Project Report On HINDUSTAN UNILIVER LIMITED

Submitted by K.Raj manohar Sharma M.B.A(Marketing) 09R91E0027

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Hindustan Unilever Limited

INTRODUCTION TO HUL
HUL was formed in 1933 as Lever Brothers India Limited and came into being in 1956 as Hindustan Lever Limited through a merger of Lever Brothers, Hindustan Vanaspati Mfg. Co. Ltd. and United Traders Ltd. It is headquartered in Mumbai, India and has employee strength of over 15,000 employees and contributes to indirect employment of over 52,000 people. The company was renamed in June 2007 as Hindustan Unilever Limited . The Anglo-Dutch company Unilever owns a 52% majority stake in Hindustan uniliver Limited. Hindustan Unilever's distribution covers over 1 million retail outlets across India directly and its products are available in over 6.3 million outlets in the country, nearly 80% of all retail outlets in India. It estimates that two out of three Indians use its many home and personal care products, food and beverages. Hindustan Unilever was recently rated among the top four companies globally in the list of Global Top Companies for Leaders by a study sponsored by Hewitt Associates, in partnership with Fortune magazine and the RBL Group. The company was ranked number one in the AsiaPacific region and in India. ("Present stature", official website) The Brand Equity rankings in 2010 are ruled by FMCG products with Hindustan Lever accounting for as many as 6 out of Top 10 most trusted Indian Brands.
(Brand Equity Survey, 2010)

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HISTORY - CHRONOLOGY
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 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 1996, HUL and yet another Tata company, 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. 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, Unilever Nepal Limited (UNL), and its factory represents the largest manufacturing investment in the Himalayan kingdom. The UNL factory manufactures
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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. In 1993, it acquired the Kissan business from the UB Group and the Dollops Ice-cream business from Cadbury India. As a measure of backward integration, Tea Estates and Doom Dooma, two plantation companies of Unilever, were merged with Brooke Bond. Then in 1994, Brooke Bond India and Lipton India merged to form Brooke Bond Lipton India Limited (BBLIL), enabling 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 Ice-cream Group families and in 1995 the Milk food 100% Ice-cream 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 Pasteurized Crabmeat business of the Amalgam Group of Companies, a leader in value added Marine Products exports. HUL launched a slew of new business initiatives in the early part of 2000 s. Project Shakti was started in 2001. It is a rural initiative that targets small villages populated by less than 5000 individuals. It is a unique win-win initiative that catalyses rural affluence even as it benefits business. Currently, there are over 45,000 Shakti entrepreneurs covering over 100,000 villages across 15 states and reaching to over 3 million homes.

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In 2002, HUL made its foray into Ayurvedic health & beauty centre category with the Ayush product range and Ayush Therapy Centers. Hindustan Unilever Network, Direct to home business was launched in 2003 and this was followed by the launch of Pureit water purifier in 2004. In 2007, the Company name was formally changed to Hindustan Unilever Limited after receiving the approval of share holders during the 74th AGM on 18 May 2007. Brooke Bond and Surf Excel breached the Rs 1,000 crore sales mark the same year followed by Wheel which crossed the Rs.2, 000 crores sales milestone in 2008. On 17th October 2008, HUL completed 75 years of corporate existence in India.
(Official website of Hindustan Unilever Limited)

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Mission
1. To add Vitality to life. y 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. 2. To help people feel good, look good and get more out of life
(Scribd 2010)

Vision
Unilever products touch the lives of over 2 billion people every day whether that's through feeling great because they've got shiny hair and a brilliant smile, keeping their homes fresh and clean, or by enjoying a great cup of tea, satisfying meal or healthy snack.

A clear direction
The four pillars of our vision set out the long term direction for the company where we want to go and how we are going to get there:
y y

We work to create a better future every day We help people feel good, look good and get more out of life with brands and services that are good for them and good for others.

We will inspire people to take small everyday actions that can add up to a big difference for the world.

We will develop new ways of doing business with the aim of doubling the size of our company while reducing our environmental impact.

The company has always believed in the power of their brands to improve the quality of peoples lives and in doing the right thing. As the business grows, so do companies responsibilities. HUL recognize that global challenges such as climate change concern us all. Considering the wider impact of companys actions is embedded in its values and is a fundamental part of who they are. (Companies official website)
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Instilling values
Our corporate purpose states that to succeed requires "the highest standards of corporate behavior towards everyone we work with, the communities we touch, and the environment on which we have an impact." y Standard of Conduct

We conduct our operations with honesty, integrity and openness, and with respect for the human rights and interests of our employees. We shall similarly respect the legitimate interests of those with whom we have relationships. y Obeying the Law Unilever companies and our employees are required to comply with the laws and regulations of the countries in which we operate. y Employees Unilever is committed to diversity in a working environment where there is mutual trust and respect and where everyone feels responsible. We will recruit, employ and promote employees on the sole basis of the qualifications and abilities needed for the work to be performed. We are committed to safe and healthy working conditions for all employees. We will not use any form of forced, compulsory or child labor. y Consumers Unilever 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 labeled, advertised and communicated. y Shareholders Unilever will conduct its operations in accordance with internationally accepted principles of good corporate governance. We will provide timely, regular and reliable information on our activities, structure, financial situation and performance to all shareholders. y Business Partners

Unilever is committed to establishing mutually beneficial relations with our suppliers, customers and business partners. In our business dealings we expect our business partners to adhere to business principles consistent with our own. (Scribd 2010)
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MANAGEMENT

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Organization structure
Hindustan Unilever Limited is India's largest Fast Moving Consumer Goods (FMCG) Company. It is present in Home & Personal Care and Foods & Beverages categories. The fundamental principle determining the organization structure is to infuse speed and flexibility in decision-making and implementation, with empowered managers across the company s nationwide operations. Board of Directors The Board of Directors as repositories of the corporate powers act as a guardian to the Company as also the protectors of shareholder s interest
Management Committee The day-to-day management of affairs of the Company is vested with the Management Committee which is subjected to the overall superintendence and control of the Board.

y y y y y y y y y

Mr. Harish Manwani - Chairman Mr. Nitin Paranjpe - CEO and Managing Director Mr. R. Sridhar - Chief Financial Officer Mr. Gopal Vittal - Executive Director, Home & Personal Care Mr. Pradeep Banerjee - Executive Director, Supply Chain Mr. D. S. Parekh - Independent Director Mr. A. Narayan - Independent Director Mr. S. Ramadorai - Independent Director Dr. R. A. Mashelkar - Independent Director

y y y y y y y y

Mr. Nitin Paranjpe - CEO and Managing Director Mr. R. Sridhar - Chief Financial Officer Mr. Shreejit Mishra - Executive Director, Foods Mr. Gopal Vittal - Executive Director, Home & Personal Care Mr. Hemant Bakshi - Executive Director Mr. Pradeep Banerjee - Executive Director, Supply Chain Ms. Leena Nair - Executive Director, HR Mr. Dev Bajpai Executive Director, CS
(Companies official website)

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Awards & Recognisitions

Year y 2010 y Achievement HUL won two prestigious awards at the World HRD Congress 2010: 'The Most Admired & Best HR Team Award' and our Executive Director-HR, Leena Nair was awarded the 'HR Super Achiever of the Year' award HUL won Customer and Brand Loyalty Award in the consumer non durables sector. HUL ranked fourth in the Top Companies for Leaders, 2009 for the Asia Pacific region and bagged the 10th place in the global rankings. HUL was 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. HUL s Project Shakti won the Silver Trophy of the EMPI-Indian Express Indian Innovation Awards. Ad club Emvies: Hindustan Unilever has bagged 7 Awards (2 Gold, 2 Silver and 3 Bronze) across categories, the only company with maximum wins. HUL won the Bombay Chamber Civic Award 2007 in the category of Sustainable Environmental Initiatives, for its water conservation and harvesting project at Karchond village, Silvassa, Dadra and Nagar Haveli. HUL won the UK Trade & Investment India Business Award in the Innovation category for Pureit. In 2007, Hindustan Unilever was rated as the most respected company in India for the past 25 years by Business world, one of India s leading business magazines. Mr.D.S.Parekh HUL in depend director received for services to financial services and banking industry in India and Best Non-Executive Director 2006 by the Asian Centre for Corporate Governance.

y y 2009 y y

2008

2007

2006

(Companies official website)

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Corporate Social Responsibility

y The water usage per tonne has been reduced by more than 32% in its own manufacturing operations against a baseline of 2004. More than 50% of our own manufacturing units have a rain water harvesting facility. As on date, five Company units return more water to ground than being consumed by them. The energy consumption and CO per unit of production since 2004 has also come down by 38% and 28% respectively. Company has initiated works in the area of sustainable agriculture sourcing for Tea, Fruits & Vegetables and Palm oil. The Company has started developing Indian producers for Tomato paste. We are working closely with key producers and the initiatives include water conservation, use of authorized pesticides, land conservation and improvement of farmer income. The Brand partnered with the Government of Tamil Nadu and organized a massive event on Global Hand Washing Day (15th October, 2009) wherein out of 47,000 children that washed their hands on that day, 15,000 washed their hands in perfect harmony to stake claim to the Guinness record for the most people washing their hands simultaneously. In the area of Health and Hygiene, during the Swine Flu epidemic, 'Lifebuoy' undertook rallies in key effected cities, where the message of the importance of hand washing was emphasized, in preventing Swine Flu. The vast majority of HUL s products reach the consumers without being tested on animals. Your Company started the Sankalp initiative of employee volunteering in the 75th year of its existence in India. In 2008 our employees undertook volunteering and community service totaling more than 48,000 hours against a target of 27,375 hours. In 2009 we have achieved more than 1, 15,000 hours of volunteering. (Annual Report 2010, p.38 & Sustainability Report 2010, p.10)

y y

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PRODUCTS PROFILE

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Product Categories/Segments
Two out of three Indians use Hindustan Unilever products. From feeding your family to keeping your home clean and fresh, our brands are part of everyday life.

Health, hygiene & beauty

Nutrition

Food
Beverages

Water

Personal care

Home care

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CURRENT PERFORMANCE

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Marketing
Hul s team are now relying more on tried and tested marketing models such as the 6P model, which focuses on getting right the product, price, package, proposition, place and promotion to attract a consumer, to expand the market and outpace competitors.
(Livemint online newspaper) Key points

Product

y y

The Company deployed its full portfolio effectively with re-launch of most of the brands on the back of high quality innovations and intensive consumer activation. For e.g.: The 'Lifebuoy' brand was re-invigorated through its re-launch, bolstering its health credentials with its strong ability to kill germs. Moreover the company had a excellent product mix, in the last one year alone, HUL had 30 product launches like: 'Pure it',. Further Hul is driving up gradation .For e.g. It has expanded its portfolio in packet tea by launching a new brand to participate in the mass segment with differentiated offering. HUL has rolled out the new Go-To-Market distribution model in 32 Cities across the country. Through this the frequency of dispatches to the distributor increased, enabling him to stock less and use the benefits to build scale and superior talent. Company has also made great strides in expanding its rural distribution network, with significant investment made in expanding the infrastructure. Across the country rural markets were brought under the direct coverage enabling better service and control. The number of distributors in rural markets has been scaled up. HUL also rolled out a unique and innovative concept of 'Perfect Stores' as part of endeavor to win with consumers at the point of sale. Hul is focusing on its cherished regional brands such as Hamam & Rexona . HUL has gone into strategic partnerships with technology companies for deeper market penetration.

y
Place

y y

y
Promotion

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FINANCIAL PERFORMANCE OF HUL

There was strong volume growth at 14 per cent which led FMCG major Hindustan Unilever (HUL) to post a 32.1 per cent jump in net profit to Rs 566.12 crores (Rs 428.53 crores) for the quarter ended September 30, 2010, over the same period last fiscal. The net profit included an exceptional gain of Rs 40 crores that the company received through sale of property, provision for expenses related to buyback of shares and restructuring costs. During the quarter, HUL recorded a 10.7 per cent increase in net sales to Rs 4,680.87 crores (Rs 4,228.11 crores). Domestic Consumer Business (FMCG and water) grew by 10.5 per cent with an 8.9 per cent growth in HPC (Home and Personal Care) and 13.2 per cent in the foods

LIFEBUOY SOAP-BUSINESS MODEL

Product Category Lifebuoy falls under the category of toiletry product in hygiene market.HUL is offering a standard product of Lifebuoy soap and shampoo by standardized packaged product. Value Proposition: Market Segmentation
Demographic segmentation Age Gender Family Size Income Target Area Social class 6 to 50 + Anyone 2,3-4,5+ Rs.4000+ Lower Income group Middle & lower class Geographic Segmentation World region Country & cities Target area Asia Developing countries like India & Pakistan Sub-urban & Semi-urban & rural areas

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Behavioral Segmentation Benefits User status Loyalty status Usage rate Buyer readiness Total protection anti-bacterial soap Regular user Split-loyal Medium Informed & interested Psychographic segmentation Attitude Lifestyle Health-conscious & energetic For people who are involved highly in Indoor as well as Outdoor oriented & sports oriented activities

http://www.scribd.com/doc/23714565/soap-industry Positioning Competitive Strategy Value chain Existing strategy: (Scribd.com)

MARKETING MIX OF LIFEBUOY

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Product y At the very first HUL has launched the red brick lifebuoy with its own unique fragrance.

Price Promotion

Recommendations
Hindustan Lever Limited has established it roots successfully in the Indian market with HUL products becoming a household preference in almost all the major cities. But with the increasing number of competitors in the FMCG industry, HUL should gear up to compete with them. The biggest rival in the market is Procter & Gamble that is threatening HUL s strong hold by introducing cost leadership strategies and price cuts. Whereas, at the local from numerous small to medium sized firms are enjoying the benefit of local presence thorough TV ads and low cost products. For some time now HUL pursued the strategy of P&G but it could not reap similar benefits and the strategy is now shrinking HUL s profit margins. Moreover, with increased saturation in the industry HUL is facing problems positioning its power brands as consumers buying pattern is changing. It is found out that the problems with the HUL are primarily related to the environment in which the company is operating. The HUL management should scan and evaluate its internal and external environment and then re-align its strategies accordingly. Here are some recommendations for HUL after the analysis we have conducted above: y y HUL should allocate its advertisement budgets more evenly among the major cities and small towns to compete with the international as well as local competitors alike. HUL should focus on market research and product development more. This is very crucial activity if the company wants to see steady growth in future. Innovation is the key to success here. HUL should seriously start developing improved products to cater the emerging needs of the consumers. HUL should not use price-cuts to compete with its key rivals like P&G, instead it should promote its power brands as premium and value added products for the following reasons:
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Price competition among rival firms is stern and it is not possible for HUL to maintain its profit margins without compromising on product quality. Products of other firms are quite similar to what HUL is offering. Buyers have low switching costs and thus low brand-loyalty. There are few ways of differentiating a product from other than developing a new one. Thus, I strongly recommend that HUL should adopt value leadership strategy to skim profits. HUL should maintain its presence as an international brand differentiated by superior quality products. This can be achieved through proper pricing, efficient advertisement and promotion and innovation in product development and brand extension. This will help achieve financial stability and generate cash flows that can be used to support the weaker brands in local markets.

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REFERENCES
Content y Company Profile : y History Reference List
Hindustan Unilever Limited. Archived from the original on 2008-08-02, Retrieved on 08-15-2010 from http://web.archive.org/web/20080802090951/http://hul.co.in/knowus/present_st ature.asp Retrieved on 26 September from http://trak.in/tags/business/2010/09/01/top-50most-trusted-brands-india/ Retrieved on 26 September 2010 from http://www.hul.co.in/aboutus/ourhistory/ Archived on Scribd 2010. Retrieved on 12 September 2010 from http://www.scribd.com/doc/37102748/hul (Companies official website)

y y

Mission

Vision y y Values y
Retrieved on 24-sep-2010 from http://www.hul.co.in/aboutus/ourvision/ Archived on Scribd.com n.d, Retrieved on Aug 31, 2010 from http://www.scribd.com/doc36686641//hul Organizational Structure : Retrieved on 26-sep-2010 from http://www.hul.co.in/aboutus/companystructure/ Awards & Recognitions : Retrieved on 27-Sep-2010 from http://www.hul.co.in/aboutus/sustanbilityreports/awards Corporate Social Responsibility : Retrieved on 27-sep-2010 from Annual Report 2010, CSR p.38 & Sustainability Report 2010, p.10

y Management y

Hindustan Unilever Limited. Archived from the company website on 25-sep-2010. Retrieved on 08-15-2010 from i. ii. iii. http://www.hul.co.in/brands/foodbrands/ http://www.hul.co.in/brands/homecarebrands/?WT.LHNAV=Home_care_br ands http://www.hul.co.in/brands/personalcarebrands/?WT.LHNAV=Personal_care_br ands

Product Profile

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Human Resource: Annual Report 2010, Human Resource , pg.34. Retrieved September 26, 2010, from http://www.hul.co.in/Images/AnnualReport0910_tcm114-225889.pdf Information Technology: Annual Report 2010, IT, pg.36. Retrieved September 26, 2010, from http://www.hul.co.in/Images/AnnualReport0910_tcm114-225889.pdf Marketing : Archived on Livemintonlinenewspaper Retrieved on 27-sep-2010 from http://business.rediff.com/report/2010/jul/29/huls-marketing-mantra-4m.htm

y Current Performance

Operations: Annual Report 2010, Supply Chain, pg.12. Retrieved September 26,
2010, from http://www.hul.co.in/Images/AnnualReport0910_tcm114-225889.pdf

Finance: Annual Report 2010, Finance & Accounting, pg.35. Retrieved September
26, 2010, from http://www.hul.co.in/Images/AnnualReport0910_tcm114-225889.pdf

Strengths : Archived on scribd.com.Retreived on 27-sep-2010 fromhttp://www.hul.co.in/Images/AnnualReport0910_tcm114-225889.pdf Weakness: Archived on Businessweek.com. Retrieved on 27-sep-2010 from http://www.businessweek.com/globalbiz/content/jun2009/gb20090612_706157.htm mainstream consumers. Opportunities: Archived on authorstream.com. Retrieved on 27-sep-2010 from http://www.authorstream.com/Presentation/vickyvishalshah-486442-hul/ Threats : i. http://profit.ndtv.com/news/show/hindustan-unilever-hikes-price-of-lifebuoysoap-cuts-lux-pack-size-91476?cp http://timesofindia.indiatimes.com/business/india-business/Price-war-HULreduces-tags-of-select-laundry-packs/articleshow/5529324.cms#ixzz10k2r6Mie http://www.slideshare.net/hardikldrp/swot-analysis-of-fmcg-industry

SWOT Analysis

ii.

iii.

Competitor Analysis y Ratio Analysis

All 6 Ratio s : Source : Religare Technova, Archived from the moneycontrol.com, Retrieved on 26-9-2010 from http://www.moneycontrol.com/financials/hindustanunilever/ratios/HU

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