A COMPREHENSIVE ORGANIZATINAL STUDY OF HUL

Conducted on

HINDUSTAN UNILEVER LIMITED

Submitted by

PATHA SANTHOSH

14MB1365

Submitted to

In partial fulfillment of the requirement

Forward Of

Masters

In

Business administration

(2014-2016)

1
 Declaration

I PATHA SANTHOSH, Roll no 14MB1365, student of MBA, ISBR Business School,

Bangalore hereby declare that the research project report on HINDUSTAN

UNILEVER LIMITED, is an original and authenticated work done by me. I further

declare that it has not been submitted elsewhere by any other person in any of the

University for the Award of any degree or diploma.

Date: Name of student

19-1-2015 P.SANTHOSH

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 Acknowledgement

I would likely to extend my deepest appreciation to all who provided the possibility to

complete the project. I take the opportunity to express my profound gratitude an deep

regards to my guide Prof Madhu smriti for her exemplary guidance, monitoring and

constant encouragement throughout the course of organizational study. Her guidance

helped in coordinating the project successfully and in writing this report.

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 Contents

Chapter I

i. Introduction

Chapter II

i. Importance of study
ii. Company profile / Industry Detail / Products /Services

Chapter III

i. SWOT Analysis
ii. Porters 5 force model
iii. 7s frame work

Chapter IV

i. Conclusion and recommendations

Appendix

i. Bibliography

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5
 EXECUTIVE SUMMARY

Hindustan Unilever Limited is the Indian arm of the Anglo-Dutch company

Unilever. Both Unilever and HUL have established themselves well in the Fast

Moving Consumer Goods (FMCG) category. In India, the company offers many

households brands like, Dove, Lifebuoy, Lipton, Lux, Pepsodent, Ponds, Rexona,

Sunsilk, Surf, Vaseline etc. Some of its efforts were also rewarded when four of HUL

brands found place in the Top 10 brands list for the year 2008 published in The

Economic Times.

Unilever was a result of the merger between the Dutch margarine company,

Margarine Unie, and the British soap-maker, Lever Brothers, way back in 1930. For

70 years, Unilever was the undisputed market leader but now faces tough competition

from Proctor & Gamble and other Water Purifier companies.

HUL is also known for its strong distribution network in India. HUL launched a water

purifier in 2004 in a district in Chennai. The idea behind this project was to create

separate market place among the water purifier market so HUL launched that purifier

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 CHAPTER-I

INTRODUCTION

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

Company with a heritage of over 81 years in India and touches the lives of two out of

three Indians.

HUL works to create a better future every day and helps people feel good, look good

and get more out of life with brands and services that are good for them and good for

others.

With over 35 brands spanning 20 distinct categories such as soaps, detergents,

shampoos, skin care, toothpastes, deodorants, cosmetics, tea, coffee, packaged foods,

ice cream, and water purifiers, the Company is a part of the everyday life of millions

of consumers across India. Its portfolio includes leading household brands such as

Lux, Lifebuoy, Surf Excel, Rin, Wheel, Fair & Lovely, Ponds, Vaseline, Lakm,

Dove, Clinic Plus, Sunsilk, Pepsodent, Closeup, Axe, Brooke Bond, Bru, Knorr,

Kissan, Kwality Walls and Pureit.

The Company has over 16,000 employees and has an annual turnover of INR 27408

crores (financial year 2013 - 2014). 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 49.8 billion in 2013.

Unilever has 67.25% shareholding in HUL.

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 CHAPTER-2

Importance of study:

Hindustan Lever and its constituent companies have been in India since 1912. Over

these decades, the company has benefitted greatly from the developments in the

country; I believe that the company equally, in its own way, has contributed to these

developments. This congruence of interests can best be exemplified by seeing the way

in which the company has reflected national priorities over the years, through its

strategy and operations. Looking ahead, it is clear that the country is now dedicated to

growth with a renewed sense of purpose and that national interests will evolve. As a

company, we remain committed to evolving national priorities and see a bright and

promising future both for ourselves and for the country; indeed we believe that the

future of Hindustan Lever depends on the future of India.

Hindustan Unilever Limited is the Indian arm of the Anglo-Dutch company

Unilever. Both Unilever and HUL have established themselves well in the Fast

Moving Consumer Goods (FMCG) category. In India, the company offers many

households brands like, Dove, Lifebuoy, Lipton, Lux, Pepsodent, Ponds, Rexona,

Sunsilk, Surf, Vaseline etc. Some of its efforts were also rewarded when four of HUL

brands found place in the Top 10 brands list for the year 2008 published in The

Economic Times.

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Unilever was a result of the merger between the Dutch margarine company,

Margarine Unie, and the British soap-maker, Lever Brothers, way back in 1930. For

70 years, Unilever was the undisputed market leader but now faces tough competition

from Proctor & Gamble and other Water Purifier companies.

HUL is also known for its strong distribution network in India. HUL launched a water

purifier in 2004 in a district in Chennai. The idea behind this project was to create

separate market place among the water purifier market so HUL launched that purifier

AIM AND ESTABLISHMENT OF THE COMPANY:

a)Date of establishment 1933

Industry consumer goods

Headquarters Mumbai, Maharashtra, India

Key people Harish manwani (chairman), sanjiv Mehta (ceo and md)

Net income 26.91 billion (US$420 million) (20112012)

b) Vision, mission, goals, aims & policies developed

Vision: Unilever is a unique company, with a proud history and a bright future. We

have ambitious plans for sustainable growth and an intense sense of social purpose.

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A clear direction

Our purpose is to make sustainable living commonplace. We work to create a better

future every day, with brands and services that help people feel good, look good, and

get more out of life.

In 2009, we launched The Compass our strategy for sustainable growth. It sets out

our clear and compelling vision to double the size of the business, while reducing our

environmental footprint and increasing our positive social impact and gives life to our

determination to build a sustainable business for the long term. This is captured in

the Unilever Sustainable Living Plan.

By combining our multinational expertise with our deep roots in diverse local

cultures, were continuing to provide a range of products to suit a wealth of

consumers. Were also strengthening our strong relationships in the emerging markets

we believe will be significant for our future growth.

And by leveraging our global reach and inspiring people to take small, everyday

actions, we believe we can help make a big difference to the world.

"We cannot close our eyes to the challenges that the world faces. Business must make

an explicit and positive contribution to addressing them. Im convinced we can create

a more equitable and sustainable world for all of us by doing so, says unilever ceo

But this means that business has to change. The Unilever Sustainable Plan is a

blueprint for sustainable growth. And in 2014 we are strengthening our Plan with new

commitments to drive further transformational change.

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Priorities and principles

Unilever is committed to supporting sustainability and providing our consumers

around the world with the products they need to look good, feel good and get more

out of life.

Five key priorities provide the foundation for our brands campaigns. Read some

examples of how different brands are upholding these principles.

A better future for children

Our oral care brands Signal and Close-Up encourage children to brush their

teeth day and night for optimal dental health. We also partner the FDI World

Dental Federation, supporting oral health programs around the world

Brands such as Omo and Persil have helped parents believe the

unconventional philosophy that Dirt is good. Children learn through play, and

mud spatters and grass stains can easily be removed with effective laundry

products

Unilever also partners the World Food Program and launched the Together for

Child Vitality initiative to bring our expertise in nutrition to children in some

of the worlds poorest countries.

A healthier future

Our Flora/Becel margarine brands have been scientifically proven to help

reduce cholesterol levels

Vaseline has launched the Vaseline Skin Care Foundation, providing research

into skin conditions and support for people affected by them

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 Lifebuoy soap has long had a presence in developing markets around the

world, and its campaign to promote handwashing with soap was celebrated by

200 million people across 53 countries in 2013.

A more confident future

Doves Campaign for Real Beauty uses real women instead of models in its

advertising campaigns. The brand has also launched the Dove Self Esteem

Fund which educates and inspires millions of young women

Our Sunsilk hair care brand has partnered some of the worlds leading hair

specialists to co-create formulas tailored to treat conditions such as hair-fall,

frizz, limp locks and uncontrollable curls

Close-Up toothpaste provides an affordable oral care solution for consumers in

developing markets, allowing them to take care of their dental health and

closer with confidence.

A better future for the planet

Were aiming to grow our business while reducing our environmental

footprint and working across the supply chain for every brand to do so

Our Laundry brands, including Surf, Omo, Persil and Comfort, have launched

the Cleaner Planet Plan together, encouraging consumers to change their

laundry habits to reduce water and energy consumption

Our Lipton tea brand backs sustainable forest management projects in Africa

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A better future for farming and farmers

Many of our brands contain ethically and sustainably sourced ingredients that

are independently certified

Among these are Lipton tea, which is accredited by the Rainforest Alliance,

and Ben & Jerrys ice cream, which includes Fair trade vanilla and almonds in

various flavors

Around half our raw materials come from agriculture and forestry, so were

working towards making our key crops 100% sustainable.

Mission or goal:

Unilevers mission is to add vitality to life. we meet every day needs for

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

look good and get more out of life.

The main aim of the company is to make a billion of Indians feel safe and

secure.

Hindustan unilever policies:

Unilever is committed to providing the very best not only to our customers but also to

the environment. Read up on some Unilever policies that aim to do just that.

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Environment policy

The aim of the Policy is to do all that is reasonably practicable to prevent or minimise,

encompassing all available knowledge and information, the risk of an adverse

environmental impact arising from processing of the product, its use or foreseeable

misuse.

Quality policy

Our Quality Policy describes the principles that everyone in Unilever follows,

wherever they are in the world, to ensure that we are recognised and trusted for our

integrity, the quality of our brands and products, and the high standards we set.

Safety and health policy

Hindustan Unilever Limited (HUL) supplies high quality goods and services to meet

the daily needs of consumers and customers.

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Corporate social responsibility policy

HUL is committed to operate and grow its business in a socially responsible way. Our

vision is to grow our business whilst reducing the environmental impact of our

operations and increasing our positive social impact.

Affirmative action policy

HUL is a signatory to the CII Code of Conduct on Affirmative Action and affirms its

recognition.

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c) position/stage in life cycle

Understanding lifecycle impacts of the companys products is a crucial to

deliver the target of reducing overall environmental impact across the value chain

while growing our business. For this purpose, unilever globally has adopted the

process of lifecycle assessment [LCA] for all product innovations. our company

leverages and benefits from various innovations and technological advancements

made by unilever globally.

LCA is one of the techniques to understand environmental impacts of

products.

Types of services/production given/produced

Food and beverages

Home care

Personal care

Water purifier

Food brands:

Annapurna salt and atta

Bru coffee

Brooke Bond (3 Roses, Taj Mahal, Taaza, Red Label) tea

Kissan squashes, ketchups, juices and jams

Lipton tea

Knorr soups & meal makers and soupy noodles

Kwality Wall's frozen dessert

Modern Bread, ready to eat chapattis and other bakery items

Magnum (ice cream)

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Homecare Brands

Active Wheel detergent

Cif Cream Cleaner

Comfort fabric softeners

Domestos disinfectant/toilet cleaner

Rin detergents and bleach

Sunlight detergent and colour care

Surf Excel detergent and gentle wash

Vim dishwash

Magic Water Saver

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Personal Care Brands:

Aviance Beauty Solutions

Axe deodorant and aftershaving lotion and soap

LEVER Ayush Therapy ayurvedic health care and personal care products

Breeze beauty soap

Clear anti-dandruff hair products

Clinic Plus shampoo and oil

Close Up toothpaste

Dove skin cleansing & hair care range: bar, lotions, creams and anti-perspirant

deodorants

Denim shaving products

Fair & Lovely skin-lightening products

Hamam

Lakm beauty products and salons

Lifebuoy soaps and handwash range

Liril 2000 soap

Lux soap, body wash and deodorant

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 Pears soap

Pepsodent toothpaste

Pond's talcs and creams

Rexona soap

Sunsilk shampoo

Sure anti-perspiran

Vaseline petroleum jelly, skin care lotions

TRESemm

TIGI

Water Purifier Brand:

Pureit Water Purifier

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DEPARTMENTS OF THE COMPANY

Executive director

It is a term sometimes applied to the chief executing officer (CEO) or managing

director of an organization, company, or corporation. The role of the Executive

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Director is to design, develop and implement strategic plans for the organization in a

cost-effective and time-efficient manner. The Executive Director is also responsible

for the day-to-day operation of the organization. This includes managing committees

and staff as well as developing business plans in collaboration with the board. In

essence, the board grants the Executive Director the authority to run the

organization. The Executive Director is accountable to the Chairman of the Board and

reports to the board on a regular basis - quarterly, semiannually, or annually. The

board may offer suggestions and ideas about how to improve the organization, but the

Executive Director decides whether or not, and how, to implement these ideas.

Non executive director

A non-executive director (abbreviated to non-exec, NED or NXD) or outside

director is a member of the board of directors of a company or organisation who does

not form part of the executive management team. They are not employees of the

company or affiliated with it in any other way and are differentiated from inside

directors, who are members of the board who also serve or previously served as

executive managers of the company (most often as corporate officers). Essentially

the non-executive director's (NED) role is to provide a creative contribution to the

board by providing independent oversight and constructive challenge to the executive

directors.

Management committee

The management committee (or sometimes referred to as the Board) of a sport

organisation is a body of people who have been given powers and responsibilities by

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the members of the organisation, to manage the affairs of the organisation. The

number of people who serve on a management committee varies from organisation to

organisation but typically the number is between 6-10 people.

BACK GROUND OF HUL:

In the summer of 1888, visitors to the Kolkata harbor noticed crates full of Sunlight

soap bars, embossed with the words "Made in England by Lever Brothers". With it,

began an era of marketing branded Fast Moving Consumer Goods (FMCG).

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

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

market in 1937.

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

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

United Traders Limited (1935). These three companies merged to form HUL in

November 1956; HUL offered 10% of its equity to the Indian public, being the first

among the foreign subsidiaries to do so. Unilever now holds 67.25% equity in the

company. The rest of the shareholding is distributed among about three lakh

individual shareholders and financial institutions.

The erstwhile Brooke Bond's presence in India dates back to 1900. By 1903, the

company had launched Red Label tea in the country. In 1912, Brooke Bond & Co.

India Limited was formed. Brooke Bond joined the Unilever fold in 1984 through an

international acquisition. The erstwhile Lipton's links with India were forged in 1898.

Unilever acquired Lipton in 1972, and in 1977 Lipton Tea (India) Limited was

incorporated.

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

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

Since the very early years, HUL has vigorously responded to the stimulus of

economic growth. The growth process has been accompanied by judicious

diversification, always in line with Indian opinions and aspirations.

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

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

allowed the company to explore every single product and opportunity segment,

without any constraints on production capacity.

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

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

Tata Oil Mills Company (TOMCO) merged with HUL, effective from April 1, 1993.

In 1996, 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.

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

1994, Kimberly-Clark Lever Ltd, which markets Huggies Diapers. HUL has also set

up a subsidiary in Nepal, Unilever Nepal Limited (UNL), and its factory represents

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

manufactures HUL's products like Soaps, Detergents and Personal Products both for

the domestic market and exports to India.

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

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

General Foods, with significant interests in Instant Coffee. In 1993, it acquired the

Kissan business from the UB Group and the Dollops Icecream business from Cadbury

India.

As a measure of backward integration, Tea Estates and Doom Dooma, two plantation

companies of Unilever, were merged with Brooke Bond. Then in 1994, 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.

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

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

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

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

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

technology base. The amalgamation was done to ensure for the Group, benefits from

scale economies both in domestic and export markets and enable it to fund

investments required for aggressively building new categories.

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

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

equity in public sector undertakings (PSU) to private sector partners. HUL's entry into

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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.

HUL launched a slew of new business initiatives in the early part of 2000s. Project

Shakti was started in 2001. It is a rural initiative that targets small villages populated

by less than 5000 individuals. It is a unique win-win initiative that catalyses rural

affluence even as it benefits business. Currently, there are over 45,000 Shakti

entrepreneurs covering over 100,000 villages across 15 states and reaching to over 3

million homes.

In 2002, HUL made its foray into Ayurvedic health & beauty centre category with the

Ayush product range and Ayush Therapy Centres. Hindustan Unilever Network,

Direct to home business was launched in 2003 and this was followed by the launch of

Pureit water purifier in 2004.

In 2007, the Company name was formally changed to Hindustan Unilever Limited

after receiving the approval of shareholders during the 74th AGM on 18 May 2007.

Brooke Bond and Surf Excel breached the Rs 1,000 crore sales mark the same year

followed by Wheel which crossed the Rs.2,000 crore sales milestone in 2008.

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

In January 2010, the HUL head office shifted from the landmark Lever House, at

Backbay Reclamation, Mumbai to the new campus in Andheri (E), Mumbai.

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On 15th November, 2010, the Unilever Sustainable Living Plan was officially

launched in India at New Delhi.

In March, 2012 HULs state of the art Learning Centre was inaugurated at the

Hindustan Unilever campus at Andheri, Mumbai.

In April, 2012, the Customer Insight & Innovation Centre (CiiC) was inaugurated at

the Hindustan Unilever campus at Andheri, Mumbai

HUL completes 81 years of corporate existence in India on October 17th, 2014.

PROMOTERS OF HUL:

Shares pledged or otherwise

Total Shares held
encumbered
As a %
of % of As a % of
No.Name of the Shareholder
grand Total grand total
Number Number
total shares (A) + (B) +
(A) + (B) held (C)
+ (C)
1 Unilever PLC 1,114,370,148 51.52 - - -
2 Brooke Bond Group Ltd 106,739,460 4.93 - - -
Unilever Overseas
3 68,784,320 3.18 - - -
Holdings AG
Unilever UK & CN
4 60,086,250 2.78 - - -
Holdings Ltd
Brooke Bond South India
5 52,747,200 2.44 - - -
Estates Ltd
Brooke Bond Assam
6 32,820,480 1.52 - - -
Estates Ltd
Unilever Overseas
7 18,865,000 0.87 - - -
Holdings BV
Total 1,454,412,858 67.24 - - -

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PRODUCT LINE: A group of related products manufactured by a single company.

For example, a cosmetic company's makeup product line might include foundation,

concealer, powder, blush, eyeliner, eyeshadow, mascara and lipstick products that are

all closely related.

d)FEATURES OF THE PRODUCTS

Our brands play a major part in helping us achieve our sustainable living aims of

helping more than a billion people improve their health and well-being; halving the

environmental footprint of our products and sourcing 100% of our agricultural raw

materials sustainably.

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 E) MARKETING STRATEGY

In 1990s HUL wanted to expand its reach in rural India. It had a choice to adopt the

traditional distribution model which could have set the cash registers ringing. But

HUL adopted an approach which was rooted in its belief of Doing Well by Doing

Good. It created a unique micro-entrepreneurship model with the aim of integrating

business interests with societal need.

This model has been guided by the belief that the private sector can help create

solutions to social challenges through innovative strategies that meet both business

and social objectives. By promoting micro-enterprise, Project Shakti not only made

great business sense but also had deep social impact.

The choice of micro-entrepreneurship model had clear benefits for the rural

community:

Sustainable investment opportunity for village community/rural women.

Increase in the household income of poor families of Shakti Entrepreneurs (SEs).

Empowerment to rural women.

Better standards of living though access to health and hygiene products.

Basic business management training for sustained livelihood to rural underprivileged

women. In this unique model, the company sells the products at additional discounts

to the Shakti Entrepreneurs (SEs) thus enabling them to raise incomes of their

families. The initiative almost doubles the average household income of a SE.

Moreover, the company also invests in training the entrepreneurs and empowering

them with sales tools like mobiles, bicycle etc.

In general, a rural woman from poor economic background (in some cases member

from a Self Help Group) is selected as a Shakti entrepreneur, commonly referred as

'Shakti Amma'. She receives stocks from HULs rural distributor. After being trained

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by the company, the Shakti entrepreneur then sells those goods directly to consumers

and retailers in the village.

Historical data shows that a majority of our Shakti Ammas are earning more than Rs.

1,000 a month. This is a significant proportion when compared to the per capita

income of their state, especially for the poorer states.

In 2013, we focused on improving and stabilizing the mobile based mini ERP

(Enterprise Resource Planning) solution that we introduced in the Shakti network last

year. This has helped Shakti Ammas to take and bill orders, manage inventory and

drive better distribution efficiencies.

SHAKTIMAANS

The programme was extended in 2010 to include Shaktimaans who are typically the

husbands or brothers of the Shakti ammas. Shaktimaans complement our Shakti

ammas. They sell our products on bicycles to surrounding villages, covering a larger

area than Shakti ammas can do on foot. There are over 50,000 Shaktimaans across

India. Each shaktimaan covers around 3 villages in his own villages vicinity which is

a larger area than a woman, Shakti amma, can cover on foot.

A GEM FOR UNILEVER

HULs Project Shakti became the model to reach out to rural consumers in developing

and emerging markets and enabled Unilever to tap opportunity at the bottom of the

pyramid. The project is being customized and adapted in several South-East Asian,

African and Latin American markets like Bangladesh, Sri Lanka and Vietnam. In

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Bangladesh and Sri Lanka, it is being promoted as project Joyeeta and Saubaghya

respectively.

WHEEL DETERGENT

The wheel detergent brand was established in the year 1987 by HUL (Then HLL) to

give competition to the then hot brand Nirma. In the year 2004, Wheel became

the first Indian brand to reach the 1000 Crore mark.

Projected as a product of the masses,Wheel detergent today contributes to around

2500 crore or roughly 12% of 20000 crore turnover of HUL.

Indian Laundry sector growing at a CAGR of 20-25 per cent is pegged at INR 13000

crore. The market share is divided amongst three key players of the Industry i.e Rohit

Surfactants Ghari detergent powder, HULs wheel and Procter and Gamble Indias

Tide detergent. Wheel Green is the single largest detergent brand in India in terms of

market share and value.

Wheel powder

Active wheel

Year 2012, saw Wheel claiming the number one market share slot in the laundry soap

market with an annual sales of 3700 crore in year 2012, against Ghary detergents

annual sale of 3500 crore.

In year 2011, as a part of strategic revamp initiatives by HUL, the distribution of

Wheel detergent was revamped. Now wheel was supplied across India through 20

supplier owned factories and 6 Lakh new delaers were added in the distribution

network.

Talking about marketing of the Brand Wheel, it has been projected as a brand for

home makers in India. Active Wheel targets smaller cities and highlights less

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washing effort as its major quality. Wheels NO Sweat NO effort campaign shows

women led commission, arrests any irresponsible husband who makes his wife sweat

washing clothes.

LUX MARKETING STRATEGY

This Hindustan Unilever product has focused on wide promotions most of

which has been short lived. Apart from tagging itself as a beauty brand made for the

stars, it has even designed short term promotions for sales. One of the famous ones

being:

The Lux Gold Star Offer This was one of the popular promotions which offered

gold coins in few selected soaps.

Star Bano Aish Karo This offer gave a chance to few lucky winners who got a

chance to live a day like Aishwarya Rai with gift offers worth Rs.50,000 from

Shoppers Stop and beauty makeover by Michelle Tung and Neeta Lulla sarees

(Aishwarya Rais favorite stylist and designer). The bumper prize was dinner date

with Aishwarya Rai herself and later in 2009 the same offer changed into a dinner

date with Aishwarya Rai Bachchan and Abhishek Bachchan together.

Har Star Lucky Star- This came at the time when Shahrukh Khan was aired in

Lux advertisements when the brand had finished 75 years of stardom. In this offer,

selected lux soap packets had stars printed with number 75 inside the wrapper. The

lucky winners got the opportunity to avail free supply of Lux soaps for a year.

RIN DETERGENT MARKETING STRATEGY

1969 Rin Bar was launched in India with the iconic lightening mnemonic.

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1994 Rin Detergent Powder was launched. This was the first product extension from
the iconic brand that stood for whiteness in laundry.

2007 The brand made an addiction in its portfolio with the introduction of Bleach

another whiteness solution for the Indian household. It even added the Rin Matic,

a specialist washing machine powder, based on the insight that ordinary powders do

not deliver performance in a machine wash thus leading to an unsatisfied consumer

need.

2012 Rin Perfect Shine, a liquid blue was launched. It is yet another extension of the

brand that promises to deliver sparkling white clothes.

Rin promised to position itself as a surf with Whitening ability, but, it could not

find a tagline that was powerful enough to convey the brand promise. In the year

2008, the brand adopted the punchline Duguni Safedi, Duguni CHamak. The ad

was catchy, but it could not establish a connection. So, Rin came up with the famous

tagline-Chamakte Rehna. It gives the brand new opportunities to communicate with

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the consumers and has immense potential and possibilities for new campaigns. The

tagline itself is making Rin a strong brand and helped it make an aggressive approach.

Recently, Rin released a new campaign- Rin Challenge which was endorsed by

Kajol. In the advertisement, Kajol challenges a group of women to join TEAM

RIN, highlighting the brands core competency Whiteness.

Hindustans Unilevers Rin and Proctor Gambles Tide are at loggerhead over a latest

advertisement by HUL where it puts an offer to the consumers to choose 1kg of Rin

pack with an Extra 100gm powder priced at Rs.67 over a 950gm pack of Tide priced

at Rs.80. HUL justifies it by saying that the advertisement is a factual representation

of the price of the two brands and helps consumers make an informed choice. It was

although not the first time that HUL had directly compared Rin with Tide. In 2010, it

used the tagline, Rin offers better whiteness than Tide as a promotional tool to be

used by the brand.

Rin detergent marketing strategy : Rins direct attack on Tide.

Nonetheless, Rin today is the most trusted by millions of households across the

country as it understands the demands and needs of its customers to deliver best in

class whiteness through its various innovative product offerings.

33
COMPETITORS OF HUL:

DABUR INDIA

COLGATE PALMOLIVE

MARICO

P&G

GODREJ INDUSTRIES

GILLETTE INDIA

EMAMI

JYOTHY LABORATORIES

HENKEL INDIA

FEM CARE PHARMA

AMAR REMEDIES

JHS SVENDGAARD

JL MORISON INDIA

PEE CEE COSMA

MULLER & PHIPPS

ADOR MULTIPROD

POLAR PHARMA

PARAM COSMETICS

MY FAIRLADY

VELVETTE INTL. PHARMA

JYOTI COSMETICS

ITC

WIPRO

34
 G) GOVERNMENT POLICIES:

FICCI-federation of Indian chamber of commerce & industry

FICCI FMCG committee is actively involved in the issues related to policy & strategy,

capacity building and global recognition to the Indian FMCG industry. The policy and

strategy agenda include taking steps to stimulate the growth of the industry, implementation

of taxation related issues, addressing the regulatory concerns and expanding the horizon of

industry by taking up the issues of direct selling distribution model.

FICCI FMCG division works under the aegis of FMCG Committee which is composed of the

key decision makers of FMCG (Non Food) Industry . The committee comprises of 26

members. It is chaired by Mr. Kurush Grant, Executive Director-FMCG Business, ITC

Limited and Co-chaired by Mr. Saugata Gupta, MD & CEO, Marico Limited

Other prominent members are Emami Limited, Fena Private Limited, Godfrey Philips India

Limited, Godrej Consumer Products Limited, Johnson & Jonson Limited, Lotus Herbals Ltd,

Nivea India Private Limited, Colgate Palmolive India Ltd, Procter & Gamble, Reckitt

Benckiser (India) Ltd, Carrefour WC&C India Pvt Ltd., HUL, Mother Dairy Fruit And

Vegetable Pvt. Ltd, Keventer Agro Ltd and many more.

Some of the key agendas pursued are as follows:

Legal Metrology Act:

Submitted various representations to the Ministry of Consumer Affairs on the

35
 standard packaging rule

Deferred the amendment on packaging rules for 6 months

Incorporation of a wide range of products with multiple options on packaging

The Act incorporated in the list of Acts which need immediate reforms

Industry Interaction to be organized in the month of May at Mumbai

Misleading Advertisements:

FICCI has been invited to be on board of the Inter Ministerial Monitoring Committee

FICCI representatives/industry members sent to the seminars / road-shows organized

by Ministry of Consumer Affairs in various states

FICCI represented at a Seminar on Consumer Awareness organized by Ministry of

Consumer Affairs

Propagated FICCIs stand on continuing with self- regulation for advertising in

various seminars and media.

Submitted Representation on distinction between Surrogate Advertisement and Brand

Extension

Submitted representation to Ministry of Consumer Affairs on the guidelines with

regard to Misleading Advertisement and promoting self-regulation for this issue.

To organize a round table interaction between the Secretary, Ministry of Consumer

Affairs and the CEOs of the concerned Industries to deliberate on some of the key

issues pertaining to Misleading Advertisement

Drugs & Cosmetics Act:

Submitted our comments to Ministry of Health & Family Welfare on behalf of our

members seeking explanation on the notification proposing insertion of rule 148 C in

36
 Drugs and Cosmetics Rules 1945, as No person shall use any animal for testing of

cosmetics.

Issue of Canteen Sales Department:

Worked closely with industry on streamlining the process of supplies to Canteen

Store Department.

Met the chairman & GM, CSD in Mumbai and presented to him the recommendations

of the Industry for effectively serving the defense consumers.

This was one of the first kinds of initiative taken by FICCI and CSD acknowledged

FICCI to be the only chamber to have interacted with them.

H) TAXATION ASPECTS:

For the financial year ending march 31st 2014

(Rs. crores)

For the year ended For the year ended

31st March, 2014 31st March, 2013

Revenue from operations,

net of excise 28,019.13 25,810.21

Profit before exceptional

items and tax 4,799.71 4,349.48

Profit for the year 3,867.49 3,796.67

37
Dividend (including tax on
distributed profits)* (3,272.97) (4,655.68)

Transfer to General Reserve (386.75) (379.67)

Profit & Loss Account balance

carried forward 743.05 535.28

* In the year 2012-13, the Board of Directors declared a Special

Dividend of Rs. 8.00 per Equity Share

1.2. Category Wise Turnover

(Rs. crores)

For the year ended For the year ended

31st March, 2014 31st March, 2013

Sales Others*" Sales Others*"

Soaps and Detergents 13,460.98 222.43 12,460.96 240.86

Personal Products 7,979.81 141.10 7,309.10 162.56

Beverages 3,275.12 36.74 2,913.67 60.99

Packaged Foods 1,620.75 27.55 1,473.86 31.88

38
Others (including
Exports, Chemicals, Infant
Care Products, Water,
etc.) 1,071.63 84.67 1,048.79 43.99

TOTAL 27,408.29 512.49 25,206.38 540.28

* Others include service income from operations, relevant to the

respective businesses

1.3. Summarised Profit and Loss Account

(Rs. crores)
For the year ended for the year ended
31st March, 2014 31st March, 2013

Sale of products less excise

duty 27,408.29 25206.38

Other operational income 610.84 603.83

Total Revenue 28,019.13 25,810.21

Operating Costs (23,543.87) (21,806.46)

Profit before Depreciation,

Interest, Tax (PBDIT) 4,475.26 4003.75

39
Depreciation (260.55) (236.02)

Profit before Interest &

Tax (PBIT) 4,214.71 3767.73

Other Income (net) 585.00 581.75

Profit before exceptional

Items 4,799.71 4349.48

Exceptional items 228.68 608.40

Profit before Tax (PBT) 5,028.39 4957.88

Taxation (1,160.90) (1,161.21)

Profit for the year 3,867.49 3,796.67

Basic EPS (Rs.) 17.88 17.56

Basic EPS (Rs.) 17.88 17.56

Problems
The problems that Hindustan Unilever Limited currently facing is increasing

input costs and operations costs due to rise in raw material costs, increasing imitative

and spurious products, and stiff competition from other FMCG players.

There is slowdown in the global economy and the problem that started in the financial

sector extended rapidly to other sectors affecting not only the US but the global

economy. Most of Indias domestic sectors are also affected including countrys

exports performance and FMCG sectors.

40
Hindustan Unilever Limited has a large brand portfolio consisting number of brands.

It will be difficult to manage such extended brand portfolio by any company but it is

the nature of FMCG industry and company. The current global scenario with

swinging raw material prices and intense competition faced by the company needs a

careful management.

Major issues or problems

The problem that the company is facing for long time is the increasing imitative

products. The popularity of the HULs brand and the reach it possess drives the local

manufactures to imitate the products leading some to produce even the fake products.

The fake products are seen highly in rural markets. This greatly affects the brand

equity of the HUL.

The company is facing increasing input costs due to increase in price of the raw

materials. There is a potential impact on the company due to rising inflation, freight

costs and raw materials.

Hindustan Unilever Limited is facing tough competition than years before from ITC,

Procter & Gamble, Colgate-Palmolive, Nestle and Godrej. ITC is competing toughly

with HUL through various brands that are market leaders. The competition is further

intensified by several new entrants. This intensified competition already witnessed by

HULs losing market share in certain segments and also increase in operation costs.

41
STRATEGY FORMULATION:

Strategic alternatives:
The strategic alternatives for HUL to address the issues of increasing input costs and

operations costs due to rise in raw material costs, increasing imitative and spurious

products, and stiff competition from other FMCG players are,

Leverage and Proliferation of brand portfolio

Competitive pricing

Cost efficient initiatives

Leverage and proliferation of brand portfolio:

HUL has gained reputation of meeting customer needs through various products in

different segments. HUL has strong supply chain and distribution network meeting

customer needs. This gives competitive advantage for HUL over its competitors. The

proliferation of brand portfolio will protect customers especially in rural markets from

purchasing spurious products. HULs product of different brand in same category will

back the revenue generating brand from imitative products.

Competitive pricing:

Hindustan Unilever Limited facing stiff competition from organized as well as

unorganized players in the industry. This is an industry where buyers have numerous

choice of brand to shift one brand to another brand if not affordable. Rising inflation

in the country makes the companies to increase the price of their product. Competitive

pricing will get the local manufactures and organized players on their feet.

Cost efficient initiatives:

42
Increase in the raw material price and uncertainties in the commodity movement rises

the operation costs of the company. The company is in desperate need to do some

initiatives like cutting down the advertisement cost and also to cut down the cost in its

operation rather than worrying about the increase in raw material price.

Alternative Evaluation:
Leverage and proliferation of brand portfolio:
Leveraging and proliferation of brand portfolio by introducing new brands will help

the company to compete with the spurious products and competitors brands by

providing the customers a variety of brand in the same category. This will prevent the

customers from shifting to imitative products and competitor brands thereby retaining

the customers. Hindustan Unilever Limited has a competitive advantage of robust

supply chain and distribution network. This will help the new brand in reaching the

customers effectively. The disadvantage is that the company will have various brands

in the same category which may make difficult to manage them.

Competitive pricing:

This strategy of competitive or decreasing the price of companys product will not to

efficient. The company is dealing with increase in input and operation costs. Reducing

the price of the products will decrease the profit margin. Moreover it will start the

price war in the industry which is not good for the company as well as to the industry.

Most of the HULs market leader brands are being closely chased by its competitors

with only slight difference in the market share and lot of local products. Also, in many

categories in oral, skin care segments the competitors are having market leader brands

with strong foothold. Initiating the price war will have a drastic impact on all the

segments also will not increase the profit margin.

43
 Cost efficient initiatives:

The cost efficient initiative like reducing cost over advertisement and reducing the

operation cost will help the company to gain competitive advantage in its operations.

However FMCG industry requires consistent advertisements and promotional effects

to stay in the minds of customers. Cutting down the expense on advertisement will let

the competitor to gain advantage over HUL in reaching the customers mind. Also the

organization cannot do much about the increasing raw material cost where they have a

choice of only optimizing the procurement procedures.

achievements

Hindustan Unilever Limited (HUL) has emerged as the No. 1 Employer of Choice

across all sectors for the 2014 graduating batch of BSchool students

Awarded top Indian company in the 'FMCG' sector for the third consecutive year at

Dun & BradstreetRolta Corporate Awards, 2009

HUL ranked fourth in the Top Companies for Leaders, 2009' (Asia Pacific region)

and 10th place in the global rankings in a survey carried out by Hewitt Associates

Awarded Customer and Brand Loyalty Award by Business India & Business

Standard in 2009

Awarded for Best Corporate Social Responsibility Practice at the Social &

Corporate Governance Awards 0809 by BSE, Nasscom Foundation and Times

Foundation

44
 Awarded in the Category 'FMCG Manufacturing Supply Chain Excellence' at the

Third Express, Logistics & Supply Chain Awards by APL Logistics, Indiatimes,

Mindscape, Business India Group in 2009

The companys Orai unit received the Gold Excellence award and the Khalilabad

unit received the Silver Excellence award in the environment category by

Greentech Foundation in 2009

HUL's Goa factory won a Gold Trophy at the Greentech Awards in 2009 the

manufacturing sector category for their outstanding work in Safety Management

Project Shakti won the Silver Trophy at the EMPIIndian Express Indian

Innovation Awards, 2009

Kwality Wall's Swirl's awarded 'The Franchisor of the year' for the Icecream

parlor category by Franchise India in 2009

HUL was felicitated for receiving the highest number of patents in the year 2009 at

Annual Intellectual Property Awards 2010. The award was instituted by

Confederation of Indian Industry (CII) in association with Department of Industrial

Policy & Promotion (DIIP) and Intellectual Property India (IPI) in New Delhi.HUL

brands have topped Brand Equity's Indias Most Trusted Brands Survey rankings

for 2010. Six HUL brands (Lux, Lifebuoy, Clinic Plus, Pond's, Fair & Lovely and

Pepsodent) featured in the top 10 and eight in the top 20. All together there are 17

HUL brands among the 100 most trusted brands in the 2010 survey. Additionally,

five HUL brands (Fair & Lovely, Lifebuoy, Lux, Pepsodent and Ponds) featured in

the list of ten Hall of Fame brands. This recognition was accorded to brands which

consistently ranked high in the survey over the last 10 years since its inception. In

2009, three HUL brands featured in the top ten, and seven in the top twenty.

45
 Received CNBC AWAAZ Consumer Awards in six categories for 2010 Green

company of the year, Value for money brand of the year, Ad effectiveness award,

Marketer of the year award across all categories, Most preferred personal care

company in FMCG category (for the third consecutive year), Most Preferred home

care company in FMCG category (for the third consecutive year).

HUL received the Award for Excellence in HR in 2010 from Confederation of

Indian Industry (CII). This is a rigorous factbased assessment which is conducted

by a team of external assessors. HUL has won this award for the third consecutive

year.

Five of HUL's leading brands Lux, Dove, Pears, Clinic Plus and Sunsilk won

the Reader's Digest Trusted Brand 2008 Awards.

Four HUL brands featured in the top 10 list of the Economic Times Brand Equity's

Most Trusted Brands 2008 survey

HUL was awarded the Bombay Chamber Civic Award 2007 in the category of

Sustainable Environmental Initiatives.

HUL was selected as the top Indian company in the FMCG sector for the Dun &

Bradstreet American Express Corporate Awards 2007.

HUL is also one of the country's largest exporters; it has been recognised as a

Golden Super Star Trading House by the Government of India.

National and international image

The Indian Economy is surging ahead by leaps and bounds, keeping pacewith

rapid urbanization, increased literacy levels, and rising per capita income.

The big firms are growing bigger and small-time companies are catching up as

well.

46
 According to the study conducted by AC Nielsen, 62 of the top 100 brands are

owned by MNCs, and the balance by Indian companies.

Fifteen companies own these 62 brands, and 27 of these are owned by

Hindustan UniLever.

The companies mentioned here are the leaders in their respective sectors.

The personal care category has the largest number of brands, i.e., 21,

inclusive of Lux, Lifebuoy, Fair and Lovely, Vicks, and Ponds. There are 11

HUL brands in the 21, aggregating Rs. 3,799 crore or 54% of the personal

care category.

The food category has also seen innovations like softies in ice

creams, chapattis by HUL, ready to eat rice by HUL

Share market position

With a market capitalization of Rs. 61,000 crores,

the Company is a part of the everyday life of millions of consumers across

India. The company earned revenues of Rs. 5,000 crores with a net profit

margin 12%.

Future prospectus
Growth Horizons for the New Millennium

At Hindustan Lever we believe that the management of the day is the custodian of the

company's legacy, and also a trustee for tomorrow. The measure of its achievement is

not just sustaining present performance, but equally assuring future prospects. To

secure the future, the main task of management is to realize sustainable growth. To

47
achieve this, we believe that we must spare no effort. We therefore stretch our growth

ambitions to set aspirations that many others might consider unrealistic.

Our quest for growth is underpinned by a strong belief that the next millennium will

be the millennium of knowledge. This inevitably means that people, as carriers of

knowledge, will be an organizations most important asset. In fact, physical assets

will lose much of their importance to business success. For India, this is indeed good

news because this is the country's big chance to leverage its key strength: its vast pool

of highly talented people. The pharmaceuticals and software industries are already

doing this and reaping the gains of their foresight. Very soon, many other industries

will also begin to capitalize on India's well-educated and highly skilled people.

The millennium of knowledge calls for a new paradigm - business growth through

people growth. Growth is the lifeblood of Hindustan Lever. It is at the root of

sustained shareholder value creation. Growth is created not by that amorphous entity,

the organization, but by its talented and knowledgeable people. Which is why we

make sure every employee has an exciting career and every opportunity for personal

development. We know that the better we harness the potential of our excellent

people, the faster Hindustan Lever will grow. Equally, the faster Hindustan Lever

grows, the more opportunities we can create to excite and retain our talent.

Three pillars support this paradigm of business growth through people growth.

Firstly, the key to creating and sustaining business growth is to combine distinctive

insight and foresight into developing our markets and meeting the evolving needs of

our consumers. We do this by creatively applying technology and knowledge that

push the boundaries of the possible. In doing so, we proactively drive the

development of new opportunities and markets. In this way, Hindustan Lever will

emerge as a shaper of its own destiny to the benefit of its shareholders, its employees,

48
its consumers, and India at large. The key question therefore is how do we increase

food consumption?

Secondly, knowledge development must be the focus of our efforts. The secret of

growth is to convert mere information into distinctive knowledge and capabilities that

will give us an advantage over competition. We must complement this quest for

knowledge with an outward-looking perspective that will allow us to identify,

evaluate, and apply ideas and best practices from around the world. We will

compound this learning with the distinctive insights and skills of our own employees

to build an unbeatable competitive edge.

Finally, to win in the millennium of knowledge, we must continue to attract and excite

the best talent in India. Today, talented people have more options available than ever

before. The challenge for us is to create an environment in which employees can work

with freedom, within a framework of empowerment and accountability, vested with

unparalleled powers to imagine, create, and implement their ideas -- fully supported

by investments in knowledge and technology.

49
These three pillars will hold together the future edifice of Hindustan Lever.

Shaping Our Destiny

To build the first pillar, Hindustan Lever must develop distinctive insights by

understanding how ongoing economic and social change is affecting the business

environment. We know that the difference between successful and unsuccessful

companies is the ability to foresee the future and prepare for it, so that when

opportunities arise they can be fully captured. Given the changes we expect over the

next decade, the challenge for Hindustan Lever will be to respond effectively to the

new markets that these changes will create.

It is important to recognize that change is already upon us, leading to new

opportunities for growth. Some companies are already benefiting from these

opportunities by creating new products and services or by redesigning their business

systems. Hindustan Lever itself is a case in point. We have always responded

effectively to new challenges. When our industries were deregulated, we set up new

capacity at little cost because we were ready with local adaptations of technology we

had received from Unilever. Within a few years of deregulation, we were able to

consolidate Unilever's operations in India because we already had a blueprint for

internal realignment. We will continue to devise such creative responses to the

challenges that the next millennium will bring.

As usual, we are already preparing to do so. To identify future trends at the global

level, Unilever has conducted a worldwide effort to single out the consumer

megatrends of the new millennium. The study has identified product and service

opportunities that Unilever can create and shape in the future. These opportunities can

be grouped into three themes: health and vitality, convenience and leisure. They

broadly hold true for the Indian consumer too. In India as well, we have already

50
discerned some megatrends. The early years of the next millennium will be marked by

major social and economic shifts that will change the way consumers behave.

Stimulated by increased knowledge, information and buying power, these shifts will

create aspirations for better lifestyles. If companies can respond creatively, demand

will escalate.

By 2005, more than two-thirds of the country's 1.1 billion people will be literate.

Close to half the people will be very young, under the age of 20. Higher education

will also have expanded due to the increasing international linkages that the Internet

and other interactive media will provide. Television will cover practically all of urban

India and over 60 per cent of rural India. The number of households earning over

$10,000 a year, in terms of purchasing power parity, will double from 16 million to 31

million. A further 165 million homes will provide a vast pool of consumers for the

mass market.

Modern telecommunications will be widespread. It was inconceivable a decade ago

that about 3.4 lakh villages would be connected by telephone; today this has become a

reality. Information Technology (IT) will pervade many homes. Promoting IT use is a

key element of the Government's agenda now. Steps will be taken to increase personal

computer penetration from 1 in every 500 persons to 1 in every 50 by 2008. The

600,000 existing public call offices are to be converted into public tele-information

centres with electronic mail and Internet connections. Large investments will be

required to meet these goals. But it is reasonable to assume that by 2005 much

progress will be made.

51
These developments will give rise to two major opportunities: new demand at the

lower end of the market spectrum, and a dramatic shift in the nature of demand at the

upper end. The key to capturing these opportunities will be technology. The

implications for our business will be profound.

As millions of people move from earning subsistence livelihoods to being able to

satisfy basic desires, a burgeoning mass market will emerge. In our market seeding

initiatives, we have already seen this latent potential. We think that applying state-of-

the-art technology to create and deliver value-for-money products to consumers, will

be the key to unlocking this market potential. For example, research in biochemistry,

cereal science and process engineering can help develop low-cost but nutritious food

products for low-income consumers whose demand for protein-rich foods will

increase. Delivering value for money will also require a cost-effective supply chain.

Satellite-based communication, which we already use to link up our factories, depots

and offices, can be extended to distribution stockists by making it easier to service the

demand and also to monitor our expanding network. As disposable incomes rise, the

aspirations of the newly prosperous will also rise. They will demand adequate choice,

functionality and other brand benefits. Today's proliferation of products bears this out.

Before 1991, there were only five manufacturers in the personal care industry. Today,

there are over 20, catering to the 9 per cent of homes that form the upper income

group. When by 2005, the number of such households doubles, demand for value-

added products will flourish. Technology will play an important role in serving these

high-end consumer segments as well. For example, developments in combinatorial

chemistry can help identify ingredients that will deliver consumer-desired

performance in personal care products. The advent of electronic commerce will also

allow companies to tailor value propositions to the needs of individual consumers. In

52
this new world of continuous relationship marketing, Hindustan Lever will be able to

establish very deep and direct linkages with consumers to build an unassailable

market position.

We have done a lot in the past to respond to changes in our environment. But we need

to do even more. Leveraging our insight into the consumer's needs and our

technological strengths, we will develop distinctive knowledge, our second pillar of

growth.

Developing Distinctive Knowledge

Knowledge must be distinguished from mere information. For example, it is well

known that the Indian housewife seeks convenience products. But she does not want

them to completely substitute her own home management skills. We must develop

distinctive knowledge to understand what exactly would offer her convenience and

yet allow her to be creative. This will enable the company to develop products that do

not just meet her expectations but exceed them.

To realise growth, knowledge must be converted into products or services that

actually offer value to the consumer. In an environment of abundant choice, growth

will come from being the best providers of the best value. This means that the

company has to develop distinctive knowledge in the entire chain of activities from

the acquisition and conversion of materials to the delivery of finished products to

customers.

Today, much of this knowledge resides in individual businesses and functions of the

organisation but can be applied in different divisions of the company. For example,

our knowledge on health can equally be applied in personal care offerings and in food

products.

53
This knowledge must be put to the vital task of creating new opportunities through

extensive sharing of knowledge among our businesses. We are putting in place

mechanisms and systems to enable knowledge sharing, that rapidly extend insights

and competencies developed in different divisions across the company. By internally

realigning the organisation, we have been able to identify such knowledge synergies.

We are also using IT to bring more focus to this process. We have already made

extensive investments in integrating different functions through IT and will continue

to do so.

It is critical for the organisation to continuously build upon and refresh the knowledge

it develops within. This happens in the organisation's continuous interface with

consumers. It also occurs through our linkage with Unilever. We have complete and

direct access to Unilever's international R&D and technology, which has enabled us to

introduce best-of-class international products and processes. Significant enrichment

also takes place indirectly through the exchange of managers between Unilever and

Hindustan Lever.

We will complement these sources of learning with special efforts to identify and tap

external sources of knowledge; the time is now ripe for us to systematically tap the

wealth of global experience and ideas, even outside the Unilever system. We will

build a knowledge web that includes external groups who can contribute to our idea

generation or technology development. As India globalises, we will lead the field to

power our own globalisation of knowledge and technology.

This will also help us to strengthen the third pillar of growth: recruiting, exciting and

retaining the best talent.

The Best Employer

54
Brands, technology and capital are considered the fundamental assets of a business.

Indeed they are. But they are created and leveraged by people. The imagination and

innovation of our employees has allowed us to create brands and leverage technology

and capital, to meet the needs of new and evolving consumers. Many of our brands

are more than a hundred years old and yet as young as if they had been launched

yesterday. We have extended them to meet the niche needs of different segments. We

have also invented technologies that convert apparently simple substances into high-

value ingredients. In some of our businesses, we derive a very high yield on gross

capital employed, while absolute margins on the products remain pegged at

reasonable levels. The stretch in brands reflects the stretch in our people's minds. The

technological feats we have accomplished reflect our people's ingenuity in deriving

innovations from science. The value we have extracted from capital corresponds to

the value our people have added to business processes. To achieve our full potential,

we must continue to empower our people to stretch their minds, ingenuity and

abilities.

In the ultimate analysis, the company is nothing but a collective intellect. Its success

is determined by the state of mind, and therefore centres around people's attitudes. We

believe that to win in the market, we first need to win in the mind; and to win in the

mind we must 'will' things to happen. Therefore, the dynamism we wish to inculcate

in our organisation is proportional to the dynamism we unlock in the minds of our

employees. Businesses are ultimately built by the spirit of the women and the men

behind them, fired with the capability and desire to succeed. We must transform our

people into sustained winners, accentuating their strengths and bridging their gaps.

This in turn will influence the

55
company's collective entrepreneurial ability and competitiveness, enabling us to adopt

new approaches and an abiding ability to take risks, the rewards of which are going to

be huge in the pursuit of growth.

In our model of business growth through people growth, therefore, people will be

vested with unparalleled power to imagine, innovate and implement new ideas, fully

supported by investments in technology, marketing, research and people development.

As our people increasingly acquire more capabilities, our businesses will develop and

retain their competitive edge. This will, in turn, attract more and more talented people,

completing the virtuous cycle.

To grow, we must continue to imagine and innovate. Doing new things and doing

things differently must become a corporate capability. The organisation will create the

conditions that foster this capability. We recognise that this will mean providing

operational autonomy and encouraging risk-taking. People must have the freedom to

implement their business ideas in a manner most relevant to their consumers. But they

must also be accountable to the strategic framework of the organisation.

This approach of freedom within a framework of accountability will require us to

review our organisation structures and people management systems. The aim will be

to drive decision-making to empowered teams as close as possible to the frontline.

This empowerment will breed entrepreneurship. We will also fine-tune our people

management systems to enhance employees' strengths and bridge their skill gaps.

Each individual will receive the attention required to upgrade corporate capability and

eliminate any collective drawbacks.

We firmly believe that our new paradigm will create a powerful value proposition for

current and future talent. As we pursue this paradigm, we will make concerted efforts

to attract, excite, and retain India's top talent, while pursuing our time-tested policy of

56
meritocracy which rewards performance and productivity. Our focus will be to fully

empower our people to increase their speed and enhance their creativity in deriving

growth from all opportunities over time. Our business model will make Hindustan

Lever not just a great company in India but also a great employer.

The over-riding theme, however, is always growth. To this end, we have already

appointed a dedicated team of young yet experienced managers to analyse future

trends and suggest ways to further strengthen growth. At the end of this exercise, we

will have a growth blueprint for the company, comprising our current businesses and

future options.

Managing Growth Horizons

Achieving rapid, sustainable growth requires that we manage three horizons

simultaneously: growing current businesses, expanding into related businesses, and

seeding options for future growth.

In our current categories, growth will come from increasing consumption and reach.

The opportunities for increasing consumption in India are large because its per capita

consumption is much lower than international levels. We have many categories, such

as toothpaste, shampoo and skin care, with very low penetration; only 4 out of 10

Indians use toothpaste, about 2 out of 10 shampoo their hair and only 1 out of 10 uses

face cream. Clearly, these categories offer tremendous growth potential. Even in a

near-saturated category like personal wash, India's per capita consumption is just 460

gms compared to 1,100 gms in Brazil.

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The scope to increase reach is also large. At least 50 per cent of India's population is

not directly covered since market reach is restricted to urban areas and those villages

connected by motorable roads. The challenge for us is to develop appropriate

channels to extend reach. For instance, a critical task for us is to create a network that

directly reaches the mass market in rural areas. We already have a significant direct

distribution network. But most of the new demand will be generated in areas we do

not yet cover. We are therefore putting in place a supply chain to directly cover these

areas, parts of which are not even accessible by motorable roads. By the time

infrastructure develops, we will have established our brands and will be able to realise

their full potential.

To grow our current businesses, we will also need to develop innovative business

systems. For most of our consumers, product choices hinge on affordability. Our

approach therefore is to find out what the consumer can pay and then tailor the supply

chain to offer the product or service within that price. For example, we have

introduced systems like replenishment-based supplies and vendor-managed inventory

to offer affordable prices to consumers. We are also using IT to redesign our business

systems in pursuing better quality, better service and lower cost.

All these steps - increasing consumption, expanding infrastructure to reach new

geographies, and developing cost-effective business systems - will maximise the

potential of today's core businesses. But they will also open up altogether new

business opportunities. The extensive interface we are building with consumers is

adding to our understanding of emerging needs. This understanding will help us

manage our other horizons of growth.

In expanding into related businesses and seeding options for future growth businesses,

the objective for Hindustan Lever is to better serve the needs and lifestyles of both our

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existing and potential consumers. We must develop products that fulfil new

aspirations but still meet old needs. We have already proved our ability to do this. For

example, urban consumers continue to oil their hair, and yet seek value additions like

dandruff control. So we have produced a dandruff-control hair oil, the only such

product in its category. Low-income consumers in rural India drink tea to assuage

hunger, not as a social custom. So we have introduced a tea-based beverage that

contains other appropriate edible ingredients.

We are also developing direct-selling mechanisms to serve the customised needs of

urban India. We have just launched a full range of customised personal care regimens

through a network of trained consultants. In the future, emerging interactive

technology tools will help provide even better service. When a consumer uses

interactive media, she leaves behind a trail of advertising seen, information sought

and transactions conducted. It enables better market segmentation, targeted

promotions and customised products. By making buying decisions over the television,

computer or telephone, consumers will continuously tell companies about their usage

patterns, leading to more focused targeting at lower costs. We have already developed

interactive tools such as websites, telephone helplines and touch screen kiosks for

some of our brands. As technology spreads, we will also explore direct-to-consumer

transactions for relevant products.

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Delivering high quality products, given the state of India's infrastructure, its

fragmented retail trade and extreme weather conditions is often viewed as a challenge.

But we see this as an opportunity to expand and seed new businesses. For example,

frozen products are the most difficult to deliver in our weather conditions. For our

cold chain we have therefore developed a technology based on eutectics, which helps

overcome these difficulties. This cold chain is now used for our ice cream business,

but can eventually be a channel for other categories as well. Thus, today's core

activities are the foundation for new businesses, which in course of time, will create

further businesses, in a virtuous cycle. What is critical is to be proactive and

farsighted in creating this cycle. Our entry into ventures like branded staples,

customised personal care products and vending are examples of our vision. More such

ventures must and will follow.

Thus, today's core activities are the foundation for new businesses, which in

course of time, will create further businesses, in a virtuous cycle. What is

critical is to be proactive and farsighted in creating this cycle. Our entry into

ventures like branded staples, customised personal care products and vending

are examples of our vision. More such ventures must and will follow.

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 CHAPTER III

SWOT ANALYSIS

1. HUL is a part of the Unilever group, hence strong brand equity

2. It has over 15000 employees

3. Reach 6.4 million retail outlets which include direct reach to over 1.5

million retail outlets

4. Two R&D centres in India in Mumbai and Bangalore

5. Products with presence in over 20 consumer categories with over 700

million Indian consumers using its products

6. As a part of CSR, HUL has initiatives like project Shakti, plastic

recycling, women empowerment etc

Strength

1. Market share is limited due to presence of other strong FMCG brands

2. HUL products has stiff competition from big domestic players and

international brands
Weakness

1. Tap rural markets and increase penetration in urban areas

2.Mergers and acquisitions to strengthen the brand

3.Increasing purchasing power of people thereby increasing demand

Opportunity

1. Intense and increasing competition amongst other FMCG companies

2.FDI in retail thereby allowing international brands

3. Competition from unbranded and local products

Threats

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 PORTERS 5 FORCE MODEL

1.Barriers to Entry and exit: The Indian FMCG Industry is characterized with modest

entry and exit barriers. Integrated business model and increasing capital requirement

in the industry restrict new entrants. Huge investments in setting up distribution

networks and promoting brands and competition from established companies.

2.Threat of substitutes: Being an essential commodity the demand for consumer

products is elastic. Multiple brands positioned with narrow product differentiation.

Companies entering a category /trying to gain market share compete on pricing which

increases products substitution. Hence, threat of substitute is high in the industry.

3.Buyer bargaining power: High brand loyalty for some products, thereby

discouraging customers product shift. But low switching cost and aggressive

marketing strategies under intense competition within the FMCG companies, induce

Customers to switch between products, thereby driving value for money deals for

consumers.

4.Supplier bargaining power: Prices are generally governed by international

commodity markets, making most FMCG companies price takers. Due to the long

term relationships with suppliers etc., FMCG companies negotiate better rates during

times of high input cost inflation

5.Industry Competition: Competitiveness among the Indian FMCG players is high.

With more MNCs entering the country, the industry is highly fragmented. Advertising

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spends continue to grow and marketing budgets as well as strategies are becoming

more aggressive. Private labels offered by retailers at a discount to mainframe brands

act as competition to undifferentiated and weak brands.

7s:

Strategy

The direction and scope of the company over the long term.

The strategy of HUL has been to introduce new and innovative products at

competitive price in the markets which gives value for money. This is the prime

reason that the company emphasizes is a lot on research and development. This is the

prime reason that the company emphasizes a lot on research and development. This is

why it has been termed as the most reputed FMCG brand in the country.

Structure

Board at the apex-Headed by Chairman,

comprising 5 whole time Directors and 5 independent non-executive Directors.

Divisions: Each division is self-sufficient with dedicated resources and assets in sales,

marketing, commercial, and manufacturing.

Each category and each function - Sales, Commercial, Manufacturing - is headed by a

Vice President.

For managing sales operations, HUL divides the country into four regions, with

regional branches in Delhi, Kolkata, Chennai and Mumbai.

In Marketing, each category has a Marketing Manager who heads a team of Brand

Managers dedicated to each or a group of brands.

Each Division has a nationwide manufacturing base, with each factory peopled by

teams of Production, Engineering, Quality Assurance, Commercial and Personnel

Managers.

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Systems

Substantial investments in IT-based sales system

Every salesman now books orders on a palmtop

All orders are fed into a central database from the distributor point.

This extensive network is installed at all 3,500 distributor pointswhich makes for

accurate on-the-fly demand projections and helps avoid stock-out losses.

Style

NitinParanjpe- Youngest CEO & MDCEO Factory-Produced many business leaders

HUL& leadership development model has groomed managers by providing a well-

rounded view of the business through job rotation and various new assignments.

The system was designed to identify fast-trackers, who were called the Lever listers

and groom them for handling greater responsibilities. For every position, typically

three people competed.

Shared values

Unilever mission is to add Vitality to life. We meet everyday needs for nutrition,

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

more out of life.

Unilever has earned a reputation for conducting its business with integrity and with

respect for all those whom our activities affect.

Singular belief that what is good for India is

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good for HUL.

It has strategically introduced new products on think global and act local concept

Deep roots in local cultures and markets around the world give it a strong relationship

with consumers.

Staff

15,000 employees, including 1200 managers, 200 scientists.

HUL has a strong management bandwidth having a team of professionals for each

SBU.

At HUL, career paths are designed such that they will build employees into business

leaders. Employees would start from a managerial level in any of the following

functions: commercial , technical, sales & marketing, IT, HR

The objective of each path is however the same: to give the employee a strong

foundation so that she would be in a position to take on complete ownership for a

brand or a unit.

Skills

Has in-house manufacturing as well as outsourcing

R&D support from parent company

Large distribution network

Strong management

Has the best marketing talent in the industry

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 CHAPTER 4
CONCLUSION
HUL enjoys a formidable distribution network covering over 3400 distributors and 16

million outlets. This helps them maintain heavy volumes, and hence, fill the shelves

of most outlets. The new sales organization named 'One HUL' brings "Household and

Personal Care" and foods distribution networks together, thereby aligning all the units

towards the common goal of achieving success. HUL has been continuously able to

grow at a rate more than growth rate for FMCG Sector, thereby reaffirming its future

stronghold in Indian market.

Though various environments have affected HUL over the years, it passed through the

economic crisis and got the opportunities in 1991 with the help of governments rules

and policies and fought with many competitors it is now marching forward towards its

goals by adopting various technologies.

BIBLIOGRAPHY

Hindustan Unilever Limited (HUL) is India's largest fast moving consumer goods

company, with leadership in Home & Personal Care Products and Foods.

www.hul.com

Hindustan Unilever Limited (abbreviated to HUL), formerly Hindustan Lever Limited

HUL is the market leader in Indian products.

en.wikipedia.org/wiki/Hindustan_Unilever

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 www.televisionpoint.com/news2007/newsfullstory.php?id=1182781375

9 Aug 2007 ... Disclosure The India Street analysis of Indias No.1 FMCG company.

www.theindiastreet.com/2007/08/stock-of-week-hindustan-unilever.html

05-APR-08 The company has increased its stake in its Indian subsidiary Hindustan

Unilever (HUL) to 52.12% from 51.40% through a buyback of shares

www.myiris.com/shares/company/snapShotShow.php?icode=HINLEVER

25 Jun 2007 ... India's largest FMCG company, HUL has unveiled a new corporate

identity represented by a new logo and also a new name Hindustan Unilever

Limited.

www.labnol.org/india/knowledge/hll-is-now-hindustan-unilever-ltd/645/

FMCG major Hindustan Unilever Limited (HUL), formerly known as Hindustan Lever

Limited, employs 36000 people, including over 1350 managers.

www.prdomain.com/company/co_index.asp?cid=60

Start world no.1.fmcg.company-HINDUSTAN UNILEVER LTD- Direct Marketing

Business (HINDUSTAN UNILEVER NETWORK) Hindustan UniLever Network

www.coimbatore.click.in/.../business-partner-jv/261463/hindustan-unilever-ltd-

business

Hindustan Unilever Limited, erstwhile Hindustan Lever Limited (also called HLL), ...

Clinic Plus, Clinic All Clear, Sunsilk and Lux shampoos, Vim dishwash

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 www.nationmaster.com/encyclopedia/Hindustan-Unilever-Limited

Hindustan Lever Ltd (HLL) has launched Clinic Plus Protein Shampoo with a new .... -

Hindustan Unilever Limited has informed that Mr. Sanjiv kakkar

www.nt.walletwatch.com/ascerc/History.asp?CompanyCode=12520002&companyn

ame=Hindustan+Lever+Ltd

What is hul product pricing? About hindustan uniliver limited? List of detergents

produced by hul? ... Food Products produced by hindustan unilever imited?

www.wiki.answers.com/Q/Product_strategi_of_hul

Hindustan Unilever Ltd. ... Mumbai: HLL has decided to stretch the equity of its Clinic

Plus shampoo into an ayurvedic ... Data Source - Asian CERC IT Ltd

www.invest.economictimes.indiatimes.com/newequity/jaycompnewsdisp.jsp?id=48

8113&ticker=hll

Hindustan Unilever Limited, formerly Hindustan Lever Limited, ... Clinic Plus, Clinic All

Clear, sunsilk and Dove shampoos, Vim dishwash, Ala bleach

www.papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID1232822_code1058635.pdf?abstr

actid=1232822&mirid=1

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