Segment

Productsandservicesfordailyneeds

TargetGroup

EveryIndianhouseholdespeciallythemiddleclass

Positioning

BeingthelargestFMCGcompany,theirlittleeffortsmakeahugedifferenceinthe
livesofpeople

Uniquely positioned to exploit the opportunity

Product Portfolio :Strong brands across benefits & price points
Capabilities :Consumer understanding, supply chain, go-to-market
Talent : No.1 Employer*, diverse talent pool
Global Leverage : R&D, brand development, buying

SWOT ANALYSIS

1) Strengths

HULisapartoftheUnilevergroup,hencestrongbrandequity
Ithasover15000employees
Reach6.4millionretailoutletswhichincludesdirectreachtoover1.5million
retailoutlets
TwoR&DcentresinIndiainMumbaiandBangalore
Productswithpresenceinover20consumercategorieswithover700million
Indianconsumersusingitsproducts
AsapartofCSR,HULhasinitiativeslikeprojectShakti,plasticrecycling,
womenempowermentetc

2)Weakness
MarketshareislimitedduetopresenceofotherstrongFMCGbrands
HULproductshasstiffcompetitionfrombigdomesticplayersandinternational
brands

3)Opportunities
Tapruralmarketsandincreasepenetrationinurbanareas
Mergersandacquisitionstostrengthenthebrand
Increasingpurchasingpowerofpeopletherebyincreasingdemand
Threats
IntenseandincreasingcompetitionamongstotherFMCGcompanies
FDIinretailtherebyallowinginternationalbrands
Competitionfromunbrandedandlocalproducts

PORTERS5FORCESONHUL(MICROENVRIONMENTANALYSIS)

Rivalry among Competing Firms:

In the FMCG Industry, rivalry among competitors is very fierce. There are scarce customers
because the industry is highly saturated and the competitors try to snatch their share of
market. Market Players use all sorts of tactics and activities from intensive advertisement
campaigns to promotional stuff and price wars etc. Hence the intensity of rivalry is very high.
Potential Entry of New Competitors:
FMCG Industry does not have any measures which can control the entry of new firms. The
resistance is very low and the structure of the industry is so complex that new firms can
easily enter and also offer tough competition due to cost effectiveness. Hence potential entry
of new firms is highly viable.
Potential Development of Substitute Products:
There are complex and never ending consumer needs and no firm can satisfy all sorts of
needs alone. There are plenty of substitute goods available in the market that can be replaced
if consumers are not satisfied with one. The wide range of choices and needs give a sufficient
room for new product development that can replace existing goods. This leads to higher
consumers expectation.
Bargaining Power of Suppliers:
The bargaining power of suppliers of raw materials and intermediate goods is not very high.
There is ample number of substitute suppliers available and the raw materials are also readily
available and most of the raw materials are homogeneous. There is no monopoly situation in
the supplier side because the suppliers are also competing among themselves.
Bargaining Power of Consumers:
Bargaining power of consumers is also very high. This is because in FMCG industry the
switching costs of most of the goods is very low and there is no threat of buying one product
over other. Customers are never reluctant to buy or try new things off the shelf

Marketing opportunities :
1) FMCG consumption every year
2) Great room for growth in penetration
3) Raising income to favour personal care and foods
4) Rural India - Rural growth in India has been stronger than urban growth.

Government programmes help in achieving that. We certainly see rural India as a big
medium-term opportunity. The investment we are making in building the rural
marketing and distribution infrastructure has been one of our biggest investments.
What we have achieved in the last couple of years is more than what we did in the
previous 50. The big job to be done in rural areas is not about building market share;
it is to develop the market. There are 650,000 villages and 750 million people living
in Indias rural areas and that is an enormous potential for growth. The population is
twice that of Western Europe. In Western Europe our business is $12 billion right
now and if you just do a calculation on the basis of population, the opportunity in
rural India is worth $25 billion. We are not close to this figure even as a total
company yet (HUL ended 2012-13 with Rs.25,810.21 crore in revenue). That means
we can potentially grow our company 6-8 times.

Rural Market Segmentation

To penetrate the rural markets, HUL launched a unique four tier distribution system. Markets
were segmented based on their accessibility and business potential.

Direct Coverage: HUL appointed a common stockist to service all outlets within a
town and sell a limited selection of the brand portfolio. Towns consisted of
populations of under 50,000 people.
Indirect Coverage: HUL targeted retailers in accessible villages close to larger urban
markets. Retail stockists were assigned a permanent route to ensure that all accessible
villages in the vicinity were served at least once a fortnight.
Streamline: Streamline leveraged the rural wholesale channel to reach markets
inaccessible by road. Star Sellers were appointed among wholesalers in a particular
village. Star Sellers would purchase stock from a local distributor and then distribute
stock to retailers in smaller villages using local means of transport (e.g. motorcycles,
rickshaws).
Project Shakti: Project Shakti targeted the very small villages (<2,000) and tapped
into pre-existing womens self help groups (SHG). Underprivileged rural women
were invited to become direct-to-consumer sales distributors for HUL products.

Termed Shakti Ammas (literally strength mothers), these women represent HUL
and sell its home-care, health, and hygiene products in their villages.

HUL categorizes target consumers in 18 different LSM groups (Living Standards

Measurement). The LSM of a consumer is determined by the income, education, durables
ownership, media consumption, entertainment preferences, etc. A declining inflation and
higher savings will lead to some upward mobility in the LSM category.
Fair & Lovely is an aspirational brand and its target consumers belong to lower middle class
or below. The consistently high inflation & high interest rates put a severe stress on
disposable income of target customers of FAL in last few quarters.

HUL Market Segmentation

Geographic Segmentation :1. Distribution channel segmentation
2. Density based segmentation:- HULs Wheel detergent tends to capture rural and semi urban
market whereas Rin and Surf Excel are being promoted to capture urban and metros.
3. Climate based segmentation :- HUL offers its ponds for various climates like Ponds cold
cream and moisturising lotion for winters or cold areas and Ponds sunscreen lotions for
summers or for hot areas.
4. Location based segmentation :- HUL try to segment on the basis of region, like Punjabi
Masala soups and chips for the north etc.

Demographic Segmentation
1.AgeHUL has

Pears and Dove to offer to teenagers and young people.

2.Gender:The very famous

in this segment is the HULs Fair & Lovely and Fair & lovely for
men. Earlier, Dove was promoted for only women now HUL has also came up with Dove
men to offer various products to men.
3.Income:HUL has

Breeze and Lifebuoy for the lower income level, Lux for the middle class
and Dove and Pears for the upper class in the bathing soaps. It has Wheel detergent for lower
income group, Rin for middle class and Surf Excel for higher Income group. Similarly, HUL
has Taj Mahal tea for higher income group whereas Taaza tea for lower income group people.
4.Lifstyle:HUL promote Taj

Mahal tea for the status and quality-seeking people whereas

Lipton and Brooke Bond for the people who put value of money first.
5.FamilyLifeCycle;HUL has

dove and pears to offer to a single person whereas it has Lux for
young aged and lifebuoy for the whole family. Like Pepsodent, toothpaste is being promoted
for whole family.

Psychological Criteria of Segmentation

1. Psychographics :- Psychographic segmentation includes an understanding of the
values that are important to different types of customers.
2. Benefit Sought: HUL also has Dove, Lux to breeze that tend to segment the
market based on the benefit sought from them.

Behavioural Criteria
Product related methods of segmenting consumer goods and service markets include using
behaviouristic methods (e.g. by product usage, purchase, and ownership) as bases for
segmentation. Observing consumers as they utilize products and media can be an important
source of new product ideas, and can lead to ideas for new product uses or product design and
development. Furthermore, new markets for existing products can be indicated, as well as
appropriate communication themes for product promotion. Purchase, ownership, and usage
ofproducts and media are three very different behavioural constructs we can use to help
profile and segment consumer markets.

Key strategies
Key targeting strategies of the HUL: HUL divide the customers into three
types of the customers: striving, aspiring and affluent and make targeting strategies
accordingly. They are as follows:

a) Personal Care: HUL targets different types of customers with different set of bath
products. For striving customers, it offers Lifebuoy and Breeze, for aspiring, it offers
Hammam and basic Lux variants and for affluent customers, it has Pears, Dove and superior
range of Lux.

Key strategy: To straddle the pyramid and move consumers up to more aspirational
brands. Grow share by growing ahead of the Market
b) Detergent: In case of detergents, it offers Wheel for striving customers, Rin for
aspiring customer and Surf Excel for affluent customers.

Key Strategy: Work the pyramid; Grow profitably ahead of the market; regain
profitability through judicious price increases and cost effectiveness programmes
c) Hair Care: HUL offers Clinic All Clear and Dove to the Affluent customers, Sunsilk to
the aspiring customers and Clinic Plus to the Striving Customers.

Key Strategy: Work the Pyramid; convert non-users & increase penetration; upgrade the
existing users to aspirational brands
d) Tooth Paste: HUL offers Close Up to affluent, Pepsodent to aspiring customers,
whereas, it offers both brands in smaller packing for the striving customers.

Key Strategy: Grow with market with the our brands Close Up on freshness platform
and Pepsodent on family & health platform
e) Tea: HUL has different tea varieties for the different segments. For affluent customer, it
offers Taj Mahal and Lipton Yellow Label. For aspiring customers, it has Red Label, whereas,
for the striving customers, it has Taaza tea.

HUL = current product portfolio

Food - 1) Annapurna

2) Brooke Bond 3 Roses

3) Brooke Bond Red Label
4)Brooke Bond Taj Mahal
5) Brooke Bond Taaza
6) Bru
7)Kissan
8) Kwality Walls
9) Knorr
10) Lipton
11) Magnum
12) Modern

Home care
1)Active Wheel
2) Surf Excel
3) Vim
4)Cif
5) Sunlight
6) RIN
7) Magic
8) Domex
9) Comfort fabric conditioner

Personal care
1) Aviance
2) Axe

3) Breeze
4) Clear
5) Clinic Plus
6) Closeup
7) Dove
8) ELLE 18
9) Hamam
10) Fair and Lovely
11) Lakme
12) Lever Ayush Therapy
13) Lifebuoy
14) Liril 2000
15) Lux
16) Ponds
17) Pears
18) Pepsodent
19) Rexona
20) Sure
21) Sunsilk
22) TIGI
23) Tony

and Guy

24) Vaseline
25) Tresemme
Water Purifier

Pure-it