Internship Report on

SALES AND DISTRIBUTION MANAGEMENT IN (HUL)

BY
AMIT KUMAR
ID- ASM12PGDM006

Submitted to
ACHARYA SCHOOL OF MANAGEMENT, BANGALORE
In partial fulfillment of the requirements for the award of the degree of
POST GRADUATE DIPLOMA IN MANAGEMENT
Under the guidance of

INTERNAL GUIDE
Prof: RAVI KUMAR

EXTERNAL GUIDE
SANJAY GUPTA

ACHARYA SCHOOL OF MANAGEMENT

Department of PGDM (2012-2014)
Dr Sarvepalli Radhakrishnan Road
Soldevanahalli, Hesarghatta Main Road, Bangalore -560090

CERTIFICATE

This is to certify that AMIT KUMAR bearing Roll Number ASM1204003, is a bonafide
Student of Post Graduate Diploma In Management, Acharya School of Management
(Batch 2012-14), Approved by AICTE, Ministry of HRD, New Delhi. Internship report on
SALES AND DISTRIBUTION MANAGEN (C.G) is prepared by him/her under the
guidance of Prof: RAVI KUMAR, in partial fulfillment of the requirements for the award
of Post Graduate Diploma in Management.

Signature of Internal Guide

Signature of Head & Mgmt Studies

Prof: RAVI KUMAR

Internship Completion Certificate

It is here by certified that Mr. /Ms. _AMIT KUMAR , student of the Acharya School of
Management has completed the Internship at our organization _TRIMURTI
ENTERPRISES BHILAI from_27-OCT-2013_ to _04-01-2014 successfully.

Mr. AMIT KUMAR during his/her stay at our organization has performed the assigned
worked satisfactorily and conduct was good. The student has attended all days for
completing his/her internship.

Reporting Officer
(With Name, Designation
Contact Number & Seal)

DECLARATION
I AMIT KUMAR, hereby declare that the Internship report entitled SALES AND
DISTRIBUTION MANAGEMENT IN (C.G) with reference to TRIMURTI
ENTERPRISES BHILAI prepared by me under the guidance of (Prof: RAVI KUMAR) ,
faculty of the Acharya School of Management.
I also declare that this Internship project is towards the partial fulfillment of the
curriculum requirements of PGDM Program at the Acharya School of Management.
I have undertaken this project for a period of 10 weeks. I further declare that this
project is based on the original study undertaken by me and has not been submitted
for the award of any degree/diploma from any other University/Institution.

Place: Bangalore

Signature of the student

Date: 22-Jan-2014

TABLE OF CONTENTS
4

CONTENTS

Page No

Chapter 1: Executive Summary

06

Chapter 2: Objective of the Study

08

Chapter 3: Industry Profile

10

12
Chapter 4: Company Profile

35

Chapter 5: SWOT Analysis

43

Chapter 6: Methodology of data collection

46

Chapter 7: Analysis and Findings

55

Chapter 8: Recommendations

64

Chapter 9: Conclusion

68

CHAPTER 1
EXECUTIVE SUMMARY

Executive Summary

The main objective of the project is to get the full

knowledge of the distribution network of the products of the
HUL and how they are using the distribution network as a
key diff erentiating factor from its competitors. This is also to
find the preferences of customer and there market knowledge
and product information, information about the presence of the
rivals of HUL and all the other options they have in the market.
HUL are also looking to tap the market in rural sector, so
they also taking into consideration the needs and wants of the
people there. The study was done with reference to many
products of HUL and there distribution channel in DURG, BHILAI of
(C.G).
It was a useful learning to understand the working of HUL.

CHAPTER 2
OBJECTIVE OF THE STUDY

Objective of the Study

To understand the distribution network of Hindustan Unilever Ltd.

To find the ways to use the distribution network as the key differentiating
factor from its competitors.

Scope of the study

The scope of the study is confined to distribution networks in DURG,

BHILAI only, as the project duration is short time.

Limitayion of study
The distributors showed lack of interest due to time constraint or some other
personal issues.

CHAPTER 3
INDUSTRY PROFILE

10

Industry Profile
Fast Moving Consumer Goods (FMCG) goods are popularly named as consumer
packaged goods. Items in this category include all consumables (other than
groceries/pulses) people buy at regular intervals. The most common in the list are toilet
soaps, detergents, shampoos, toothpaste, shaving products, shoe polish, packaged
foodstuff, and household accessories and extends to certain electronic goods. These
items are meant for daily of frequent consumption and have a high return.
The Indian FMCG sector with a market size of US$14.8 billion is the fourth largest
sector in the economy. The FMCG market is set to double from USD 14.7 billion in
2008-09 to USD 30 billion in 2012. FMCG sector will witness more than 60 per cent
growth in rural and semi-urban India by 2010. Indian consumer goods market is
expected to reach $400 billion by 2010.Hair care, household care, male grooming,
female hygiene, and the chocolates and confectionery categories are estimated to be
the fastest growing segments. At present, urban India accounts for 66% of total FMCG
consumption, with rural India accounting for the remaining 34%. However, rural India
accounts for more than 40% consumption in major FMCG categories such as personal
care, fabric care, and hot beverages. In urban areas, home and personal care category,

11

including skin care, household care and feminine hygiene, will keep growing at relatively
attractive rates. Within the foods segment, it is estimated that processed foods, bakery,
and dairy are long-term growth categories in both rural and urban areas.The growing
incline of rural and semi-urban folks for FMCG products will be mainly responsible for
the growth in this sector, as manufacturers will have to deepen their concentration for
higher sales volumes.
Major Players in this sector include Hindustan Unilever Ltd., ITC (Indian Tobacco
Company), and Nestl India, GCMMF (AMUL), Dabur India, Asian Paints (India),
Cadbury India, Britannia Industries, Procter & Gamble Hygiene and Health Care, Marico
Industries, Nirma, Coca-Cola, Pepsi and others. As per the analysis by ASSOCHAM,
Companies Hindustan Unilever Ltd, Dabur India originates half of their sales from rural
India. While Colgate Palmolive India and Marico constitutes nearly 37% respectively,
however Nestle India Ltd and GSK Consumer drive 25 per cent of sales from rural India.
A rapid urbanization, increase in demands, presence of large number of young
population, a large number of opportunities is available in the FMCG sector. The
Finance Minister has proposed to introduce an integrated Goods and Service Tax by
April 2010.This is an exceptionally good move because the growth of consumption,
production, and employment is directly proportionate to reduction in indirect taxes which
constitute no less than 35% of the total cost of consumer products - the highest in Asia..
The bottom line is that Indian market is changing rapidly and is showing unprecedented
consumer business opportunity.

12

CHAPTER 4
COMPANY PROFILE

13

Company Profile
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.

14

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

15

factory represents the largest manufacturing investment in the Himalayan kingdom. The
UNL factory manufactures 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.
HUL launched a slew of new business initiatives in the early part of 2000s.
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.
In 2002, HUL made its foray into Ayurvedic health & beauty center 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
Pure-it water purifier in 2004.
In 2007, the Company name was formally changed to Hindustan Unilever Limited
after receiving the approval of shareholders during the 74th AGM on 18 May 2007.

16

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 crore sales milestones in 2008.
On 17th October 2008, HUL completed 75 years of corporate existence in India.

BRANDS
HUL is the market leader in Indian consumer products with presence in over 20
consumer categories such as soaps, tea, detergents and shampoos amongst others
with over 700 million Indian consumers using its products. Sixteen of HULs brands
featured in the ACNielsen Brand Equity list of 100 Most Trusted Brands Annual Survey
(2008). According to Brand Equity, HUL has the largest number of brands in the Most
Trusted Brands List. It has consistently had the largest number of brands in the Top 50,
and in the Top 10 (with 4 brands).
The company has a distribution channel of 6.3 million outlets and owns 35 major
Indian brands. Its brands include Kwality Wall's ice-cream, Knorr soups & meal
makers, Lifebuoy, Lux, Pears, Breeze, Liril, Rexona, Hamam and Moti soaps, Pureit water purifier, Lipton tea, Brooke

Bond (Roses, Taj Mahal, Taaza, Red Label)

tea, Bru coffee, Pepsodent and Close

Up toothpaste

and

brushes,

and Surf, Rin and Wheel laundry detergents, Kissan squashes and jams, Annapurna
salt and atta, Pond's talcs and creams, Vaseline lotions, Fair and Lovely creams, Lakme

17

beauty products, Clear, Clinic Plus, Clinic All Clear, Sunsilk and Dove shampoos, VIM
dishwash, Ala bleach, Domex disinfectant, Modern bread, Axe deo sprays and Comfort
fabric softeners.

MILESTONE ACHEIVED
Five of HUL's leading brands Lux, Dove, Pears, Clinic Plus and Sunsilk won
the Reader's Digest Trusted Brand 2008 Awards.
Four HUL brands featured in the top 10 list of the Economic Times Brand Equity's
Most Trusted Brands 2008 survey
HUL was awarded the Bombay Chamber Civic Award 2007 in the category of
Sustainable Environmental Initiatives.
HUL was selected as the top Indian company in the FMCG sector for the Dun &
Bradstreet - American Express Corporate Awards 2007.

18

HINDUSTAN UNILEVER LIMITED INDIAS LARGEST FMCG COMPANY

19

HUL DISTRIBUTION NETWORK

MANUFACTITS ALL ACROSS INDIA

C&F 1

STOCKISTS

C&F 2

C&F 3

C&F 4

STOCKISTS

STOCKISTS

STOCKISTS

C&F 5

STOCKISTS

C&F 6

STOCKISTS

C&F 7

STOCKISTS

WHOLESALERS
RETAILERS
CUSTOMERS

20

This is the whole Distribution Chain of HUL to cover the rural market. The company
have remarkably worked upon to make the supply chain from manufacturers to retailers
simple with very few number of mediators and jobbers. It has helped them to maintain
the transparency in the cycle and also have let them established a prompt delivery
process. The products are manufactured in the factories all across India and then is
supplied from there to the various Carriage and Forwarding (C&F) units which are 5-10
per state depending on the area they have to cover and are established by the
company. These C&F units then supply the products to the various Wholesalers
confined to their area only and according to the wholesalers demand. The wholesalers
then supply the products to the semi-wholesalers and the retailers as per the volume of
their order. Then the semi-wholesalers deliver the products to the retailers and
customers.

MANUFACTURER

STAGE 1C&F

In this stage the products reach to the Carriage and Forwarding unit from various
manufacturing units established all across India. The volume of the delivery depends
upon the quantity required/ordered by the C&F unit. The depot sends the request of the
volume of the products to the Head Office, which then order the various factories to
supply the products to the mentioned depot. The supply is met within a week. HUL has
45 C&Fs with 7000 stockists and 2000+ suppliers and associates to target the market.

21

C&F

WHOLESALERS
STAGE 2-

The C&F then supplies the products according to the demand of various wholesalers.
Each of the depot cover a region assigned to them.
Each C&F acquires 5-7 trucks and hire 4-5 more trucks to supply products everyday.
They work on the concept of advance payment by DD by the wholesalers and deposit
them in the bank which is transferred to the head office.

22

HUL DISTRIBUTION NETWORK IN RURAL MARKET

ALL ACROSS INDIA

C&F 1

STOCKISTS

C&F 2

C&F 3

C&F 4

STOCKISTS

STOCKISTS

STOCKISTS

C&F 5

STOCKISTS

C&F 6

STOCKISTS

C&F 7

STOCKISTS

WHOLESALERS
AGENTS

RETAILERS

CUSTOMERS

IN Rural Geographic Regions of India the product which should be made by the
manufactures can be delivered through by C & F unit and these unit provide stock in the
hand of the merchant wholesalers. Wholesaler delivers the product or stock to the
different retailers (who sales stock in breaking bulk) through by agents. The main
difference in urban and rural areas distribution networks are the agent who made
relation between merchant wholesalers to retailers. Retailers can sell stock in small
quantity to the ultimate consumers.

23

24

CHAPTER 5
SWOT ANALYSIS

SWOT ANALYSIS

25

Strengths
H L L e n j o ys a f o r m i d a b l e d i s t r i b u t i o n n e t w o r k c o v e r i n g o v e r 3 4 0 0
d i s t r i b u t o r s a n d 1 6 million outlets. This helps them maintain heavy volumes,
and hence, fill the shelves of most outlets. The new sales organization named 'One
HLL' brings "Household and Personal Care and foods distribution networks
together, thereby aligning all the units towards the common g o a l

of

achieving success. HLL has been continuously able to grow at a rate

m o r e t h a n growth rate for FMCG Sector, thereby reaffirming its future
stronghold

in

Indian

market.

Project Shakti

Rral India is spread across 627,000 villages and possesses a

s e r i o u s distribution challenge for FMCG Cos. HLL has come up with
a u n i q u e a n d s u c c e s s f u l i nitiative wherein the women from the rural sector
market HLL products, and hence, are able to reach the same wavelength as of the
common man in village. Apart from product reach, t h e i n i t i a t i v e a l s o
c r e a t e s b r a n d a w a r e n e s s a m o n g s t t h e l o w e r s t r a t a o f s o c i e t y. T h i s
h a s brought about phenomenal results.

Weakness

26

HLL's market dominance, originating from its extensive reach and strong brand
presence, allowed it to raise the prices even as raw materials were getting cheaper.
Hence, though the volumes decreased, t h e m a r g i n s g r e w, a n d c o m p a n y w a s
a b l e t o e a r n m o r e p r o f i t s . B u t h i g h e r m a r g i n s a t t r a c t e d competition in
areas of operations. HLL's strategy remained focused on creating power
brands and earning higher margins. It was not left with any other option but to try
cutting down the costs in order to protect volumes, if not increase it. As shown in above
figure, the key differentiators for an FMCG player are ability to call shots and
pricing power, and HLL has shown weakness over both the re factors. HLL's
weakness was its inability to transform its strategies at the right time. They continued
with the same old strateg y which helped them gain profits but was
n o t g e n u i n e i n t h i s c h a n g e e nvironment. HLL's risk aversion and market
myopia led to stagnation of business, and ferocity of competition forced it into a
defensive mode. Lack of pricing power in core business and absence of growth drivers
have put HLL on a deflationary mode.

Opportunities
India is one of the world's largest producer of FMCG goods but its exports are miniscule
as compared t o p r o d u c t i o n . T h o u g h

Indian Cos. have

been going

g l o b a l , t h e i r f o c u s i s m o r e t o w a r d s As i a n countries because of the

similar preferences. HLL is one of the top companies exporting FMCG goods
from India. An expansion of horizons towards more and more countries would help HLL

27

grow its consumer base and henceforth the revenues. Opportunity in Food Sector - The
advent of modern trade has opened up greater opportunities for HLL to diversify its
brand and strength its food division. It could look at introducing products from its
parents stable like margarines and could also look at expanding its Knorr range
of products. Well-placed to take advantage of future FMCG Growth HUL reach out
80% of 207 million households in the country through various brands. It has a
very

well-defined product portfolio spread across many product categories.

Penetration levels for some major

Categories like skin-cream (22%), shampoo (38%), toothpaste (48%) and processed
foods, continue to remain low offerings but great growth opportunities products.

Threats

ITC has reduced its dependence on the cigarettes business - Contribution of

the core business in revenues has come down from 87% in FY99 to 70% in
FY05. Over a period of five years, ITC has extended its presence into areas
like foods, retailing, hotels, greetings, agro, paper, etc. These are businesses
that can give it growth impetus in the long run. With ITC gaining momentum
in each of these businesses, it is turning into a consumer monolith, and
hence, the greatest threat to HLL's Business. SSKI India has gone on to say, "they

28

maintain Out performer on ITC with a price target of Rs. 2200, while our under
performer call on HLL remains unaltered (price target of Rs. 160)."

29

CHAPTER 6
METHODOLOGY OF DATA COLLECTION

Methodology of Data Collection

30

The Data for this project was collected through Primary and Secondary sources.

PRIMARY DATA:

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 people who are
residing in the CHATTISGARH region.

SECONDARY DATA:

This Report is dedicated to Secondary information about company profile and

various decisions taken by the company regarding product line expansion,
product line pruning and various other matters 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:

31

 I have collected all the information with the help of Internet, Journals and
Secondary source.

SAMPLE PLAN
Units- People residing in the Chhattisgarh region.
Size- 43 respondents.

ANALYSIS OF DATA
Three preliminaries should be followed for analyzing the data:1. Editing
2. Classifying

32

CHAPTER 7
ANALYSIS AND FINDINGS

33

1. Do you keep products of HUL in your outlet/shop?

a).Yes

88

b). No

12

2. Why dont you keep the products of HUL in your shop or why did you stop
keeping its
products?
a). erratic supply

b). lack of demand

c). low margin

d). no supplier

e). dont know about the company

34

2. From whom do you purchase your product?

1). Distributor

25

2). Dealer/ Agent

40

3). Agency

18

4). Wholesaler

17

35

3. How do you rate the delivery process of the distributor/dealer?

a Excellent

25

b Above Average

33

38

Average

d Below Average

e Extremely Poor

36

37

4.

Are you satisfied with the distributor/dealer behavior?

Yes

68

No

32

38

5.

Are you satisfied with the delivery of the goods supplied by distributor/ dealer?

Yes

71

No

39

6 Are they providing you adequate supply of goods?

Yes
No

76
24

7 Is the distributor taking the damages/ compensation regularly?

40

Yes

78

No

22

41

8 What is the mode of payment to the distributor/ Dealer by Retailer?

Cash

62

Credit

24

Cheque

14

42

9.

Are they providing you any discount on cash payment?

Yes

52

No

48

Are they providing you any discount on cash payment?

53
52

52
51
50

Yes

No

49
48

48

47
46
1

1
0.

Any extra benefit for the increment of the sales given by them?

43

Windows Display

75

Long term sales plan

20

Canopy

5
Any extra benefit for the increment of the sales given by them?

5
20
Windows Display

Long term sales plan

Canopy

75

44

1. Can agents regularly make aware you about the new products of HUL regular or
not?

Yes

72

No

28

45

FINDINGS

1. 88% of distributer keep HUL product in their outlet.

2. 25% of retailor purchase our product from distribute.
40% of retailor purchase our product from dealer or agents.

46

3.
4.
5.
6.
7.
8.

18% of retailor purchase our product from agencies.

17% of retailor purchase our product from wholesaler
68% of retailor are satisfied with our distributer or dealer behavior.
71% of retailor satisfied with the delivery of goods supply by distributer /dealer.
76% of dealer providing adequate supply if goods
52% of dealer providing cash discount.
72% of distributer provide information about new launch of HUL products.
Majority of 33% of retailor do not keep the stocks due to low margins.

47

CHAPTER 8
RECOMMENDATIONS

Recommendations

HUL should serve channel partners and customers by replacing damaged

products continuously.
HUL should improve the response time and try to deliver products on time.
HUL should encourage to the dealer to provide cash discount.

48

HUL should increase the quality of packaging of their product to decrease the

damages.
Launching for several sales promotional schemes for existing wholesaler and
distributors instance, it has started the Vijeta Rista jeet ka scheme last year to
provide a platform for the wholesaler and HUL to grow the business by earning
points and redeem them.

CHAPTER 9
49

CONCLUSION

Conculaction

With the study of the topic we can know about the distributor relationship with the
retailers of the largest firm in retail Sector are:
HINDUSTAN UNILEVER LIMITED.
With the study it can be easily known how the retailers are been selected HINDUSTAN
UNILEVER LIMITED (Super value store) and what the terms and conditions regarding
the selection of the retailers and what are the benefits being provided to the retailers
and what are the various benefits being provided to the retailers in order to increase
their sales.

50

The company is making there strategies regarding the customer and the various
product assortment being provided to the retailers and whether the distributor is helping
the retailers in managing the demand of the retailers and also the sales agent behavior
and delivery man behavior affects the sale of the retailers as well as the distributor.

So, my study is visualize the distribution channel of the HINDUSTAN UNILEVER

LIMITED in rural areas and they say that retailers liked

ARTICLES:
WEBLIOGRAPHY

Books:-

C R Kothari (Research Methodology)

Websites:-

www.hul.com

51

www.google.com

Magazines & Newspapers:-

Business World
Economic Times
The Times of India

52