or consumers at a profitable price. It is the process that involves personal and
impersonal efforts made in persuading the prospective customers to buy a commodity or
service.
Product planning and development: Product – planning is the planning or forecasting what
consumers want in terms of quantity, quality, time, place, price, where as, product development
refers to making available such goods to meet the requirement of consumers as demanded by them.
Demand Creation: It includes such special efforts to induce and persuade the prospective
users to purchase the products of the seller only.
Negotiation: Negotiation as to terms of quality, quantity, price of the product time and
mode of transport payment etc… are to be made with prospective buyers.
Contractual: Once the terms and conditions are settled between buyers and sellers a final
contract would be entered into, where legally, ownership of goods passes on from seller to
buyer.
3
Buying: Buying is another function of exchange that refers to all such activities involves in
the assembling of goods under a single ownership and control. Its immediate purpose is to
bring commodities together where they are wanted for use in production for final
consumption.
This buying function has following four elements:
Planning Assortments: Buyers are to study their own market condition in order know the
types quantity and quality of goods that are required by final users.
Contractual: It is clothed with the selection of various sources of supply, keeping in touch
with them, to get the goods quickly reasonably and regularly.
Negotiation: Buyers and sellers negotiate the terms and condition of price quantity, quality
and time of delivery, transport & payment.
Contractual: It is the last phase that binds the parties of exchange by means of a contract
where the titles to the goods more from seller to buyers.
2. Functions of Physical supply
These are the functions that are related with creation of place and time utilities, they are:
Transportation: Transportation is the physical means to move the goods and people from
a place to another. It is essential spoke in the wheel of market. It is responsible for the
creation of time utility
Storage: Storage is equally important that is creates time utility. The products are to be
preserved from time of production to the time of consumption. It is the base of consumers
to get the goods as and when required.
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3. Facilitating Functions
These are the function that facilitates the process of exchange.
Financing: Finance is the base for all marketing activities. It makes the exchange process
smooth and acts as lubricating oil to the wheel of marketing.
Risk-bearing: Market risk are inherent so long the process of exchange continues many
risks are involved in marketing which brings about changes in ownership, place etc…
Market information: The much desired success of marketing depends on correct and
timely decisions. These decisions are based on market information. It includes all facts,
estimates, opinion, views, regarding the market
Standardization: Standardization helps on tackle certain major problems of marketing. It
is related with the division of commodities into distinct groups standardization involves
establishment of certain criteria to which the goods must confirm.
7P’s of Marketing:
In popular usage, "marketing" is the promotion of products, especially advertising and
branding. However, in professional usage the term has a wider meaning which recognizes that
marketing is customer centered. Products are often developed to meet the desires of groups of
customers or even, in some cases, for specific customers. E. Jerome McCarthy divided marketing
into four general sets of activities. His typology has become so universally recognized that his four
activity sets, the Four Ps, have passed into the language.
5
The four Ps are:
Product: The Product management and Product marketing aspects of marketing deal with
the specifications of the actual goods or services, and how it relates to the end-user's needs
and wants.
Pricing: This refers to the process of setting a price for a product, including discounts. The
price need not be monetary - it can simply be what is exchanged for the product or service,
e.g. time, or attention.
Promotion: This includes advertising, sales promotion, publicity, and personal selling, and
refers to the various methods of promoting the product, brand, or company.
People: People refer to the customers, employees, management and everybody else
involved in it. It is essential for everyone to realize that the reputation of the brand that you
are involved with is in the people's hands.
Process: It refers to the methods and process of providing a service and is hence essential
to have a thorough knowledge on whether the services are helpful to the customers, if they
are provided in time, if the customers are informed in hand about the services and many
such things.
Physical (Evidence): It refers to the experience of using a product or service. When a
service goes out to the customer, it is essential that you help him see what he is buying or
not. For example- brochures, pamphlets etc serve this purpose Physical distribution refers
to how the product gets to the customer; for example, point of sale placement or retailing.
This fourth P has also sometimes been called Place, referring to the channel by which a
product or service is sold (e.g. online vs. retail), which geographic region or industry, to
which segment (young adults, families, business people), etc.
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These four elements are often referred to as the marketing mix. A marketer can use these
variables to craft a marketing plan. The four Ps model is most useful when marketing low value
consumer products. Industrial products, services, high value consumer products require
adjustments to this model.
Services marketing must account for the unique nature of services. Industrial or B2B
marketing must account for the long term contractual agreements that are typical in supply chain
transactions. Relationship marketing attempts to do this by looking at marketing from a long term
relationship perspective rather than individual transactions.
As a counter to this, Morgan, in Riding the Waves of Change (Jossey-Bass, 1988), adds
"Perhaps the most significant criticism of the 4 Ps approach, which you should be aware of, is that
it unconsciously emphasizes the inside–out view (looking from the company outwards), whereas
the essence of marketing should be the outside–in approach". Even so, having made this important
caveat, the 4 Ps offer a memorable and quite workable guide to the major categories of marketing
activity, as well as a framework within which these can be used.
Evolution of Marketing:
Marketing has evolved from the time man existed on earth. Following are the phases of
development of marketing
7
Barter system: The goods are exchanged against goods without any other medium of exchange
like money.
Production orientation: This was the stage where producers, instead of buying concerned with
customer preference concentrating on the mass production of goods for the purchase of profit.
Sales orientation: This stage witness major changes in all the spheres of economic life. The
selling activity becomes the dominating factor without any efforts for the satisfaction of the
consumer needs.
Marketing orientation: Customer’s importance was satisfied but only as a means of disposing of
goods produced competition become more stiffer.
Social Orientation
Production Orientation
Sales Orientation
Marketing Orientation
Consumer Orientation
Management Orientation
Barter system
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Consumer orientation: Under this stage only such products are bought forward to the markets
which are capable of satisfying of taste and expectation of consumer satisfaction.
Management orientation: The marketing function assumes the managerial role to co-ordinate all
the interacting business with the objectives of planning, promotion and distribution.
Social orientation: The companies are not only cares for consumers but also for social welfare.
Thus, social welfare becomes the added dimension to the companies.
MARKETING STRATEGY OF FMCG PRODUCTS:
Barring a few, notable exceptions, rural marketing in India is still about a van campaign, a badly-
made commercial, a few painted walls and the occasional participation in village haats and melas.
But then, "rural" means different things to different people: from 500,000 people for consumer
durables, to less than 50,000 for fast-moving consumer goods.
Still, it is heartening to note the increasing awareness of the importance of rural markets - or, at
least, of companies wanting to move beyond urban boundaries.
According to estimates by the Rural Marketing Agencies Association of India, the total budget for
rural marketing is only about Rs 500 crore (Rs 5 billion), compared to the over Rs 13,000 crore
(Rs 130 billion) allotted to mass media.
This is grossly inadequate to cover the huge potential for different products in rural markets. Of
course, clients' reluctance to spend big money for bigger results in rural markets is because there
are no standard performance yardsticks for judging the efficacy of the rural marketing efforts.
9
The TRPs and NRS/IRS data help you determine the efficacy of TV and press marketing. But
there is no study to tell you what is the ideal cost per contact or what is the ideal number of
eyeballs or footfalls for different rural activities.
But only consider the huge successes of some regional brands, especially in the FMCG sector,
which are giving the multinationals a run for their money.
Companies like Cavin Kare (Chik Shampoo, Meera Herbal Powder, Fairever Cream and so on),
Anchor (100 per cent vegetarian toothpaste), Ghadi detergent powder and Power soap are proof
that regional brands can become brands to reckon with. And don't forget Nirma, the most enduring
example of a brand that began as a regional player and is now a giant.
What did these products do that was so different? Most of them identified a segment that was
vacant in terms of product and area of operation. They all started in small, concentrated markets,
appealing to the local ethos and aspirations of the targeted area.
Their communication, be it a simple radio spot or a wall painting or a theatre film, touched a chord
in the target audience. And, most importantly, their policies were flexible and they could adopt to
fast changing marketing situations. What should companies do to step up their payback from rural
marketing efforts? Here are some steps that should help.
People power
Total commitment from top leadership, keeping in mind that rural marketing is a long-term
relationship, is imperative - the successes of Hindustan Lever [ Get Quote ] and ITC are proof of
this statement. But even more important is the need for a dedicated task force.
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Rural marketing efforts need special mindsets, which many of the urban-oriented management
graduates who are at the helm of affairs at most organisations do not possess.
A separate marketing and sales vertical headed by people with passion and commitment to rural
marketing and supported by a field team that can face the rough and tough of the vast country-side
with courage and conviction is a must.
The best bet is to recruit students from specialised institutes such as the Indian Institute of Rural
Management, or at least, management graduates who have studied the subject as an elective.
Many of these are students from small towns, people with fire in their bellies who want to prove
themselves in big companies and have no issues about working in smaller markets. Pay them well -
remember, you pay peanuts, you get only monkeys - and discuss the path their careers are likely to
take in the organisation. And send them out in the field only after thorough training.
Ensure the consistency of the team involved in any project, until the completion of a specific task.
Recently, we were involved with two big clients. In both cases, the teams that briefed us in the
initial stages and participated enthusiastically in the campaign, were shifted out midway, in
keeping with their companies' policy of shifting and promoting people.
The teams that succeeded felt no ownership of the campaigns they had not initiated. What started
as a great rural marketing initiative has been relegated to the dustbin... the fate of many rural
marketing initiatives in the country.
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Goals are good
Early on in the campaign, define your objective: is it a tactical effort to achieve increased sales in
specific areas during a specific time, or do you want to build a strong equity for your brand in rural
India?
Our experience with FMCG companies is that they are more interested in the first choice. Most of
them have previously appointed vendors who implement the company's ideas blindly, be they van
campaigns or below-the-line activities.
There is very little effort to tailor whatever communication is made in such efforts, to suit the local
audience or fit it with the overall campaign efforts in the mass media.
This invariably leads to less than satisfactory results in terms of awareness of the brands and long-
term impact of the efforts in the targeted markets. If you are interested in the second alternative, a
comprehensive brand building strategy in rural India, with both short term and long term goals, is a
must.
Know your customers
A good place to begin is studying the mindset of your customers, so you can create a customised
plan of action. All too often, clients insist their knowledge of their customers (based on studies of
urban India) is enough on which to base an action plan. Our experience shows that the attitudes,
aspirations and fears of rural customers, with regard to products and brands, is very different from
their urban counterparts.
12
Research can give you invaluable ideas for new product development as well as new methods of
reaching your target audience. The refrigerator with standby power for 12 hours, pressure cookers
with two handles and a radio with key-winding mechanism are all the result of research.
More and more companies turn to the local haats to sell their products. While haats offer
opportunities to target consumers from several villages at one place, and to that extent make your
effort cost-effective, ensure that the people who patronise these haats are the kind who will buy
your brand.
For instance, we recently conducted a survey among some haats in Tamil Nadu, with some
interesting results. The haatswere popular with the poorest agricultural labourers who consciously
buy the duplicate, spurious products that are sold in these bazaars, since they can't afford the real
thing. It is estimated that FMCG companies lost more than Rs 10,000 crore (Rs 100 billion) to
spurious products, mostly sold through such local haats and bazaars.
Ensure availability
Most anecdotes about rural marketing centre on the distribution aspect - the humongous task of
physically reaching your product to over 600,000 villages, most of them without motorable roads.
But it's not really as nightmarish as it is made out to be, at least keeping in mind the present goals
of marketing companies in rural India.
We've all heard about the shampoo sachets that are available in even the smallest villages. How
does that happen? It's a direct result of rising aspirations, fuelled by television commercials. The
consumer demands the product from the local shopkeeper, who then buys the products from the
nearest feeder markets.
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Which means if you can ensure distribution to the feeder markets in towns or villages with
populations of 10-15,000, you've already taken the first step towards reaching your target
customer.
Studies also indicate that rural consumers prefer to shop for durables such as televisions,
automobiles and appliances in the nearest big town or city. So, if your products are in towns with
populations of 50,000, you're closer to the rural consumer than you would have thought.
MARKETING STRATEGY ADOPTED BY HUL
“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.
A worker stacks Hindustan Unilever products in a store in Mumbai
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.”
14
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.
15
“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 yield.”
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SCOPE AND IMPORTANCE
This project is appliciable on the on the area of FMCG.This is widely swited,in order to frame out
marketing strategies for different productin this sector.
IMPORTANCE
To determine the product of HUL in FMCG sector.
This study would be helping HUL to frame its different promotion schemes.
It would help to analyze the current position of HUL and then to sector marketing
channel of the same.
17
OBJECTIVE OF THE STUDY
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
To identify the marketing strategies and policies of Hindustan Unilever Limited
18
LITERATURE REVIEW
Although formulating a consistent strategy is a difficult task for any management team, making
that strategy work – implementing it throughout the organization – is even more difficult
(Hrebiniak, 2006). A myriad of factors can potentially affect the process by which strategic plans
are turned into organizational action. Unlike strategy formulation, strategy implementation is often
seen as something of a craft, rather than a science, and its research history has previously been
described as fragmented and eclectic (Noble, 1999b). It is thus not surprising that, after a
comprehensive strategy or single strategic decision has been formulated, significant difficulties
usually arise during the subsequent implementation process. The best-formulated strategies may
fail to produce superior performance for the firm if they are not successfully implemented, as
Noble (1999b) notes. Results from several surveys have confirmed this view: An Economist
survey found that a discouraging 57 percent of firms were unsuccessful at executing strategic
initiatives over the past three years, according to a survey of 276 senior operating executives in
2004 (Allio, 2005). According to the White Paper of Strategy Implementation of Chinese
Corporations in 2006, strategy implementation has become “the most significant management
challenge which all kinds of corporations face at the moment”. The survey reported in that white
paper indicates that 83 percent of the surveyed companies failed to implement their strategy
smoothly, and only 17 percent felt that they had a consistent strategy implementation process. It is
thus obvious that strategy implementation is a key challenge for today‟s organizations. There are
many (soft, hard and mixed) factors that influence the success of strategy implementation, ranging
from the people who communicate or implement the strategy to the systems or mechanisms in
place for co-ordination and control. How can we better understand these issues and their
importance for successful strategy implementation? In this article, we try to respond to this
19
question by analyzing existing research on the factors that influence strategy implementation. We
have conducted an analysis in the most widely used literature databases to identify key factors
influencing the process of strategy implementation, to surface current areas of agreement and
disagreement, as well as missing evidence and resulting future research needs. Our study also
examines the ways in which strategy implementation has been researched so far, in terms of the
applied research methods and the examined strategy contexts. It will consequently also reveal
under-exploited methods or contexts.
The structure of this paper is as follows: First, we analyze definitions of strategy implementation
and compare them with other synonymous and related terms (in section 2). Then, we describe the
methodology that we have used to conduct our literature review and define its scope (section 3).
The next part of the article, section 4, contains the actual review of literature, focusing on the main
results of prior studies. In that section we present a discussion of nine major factors that affect
strategy implementation. Section four also contains a review of existing models and frameworks of
strategy implementation. In the fifth section of the article, we discuss the implications of our
findings as well as their limitations. We present a conceptual framework that organizes the current
research findings. We also discuss directions for future research in the domain of strategy
implementation and how they may be pursued. In the sixth and final section, we discuss the
limitations of our own approach and summarize open research questions regarding strategy
implementation that have surfaced at various points in our literature analysis.
In this section, we will review the 60 identified studies and analyze their research context, their
main results, theoretical bases, the research methods used as well as the analytical techniques
employed. Examined organizational levels and organizational types are two elements of the
research context. As the core of our literature review, the results section compiles nine factors that
20
influence strategy implementation success, as well as several frameworks or models that aggregate
or relate relevant factors to each other. We then briefly discuss the theoretical bases of the
reviewed studies. Finally, the research methods and analytical techniques will be reviewed to see
which methods are still underutilized in the context of strategy implementation. 4.1 Research
Contexts We classify research contexts into two dimensions: the examined organizational levels
and the considered organizational types. Organizational levels designate the locus of strategizing,
i.e., whether a study focuses on functional strategies (i.e., marketing, HR, R&D), SBU-level
strategies or corporate strategies. Organizational types refer to the kind of organization that is
studied, i.e., whether it is privately held or state-owned and whether its operating scope is regional
or rather multinational. Organizational Levels In the context of strategy implementation research,
five organizational levels can be distinguished. They are: corporate level, strategic business unit
(SBU) level, functional level, operational level and mixed levels (such as corporate and SBU level,
SBU and functional level, inter-functional levels, corporate-SBU-functional levels, etc.).
Surprisingly few researchers focus on the implementation of corporate level strategies, such as
Wernham (1985) and Schmidt & Brauer (2006), while many examine SBU level strategies (Gupta
& Govindarajan, 1984; White, 1986; Govindarajan, 1988; Govindarajan, 1989; Govindarajan &
Fisher, 1990; Skivington & Daft, 1991; Roth & Schweiger & Morrison, 1991; Floyd &
Wooldridge, 1992b; Waldersee & Sheather, 1996; Nilsson & Rapp, 1999; Chimhanzi & Morgan,
2005; Olson & Slater & Hult, 2005; Schaap, 2006; Brenes & Mena & Molina, 2007). The same
holds true for functional strategies: We have found eight studies that focus on the implementation
of such strategies, namely Rapert & Lynch & Suter (1996), Sashittal & Wilemon (1996), Piercy
(1998), Noble (1999a), Noble & Mokwa (1999), Chimhanzi (2004), Qi (2005), Viseras & Baines
& Sweeney (2005). Most of these studies, however, focus on marketing strategy (such as Sashittal
21
& Wilemon, 1996; Piercy, 1998; Noble & Mokwa, 1999, Chimhanzi, 2004). There are few studies
dedicated to the implementation of other functional strategies (this is clearly an area of future
research). The only other study of functional strategy implementation that we have been able to
identify is Viseras, Baines and Sweeney‟s study (2005) in the context of manufacturing strategies.
This study focuses on the key success factors in the project management for the implementation of
strategic manufacturing initiatives. Few studies focus on the actual operational level of strategy
implementation, such as Bantel (1997), Homburg & Krohmer & Workman (2004). Bantel (1997)
analyzes the effects of two key aspects of product strategy (product leadership and product/market
focus) on performance, and on two aspects of strategic implementation (stakeholder input and
employee empowerment). This study also emphasizes the relationship between product strategy
and several strategic implementation variables. Homburg, Krohmer & Workman (2004) point out
that market orientation plays a key role for the successful implementation of a PPD (premium
product differentiation) strategy.
There are some studies which cannot be classified into the above categories. Consequently, we
classify them into a group called mixed level studies: Gupta (1987), Beer & Eisenstat (2000) and
Hrebiniak (2006) have carried out research on corporate and SBU-level strategy. Walker and
Ruekert (1987) analyze three levels of strategy – corporate, SBU and functional. Higgins (2005)
even focuses on four types of strategies: corporate, business, functional and process. Process
strategies, the last type, normally cut across functions and are aimed at integrating organizational
processes across the organization in order to make them more effective and more efficient. Slater
and Olson (2001) analyze marketing‟s contribution to the implementation of business strategy.
The mixed studies category also includes articles that focus on the role of project management for
strategy implementation. Okumus (2001), for example, focuses on the implementation of a yield
22
management project and a key client management project in two hotels. Peng and Litteljohn
(2001) investigate three hotel chains implementing a strategic initiative on yield management.
Grundy (1998) examines the synergies among project management and strategy implementation
and reviews strategy tools that may help in project management. Finally, there are many studies
that are not sufficiently explicit regarding their scope concerning strategic levels. Examples of
such ambiguous studies are Bourgeois Ш and Brodwin (1984), Nutt (1986, 1987, 1989), Noble
(1999b), Lehner (2004), Higgins (2005), Harrington (2006), and Schaap (2006). We can draw
multiple conclusions based on our analysis of the treatment of organizational levels in prior studies
of strategy implementation. We note that – among the five strategy levels – the SBU-level (14
articles), the functional- level (8 articles) and mixed levels (9 articles) have received more attention
than the other two levels, corporate (2 articles) and operational (2 articles). Many studies (25
articles) do not even indicate at which level their discussion of strategy implementation is located.
Two calls to action result from these findings. First, the implementation of corporate strategies is
an under-researched area (perhaps with the exception of post-merger integration research that we
have excluded in our review) and should be given more research attention. Second, future strategy
implementation research should pay attention to explicitly indicate the level of analysis. Within the
functional level, another finding revealed that marketing is the prevailing domain, compared with
other functional areas (such as manufacturing, R&D, HR, accounting etc.). In terms of promising
future research on strategy implementation, we can observe that there are very few studies that
have examined the inter-relationships of functional and business strategies. One such study focuses
on marketing‟s contribution to the implementation of business strategy (Slater & Olson, 2001).
Another study has examined the mutual influence of functional departments‟ relationships on
strategies, which seems a highly relevant area to improve our understanding of strategy
23
implementation: Chimhanzi (2004) has examined the impact of marketing and HR interactions on
marketing strategy implementation. Organizational types Organizational types, as stated earlier,
refer to the characteristics of organizations: if they are private or state-owned, local or
multinational. As far as ownership forms are concerned, strategy implementation studies discuss
both, state-owned and privately held companies. Wernham (1985), for example, explores the
reality of strategy implementation in a U.K. nationalized company, British Telecom (BT).
Alexander (1985) surveys 93 private sector firms through a questionnaire. Qi (2005) issues
questionnaires to the head offices of 800 private companies in the UK. Noble‟s (1999a) study
spans several types of organizations – a national airline, a major financial services firm, a leading
packaged goods company, a provider of emergency fire and medical services, and a leading firm in
the imaging technology industry. Some of the researched companies focus on their domestic
markets, while others are multinational corporations. Rapert, Velliquette and Garretson‟s (2002)
study on strategy implementation takes a nationwide sample of 1000 CEOs of general service
hospitals, which are members of the American Hospital Association (AHA); Roth & Schweiger &
Morrison (1991) and Kim & Mauborgne (1991, 1993) study global strategy; Okumus (2001)
investigates two international hotel groups; Forman and Argenti (2005) select five multinational
companies as samples, namely Accenture, Dell, FedEx, Johnson & Johnson, Sears. In conclusion,
the subjects of strategy implementation studies are not only state-owned corporations, but mostly
private corporations, not only local firms but also multinational firms. However, there have been
no studies comparing similarities and differences of strategy implementation among private
corporations and state-owned corporations, or among local firms and multinational firms. We thus
do not know which specific differences exist regarding strategy implementation in these various
forms organizations. This clearly is another interesting avenue for future research.
24
INDUSTRY PROFILE
Fast Moving Consumer Goods(FMCG)
FMCG are products that have a quick shelf turnover, at relatively low cost and don't require a lot
of thought, time and financial investment to purchase. The margin of profit on every individual
FMCG product is less. However the huge number of goods sold is what makes the difference.
Hence profit in FMCG goods always translates to number of goods sold. Fast Moving Consumer
Goods is a classification that refers to a wide range of frequently purchased consumer products
including: toiletries, soaps, cosmetics, teeth cleaning products, shaving products, detergents,
other non-durables such as glassware, bulbs, batteries, paper products and plastic goods,
such as buckets.
‘Fast Moving’ is in opposition to consumer durables such as kitchen appliances that are generally
replaced less than once a year. The category may include pharmaceuticals, consumer electronics
and packaged food products and drinks, although these are often categorized separately.
The term Consumer Packaged Goods (CPG) is used interchangeably with Fast Moving Consumer
Goods (FMCG). Three of the largest and best known examples of Fast Moving Consumer Goods
companies are Nestlé, Unilever and Procter & Gamble. Examples of FMCGs are soft drinks,
tissue paper, and chocolate bars. Examples of FMCG brands are Coca-Cola, Kleenex, Pepsi
and Believe.
The FMCG sector represents consumer goods required for daily or frequent use The main
segments of this sector are personal care (oral care, hair care, soaps, cosmetics, toiletries),
household care (fabric wash and household cleaners), branded and packaged food, beverages
(health beverages, soft drinks, staples, cereals, dairy products, chocolates, bakery products) and
tobacco.
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The Indian FMCG sector is an important contributor to the country's GDP. It is the fourth largest
sector in the economy and is responsible for 5% of the total factory employment in India. The
industry also creates employment for 3 m people in downstream activities, much of which is
disbursed in small towns and rural India.
This industry has witnessed strong growth in the past decade. This has been due to liberalization,
urbanization, increase in the disposable incomes and altered lifestyle. Furthermore, the boom has
also been fuelled by the reduction in excise duties, de-reservation from the small-scale sector and
the concerted efforts of personal care companies to attract the burgeoning affluent segment in the
middle-class through product and packaging innovations. Unlike the perception that the FMCG
sector is a producer of luxury items targeted at the elite, in reality, the sector meets the every day
needs of the masses. The lower-middle income group accounts for over 60% of the sector's sales.
Rural markets account for 56% of the total domestic FMCG demand. Many of the global FMCG
majors have been present in the country for many decades. But in the last ten years, many of the
smaller rung Indian FMCG companies have gained in scale. As a result, the unorganized and
regional players have witnessed erosion in market share.
History of FMCG in India
In India, companies like ITC, HLL, Colgate, Cadbury and Nestle have been a dominant force in
the FMCG sector well supported by relatively less competition and high entry barriers (import
duty was high). These companies were, therefore, able to charge a premium for their products. In
this context, the margins were also on the higher side. With the gradual opening up of the economy
over the last decade, FMCG companies have been forced to fight for a market share. In the
process, margins have been compromised, more so in the last six years (FMCG sector witnessed
decline in demand).
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Current Scenario
The growth potential for FMCG companies looks promising over the long- term horizon, as the
per-capita consumption of almost all products in the country is amongst the lowest in the world.
As per the Consumer Survey by KSA- Technopak, of the total consumption expenditure, almost
40% and 8% was accounted by groceries and personal care products respectively. Rapid
urbanization, increased literacy and rising per capita income are the key growth drivers for the
sector. Around 45% of the population in India is below 20 years of age and the proportion of the
young population is expected to increase in the next five years. Aspiration levels in this age group
have been fuelled by greater media exposure, unleashing a latent demand with more money and a
new mindset. In this backdrop, industry estimates suggest that the industry could triple in value by
2015 (by some estimates, the industry could double in size by 2010).
In our view, testing times for the FMCG sector are over and driving rural penetration will be the
key going forward. Due to infrastructure constraints (this influences the cost-effectiveness of the
supply chain), companies were unable to grow faster. Although companies like HLL and ITC have
dedicated initiatives targeted at the rural market, these are still at a relatively nascent stage.
The bottlenecks of the conventional distribution system are likely to be removed once organized
retailing gains in scale. Currently, organized retailing accounts for just 3% of total retail sales and
is likely to touch 10% over the next 3-5 years. In our view, organized retailing results in
discounted prices, forced-buying by offering many choices and also opens up new avenues for
growth for the FMCG sector. Given the aggressive expansion plans of players like Pantaloon,
Trent, Shopper’s Stop and Shoprite, we are confident that the FMCG sector has a bright future
India is rated as the fifth most attractive emerging retail market. It has been ranked second in a
Global Retail Development Index of 30 developing countries drawn up by A T Kearney.
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A.T. Kearney has estimated India's total retail market at $202.6 billion, is expected to grow at a
compounded 30 per cent over the next five years. The share of modern retail is likely to grow from
its current 2 per cent to 15-20 percent over the next decade, analysts feel. The Indian FMCG sector
is the fourth largest sector in the economy with a total market size in excess of US$ 13.1 billion.
The FMCG market is set to treble from US$ 11.6 billion in 2003 to US$ 33.4 billion in 2015.
Penetration level as well as per capita consumption in most product categories like jams,
toothpaste, skin care, hair wash etc in India is low indicating the untapped market potential.
Burgeoning Indian population, particularly the middle class and the rural segments, presents an
opportunity to makers of branded products to convert consumers to branded products. India is one
of the world’s largest producers for a number of FMCG products but its FMCG exports are
languishing at around Rs 1,000 crore only.
There is significant potential for increasing exports but there are certain factors inhibiting this.
Small-scale sector reservations limit ability to invest in technology and quality up gradation to
achieve economies of scale. Moreover, lower volume of higher value added products reduce scope
for export to developing countries. The FMCG sector has traditionally grown at a very fast rate and
has generally out performed the rest of the industry. Over the last one year, however the rate of
growth has slowed down and the sector has recorded sales growth of just five per cent in the last
four quarters. The outlook in the short term does not appear to be very positive for the sector.
Rural demand is on the decline and the Centre for Monitoring Indian Economy (CMIE) has
already downscaled its projection for agriculture growth in the current fiscal. Poor monsoon in
some states, too, is unlikely to help matters. Moreover, the general slowdown in the economy is
also likely to have an adverse impact on disposable income and purchasing power as a whole. The
growth of imports constitutes another problem area and while so far imports in this sector have
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been confined to the premium segment, FMCG companies estimate they have already cornered a
four to six per cent market share. The high burden of local taxes is another reason attributed for the
slowdown in the industry
At the same time, the long term outlook for revenue growth is positive. Give the large market and
the requirement for continuous repurchase of these products, FMCG companies should continue to
do well in the long run. Moreover, most of the companies are concentrating on cost reduction and
supply chain management. This should yield positive results for them
COMPANY PROFILE
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
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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
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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.
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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
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33
ORGANIZATIONAL STRUCTURE
FIG.3
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Managing Director
General Manager
Vice President
Marketing Manufacturing
Sales Finance Distribution
PRESENT STATUS
Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods company,
touching the lives of two out of three Indians with over 20 distinct categories in Home & Personal
Care Products and Foods & Beverages. They endow the company with a scale of combined
volumes of about 4 million 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
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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%.
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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 yield.”
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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
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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.
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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.
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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
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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.
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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
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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.
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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.
45
“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.
46
COMPETITIVE 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.
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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
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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.
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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%
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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,
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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.
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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
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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.
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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
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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.
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“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
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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
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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
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“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 millionpeople.
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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
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Financial Overview -2007
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*FIGURES BASED ON FY 2007 AUDITED RESULTS
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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 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
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Colour cosmetics:
Lakme
Ayurvedic:
Ayush
Tea:
Brooke Bond and Lipton
Coffee:
Bru
Foods:
Kissan, Annapurna and Knorr
Ice cream:
Kwality Wall’s .
BRANDS
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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.
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Chapter -5
RESEARCH METHODOLOGY
Research Design: Research design is simply the framework or plan for a study, used as a guide in
collecting and analyzing data. There are three types of Research Design:-
Types of Research:
Exploratory Research Design:- The major emphasis in exploratory Research design is on
discovery of ideas and insights.
Descriptive Research Design:- The Descriptive Research Design Study is typically
concerned with determining the frequency with which something occurs or the relationship
between two variables.
Casual Research Design:- A Casual Research Design is concerned With determining
cause and effect relationship.
For the study, Descriptive Research Design was undertaken as it draws the opinion of employees/
workers on a specific aspe
Research Objective:
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
To identify the marketing strategies and policies of Hindustan Unilever Limited
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SAMPLE DESIGN
A sample design is a definite plan determined before any data is actually collected for obtaining
a sample. Researcher must select a sample design, which should be reliable and appropriate for his
report.
SAMPLING METHOD:
There are two methods of sampling:-
Probability Sampling: It is based on the concept of random selection of a controlled
procedure that assures that each Population element is gives a non-zero chance of
selection. Probability Sampling is of following types:
Simple Random
Systematic
Cluster
Stratified
Double
Non-Probability Sampling: Non probability sampling is non-random and subjective. That
is each member does not have a known non zero chance of being included. Types of Non-
Probability Sampling
Convenience
Judgement
Quota
Researcher selects the sample as per their convenience.
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For this research work I have chosen Non- Probability Convenience Sampling because time limit
for the completion of the work is limited and also managers and employees are not available all the
time.
DATA COLLECTION METHOD
Data for the present study is collected from two sources:
Primary:- The first hand information is collected with the responses of questionnaire. For this
purpose a questionnaire is given to the managerial staff of the CAP. They were asked to choose
the best alternative among the given alternatives, as per their knowledge, experience and
observation.
Secondary: - Secondary data is collected from published sources like Journals, Magazines,
various newspapers and published books.
Secondary Data
Secondary data are the data that are already collected and are only analyzed by different
sources these sources are as follows:-
Corporate magazine
Manuals of various companies
Books, journals, newspaper
Employment exchange
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The secondary data would be collected from financial statement, journal of national
repute, books of national and international author as well as the annual report of the company. In
addition to this internet access will make the study more effective and meaningful.
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FINDINGS & ANALYSIS
FINDINGS & ANALYSIS
3rd consecutive year of 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.
In above study we find out that HUL product is better than P & G Products.
In rural areas HUL products are very popular in comparison to P & G Products.
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..
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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.
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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.
FMCG secter hold a prime importance as the competition is increasing day by day.
Different line of products are offering customers to choose according to their
gender,Demography,personality,income and other attributes.This sector has member of players
which altimately shopes the buying decision products like- Lux,clinic plus,lifebuoy,ariel,pantene
etc. are some of the main ingredients of FMCG sector.
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SUGGESTIONS
P&G
P&G need to make their product affordable in Indian market so as to get quantity
of sale benefit
P&G should enter into lower and product which has high potential with reference to
Indian market
They need to promote their product Ariel which is loosing market share in its
segment
They need to promote their companies name along with the brand name.
HUL
They need to enter into lower segments of detergent.
They need to take care regarding the competition with in its own
brands.
They need to bring more awareness of the companies name along
with the brand name.
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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.
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BIBLIOGRAPHY
BOOKS:
Kothari C.R. , Research Methodology, 4th Edition 2002 Page 135.
Kottler Philip, Marketing Management, 10th Edition, Prentice- Hall of India Pvt. Ltd.,
2001 Page 365.
Thakur Devendra, Research Methodology, Deep & Deep Publication Pvt. Ltd. , 2005 Page
85.
Webliography:
www.unilever.com
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