PRESENTED BY:-

Kamran Shabbir

MANAGERIAL ECONOMICS

MISSION STATEMENT

Unilever's mission is to add Vitality to life.

LOGO

This is the logo of UNILEVER

INTRODUCTION TO HUL
Lever brothers is founded by WILLIAM HESKETH LEVER in 1890 Key player in food & household product industry Historically grew through acquisitions LEVER BROTHERS, THE OLD NAME WAS CHANGED INTO UNILEVER AFTER THE MERGER OF LEVER BROTHERS & MARGARINE UNIE IN 1930 UNILEVER IS A MULTI NATIONAL COMPANY IT IS ONE OF THE LARGEST CONSUMER GOODS COMPANIES IN THE WORLD ITS BRANDS ARE ON SALE IN 151 COUNTRIES

PRODUCT OF FOCUS
SURF EXCEL It is the oldest detergent To be present in INDIA Since 1960. It believes that children must be free to experience their LIFE for themselves

BRAND EVALUTION
HISTORY: Launched in 1959 & first in Indian detergent powder market. It was the first Fast Moving Consumer Goods (FMCG) for Detergent. Brand to set up a one-stop shop - called Care line - for people seeking solutions to their varied laundry problems. Surf was the first brand of detergent that was advertised on TV. It is advertise on more than 300 channels across the globe . Introduced the concept of bucket wash to housewives who were used to washing clothes with laundry soap bars.

PRODUCT
SURF EXCEL Advance Tropical Small & mighty Automatic Blue detergent Quick wash

RANGE & PRICEOF PRODUCT

2KG Rs405

1KG Rs210

500G Rs115

115G Rs20

50G RS10

25G Rs5

A comparison of cost price with sale price of Products in product line

Quantity

Cost Price in Rupees

Sale Price in Rupees

25 grams 50 grams 115 grams 500 grams 1000 grams 2000 grams

4.7 9.5 19 110.50 199.50 385

5 10 20 115 210 405

PROFIT RATIO

DEMAND ANALYSIS
Factors affecting demand: Price of the product, Price of substitutes and complements, Income of the household, Taste and preference of the household, and The amount annually spent on advertisement of the product.

Law of demand : Law of demand states that the amount demanded of a commodity and its prices are inversely related, other remaining constant.

CAUSES OF CHANGES IN DEMAND

Increase in demand Consumers income rises Prices of substitute good rises Prices of complements fall Taste and preference change in favor of the commodity decrease in demand Consumers income fall. Prices of substitute good fall Prices of complements rise Taste and preference change in against of the commodity

SUPPLY FOR THE PRODUCT

Supply channel : Distributers. wholesalers. Retailers. Cheaper price range of Rs.450 to Rs.2 Very good geographical distribution across whole India. Both Urban and Rural market segment covered.

Distribution channel

PRICING STRATEGY
Primary : 1. Cost-plus pricing : Mark-up to the cost of the product 2. Competitive Pricing : Price dependent upon price of the competitors. Secondary : 1. Customer-Segment Pricing. DISTRIBUTION PRICING STRATEGY: FOR EXAMPLE:

List price Add: Distributor price (5%) Add: Trade price (5%) Final Retail price (10%)

Rs. 100 Rs. 105 Rs. 110.25 Rs. 121

CROSS ELASTICITY OF DEMAND :

Cross Elasticity of the demand is defined as the ratio of the percentage change in the demand for one good to the percentage change in the price of some other goods.

Substitute goods: Tide, Ariel, Rin, ghadi etc. Cross Elasticity will be positive in this case

Complement goods: detergent cake, liquid soap . Cross Elasticity will be Always negative.

SWOT FOR SURF EXCEL

STRENGTH

Indias largest selling detergent company.

Brand innovation and renovation. Reach of the product. Competitive advantage. Supply chain & distribution.

WEAKNESSES
Labour and input cost. Finance. Managing scale. Raw material.

OPPORTUNITIES
Indian market for FMCG is growing @ 20% Niche target market.

Market penetration Geographical export

THREAT
Cheaper product eat into HUL market share. Competitor trade strategy.

Urban consumer are shopping less. Product from its own stable.

DEMAND FORCAST
IN SHORT RUN:

Increase the promotion and marketing of surf excel .

Reduce the price of quick wash surf excel to wither the competition from P&G ( TIDE ) Investment of rupees 150 core in distribution network .(Specially on Wednesday and Thursday ) Work on R & D to find tune Cost reduction to make the pricing more competitive.

IN LONG RUN
Introduce existing products into a new market, build on a strength.

Identify key sustainability issue for detergent market in India , as well as bench marking current sustainability.
Increase the production to 10 -12 tones / hour. Maximize the share in 5000 Crore in detergent market.

Wider geographic coverage than rivals.

Recognition as a leader in technology and/or product innovation

MARKET STRUCTURE
Type of market : OLIGOPOLY
Oligopoly = An oligopoly is a market form in which a market or industry is dominated by a small number of sellers (oligopolists) Because there are few sellers, each oligopoliest is likely to be aware of the actions of the others. The decisions of one firm influence, and are influenced by, the decisions of other firms. REASONS FEW PLAYERS LIKE : HUL ( blue,matic) Nirma P&G ( Tide,Aerial) Henkel India (Mir, persil, porwall, vernel,purex) Reckitt Benckiser ( Varnish)

 RESTRICTED MARKET. AVAILABILITY OF VARITIES. SELLING COST. SIMILAR PRODUCTS.

STABLE MARKET.
PRICING.

Break Even Analysis of Surf

Total Sales Total Variable Cost Total Fixed Cost

2005 18,119,110 14,474,255 1,205,298

2004 18,238,218 15,423,984 1,160,561

2003 21,471,724 18,029,310 1,091,622

Break Even Analysis

Break Even Point =

Total Fixed Cost S.P per unit- V.C per unit

Break even(2005) = 1-

Fixed cost Variable cost Sales

1,205,298 14,474,255 118,119,110

= RS 5,991,714 Break Even(2004) Break Even (2003) = Rs 7,521,253 = Rs 6,808,887

Break-Even Analysis
Revenue

TC VC

FC Sales

2005

2004

2003

Break-Even Analysis
Cost s

TC VC

Loss FC
Sales

2004

THANK U!