Demand Forecasting

of
Surf Excel

By: Sneha Jaiswal (506)

 • About HUL
• Detergent market in India
• Demand of Surf Excel in India
Flow Of • Types of Forecasting Methods
Presenta • Demand Forecasting in HUL
tion • Methods to forecast demand of Surf Excel
• Calculations
• Conclusions
• Recommendations
Introduction Hindustan Unilever
Limited (HUL) is a British-Dutch
manufacturing company
established in 1933,
headquartered in Mumbai,
India.

 Its products include foods,

beverages, cleaning
agents, personal care products,
water purifiers and consumer
goods.
Cont…
The Company has 18,000
employees and has sales of INR
37,660 crores. HUL is a
subsidiary of Unilever, one of the
world’s leading suppliers of
Food, Home Care, Personal Care
and Refreshment products with
sales in over 190 countries and
an annual sales turnover of €51
billion in 2018.
 • Personal wash – Lux,
Lifebuoy, Liril, Hamam,
Breeze, Moti, Dove, Pears and
Rexona
• Laundry - Surf Excel, Sun light,
Rin, Wheel & Ala bleach
• Dishwasher - Vim
• Disinfectants - Domex, cif 

Products Offered
 • Foods - Kissan (Jam, Ketchup,
Squashes), Annapurna (Aata
and salt), Knorr Soups, Modern
Bread
• Ice-cream - Kwality Wall's
• Tea - Brooke bond, Lipton, Taj
mahal
• Coffee - Brooke bond Bru
• Beauty Products: Fair & Lovely,
Lakme, Ponds, Vaseline and
Aviance
Cont…
 Cont…

• Hair-Care - Sunsilk naturals, Clinic Plus,

Dove and Lifebouy
• Oral-Care - Pepsodent and Close-up
• Deo spray - Axe and Rexona
• Water Purifier - Pureit
• Ayurvedic Personal & health care - Ayush
 Cont…

The detergent market in India is divided into

premium, mid-range, and popular. The
premium segment comprises Ariel and Surf
Excel; the mid-range comprises Tide, Henko,
and Rin; and the popular segment comprises
Mr. White, Wheel, Nirma and Ghadi. The
market share is premium is 15%, mid-range
and popular are 40% and 45%.
Detergent
Market in India

These detergent brands are

considered organized players in the
industry and comprise 60% of the
total market. The remaining 40% of
the market is saturated with
regional and small unorganized
players.
 Demand of
Surf Excel
Surf Excel, which
touched ₹3,000 crore in
annual sales in year 2016, is
the biggest brand in HUL. Of
the six brands that have
achieved the ₹2,000-crore
sales mark, four are
detergents.
 Market Share (%) in 2015 and 2016
40 37.6
37.4
35 We can see that market share of
Surf Excel has been decreased
30
from 37.6% in 2015 to 37.4% in
25 2016. New entries in detergent
market every year reduce the
20 19.3
18.9
16.5
16.3
market share of existing players.
15 We can see, others category has
11.311 increased from 18.9 to 19.3 and
10 7.77.8 other companies has either lost
5 4.34.2 the market share or at the same
2.52.5 1.51.5 level.
0
L PL G a bs na r rs
HU
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2015 2016
 Types of
Forecasting

1. Qualitative methods
2. Quantitative method
 Delphi Method
A panel of Experts is interrogated
by a sequence of questionnaire
in which the responses to one
questionnaire are used to
produce next questionnaire.

Expert Opinion method

In this method, the services of
experts in that area such as
marketing professionals,
distributors/dealers and
marketing consultants may be
Qualitative Methods asked for.
 
 Visionary Forecasting
It is a prophecy that uses
personal insights, judgement and
facts about different scenarios of
the future.  
 
Historical Analogy
This is a comparative analysis of
the introduction and growth of
similar new products that bases
the forecast on similarity pattern.
Cont…
 Quantitative
methods

1. Time Series technique

Time series methods are attempts to
predict the future patterns by using
historical data which over a period time.
 
Moving Average Method
A moving average is a technique that
calculates the overall trend in a data set. In
operations management, the data set is
sales volume from historical data of the
company.  
 Cont…

Exponential Smoothing
In exponential smoothing, the recent past sales
are given more weight. The objective is to
smooth out fluctuations in the time series for
accurate estimation of sales forecast. 

2. Simulation technique
Simulation usually rely on computer software to
complete the tasks,  the benefit is it can simulate
the situation from reality into the virtual world,
where analyst can see the future change in
specify situation by changing the relevant
parameters.
 Demand
Forecasting in
HUL

HUL has a two-tier demand planning

structure. In Tier one, consists of a
centralized team of planners, they make the
first cut demand plan. The second tier
operates from the branches and is headed
by the customer service team. A combined
effort of these two tiers produces the
demand plan.
 Methods used to forecast demand of Surf Excel
Moving Average Method for forecasting
This method can be used as this technique is very
useful for forecasting short-term trends and in HUL
first they forecast for 10 days, then use that 10 days
forecasted data to forecast demand for a month and
then use that data to forecast quarterly demand.

Simple Exponential Smoothing

The detergent market is very competitive, lots of new
players are joining the market and changing the
market share. Simple exponential Method could be
perfect to forecast demand of detergents as this
method is suitable for forecasting data with no clear
trend. Also, simple exponential smoothing method
take Error component into consideration if any
present in forecasting of past data.
Calculati
ons
Moving Average Method
Actual demand in 2009- Forecasted demand for 2010-11 Actual Demand of 2010-11
Month 10 ('0, Cr) (last 3 phase) ('0, Cr) (‘0, Cr)

Jan 9.33 10.24333333 11.66

Feb 9.45 10.40777778 10.98
Mar 8.66 10.5437037 9.8
Apr 8.45 10.3982716 12.38
May 9.48 10.4499177 10.38
Jun 7.89 10.46396433 12.66
Jul 8.95 10.43738455 13.02
Aug 9.02 10.45042219 11.11
Sep 10.04 10.45059036 13.09
Oct 9.75 10.44613236 14.45
Nov 10 10.4490483 14.62
Dec 10.98 10.44859034 15.45
Total 112 125.1891366 149.6
 Forecasted vs Actual demand of 2010-11
18
16
14
We can see that the actual demand for
the year 2010-11 is of fluctuating 12
nature and the forecasted demand is 10
constant. 8
6
4
2
0
1 2 3 4 5 6 7 8 9 10 11 12
Forecasted demand Actual Demand
Simple Exponential
Smoothing Method

F(t) = F(t-1) + A (A(t-1) - F(t-1))

 Actual
deman Actual
d in Demand of
Forecasted demand of 2010-11 as per Alpha Values
Month 2009- 2010-11
10 ('0,
  Cr)
    0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9  
Jan 9.33 9.33 9.33 9.33 9.33 9.33 9.33 9.33 9.33 9.33 11.66
Feb 9.45 9.33 9.33 9.33 9.33 9.33 9.33 9.33 9.33 9.33 10.98
Mar 8.66 9.342 9.354 9.366 9.378 9.39 9.402 9.414 9.426 9.438 9.8
Apr 8.45 9.273 9.215 9.154 9.090 9.025 8.956 8.886 8.813 8.737 12.38
May 9.48 9.191 9.062 8.942 8.834 8.737 8.652 8.580 8.522 8.478 10.38
Jun 7.89 9.220 9.145 9.104 9.092 9.108 9.149 9.210 9.288 9.379 12.66
Jul 8.95 9.087 8.894 8.739 8.611 8.499 8.393 8.286 8.169 8.038 13.02
Aug 9.02 9.073 8.905 8.802 8.746 8.724 8.727 8.750 8.793 8.858 11.11
Sep 10.04 9.068 8.928 8.868 8.856 8.872 8.902 8.939 8.974 9.003 13.09
Oct 9.75 9.165 9.150 9.219 9.329 9.456 9.585 9.709 9.826 9.936 14.45
Nov 10 9.223 9.270 9.378 9.497 9.603 9.684 9.737 9.765 9.768 14.62
Dec 10.98 9.301 9.416 9.565 9.698 9.801 9.873 9.921 9.953 9.976 15.45
 Actual Demand Vs Forecasted Demand
18
16
14
We can see that the actual 12
demand for the year 2010-11
is of fluctuating nature and the 10
forecasted demand is following 8
the actual demand. 6
4
2
0
1 2 3 4 5 6 7 8 9 10 11 12
Forecasted Demand Acual Demand
 Conclusion

The best method for forecasting demand of

Surf Excel is Moving Average as the
forecasted data is more accurate in Moving
Average method than in Simple Exponential
Smoothing method.
 Recommendations

Technique can be used for tier 1:

Experts opinion method

HUL has a Steering Committee, which is
headed by the CFO and includes director
marketing, Director Sales, the demand
planning heads who provide guidance on
lots of different issue like demand
forecasting, inventory planning etc.
 Cont…

Technique can be used for tier 2:

Moving Average method

It can be used to forecast the demand of
Surf Excel. As this technique is very useful
for forecasting short-term trends and the
forecasted data in this method is more
accurate when compared with actual
demand.