Group 3

Stuti (231159)
Heena (231153)
Sorabh (231154)
Saket (231127)
Vaibhav (231168)
Jermond

Hindustan Unilever Limited

It is Indias largest Consumer goods company based in Mumbai, Maharashtra. It is owned by
british Dutch company which owns 52% majority stake in HUL.
Mission OF HUL
Unilever's 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.

Unilever Mission statement defines the scope of its operations by providing personal
care, hygiene and nutrition to its customer.
Customer value and building relationships with its customers is at the core of HULs
business.

Vision of HUL

Our long term success requires a total commitment to exceptional standards of performance
and productivity, to working together effectively, and to a willingness to embrace new ideas
and learn continuously.

It clearly states where HUL wants to reach in future in terms of operational

excellence, sales volume and innovation.
Vision and mission brings out some of the values that are the winning principles of
HUL
These values are sustainable living, innovation, working together and keeping
customer at the core of the value creation cycle.

Present Strategies of HUL

Present strategies of HUL are aligned with mission and vision perfectly. HUls present
strategies are :
1. Deliver superior products, design, branding and marketing.
2. Bigger better and faster innovations.
3. Appeal to more consumers across needs and price points.
4. Lead market development.
5. Win with customers.
6. Be an execution powerhouse.
7. Lean, responsive and consumer led value chain.
8. Drive return on brand support.
9. Agile cost competitive organization.
10. Oraganisation and diverse pipleline talent ready to meet growth ambitions.
11. Performance with respect to values.
12. Leverage operating framework for competitive advantage.
Huls present strategy focus on brand and innovation to win the marketplace through
continuous improvement with the help of its employees which is what reflected in its mission
and vision statement.

Pestle analysis
Political factors Post liberalization of economy there has been vast changes in soap
industry.

The sops given to various new entrants to set up plants in the form of sales tax
concessions and other incentives.
There has been an emphasis on promotion of small scale industry to benefit small
scale player.
Focus on rural industries and promotion for major trade fair and events.

Economic Factors Various economic factors worked in favor of soap industry.

Reduced basic customs duty (BCD) on fatty acids, crude palm stearin, RBD and
other palm stearin, specified industrial grade crude oils from 7.5 percent to Nil; Crude
glycerin from 12.5 percent to 7.5 percent.
Increasing purchasing power of population both urban and Rural.
Higher import duty on caustic soda to offset dumping by foreign companies.

Social Factors the social factor is very important when it comes to soap industry.

With rise of education and income level, the need for personal hygiene and skin care
is increasing
Lack of availability of clear water thus investing in basic sanitation will make
improvement to health and soap industry.

Technological Factors

Soap industry is an capital intensive industry as well as requires constant innovation

in product thus huge investments in research and development.
Heavy investment in logistic management specially supply chain management and
customer relationship management.

Legal and Environmental factors

Soap industry has to identify itself as a cosmetic industry and follow Good
manufacturing practice (GMP) which lay down the rules of producing safe goods and
restricts use of hazardous chemicals.
Make sure that ingredients used adhere to Grade 1, 2 and 3 of BIS standards.

Porters 5 forces model

New Entrants Large number of brands are operating in industry at national and local level.
As it is a delicensed industry the entry of new firms is easy. Existing brand come up with new
brands with little product variations catering to each segment. For example Hindustan
Unilever limited offers a wide range of brand under bathing soaps industry.

Switching cost of the customer is not very high, whereas there is some amount of
brand loyalty in specialty segment.
Capital required to produce standard goods is high but also enjoys high learning
curve that improves with experience.

Distribution is the key factor in this industry and barriers to get hold on distribution
channels proves to be a major barrier to new entrant.

Substitutes

Consumers are price sensitive. Any increase in price of premium category shifts
consumer to popular category soap.
Consumers shifting from bathing soap to face wash and body wash.

Suppliers

Soda ash is a concentrated industry.

Only few exporters of Palm oil from foreign countries thus they have a commanding
position.
Threat of forward integration similar to Godrej who earlier supplied soap to bigger
companies and deals in its own soap brand.
Bargaining power of supplier is high.

Buyer

Many substitutes available in each category.

Switching cost of buyer is low and this results in price war and promotional schemes
like 2 +1.
More focused towards catering women buyers.
Bargaining power of buyer is high.

Rivalry
Market is littered over with several, leading national, and global brands and a large number
of small brands, which have limited markets.

High penetration rate.

Cut throat competition.
High exist barriers due to high capital investments.

Fast Moving Consumer Goods (FMCG) goods are popularly named as consumer
packaged goods. Items in this category include all consumables (other than
groceries/pulses) people buy at regular intervals. The most common in the list are toilet
soaps, detergents, shampoos, toothpaste, shaving products, shoe polish, packaged
foodstuff, and household accessories and extends to certain electronic goods. These items
are meant for daily of frequent consumption and have a high return. The Indian FMCG
sector is the fourth largest sector in the economy with a total market size in excess of US$
13.1 billion. It has a strong MNC presence and is characterised by a well established
distribution network, intense competition between the organised and unorganised segments
and low operational cost. Availability of key raw materials, cheaper labour costs and
presence across the entire value chain gives India a competitive advantage. The FMCG
market is set to treble from US$ 11.6 billion in 2003 to US$ 33.4 billion in 2015. Penetration
level as well as per capita consumption in most product categories like jams, toothpaste,
skin care, hair wash etc in India is low indicating the untapped market potential. Burgeoning
Indian population, particularly the middle class and the rural segments, presents an

opportunity to makers of branded products to convert consumers to branded products.

Growth is also likely to come from consumer 'upgrading' in the matured product categories.
The fast moving consumer goods (FMCG) segment is the fourth largest sector in the Indian
economy. The market size of FMCG in India is estimated to grow from US$ 30 billion in 2011
to US$ 74 billion in 2018.
Food product is the leading segment, accounting for 43 per cent of the overall market.
Personal care (22 per cent) and fabric care (12 per cent) come next in terms of market
share.
Growing awareness, easier access, and changing lifestyles have been the key growth
drivers for the sector.
Some important facts about the FMCG industry are:

FMCG companies are behind the biggest brands in the world

The FMCG industry changes fast and is constantly evolving
FMCG firms thrive on employee and customer retention
FMCG companies can beat the recession
The FMCG industry thinks bigger and better
FMCG has a history of delivering what consumers want

Indian FMCG sector market (2009-2014) and forecasts.

Year

Revenue (crore)

2009
2010
2011
2012
2013
2014

145200
181200
208800
220800
240700
264800

CAGR = 16.5%

300000
250000
200000
150000

Column2

100000
50000
0
2009

2010

2011

2012

2013

2014

Based on the past years CAGR we see that FMCG sector has seen a steady growth. The
per capita income is growing in India. This leads to the increase in purchasing power of
consumers which will result in increase in the revenue of FMCG sector sales.
The FMCG sector can expect an annual growth rate of 11-12% for the coming 3 years.
Year
2015
2016
2017

Revenue (crore)
295200
329200
367000

. Few factors supporting this growth rate could be :

Increase in the rural market, which is the new consumer segment.

Expansion and new launches.
Premiumization.

Indian bathing soap market (2009-2014) and forecasts.

Year
2009
2010
2011
2012
2013
2014
CAGR = 5%

Revenue (crore)
7000
7600
8000
8200
8500
8800

10000
9000
8000
7000
6000
Revenue

5000

4000
3000
2000
1000
0
2009

2010

2011

2012

2013

2014

Based on the past years CAGR i.e 5%, we see that bathing soap sector has seen a steady
growth. Seeing this we can expect an annual growth rate of 7% for it.
Year
2015
2016
2017

Revenue (crore)
9400
10000
10700

Few factors supporting this growth rate could be :

Consumers are becoming more hygiene conscious.

Increase in disposable incomes in the rural areas.
Launch of more value-added premium soaps has led to an increase in the demand
of cheaper (or the popular category) substitute products.
Moving trend towards ayurvedic/herbal soaps due to increasing awareness about
their medicinal value, hence fast growth observed in this segment as well.
Growing demand of beauty soaps amongst men also.

Break-up of demand from urban and rural for your product group to see changing
patterns.
One of the factors, which affect the demand of soaps, is the penetration. In case of soaps
the penetration in the rural area is 97% and that for urban area is around 99%. Thus
approximately the penetration is around 98% for overall India.
The market for soap is growing at 7% a year. With increasing awareness of hygienic

standards, the market for the Soaps could grow at a rate higher than 8% annually. Around
60% of the market is now sourced from the rural sector. This means that the variance
between the two segments is not very large. Since upper-end market focus is the urban
areas, margins come from the urban sector. Rural consumers in India constitute 70% of the
population. Rural demand is growing, with more and more soap brands being launched in
the discount segment targeting the lower socio-economic strata of consumers. Soap
manufacturers originally targeted their products to the lowest income strata in urban as well
as rural areas, positioning their brands as a way to remove dirt and clean the body. For
some brands, that positioning persists even today with a focus on removal of body odor and
keeping the user healthy. However, soap positioning is moving towards skin care as a valueadded benefit.
If we look from the category point of view, there are three categories of Soaps: Premium,
Economy & Popular. With increase in disposable incomes, growth in rural demand is
expected to increase because
Consumers are moving up towards premium products. However, in the recent past there has
not been much change in the volume of premium soaps in proportion to economy soaps,
because increase in prices has led some consumers to look for cheaper substitutes.

The top five players in the soap industry are:

1.
2.
3.
4.
5.

ITC Ltd.
HUL
Godrej Consumer Products Ltd.
Colgate Palmolive
Emami

MARKET SHARE IN 2013:

PLAYERS
ITC Ltd.
HUL
Godrej Consumer Products

MARKET SHARE
(in Cr.)
256,769
127,144
28,107

Ltd.
Colgate Palmolive
Emami

18,329
10,788

MARKET SHARE IN 2014:

PLAYERS
ITC Ltd.

MARKET SHARE
(in Cr.)
267,930

HUL
Godrej Consumer Products

138,092
30,147

Ltd.
Colgate Palmolive
Emami

19,400
10,351

A review of the detailed marketing strategy for all four Ps for the top five brands in
your product group.

Lux

Dove

Dettol

Lifebuoy

Cinthol

Product
Beauty soap

Place
Urban &
rural areas
with covering
almost all
retails shops
and malls
Mild moisturizing
More focus
soap
on Urban
areas with
covering
almost all
retails shops
and malls
Hand
Urban areas
wash/antiseptic
with covering
almost all
retails shops
and malls.
Rural areas
to some
extent
Handwash/antiseptic Urban &
rural areas
with covering
almost all
retails shops
and malls
freshness
Urban &
rural areas
with covering
almost all
retails shops
and malls

Price
Not very costly,
affordable

Promotion
Celebrity
endorsement

Premium pricing

Focus on
common
women look,
focus on
common
people in ads.

Affordable(affordable
by middle class and
upper middle class)

Emphasis on
healthy &
protected living

Low (affordable by
all income ranges)

Emphasis on
healthy living
and family
protection.

Low to
moderate(affordable
by all income
ranges)

Focus on
freshness and
men

Review:
Lux: HULs Lux is the top beauty soap. It is a convenience product with a touch of personal
care. It has an extremely good coverage for distribution in both rural and urban areas. Price
is generally affordable by lower middle class and above. From always, it has relied on
celebrity endorsements. Almost all top actresses of bollywood till date have been seen in the
LUX ads.
Dove is another HUL soap which offers its products as mild, gentle & moisturizing. Dove has
targeted premium market and therefore is readily available in urban areas. The pricing is
premium and is affordable by upper middle class and above. The ads mainly focus on a
without makeup look which takes average looking girls from decent background as its
promoters.
Reckitt Benckiser s Dettol is one of the most common antiseptic hand washing soap in the
market. It is well distributed in urban areas and to some extent in rural areas ( as the price
has come down). Pricing was premium at early stages, but came down to make it affordable
to middle class families. Advertisements mostly focus on a protected germ free environment
to live in.
Lifebuoy: It is the most common antiseptic hand wash soap in India, whether its urban or
rural. This offering from HUL is focused on health benefits. It came up as a manly soap and
slowly converted itself as a family soap. Its distribution is extensive and is available almost
everywhere in India. It is also called the King of rural markets. Price is affordable by all
classes. Its tagline Lifebuoy hai jaha, tandrusti hai waha clearly projects its value for
healthy living.

SWOT for your SBU

Strengths:

Humans always give a great priority to care for their personal body.
Freshness, glowing skin and protection from germs would be preferred by the
customers always.

Weaknesses:

Customers want instant results, which is quite difficult to happen.

Genuine and promising products are difficult to find as there are many products that
have come up.

Opportunities:

It has a great future growth in the rural market which has started increasing quite
well.
Since there is an income growth, people would be happy to invest in personal care.

Threats:

Big players like ITC and HUL have dominated the market, not allowing small
companies to stay in the market.
Big players spend greatly on advertisements which manipulate the purchasing
intentions of the customer.

Past performance of the product and elements of the marketing mix

Timeline for dove:
1957- Launched in the market
1970- Popularity increased as a milder soap
1980- Started its global rollout
1990s- Dove launches its Beauty Wash Cream.
Litmus test spots started in 1991, by 1996 present in 80 countries
1995-2001- came up with new range of products
2002- Campaign for real beauty
2005- Self- esteem campaign

Marketing mix:
PRODUCT
Dove came with a new idea of moisturizing of skin which was not there before its inception.
The products line of Dove is developed after carefully examining the traits and behaviors of women when it
comes to beauty and personal care. The product line of dove has a lot of products ranging
from variety of skin care soaps, body wash, moisturizing lotions and hair care products to dove for men
which was launched in 2010. Unilever has reached every single individual by producing a range of products
according to the needs of current and prospective consumers. Dove has five different classes of product i.e.
Hair care Products, Men care, Lotions, Beauty Bars/body wash and Deodorants. Dove has a range of
products in its each main category i.e. in Hare Care Products it has 44 different products, in
men care, in lotion, in beauty Bars/Body Wash and deodorants has sub products.
PRICE

Soon after the establishment of Dove soap, it was highly priced because of its high quality
and most of the consumers at that time did not consider buying it because of its high price but later on
Unilever changed its pricing strategy and made its products inexpensive and caught the attention of upper
middle and middle class consumers. Dove shampoo is a good option for repair and maintenance of hair in a
low price . The soaps produced by Dove are packed in a similar way as other brands soaps are packaged
therefore bringing its packaging costs low.
PROMOTION
The promotion strategy of Dove is to make the brand famous in the market for its personal care specifically
beauty products. Dove promotes its products in the market as the products which enhance and maintain the
beauty of women.
Doves markets its products heavily on print media, banners, signboards, social media and the most
important TV commercials that makes Dove the strongest advertiser of its products in the market. To
grab the attention of more buyers Dove rigorously take advantage of some marketing tools like
promotion counters, previous recommendations from costumers and over-the-counter advertising which is
very common in recent times. Poster campaigns, flyers, magazines and face-to-face marketing are the
strategies which are used by Dove to show the target market that Dove is the only brand which cares for your
skin and try to solve skin problems. Unilever also amalgamate its promotional strategy with social
responsibility, in many educational projects in schools in different countries Unilever promoted its
products like Dove and toothpaste. Specifically for promotion of Dove, Unilever joined hands with GS
of United States of America and EDA of United Kingdom to help raise fund for the project Self Esteem Fund
to raise some money for deprived women. Unilever is among the top 5 companies which spend billions of
dollars on advertising every year and personal care products accounts for 75% of that. Doves Campaign
for Real Beauty was a successful promotional campaign and the main idea behind this campaign was to
build self-esteem and confidence in women.
PLACE
Unilever utilizes its own distribution network to distribute its products. Unilever has an
extensive supply chain management system which means that it does not rely on outsourcing and does
all the activities from bringing raw material to manufacturing facilities i.e. procurement to selling
the finished goods to the end consumer on its own. Unilever has several warehouses to accommodate
such a large quantity of products. Unilevers global presence and incredibly good supply chain
management create a lot of opportunities for Unilever to take advantage of profit sanctuaries
in the emerging markets and developing countries. Unilever because of its economies of scale can enter
any market and gain substantial market share from domestic producers. Unilevers strategy when entering a
market is to compete on low prices while providing the customers with high quality products and services.

SEGMENTATION
GEOGRAPHIC

North, South, West, East

Tier 1 cities: Delhi, Mumbai, Chennai, Kolkata, Bangalore, Hyderabad.
Tier 2 cities: Ahmedabad, Jaipur, Lucknow, Chandigarh.
DEMOGRAPHIC
GENDER: Females
AGE GROUP: Young adult women, Middle aged women.
INCOME GROUPS: Upper-Middle income groups, High income groups.
OCCUPATION: Working women, Housewives
EDUCATION: Educated and Informative
LIFESTYLE AND PERSONALITY: Skincare, Wrinkle free skin requirement, Beauty
oriented.

TARGETING
Four Metropolitan cities
Urban: Women in urban areas are more aware about the anti-ageing soaps and ready to
invest in that product. They want a young, glowing skin throughout. Lower-middle class and
rural people look for a cheap product which caters to their daily, simple requirements; so
they will not be targeted.
Age group: Females of age 25-55
Gender: Females, which are conscious about their anti-ageing problems.
Income Group: Upper-Middle income groups and High income groups, who are ready to
invest on anti-ageing soap on regular basis.
Lifestyle: Educated customers, who carefully focus on their anti-ageing problems.
Brand loyal customers: DOVE is one of the most popular brands. Its customers are happy
with the results. Women are more than happy to pay the price to look young. So, introducing
this variant under DOVE would be welcomed by the targeted segment.

POSITIONING
5
4

1- Dove
2- Lifebuo
y
3- Cinthol
4- Medimix
5- Dettol
6- Lux

OBJECTIVE

To launch a product that would be welcomed by women to overcome their antiageing problem, without lowering their quality.
Strong advertising is needed to gain popularity among the women.
To increase the market size as most of the brands have already covered different
variants; so bringing in an anti-ageing soap would be a good idea.
Sale of 10 crore units (after 5 years)
Promotion cost 25 crores
Turnover of 20 crores in one year

Profit and Loss statement of Dove

(in crores)

Year 1
40

Year 2
42

Year 3
44.1

Total Sales
Less:
Excise Duty
R&D and market
analysis cost

12%
20, 5, 5, 5
respectively

4.8
8

5.04
2.1

5.29
2.2

Cost of raw
material &
manufacturing

(15% , 15%,
15%, 15%
year wise)

6.3

6.62

Initial cost setting

up of machines
and
factory(Spread
over next 4 years)
Marketing,
advertising and
Sales expenses

Total cost =
20 crores

40%, 35%,
30%, 25%
respectively

16

14.7

13.23

Administration and
other expenses

5%

2.1

2.2

Margin for various

intermediaries

20%

8.4

8.82

49.8
-9.8

43.64
-1.64

43.36
0.74

Total Cost
Total Profit/Loss

Break even graph

(in crores)

60
50
40
30
cost
20
10
0
2015

2016

2017

Total sales of dove soap segment is around 255 crore and it has 3 variants already in
place. So, accordingly we can say 85 crore from each variant. Since we are launching a new
variant we suppose our sales to be nearly 50%.

Excise duty is fixed by government and is 12 % of sales.

R&D cost is estimated to be around 20 % for the first year. The cost of R&D will
definitely decrease over the years which we have taken to be around 5%.
The cost of raw material is taken to be 15% which will be fixed throughout the years.
Initial cost for capacity building and additional machineries is taken to be 20 crores
which will be spread over for next 4 years.
Initially the marketing cost is taken to be 40%, considering the fact that the new
product is to be launched. Later the cost for marketing will subsequently decrease, as
the product starts selling.
Admin and other expenses are taken to be 5% which will be constant throughout the
years.
Finally the margin for various intermediaries is taken to be 20%. Here 15% margin
will be given to retailers and 5% margin will be given to the distributors.

Subsequently we will get the break even sale in the 3rd year.

CONTROL
Monitoring:

Through a proper review and feedback system of the work done by the sales force.

Clearly stating the target to be met by the sales force on daily, weekly and monthly basis.
Implementing a proper redressal system in case any complaint or problem is faced by the
consumer.
Frequent contacts with the distributors and the sales force to focus on achieving the
objectives set by the company.
Corrective action
Free trials: It is imperative for us for making the free trial as easy to use as possible for
consumers, while also proactively engaging prospects throughout the trial experience. We
have to consider how much it costs for the company to support the free trial.
Contests and offers: Introducing contest and offers for the consumers can provide a lot of
insights into our marketing strategy and may help us achieve our expectations.

Contests will serve a great tool for building fan base for the new product. It will enable the
company to engage the audience.
Contests are a rich source of data, which in turn will give us the opportunity to learn a bit
more about the exact needs of the consumers.
Organizing contests will empower consumers to do the products marketing for us. Hence we
have to come up with a promotional plan that encompasses multiple marketing channels and
sharing via social media. Such contests will enable an amplification of Diet Caf Cokes
marketing message that was not previously possible.
Incentives for the salespersons: In case the new product does not meet the expected
sales target, the workforce might get de-motivated. Hence in order to boost their confidence
as well as sales, incentives and bonuses should be offered on achievement of the targeted
sales.
Aggressive advertising: In order to increase the visibility of the new product, Coca Cola
should implement aggressive promotion policies like setting up more billboards, hoardings,
more banners near favourite fast food outlets, more T.V. commercials and greater presence
in the social media.
Coupons: The whole purpose of introducing coupons is to reduce or eliminate the hesitation
that consumers may feel when they are considering purchasing a Dove soap. That hesitation
factor may be price, but it can come from another reason altogether. The main objective
behind couponing for our product is to offer a discount for that first purchase and build loyalty
for repeat purchases at the full price. All we will be trying to do is launching a new product
line for Dove soap and want to provide an incentive for people to try it.