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CHAPTER NO.1
INTRODUCTION TO HINDUSTAN UNILEVER LIMITED
Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods
Company with a heritage of over 75 years in India and touches the lives of two out of
three Indians.
HUL works to create a better future every day and helps people feel good, look good
and get more out of life with brands and services that are good for them and good for
others.
With over 35 brands spanning 20 distinct categories such as soaps, detergents,
shampoos, skin care, toothpastes, deodorants, cosmetics, tea, coffee, packaged foods,
ice cream, and water purifiers, the Company is a part of the everyday life of millions
of consumers across India. Its portfolio includes leading household brands such as
Lux, Lifebuoy, Surf Excel, Rin, Wheel, Fair & Lovely, Ponds, Vaseline, Lakm,
Dove, Clinic Plus, Sunsilk, Pepsodent, Closeup, Axe, Brooke Bond, Bru, Knorr,
Kissan, Kwality Walls and Pureit.
The Company has over 16,000 employees and has an annual turnover of around
Rs. 21,736 crores (financial year 2011 - 2012). HUL is a subsidiary of Unilever, one
of the worlds leading suppliers of fast moving consumer goods with strong local
roots in more than 100 countries across the globe with annual sales of about 46.5
billion in 2011. Unilever has about 52% shareholding in HUL. Hindustan Unilever
Limited (HUL) is India's largest consumer goods company based in Mumbai,
Maharashtra.
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HUL was formed in 1933 as Lever Brothers India Limited and came into being in
1956 as Hindustan Lever Limited through a merger of Lever Brothers, Hindustan
Vanaspati Mfg. Co. Ltd. and United Traders Ltd. It is headquartered in Mumbai, India
and has an employee strength of over 16,500 employees and contributes to indirect
employment of over 65,000 people. The company was renamed in June 2007 as
Hindustan Unilever Limited.
Lever Brothers started its actual operations in India in the summer of 1888, when
crates full of Sunlight soap bars, embossed with the words "Made in England by
Lever Brothers" were shipped to the Kolkata harbor and it began an era of marketing
branded Fast Moving Consumer Goods (FMCG).
Hindustan Unilever's distribution covers over 2 million retail outlets across India
directly and its products are available in over 6.4 million outlets in the country. As per
Nielsen market research data, two out of three Indians use HUL products.
Our vision
Unilever products touch the lives of over 2 billion people every day whether that's
through feeling great because they've got shiny hair and a brilliant smile, keeping
their homes fresh and clean, or by enjoying a great cup of tea, satisfying meal or
healthy snack.
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A clear direction
The four pillars of our vision set out the long term direction for the company where
we want to go and how we are going to get there:
We work to create a better future every day
We help people feel good, look good and get more out of life with brands and
services that are good for them and good for others.
We will inspire people to take small everyday actions that can add up to a big
difference for the world.
We will develop new ways of doing business with the aim of doubling the size of
our company while reducing our environmental impact.
We've always believed in the power of our brands to improve the quality of peoples
lives and in doing the right thing. As our business grows, so do our responsibilities.
We recognise that global challenges such as climate change concern us all.
Considering the wider impact of our actions is embedded in our values and is a
fundamental part of who we are.
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Purpose & principles
Our corporate purpose states that to succeed requires "the highest standards of
corporate behaviour towards everyone we work with, the communities we touch, and
the environment on which we have an impact."
Always working with integrity
Conducting our operations with integrity and with respect for the many people,
organisations and environments our business touches has always been at the
heart of our corporate responsibility.
Positive impact
We aim to make a positive impact in many ways: through our brands, our commercial
operations and relationships, through voluntary contributions, and through the various
other ways in which we engage with society.
Continuous commitment
We're also committed to continuously improving the way we manage our
environmental impacts and are working towards our longer-term goal of developing a
sustainable business.
Setting out our aspirations
Our corporate purpose sets out our aspirations in running our business. It's
underpinned by our code of business Principles which describes the operational
standards that everyone at Unilever follows, wherever they are in the world. The code
also supports our approach to governance and corporate responsibility.
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Working with others
We want to work with suppliers who have values similar to our own and work to the
same standards we do. Our Business partner code, aligned to our own Code of
business principles, comprises ten principles covering business integrity and
responsibilities relating to employees, consumers and the environment.
Our purpose
At the heart of the corporate purpose, which guides us in our approach to doing
business, is the drive to serve consumers in a unique and effective way. This purpose
has been communicated to all employees worldwide.
Our vision
We meet everyday needs for nutrition, hygiene and personal care with brands that
help people feel good, look good and get more out of life. Sustainability is at the heart
of our business, and through our brands, we seek to inspire people to take small
everyday actions that can add up to a big difference for the world.
Our deep roots in local cultures and markets around the world give us our strong
relationship with consumers and are the foundation for our future growth. We will
bring our wealth of knowledge and international expertise to the service of local
consumers a truly multi-local multinational.
Our long-term success requires a total commitment to exceptional standards of
performance and productivity, to working together effectively, and to a willingness to
embrace new ideas and learn continuously.
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CHAPTER NO.2
CODE OF BUSINESS PRINCIPLES
Introduction
Our Principles
Our code of business principles describes the operational standards that everyone at
Unilever follows, wherever they are in the world. It also supports our approach to
governance and corporate responsibility.
Unilever has earned a reputation for conducting its business with integrity and with
respect for all those whom our activities affect. This reputation is an asset, just as
valuable as our people and our brands.
To maintain this reputation requires the highest standards of behaviour consistently
observed by all of us. Unilevers Code of Business Principles sets out these standards
and we expect all our employees to adhere to them.
Being a successful business does not just mean investing for growth and balancing
short and long term interests. It also means caring about our consumers, employees
and shareholders, our business partners and the world in which we live.
We therefore want this Code to be more than a collection of high sounding
statements. It must have practical value in our day-to-day business lives and each of
us must follow these principles both in the spirit and the letter.
If we do so, Unilevers reputation will be enhanced, our business will perform better
and our professional lives will be all the more fulfilling.
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Standard of Conduct
We conduct our operations with honesty, integrity and openness, and with respect for
the human rights and interests of our employees.
We shall similarly respect the legitimate interests of those with whom we have
relationships.
Obeying the Law
Unilever companies and our employees are required to comply with the laws and
regulations of the countries in which we operate.
Employees
Unilever is committed to diversity in a working environment where there is mutual
trust and respect and where everyone feels responsible for the performance and
reputation of our company.
We will recruit, employ and promote employees on the sole basis of the qualifications
and abilities needed for the work to be performed. We are committed to safe and
healthy working conditions for all employees. We will not use any form of forced,
compulsory or child labour. We are committed to working with employees to develop
and enhance each individual's skills and capabilities.
We respect the dignity of the individual and the right of employees to freedom of
association.
We will maintain good communications with employees through company based
information and consultation procedures.
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Consumers
Unilever is committed to providing branded products and services which consistently
offer value in terms of price and quality, and which are safe for their intended use.
Products and services will be accurately and properly labelled, advertised and
communicated.
Shareholders
Unilever will conduct its operations in accordance with internationally accepted
principles of good corporate governance. We will provide timely, regular and reliable
information on our activities, structure, financial situation and performance to all
shareholders.
Business Partners
Unilever is committed to establishing mutually beneficial relations with our suppliers,
customers and business partners. In our business dealings we expect our business
partners to adhere to business principles consistent with our own.
Community Involvement
Unilever strives to be a trusted corporate citizen and, as an integral part of society, to
fulfil our responsibilities to the societies and communities in which we operate.
Public Activities
Unilever companies are encouraged to promote and defend their legitimate business
interests.
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Unilever will co-operate with governments and other organisations, both directly and
through bodies such as trade associations, in the development of proposed legislation
and other regulations which may affect legitimate business interests.
Unilever neither supports political parties nor contributes to the funds of groups
whose activities are calculated to promote party interests.
The Environment
Unilever is committed to making continuous improvements in the management of our
environmental impact and to the longer-term goal of developing a sustainable
business.
Unilever will work in partnership with others to promote environmental care, increase
understanding of environmental issues and disseminate good practice.
Innovation
In our scientific innovation to meet consumer needs we will respect the concerns of
our consumers and of society. We will work on the basis of sound science applying
rigorous standards of product safety.
Competition
Unilever believes in vigorous yet fair competition and supports the development of
appropriate competition laws. Unilever companies and employees will conduct their
operations in accordance with the principles of fair competition and all applicable
regulations.
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Business Integrity
Unilever does not give or receive whether directly or indirectly bribes or other
improper advantages for business or financial gain. No employee may offer give or
receive any gift or payment which is, or may be construed as being, a bribe. Any
demand for, or offer of, a bribe must be rejected immediately and reported to
management.
Unilever accounting records and supporting documents must accurately describe and
reflect the nature of the underlying transactions. No undisclosed or unrecorded
account, fund or asset will be established or maintained.
Conflicts of Interests
All Unilever employees are expected to avoid personal activities and financial
interests which could conflict with their responsibilities to the company.
Unilever employees must not seek gain for themselves or others through misuse of
their positions.
Compliance - Monitoring Reporting
Compliance with these principles is an essential element in our business success. The
Unilever Board is responsible for ensuring these principles are applied throughout
Unilever.
The Chief Executive Officer is responsible for implementing these principles and is
supported in this by the Corporate Code Committee chaired by the Chief Legal
Officer, Members of the Committee are the Group Secretary, the Chief Auditor, the
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SVP HR and the SVP Communications. The Global Code Officer is Secretary to the
Committee. The Committee presents quarterly updates to the Corporate
Responsibility and Reputation and the Audit Committee, half-yearly reports to the
Unilever Executive and an annual report to the Board.
Day to day responsibility is delegated to all senior management of the regions,
categories, functions and operating companies. They are responsible for implementing
these principles, if necessary through more detailed guidance tailored to local needs,
and are supported in this by Regional Code Committees comprising the Regional
General Counsel together with representatives from all relevant functions and
categories. Assurance of compliance is given and monitored each year. Compliance
with the Code is subject to review by the Board supported by the Corporate
Responsibility and Reputation Committee and for financial and accounting issues the
Audit Committee.
Any breaches of the Code must be reported in accordance with the procedures
specified by the Chief Legal Officer. The Board of Unilever will not criticise
management for any loss of business resulting from adherence to these principles and
other mandatory policies and instructions. The Board of Unilever expects employees
to bring to their attention, or to that of senior management, any breach or suspected
breach of these principles. Provision has been made for employees to be able to report
in confidence and no employee will suffer as a consequence of doing so.
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Business Partner Code
It is Unilevers policy to formally request that all our suppliers respect the principles
of our Supplier Code and adopt practices that are consistent with it.
The Code
Unilevers Supplier Code states that:
There shall be compliance with all applicable laws and regulations of the country
where operations are undertaken.
There shall be respect for human rights, and no employee shall suffer harassment,
physical or mental punishment, or other form of abuse.
Wages and working hours will, as a minimum, comply with all applicable wage and
hour laws, and rules and regulations, including minimum wage, overtime and
maximum hours in the country concerned.
There shall be no use of forced or compulsory labour, and employees shall be free
to leave employment after reasonable notice.
There shall be no use of child labour, and specifically there will be compliance with
relevant International Labour Organization (ILO) standards.
There shall be respect for the right of employees to freedom of association and
recognition of employees rights to collective bargaining, where allowable by law.
Safe and healthy working conditions will be provided for all employees.
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Operations will be carried out with care for the environment and will include
compliance with all relevant legislation in the country concerned.
All products and services will be delivered to meet the quality and safety criteria
specified in relevant contract elements, and will be safe for their intended use.
Business will be conducted with integrity. There will be no payments, services,
gifts, entertainment or other advantages offered or given to any Unilever employee or
third party which are intended to influence the way in which the Unilever employee or
third party goes about his or her duties. Similarly Unilever will not offer or give such
payments, services, gifts, entertainment or other advantages to any supplier which are
intended to influence the way in which the supplier goes about his or her duties. There
will be no actual or attempted money laundering.
Unilever's direct suppliers will take responsibility to require adherence to the
principals of this Supplier Code from their direct suppliers and exercise diligence in
verifying that these principles are being adhered to in their supply chains.
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CHAPTER NO. 3
COMPANY STRUCTURE
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ManagingDirector
GeneralManager
Vice President
Marketing Manufacturing
Sales Finance Distribution
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Hindustan Unilever Limited is India's largest Fast Moving Consumer Goods (FMCG)
company. It is present in Home & Personal Care and Foods & Beverages categories.
HUL has over 16,500 employees, including over 1500 managers
The fundamental principle determining the organization structure is to infuse speed
and flexibility in decision-making and implementation, with empowered managers
across the companys nationwide operations.
Board of Directors
The Board of Directors of the Company represents an optimum mix of
professionalism, knowledge and experience. The total strength of the Board of
Directors of the Company is nine Directors, comprising Non-Executive Chairman,
four Executive Directors and four Non-Executive Independent Directors.
Management Committee
The day-to-day management of affairs of the Company is vested with the
Management Committee which is subjected to the overall superintendence and control
of the Board.
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CHAPTER NO.4
INTRODUCTION TOMARKETING MIX STRATEGY
Marketing is the process of communicating the value of a product or service to
customers. Marketing can sometimes be interpreted as the art of selling products, but
selling is only a small fraction of marketing.
Marketing can be looked at as an organizational function and a set of processes for
creating, delivering and communicating value to customers, and managing customer
relationships in ways that benefit the organization and its shareholders. Marketing
management is the art of choosing target markets and acquiring, and keeping
customers through providing superior customer value.
There are five competing concepts under which organizations can choose to operate
their business; the production concept, the product concept, the selling concept, the
marketing concept, and the holistic marketing concept. The four components of
holistic marketing are relationship marketing, internal marketing, integrated
marketing, and socially responsive marketing. The set of engagements necessary for
successful marketing management includes, capturing marketing insights, connecting
with customers, building strong brands, shaping the market offerings, delivering and
communicating value, creating long-term growth, and developing marketing strategies
and plans.
The marketing mix is a business tool used in marketing products. The marketing mix
is often crucial when determining a product or brand's unique selling point (the unique
quality that differentiates a product from its competitors), and is often synonymous
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with the four Ps: price, product, promotion, and place; in recent times, however, the
four Ps have been expanded to the seven Ps or replaced by the four Cs. And there are
two four Cs theories today. One is Lauterborn's four Cs(Consumer, Cost,
Communication, Convenience), another is Shimizu's four Cs (Commodity, Cost,
Communication, Channel).
The term marketing mix was coined in an article written by Neil Borden called The
Concept of the Marketing Mix. He started teaching the term after he learned about it
from an associate, James Culliton, who in 1948 described the role of the marketing
manager as a "mixer of ingredients"; one who sometimes follows recipes prepared by
others, sometimes prepares his own recipe as he goes along, sometimes adapts a
recipe from immediately available ingredients, and at other times invents new
ingredients no one else has tried.
Four Ps In Marketing Strategy
The marketer, E. Jerome McCarthy, proposed a four Ps classification in 1960, which
has since been used by marketers throughout the world.
Product Strategy
Product is the mix of all the features, advantages, and benefits that you offer to your
target market. It may include certain characteristics such as quality, packaging, after
sales support, customer services etc. In order to ensure that your customers are
gaining the full benefits of your product, you can consider the following questions.
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A product is seen as an item that satisfies what a consumer needs or wants. It is a
tangible good or an intangible service. Intangible products are service based like the
tourism industry, thehotel industry and the financial industry. Tangible products are
those that have an independent physical existence. Typical examples of mass-
produced, tangible objects are the motor carand the disposable razor. A less obvious
but ubiquitous mass produced service is a computer operating system.
Every product is subject to a life-cycle including a growth phase followed by a
maturity phase and finally an eventual period of decline as sales falls. Marketers must
do careful research on how long the life cycle of the product they are marketing is
likely to be and focus their attention on different challenges that arise as the product
moves through each stage.
The marketer must also consider the product mix. Marketers can expand the current
product mix by increasing a certain product line's depth or by increasing the number
of product lines. Marketers should consider how to position the product, how to
exploit the brand, how to exploit the company's resources and how to configure the
product mix so that each product complements the other. The marketer must also
consider product development strategies.
What is the core benefit your product offers? For instance, customers who purchase
mobile phones buy more than just a phone; they purchase the ability to keep in touch.
What does the actual product include? This includes branding, additional features
and benefits that provide differentiation and ensures that customers will purchase your
product over the competitors.
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What non tangible benefits can you offer? Factors to consider at this point may
include after sales service, warranties, delivery etc.
Price Strategy
Price relates to the pricing strategy of your products or services. It may include
discounts, trade in allowances and credit terms to adjust for the competitive situation
in order to bring the price into line with the buyer's perception of the value of the
product. Businesses may use different pricing strategies based on different situations.
These are listed following:
Premium Pricing - is used where a business may feel that there is a substantial
competitive advantage for its products. Such high prices may be charged for luxurious
products such as rare automobiles, first class airline services etc.
Penetration pricing - may be used where a business would set a price lower than the
general market price in order to increase sales and market share. Once this is
achieved, the prices would be increased. Penetration pricing would normally be most
suitable for products with high price sensitivity whereby a small change in price
would result in a large change in demand.
Skimming Pricing - involves setting a high initial price relative to the prices of
competing products. Price Skimming works best for prestigious products since
buyers tend to be more prestige conscious rather than price conscious. Due to the
initial high prices, the skimming strategy may also enable the organisation to recover
its product development costs at an early stage. Once the product has been in the
market for a short period, most businesses tend to lower prices over time making the
product available to a wider market.
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Competition Pricing - involves setting prices in comparison with your competitors.
This pricing strategy is one of the most common strategies used by small retail
businesses as an attempt to avoid price wars and still maintain a stable level of profit.
The price is the amount a customer pays for the product. The price is very important
as it determines the company's profit and hence, survival. Adjusting the price has a
profound impact on the marketing strategy, and depending on the price elasticity of
the product, often it will affect the demand and sales as well. The marketer should set
a price that complements the other elements of the marketing mix.
When setting a price, the marketer must be aware of the customer perceived value for
the product. Three basic pricing strategies are: market skimming pricing, market
penetration pricing and neutral pricing. The 'reference value' (where the consumer
refers to the prices of competing products) and the 'differential value' (the consumer's
view of this product's attributes versus the attributes of other products) must be taken
into account.
Promotion Strategy
Represents all of the methods of communication that a marketer may use to provide
information to different parties about the product. Promotion comprises elements such
as:advertising,public relations,personal selling and sales promotion.
Promotion refers to the promotional activities that communicate the merits of your
product to your target market in an attempt to persuade them to purchase it. It may
include various methods of promotions such as direct marketing, advertising, personal
selling, sales promotions etc.
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Advertising covers any communication that is paid for, from cinema commercials,
radio and Internet advertisements through print media and billboards. Public relations
is where the communication is not directly paid for and includes press releases,
sponsorship deals, exhibitions, conferences, seminars or trade fairs and events. Word-
of-mouth is any apparently informal communication about the product by ordinary
individuals, satisfied customers or people specifically engaged to create word of
mouth momentum. Sales staff often plays an important role in word of mouth and
public relations.
PlaceStrategy
Refers to providing the product at a place which is convenient for consumers to
access. Place is synonymous with distribution. Various strategies such as intensive
distribution, selective distribution, exclusive distribution and franchising can be used
by the marketer to complement the other aspects of the marketing mix.
Place refers to where the sales are to be made and how the products will be
distributed. It includes: channels of distribution, the extent of market coverage,
managing inventories, transportation and logistics. Put simply, Place involves all
activities that deliver the product to your target customers.
Organizations that facilitate the movement of products from the manufacturer to the
final user of the product are known as intermediaries. The common types of
intermediaries include:
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Retailers: Those companies that sell mainly to consumers and determine the final
selling price of the product.
Wholesalers: Those companies that purchase merchandise in bulk from producers
and resell mainly to businesses, the government and other retailers.
Agents and brokers: Those firms do not take the title or ownership of goods and
services but facilitate the sale of products from the manufacturer to the end user and
take a commission upon the sale of goods.
With the rapid advancement of internet technology and increasing broadband uptake
there is currently a move towards selling goods online particularly with the increased
use of e-commerce technology. As the internet facilitates a geographically dispersed
market, firms are now able to reach a wider audience with a low setup cost.
The 'seven Ps' refers to the already mentioned four Ps, plus 'physical evidence',
'people', and 'process'. 'Physical evidence' refers to elements within the store -- the
store front, the uniforms employees wear, signboards, etc. 'People' refers to the
employees of the organization with whom customers come into contact with. 'Process'
refers to the processes and systems within the organization that affects its marketing
process. These later three factors are not cited nearly as often as the first four outlined
in depth above.
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CHAPTER NO.5
MARKETING MIX STRATEGY OF HINDUSTAN UNILIVER LIMITED
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 Srimatiwhich was rolled out in 2006is also on the right track.
HULs 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 HULs
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 doesnt report its laundry revenues separately
but puts them under the soaps and detergent category. In 2006, HULs soaps and
detergents segment contributed around Rs5,596 crore to the companys 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.
PRODUCT STRATEGY
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:
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The companys popular products include:
Bathing soaps: Lux, Lifebuoy, Liril, Hamam, Breeze, Dove, Pears and Rexona
Laundry items: Surf Excel, Rin and Wheel
Skin care: Fair & Lovely, Ponds and Vaseline
Hair care: Sunsilk and Clinic
Oral care: Pepsodent and Close up
Deodorants: Axe and Rexona
Colour cosmetics: Lakme
Ayurvedic: Ayush
Tea: Brooke Bond and Lipton
Coffee: Bru
Foods: Kissan, Annapurna and Knorr
Ice cream: Kwality Walls .
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PRICING STRATEGY
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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PLACE STRATEGY
BRAND ISNT 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 isnt 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.
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PROMOTION STRATEGY
If an advertisement is to communicate effectively, the receiver must at least half want
it to, and be prepared too take step toward the sender. Effective advertising is rarely
hectoring or loudly explicit. It often both attracts and generates arm feelings. More
often than not, a successful campaign has a stronger element of the unexpected a
quality that good advertising shares with much worthwhile literature.
To penetrate into the inner recesses of her memory, communication must first ensure
exposure, grab her attention evoke her comprehension, grab her acceptance and then
extract retention competing with thousands of other units of communication trying to
do the same.
Finding showed that the adults felt too conscious to be seen consuming a product
actually meant for children. The strategic response address the emotional appeal of
the band to the child within the adult. Naturally, that produced just the value vacuum
that Hindustan Unilever Ltd(HUL) was looking to fill. Thereafter it was the job of the
advertising to communicate customer the wonderful feeling that he could experience
by re-discoursing the careful, unself conscious, pleasure seeking child within
himself a graft these feeling onto the Ad campaign like hasso to khul k hasso for
close up, cream bathing bar for dove soap and daag ache hai for surf excel have
been sure shot winner with the audience.
It has also launched Pureit, a home water purifier which supplies drinking water
without boiling/need of electricity , As well as outdoor and radio ads, ad agency
contract has created communication for cinemas and even ATM machines for the
brand.
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All ICICI s ATM a message flashes on the screen as soon as customer insert his
ATM card. Something familiar is planned for phone-book as well. In cinemas,
Hindustan Unilever(Ltd)has a message on-screen just before the lights are dimmed to
give them a chance to get their product There will also be after dinner sampling in
restaurants to begin with, 30 catteries in Mumbai have been selected.
Ad spend in 2000 was about 14% of sales and the management said that plans to
maintain as spend at this level in the current year also.
Ad since any discussion today would be incomplete without mention e word, the
management plans to tap this new channel of marketing. Beside the company website
(i.e. www.unilever.com), that the company has launched, it had also entered into
various marketing relationship with other portals, specially targeted during festivals
and events such as Valentines day, etc.
Its a combination of spiffing up its key brand, researching and improving the newer
products that havent 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.
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CHAPTER NO.6
SWOT ANALYSIS OF HUL
Strength
1. Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer
Goods company, touching the lives of two out of three Indians with over 20 distinct
categories in Home & Personal Care Products and Foods & Beverages..
2. Due to its long presence in India has deep penetration 20 consumer
product category, over 15,000 employees, including over 1,300 managers, is to "add
vitality to life."
3. The company derives 44.3% of its revenues from soaps and detergents, 26.6%
from personal care products, 10.5% from beverages, and the rest from foods, ice
creams, exports, and other products.
4. Low cost of production due to economic of scale. That means higher profits
and / or more competitioners. Better market penetration.
5. HUL is also one of the country's largest exporters; it has been recognised as a
Golden Super Star Trading House by the Government of India.
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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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CHAPTER NO.7
PEST ANALYSIS OF HUL
P: since the budget range is decontrolled, no political effects are envisaged.
E: 1) increasing per capita income resulting in higher
Disposable income
2) Growing middle class/urban population increase in
Demand
3) Low cost of production better penetration
S: 1) Per capita consumption expected to increase fashion
2) Increasing gifts culture increase in demand
T: Will have to reinforce technology to international levels
Once India is a fully free economy.
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CHAPTER NO.8
HINDUSTAN UNILEVERS 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.
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Impulse segment these products are often purchase on impulse, used these and
then. They include product such as close up.
Take home segment this describes product that are normally purchased in
supermarkets, taken home consumed at a later stage.
HUL-UNIQUELY POSITIONED TO CREATE VALUE
Our 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
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Shakti
Three shakti initiatives
Shakti entrepreneur; currently~44000 women cover 1,25000 villages.
Shakti vani: one-to-many communication for category growth
ishakti: customized interaction with remote consumers.
Impact of community
business and social impact can go together.
partnerships with diverse stakeholders.
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CHAPTER NO.9
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.
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This analysis compares Hindustan Unilever Limited with three other companies in
closely related industry sectors.
The company focuses on efficient delivery to consumers with an improved supply
chain, brand building initiatives and innovation, which has helped the company to
sustain its leadership position in the overall FMCG category in India.
Its brands are spread across 20 consumer product categories. Hindustan Unilever
markets consumer goods throughout India. The company faces competition from
international, local and regional players.
CHAPTER NO.10
JOINT VENTURE
Hindustan Unilever Sets Up Joint Venture With Smollan Holdings
Hindustan Unilever Limited (HUL) has decided to set up a Joint Venture (JV) with
Smollan Holdings of South Africa and the JV will be operational from January 1,
2008. The strategic tie-up aims to build long term capabilities and bring in-store
execution focus in servicing the Companys 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.
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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 companys marketing strategy in Modern Trade.
Other Acquisition
Hindustan Unilever has acquired several Indian FMCG companies so far. This
includes:
Tata Oil Mills Company
Brooke Bond
Lipton India
Modern Foods
It acquired Kissan brand from UB group; Dollops ice cream brand from Cadbury
India; Lakme cosmetics brands from Tata. It has also launched Pureit, a home water
purifier which supplies drinking water without boiling/need of electricity.
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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 Ponds skin care and Dove hair care products from Unilevers
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 brandsFair & Lovely, a hot-selling
fairness cream, which promises a lighter skin, tone for many of Indias 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 Unilevers brand is still tops.
Baillie is also getting aggressive on foods, focusing on the Knorr brand of soups and
curry mixesideal for the Indian market. Analysts believe the companys current
strategy of concentrating on premium products and marketing them in the large retail
stores is a winning one. Sumeet Budhraja, consumer analyst at Mumbai brokerage
First Global Securities, says that Hindustan Unilever could have addressed a lot
more categories, but they are more focused and regaining their aggressiveness. He
points to the demand for safe drinking water in India, which Hindustan Unilever
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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 companys sales grew 13%,
with net profit up 29.6%. Reason enough to keep patrolling those store aisles.
CHAPTER NO.11
SERVICE TO SOCIETY
HUL believes that an organizations 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 programmes, Shakti. Through
Shakti, HUL is creating micro-enterprise opportunities for rural women, thereby
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improving their livelihood and the standard of living in rural communities. Shakti also
includes health and hygiene education through the Shakti Vani Programmes, 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 600million people.
HUL is also running a rural health programmes Lifebuoy Swasthya Chetana. The
programmes 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.
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CONCLUSION
This company project has demonstrated HINDUSTAN UNILEVERS
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 Unilevers in its indorse its
strong potential to continue to do well.
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BIBLIOGRAPHY
A L Ries (1996), Focus Harper Collins Publishers Ltd.
David A. Aaker (1991), Managing Brand Equity, The Free Press.
David A. Aaker (1996) Building Strong Brands, The Free Press.
Philip Kotler (Eighth Edition) Marketing Management, Prentice Hall of India Ltd.
The Economic Times Brand Equity
Market survey and questionnaires
www.unilever.com