PROJECT REPORT

ON

Marketing Strategies

of Hindustan Unilever Ltd.

AT

HINDUSTAN UNILEVER LTD.

PLOT NO.-8, BLOCK-A, SOUTH CITY-I

GURGAON

Research Supervisor Submitted By:

Mr. Shashank Shekhar Chandra Bhushan Tiwari

Branch Manager, HUL Roll No. 08061234

ACKNOWLEDGEMENT

I wish to express my heartfelt appreciation to many who have contributed to this study. I
would like to thank Mr. Shashank Shekhar, Manger, HUL for his valuable guidance. I
wish to express my gratitude to my faculty guide, who provided me with constant
impetus to complete this project.

CHANDRA BHUSHAN TIWARI

2
TABLE OF CONTENTS

 Executive Summary
 Introduction
 Company Profile
 Current Market Context
 Research & Innovation Centre
 Safety & Health Policy
 Market Strategies
 Hindustan Unilever Ltd.
 Competitors
 Research Methodology
 Scope
 Findings, Data Analysis & Conclusion
 Recommendations
 Suggestions
 Limitations
 Bibliography
(Annexure) Questionnaire

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EXECUTIVE SUMMARY

Hindustan Unilever Limited (HUL) is India’s largest Fast Moving Consumer Goods
Company, touching the lives of two out of three Indians with over 20 distinct categories
in Home & Personal Care Products and Foods & Beverages. They endow the company
with a scale of combined volumes of about 4 million units and sales of Rs.10, 000 crores.
HUL is also one of the country’s largest exporters; it has been recognized as a Golden
Super Star Trading House by the Government of India. Hence, research aims is that to
study the existing marketing practices, emerging marketing plans and understanding
companies business strategy with its profile. The main recommendations have been made
on the addressing of the advertising message to the customers. An attempt has been made
to formulate the communication in a way to build it on a platform of the basic need for
buying HUL products. In another recommendation the suggestions towards better dealer
interest in HUL products has been given a chance.
The research is based primarily on primary data; however few references to industry
figures from secondary data have been made. Data has been collected through in depth
interviews and administered questionnaires.

4
INTRODUCTION

Over 100 years' link with India. In the summer of 1888, visitors to the Kolkata harbor &
noticed crates full of Sunlight soap bars, embossed with the words "Made in England by
Lever Brothers". With it, began an era of marketing branded. Fast Moving Consumer
Goods (FMCG).
Soon after followed Lifebuoy in 1895 and other famous brands like Pears, Lux and Vim.
Vanaspati was launched in 1918 and the famous Dalda brand came to the market in 1937.
In 1931, Unilever set up its first Indian subsidiary, Hindustan Vanaspati Manufacturing
Company, followed by Lever Brothers India Limited (1933) and United Traders Limited
(1935). These three companies merged to form HUL in November 1956; HUL offered
10% of its equity to the Indian public, being the first among the foreign subsidiaries to do
so. Unilever now holds 51.55% equity in the company. The rest of the shareholding is
distributed among about 380,000 individual shareholders and financial institutions. The
erstwhile Lipton's links with India were forged in 1898. Unilever acquired Lipton in
1972, and in 1977 Lipton Tea (India) Limited was incorporated.
Pond's (India) Limited had been present in India since 1947. It joined the Unilever fold
through an international acquisition of Chesebrough Pond's USA in 1986.
The liberalization of the Indian economy, started in 1991, clearly marked an inflexion in
HUL's and the Group's growth curve. Removal of the regulatory framework allowed the
company to explore every single product and opportunity segment, without any
constraints on production capacity.
Simultaneously, deregulation permitted alliances, acquisitions and mergers. In one of the
most visible and talked about events of India's corporate history, the erstwhile Tata Oil
Mills Company (TOMCO) merged with HUL, effective from April 1, 1993. In 1995,
HUL and yet another Tata company, Lakme Limited, formed a 50:50 joint venture,
Lakme Lever Limited, to market Lakme's market-leading cosmetics and other appropriate
products of both the companies. Subsequently in 1998, Lakme Limited sold its brands to
HUL and divested its 50% stake in the joint venture to the company.
HUL formed a 50:50 joint venture with the US-based Kimberly Clark Corporation in
1994, Kimberly-Clark Lever Ltd, which markets Huggies Diapers and Kotex Sanitary
Pads. HUL has also set up a subsidiary in Nepal, Nepal Lever Limited (NLL), and its
factory represents the largest manufacturing investment in the Himalayan kingdom. The
NLL factory manufactures HUL's products like Soaps, Detergents and Personal Products
both for the domestic market and exports to India.
The 1990s also witnessed a string of crucial mergers, acquisitions and alliances on the
Foods and Beverages front. In 1992, the erstwhile Brooke Bond acquired Kothari General
Foods, with significant interests in Instant Coffee. Then in July 1993, Brooke Bond India
and Lipton India merged to form Brooke Bond Lipton India Limited (BBLIL), enabling

5
greater focus and ensuring synergy in the traditional Beverages business. 1994 witnessed
BBLIL launching the Wall's range of Frozen Desserts. By the end of the year, the
company entered into a strategic alliance with the Kwality Icecream Group families and
in 1995 the Milkfood 100% Icecream marketing and distribution rights too were
acquired.
Finally, BBLIL merged with HUL, with effect from January 1, 1996. The internal
restructuring culminated in the merger of Pond's (India) Limited (PIL) with HUL in
1998. The two companies had significant overlaps in Personal Products, Specialty
Chemicals and Exports businesses, besides a common distribution system since 1993 for
Personal Products. The two also had a common management pool and a technology base.
The amalgamation was done to ensure for the Group, benefits from scale economies both
in domestic and export markets and enable it to fund investments required for
aggressively building new categories.
In January 2000, in a historic step, the government decided to award 74 per cent equity in
Modern Foods to HUL, thereby beginning the divestment of government equity in public
sector undertakings (PSU) to private sector partners. HUL's entry into Bread is a strategic
extension of the company's wheat business. In 2002, HUL acquired the government's
remaining stake in Modern Foods.
In 2003, HUL acquired the Cooked Shrimp and Pasteurised Crabmeat business of the
Amalgam Group of Companies, a leader in value added Marine Products exports.

6
COMPANY PROFILE

The mission that inspires HUL's 36,000 employees, including over 1,350 managers, is to
"add vitality to life." HUL meets everyday needs for nutrition, hygiene, and personal care
with brands that help people feel good, look good and get more out of life. It is a mission
HUL shares with its parent company, Unilever, which holds 51.55% of the equity. The
rest of the shareholding is distributed among 380,000 individual shareholders and
financial institutions.
HUL's brands - like Lifebuoy, Lux, Surf Excel, Rin, Wheel, Fair & Lovely, Pond's,
Sunsilk, Clinic, Pepsodent, Close-up, Lakme, Brooke Bond, Kissan, Knorr-Annapurna,
Kwality Wall's – are household names across the country and span many categories -
soaps, detergents, personal products, tea, coffee, branded staples, ice cream and culinary
products. They are manufactured in close to 80 factories. The operations involve over
2,000 suppliers and associates. HUL's distribution network, comprising about 7,000
redistribution stockists, directly covers the entire urban population, and about 250 million
rural consumers.
HUL has traditionally been a company, which incorporates latest technology in all its
operations. The Hindustan Lever Research Centre (HLRC) was set up in 1958, and now
has facilities in Mumbai and Bangalore. HLRC and the Global Technology Centres in
India have over 200 highly qualified scientists and technologists, many with post-doctoral
experience acquired in the US and Europe.
HUL believes that an organisation's worth is also in the service it renders to the
community. HUL is focusing on health & hygiene education, women empowerment, and
water management. It is also involved in education and rehabilitation of special or
underprivileged children, care for the destitute and HIV-positive, and rural development.
HUL has also responded in case of national calamities / adversities and contributes
through various welfare measures, most recent being the village built by HUL in
earthquake affected Gujarat, and relief & rehabilitation after the Tsunami caused
devastation in South India.
Over the last three years the company has embarked on an ambitious programme, Shakti.
Through Shakti, HUL is creating micro-enterprise opportunities for rural women, thereby
improving their livelihood and the standard of living in rural communities. Shakti also
includes health and hygiene education through the Shakti Vani Programme, and creating
access to relevant information through the iShakti community portal. The programme
now covers about 50,000 villages in 12 states. HUL's vision is to take this programme to
100,000 villages impacting the lives of over a 100 million rural Indians.
HUL is also running a rural health programme – Lifebuoy Swasthya Chetana. The
programme endeavtheirs to induce adoption of hygienic practices among rural Indians
and aims to bring down the incidence of diarrhoea. It has already touched 70 million
people in approximately 15000 villages of 8 states. The vision is to make a billion Indians

7
feel safe and secure. If Hindustan Lever straddles the Indian corporate world, it is
because of being single-minded in identifying itself with Indian aspirations and needs in
every walk of life.

8
HINDUSTAN UNILEVER LIMITED INDIA’S LARGEST FMCG COMPANY

9
FINANCIAL OVERVIEW

10
 Hindustan Lever Limited Shareholding
Pattern
Flls
13.7

Domestic
Fls
14.8 Unilever
51.6

Individual
19.9

HUL Equity Capital - 50 Mn $

Market Capitalisation - 7,300 Mn $

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PRESENT MARKETING STRATEGY:

Mission:

Hindustan Unilever Limited mission is to add Vitality to life. We meet everyday needs
for nutrition, hygiene, and personal care with brands that help people feel good, look
good and get more out of life.

Policy:

HUL has earned a reputation for conducting its business with integrity and with respect
for the interests of those their activities can affect. This reputation is an asset, just as real
as their people and brands.

From HUL Spokesperson “To succeed requires the highest standards of behavior from all
of us. The general principles contained in this Code set out those standards. More detailed
guidance tailored to the needs of different countries and companies will build on these
principles as appropriate, but will not include any standards less rigorous than those
contained in this Code.

We want this Code to be more than a collection of high-sounding statements. It must

have practical value in their day-to-day business and each one of us must follow these
principles in the spirit as well as the letter”.ref: business world magazine.

Obeying the Law

HUL companies and employees are required to comply with the laws and regulations
of the countries in which they operate.

Employees

• HUL is committed to diversity in a working environment where there is

mutual trust and respect and where everyone feels responsible for the
performance and reputation of the company. HUL will recruit, employ and
promote employees on the sole basis of the qualifications and abilities needed
for the work to be performed.

• HUL respect the dignity of the individual and the right of employees to
freedom of association.

• HUL will maintain good communications with employees through company

based information and consultation procedures.

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Consumers
HUL is committed to providing branded products and services which consistently offer
value in terms of price and quality, and which are safe for their intended use. Products
and services will be accurately and properly labelled, advertised and communicated.

The Environment

HUL is committed to making continuous improvements in the management of their

environmental impact and to the longer-term goal of developing a sustainable business.

HUL will work in partnership with others to promote environmental care, increase
understanding of environmental issues and disseminate good practice.

Innovation
In their scientific innovation to meet consumer needs they will respect the concerns of
their consumers and of society. They will work on the basis of sound science, applying
rigorous standards of product safety.

Business Integrity

HUL does not give or receive, whether directly or indirectly, bribes or other improper
advantages for business or financial gain. No employee may offer, give or receive any
gift or payment which is, or may be construed as being, a bribe. Any demand for, or offer
of, a bribe must be rejected immediately and reported to management.

HUL accounting records and supporting documents must accurately describe and reflect
the nature of the underlying transactions. No undisclosed or unrecorded account, fund or
asset will be established or maintained.

Conflicts of Interests

All HUL employees are expected to avoid personal activities and financial interests
which could conflict with their responsibilities to the company.

HUL employees must not seek gain for themselves or others through misuse of their
positions.

Compliance – Monitoring – Reporting

Compliance with these principles is an essential element in their business success. The
Unilever Board is responsible for ensuring these principles are communicated to, and
understood and observed by, all employees.

13
Day-to-day responsibility is delegated to the senior management of the regions and
operating companies. They are responsible for implementing these principles, if
necessary through more detailed guidance tailored to local needs.

Assurance of compliance is given and monitored each year. Compliance with the Code is
subject to review by the Board supported by the Audit Committee of the Board and the
Corporate Risk Committee.

The Board of Unilever expects employees to bring to their attention, or to that of senior
management, any breach or suspected breach of these principles.

Provision has been made for employees to be able to report in confidence and no
employee will suffer as a consequence of doing so.

In this Code the expressions 'Unilever' and 'Unilever companies' are used for convenience
and mean the Unilever Group of companies comprising Unilever N.V., Unilever PLC and
their respective subsidiary companies. The Board of Unilever means the Directors of
Unilever N.V. and Unilever PLC’.ref:THE NEWS

14
FMCG Markets
Slowdown in growth & then 2 years of decline

FMCGMarket (HLL Categories)

Growth%

00 01 02 03
8
6
4
6.7
2 3.4
0
-1.1
-2.5
-2
-4

FMCG Market (HLL Categories)

Growth%

02 03 Q1 '04 Q2 '04 Q3 '04 Q4 '04

FMCG Markets
8
2004 - Revival after 2 years of decline
6
4
6.1
2
2.0
0 0.8
-1.1
-2.5 -2.8
-2
-4

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Pricing action in 2008:

Price reduction

Price reduction (Bottles) & Value improvement (Sachets)

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 Investment Behind Brands

Innovation & Superior Quality

Current Market Context

Actions

• Pricing
–Laundry : Price Reduction
–Shampoos: Value Improvement & Lower Price Points
–Toothpaste: Value Corrections & SKU rationalization
• Investments behind brands
– Innovations
– Quality
– Higher A&P
• Corrective actions in processed

Processed Foods

• Corrective actions
– Phased stock reduction
– Withdrawl of ‘03 innovation
– Defocus of Atta in unviable geographies
• Sales decline of 26% arising from above actions
• Market shares held / improved

17

Sales Growth%
Research and Innovation Centers

Since most new products and processes are developed in these Units, certain additional
responsibilities devolve on them to ensure implementation of the Environment Policy of
the company. In addition to the Unit Head's responsibilities outlined above, the heads of
these units will:

 Ensure that a formal and systematic risk assessment exercise is undertaken during
the process/product development stage with specific reference to environmental
impact.

 Transfer technology to the pilot plant and main production through a properly
documented process specification which will clearly define environmental impact
and risks associated with processes, products, raw material and finished product
handling, transport and storage.

 Ensure that treatment techniques are developed for any wastes generated as a
result of the new product/process and is incorporated into the process
specifications.

QUALITY POLICY:

Hindustan Unilever Limited considers quality as one of the principal strategic objectives
to guarantee its growth and leadership in the markets in which it operates.

The company is committed to respond creatively and competitively to the changing needs
and aspirations of their consumers through relentless pursuit of technological excellence,
innovation and quality management across their businesses, and offer superior quality
products and services that are appropriate to the various price points in the market as well
as to their commitment to building shareholder value.
The company is committed to fulfill its legal and statutory obligations and international
standards of product safety and hygiene and will not knowingly sell product that is
harmful to consumers or their belongings. It will institute systems and measures to
monitor compliance in order to meet its responsibilities to consumers.
The company will maintain an open communication channel with its consumers and

18
customers and will carefully monitor the feedback to continuously improve its products
and services and set quality standards to fulfill them. The company is committed to
extend its quality standards to its contract manufacturers, key suppliers and service
providers and by entering into alliances with them, to jointly improve the quality of its
products and services. This policy is applicable to production from its own facilities as
well as to production that is outsourced.
The company will periodically review this quality policy for its effectiveness and
consistency with business objectives.
The company delegates authority and responsibility for dissemination and
implementation of this policy to each Business and Unit Head.

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 MARKET STRATEGIES

Consumer satisfaction
Indira is 20 years old, a tribal woman at Kondegaon village in Bastar district. She is just
back from the nearby jungles, collecting firewood. After attending to her baby son, she
will go to the village well to take a quick wash. Yesterday her husband brought her a
white soap, with pink petals in it. Indira had requested him to buy one, for the festival
later this evening.
Home to over 700 million people, rural India comprises not only over 70% of India's
billion-strong population, but also over 12% of the world's population. The rural
population already accounts for substantial consumption of Fast Moving Consumer
Goods and also consumer durables. About 50% of the sales of soaps & detergents are
generated in rural India. Similarly, almost half the demand for black & white television
sets, pressure cookers, table fans, sewing machines also comes from there.

Cost management:
But the potential is even larger, both in terms of consumption and penetration. The fact
that 70% of the population accounts for only 50% of even relatively well-penetrated
categories, like soaps & detergents, indicates the enormous scope of consumption-led
growth in these categories. In categories, which are relatively less penetrated, like
personal products, rural India offers an even bigger growth opportunity through greater
penetration and then consumption. For example only three out of 10 consumers in rural
markets use shampoo or skin care products. Therefore growth in such categories will
emerge, as more consumers purchase these products, and then continue to use them
regularly.
Hindustan Lever has taken many initiatives over the decades to create markets in the rural
hinterlands. By marketing relevant products, at affordable prices.
At the same time, if products have to come up the order in the rural purchase hierarchy,
they have to be affordable. If rural India today accounts for about half of detergents sales,
it is because HUL has developed low-cost value-for-money branded products, like
Wheel. The company has also taken initiatives to create markets even for apparently
premium products, by offering them in pack sizes, like sachets, whose unit prices are
within the reach of rural consumers. For example, initiated in the 1980s, sachets (Rs.2,
Re.1, or 50 paise) today constitute about 55% of Hindustan Lever's shampoo sales. With
media reach gradually increasing, rural consumers today, where the media has its
footprints, share the same aspirations with their urban counterparts. HUL has responded
to the trend with low unit price packs of even other products - Lux at Rs.5, Lifebuoy at
Rs.2, Surf Excel sachet at Rs.1.50, Pond's Talc at Rs.5, Pepsodent toothpaste at Rs. 5,

20
Fair & Lovely Skin Cream at Rs.5, Pond's Cold Cream at Rs.5, Brooke Bond Taaza tea at
Rs.5.

Other marketing strategies:

For decades now, Hindustan Lever has also taken initiatives to circumvent the limitation
in communication channels, by innovatively leveraging non-conventional media. Among
them are wall paintings, cinema vans, weekly markets (haat), fairs and festivals. Given
the rural consumer's fascination for cinema, the cinema vans show popular movies,
interspersed with products advertisements. Weekly markets, fairs and festivals are parts
and parcel of rural life. The occasions are used to demonstrate product benefits and also
sell such products. Such demonstrations have played a significant role in creating, for
example, the detergents market in rural India. In recent times, such demonstrations are
being deployed to illustrate how visible clean is not hygienic clean, and how using soap is
essential to prevent easily avoidable infections.
demonstrations. The project has helped eliminate barriers to trial, and has strengthened
salience of both particular categories and brands. Similarly in 2002, Hindustan Lever has
launched a similar large-scale direct contact, called Lifebuoy Swasthya Chetana, which
already covers 70 million people in 18,000 villages of 8 states. The project is intended at
generating awareness about good health and hygiene practices, and specifically how a
simple habit of washing hands is essential to maintaining good health. The initiative will
involve interaction with students and senior citizens, who act as change agents.

Availability of HUL’s Product:

Generating awareness pays dividends only when steps are taken to ensure constant
availability of products. In rural India particularly, availability determines volumes and
market share, because the consumer usually purchases what is available at the outlet,
influenced very largely by the retailer.
Therefore, over the decades, Hindustan Lever has progressively strengthened its
distribution reach in rural India, which today has about 33 lakh outlets. Direct rural
distribution in Hindustan Lever began with the coverage of villages adjacent to small
towns. The company's stockists in these towns were made to use their infrastructure to
distribute products to outlets in these villages. But this distribution mode could only be
extended to villages connected with motorable roads, and it could cover about 25% of the
rural population by 1995..

21
HUL has in the recent past established a common distribution system in rural areas for all
its products. Given the number of brands and their packs the rural retailer usually
requires, one HUL representative can take all the products from the company portfolio
that he needs.
Over time, Hindustan Lever will further strengthen its rural distribution through mutually
beneficial alliances with rural Self Help Groups (SHGs). Over the last five years,
financial institutions, NGOs and government organisations are working closely to
establish SHGs, whose objective is to alleviate poverty through sustainable income-
generating activities. Since 2001, Hindustan Lever is implementing Project Shakti,
whereby SHGs are being offered the option of distributing relevant products of the
company as a sustainable income-generating activity.
HUL's vision for Project Shakti is to scale it up across the country by 2005, creating
about 25000 Shakti entrepreneurs, covering 100,000 villages, and touching the lives of
100 million rural consumers. Begun with 50 groups in Nalgonda district of Andhra
Pradesh, with the support of local authorities, the project has been extended, as of now, to
about 50,000 villages in 12 states. A typical Shakti entrepreneur conducts business of
around Rs.10,000 - Rs 15,000 per month, which gives her an income of about Rs 700 -
Rs.1000 per month on a sustainable basis. As most of these women are from below the
poverty line, and live in extremely small villages (less than 2000 population), this earning
is very significant, and is almost double of their past household income. The full benefit
of Project Shakti will be realised after some years.

HINDUSTAN UNILEVER LIMITED

– DECEMBER QUARTER 2008 RESULTS

• Total Sales grow by 14.4%; FMCG Sales growth at 15.8%

• HPC and Foods grow by 17% and 9% respectively; Broad based growth across
categories
• PBIT grows 13.5%; Net Profit increases by 56%
• EPS for 2008 grows 17.6%; Final Dividend Rs 2.50 per share of Re 1/- each; Total
Dividend Rs 5.00 per share for 2008

Mumbai, February 14, 2009: Hindustan Unilever Limited (HUL) announced its results
for December Quarter 2008. Growth momentum achieved in the last three quarters has

22
been sustained with total sales growing by 14.4%. Domestic FMCG sales were higher by
15.8% with both Home and Personal Care (HPC) and Foods performing well.
HPC business grew by 17.3% driven by strong performance in all categories. Significant
sales growth was achieved in the highly competitive categories of Laundry and Shampoo.
Soaps recorded good growth, with Lux growing handsomely reflecting in market share
gains. All the brands in Skin category maintained their strong performance leading to a
double digit growth for the category. Consumer relevant innovations continue to drive
off-take and key innovations during the quarter include the re-launch of “Thick and
Strong” Sunsilk Pink, Lux variants for the 75-year celebrations, and the national launch
of “Jasmine Fresh” Rin Advanced Powder.
In Foods business, Tea achieved a modest growth despite a declining market and falling
commodity prices; Coffee continued to perform well. Processed Foods business grew
strongly, albeit on a low base. The Icecream business also achieved a 33% increase in
sales, led by the impulse category. Relaunch of Knorr soup with a superior mix and
introduction of new variants was the key Foods innovation during the quarter.
Mr Harish Manwani, Chairman commented: “We have sustained the growth momentum
in December quarter and it continues to be broad based across HPC and Foods categories,
particularly, in the competitive categories of Laundry and Shampoo. This was driven by
higher investment behind our brands with exciting innovations, excellent activation, new
initiatives in Customer Management and with significantly higher levels of A&P spends.
The double digit sales growth of over 11% for the year 2005 has been achieved after a
gap of six years.
Our strategic priority remains unchanged. We will continue to leverage our focused
portfolio of powerful brands to sustain market leadership and grow our market position
across strategic brands and categories. In a competitive landscape, we shall continue to
deliver consumer value and invest behind our brands. We recognize the challenge of
inflationary cost pressures driven by crude oil prices and, in the competitive context,
achieving cost leadership across the extended supply chain continues to be a key
priority.”

HUL TRANSFERS TEA ESTATES INDIA TO MAXWELL GOLDEN TEA

PRIVATE LIMITED

Mumbai, March 01, 2006: Hindustan Unilever Limited (HUL) has transferred its entire
shareholding in its 100% subsidiary Tea Estates India Limited (TEIL) to Maxwell Golden
Tea Private Limited (MGT), a Woodbriar Group company on March 1, 2006. TEIL owns
8 tea estates and 6 factories for processing tea in the high-yielding belt of Tamilnadu with
an average annual output of approx. 10,500 metric tons.

23
The acquisition of TEIL by Woodbriar Group will provide scale and bring in synergy
benefits to Woodbriar Group, as a large portion of TEIL gardens are contiguous to the
existing tea gardens of Woodbriar Group. Canara Bank, Madurai Circle has funded the
debt component to Woodbriar Group for this acquisition.
With this disposal of shareholding in TEIL, HUL has completed its exit from its tea
plantations business both in South India and Assam. It may be recalled that HUL had sold
its interests in Rossell Industries Limited and Doom Dooma Tea Company Limited in
Assam during the last 12 months.
About HUL:
HUL is India's largest Fast Moving Consumer Goods Company, touching the lives of two
out of three Indians. HUL's mission is to "add vitality to life" through its presence in over
20 distinct categories in Home & Personal Care Products and Foods & Beverages. The
company meets everyday needs for nutrition, hygiene, and personal care, with brands that
help people feel good, look good and get more out of life. For more information visit
www.HUL.com
COMPETITORS

The Procter & Gamble Company Company Profile

The Procter & Gamble Company (P&G) is a brand behemoth. The world's #1 maker of
household products courts market share and billion-dollar brands. P&G's products fall into three
categories: global beauty care; global health, baby, and family care; and global household care. It
also makes pet food and water filters and produces soap operas (As the World Turns). More than
20 of P&G's brands are billion-dollar sellers (including Actonel, Always/Whisper, Bounty,
Charmin, Crest, Downy/Lenor, Folgers, Iams, Olay, Pampers, Pantene, Pringles, Tide, and
Wella). Acquisitive P&G bought Clairol in 2001 and a majority of Wella in 2003. Its purchase of
Gillette in late 2005 was its biggest buy in company history.

Financial Highlights
Fiscal Year End: June
Revenue (2005): 56741.00 M
Revenue Growth (1 yr): 10.40%
Employees (2005): 110,000
Employee Growth (1 yr): 0.00%

RESEARCH METHODOLOGY

The section includes the overall research design, the sampling procedure, the data
collection method, the field method, and analysis and procedure.

RESEARCH DESIGN
For this research project exploratory method is used

24
DATA COLLECTION METHOD
The data collect for the research can be classified as primary data and secondary data.
Primary data is by visiting existing customer and expected customer of Hindustan
Unilever Limited and making them fill up the questionnaire. Secondary data is from
internet, books, magazine etc.

RESEARCH INSTRUMENT

The instrument use for data collection is structured questionnaire. Question is open and
close ended depending upon the information that needed to be elicited. I am also using
the scaling technique to assess the attitude of the customer.

SAMPLING PLAN
Keeping all the constrains in mind a sample size of 100 people .The sampling procedure
is systematic sampling.
SCOPE

The Indian FMCG market currently appears to be at a crossroads, and HUL are
attempting to change customer perceptions of their brands and where specific buying
motivations appear to be replacing generalities.

This meanwhile, is quite unlike the west where buyers consider aesthetics, comfort and
safety, not necessarily in that order, before finalising a purchase. “It’s smarter to think
about emotions and attitudes, if marketers are to do a better job of marrying what a HUL
offers to the consumer’s image of the offerings. Another important outcome of the
research is the believability of the claims. Most of the claims are realistic and easy to
understand. Most of the people don’t understand the quality claims by HUL.

The mindset of the Indian consumer is such that he is delighted if he buys a pen a little
cheaper than his neighbour. Things are, however, slowly changing and customers at the
upper end of the market are now ready to pay more for more. I hope that this approach
will soon enter the new era, maybe not with the same intensity .

“Success will largely be determined to the extent a company can differentiate

itself in terms of intangibles that go with a Product”. Thus, success could well hinge on
the best of bundle of services that HUL provides.HUL grew from zero to the 2,268
Million $, mark and the number One FMCG company in India this year. Looking at the
present scenario it can be said that though there is lot of competition in the market but
HUL is picking up well. The landmark achievement comes in 74 years in India after
clinching its first overseas sale.

25
 DATA ANALYSIS

AND
INTERPRETATION

26
 1. Have you ever heard of HUL (Hindustan Unilever Limited )?
Table .1
Response Percentage
Yes 90
No 10

Graph .1 Types of account

Heardof HUL

90
80
70
60
50
40
30
20
10
0
Yes No

INFERENCE:
It was found that 90% people known HUL and 10% don’t know about it.

27
 2. Sources which provide awareness about HUL
Table.2
Sources Percentage
Newspaper 25
Magazines 15
Television 45
Others 15

Graph.2

INFERENCE:

It was found that 45% of people is having awareness through television and lowest
through magazines.

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 3. Using any HUL product
Table .3
Response Percentage
Yes 90
No 10

Graph.3

INFERENCE:
It was found that 90% people are using HUL and 10% don’t use it

29
 Q4. Satisfaction level from HUL products
Table .4
Response Percentage
Yes 90
No 10

Graph.4

INFERENCE:
It was found that 90% people are satisfied from HUL and 10% do not satisfied.

5. Reason why people not satisfied

Table .5
Factors Percentage
Poor quality 10

30
 High prices 45
No Service 20
Others 25

Graph.5

INFERENCE
It was found that 45% of people is not satisfied from high prices and lowest 10 from poor
quality.

FINDINGS AND CONCLUSIONS WHEN COMPARED WITH PROCTER AND

GAMBLE LTD.

Findings

On the basis of research, we found that there is a nominal difference in the efficiency of
Hindustan leaver limited. vis-à-vis Procter and Gamble Ltd. I have reached to this
conclusion on the basis of following findings. They are as follows.

Product line

Hindustan leaver limited

31
HUL Home & Personnel Care

> In personal Wash they have Lux , Lifebuoy, Liril, Hamam, Breeze, Dove, Pears and

Rexona .

 In Laundry they have Surf Excel, Rin and Wheel.

 In skin care their brands are Fair N Lovely and Ponds.
 In hair Care they have Sunsilk Naturals and Clinic All clear.
 In Oral Care their brands are Pepsodent and Close-up.
 In Deodorants they have Axe and Rexona.
 In Colour Cosmetics they have Lakeme.
 In Ayurvedic Personal And Health Care they have Ayush.

FOODS

 In tea they have the brand name brook bond and lipton.
 In coffee they have bru.
 In foods they have kissan and kinnor annpuran.
 In ice creams they have the kwality walls.

WATER

 Hindustan Unilever Limited has launched pueit, the most advanced in home
water purifier in the world.

Procter and Gamble P&G Hygiene and Health care ltd. markets several leading brands:
Whisper sanitary napkins in the Feminine Hygiene category; Health care products such as
Vicks VapoRub, vicks action 500, Vicks Cough Drops, Vicks Inhaler; skin care and
cosmetic products viz. Old Spice.

P&G Home Products Ltd. markets several leading brands. In Fabric Care P&G has two
of its world leading detergents Tide and Ariel, in Hair Care they have Pantene Pro V,
Head & Shoulders and Rejoice. In Baby Care they have Pampers.

CONCLUSION- As Hindustan Unilever Limited has more brands in its basket then
Procter and gamble so it is more close to common man and touching his or her daily life
in a more comprehensive manner.

32
DEALERS

Hindustan leaver limited While choosing the dealers HUL mainly emphasizes on the
‘market potential of that area, dealer’s financial position, and dealers back ground
(previous business), present business, goodwill and risk taking capabilities ,by the good
responsibility of the dealer.

Procter and Gamble there is no difference as such in the process of selection of dealers
in Procter and Gamble also. Like HUL, P&G also considers dealer’s financial position;
present business, goodwill and risk taking capabilities.

Conclusion: Dealers of HUL are satisfied by the companies support in there sales
because the company provides them with various schemes and discounts, whereas
satisfaction of P&G dealers lies in good promotional activities, advertisement and the
flexibility that the company provides them. According to the senior officials of P&G it
was found that it’s a volume based company, hence all the above stated parameters helps
the dealer to attract more and more customers.

MODE OF TRANSPORTATION

Hindustan leaver limited; HUL uses modified trucks and rails to deliver the products
from various production sites to the dealers. They are using new state of the art
technology so that they can even track every single bottle of shampoo. Transportation
cost is shared by HUL and the dealer.

Procter and Gamble P&G is also using road and railway transportation system to
deliver product from various production sites to the dealers. They are also using latest
Information Technology to track there consignment whose backend is managed by
infosys. Each dealer has to keep the Good Receipt Note (GRN) number and report of the
whole items of delivered products. Transportation cost is paid by P&G.

Conclusion: Both P&G and HUL uses advanced tracking technology to track the goods
and both companies use railways and roadways for transporting there products. In HUL
transportation cost is shared by HUL and the dealer, where as at P&G, transportation cost
is paid by P&G.

FLEXIBILITY

33
Hindustan leaver limited As far as flexibility is concerned; our group found that HUL
provides more flexibility in terms of delivery of produce. HUL has there own warehouses
in every state and if the dealer orders more , he is supplied with the products in time.

Procter and Gamble As far as flexibility is concerned; our group found that P&G does
not provides more flexibility in terms of delivery of produce and in taking order from
dealers.

Conclusion: our group has found that Dealers of HUL are more satisfied than the dealers
of P&G and therefore HUL is a step ahead in terms of flexibility of placing orders and
accepting orders from the dealers.

DISTRIBUTION CHANNEL STRUCTURE

Hindustan Unilever limited- Hindustan Unilever Limited channel structures consist of

whole seller, mass retailers, rural and modern trade. Their new approach to distribution is
holistic and seeks a three way convergence of product availability brand communication
and brand experience. They are reinventing distribution—creating new channels and
redefining the way current channels are serviced. They are building new capabilities in
training the large number of people involved in these initiatives.

Procter and gamble- Procter and gamble’s channel structure also have whole sellers,
mass retailers. They are revamping the company’s distribution system using efficient
consumer response {E C R} principles. The new distribution system has given the
company considerable cost and process efficiencies while significantly availability and
visibility of the company’s product in the stores.

Conclusion- Our group has found that H.L.L. has more effective and efficient
distribution network as compared to P & G, which increases the availability and presence
of HUL product. HUL is also given emphasis on penetrating the rural market as well.

DEALING WITH UNSOLD & DAMAGED MERCHANDISE

34
Hindustan Unilever Limited-It depends on the condition and type of the product. If
company feels that it is not the fault of the dealer then company would return it, unsold
products are mostly taken back by HUL

Procter And Gamble- P & G replaces the damaged product with the new one, it means
that the damaged product are replaced by new product.

Conclusion- Our group has found that both the companies take back the unsold product
however P & G is more flexible in returning the damaged product as compared to the
HUL. Hence P & G is more flexible here.

PERFORMANCE APPRAISAL SYSTEM

Hindustan Unilever Limited- The performance appraisal system in Hindustan Unilever

Limited is done under the supervisory of the Appraisal supervisor. The supervisor keep
track of the performance of the employees and based on their performance he choose the
right method of performance appraisal. The main method of performance appraisal that
have been adopted by Hindustan Unilever Limited are 360 degree appraisal and
supervisory appraisal methods. it is done as an early exercise and performance appraisal
parameter is the past performance of the employees.

Procter And Gamble- the performance appraisal system in Procter and gamble is also
done under the supervisory officer and almost same method are used as in the Hindustan
Unilever Limited .

Conclusion- the conclusion that our group has found that there is hardly any differences
is the performance appraisal methods in both the companies .both the companies are
taking almost the same measures and same parameters for performance appraisal ,

35
however both the company were not willing to disclosed any changes brought in
performance appraisal system during the past five years .both of the companies said that
there have been change in some areas and which has shown positive results, but not
willing to give any reasons and what changes have been brought.

TARGETS

Hindustan Unilever Limited : HUL has different channel members with specified
targets and they are intended to increase sales, HUL has also made changes in channel
members during 2001-2006 to increase sales of the company. Every channel member has
to fulfill there given targets, channel members expect the company of ROI. Every
channel member gets credit period of two weeks. There was also change in performance
appraisal system during 2001-2006 to improve sales. HUL has also made changes in
commercial terms intended to increase the sales in different channels and also to increase
profit margins to company.

Procter And Gamble- P&G also has different channel members with specified targets
and they are intended to increase sales .P&G also made changes in channel members
during 2001-2006 to increase sales of the company. The channel members expect ROI
depending on there knowledge and on there performance to. Channel members get credit
period of 30 days. Payment terms of P&G are also flexible to the channel members and
P&G also has flexible payment terms P&G also offers many discounts to these channel
members. P&G has made many changes to there commercial terms during 2001-2006 to
increase sales.

Conclusion-Both HUL and P&G are flexible to channel members, but HUL runs some
monopoly over the market by offering a credit period of only two weeks where as P&G
offers credit period of 30 days. HUL also sets targets to there channel members and
provides very less margins to dealers compared to P&G.

SALES FUNCTIONING

Hindustan Unilever Limited : HUL is emphasizing on rural areas through project

Shakti these days and sales also have been increased and HUL does not have any sales
outlets HUL assigns sales territory to there sales persons according to there skill and
experience and assigns targets to them. HUL adopts on the job and off the job training

36
system to there sales force it is emphasized on improving skill and experience of the sales
personnel. Sales personnel are motivated through incentives and promotions.

Procter And Gamble: P&G has increased the number of outlets in the country and the
population in the area also increased and there is no effect on sales. P&G sets targets to
there sales force on the basis of increase or decrease in demand and also according to the
previous sales , sales territories are assigned according to the capabilities of the sales
personnel, responsibility of the sales personnel is to clarify the doubts of the customer
and make sales of the product. P&G trains their sales force by on the job training and
training process is emphasized on skill and experience, P&G has also brought many
changes in the training system that has affected its sales too. P&G motivates their sales
force by providing them with targets and incentives.

Conclusion; Both P&G and HUL trains their sales force and has a good performance
appraisal system, P&G does appraisal on a monthly basis depending on increase and
decrease of sales where as HUL does it once in a year.

RECOMMENDATIONS

Both the companies having good market share in India and it keep on increasing. Both
the co. i.e. HUL and P&G should open exclusive shop. HUL is already having exclusive
shop in Mumbai called SANGAM STORE. But it is only in India so it should be
increased. The employee should be given uniforms in which the name of the company
should be printed, by doing this the sales people get motivated. These shops should be
opened for 24 hours. They should offer 24 hours free home delivery system. The delivery
vehicle should be attractive the name of the company should be printed in that so that it
becomes the sources of advertisement.

The companies should emphasis on its advertisement, there should be BRAND FIT in
that. For example when lux launch its advertisement with sharukh khan with girls. It was
heavily criticized because it was not fit with the brand. It adversely affect the opinion of
the customer and it results in decrease in sales.

Both companies should emphasis their business in areas. They should penetrate their
business in the rural areas. 69% of the Indian population lives in rural areas. There is
huge market there and very less market has been penetrated. Both these companies
should concentrate on rural areas. P&G has been hardly been seen in the rural areas.

37
They should increase their CSR activities in northern India. At present they are currently
doing their CSR in southern India. So they should increase their activities in north India
also.

SUGGESTIONS

Key attribute components:

♦ Value for money and Customer Care
♦ Operational attributes.
♦ Physical attributes.
♦ Brand Image.
♦ Customer Specific Details.
In any correspondence with the customers the message should be sent in these
components only to have the maximum benefit from the advertisement. Also these
components should be dealt with independently. The basic need of the customer need to
be addressed which is actually not much expensive and better quality.

HUL sales growth in june 2004 was decreased due to the problem with promotion and
pricing. Although being the most competitive product on the basis of the Market
Operating Price (MOP), the shampoos are still not selling much. This is perhaps due to
the bargaining stress on the customer and the weak push given by the dealer to the
particular item, when actually it should be sold like a high volume product.
Another serious suggestion is that HUL must give good attention to their all the products
rice and all are not getting much attention. The dealers don’t provide much support to the
customers in making them understand the real Quality behind them. Either, the technical
details should be presented in a clearer manner or the dealers need to be educated
properly.
LIMITATIONS

Everything in this world has its own advantages and disadvantages which shows ‘nothing
is perfect’.

Following are the problems faced but it’s a part of game:

1. TIME CONSUMING: It is very much obvious that it is a time consuming process. So

much time has been spent for this purpose.

2. LOW PARTICIPATION: Obviously many respondents have not participated in this

and have also created some problems which simply shows that they were not
interested.

38
3. BIASNESS: Sometimes interested customers were also biased so the collected figures
involve both positive and negative figures.

4. It does not cover all the aspects of the company.

5. SUBJECTIVE: This project only tells you what it is all about.

BIBLIOGRAPHY

1. The Times of India and Hindustan Times

2. The Economic Times

3. Company’s brochure

4. www.google.co.in

5. www.HUL.com

ANNEXURE

SPECIMEN

CUSTOMER SURVEY QUESTIONNAIRE

39
Name
Age
Address

Q1. How many members are there in your family?

Q2. Have you ever heard of HUL (Hindustan Unilever Limited )?

YES ______ NO ______

If Yes, from where?

Newspaper Magazines
Television Others _______

Q3. Are you using any HUL product?

YES NO

Q4. If Yes, then are you satisfied?

YES NO

Q5. If No, then reason being

Poor quality High prices

No services Others

Q6. Which brand do you use in the following categories :

Personal Wash

Lux __________ Breeze ___________

Dove __________ Others ___________

Laundary

40
 Surf Excel _______ Rin ________
Wheel Others

Skin Care

Fair&Lovely ________ Pond’s ________

Sunslik Naturals ________ Others ________

Oral Care
Pepsodent ________ Close-up ________
Others ________

Deodorants
Axe ________ Lakme ________
Rexona ________

Colour Cosmetics
Lakme ________ Others ________

Q7. What Recommendations or suggestions would you like to give for

improvement of our products?

RETAILER SURVEY QUESTIONNAIRE

1. Do you keep products of Parle in your shop? ( please tick mark on the
appropriate answer)

a).Yes b). No .

(If the answer is yes then go to question number: 3 )

2. Why don’t you keep the products of Parle in your shop or why did you stop
keeping its products?

41
 Yes No

a). erratic supply

b). lack of demand
c). low margin
d). no supplier
e). don’t know about the company

3. Which products of HUL do you keep?

Personal Wash

Lux __________ Breeze ___________

Dove __________ Others ___________

Laundry

Surf Excel Rin ________

Wheel Others

Skin Care

Fair &Lovely ________ Pond’s ________

Sunslik Naturals ________ Others ________

Oral Care
Pepsodent ________ Close-up ________
Others ________
Deodorants
Axe ________ Lakme ________
Rexona ________

Colour Cosmetics

Lakme ________ Others ________

4. What is the sales/demand of the product?

42
 1. Very High 
2. High 
3. Average 
4. Rarely 
5. Very Rarely 
6. Never 

5. From whom do you purchase your product?

1). Distributor 
2). Dealer 
3). Agency 
4). Wholesaler 

6. How do you rate the delivery process by the dealer?

1. Excellent 
2. Above Average 
3. Average 
4. Below Average 
5. Extremely Poor 

7. How many dealers are there in the district?

a).One 
b)Two. 
c)Three. 
d)More than three. 

8. Which vehicle do they mainly use for delivery?

43
1). Two wheeler 
a). scooters__ , b). motorbike__.
2) Three wheeler 
3) Four wheeler 
a) van__ ,b) truck__,c) others__.

13. What are the other schemes and incentives offered by them?
___________________________________________________
___________________________________________________.

14. What improvements would you like to have in the distribution process?

_________________________________________________
_________________________________________________

PERSONAL DETAILS:
Name: ___________________________________________
Address: _________________________________________
Cont. No.: ________________________________________
Signature: ________________________________________

44