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A THESIS REPORT ON CONSUMER BEHAVIOUR IN FULFILLMENT OF THE REQUIREMENTS FOR POST GRADUATE DEGREE IN MANAGEMENT (PGDM) SPECIALIZATION MARKETING

NG (2011- 2013) UNDER THE GUIDANCE OF: PROF. CHABRA SUBMITTED BY: KAVISH MISHRA BATCH: SS/11-13/HS2 THESIS ID: SS/11-13/Mumbai/IIPM

THE INDIAN INSTITUTE OF PLANNING & MANAGEMENT IIPM TOWER 32, S. V. ROAD BANDRA (W) MUMBAI - 400050
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Abstract
This study reviews the course of consumer behaviour analysis, a research programme that employs the findings and principles of behavioural research toelucidate consumer behaviour and marketing management. Although attempts have been made from time to time to integrate a behaviour analytic perspective into marketing research, the tendency has been to concentrate on the potential contribution of operant psychology to managerial practice rather than to examine the potential of behaviourism to provide a theoretical basis for marketing and consumer research. Moreover, concentration on research with animal subjects has severely limited the relevance of behaviour analysis to marketing. The study therefore pursues three themes: (1) to explicate recent developments in behaviour analysis, such as the analysis of verbal behaviour; (2) to take account of work by behaviour analysts on economic choice and to apply its lessons to understanding consumer behaviour and marketing action in naturally occurring environments; (3) to establish the requirements of an interpretive approach to consumer behaviour and marketing which is not limited to an experimental analysis of choice

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DECLARATION

I Kavish Mishra have made this report in partial fulfillment of the requirement of the MBA program of IIPM, Mumbai. The project is based on my knowledge and interpretation of assessing the Consumer Behaviour and the report has been compiled at home but with the help of my supervising guide. The data mentioned in the report is not necessarily provided by the organization. No particular person from the organization is responsible for any kind of discrepancies arising out of this report.

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CERTIFICATE OF ORIGINALITY

I hereby declare that the research paper titled Consumer Behaviour my own work and to the best of my knowledge. It contains no materials previously published or written by another person, nor material which to a substantial extent has been accepted for the award of any degree or except where due acknowledgment, is made in the thesis. Any contribution made to the research by others, with whom I have worked at IIPM or elsewhere, is explicitly acknowledged in the thesis.

I also declare that the intellectual content of this thesis is the product of my own work, except to the extent that assistance from others in the projects design and conception or in style, presentation and linguistic is acknowledged. I also verified the originality of contents through plagiarism software.

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SYNOPSIS
. The company under study is the FMCG behemoth Hindustan Lever Limited (HUL). A partially owned subsidiary of Unilever, HUL was set up in India in 1931. Today it has gained the status of the biggest FMCG player in the country. With a wide product base and a mass-market focus, HUL touches the lives of people all over India

The cos focuses on efficient delivery to consumers with improved supply chain, brand building initiatives & innovation which has

helped the company to sustain its leadership position in the overall (FMCG).

All around the world, people reach for Unilever products. Their brands are trusted everywhere and, by listening to the people who

buy them; theyve grown into one of the world's most successful consumer goods companies. In fact, 150 million times a day, someone somewhere chooses a Unilever product. HUL has responded to the market challenge by studying its shortcomings, identifying failing strategies, and adopting new and innovative

methods to re-gain market share. The project covers in detail study of hul, its history, brands offered, mergers & acquisitions, subsidiaries & competitors. It also includes its business description across various categories & strategies to achieve that business, its

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best marketing practice along with marketing effort (i.e. transition to rural market), its R& D centers and areas of research.

The project covers HULs growth both organic and inorganic. Acquisitions like that of and mergers like Lakme Lever limited were well thought out with clear targets in mind. Strategies such as these have been responsible for the extensive distribution network that HUL has today. It has strong and well-differentiated brands with leading share positions, and its brand portfolio includes both global Unilever brands and local brands. The project covers detailed description of recent product launches, its brand extensions & its rural marketing campaigns (i.e. project Shakti, I-shakti, lifebuoy swasthya chetana, operation bharat (unilever product strategy), operation streamline (unilever distribution strategy). Followed by SWOT analysis of Hindustan unilever limited.

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TABLE OF CONTENT

CONTENT

PAGE NO.

Title Page

Abstract

Declaration

Certificate of Originality

Synopsis

Chapter 1 : Introduction to the topic of study

Chapter 2 : Research objective and Methodology

11

Chapter 3 : Literature Review

14

Chapter 4 : Primary Findings and Analysis

18

Chapter 5: Conclusion

81

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Chapter 7:References

84

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CHAPTER 1 Research Design

Objective of the Study

To study about Growth of FMCG sector and challenges To study the emergence of Marketing and consumer behavior for HUL Brand To study about various strategies used in urban and rural marketing

To about role of Media for promotion of HUL To study about project shakti and its impact

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Significance of the Study

The project helps us in understanding about the importance of the various strategies for urban and rural marketing for HUL. It facilitates the understanding success of Project sakti in rural markeing doe HUL This study will be primarily beneficial of marketing since they can understand the innovators and non innovators perception of the products of HUL Furthermore, the results of this study may allow them to better segment and target the market.

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Methodology Data Collection Method: Primary Data:

The data was collected by drafting a questionnaire and thereby interpreted or analyzed by using the Microsoft Excel. The prominent features of the questionnaire were: The questionnaire contained a set of thirteen (13) well structured and organized questions. The questionnaires were filled by fifty (50) respondents. The conclusions were drawn according to their views and opinions. The questionnaire included seven (07) close ended questions (Yes or No) and six (06) multiple choice questions (Alternative Options listed).

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Secondary data:

Secondary data was collected by the means of Newspapers, Internet, Reports Magazines and Books.

Dealer of Hindustan Unilever of Mumbai western area

Sample Design Fifty (50) respondents were selected from the city of Mumbai to constitute a sample. The sample size was categorized into Male and Female. The sample procedure followed in this study was stratified random sampling. It is a technique generally applied in order to obtain a representable sample. This type of sampling helps in taking equal views from both male and female.

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Hypothesis

The following are the hypotheses of this project: People are quite aware about Hindustan Unliver Lrd. FMCG is gaining importance in the contemporary world. People are willing to buy HUL brand products one the largest brand factory of India .

Limitations A large number of people could not be contacted for filling up the questionnaire because of lack of time and resources as the survey was conducted by a single student. The survey was carried out on a small scale; the sample size is fifty in Mumbai area wester part of Mumbai. The survey was carried out in the city of western part of Mumbai; hence the conclusions and results are restricted to the metropolitan cities because of the typical behavior and attitude. Many a times the sample group reveals false information leading to wrong conclusions.

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Chapter 3 LITERATURE REVIEW Rural Marketing: A Case Study on Hindustan Unilever Limited

International Journal of Applied Research and Studies (iJARS) ISSN: 2278-9480 Volume 2, Issue 6 (June- 2013) www.ijars.in Author: Manpreet Kaur * Address For correspondence: Assistant Professor, Guru Gobind Singh College for Women, Sector 26, Chandigarh

In recent years, rural markets have acquired significance, as the overall growth of the economy has resulted into substantial increase in the purchasing power of the rural communities. On account of green revolution, the rural areas are consuming a large quantity of industrial and urban manufactured products. In this context, a special marketing strategy, namely, rural marketing has emerged. This paper is an attempt to find out the various initiatives taken by HUL to reach the rural consumer. Hindustan Unilever is the pioneer and largest player in Indias FMCG market. HUL was the first company to step into the Indian rural marketing. HUL started its first effort

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towards going rural 1960s onwards, through indirect coverage of accessible rural market through its urban network stockists and distributors. HUL proactively engaged in rural development in 1976 with Integrated Rural Development Programme in Etah district of Uttar Pradesh. In 1990, HUL launched Operation Streamline for distribution of products to inaccessible rural markets with High potential using unconventional transport like bullock carts, tractors and bicycles and appointed rural distributors and star sellers. In 2000, HUL started Project Shakti to reach inaccessible low potential rural markets. This project has reached 100,000 villages. HUL embarked upon Project Samuriddhi in 2003 to create sustainable villages.

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India: Innovation in Rural Marketing Prof. Pankaj Arora "Rural Market: Currently, it's a black hole, there's not enough data; we will try to create a knowledgebase," Mr Pradeep Kashyap { Prof. Pankaj Arora, Lecturer, DIMAT, Raipur (Chhattisgarh)} Key Words: Innovation, Rural market The focus of literature, mainly written in the post liberalization period, is on highlighting potential of vast rural market and providing description of a few cases of commercial organization of rural areas. The literature has uncritically borrowed theories, framework and concept from the mainstream marketing discipline, which has shifted the growth of the subject as an independent field of academic investigation. There is an urgent need to build a distinctive perspective and a sound theoretical base for rural marketing, which would create its own concepts, frameworks, theories and body of knowledge. The issue needs immediate attention of the researcher in rural marketing.

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Indian urban and rural market: a comparative study on place of purchase in selected consumer products Sampath Kumar Ravikanthi Osmania University, India Key Words Consumer behavior, Consumer product, durable and non-durable, rural marketing, retailer, shopping Malls

This study reveals that majority of consumers are now-a-days a highly enlightened lot. The products should be made available at various out lets for the consumers to purchase or procure. Hence, the marketing distribution systems or marketing channels should be well-established. This helps the consumers to purchase items with minimum of efforts. The study of consumer behaviour towards place of purchase as a subject of study is important to the marketers, students of marketing, policy makers, regulators and the consumers themselves. In the light of the above revelation it is recommended that the marketers must make efforts to supply quality goods at reasonable prices and also maintain good relations with their retailers because the retailer is a major influencing person at the point of purchase.

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Chapter 4

CONSTITUENTS OF FMCG SECTOR IN INDIA


HOUSEHOLD CARE The size of the fabric wash market is estimated to be $1 billion, household cleaners to be $239 million and the production of synthetic detergents at 2.6 million tonnes. The demand for detergents has been growing at an annual growth rate of 10 to 11 per cent during the past five years. The urban market prefers washing powder and detergents to bars. The regional and small un-organized players account for a major share of the total volume of the detergent market. PERSONAL CARE The size of the personal wash products is estimated at $989 million; hair care products at $831 million and oral care products at $537 million. While the overall personal wash market is growing at one per cent, the premium and middle-end soaps are growing at 10 per cent. The leading players in this market are HLL, Nirma, Godrej Soaps and Reckitt & Colman. The oral care market, especially toothpastes, remains under penetrated in India (with penetration level below 45 per cent). The industry is very competitive both for organised and smaller regional players. The Indian skin care and cosmetics market is valued at $274 million and dominated by HLL, Colgate Palmolive, Gillette India and Godrej Soaps. The coconut oil market accounts for 72 per cent share in the hair oil market. In the branded coconut hair oil market, Marico (with Parachute) and Dabur are the leading players. The market for branded coconut oil is valued at approximately $174 million. FOOD AND BEVERAGES The size of the Indian food processing industry is around $ 65.6 billion, including $20.6 billion of value added products. Of this, the health beverage industry is valued at $230

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million; bread and biscuits at $1.7 billion; chocolates at $73 million and ice creams at $188 million. The size of the semi-processed/ready-to-eat food segment is over $1.1 billion. Large biscuits & confectionery units, soya processing units and

starch/glucose/sorbitol producing units have also come up, catering to domestic and international markets. The three largest consumed categories of packaged foods are packed tea, biscuits and soft drinks. The Indian beverage industry faces over supply in segments like coffee and tea. However, more than half of this is available in unpacked or loose form. Indian hot beverage market is a tea dominant market. Consumers in different parts of the country have heterogeneous tastes. Dust tea is popular in southern India, while loose tea in preferred in western India. The urbanrural split of the tea market was 51:49 in 2000. Coffee is consumed largely in the southern states. The size of the total packaged coffee market is 19,600 tonnes or $87 million. The total soft drink (carbonated beverages and juices) market is estimated at 284 million crates a year or $1 billion. The market is highly seasonal in nature with consumption varying from 25 million crates per month during peak season to 15 million during offseason. The market is predominantly urban with 25 per cent contribution from rural areas. Coca cola and Pepsi dominate the Indian soft drinks market. Mineral water market in India is a 65 million crates ($50 million) industry. On an average, the monthly consumption is estimated at 4.9 million crates, which increases to 5.2 million during peak season.

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FMCG SECTOR: STATISTICS



The size of the food processing industry exceeds US$65.6 billion.

The size of the semi-processed/ready-to-eat food segment is over $1.1 billion. Of the food processing industry, Bread and biscuits sales exceeds US$1.7 billion; Health beverage sales exceeds US$ 230 million; Ice cream exceeds US$188 million Chocolates sales exceeds US$73 million

In the hot beverage market, tea rather than coffee dominates. Coffee is consumed largely in the southern states. The soft drink (carbonated beverages and juices) market is in excess of US$1 billion, predominantly urban (>70%), and its consumption is highly seasonal. Major players in this segment include Hindustan Lever, Nestle, Cadbury and Dabur

Demand Dynamics The general factors driving the growth of the FMCG sector are increase in disposable income, rural areas, and companies aggressive promotion of product awareness. Rise in Disposable Income With increasing disposable income and subsequent rise in quality of living and hygiene concerns, the average Indians spending on grocery and personal care products will likely increase. Currently, the average Indian spends about 48%, also the majority, of his total income on groceries (~40%) and personal care products (~8%)1. Chart 1: Rise in Disposable Income (In USD Thousands)

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Sources: Euro Monitor, Goldman Sachs BRICS Report

Higher Penetration of the Rural Population Many companies are deepening their penetration in the rural areas as: The FMCG sector in the urban areas is becoming quite saturated (though it will continue to dominate in the next 8 10 years while the penetration in the rural areas are only about 1%3. The rural areas have and will continue to make up more than 50% (153 million) of Indias total households and accounting for more than its current 66% contribution to total FMCG consumption. Rural India has a large consuming class with 41 per cent of India's middleclass and 58 per cent of the total disposable income. Currently, nearly 34% of the off take of FMCG companies come from rural areas. Companies like HUL, ITC and Colgate have already established good distribution networks in these regions. Other companies would start catering to these regions in near future. Between 2005 and 2010, the FMCG sector in the rural and semi-urban areas will experience some 50% growth, at a CAGR of 10% and increase its market size to nearly US$ 23 billion from the 2005 level of US$11.4 billion.

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Rural Vs. Urban Households Growth

Sources: Statistical Outline of India, NCAER

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Chapter 4 Hindustan Unilever History

Unilever's corporate mission to add vitality to life shows how clearly the business understands 21st-century consumers and their lives. But the spirit of this mission forms a thread that runs throughout our history.

Helping people get more out of life

In the 1890s, William Hesketh Lever, founder of Lever Bros and later Lord Leverhulme, wrote down his ideas for Sunlight Soap his revolutionary new product that helped popularise cleanliness and hygiene in Victorian England. It was 'to make cleanliness commonplace; to lessen work for women; to foster health and contribute to personal attractiveness, that life may be more enjoyable and rewarding for the people who use our products'.

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This was long before the phrase 'Corporate Mission' had been invented, but these ideas have stayed at the heart of our business, even if their language and the notion of only women doing housework has become outdated. In a history that now crosses three centuries, Unilever's success has been influenced by the major events of the day economic boom, depression, world wars, changing consumer lifestyles and advances in technology. And throughout they have created products that help people get more out of life cutting the time spent on household chores, improving nutrition, enabling people to enjoy food and take care of their homes, their clothes and themselves. The two things that reflect HULs spirit are its meritocracy and a professional, market-linked business approach.

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Background
Hindustan unilever ltd(HUL) was formed in 1956, out of the merger of three unilever subsidiaries in india operating since 1931. the first unilever product to have been introduced in india was sunlight in 1888. HUL, a 51.6 per cent subsidiary of unillever plc,is the largest FMCG company in india. It operates in two segments: Home and personal care (HPC); it includes soaps, detergents,oral care products , hair care products, skin care products,cosmetics, deodorants and fragrances Food and beverages: it incloudes tea coffee, wheat flour,salt, icecreams and culinary products.

With sales of over us$ 2100 million in 2004, HUL employs over 40,000 people across the country. An unmatched distribution reach directly covering over a million retailers and a wide, price- competitive product portfolio are the reasons for its market leadership.sales of HUL have shown steady perfomance over the past few years. Hindustan unilever is the market leader in almost all of the segments it operates in like jams(75 %), deoderants(62%), personal wash(58%), hair wash(54%) fabric wash(38%), packaged tea(31%) and occupies second section in toothpastes,instant coffee and ketchups.
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HUL launches new corporate identity

Mumbai June 25 Maintaining a fine balance between its Indian identity and global heritage, Hindustan Lever Ltd has formally introduced a new corporate logo and changed its name to Hindustan Unilever Ltd. Adapting its universal global logo, comprising 25 different icons, the purpose is to leverage the global scale of the company and at the same time keep its Indian identity intact with its new name. Making India an exception, Unilever has decided to use its name as a suffix for its Indian subsidiary unlike the rest of its subsidiaries where it prefixes its name with the name of the country. According to HUL, retaining the name "Hindustan" as the first word in its name reflects the company's continued commitment to local economy, consumers, partners and employees. The new logo is symbolic of the company's mission of `adding vitality to life'. It comprises 25 different icons representing the organisation, its brands and the idea of vitality. Each of the icons, which make up the U, represent

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broadly product categories the group is in - for example, a tiny spoon in the logo is a symbol of nutrition, taste and cooking, while a chilli indicates spice and flavours and lips represent beauty, looking good and great taste. The shareholders had earlier approved the proposal for change of name at the company's 74th Annual General Meeting on May 18. The identity symbolises the benefits they bring to their consumers and the communities they work in. their mission is full of promise for the future, opening up exciting opportunities where they have competitive advantage for developing their business and their new identity will help them confidently position themselvs in every aspect of their business."

Principal Subsidiaries
Bon Limited; Daverashola Tea Company Limited; Hind lever Trust Limited; Indexport Limited; Indigo Lever Shared Services Limited; International Fisheries Limited; KICM (Madras) Limited; Kimberly-Clark Lever Private Limited (50%); Lever India Exports Limited; Levers Associated Trust Limited; Levindra Trust Limited; Lipton India Exports Limited; Merry weather Food Products Limited; Modern Food and Nutrition Industries Limited; Modern Food Industries (India) Limited; Nepal Lever Limited (Nepal) (80%); Ponds Exports Limited; Quest International India Limited (49%); Thiashola Tea Company Limited; TOC Disinfectants Limited.

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Principal Competitors
Nirma Ltd.; Jocil Ltd.; Nahar Industrial Enterprises Ltd.; Shrihari Laboratories P Ltd.; Ruchi Infrastructure Ltd.; Procter & Gamble Hygiene and Healthcare Ltd.; Amrit Banaspati Company Ltd.; Henkel SPIC India Ltd.; K S Oils Ltd.; Ultramarine and Pigments Ltd.; Vashisti Detergents Ltd.

MERGERS & ACQUISITIONS:


1. Modern Food (acquired 74 % Equity) 2. Rossel acquired (74 % by Unilever and 26 % by Hindustan Lever Ltd (HUL).) 3. Purchase of Coco care brand. 4. Dairy business sold to Nutrilia.

5. IPL merged with HUL

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INTRODUCTION TO HUL
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. The companys Turnover is Rs. 17,523 crores (for the financial year 2009 - 2010) HUL is a subsidiary of Unilever; one of the worlds leading suppliers of fast moving consumer goods with strong local roots in more than 100 countries across the globe with annual sales of about 40 billion in 2009 Unilever has about 52% shareholding in HUL. Hindustan Unilever was recently rated among the top four companies globally in the list of Global Top Companies for Leaders by a study sponsored by Hewitt Associates, in partnership with Fortune magazine and the RBL Group. The company was ranked number one in the Asia-Pacific region and in India. The mission that inspires HUL's more than 15,000 employees, including over 1,400 managers, is to help people feel good, look good and get more out of life with brands and services that are good for them and good for others. It is a mission HUL shares with its parent company, Unilever, which holds about 52 % of the equity.

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Our brands Food brands Personal care brands Nutrition Home care brands Water Health, hygiene & beauty

our brands
Unilever makes and sells products under more than 1,000 brand names worldwide. Two billion people use them on any given day. Here is a selection of our top brands, available in many countries, along with the stories behind them.

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Brand Equity of HUL

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BRAND STRATEGY OF HUL BRAND Branding in essence is effective brand strategy. It's the application of sound research into brand communications, analytical techniques, and the development of an improved strategy for your brand. Strategy is all about brand positioning. It identifies the key elements of product brand and develops a branding action plan to implement it.

Line extension brand extension BRAND STRATEGY DECISION Brand relaunch Multibrands New brand name

Extending the brand Line extension Reaching out to a new category

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Chapter Marketing

Marketing is the process of communicating the value of a product or service to customers, for the purpose of selling the product or service. It is a critical business function for attracting customers. From a societal point of view, marketing is the link between a societys material requirements and its economic patterns of response. Marketing satisfies these needs and wants through exchange processes and building long term relationships. It is the process of communicating the value of a product or service through positioning to customers. Marketing can be looked at as an organizational function and a set of processes for creating, delivering and communicating value to customers, and managing customer relationships in ways that also benefit the organization and its shareholders. Marketing is the science of choosing target markets through market analysis and market segmentation, as well as understanding consumer buying behavior and providing superior customer value. There are five competing concepts under which organizations can choose to operate their business; the production concept, the product concept, the selling concept, the marketing concept, and the holistic marketing concept. The four components of holistic marketing are relationship marketing, internal marketing, integrated marketing, and socially responsive marketing. The set of

engagements necessary for successful marketing management includes, capturing marketing insights, connecting with customers, building strong brands, shaping the market offerings, delivering and communicating value, creating longterm growth, and developing marketing strategies and plans

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Profit driver Description : A firm focusing on a production orientation specializes in producing as much as possible of a given product or service. Thus, this signifies a firm exploiting economies of scale until the minimum efficient scale is reached. A production orientation may be deployed when a high demand for a product or service exists, coupled with a good certainty that consumer tastes will not rapidly alter (similar to the sales orientation).

Product Quality of the product : A firm employing a product orientation is chiefly concerned with the quality of its own product. A firm would also assume that as long as its product was of a high standard, people would buy and consume the product

Selling Selling methods : A firm using a sales orientation focuses primarily on the selling/promotion of a particular product, and not determining new consumer desires as such. Consequently, this entails simply selling an already existing product, and using promotion techniques to attain the highest sales possible. Such an orientation may suit scenarios in which a firm holds dead stock, or otherwise sells a product that is in high demand, with little likelihood of changes in consumer tastes that would diminish demand.

Marketing Needs and wants of customers : The 'marketing orientation' is perhaps the most common orientation used in contemporary marketing. It involves a firm

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essentially basing its marketing plans around the marketing concept, and thus supplying products to suit new consumer tastes. As an example, a firm would employ market research to gauge consumer desires, use R&D (research and development) to develop a product attuned to the revealed information, and then utilize promotion techniques to ensure persons know the product exists. The holistic marketing concept looks at marketing as a complex activity and acknowledges that everything matters in marketing - and that a broad and integrated perspective is necessary in developing, designing and implementing marketing programs and activities. The four components that characterize holistic marketing are relationship marketing, internal marketing, integrated marketing, and socially responsive marketing.

Contemporary approaches Recent approaches in marketing include relationship marketing with focus on the customer, business marketing or industrial marketing with focus on an organization or institution and social marketing with focus on benefits to society.[5] New forms of marketing also use the internet and are therefore called internet marketing or more generally e-marketing, online marketing, "digital marketing", search engine marketing, or desktop advertising. It attempts to perfect the segmentation strategy used in traditional marketing. It targets its audience more precisely, and is sometimes called personalized marketing or one-to-one marketing. Internet marketing is sometimes considered to be broad in scope, because it not only refers to marketing on the Internet, but also includes marketing done via e-mail, wireless media as well as driving audience from traditional marketing methods like radio and billboard to internet properties or landing page.

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Relationship marketing / Relationship management Building and keeping good customer relations:: Emphasis is placed on the whole relationship between suppliers and customers. The aim is to provide the best possible customer service and build customer loyalty.

Branding Brand value : In this context, "branding" refers to the main company philosophy and marketing is considered to be an instrument of branding philosophy.

Customer orientation

Constructive criticism helps marketers adapt offerings to meet changing customer needs.

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A firm in the market economy survives by producing goods that persons are willing and able to buy. Consequently, ascertaining consumer demand is vital for a firm's future viability and even existence as a going concern. Many companies today have a customer focus (or market orientation). This implies that the company focuses its activities and products on consumer demands. Generally, there are three ways of doing this: the customer-driven approach, the market change identification approach and the product innovation approach[citation needed]. In the consumer-driven approach, consumer wants are the drivers of all strategic marketing decisions. No strategy is pursued until it passes the test of consumer research. Every aspect of a market offering, including the nature of the product itself, is driven by the needs of potential consumers. The starting point is always the consumer. The rationale for this approach is that there is no reason to spend R&D (research and development) funds developing products that people will not buy. History attests to many products that were commercial failures in spite of being technological breakthroughs.[6] A formal approach to this customer-focused marketing is known as SIVA[7] (Solution, Information, Value, Access). This system is basically the four Ps renamed and reworded to provide a customer focus. The SIVA Model provides a demand/customer-centric alternative to the well-known 4Ps supply side model (product, price, placement, promotion) of marketing management. Product Promotion Price Solution Information Value

Place (Distribution) Access

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If any of the 4Ps were problematic or were not in the marketing factor of the business, the business could be in trouble and so other companies may appear in the surroundings of the company, so the consumer demand on its products will decrease. However, in recent years service marketing has widened the domains to be considered, contributing to the 7P's of marketing in total. The other 3P's of service marketing are: process, physical environment and people. Some consider there to be a fifth "P": positioning. See Positioning (marketing). Some qualifications or caveats for customer focus exist. They do not invalidate or contradict the principle of customer focus; rather, they simply add extra dimensions of awareness and caution to it. The work of Christensen and colleagues on disruptive technology has produced a theoretical framework that explains the failure of firms not because they were technologically inept (often quite the opposite), but because the value networks in which they profitably operated included customers who could not value a disruptive innovation at the time and capability state of its emergence and thus actively dissuaded the firms from developing it. The lessons drawn from this work include:

Taking customer focus with a grain of salt, treating it as only a subset of one's corporate strategy rather than the sole driving factor. This means looking beyond current-state customer focus to predict what customers will be demanding some years in the future, even if they themselves discount the prediction.

Pursuing new markets (thus new value networks) when they are still in a commercially inferior or unattractive state, simply because their potential to grow and intersect with established markets and value networks looks like a likely bet. This may involve buying stakes in the stock of smaller firms, acquiring them outright, or incubating small, financially distinct units within one's organization to compete against them.

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Other caveats of customer focus are:

The extent to which what customers say they want does not match their purchasing decisions. Thus surveys of customers might claim that 70% of a restaurant's customers want healthier choices on the menu, but only 10% of them actually buy the new items once they are offered. This might be acceptable except for the extent to which those items are money-losing propositions for the business, bleeding red ink. A lesson from this type of situation is to be smarter about the true test validity of instruments like surveys. A corollary argument is that "truly understanding customers sometimes means understanding them better than they understand themselves." Thus one could argue that the principle of customer focus, or being close to the customers, is not violated herejust expanded upon.

The extent to which customers are currently ignorant of what one might argue they should wantwhich is dicey because whether it can be acted upon affordably depends on whether or how soon the customers will learn, or be convinced, otherwise. IT hardware and software capabilities and automobile features are examples. Customers who in 1997 said that they would not place any value on internet browsing capability on a mobile phone, or 6% better fuel efficiency in their vehicle, might say something different today, because the value proposition of those opportunities has changed.

Organizational orientation In this sense, a firm's marketing department is often seen as of prime importance within the functional level of an organization. Information from an organization's marketing department would be used to guide the actions of other departments within the firm. As an example, a marketing department could ascertain (via marketing research) that consumers desired a new type of product, or a new usage for an existing product. With this in mind, the marketing department would

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inform the R&D (research and development) department to create a prototype of a product or service based on the consumers' new desires. The production department would then start to manufacture the product, while the marketing department would focus on the promotion, distribution, pricing, etc. of the product. Additionally, a firm's finance department would be consulted, with respect to securing appropriate funding for the development, production and promotion of the product. Inter-departmental conflicts may occur, should a firm adhere to the marketing orientation. Production may oppose the installation, support and servicing of new capital stock, which may be needed to manufacture a new product. Finance may oppose the required capital expenditure, since it could undermine a healthy cash flow for the organization.[citation needed] Herd behavior Herd behavior in marketing is used to explain the dependencies of customers' mutual behavior. The Economist reported a recent conference in Rome on the subject of the simulation of adaptive human behavior. [9] It shared mechanisms to increase impulse buying and get people "to buy more by playing on the herd instinct." The basic idea is that people will buy more of products that are seen to be popular, and several feedback mechanisms to get product popularity information to consumers are mentioned, including smart card technology and the use of Radio Frequency Identification Tag technology. A "swarm-moves" model was introduced by a Florida Institute of Technology researcher, which is appealing to supermarkets because it can "increase sales without the need to give people discounts." Other recent studies on the "power of social influence" include an "artificial music market in which some 19,000 people downloaded previously unknown songs" (Columbia University, New York); a Japanese chain of convenience stores which orders its products based on "sales data from department stores and research companies;" a Massachusetts company exploiting knowledge of social networking to improve sales; and online retailers

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who are increasingly informing consumers about "which products are popular with like-minded consumers" (e.g., Amazon, eBay). Further orientations

An emerging area of study and practice concerns internal marketing, or how employees are trained and managed to deliver the brand in a way that positively impacts the acquisition and retention of customers, see also employer branding.

Diffusion of innovations research explores how and why people adopt new products, services, and ideas.

With consumers' eroding attention span and willingness to give time to advertising messages, marketers are turning to forms of permission marketing such as branded content, custom media and reality marketing.

The market environment is a marketing term and refers to factors and forces that affect a firms ability to build and maintain successful relationships with customers.Three levels of the environment are: Micro (internal) environment forces within the company that affect its ability to serve its customers. Meso environment the industry in which a company operates and the industrys market(s). Macro (national) environment - larger societal forces that affect the microenvironment

Market segmentation Main article: Market segmentation Market segmentation pertains to the division of a market of consumers into persons with similar needs and wants. For instance, Kellogg's cereals, Frosties are marketed to children. Crunchy Nut Cornflakes are marketed to adults. Both goods denote two products which are marketed to two distinct groups of persons,
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both with similar needs, traits, and wants. In another example, Sun Microsystems can use market segmentation to classify its clients according to their promptness to adopt new products.[12] Market segmentation allows for a better allocation of a firm's finite resources. A firm only possesses a certain amount of resources. Accordingly, it must make choices (and incur the related costs) in servicing specific groups of consumers. In this way, the diversified tastes of contemporary Western consumers can be served better. With growing diversity in the tastes of modern consumers, firms are taking note of the benefit of servicing a multiplicity of new markets. Market segmentation can be viewed as a key dynamic in interpreting and executing a logical perspective of Strategic Marketing Planning. The

manifestation of this process is considered by many traditional thinkers to include the following;Segmenting, Targeting and Positioning Types of market research Market research, as a sub-set aspect of marketing activities, can be divided into the following parts:

Primary research (also known as field research), which involves the conduction and compilation of research for a specific purpose

Secondary research (also referred to as desk research), initially conducted for one purpose, but often used to support another purpose or end goal.

By these definitions, an example of primary research would be market research conducted into health foods, which is used solely to ascertain the needs/wants of the target market for health foods. Secondary research in this case would be research pertaining to health foods, but used by a firm wishing to develop an unrelated product. Primary research is often expensive to prepare, collect and interpret from data to information. Nevertheless, while secondary research is relatively inexpensive, it

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often can become outdated and outmoded, given that it is used for a purpose other than the one for which it was intended. Primary research can also be broken down into quantitative research and qualitative research, which, as the terms suggest, pertain to numerical and non-numerical research methods and techniques, respectively. The appropriateness of each mode of research depends on whether data can be quantified (quantitative research), or whether subjective, non-numeric or abstract concepts are required to be studied (qualitative research). There also exist additional modes of marketing research, which are:

Exploratory research, pertaining to research that investigates an assumption.

Descriptive research, which, as the term suggests, describes "what is". Predictive research, meaning research conducted to predict a future occurrence.

Conclusive research, for the purpose of deriving a conclusion via a research process.

Marketing planning Main article: Marketing plan The marketing planning process involves forging a plan for a firm's marketing activities. A marketing plan can also pertain to a specific product, as well as to an organization's overall marketing strategy. Generally speaking, an organization's marketing planning process is derived from its overall business strategy. Thus, when top management are devising the firm's strategic direction or mission, the intended marketing activities are incorporated into this plan. There are several levels of marketing objectives within an organization. The senior management of a firm would formulate a general business strategy for a firm. However, this

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general business strategy would be interpreted and implemented in different contexts throughout the firm. Marketing strategy The field of marketing strategy considers the total marketing environment and its impacts on a company or product or service. The emphasis is on "an in depth understanding of the market environment, particularly the competitors and customers. A given firm may offer numerous products or services to a marketplace, spanning numerous and sometimes wholly unrelated industries. Accordingly, a plan is required in order to effectively manage such products. Evidently, a company needs to weigh up and ascertain how to utilize its finite resources. For example, a start-up car manufacturing firm would face little success should it attempt to rival Toyota, Ford, Nissan, Chevrolet, or any other large global car maker. Moreover, a product may be reaching the end of its life-cycle. Thus, the issue of divest, or a ceasing of production, may be made. Each scenario requires a unique marketing strategy. Listed below are some prominent marketing strategy models. A marketing strategy differs from a marketing tactic in that a strategy looks at the longer term view of the products, goods, or services being marketed. A tactic refers to a shorter term view. Therefore, the mailing of a postcard or sales letter would be a tactic, but changing marketing channels of distribution, changing the pricing, or promotional elements used would be considered a strategic change. Buying behavior A marketing firm must ascertain the nature of customers' buying behavior if it is to market its product properly. In order to entice and persuade a consumer to buy a product, marketers try to determine the behavioral process of how a given product is purchased. Buying behavior is usually split into two prime strands,

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whether selling to the consumer, known as business-to-consumer (B2C), or to another business, known as business-to-business (B2B). B2C buying behavior This mode of behavior concerns consumers and their purchase of a given product. For example, if one imagines a pair of sneakers, the desire for a pair of sneakers would be followed by an information search on available types/brands. This may include perusing media outlets, but most commonly consists of information gathered from family and friends. If the information search is insufficient, the consumer may search for alternative means to satisfy the need/want. In this case, this may mean buying leather shoes, sandals, etc. The purchase decision is then made, in which the consumer actually buys the product. Following this stage, a post-purchase evaluation is often conducted, comprising an appraisal of the value/utility brought by the purchase of the sneakers. If the value/utility is high, then a repeat purchase may be made. This could then develop into consumer loyalty to the firm producing the sneakers. B2B buying behavior Relates to organizational/industrial buying behavior.[16] Business buy either wholesale from other businesses or directly from the manufacturer in contracts or agreements. B2B marketing involves one business marketing a product or service to another business. B2C and B2B behavior are not precise terms, as similarities and differences exist, with some key differences listed below: In a straight re-buy, the fourth, fifth and sixth stages are omitted. In a modified rebuy scenario, the fifth and sixth stages are precluded. In a new buy, all stages are conducted. Use of technologies Marketing management can also rely on various technologies within the scope of its marketing efforts. Computer-based information systems can be employed,

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aiding in better processing and storage of data. Marketing researchers can use such systems to devise better methods of converting data into information, and for the creation of enhanced data gathering methods. Information technology can aid in enhancing an MKIS' software and hardware components, and improve a company's marketing decision-making process. In recent years, the notebook personal computer has gained significant market share among laptops, largely due to its more user-friendly size and portability. Information technology typically progresses at a fast rate, leading to marketing managers being cognizant of the latest technological developments. Moreover, the launch of smartphones into the cellphone market is commonly derived from a demand among consumers for more technologically advanced products. A firm can lose out to competitors should it ignore technological innovations in its industry. Technological advancements can lessen barriers between countries and regions. Using the World Wide Web, firms can quickly dispatch information from one country to another without much restriction. Prior to the mass usage of the Internet, such transfers of information would have taken longer to send, especially if done via snail mail, telex, etc. Recently, there has been a large emphasis on data analytics. Data can be mined from various sources such as online forms, mobile phone applications and more recently, social media.

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Chapter GRAND STRATEGIES


Grand Strategies are Comprehensive, long-term plan of essential actions by which a firm plans to achieve its major objectives. Key factors of this strategy may include market, product, and/or organizational development through acquisition, divestiture,

diversification, joint ventures, or strategic alliances. Types of Grand Strategies Consortia Concentrated Growth Market Development Product Development Innovation Turnaround Conglomerate Diversification Joint Ventures Strategic Alliances Concentric Diversification Bankruptcy Horizontal Integration Vertical Integration Divestiture Liquidation

Grand Strategies Adopted by HUL Concentrated Growth & Market Development 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 Lipton Tea (India) Limited was incorporated.

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HUL made many acquisitions in Tea segment; they first acquired Brooke Bond & Co, which was an Indian co. in 1984, while they already had Lipton brand in their Tea Segment which was acquired in 1977. When they acquired Brooke Bond in 1984 it was a strategy aimed at market development as the Lipton brand was meeting the needs of Premium segment, while Red Label Brand aimed to meet the needs of middle segment. Joint Venture 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 Unilever 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. In1994, the company entered into a strategic alliance with the Kwality Ice-cream Group families and in 1995 the Milk food 100% Ice-cream marketing and distribution rights too were acquired Backward Integration As a measure of backward integration, Tea Estates and Doom Dooma, two plantation companies of Unilever, were merged with Brooke Bond. 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 in 1995 the Milkfood 100% Icecream marketing and distribution rights too were acquired.

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Product Development
HUL made a strategic acquisition aimed at development of new product, 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 Divestiture HUL puts its leather business sale on hold Hindustan Unilever (HUL) has put the sale of its leather business on hold as it failed to find a suitable buyer. The business is run by Ponds Exports, a wholly-owned subsidiary of HUL. The annual report said leather exports had a difficult year due to forex volatility and recessionary conditions in Europe. Indias competitive advantages of good quality leather and the ability to service small orders were neutralized by Chinas significant cost advantages and a well developed market for components. Conglomerate Diversification In 1993, it acquired the Kissan business from the UB Group and the Dollops Icecream business from Cadbury India. As at that time both of the business concerns were on peak & the best promising businesses.

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Chapter Media Plays a vial role for Promotion of HUL Brand -Media Promotion

Lifebuoy (India) 'Hulk

One Crore Safety Challenge

Axe gets Ranbir going with the clicker, without Axe

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Bru Coffee

Pure

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Rural Markets for HUL

Corporate sector is now moving very quickly in the rural market for settingup of their retail outlets, distribution channels, private schools and hospitals. These need skilled workforce but trained manpower is not available in rural areas. Some organised rural retail chains have brought people from urban areas but retention rate is very low due to lack of good schools or medical facilities for the employees and families. Where almost seventy percent of Indian are living in rural areas, most of these are hard to reach and offer relatively lower business potential. Hence reaching them through the conventional distribution system is a big challenge. These challenges may require new marketing thinking to deal with the issues and to realize vast potential of thus far ignored rural markets. Hindustan Unilever Limited (HUL) to tap this market conceived of Project Shakti. The project begin in year 2001 developed a network of forty five thousand Shakti Entrepreneurs in more than one lakh villages across fifteen states reaching three million homes. The strategy not only played a vital role to penetrate in rural India but also bring to the notice the potential of business opportunity exists in Indian villages. It is the foresight of the company to sense the new
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business opportunity in rural India and tapped it so beautifully that it became a case study for new comers in the sector. The present paper explores in detail survival and growth of the HUL unique marketing strategy Shakti Entrepreneur with passage of time

With the urban market saturated, FMCG companies are now targeting the rural markets. In spite of the income imbalance between urban and rural India, rural holds great potential since 70% of India's population lives there. India has more than 6, 30,000 villages, most of these are hard to reach due to poor connectivity and offer relatively low business potential. This rural context poses several challenges, such as low-income, absence of basic marketing infrastructure, subsistence living, irregular income and demand patterns, dependence on agriculture, high social stratification, lack of social mobility, and traditional value orientation, to marketers. Furthermore, retailers cannot be present in all the centers as many of them are so small that it makes them economically unfeasible. These challenges may require new marketing thinking to deal with the issues and to realize vast potential of thus far ignored rural markets. Hindustan Unilever Limited (HUL) to tap this
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market conceived of Project Shakti. This project was started in year 2001 with the aim of increasing the company's rural distribution reach as well as providing rural women with income-generating opportunities. This is a case where the social goals are helping achieve business goals. In rural Indian economy tiny and micro enterprises, creates huge employment opportunities; produces necessary goods and services to cater to the local requirements and contributes significantly to the development and growth of the nation. It helps inculcate growth with equity viz; both women and men alike; mobilize savings and internal financial resources for entrepreneurial activities. In fact creations of micro enterprises are considered as an effective tool for sustainable livelihood, poverty alleviation and employment generation. Similarly, economics of micro finance makes it a compelling anti-poverty strategy. With a small amount, rural youth can establish a small business, repay the loan and still own the productive assets. PROBLEMS ASSOCIATED WITH RURAL INDIA 1. Lower purchasing power 2. Poor developed distribution channels 3. Lack of trained staff 4. Limited infrastructure facility
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5. Poor media penetration 6. Almost non existence of virtual 7. Communication

AGGREGATE RURAL CONSUMPTION (IN RS. 000 CRORES)

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SHAKTI: A MICRO BUSINESS WITH MASSIVE IMPACT Rural Indian markets, whose potential has historically been dismissed, account for more than 50% of fast-moving consumer good (FMCG) sales, and 60% of the durables market. The annual size of the rural market for FMCGs has been steadily growing and is estimated at $11 billion. The companies have realized that it is too costly to ignore this market any longer. It is an interesting fact to note that while the per capita income of rural India is half what it is in urban India, the surplus disposable income is roughly the same, as standard of living is cheaper in rural area as compare to urban areas. In overcoming the difficulties of penetrating rural markets, companies are turning to the rural poor not only as potential consumers, but as retailers as well. Collaborating with microcredit clients has proven to be good business. The most revolutionary example of such partnership is between Indian company Hindustan Lever Limited (HLL), a subsidiary of Unilever, and CARE Indias multi-state microfinance program. By linking HLL with selfhelp groups throughout India, women have received training in retail and marketing to sell staple products in rural, lowincome areas. The Shakti is a micro enterprise programme initiated in year 2001 that creates opportunity

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for the rural population to sell HUL products door to door in their local area. This resulted in easy access of HUL products in the hands of low income consumers and reduces the menace of locally sold spurious products. The company targeted the Self Help Groups (SHG) members as the promoter of their product. The initial training is also imparted to market and sell the product efficiently to the HUL agents. These agents were termed as Shakti Ammas. The term has been derived to rightly address the Indian rural entrepreneurs. The word Shakti means the power, which HUL gave to rural women through providing means to become an entrepreneur. While the word Amma, is a local term generally used in villages to address women. Thus the theme of the project is to empower the rural based women while at the same time creating a healthy route to penetrate in rural market. OBJECTIVE of HUL 1. TO EXTEND DIRECT REACH INTO UNTAPPED MARKETS : The aim of the project to help the company to penetrate in rural untapped areas in partnership with Self Help Groups. The direct marketing strategy adopted by the company to promote its products. 2. TO BUILD BRAND THROUGH LOCAL INFLUENCE: To overcome the problem of limited media coverage, the company appointed
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the Shakti Entrepreneur as a brand ambassador of their products. They are not just brand ambassador but also generate sales of HUL products. 3. EMPOWER UNDERPRIVILEGED WOMEN HUL : As a company is also well aware of its social obligation towards the society. Hence through partnership with village level Self Help Groups provided sustainable livelihood opportunity to its members. (a) Communication builds a brand (b) Micro enterprise create livelihood (c) Social initiatives improve the standard of life by providing quality products. 4. BUSINESS MODEL OF SHAKTI PROJECT: The recruitment of a Shakti Entrepreneur or Shakti Amma (SA) begins with the executives of HUL identifying the uncovered village. The representative of the company meets the panchayat and the village head and identify the woman who they believe will be suitable as a SA. After training she is asked to put up Rs 20,000 as investment which is used to buy products for selling. The products are then sold door-to-door or through petty shops at home. On average, a Shakti amma records monthly sales of Rs10,000-15000, on which she earns Rs1000-1500; those earnings come out of a 3% discount that HUL gives her

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on its products, as well as a trade margin of approximately 10%. A really outstanding Shakti ammaa Diamond Shakti ammacan even book Rs30,000-40,000 of sales every month, often turning her house into an HUL store. Thus on an average a Shakti Amma makes a 10% margin on the products she sells. SHAKTI CHANGING LIVES IN RURAL INDIA One in eight people on the planet lives in an Indian village. Hindustan Unilever's Shakti Entrepreneurial Programme helps women in rural India set up small businesses as direct-to-consumer retailers. The scheme equips women with business skills and a way out of poverty as well as creating a crucial new distribution channel for Unilever products in the large and fastgrowing global market of low-spending consumers. 1. HUL has been proactively engaged in rural development since 1976 with the initiation of the Integrated Rural Development Programme in the Etah district of Uttar Pradesh, in tandem with the companys dairy operations. This Programme now covers 500 villages in the district. Subsequently, the factories that HUL continued establishing in less-developed regions of the country have been engaged in similar programmes in adjacent villages. These factory-centered activities mainly focus on training farmers, animal
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husbandry, generating alternative income, health & hygiene and infrastructure development. 2. Shakti is HUL's rural initiative, which targets small villages with population of less than 2000 people or less. It seeks to empower underprivileged rural women by providing income-generating opportunities, health and hygiene education through the Shakti Vani programme, and creating access to relevant information through the iShakti community portal. Shakti is a pioneering effort in creating livelihoods for rural women, organised in Self-Help Groups (SHGs), and improving living standards in rural India. Shakti provides critically needed additional income to these women and their families, by equipping and training them to become an extended arm of the company's operation. 3. Started in 2001, Shakti has already been extended to about 80,000 villages in 15 states Shakti already has about 25,000 women entrepreneurs in its fold. A typical Shakti entrepreneur earns a sustainable income of about Rs.700 Rs.1,000 per month, which is double their average household income. Shakti is thus creating opportunities for rural women to live in improved conditions

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and with dignity, while improving the overall standard of living in their families. 4. Shakti Vani is a social communication programme. Women, trained in health and hygiene issues, address village communities through meetings at schools, village baithaks , SHG meetings and other social fora. In 204, Shakti Vani has covered 10,000 villages in Madhya Pradesh, Chattisgarh and Karnataka. The vision is to cover 80,000 villages in 2005. iShakti, the Internet-based rural information service, has been launched in Andhra Pradesh, in association with the Andhra Pradesh Government's Rajiv Internet Village Programme. The service is now available in Nalgonda, Vishakapatnam, West Godavari and East Godavari districts. iShakti has been developed to provide information and services to meet rural needs in medical health and hygiene, agriculture, animal husbandry, education, vocational training and employment and women's empowerment. The vision is to have 3,500 kiosks across the state by 2005 5. The model was piloted in Nalgonda district of Andhra Pradesh in 50 villages in the year 2000. The Government of Andhra Pradesh took the pioneering step of supporting the initiative by enabling linkages with the

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network of DWACRA Groups of rural women set up for their development and self-employment. Most SHG women view Project Shakti as a powerful business proposition and are keen participants in it. It has since been extended to in Andhra Pradesh, Bihar, Chattisgarh, Gujarat, Haryana, Jharkhand, Karnataka, Madhya Pradesh,

Maharashtra, Orissa, Punjab, Rajasthan, Tamilnadu, Uttar Pradesh and West Bengal with the total strength of over 40,000 Shakti Entrepreneurs. 6. Other Activities: To improve the business skills of the SHG women, extensive training programmes are being held. Such workshops have already covered a large number of Shakti Entrepreneurs in Andhra Pradesh, Karnataka, Gujarat, Madhya Pradesh, Uttar Pradesh, Tamilnadu, Chattisgarh and Orissa As part of their training programme, all HUL Management Trainees spend about 4 weeks on Project Shakti in rural areas with NGOs or SHGs. Assignments include business process consulting for nascent enterprises engaged in the manufacture of products such as spices and hosiery items.

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7. Participated States Andhra Pradesh Karnataka Madhya Gujarat Chhattisgarh Maharashtra Orissa Punjab Rajasthan Tamilnadu Uttar Pradesh West Bengal Bihar Haryana Jharkha 8. Support Shakti Shakti is working closely with the rural development departments of the state governments, as well as large number of NGOs across the geographies it currently on Project Shakti. BENEFITS OF THE SHAKTI PROJECT The project Shakti popularized the brand HUL among the rural India. It leads to easy access to such areas which was far beyond the reach of the company with its present resources. The benefits which the company derives out of the project are as follows: (A) AVAILABILITY OF STAFF AT LOWER COST: In India the peoples are strongly connected socially. To reach the Indian customer efficiently and effectively is through word of mouth. To penetrate in Indian rural market, it is strongly required that the seller familiar with the customer taste, income and buying behaviour. Thus a local villager when hired by the company increases the sales to many folds. The women are the homemaker and are the real purchaser of the fast moving consumer goods. Hence to tap the rural India with its FMCG products, the company targeted the women
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folk. In addition the direct selling helps the company to manage its administration cost of operations and survive in the market. (B) LOCALISED PARTNER: The local hired and trained Shakti Entrepreneur is the unique selling tactic of the HUL. The shakti entrepreneur moves from home to home for selling products helped to well verse its brand among the rural India. The frequent visit to customers created a strong bonding of the Shakti Entrepreneurs with its customers. They are familiar what are their customers requirement, taste and preference. (C) DISTRIBUTION CHANNEL AND DIRECT MARKETING: To overcome the issues of weak distribution network in remote areas, the company adopted the direct marketing strategy by appointing Shakti Amma. The shakti amma move from house to house and even small kirana shops and kiosks in the village to sell the product. Thus makes the easy accessibility of the brand even in far flung areas. (D) ADVERTISEMENT AND PROMOTION: To promote the product the company trained the selected Shakti Amma by providing soft skills and complete knowledge about the HUL products and their correct usage. The Shakti Entrepreneurs are the live advertisements who go from home to home talking about relevant brand benefits -- like hygiene and healthcare - of HUL
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products. The front room of the family house often becoming a marketing and distribution tools in one go. The Shakti Amma not only created awareness among the potential consumers but also increased demand of the HUL products. (E) COMMUNICATION LINKAGE: The company also run a Shakti Vani project to supplement the project shakti Under this programme, trained communicators visit schools and village congregations to drive messages on sanitation, good hygiene practices and women empowerment. This serves as a rural communication vehicle and helps to boost up sales. (F) DECISION MAKING TOOL: The Shakti entrepreneurs provide indepth knowledge about the consumers buying behavior in terms of what they want, what they can afford, when they buy. She knows all its customers very well. It provide the vital information which facilitate the company in decision making regarding to the type of product to promote, divestment decision, the pricing issue, discounts, marketing strategies. In addition the information so gathered helps the company to take decisions at the time of launch of new product. (G) SHAKTI ENTREPRENEURS: In overcoming the difficulties of penetrating rural markets, company turning to the rural poor not only as

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potential consumers, but as retailers as well. Collaborating with microcredit clients has proven to be good business. The project helps the Shakti entrepreneur to earn 1000-1500 rupees a month, which is a significant amount for a BPL family, supplement the monthly income. Moreover it provides entrepreneur skills, boost up confidence, and enhance the decision making skills, leadership qualities of the Shakti Entrepreneur. In short contribute towards the overall development of the underprivileged sectio and helps HUL to achieve its social obligation towards society. The main advantage of the Shakti programme for HUL is having more feet on the ground. Shakti Ammas (SAs) are able to reach far flung areas, which were economically unviable for the company to tap on its own, besides being a brand ambassador for the company. Moreover, the company has ready consumers in the SAs who become users of the products besides selling them. To solve the value chain issue the company closely work with its local shakti entrepreneurs. The shakti entrepreneurs has lead to twin benefit to the company. Where it boost the income prospects of the Shakti Entrepreneurs, it also provides HUL with security of supply of raw materials and new distribution routes to improve the penetration of company products.

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(A) UNORTHODOX SOLUTIONS: Roshni, a Shakti amma from Dhindaar village of Uttar Pradesh, found that her customers were dissatisfied with the effects of the Fair & Lovely she told. So she organized a seminar devoted to showing the women the correct way to use Fair & Lovelywhat her Shakti trainer, Jitendra Kumar, calls the aath ka funda, the method of daubing spots of the cream in a figure of eight on the face, and then massaging it in. And now it (B) LIVE DEMONSTRATION: Roshni, a Shakti amma from Dhindaar village in Uttar Pradesh, says sales of Fair and Lovely improved after she conducted a seminar to show her customers the right way to apply the cream. (C) CASH BASED TRANSACTION: It was being realized by the company that few Shakti Ammas who sold their products at credit to enhance sales found difficulty in recovery. Thus We also advise our Shakti Ammas not to sell on credit, says Prashant Jain, an area sales and customer manager for central Uttar Pradesh (rural) with HUL. Recovery is sometimes difficult, because many of these customers are also relatives or known to her in the village, so they feel embarrassed to ask for money. So we advise them to sell (for) cash only.
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(D) HOME TO SHOPS : HUL learned very early that Shakti Ammas should be encouraged to sell to retail shops as well as homes if they were to feel optimistic about their earning potential. (E) LOGISTICS: Another lesson rose out of Project Shaktis logistics. Jain describes how HUL initially thought it viable to only target villages with a population of 2,000 or more, how market strategists sat down with census lists, and how ammas were found in those selected villages and started off with a minimum of Rs10,000 worth of stock. When HUL started delivering stock to these ammas twice a month, however, it realized that it was also in its best interests to cultivate Shakti ammas in the villages that lay along that route, however small they were. Even if we are just dropping off stock worth Rs1,000 or Rs2,000 at these villages on the way, it makes economic sense, Jain says. (F) SHAKTIMAAN MODE: Today 45,000 shakti ammas push HUL products in India. Last year, the company decided to diversify the network and include husbands and sons in the distribution process. To further expand its reach to far off rural areas, HUL recently brought in its new Shaktimaan model (empowered man) where the village men work as distributors of HUL products. They head out on their bicycles, provided by

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the company, in order to sell the subsidized HUL products to nearby villages. They cover much more ground than the women, who do not like to travel outside their villages on their own. As of 2011 there are about 10,000 men signed up for the system. That has added an additional 23,000 rural shakti distributors, helping HUL triple their rural reach. (G) SHAKTI DAYS: Although the company has been successful in the initiative and has been scaling up, it faces problems from time to time for which it comes up with innovative solutions. For example, a problem faced by HUL was that the SAs were more inclined to stay at home and sell rather than going from door to door since there is a stigma attached to direct selling. Moreover, men were not liable to go to a woman's house and buy products. The company countered this problem by hosting Shakti Days. Here an artificial market place was created with music and promotion and the ladies were able to sell their products in a few hours without encountering any stigma or bias. (H) SHAKTI PROJECT ACHIEVEMENTS: This model has been the growth driver for HUL and presently about half of HUL's FMCG sales come from rural markets. The Shakti entrepreneur project has almost ten percent contribution in the total national turnover. According to the HUL Annual
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Report of 2009, the company has developed a network of 45000 Shakti entrepreneurs in more than 100000 villages across fifteen states reaching three million homes. The project not only benefited the company but also enhanced livelihood of 75000 rural women by INR 18 crore. In addition the expansion of project towards Shakti Man (Empowered Man) further enhanced the rural shakti distributors to 23000 helping the HUL to tripilate its penetration in rural areas. (I) FUTURE PLANS : The long term aim of the company is to have 100,000 Ammas covering 500,000 villages and reaching 600 million people. This programme will help provide HUL with a growing customer base which will benefit the company for years to come. Since the beginning of first quarter of previous year, the HUL want to ensure that the rural folks not only get access to capital, but also generate savings. In a step to promote financial inclusion in rural markets, HUL's 'Shakti Ammas', a network of self-help groups that distribute the company's products in remote villages with a population of 2,000 and less, will now be opening bank accounts for people. HUL has tied up with leading public sector bank, State Bank of India (SBI), to kick off a pilot project on financial inclusion in Maharashtra and

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Karnataka. At present, 12 Shakti Ammas, as customer service providers, have opened around 1,000 accounts, and the plan is to roll out the project across the country in the next 12 months. With a network of 43,000 Shakti Ammas enrolled with HUL, in excess of 30 lakh bank accounts are expected to be opened in the next one year-each Shakti Amma is expected to open at least 70 accounts.

While general trade encompasses both urban and rural markets, serving customers in more remote areas of India poses unique challenges. Rural markets are scattered over large areas with low per capita consumption rates. While the aggregate potential of rural markets is large, the potential of each of the 600+ dispersed markets is very low. As well, rural markets are not connected to urban centers by air or rail, with road connectivity poor at best. Accessing these markets, even when feasible, means additional logistics costs to HUL. Despite the roadblocks, conquering the rural markets is a must for HUL. One out of every eight people on this planet lives in an Indian village. In comparison to the urban market, which consists of roughly 250 million

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people, the rural market is 775 million people across 638,000 villages. Within ten years, per household consumption in rural India is forecasted to equal todays urban levels. To penetrate the rural markets, HUL launched a unique four tier distribution system. Markets were segmented based on their accessibility and business potential.

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1. Direct Coverage: HUL appointed a common stockist to service all outlets within a town and sell a limited selection of the brand portfolio. Towns consisted of populations of under 50,000 people. 2. Indirect Coverage: HUL targeted retailers in accessible villages close to larger urban markets. Retail stockists were assigned a permanent route to ensure that all accessible villages in the vicinity were served at least once a fortnight. 3. Streamline: Streamline leveraged the rural wholesale channel to reach markets inaccessible by road. Star Sellers were appointed among wholesalers in a particular village. Star Sellers would purchase stock from a local distributor and then distribute stock to retailers in smaller villages using local means of transport (e.g. motorcycles, rickshaws). Project Shakti: Project Shakti targeted the very small villages (<2,000) and tapped into pre-existing womens self help groups (SHG). Underprivileged rural women were invited to become direct-to-consumer sales distributors for HUL products. Termed Shakti Ammas (literally strength mothers),

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these women represent HUL and sell its home-care, health, and hygiene products in their villages. To maintain their market leadership, HUL pursues innovative distribution mechanisms to reach the millions of potential consumers in both urban areas and small remote villages where there is no retail distribution network, no advertising coverage, and poor roads and transport. HUL realized from the onset that its sales and distribution network gave it an edge over the competition, but that rivals would try to match it over time. To maintain their competitive advantage, HUL has aggressively extended more deeply in India, moving from large to small towns, and from urban to semi-urban areas. General trade

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Photo Credit: CGAP

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General trade consists of the thousands of independent retail and wholesale outlets across the country. Often called mom and pop shops, each of these stores is considered a distinct customer and has to be addressed individually. HUL services these outlets through a network of 2,900 stockists. Goods are sent to a local warehouse or carrying and forwarding agent (CFA), and are then stocked and dispatched to specific retailers upon orders from the HUL stockists. The stockists are responsible for servicing all the small retail outlets in a specific geographic area. General trade makes up the majority of HULs sales.

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Media Promotion in Rural by AMAGI for HUL Brand On HULs Regionally Targeted TV Campaign With Amagi Amagi Media, which delivers location specific advertising on cable TV in India, as landed a noteworthy campaign with Hindustan Unilever Ltd. HUL is going to use Amagi to deliver different ads in different regions on the same advertising spot on Nickelodeon. Why is this interesting? Television in India is national: unlike the US, where cable networks are local, in India, the same channels are (typically) beamed via satellite, across the country. An ad campaign running on these channels is also, typically, national, and to target regional language consumers, there are regional channels. Services like Amagi and Rediff owned Vubites, sought to bring local advertising to TV, by providing local, city based advertisers an opportunity to take over house inventory. So, while a channel might be advertising its own shows on an empty ad slot on a day, in one city, that ad can be replaced with a city specific commercial. A national advertiser with HUL would (if it wants to) produce ads in multiple languages, and run them on different languages. This has its limitations, since the number of channels for each language can be limited,
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and for a particular demographic, like kids, there may not be sufficient options. With a service like Amagi or Vubites, the national advertiser can run different ads in different languages in different regions, on the same channel. While the terms of the deal are not clear, this is clearly a much bigger opportunity for local TV advertising networks. Amagi is calling this creative versioning. In its press release, Amagi claims to work with 15 TV channels in over 100 cities, with more than 2000 clients. This is contrary to something that TechCircle reported last week, wherein Amagi co-founder Srinivasan KA told the website that it was working with 18 TV channels and has over 1500 advertisers. Quite a week, eh? Losing 3 channels partners and add 500 advertising Amagi has gone live with two channels in Singapore, and has a (channel) customer in Europe, TechCircle had reported. Amagi raised Rs 30 Crore from Mayfield Fund and existing investors, Nadathur Group and Ojas Ventures, last month, adding to the Rs 37 crore from Nadathur Group and Ojas Ventures in 2011.

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CONCLUSION The rule of caveat emptor wonderfully fits into today's marketing environment. Advertisements, more specifically comparative advertisements are the brainchild of our creative advertisers. These advertisements are just the tools in the hands of people who are designing them, so any complaints or criticisms need to be addressed to and against their makers and not against the tools (comparative advertisements). Marketers and advertisers must remember that it's easy to look at a competitor and find gaps in his product or services. It's harder, but definitely more valuable, to fill these gaps in one's own offering and build real competitive advantages with which you can offer delight to the customer rather than just satisfying them

With emerging markets contributing roughly 44% to global revenues, Unilevera Fortune 500 foods, home and personal care product giant with operations in about 100 countriesis betting on Project Shakti to reach to the bottom of the pyramid in Asian, African and Latin American markets. The project is being customised and adapted to Sri Lanka, Vietnam and Bangladesh. In Bangladesh and Sri Lanka, it is being promoted as Joyeeta and Saubaghya, respectively. The effort is expected to help Unilever tap fresh growth avenues in emerging markets in the face of recessionary trends in the US and Europe. The rural micro-enterprise has helped the Rs 13,717-

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crore Hindustan Unilever to push growth rates in several categories such as personal wash, fabric wash, shampoos, oral care and skin care. Brands like Annapurna, Lux, Lifebuoy, Breeze, Wheel, Fair & Lovely, Lakme, Ponds, Clinic Plus and Pepsodent have sold good numbers in smaller markets, company sources said, Overall, around 50% of HUL's revenues came from the rural markets in India. There are over 45,000 Shakti entrepreneurs covering over 135,000 villages across 15 states. Industry officials say the awareness of rural consumers about products and brands is lesser than the urban markets. Also, urban business models are not really successful in tapping the full potential of several small clusters of consumers across remote markets. Project Shakti is a low-cost distribution network HUL launched in 2001 in tie-up with rural women's self-help groups A typical Shakti entrepreneur gets an income in excess of Rs 1,000 per month Project Shakti serves over 1,35,000 villages across 15 states through more than 45,000 entrepreneurs. Almost a decade back when no single company thought about reaching to the 70 percent of the potential rural customers, the Hindustan Unilever Ltd. came up with a unique marketing strategy called Shakti Amma. The project became a powerful tool in the hands of HUL that helps to reach the

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untapped area of its potential customers at the cheapest cost. It was a successful strategy in such remote areas where the role of media was totally absent, and peoples are unfamiliar with the companys product. Despite challenges faced to penetrate in rural India, the company being focused and gradual improvement in the Shakti Project positioned the HUL as a leader of the fast moving consumer good market especially in rural India. The success of the brand HUL can be judged by the claims of the company HUL is a part of daily life two out of three Indian.

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REFERENCES

Pearce II, J.A., Robinson Jr., RB and Mital, A., Strategic Management: Formulation, Implementation and Control, 10th Ed., Tata McGraw -Hill, New Delhi, 2008

Journals, Publications & Websites DasGupta, P, (2009), HUL puts its leather business sale on hold , Mumbai, Accessed From: http://www.mydigitalfc.com/companies/hulputs-its-leather-business-sale-hold-299

Equitymaster.com.: http://www.equitymaster.com/researchit/sectorinfo/consprds

Equity http://www.equitymaster.com/detail.asp?date=1/9/2008&story=2

Master:

IBEFs , Fast Moving Consumer Goods Report 2009, Accessed from:www.ibef.org

http://www.thehindubusinessline.com/2005/07/19/stories/200507190308 0400.htm

http://www.redorbit.com/news/business/1359302/indias_fmcg_brands_re ady_to_move_into_the _fast_lane/index.html

http://www.quickmba.com/marketing/mix/ http://www.greenfile.net/resources/downloads/mkt_mix.pdf http://www.researchconnect.com/downloadreport.asp?RepID=55248 http://managementfunda.com/tag/marketing/ http://wiki.answers.com/Q/PESTLE_analysis_of_HUL www.plu.edu/~simpsoja/doc/pg-pp.ppt http://marketingteacher.com/lesson-store/lesson-segmentation.html


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http://202.205.89.79/download/materials/2007f/discipline/Marketing/Kev in%20Jones/6.%20Segmentation,%20Tarketing%20&%20Positioning%2 0for%20Competitive%20Advantage.ppt

http://news.priorsmart.com/rin-v-tide-analysis-the-controversy-b388/ http://rajeshaithal.blogspot.com/2010/03/rin-vs-tide-ad-ethical.html

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Rural Reference [1] Goyal, Aparajita. 2010. "Information, Direct Access to Farmers, and Rural Market Performance in Central India." American Economic Journal: Applied Economics, 2(3): 2245HUL Annual Report 2010-11 [2] HUL Annual Report 2009-10 [3] Hindustan Unilever Sustainable Development Report (2009), pp. 22 [4] Kotler Philip, Keller Kevin Lane (2003), Marketing Management. 308 Kotler Philip, Keller Kevin Lane (2006), Marketing Management [5] Levitt. Theodre (1980), Marketing success through differentiation of anything, Harvard Business Review, Vol. 58(1) [6] Rural Marketing, Ravindranath V. Badi and Naranyansa V. Badi, Himalaya Publishing, 2004 [7] Womens Livelihoods, Gloal and Citizenship, Institute of Development Studies (2009), Working paper. The Fortune at the Bottom of the Pyramid, C.K. Prahalad [8] www.deccanherald.com [9] www.indiantelevision.com

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1 When asked about FMCG products which brand comes to your mind first?

HUL 2 Which brand you prefer the most? HUL 3 Why do you prefer this Brand? Price Quality

Variety Availability 4 According to you which brand is more famous?

HUL 5 Which Brands Ad attracts you the most?

HUL 6 Which brand provides you value for money?

HUL 7 Which brand is more conveniently available?

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HUL

8 Which brand is more socially responsible?

HUL 9 Which brand according to you offer more product range?

HUL 10 Did you ever switch your brand ? Yes No 11 Why did you switch your Brand? Price Attractive offers Availability Quality 12 PERSONAL DETAILS NAME: GENDER: AGE:

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