A

Project Report
On
“Study of supply Channel Management
of Hindustan Unilever Limited.”

Submitted By
Partho mukherjee
PGDM (operations)
Sem 3rd
under the guidance of
mr. Vivek swami
sinhgad institute of business
administration&research

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 S. NO. 40/4A+4B/1 NEARPMCOCTROI POST,
KONDHWA –SASWAD ROAD, KONDHWA (BK)
PUNE-411048

CERTIFICATE

This is to certify that Mr. /Ms PARTHO MUKHERJEE student of SINHGAD

INSTITUTE OF BUSINESS ADMINISTRATION & RESEARCH; Pune has
completed report of “STUDY OF SUPPLY CHAIN MANAGEMENT OF
HINDUSTAN UNILEVER LIMITED” academic year 2009-11

He has worked under our guidance and direction. The said report is based on
bonafide information.

PROJECT GUIDE NAME DIRECTOR

Prof. VIVEK SWAMI prof . Avadhoot

D. pol

Date:-

Place:-

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 Declaration

I PARTHO MUKHERJEE of MMM-1V (2009-11), hereby declare that the

project work STUDY OF SUPPLY CHAIN MANAGEMENT OF HUL Which has
been submitted to SINHGAD INSTITUTE OF BUSINESS
ADMINISTRATION & RESEARCH; is an original work of the undersigned
and has not been reproduced from any other sources and has not been submitted to
any University for any other award of degree or Scholarship.

Date:

Signature of student

Place: Partho Mukherjee

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 Acknowledgement

It gives me the great pleasure to express our deep sense of gratitude towards Prof.
A. POL Director, of Sinhgad Institute of Business Administration & Research,,
for his valuable guidance, inspiration, and wholehearted involvement during every
stage of this project. His experience, perception and through professional
knowledge, being available beyond the stipulated period of time for all kind of
guidance and supervision and ever-willing attitude to help, whose embellished
ideas helped us to blossom our endeavors without whose considerate approach
and insight, this project would never have been possible and have greatly
influenced the timely and successful completion of this project.

My special thanks to Prof. Vivek Swami., Project Supervisor of MMM-IV

Department, for his/her support and invaluable assistance rendered towards
presentation of this work.

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 Table of Contents
No Topic Page No.

1 ACKNOWLEDGEMENT 04

2. OBJECTIVE OF THE STUDY 06

3. SUMMARY 07

4 RESEARCH METHODOLOGY 08

5. INTRODUCTION COMPANY 09

6. INTRODUCTION OF STUDY 12

7. CONCLUSION 23

8. REFERENCES 24

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OBJECTIVE OF STUDY

1. To do the deep study of channel management adopted by Hindustan

Unilever Limited.

2. To understand the types of channel management.

3. To understand the way how they make smooth their processes.

4. Which channel level is adopting by company?

5. What is the benefit to the customer from company`s channel management?

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 SUMMARY

I am doing my management thesis on Distribution Channel management of

Hindustan Unilever Limited. For smooth running Channel management is very
important to every firm. Now a day’s FMCG sector is booming sector. In India
there are very few organized retailer like P&G, ITC, and HUL etc. In it Hindustan
Unilever Limited is one of the leading Organized Retailer.

There are four types of P`s Product, Price, Place and Promotion. In this four
P`s Place means Distribution .

Distribution Channel management means, this is one of the P from 4 P`s.

frequently there may be a chain of intermediaries; each passing the product down
the chain to the next organization, before it finally reaches the consumer or end-
user. There are alternate channels of distribution channel may be available.

I. Direct sell.

II. Agent

III. Distributors

IV. Retailers.

V. Brokers.

Distribution channels can thus have a number of levels. There are four types of
distribution channels.

I. Zero level.

II. One level.

III. Two level.

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IV. Three level.

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 RESEARCH METHODOLOGY

Research Methodology is a way to systematically solve the research problem. The

Research Methodology includes the various methods and techniques for
conducting a Research. “Marketing Research is the systematic design, collection,
analysis and reporting of data and finding relevant solution to a specific marketing
situation or problem". D. Slazenger and Mr. .Stephenson in the encyclopedia of
Social Sciences define Research as "the manipulation of things, concepts or
symbols for the purpose of generalizing to extend, correct or verify knowledge,
whether that knowledge aids in construction of theory or in the practice of an art".

Research Design

Research design is an arrangement of conditions for collection of and analysis of

data in a manner that aims to combine relevance to research purpose with economy
of procedure. The research design will be descriptive in nature.

Data Collection

Data will be collected by two ways: -

Secondary Data

This type of data has already been collected by someone else and has already
passed through statistical process. The sources of secondary data are: -

• Books
• Websites
• Magazines

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 INTRODUCTION OF COMPANY
Hindustan Unilever Limited (abbreviated to HUL), formerly Hindustan
Lever Limited , is India's largest consumer products company and was formed in
1933 as Lever Brothers India Limited. It is currently headquartered in Mumbai,
India and its 41,000 employees are headed by Harish Manwani, the non-executive
chairman of the board. HUL is the market leader in Indian products such as tea,
soaps, detergents, as its products have become daily household name in India. The
Anglo-Dutch company Unilever owns a majority stake in Hindustan Unilever
Limited.

The company was renamed in late June 2007 "Hindustan Unilever Limited".

BRANDS

Some of its brands include Kwality Wall's ice cream, Lifebuoy, Lux, Breeze,
Liril, Rexona, Hamam, Moti soaps, Pureit Water Purifier, Lipton tea, Brooke Bond
tea, Bru Coffee, Pepsodent and Close Up toothpaste and brushes, and Surf, Rin and
Wheel laundry detergents, Kissan squashes and jams, Annapurna salt and atta,
Pond's talcs and creams, Vaseline lotions, Fair & Lovely creams, Lakmé beauty
products, Clinic Plus, Clinic All Clear, Sunsilk and Dove shampoos, Vim
dishwash.

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Mission

Unilever's mission is to add Vitality to life. We meet everyday needs for

nutrition, hygiene, and personal care with brands that help people feel good, look
good and get more out of life.

Corporate purpose

Unilever's mission is to add Vitality to life. We meet everyday needs for

nutrition, hygiene and personal care with brands that help people feel good, look
good and get more out of life.

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.

To succeed also requires, we believe, the highest standards of corporate

behaviour towards everyone we work with, the communities we touch, and the
environment on which we have an impact.

This is our road to sustainable, profitable growth, creating long-term value

for our shareholders, our people, and our business partners.

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Market Share of Hindustan Unileaver Limited

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 INTRODUCTION OF STUDY
Meaning of Distribution Channel

Frequently there may be a chain of intermediaries; each passing the product

down the chain to the next organization, before it finally reaches the consumer or
end-user. This process is known as the 'distribution chain' or the 'channel.' Each of
the elements in these chains will have their own specific needs, which the producer
must take into account, along with those of the all-important end-user.

Alternate Channels

A number of alternate 'channels' of distribution may be available:

Selling direct, such as with an outbound sales force or via mail order,
Internet and telephone sales

Agent, who typically sells direct on behalf of the producer

Distributor (also called wholesaler), who sells to retailers

Retailer (also called dealer or reseller), who sells to end customers

Advertisement typically used for consumption goods

Distribution channels may not be restricted to physical products alone. They

may be just as important for moving a service from producer to consumer in
certain sectors, since both direct and indirect channels may be used. Hotels, for
example, may sell their services (typically rooms) directly or through travel agents,
tour operators, airlines, tourist boards, centralized reservation systems, etc.

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 Channel Level

Distribution channels can thus have a number of levels. Kotler defined the
simplest level, which direct contact with no intermediaries involved, as the 'zero-
level' channel.

The next level, the 'one-level' channel, features just one intermediary; in
consumer goods a retailer, for industrial goods a distributor. In small markets (such
as small countries) it is practical to reach the whole market using just one- and
zero-level channels.

In large markets (such as larger countries) a second level, a wholesaler for

example, is now mainly used to extend distribution to the large number of small,
neighborhood retailers or dealers.

In Japan the chain of distribution is often complex and further levels are
used, even for the simplest of consumer goods.

In Bangladesh Telecom Operators are using different Chains of Distribution,

especially 'second level'.

In IT and Telecom industry levels are named "tiers". A one tier channel
means that vendors IT product manufacturers (or software publishers) work
directly with the dealers. A one tier / two tier channel means that vendors work
directly with dealers and with distributors who sell to dealers. But the most
important is the distributor or wholesaler.

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 The internal market

Many of the marketing principles and techniques which are applied to the
external customers of an organization can be just as effectively applied to each
subsidiary's, or each departments, 'internal' customers.

In some parts of certain organizations this may in fact be formalized, as

goods are transferred between separate parts of the organization at a `transfer
price'. To all intents and purposes, with the possible exception of the pricing
mechanism itself, this process can and should be viewed as a normal buyer-seller
relationship. The fact that this is a captive market, resulting in a `monopoly price',
should not discourage the participants from employing marketing techniques.

Less obvious, but just as practical, is the use of `marketing' by service and
administrative departments; to optimize their contribution to their `customers' (the
rest of the organization in general, and those parts of it which deal directly with
them in particular). In all of this, the lessons of the non-profit organizations, in
dealing with their clients, offer a very useful parallel.

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 Criteria for Selecting Channel Partners

Sales Factors
Product Factors
Experience Factors
Administrative Factors
Risk Factors

Motivating Channel Members

Distributor Advisory Councils

Evaluating Channel Members

Modifying Channel Arrangements

PLC Changes
Growth of Multi-Channel Marketing Systems

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 How HUL Recruit Their Channel Members?
To successful in the market HUL focus on core competencies and outsource
other activities. Distribution channel is a key area that can be outsourced, but
channel members have to be selected carefully .for selecting channel members,
who suit the company`s requirement, careful recruiting and screening producer is
essential.
Recruiting as a Continuous Process.
Recruiting channel member should be a continuous process for two reason
one is that channel member may leave the organization .the other is that the
organization might feel the need to change existing channel members. Therefore
recruitment of channel member in HUL is continuous process.
A change in HUL product policy may need new type of channel members.
Alteration in customers test and preference will also influence the HUL to change
existing channel members if they are unable to cater to the changed conditions.

Managing channels is one of the most important dimensions of businesses

across the world for improving their value in the market. Customers are constantly
on the look out for convenience and service, when purchasing goods. Effective
channel management helps companies decrease costs and reach potential
customers profitably. Effective channel management involves proper recruitment
of channel members. Recruiting channel members should be a continuous process.
In the recruitment process, screening involves elimination of applicants who do
not match the criteria set for the position. After effective screening, the Hindustan
Unileaver Limited. has to make the final selection based on some criteria. These
criteria can be divided into sales factors, product factors, experience factors,

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administrative factors and riskfactors.

After selecting channel members, they have to be constantly evaluated and

based on their performance, the Hindustan Unileaver Limited will either retain
existing channel members or try to forge relationships with new channel members.
Channel members can be evaluated by using parameters like sales quota
attainment, average inventory levels, proper management of inventory, channel
members’ cooperation in promotional and training programmers, etc. The
distribution requirements of a company will keep changing according to changes in
the product life cycle. Modifying channels accordingly is essential for the success
of the organization. However, care should be taken in dealing with channel
members for proper channel management. Conflict management among channel
members is another important activity for the management of the Hindustan
Unileaver Limited..

Channels of Distribution Of Hindustan Unilever Ltd`s

In the Business Buying Behavior Tutorial, we describe a supply chain as

consisting of all parties and their supplied activities that help a marketer create and
deliver products to the final customer. For marketers, the distribution decision is
primarily concerned with the supply chain’s front-end or channels of distribution
that are designed to move the product (goods or services) from the hands of the
company to the hands of the customer. Obviously when we talk about intangible
services the use of the word “hands” is a figurative way to describe the exchange
that takes place. But the idea is the same as with tangible goods. All activities and
organizations helping with the exchange are part of the marketer’s channels of
distribution.

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 Activities involved in the channel of Hindustan Unileaver Limited are wide
and varied though the basic activities revolve around these general tasks:

 Ordering
 Handling and shipping
 Storage
 Display
 Promotion
 Selling
 Information feedback

Type of Channel Members

Channel activities may be carried out by the marketer or the marketer may
seek specialist organizations to assist with certain functions. We can classify
specialist organizations into two broad categories: Resellers and Specialty Service
Firms.

Resellers

These organizations, also known within some industries as intermediaries,

distributors or dealers, generally purchase or take ownership of products from the
marketing company with the intention of selling to others. If a marketer utilizes
multiple resellers within its distribution channel strategy the collection of resellers
is termed a Reseller Network.

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These organizations can be classified into several sub-categories including:

Retailers – Organizations that sell products directly to final consumers.

Wholesalers – Organizations that purchase products from suppliers, such as

manufacturers or other wholesalers, and in turn sell these to other resellers, such as
retailers or other wholesalers.

Industrial Distributors – Firms that work mainly in the business-to-

business market selling products obtained from industrial suppliers.

Specialty Service Firms

Hindustan Unileaver Limited that provide additional services to help with

the exchange of products but generally do not purchase the product (i.e., do not
take ownership of the product):

Agents and Brokers – Organizations that mainly work to bring suppliers

and buyers together in exchange for a fee.

Distribution Service Firms – Offer services aiding in the movement of

products such as assistance with transportation, storage, and order processing.

Others – This category includes firms that provide additional services to aid
in the distribution process such as insurance companies and firms offering
transportation routing assistance.

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 Benefits of Technology used in channel management

Information technology has made a big difference to channel operations and

management. Information systems have revolutionized the way information is
collected, stored and transmitted between channel members. They add value to the
distribution function and enable channel members to integrate different channel
functions, which was not possible in conventional distribution systems. Channel
information systems have also influenced the structure of distribution channels.
Lengthy channels have given way to shorter and highly efficient distribution
systems.

Coordination and cooperation among channel members have greatly

improved due to CIS. Channel members have opted for collective goals over
individual goals and have started looking for benefits to the channel as a whole.
Information is easily available to all channel members, resulting in an increase in
trust and commitment. Channels differ based on the type of channel members
involved in cooperation and the extent to which members cooperate. Different
channel systems include consensus systems, vertical systems, horizontal systems
and inter-type systems. Channel cooperation and coordination have led to
successful and profitable relationships at different levels in the channel – between
manufacturers and suppliers, suppliers and retailers and between manufacturers
and retailers.

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Ways and Means of Supply Chain Management

Nature of Supply Chain Integration

Cross - Functional Process Integration

External Integration

Factors Driving Supply Chain Integration

Increasing Customer Satisfaction

Improving Supply Chain Productivity

Changing Competitive Environment

Role of Organizational and Channel Support for Supply Chain Integration

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 Effective supply chain integration enables firms to improve efficiency and
effectiveness of their supply chain. An integrated supply chain can be defined as
one which has achieved alignment of the members of the supply chain and their
processes. The process of achieving effective supply chain integration.

We first discussed the nature of supply chain integration.

There are two types of supply chain integration-internal integration which

aims at achieving the integration between functional areas, and external integration
which aims at integrating the internal operations of the firm with that of its supply
chain partners.

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 CONCLUSION
• Through this study I understood the process of Hindustan unilever ltd.
Which contain following

o Agent

o Distributor

o Retailer

o Distribution service firms.

• In Hindustan Unileaver ltd. There are some channel Levels adopted by...

o Zero Level.

o One Level.

o Two Levels.

o Three Levels.

• As Hindustan Unileaver ltd adopted Hybrid Integration which benefited

customer by getting various kinds of products with schedule.

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 REFERENCES
 Retail Management.

 sales and Distribution.

 www.supplychain management.com

 www.google.co.in

 www.wikipedia.com

 www.hul.com

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Thank You

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