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Analysis of Product Line Decisions Taken by Hindustan Unilever Limited
Analysis of Product Line Decisions Taken by Hindustan Unilever Limited
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DECLARATION
I declare that the whole information of this management training is to tally pure, true and based on organization site, place, customer information and website information. I hereby declare that the training entitled Analysis Of Product Line
Certificate
This is to certify that Ms. Deepika Nontani studying in MBA IVth semester in this institute have successfully completed the project titled Analysis Of Product Line Decisions Taken By Hindustan Unilever Limited in the partial fulfillment of the requirement for the award of degree of Master of Business Administration, Rani Durgavati Vishwavidyalaya, Jabalpur [M.P.]. It has not been submitted elsewhere for any other degree.
ACKNOWLEDGEMENTS
Its a pleasure, to dedicate this project to my parents and all those people who are involved and related to my education in some way or the other. It has been great pleasure working under the guidance of Ms. Priyanka Khosla , Mr. Chandrashekhar Aronkar who truly in the sense of word has been a constant source of inspiration and encouragement and this project has been completed by the help of his valuable guidance and advises from beginning to the end of the project. Lastly, thanks to the Gyan Ganga family for their constant support and help.
CONTENTS
1. Executive Summary 2. Company Profile 3. Research Methodology Limitations of the Study
4. Data Analysis & Interpretation 5. Finding of the Study 6. Conclusion 7. References & Bibliography 8. Annexure
EXECUTIVE SUMMARY
HUL is India's largest Fast Moving Consumer Goods (FMCG) company. HLL's brands like Lifebuoy, Lux, Surf Excel, Rin, Wheel, Fair & Lovely, Pond's, Sunsilk, Clinic, Pepsodent, Close-up, Lakme, Brooke Bond, Kissan, Knorr-Annapurna, Kwality Wall's are household names across the country and span a host of categories, such as soaps, detergents, personal products, tea, coffee, branded staples, ice cream and culinary products.
This Study Is Undertaken To Analyse Of Product Line Decisions Taken By Hindustan Unilever Limited.
Product lining is the marketing strategy of offering for sale several related products. A group of products that are closely related because they function in a similar manner are sold to the same customer groups, are marked through the same types of outlets, or fall within given price range. A major product line decision involves product line length.
The number of items in the product line. The line is too short if the manager can increase profits by adding items. The line is too long if the manager can increase profits by dropping items. Product line length is influenced by company objectives and resources.
OBJECTIVES OF RESEARCH
To Know about the Product line Decisions Taken by the Hindustan Unilever limited. To Know about the various Products offered by the company. To Know about the New Products introduced in the existing Product Line. To know about various Products Pruned by the company from the existing Product Line. To know about Different Strategy adopted by the company to flourish its Product line. To know about Performance of Product line in an Indian market.
INTRODUCTION
Description Of Business And Company Profile.
Hindustan Unilever is one of the worlds leading suppliers of fast moving consumer goods across foods, home and personal product categories. Unilevers portfolio includes some of the worlds best known and most loved brands.
Business structure
Our operations are currently Organized into two global divisions Foods Division Home and Personal Care (HPC) both headed by Divisional Directors. This structure allows the appropriate focus on foods and home and personal care activities at both regional and global levels and allows us to optimize synergies across the product portfolio. The two divisions operations are currently organized into business groups on a regional basis, with certain exceptions: the global businesses of prestige, our fragrance business within HPC and Unilever Food solutions within Foods. The regional and global businesses are currently headed by Business Presidents. These businesses remain the driving force behind Unilever, comprising the operating companies which provide the key interface with customers and consumers, allowing quick response to the needs of local markets. The division of Unilever limited is classified into various division explained as under:-
1. FOOD DIVISION Unilever is one of the leading food companies in the world. Its mission is to add vitality to life by meeting everyday needs of people everywhere, through branded products that make people enjoy food, enjoy health, and enjoy life. Savoury and dressings: A Unilever global leader in savoury and dressings, with strong brands rooted in chefmanship and taste, including Knorr, Hellmanns, Calv, Wishbone, Amora and Bertolli. Our leading savoury brand, Knorr, is Unilevers biggest brand, and is sold in over 100 markets. Its product range includes soups, bouillons, sauces, snacks, noodles, frozen food and meal solutions. A wider savoury product range is marketed around the world under a variety of brand names. Its combined dressings business is the biggest in the world. With Bertolli, which began as a leading Italian olive oil brand, we are building on the qualities associated with Italian food to extend the brand into spreads, dressings and pasta sauces. Spreads and cooking products HUL leads with the spreads and cooking products category with two key brand families with increasingly consistent positionings around the world. Healthy heart brands Becel and Flora deliver strong growth, particularly with proactiv, through health benefits enabling people to enjoy life to the full. Family brands including Rama, Blue Band and Country Crock are building a positioning based on tasty, nutritious foods for the family.
Beverages: HUL Leads market in tea-based beverages with Lipton, then global market leader in leaf and ready-to-drink tea. Innovations, including Lipton Ice Tea Green and Lipton Aqua, target the growing market for healthy, refreshing beverages. HUL respond with products and brands across our portfolio including SlimFast, whose range includes meal replacement drinks, soups and snack bars. Hindustan unilever limited meets the needs of various customer by providing good nutrition in affordable formats with Annapurna and, under AdeS, a range of tasty, nutritional, soy-based drinks. Ice cream and frozen foods: Hindustan Unilever is worlds leading producer of ice cream, with sales in more than 40 countries. Ice cream products under the Heart brand, including Cornetto, Magnum, Carte dOr and Solero, are sold internationally. Breyers, Ben & Jerrys, Klondike and Popsicle are leading North American-based brands. Ben & Jerrys is also sold in Europe. Although not a separate reporting category as its results are reported within the categories above, Unilever Food solutions is a global food service business providing solutions for professional chefs and caterers. For example, it provides preprepared ingredients that save time and new ways of serving food on a large scale at consistent quality.
2. HOME AND PERSONAL CARE Unilever Home and Personal Care has some of the worlds most successful brands, such as Dove, Lux, Omo and Surf. All its brands are about looking good, feeling good and getting more out of life. With a strong heritage in hygiene and personal care, combined with deep consumer insights. This brand portfolio adds vitality to life and delivers value to our business. Home care product segment: Company is market leaders in laundry products in developing and emerging markets, and hold number two positions in North America and most of Europe. Its products have been developed to meet the diverse range of consumer needs to clean and care for their clothes. They include tablets for convenience, traditional powders and liquids for washing by hand or machine. Tailored products, including soap bars, are available for lower income consumers. It brands include Comfort, Omo, Radiant, Skip, Snuggle and Surf, and they are available in over 100 countries. Household care products are designed to meet most cleaning and hygiene needs around the home. Where Cif and Domestos hold strong positions in the key markets in which they operate.
Personal care
HUL lead the global deodorants and skin cleansing markets, and are in the top three in daily hair care and mass-market skin care. Six global brands Axe, Dove, Lux, Ponds, Rexona and Sunsilk are the core products in these categories. They are complemented by Suave, mainly in North America, and health brands such as
Clear, Lifebuoy and Vaseline, together with a selection of regional and local jewels. In oral care we have strong positions in a number of countries in Europe and in developing and emerging markets, particularly with our Signal and Close Up toothpaste brands. Its global prestige fragrance business is based on the Calvin Klein range, which includes cK one, Eternity and Obsession, complemented by ranges developed with other designers.
1888 Sunlight soap introduced in India. 1895 Lifebuoy soap launched; Lever Brothers appoints agents in Mumbai, Chennai, Kolkata, and Karachi.
1902 Pears soap introduced in India. 1903 Brooke Bond Red Label tea launched. 1905 Lux flakes introduced. 1913 Vim scouring powder introduced. 1914 Vinolia soap launched in India. 1918 Vanaspati introduced by Dutch margarine manufacturers like Van den Berghs, Jurgens,Verschure Creameries, and Hartogs.
1922 Rinso soap powder introduced. 1924 Gibbs dental preparations launched. 1925 Lever Brothers gets full control of North West Soap Company. 1926 Hartogs registers Dalda Trademark.
1930 Unilever is formed on January 1 through merger of Lever Brothers and Margarine Unie.
1931 Hindustan Vanaspati Manufacturing Company registered on November 27; Sewri factorysite bought.
1932 Vanaspati manufacture starts at Sewri. 1933 Application made for setting up soap factory next to the Vanaspati factory at Sewri; LeverBrothers India Limited incorporated on October 17.
1934 Soap manufacture begins at Sewri factory in October; North West Soap Companys GardenReach Factory, Kolkata rented and expanded to produce Lever brands.
1935 United Traders incorporated on May 11 to market Personal Products. 1937 Mr. Prakash Tandon, one of the first Indian covenanted managers, joins HVM.
1939 Garden Reach Factory purchased outright; concentration on building up Dalda Vanaspatias a brand.
1941 Agencies in Mumbai, Chennai, Kolkata and Karachi taken over; company acquires ownsales force. 1942 Unilever takes firm decision to train Indians to take over junior and senior managementpositions instead of Europeans.
1944 Reorganisation of the three companies with common management but separate marketingoperations. 1947 Ponds Cold Cream launched.
1951 Mr. Prakash Tandon becomes first Indian Director. Shamnagar, Tiruchy, and GhaziabadVanaspati factories bought.
1955 65% of managers are Indians. 1956 Three companies merge to form Hindustan Unilever Limited, with 10% Indian equityparticipation.
1958 Research Unit starts functioning at Mumbai Factory. 1959 Surf launched. 1962 Formal Exports Department starts. 1963 Head Office building at Backbay Reclamation, Mumbai, opened. 1964 Etah dairy set up, Anik ghee launched; Animal feeds plant at Ghaziabad; Sunsilk shampoo launched.
1965 Signal toothpaste launched; Indian shareholding increases to 14%. 1966 Levers baby food, more new foods introduced; Nickel catalyst production begins; Indian shareholding increases to 15%. Statutory price control on Vanaspati; Taj Mahal tea launched.
1967 Hindustan Unilever Research Centre, opens in Mumbai. 1969 Rin bar launched; Fine Chemicals Unit starts production; Bru coffee launched.
1971 Mr. V. G. Rajadhyaksha presents plan for diversification into chemicals to Unilever SpecialCommittee - plan approved; Clinic shampoo launched.
1974 Pilot plant for industrial chemicals at Taloja; informal price control on soaps withdrawn;Liril marketed.
1975 Ten-year modernisation plan for soaps and detergent plants; Jammu project work begins; statutory price control on Vanaspati and baby foods withdrawn; Close-up toothpaste launched.
1976 Construction work of Haldia chemicals complex begins; Taloja chemicals unit begins functioning.
1977 Jammu synthetic Detergents plant inaugurated; Indian shareholding increases to 18.57%.
1978 Indian shareholding increases to 34%; Fair & Lovely skin cream launched.
1979 Sodium Tripolyphospate plant at Haldia commissioned. 1980 Dr. A. S. Ganguly takes over as Chairman from Mr. T. Thomas; Unilever shareholding inthe company comes down to 51%.
1982 Government allows 51% Unilever shareholding. 1984 Foods, Animal Feeds businesses transferred to Lipton. 1986 Agri-products unit at Hyderabad starts functioning - first range of hybrid seeds comesout; Khamgaon Soaps unit and Yavatmal Personal
1988 Launch of Lipton Taaza tea. 1990 Mr. S. M. Datta takes over as Chairman from Dr. A. S. Ganguly. 1991 Surf Ultra detergent launched. 1992 HUL recognised by Government of India as Star Trading House in Exports.
1993 HULs largest competitor, Tata Oil Mills Company (TOMCO), merges with the companywith effect from April 1, 1993, the biggest such in Indian industry till that time. Mergerultimately accomplished in December 1994; Launch of Vim bar; Kissan acquired from the UBGroup.
1994 HUL forms Unilever Nepal Limited, HUL and US-based KimberleyClark Corporation form
50:50 joint venture - Kimberley-Clark Lever Ltd. - to market Huggies diapers and Kotex
Feminine care products. Factory set up at Pune in 1995; HUL acquires Kwality and Milk food 100% brand names and distribution assets. HUL introduces Walls.
1995 HUL and Indian cosmetics major, Lakme Ltd., form 50:50 joint venture - Lakme Lever Ltd.; HUL enters branded staples business with salt; HUL recognised as Super Star Trading House.
1996 Mr. K. B. Dadiseth takes over as Chairman from Mr. S. M. Datta; Merger of Group company, Brooke Bond Lipton India Limited, with HUL, with effect from January 1; HUL introduces branded atta; Surf Excel launched.
1997 Unilever sets up International Research Laboratory in Bangalore; new Regional Innovation Centres also come up. 1998 Group company, Ponds India Ltd., merges with HUL with effect from January 1, 1998. HUL acquires Lakme brand, factories and Lakme Ltd.s 50% equity in Lakme Lever Ltd.
2000 Mr. M. S. Banga takes over as Chairman from Mr. K. B. Dadiseth, who joins the Unilever Board; HUL acquires 74% stake in Modern Food
Industries Ltd., the first public sector company to be disinvested by the Government of India.
2002 HUL enters Ayurvedic health & beauty centre category with the Ayush range and Ayush Therapy Centres.
2003 Launch of Hindustan Lever Network; acquisition of the Amalgam Group 2005 Launch of Pureit water purifiers.
What is PRODUCT?
Product is a bundle of satisfactions that a customer buys. It represents a solution to a customers problems. The product is always a combination of tangible and intangible benefits. Three concepts of a product: Tangible Product, Core Product and Augmented Product. Core Product The essential utility or product that is being sought or offered Tangible Product Physical entity or service that is offered to the market, Quality level, features, styling, brand name, packaging Augmented Product The totality of benefits and costs that the person receives or experiences in obtaining the product.
The number of different product lines sold by a company is referred to as width of product mix. The total number of products sold in all lines is referred to as length of product mix. If a line of products is sold with the same brand name, this is referred to as family branding. When you add a new product to a line, it is referred to as a line extension. When you add a line extension that is of better quality than the other products in the line, this is referred to as trading up or brand leveraging. When you add a line extension that is of lower quality than the other products of the line, this is referred to as trading down. When you trade down, you will likely reduce your brand equity. You are gaining short-term sales at the expense of long term sales. Image anchors are highly promoted products within a line that define the image of the whole line. Image anchors are usually from the higher end of the line's range. When you add a new product within the current range of an incomplete line, this is referred to as line filling. Price lining is the use of a limited number of prices for all your product offerings. This is a tradition started in the old five and dime stores in which everything cost either 5 or 10 cents. Its underlying rationale is that these amounts are seen as suitable price points for a whole range of products by prospective customers. It has the advantage of ease of administering, but the disadvantage of inflexibility, particularly in times of inflation or unstable prices. There are many important decisions about product and service development and marketing. In the process of product development and marketing we should focus on strategic decisions about product attributes, product branding, product packaging, product labeling and product support services. But product strategy also calls for building a product line.
The number of items in the product line. The line is too short if the manager can increase profits by adding items. The line is too long if the manager can increase profits by dropping items. Product line length is influenced by company objectives and resources. In case of non-profit organizations, line length determined on the basis of achievement of organizations objectives. There are some issues in Product line decisions are involves:
Line pruning - There is a tendency for product lines to lengthen over time. Hence a review must be carried out regularly. Line modernization Modernizing all products in the line. Line featuring Selecting a few items from the line and promoting them aggressively to attract attention to the total line.
The Group's principal activities are to manufacture and market consumer products. The Group operates through seven segments: Soaps and Detergents, Personal Products, Exports, Beverages, Foods, Ice Creams and Other. The products include home and personal care products, foods and beverages, industrial and agricultural products. Home and personal care products consists of personal and fabric wash, household, oral care, skin and hair care, deodorants, perfumes, colour cosmetics and baby care. Foods and beverages includes tea, coffee, cooking fats and oils, bakery fats, ice creams, tomato products, fruit and vegetable products, rice, salt, atta and rawa, marine products and mushrooms. Industrial and agricultural products includes specialty chemicals, bulk chemicals, fertilisers, animal feeds, seeds, plant growth nutrients, processed-tri-glycerides and agri commodities, yeast, leather, footwear and carpets, thermometers and plantations. HUL has adopted a focused growth strategy by concentrating on brands which constitute most of the business. From marketing 110 brands in 2000. HUL now focuses on 35 power brands, chosen for their scale and potential. Non-core business has been divested or transferred through joint ventures.
This has helped HUL achieve product differentiation and improvement in sales.
Brands
Unilever owned until recently some 2000 different brands worldwide. This is the
direct result of the companys history. Over the decades, it acquired many local/national companies, each with its own national brands. This legacy continued for a long time. In 1999, Unilever came up with a new strategy to accelerate growth, its so-called Path to Growth. One of the major elements of this strategy involved refocusing more on major brands. This involved the reduction of its number of brands from about 1600 still in use to 400.Very few brand names have worldwide resonance. Unilevers policy involves stretching well-known brand names into different product categories. For instance, Lipton started as a brand name in tea but has since expanded into beverages. Dove began as a brand name for special soaps, but has since expanded into shampoos, deodorants, shower gels and other products. The major brand names are mentioned below, with foods and home & personal care products separate.
Cosmetics
Axe Deo Axe Talc Lakme hair Vaseline Fair&lovely. Ponds talc Denim Talc PondsCold Cream Rexona deo. Sunsilk
ProductLine Length
Started franchised Lakme Beauty Salons and Ayush Therapy centres to offer standardised services, in line with the strategy to leverage the equity of its brands through relevant services. Innovatively reached out to its consumers, particularly in rural areas by leveraging nonconventional media like wall paintings, cinema vans, weekly markets (haats), fairs and festivals.
RESEARCH METHODOLOGY
The Data for this project was collected through Primary and Secondary sources. It is essential to collect PRIMARY DATA to make sample survey. A successful and the most popular technique of data collection is through a questionnaire, thus a questionnaire was framed and distributed manually among different wholesalers and retailers in the Jabalpur region. SECONDARY SOURCE: This Report is dedicated to Secondary information about company profile and various decision taken by the company regarding product line expansion ,product line pruning and various other matter related to product line. I have collected this information with the help of internet and journals. This report gives you relevant information about various activities taken by Hindustan Unilever limited.
DATA COLLECTION TOOL:I have collected all the information with the help of Internet, Journals and Secondary source.
SAMPLE PLAN
Units- Wholesalers and retailers in the Jabalpur region. 1. Size- 30 respondents.
ANALYSIS OF DATA
Three preliminaries should be followed for analyzing a data:1. Editing 2. Classifying 3. Coding The contents of data obtained in the study were carefully checked for any possible inconsistencies or incompleteness. And then finally the data was interpreted to reach a final conclusion.
DATA INTERPRETATION
Ques 1) Which of the brand is most preferred by the customer? A) For bathing soaps Lux Liril Dove
60% 50% 40% 30% 20% 10% 0% Lux Liril Dove
Interpretation 57% of the respondents feels that the Lux is the most preferred brand by the customer followed by Dove and Liril.
Interpretation 51% of the respondents feels that the Surf is the most preferred brand by the customer followed by Rin and Wheel.
Interpretation 47% of the respondents feels that Fair & Lovely is the most preferred brand by the customer followed by Ponds and Lakme.
Interpretation 46% of the respondents feels that Taj Mahal tea is the most preferred brand by the customer followed by bru coffee and Tazaa tea.
Ques 2) Rate the distribution Process of the Company? Good Average Poor
60% 50% 40% 30% 20% 10% 0% Good Average Poor
Interpretation 55% of the respondents feels that the distribution Process of the Company is good,37% feels its average while 8% found it to be poor.
Ques 3) Rate the Product Line of the company related to FMCG? Excellent Good Poor
70% 60% 50% 40% 30% 20% 10% 0% Excellent Good Poor
Interpretation 65% of the respondents feels that the Product Line of the company related to FMCG is Excellent, 26% feels its good while 9% found it to be poor.
According to Secondary Data Hindustan Unilever Ltd is a 51 per cent owned subsidiary of the Anglo Dutch giant Unilever, which has been expanding the scope of its operations in India since 1888. It is the country's biggest consumer goods company with net sales of US$ 2.4 billion in 2003. HUL is amongst the top five exporters of the country and also the biggest exporter of tea and castor oil. The product portfolio of the company includes household and personal care products like soaps, detergents, shampoos, skin care products, colour cosmetics, deodorants and fragrances. It is also the market leader in tea, processed coffee, branded wheat flour, tomato products, ice cream, jams and squashes. HUL enjoys a formidable distribution network covering over 3,400 distributors and 16 million outlets. In the future, the company plans to concentrate on its herbal health care portfolio (Ayush) and confectionary business (Max). Its implementing its strategy to grow includes focusing on the power brands' growth through consumer relevant information, cross category extensions, leveraging channel opportunities and increased focus on rural growth.
First launched in France in 1983,leading male grooming brand, Axe, now gives guys the edge in the mating game in over 60 countries.
Its oral care brands Mentadent, Peposodent and Signal have teamed up with the world's largest dental federation, the FDI, which represents over 750 000 dentists around the world.
Lux became the first mass-marketed soap when it launched in 1924. Today it achieves annual global sales of over 1 billion.
Hindustan Lever in India has launched a hand-wash product, Surf Excel Quick Wash, with a low foaming formulation, reducing the amount of water needed for rinsing by up to two buckets per wash.
Recent breakthroughs at Rexona include Rexona Crystal, a deodorant that eliminates unsightly white deposits on dark garments.
Knorr is biggest food brand with a strong presence in over 80 countries and a product range including soups, sauces, bouillons, noodles and complete meals.
HUL is the world's largest ice cream manufacturer, with successful Heartbrand which includes Magnum, Cornetto, Carte d'Or and Solero, and Ben & Jerry's and Breyers in the US
Lipton's tea-based drinks include the international Lipton Iced Tea range, the Lipton range in North America and Lipton Yellow Label, the world's favourite tea brand.
Becel/Flora pro.activ products have been recognised as the most significant advancement in the dietary management of cholesterol in 40 years.
AdEs, soy-based fruit drink, has been growing at the impressive rate of 35% since its launch in 1997 in Latin America.
CONCLUSION
Company is having good postion in the market and they are offering quality product in the market. Unilever has over the past 5 years been actively involved in setting standards for social and environmental behaviour and conduct. It does this in a very systematic way and is in the process of developing procedures to make the developed standard applicable throughout all of its operations. With 400 brands spanning 14 categories of home, personal care and foods products, no other company touches so many people's lives in so many different ways. They have a wide and diverse set of competitors in consumer goods businesses. Many of they also operate on an international scale, but others have a narrower regional or local focus. Competition is a normal part of business. They aim to compete and give value consumers, customers and shareholders in following ways: They continually developing new and improved products. They are sharing innovations and concepts with businesses all around the world. HUL is striving to lower the cost of our sourcing, manufacturing and distribution processes while still maintaining, and improving, the quality of our products. They support efforts to create a more open competitive environment through the liberalisation of international trade. They support the fuller implementation of the Single European Market and inclusion
BIBLOGRAPHY
1. Kripalani, Manjeet, "Unilever's Jewel: It May Be the Best-Run Outfit in India," Business Week, April 26, 1999, p. 114E2.
2. Nayyar, Seema, "Unilever Makes Power Move on Arden," Adweek's Marketing Week, June 22, 1992.
Questionnaire
NameAge.. Address.
Ques 1) Which of the brand is most preferred by the customer? A) For bathing soaps Lux Liril Dove B) Detergents Surf Wheel Rin C) Cosmetics Lakme Ponds Fair & Lovely D) Beverages Bru coffee Taj Mahal Tea Tazaa Tea Ques 2) Rate the distribution Process of the Company? Good Average Poor Ques 3) Rate the Product Line of the company related to FMCG? Excellent Good Poor