Documente Academic
Documente Profesional
Documente Cultură
COURSE : M.B.A.
SUBJECT : Marketing
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TABLE OF CONTENTS
1. Terms of reference:................................................................................................................................................ 4
2. Executive Summary............................................................................................................................................... 4
6. SWOT Analysis....................................................................................................................................................... 20
7. Marketing Objective-Recommendations.................................................................................................... 22
8. Core Strategy.......................................................................................................................................................... 24
9.1 Product................................................................................................................................................................... 25
9.2 Price........................................................................................................................................................................ 25
9.3 Place........................................................................................................................................................................ 26
9.4 Promotions........................................................................................................................................................... 26
10. Budget.................................................................................................................................................................... 28
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MARKETING PLAN FOR HINDUSTAN UNILEVER LIMITED:-
GIANTS IN FMCG
1. TERMS OF REFERENCE:
Hindustan Unilever Limited (HUL) is India's largest fast moving consumer goods
company, with leadership in Home & Personal Care Products and Foods & Beverages.
HUL's brands, spread across 20 distinct consumer categories, touch the lives of two out of
three Indians. (Refer Appendix A).
2. EXECUTIVE SUMMARY
This report examines Hindustan Unilever Limited with main focus on Detergent segment
which is a major revenue generating segment. HUL has been the market leader for many
years in this segment. This report showcases macro and micro environment for HUL. There
is a huge market for detergents in India. HUL with the brand name it has, should cash in on
the situation. A marketing plan has been developed keeping in mind current trends in
consumer buying patterns. The marketing plan has been drawn upon by considering the
feedback from consumers as well. The report consists of PESTL analysis, information on
market segmentation, target market identification, competitor analysis, SWOT analysis, and
competitive advantage and core competencies of HUL as a company. Marketing mix
effectiveness of detergent segment of HUL has been discussed to achieve overall marketing
objective for the sales of HUL detergents by targeting the right people and offering them
with the improved range of products. New ways of promotions have been suggested. The
budget for the promotions has been arrived upon. Various channels have been chosen to
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promote the detergents. New product launch is been suggested keeping in mind the
feedback received from the respondents of the survey.
The marketing plan is developed by accessing the primary and secondary data. The
prime objective of this report is to precisely analyze the current trends in detergent market
in India and develop a strategy for HUL to regain their sales volume share. Some
recommendations have been made to improve the way the products have to be promoted;
there should be a monthly review by the management of HUL to access the situation.
Their corporate purpose states that to succeed requires "the highest standards of
corporate behaviour towards everyone we work with, the communities we touch, and
the environment on which we have an impact."
HUL is India's largest fast moving consumer goods company, with leadership in Home &
Personal Care Products and Foods & Beverages. HUL's brands are spread across 20 distinct
consumer categories which touch the lives of two out of three Indians.
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market is women in India. Buying power is middle. It is a volume market hence customer is
price sensitive.
Source:Euromonitor 2009
Surf Automatic- Top Load Surf Excel Quick Wash Rin Advance
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In India, laundry detergent Surf Excel is used mostly for hand washing. When washing
clothes by hand, it’s rinsing that often takes most time and uses most water.
Surf Excel is improved so that less rinsing is needed, while still getting clothes as clean as
before. People keep rinsing in water till the lather is gone completely, so to cut the number
of rinses by adding one of a number of anti-foam ingredients commonly used in machine-
washing detergents. That would make the lather rinse more quickly. But Surf Excel Quick
Wash can deliver a good lather at the washing stage, and reduce the need for the rinsing –
saving two bucketfuls of water per wash.
External Marketing Audit is concerned with those factors over which the organization
has no control. It can be classified into Macro environment and Microenvironment.
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Table 4.1 PESTL Analysis
Political/Legal: Economic:
HUL has contributed significantly in The size of the detergent market in India is
saving water through technology. estimated to at Rs.12, 000 Crores. Detergent
Educating people on Rain water segment is characterized by high degree of
harvesting, soil conservation and competition and high level of penetration. With
reduction of greenhouse gases. rapid urbanization in India, emergence of small
pack size and sachets, the demand for the
A carbon reduction supply-chain detergents is flourishing. With the use of hard
project has enabled (HUL) to be water for washing and scarcity of water it is
awarded carbon credits. imperative that HUL produces products that suit
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the water type in India.
Technological:
HUL has research centers in Bangalore and Mumbai which has more than 200 scientists
and technologists. Addressing the washing needs of consumers is a key challenge for the
laundry Research group. How to minimize water usage while washing? How to impart
stain repellent treatment to garments? These are the questions which have been answered
by HUL R&D team.
The useful framework that can be utilized when undertaking this analysis is Porter’s ‘Five
forces’ model. This analysis is carried out at the level of Detergent SBU of HUL.
Figure 4.1 The Five Forces model (Source: Adapted from Porter 1980)
Potential
Entrants 9
Suppliers Competitiv Buyers
e
Rivalry
Substitutes
Suppliers:
HUL has a very strong supplier base. Supplier power is considerable in case of detergent
segment of HUL as there is a lot of costing involved when switching suppliers. As HUL
provides a large amount of its business to the suppliers, these suppliers are beholden to
HUL. As said earlier, the supply power is limited.
Potential Entrants:
Given the capital investment required to enter the detergent market in India, with the
pricing of the products being very low, threat of potential entrants is low. With a lot of local
brands in the market and names like Nirma, P&G, the detergent market has become
extremely competitive and crowded. For the new entrant to position its products on the
shelves of retailers alongside Surf Excel, Rin, Henko and Rin would be a real challenge.
Buyers:
Buying power of retailers of HUL when it comes to detergent market is very high as they
are able to negotiate on price. Buying power of consumers is low as the consumers are
fragmented and they do not have a great influence on the price as well as the product.
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Buyer loyalty is considerably less when it comes to Mass market detergents, as the
consumers of that segment are price sensitive. Consumers in the premium and mid priced
segment are very loyal to the brand.
Substitutes:
There is a strong threat from substitutes from the local market especially in the rural
market. Even though within the detergent market, brand succeeds in building up a
competitive market the threats from substitutes are high such that the pricing power of HUL
brands are eroded. Government regulations for local brands are very conducive to set up the
business in India.
Competitive Rivalry:
Consumers of detergents have enormous amount of choices. The brand loyalty in detergent
segment is very poor. Price wars among competitors of HUL like P&G, Nirma is fierce.
(Refer Appendix C).The competitive rivalry in the detergent segment is very high. Price
wars are regular affairs which is beneficial from a customer perspective. Due to this the
companies are forced to bring down their operational costs to survive in this hostile
atmosphere.
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Source: Russel Davis, Nirma 2007-08.
Internal Marketing Audit is concerned with those factors over which the organization has
control.
HUL is India's largest Fast Moving Consumer Goods Company, touching the lives of two
out of three Indians. Detergent segment in HUL accounts for 48% of the total
turnover.15, 28,391 tonnes of synthetic detergents were sold by HUL during January
2008- March 2009.The total sales value of detergents according to the annual report of
HUL is 4908.46 Cr INR. Market share of HUL detergents is 36% as per annual report
of HUL 2009.
Figure 5.1 Sales value of various divisions of HUL from the period of Jan-08 to Mar-
09.
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Source: Annual report 2008-09 HUL. http://www.hul.co.in/ [Accessed on 1305/2010]
Source: http://money.rediff.com/companies/hindustan-unilever-ltd/12520002
[Accessed on 01/07/2010]
Marketing segmentation as stated by (Ferrell, O.C and Hartline, D. 2007) is the process of
dividing the total market for a particular product or product category into relatively
homogenous segments.
In the discussion that follows, we look more closely at segmentation in detergent markets
by examining the different factors that can be used to divide the market. As table 4.1
illustrates, these factors fall into one of these categories: Behavioral segmentation,
Demographic segmentation, Psychographic segmentation and Geographic segmentation.
(Refer Appendix D)
Source: Hartline, D and Ferrell, O.C (2007) Marketing Strategy. Thomson South-
Western
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HUL’s Competitive advantage lies in its strong and efficient distribution network. Its
culture to continuously innovate for product betterment keeps them ahead of competition.
Their high markets spend that enables their products gets a greater reach. HUL operates at
zero working capital. The key is constant efforts to reduce capital investments by
outsourcing manufacturing, streamlining supply chains and paying close attention to
distributor’s performance*. Developing new channels like Rural marketing (for eg. Shakthi
Ammas) and direct selling. Most importantly their products are low priced and good value
for money and strong commitment towards improving the community. (For further
information refer Appendix E).
* Prahalad, C.K and Hammond, A, (2002) Serving the World’s poor, Profitability,
Harvard Business review.
HUL has a wide range of quality products designed to meet the needs of the consumers. It
has country wide reputation and presence. All their detergents are conservatively priced.
They have an innovative style and low cost packaging. HUL has an excellent distribution
network which enables greater reach. Their main focus on providing value to customers
through continuous product innovation and to be known as socially responsible company.
HUL has a very good brand name in the market which they have used to their advantage to
maintain their market share.
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Source: Created by Sharath Shyamasunder (2010)
HUL detergents are in between the growth and maturity stage. The marketing mix elements
have been planned keeping the product life cycle in mind. Detergent features should be
such that it is differentiated from the rest of the competition. Pricing should be lower
because of intense competition. The distribution channels needs to be very effective with
investment on IT, so as to increase the efficiency. Promotions are aimed at a larger target
audience with focus on product differentiation. With right promotions in the right place,
HUL can reap the benefits.
5.3.1 Product:
Current products offered by HUL (Detergent segment) are Surf Excel Automatic
exclusively for washing machines, Surf Excel Blue, Rin Advance, and Wheel Regular.
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Premium Mid-Priced Mass Market
Surf Automatic- Top Load Surf Excel Quick Wash Rin Advance
Products are designed keeping in mind the nature of water in India and the scarcity
of it. New technology wherein less water is consumed while washing clothes makes HUL
products fare better. Detergents have micro granules which can penetrate into the fabric
easily and remove the dirt and stains easily. They are available in small sachets also.
Currently a lot of promotions are splashed in the media to educate the audience about the
products.
5.3.3 Place
HUL products are made easily available through the efficient distribution system. The
detergents are available in the Local grocery stores, Super markets and there is a door to
door sale. (Refer Appendix E)
5.3.2 Pricing
The following are the prices of few detergents in India.
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Table 5.3 Prices of detergents in rupees
Table 5.4 Various channels through which HUL promotes its detergents
Print Media- HUL advertises in leading Television-Advertisements of
dailies like Times of India and Indian express Detergents are aired in prime time to get
which has a wide reach. the attention of women.
Demo campaigns- Demo campaigns are done Hoardings- Hoarding advertisements
regularly with sales people going to household are done usually during a new product
and give a demo to the consumers so that the launch or a reduction in price. For e.g.
consumers can have a firsthand experience when the prices of Surf excel was cut by
and they believe what they see. 5%, huge hoardings were put in
prominent places across all cities.
Live shows-TV shows like “Wheel Shrimati” Radio- Radio Jingles are aired which
which is aired in prime time on National promote detergents.
channel, the target audience being women was
well received.
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6. SWOT ANALYSIS
SWOT analysis as stated by (Baker, 1995) is “a summary of the audit under the headings of
internal strengths and weaknesses as they relate to external opportunities and threats”.
Strengths Weakness
Presence of established distribution Focus on building a power brand so
networks in both urban and rural priced higher than others and
areas neglecting other brands
Strengths:
One of the major strengths of HUL is its distribution network, which has foot print even in
the rural areas. Their reach makes them the market leader in FMCG. The brand value of
HUL products is very high so its keeps them ahead of competition. The need for product
improvement and innovation is the main agenda of HUL which augurs well for the future.
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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.
Weakness:
HUL’s extensive reach and country wide presence enabled them to rise the prices of the
detergents even though the raw material prices were decreasing. This has allowed HUL to
gain more profits but the volume came down, this allowed a lot of competitors to grow.
HUL was backing its power brands with an idea to earn high revenues. HUL's weakness
was its inability to transform its strategies at the right time. They continued with the same
old strategy which helped HUL gain profits but was not genuine in this changing
environment. The competition has put HUL on the defensive mode.
Opportunities:
HUL has a large customer base; people who do not use HUL’s detergents but use other
HUL products can be influenced to use HUL detergents. According to the forecasting done
the detergent market is expected to grow by double digit. The per capita consumption of
detergents in India is pretty high. The buying patterns of consumers for detergent segment
have been changing which again augurs well for HUL.
Threats:
Strong backing of Power brands by HUL and the continuation of old strategy which helped
HUL to gain in revenues created opportunities for its competitors to grow. This situation
created avenues for Local detergent manufacturers to enter the market with cheap
detergents. Lot of imitation or me-too products gained popularity at the expense of HUL.
Government regulations have been relaxed which has helped the rural players to set up their
business and they now pose a threat to HUL. The price war among HUL and its
competitors has intensified and this has made HUL to cut down the prices of detergents.
The market share and the sales volume has been affected due to the entry of local players.
7. MARKETING OBJECTIVE-RECOMMENDATIONS
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For the Marketing objective to be set, we shall consider Strategic Thrust and strategic
Objective. The planning phase of strategic marketing phase consists of (1) Situation
Analysis (2) Market product focus and goal setting (3) Marketing program.
Marketing plan
Implementation phase
Obtain resources
Develop schedules
Results
Strategic thrust defines which products to sell in which markets.HUL will go for existing
product in the existing markets as they are doing well. There has to be a reduction in the
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prices as there is stiff competition. They can diversify their product range into liquid
detergent, and then HUL will have a complete range of products for fabric care.
PRODUCTS
Existing New
Market Penetration New Product Development
Quality products for Washing Design detergents specially for woollen
Existing
machines clothes
Recution in Prices Design detergents specially for color clothing
MARKETS
Conduct demonstrations to
observe the needs of Customer
and educate them on the products
Build Hold
Invest of new product development like Selective investment on new methods of
Liquid detergents packaging
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Invest on product innovation
Harvest Divest
HUL has traditionally followed the Non performing brands such as Breeze
Harvest method, wherein more is dropped from the Indian market
emphasis was on maximizing profit
margins, sales and market share was
allowed to fall
8. CORE STRATEGY
Competitors of HUL in detergent segment are P&G, Nirma, Ghari, 555 etc. HUL initially
had a strategy of increasing profit margins so the detergents were priced high when
compared to the competition. The sales volume and the market share were affected due to
this. The strategy now employed by HUL is that the detergents are priced on par with the
competition and the advertisement expense has been increased by 66% when compared to
2008.
HUL is targeting its competitor’s brands and is engaged in a price war to gain the
market share. For e.g 30% cut in the price of Rin as Wheel had reduced the price. The Ad
wars between Surf Excel and Tide, where HUL compared the two brands in terms of the
content and the effectiveness.
The competitive advantage which HUL has over its competitors is that they have an
excellent distribution network. They have the brand name which has a country wide
presence. Their penetration in rural areas cannot be matched by its competitors. Their
continuous spend on R & D will help to build their product portfolio. The image that HUL
as a socially responsible company goes down well with the public.
9.1 PRODUCT
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HUL can go with their existing range of detergents are they are doing well in terms
of sales volumes. Their market share although has decreased, with the reduction in prices.
An effort is there to get the production cost down by having pared down the color palette
used for printing across many products. The system has been used to reduce printed
packaging costs. Some non performing brands like Breeze should be shelved out.
According to the survey results (Refer Appendix F) Surf excel is the most widely
used detergent in its segment. The need to have a good fragrance in the detergents is
emphasized. An Insta- whitener and liquid detergent market can be entered as per the
feedback got from the survey.
9.2 PRICE
The prices of all the detergents of HUL have been reduced considerably to compete
with the competitors. For e.g. 30% Price reduction in Rin and 20% price reduction in Surf
excel they hope to get back that market share. If the production cost is reduced then the
price of the detergents will come down. An effort to reduce the cost has to be a top
priority.“Zero inventory” and “Go to the market” initiative to reduce cost and increase
efficiency.
9.3 PLACE
The distribution network of HUL is one of the best in this industry. Efforts must be taken to
use technology like SAP which help in managing the distribution effectively. Some of the
benefits of SAP are
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• Improved information sharing with partners even if they are not using SAP’s
solutions
9.4 PROMOTIONS
Great advertising is inspired by insights about brands, consumers, and how the two interact.
It starts with a problem from the client and ends with a solution to the customers.
As seen from the survey, many people do not identify HUL products and are not
aware of the features of specific products, so an effort to educate the customer through
promotions must be taken.
Creativity defined
Creative ads make a relevant connection between the brand and its target audience and
present a selling idea in an unexpected way. Creative ads present a selling idea.
Media
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When and where a message runs can be as creative as the words and visuals. Everyday
items have become media vehicles. HUL can promote its line of detergents on dress
hangers in trains and buses frequented by women. The hangers can come with a message
“Want your dress to be bright and clean use Surf Excel/ Rin/ Wheel”*.
10. BUDGET
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Television Advertisements in channels like Star 89450 35
and Zee TV between 7.PM and
10.PM to reach the women who are
the target audience
Newspapers Advertisement and promotions in 38356 15
major dailies like Times of India and
Indian Express as they carry out
exclusive sections for women
Mass media “Daag accha hai” type of campaigns 25570 10
campaigns and which catch the eye of the viewer
creative ads and the hanger promotion*
TV shows Sponsoring TV shows where women 38356 15
sponsorship are the main focus
Radio Radio jingles should be aired which 12785 5
should have catchy phrases
Internet Till date Internet marketing or 12785 5
Internet sales of detergents have not
been implemented in a big way, if
HUL can do it they can have a early
entrant advantage
Demonstrations Demonstrations in supermarkets 38356 15
with some contests and offers should
be carried out regularly.
According to annual report of HUL 2009, the budget for sales promotion for the
year 2009-10 would be 2,55,658 lakhs INR. I would recommend the amount to spend as
shown in the table.
Source: Annual report 2008-09 HUL. http://www.hul.co.in/ [Accessed 13/05/2010]
The changing environment, the fierce competition faced by HUL in the detergent
segment calls for a marketing plan with a long term vision and in accordance with the
company’s objectives. The marketing plan formulated above is of such nature and needs the
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support of the management. The marketing team of HUL has to take full responsibility of
implementing the marketing plan with the support of the management. The management
should define the roles of people involved in carrying out the marketing plan. The budget
needs to be allocated for the promotional activities and the marketing team should be
accountable for the utilization of the funds. Reviews by the management should be an
integral part of the implementation process.
Control is required to take corrective actions from the feedback received from the
market. Reviews by the management should happen regularly regarding the sales growth,
expenses, R & D, feedback from the customers. The progress of the marketing plan should
be closely monitored by the Business Manager of the detergent department.
The reason for choosing Hindustan Unilever Limited for this report is because of
the fact that HUL touches almost every Indian’s life. I, myself have used most of the
products of HUL and I am a very satisfied and a loyal customer of HUL products.
Moreover the market for FMCG in India is set to grow in the years to come. HUL being the
brand it is should take stock of the situation and prepare for the growth. Working on this
report has been very enriching for me in terms of knowledge, and I have derived immense
pleasure in researching on HUL. The response for my questionnaire was very encouraging
and HUL products have got an excellent feedback.
HUL is such a big brand that it is one of the most discussed companies in
Management studies, so when I started researching about HUL, i was a little skeptical about
choosing HUL. But later I realized I could contribute a new perspective to the HUL
marketing plan. Although the response to the survey was encouraging, it took constant
follow ups with the respondents. Compiling the responses was very time consuming and a
tedious process. The reason that I started early on the project helped me, as i never faced a
time crunch. Since HUL is a listed company in India and is one of the most discussed
company, huge chunks of data was available on the internet like the annual reports,
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newspaper articles, Case studies. To go through them, understand the write ups and
precisely use the information in the report was a very challenging task.
As stated earlier since HUL is a listed company in India getting relevant data like
Annual reports very relatively easier, compiling these data and arriving at PESTL analysis
was easier. By speaking to few friends who work for HUL in different departments and
understanding the work culture, marketing initiatives was very useful experience and this
has helped me to present certain facsssts with more depth. Based on the product life cycle
and the macro and micro environments the marketing mix decisions and SWOT has been
derived.
Role of Marketer
Being in a Sales and marketing position for over two years has helped me visualize
the plan with relative ease. Since marketing is the most important aspect of business as it
has a direct impact on the company’s profitability and sales, role of the marketer is very
challenging. It requires constant interaction with customers as well people within the
organization. Collecting the information from the customers and compiling the data in a
way most suitable for the people concerned in the organization for e.g. R&D department is
a vital function of a marketer.
One of the things which have changed over the years is the perception of people that
a company is not just a seller of products but also have responsibility to be more socially
responsible. Being socially responsible means an organization shows concern for the people
and environment in which it transacts business. It also means that these values are
communicated and enforced by everyone in the organization. In addition to insuring these
values exist within the organization and its business partners, social responsibility may also
manifest itself in the support of social causes that help society. For instance, marketers may
sponsor charity events or produce cause-related advertising.
Marketers who are pursuing a socially responsible agenda should bear in mind that
such efforts do not automatically translate into increased revenue or even an improved
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public image. However, organizations that consistently exhibit socially responsible
tendencies may eventually gain a strong reputation that could pay dividends in the form of
increased customer loyalty.
REFERENCE
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Prahalad, C.K and Hammond, A, (2002) Serving the World’s poor, Profitability.
Harvard Business review.
Sangani, P. Economic Times (2009), The Zero Effect Pg no 3.
Journals
Websites
APPENDIX A
Hindustan Unilever Limited (HUL) is India's largest fast moving consumer goods
company, with leadership in Home & Personal Care Products and Foods & Beverages.
HUL's brands, spread across 20 distinct consumer categories, touch the lives of two out of
three Indians. They endow the company with a scale of combined volumes of about 4
million tonnes and sales of Rs.13, 913 crores.
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The mission that inspires HUL's over 15,000 employees is to "add vitality to life". With 35
Power Brands, HUL 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 52.10% of the equity. A Fortune 500
transnational, Unilever sells Foods and Home and Personal Care brands in about 100
countries worldwide.
CEO: Mr.Nitin Paranjpe
Average Market Capitalization for the last 4 years is INR 56000 Cr.
YEAR MILESTONES
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1961 Mr. Prakash Tandon takes over as the first Indian Chairman; 191 of the 205 managers
are Indians.
1967 Hindustan Unilever Research Centre, opens in Mumbai.
1969 Rin bar launched; Fine Chemicals Unit starts production; Bru coffee launched
1977 Jammu synthetic Detergents plant inaugurated; Indian shareholding increases to
18.57%.
1982 Government allows 51% Unilever shareholding.
1991 Surf Ultra detergent launched.
1995 HUL and Indian cosmetics major, Lakme Ltd., form 50:50 joint venture- Lakme
Lever Ltd.; HUL enters branded staples business with salt; HUL recognised as Super Star
Trading House.
1997 Unilever sets up International Research Laboratory in Bangalore; new Regional
Innovation Centres also come up.
2005 Launch of "Pureit" water purifiers
2007 Company name formally changed to Hindustan Unilever Limited after receiving the
approval of share holders during the 74th AGM on 18 May 2007
Sales of Brooke Bond and Surf Excel each cross the Rs 1,000 crore mark
2008 HUL completes 75 years on 17th October 2008.
APPENDIX B
POLITICAL/LEGAL:
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country. The consumers are in a position to use and appreciate HUL products at an
attractive price. 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.
ECONOMIC:
HUL is the India’s largest FMCG player. It creates employment for more than 18 thousand
people. Its principal constituents are Household Care, Personal Care and Food &
Beverages. Detergents segment of HUL has about 36% market share in that segment (FY
08-09). This segment accounts for at least 40% of the total revenue. HUL’s market share in
detergents segment has declined in the last two years, due to heavy competition on the price
front from other players like P&G, Nirma, Ghari and other local players. But the positive is
that the volumes grew by 4% in the last quarter. An increase is spending pattern has been
witnessed in Indian FMCG market especially the detergent market. There is an upward
trend in urban as well as rural market. An increase in disposable income, of household
mainly because of increase in nuclear family where both the husband and wife are earning,
has lead to growth rate in FMCG goods.
ECOLOGICAL/PHYSICAL ENVIRONMENT:
35
greenhouse gases. Serving the communities has been integral to HUL’s business conduct.
Rainwater harvesting and soil conservation projects around their factories have made
significant impact in these regions. HUL has planned to come up with bio-degradable
covers for their detergent brands. HUL is working to promote environmental care, increase
understanding of environmental issues and disseminate good practice. A carbon reduction
supply-chain project has enabled Hindustan Unilever Limited (HUL) to become the first
Unilever business worldwide to be awarded carbon credits under the Clean Development
Mechanism (CDM) scheme.
SOCIAL/CULTURAL:
The size of the detergent market in India is estimated to at Rs.12, 000 Crores. Detergent
segment is characterized by high degree of competition and high level of penetration. With
rapid urbanization in India, emergence of small pack size and sachets, the demand for the
detergents is flourishing.HUL has a major share in this market.
TECHNOLOGICAL:
HUL has research centers in Bangalore and Mumbai which has more than 200 scientists
and technologists. HUL R&D is the hub for the best minds. Addressing the washing needs
of consumers is a key challenge for the laundry Research group. How to minimize water
usage while washing? How to impart stain repellent treatment to garments? These are the
questions which have been answered by HUL R&D team. By adding one of a number of
anti-foam ingredients commonly used in machine-washing detergents, lather is reduced
while rinsing the clothes thus reducing the water consumption by 50%.HUL detergents
penetrate deep down into fabrics and removes dirt. HUL has separate detergents for TOP
loading and FRONT loading washing machines keeping in mind the washing patterns of
both the machines.
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http://www.hul.co.in/careers-redesign/carreerschoices/researchanddevelopment/
[accessed 13/05/2010]
CORPORATE RESPONSIBILITIES
The Board and the Management Committee of HUL is committed to conduct the company
operations in an environmentally sound manner. The Management Committee will:
Set mandatory standards and establish environmental improvement objectives and
targets for HUL as a whole and for individual units, and ensure these are included in
the annual operating plans.
Formally review environment performance of the company once every quarter.
Review environment performance when visiting units and recognise exemplary
performance.
Nominate:
The Management Committee, through the nominated environmental coordinator
will:
Ensure implementation of HUL Policy on environment and compliance with
Unilever and HUL environmental standards and the standards stipulated under
relevant national / local legislation. When believed to be appropriate, apply more
stringent criteria than those required by law.
Assess environmental impact of HUL operations and establish strategies for sound
environment management and key implementation steps.
Encourage development of inherently safer and cleaner manufacturing processes to
further raise the standards of environment performance.
Establish appropriate management systems for environment management and
ensure regular auditing to verify compliance.
Establish systems for appropriate training in implementation of Environment
Management Systems at work.
Ensure that all employees are made aware of individual and collective
responsibilities towards environment.
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Arrange for expert advice on all aspects of environment management.
Participate, wherever possible, with appropriate industry and Government bodies
advising on environmental legislation and interact with national and local
authorities concerned with protection of environment.
APPENDIX C
COMPETITOR ANALYSIS
APPENDIX D
HUL
product Category Variables Examples
Benefits sought Quality, Value, Convenience,
Surf Behavioral
Product usage Heavy , Medium and Light,
Excel segmentation
Occasions or Situations Daily use/Weekly
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Value conscious, Status
Price sensitive conscious
Age 18-60
Gender Male/Female
Income Mid income, High income
White collared, technical,
Demographic Professional, Managers,
segmentation Laborers, Homemakers,
Occupation Retired,
Education College graduate, Graduate
Social class Upper class, Middle class
Generation Generation Y,X Baby boomers
Outgoing, Shy, Materialistic,
Anxious, Civic minded,
Psychographic Personality Venturesome
segmentation Outdoor Enthusiast, Homely,
Lifestyle Workaholic, Family centered
Motives Cleaning
Regional North, South, East, West
Geographic
City
segmentation
Population Urban, Sub urban ,Rural
HUL
Product Category Variables Examples
Benefits sought Quality, Value, Convenience,
Product usage Heavy , Medium and Light
Occasions / Situations Daily use/Weekly
Behavioral
segmentation Price sensitive Price sensitive, Value conscious
RIN
Age 18-60
Gender Male/Female
Demographic Low income, Mid income, High
segmentation Income income
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White collared, technical,
Professional, Laborers,
Homemakers, Retired,
Occupation Unemployed
High school, College graduate,
Education Graduate
Upper class, Middle class,
Social class Lower class, Poverty level
Generation Generation Y,X, Laggards
Outgoing, Shy, Materialistic,
Anxious, Civic minded,
Personality Venturesome
Outdoor Enthusiast, Homely,
Psychographic Lifestyle Workaholic, Family centered
segmentation Motives Cleaning
Geographic Regional North, South, East, West
segmentation Population Urban, Sub urban ,Rural
HUL
Product Category Variables Examples
Benefits sought Quality, Value, Convenience
Product usage Heavy , Medium and Light,
Occasions / Situations Daily use/Weekly
Behavioral
Wheel segmentation Price sensitive Price sensitive, Value conscious
Age 18-60
Demographic Gender Male/Female
segmentation Income Low income, Mid income
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Laborers, Homemakers,
Occupation Retired, Unemployed
High school, College graduate,
Education Graduate
Middle class, Lower class,
Social class Poverty level
Generation Baby boomers, Laggards
Outgoing, Shy, Materialistic,
Anxious, Civic minded,
Personality Venturesome
Outdoor Enthusiast, Homely,
Psychographic Lifestyle Workaholic, Family centered
segmentation Motives Cleaning
APPENDIX E
HUL’s 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. It
continues to be the market leader in the detergents segment in India. Although in the last
four years the volumes have gone down. The Volumes shares grow in Laundry 100 bps in
powders and 60 bps in Bars. This is due to their continued innovation to provide quality
detergents at affordable prices. Surf Excel’s formulation has been improved for better stain
removal without colour damage. The Rin franchise has emerged as India’s number two
detergent brand by value, with particularly good growth in Rin Shakti.
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Since the competition has intensified significantly, HUL has increased its marketing
spend in Media to educate the consumers on the detergents.HUL has strategically invested
behind their powerful brands like Surf Excel and Rin. Surf Excel’s “Daag tho acche hain”
campaign was a runaway hit among the consumers. Aggressive ads for Rin detergent have
had a very good impact on the brand. Such creative and aggressive ads have helped HUL to
maintain its premium position.
The marketing initiatives were supported by major sales initiatives. In rural India,
the focus is to further extend reach, which has resulted in direct coverage of about 46% of
the rural population as of now. In urban markets, the objective is to improve customer
service. Dedicated sales teams have been formed to service key accounts and wholesalers in
larger towns and cities. A cell has been set up to attend to the modern trade, comprising
chain stores.
One of the Major contributors to HUL’s success is its Supply chain and networks. HUL is
able to maintain its market share in the detergent industry because of their strong
distribution channel and wide reach across the country.
HUL ensures that consumers have ready access to their products across every corner of
urban and rural India. Their retail and distribution system spreads across the length and
breadth of the country. Their distribution network, comprising about 7,000 redistribution
stockiest.6.3 million retail outlets reaching the entire urban population, and about 250
million rural consumers.
Factory
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Customer Service Provider
Consumer
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Source: HUL (2010). http://www.hul.co.in/ [Accessed 11/05/2010]
With the urban market saturated, FMCG companies are now targeting the rural markets. In
spite of the income imbalance between urban and rural India, rural holds great potential
since 70% of India’s population lives there.
Hindustan Unilever Limited (HUL) to tap this market conceived of Project Shakti. This
project was started in 2001 with the aim of increasing the company’s rural distribution
reach as well as providing rural women with income-generating opportunities. This is a
case where the social goals are helping achieve business goals.
The recruitment of a Shakti Entrepreneur or Shakti Amma (SA) begins with the executives
of HUL identifying the uncovered village. The representative of the company meets the
village head and identifies the woman who they believe will be suitable as a SA. After
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training she is asked to put up Rs 20,000 as investment which is used to buy products for
selling. The products are then sold door-to-door or through petty shops at home. On an
average a Shakti Amma makes a 10% margin on the products she sells.
The main advantage of the Shakti programme for HUL is having more feet on the ground.
Shakti Ammas are able to reach far flung areas, which were economically unviable for the
company to tap on its own.
Although the company has been successful in the initiative and has been scaling up, it faces
problems from time to time for which it comes up with innovative solutions. For example, a
problem faced by HUL was that the SAs were more inclined to stay at home and sell rather
than going from door to door. Moreover, men were not liable to go to a woman’s house and
buy products. The company countered this problem by hosting Shakti Days.
This model has been the growth driver for HUL and presently about half of HUL’s FMCG
sales come from rural markets. The Shakti network at the end of 2008 was 45,000 Ammas
covering 100,000+ villages across 15 states reaching 3 million homes. The long term aim
of the company is to have 100,000 Ammas covering 500,000 villages and reaching 600 m
people. HUL has been successful in maintaining its distribution reach advantage over its
competitors. This programme will help provide HUL with a growing customer base which
will benefit the company for years to come.
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APPENDIX F
A total of 140 respondents have taken the survey and the results are as follows.
Questionnaire
a. Surf excel
b. Ariel
c. Wheel
d. Rin
e. Nirma
f. Others (Please specify)
Brand
Surf Excel Ariel Rin Henko Others Wheel
5%
10%
5%
5%
55%
20%
By the graph it is clear that Surf Excel is the most preferred brand.
a. Daily
b. Weekly
c. Fortnightly
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d. Monthly
By the graph below it is seen that people prefer to buy detergents once in a month,
and none of the respondents buy it daily.
a. Sachet
b. 500 Gm
c. 1Kg
d. 2kg
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By this graph we can interpret that people prefer to buy 1kg detergent packets.
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5. Do you use washing machine for washing clothes or hand wash?
a. Washing machine
b. Hand wash
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7. Are you aware that HUL detergents consume less water while washing clothes?
a. Yes
b. No
a. Yes
b. No
9. Do you like the fragrance of the clothes after they are washed using your preferred
detergent?
a. Yes
b. No
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10. Can you differentiate between a HUL brand of detergents and other brands?
A. Yes
B. No
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Section B: Please circle your choice in each of the options
Surf Excel 1 2 3 4 5
Ariel 1 2 3 4 5
Wheel 1 2 3 4 5
Rin 1 2 3 4 5
Nirma 1 2 3 4 5
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Others 1 2 3 4 5
(Please specify)
On an average Surf Excel’s quality was rated Good. Ariel, Wheel, Rin and Nirma were
rated Average. Tide was rated good.
Surf Excel 1 2 3 4 5
Ariel 1 2 3 4 5
Wheel 1 2 3 4 5
Rin 1 2 3 4 5
Nirma 1 2 3 4 5
Others 1 2 3 4 5
(Please specify)
On an Average Surf Excel was rated Costly and all others except Wheel were rated
Average. Wheel was rated cheap.
Surf Excel 1 2 3 4 5
Ariel 1 2 3 4 5
Wheel 1 2 3 4 5
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Rin 1 2 3 4 5
Nirma 1 2 3 4 5
Others 1 2 3 4 5
(Please specify)
Surprisingly all the detergents except Wheel were rated Good. Wheel was rated Average.
Section C
A. Male ( )
B. Female ( )
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15. What is your occupation? (Please tick one)
A. Student ( )
B. Employed ( )
C. Retired ( )
D. Homemaker ( )
65% of the respondents were students, 20% were employed, and 15% were homemakers.
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17. Which product does HUL needs to include in their portfolio of detergents?
70% of the respondents felt that HUL should include the Insta-whitener Liquid and 45% of
respondents wanted liquid detergent.
APPENDIX G
Zero is the amount of inventory HUL's distributors currently hold in Mumbai, and
the amount of inventory that distributors in the 42 major urban centers will hold. Zero is
also the percentage of stock damaged in transit from the company depots to the retailers in
Mumbai. Given that both these statistics are a rarity, if not a completely anomaly not only
in India but also globally, it's not surprising that the company is happy about hitting zero
with such regularity.
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The 'Go To Market' (GTM) initiative was born out of a range of factors. "The marketplace,
as we know it, is changing with the evolution of modern trade. As a result, the throughput
from general trade is going down in certain markets, affecting the distributor's business.
All HUL salesmen now use handheld terminals on which they book replenishment orders
from retailers. Once they come back to the distributor, this data is synced in with the system
at HUL. Accordingly, the next the clearing and forwarding agents sends the stock to the
respective distributor who in turn sends it to the retailer. Now distributors hold no
inventory.
For the consumer too, as a result of the increased efficiency, the likelihood of finding the
required product in the shop when they visit it increases.
APPENDIX H
This challenge of ensuring that the business is optimised to cater to everchanging market
demands is an issue that HUL is deeply familiar with. Behind HUL’s vast business
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footprint that spans 4,000 distributors is an entity consisting of 15,000 staff as well as
multiple factories, warehouses and branches. It is not easy keeping its house in order but it
found a perfect solution to its business management needs with SAP.
HUL knew that business optimization and supply chain efficiency cannot be achieved
without tight communication links with its external business partners. However, the task of
ensuring seamless connectivity between its IT systems with that of its distributors was not
an easy one.
In a distributed general trade environment, HUL has implemented a standard
distributor management system. To cover the extended supply chain, the distributor
operations needed to be tightly integrated with its internal ERP solutions. This system is
functioning well; HUL wants to preserve its investment in this area. This meant that the
new ERP solution must be able to integrate with this back-office application too, so that
HUL can continue to leverage and maximize it well into the future.
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