PROJECT REPORT

ON

Marketing Strategies

of Hindustan Unilever Ltd.

AT

HINDUSTAN UNILEVER LTD.

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

GURGAON

Research Supervisor Submitted By:

Mr. Shashank Shekhar Chandra Bhushan Tiwari

Branch Manager, HUL Roll No. 08061234015

I wish to express my heartfelt appreciation to many who have contributed to this study. I

would like to thank Mr. Shashank Shekhar, Manger, HUL for his valuable guidance. I

wish to express my gratitude to my faculty guide, who provided me with constant

impetus to complete this project.

CHANDRA BHUSHAN TIWARI

2
 TABLE OF CONTENTS

 Executive Summary

 Introduction

 Company Profile

 Current Market Context

 Research & Innovation Centre

 Safety & Health Policy

 Market Strategies

 Hindustan Unilever Ltd.

 Competitors

 Research Methodology

 Scope

 Findings, Data Analysis & Conclusion

 Recommendations

 Suggestions

 Limitations

 Bibliography

3
(Annexure) Questionnaire

EXECUTIVE SUMMARY

Hindustan Unilever Limited (HUL) is India’s largest Fast Moving Consumer Goods

Company, touching the lives of two out of three Indians with over 20 distinct categories

in Home & Personal Care Products and Foods & Beverages. They endow the company

with a scale of combined volumes of about 4 million units and sales of Rs.10, 000 crores.

HUL is also one of the country’s largest exporters; it has been recognized as a Golden

Super Star Trading House by the Government of India. Hence, research aims is that to

study the existing marketing practices, emerging marketing plans and understanding

companies business strategy with its profile. The main recommendations have been made

on the addressing of the advertising message to the customers. An attempt has been made

to formulate the communication in a way to build it on a platform of the basic need for

buying HUL products. In another recommendation the suggestions towards better dealer

interest in HUL products has been given a chance.

The research is based primarily on primary data; however few references to industry

figures from secondary data have been made. Data has been collected through in depth

interviews and administered questionnaires.

4
 INTRODUCTION

Over 100 years' link with India. In the summer of 1888, visitors to the Kolkata harbor &

noticed crates full of Sunlight soap bars, embossed with the words "Made in England by

Lever Brothers". With it, began an era of marketing branded. Fast Moving Consumer

Goods (FMCG).

Soon after followed Lifebuoy in 1895 and other famous brands like Pears, Lux and Vim.

Vanaspati was launched in 1918 and the famous Dalda brand came to the market in 1937.

In 1931, Unilever set up its first Indian subsidiary, Hindustan Vanaspati Manufacturing

Company, followed by Lever Brothers India Limited (1933) and United Traders Limited

(1935). These three companies merged to form HUL in November 1956; HUL offered

10% of its equity to the Indian public, being the first among the foreign subsidiaries to do

so. Unilever now holds 51.55% equity in the company. The rest of the shareholding is

distributed among about 380,000 individual shareholders and financial institutions. The

erstwhile Lipton's links with India were forged in 1898. Unilever acquired Lipton in

1972, and in 1977 Lipton Tea (India) Limited was incorporated.

Pond's (India) Limited had been present in India since 1947. It joined the Unilever fold

through an international acquisition of Chesebrough Pond's USA in 1986.

The liberalization of the Indian economy, started in 1991, clearly marked an inflexion in

HUL's and the Group's growth curve. Removal of the regulatory framework allowed the

5
company to explore every single product and opportunity segment, without any

constraints on production capacity.

Simultaneously, deregulation permitted alliances, acquisitions and mergers. In one of the

most visible and talked about events of India's corporate history, the erstwhile Tata Oil

Mills Company (TOMCO) merged with HUL, effective from April 1, 1993. In 1995,

HUL and yet another Tata company, Lakme Limited, formed a 50:50 joint venture,

Lakme Lever Limited, to market Lakme's market-leading cosmetics and other appropriate

products of both the companies. Subsequently in 1998, Lakme Limited sold its brands to

HUL and divested its 50% stake in the joint venture to the company.

HUL formed a 50:50 joint venture with the US-based Kimberly Clark Corporation in

1994, Kimberly-Clark Lever Ltd, which markets Huggies Diapers and Kotex Sanitary

Pads. HUL has also set up a subsidiary in Nepal, Nepal Lever Limited (NLL), and its

factory represents the largest manufacturing investment in the Himalayan kingdom. The

NLL factory manufactures HUL's products like Soaps, Detergents and Personal Products

both for the domestic market and exports to India.

The 1990s also witnessed a string of crucial mergers, acquisitions and alliances on the

Foods and Beverages front. In 1992, the erstwhile Brooke Bond acquired Kothari General

Foods, with significant interests in Instant Coffee. Then in July 1993, Brooke Bond India

and Lipton India merged to form Brooke Bond Lipton India Limited (BBLIL), enabling

greater focus and ensuring synergy in the traditional Beverages business. 1994 witnessed

BBLIL launching the Wall's range of Frozen Desserts. By the end of the year, the

company entered into a strategic alliance with the Kwality Icecream Group families and

6
in 1995 the Milkfood 100% Icecream marketing and distribution rights too were

acquired.

Finally, BBLIL merged with HUL, with effect from January 1, 1996. The internal

restructuring culminated in the merger of Pond's (India) Limited (PIL) with HUL in

1998. The two companies had significant overlaps in Personal Products, Specialty

Chemicals and Exports businesses, besides a common distribution system since 1993 for

Personal Products. The two also had a common management pool and a technology base.

The amalgamation was done to ensure for the Group, benefits from scale economies both

in domestic and export markets and enable it to fund investments required for

aggressively building new categories.

In January 2000, in a historic step, the government decided to award 74 per cent equity in

Modern Foods to HUL, thereby beginning the divestment of government equity in public

sector undertakings (PSU) to private sector partners. HUL's entry into Bread is a strategic

extension of the company's wheat business. In 2002, HUL acquired the government's

remaining stake in Modern Foods.

In 2003, HUL acquired the Cooked Shrimp and Pasteurised Crabmeat business of the

Amalgam Group of Companies, a leader in value added Marine Products exports.

7
 COMPANY PROFILE

The mission that inspires HUL's 36,000 employees, including over 1,350 managers, is to

"add vitality to life." HUL meets everyday needs for nutrition, hygiene, and personal care

with brands that help people feel good, look good and get more out of life. It is a mission

HUL shares with its parent company, Unilever, which holds 51.55% of the equity. The

rest of the shareholding is distributed among 380,000 individual shareholders and

financial institutions.

HUL's brands - like Lifebuoy, Lux, Surf Excel, Rin, Wheel, Fair & Lovely, Pond's,

Sunsilk, Clinic, Pepsodent, Close-up, Lakme, Brooke Bond, Kissan, Knorr-Annapurna,

Kwality Wall's – are household names across the country and span many categories -

soaps, detergents, personal products, tea, coffee, branded staples, ice cream and culinary

products. They are manufactured in close to 80 factories. The operations involve over

2,000 suppliers and associates. HUL's distribution network, comprising about 7,000

redistribution stockists, directly covers the entire urban population, and about 250 million

rural consumers.

HUL has traditionally been a company, which incorporates latest technology in all its

operations. The Hindustan Lever Research Centre (HLRC) was set up in 1958, and now

8
has facilities in Mumbai and Bangalore. HLRC and the Global Technology Centres in

India have over 200 highly qualified scientists and technologists, many with post-doctoral

experience acquired in the US and Europe.

HUL believes that an organisation's worth is also in the service it renders to the

community. HUL is focusing on health & hygiene education, women empowerment, and

water management. It is also involved in education and rehabilitation of special or

underprivileged children, care for the destitute and HIV-positive, and rural development.

HUL has also responded in case of national calamities / adversities and contributes

through various welfare measures, most recent being the village built by HUL in

earthquake affected Gujarat, and relief & rehabilitation after the Tsunami caused

devastation in South India.

Over the last three years the company has embarked on an ambitious programme, Shakti.

Through Shakti, HUL is creating micro-enterprise opportunities for rural women, thereby

improving their livelihood and the standard of living in rural communities. Shakti also

includes health and hygiene education through the Shakti Vani Programme, and creating

access to relevant information through the iShakti community portal. The programme

now covers about 50,000 villages in 12 states. HUL's vision is to take this programme to

100,000 villages impacting the lives of over a 100 million rural Indians.

HUL is also running a rural health programme – Lifebuoy Swasthya Chetana. The

programme endeavtheirs to induce adoption of hygienic practices among rural Indians

and aims to bring down the incidence of diarrhoea. It has already touched 70 million

people in approximately 15000 villages of 8 states. The vision is to make a billion Indians

feel safe and secure. If Hindustan Lever straddles the Indian corporate world, it is

9
because of being single-minded in identifying itself with Indian aspirations and needs in

every walk of life.

10
HINDUSTAN UNILEVER LIMITED INDIA’S LARGEST FMCG COMPANY

11
FINANCIAL OVERVIEW

12
 Hindustan Lever Limited Shareholding
Pattern
Flls
13.7

Domestic
Fls
14.8 Unilever
51.6

Individual
19.9

HUL Equity Capital - 50 Mn $

13
 PRESENT MARKETING STRATEGY:

Mission:

Hindustan Unilever Limited mission is to add Vitality to life. We meet everyday needs

for nutrition, hygiene, and personal care with brands that help people feel good, look

good and get more out of life.

Policy:

HUL has earned a reputation for conducting its business with integrity and with respect

for the interests of those their activities can affect. This reputation is an asset, just as real

as their people and brands.

From HUL Spokesperson “To succeed requires the highest standards of behavior from all

of us. The general principles contained in this Code set out those standards. More detailed

guidance tailored to the needs of different countries and companies will build on these

principles as appropriate, but will not include any standards less rigorous than those

contained in this Code.

We want this Code to be more than a collection of high-sounding statements. It must

have practical value in their day-to-day business and each one of us must follow these

principles in the spirit as well as the letter”.ref: business world magazine.

14
 Obeying the Law

HUL companies and employees are required to comply with the laws and regulations

of the countries in which they operate.

Employees

• HUL is committed to diversity in a working environment where there is

mutual trust and respect and where everyone feels responsible for the

performance and reputation of the company. HUL will recruit, employ and

promote employees on the sole basis of the qualifications and abilities needed

for the work to be performed.

• HUL respect the dignity of the individual and the right of employees to

freedom of association.

• HUL will maintain good communications with employees through company

based information and consultation procedures.

Consumers

HUL is committed to providing branded products and services which consistently offer

value in terms of price and quality, and which are safe for their intended use. Products

and services will be accurately and properly labelled, advertised and communicated.

The Environment

HUL is committed to making continuous improvements in the management of their

environmental impact and to the longer-term goal of developing a sustainable business.

15
HUL will work in partnership with others to promote environmental care, increase

understanding of environmental issues and disseminate good practice.

Innovation

In their scientific innovation to meet consumer needs they will respect the concerns of

their consumers and of society. They will work on the basis of sound science, applying

rigorous standards of product safety.

Business Integrity

HUL does not give or receive, whether directly or indirectly, bribes or other improper

advantages for business or financial gain. No employee may offer, give or receive any

gift or payment which is, or may be construed as being, a bribe. Any demand for, or offer

of, a bribe must be rejected immediately and reported to management.

HUL accounting records and supporting documents must accurately describe and reflect

the nature of the underlying transactions. No undisclosed or unrecorded account, fund or

asset will be established or maintained.

Conflicts of Interests

All HUL employees are expected to avoid personal activities and financial interests

which could conflict with their responsibilities to the company.

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

positions.

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Compliance – Monitoring – Reporting

Compliance with these principles is an essential element in their business success. The

Unilever Board is responsible for ensuring these principles are communicated to, and

understood and observed by, all employees.

Day-to-day responsibility is delegated to the senior management of the regions and

operating companies. They are responsible for implementing these principles, if

necessary through more detailed guidance tailored to local needs.

Assurance of compliance is given and monitored each year. Compliance with the Code is

subject to review by the Board supported by the Audit Committee of the Board and the

Corporate Risk Committee.

The Board of Unilever expects employees to bring to their attention, or to that of senior

management, any breach or suspected breach of these principles.

Provision has been made for employees to be able to report in confidence and no

employee will suffer as a consequence of doing so.

In this Code the expressions 'Unilever' and 'Unilever companies' are used for convenience

and mean the Unilever Group of companies comprising Unilever N.V., Unilever PLC and

their respective subsidiary companies. The Board of Unilever means the Directors of

Unilever N.V. and Unilever PLC’.ref:THE NEWS

17
FMCG Markets
Slowdown in growth & then 2 years of decline

FMCGMarket (HLL Categories)

00 01 02 03
8
6
4
6.7
2 3.4
0
-1.1
-2.5
-2
-4

18
FMCG Markets
2004 - Revival after 2 years of decline

FMCG Market (HLL Categories)

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

19
Pricing action in 2008:

Price reduction

Price reduction (Bottles) & Value improvement (Sachets)

20
Investment Behind Brands

Innovation & Superior Quality

21
Family – safe Petalsoft Water & effort saving Quick wash - 50% No mud Rin

Advance from germs

Perfect Radiance “5 in 1” hair Total Care Whiter teeth Fresher breath

health benefits

22
 Current Market Context

Actions

• Pricing

–Laundry : Price Reduction

–Shampoos: Value Improvement & Lower Price Points

–Toothpaste: Value Corrections & SKU rationalization

• Investments behind brands

– Innovations

– Quality

– Higher A&P

• Corrective actions in processed

Processed Foods

• Corrective actions

– Phased stock reduction

– Withdrawl of ‘03 innovation

– Defocus of Atta in unviable geographies

• Sales decline of 26% arising from above actions

• Market shares held / improved

23

Sales Growth%
 BRANDS

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Research and Innovation Centers

Since most new products and processes are developed in these Units, certain additional

responsibilities devolve on them to ensure implementation of the Environment Policy of

the company. In addition to the Unit Head's responsibilities outlined above, the heads of

these units will:

 Ensure that a formal and systematic risk assessment exercise is undertaken during

the process/product development stage with specific reference to environmental

impact.

 Transfer technology to the pilot plant and main production through a properly

documented process specification which will clearly define environmental impact

and risks associated with processes, products, raw material and finished product

handling, transport and storage.

 Ensure that treatment techniques are developed for any wastes generated as a

result of the new product/process and is incorporated into the process

specifications.

QUALITY POLICY:

Hindustan Unilever Limited considers quality as one of the principal strategic objectives

to guarantee its growth and leadership in the markets in which it operates.

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The company is committed to respond creatively and competitively to the changing needs

and aspirations of their consumers through relentless pursuit of technological excellence,

innovation and quality management across their businesses, and offer superior quality

products and services that are appropriate to the various price points in the market as well

as to their commitment to building shareholder value.

The company is committed to fulfill its legal and statutory obligations and international

standards of product safety and hygiene and will not knowingly sell product that is

harmful to consumers or their belongings. It will institute systems and measures to

monitor compliance in order to meet its responsibilities to consumers.

The company will maintain an open communication channel with its consumers and

customers and will carefully monitor the feedback to continuously improve its products

and services and set quality standards to fulfill them. The company is committed to

extend its quality standards to its contract manufacturers, key suppliers and service

providers and by entering into alliances with them, to jointly improve the quality of its

products and services. This policy is applicable to production from its own facilities as

well as to production that is outsourced.

The company will periodically review this quality policy for its effectiveness and

consistency with business objectives.

The company delegates authority and responsibility for dissemination and

implementation of this policy to each Business and Unit Head.

26
 MARKET STRATEGIES

Consumer satisfaction

Indira is 20 years old, a tribal woman at Kondegaon village in Bastar district. She is just

back from the nearby jungles, collecting firewood. After attending to her baby son, she

will go to the village well to take a quick wash. Yesterday her husband brought her a

white soap, with pink petals in it. Indira had requested him to buy one, for the festival

later this evening.

Home to over 700 million people, rural India comprises not only over 70% of India's

billion-strong population, but also over 12% of the world's population. The rural

population already accounts for substantial consumption of Fast Moving Consumer

Goods and also consumer durables. About 50% of the sales of soaps & detergents are

generated in rural India. Similarly, almost half the demand for black & white television

sets, pressure cookers, table fans, sewing machines also comes from there.

Cost management:

But the potential is even larger, both in terms of consumption and penetration. The fact

that 70% of the population accounts for only 50% of even relatively well-penetrated

categories, like soaps & detergents, indicates the enormous scope of consumption-led

growth in these categories. In categories, which are relatively less penetrated, like

personal products, rural India offers an even bigger growth opportunity through greater

penetration and then consumption. For example only three out of 10 consumers in rural

markets use shampoo or skin care products. Therefore growth in such categories will

27
emerge, as more consumers purchase these products, and then continue to use them

regularly.

Hindustan Lever has taken many initiatives over the decades to create markets in the rural

hinterlands. By marketing relevant products, at affordable prices.

At the same time, if products have to come up the order in the rural purchase hierarchy,

they have to be affordable. If rural India today accounts for about half of detergents sales,

it is because HUL has developed low-cost value-for-money branded products, like

Wheel. The company has also taken initiatives to create markets even for apparently

premium products, by offering them in pack sizes, like sachets, whose unit prices are

within the reach of rural consumers. For example, initiated in the 1980s, sachets (Rs.2,

Re.1, or 50 paise) today constitute about 55% of Hindustan Lever's shampoo sales. With

media reach gradually increasing, rural consumers today, where the media has its

footprints, share the same aspirations with their urban counterparts. HUL has responded

to the trend with low unit price packs of even other products - Lux at Rs.5, Lifebuoy at

Rs.2, Surf Excel sachet at Rs.1.50, Pond's Talc at Rs.5, Pepsodent toothpaste at Rs. 5,

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

Rs.5.

Other marketing strategies:

For decades now, Hindustan Lever has also taken initiatives to circumvent the limitation

in communication channels, by innovatively leveraging non-conventional media. Among

them are wall paintings, cinema vans, weekly markets (haat), fairs and festivals. Given

the rural consumer's fascination for cinema, the cinema vans show popular movies,

interspersed with products advertisements. Weekly markets, fairs and festivals are parts

28
and parcel of rural life. The occasions are used to demonstrate product benefits and also

sell such products. Such demonstrations have played a significant role in creating, for

example, the detergents market in rural India. In recent times, such demonstrations are

being deployed to illustrate how visible clean is not hygienic clean, and how using soap is

essential to prevent easily avoidable infections.

demonstrations. The project has helped eliminate barriers to trial, and has strengthened

salience of both particular categories and brands. Similarly in 2002, Hindustan Lever has

launched a similar large-scale direct contact, called Lifebuoy Swasthya Chetana, which

already covers 70 million people in 18,000 villages of 8 states. The project is intended at

generating awareness about good health and hygiene practices, and specifically how a

simple habit of washing hands is essential to maintaining good health. The initiative will

involve interaction with students and senior citizens, who act as change agents.

Availability of HUL’s Product:

Generating awareness pays dividends only when steps are taken to ensure constant

availability of products. In rural India particularly, availability determines volumes and

market share, because the consumer usually purchases what is available at the outlet,

influenced very largely by the retailer.

Therefore, over the decades, Hindustan Lever has progressively strengthened its

distribution reach in rural India, which today has about 33 lakh outlets. Direct rural

distribution in Hindustan Lever began with the coverage of villages adjacent to small

towns. The company's stockists in these towns were made to use their infrastructure to

distribute products to outlets in these villages. But this distribution mode could only be

29
extended to villages connected with motorable roads, and it could cover about 25% of the

rural population by 1995..

HUL has in the recent past established a common distribution system in rural areas for all

its products. Given the number of brands and their packs the rural retailer usually

requires, one HUL representative can take all the products from the company portfolio

that he needs.

Over time, Hindustan Lever will further strengthen its rural distribution through mutually

beneficial alliances with rural Self Help Groups (SHGs). Over the last five years,

financial institutions, NGOs and government organisations are working closely to

establish SHGs, whose objective is to alleviate poverty through sustainable income-

generating activities. Since 2001, Hindustan Lever is implementing Project Shakti,

whereby SHGs are being offered the option of distributing relevant products of the

company as a sustainable income-generating activity.

HUL's vision for Project Shakti is to scale it up across the country by 2005, creating about 25000 Shakti

entrepreneurs, covering 100,000 villages, and touching the lives of 100 million rural consumers. Begun

with 50 groups in Nalgonda district of Andhra Pradesh, with the support of local authorities, the project has

been extended, as of now, to about 50,000 villages in 12 states. A typical Shakti entrepreneur conducts

business of around Rs.10,000 - Rs 15,000 per month, which gives her an income of about Rs 700 - Rs.1000

per month on a sustainable basis. As most of these women are from below the poverty line, and live in

extremely small villages (less than 2000 population), this earning is very significant, and is almost double

of their past household income. The full benefit of Project Shakti will be realised after some years.

30
 HINDUSTAN UNILEVER LIMITED

– DECEMBER QUARTER 2008 RESULTS

• Total Sales grow by 14.4%; FMCG Sales growth at 15.8%

• HPC and Foods grow by 17% and 9% respectively; Broad based growth across

categories

• PBIT grows 13.5%; Net Profit increases by 56%

• EPS for 2008 grows 17.6%; Final Dividend Rs 2.50 per share of Re 1/- each; Total

Dividend Rs 5.00 per share for 2008

Mumbai, February 14, 2009: Hindustan Unilever Limited (HUL) announced its results

for December Quarter 2008. Growth momentum achieved in the last three quarters has

been sustained with total sales growing by 14.4%. Domestic FMCG sales were higher by

15.8% with both Home and Personal Care (HPC) and Foods performing well.

HPC business grew by 17.3% driven by strong performance in all categories. Significant

sales growth was achieved in the highly competitive categories of Laundry and Shampoo.

Soaps recorded good growth, with Lux growing handsomely reflecting in market share

gains. All the brands in Skin category maintained their strong performance leading to a

double digit growth for the category. Consumer relevant innovations continue to drive

off-take and key innovations during the quarter include the re-launch of “Thick and

Strong” Sunsilk Pink, Lux variants for the 75-year celebrations, and the national launch

of “Jasmine Fresh” Rin Advanced Powder.

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In Foods business, Tea achieved a modest growth despite a declining market and falling

commodity prices; Coffee continued to perform well. Processed Foods business grew

strongly, albeit on a low base. The Icecream business also achieved a 33% increase in

sales, led by the impulse category. Relaunch of Knorr soup with a superior mix and

introduction of new variants was the key Foods innovation during the quarter.

Mr Harish Manwani, Chairman commented: “We have sustained the growth momentum

in December quarter and it continues to be broad based across HPC and Foods categories,

particularly, in the competitive categories of Laundry and Shampoo. This was driven by

higher investment behind our brands with exciting innovations, excellent activation, new

initiatives in Customer Management and with significantly higher levels of A&P spends.

The double digit sales growth of over 11% for the year 2005 has been achieved after a

gap of six years.

Our strategic priority remains unchanged. We will continue to leverage our focused

portfolio of powerful brands to sustain market leadership and grow our market position

across strategic brands and categories. In a competitive landscape, we shall continue to

deliver consumer value and invest behind our brands. We recognize the challenge of

inflationary cost pressures driven by crude oil prices and, in the competitive context,

achieving cost leadership across the extended supply chain continues to be a key

priority.”

32
HUL TRANSFERS TEA ESTATES INDIA TO MAXWELL GOLDEN TEA

PRIVATE LIMITED

Mumbai, March 01, 2006: Hindustan Unilever Limited (HUL) has transferred its entire

shareholding in its 100% subsidiary Tea Estates India Limited (TEIL) to Maxwell Golden

Tea Private Limited (MGT), a Woodbriar Group company on March 1, 2006. TEIL owns

8 tea estates and 6 factories for processing tea in the high-yielding belt of Tamilnadu with

an average annual output of approx. 10,500 metric tons.

The acquisition of TEIL by Woodbriar Group will provide scale and bring in synergy

benefits to Woodbriar Group, as a large portion of TEIL gardens are contiguous to the

existing tea gardens of Woodbriar Group. Canara Bank, Madurai Circle has funded the

debt component to Woodbriar Group for this acquisition.

With this disposal of shareholding in TEIL, HUL has completed its exit from its tea

plantations business both in South India and Assam. It may be recalled that HUL had sold

its interests in Rossell Industries Limited and Doom Dooma Tea Company Limited in

Assam during the last 12 months.

About HUL:

HUL is India's largest Fast Moving Consumer Goods Company, touching the lives of two

out of three Indians. HUL's mission is to "add vitality to life" through its presence in over

20 distinct categories in Home & Personal Care Products and Foods & Beverages. The

company meets everyday needs for nutrition, hygiene, and personal care, with brands that

help people feel good, look good and get more out of life. For more information visit

www.HUL.com

33
 COMPETITORS

The Procter & Gamble Company Company Profile

The Procter & Gamble Company (P&G) is a brand behemoth. The world's #1

maker of household products courts market share and billion-dollar brands. P&G's

products fall into three categories: global beauty care; global health, baby, and

family care; and global household care. It also makes pet food and water filters and

produces soap operas (As the World Turns). More than 20 of P&G's brands are

billion-dollar sellers (including Actonel, Always/Whisper, Bounty, Charmin, Crest,

Downy/Lenor, Folgers, Iams, Olay, Pampers, Pantene, Pringles, Tide, and Wella).

Acquisitive P&G bought Clairol in 2001 and a majority of Wella in 2003. Its

purchase of Gillette in late 2005 was its biggest buy in company history.

Financial Highlights
Fiscal Year End: June
Revenue (2005): 56741.00 M
Revenue Growth (1 yr): 10.40%
Employees (2005): 110,000
Employee Growth (1 yr): 0.00%

RESEARCH METHODOLOGY

The section includes the overall research design, the sampling procedure, the data

collection method, the field method, and analysis and procedure.

34
RESEARCH DESIGN

For this research project exploratory method is using

DATA COLLECTION METHOD

The data collect for the research can be classified as primary data and secondary data.

Primary data is by visiting existing customer and expected customer of Hindustan

Unilever Limited and making them fill up the questionnaire. Secondary data is from

internet, books, magazine etc.

RESEARCH INSTRUMENT

The instrument use for data collection is structured questionnaire. Question is open and

close ended depending upon the information that needed to be elicited. I am also using

the scaling technique to assess the attitude of the customer.

SAMPLING PLAN

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

sampling.

SCOPE

The Indian FMCG market currently appears to be at a crossroads, and HUL are

attempting to change customer perceptions of their brands and where specific buying

motivations appear to be replacing generalities.

35
This meanwhile, is quite unlike the west where buyers consider aesthetics, comfort and

safety, not necessarily in that order, before finalising a purchase. “It’s smarter to think

about emotions and attitudes, if marketers are to do a better job of marrying what a HUL

offers to the consumer’s image of the offerings. Another important outcome of the

research is the believability of the claims. Most of the claims are realistic and easy to

understand. Most of the people don’t understand the quality claims by HUL.

The mindset of the Indian consumer is such that he is delighted if he buys a pen a little

cheaper than his neighbour. Things are, however, slowly changing and customers at the

upper end of the market are now ready to pay more for more. I hope that this approach

will soon enter the new era, maybe not with the same intensity .

“Success will largely be determined to the extent a company can differentiate

itself in terms of intangibles that go with a Product”. Thus, success could well hinge on

the best of bundle of services that HUL provides.HUL grew from zero to the 2,268

Million $, mark and the number One FMCG company in India this year. Looking at the

present scenario it can be said that though there is lot of competition in the market but

HUL is picking up well. The landmark achievement comes in 74 years in India after

clinching its first overseas sale.

FINDINGS, DATA ANALYSIS AND CONCLUSIONS WHEN

COMPARED WITH PROCTER AND GAMBLE LTD.

Findings

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On the basis of research, we found that there is a nominal difference in the efficiency of

Hindustan leaver limited. vis-à-vis Procter and Gamble Ltd. I have reached to this

conclusion on the basis of following findings. They are as follows.

Product line

Hindustan leaver limited

HUL Home & Personnel Care

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

Rexona .

 In Laundry they have Surf Excel, Rin and Wheel.

 In skin care their brands are Fair N Lovely and Ponds.

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

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

 In Deodorants they have Axe and Rexona.

 In Colour Cosmetics they have Lakeme.

 In Ayurvedic Personal And Health Care they have Ayush.

FOODS

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

 In coffee they have bru.

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  In foods they have kissan and kinnor annpuran.

 In ice creams they have the kwality walls.

WATER

 Hindustan Unilever Limited has launched pueit, the most advanced in home

water purifier in the world.

Procter and Gamble P&G Hygiene and Health care ltd. markets several leading brands:

Whisper sanitary napkins in the Feminine Hygiene category; Health care products such as

Vicks VapoRub, vicks action 500, Vicks Cough Drops, Vicks Inhaler; skin care and

cosmetic products viz. Old Spice.

P&G Home Products Ltd. markets several leading brands. In Fabric Care P&G has two

of its world leading detergents Tide and Ariel, in Hair Care they have Pantene Pro V,

Head & Shoulders and Rejoice. In Baby Care they have Pampers.

CONCLUSION- As Hindustan Unilever Limited has more brands in its basket then

Procter and gamble so it is more close to common man and touching his or her daily life

in a more comprehensive manner.

DEALERS

Hindustan leaver limited While choosing the dealers HUL mainly emphasizes on the

‘market potential of that area, dealer’s financial position, and dealers back ground

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(previous business), present business, goodwill and risk taking capabilities ,by the good

responsibility of the dealer.

Procter and Gamble there is no difference as such in the process of selection of dealers

in Procter and Gamble also. Like HUL, P&G also considers dealer’s financial position;

present business, goodwill and risk taking capabilities.

Conclusion: Dealers of HUL are satisfied by the companies support in there sales

because the company provides them with various schemes and discounts, whereas

satisfaction of P&G dealers lies in good promotional activities, advertisement and the

flexibility that the company provides them. According to the senior officials of P&G it

was found that it’s a volume based company, hence all the above stated parameters helps

the dealer to attract more and more customers.

MODE OF TRANSPORTATION

Hindustan leaver limited; HUL uses modified trucks and rails to deliver the products

from various production sites to the dealers. They are using new state of the art

technology so that they can even track every single bottle of shampoo. Transportation

cost is shared by HUL and the dealer.

Procter and Gamble P&G is also using road and railway transportation system to

deliver product from various production sites to the dealers. They are also using latest

Information Technology to track there consignment whose backend is managed by

infosys. Each dealer has to keep the Good Receipt Note (GRN) number and report of the

whole items of delivered products. Transportation cost is paid by P&G.

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Conclusion: Both P&G and HUL uses advanced tracking technology to track the goods

and both companies use railways and roadways for transporting there products. In HUL

transportation cost is shared by HUL and the dealer, where as at P&G, transportation cost

is paid by P&G.

FLEXIBILITY

Hindustan leaver limited As far as flexibility is concerned; our group found that HUL

provides more flexibility in terms of delivery of produce. HUL has there own warehouses

in every state and if the dealer orders more , he is supplied with the products in time.

Procter and Gamble As far as flexibility is concerned; our group found that P&G does

not provides more flexibility in terms of delivery of produce and in taking order from

dealers.

Conclusion: our group has found that Dealers of HUL are more satisfied than the dealers

of P&G and therefore HUL is a step ahead in terms of flexibility of placing orders and

accepting orders from the dealers.

DISTRIBUTION CHANNEL STRUCTURE

Hindustan Unilever limited- Hindustan Unilever Limited channel structures consist of

whole seller, mass retailers, rural and modern trade. Their new approach to distribution is

holistic and seeks a three way convergence of product availability brand communication

and brand experience. They are reinventing distribution—creating new channels and

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redefining the way current channels are serviced. They are building new capabilities in

training the large number of people involved in these initiatives.

Procter and gamble- Procter and gamble’s channel structure also have whole sellers,

mass retailers. They are revamping the company’s distribution system using efficient

consumer response {E C R} principles. The new distribution system has given the

company considerable cost and process efficiencies while significantly availability and

visibility of the company’s product in the stores.

Conclusion- Our group has found that H.L.L. has more effective and efficient

distribution network as compared to P & G, which increases the availability and presence

of HUL product. HUL is also given emphasis on penetrating the rural market as well.

DEALING WITH UNSOLD & DAMAGED MERCHANDISE

Hindustan Unilever Limited-It depends on the condition and type of the product. If

company feels that it is not the fault of the dealer then company would return it, unsold

products are mostly taken back by HUL

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Procter And Gamble- P & G replaces the damaged product with the new one, it means

that the damaged product are replaced by new product.

Conclusion- Our group has found that both the companies take back the unsold product

however P & G is more flexible in returning the damaged product as compared to the

HUL. Hence P & G is more flexible here.

PERFORMANCE APPRAISAL SYSTEM

Hindustan Unilever Limited- The performance appraisal system in Hindustan Unilever

Limited is done under the supervisory of the Appraisal supervisor. The supervisor keep

track of the performance of the employees and based on their performance he choose the

right method of performance appraisal. The main method of performance appraisal that

have been adopted by Hindustan Unilever Limited are 360 degree appraisal and

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supervisory appraisal methods. it is done as an early exercise and performance appraisal

parameter is the past performance of the employees.

Procter And Gamble- the performance appraisal system in Procter and gamble is also

done under the supervisory officer and almost same method are used as in the Hindustan

Unilever Limited .

Conclusion- the conclusion that our group has found that there is hardly any differences

is the performance appraisal methods in both the companies .both the companies are

taking almost the same measures and same parameters for performance appraisal ,

however both the company were not willing to disclosed any changes brought in

performance appraisal system during the past five years .both of the companies said that

there have been change in some areas and which has shown positive results, but not

willing to give any reasons and what changes have been brought.

TARGETS

Hindustan Unilever Limited : HUL has different channel members with specified

targets and they are intended to increase sales, HUL has also made changes in channel

members during 2001-2006 to increase sales of the company. Every channel member has

to fulfill there given targets, channel members expect the company of ROI. Every

channel member gets credit period of two weeks. There was also change in performance

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appraisal system during 2001-2006 to improve sales. HUL has also made changes in

commercial terms intended to increase the sales in different channels and also to increase

profit margins to company.

Procter And Gamble- P&G also has different channel members with specified targets

and they are intended to increase sales .P&G also made changes in channel members

during 2001-2006 to increase sales of the company. The channel members expect ROI

depending on there knowledge and on there performance to. Channel members get credit

period of 30 days. Payment terms of P&G are also flexible to the channel members and

P&G also has flexible payment terms P&G also offers many discounts to these channel

members. P&G has made many changes to there commercial terms during 2001-2006 to

increase sales.

Conclusion-Both HUL and P&G are flexible to channel members, but HUL runs some

monopoly over the market by offering a credit period of only two weeks where as P&G

offers credit period of 30 days. HUL also sets targets to there channel members and

provides very less margins to dealers compared to P&G.

SALES FUNCTIONING

Hindustan Unilever Limited : HUL is emphasizing on rural areas through project

Shakti these days and sales also have been increased and HUL does not have any sales

outlets HUL assigns sales territory to there sales persons according to there skill and

experience and assigns targets to them. HUL adopts on the job and off the job training

44
system to there sales force it is emphasized on improving skill and experience of the sales

personnel. Sales personnel are motivated through incentives and promotions.

Procter And Gamble: P&G has increased the number of outlets in the country and the

population in the area also increased and there is no effect on sales. P&G sets targets to

there sales force on the basis of increase or decrease in demand and also according to the

previous sales , sales territories are assigned according to the capabilities of the sales

personnel, responsibility of the sales personnel is to clarify the doubts of the customer

and make sales of the product. P&G trains their sales force by on the job training and

training process is emphasized on skill and experience, P&G has also brought many

changes in the training system that has affected its sales too. P&G motivates their sales

force by providing them with targets and incentives.

Conclusion; Both P&G and HUL trains their sales force and has a good performance

appraisal system, P&G does appraisal on a monthly basis depending on increase and

decrease of sales where as HUL does it once in a year.

RECOMMENDATIONS

Both the companies having good market share in India and it keep on increasing. Both

the co. i.e. HUL and P&G should open exclusive shop. HUL is already having exclusive

shop in Mumbai called SANGAM STORE. But it is only in India so it should be

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increased. The employee should be given uniforms in which the name of the company

should be printed, by doing this the sales people get motivated. These shops should be

opened for 24 hours. They should offer 24 hours free home delivery system. The delivery

vehicle should be attractive the name of the company should be printed in that so that it

becomes the sources of advertisement.

The companies should emphasis on its advertisement, there should be BRAND FIT in

that. For example when lux launch its advertisement with sharukh khan with girls. It was

heavily criticized because it was not fit with the brand. It adversely affect the opinion of

the customer and it results in decrease in sales.

Both companies should emphasis their business in areas. They should penetrate their

business in the rural areas. 69% of the Indian population lives in rural areas. There is

huge market there and very less market has been penetrated. Both these companies

should concentrate on rural areas. P&G has been hardly been seen in the rural areas.

They should increase their CSR activities in northern India. At present they are currently

doing their CSR in southern India. So they should increase their activities in north India

also.

SUGGESTIONS

Key attribute components:

♦ Value for money and Customer Care

♦ Operational attributes.

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 ♦ Physical attributes.

♦ Brand Image.

♦ Customer Specific Details.

In any correspondence with the customers the message should be sent in these

components only to have the maximum benefit from the advertisement. Also these

components should be dealt with independently. The basic need of the customer need to

be addressed which is actually not much expensive and better quality.

HUL sales growth in june 2004 was decreased due to the problem with promotion and

pricing. Although being the most competitive product on the basis of the Market

Operating Price (MOP), the shampoos are still not selling much. This is perhaps due to

the bargaining stress on the customer and the weak push given by the dealer to the

particular item, when actually it should be sold like a high volume product.

Another serious suggestion is that HUL must give good attention to their all the products

rice and all are not getting much attention. The dealers don’t provide much support to the

customers in making them understand the real Quality behind them. Either, the technical

details should be presented in a clearer manner or the dealers need to be educated

properly.

LIMITATIONS

Everything in this world has its own advantages and disadvantages which shows ‘nothing

is perfect’.

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

1. TIME CONSUMING: It is very much obvious that it is a time consuming process. So

much time has been spent for this purpose.

2. LOW PARTICIPATION: Obviously many respondents have not participated in this

and have also created some problems which simply shows that they were not

interested.

3. BIASNESS: Sometimes interested customers were also biased so the collected figures

involve both positive and negative figures.

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

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

BIBLIOGRAPHY

1. The Times of India and Hindustan Times

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2. The Economic Times

3. Company’s brochure

4. www.google.co.in

5. www.HUL.com

ANNEXURE

SPECIMEN

CUSTOMER SURVEY QUESTIONNAIRE

49
Name

Age

Address

Q1. How many members are there in your family?

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

YES ______ NO ______

If Yes, from where?

Newspaper Magazines

Television Others _______

Q3. Are you using any HUL product?

YES NO

Q4. If Yes, then are you satisfied?

50
 YES NO

Q5. If No, then reason being

Poor quality High prices

No services Others

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

Personal Wash

Lux __________ Breeze ___________

Dove __________ Others ___________

Laundary

Surf Excel _______ Rin ________

Wheel Others

Skin Care

Fair&Lovely ________ Pond’s ________

Sunslik Naturals ________ Others ________

Oral Care

Pepsodent ________ Close-up ________

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 Others ________

Deodorants

Axe ________ Lakme ________

Rexona ________

Colour Cosmetics

Lakme ________ Others ________

Q7. What Recommendations or suggestions would you like to give for

improvement of our products?

RETAILER SURVEY QUESTIONNAIRE

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

appropriate answer)

a).Yes b). No .

52
 (If the answer is yes then go to question number: 3 )

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

keeping its products?

Yes No

a). erratic supply

b). lack of demand

c). low margin

d). no supplier

e). don’t know about the company

3. Which products of HUL do you keep?

Personal Wash

Lux __________ Breeze ___________

Dove __________ Others ___________

Laundry

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 Surf Excel Rin ________

Wheel Others

Skin Care

Fair &Lovely ________ Pond’s ________

Sunslik Naturals ________ Others ________

Oral Care

Pepsodent ________ Close-up ________

Others ________

Deodorants

Axe ________ Lakme ________

Rexona ________

Colour Cosmetics

Lakme ________ Others ________

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

1. Very High 

2. High 

3. Average 

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 4. Rarely 

5. Very Rarely 

6. Never 

5. From whom do you purchase your product?

1). Distributor 

2). Dealer 

3). Agency 

4). Wholesaler 

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

1. Excellent 

2. Above Average 

3. Average 

4. Below Average 

5. Extremely Poor 

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7. How many dealers are there in the district?

a).One 

b)Two. 

c)Three. 

d)More than three. 

8. Which vehicle do they mainly use for delivery?

1). Two wheeler 

a). scooters__ , b). motorbike__.

2) Three wheeler 

3) Four wheeler 

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

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

___________________________________________________

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___________________________________________________.

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

_________________________________________________

_________________________________________________

PERSONAL DETAILS:

Name: ___________________________________________

Address: _________________________________________

Cont. No.: ________________________________________

Signature: ________________________________________

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