A PROJECT REPORT

ON
STUDY OF SALES AND DISTRIBUTION
MANAGEMENT IN (HUL)

BATCH 2022 -2024

MODI INSTITUTE OF MANAGEMENT AND
TECHNOLOGY,

Kota (RAJASTHAN)
Guided by:
Prepared by: Muskan Tanwar
Roll no: 22MMOXX637

1
 ACKNOWLEDGEMENT

Project development is not an easy task. It requires corporation and help of various people. It al-
ways happens that word run out when we are thankful and sincerely want to inspire my feeling
of gratitude towards the one when helped in the completion of the project. First my grateful
thank to ……………………………. ……………………………. for the golden opportunity. To-
day after completing my project work, I am immensely satisfied. There were many times during
the span of making the project when the clock beats you to learn out of energy and you just want
to finish at forever.

2
 DECLARATION

I’am Muskan Tanwar the student of third year MIMT (MBA Se-
mester 3rd) 2022-2024 hereby declare that I have completed the
project report on SALES AND DISTRIBUTION MANAGE-
MENT IN (HUL).

The information submitted is true and original to the best of my

knowledge.

Name of the Student

Muskan Tanwar
.
Roll no
. 22MMOXX637

Signature of Student
: _______________

3
 TABLE OF CONTENTS

CONTENTS

1: Executive Summary

2: Objective of the Study

3: Industry Profile

4: Company Profile

5: SWOT Analysis

6: Methodology of data collection

7: Analysis and Findings

8: Recommendations

9: Conclusion

4
 EXECUTIVE SUMMARY

The main objective of the project is to get the full knowledge of the distribution

network of the products of the HUL and how they are using the distribution network

as a key differentiating factor from its competitors. This is also to find the preferences of

customer and their market knowledge and product information, information about the presence

of the rivals of HUL and all the other options they have in the market. HUL are also look -

ing to tap the market in rural sector, so they also taking into consideration the needs

and wants of the people there. The study was done with reference to many products of HUL and

their distribution channel in DURG, BHILAI of (C.G).

It was a useful learning to understand the working of HUL.

5
 OBJECTIVE OF THE STUDY

 To understand the distribution network of Hindustan Unilever Ltd.

 To find the ways to use the distribution network as the key differentiating
factor from its competitors.

Scope of the study

 The scope of the study is confined to distribution networks in DURG, BHI-

LAI only, as the project duration is short time.

Limitation of study

 The distributors showed lack of interest due to time constraint or some other
personal issues.

6
 INDUSTREY PROFILE

Fast Moving Consumer Goods (FMCG) goods are popularly named as consumer-packaged
goods. Items in this category include all consumables (other than groceries/pulses) people buy at
regular intervals. The most common in the list are toilet soaps, detergents, shampoos, toothpaste,
shaving products, shoe polish, packaged foodstuff, and household accessories and extends to cer-
tain electronic goods. These items are meant for daily of frequent consumption and have a high
return.

The Indian FMCG sector with a market size of US$14.8 billion is the fourth largest sector in the
economy. The FMCG market is set to double from USD 14.7 billion in 2008-09 to USD 30 bil-
lion in 2012. FMCG sector will witness more than 60 per cent growth in rural and semi-urban In-
dia by 2010. Indian consumer goods market is expected to reach $400 billion by 2010.Hair care,
household care, male grooming, female hygiene, and the chocolates and confectionery categories
are estimated to be the fastest growing segments. At present, urban India accounts for 66% of to-
tal FMCG consumption, with rural India accounting for the remaining 34%. However, rural India
accounts for more than 40% consumption in major FMCG categories such as personal care, fab-
ric care, and hot beverages. In urban areas, home and personal care category, including skin care,
household care and feminine hygiene, will keep growing at relatively attractive rates. Within the
foods segment, it is estimated that processed foods, bakery, and dairy are long-term growth cate-
gories in both rural and urban areas. The growing incline of rural and semi-urban folks for

7
FMCG products will be mainly responsible for the growth in this sector, as manufacturers will
have to deepen their concentration for higher sales volumes.

Major Players in this sector include Hindustan Unilever Ltd., ITC (Indian Tobacco Company),
and Nestlé India, GCMMF (AMUL), Dabur India, Asian Paints (India), Cadbury India, Britannia
Industries, Procter & Gamble Hygiene and Health Care, Marico Industries, Niram, Coca-Cola,
Pepsi and others. As per the analysis by ASSOCHAM, Companies Hindustan Unilever Ltd,
Dabur India originates half of their sales from rural India. While Colgate Palmolive India and
Marico constitutes nearly 37% respectively, however Nestle India Ltd and GSK Consumer drive
25 per cent of sales from rural India.

A rapid urbanization, increase in demands, presence of large number of young populations, many
opportunities is available in the FMCG sector. The finance minister has proposed to introduce an
integrated Goods and Service Tax by April 2010.This is an exceptionally good move because the
growth of consumption, production, and employment is directly proportionate to reduction in in-
direct taxes which constitute no less than 35% of the total cost of consumer products - the high -
est in Asia. The bottom line is that Indian market is changing rapidly and is showing unprece-
dented consumer business opportunity.

8
 COMPANY PROFILE

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. Vanas -
pati 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 Com-
pany, 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
52.10% equity in the company. The rest of the shareholding is distributed among about 360,675
individual shareholders and financial institutions.

The erstwhile Brooke Bond's presence in India dates back to 1900. By 1903, the company had
launched Red Label tea in the country. In 1912, Brooke Bond & Co. India Limited was formed.
Brooke Bond joined the Unilever fold in 1984 through an international acquisition. The erstwhile
Lipton's links with India were forged in 1898. Unilever acquired Lipton in 1972 and in 1977 Lip-
ton Tea (India) Limited was incorporated.

9
Pond's (India) Limited had been present in India since 1947. It joined the Unilever fold through
an international acquisition of Chesbrough Pond's USA in 1986.

Since the very early years, HUL has vigorously responded to the stimulus of economic growth.
The growth process has been accompanied by judicious diversification, always in line with In-
dian opinions and aspirations.

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 company to ex-
plore every single product and opportunity segment, without any constraints on production ca-
pacity.

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 Com-
pany (TOMCO) merged with HUL, effective from April 1, 1993. In 1996, HUL and yet another
Tata company, Lakme Limited, formed a 50:50 joint venture, Lakme Unilever Limited, to mar-
ket 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, Kim-
berly-Clark Lever Ltd, which markets Huggies Diapers and Kotex Sanitary Pads. HUL has also
set up a subsidiary in Nepal, Unilever Nepal Limited (UNL), and its factory represents the
largest manufacturing investment in the Himalayan kingdom. The UNL 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 sig-
nificant interests in Instant Coffee. In 1993, it acquired the Kissan business from the UB Group
and the Dollops Ice-cream business from Cadbury India.

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HUL launched a slew of new business initiatives in the early part of 2000’s. Project Shakti was
started in 2001. It is a rural initiative that targets small villages populated by less than 5000 indi -
viduals. It is a unique win-win initiative that catalysis rural affluence even as it benefits business.
Currently, there are over 45,000 Shakti entrepreneurs covering over 100,000 villages across 15
states and reaching to over 3 million homes.

In 2002, HUL made its foray into Ayurvedic health & beauty center category with the Aayush
product range and Aayush Therapy Centers. Hindustan Unilever Network, Direct to home busi-
ness was launched in 2003 and this was followed by the launch of ‘Pure-it’ water purifier in
2004.

In 2007, the Company name was formally changed to Hindustan Unilever Limited after receiv-
ing the approval of shareholders during the 74th AGM on 18 May 2007. Brooke Bond and Surf
Excel breached the Rs. 1,000 crore sales mark the same year followed by Wheel which crossed
the Rs. 2,000 crore sales milestones in 2008.

On 17th October 2008, HUL completed 75 years of corporate existence in India.

BRANDS

HUL is the market leader in Indian consumer products with presence in over 20 consumer cat-
egories such as soaps, tea, detergents, and shampoos amongst others with over 700 million In-
dian consumers using its products. Sixteen of HUL’s brands featured in the ACNielsen Brand
Equity list of 100 Most Trusted Brands Annual Survey (2008). According to Brand Equity, HUL
has the largest number of brands in the Most Trusted Brands List. It has consistently had the
largest number of brands in the Top 50, and in the Top 10 (with 4 brands).

The company has a distribution channel of 6.3 million outlets and owns 35 major Indian brands.
Its brands include Kwality Wall's ice-cream, Knorr soups & meal makers, Lifebuoy, Lux, Pears,
Breeze, Liril, Rexona, Hamam and Moti soaps, Pure-it water purifier, Lipton tea, Brooke
Bond (Roses, Taj Mahal, Taaza, Red Label) tea, Bru coffee, Pepsodent and Close

11
 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 and
Lovely creams, Lakme beauty products, Clear, Clinic Plus, Clinic All Clear, Sunsilk and Dove
shampoos, VIM dishwash, Ala bleach, Domex disinfectant, Modern bread, Axe deo sprays and
Comfort fabric softeners.

MILESTONE ACHEIVED

 Five of HUL's leading brands – Lux, Dove, Pears, Clinic Plus and Sunsilk – won the
Reader's Digest Trusted Brand 2008 Awards.
 Four HUL brands featured in the top 10 list of the Economic Times Brand Equity's Most
Trusted Brands 2008 survey
 HUL was awarded the Bombay Chamber Civic Award 2007 in the category of Sustain-
able Environmental Initiatives.
 HUL was selected as the top Indian company in the FMCG sector for the Dun & Brad-
street - American Express Corporate Awards 2007.

12
 HINDUSTAN UNILEVER LIMITED INDIA’S LARGEST FMCG
COMPANY

HUL DISTRIBUTION NETWORK

MANUFACTITS ALL ACROSS INDIA

C&F 1 C&F 2 C&F 3 C&F 4 C&F 5 C&F 6 C&F 7

13
STOCKISTS STOCKISTS STOCKISTS STOCKISTS STOCKISTS STOCKISTS STOCKISTS
 WHOLESALERS

RETAILERS

CUSTOMERS

This is the whole Distribution Chain of HUL to cover the rural market. The company have re-
markably worked upon to make the supply chain from manufacturers to retailers simple with
very few numbers of mediators and jobbers. It has helped them to maintain the transparency in
the cycle and have let them establish a prompt delivery process. The products are manufactured
in the factories across India and then is supplied from there to the various Carriage and Forward-
ing (C&F) units which are 5-10 per state depending on the area they have to cover and are estab -
lished by the company. These C&F units then supply the products to the various Wholesalers
confined to their area only and according to the wholesalers’ demand. The wholesalers then sup-
ply the products to the semi-wholesalers and the retailers as per the volume of their order. Then
the semi-wholesalers deliver the products to the retailers and customers.

MANUFACTURER

STAGE 1-
C&F

14
 In this stage the products reach to the Carriage and Forwarding unit from various manufacturing
units established all across India. The volume of the delivery depends upon the quantity
required/ordered by the C&F unit. The depot sends the request of the volume of the products to
the Head Office, which then order the various factories to supply the products to the mentioned
depot. The supply is met within a week. HUL has 45 C&F’s with 7000 stockists and 2000+ sup-
pliers and associates to target the market.

C&F

STAGE 2-

WHOLESALERS

The C&F then supplies the products according to the demand of various wholesalers. Each of the
depot cover a region assigned to them.

Each C&F acquires 5-7 trucks and hire 4-5 more trucks to supply products everyday.They work
on the concept of advance payment by DD by the wholesalers and deposit them in the bank
which is transferred to the head office.

HUL DISTRIBUTION NETWORK IN RURAL MARKET

ALL ACROSS INDIA

C&F 1 C&F 2 C&F 3 C&F 4 C&F 5 C&F 6 C&F 7

STOCKISTS STOCKISTS STOCKISTS STOCKISTS STOCKISTS STOCKISTS 15

STOCKISTS
 WHOLESALERS

AGENTS

RETAILERS

CUSTOMERS

IN Rural Geographic Regions of India, the product which should be made by the manufactures
can be delivered through by C & F unit and these unit provide stock in the hand of the merchant
wholesalers. Wholesaler delivers the product or stock to the different retailers (who sales stock in
breaking bulk) through by agents. The main difference in urban and rural areas distribution net-
works are the agent who made relation between merchant wholesalers to retailers. Retailers can
sell stock in small quantity to the ultimate consumers.

SWOT ANALYSIS

Strengths
HLL enjoys a formidable distribution network covering over 3400 distributors and 16million
outlets. This helps them maintain heavy volumes, and hence, fill the shelves of most outlets. The
new sales organization named 'One HLL' brings "Household and Personal Care “and foods dis-
tribution networks together, thereby aligning all the units towards the common goal of achieving

16
success. HLL has been continuously able to grow at a rate more than growth rate for FMCG Sec -
tor, thereby reaffirming its future stronghold in Indian market. Project Shakti Rral In-
dia is spread across 627,000 villages and possesses a seriousdistribution challenge for FMCG
Cos. HLL has come up with a unique and successful initiative wherein the women from the rural
sector market HLL products, and hence, are able to reach the same wavelength as of the common
man in village. Apart from product reach, the initiative also creates brand awareness amongst the
lower strata of society. This has brought about phenomenal results.

Weakness

HLL's market dominance, originating from its extensive reach and strong brand presence, al-
lowed it to raise the prices even as raw materials were getting cheaper. Hence, though the vol-
umes decreased, the margins grew, and company was able to earn more profits. But higher mar-
gins attracted competition in areas of operations. HLL's strategy remained focused on creating
power brands and earning higher margins. It was not left with any other option but to try cutting
down the costs to protect volumes, if not increase it. As shown in above figure, the key differen-
tiators for an FMCG player are ability to call shots and pricing power, and HLL has shown
weakness over both the refactors. HLL's weakness was its inability to transform its strategies at
the right time. They continued with the same old strategy which helped them gain profits but was
not genuine in this change environment. HLL's risk aversion and market myopia led to
stagnation of business, and ferocity of competition forced it into a defensive mode. Lack of
pricing power in core business and absence of growth drivers have put HLL on a deflationary
mode.

Opportunities

India is one of the world's largest producers of FMCG goods, but its exports are miniscule as
compared to production. Though Indian Cos. have been going global, their focus is more towards

17
Asian countries because of the similar preferences. HLL is one of the top companies exporting
FMCG goods from India. An expansion of horizons towards more and more countries would
help HLL grow its consumer base and henceforth the revenues. Opportunity in Food Sector - The
advent of modern trade has opened greater opportunities for HLL to diversify its brand and
strength its food division. It could look at introducing products from its parents stable like mar-
garines and could also look at expanding its Knorr range of products. Well-placed to take advan -
tage of future FMCG Growth – HUL reach out 80% of 207 million households in the country
through various brands. It has a very well-defined product portfolio spread across many product
categories. Penetration levels for some major Categories like skin-cream (22%), shampoo (38%),
toothpaste (48%) and processed foods, continue to remain low offerings but great growth oppor-
tunities products.

Threats

ITC has reduced its dependence on the cigarettes business - Contribution of the core business in
revenues has come down from 87% in FY99 to 70% in FY05. Over a period of five years, ITC
has extended its presence into areas like foods, retailing, hotels, greetings, agro, paper, etc. These
are businesses that can give it growth impetus in the long run. With ITC gaining momentum in
each of these businesses, it is turning into a consumer monolith, and hence, the greatest threat to
HLL's Business. SSKI India has gone on to say, "they maintain Out performer on ITC with a
price target of Rs. 2200, while us under performer call on HLL remains unaltered (price target of
Rs. 160).

METHODOLOGY OF DATA

COLLECTION
The Data for this project was collected through Primary and Secondary sources.

18
 PRIMARY DATA:

 It is essential to collect PRIMARY DATA to make sample survey. A successful and the most
popular technique of data collection is through a questionnaire, thus a questionnaire was
framed and distributed manually among different people who are residing in the CHATTIS-
GARH region.

SECONDARY DATA:

 This Report is dedicated to Secondary information about company profile and various de-
cisions taken by the company regarding product line expansion, product line pruning, and
various other matters related to product line. I have collected this information with the
help of internet and journals. This report gives you relevant information about various ac-
tivities taken by Hindustan Unilever limited.

DATA COLLECTION TOOL:

 I have collected all the information with the help of Internet, Journals and Secondary
source.

SAMPLE PLAN

 Units- People residing in the Chhattisgarh region.

 Size- 43 respondents.

ANALYSIS OF DATA

19
 Three preliminaries should be followed for analyzing the data: -

1. Editing
2. Classifying

ANALYSIS AND FINDINGS

1. Do you keep products of HUL in your outlet/shop?
a). Yes 88 b). No 12

Do you keep products of HUL in your outlet/shop?

100
88
90

80

70

60

50

40

30

20
12
10

0
Yes No

20
2. Why don’t you keep the products of HUL in your shop or why did you stop keeping
its products?

a). erratic supply 4

b). lack of demand 2

c). low margin 2

d). no supplier 3

e). don’t know about the company 1

Why don’t you keep the products of HUL in your

shop?

4.5
4
4
erratic supply
3.5
3
3 lack of demand

2.5
low margin
2 2
2
no supplier
1.5
1
1 don’t know about the
company
0.5

0
1

21
1). Distributor 25

2). Dealer/ Agent 40

3). Agency 18

4). Wholesaler 17

From whom do you purchase your product?

17
25

Distributor
Dealer/ Agent
18 Agency
Wholesaler

40

22
4. How do you rate the delivery process of the distributor/dealer?

a) Excellent 25

b) Above Average 33

c) Average 38

d) Below Average 4

e) Extremely Poor 0

How do you rate the delivery process of the

distributor/dealer?

4 0

25

Excellent
Above Average
38
Average
Below Average
Extremely Poor

33

23
5. Are you satisfied with the distributor/dealer behavior?

Yes 68

No 32

Are you satisfied with the distributor/dealer behavior?

80

68
70

60

50
Yes
40
32 No
30

20

10

0
1

6. Are you satisfied with the delivery of the goods supplied by distributor/ dealer?

24
Yes 71

No 2

Are you satisfied with the delivery of the goods supplied by

distributor/ dealer?

29

Yes
No

71

25
7. Are they providing you adequate supply of goods?

Yes 76

No 24

Are they providing you adequate supply of goods?

80 76

70

60

50
Yes
40
No
30 24

20

10

0
1

26
8. Is the distributor taking the damages/ compensation regularly?

Yes 78

No 22

Is the distributor taking the damages/ compensation regularly?

90
78
80

70

60

50 Yes
40 No

30
22
20

10

0
1

27
Cash 62

Credit 24

Cheque 14

What is the mode of payment to the distributor/ Dealer by

Retailer?

14

Cash
Credit
24
Cheque
62

28
10. Are they providing you any discount on cash payment?

Yes 52

No 48

Are they providing you any discount on cash payment?

11.

53

52
52

51

50
Yes

No
49

48
48

47

46
1

Any extra benefit for the increment of the sales given by them?

29
Windows Display 75

Long term sales plan 20

Canopy 5

Any extra benefit for the increment of the sales given by them?

20

Windows Display

Long term sales plan

75
Canopy

30
12. Can agents regularly make aware you about the new products of HUL regular or not?

Yes 72

No 28

Can agents regularly make aware you about the new products
of HUL regular or not?

80
72
70

60

50
Yes
40
No
28
30

20

10

0
1

31
FINDINGS
1. 88% of distributer keep HUL product in their outlet.

2. 25% of retailor purchase our product from distribute.

3. 40% of retailor purchase our product from dealer or agents.

4. 18% of retailor purchase our product from agencies.

5. 17% of retailor purchase our product from wholesaler

6. 68% of retailor are satisfied with our distributer or dealer behavior.

7. 71% of retailor satisfied with the delivery of goods supply by distributer /dealer.

8. 76% of dealer providing adequate supply if goods

9. 52% of dealer providing cash discount.

10. 72% of distributer provide information about new launch of HUL products.

11. Majority of 33% of retailor do not keep the stocks due to low margins.

RECOMMENDATIONS

 HUL should serve channel partners and customers by replacing damaged products con-
tinuously.
 HUL should improve the response time and try to deliver products on time.
 HUL should encourage to the dealer to provide cash discount.
 HUL should increase the quality of packaging of their product to decrease the damages.
 Launching for several sales’ promotional schemes for existing wholesaler and distributors
instance, it has started the ‘Vijeta – Rista jeet ka’ scheme last year to provide a platform
for the wholesaler and HUL to grow the business by earning points and redeem them.

32
 CONCLUSION

With the study of the topic, we can know about the distributor relationship with the retailers of
the largest firm in retail Sector are:

HINDUSTAN UNILEVER LIMITED.

With the study it can be easily known how the retailers are been selected HINDUSTAN
UNILEVER LIMITED (Super value store) and what the terms and conditions regarding the se-
lection of the retailers and what are the benefits being provided to the retailers and what are the
various benefits being provided to the retailers to increase their sales.

The company is making their strategies regarding the customer and the various product assort-
ment being provided to the retailers and whether the distributor is helping the retailers in manag-
ing the demand of the retailers and also the sales agent behavior and delivery man behavior af -
fects the sale of the retailers as well as the distributor.

So, my study is visualizing the distribution channel of the HINDUSTAN UNILEVER LIMITED
in rural areas, and they say that retailers liked

33
ARTICLES:
WEBLIOGRAPHY

Books: -

C R Kothari (Research Methodology)

Websites: -

www.hul.com

www.google.com

Magazines & Newspapers: -

Business World

Economic Times

The Times of India

34