The Project is titled as “INDUSTRIAL REVIEW PROJECT” and has been

prepared by Chetan.M.Daga, Deepak Lunawat, Deepesh Agarwal and Gaurav

Bengani.
The Following table gives the detail about the Name, Register Number and
Company of a particular Student.

Name Register No Company Company Logo

Chetan M 08D1246 EMAMI LTD

Daga

Deepak 08D1247 COLGATE

Lunawat PALMOLIVE INDIA
LTD

Deepesh 08D1248 GILLETTE INDIA

Agarwal

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Gaurav 08D1249 GLAXOSMITHKLINE
Bengani CONSUMER AND
HEALTHCARE LTD

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An Introduction to the Indian Industry

Indian economy is one of the fastest growing in the world. Its GDP
growth rate is 6.5% with a GDP of rupees 177000 crore, which is the
fourth largest in the world and the 12th largest economy in the world.
The country is fast adapting to industrialization, the speed of which is
measured as the second fastest in the world. The major industries of
India are automobiles, cement, chemicals, consumer electronics, food
processing, machinery, mining, petroleum, pharmaceuticals, steel,
transportation equipment, and textiles.

In the post liberalization era the country has capitalised on its vast
pool of educated, English speaking manpower to become a major power
in Outsourcing, Information Technology, financial and biomedical
technology research, banking & insurance, and real estate development.

FMCG SECTOR

An Introduction

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.

A major portion of the monthly budget of each household is reserved

for FMCG products. The volume of money circulated in the economy

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against FMCG products is very high, as the number of products the
consumer use is very high. Competition in the FMCG sector is very
high resulting in high pressure on margins.

FMCG companies maintain intense distribution network. Companies

spend a large portion of their budget on maintaining distribution
networks. New entrants who wish to bring their products in the
national level need to invest huge sums of money on promoting brands.
Manufacturing can be outsourced. A recent phenomenon in the sector
was entry of multinationals and cheaper imports. Also the market is
more pressurized with presence of local players in rural areas and state
brands.

Overview of FMCG Sector

What are FMCGs?

We regularly talk about things like butter, potato chips, toothpastes,

razors, household care products, packaged food and beverages, etc. But
do we know under which category these things come? They are called
FMCGs. FMCG is an acronym for Fast Moving Consumer Goods, which
refer to things that we buy from local supermarkets on daily basis, the
things that have high turnover and are relatively cheaper.

FMCG Products and Categories

- Personal Care, Oral Care, Hair Care, Skin Care, Personal Wash
(soaps);

- Cosmetics and toiletries, deodorants, perfumes, feminine hygiene,

paper products;

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- Household care fabric wash including laundry soaps and synthetic
detergents; household cleaners, such as dish/utensil cleaners, floor
cleaners, toilet cleaners, air fresheners, insecticides and mosquito
repellents, metal polish and furniture polish;

FMCG in 2006

The performance of the industry was inconsistent in terms of sales and

growth for over 4 years. The investors in the sector were not gainers at
par with other booming sectors. After two years of sinking performance
of FMCG sector, the year 2005 had witnessed the FMCGs demand
growing. Strong growth was seen across various segments in FY06.
With the rise in disposable income and the economy in good health, the
urban consumers continued with their shopping spree.

- Food and health beverages, branded flour, branded sugarcane, bakery

products such as bread, biscuits, etc., milk and dairy products,
beverages such as tea, coffee, juices, bottled water etc, snack food,
chocolates, etc.

- Frequently replaced electronic products, such as audio equipments,

digital cameras, Laptops, CTVs; other electronic items such as
Refrigerator, washing machines, etc. coming under the category of
White Goods in FMCG;

Sector Outlook:

FMCG is the fourth largest sector in the Indian Economy with a total market size of
Rs1,25,000crore ($25 billion) crore sales and is expected to grow to Rs 4,50,000 crore ($95
billion) by 2018. This will be a result of GST (Goods & Service Tax) – announced to be
implemented from 1st April, 2010– and possible opening of retail to foreign investment
(FDI), will ensure multi-fold growth for FMCG sector in the next 10 years. FMCG sector

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generates 5% of total factory employment in the country and is creating employment for
three million people, especially in small towns and rural India

Analysis of FMCG Sector

Strengths:

1. Low operational costs.

2. Presence of established distribution networks in both urban and rural areas.

3. Presence of well-known brands in FMCG sector.

Weaknesses:

1. Lower scope of investing in technology and achieving economies of scale, especially in

small sectors.

2. Low export levels.

3. The "Me-too" products, which illegally mimic the labels of the established brands, narrow
the scope of FMCG products in rural and semi-urban market.

4. Huge number of alternatives, leading to confusion in minds of the customers.

Opportunities:

1. Untapped rural markets.

2. Rising income levels; i.e. increase in purchasing power of consumers

3. Large domestic market- a population of over one billion.

4. Export potential

5. High consumer goods spending

Threats:

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1. Removal of import restrictions resulting in replacing of domestic brands

2. Slowdown in rural demand.

3. Tax and regulatory structure

4. Heavy competition.

Scope of the Sector

The Indian FMCG sector with a market size of US$25 billion is the
fourth largest sector in the economy. A well-established distribution
network, intense competition between the organized and unorganized
segments characterizes the sector. FMCG Sector is expected to grow by
over 60% by 2010. It had been estimated that FMCG sector will rise
from around Rs 56,500 crores in 2005 to Rs 92,100 crores in 2010.
Hair care, household care, male grooming, female hygiene, and the
chocolates and confectionery categories are estimated to be the fastest
growing segments, says an HSBC report. Though the sector witnessed a
slower growth in 2002-2004, it has been able to make a fine recovery
since then.

For example, Hindustan Unilever Limited (HUL) has shown a healthy

growth in the previous few quarters. An estimated double-digit growth
over the next few years shows that the good times are likely to
continue.

Growth Prospects:

With the presence of around 12.5% of the world population in the

villages of India, the Indian rural FMCG market is something no one
can overlook. Increased focus on farming sector will boost rural
incomes, hence providing better growth prospects to the FMCG

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companies. Better infrastructure facilities will improve their supply
chain. FMCG sector is also likely to benefit from growing demand in
the market. FMCG companies have immense possibilities for growth.
And if the companies are able to change the mindset of the consumers,
i.e. if they are able to take the consumers to branded products and
offer new generation products, they would be able to generate higher
growth in the near future. However, the demand in urban areas would
be the key growth driver over the long term.
Also, increase in the urban population, along with increase in income
levels and the availability of new categories, would help the urban
areas maintain their position in terms of consumption. At present,
urban India accounts for 63% of total FMCG consumption, with rural
India accounting for the remaining 37%. However, rural India accounts
for more than 41% consumption in major FMCG categories such as
personal care, fabric care, and hot beverages. In urban areas, home and
personal care category, including skin care, household care and
feminine hygiene, will keep growing at relatively attractive rates.
Within the foods segment, it is estimated that processed foods, bakery,
and dairy are long-term growth categories in both rural and urban
areas.

Factors that make India a competitive player in FMCG sector:

Availability of raw materials:

Because of the diverse agro-climatic conditions in India, there is a

large raw material base suitable for food processing industries. India is
the largest producer of livestock, milk, sugarcane, coconut, spices and
cashew and is the second largest producer of rice, wheat and fruits
&vegetables. India also produces caustic soda and soda ash, which are
required for the production of soaps and detergents. The availability of
these raw materials gives India the location advantage.

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Cost of Labour:

Low cost labor gives India a competitive advantage. India's labor cost
is amongst the lowest in the world, after China & Indonesia. Low labor
costs give the advantage of low cost of production. Many MNC's have
established their plants in India to outsource for domestic and export
markets.

Presence across value chain:

Indian companies have their presence across the value chain of FMCG
sector, right from the supply of raw materials to packaged goods in the
food-processing sector. This brings India a more cost competitive
advantage. For example, Amul supplies milk as well as dairy products
like cheese, butter, etc.

7 Reasons why FMCG can be pursued as a Career

Industry Background

FMCG industry creates a wide range of job opportunities. This

industry is a stable, diverse, challenging and high profile industry
providing a wide range of job categories like sales, supply chain,
finance, marketing, operations, purchasing, human resources, product
development, and general management.

FMCG is one of the most dynamic domains of the business world. In

this sector, one needs to be fast in translating the ideas into new
products. There is a requirement to create the products that people
trust, enjoy and use in their daily lives. Advertising and marketing
have a vital role to play in this.

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Skills Required
FMCG sector requires huge amount of commercial awareness; one must
have the skills of a team player. Apart from that, good numerical
skills, communication and organizational skills are all essential for a
successful career in this industry. Key skills will also depend upon the
type of position you want to pursue, i.e. marketing, human resources,
finance, etc.

The reasons why one should pursue one's career in FMCG sector:

1. Job security
It is a stable industry. Unlike some other industries, such as
automobiles, IT, and aviation, FMCG industry does not suffer from
mass layoffs, when the economy starts to dip. One may drop the idea of
buying a car but not the idea of having dinner. This lends FMCG a
level of job security unknown in other industries especially during the
Current slowdown.

2. A high profile industry

India has billions of people and all are consumers. Therefore everyone
is affected by FMCG sector. People now are getting more health
conscious and about what they are eating. All this has become possible
because of the frequent display of various advertisements, such as
protests against the genetic modification of foods, the growing problem
of obesity, etc.

3. Quick experience
Consider an example: One person is working in the sales of
automobiles while the other one is working in the sales of beverages.
At the end of the month, the person who is working for the sales of
automobiles may sell 2 or 3 units, if he is fortunate. On the other hand,

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the other person sells a large number of products every day. Definitely,
the person selling beverages will get more experienced in less time
working in FMCG than any other sector, no matter whether in sales,
marketing, operations, accounting, etc. In the end, one will land up
learning more and gaining a firm grasp of basic business skills.

4. A wide range of experience

One can have a wide range of choices if one desires a career path in
FMCG sector. The "fast moving" part of FMCGs requires people who
are flexible. Inter0department transfers are very common. One will get
to learn a lot, even if one enters this sector for a short duration.
5. An industry that thrives on innovation
FMCG sector gives the opportunity to do creative work. There is a
constant requirement of innovation in production, advertising,
packaging and branding. FMCG offers an opportunity to express ones
creativity through developing new ideas for products, as brands
compete head to head on the shelf.

6. Nationwide opportunities, both urban and rural

FMCG sector offers opportunities through its connection to the primary
sector in rural and urban areas. The sector is particularly attractive for
those interested in working in different parts of the country, as it has a
nationwide base, unlike many other sectors confined to particular
locations.

7. Offshore opportunities
The International offices of most FMCG multinationals regularly
recruit staff from our country, either for short projects or for longer
stints.

Indian Consumer Class

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 India has a population of over 1 billion and 4 climatic zones.
Several religious and personal beliefs, 15 official languages, different
social customs and food habits characterise Indian consumer class.
Besides, India is also different in culture if compared with other Asian
countries. Therefore, India has high distinctiveness in demand and the
companies in India can get lot of market opportunities for various
classes of consumers. Consumer goods marketers’ experience that
dealing with India is like dealing with many small markets at the same
time.

Indian consumer goods market is expected to reach $400 billion by

2010. India has the youngest population amongst the major countries.
There are a lot of young people in India in different income categories.

Consumer goods marketers are often faced with a dilemma regarding

the choice of appropriate market segment.

In India they do not have to face this dilemma largely because rapid
urbanization, increase in demand, presence of large number of young
population, any number of opportunities is available. The bottom line
is that Indian market is changing rapidly and is showing unprecedented
consumer business opportunity.

As the restrictions on foreign investments were relaxed in 1991, Multi-

National Companies have been entering India since then.

Recent Developments in Fast Moving Consumer Goods (FMCG)

Sector

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FMCG sector is no doubt registering an uptrend in growth. According
to CNBC, FMCG sector growth story will continue because of the
positive budget. Nevertheless, there are some barriers to the growth of
the sector. Indirect taxes constitute no less than 35% of the total cost
of consumer products - the highest in Asia. Last year, Finance Minister
proposed to introduce an integrated Goods and Service Tax by April
2010.This is an exceptionally good move because the growth of
consumption, production, and employment is directly proportionate to
reduction in indirect taxes.

Budget 2008-2009 for FMCG Sector

The income tax propositions have an indirect impact on FMCG sector.

More disposable income in the hands of consumers will enable them to
graduate to high end category products. Overall FMCG product
consumption is expected to increase in urban as well as rural areas.
Proposed increase of the corpus of rural infrastructure development
fund to Rs.140bn will benefit to rural development which ultimately
increase product penetration in rural areas. Reduction of Excise duty
from 16% to 14% will benefit sector as a whole
Duty impose on non-filter Cigarettes is positive for ITC as it has filter
cigarettes.
Reduction in CST from 3% to 2% is positive for all food processing
companies.
Exclusion of tea & coffee from excise duty will not only benefit
consumers but also to the companies like ITC, HUL, Tata Tea, Tata
Coffee, Nestle, etc.

Corporate Social Responsibility

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FMCG companies have now started taking Corporate Social
Responsibility seriously. For instance, to encounter domestic violence,
Ponds has tied up with the United Nations Development Fund (UNDF)
for Women. Surf Excel is funding the education of children. Most
brands link themselves with the social causes, thereby linking
consumers with the brands and gaining goodwill in the market.

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FMCG ON BUYING SPREE

To attain a maximum growth, many FMCG companies have fixed

various major buy out deals in both domestic as well as international
market. As an example, Tata Tea, the largest tea manufacturing
company in India and the second largest tea company in the world and
its promoter Tata Sons had jointly acquired a 30% stake in Energy
brands Inc (Energy Brands was founded in 1996 and is a subsidiary of
Coca-Cola.) for Rs. 3148 crore in August 2006. This acquisition was
the third largest global acquisition after Videocon and Tata Steel by an
Indian company.

Also in the year 2006, Tata Coffee Ltd. Acquired Eight O' Clock coffee
company (EOC), USA from Gryphon Investors worth Rs 1015 crore.

In another example, Marico Ltd.-a leading Indian group in Consumer

Products and Services, acquired Hindustan Unilever Ltd's brand Nihar
for Rs 227 crore in 2006. In the same year Marico had acquired two
Egyptian color and hair care brand by the name of Hairmode and
fiancée.

In domestic market Godrej Beverages & foods Ltd. (GBFL) has

acquired Nutrine, a confectionary brand. Emami’s acquisition of Zandu
is also a notable one.

These acquisitions have played a major role to push the growth in the
sector. Also the FMCG majors hiked the prices and that move proved to
be good for them. Another factor that is driving the growth up is
increase in advertising budgets, and investing heavily behind brands.

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In essence, the major factors that have propelled the growth of FMCG
Sector are:
• Major acquisitions
• Pricing power
• Effective marketing and advertising strategy.

Major FMCG companies are now planning to enter new categories with
fresh marketing objectives and are also gearing up for more acquisition
in domestic and international markets that will certainly give a spur to
the growth in FMCG sector.

FMCG REPORT AT THE ONSET OF 2008

We believe that in a scenario of a buoyant economy and multiple

growth triggers being in place, the FMCG sector should sustain robust
growth momentum. We expect new product developments, better health
and happier taste buds in the FMCG sector.

Momentum to sustain: With India rising, the outlook of Indians is

changing too. They are willing to experiment and try out new products.
Capturing insights into their needs and synthesizing these into
strategies and final product formats presents a new opportunity for
FMCG players. Up gradation from unbranded to branded goods
(packaged grocery, household cleaning products), demand of emerging
categories (breakfast cereals, hair colours) and health and hygiene
products (chyavanprash) would be the growth drivers.

Going rural: As per Asschom, FMCG will be witnessing more than 50%
of its growth in the rural and semi-urban segments by 2010. Currently,
nearly 34% of the off take of FMCG companies come from rural areas.
As seen like last year, even in 2008, the rural areas would provide a
huge potential.

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Companies like HUL, ITC and Colgate have already established good
distribution networks in these regions. Other companies would start
catering to these regions in near future.

Health and wellness: With the growth prospects of the economy and
sector in place, though most of the categories will continue their
growth, processed foods and the Personal Care segment is likely be the
fastest growing segments.

Foods: Food forms the largest component of the total consumption

expenditure in India accounting for as much as 51%. This is highest
compared to 9.7% for an average American person and 15% for both
Japanese and British. Though with rising income, the share would go
down, but would increase in absolute terms. Further, the companies are
widening their health food portfolio to target the rich, health conscious
urbans. Dabur, HUL and ITC have made investments in this segment.

Value growth: Along with volume growth we expect the value growth
to be strong too. The companies would take selective hikes in price to
meet the inflationary pressure. Also the consumers would upgrade from
mass brands to premium brands, which would be a key driver in the
value growth.

Retail formats: India is witnessing a retailing revolution in recent

times. While some retail chains are of large retail formats enabling
huge volumes, some are focused on affordability and thereby squeezing
the margins. Only 4% retail outlets are in the organised sector, thereby
reducing the reach. With FDI expected to be allowed, the share from
the retail formats by the FMCG players is expected to increase.

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Cut- throat competition: FMCG companies continue to face intense
competition. Players from unorganized and organized sectors continue
to grab each other’s market shares. Low brand awareness enables local
players to market their spurious look-alike brands. Also with entry of
existing players in new segments like ITC’s entry in personal care
products, Dabur’s plans to venture into health beverages would add to
the already aggressive environment resulting in high pressure on
margins.

Commodity prices- a key risk: A worsening of the commodity price

environment is a key risk. In the last two years, most of the companies
had faced pressure on its input prices. Crude, palm oil, wheat and
packaging costs were on a rise. Though most of the companies had
taken judicious price increases, however, a sustained inflationary
environment could hurt growth or margins or both.

Going forward:
With the economy on a high growth flight, robust consumerism, greater
rural penetration and rapidly growing organized retail, we remain
bullish over the growth traction in the FMCG space. While rural
regions would drive consumption due to higher penetration, organised
retailing in urban markets would help increase value growth led by
demand of premium products. The shift from unorganized to organized
and from unbranded to branded will add further impetus to growth in
this segment. India's immense population of one billion-plus people
offers tremendous market potential. But its many languages, size and
poor infrastructure can make it a difficult place to operate. The
companies will have to align its strategies as per the changing
environment, attitudes and preferences of the customers to be
successful.

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RURAL INDIA:

Higher penetration, per capita consumption, increasing population

base, and rising household income continued to drive the growth in the
FMCG sector in FY08. The FMCG sector grew by 12% YoY in 2007.

Rural regions, where nearly 70% of India's population resides,

accounted for 34% of the off take for FMCG products. Since urban
regions are already matured, the rural region is expected to be the key
growth driver. In urban areas, introduction of newer, convenience and
higher end products propelled the growth. However, concerns with
respect to the increasing competitive environment, input cost pressures
and infrastructure bottlenecks continued to worry.

Industry Wish List

The VAT on processed foods should be reduced from existing high

levels. The perishable foods should attract VAT of 0% whereas non-
perishables should attract VAT of 4%.

Excise duty should be reduced, while central excise should be

exempted. Taxes should be converged instead of charging multiple
taxes.

Infrastructure status should be accorded to agri-processing industry.

Tax breaks and incentives should be given to the food processing
industry as it establishes a vital linkage and synergy between the two
pillars of the economy-industry and agriculture. Further, establishment
of cold chain and other modernized technology for up gradation of
storage handling and transportation should be granted infrastructure
status and the tax benefit to spur its growth.

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Confederation of Indian Industries

The excise duty difference between 'branded' and 'unbranded' food

products existing at present should be removed to encourage consumers
to move from unhygienic unbranded foods to hygienically packaged
processed foods.

Thrust on better packaging should be made. Import duty on packaging

machinery should be nil. Incentives, wherever necessary, should be
given to the input side like capital goods, infrastructure development,
new technology, etc for the domestic packaging industry. Also the
taxes should be rationalized. These initiatives would help to reduce the
wastages and raise the quality of exportable food products.

Budget over the years

Budget 2005-06

• Increase in customs duty of refined palm oil to 75%

• Excise duty on dairy machinery hived off from 16%.
• Implementation of VAT across all states
• Concessional rate of 5% custom duty on tae and coffee machinery
• Excise duty on preparations of meat, poultry and fish halved to
8%
• Excise duty on food grade hexane (used in the edible oil
industry) halved to 16%

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Budget 2006-07

• Excise duty on Condensed milk abolished (16% earlier).

• Excise duty on Pectines and Pectates, used as a gelling agent in
Jams and Jellies abolished (16% earlier).
• Excise duty on unbranded edible preparations of oil increased
from nil to 8%.
• Excise on biscuits manufactured without aid of power will now
attract a duty of 8% (nil earlier).
• Excise duty on ice-creams exempted
• Excise on ready to eat packaged food reduced from 16% to 8%
• Excise on instant food mixes exempted
• Excise on soaps manufactured without power will now attract
16% duty
• Excise duty on processed meat, fish and poultry products reduced
from 8% to nil.
• Excise duty on yeast exempted

Budget 2007-08

• Farm sector has been given the top priority. Agriculture

investments to go upto 2% of GDP.
• Duty on edible oil has been reduced.
• Customs duty on food processing machinery and their parts is
being reduced from 7.5% to 5%. Excise duty has been fully
exempted on biscuits of per kilogram retail sale price equivalent
of Rs.50 per kg or less.
• Excise duty on food mixes, including instant food mixes, has
been reduced from 16%/ or 8% to Nil.
• Free samples and displays are exempt form the purview of FBT.

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 • Venture capital investing in dairy industry will get a pass
through status.
• Better rural infrastructure development to be an area of focus.
Budget 2008 -09

• Reduction in excise duty from 16% to nil on tea and coffee

mixes.
• Customs duty on bactofuges has been reduced from 7.5% to Nil.
• Customs duty on feed additives/pre-mixes has been reduced from
30% to 20%.
• Customs duty is being reduced on vitamin premixes and mineral
mixtures from 30% to 20% and on phosphoric acid from 7.5% to
5% to reduce cost of manufacture of dairy and poultry feeds
• Excise duty on packing paper has been reduced from 12% to 8%.
• Excise duty on pan masala, not containing tobacco, with betel nut
content not more than 15%, has been reduced from 16% to 8%.
• Excise duty on ink for writing instruments such as white board
markers and the like is being reduced from 16% to 8%.
• Menthol is fully exempted from excise duty.
• Rs.40 crore in 2008-09 is provided for Special Purpose Tea Fund
for re-plantation & rejuvenation and similar support to
cardamom, rubber & coffee is also given. Crop insurance scheme
for tea, rubber, tobacco, chilli, ginger, turmeric, pepper and
cardamom is to be introduced.

Page | 22
Budget 2009-10
Emphasis is on agriculture, rural growth, rural infrastructure is likely
to increase. Income in the hands of rural people and thereby lead to
increase in consumption.
• Agriculture credit flow allocation in FY10 of Rs. 3,25,000 crore
to boost agriculture and thereby accelerate rural demand.
• Interest subvention scheme on short term loan to be continued
and additional subvention of 1% to be given to those farmers who
repay short term crop loan on time to Encourage farmers to repay
loan on time to save interest and thereby stimulate consumption
• Allocation under NREGS increased by 144% to Rs. 39,100 crore
and real wage of Rs. 100/day provided under NREGA to increase
employment in rural areas and thereby boost rural consumption
• Abolition of FBT – positive for all FMCG companies
• Personal Income Tax slabs raised by Rs. 10,000 for male &
female and Rs. 15,000 for senior citizens ,this will result in
savings and thereby encourage consumption.

All FMCG companies are likely to benefit from this as all companies
have started focusing on rural India for driving volume growth.
No increase in excise duty on cigarettes is a positive move for ITC
HUL, Tata Tea, ITC

Key Positives

Rural penetration levels are increasing: According to estimates, only

about 11% to 13% of the total food production is consumed in

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processed form. This speaks for itself, highlighting the scope for
growth. The planned development of roads, ports, railways and
airports, is increasing FMCG penetration in the rural areas.

Newer products: As growth has shown signs of slackening companies

are increasingly focusing on key products and brands, cost efficiencies
and rural markets. This is a sign of market sophistication, both from
the manufacturer's point of view as well as the consumer's point of
view. With rising consumerism and changing lifestyle the demand for
value added products is increasing.

Cost advantage: Owing to India's cost advantage, many MNC

companies have started using their Indian operations as their
manufacturing base. Alternatively, some Indian companies have tested
foreign shores like Bangladesh, Sri Lanka and the Middle East among
other.

VAT: The proposed introduction of VAT at the start of FY06 is a long

term positive for the FMCG sector. This had been a long pending
demand of the FMCG sector. Post this; the tax ambiguity will get
reduced, benefiting the sector.

Retailing: FMCG companies have partnered with modern retailing

stores and as this format is the future. Growth will be faster because
modernisation of the retail sector will be reflected in rapid growth in
sales of supermarkets, department stores and hypermarkets, because of
the growing preference of the affluent and upper middle classes for
shopping at these types of retail stores, given the conveniences they
offer such as shopping ambience, variety and a single-point source for
purchases.

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Key Negatives

Competition: New entrants in the sector have heightened competition

in key segments like soaps and detergents, putting pressure on
profitability

Higher input costs: The companies witnessed rise in the input prices
during the year. Higher crude, wheat, palm oil prices amongst others
pressurized the margins. Though the companies took effective price
hike of the final products, a further hike would lead to loss of market
share.

Infrastructure: The infrastructure for free transport of goods is not

adequate in the country. Also, the fall in agricultural output continues
to cast on FMCG sector's prospects in the short term.

Spurious goods: A large part of the branded market continues to be

threatened by spurious goods and illegal foreign imports. In times of
weakened consumer demand such menaces continue to nightmares to
large companies.

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KEY INFORMATION WHY FMCG IS ASKING SLUMP?

Whether it is a bull or bear market, roti, kapda and makaan continue to

remain the basic necessities of life. While makaan is facing some
trouble amidst the current slowdown, and shopping for kapda is not
likely to be as strong as before, it is the roti component that still
dominates the consumer’s basket.

This trend is being replicated in the financial market as well. Having

exited other sectors like realty, infrastructure and capital goods,
investors are now turning their attention to FMCG. This is reflected by
the gradual increase in investors’ interest in companies that focus on
food and other ancillary consumables required by households. Apart
from retail investors, even private equity investors are flocking to
clinch deals with companies in the FMCG sector.

So, what can be the reasons behind this shift in focus in favour of
FMCG companies? Historically, FMCG companies have ruled the roost
during periods of slump in the market.

Page | 26
There are several factors which hint at a resurgence in investors’
interest in FMCG companies. This sector has been the best performer
in various quarters like the quarter ended September ’08. Most
companies in the sector have been able to ward off the effects of the
slowdown caused due to various factors like cost inflation, credit
crunch and higher interest costs. And the market already seems to be
acknowledging this fact. For instance, Nestle has a higher m-cap than
companies like Tata Motors, Hindalco and Grasim.

However, the FMCG sector is not absolutely insulated from macro-

economic factors that are affecting other sectors. A look at the
historical revenues and profit figures of 14 leading FMCG companies
on a trailing four-quarter basis indicates that the picture’s not too rosy
for this sector. While total revenues have grown steadily over the past
three years, aggregate operating profit margin (OPM), that had surged
during ’06, has dropped steadily ever since.

The fall has been more pronounced since the past two quarters.
However, the good thing about the FMCG sector is that it does not
witness extremes. The range of the rise and fall in OPM in this sector
has been between 17% and 19.5%, or 250 basis points. This is quite a
narrow range compared to interest rate-sensitive and cyclical sectors,
which are showing volatile movements in performance.

Another positive trend is that while most companies in other sectors

are shelving their acquisition plans or going slow on expansion, FMCG
is one of the very few sectors which is seeing increased M&A activity
in recent times. Emami’s buyout of Zandu Pharma and Dabur India’s
acquisition of Fem Care Pharma are notable examples of this trend.
Also, Marico and Godrej Consumer Products are expanding their
business in countries like West Asia, South Africa and Egypt. Most
domestic companies are launching homegrown brands in other emerging
markets.

Page | 27
Moreover, India’s rural market is under-penetrated, which holds
immense growth potential for the FMCG sector. Most companies have
devised strategies involving distinct packaging, differential pricing
and local advertising to tap these markets. The emergence of strong
regional brands, which are giving tough competition to multinational
brands, also highlights the potential growth in these markets.

While fears of a recession have resulted in hazy growth projections for

companies in most other sectors, the FMCG segment provides the
much-needed predictability to the market. The economic problems
afflicting other sectors are not likely to adversely affect growth in
agriculture, food and allied businesses. Moreover, the effect of the
slowdown is not likely to be as bad in the case of FMCG companies, as
for other cyclical and capital-intensive sectors.

With a fairly stable performance, predictable growth, relatively

recession-proof business and growing investor interest, it may not be
surprising if companies from this sector once again surge to
prominence. Their rise, like in the past, may herald the next bull run.

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 INTRODUCTION

EMAMI

About the Company:

Emami Ltd, the flagship company of the Rs 2000 crore Emami Group, is a leading player in
the personal and healthcare consumer products industry in India. A jewel in the crown of the
conglomerate, the company is a coveted Rs 700 crore business entity engaged in
manufacture and marketing of health, beauty and personal care products that are based
entirely on ayurvedic formulation.

Established by Mr. R S Agarwal and Mr. R S Goenka in 1974, Emami Limited has over 25
brands under its portfolio. The company’s financials show it has repeatedly outperformed the
industry standards. Emami Ltd has maintained a CAGR of 25% over the last three years
compared to the industry average of 16-17%

Understanding the human needs and fulfilling them by dint of technical research is a positive
feature of Emami. This is being made possible by Himani Ayurveda Science Foundation
(HASF) that generates the very best of ayurvedic formulations. The world class quality
control methods and processes maintained by HASF ensure optimum utility of each
ingredient. The foundation is completely engaged in constant innovation and pharmaceutical
enhancements.

Boroplus brand is the market leader in the antiseptic cream segment; the Navratna Oil is also
in the pole position in the cool oil segment. Fair and Handsome is the pioneer in the fairness
cream for men segment.

Boroplus has been selected as among the top 100 brands by the Brand Equity of The
Economic Times. In 2006 and 2007, Navratna has been ranked the 6th Most Energized

Page | 29
Indian Brand by the DY&R Brand Asset Valuator. Brand extensions have helped Emami
consolidate its position in the market and also cater to varied consumer needs.

Emami has recently entered the glycerine soap category with Emami Pure Skin and
petroleum jelly category with Emami Vasocare.

Emami has successfully established its brands through strong celebrity endorsements.
Besides Amitabh Bachan and Shah Rukh, other celebrity endorsers of Emami’s brand
include Madhuri Dixit, Kareena Kapoor, Govinda, Sourav Ganguly, Chiranjeevi, Surya and
Upendra among others.

Emami has also taken up a major revamping project to enhance the sales and distribution,
human resources development and logistics with the globally renowned professional
advisory services firm, Ernst and Young. ‘Project Navodaya’, as it is truly called, will help
Emami fast track its topline and bottom-line growth and build a robust platform for growth
initiatives

Emami covers all the states with 28 depots across India. Its supply-chain management
assumes immense significance which was aptly reflected through remarkable expansion in
dealer-distribution network, outlets and manpower. The domestic sales and distribution
division directly covers 4,00,000 outlets all across the country along with an additional 2100
modern retail outlets. Emami’s products reach out to nearly 30 lakh retail outlets across India
through 4,000 distributors.

The company has ultra modern manufacturing facilities all across India including Kolkata
(West Bengal), Guwahati (Assam), Pondicherry, Uttaranchal and Baddi (Himachal Pradesh).
It has adopted the Total Quality Management system and all its manufacturing facilities have
received cGMP and ISO 9001:2000 certifications.

Recently Emami Limited with an investment of Rs 700 crore has acquired Zandu
Pharmaceuticals Works Ltd on the basis of huge business synergy between Zandu and
Emami.

Emami Ltd has recently been conferred the Most Enterprising Company of the Year by IIPM
(Indian Institute of Planning and Management) and The Sunday Indian publication of the

Page | 30
Planman Media Group. In 2007, the company received the Institute of Cost and Works
Accountants of India (ICWAI) Award for Excellence in Cost Management.

Vision:

Making people healthy and beautiful, naturally

Mission:

• To contribute whole heartedly towards the environment and society integrating all our
stakeholders into the Emami family
• To make Emami synonymous with natural beauty and health in the consumers mind
• To effectively manage talents by building a learning organization
• To strengthen and foster in the employees, strong emotive feelings of oneness with the
company through commitment to their future
• To drive growth through quality and innovation in products and services
• To uphold the principles of corporate governance
• To encourage decision making ability at all levels of the organization

Strive to:

• To be part of every household in the country

• To be a major player in every product category we venture into
• To be one of the most respected marketer in the country
• To be recognized as a global brand

Core values

• Commitment & Loyalty to institutional values and principles

• Integrity
• Customer Orientation
• Leadership and Innovation

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• Attention to detail
• Teamwork & Team Environment
• Simple living, High thinking
• Social Responsibility
• Environmental Safety

HISTORY

The inception of Emami Group took place way back in mid seventies when two childhood
friends, Mr. R.S. Agarwal and Mr. R.S. Goenka left their high profile jobs with the Birla
Group to set up Kemco Chemicals, an Ayurvedic medicine and cosmetic manufacturing unit
in Kolkata in 1974.

The company that was started with a meagre amount of Rs. 20,000, the first-rate quality of
the products soon created a consumer pull, a chain of distributors was established and the sale
of their products spread from West Bengal to rest of Eastern India and gradually to other
states.

In 1978, Himani Ltd (incorporated as a Private Limited Company in 1949) had become sick
unit and was up for sale. Himani, almost a 100 year old company with good brand equity in
Eastern India and a well laid out factory in Kolkata, was producing a number of cosmetics.
Mr. Agarwal realized the opportunity and acquired Himani, it was a tough task to mobilize
resources for buying a sick unit and even tougher to turn it around to a profitable venture.
However Mr. Agarwal, supported by Mr. Goenka decided to go ahead with the deal which
later on proved to be the turning point for the organization.

Mr. Agarwal decided to produce in the Himani factory different types of health care items
and toiletries based on Ayurvedic preparation. Ten years after commencement of the
company, it launched their first flagship brand Boroplus Antiseptic Cream under the Himani
umbrella in 1984. Many additional brands followed Boroplus including Boroplus Prickly
Heat Powder which came as a brand extension of the mother brand. Today Boroplus is not

Page | 32
only the largest selling Antiseptic Cream in India but also in Russia, Ukraine, and Nepal.

Nineties was very eventful for Emami. The next flagship brand of the company Navratna
Cool Oil came in the nineties under the Himani Umbrella and the second factory was opened
at Pondicherry to expand production. Navratna over the years has become a market leader in
the cool oil category.

The introduction of new brands continued and the distribution network of the company was
extended to South India with Navratna spear heading the process. In 1995, Kemco
Chemicals, the partnership firm was converted into a Public Limited Company under the
name and style of Emami Ltd. In 1998, Emami Ltd was merged with Himani Ltd and its
name was changed to Emami Ltd as per fresh certificate of incorporation dated September1,
1998.

In 2005 Emami created a marketing history in India by launching Fair and Handsome, the
first fairness cream for men. In 2006 the company decided to introduce a Health Care
Division and a number of new brands of Ayurvedic OTC medicines. The company has taken
up the challenge of growing this new division with a dedicated and enthusiastic team working
on this project.

Among the brands created by the company, today Navratna brand is Rs.200 crore followed
by Boroplus brand standing at Rs.150 crore and Fairness family standing at Rs.55 crore. Sona
Chandi Chyawanprash is number two and Menthoplus and Fast Relief are number two in
their respective categories. In 2006, J B Marketing & Finance Ltd., the erstwhile
marketing company of the Emami Group merged with Emami Ltd. and the total turnover of
Emami including sales in domestic and export market stood at Rs 516 crores at the end of the
fiscal year 2006-07.

While Emami Limited is on lookout for acquisitions in India and abroad for inorganic growth
in FMCG sector, it has also identified ‘Realty’ as another potential business opportunity. A
wholly owned subsidiary, Emami Realty Pvt. Limited, has been formed in May, 2007 to take
up this business. Apart from utilization of Emami’s war chest, it would also give Realty
business an independent and separate focus since it would be a 100 per cent subsidiary of

Page | 33
Emami Ltd. While aggressive growth in FMCG business would continue, Realty would
further enhance profitability and shareholders’ wealth.

With in three decades, the company has grown into a huge Rs. 700 crore Emami Ltd under
the flagship company of the Rs.2000 crore Emami Group.

Today, Emami Limited is lead by Mr. R S Agarwal and Mr. R S Goenka with the help of the
second generation Promoter Directors from the two families. Qualified and dedicated set of
professionals run the day to day operations of the company. Recently a new corporate office
“Emami Tower” has been added to the history of the company which houses Emami Limited
as well as all the other Group companies in Kolkata.

Emami Group’s expertise also lies in the following fields:

Today, Emami Group is run by Mr. R S Agarwal and Mr. R S Goenka, Joint Chairman, with
the help of the second generation Promoter Directors from the two families and highly
qualified business professionals.

Emami Paper Mills has been rebuilt from the sick unit of Gulmohar Paper Mills and is the
largest paper mill in the Eastern India with manufacturing units in Kolkata and Balasore.
After the current expansion with an investment of Rs 330 crore, it becomes the second
largest newsprint manufacturer in India. Recently Emami has signed a MoA with the West
Bengal Government to come up with Rs 2200 crore paper plant in the state.

CRI limited manufacturing ball point tips is another unit of the Emami Group which has
been consistent winner of the best exporter’s award from the Writing Instruments
organization in India over the last three years. It is the fourth largest tips manufacturing unit
in India with manufacturing units in West Bengal and Gujarat.

Emami and Shrachi Groups together have turned the AMRI Hospitals, originally a
Government Hospital incurring losses into a profitable venture. AMRI is ensuring that
people from the Eastern India need not travel to other parts of the country for medical
treatment.

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Frank Ross Ltd, the 100 year old retail pharmacy chain in West Bengal has been acquired
and rejuvenated by adding shops in different localities of Kolkata. An ambitious plan of
having a network of the pharmacy chain all over India has been taken up by the Group now.

Emami Group also has large presence in real estate in West Bengal. South City Project
(Kolkata) Ltd, a joint venture project of Rs 2500 crore is one of the largest real estate project
in Kolkata. Emami Realty has its projects undergoing in Kolkata, Coimbatore and
Hyderabad entailing construction over 50 lakh sq ft.

Starmark, retailing books, stationeries and gift items is one of the biggest retail stores of its
kind in Kolkata with 4 stores and plan for further expansion.

Emami Biotech Limited has come up with a state-of-the-art 300 tonne-per day bio-diesel
production facility at Haldia, set up at a cost of Rs 150 crore. An additional amount of Rs
100 crore has also been spent at the same facility for producing edible oil of 3 lakh tonnes
per annum capacity. Recently Emami has launched 100% cholesterol free refined cooking oil
‘Healthy Gold’.

Emami also has presence in the field of art. Emami Chisel Art (ECA) the auction house is the
first of its kind in India. ECA is embellished with a characteristic mix of genuine
masterpieces and rare collections from India’s eminent artists as well as contribution from
the new generation contemporary artists.

Emami Group has also signed a MoU for a Cement and Power Plant in Chhattisgarh.

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Companies under Emami Group are:-

• Emami Paper Mills Limited

• Emami Chisel Art
• South City Projects (Kolkata) Ltd
• Advanced Medicare & Research Institute Ltd (AMRI)
• Frank Ross Limited
• Emami Realty Limited
• Emami Retail Pvt Limited (Starmark)
• Emami Biotech Limited
• Susruta Clinic & Research Institute for Advanced Medicine Pvt Ltd

EMAMI INTERNATIONAL MARKETING DIVISION (IMD)

Emami IMD reaches out to nearly 60 countries in the CIS, Middle East, Indian sub-
continent, Europe & North America offerings top line Skincare & Personal products, Hair
care products and Ayurvedic Healthcare products in the international markets.

It was established in the 90-s to cater mainly to the demand of Indians settled abroad. The
business has over the years assumed increasing proportions with a phenomenal top line
growth rate of more than 40%. Initially it exported only the brands & products that Emami
marketed in India. Now it caters to varying needs of customers in different countries.

Page | 36
Rich Experience in Beauty & Personal Care:

Through intensively researching nature, Emami has excelled in developing a head-to toe line
of beauty and personal care products focused at providing safe and proven solutions to
family’s day-to-day health concerns. Today, Emami markets its products under four brands –
Emami, Himani, Ayucare and Emita, across different categories such as skincare, hair care,
personal care and health care. The Emita Range is aimed at the masses in developing
countries and the Ayucare Range aimed at niche, premium and highly evolved markets.
Its global portfolio comprises over 40 product ranges made from natural extracts, herbs and
essential oils. These products reflect a prudent combination of Ayurvedic knowledge and
scientific manufacturing processes.

Key Brands :

As an international branded consumer goods Company, Emami IMD is clearly focused to

build brands, developing superior consumer insights and finding out how to delight
consumers and offer them brands that are relevant and meet consumer wishes.

The past decade has witnessed enhancement of the Boroplus brand equity in the CIS and

Page | 37
South Asia nations. Boroplus Antiseptic Cream is the market leader in its category in Russia
& Ukraine. The company is also moving towards leadership in cool oil category with
Navratna Cool Oil in Middle East. Fair and Handsome – fairness cream for men is
increasingly growing into a big brand in the Gulf and the Indian sub-continent.

Overseas Offices:

To strengthen its exports in terms of marketing activities and better penetration and
availability of products, marketing offices in the UK and UAE were established.

The division is expected to set up offices in Russia and Bangladesh in near future.

Environmental Safety:

Environmental Safety makes the framework of all the activities of the company. They
strongly believe that safety of an individual only will lead to a safer society for the
forthcoming generations and earnestly vouch for that. All the processes, products and
services aims at safeguarding the environment.

CORPORATE SOCIAL RESPONSIBILITY

Emami's mission of a contributing whole heartedly towards the environment and society'
attains a more humane form with its approach of addressing various social issues. As a
responsible corporate citizen, Emami continues to invest in socially meaningful projects in
West Bengal and adjoining states. The company strives to utilize the resources around them
and build a vibrant nation for the people of the country.

As a part of company's Corporate Social Responsibility, Emami has devised various Self

Page | 38
Employment schemes like Emami Mobile Traders and Small Village Shops schemes for the
rural unemployment youth.

An initial trial in West Bengal showed encouraging results leading to financial independence
of women and unemployed youth. The Company has rolled out the schemes to Andhra
Pradesh, Madhya Pradesh, Orissa and Chhattisgarh over last one year. It also plans to
consolidate the activities in more states like Orissa, Madhya Pradesh, Andhra Pradesh and
Chhattisgarh.

Highlights of "Self Employment" scheme

Emami Mobile Traders:

• The scheme covers small to large villages with population ranging from 1500 to 5000.

• Selected persons are involved in door to door selling of Emami products in interior
villages and depending on their effort and motivation, the monthly earning varies
between Rs 500 to Rs 2000 per month.

• On an average they can earn 18% on the sale value of the products. The Company does
not take any deposit from the selected individuals, guaranteeing them a minimum
income of Rs 1000 per month(only if sales of 4000 is achieved) and takes back unsold
stocks if required

• Free product samples were supplied for personal use to give prospective consumers a
first-hand experience.

• Uniform, raincoats and pullovers and personal accident insurance cover is provided

Emami Small Village Shops

• This scheme is being promoted mostly for women in villages where there are no
permanent shops.

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 • The housewives put up the Small Village Shops at their own village residence and
market the Company’s products from their home to the other villagers
• The housewives are encouraged to take up this challenge with the help of NGOs and
voluntary workers working in villages
• The marketing training given by Emami helps the person to find selling opportunities
for other items manufactured by micro enterprises as well.

Community Medical Support

The Company sponsors subsidized treatment of the needy in best-in-class hospitals like
AMRI and Shree Vishudhanand Hospital and Research Institute in Kolkata. Donations
are made in the form of free supplies of medicines, assistance for surgeries and hospital
charges for the poor through trust. Emami established the 'Emami National Institute for
Bone Marrow Transplantation' in the Narayana Hrudayalaya Institute, Bangalore, under
the supervision of Dr Devi Shetty, the well-known cardiac surgeon. This institute
provides treatment for bone marrow transplantation at free or affordable costs to the
needy.

Emami’s Initiatives

Emami stands to capitalize on the following industry opportunities through the following
initiatives:

• Aggressive marketing and distribution:

Emami continues to market its products aggressively. While huge resources are spent
on new launches, existing power brands are marketed through endorsements from celebrities
like Amitabh Bachchan, Shah Rukh Khan, Chiranjeevi, Kareena Kapoor, Govinda and

Page | 40
Dharmendra. Distribution is also being strengthened and new channels of sales are being
established to take care of rural markets and emerging new retail stores.

• New product launches:

The Company continues to launch new products like Baby Oil, Boroplus light cream
and lotion, Mr. and Mrs. Black kesh kala, Malai Kesar Cold Cream and Ayurvedic OTC
products like Good Morning (an Ayurvedic laxative churna), Sardi Ja (a cough syrup and
Vaporub) and Memo-plus (a memory booster).

• Continuous innovation:

Emami’s strong R&D and aggressive marketing capabilities enable it to identify

emerging needs and aspirations of consumers and convert them into opportunities. Fairness
cream for men, the first of its kind in India and the branding of Chyawanprash as ‘Sona
Chandi’ Chyawanprash are results of such innovative R&D and marketing efforts.

• Entry into new segments:

Emami forayed into hair care and baby care segments through the introduction of
products like Mr. and Mrs. Black kesh kala and hair dye powder, and Sona Chandi baby
massage oil. It plans to come out with a full range of male grooming products as well as
enter the baby range category.

• Wider international footprint:

The Company will widen the presence of its Fair and Handsome fairness brand in Asia
and Africa. It will expand the global reach of its Naturally Fair brand in the Middle East and
Asia. It has initiated efforts to globalize its power brands. Boroplus Antiseptic cream is the
largest selling antiseptic cream not only in India but also in Ukraine, Russia and Nepal. Fair
and Handsome is also recently launched in GCC countries and is the number 1 selling

Page | 41
whitening cream for men.

Emami Realty :

While Emami Limited is on the lookout for acquisitions in India and abroad for
inorganic growth in the FMCG sector, it has identified realty as a potential business
opportunity leveraging its resources. A wholly-owned subsidiary, Emami Realty Pvt.
Limited, was formed in May 2007 to drive this business through an independent focus since
it would be a 100% subsidiary of Emami Ltd. While aggressive growth in the FMCG
business will continue, the realty segment will enhance profitability and shareholders wealth.

Product Portfolio:

The Company has a diversified product portfolio, even when the products are Healthcare
Products. It caters to all the people of the society right from children to the Old aged.

List of products:

Page | 42
 • Himani Pudina Strong
• Boroplus Antiseptic Cream
• Himani Fast Releif
• Boroplus Light Antiseptic Cream
• Emami Hair Life
• Boroplus Icy Cool Talc, Icy Sandal • Emami Fair and Handsome
Talc, Pricly Heat Powder • Emami Malai Kesar Cold Cream
• Emami Mentho Plus
• Boroplus Long Acting Body Lotion
• Emami Vasocare
• Boroplus Triple Action Light
• Emami Gold 24
Moisturising Body Lotion
• Zandu Balm
• Sona Chandi Chyawanprash
• Gulbahar
• Sona Chandi Baby oil
• Pancharishta Brento
• Sona Chandi Amritprash
• Vigorex tablets
• Navratna cool Talc
• Chandraprabhavati
• Navratna Extra Thanda
• Navratna Lite
• Navratna Oil

Page | 43
EMAMI’S SPREAD THROUGHOUT INDIA

Page | 44
 COLGATE-PALMOLIVE

About the Company:

Page | 45
Colgate-Palmolive Company, The small soap and candle business that William Colgate
began in New York City early in the 19th century is now, more than 200 years later, a truly
global company serving hundreds of millions of consumers worldwide.

The company is 200-year history reflects the strength and innovation that Colgate people
have used to constantly transform our Company and identify new opportunities. With global
brands sold in over 200 countries; Colgate, Mennen, Palmolive, Ajax, Softsoap, and Hill’s
Pet Nutrition are among the world's most recognizable household names, trusted and relied
upon by consumers everywhere.

Colgate People, working around the world, share a commitment to our three core corporate
values: Caring, Global Teamwork and Continuous Improvement. These values are reflected
not only in the quality of our products and the reputation of our Company, but also in our
dedication to serving the communities where we do business.

As a leading consumer products company we are also deeply committed to advancing

technology which can address changing consumer needs throughout the world. In fact, the
company’s goal is to use our technology to create products that will continue to improve the
quality of life for our consumers wherever they live.

As a successful business, we are focused on achieving the consistent growth required to

continue our global success and to make us an even stronger company. We believe this is the
best way to benefit our consumers, our people and our shareholders. The company’s long
history of strong performance comes from absolute focus on our core global businesses,
combined with a successful worldwide financial strategy. This financial strategy is designed
to increase gross profit margin and reduce costs in order to fund growth initiatives and
generate greater profitability.

Mission

Page | 46
Colgate-Palmolive Company’s mission is to consistently deliver strong business results and
superior returns to stakeholders by providing consumers with the best of their products to
healthier and more enjoyable lives.

Vision

Colgate-Palmolive Company is to become the best among the consumer products by

understanding consumers and consumers’ expectations better and by continually innovating
and improving their products, services ad processes.

Core Values

Colgate-Palmolive’s business operations has always been guided by three core values which
includes caring, global teamwork and continuous improvement.

Caring

Caring is one of the values that Colgate-Palmolive valued the most. The company cares for
their people especially, their employees, their customers, shareholders and business partners.
The company commits themselves to consistently act with integrity, compassion and
honesty, to respect differences and to respect others opinions and ideas. Also, the company
commits themselves in protecting the global environment and enhancing the communities in
which their business operates.

Global Teamwork

Colgate-Palmolive as a global company works with people around the globe. The Colgate
people works together even though divided with geographical distance throughout the globe
by sharing ideas, technologies and talents in sustaining a profitable growth.

Continuous Improvement

Colgate-Palmolive does their initiative in innovating to be progressively better everyday as a

team and as individual.

History:

Page | 47
Colgate-Palmolive Company's growth from a small candle and soap manufacturer to one of
the most powerful consumer products giants in the world is the result of aggressive
acquisition of other companies, persistent attempts to overtake its major U.S. competition,
and an early emphasis on building a global presence overseas where little competition
existed. The company is organized around four core segments--oral care, personal care,
home care, and pet nutrition--that market such well-known brands as Colgate toothpaste,
Irish Spring soap, Softsoap liquid soap, Mennen deodorant, Palmolive and Ajax dishwashing
liquid, Ajax cleanser, Murphy's oil soap, Fab laundry detergent, Soupline and Suavitel fabric
softeners, and Hill's Science Diet and Hill's Prescription Diet pet foods. Colgate-Palmolive
has operations in more than 200 countries and generates about 70 percent of its revenue
outside the United States.

The Start

In 1806, when the company was founded by 23-year-old William Colgate, it concentrated
exclusively on selling starch, soap, and candles from its New York City-based factory and
shop. Upon entering his second year of business, Colgate became partners with Francis
Smith, and the company became Smith and Colgate, a name it kept until 1812 when Colgate
purchased Smith's share of the company and offered a partnership to his brother, Bowles
Colgate. Now called William Colgate and Company, the firm expanded its manufacturing
operations to a Jersey City, New Jersey, factory in 1820; this factory produced Colgate's two
major products, Windsor toilet soaps and Pearl starch.

Upon its founder's death in 1857, the firm changed its name to Colgate & Company and was
run by President Samuel Colgate until his death 40 years later. During his tenure several new
products were developed, including perfumes, essences, and perfumed soap. The
manufacture of starch was discontinued in 1866 after a fire destroyed the factory.

In 1873 Colgate began selling toothpaste in a jar, followed 23 years later by the introduction
of Colgate Ribbon Dental Cream, in the now familiar collapsible tube. By 1906 the company
was also producing several varieties of laundry soap, toilet paper, and perfumes. Colgate &
Company shifted its headquarters to Jersey City in 1910.

Page | 48
While the Colgate family managed its manufacturing operations on the East Coast, soap
factories were also opened in 1864 by B.J. Johnson in Milwaukee, Wisconsin (under the
name B.J. Johnson Soap Company), and in 1872 by the three Peet brothers in Kansas City,
Kansas. In 1898 Johnson's company introduced Palmolive soap, which soon became the
best-selling soap in the world and led the firm to change its name to the Palmolive Company
in 1916. The Peets, who sold laundry soap mainly in the Midwest and western states, merged
their company (Peet Brothers) with Palmolive in 1926, forming Palmolive-Peet Company.
Two years later that firm joined with Colgate & Company to form Colgate-Palmolive-Peet
Company, with headquarters in Jersey City. Palmolive-Peet's management initially assumed
control of the combined organization.

On October 25, 1929, management signed an agreement to merge the company with Kraft
Phenix Cheese Corporation (forerunner of Kraft Foods) and Hershey Chocolate Company.
The three companies would continue to operate independently, but they would become
subsidiaries of a holding company slated to be called International Quality Products
Corporation. Just four days after the deal was signed, however, the stock market crashed,
forcing the huge amalgamation to be scuttled. In the wake of the crash, the Colgate family
regained control of Colgate-Palmolive-Peet and installed Bayard Colgate as president in
1933.

International Expansion

Colgate & Company had been a pioneer in establishing international operations, creating a
Canadian subsidiary in 1913 and one in France in 1920. In the early 1920s the firm expanded
into Australia, the United Kingdom, Germany, and Mexico. Colgate or its successor firm
next created subsidiaries in the Philippines, Brazil, Argentina, and South Africa in the late
1920s. In 1937 the company moved into India and by the end of the 1940s had operations in
most of South America. By 1939 Colgate-Palmolive-Peet's sales hit $100 million.

In the 1940s and 1950s the company also built upon its strategy of growth by acquisition,
buying up a number of smaller consumer product companies. Organic growth remained on
the agenda as well, and in 1947 the company introduced two of its best-known products, Fab
detergent and Ajax cleanser.

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These acquisitions and new products, however, did little to close the gap between Colgate
and its arch-rival, the Procter & Gamble Company, a firm that had been formed in the 1830s
and had by now assumed a commanding lead over Colgate in selling detergent products in
the United States. Meanwhile, the firm adopted its present name in 1953 and moved its
offices for domestic and international operations to New York City in 1956.

In 1960 George H. Lesch was appointed Colgate's president in the hopes that his
international experience would produce similar success in the domestic market. Under his
leadership, the company embarked upon an extensive new product development program
that created such brands as Cold Power laundry detergent, Palmolive dishwashing liquid, and
Ultra Brite toothpaste. In an attempt to expand beyond these traditional, highly competitive
businesses into new growth areas, Colgate also successfully introduced a new food wrap
called Baggies in 1963. As a result of these product launches, the company's sales grew
between 8 and 9 percent every year throughout the 1960s. Sales topped the $1 billion mark in
1967.

Lesch assumed the chairmanship of Colgate, and David Foster became president in 1970 and
CEO in 1971. Foster was the son of the founder of Colgate-Palmolive's U.K. operations. He
joined the company in 1946 as a management trainee and rose through the sales and
marketing ranks both in the United States and overseas.

New Challenges in the Early 2000s

Under Mark's continued leadership, Colgate-Palmolive maintained its momentum into the
early 2000s. By keeping a tight rein on costs, the company boosted its gross profit margin to
54.6 percent by 2002, when net income reached $1.29 billion on sales of $9.29 billion. On
the new product front, the Colgate Actibrush battery-powered toothbrush was brought to
market in 2000, soon followed by products in the burgeoning at-home tooth-whitening
sector, such as Simply White gel and Total Plus Whitening toothpaste. In pet food, the
company in 2002 introduced Hill's Science Diet Nature's Best, a new line of premium dog
and cat food made with natural ingredients.

In 2001 it sold its detergent business in Mexico, headed by the Viva brand, to Henkel KGaA,
and then two years later off-loaded its European detergent brands to Procter & Gamble. In
2004 Colgate sold its detergent business in Ecuador and Peru.

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In June of that year, the company completed its first major acquisition since the 1995
purchase of Kolynos. Colgate spent $866 million for GABA Holding AG, a privately held
European oral care company based in Switzerland. GABA, operating in 15 countries, had
annual sales of about $300 million. Its strength in the pharmacy channel complemented
Colgate's leading presence in the European retail market. The addition of GABA boosted
Colgate's share of the European toothpaste market to 33 percent.

Although revenues increased another 7 percent in 2004, topping the $10 billion mark for the
first time, profits fell 7 percent, to $1.33 billion. Intense global competition--particularly
from a resurgent Procter & Gamble--forced Colgate to allocate additional money for
advertising, and the firm also had to contend with increased raw material and packaging
costs and the growing power of discount retailers such as Wal-Mart Stores, Inc. who were
forcing consumer product makers to hold the line on price increases. To free up funds for
marketing initiatives and new product development efforts, Colgate launched a sweeping
restructuring in December 2004, its first major overhaul since 1995. The latest
reorganization, a four-year program, aimed to generate between $250 million and $300
million in after-tax cost savings by 2008 by closing 26 of the firm's 78 factories around the
world and eliminating about 12 percent of the workforce, or more than 4,400 jobs.
Cumulative after-tax restructuring charges of between $550 million and $650 million were
anticipated. As part of the restructuring, further divestments of noncore lines were very
possible. As Colgate continued to deemphasize its detergent business, it seemed likely to
seek buyers for its Fab and Ajax brands. Just as the restructuring began, however, Colgate
faced the prospect of an even more formidable chief foe. Procter & Gamble reached an
agreement to acquire The Gillette Company in January 2005 for $57 billion, which would
add Gillette's Oral-B toothbrushes and toothpastes to P&G's Crest line. This deal was likely
to compound the competitive pressures that Colgate-Palmolive faced, making the successful
implementation of the restructuring that much more important.

Principal Competitors: The Procter & Gamble Company; Unilever; The Clorox Company;
S.C. Johnson & Son, Inc.; The Gillette Company; Johnson & Johnson; Alberto-Culver
Company; Reckitt Benckiser plc; Sara Lee Corporation; Church & Dwight Co., Inc.; The
Dial Corporation.

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FOUNDER’S PROFILE

In 1806, William Colgate, himself a soap and candle maker, opened up a starch, soap, and
candle factory on Dutch Street in New York City under the name of "William Colgate &
Company". In the 1840s, the firm began selling individual bars in uniform weights. In 1857,
William Colgate died and the company was reorganized as "Colgate & Company" under the
management of Samuel Colgate, his son. In 1872, Colgate introduced Cashmere Bouquet, a
perfumed soap. In 1873, the firm introduced its first toothpaste, an aromatic toothpaste sold
in jars. His company sold the first toothpaste in a tube, Colgate Ribbon Dental Cream, in
1896. By 1908 they initiated mass selling of toothpaste in tubes. His other son, James
Boorman Colgate, was a primary trustee of Colgate University (formerly Madison
University).

In Milwaukee, Wisconsin, the "B.J. Johnson Company" was making a soap entirely of palm
and olive oil, the formula of which was developed by B.J. Johnson in 1898. The soap was
popular enough to rename their company after it - "Palmolive".At the turn of the century
Palmolive, which contained both palm and olive oils, was the world's best-selling soap, and
extensive advertising included The Palmolive Hour, a weekly radio concert program which
began in 1927. A Kansas based soap manufacturer known as the "Peet Brothers" merged
with Palmolive to become Palmolive-Peet. In 1928, Palmolive-Peet bought the Colgate
Company to create the Colgate-Palmolive-Peet Company. In 1953 "Peet" was dropped from
the title, leaving only "Colgate-Palmolive Company", the current name.

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External Factors affecting the company:

There are factors that can stimulate changes. One of these sources is external to the
organization. This includes society, political or legal environment and technological
developments.

Society

These changes are affected by the beliefs, values, attitudes, opinions, and lifestyles shift in
society. In the case of Colgate-Palmolive Company, with the increasing changes in
consumers’ preferences and with continuous interests of the consumers to Internet, this
proposes an opportunity to marketing of the company. In consumer products, consumers
dictate the success of the company. The society today is more demanding and is demanding
for quality products and with value to their money. Hence, the trend of organizations today is
to implement changes on their process with the technology.

Political/legal environment

Another source of change is the government’s policies. Colgate-Palmolive Company is

operating in different parts of the globe which would probably face these challenges of
different government policies. With these, the company would likely to change how they
work in each country that would be according to the policies of the government in the
country they operate. Companies such as Colgate-Palmolive are having changes in their
process and how they act in each country to conform to the government policies.

Technological developments

With the rapid change in the technology especially in the communications and transportation,
organizational change would likely to occur. In a global organization, communication and
transportation are of great importance. Colgate-Palmolive is one of the companies that have
gone global. With the technological developments, the company should also be updated their
system to ensure great capability of producing their products and to improve business

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processes. The company is already installing their system but with the rapid changes, their
systems is already outdated and needed to install updated systems.

CORPORATE SOCIAL RESPONSIBILITY

Colgate employees worldwide share a commitment to the three core corporate values:
Caring, Global Teamwork and Continuous Improvement. These values are reflected not just
in the quality of our products and the reputation of our Company, but also in our dedication
to serving the communities in which we do business.

Colgate – Palmolive India undertakes its corporate social responsibility through a variety of
effective programs. Since 1976, the company has been delivering oral health education to
children in rural and urban India in partnership with the Indian Dental Association (IDA).
Colgate’s community outreach efforts have touched the lives of millions of children,
providing the information, insight and inspiration they need for a healthy life and a healthy
smile.

Reading is fundamental:

For the past five years, Colgate in partnership with Pratham, has set up libraries for
the underprivileged children in economically backward areas in Mumbai, to encourage and
inculcate the habit of reading among these children. Colgate firmly believes education will
empower these children for the future and help them to explore new avenues.

Welfare of the local community is an integral part of our values around the world, and we
respect the contribution made by our employees. At the plant in Baddi, our employees
volunteer their time and effort to support community initiatives.

Lending a Helping Hand:

Volunteers demonstrated their commitment to society by creating a safe and protective

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environment for the children of the Government Primary and Secondary School in
Jharmajari, HP. They helped in construction of the boundary wall of the school. Entry of
vehicles was restricted in the area, so the children are safe from external dangers and can
now play fearlessly within the school compound. The volunteers also maintain the ecology
of the school premises by maintaining the greenery. Team work of this kind is even more
satisfying when the time and effort invested has made such a difference to the children.
Building Environmental Awareness:
Every year, our employees at Baddi invite children from the local schools in Jharmajari to
celebrate the ‘Environment Day’. These children are educated to create and sustain healthy
natural outdoor spaces.

Oral Health programme:

To create awareness and promote the importance of good oral hygiene, free dental check ups
were carried out for the children at Kinnaur district. In addition about 15,000 dental health
packs of toothpaste and toothbrushes were also distributed to children. Close to 5000
children' lives have been touched till date, through this programme.

These are a few of the companies initiatives and others include Sponsoring cricket
tournaments, helping to live a life of dignity for HIV infected people and so on.

PRODUCTS OF COLGATE PALMOLIVE

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 ◊ Colgate Total Fresh ◊ Colgate Navigator Plus

◊ Colgate Herbal ◊ Colgate Plus

◊ Colgate Herbal White ◊ Colgate Premier

◊ Colgate Whitening ◊ Colgate Extra Clean

◊ Colgate Fresh Energy Gel ◊ Colgate Super Flexible

◊ Sparkle ◊ Max Bar

◊ Beauty Soap Palmolive Naturals ◊ Max Liquid

◊ Skin Germ Protection Soap - Protex ◊ Max Antibacterial

◊ Bonus ◊ Brite Total

◊ Azadi Dish Bar ◊ Express Power

GILLETTE

About The Company:

Gillette is a brand of Procter & Gamble currently used for safety razors, among other
personal hygiene products. Based in Boston, Massachusetts, it is one of several brands
originally owned by The Gillette Company, a leading global supplier of products under
various brands, which was acquired by P&G in 2005. Their slogan is, "The Best a Man Can
Get". The original Gillette Company was founded by King C. Gillette in 1901 as a safety
razor manufacturer.

On October 1, 2005, Procter & Gamble finalized its purchase of The Gillette Company. As a
result of this merger, the Gillette Company no longer exists. Its last day of market trading -
symbol G on the New York Stock Exchange - was September 30, 2005. The merger created
the world's largest personal care and household products company. In addition to Gillette, the
company marketed under Braun, Duracell and Oral-B, among others, which have also been
maintained by P&G.

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The Gillette Company's assets were initially incorporated into a P&G unit known internally
as "Global Gillette". In July 2007, Global Gillette was dissolved and incorporated into
Procter & Gamble's other two main divisions, Procter & Gamble Beauty and Procter &
Gamble Household Care. Gillette's brands and products were divided between the two
accordingly.

Brand Worth

Some of Gillette’s profit and sales may not have been due to the direct worth of the product,
but due to it being presented to the public from a well-known company. In 1999 Gillette, as a
company, was worth US$43 billion and it was estimated that the brand value of Gillette was
worth US$16 billion. This equated to 37% of the company’s value, which was the same as
DaimlerChrysler, one of the world's largest car manufacturers at the time.

Promotions

Gillette has a long history of promotions for its products, especially towards young men.
Current promotions include sponsorship of sports events such as the Rugby League Tri-
nations and shipping their then-flagship product (currently the Fusion) to males in the United
States around the time of their 18th birthday. Athletes such as Roger Federer, Tiger Woods
and Thierry Henry also sponsor the company. Also, Gillette provides many promotional
razors to campuses of universities.

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 Norman Augustine · Bruce Byrnes · R. Kerry Clark · Scott D. Cook ·

Corporate Directors Joseph T. Gorman · A. G. Lafley · Charles R. Lee · Lynn M. Martin

· W. James McNerney, Jr. · Jonathan Rodgers · John F. Smith, Jr. ·
P&G: Ralph Snyderman · Robert Storey · Margaret Whitman · Ernesto
Zedillo
Always · Ariel · Art of Shaving · Aussie · Bounty · Braun · Camay ·
Charmin · Cheer · Clairol · CoverGirl · Crest · Downy · Dreft ·
Duracell · Eukanuba · Fairy · Febreze · Folgers · Gillette · Head &
Brands: Shoulders · Herbal Essences · Iams · Ivory · Joy · Luvs · Max Factor
· Metamucil · Mr. Clean · Nice 'n Easy · Olay · Old Spice · Oral-B ·
Pampers · Pantene · Pepto-Bismol · Pringles · Puffs · Pur · SK-II ·
Swiffer · Tampax · Tempo · Tide · Vicks · Wella · Zest

GILLETTE INDIA

Gillette India Limited (GIL) is one of India's well-known FMCG Companies that has in its
portfolio GILLETTE MACH 3 TURBO, ORAL-B and DURACELL - world's leading
brands and has carved a reputation for delivering high quality, value-added products to meet
the needs of consumers.

History:
Incorporated in the year 1985 as Indian Shaving Products Limited, now Gillette India
Limited, its products speak for themselves. The company is always been known for the
strength of its brands, and always continues to penetrate deeper into the hearts of Indian
Consumers.

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In the year 1990-91, the company launched two products, first was 7 0'Clock EJTEK PII
Shaving System. This was the First time that a shaving cream was introduced in Indian
markets with special features.

In the year 1992-93, the company launched the first advanced shaving product under the
Gillette brand name Gillette Presto ready shaver all over India. The company earned
distinction of being included for the first time in the top 100 companies in India, in terms of
Market capitalization as published in Business today.

In the year 1995-96, launch of 7 0'Clock Ready II ready shave and re launch of shave cream
in two variants, further strengthened the Brand name. During the year the company also
launched under a distribution arrangement tooth brushes under a well known international
brand name Oral-B, which met good success.

In the year 1998, the company successfully launched the Gillette Series range comprising
Shave gel, Shave Foam, After Shave Splashes, Conditioners and Deodorants, thereby making
it the premier male grooming company. In the year 1999, the company introduced Gillette
Series shave gel tube and Gillette Sensor Excel single cartridge pack, also successfully
launched Cool wave and Wild Rain range of personal grooming products under the Gillette
series line. In the First month of new Millennium, the company launched Gillette Mach 3.

In the year 2000, the company launched successfully Gillette Sensor Excel for women
grooming category, and also launched Pacific Light. It also launched Geep Laserlite, a Sport
flashlight. Company successfully consolidated Duracell and Wilkinson business to leverage
distribution strengths with mega displays and sales promotion.

In the year 2001, the company launched the Gillette Series Arctic Ice Line of products during
the first half and undertook a series of very successful consumer promotions across product
lines. Gillette India was ranked amongst the Top Ten Best Employers of India in Best
Employers of India conducted by Hewitt Associates and Business Today magazine.

In the year 2003, Company successfully re launched Gillette Foam in 4 Variants .Duracell
also launched its Ultra M 3 AA batteries, which was well received by consumers. Oral Care

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launched Power Oral Care brushes, which were well received in the market. Towards the
End of 2003, Company launched Gillette Vector Plus.

In the year 2004, the Company launched Storm Force, a revolutionary after shave splash and
New Ultra Comfort Shaving Gel .In the fourth Quarter, Company launched two new Gillette
Series Tube Shave Gel variants, namely for Sensitive skin and Moisturizing, to suit different
skin types.

In the year 2005, Company launched New Improved Gillette Vector Plus featuring all new
contemporary look. The Gillette Company, USA was acquired worldwide through merger in
October, 2005 by Procter& Gamble Company, USA creating the largest Consumer products
Company in the World. In the year 2006-2007, Company launched Gillette Presto Plus for
more discerning consumers. Oral B brand launched Oral B Vision and Kid in Premium
Market Segment.

In the year 2007-2008, Company launched The Gillette Winners program that had sports
legends Roger Federer, Thierry Henry and Tiger Woods and Rahul Dravid. An innovative
program "Free Dental Check up" was organized to enable consumers to benefit from
expertise of professional dentists at no cost. Oral-B brand launched a new variant "Shiny
Clean" targeted at the value segment.

Organization Structure & Future Strategies

Gillette India (GIL) today announced that it would be adopting a new organisational
structure as part of the Proctor & Gamble (USA) acquisition. While Gillette would continue
as a separate legal entity in India, its headquarters will be relocated from Gurgaon to
Mumbai.

Managing director, Gillette India, said: “We believe that with GIL remaining a separate legal
entity in India, leveraging synergies from P&G in the areas of organisational structure,
distribution, systems and facilities will help increase our reach, cost-efficiencies, speed to
market and current growth momentum.”
As part of the re-organisation, GIL would adopt P&G’s global business unit (GBU), market

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development organisation (MDO) and global business services (GBS) structures. Under the
new GBU, the company will move away from business units based on geographical regions
to units based on product lines. The MDOs will adopt global programmes to suit local
markets and develop market strategies accordingly.
The GBS will bring together business activities such as accounting, human resource systems,
order management and information technology.
As a result of the new structure, GIL would relocate some of its employees to Singapore –
P&G’s regional headquarters. GIL will also transfer some employees to the new
headquarters in Mumbai, and offer VRS packages to others affected by the restructuring. The
relocation to Mumbai would be effective from July 1, 2006. It also hopes to be able to focus
on big brands and move the market faster. The other changes to be effected will be on the
distribution front, where GIL will move from its current distribution structure to P&G
distributors.
To synchronise its financial year with P&G, Gillette would also start following the July-June
accounting year and, hence, would extend its accounting year for 2006-07 for January 2006
to June 2007, subject to necessary approvals.
GIL would relocate some of its employees to Singapore, and also transfer a few to the new
headquarters in Mumbai
GIL would move from its current distribution structure to P&G distributors

Thanks to years of innovation and heavy investment in marketing and advertising, Gillette
occupies perhaps the most dominant position of any consumer goods brand in the UK, with
an 85% share of razor-blade sales.

Common sense might suggest that one would sit back and count the half-billion pounds in
annual revenues this market share delivers. Gillette, however, is owned by Procter &
Gamble, and while even the best marketing company in the world can't improve much
beyond that level of market share, there are plenty of other levers to pull to generate
shareholder value.

First, drive profitability. Market share might have reached its zenith, but that doesn't mean
your margins can't be squeezed. One industry insider recently claimed that, despite a pack of

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four Fusion razor blades retailing for £9.72, the manufacturing and packaging costs for the
product are less than 30p. That's a whopping mark-up of more than 3000%.

Second, practise positive cannibalisation. Gillette launched its five-blade Fusion line in 2006
with a 30% price premium over Mach 3, its previous three-blade offering. With an 85%
market share, it makes more sense for Gillette to focus its marketing on switching its own
customers from Mach 3 to the more profitable Fusion line than trying to win any more
competitor share. That is why Gillette is spending millions to compete against itself with ads
and online comparisons to convince its Mach 3 consumers that their current razor is simply
not good enough and to trade up to Fusion.

Third, drive usage. This has always been the number-one way to fuel profitability. In
Gillette's case the company is now investing heavily in an online campaign to encourage
consumers to use their Gillette razor downstairs as well as upstairs. Videos with powerful
messages, such as 'When there's no underbrush, the tree looks taller', are increasing blade-use
on the lower body. One of the joys of an 85% share is that you can run general campaigns to
grow total category usage, safe in the knowledge that most of the upturn in sales will benefit
your brands.

Fourth, don't just sit there, extend the brand. Gillette that has meant a successful foray into
the 'software' side of shaving with a 55% share of the UK's shaving-cream category and a
growing slice of deodorants and shampoos, too.

Finally, stay frosty. Today's market dominator could end up tomorrow's has-been brand. The
vast majority of marketing spend in the FMCG world is focused defensively on maintaining
share. It is no surprise therefore that Gillette is one of the brands linked to the hottest TV
series of 2009 - HBO's True Blood

PODUCT PROFILE:

Early Gillette Products

The first safety razors using the new disposable blade, were introduced around 1902. Gillette
maintained a limited range of models of this new type razor until 1938 and the introduction

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of the 'Sheraton'. The great innovation of this new model was the 'Twist to Open', or TTO
design, which made blade changing much easier than previously, wherein the razor head had
to be detached from the handle.

1947 saw the introduction of the new 'Super Speed' model, also a TTO design. This was
updated in 1954, with different versions being produced to shave more closely. In 1958, the
first 'adjustable' razor was produced. This allowed for an adjustment of the blade to increase
the closeness of the shave. The model, in various versions, remained in production until
1986. A companion model, 'The Knack', with a longer plastic handle, was produced from
1966 to 1976.

Older Gillette products

Trac II was the world's first two-blade razor, debuting in 1971. Gillette claimed that the
second blade cut the number of strokes required and reduced facial irritation. The Trac II
Plus is an identical model but adds a lubricating strip at the top of the blade. The blades and
handles are interchangeable.

Atra (known as the Contour in some markets) was introduced in 1977 and was the first razor
to feature a pivoting head, which Gillette claimed made it easier for men to shave their
necks. The Atra Plus featured a lubricating strip, dubbed Lubra-Soft.

Gillette Sensor debuted in 1990, and was the first razor to have spring-loaded blades. The
Sensor for Women was released around the same time and is nearly identical, but has a wider
cartridge head. In 1995, an improved version, the Sensor Excel was released. This featured
"Microfins," a piece of rubber with slits at the top of the cartridge and Gillette claimed this
helped to raise facial hairs, making for a closer shave.

Good News! was the first disposable, double-blade razor - released in 1976. The Good
News! came in three forms: the "original", the "Good News! Plus", which included a
lubricating strip, and the "Good News! Pivot Plus", which featured a lubricating strip as well
as a pivoting head. Blue II is a line of disposable razors.

Mach3 The first three-blade razor, introduced in 1998, which Gillette claims reduces
irritation and requires fewer strokes. Venus was designed for women and is a Mach 3 variant.

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Mach3 Turbo had ten microfins (as opposed to five on the original), a new grip and claims
improved lubrication and "anti-friction" blades. All Mach3 blades are interchangeable
between the three products in the range, so it is possible to use the Mach3 Turbo blades on a
Mach3 razor. The Mach3 Turbo Champion has a slightly different handle design. The Venus
Divine is the Venus version of the Mach3 Turbo. M3Power is a battery-powered version of
the Mach3 Turbo razor which can also be used with the power switched off. The blades
differ from Mach3 Turbo in having what Gillette says is a new blade coating which it
describes as "PowerGlide". The Mach 3 Power Nitro has a slightly different handle design.
The Venus Vibrance is the Venus variant of the M3Power.

The Gillette Fusion is a five-bladed razor released in 2006. There are two different versions
of the Fusion available: the Gillette Fusion, and the Gillette Fusion Power. All share the
characteristic five blades on the front, and a single sixth blade on the rear that Gillette claims
acts as a "precision trimmer". In February 2007, the Fusion Power Phantom (Stealth in UK)
was released and in February 2008, Gillette released another revision, the Fusion Power
Phenom. The Venus Embrace is the Venus variant for women and is also marketed towards
cyclists.

The desire to release ever more expensive products, each claiming to be the best ever, has led
Gillette to make disputed claims for its products. In 2005 an injunction was brought by rival
Wilkinson Sword which was granted by the Connecticut District Court who determined that
Gillette's claims were both "unsubstantiated and inaccurate" and that the product
demonstrations in Gillette's advertising were "greatly exaggerated" and "literally false."
While advertising in the United Stated now had to be rewritten, the court's ruling does not
apply in other countries.

Procter & Gamble shaving products are currently under investigation by the Office of Fair
Trading in an inquiry into alleged collusion between manufacturers and retailers in setting
prices. An industry insider has revealed that the Fusion range of blades, which cost 5p
($0.08) each to manufacture, sell with a mark-up of more than 4,750 per cent.

GLAXOSMITHKLINE CONSUMER HEALTHCARE INDIA LTD

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 GlaxoSmithKline Consumer Healthcare Ltd (GSK
Consumer Healthcare) is the Indian associate of UK-
Background
based GlaxoSmithKline Plc. GSK Consumer Healthcare
was formed in 1958 by the name of Hindustan Milk
Food Manufacturers Pvt Ltd and promoted by Horlicks
Ltd to provide malted milk foods in the domestic
market. The company acquired its present name in
2002. The company specialises in manufacturing health
food drinks.

Business Profile GSK Consumer Healthcare produces malted milk food,

biscuits, milkose baby food, powdered milk and ghee
among others. The company’s range of major nutritional
drinks includes Horlicks, Boost, Maltova and Viva.The
company exports to Bangladesh, Myanmar, Sri Lanka,
Middle East, Hong Kong, Malaysia, Fiji and Mauritius.

They have a challenging and inspiring mission: to improve the quality of human life by
enabling people to do more, feel better and live longer. This mission gives us the purpose to
develop innovative medicines and products that help millions of people around the world.

They are one of the few companies researching both medicines and vaccines for the World
Health Organization’s three priority diseases – HIV/AIDS, tuberculosis and malaria, and are
very proud to have developed some of the leading global medicines in these fields.
Headquartered in the UK and with operations based in the US, they are one of the industry
leaders, with an estimated seven per cent of the world's pharmaceutical market.

But being a leader brings responsibility. This means that they care about the impact that they
have on the people and places touched by our mission to improve health around the world.

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It also means that they must help developing countries where debilitating disease affects
millions of people and access to life-changing medicines and vaccines is a problem. To meet
this challenge, they are committed to providing discounted medicines where they are needed
the most. As a company with a firm foundation in science, they have a flair for research and
a track record of turning that research into potheyrful, marketable drugs. Every hour they
spend more than £300,000 (US$562,000) to find new medicines.

They produce medicines that treat six major disease areas – asthma, virus control, infections,
mental health, diabetes and digestive conditions. In addition, they are a leader in the
important area of vaccines and are developing new treatments for cancer.

GlaxoSmithKline Consumer Healthcare Limited manufactures and markets nutritional foods

and beverages, and over the counter drugs primarily in India. It offers malt based foods,
cereal based beverages, baby foods, protein rich foods, malt based foods, biscuits, and ghee
under the Horlicks, Boost, Viva, and Maltova brand names.

The company also provides vending machines for its Horlicks and Boost products for
corporate, school, and hospital sectors. In addition, it offers over the counter drugs, such as
Crocin, a remedy for fever and mild-to-moderate pain; Eno, an antacid for acidity, gastric
discomfort, and heat burn; and Iodex, a balm for back pains and waist pains.

Vision

To work with the spirit and principles of GSK in order to serve the consumers effectively.To
improve the quality of human life,to do more,feel better and live longer.

Mission

The pharmaceutical industry is experiencing a time of unprecedented challenge. Patent

expiries, regulatory issues and increased pressures from healthcare providers have combined
to create an environment where our sector is associated with lotheyr growth and higher risk.

They are addressing these challenges through three key strategic priorities that they believe
will transform GSK into a company that delivers more growth, less risk and an improved
financial performance.

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Words of the CEO- Andrew Witty

GSKCH’s Corporate Responsibility report which provides information on our activity and
performance during 2008.They want to be a company that is forward looking, innovative and
willing to try new approaches and partnerships; a company that is constantly looking for new
and sustainable ways to increase access to our medicines and vaccines, especially for those
least able to pay.

They have made significant progress in helping to address global healthcare challenges. For
example, over the past ten years they have donated over one billion tablets to the programme
to eliminate lymphatic filariasis, a debilitating tropical disease and they are doubling
manufacturing capacity to 600 million tablets a year.

Our commitment to preferential pricing means they offer our AIDS and malaria medicines at
not-for-profit prices in the world’s poorest countries. They also supply our vaccines to
organizations such as GAVI and UNICEF at preferential prices, typically 10-20 per cent of
the prices in developed countries.

But for every success story, there are examples of where they could do more. As I review our
performance, I believe it is time for a new mindset in our industry and a new contract with
society. In these difficult economic times it is a challenge to think beyond short-term
performance. But they must look to the long-term and not be distracted by our own economic
problems when the needs of the developing world remain just as pressing. To begin with,
there are four areas where they can show they are going to do things differently.

First, they are exploring a more flexible approach to intellectual property rights to incentivise
much needed research into medicines for 16 neglected tropical diseases where there is a
severe lack of research. One option is a Least Developed Country (LDC) ‘patent pool’ in to
which they would put our relevant small molecule compounds, process patents or other
knowledge, and which would allow others access to develop and produce new products.

Secondly, on 1 April 2009 they will reduce our prices for patented medicines in the 50
poorest countries in the world, the LDCs, so they are no higher than 25 per cent of the

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developed world price. Where possible they will reduce our prices further while ensuring
they cover our manufacturing costs so this offer is sustainable.

They also recognise the challenge in middle-income countries where there is a wide
disparity in incomes and ability to pay. Here our intention is to work on a case-by-case basis
recognising that there is no ‘one size fits all’ solution to improving access to medicines in
these countries. Thirdly, they will seek out partnerships and open the doors of our developing
world research centre in Spain. They already know what partnership can achieve – for
example, they successfully trialled a malaria vaccine candidate in partnership with the
PATH’s Malaria Vaccine Initiative and the Bill and Melinda Gates Foundation. If they
extend this approach the benefits will be huge.

Fourthly, working with partners such as NGOs, they will reinvest 20 per cent of the profit
they make from selling medicines in LDCs to support the strengthening of healthcare
infrastructure in these countries.

Our sales in LDCs are relatively low so this profit is limited; initially this funding will
amount to £1 to £2 million annually. But by our action they hope to send a signal to all
multi-national companies operating in LDCs to join us and make a meaningful change in
these countries.

In all developing countries they must transform GSK into a local company addressing local
healthcare needs. Our Brazilian business is leading the way – supplying vaccines and sharing
technical expertise to help build local capacity.

They will not forget that significant healthcare challenges exist in developed countries too.
They must work in partnership to create a virtuous circle, where industry gets rewarded for
demonstrating genuine innovation.

Healthcare payers get value-for-money because our medicines save them from high-cost
healthcare interventions, and more patients get the medicines they need.

Of course, access to medicines is not the only issue that counts. They want GSK to be
recognised around the world - by all stakeholders - as a company with the highest ethical
standards.

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They made good progress in 2008. They committed to stopping all corporate political
contributions from 2009. Our decision to report more fully on our funding for medical
education, patient groups and payments to physicians, will increase transparency and provide
reassurance to stakeholders.

Reflecting our commitment to animal theylfare, they took a voluntary decision to end
research in great apes, the highest-order of animals next to humans.It is time for a new
mindset in our industry and a new contract with society. With the support of other
pharmaceutical companies and partners outside the industry, I believe significant
improvements in human health can really be achieved.

Management

The company is managed by the Board of Directors and the Corporate Executive Team.

The Board is comprised of executive and non-executive directors who are responsible for our
corporate governance and ultimately accountable for our activities, strategy and
performance.

The Chief Executive Officer (CEO) is responsible for the management of the business and is
assisted by the Corporate Executive Team that manages our activities. Each member is
responsible for a specific part of the business

Strategic priorities

In 2008, they established the following three strategic priorities:

 Grow a diversified global business

 Deliver more products of value

 Simplify the operating model

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They believe these priorities will enable us to navigate the coming years successfully and
retain our leading-edge position as a company able to meet patients’ and healthcare
providers’ needs into the future.

Consumer Healthcare Products

Vitamins and naturals, weight loss , oral healthcare, BC Powder, pain relief, Beano vitamins
and naturals, allergy treatment and medicines for cold and flu, oral healthcare analgesics and
respiratory tract and nutritious drinks like horlicks,boost, milo,etc.

Work with Community and Global Programmes

They will make a positive contribution to the communities in which they operate, and invest
in health and education programmes and partnerships that aim to bring sustainable
improvements to under-served people in the developed and developing world.

They provide money, medicines, time and equipment to non-profit organisations to help
improve health and education in under-served communities.They focus on programmes that
are innovative, sustainable, and bring real benefits to those most in need. Global health
programmes .In communities around the world, people affected by certain diseases face
stigma and discrimination, disability and a vicious cycle of ill health and poverty.

In the developing world, diseases that can be prevented, managed or cured cause significant
suffering and mortality due to a lack of basic knowledge and inadequate health services.

They support activities to tackle these diseases through donations of medicines, financial
and practical support. They have chosen to focus our efforts on lymphatic filariasis (LF),
HIV/AIDS and malaria as theyll as diarrhoea-related disease in children. Every year more
than two million people die of diarrhoea-related disease, mostly children in developing
countries. These deaths can often be easily prevented through better hand washing and
sanitation.

Established in 1988, PHASE is a low-cost education programme helping to reduce diarrhoea-

related disease by encouraging school children to wash their hands.PHASE currently
operates in eight countries - Bangladesh, Kenya, Uganda, Zambia, Nicaragua, Peru, Mexico
and Tajikistan- reaching more than 375,000 children and their extended families.

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Research & development

From molecules to medicines,scientists are working hard to discover new ways of treating
and preventing diseases.

Our success depends on a vibrant and productive R&D function. To this end, they have
established an innovative R&D structure that encourages creativity and facilitates the
accelerated discovery and development of new medicines.

External collaborations

They also build collaborations and links with other research groups, biotechnology
companies and academic institutions to help develop transformative scientific concepts.

R&D organization

They have a large and promising development pipeline, due in the main to the innovative
R&D organization, which concentrates research in key areas through our Centres of
Excellence of Drug Discovery (CEDDs).Our CEDDs are focused on five therapeutic areas:

1. Infectious disease

2. Metabolic pathways

3. Neurosciences

4. Respiratory

Strategies

They have set out three new strategic priorities that aim to increase growth, reduce risk and
improve GSKCH’s long-term financial performance:

1. Grow a diversified global business

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2. Deliver more products of value

3. Simplify GSKCH’s operating model

Achievements

Corporate and individual responsibility award

Recognized for building trust in the community, internationally

Human rights campaign foundation

Initiative and innovation award in 2007

Announced Policy Change

In February of 2009, GSK head Andrew Witty announced that the company will reduce all
drug prices to 25% Western prices in the 50 least developed countries.

Released intellectual property rights for substances and processes relevant to neglected
disease into a patent pool to encourage new drug development, and invest 20% of profits
from the least developed countries in medical infrastructure for those countries.

The decision has received mixed reactions from medical charities. Medicines Sans Frontiers
welcomed the decision, encouraging other companies to follow suit, but criticized GSK for
failing to include HIV patents in their patent pool, and for not including middle-income
countries in the initiative.

Corporate social responsibility

The company is involved in various development initiatives all over the globe. The
company's flagship community programme is its key role in the global alliance to eliminate
lymphatic filariasis, one of the most disfiguring and disabling disease prevalent in the world
today. In India too, the company has been committed to social and health related activities

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since 1977. The company has initiated various development programmes by building
effective partnerships with local NGOs, governments and communities. These initiatives are
implemented through coordinated projects on urban community development, rural
development, disaster relief, workplace initiatives and medical fraternity initiatives.

GSK India's Current Projects

GAVS, a Trust promoted for the development of rural masses Gramin Arogya Vikas
Sanstha (GAVS) is a registered public trust promoted by Glaxo in April 1997. The Trust
operates in three needy, predominantly tribal villages, 55 kms away from GSK's factory at
Nashik. The Trust aims at fulfilling basic healthcare, education and other developmental
needs of the villagers.

GAVS organises:

• weekly medical check-ups and treatment by qualified doctors

• preventive health awareness programmes using audio-visuals besides running a

small savings scheme for women and the youth.

• Training programmes in health, midwifery are also being conducted by the

organisation.
All programmes are implemented through a full-time trained social worker, under the
guidance of four trustees (all GSK management staff) who periodically visit the
project and provide their time, professional skills and expertise towards its activities.

• Through constant interaction, the full-time social worker has built an excellent
rapport with the villagers and the local and district governmental functionaries. As a
result of continuous follow-up by the Trust, a major drinking water supply scheme
has been implemented last year in one of the drought-prone villages by the local
government authorities.

• The Trust has been recently able to get the State Public Department's approval of
establishing a Sub-Primary Health Centre in this village. This centre, costing
about Rs. 45 lakhs (approx. £ 65407), would be established by the district

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 government authorities as a result of the Trust's periodic follow-up for the last four
years.

• SSSS,a Trust Working For Disadvantaged Slum Children in Mumbai

Shishukalyan Snehi Swayamsevak Sanstha (SSSS) -- meaning ''a voluntary
organisation for Child Welfare'', is a charitable trust promoted by Glaxo India
employees in 1979 for the development of financially disadvantaged children -
deprived of opportunities such as basic education, healthcare and recreation. The
SSSS operates in the slums of Worli Koliwada, a fisher folk community, located near
the company's head office in Mumbai. The SSSS runs a Medical Care Centre which
provides comprehensive health check-up and treatment.

• Nutritional Supplements Scheme for children at a preprimary education centre and an

Educational Sponsorship Scheme for needy girl students of a local school. The
programmes are implemented by a full-time trained social worker, under the
guidance of a Managing Committee which has representatives of GSK and leading
voluntary organizations in Mumbai.

• Glaxo AIDS helpline As a unique and innovative initiative for counselling and
dissemination of information on HIV/AIDS to the lay public in Mumbai, the
company launched a 24 hours phone-in helpline in October 2000. Highly trained and
experienced team of counsellors answer thousands of callers from 10 a.m. to 9 p.m.

• Thereafter, the callers can obtain basic information on issues related to HIV/AIDS
through a comprehensive Interactive Voice Response that is operational from 9 p.m.
to 10 a.m., available in two local languages besides English. The helpline focuses on
various aspects related to general awareness, prevention, treatment and care, psycho-
social support for HIV positive people and their families.

• The helpline provides immediate, complete and factual information to the general
public. It is aimed at addressing various existing myths, misconceptions and

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 prejudices related to issues on sexual and HIV/AIDS in an atmosphere of anonymity
and confidentiality. The highly trained staff provide counselling, further referrals if
needed.As on March 31, 2003, around 25,000 phone calls have been answered by
the Glaxo AIDS helpline, adjudged as one of the best professionally managed
helplines by several leading bodies like the Tata Institute of Social Sciences.

• Supporting mentally challenged children

• Providing infrastructure to local skills

EMAMI

Strengths:

• Diversified business and product portfolio.

• Brand ambassadors: Besides Amitabh and Shah Rukh, other celebrity endorsers of
Emami’s brand include Madhuri Dixit, Kareena Kapoor, Govinda, Sourav Ganguly,
Chiranjeevi, Surya and Upendra among others.
• Himani Ayurveda Science Foundation that helps Emami in R&D.
• Continuous Innovation and market research
• Timely introduction of new products.
• The Policy of partner and progress presents a strong image of the company to its
stakeholders and customers.
• Fair dealings.

Weakness:

Small Product portfolio.

Low Brand Awareness

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Opportunities:

Expansion by introduction of new products.

Innovation in existing product lines and Diversification.

Introduction of new schemes like the Self Employment Scheme.

Threats:

Competition by existing and new firms.

Government regulations

Slowdown in the FMCG sector or the economy on the whole.

Rise in Price of raw materials.

COLGATE-PALMOLIVE

Strengths:

• Strong financial performance

• Focus on innovation and new product launches
• Colgate business planning initiative

Weakness:

• Product recalls
• Highly leveraged

Opportunities:

• Emerging markets growth

• Deploying advance technologies

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 • Growing Hispanic population in the US
• Specialty pet nutrition growth

Threats:

• Competitive landscape from other CPGs

• Private label growth
• Increasing commodity prices
• Falling consumer confidence in the US

GILLETTE

Strengths:
• First mover advantage and 97% Brand Awareness
• 48% market share and increase in Sales.
• Established international manufacturing, wholesalers, retailers and agents
• Has 90% of the Indonesian premium priced segment market
• Consistently profitable for the last 5 years
• Increase in the number of individuals with a disposable income
• 7% GDP growth for past 20 years under Replita plan
• Company management supports geographic expansion, R&D, advertising and capital
spending as drivers for growth

Weaknesses:
• Inability to meet the demand in the upcoming year, until new capacity.

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• Suboptimal product mix leading to product cannibalization- too much diversification
• Four times higher price than competitors - some of the target customers cannot afford

Opportunities:
• Reduction of competitors due to bankruptcies of retailers due to low-price gouging war
• Increased demand for higher end, higher margin products
• Percentage of population earning >$10,000/year increasing rapidly
• 40% of the higher income group shop in supermarkets
• 60% of shavers are currently shaving with knives rather than competitor products- room for
new customer acquisition
• Room for additional revenue through the potential to sell more shaving product - 4% men
use shave lotion and 58% shave dry
• Small kiosks and mom & pop shops requesting product from wholesalers

Threats:
 The major threat is that it cannot cater to the demands of the common man, thereby
having less sales and inability for the survival in the future.
 Another major threat is from the competitors.
 Not a good growth rate, hence it might not be able to cope up with its competitors.
GLAXOSMITHKLINE CONSUMER

Strengths:

• The group operates primarily in 117 countries

• Products are sold in over 140 countries.
• Recorded revenues of £22,716 million

Weakness:

• Employs huge number of employees(103000)

• Limited variety of different segments of products
• Less of company know-how to people

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Oppourtunities:

• Expansion of business and advertisements

• New variety of products
• Better management of human resource

Threats:

• Competition from competitors

• Launching of new products in market pose a danger

EMAMI

Shared Values:

The values of the company are strong which has lead to its growth over the time.

“Making people healthy and beautiful, naturally” is its core value. The company aims at
contributing whole heartedly towards the environment and society integrating all the
stakeholders into the Emami family.

Its other values are:

• To make Emami synonymous with natural beauty and health in the consumers mind
and to effectively manage talents by building a learning organization.
• To drive growth through quality and innovation in products and services and to
uphold the principles of corporate governance.

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 • Commitment and loyalty to institutional values and principles
• Customer Orientation
• Social Responsibility
• Environmental Safety

Strategy

Emami Limited is one of the fastest growing ayurveda-focused, health, beauty and personal
care product companies in India today. Through the efforts of a team of committed and
competent personnel, the company strives for continual improvement in their quality
performances.

Emami is planning to take on Johnson and Johnson in the baby products arena with a two-
pronged strategy which hinges on working out a right pricing formula on the one hand and
marketing products based on ayurveda on the other.

Starting with an entry in the southern markets, Emami, which has under its belt, brands like
Navratna, Boroplus and Zandu, is planning to add to its portfolio of three baby products that
it has now launched — soap, oil and talc, while creating price-points which the company
hopes will expand the market. A national roll-out is planned by September.

The company is also planning to expand the product-base with creams, lotions and shampoo
with medicinal products like gripe-water coming in the next phase.

Emami is planning to beat the slowdown in the economy with its winter care products from
which it is targeting a Rs. 200 crore turnover, these products are expected to contribute 30
per cent of the company’s turnover. The company planned an investment of between Rs. 60
crore and Rs. 80 crore on advertising and brand promotion.

The company plans to reach an additional 15 lakh households, through door-to-door

activities and promotions. Emami has recently entered niche categories, petroleum jelly and
glycerin soap. It is also looking at strengthening its foothold in the over-the-counter (OTC)
segment with the launch of a cough syrup.

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Structure:

The structure is very formal with Board of directors at the top of the hierarchy followed by
the other managers and executives. The decisions relating to company’s growth and various
strategies are taken by the Top level managers after consulting the Board of Directors. It
follows the conventional top down hierarchy with Board of Directors on the top followed by
the Chief Officers like CEO, CFO, COO and so on. These Chief Officers are followed by
Head Managers like Marketing Manager, H.R Manager and so on, under whom branch
managers perform their tasks.

Board of Director's:

Founders:
Mr R S Agarwal, Executive Chairman, is a Chartered Accountant, Company Secretary and
LLB. He is an eminent industrialist with experience in strategic planning, corporate affairs
and finance.

Mr R S Goenka, Director, is an M Com and LLB with expertise in taxation, strategic

planning, corporate affairs and finance.

• Mr S K Goenka, Managing Director

• Mr Viren J Shah, Director
• Mr K N Memani, Director
• Mr K K Khemka, Independent Director
• Mr S N Jalan - Independent Director
• Mr S K Todi - Independent Director
• Mr Vaidya S Chaturvedi, Independent Director
• Mr Mohan Goenka, Wholetime Director
• Mr Aditya V Agarwal, Wholetime Director

Management Team:

• Mr N Venkat, CEO and ED

• Mr N H Bhansali, CFO and President
• Mr Shyam Sutaria, CEO – IMD

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 • Mr Saroj Chakraborty, CEO - Foods Division
• Mr R K Surana, President - Operations and Commercial
• Mr Krishna Mohan, President – Sales

System

Emami is investing in its future by further building integrity into its information systems. It
has implemented SAP. With the implementation, the following benefits are in the process of
being accrued:

Standardized Work Processes

Emami is a global company, offering a diverse portfolio of products to markets in more than
58 countries. With the SAP implementation, the Company will be able to manage their entire
global supply chain more efficiently, enabling them to make the best possible business
decisions ranging from capacity planning to production scheduling. This is also helping them
to reduce the amount of time and effort it takes to fulfill customer requests and transactions.
Having a robust, online transactional system with a single data base the company can analyze
and evaluate their global inventory.

Improved Timeliness

Operational efficiency to respond quickly to fast changing market realities is a strength built
in their IT department.

Strengthen Relationships

Companywide access to accurate information about customers, production and distribution

will form the backbone of the customer care concept-ultimately integrating disparate touch
points, raising the quality of customer interactions, and focusing business processes across
the enterprise around customer needs. Business process will streamline and automation
across all locations.

Accuracy of Information

This new system will serve as a repository of information and allow the Company to build
accurate customer profiles based on the products we sell and the services we offer. The

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business information system enables them to gather, store, analyze, and provide easy access
to the most up-to-date information available—all updated in real-time. It also helps in
Enhanced management control and online user-friendly management reporting.

Staff

At Emami exciting, challenging and satisfying career is promised, derived from professional
and personal progress, sincerity and dignity. They attempt to recruit a varied group of highly
qualified and dedicated people, and offer them opportunities to bring out their finest. A
career at Emami lets a person to work with most competent professionals on some of the
power brands in the personal and healthcare industry. The Company believes that talented
professionals are the most valuable resources for significant growth.

Working at Emami means to learn and grow continuously. They look out for highest ethical
principles apart from technical skill. The company believes their achievement depends
wholly on the creativity, performance and success of our associates at all levels. Challenge,
innovation, teamwork and knowledge are of high priority in the organization

Style:

The company has a unique style of working. It comprises of various attributes that needs to
be developed and followed in the day to day working of the Organization. A few of them are
listed below:

Commitment & Loyalty to institutional values and principles

A strong sense of ownership and commitment towards the organization and the business as a
whole is the basic premise of all actions. The human dignity and worth of an individual is
acknowledged and maintained at all times.

Integrity

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This is cherished above all within the organization and whatever said, done, and the way they
do it, will emphasize integrity and dependability. The Company practices integrity in its real
sense in all personal and business actions

Attention to detail
Utmost importance is given to attention for details in all the activities. It is the diligence
which provides them with the competitive edge and also ensures quality in all their activities.

Teamwork & Team-oriented Environment

Teamwork is the cornerstone of business that helps deliver value to the customers. They
work together across titles, jobs and organization structure to share knowledge and expertise
for the growth of the individual and the organization. An environment which would foster
teamwork, cooperation and an urge to utilize knowledge and information is made available.

Simple living, High thinking

As an organization it will imbibe the principles of leanness and agility of a small
organization and discourage extravagant expenses in all their dealings and strive towards
becoming an organization worth emulating.

Skill:

The skill required differs from job to job. The company recruits employees with high
technical and conceptual skills. Various steps are taken to ensure that the best of the talent is
acquired and retained. Management skills, Leadership skills, Decision making and problem
solving ability are a few of the skills required in the company. Moreover Emami believes in
recruiting employees who love to undertake challenging tasks, complicated situations and
ready to face anything that comes their way.

COLGATE-PALMOLIVE

Strategy:

(1) Getting closer to consumers, the profession and our customers;

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(2) Driving innovation throughout all areas of our business;

(3) Increasing effectiveness and efficiency everywhere

(4) Strengthening leadership worldwide.

Alignment of the company goals and strategies with those of the company retail customers is
another critical component of the company business strategy. One new initiative rolling out
globally fosters the joint development of commercial plans that align both the customer's and
Colgate's strategic priorities and business goals.

Colgate has developed global commercial selling principles that apply to the company
relationships with all customers, regardless of their size or location. These principles provide
specific guidelines on how to achieve business goals while maintaining Colgate's
commitment to its values and to upholding the highest ethical standards in its business
dealings.

Another global initiative, Colgate Business Planning (CBP), a fully integrated commercial
planning and execution discipline, from the budget process through to the store-shelf, is
accelerating profitable growth by contributing to higher market shares, net sales and margin
growth

Underlying the company success is a strong focus on innovation throughout all areas of the
company business from new product development to the supply chain to all business
functions and processes. The number of marketing professionals dedicated full time to new
product development has increased by more than 50% in the past of the company years.
Additionally, we have reorganized the research and development function into dedicated
teams focused on specific elements of the innovation process. These include conducting
early research, seeking external innovation opportunities, developing products that combine
consumer needs with technology, and global implementation support for quality execution.

Structure:

The structure is very formal with Board of directors at the top of the hierarchy followed by
the other managers and executives. It follows the conventional top down hierarchy with
Board of Directors on the top followed by the Chief Officers like CEO, CFO, COO and so

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on. These Chief Officers are followed by Head Managers like Marketing Manager, H.R
Manager and so on, under whom branch managers perform their tasks.

Board of Directors:

• Ian Cook -Chairman, President and Chief Executive Officer

• John Cahill -Former Chairman and CEO, The Pepsi Bottling Group, Inc.
• David Johnson -Chairman Emeritus of Campbell Soup Company
• Richard Kogan -Former President and Chief Executive Officer of Schering-Plough
Corporation, 1996-2003
• Delano Lewis -Senior Fellow, New Mexico State University, since 2006
• J. Pedro Reinhard -Former Executive Vice President and Chief Financial Officer of
The Dow Chemical Company

Management Team:

• Ian.M.Cook-Chairman And CEO

• Michael J. Tangney -Chief Operating Officer
• Stephen C. Patrick-Chief Financial Officer
• Andrew D. Hendry-Senior Vice President,

Systems:

• Strengthening relationship among employees, suppliers and retailers

• Create a “Design Win” calculator and more efficient process for accepting orders

• Define the “sales process” model? Identify and communicate expectations to all
sales personnel

Style:

Colgate works with the core style of strengthening Leadership worldwide. It includes
essential values such as inspiring leadership in everyone, acting courageously, providing a
strategic perspective, building a collaborative environment and delivering outstanding

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results. It also has increased visibility of leadership through establishing regular staff
meetings and implementing leadership development program for directors and managers

Staff:

It has over 36000 dedicated employees who help the company in achieving its goals. The
employees have their goals aligned with that of the company resulting in increased
efficiency. It is ensured that employees are competent and dedicated along with being
responsible.

Skills:

The company looks for talented professionals who have their objectives in line with their
objectives. Employees with critical reasoning and good communication along with integrity
are the ones most preferred.

Shared Values:

The Company’s mission is to consistently deliver strong business results and superior returns
to stakeholders by providing consumers with the best of their products to healthier and more
enjoyable lives and aims to become the best among the consumer products by understanding
consumers and consumers’ expectations better and by continually innovating and improving
their products, services and processes.

Colgate-Palmolive’s business operations have always been guided by three core values
which includes caring, global teamwork and continuous improvement.

GILLETTE

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Strategy:

• Create and implement improved sales process and sales skill/tool improvement
program
• Work with the sales team to create and communicate a stronger value proposition for
selling products; Use CEO to help communicate it.
• Increase the focus on Global Account Manager role including role clarity and
training.
• Implement CRM (customer requirements management) tool to increase sales team
effectiveness

Structure:

• Redefine role of Global Account Manager (GAM)

• Identify compensation structure for GAM
• Define and communicate the career paths for each sales job function
• Change organization structure so that FAE become part of separate team structure

Systems:

• Create a “Design Win” calculator and more efficient process for accepting orders
• Define the “sales process” model? Identify and communicate expectations to all sales
personnel
• Develop clearer employee policies in areas such as auto and travel expenses
(especially for Europe)
• Develop the needed infrastructure (comp, benefits, payroll, etc.) for Asia sales
• Make gross margin bonus an element of the 2004 commission plan

Style:

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Increased visibility of leadership through establishing regular staff meetings Implement
leadership development program for directors and managers

Staff:

• Hire Customer GAM

• Hire FAE in Europe

Skills:

• Validate the needed GAM skills and test for those among existing team
• Increase the team’s skills and willingness to use the new CRM tool & processes
• Increase sales management
• Train sales staff in the “sales process” model
• Increase technical knowledge of products and technologies
• Improve sales team’s skills in building customer relationships

Shared Values:

Instill the value that each AM and GAM is an independent business person who can
demonstrate their value to the organization and manager their own business

GLAXOSMITHKLINE CONSUMER

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Structure:

It follows a hierarchical structure headed by the board of directors followed by the chief
officers and the functional heads.

1. Redefine role of Global Account Manager (GAM)

2. Identify compensation structure for GAM

3. Define and communicate the career paths for each sales job function

4. Change organization structure so that FAE become part of separate team structure

Chairperson- SJScarff
Managing Director- ZAhmed
Directors - A Dayal, R Subramanian, K Kashyap, Dwarakanath, P Murari, P K Gupta

Staff:

1.Hire Customer GAM

2.Hire FAE in Europe

Systems:

1.Create a “Design Win” calculator and more efficient process for accepting orders

2.Define the “sales process” model? Identify and communicate expectations to all sales
personnel

3.Develop clearer employee policies in areas such as auto and travel expenses (especially for
Europe)

4.Develop the needed infrastructure (comp, benefits, payroll, etc.) for Asia sales

5.Make gross margin bonus an element of the 2004 commission plan

Style:

Increased visibility of leadership through establishing regular staff meetings Implement

leadership development program for directors and managers

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Strategy:

1.Create and implement improved sales process and sales skill/tool improvement program

2. Grow a diversified global business

2. Deliver more products of value

3. Simplify GSKCH’s operating model

Skills:

1.Validate the needed GAM skills and test for those among existing team

2.Increase the team’s skills and willingness to use the new CRM tool & processes

3.Increase sales management

4.Train sales staff in the “sales process” model

5.Increase technical knowledge of products and technologies

6.Improve sales team’s skills in building customer relationships

Shared Values:

Instill the value that each AM and GAM is an independent business person who can
demonstrate their value to the organization and manager their own business

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Yearly Financial Comparison (2008):

GLAXO
SMITHKLINE
PARTICULARS EMAMI COLGATE- GILLETTE CONSUMER
PALMOLIVE INDIA

Sales Turnover 583.71 1,473.38 588.84 1,592.30

Other Income 2.66 84.78 19.13 45.96

Total Income 586.37 1,558.16 607.97 1,638.26

Total Expenses 487.69 1,244.83 426.25 1,305.26

Operating Profit 96.02 228.55 162.59 287.04

-- -- -- --
Pr
ofit On Sale Of
Assets

Gain/Loss On -- -- -- --
Foreign
Exchange

Other -- -- -- --
Extraordinary
Income/Expenses

Total -- -- 14.45 --
Extraordinary
Income/Expenses

Tax On -- -- -- --
Extraordinary
Items

Net Extra -- -- -- --
Ordinary
Income/Expenses

Gross 98.68 313.33 181.72 333.00

Pr
ofit

Page | 92
Interest -13.53 1.44 -- 6.97

PBDT 112.21 311.89 196.17 326.03

Depreciation 7.28 19.84 13.98 41.95

Depreciation On -- -- -- --
Revaluation Of
Assets

PBT 104.93 292.05 182.19 284.08

Tax 12.18 60.34 64.82 95.75

Net 92.75 231.71 117.37 188.33

Pr
ofit

Depreciation for -- -- -- --
Previous Years
Written Back/
Provided

Dividend -- -- -- --

Dividend Tax -- -- -- --
Earnings Per Share 14.92 17.04 36.01 44.78

Book Value -- -- -- --

Equity 12.43 13.60 32.59 42.06

Reserves 276.57 148.61 -- --

Face Value 2.00 1.00 10.00 10.00

Competition:

Name Of The Last Price Market Cap. Sales Net Profit Total Assets
Company (in Rs) Turnover

Colgate 617.55 8,398.24 1,770.82 290.22 220.98

Page | 93
Gillette 922.90 3007.29 588.84 117.37 425.40

Ind
ia

Emami 390.15 2,424.59 651.01 67.36 324.20

GlaxoSmithKline 1,032.65 4,342.87 1,592.30 188.33 646.36

Consumer

The above data is as 26.08.09

Comparison:

Particulars Emami Colgate-Palmolive Gillette India GlaxoSmithKline

Type of Company Public Public Public Public

No of Products 40+

BSE group S A B B

Brand Recognition Medium High High Medium

EPS* 9.36 23.61 32.21 53.43

Dividend Yield (%)* 1.15 2.43 1.36 1.17

*As per latest stand alone adjusted profit.

Company Share Vs Sensex:

Page | 94
GlaxoSmithKline Consumer Healthcare

Page | 95
Emami:

Emami focuses on ayurvedic products backed by modern manufacturing technology. Its scrip
was recommended by analysts in October 2008 at 18 times its TTM earnings when it was in
process of acquiring Zandu Pharmaceutical Works.

The acquisition is now complete—Emami paid around Rs 750 crore to buy a 72 per cent
stake in Zandu. The amount seems large compared with Emami’s Rs 650-crore annual
revenue in FY09. However, the acquisition will add value to the company in the long run.

Colgate-Palmolive:

It undertakes marketing initiatives at regular intervals to increase consumption of oral care

products, which has helped it sustain growth in both rural and urban areas. On yearly basis,
sales growth averaged 15 per cent and the average profit growth was 20 per cent.

The company’s scrip was priced at 24 times its trailing 12 months’ (TTM) earnings, which
was a bit higher than the April 2008 level. Along with the price rise, the company should be
able to maintain high growth in its earnings in the future.

Gillette-India:

Gillette’s business seems shielded from the effects of the downturn. Its male grooming
products, including razor blades, reported a revenue growth of around 14 per cent y-o-y. The
oral care segment grew robustly at 59 per cent. The relatively smaller segment, portable
power, grew at a healthy 19 per cent. Overall, the company’s net sales and profit grew at 22
per cent and 27 per cent, respectively. Its EPS has also come down.

GlaxoSmithKline Consumer:

In the March quarter, the company registered a sales growth of 31.28 per cent, while net
profits were up 48.35 per cent, which was above industry expectations. The company also
improved its operating margin in the March quarter to 25.54 per cent against 18.01 per cent
in the previous quarter.

Page | 96
During the March quarter, the company added two products to its portfolio—Horlicks
Nutribar and Actigrow. Also, Boost is the official energy drink of Rajasthan Royals in the
Indian Premier League (IPL).Also, at the end of 2008, the company had cash in excess of Rs
470 crore, which can be used for expansion or for disbursing higher dividends.

Balance Sheet Comparison:

---------- in Rs. Cr. -----------

Particulars Emami Colgate Gillette GlaxoSmithKline

India
Consumer

Mar’08 Mar’09 Jun’08 Jan’08

Sources Of Funds

12.43 13.60 32.59 42.06

Total Share
Capital

Equity Share Capital 12.43 13.60 32.59 42.06

Share Application Money 0.00 0.00 0.00 0.00

Preference Share Capital 0.00 0.00 0.00 0.00

Reserves 276.57 202.70 392.82 604.29

Revaluation Reserves 0.00 0.00 0.00 0.00

Networth 289.00 216.30 425.41 646.35

Secured Loans 35.19 0.00 0.00 0.00

Unsecured Loans 0.00 4.69 0.00 0.00

35.19 4.69 0.00 0.00

Total Debt

324.19 220.99 425.41 646.35

Total
Liabilities

Emami Colgate Gillette GlaxoSmithKline

Consumer

Page | 97
 India

Mar'08 Mar '09 Jun '08 Jan '08

Application Of Funds

Gross Block 105.73 425.26 253.08 523.68

Less: Accum. Depreciation 27.91 251.33 161.89 297.65

Net Block 77.82 173.93 91.19 226.03

Capital Work in Progress 13.47 4.67 3.00 17.31

Investments 102.97 38.33 0.00 297.84

Inventories 40.10 82.42 103.20 194.82

Sundry Debtors 34.03 11.13 64.35 27.36

Cash and Bank Balance 2.77 43.69 4.38 32.17

76.90 137.24 171.93 254.35

Total Current

Assets

Loans and Advances 156.01 232.48 280.01 62.15

Fixed Deposits 0.04 207.45 72.06 61.50

232.95 577.17 524.00 378.00

Total CA,
Loans & Advances

Deferred Credit 0.00 0.00 0.00 0.00

Current Liabilities 56.21 411.93 138.91 243.65

Provisions 46.80 161.19 53.88 29.17

103.01 573.12 192.79 272.82

Total CL &
Provisions

129.94 4.05 331.21 105.18

Net Current
Assets

Miscellaneous Expenses 0.00 0.00 0.00 0.00

Page | 98
 324.20 220.98 425.40 646.36
Total

Assets

Contingent Liabilities 26.45 46.46 205.06 7.03

Book Value (Rs) 46.50 15.90 130.55 153.69

Share Holding Pattern:

Particulars Emami Colgate Gille GlaxoSmithKline

- tte
Palmoli Indi Consumer
ve a

Indian promoters 82.87 - 47.7 -

1

Foreign promoters 4.97 51.00 41.0 43.16

2

Acting person - - - -

Other promoters - - - -

MFs/UTI 2.79 5.20 1.38 14.68

Page | 99
Banks/FIs - 7.76 0.03 13.97

FIIs 1.65 7.84 0.17 1.27

Public corporate 5.41 4.24 2.25 9.41

bodies

Indian public 2.29 23.71 6.77 17.09

NRIs/OCBs - - - -

Others 0.02 0.24 0.66 0.43

No of shares 621451 135992 325 42055538

77 817 852
17

Findings:

Page | 100
Indian FMCG Industry:
In the Indian FMCG sector, rural India accounts for more than 40% of the country’s
consumption. It is our understanding that as prosperity percolates across the lower levels of
India’s income pyramid, the FMCG industry will outperform its earlier annual growth
average. As the Indian economy is reporting highest ever growth, there are a number of
pockets of optimism:

• Urban demand: We feel that a 10% annual growth will continue to drive FMCG sector
growth.

• Rural demand: A huge proportion of India’s population lives in rural villages; the per
capita consumption in these pockets is among the lowest. In our opinion, we have reached
the tipping point and annual demand is now soaring.

• Infrastructural development: We feel that planned infrastructure development – roads,

ports, railways and airports – will accelerate FMCG growth.

• Low manufacturing base: We foresee that India’s low-cost manufacturing base will enable
it to address the growing FMCG demand in Bangladesh, Sri Lanka, Middle East, Pakistan
and similar countries; besides, non-resident Indians in the UK and the USA represent a
prospective market.

• Brand consciousness: We perceive increasing brand consciousness as consumers gradually

move away from loose and unbranded alternatives.

• Favourable tax structure: The introduction of VAT will reduce longstanding tax
ambiguities; Companies in tax exemption zones will benefit.

Page | 101
The fringe benefit tax rationalization on brand ambassadors, celebrity endorsement as well as
tours and travels will strengthen the FMCG sector.

• Modern retail formats: We see modern retail stores accelerating FMCG off take and
leading to a greater proportion of the growth of branded and value-added products.

COMPANY:

Colgate-Palmolive:

Focus on core business will give company a steady income stream. The company has high
brand recognition and its products are used in almost every house of the country. The
company is facing heavy competition in most of its product lines. Colgate has focused solely
on its core strength—oral dental care products. Through its marketing efforts, the company
has retained the top position in product categories such as toothpastes and toothbrushes. The
company’s profits have increased resulting in increase of its share value. This has resulted in
increased shareholder wealth which has had a positive impact on the company’s reputation
and growth. Colgate’s continuous interaction with the people through its various initiatives
has helped the company in increasing trust and revenues. Colgate is doing well in the market
and will continue to do so only if the company is able to face the stiff competition from its
rival firms.

Gillette India:

Strong brand value, and various products catering to all income groups are the key points for
the companies’ growth. The increasing needs of men in relation to grooming themselves and
the look good idea have helped boost the sales of its products. The company’s timely
introduction of products has given it a first mover’s advantage and faces less or no
competition in the industry. Some of the company’s good products are priced high, which
makes them inaccessible to the low and middle income groups of the society. However its
brand value and years of experience in the industry will help them overcome all possible
threats and prosper in the coming future.

Page | 102
GlaxoSmithKline Consumer Healthcare:

Huge segmental growth potential, strong brand recall, strong balance sheet and cash flows
makes GSK Consumer one of the best plays in the FMCG space. Furthermore, its growth
strategy of launching new products, capacity expansions and targeting new segments will
continue to drive its growth in future. Its white beverage brand 'Horlicks' pioneered the
broadening of the malted beverage market in India. And with low penetration levels and
rising income, the company is attractively placed. It is believed that the increase in the
earnings power of the company in the medium term is not being reflected in the current stock
price. It has continuously tried to improve its operating margin quarter after quarter and
showed signs of improvement over the recent years.

Emami:

The Company has been growing at a fast pace since 2000, introducing new products now and
then and aggressive marketing strategies. It can draw synergies from Zandu, which it
acquired recently. The company’s products have less brand awareness which is to an extent
hampering its growth. Moreover if the Brand is recognized the company is not. For Example
people are well aware of Fair and Handsome but when asked which company the product
belonged only a few people could give the name of the company.

Emami’s products in the domestic market, would be fitted into a four-layer pyramid structure
with the top layer being made up by ultra premium brands, the second tier representing the
premium products, the third comprising what we call the ‘class for the mass range' for buyers
and finally the range for mall-based and institutional sales which will help in efficient
targeting of the customers helping them to relate to the customers in a better way. In
overseas markets, Emami would be engaged in international brand building under the
guidance of foreign experts to begin international brand exports as early as possible. In the
short term, there could be contract manufacturing of Emami products and brands overseas by
entities there helping them expand their market.

The Sales of the company have also increased over the years and Emami now play an
important role in the FMCG industry. The company’s products are being well accepted by
the general public leading to its growth. Emami has a good hold in the industry and has the
potential of obtaining greater market share.

Page | 103
 BIBLIOGRAPHY:

Annual Report of Emami (07-08)

Annual Report of Colgate-Palmolive (07-08)

Outlook money (Magazine | Jun 03, 2009)

www.business-standard.com

www.bharatbook.com

www.colgate.com

www.colgate.co.in

www.economywatch.com

www.emamigroup.com

www.emamiltd.in

www.equitymaster.com

www.finance.yahoo.com

www.gsk.com

www.icmrindia.org

www.indiaretailbiz.com

www.moneycontrol.com

www.naukrihub.com

www.wikipedia.org

www.webindia123.com

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