Study of the BCG Matrix for Hindustan Unilever Limited

Himanshu Yadav MBA (Finance) MBL, National Law University, Jodhpur, Rajasthan

E-mail: himanshuyadav_151@yahoo.com

Electronic copy available at: http://ssrn.com/abstract=2124042

EXECUTIVE SUMMARY
The project required an inherent study of the Boston Consultancy Group (BCG) matrix in order to develop an intricate understanding of its underlying concept. The BCG matrix is a chart developed by Bruce Henderson for Boston Consultancy Group in 1968. The fundamental notion of developing such a chart was to enable multi-divisional or multiproduct companies to analyse its various business units (SBUs) or products. The matrix uses market growth rate and market share as the parameters for analysing the portfolio of any organisation. Thus acting as a powerful portfolio management tool, it helps the organisation to examine and allocate resources among its various units or products. The project specifically demands the study of BCG matrix for Hindustan Unilever Limited (HUL). HUL marked the initiation of marketing branded fast moving consumer goods (FMCG). In 1931, Unilever set up its first Indian subsidiary, Hindustan Vanaspati Manufacturing Company, followed by Lever Brothers India Limited (1933) and United Traders Limited (1935). In November 1956, these three companies merged to form Hindustan Unilever Limited (then known as Hindustan Lever Limited). 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 1,300 managers, is to add vitality to life". The company meets every day needs for nutrition, hygiene, and personal care, with brands that help people feel good, look good and get more out of life. It is a mission HUL shares with its parent company, Unilever, which holds about 52 % of the equity. HUL have an extremely wide market exposure with over 35 brands spanning across 20 distinct categories such as soaps, detergents, shampoos, skin care, toothpastes, deodorants, cosmetics, tea, coffee, packaged foods, ice cream, and water purifiers. HULs brands -- like Lifebuoy, Lux, Surf Excel, Rin, Wheel, Fair & Lovely, Sunsilk, Clinic, Close-up, Pepsodent, Lakme, Brooke Bond, Kissan, Knorr, Annapurna, Kwality-Walls - are household names across the country and span many categories - soaps, detergents, personal products, tea,
1

Electronic copy available at: http://ssrn.com/abstract=2124042

coffee, branded staples, ice cream and culinary products. They are manufactured in over 35 factories, several of them in backward areas of the country. The operations involve over 2,000 suppliers and associates. HUL's distribution network covers 6.3 million retail outlets including direct reach to over 1 million. The project will try to cover almost all the categories and label the entire product range into following characterised quadrants of BCG matrix, Cash Cows Question Marks Dogs Stars

Electronic copy available at: http://ssrn.com/abstract=2124042

RESEARCH OBJECTIVES
Every research is bound with the prerequisite of devising certain objectives that are going to shape up and guide the path of research. In respect of this project the following objectives are being laid down, 1. To identify the product mix of HUL. 2. To analyse the product portfolio of HUL with respect to BCG matrix. 3. To highlight and recommend effective strategies for manoeuvring within the BCG matrix.

RESEARCH METHODOLOGY
The research will be based upon the secondary sources of data as the purview of the research is restricted to application of the BCG concept onto HUL involves neither the discovery nor the evaluation of effectiveness. In order to achieve the first objective secondary sources of data will be referred i.e. books, internet, magazines, articles, websites, etc. To fulfil the last two objectives, the help of hard facts and statistical data will be taken, for such data collection various market surveys will be helpful. The data will be analysed and valuable inputs will be given in form of suggested strategies.

Chapter 1: BCG Matrix

I. Brief history of Boston Consultancy Group The Boston Consulting Group was started up in 1963 by Bruce Henderson and from its inception sought to establish itself in the planning and was considered the pioneer of Business Strategy analysis. Boston Consulting Group was founded as the Management and Consulting Division of the Boston Safe Deposit and Trust Company - a subsidiary of The Boston Company. In 1968, The Boston Company spinned off BCG as a separate subsidiary. 1 In 1965 Henderson thought that to survive, much less grow, in a competitive landscape occupied by hundreds of larger and better-known consulting firms, a distinctive identity was needed, and pioneered "Business Strategy" as a special area of expertise for BCG.As his client list grew, Henderson targeted the nation's best business schools. At some point he was said to have eclipsed McKinsey as the top recruiter at Harvard, aggressively wooing its best students with high salaries and the chance to make a difference in a cutting-edge firm. He encouraged the brilliant young minds he hired to come up with innovative ideas that were meant to dazzle hardened corporate veterans.2 In 1973 Bill Bain and others left BCG to form Bain & Company, and two years later Henderson arranged an employee stock ownership plan (ESOP), so that the employees could take the company independent from The Boston Safe Deposit and Trust Company. The buyout of all shares was completed in 1979.3 In 1998 BCG created The Strategy Institute. Its purpose is to enrich the firm's strategic thinking by applying insights from a variety of academic disciplines to the strategic challenges facing both business and society. 4 The Boston Consulting Group (BCG) ranked 8th overall and first among smaller companies in Fortune Magazine's 2007 "100 Best US Companies to Work For" survey, based on strong employee development, a supportive culture, and progressive benefits. 5

http://www.bcg.com/this_is_bcg/bcg_history/Printable.pdf http://en.wikipedia.org/wiki/Boston_Consulting_Group#_note-0 3 Ibid 4 Ibid 5 http://money.cnn.com/galleries/2007/fortune/0701/gallery.bestcos/8.html

1 2

II. BCG Growth-Share Matrix In the late 1960s a consultant for the Boston Consulting Group presented his ideas about cash deficient and growth deficient businesses and the need for a balance between cash generators and cash users. In the late 1960s the Boston Consulting Group developed a portfolio business model based on this thinking. The model, the BCG matrix or growth/share matrix, was based on the Boston Consulting Groups knowledge and work in the area of the experience curve and of the product life cycle and how they relate to cash generation and cash requirements. The growth-share matrix was intended to analyse a portfolio from a corporate perspective because it is only at that level that cash balance is meaningful. A business may, however, be segmented further using this diagnostic tool to understand the positions of its various product lines or market segments. This portfolio can therefore be made up of products in a multiproduct company, divisions in a multidivisional company and companies in a conglomerate. The BCG Growth-Share Matrix is based on the observation that a company's business units can be classified into four categories based on combinations of market growth and market share relative to the largest competitor, hence the name "growth-share". Market growth serves as a proxy for industry attractiveness, and relative market share serves as a proxy for competitive advantage. The growth-share matrix thus maps the business unit positions within these two important determinants of profitability The BCG Growth-Share Matrix positions the various SBUs/product lines on the basis of Market Growth Rate and Market Share relative to the most important competitor as shown below; Relative market share6 This indicates likely cash generation, because the higher the share the more cash will be generated. As a result of 'economies of scale' (a basic assumption of the BCG Matrix), it is assumed that these earnings will grow faster the higher the share. The exact measure is the brand's share relative to its largest competitor. Thus, if the brand had a share of 20 percent, and the largest competitor had the same, the ratio would be 1:1. If the largest competitor had a share of 60 per cent, however, the ratio would be 1:3, implying that the organization's brand
6

http://futureobservatory.dyndns.org/9435.htm#The_Boston_Matrix_

was in a relatively weak position. If the largest competitor only had a share of 5 per cent, the ratio would be 4:1, implying that the brand owned was in a relatively strong position, which might be reflected in profits and cash flows. If this technique is used in practice, this scale is logarithmic, not linear. On the other hand, exactly what is a high relative share is a matter of some debate. The best evidence is that the most stable position (at least in FMCG markets) is for the brand leader to have a share double that of the second brand, and triple that of the third. Brand leaders in this position tend to be very stable - and profitable. The reason for choosing relative market share, rather than just profits, is that it carries more information than just cash flows. It shows where the brand is positioned against its main competitors, and indicates where it might be likely to go in the future. It can also show what type of marketing activities might be expected to be effective. Market growth rate7 Rapidly growing brands, in rapidly growing markets, are what organizations strive for; but the penalty is that they are usually net cash users - they require investment. The reason for this is often because the growth is being 'bought' by the high investment, in the reasonable expectation that a high market share will eventually turn into a sound investment in future profits. The theory behind the matrix assumes, therefore, that a higher growth rate is indicative of accompanying demands on investment. The cut-off point is usually chosen as 10 per cent per annum. Determining this cut-off point, the rate above which the growth is deemed to be significant (and likely to lead to extra demands on cash) is a critical requirement of the technique; and one that, again, makes the use of the BCG Matrix problematical in some product areas. What is more, the evidence, from FMCG markets at least, is that the most typical pattern is of very low growth, less than 1 per cent per annum. This is outside the range normally considered in BCG Matrix work, which may make application of this form of analysis unworkable in many markets. Where it can be applied, however, the market growth rate says more about the brand position than just its cash flow. It is a good indicator of that market's strength, of its future potential

http://futureobservatory.dyndns.org/9435.htm#The_Boston_Matrix_

(of its 'maturity' in terms of the market life-cycle), and also of its attractiveness to future competitors. It can also be used in growth analysis. The calculation of the relative market share and market growth is as follows-

The Boston Consulting Group developed this model for managing a portfolio of different business units (or major product lines). The BCG growth-share matrix displays the various business units on a graph of the market growth rate vs. market share relative to competitors:

This framework assumes that an increase in relative market share will result in an increase in the generation of cash. This assumption often is true because of the experience curve; increased relative market share implies that the firm is moving forward on the experience curve relative to its competitors, thus developing a cost advantage. A second assumption is that a growing market requires investment in assets to increase capacity and therefore results in the consumption of cash. Thus the position of a business on the growth-share matrix provides an indication of its cash generation and its cash consumption. Henderson reasoned that the cash required by rapidly growing business units could be obtained from the firm's other business units that were at a more mature stage and generating significant cash. By investing to become the market share leader in a rapidly growing market, the business unit could move along the experience curve and develop a cost advantage. From this reasoning, the BCG Growth-Share Matrix was born. Resources are allocated to business units according to where they are situated on the grid as follows:

Dog - a business unit that has a small market share in a mature industry. A dog may not require substantial cash because dogs have low market share and a low growth rate and thus neither generate nor consume a large amount of cash, and dogs are cash traps because of the money tied up in a business that has little potential and the capital that could better be deployed elsewhere. Unless a dog has some other strategic purpose, such businesses are candidates for divestiture, and it should be liquidated if there is little prospect for it to gain market share.

Question Mark (or Problem Child) - a business unit that has a small market share in a high growth market. Question marks are growing rapidly and thus consume large amounts of cash, but because they have low market shares they do not generate much cash. The result is large net cash consumption. A question mark (also known as a "problem child") has the potential to gain market share and become a star, and eventually a cash cow when the market growth slows. If the question mark does not succeed in becoming the market leader, then after perhaps years of cash consumption it will degenerate into a dog when the market growth declines. Question marks must be analyzed carefully in order to determine whether they are worth the investment required to grow market share.

Star - a business unit that has a large market share in a fast growing industry. Stars generate large amounts of cash because of their strong relative market share, but also consume large amounts of cash because of their high growth rate; therefore the cash in each direction approximately nets out. If a star can maintain its large market share, it will become a cash cow when the market growth rate declines. The portfolio of a diversified company always should have stars that will become the next cash cows and ensure future cash generation. If successful, a star will become a cash cow when its industry matures.

Cash Cow - a business unit that has a large market share in a mature, slow growing industry. As leaders in a mature market, cash cows exhibit a return on assets that is greater than the market growth rate, and thus generate more cash than they consume. Such business units should be "milked", extracting the profits and investing as little cash as possible. Cash cows provide the cash required to turn question marks into market leaders, to cover the administrative costs of the company, to fund research and development, to service the corporate debt, and to pay dividends to shareholders. Because the cash cow generates a relatively stable cash flow, its value can be determined with reasonable accuracy by calculating the present value of its cash stream using a discounted cash flow analysis. Cash cows require little investment and generate cash that can be used to invest in other business units. After plotting the Growth-share matrix, the same would typically look like this:

10

III. Strategic Options for the Four Types of Business Units

QUESTION MARKS Strategic options for question marks include Market penetration

The most frequently used strategy is to take the existing product (or service) in the existing market and try to obtain improved `penetration' (or, more accurately, an increased share) of that market. There are two ways in which this can be achieved: Increasing sales to existing customers and Finding new customers in the same market. In general, the first strategy means persuading users to use more. This may be achieved by motivating them to use the product on more occasions, perhaps by replacing an indirect competitor; for example, inducing a house-hold to eat beans on toast an extra time each week, instead of fish fingers. It may, on the other hand, simply be to use the product more often without any need to take business from competitors; as Unilever used Timotei to promote the more regular shampooing of hair. Possibly it may be to use more each time; promotions offering `30 per cent more free' may have, as one objective, the intention of persuading customers to get into the habit of using more. The second strategy almost invariably relates to taking business directly from competitors, increasing both penetration and market share. Market development The expansion of the total market served by a business, achieved by (1) entering new segments-by expanding the geographic base of the business or by using new channels to reach un-served customers; (2) conversion of nonusers-by lower prices or increased (or specially designed) promotion; and (3) increasing usage by present users-by developing and promoting new uses for the product.8 Product development This involves a relatively major modification of the product or service, such as quality, style, performance, variety and so on. Adding sausages to tinned baked beans will possibly cause some existing users to increase their usage, but may also attract new users. To be most effective, such developments should extend the `product' into a
8

http://www.marketingpower.com/mg-dictionary-view1826.php

11

new segment, or to a new competitive position in relation to the clusters of consumers. Divestment The term is used as a corporate strategy in which a company sells off a business unit in order to focus their resources on a -in their view- more profitable or promising market.9

STARS Strategic options for stars include Integration forward, backward and horizontal

Forward integration: a strategy for growth in which a company develops by seeking ownership of, or some measure of control over, its distribution systems. Backward Integration: A form of vertical integration that involves the purchase of suppliers in order to reduce dependency. Horizontal integration: 1. The expansion of a business by acquiring or developing businesses engaged in the same stage of marketing or distribution. The most common approach is to buy out competitors. It is also known as horizontal expansion. 2. The combination of two or more separate enterprises at the same stage in the channel through ownership, including mergers or acquisitions)10 Market penetration Market development Product development Joint ventures

10

http://www.investordictionary.com/definition/divestment.aspx http://www.marketingpower.com/mg-dictionary-view1406.php

12

COWS As regards cows, it is desirable to maintain the strong position as long as possible and strategic options include Product development Concentric diversification

Concentric diversification: a growth strategy in which a company seeks to develop by adding new, but related, products to its existing product lines to attract new customers. If the position weakens as a result of loss of market share or market contraction then options would include Retrenchment (or even divestment)

DOGS Strategic options for dogs would include Retrenchment (if it is believed that it could be revitalized) Liquidation Divestment

IV. The BCG Matrix and one size fits all strategies The BCG Matrix method can help to understand a frequently made strategy mistake: having a one size fits all strategy approach, such as a generic growth target (9 percent per year) or a generic return on capital of say 9.5% for an entire corporation. In such a scenario:

Cash Cows Business Units will reach their profit target easily. Their management have an easy job. The executives are often praised anyhow. Even worse, they are often allowed to reinvest substantial cash amounts in their mature businesses.

Dogs Business Units are fighting an impossible battle and, even worse, now and then investments are made. These are hopeless attempts to "turn the business around".

13

As a result all Question Marks and Stars receive only mediocre investment funds. In this way they can never become Cash Cows. These inadequate invested sums of money are a waste of money. Either these SBUs should receive enough investment funds to enable them to achieve a real market dominance and become Cash Cows (or Stars), or otherwise companies are advised to disinvest. They can then try to get any possible cash from the Question Marks that were not selected.

V. Assumptions of BCG 1. This matrix assumes that a larger market share in a growth market leads to profitability. An effort to obtain a large market share in a slowly growing market requires too much cash. 2. The higher the growth rate, the easier to gain market share.

VI. Limitations / problems of the BCG Matrix 1. The problems of getting data on the market share and market rate 2. There is no clear definition of what constitutes a market. 3. A high market share need not necessarily lead to profitability all the time. 4. The model employs only two dimensions market share and growth rate. This may tempt management to emphasis a particular product or divest prematurely. 5. Low share businesses can be profitable too. 6. It considers the product or SBU only in relation to one competitor: the market leader. It misses small competitors with fast growing market shares.

VII. Critiques of BCG Matrix 1. In another word: by definition, only a single company can have a share greater than 1.0 in any given market. Thus, in the BCG matrix, there can be but one cash cow or one star per market. 2. The BCG model implies resource allocation rules regarding cash usage.

14

VIII. Uses / Application of BCG Matrix 1. If a company is able to use the experience curve to its advantage, it should be able to manufacture and sell new products at a price low enough to get early market share leadership. Once it becomes a star, it is destined to be profitable. 2. BCG model is helpful to management in evaluating the firm's current balance among stars, cash cow, problem child and dogs. 3. BCG model is applicable to large companies that seek volume and experience effects. 4. The model is simple and easy to understand. 5. It provides a base for management to decide upon and prepare for contingent future courses of action.

IX. Strategic Use of B.C.G Matrix 1. The BCG growth share matrix is widely used as a strategic planning tool giving planners a sense of direction. 2. The matrix facilitates the strategic planning process and service as a rich source of ideas about possible strategic options. 3. In multi-product organizations, management can use this matrix as a guide to allocate limited resources. BCG MATRIX 22% 10% market growth rate 0% 10x 1.5x 1x 0.1x

15

Chapter 2: Hindustan Unilever Limited

I. History of Hindustan Unilever Limited Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods Company; its journey began 75 years ago, in 1933, when the company was first incorporated. The company stirring the lives of two out of three Indians with over 20 distinct categories in Home & Personal Care Products and Foods & Beverages and also one of the country's largest exporters. HUL's brands includes Lifebuoy, Lux, Surf Excel, Rin, Wheel, Fair & Lovely, Pond's, Sunsilk, Clinic, Pepsodent, Close-up, Lakme, Brooke Bond, Kissan, KnorrAnnapurna, Kwality Wall's - are household names across the country and span many categories - soaps, detergents, personal products, tea, coffee, branded staples, ice cream and culinary products. They are manufactured in over 40 factories across India. In the late 19th and early 20th century Unilever used to export its products to India. This process began in 1888 with the export of Sunlight soap, which was followed by Lifebuoy in 1895 and other famous brands like Pears, Lux and Vim soon after. In 1931, HUL set up its first Indian subsidiary, Hindustan Vanaspati Manufacturing Company, followed by Lever Brothers India Limited in the year 1933 and United Traders Limited in 1935. In 1956, these three companies merged to form Hindustan Unilever Limited. HLL offered 10% of its equity to the Indian public, and it was the first among the foreign subsidiaries to do so. In the year 1958 the compa ny started its Research Unit at Mumbai Factory namely The Hindustan Unilever Research Centre (HLRC). In the year 1962 the company's Formal Exports Department was started and HUL recognised by Government of India as Star Trading House in Exports in 1992. A turning point to the company was guaranteed in the year 1993, HUL's largest competitor, Tata Oil Mills Company (TOMCO), merges with the company with effect from April 1, 1993, the biggest such in Indian industry till that time. Merger ultimately accomplished in December 1994.

16

HUL formed Nepal Lever Limited in 1994, HUL and US-based Kimberley-Clark Corporation form 50:50 joint venture as Kimberley-Clark Lever Ltd to market Huggies diapers and Kotex feminine care products. Factory was set up at Pune in 1995.

HUL acquired Kwality and Milkfood 100% brand names and distribution assets accordingly HUL introduced Wall's. The company and Indian cosmetics major, Lakme Ltd came to joint ventures and formed Lakme Lever Ltd and HUL recognised as Super Star Trading House in 1995. A group company, Pond's India Ltd was merged with HUL on January of the year 1998. In 2001, the company embarked on an ambitious programme, Shakti. Through Shakti, HUL is creating micro-enterprise opportunities for rural women, thereby improving their livelihood and the standard of living in rural communities.

The company's spotlight was turned on to Ayurvedic health & beauty, HUL entered Ayurvedic health & beauty centre category with the Ayush range and Ayush Therapy Centres 2002.

During the year 2003 the company launched Hindustan Lever Network, a strong initiative by the company worth of Rs. 1800 crore for Direct Selling Channel. In line with company's business strategy to exit non-core business, the Company has disposed its Mushroom business, which formed part of KICM (Madras) Ltd and its Seeds Business also in the year 2004.

As of December 2005, Lever India Exports Ltd, Lipton India Exports Ltd, Merry weather Food Products Ltd, Toc Disinfectants Ltd and International Fisheries Ltd was merged with the company, both the five companies are wholly owned subsidiaries of the company and Vasishti Detergents Ltd (VDL) came in to fold of the company as a result of amalgamation of the Tata Oil Mills Company Ltd, VDL was merged with the company in February, 2006.

In February 2007, the company has been renamed to "Hindustan Unilever Limited" to strike the optimum balance between maintaining the heritage of the Company and the future benefits and synergies of global alignment with the corporate name of "Unilever".

During 2008, Unilever announced its collaboration with the Indian Dental Association (IDA) in conjunction with World Dental Federation (FDI) through its
17

Pepsodent, leading oral care brand to help improve the oral health and hygiene standards in India. HUL identified five key platforms and have articulated goals, both short term and long term goals, stretching to 2015, would work in areas of health & nutrition & women empowerment on the social front, the economic agenda would be to enhance livelihoods and the environmental agenda would focus on water conservation and cutting green house gases. Currently, Unilever holds 51.55% equity in the company while the rest of the shareholding is distributed among about 380,000 individual shareholders and financial institutions. HUL believes that an organisation's worth is also in the service it renders to the community. HUL is focusing on health & hygiene education, women empowerment, and water management. It is also involved in education and rehabilitation of special or underprivileged children, care for the destitute and HIV-positive, and rural development.

II. Company Vision11 The four pillars of our vision set out the long term direction for the company where we want to go and how we are going to get there:

We work to create a better future every day We help people feel good, look good and get more out of life with brands and services that are good for them and good for others.

We will inspire people to take small everyday actions that can add up to a big difference for the world. We will develop new ways of doing business with the aim of doubling the size of our company while reducing our environmental impact.

11

http://www.hul.co.in/aboutus/ourvision/default.aspx

18

Chapter 3: Product Mix of HUL

(OBJECTIVE I) The entire product range of HUL can be visualised in terms of the following of the following segments12: 1. FOOD BRANDS 2. HOME CARE BRANDS 3. PERSONAL CARE BRANDS

I. FOOD BRAND SEGMENT: HUL is one of Indias leading food companies. Its passion for understanding what people want and need from their food - and what they love about it - makes its brands a popular choice. The category that this segment tends to cover includes; 1. TEA13: A. 3 ROSES: The 3 Roses tea of HUL is known for its perfect colour, strength and aroma that create a perfect tea moment. Being marketed while keeping in mind the couples, it portrays itself as an essential drink with which they can spend time talking about the everyday issues that matter to them. Key facts

3 Roses is a 30 year old regional brand and is the market leader in Tamil Nadu. It is one of the largest FMCG brands in Tamil Nadu across categories. It has a strong presence in both in home and out of home segments. It has two functionally differentiated variants - 3 Roses Natural Care and 3 Roses Mind Sharp.

The products shown are those which are easily available and have a sizeable market share in their respective segments 13 No. 1 in Tea category, HUL Factsheet, http://www.hul.co.in/Images/HULFactsheettcm114188694.pdf
12

19

3 Rose range:

3 Roses Regular

3 Roses Natural Care

3 Roses Mind Sharp

B. RED LABEL: Red Label is for the housewife who seeks to bring her family together over a cup of great Red Label with its perfect strength taste and colour. Key facts

Red Label is a 107 year old brand and has tremendous equity and heritage in the Indian market. It is the second largest tea brand in the country. The oldest and largest brand in the Brooke Bond portfolio in India It has both leaf and dust variants, as well as a health and immunity variant - Red Label Natural Care. Red has also launched a premium variant under the name Red Special

Range

Red Label 250gms

Red Label Dust

Red Label Natural Care

Red Label Special

C. TAAZA: Brooke Bond Taaza entered the lives of the contemporary Indian housewife in the 1990s. And over the years, Taaza has found a place, not just in her home but also in her heart. Taaza is a unique and refreshing blend of tea that's sprinkled with fresh green tea leaves. It's her daily cup of joy that helps her to refresh and connect with her inner self and aspirations. Key facts

Taaza is a 20 year old brand with strong presence in North, West and Eastern India.

20

It is the 3rd largest tea brand in the country with a portfolio spanning in both leaf and dust segments. It has a strong presence in the out of home segment in South India.

Range

Taaza Leaf

Taaza Dust

D. TAJ MAHAL: Brooke Bond Taj Mahal- Indias best tea since 1966. For over four decades, Taj Mahal has been the gold standard of tea in India. It has been a pioneer of innovations in the Indian tea market. Taj Mahal was the first to introduce tea bags and also the first to usher-in new formats like instant tea and dessert tea. Taj Mahal is special because it is made from the rarest and the best tea leaves. Key facts

Taj Mahal was launched in 1966 by Brooke Bond. Ustad Zakir Hussain, the tabla maestro was the brands ambassador for over a decade, exemplifying both discernment as well as the pursuit of excellence. Taj Mahal is the most premium brand of tea in the Indian market. Since 2006, Saif Ali Khan is the brand ambassador.

Range

Taj Mahal

Taj Mahal Teabags

Taj Mahal Flavoured Tea Bags

E. LIPTON: Lipton Yellow Label is a premium, full-bodied tea, made out of the finest teas, perfect for the healthy Indian .Lipton Yellow Label has a unique blend that has

21

high levels of natural Theanine, which along with other goodness of tea can help you clear your mind. The range also contains, Lipton Clear Green tea, which combines the goodness of antioxidants and purifying effect of water to help cleanse your body naturally. Key facts14

Lipton Yellow Label

Lipton Clear Green Tea

Lipton Darjeeling Tea

F. Brooke Bond Sehatmand: The primary reason to introduce Brooke Bond Sehatmand, a Vitamin Fortified Tea was to allow people to have access to a healthier yet affordable product. Three Cups of BB Sehatmand guarantees delivery of 50 % of the Recommended Dietary Allowance (RDA) of added B Vitamins, required by a person. Key facts

A Tea brand enriched with Vitamins, The first tea of its kind to address vitamin intake gaps among the masses. 3 Cups of Brooke Bond Sehatmand a day helps satisfy 50% of the RDA of B Vitamins.

Range

Brooke Bond Sehatmand

14

Lipton is the # 1 tea in the world, HUL Factsheet

22

2. COFFEE: A. BRU: Bru has been on a constant endeavour to bring better products and formats to the consumer with every passing year. With the launch of Cappuccino in 2007, Bru pioneered the launch of instant coffee premixes in India for the youth. Brus specially selected and freshly roasted coffee beans offer a great cup of aromatic coffee that makes those moments of genuine warmth and happiness even more special Key Facts

Number 1 Coffee brand in India Unilever's only Coffee brand Enjoys a rich heritage, came into existence in 1962 under the brand name Deluxe Green Label Consistently offering better and newer products to the consumer through improved packaging solutions and innovative product formats

Bru Roast and Ground

Bru Instant

Bru Ice cappuccino

Bru hot cappuccino

3. KISSAN: Kissan is being projected to be the brand which will help dissolve tension between mother and the family during informal good food moments. Kissan acts as a catalyst, easing stressful moments at the dining table. With Kissan, good food is loved not shoved! Key facts

Kissan is in its 62nd year of its existence in India. Category leaders in India.

23

Kissan Jam

Kissan Squashes

Kissan Tomato Ketchup

Pichkoo

Kissan Squeezo Ketchup

Mango

Pineapple

Strawberry

4. MODERN: Modern has a heritage of over 42 years and has presence across India. Modern was the first brand to operate a fully mechanised bakery. Modern has evolved to keep in step with the changing needs of consumers by constantly renovating its offering to make it relevant for all segments and to meet various needs, occasions and usages by consumers. Key facts

Indias No 1 Bread Touches the lives of 3 million families

Brown Bread

Atta Shakti

Modern - Multi-seed bread

Modern

5. READY TO COOK: The ready to cook segment can be further divided into: (a) KNOR SOUPS: The Knorr range of soups is available in a number of tasty and exciting varieties. There is a flavour to literally suit every taste palate; the Classic range of soups with flavours like Thick Tomato, Mixed Vegetable Chicken Delite and Tomato Twisty Pasta, the Oriental range with flavours like Sweet Corn Vegetable, Sweet Corn Chicken and Hot n Sour and the Indian range with flavours like Tomato Makhni and Corn Mast Masala

24

(b) KNOR MEAL MAKER RANGE: Knorr Ready to Cook helps the consumer make her family's favourite dishes at home and helps her get restaurant like taste at home itself. It comes in the Indian Ready to Cook range and Chinese Ready to Cook range. Key facts

Knorr in India is generic to soups. Knorr is the largest soup brand in India and has a lions share of the soup market in India 70% All Knorr products have no added preservatives and are a healthy choice option.

Range

Classic Soups

Chinese Soups

Indian Soups

Indian Meal Maker Range

Chinese Meal Maker Range

Soupy Noodles Range

6. KWALITY WALLS: Kwality Walls, the brand with a big heart, offers a range of delightful frozen desserts that bring smiles to the faces of millions of Indians kids, teens and adults. Key facts

Unilever is the world's biggest ice cream manufacturer, operating under the Heartbrand. Heartbrand products are sold in more than 40 countries worldwide and has an annual turnover of 5 billion Also sold as Algida in Italy & Turkey, Langnese in Germany, Kibon in Brazil, Streets in Australia and Ola in the Netherlands

25

Range

Cornetto

Feast

Paddle Pop

Selection

II. HOME CARE BRAND SEGMENT: 1. ACTIVE WHEEL: Indias largest detergent brand, Wheel, aims to bring delight ba ck into the lives of lacks of women across India, by giving them a magical wash experience of lemons and thousands of flowers. Key Facts

The largest selling detergent brand in India. Used by over 1 in 2 households in India Famous for using Bollywood stars as its Brand Ambassadors.

Range

Blue Bar

Lemon & Orange

Lemon & Jasmine

Green Bar

2. RIN: It plays an integral part in enabling us to look good by providing demonstrably superior whites, giving us the confidence to realize our ambitions. Key Facts

Rin was launched in India as a bar in 1969 with the iconic lightning mnemonic. Rin powder was launched in 1994 as Rin Power White Rin Matic for washing machines, launched in July 2008

26

Range

Rin Bar

Rin Powder

Rin Jasmine Powder

Rin Matic

3. SURF EXCEL: A pioneer in the Indian detergent powder market, Surf Excel has constantly upgraded itself over the years, to answer the constantly changing washing needs of the Indian homemaker. Range

Quick Wash Detergent Powder

Blue Detergent Powder

Detergent Bar

Gentle Wash

Matic Top Load

III. PERSONAL CARE BRAND SEGMENT: 1. SOAP: The soap segment of HUL comprises of various brands catering to different customer base. A. BREEZE: Breeze makes use of a new revolutionary global technology which enhances the impact of world class perfumes in a much larger way, apart from bringing out the goodness of glycerine.

27

Key facts

Launched in 1988 as a family beauty soap with the promise of a fresh feeling of nature Comes in 5 attractive variants Lemon Twist, Rose Mallika, Sandal Sparsh, Rajni gandha & Morning Muskaan

Range

Lemon Twist

Rose Mallika

Sandal Sparsh

Rajni Gandha

B. LIRIL: New Liril 2000 makes every part of your skin come alive with freshness. Its combination of lime extracts and tea tree oil freshens and cleanses skin. Liril keeps skin germ-free and so beautiful that you cannot resist touching it. Key facts

One of the oldest soap brands in India A brand that has been consistent in bringing alive freshness A brand that has managed to create breakthrough advertising over the years

Range

Liril 2000 soap C. LUX: Lux stands for the promise of beauty and glamour as one of India's most trusted personal care brands.

28

Key facts

The brand name Lux has been derived from Luxury Since Leela Chitnis in 1929, Bollywood beauties throughout ages have appeared in Lux commercials. Till date nearly 50 Bollywood heroines have featured in Lux ads. The first bar of Lux was made in India and sold for a princely sum of two annas in 1934

Range

Lux Strawberry

Lux Peach

Lux Purple Lotus

Lux International

D. LIFEBUOY: It is an undisputed market leader for 112 years, has a compelling vision to make 5 billion people across the world, feel safe and secure by meeting their personal care hygiene & health needs Key facts

Undisputed Leader in the soaps market of India, with 18.4% share. Turnover of 350 million a year globally, 200 million in India. Recent Awards:Voted in the top 10 most trusted brands in India in the Brand Equity Survey (came in at No. 9 in 2008 as well)Marketing excellence awards for its recent innovations and activations:
o o

Gold at the Emvies 2008 for best use of media innovation ASIA Pacific CSR Award 2007, for Lifebuoy Swasthya Chetna

Range

Core Soaps

Handwash Range

SkinGuard

ClearSkin

29

E. PEARS: With the goodness of glycerine & natural oils, Pears is trusted for being gentle, and is recommended by doctors and paediatricians worldwide. It keeps your skin soft and smiling with innocence. It is so pure that you can actually see through it! Key facts

Pears was first made in 1789 by Andrew Pears in London. This is from where it derived its name! The most famous Pears 'face' is 'Bubbles', from an original painting by Sir John Everett Millais in 1866. The painting later became to be the very first advertising on the brand!

Pears is the worlds first registered brand and it is in existence continuously since then.

Range

Pears Pure & Gentle

Pears Germ Shield

Pears Oil Clear

2. DOVE: Since 1993, Indian women have relied on Dove for beautiful skin. Dove is known to be a keeper of promises and has given real products to women world over. To help you enjoy your own brand of beauty, Dove provides a wide range of personal care, hair care, skin care and deodorants Key facts

Launched first in the US in 1957; is one of the leading brands of Unilever globally. Dove has its footprint in 80 countries worldwide with a range of superior products from bar, lotions, body washes, face care and creams. It is the leading bar brand in UK, US and Canada. Fastest growing hair category brand in India

30

Range

Dove Bathing range

Dove Hair Care range

Dove Deodorants Range

3. ORAL CARE: HUL owns two major brands in the oral care segment with toothpaste as its major product. These are; A. PEPSODENT: It has a range of toothpastes and toothbrushes that could take care of specific oral care needs. Pepsodent toothpaste fights germs to protect teeth against cavities and gives strong teeth, fresh breath and healthy gums. Key facts

Endorsed by FDI ( the largest dental association globally) Among the most trusted brands in India (Brand Equity, Economic Times, India) Also sold as Mentadent, Zhonghua, PS and Signal in other countries

Range

Pepsodent Germicheck+

Pepsodent Whitening

Pepsodent 2in1

Center Fresh

Pepsodent Gum Care

Pepsodent Sensitive

Pepsodent Kids

B. CLOSEUP: The brand has always had a youthful communication, one that has always been unique and fun; using music, song and dance to get its message across. It is aimed at every person who is young at heart.
31

Key facts

First HUL offering in the oral care category First gel toothpaste in India launched in 1980 Market leader in the gel-segment for almost 3 decades Making stars out of models (Present-day stars like John Abraham, Deepika Padukone, Salman Khan, etc. are some of many who have been models of Closeup in the early days of their careers)

Range

Closeup Red

Lemon Mint

Menthol Milk

Calcium

4. HAIR CARE: The hair care segment constitutes the major brands known throughout the hair industry, A. SUNSILK: The Sunsilk hair care range provides a complete hair care solution and functions as a 3-step combination of cleansing, nourishing and manageability that gives a 20 something girl the confidence to express herself. Key facts

Number 1 in Asia, Latin America and the Middle East Sales of more than 1 billion a year. Recent Awards: Holds the Guinness World Record for the most heads of hair washed and styled in one day. Created the largest community for Indian girls which is

www.sunsilkgangofgirls.com

32

Range

Soft & Smooth

Thick & Long

Damaged Repair

Hair Fall Solution

Stunning Black Shine

Anti Dandruff

B. CLINIC PLUS: For most Indians, the first interaction with shampoos has been Clinic Plus. Over time, it has evolved to keep in step with the changing needs of consumers by constantly renovating its offering to make sure it is the best solution for the eternal desire of having long hair for both mom and daughters Key facts

The largest selling Shampoo brand in India. The most widely distributed Shampoo brand in India

Range

Strong and Long Health

Strong and Long Natural

Strong and Long Anti Dandruff

5. SKIN CARE: The skin care segment caters to the beauty of the women and men by providing products ranging from whiteness cream to anti marks. A. PONDS: Ponds, has been listening to womens needs and desires for 150 years and this has enabled us to deliver new products customised to their needs. Ponds accompanies them on their journey to enhance the beauty of their skin
33

Range

Age Miracle

Flawless

White Perfect

White Beauty

B. FAIR & LOVELY: Its skin-lightening technology is known to be the best in the world! However, this hasnt stopped the brand from innovating fu rther to pioneer the development of cutting-edge fairness solutions. Key facts

Developed in 1975, Fair & Lovely is the worlds first fairness cream. It contains no bleach or harmful ingredients. Instead, it provides visible fairness in a safe and reversible process. In 2003, it was rated as the Twelfth Most Trusted Brand in India by ACNielsen ORGMARG. In 2004, it was identified as a Super Brand.

Range

Multivitamin Ayurvedic Balance

Antimarks

Menz active

Winter Fairness

34

Chapter 4: Data Tabulation

In order to design the BCG matrix of HUL and to diversify the various products into Cash Cows, Dogs, Stars and Question marks, data had been collected at the industry level from various authenticated sources. Thus the entire data is being tabulated in three spheres: I. MARKET GROWTH RATE DATA: This industry level data will help us to portray the various segments in which the HUL has launched its products to be into High or Low market growth rate. For this purpose a recently conducted survey of the FMCG (Fast Moving Consumer Goods) industry by CII (Confederation of Indian Industry) has been consulted. The highlights of which are: The FMCG industry as a whole has maintained a higher growth of 13% in the fiscal year April-March 2010-11 The market or industry growth rate of various segments of FMCG are as follows:

Growth Rate

Segments/Sectors 15

Deodorant 41.5% (40%), Anti-ageing cream 30.5% (30%), Tooth paste 22% (20%), Skin and fairness cream 18% Excellent growth of above 20 percent (>20%) (16%), Mens Fairness product 32% (32%), Hair colorants/dies 22% (21%), Cleaners and repellents 23% (22%), Feminine hygiene 22% (20%), Baby diapers 21% (20)% and Dish wash 27% (26%)

15

Figures in brackets are the previous year 2009-2010 growth rates

35

Detergent powder 16% (15%), washing cakes 13% (13%), toilet soaps 16% High growth rate of 10 to 20 percent (10-20%) (15%), tooth brush 13% (13%), fairness cream 18% (16%), mens hair grooming and styling 20% (18%), branded coconut oil 10% (10%), shampoos 12% (9.8%), baby care 17% (17%) and skincare 15% (15%). Moderate growth of 0 to 10 percent (0-10%) Table: 4.1

Toothpowder 1.8% (2%), Liquid soaps 7% (6%), Shaving products 8% (7%), and coconut oil 2% (2%)

II.

RELATIVE MARKET SHARE DATA: The relative market data has been calculated for almost all the products of HUL whereby their market share is being evaluated with respect to the largest competitor in the market;

The market share has been analysed on the basis of various Business articles, Annual Financial Statements of HUL and its competitors, Market Research firms, etc. Efforts have been made to attain the most accurate market share in the present market scenario since being a FMCG industry the volatility is quite high. A detailed is hereby provided along with the calculated RVM;

36

S. NO.

INDUSTRY

HUL PRODUCT AND ITS MARKET SHARE (C1)

LARGEST COMPETITOR AND ITS MARKET SHARE (C2) Fa (8.5%) Colgate - Palmolive

RELATIVE MARKET VALUE (RMV) =C1/C2 2.9416

1.

DEODRANT

AXE Deodorant (25%) Close Up and Pepsodent (32.8 %)

2.

TOOTHPASTE

{Colgate Dental Cream, Active Salt, and Cibaca} (52.4%)

0.6217

3.

FAIRNESS CREAM

Fair & Lovely (76%)

Cavin Kares {Fairever} (15%) Emami {Fair & Handsome} (Almost equal to 70%) Reckitt Benckiser {Harpic} (80%) Nirma (35%) Nirma {Ghari} (13.5%) 1.5422 0.1221 0.1320 0.0419 5.0618

4.

MENs FAIRNESS CREAM

Fair & Lovely Menz Active (<5%)

5.

FLOOR CLEANER DETERGENT BAR DETERGENT POWDER

Domex (10.5%) Rin (4.2%) Wheel (20.83%)

6.

7.

Business Standard, http://www.business-standard.com/india/news/can-axe-retain-its-effect/415654/ Colgate Financial Statements, http://www.colgate.co.in/ 18 http://www.articlesbase.com/health-articles/there-are-a-number-of-fairness-creams-in-the-market-939990.html 19 http://www.hindustantimes.com/StoryPage/Print/590367.aspx 20 Mariquity, Market club of MDI, http://www.mdi-marquity.com/Case-Study/Reckitt%20Benckiser%20%20Harpic%20Case.pdf 21 http://toostep.com/insight/success-story-of-nirma; http://www.lbhat.com/advertising/comparative-advertisingthe-debate-is-back/ 22 http://articles.economictimes.indiatimes.com/2011-05-06/news/29517095_1_ghari-detergent-brand-nirma
16 17

37

8.

DETERGENT POWDER

Surf (35%) Lifebuoy

Wheel (20.83%) Nirma (10%) Nirma (10%) Pantene (9.4%) Pantene (9.4%) Pantene (9.4%) ITC {Ashirwad} (40%) Tata Tetley (56%) Nivea (20.2%) Maggi Ketchup {Nestle} (47%) Mapro Jam (21%)

1.68

9. TOILET SOAP 10.

(18.4%) Lux (15.5%) Dove (7.9%)

1.84

1.55

11.

0.8423

12.

SHAMPOO

Clinic Plus (21.1%) Sunsilk (15.8%) Annapurna (26%) Taj Mahal (25%) Vaseline (55.6%) Kissan Ketchup

2.2424

13.

1.68

14.

ATTA

0.6525

15.

TEA BAG MOISTURISING CREAM

0.4426

16.

2.75

17. FOOD 18.

(26%) Kissan Jam (65%) Table: 4.2

0.55

3.09

http://www.business-standard.com/india/news/dove-flies-high-pantene-waits-inwings/408550/ http://www.livemint.com/2010/08/10224005/N-Rajaram--As-leaders-we-ha.html 25 http://www.hindustantimes.com/ 26 http://www.slideshare.net/sushmagurav/market-research-on-tea-in-india

23 24

38

III.

RELATIVE SEGMENTS SALES DATA27: The entire range of HUL offering is being divided into five major segments and the segmental analysis of it is being here under done for the year ended 31 March 2011; (in crores) SALES OF PRODUCTS AS % OF TOTAL SALES 44.6 29.7 11.9 4.6 1.4 5.6 2.2

PRODUCTS SEGMENT Soaps and Detergents Personal Products Beverages Foods Ice Creams Exports Others

TOTAL SALES OF HUL 20,018.51 20,018.51 20,018.51 20,018.51 20,018.51 20,018.51 20,018.51

SALES OF PRODUCTS IN 2010-11 8,791.56 5,844.10 2,343.97 902.57 274.58 1,171.79 656.05

Table: 4.3 (in crores) % OF GROWTH IN EACH SEGMENT 6.168501 14.64603 8.990537 21.11338 17.28249

PRODUCTS SEGMENT Soaps and Detergents Personal Products Beverages Foods Ice Creams

SALES OF PRODUCTS IN 2010-11 8,791.56 5,844.10 2,343.97 902.57 274.58

SALES OF PRODUCTS IN 2009-10 8,265.64 5,047.90 2,142.43 730.78 231

Table: 4.4

27

Annual Financial Statement of HUL for the year 2010-2011

39

Chapter 5: Data Analysis BCG Matrix of HUL

(OBJECTIVE II) After going through the data being collected and tabulated in the chapter 4, the analysis will be done of each table to design the BCG matrix of the various products of HUL: MARKET GROWTH RATE ANALYIS: The table 4.1 clearly depicts the various FMCG sectors in which the industries are performing at a high rate, moderate rate and a low rate of growth. Since the entire FMCG sectors growth rate is calculated to be 13%, thus this 13% benchmark will be used to distinguish between the industries (w.r.t. HULs products) with high growth rate and low growth rate. High Growth Rate Industries Deodorant Anti-Ageing Cream Tooth Paste Skin And Fairness Cream Mens Fairness Product Cleaners Dish Wash Detergent Powder Toilet Soaps Processed Food Packed Wheat Flour Tea Bags Washing Cakes Ice Creams Shampoos Toothpowder Liquid Soaps Shaving Products Jam & Jellies Moisturizing Creams Packed Branded Tea Coffee Low Growth Rate Industries

40

RELATIVE MARKET SHARE ANALYSIS: The table 4.2 provides the relative market value of HUL products in comparison with the largest competitor for the individual products. The market leader position occur when the relative market value crosses 1.0 because then the organisations market share in terms of sales is above that of its largest competitor. The bigger the value (>1.0) the higher market share that product has and is more preferably placed on the extreme of the BCG matrix.

High Market Share

Low Market Share

AXE Deodorant Fair & Lovely Fairness Cream Wheel Surf Excel Lifebuoy Lux Clinic Plus Sunsilk Vaseline Kissan Jam Vim Kwality Walls Lipton28 Red Label Knor Soups29

Close Up Pepsodent Fair & Lovely Menz Active Domex Rin Dove Shampoo Annapurna Taj Mahal Tea Bags Kissan Ketchup Bru Breeze Taaza Brooke Bond Sehatmand Knor Meal Maker Range

On the basis of above mentioned analysis, almost every product of HUL is being analysed against the industry to which it belongs and then placed in one of the 4 quadrants of BCG matrix

28 29

HUL Factsheet, No 1 tea in the world HUL Factsheet, No 1 in the soup segment with 70% share

41

BCG MATRIX OF HUL

STARS
High AXE Deodorant Fair & Lovely Lakme Anti Ageing Vim Wheel Surf Excel Lifebuoy Lux Kwality Walls Kissan Jam Knor Soup

QUESTION MARKS
Close Up Pepsodent Annapurna Fair & Lovely Menz Active Domex Rin Breeze Taj Mahal Tea Bags Kissan Ketchup Knor Meal Maker

Market Growth

CASH COWS

DOGS

Low

Clinic Plus Sunsilk Vaseline Red Label

Taaza Brooke Bond Sehatmand Bru

High

Low

Market Share
42

Chapter 6: Conclusions & Recommendation

(OBJECTIVE III) An in-depth analysis of the entire markets data has been done and the various SBUs and products of HUL have already been classified into the four quadrants of BCG matrix. Subsequent to their allocation into one of the four quadrants a detailed parallelism will be drawn with the various strategies being discussed in the first chapter and will be quote conclusively.

1. COWS: Since the cows needed to be milked now and then, and efforts are to be made to ensure that they maintain the largest share in the market the following strategies are being adopted by HUL; Product Development: Sunsilk created the largest community for Indian girls which is www.sunsilkgangofgirls.com. Sunsilk innovatively comes up with an entire product range of Soft & Smooth, Thick & Long, Damaged Repair, Hair Fall Solution, Stunning Black Shine and Anti Dandruff. Clinic Plus has evolved to keep in step with the changing needs of consumers by constantly renovating its offering to make sure it is the best solution for the eternal desire of having long hair for both mom and daughters. Vaseline the moisturising cream has developed itself from just being a petroleum jelly to a leader among moisturisers with Vaseline Total Moisture, Vaseline Aloe Cool, Fresh Vaseline Healthy White and Vaseline Lip Care. Concentric Diversification: To keep milking its cash cow Red Label, the HUL after floating its company entered into a series of merger and acquisition of related tea companies starting with Brooke Bond and then Lipton. Lipton was added because it catered to only the premium segment whereas Red Label focussed upon
43

middle level segment. Thus a manoeuvred approach to widen the customer base. 2. STARS: The stars though generate funds but need to be constantly invested into because their prospectus of becoming cash cows depends on the pre-requisite of them being the market leader. Market Development: AXE came out with highly innovative products (like Axe Instinct, Axe Dark Temptation, Axe Pulse and Axe Denim) and intensive sexually provocative advertisements thereby converting the non-users of deodorant products into its users. Market Penetration: Kissan Jams new squeeze collection of different fruit flavours namely mango, blueberry, etc. in attractive and kids friendly packaging is an attempt to boost more sales within the existing kid segment. Joint Venture: Initially HUL and Lakme Limited, a TATA company, came out with Lakme Unilever Limited, a 50:50 joint venture. Though later on the Lakme Limited sold its entire divested selling its entire shares to HUL. Backward Integration: The Doom Dooma and Tea estate, two production facilities of Unilever were merged with Brooke Bond. Later in 1995, Brooke Bond and Lipton were merged to form Brooke Bond Lipton India Limited (BBIL) 30. BBIL acquired Kwality and Milkfood 100% brand names and distribution assets accordingly and HUL introduced Wall's ice creams.

Because of the high growth rate of tea industry, they both were stars in that period and later on switched into cash cows
30

44

3. QUESTION MARKS: Since they are the new entrants or strugglers in the market for major share where the market is changing at a high pace, efforts are being made to make sure that the gain on their market share. Product Development: Pepsodent entered into a major modification of its Germicheck and Whitening toothpaste by coming up with the Sensitive and Gumcare range of toothpastes. Knor soups coming up with the entire range of soups ranging from tomato mix vegetable, Chinese to chicken soups.

Market Penetration: Kissan Ketchup has come up with a new packaging called Pichkoo, the attempt has been to induce the users to use more and more of ketchup every time they use it.

4. DOGS: Dogs they are run on breakeven point and in the eyes of an accountant they are not even viable. But can be important for synergies; Divestment: In line with company's business strategy to exit non-core business, the Company has disposed its Mushroom business, which formed part of KICM (Madras) Ltd and its Seeds Business also in the year 2004

RECOMMENDATIONS: The existing strategies for the various segment of the entire product range of HUL have already been concluded. Certain recommendations are hereby given for the selection and adoption of strategies;

45

While implementing the strategy due consideration should be given to the above shown movements of products through various quadrants in order to ensure that only strategies within possibility of success sequences are being executed. RECOMMENDED STRATEGIES: Though HUL has been implementing several strategies to outperform and boost up its market share. Following are some strategies that might lead to generation of cash cows:

1. QUESTION MARKS: Taj Mahal Tea bags in order to capture the market share of Tetley Tea bags should also come up with its own range of Herbal or Green Tea bags . (Product Development)

46

 Close Up being a leader in the gel based toothpaste segment should try to cut the monopolistic holding of Colgate in the market by: a) Coming up with innovative cream based toothpastes b) Entering into the toothpowder industry31 Kissan Ketchup can boost up its market share to outcast Maggi by expanding its geographical base by going for wide scale product distribution, thereby substituting ketchups name with Kissan ketchup in the minds of users. (Market Development)

2. STARS: Having Vim, Wheel, Lifebuoy and Lux in the star segment and that too in an industry with high growth rate, HUL should go for backward integration in order to secure the supply of raw material for all the soaps. (Backward Integration) To maintain its market share Lakme Anti-Ageing should carry on excessive interactive sessions with high network individuals. Record those sessions and use them as advertisements to get their product indirectly endorsed by them. (Market Development) 3. DOGS: Brooke Bond Sehatmad should be sold off because the customer tastes and nutritional requirements have changed from sipping vitamin B enriched tea to anti-oxidants enriched tea. With the evolution of green tea, the demand by health conscious individuals is more of anti-oxidants rather vitamin b, as fruits provide an ample source of vitamins. (Liquidation)

Being an industry with low growth rate, conversion of it being an entrant though will be requiring lot of investment but if processed will end up providing HUL with one more cash cow
31

47

LIMITATIONS
The entire project is based upon an extensive research extending from the individual products market share data to that of the entire industry, but there is no such thing as perfection when it comes to research because perfection is just a state of relative comparison. The applicability of the findings of project suffers from certain limitations, such as. The dependence is entirely on the market surveys, annual financial statements of the company and economic news. There was an element of Time Constraint while carrying out the research, whereby not all the products of HUL would have been covered by the project.

48

BIBLIOGRAPHY
Books: Prasad LM, Business Policy; Strategic Management, Sultan Chand & Sons, 2001 Aaker David A, Strategic Market Management, 6th Edn; John Wiley & Sons Inc., 2005 Wheelan Thomas L& Hunger David J, Strategic Management & Business Policy; Entering 21st Century Global Society, 6th Edn, Addison- Wesley, 1998

Websites: http://www.hul.co.in http://en.wikipedia.org/wiki/Growth-share_matrix#Critical_evaluation http://www.maxi-pedia.com/BCG+matrix+model http://www.economictimes.com

Reports: HUL Factsheet HUL, Annual Financial Statement 2010-11

49