Presented by, Rajesh Kumar . S Roll No.

14

Background: Unilever was a result of the merger between the Dutch margarine company, Margarine Unie, and the British soap-maker, Lever Brothers, way back in 1930. A year latter Unilever set up Hindustan Vanaspathi Manufacturing company its first subsidiary in India and further strengthened its position in establishing two more subsidiaries Lever brothers India Ltd and United traders Ltd.

The three companies manufactured soaps, vanaspathi and personal products . These three merged to form Hindustan Lever in the year 1956 in which Unilever has 51 % stake. The company was renamed in late June 2007 as "Hindustan Unilever Limited . Today, HUL is one of India s largest exporters of branded Fast Moving Consumer Goods. It has been recognized by the Government of India as a Golden Super Star Trading House.

1% 4% 12%

Icecreams Food Beverages

47%

28%

Personal products Others Exports

6% 2%

Soaps & Detergents

1% 6% 6% 6% 7%

Carriage & freight Depreciation Other expenditure Materials Advertising costs

16%

58%

staff costs Utilities, Rent, Repairs

COMPETITORS

Competitors of HUL Oral Care

Pepsodent Close Up

Colgate Meswak Dabur Red Anchor

COMPETITORS

SURF EXCEL: ARIEL WHEEL: NIRMA RIN: TIDE

TEA

SALT

SOUPS

ICE CREAM

Competition in the Indian FMCG Market There has been overall slow down in demand in the FMCG market. HLL has been losing market share continuously. In the last quarter of 2001-02 the company witnessed declining volumes in all major product categories. Even though HLL still remains the market leader in the Rs 80000 crore FMCG market, it faces stiff competition from focused players in different product segments. In food products availability of cheap generic substitutes hampering the growth. Companies like Godrej soaps, Nirma, Smithkline consumer, Tata Tea and Cavin Kare gain market share at HLL s expense in their respective product categories.

1) Colgate Palmolive bought off the entire oral hygiene business of Hindustan

Ciba Geigy for Rs 1.31 billion taking over Cibaca Top and Cibaca Flouride toothpaste brands, Supreme, Standard Angular and Deluxe Transport Tooth brush brand. Colgate s market share has doubled from 33 to 68% Colgate further lured the rural consumer by offering low priced products in small and convenient packs. 2) Nirma has been succesful in upgrading its products packaging and offering the value of a branded product and used extensive advertising for this purpose. Nirma launched Nirma lime fresh in 1997 and head on competition with Liril. Nirma continues to gain volumes by passing on cost benefits to the customers.

3) Dabur fight competition successfully through its herbal positioning. 4) In the Ice cream segment HLL enjoys 50% market share but it is mainly through mergers and acquisitions of companies like Milk food icecreams and Kwality. HUL facing tough competition from AMUL ice creams which offers same quality ice creams at lesser rates.

Strategies of some major competitors 1) Cavinkare Ltd: The company launched Fair ever skin cream and captured 14% market share in the 650 crore fairness cream market and surprising HUL. In hair care segment it launched Chik brand through small pack sachet route and gained 15% market share of 840 crore shampoo market in just two years. Chick shampoo sachets priced at 50 paise have created waves in the market. Company entered into toilet soap market with the launch of Meera herbal soap and competing with Nirma, P&G, HUL. The marketing strategy adopted by the company is through brand acquisition route.

2) PROCTER & GAMBLE: In fabric wash segment company announce it price cut through Tide detergent. Initially Tide was positioned midway between Ariel and Surf Excel (160/kg) and premium segment occupied by surf (Rs 85/kg). After creating a premium image company lowered the price from 120/kg to 85/kg. These price cut pose a threat to HUL s Surf. Procter & Gamble concentrate on value for money consumer and this is the company s most successful strategy and strongest effort to capture volume in the market. MARICO GROUP: The company follow the strategy of being proactive in all areas of marketing supported by new product development and segmentation. Marico is the leader in the coconut oil category. Their product parachute gained market share of 53%. Marico launched Parachute dandruff hair oil and positioned it on herbal platform. Company has good marketing, distribution network. It plans on tapping a large number of customers and expanding its distribution especially in Rural markets.

Godrej consumer products Ltd: The company introduces Ezee a detergent for woolen and delicate cloth and a fabric softener for cotton clothes. In skin care segment it introduces Fair glow and capture 2.1% market share. The market share in the hair care category also improved from from 39.4 percent to 41.7 percent.

Dabur: A strong brand equity in the Ayurvedic segment helped Dabur to sustain the growth. It has a strong transnational distribution network with 5500 distributor sand 13,00,000 retail outlets. The successful repositioning of Chyawanprash, Pudin hara and Dabur Honey led Dabur to modernize its portfolio of traditional products. Dabur has created a niche market in the shampoo segment. Vatika shampoo has grown 78% in 2001. Dabur lal Dant manchan has achieved a growth rate of 12% in 2001.Brands such as Dabur Amla, Dabur Chyawanprash,Lal Dant manjan, Hajmola, Pudin Hara and Hingoli are undisputed leader in respective category.

SWOT Analysis
Strengths:

Strong brand portfolio, price quantity & variety. Innovative Aspects. Presence of Established distribution networks in both urban and rural areas. Solid Base of the company. Corporate Social Responsibility(CSR)
Weaknesses:

"Me-too" products which illegally mimic the labels and brands of the established brands. Strong Competitors & availability of substitute products. Low exports levels. High price of some products.
High Advertising Costs.

SWOT Analysis
Opportunities:

Large domestic market over a billion populations . Untapped rural market. Changing Lifestyles & Rising income levels, i.e. increasing per capita income of consumers. Export potential and tax & duty benefits for setting exports units. Threats: Tax and regulatory structure. Mimic of brands Removal of import restrictions resulting in replacing of domestic brands. Temporary Slowdown in Economy can have an impact on FMCG Industry.

Strategies adopted by HUL for surviving in the FMCG sector 1) Brand portfolio restructuring 2) New product introductions 3) New Business opportunities 4) Mergers and acquisitions 5) e-commerce initiatives

Brand portfolio restructuring

To survive the strong competition from existing players HUL deployed its full portfolio effectively with re launch of most of the brands on the back of high quality innovations and intensive consumer activation. Growth was led by the premium segment brand with Dove Pears, Liril. Lifebuoy brand was re-invigorated through its re launch bolstering its health credentials with its strong ability to kill the germs.

Lux was re launched with improved fragrance and beauty oils for soft and smooth skin. Lux enjoys wide appeal among consumers as beauty brand. Banking on this equity HUL introduce Lux shampoo sachets in the market. Unilever mainly focus on top 30 out of 110 brands. These top brands contribute more than 75% of the turn over. Rest will either be sold, migrated or continued as Regional brand. Brands which contribute to about 25% of the HUL turnover is classified into separate group. One such group is called Regional Jewels ie, brands which are exceptionally strong in certain geographic area.

For eg: Hamam. It gets about 60% of volume from Tamil Nadu more than 30% of market share. HUL keeps such brands as purely geographic brand and support them heavily in these geographic areas. Brands which are unprofitable are discontinued or sold off. HUL delisted two tooth paste variants close up renew, close up oxy fresh and Revel washing powder

Two mass marketing brands are Breeze and Jai soap. Breeze in the toileteries market is growing at 50 percent plus per annum . Hence the company plans to phase out the other mass market brand Jai soap which has lesser support. Another phase out brand is Moti soap which had sales only in one or two state mostly during Diwali season.

To face the stiff competition from the fabric wash category HUL strategically reduced the price of Rin powder. Operation stream line started to enhance rural coverage of its detergents which lead to increased contribution from rural market.

Usage of media on fabric segment helps communicate value proposition to the consumer. Cost effectiveness programme introduced by the firm gives better results.

New business opportunity

After evaluating the feasibility, HUL enter into new business segments. 1) Consumer health care 2) Water 3) Rural marketing 4)Direct consumer distribution.

In water segment HUL launched Pureit It is unique in-home drinking water purification solution that offers protection to children and family from water borne diseases. Pureit compact has launched at an extremely affordable price. This enable the company to protect lives in the segment of society with lower purchasing power. Pureit got the prestigious British government for consumer product innovation 200910.

Consumer beauty and health care:

The strategy of HUL network was redefined in line with its vision of empowering modern Indian women by serving her with superior beauty and health care products through customized and professionalized service. Recently, company successfully transformed the network into a premium personal care and health care channel.

HUL identified growing disposable income and changing life style in Urban India. These trends entered the company into Beauty and wellness service sector. Company currently operates in the beauty and wellness service segments largely through a network of franchised Lakme Beauty Salon . In 2010 company owned Lakme Beauty salon were transferred to Lakme Lever Pvt ltd as a subsidiary of the company.

Rural Marketing HUL launched Project Shakthi. It is an initiative which focuses on reaching out to consumers in very small villages that typically have a population of less than 5000 individuals. Shakthi programmed was first launched in Andhra pradesh and next scaled up to Orrisa and Maharashtra. The Shakthi programme is essentially built upon two pillars 1) Shakthi entrepreneurship programme 2) Shakthi vani programme Shakthi entrepreneurship programme provides livelihood opportunity to women in rural areas and enhances the quality and depth of company s distribution. Shakthi vani programme focus on building awareness about health and hygiene in the rural activity

New product introductions and re launching of products Surf Excel re launched with new and improved formulation. In the house hold category company re launched the dish washing product Vim liquid. In the hair care category company introduced Dove shampoo and conditioners in the year 2009. Clinic plus successfully re launched by re-emphasising the value proposition of being ideal for long hair. Clinic plus continued to grow well and strengthened its position as a single largest shampoo brand. Product credentials of Clinic All Clear has been strengthened and supported through a high decibel Zero dandruff campaign.

Two Sunsilk range was relaunched with superior product quality and packaging. In skin care category HUL introduced Vaseline Body lotion care that offers protection against skin darkening. flag ship brands in oral category are close up and Pepsodent. Focus on these two brands company took actions to drive growth through high attractive value offerings in the upgrader packs. In lakme range of cosmetics company introduced lip duo as summer collection. In deodrant brand category HUL witness high growth momentum under the flag shipbrand of Axe .

Research and development R& D programmes are geared towards delivering bigger and faster innovations with a robust pipeline of radically new technologies with innovative consumer propositions On the back of strong R&D initiatives a number of products were launched successfully in the market. They are 1) Pureit a unique home drinking water purification solution 2) Fair & Lovely fairness ream as a winter variant. 3) Relaunching of lifebuoy with clinically proven hygiene benefits.

4) In 2009 Knorr soups were re-launched with new formulations with 100 % real vegetables. Ice cream business grew on the back of successful innovations such as cornetto variants-strawberry Tease cake and Black forest. In the beverage segment company introduced premium green tea, Lipton clear Green and launched a new blend of Lipton Yellow labels with higher levels of Theanine. Company relaunched superior brue coffee with improved aroma.

Mergers & Aquistions Unilever acquired Lipton in 1972 In 1984 Brooke Bond joined the Unilever fold through international acquisition. In April 1993, Tata Oil Mills Company (TOMCO) merged with HUL. Joint Venture In 1996, HUL and Lakme limited formed a 50:50 Joint venture Lakme Unilever 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. The internal restructuring culminated in the merger of Ponds India ltd with HUL in 1998. In January 2000 government decided to award 74 percent equity in Modern Foods to HUL. Hul s entry into bread is a strategic extension of companys wheat business In 2002, HUL acquired the government s remaining stake in Modern foods.

As a measure of backward integration, Tea estates and Doom Dooma two plantations companies opf unilever were merged with Brooke Bond. Then in 1994 Brooke Bond India and Lipton India merged to form Brooke Bond Lipton India Ltd (BBLIL) Finally in January 1996 BBLIL merged with HUL.

In 2003, HUL acquired the cooked Shrimp and Pasteurised crabmeat business of Amalgam Group of Companies a leader in value added Marine products exports.

MARKETING STRATEGIES OF HUL FOR URBAN INDIA

Adopted Total Productive Maintenance(TPM) to meet zero error, zero loss. Focuses on short supply chain for distribution. To meet the every needs of people everywhere. Also uses Direct selling channel franchisee to reach everyone. Build segments & market for the future where Unilever has strong expertise.

MARKETING STRATEGIES OF HUL FOR RURAL INDIA

For long term benefits, HUL started Project Streamline in 1997.

Appointed 6000 Sub-stockists that directly covers about 50,000 villages & 250 million customers.

Integrate Economic, Environment & Social objectives with Business agenda.

Project Shakti, partnership with Self help groups of Rural women & covers 5000 villages in 52 districts in different states.

EVERYDAY I WILL SELL. EVERYDAY I WILL EARN. MONEY. RESPECT

Started in 2001, Shakti is HUL's rural initiative, which targets small villages with population of less than 2000 people or less. micro-enterprise opportunities for rural women Providing health n hygiene education through shaktivani program

Shakti has already been extended to about 15 states ,80,000 villages in with 45,000 women entrepreneurs and generating Rs.700-1000 per month to each women.

2000 Profit and loss Account Gross sales Other Income Interest PBT PAT Earning per share of Re.1 Dividend per share of Re 1 11,392.14 345.07
(13.15) 1665.09 1310.09

2001

2002

2003

2004

2005

2006

2007

11781.3 381.79
(7.74) 1943.37 1540.95

10951.6 384.54
(9.18) 2197.12 1731.32

11096.0 10888. 11975.5 13035.0 1471 5.1 459.83

(66.76) 2244.95 1804.34

318.33 304.79
(129.98
1505.32

354.51
(10.73) 1861.68 1539.67

431. 53
(25.5 0)
2146.3 3

(19.19) 1604.47

1199.28 1354.51

1743. 12

5.95

7.46

8.04

8.05

5.44

6.40

8.41

8.73

3.50

5.00

5.16

5.50

5.00

5.00

6.00

9.00

FINANCIAL ANALYSIS Rs in crores Particulars Net sales 2008-09 16476. 75 2009-10 17523.80 2565.94 Sales growth 6.4% 7.1%

Profit from operations 2396.06 before interest & exceptional items PAT from ordinary activities before exceptional items NET PROFIT 2065.20

2058.71

-0.3%

2115.20

2202.03

4.1%

CORPORATE AWARDS HUL has won Dun & Bradstreet-Rolta corporate Awards 2009 for being the top Indian Company in the FMCG sector for the fourth consecutive year. HUL has ranked fourth in the Top Companies for leaders, 2009 for the Asia Pacific region and bagged the 10 the place in the global rankings. HUL has been felicitated for receiving the highest number of patents in the year 2009 at the Annual Intellectual Property Awards 2010. Brand Awards HUL brands dominate India s Most Trusted Brands Survey rankings. Three brands (Lux, Lifebuoy,Pepsodent) feature in the top 10 and seven in the top 20. HUL has been awarded the CNBC Awaaz Consumer Awards 2009 in three categories. Most preferred Personal Care Company, Most preferred Home Care Company and Value for Money Brand of the Year.

Two flagship brands of HUL Oral Care

The HUL Hair Care

 Launched in 1969, Rin with the power of its thunderous lightning flash has become a household name synonymous with dazzling white clothes.  A Value added brand with different variants e.g. Rin matric & Rin advanced.  Rin has won a number of accolades, the most recent being voted as the Most Preferred Detergent brand in India at the Awaaz Consumer Awards in 2006.

SUNLIGHT

A Heritage brand launched in 1888 In the form of detergent cake. Value added brand i.e. priced over Wheel but below Rin. Famous in WB & Kerala.

 Low priced detergent. Introduced in 1987 to compete with Nirma.

Pioneer in Indian detergent powder. Constantly upgraded itself. e.g. Surfexcel Blue, Quick wash,

1)What is the Net Profit for the financial year 2009-10 2)Rural marketing strategy Project stream line was introduced in the year---3)Which product segment gives highest percentage of revenue to the HUL