Project

On

Hindustan Unilever Limited (HUL)

Submitted by -

Name: Aditi Asolkar

Roll No: 12H04
Stream: (MHRDM)

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This is to certify that

Ms. Aditi Asolkar 12H04 1st Year student of MHRDM,
Jamnalal Bajaj Institute of Management Studies
has successfully completed the Managerial Economics project
titled Hindustan Unilever Limited
under the guidance of Professor Varsha Malawade, JBIMS

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Index

Sr. No

Topic

1
2

Introduction
Hindustan Lever Limited in Pre 1990

How HLL Got There

Rural Development

Financial Performance

Organisational Structure

Hindustan Unilever Limited Post 1990

How HUL Got There

Organisational Structure

10
11

Distribution Channel
Products

12

Core Competencies

13

Social Cause Projects

14

Financial Performance

15

Strategies

16

Conclusion & Recommendations

17

Bibliography

Introduction

Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods Company with a heritage of
over 75 years in India and touches the lives of two out of three Indians.HUL works to create a better future
every day and helps people feel good, look good and get more out of life with brands and services that are
good for them and good for others.
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Brands like Lux, Lifebuoy, Vim, Surf, Rin, Wheel, Closeup, Brooke Bond, Bru, Clinic Plus, Fair & Lovely,
Pond's, Lakm, Sunsilk, Kwality Wall's, Kissan, Knorr and many others have become household names used
by around 700 million consumers across India. HUL is a subsidiary of Unilever, one of the worlds leading
suppliers of fast moving consumer goods with strong local roots in more than 100 countries across the globe
with annual sales of about 46.5 billion in 2011. Unilever has about 52% shareholding in HUL.These products
are manufactured over 40 factories across India and the associated operations involve over 2,000 suppliers
and associates. Hindustan Unilever Limited's distribution network comprises about 4,000 redistribution
stockists, covering 6.3 million retail outlets reaching the entire urban population, and about 250 million rural
consumers. HUL is also one of India's largest exporters. It has been recognised as a Golden Super Star
Trading House by the Government of India. Presently, HUL has over 15,000 employees including over 1,500
managers and has an annual turnover of around Rs. 21,736 crores (financial year 2011 - 2012). Its mission is
to "add vitality to life."

The vision that inspires "to meet everyday needs of people everywhere to anticipate the aspirations of our
consumers and customers and to respond creative and competitive with branded products and services
which raise the Quality of life." This objective is achieved through the 110 brands that the company markets. Its
deep roots in local cultures and markets around the world are HUL's unparalleled inheritance and the
foundation for its future growth. With this wealth of knowledge and international expertise in the services of
local consumers it is truly a multi-local multinational.
Today as the Unilever Group, its brands are bought 150 million times a day across 150 countries.

Hindustan Lever Limited in Pre 1990

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Lever Brothers India Limited was incorporated in India on October 17th, 1933. The event is
recorded in the Gazetteer of India (Maharashtra State, Greater Bombay District, Volume II,
published by the Government of Maharashtra) in the following words: ...the establishment
of soap factories by the Lever Brothers...in 1933-34 gave new dimensions to the industry,
with which imports of soap fell down.

To make cleanliness a commonplace; to lessen work for women; to foster health

and contribute to personal attractiveness, that life may be more enjoyable and
rewarding for the people who use our products.
~ William Hesketh Lever, 1890

Unilever's mission is to add vitality to life. We meet everyday needs of nutrition,

hygiene and personal care with brands that help people feel good, look good and
get more out of life. Mission Statement, The two statements were written some 120 years apart. Their words
are very different, as indeed are the times that framed these thoughts. But the sense of purpose has remained
unchanged from the days it all began with a simple idea.
It had a simple name and a singular purpose. It was a soap named Sunlight and
W. H. Lever wanted it to relieve the drudgery of washing in Victorian England.

India is one of those numerous countries, but it is also unique. The Indian roots travel almost as long back as
the birth of the enterprise in the 1880s.

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In the summer of 1888, visitors to the Kolkata harbour 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 52.10% equity in the company. The rest of the shareholding
is distributed among about 360,675 individual shareholders and financial institutions.

The erstwhile Brooke Bond's presence in India dates back to 1900. By 1903, the company had launched Red
Label tea in the country. In 1912, Brooke Bond & Co. India Limited was formed. Brooke Bond joined the
Unilever fold in 1984 through an international acquisition. 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.

Since the very early years, HUL has vigorously responded to the stimulus of economic growth. The growth
process has been accompanied by judicious diversification, always in line with Indian opinions and aspirations.
The 1990s witnessed a string of crucial mergers, acquisitions and alliances.

HUL's introduction of a variety of products from the time of its conception till 1971.

How HLL Got There

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1888

Sunlight soap introduced in India

Lifebuoy soap launched; Lever Brothers appoints agents in Mumbai,

1895
1902
1905
1913

Chennai,Kolkata and Karachi

Pears soap introduced in India
Lux soap and Lux flakes introduced
Vim scouring powder introduced
Unilever is formed on January 1st through merger of Lever Brothers and Margarine

1930
Unie
Hindustan Vanaspati Manufacturing Company registered on November 27th; Sewri
1931
1932

factory site bought

Vanaspati manufacture starts at Sewri
Application made for setting up soap factory next to the Vanaspati factory at Sewri;

1933
Lever Brothers India Limitedincorporated on October 17th
1937

Prakash Tandon, one of the first Indian covenanted managers, joins HVM Agencies
Agencies in Mumbai, Chennai, Kolkata and Karachi taken over; Company acquires

1941
1947

1956

own sales force

Pond's Cold Cream launched
Three companies Lever Brothers India Limited, Hindustan Vanaspati
Manufacturing Company Limited and United Traders Limited merge to form
Hindustan Lever Limited, with 10% Indian equity participation

1959

Surf launched
Prakash Tandon takes over as the first Indian Chairman; majority of the managers

1961
1963
1967

are Indians
Head Office building at Backbay Reclamation, Mumbai, opens
Hindustan Unilever Research Centre, opens in Mumbai
V. G. Rajadhyaksha takes over as Chairman from Prakash Tandon; Fine Chemicals

1968
1969

Unit commissioned at Andheri; informal price control on soap begins

Rin bar launched; Fine Chemicals Unitstarts production; Bru coffee launched
V. G. Rajadhyaksha presents plan for diversification into chemicals to Unilever

1971
Special Committee plan approved; Clinic shampoo launched
1973

T. Thomas takes over as Chairman from V. G. Rajadhyaksha

Pilot plant for industrial chemicals at Taloja opens; price control on

1974
soaps withdrawn
Jammu project work begins; statutory price control on vanaspati & baby
1975
foods withdrawn; Close-up toothpaste launched
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51% foreign shareholding allowed for

1976

companies with 60% turnover in core

sector & 10% in exports
Construction work of Haldia chemicals

1976

complex begins; Taloja chemicals unit

begins functioning
Jammu Synthetic Detergents plant inaugurated; Indian shareholding

1977
increases to 18.57%
1978

Indian shareholding increases to 34%; Fair & Lovely skin cream launched
Sodium tri-polyphospate plant at Haldia

1979
commissioned
Dr. A. S. Ganguly takes over as Chairman
1980

from T. Thomas; Unilever shareholding in

the Company comes down to 51%

1982

Government allows 51% Unilever shareholding

1984

Foods, Animal Feeds businesses transferred to Lipton

1985

Acquisition of Kothari General Foods by Brooke Bond

Agri-products unit at Hyderabad starts functioning first range

1986
of hybrid seeds hits the market
1988

Launch of Lipton Taaza tea

1990

S. M. Datta takes over as Chairman from Dr. A. S. Ganguly

From the Indianisation of management way back in the 1940s that led to Prakash Tandon becoming the first
Indian Chairman in 1961, to the era of price control on soap in the 1970s, expansion in the 1980s, the big
acquisitions and mergers of the 1990s and the challenges brought by the new millennium, HUL has travelled a
long distance indeed.

Integrated Rural Development

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The IRD programme began in Etah, Uttar Pradesh, in the 1970s with five villages. It grew to cover over 200
villages within 10 years. This not only helped increase milk supply in the region but also had a significant
impact on community development.

FINANCIAL PERFORMANCE from 1992 2001

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Chairmans Of HUL
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10

T. Thomas, Chairman~1973-1980

Dr. A. S. Ganguly,Chairman~1980-1990

Growth and Achievements

On 27th October, the company was converted into Public Ltd Co., On 17th
1956
November Offered to the public 557,000 No. of Equity shares of Rs. 10 each.
In order to reduce the non resident holding in the Co. to 51% it offered for sale
during Feb out of its shareholding in the Co. 4239523 No. equity shares of Rs. 10
each at a premium of Rs. 9.50 per share in the following manner, (1) 10,00,000
1980
shares to public financial institute, (2) 25,12,702 shares to the existing resident
Indian shareholders on pro -rate basis in the ratio 1:4, (3) 726, 821 share to
employees and Indian Directors.

Hindustan Unilever Limited Post 1990

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The liberalization of Indian economy in 1991 and subsequent removal of the regulatory framework allowed
HUL to explore every single product and opportunity segment, without any constraints on production capacity.

A new chapter that would see growth and innovation, mergers and acquisitions, ups and downs had begun. It
built and shaped what is today called HUL, as much a leading corporate house as it is an institution.

From simple beginnings, HUL has grown with the times. It has been powered by organic growth
that has come from a deep understanding of Indian markets and Indian culture. The Company
seized opportunities to grow inorganically, like when it acquired the Tata Oil Mills Limited in 1994 or went in for
other acquisitions that brought us brands like Kissan, Kwality, Lakm and Modern. Some opportunities have
come its way, like when Brooke Bond and Lipton came to it under a worldwide acquisition by Unilever. Brooke
Bond India and Lipton India merged in 1994 to form Brooke Bond Lipton India Limited, which merged with HUL
in 1996. HUL has also set up a subsidiary in Nepal, Nepal Lever Limited (NLL). The NLL factory manufactures
HUL's products like Soaps, Detergents and Personal Products both for the domestic market and exports to
India.

In January 2000, as part of its divestment strategy, the government decided to award 74 per cent equity in
Modern Foods to HUL. In 2002, HUL acquired the government's remaining stake in Modern Foods. HUL
completed 75 years on October 17th, 2008. The Company's name changed to Hindustan Unilever Limited in
2007 to reflect the One Unilever philosophy that seeks to use Unilever's global reach and the local knowledge
of its Indian operations to deliver faster growth. The name reflects the Company's Indian heritage and its global
alignment with Unilever.

How HUL Got There

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The erstwhile Brooke Bond India acquires the Kissan brand from the United
1993

Breweries Group, giving HUL an entry into the foods business; Dollops ice cream
acquired from Cadbury India
Tata Oil Mills Company merges with HUL, the largest merger in Indian corporate

1994
history then
Brooke Bond India and Lipton India merged to form Brooke Bond Lipton India
1994

Limited, providing greater focus and ensuring synergy in the traditional beverages
business
Wall's frozen desserts launched, name changed to Kwality Wall's after a strategic

1994
alliance with the families running Kwality ice cream business
1995

HUL enters the business of branded staples; Kissan Annapurna salt is launched

1996

Brooke Bond Lipton India Limited merges with HUL

Lakm Lever Limited, a joint venture

1996
1996

with Lakm Limited is formed

K. B. Dadiseth takes over as Chairman from S. M. Datta
Unilever sets up an international research laboratory in Bengaluru, it's sixth, and

1997
1998

only the second outside of Europe/North America

Pond's India Limited merges with HUL
Project Millennium is launched to study new growth opportunities, cost efficiency,

1999
knowledge sharing, and to attract and retain talent
HUL acquires 74% in Modern Foods (India) Limited, the first public sector company
2000

to be divested by the Government of India; gives HUL a presence in the bread

2001

market
M. S. Banga takes over as Chairman from K. B. Dadiseth
The Power Brands approach is unveiled under which HUL identifies 35 Power

2001
brands, from a total of 110 brands, to be pushed for higher growth
HUL acquires the balance 26% in Modern Foods Limited, from the Indian
2002

government, consequent to which Modern becomes a wholly owned subsidiary of

2003
2005
2005
2006
2007

HUL
Edible oils and fats businesses sold to Bunge Limited
Management Committee formed, organisation structure simplified
Harish Manwani takes over as the Chairman
Douglas Baillie appointed as CEO & MD
Name formally changed to Hindustan Unilever Limited
Joint venture with Smollan Holdings of South Africa to focus on in-store executions

2007
and field services for modern trade in India
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2008

Nitin Paranjpe succeeds Douglas Baillie as CEO & MD

ORGANIZATION STRUCTURE

VP

GM
Sr. Sales Manager
Area Sales Manager
Territory Sales Manager
Team Leader
Sales Executive
Chairmans Of HUL

Board of Directors: The Board of Directors of the Company represents an optimum mix of professionalism,
knowledge and experience. The total strength of the Board of Directors of the Company is 10 Directors
comprising a Non-Executive Chairman, four Executive Directors and five Non-Executive Independent
Directors.

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S. M. Datta, Chairman~1990-1996

K. B. Dadiseth, Chairman~1996-2000

M. S. Banga, Chairman~2000-2005
2008

Harish Manwani,Chairman Present

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Douglas Baillie, CEO & MD~2006-

Distribution Channel of HUL

HUL

C&F Agents

Redistribution Stockiest

Whole sellers

Urban Retailer

Rural Retailer

CUSTOMERS
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Market Penetration of HUL

HUL products in India

Personal wash:

Laundry:
Lux.
Lifebuoy,
Liril ,
Hamam,
Breeze,
Moti ,
Dove,
Pears
Rexona

Foods:
-Kissan(Jam,Ketchup,Squashes),
Annapurna (Aata and salt),
Knorr Soups,
Modern Bread
Ice-cream:
Kwality Wall's
Bewerages:Tea:
Brooke bond,
Lipton,
taj mahal
Coffee:
Brooke bond bru
Disinfectants:

Surf Excel,
sun light,
Rin
Wheel
Ala bleech
Beauty Products:
Fair & Lovely,
Lakme,
Ponds,
Vaseline
Aviance
Hair-Care:
Sunsilk naturals,
Clinic ,
Dove
Oral-Care:
Pepsodent
Close-up
Deo spray:
Axe
Rexona
Water Purifier: Pureit
Dishwasher :Page
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 Domex
cif

Vim

CORE COMPETENCIES

HUL is the market leader in soaps and detergents as well as hair and skin care products and is
the second largest manufacturer of dental care products. One of the HUL's strengths that has
greatly, contributed to this success are the breakthroughs at the Hindustan Unilever Research
Centre. Their research center is India's largest in the private sector. The focus on research gives
HUL an edge over competitors by coming up with innovative products and processes.
Many of which have been patented. Some of the researches have been in household cleaning
in soaps and improving performance related to tough soil removal and dingy clothes. Studies
related to improving Quality in tea and enhancing characteristics like colour. Aroma and taste
have enabled HUL to make better blends of tea. The company achieved remarkable success in
ice-creams when HLRC developed a 'eutectic mixture' which acts as a refrigeration 'battery' and'
thus enables the sub-ambient temperature distribution/vending of ice-creams.. In the personal
products segment an important research based product is Fair & Lovely.

HUL has always stressed on constant technology up gradation. In 1999 there was a change in
the entire instrumentation setup of HUL Research to bring it on par with the latest research
facilities in the world. The company has always focused on acquiring knowledge-based software
with a view to creating knowledge-based communities in HUL Research. HUL has tied up with
organizations like the Indian Institute of Science (Bangalore), All India Institute of Medical
Sciences (Delhi), National Chemical Laboratory (pune) and Department of Physics, University
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of Pune in different areas of research. Besides. HUL has also funded research projects at the
Lawahar Lal Nehru University, New Delhi and the MS Swaminathan Research Foundation at
Chennai.

Another factor that contributes to the success of HUL is its massive and efficient distribution
system. The operation involves 2.000 suppliers and associates and 7.000 stockists and agents.
Its operations are spread across 70 locations in India. There are around 100 factories. of which
28 are in backward areas. In the recent years most of HUL's major investments have been in a
category backward areas or no-industrial districts. A few such areas where investments have
been made are Khamgaon and Yavatmal in Maharashtra, Chhindwara in Madhya Pradesh, Orai
and Sumerpur in Uttar Pradesh, Dabgram in West Bengal, Silvassa in Dadra and Nagar Haveli
and Pondicherry. Many of HUL's factories including export oriented units are ISO 9002 certified.
Some of these, like the Khamgaon soap plant and the Sumerpur detergent bar unit, have been
recognized as the best in the Unilever Group. To add to its distribution system, HUL has even
acquired sick enterprises in Mangalore, Rajpura and Gajraula and converted them into viable
operations. HUL has over 36.000 employees, and has created 2 lakh indirect jobs.

HUL has an export portfolio of soaps. detergents. tea. tomato-based products. cosmetics. Agro
products, leather products and marine products, carpets, chemicals and fatty acids and castor
oil. Castor oil is one of the biggest export products and the company supplies 30% of the world
demand. It is also the largest exporter of tea and branded fast moving consumer goods. HUL's
export turnover in the year 1999 was Rs. 1.803 crores. HUL is one of the country's five biggest
exporters and has been recognized as a star trading house by the Government of India. It is a
net foreign exchange earner. Due to its outstanding performance in exports of castor seeds,
castor oil and its derivatives. HUL received the Globe oil Gold Award. The company also
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received the Silver Shield from Federation of Indian Export Organization (FIEO) for
"Outstanding Export Performance in Superstar Trading Housing Category" for the year 1996-97.

COMPETITION IN THE FMCG MARKET

Five main competitive strategies are:

Overall low cost leadership strategy

Best cost provider's strategy
Broad differentiation strategy
Focused low cost strategy
Focused differentiation strategy

Here competitive strategy varies from sector to sector and company to company. Thus, it is not
easy to predict a single or to find a single strategy for the whole sector. When we come on to
FMCG Sector main strategies lay behind market strategies, cost, and quality strategies. Here in
this report you are going to get information about such type of strategies of FMCG giants.

Competitive Strategies and Comparison with ITC

HUL (Hindustan Unilever Ltd)

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This Company is earlier known as Hindustan Lever Ltd. This is India's largest FMCG sector
company with all type of household products available with it. It has Home & Personal Care
products, and also food and Water Purifier available with it. According to Brand Equity, HUL has
largest no of brands in most trusted brands list 16 of HUL's brands featured in AC-Nielson
Brand Equity list of 100 most trusted brands in 2008 in an annual survey. For the entire year
ending March - 2009 net turnover of company is Rs. 20'239.33 Crore which is 47.99% higher
than 31st December 2007's Rs. 13675.43 Crore driven mainly by domestic FMCG's with net
profit stood at Rs. 2'496.45 Crore.

Products of HUL are: Annapurna; Ayush; Axe; Breeze; Bru; Brooke bond; Clinic; Dove; Fair &
Lovely; Hamam; Liril; Lux; Pears; Ponds; Pepsodent; Pureit; Rexona; Rin; Sunlight; Surfexcel;
Vaseline; Wheel.

ITC Limited

This Company was earlier known as Imperial Tobacco Company of India Ltd. It is currently
headed by Yogesh Chander Deveshwar. Company mainly operates in the industry like Tobacco,
Foods, Hotels, Stationary and Greeting Cards with the major products constitutes Cigarettes,
packed foods, hotels, and apparels. For the entire year ending Mar-2009 the turnover of
company is at Rs. 15388 Crore which is 10.3% higher than previous year's Rs. 13947.53 Crore,
driven mainly by robust 20% growth in non cigarette FMCG business with net profit stood at Rs.
3324 Crore.

Analysis of Both Companies

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HUL & ITC are major companies in FMCG market in India. When we compare both companies
on the basis of their strategies i.e., their competitive strategies in the present market. When we
look at the present segment breakup for both of the companies then we came to know that their
different products vary too much in the market.

Now let us take a comparative analysis of both the companies under some heads:

HUL

Hindustan Unilever (HUL) is the largest pure-play FMCG Company in the country and has one
of the widest portfolio of products sold via a strong distribution channel. It owns and markets
some of the most popular brands in the country across various categories, including soaps,
detergents, shampoos, tea and face creams.

ITC

ITC is not a pure-play FMCG company, since cigarettes is its primary business. It is diversifying
into non-tobacco. FMCG segments like foods, personal care, paper products, hotels and agribusiness to reduce its exposure to cigarettes.

Performance

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After stagnating between 1999 and '04, the company is back on the growth track. In the past
three years, till 2008 HUL's net sales have witnessed a CAGR of 11%, while net profit has
posted a CAGR of 17%.

Despite diversification, ITC's reliance on cigarettes is still huge. The tobacco business
contributes 40% to its revenues, and accounts for over 80% of its profit. This cash-generating
business has enabled it to take ambitious, but expensive bets in new segments and deliver
modest profit growth.

Overall Strategy:

HUL always believes in customer friendly products with major emphasis on low cost overall
without compromising on the quality of the product. They are leveraging the capabilities and
scale of the parent company and focusing on the value of execution. The entire product portfolio
is also being tweaked to include premium offerings such as Pond's Age Miracle and dove
shampoo in skin and hair care. HUL introduced Project Shakti to penetrate the rural market.

ITC is focusing on delivering value at competitive prices. Its tremendous reach through
extensive distribution chain has been a competitive advantage. Additionally, the company's
e-choupal model for direct procurement is well known under which ITC partners with over
100,000 farmers for spices and wheat procurement and an even larger number for oilseeds.
This kind of rural pedigree is hard to beat.

Growth Drivers

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HUL has been launching new products and brand extensions, with investments being made
towards brand-building and increasing its market share. HUL is also streamlining its various
business operations, in line with the One Unilever' philosophy adopted by the Unilever group
worldwide. Introduction of premium products and addition of new consumers via market
expansion will be HUL's growth drivers.

ITC's backward integration to ensure that its products pass efficiently from the farms to
consumers has helped it to cut down supply and procurement costs. ITC's non-cigarette FMCG
business leverages the large distribution network the company has developed by selling
cigarettes over the years. A rich product mix, along with ramp-up of investments in its new
sectors, will be instrumental in charting ITC's growth path.

Risk for both the companies

For HUL

Being an MNC operating in India, HUL is more conservative in its strategies than its Indian
counterparts. Moreover, given increasing competition, it faces the risk of being overtaken by
domestic players in various categories. Prolonged inflation may lead to margin contraction, in
case HUL is not able to pass on this burden to consumers. The company's large size also poses
a problem, since it does not give HUL the agility to address the competition it faces from
national and regional players.

For ITC
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Increased regulatory clamps on tobacco, along with rising tax burden, pose a business risk for
ITC. So, it has started an ambitious diversification plan, which has its own set of risks. With its
foray into the conventional FMCG space, ITC has entered the high-clutter branded products
market. This will burden its resources in terms of ad spend and brand-building. Creating brand
recall and building market share in new products are ITC's key challenges. Export ban and
rising crop prices pose a threat for its agri-business, taxing its margins.

MARKETING

The company has a strong brand equity which gives it credibility and respect among its peers
in the market. It has even created a positive motivational climate in the organization as
employees take pride in remaining associated with it. It attracts the best talent and inspires
respect among industry professionals. Pursuing aggressive marketing strategies, HUL continues
to be India's most admired marketing company in the FMCG sector. HUL has in fact emerged as
one of Asia's most admired companies. HUL continued to be the top advertising spender.

Brand Portfolio

HUL, like its parent brand Unilever, plans to prune its brands and focus on the top 30 out of a
total 110brands. These top 30 brands contribute more than 75% of the turnover. The rest will
either be dropped sold, migrated or continued as regional brands. HUL is not planning to vacate
any category it is present in. and is only eliminating brands. With the rationalising of these
brands an enormous simplification is expected to take place. According to Chairman, Banga
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"Because you cut down on the number of SKU's, the supply chain gets simplified and that saves
costs". The company plans to support the power brands with strong advertising.

Brands which contribute to about 25% of HUL's turnover have been classified into three groups.
First, they are the 'regional jewels', that is, brands which are exceptionally strong in certain
geographic areas. Hamam, for instance, gets about 60% of its volumes from Tamil Nadu, where
it has more than 30% market share. HUL will keep such brands as purely regional brands, and
support them heavily in these limited geographies. HUL, though tight lipped about its power
brands gameplan, has started to announce its list of casualties, or brands which are both small
and unprofitable, and are to be discontinued or sold off. HUL has delisted two toothpaste
variants, Close-Up Renew and Close-Up Oxyfresh, which are off the shelves, the washing
powder Revel and the rural toothpaste Aim which will also go off the shelves soon. Breeze, a
mass market brand in the toiletries market is growing at 50% plus per annum. Hence, the
company plans to phase out the other mass market brand Jai soap, which is now being
supported lesser and lesser. Another brand that might be phased out is Moti soap which sells
only in one or two states and just about 5,000 tonnes ayear, mostly during the Diwali season.
Among the emerging categories Rexona and Axe deodorants are the power brands. Rexona
has been used to build the deodorant market by HUL. Axe, though launched only last year, has
been doing well. However Denim and Impulse are likely to go since they have not fared well in
the market. Banga explains, "Whenever you have the same benefit and same price point theres
no advantage to me to carry two brands. So what we would do is to merge those brands with
some of the 30". The company through intelligent communication and use of pack graphics
intends to migrate the consumers of the phased out brands to existing brands.

HUL has designed the power brand portfolio in such a way that the Company has a presence in
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all categories and key consumer segments

Working for a Social Cause

HUL is a socially responsive organization. HUL believes that "an organization's worth is equally
reflected by the service it renders to the community". HUL has contributed to the society in
many ways. Through different projects, it provides care for HIV positive patients, education and
support for children with challenges, a hospice for dying destitute, basic education for children in
rural areas, and support to government relief measures in natural calamities.

HUL shows more interest in CSR also as-

From 2004 to 2008 it has reduced the emission of Carbon di-oxide by more than 25% in
the manufacturing.

HUL follows 5 R strategies to deal with the Green House Gases (GHG):

Reduce
Re-Use
Recycle
Recover
Renew

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HUL uses Agriculture wastages as the fuel (Ground nut shells, bagasse, saw dust, Coconut
shells, cashew etc)

DOMEX, a product of HUL is planning to sponsor the world toilet day on the 19th November
every year.

PROJECTS under taken by HUL

Lifebuoy Swasthya Chetna

The rural health and hygiene initiative was launched in 2002 with the objective
of spreading awareness on the importance of washing hands with soap.
This programme has reached around 120 million people in over 50,000 villages
across India.

Project Shakti
Project Shakti turns rural women into entrepreneurs who sell HUL products.
They work with Shakti vanis (communicators) who help promote good health
and hygiene practices in rural areas. The project now touches the lives of over
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45,000 women across135,000 villages.

As competition is increasing day by day, its difficult to maintain the leader position & to further
strengthen the distribution network HUL made a project called project SHAKTI which will serve
the following purpose:

A) To Reach:

Small, scattered settlements and poor infrastructure make distribution difficult.

Over 500,000 villages not reached directly by HUL.

B) To Communicate:

Low literacy hampers effectiveness of print media.

Poor media-reach: 500 million Indians lack TV& radio.

C) To Influence:

Low category penetration, consumption.

D) Awareness:

Per capita consumption in Unilever categories is 33% of urban level.

Project Shakti

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HUL soon realized that although it was enjoying a greater penetration in the rural market when
compared with its competitor such as Nirma and ITC, its direct reach was restricted to only 16%.
The FMCG giant was desperate to increase this share. HUL saw its dream fulfillment in the vast
Indian rural market. The company was already engaged in rural development with the launch of
the Integrated Rural Development Programme in 1976 in the Etah district of Uttar Pradesh.
This program was in tandem with HUL's dairy operations and covered 500 villages in Etah.
Subsequently, the company introduced similar programs in adjacent villages. These activities
mainly aimed at training farmers, animal husbandry, generating alternative income, health &
hygiene and infrastructure development. The main issue in rural development was to create
income-generating prospects for the poor villagers. Such initiatives, linked with the company's
core business, became successful and sustainable and proved to be mutually beneficial to both
the company and its rural customers. However much more remained to be done.

Project Shakti was conceived following the pioneering work carried out by Grameen Bank of
Bangladesh , Self Help Groups (SHGs) of rural women were formed by several institutions,
NGOs and government bodies in villages across India. This group of usually 15 members
contributed a small amount of money to a common pool and then offered a micro-credit to a
member of the group to invest in a commonly approved economic activity. Partnering with these
SHGs, HUL started its Project Shakti in Nalgonda district of Andhra Pradesh in 50 villages in the
year 2000. The social side of the Project Shakti was that it was aimed to create incomegenerating capabilities for underprivileged rural women, by providing a sustainable micro
enterprise opportunity, and to improve rural living standards through health and hygiene
awareness. Most SHG women viewed Project Shakti as a powerful business proposition and

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are keen participants in it. There after it was extended in other states with the total strength of
over 40,000 Shakti Entrepreneurs.

HUL offered a wide range of products to the SHGs, which were relevant to rural customers. HUL
invested significantly in resources who work with the women on the field and provide them with
on-the-job training and support. HUL provided the necessary training to these groups on the
basics of enterprise management, which the women need to manage their enterprises. For the
SHG women, this translated into a much-needed, sustainable income contributing towards
better living and prosperity. Armed with micro-credit, women from SHGs become direct-to-home
distributors in rural markets.

FINANCIAL PERFORMANCE from 2002 - 2012

Strategic growth summary of HUL

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HUL prioritized opportunities which build upon the existing assets and capabilities. It
avoided spreading their management thinly. For example: HUL first made its sales and
distribution channel & supply chain management in manufacturing and selling wheat
flour and utilized it into the selling breads produced by wheat flour.
HUL is more focused on the innovations Example: In 1995 launched KISSAN
ANNAPURNA staple foods with the message staple food including iodized salt
Serving Rural population: In 2000 the 32% of the sales were from rural sector but in
2010 it is more than 50%.
It follows direct communication from the customers.
It believes in expanding the portfolio.
Each category has a different set of supply chain, production and consumer decision
making process issuing associated with it.

Strategies - Market entry

(Kissan Annapurna iodized salt)

In 1995 HUL launched Kissan Annapurna iodized salt at that time only 10% of 6.5 million
ton of salts were branded and refined HUL identified it and launched the KISSAN
ANNAPURNA SALT.

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Firstly it launched in the few cities of the country for test marketing and then for all.
Shifted from purity- a product attribute to Health consumer benefit (As a positioning
strategy)
Tried to shift the consumers from unbranded to brand.
Started Using IODINE as a marketing strategy as there were other salts including iodine but
no one was focused on that. HUL started it.
Started endorsement through trusted government agencies.
In 2002 it has made iodine patented in 80 countries.

Strategic Shifts

In the past 10 years, HUL has made four shifts in its business strategy, targeted at boosting
growth and reach

POWER BRANDS: Strategy in 2000. Focusing on fewer brands, 30 of them, and

showering marketing attention on them.

MASSTIGE: Strategy in 2005-06. Making premium brands (prestige)

attainable for a larger section of consumers (mass).

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ONE UNILEVER: Strategy in 2007. Building leadership position in fast-growing markets.

PUMP UP THE VOLUMES: Strategy in 2010. Global CEO Paul Polman is pushing the
Indian operations chasing value growth to deliver on the volumes as well.

Conclusion & Recommendations

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HUL's up-and-running business model is a treat for investors seeking exposure in the FMCG
segment. The company has delivered in the past and has the potential to do better in future. In
short term. HULs growth story is evolving.
According to us the company should continue with their CSR and also continue with their
strategies. The thing that needs to be changed is that, while HUL should come up with the new
strategies that could take the new product forward to create a new segment. A recommendation
For HUL is that it should focus on rural area more.

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Bibliography

www.hll.com

www.google.com

www.hul.com

www.projectshakti.com

www.moneypore.com

www.wikipedia.com

Visited Company and met Mrs.Trupti Prabhu Desai

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