1. Study the Case below and answer the following questions: a.

What sales methods HUL has adopted for selling Pure It? b. What could be the problems or issues in this sales method? c. What sales method would you suggest to HUL going forward? In 2007 I was doing my MBA and staying in a shared flat with two of my classmates, I used to notice small kiosks near many stations in Mumbai then. All station roads had these small brown colored kiosks with 2 sales people standing beside them. These brown colored kiosks had Hindustan Unilever written on them. It had a container type of equipment. One day I and my friend went to one such kiosk (due to Brand Hindustan Unilever) and asked what was it all about. They told us very professionally about this new Water Purifier from Hindustan Unilever. They kept explaining it and the word Hindustan Unilever was very prominent in their description. I was concerned if it was real or fake because: 1) I had not seen any ad for it very unlikely for a Hindustan Unilever product 2) The perception of HUL was of a typical FMCG company dealing with Soaps, oils etc But a water purifier? The salespersons showed us all sorts of company documents and authorized letters. They also said that Pure it being an unconventional product, HUL is going for Direct Marketing Approach in this case. Then they demonstrated the working of pure it and offered us clear and germ free drinking water from the purifier. No advertising, direct approach to customers! I was impressed. We exchanged numbers and then next day we received a call from them .By evening a guy came to our home for detailed demonstration and we liked it. We ordered one. Next day itself it was installed at our home. It worked well and now I have bought a second one in my new flat where Im staying with my family. Pureit is the water purifier appliance from HUL. Pureit made its test marketing debut in 2005. The brand was initially launched in Chennai. During the test marketing, the result was pretty encouraging and the brand was launched nationally in 2007. The domestic water purifier appliances market is estimated to be Rs 450 crore and is dominated by Aquaguard from Eureka Forbes. This category was not growing very fast because of the high cost of the product. The entry level water purifier was costing anywhere between Rs 5000- Rs10, 000. Pureit is a battery operated purifier made of high-quality plastic and has a storage capacity of 18 litres. The company uses the following differentiation points against the main competitor Aquaguard by claiming that the product works without gas/electricity thus the cost per litre of pure water is very less. More over the brand is priced at a tempting Rs 2000 which makes it the lowest priced purifier compared to Aquaguard or Kent. Pureit is being positioned on the basis of its performance. The brand claims that the water from the purifier is ' as safe as the boiled water'. By claiming that it purifies water as safe as boiling water, Pureit is trying to achieve Points of Parity with

Aquaguard and Kent which also claims the same feature. Along with this POP, the brand tries to differentiate on the following points: a. No electricity/gas; b. Cost per litre low; and c. Price of the product is also low Pureit works on different cleaning layers to ensure purity. There is a fibre mesh layer which removes visible dirt. Next there is a unique carbon trap that filters harmful pesticides and dirt. The next is the USP for Pureit Germ-kill processor which kills all the bacteria and virus. Then there is a polisher which gives clear odorless water and a battery life indicator which tells you when to replace the battery. The product has a capacity of 9 liters in the upper chamber and 9 liters in the transparent chamber. According to the product website, the battery lasts for 1500 liters and the replacement battery costs Rs 250. As and when the battery life indicator button turns red it is understood that the battery is exhausted. Battery must then be replaced immediately. Till the time the battery is replaced, the auto switch off function in-built in the purifier automatically switches off the water supply. This ensures that no one drinks water from it that might not be pure anymore. Pureit is now being promoted through all media. There are ads in local print as well as TV. Being the FMCG major, HLL was able to place the product in most of the supermarkets and key consumer points. The brand uses the tagline " As Safe as Boiled water'. The brand is mainly targeting households (mothers) which have small kids. Apart these common above the line promotions, what has struck me was the below the line promotions that HUL has undertaken for Pureit. A visit to my doctor proved it. There was a product displayed prominently in his clinic with all necessary brochures and inquiry forms. The brand is using the influencing power of the medical fraternity to its advantage. For the doctor, it just means that his patient has access to pure water while waiting but for the brand this small gesture adds lot of authenticity. HUL has done pretty good homework on this product. The brand is available in shops and also sold through direct marketing associates. Although the low price of this product will help it to penetrate many households, there are certain issues also. Pureit is a consumer durable that requires after sales support. When even specialist consumer durable companies are blamed for offering poor after sales support, can an FMCG company deliver efficient customer service? Another issue is the battery. Will HUL be able to offer this spare without delay? It is crucial that the consumer replace the battery at the right time and use this product. A delay in the supply of battery can cause non-usage for Pureit at households thus causing bad word of mouth. May be it is because of this fear that HUL in its website tells the consumers to buy an additional spare battery.

SALES METHODS HUL HAS ADOPTED FOR SELLING PURE IT

Hindustan Unilever (HUL) is Indias largest selling FMCG (fast moving consumer goods) company. HUL is the market leader in Indian consumer products with presence in over 20 consumer categories such as soaps, tea, detergents and shampoos amongst others with over 700 million Indian consumers using its products. Pure It is the water purifier appliance from HUL. Pure it is a battery operated purifier made of high-quality plastic and has a storage capacity of 18 liters.

Pure it being an unconventional product, HUL adopted Direct Marketing Approach for its selling. Direct marketing is the use of consumer-direct (CD) channels to reach and deliver goods and services to customers without using marketing middlemen. These channels include direct mail, catalos, telemarketing, interactive TV, kiosks, websites and mobile devices. The sales method HUL used under Direct marketing was KIOSKS marketing. A "Kiosk" by definition is a small stand-alone unit that performs a specific function, generally without management intervention and are generally intended to provide information to those that use it.

For Pure It, HUL used simple brown colored Kiosks as an information center designed to hold brochures with two sales persons providing details of the product. These brown colored kiosks had Hindustan Unilever written on them. It had a container type of equipment where the sales persons can demonstrate the working of pure it and can offer samples of clear and germ free drinking water from the purifier. This way customer can be sure of what they are purchasing and can see and test it for themselves before buying it. In some situations, a kiosk can also be more attractive to potential clients than a human because the consumer can obtain information without feeling like they are risking a sales pitch. After the demonstration, if the customer is willing to purchase the product, personal and home details such as address and contact number is taken down by the sales persons and the customer is showed a detailed demonstration of the product (pure it) and then installed in their homes the very next day.

At first, HUL did not use advertising for promoting Pure It, they used direct approach to customers. Pure it made its test marketing debut in 2005. The brand was initially launched in Chennai. During the test marketing, the result was pretty encouraging and the brand was then launched nationally. After which HUL started promoted Pure it through all media. There are ads in local print as well as TV. Being the FMCG major, HUL was able to place the product in most of the supermarkets and key consumer points. Under the sales method HUL went for personal selling method since Pure It was an unconventional product , therefore the demonstrations. Personal selling is oral communication with potential buyers of a product with the intention of making a sale. The personal selling may focus initially on developing a relationship with the potential buyer, but will always ultimately end with an attempt to "close the sale".

Kotler

describes

six

main

activities

of

sales

force:

(1) Prospecting - trying to find new customers (2) Communicating - with existing and potential customers about the product range (3) Selling - contact with the customer, answering questions and trying to close the sale

(4) Servicing - providing support and service to the customer in the period up to delivery and also post-sale (5) Information gathering - obtaining information about the market to feedback into the marketing planning process (6) Allocating - in times of product shortage, the sales force may have the power to decide how available stocks are allocated Advantages of using personal selling as a means of promotion: Personal selling is a face-to-face activity; customers therefore obtain a relatively high degree of personal attention The sales message can be customized to meet the needs of the customer The two-way nature of the sales process allows the sales team to respond directly and promptly to customer questions and concerns Personal selling is a good way of getting across large amounts of technical or other complex product information The face-to-face sales meeting gives the sales force chance to demonstrate the product Frequent meetings between sales force and customer provide an opportunity to build good long-term relationships

The brand uses the tagline " As Safe as Boiled water. Pure it claims that the water from the purifier is 'as safe as the boiled water'. By claiming that it purifies water as safe as boiling water, Pure it is trying to achieve Points of Parity. Points-of-difference (PODs) Attributes or benefits consumers strongly associate with a brand, positively evaluate and believe they could not find to the same extent with a competing brand i.e. points

where you are claiming superiority or exclusiveness over other products in the category. Points-of-parity (POPs) Associations that are not necessarily unique to the brand but may be shared by other brands i.e. where you can at least match the competitors claimed benefits. While POPs may usually not be the reason to choose a brand, their absence can certainly be a reason to drop a brand.

The company uses the following differentiation points against the main competitor Aquaguard by claiming that the product works without gas/electricity thus the cost per liter of pure water is very less. HUL has done pretty good homework on this product. This category was not growing very fast because of the high cost of the product. More over the brand is priced at a tempting Rs 2000 which makes it the lowest priced purifier compared to Aqua guard or Kent. The brand is available in shops and also sold through direct marketing associates. The brand is mainly targeting households (mothers) who have small kids.

HUL also used common above the line promotions, key consumer points, pop display. The product being displayed prominently in a doctors clinic with all

necessary brochures and inquiry forms increases authenticity of the product pure it . The brand is using the influencing power of the medical fraternity to its advantage. For the doctor, it just means that his patient has access to pure water while waiting but for the brand this small gesture adds lot of authenticity

PROBLEMS OR ISSUES IN THIS SALES METHOD

Direct marketers and their customers usually enjoy mutually rewarding relationships. However, a darker side emerges: Many people do not like the increasing number of hard-sell, direct

marketing solicitations. Especially dinnertime or late-night phone calls, poorly trained callers and computerized calls placed by auto-dial recorded message players. It was also the first time that HUL was using Direct marketing for any of

its products (Pure it) . And people had to wonder if it was real or fake since they did not have any advertisements or hoardings unlike the other FMCG goods. For such instances, proof of documents had to be shown.

Pure it is a consumer durable that requires after sales support. The

main drawback would be that this product pure it required after sales support / services which have to be taken care of. Any delay in this manner would bring a bad response by the customer. Moreover an FMCG company providing sales support would be hard to handle. When even specialist consumer durable companies are blamed for offering poor after sales support, can an FMCG company deliver efficient customer service? The other problem is that the battery of the product pure it would have

to be replaced once its over. Otherwise the purifier wont be working since it runs on batteries. It is crucial that the consumer replace the battery at the right time and use this product. A delay in the supply of battery can cause nonusage for Pure it at households thus causing bad word of mouth.

While the kiosk has incredible advantages, they do require that someone

periodically check on them to make sure that they are doing what they are supposed to do. If your kiosk runs out of brochures, it quickly becomes unattractive If your kiosk collects contact requests and you dont pull them and act

on them, it not only wont do you any good, it can hurt your reputation. Also in kiosks marketing you can only talk with one person at a time, if

several other customers show up at the same time, you risk losing potential customer contacts. Limited Reach - There is an inherently limited geographic reach to direct marketing involving fliers and street advertising. By using this form of direct marketing, you will be limited to consumers in a very specific distribution area and will have to depend on word of mouth for others.

Time - It is hard to get as immediate of an impact when using direct marketing, as the advertising product, by its nature, takes time to reach consumers. Time is often equated with money in business, and the time ratio in direct marketing is a disadvantage.

Main disadvantages of using personal selling: The main disadvantage of personal selling is the cost of employing a sales force. Sales people are expensive. In addition to the basic pay package, a business needs to provide incentives to achieve sales (typically this is based on commission and/or bonus arrangements) and the equipment to make sales calls (car, travel and subsistence costs, mobile phone etc). In addition, a sales person can only call on one customer at a time. This is not a cost-effective way of reaching a large audience.

SALES METHODS FOR HUL TO MOVE FORWARD

Under kiosk marketing, the kiosk should be kept good, clean, take care of blemishes, and make sure everything is working properly. Though maintenance costs are remarkably low, you should look at your kiosk as the consumer would. Keep it up, keep it functional and your kiosk will give you years of life and create a lot of business for you. Following are some of the sales methods Hindustan Unilever (HUL) can use other than direct marketing for going forward: Relationship marketing : Relationship marketing is the approach underlying all of the "sales-lead-generation-success" methods. Sales lead generation using this method simply refers to cultivating a personal, sales-winning relationship with your prospects. Keeping in touch with prospects via a series of ongoing communications and offers throughout your prospective customers' consideration processes lets you pick up sales others leave on the table. Maintaining Customer Contact : Part of relationship selling involves maintaining regular contact. If you neglect a client who has trust in your integrity as a person and as a salesperson, that client may finally be forced to turn to your competitor. (Who has probably been calling regularly to get their business.) So, HUL should make sure that they not only build the relationship, but keep regular contact and keep all channels of communication open and maintain the CRM. Internet marketing and search engine optimization : Business buyers are more sophisticated and getting harder to reach than ever. Studies show that about 90% of business buyers start with research on the Internet. Therefore, it's critical to have a well-

tuned sales lead generation program that includes Search Engine Optimization (SEO)/Internet marketing strategies to attract prospects at the beginning of their buying cycle.

Telemarketing : Even though many people despise the thought of telemarketing, it is very effective for sales lead generation when executed properly. Telemarketing is a personal marketing and sales lead generation technique that offers a cost-effective, efficient alternative to field selling, but it can be significantly more expensive than direct mail email. By including telemarketing in your B2B sales lead generation marketing plan, you can reach up to thirty decision-makers a day at a cost of $15 to $20 per contact. In contrast, with field sales, you can reach only four or five decision-makers a day at an average cost of $392 or more per contact. Direct mail may cost as little as a dollar, and email is often much less. However, if you consistently prospect for and nurture leads via phone, you will consistently generate qualified sales leads. Email publications : By creating your own email newsletter, you could send out industry news and tips to suspects in your market. Since you will be on your prospects' minds more often than your competition, eventually, your sales leads will turn into actual sales. Direct mail: There is an entire industry of people like Dan Kennedy, Bob Bly, and Bill Glazer who are dedicated to business-to-business

selling through direct marketing. Sales letters can be an excellent sales lead generation method. But most sales and business professionals do not know how to use this lead generation technique effectively and efficiently. For HUL , best place to start revamping their direct response marketing is by determining who their best customers are (mother and child), then trying to target their database marketing efforts at companies and individuals who are similar in nature.

Event marketing : Whether you do it live, through the telephone (teleseminars) or via the Web (webinars), seminars and workshops are a great sales lead generation tool. People who attend your seminar have an interest in the information you are presenting and a need for your product or service. HUL can use Live seminars as they can be done inexpensively. Teleseminars are the least expensive, with the only costs being conference phone line rental and promotion fees. Webinars are more expensive but it creates a very interactive environment for attendees without having to leave the office.

Better Customer service : Good customer service is the lifeblood of any business. You can offer promotions and slash prices to bring in as many new customers as you want, but unless you can get some of those customers to come back, your business won't be profitable for long. Good customer service is all about bringing customers back. And about sending them away happy - happy enough to pass positive feedback about your business along to others, who may then try the product or service you offer for themselves and in their turn become repeat customers. HUL should adopt proper trainers and sales persons with excellent customer services as this plays a major role in every company.

Promotion:

Integrated

Marketing

Communication:

Integrated

Marketing Communication (IMC) involves the idea that a firms promotional efforts should be coordinated to achieve the best combined effects of the firms efforts. Resources are allocated to achieve those outcomes that the firm values the most. Promotion involves a number of tools we can use to increase demand. The most well known component of promotion is advertising, HUL can adopt tools such as the following:

Public relations (the firms staff provides information to the media in the hopes of getting coverage). This strategy has benefits (it is often less expensive and media coverage is usually more credible than advertising) but it also entails a risk in that we cant control what the media will say. Note that this is particularly a useful tool for small and growing businessesespecially those that make a product which is inherently interesting to the audience.

Trade

promotion.

Here,

the

firm

offers

retailers

and

wholesalers temporary discounts, which may or may not be passed on to the consumer, to stimulate sales.

Sales promotion. Consumers are given either price discounts, coupons, or rebates. Personal selling. Sales people either make cold calls on

potential customers and/or respond to inquiries.

In-store displays. Firms often pay a great deal of money to have their goods displayed prominently in the store. displays, and near the check-out counter. representative may display the product. More desirable display spaces include: end of an aisle, free-standing Occasionally, a

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