SUMMER TRAINING REPORT

ON

MARKETING STRATEGIES
OF HINDUSTAN UNILEVER
LTD.

Submitted for the fulfillment towards the award of the degree in Master of Business
Administration of U.P.Technical. University, Lucknow
[2009-2011]

SUBMITTED BY

SUBMITTED TO

MOHD. WAHID

DR. V.K.BHATIA

Roll.No-0915870041

Director General

MBA -3rd Sem

JANHIT INSTITUTE OF EDUCATION & INFORMATION

GREATER NOIDA
(Affiliated by Uttar Pradesh Technical University,
Lucknow)

ACKNOWLEDGEMENT

I wish to express my heartfelt appreciation to many who have contributed to this

study. I would like to thank to Faculty Guide, JIEI, Greater Noida for her valuable
guidance. I wish to express my gratitude to my faculty guide, who provided me with
constant impetus to complete this project.

MOHD. WAHID

TABLE OF CONTENTS
Executive Summary
Introduction
Company Profile
Current Market Context
Exports Portfolios
Corporate Management
Research & Innovation Centre
Safety & Health Policy
Market Strategies
HLL Distribution Network
Pioneering Channels
Hindustan Unilever Ltd.
Competitors
Research Methodology
Future Scope
Findings, Data Analysis & Conclusion
Recommendations
Suggestions
Limitations
Bibliography
(Annexure) Questionnaire

EXECUTIVE SUMMARY

Hindustan Unilever Limited (HUL) is Indias largest Fast Moving

Consumer Goods Company, touching the lives of two out of three
Indians with over 20 distinct categories in Home & Personal Care
Products and Foods & Beverages. They endow the company with a
scale of combined volumes of about 4 million units and sales of Rs.10,
000 crores.
HUL is also one of the countrys largest exporters; it has been
recognized as a Golden Super Star Trading House by the Government
of India. Hence, research aims is that to study the existing marketing
practices, emerging marketing plans and understanding companies
business strategy with its profile. The main recommendations have
been made on the addressing of the advertising message to the
customers.

An

attempt

has

been

made

to

formulate

the

communication in a way to build it on a platform of the basic need for

buying HUL products. In another recommendation the suggestions
towards better dealer interest in HUL products has been given a
chance.

The research is based primarily on primary data; however few

references to industry figures from secondary data have been made.
Data has been collected through in depth interviews and administered
questionnaires.

The study has given the researchers an inside

of the Consumer durable Industry and
an opportunity to use the theoretical
knowledge in live project.

INTRODUCTION
Over 100 years' link with India. In the summer of 1888, visitors to the
Kolkata harbor & 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 51.55% equity in the
company. The rest of the shareholding is distributed among about
380,000

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 1995, HUL and yet
another Tata company, Lakme Limited, formed a 50:50 joint venture,
Lakme Lever 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, Nepal Lever Limited (NLL), and its factory represents the
largest manufacturing investment in the Himalayan kingdom. The NLL
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 Icecream 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 July 1993, 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 Icecream Group families and in 1995 the Milkfood 100%
Icecream 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 Pasteurised Crabmeat

business of the Amalgam Group of Companies, a leader in value added
Marine Products exports.

10

COMPANY PROFILE
The mission that inspires HUL's 36,000 employees, including over
1,350 managers, is to "add vitality to life." HUL meets everyday needs
for nutrition, hygiene, and personal care with brands that help people
feel good, look good and get more out of life. It is a mission HUL
shares with its parent company, Unilever, which holds 51.55% of the
equity. The rest of the shareholding is distributed among 380,000
individual shareholders and financial institutions.

HUL'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 many categories - soaps, detergents,
personal products, tea, coffee, branded staples, ice cream and culinary
products. They are manufactured in close to 80 factories. The
operations

involve

over

2,000

suppliers

and

associates.

HUL's

distribution network, comprising about 7,000 redistribution stockists,

directly covers the entire urban population, and about 250 million rural
consumers.

HUL has traditionally been a company, which incorporates latest

11

technology in all its operations. The Hindustan Lever Research Centre

(HLRC) was set up in 1958, and now has facilities in Mumbai and
Bangalore. HLRC and the Global Technology Centres in India have over
200 highly qualified scientists and technologists, many with postdoctoral experience acquired in the US and Europe.

HUL believes that an organisation's worth is also in the service it

renders to the community. HUL is focusing on health & hygiene
education, women empowerment, and water management. It is also
involved in education and rehabilitation of special or underprivileged
children,

care

for

the

destitute

and

HIV-positive,

and

rural

development. HUL has also responded in case of national calamities /

adversities and contributes through various welfare measures, most
recent being the village built by HUL in earthquake affected Gujarat,
and relief & rehabilitation after the Tsunami caused devastation in
South India.

Over the last three years the company has embarked on an ambitious
programme, Shakti. Through Shakti, HUL is creating micro-enterprise
opportunities for rural women, thereby improving their livelihood and
the standard of living in rural communities. Shakti also includes health
and hygiene education through the Shakti Vani Programme, and

12

creating access to relevant information through the iShakti community

portal. The programme now covers about 50,000 villages in 12 states.
HUL's vision is to take this programme to 100,000 villages impacting
the lives of over a 100 million rural Indians.

HUL is also running a rural health programme Lifebuoy Swasthya

Chetana. The programme endeavtheirs to induce adoption of hygienic
practices among rural Indians and aims to bring down the incidence of
diarrhoea. It has already touched 70 million people in approximately
15000 villages of 8 states. The vision is to make a billion Indians feel
safe and secure. If Hindustan Lever straddles the Indian corporate
world, it is because of being single-minded in identifying itself with
Indian aspirations and needs in every walk of life.

13

HINDUSTAN UNILEVER LIMITED INDIAS LARGEST FMCG COMPANY

14

FINANCIAL OVERVIEW

15

Hindustan Lever Limited Shareholding

Pattern
Flls
13.7
Domestic
Fls
14.8

Unilever
51.6

Individual
19.9

HUL Equity Capital - 50 Mn $

Market Capitalisation - 7,300 Mn $

16

PRESENT MARKETING STRATEGY:

Mission:
Hindustan Unilever Limited mission is to add Vitality to life. 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.
Policy:
HUL has earned a reputation for conducting its business with integrity and with
respect for the interests of those their activities can affect. This reputation is an
asset, just as real as their people and brands.
Their first priority is to be a successful business and that means investing for
growth and balancing short-term and long-term interests. It also means caring
about their consumers, employees and shareholders, their business partners and
the world in which we live.
From HUL Spokesperson To succeed requires the highest standards of behavior
from all of us. The general principles contained in this Code set out those
standards. More detailed guidance tailored to the needs of different countries and
companies will build on these principles as appropriate, but will not include any
standards less rigorous than those contained in this Code.

17

We want this Code to be more than a collection of high-sounding statements. It

must have practical value in their day-to-day business and each one of us must
follow these principles in the spirit as well as the letter.ref: business world
magazine.
Obeying the Law
HUL companies and employees are required to comply with the laws and
regulations of the countries in which they operate.
Employees

HUL is committed to diversity in a working environment where there is

mutual trust and respect and where everyone feels responsible for the
performance and reputation of the company. HUL will recruit, employ
and promote employees on the sole basis of the qualifications and
abilities needed for the work to be performed.

HUL are committed to safe and healthy working conditions for all
employees. We will not use any form of forced, compulsory or child
labour.

HUL are committed to working with employees to develop and

enhance each individual's skills and capabilities.

HUL respect the dignity of the individual and the right of employees to
freedom of association.

18

HUL will maintain good communications with employees through

company based information and consultation procedures.

Consumers
HUL 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 labelled, advertised
and communicated.
Shareholders
HUL will conduct its operations in accordance with internationally accepted
principles of good corporate governance. They will provide timely, regular and
reliable information on their activities, structure, financial situation and
performance to all shareholders.
Business Partners
HUL is committed to establishing mutually beneficial relations with their suppliers,
customers and business partners.
In their business dealings they expect their partners to adhere to business
principles consistent with their own.
Community Involvement
HUL strives to be a trusted corporate citizen and, as an integral part of society, to
fulfill their responsibilities to the societies and communities in which they operate.

19

Public Activities
HUL companies are encouraged to promote and defend their legitimate business
interests. HUL will co-operate with governments and other organisations, both
directly and through bodies such as trade associations, in the development of
proposed legislation and other regulations which may affect legitimate business
interests.
HUL neither supports political parties nor contributes to the funds of groups
whose activities are calculated to promote party interests.
The Environment
HUL is committed to making continuous improvements in the management of
their environmental impact and to the longer-term goal of developing a
sustainable business.
HUL will work in partnership with others to promote environmental care, increase
understanding of environmental issues and disseminate good practice.
Innovation
In their scientific innovation to meet consumer needs they will respect the
concerns of their consumers and of society. They will work on the basis of sound
science, applying rigorous standards of product safety.
Competition
HUL believes in vigorous yet fair competition and supports the development of

20

appropriate competition laws. Their companies and employees will conduct their
operations in accordance with the principles of fair competition and all applicable
regulations.
Business Integrity
HUL does not give or receive, whether directly or indirectly, bribes or other
improper advantages for business or financial gain. No employee may offer, give
or receive any gift or payment which is, or may be construed as being, a bribe.
Any demand for, or offer of, a bribe must be rejected immediately and reported to
management.
HUL accounting records and supporting documents must accurately describe
and reflect the nature of the underlying transactions. No undisclosed or
unrecorded account, fund or asset will be established or maintained.
Conflicts of Interests
All HUL employees are expected to avoid personal activities and financial
interests which could conflict with their responsibilities to the company.
HUL employees must not seek gain for themselves or others through misuse of
their positions.

21

Compliance Monitoring Reporting

Compliance with these principles is an essential element in their business
success. The Unilever Board is responsible for ensuring these principles are
communicated to, and understood and observed by, all employees.
Day-to-day responsibility is delegated to the senior management of the regions
and operating companies. They are responsible for implementing these
principles, if necessary through more detailed guidance tailored to local needs.
Assurance of compliance is given and monitored each year. Compliance with the
Code is subject to review by the Board supported by the Audit Committee of the
Board and the Corporate Risk Committee.
Any breaches of the Code must be reported in accordance with the procedures
specified by the Joint Secretaries. The Board of Unilever will not criticise
management for any loss of business resulting from adherence to these
principles and other mandatory policies and instructions.
The Board of Unilever expects employees to bring to their attention, or to that of
senior management, any breach or suspected breach of these principles.
Provision has been made for employees to be able to report in confidence and no
employee will suffer as a consequence of doing so.
In this Code the expressions 'Unilever' and 'Unilever companies' are used for
convenience and mean the Unilever Group of companies comprising Unilever
N.V., Unilever PLC and their respective subsidiary companies. The Board of
Unilever means the Directors of Unilever N.V. and Unilever PLC.ref:THE NEWS

22

Envoirment policy
Hindustan Unilever Limited (HUL) supplies high quality goods and services to
meet the daily needs of consumers and industry. In doing so, the Company is
committed to exhibit the highest standards of corporate behaviour towards its
consumers, employees, the societies and the world in which we live.
The company recognises its joint responsibility with the Government and the
Public to protect environment and is committed to regulate all its activities so as
to follow best practicable means for minimising adverse environmental impact
arising out of its operations.
The company is committed to making its products environmentally acceptable, on
a scientifically established basis, while fulfilling consumers' requirements for
excellent quality, performance and safety.
The aim of the Policy is to do all that is reasonably practicable to prevent or
minimise, encompassing all available knowledge and information, the risk of an
adverse environmental impact arising from processing of the product, its use or
foreseeable misuse.
This Policy document reflects the continuing commitment of the Board for sound
Environment Management of its operations. The Policy applies to development of
a process, product and services, from research to full-scale operation. It is
applicable to all company operations covering its plantations, manufacturing,
sales and distribution, research & innovation centres and offices. This document
defines the aims and scope of the Policy as well as responsibilities for the
achievement of the objectives laid down.

23

The Vision
Their vision is to continue to be an environmentally responsible organisation
making continuous improvements in the management of the environmental
impact of their operations.
HUL will achieve this through an Integrated Environment Management approach,
which focuses on People, Technology and Facilities, supported by Management
Commitment as the prime driver.

FMCG Markets

Slowdown in growth & then 2 years of decline

FMCGMarket (HLL Categories)

Growth%
00

01

02

03

8
6
4
2
0

6.7
3.4
-1.1

-2
-4

24

-2.5

FMCG Markets

2009 - Revival after 2 years of decline

FMCG Market (HLL Categories)

Growth%
02

03

Q1 '04

Q2 '04

Q3 '04

Q4 '04

8
6
4

6.1

2
0

-1.1

-2

0.8
-2.5

-2.8

-4

Pricing action in 2009:

Price reduction

25

2.0

Price reduction (Bottles) & Value improvement (Sachets)

26

Investment Behind Brands

Innovation & Superior Quality

Family safe

Petalsoft

Water & effort saving

Quick wash - 50%

No mud Rin

Advance from germs

Perfect Radiance 5 in 1 hair

Total Care

health benefits

27

Whiter teeth

Fresher breath

Current Market Context

Actions
Pricing
Laundry : Price Reduction
Shampoos: Value Improvement & Lower Price Points
Toothpaste: Value Corrections & SKU rationalization
Investments behind brands
Innovations
Quality
Higher A&P
Corrective actions in processed
Processed Foods
Corrective actions
Phased stock reduction
Withdrawl of 03 innovation
Defocus of Atta in unviable geographies
Sales decline of 26% arising from above actions
Market shares held / improved

Sales Growth%

28

BRANDS

29

PRODUCTS
Lux
Lifebuoy
Liril
Hamam

Breeze
Dove
Pears
Rexona

Surf Excel
Rin
Wheel

Fair & Lovely

Pond's

Sunsilk Naturals
Clinic

Pepsodent
Close-up

Axe
Rexona

Lakme

Ayush
Brooke Bond
Lipton

Bru

Kissan
Knorr Annapurna

Kwality Wall's

30

India's Largest Branded FMCG Exporter

It was 1962. The reality of India then was very different from what it is today.
India's economy then suffered from foreign exchange shortage. Hindustan
Lever voluntarily decided to take up Exports to support the country's economy.
Today, HUL is India's largest exporter of branded Fast Moving Consumer Goods.
It has been recognized by the Government of India as a Golden Super Star
Trading House.
Over

time,

competitive

HUL
in

has
cost

developed
and

appropriate

quality

for

capabilities
viable

to

Exports

be

globally

business.

Focus Areas
HUL's Exports focuses on two broad areas. It is a sourcing base for Unilever
brands in Home & Personal Care (HPC) and Tea for supplies to other Unilever

31

companies. It also focuses on becoming a preferred supplier to both nonUnilever and Unilever clients in three categories in which India, as a country,
has competitive advantage - Marine Products, Castor and its Derivatives and
Rice. HUL enjoys international recognition within Unilever and outside for its
quality, reliability and speed of customer service.
HUL's Exports geography comprises, at present, countries in Asia, Australia,
Africa, North America and Europe.

HUL's Exports portfolio

HPC:
The categories are soaps, skin care products and oral care products. The brands
are Lux, Lifebuoy, Pears, Fair & Lovely, Dove, Vaseline, Close-Up, Pepsodent,
Signal.

HUL

is

the

only

source

of

Pears

soap

across

the

world.

Tea:
The categories are branded packet tea, and instant tea for Unilever's ready-todrink tea business. The branded teas are Brooke Bond, Brooke Bond Red label,
Brooke Bond Taj Mahal, Lipton, Lipton Yellow Label, Lipton Green Label, Lipton
Brisk, Lipton 3-in-1 premix, Chinese Rickshaw.
Marine Products:
HUL offers a comprehensive portfolio, ranging from Surimi, Crabsticks to
Shrimps and several value-added products. Among its customers is Icelandic,
the world's third largest seafood company. In addition, HUL has also become a
part of Unilever's supply chain in seafoods for Europe too. HUL's Marine
Products brands are Ocean Diamond, Ocean Excellence, Shogun, Hima, Gold

32

Seal, Tara and Prima.

Rice:
The categories are Basmati Rice and Basmati Rice-based ready-to-eat rice
meals. The brands are Gold Seal Indus Valley, Rozana and Annapurna.
Castor:
The categories are Castor Oil, Castor-oil based products, like hydrogenated
castor oil, 12 - Hydroxy Stearic Acid, Ricinoleic Acid (used in grease and
lubricant industry, paints and surface coatings, cosmetics, emulsifiers), and
Speciality

Castor

Oils

(USP

grade,

BP

grade,

DAB

10)

etc

used

in

pharmaceutical preparations. HUL's Castor brand is Topsol.

Today, Exports is a substantial business in HUL, accounting for about 12% of
the company's turnover. HUL believes that its competitive advantages of cost
competitiveness, process competitiveness and economies of scale both at the
company and country level, hold it in good stead. They position the company to
become one of the hubs for sourcing by Unilever companies in HPC and Tea,
and also simultaneously become a preferred partner to global customers in
Marine Products, Castor and Rice.
Direct Selling:
Product Range
Lever home range
Male grooming
Oral Care
Ayurveda
Personal Wash
Foods
Reach - 1400 towns (Largest in India)
Consultant base - 330,000

33

34

Accordingly, HUL's aims are to:

Ensure safety of its products and operations for the environment
by

using

standards

of

environmental

safety,

which

are

scientifically sustainable and commonly acceptable.

Develop, introduce and maintain environmental management
systems across the company to meet the company standards as
well

as

statutory

requirements

for

environment.

Verify

compliance with these standards through regular auditing.

Assess environmental impact of all its activities and set annual
improvement objectives and targets and review these to ensure
that these are being met at the individual unit and corporate
levels.
Reduce Waste, conserve Energy and explore opportunities for
reuse and recycle.
Involve all employees in the implementation of this Policy and
provide

appropriate

training.

Provide

for

dissemination

of

information to employees on environmental objectives and

performance through suitable communication networks.
Enctheirage suppliers and co-packers to develop and employ
environmentally superior processes and ingredients and cooperate with other members of the supply chain to improve
overall environmental performance.

35

Work in partnership with external bodies and Government

agencies to promote environmental care, increase understanding
of

environmental

issues

and

disseminate

good

practice.

Responsibilities
Corporate

The Board and the Management Committee of HUL is committed

to conduct the company operations in an environmentally sound
manner. The Management Committee will:

Set

mandatory

standards

and

establish

environmental

improvement objectives and targets for HUL as a whole and for

individual units, and ensure these are included in the annual
operating plans.
Formally review environment performance of the company once
every quarter.
Review

environment

performance

when

visiting

units

and

recognise exemplary performance.

Nominate:
- A senior line manager responsible for environmental performance at
the individual HUL site.
- HUL environmental coordinator.
The

Management

Committee,

environmental coordinator will:

36

through

the

nominated

Ensure implementation of HUL Policy on environment and

compliance with Unilever and HUL environmental standards and
the

standards

stipulated

under

relevant

national

local

legislation. When believed to be appropriate, apply more

stringent criteria than those required by law.

Assess environmental impact of HUL operations and establish

strategies

for

sound

environment

management

and

key

implementation steps.
Enctheirage

development

of

inherently

safer

and

cleaner

manufacturing processes to further raise the standards of

environment performance.
Establish appropriate management systems for environment
management and ensure regular auditing to verify compliance.
Establish systems for appropriate training in implementation of
Environment Management Systems at work.
Ensure that all employees are made aware of individual and
collective responsibilities towards environment.
Arrange for expert advice on all aspects of environment
management.
Participate, wherever possible, with appropriate industry and
Government bodies advising on environmental legislation and
interact with national and local authorities concerned with
protection of environment.
Individual Units

37

The overall responsibility for environment management at each

unit will rest with the Unit Head, who will ensure implementation
of HUL Policy on environment at unit level. Concerned line
managers

heads

of

departments

are

responsible

for

environmental performance at department levels.

In order to fulfill the requirements of the Environment Policy at
each site, the Unit Head will:
Designate a unit environment coordinator who will be responsible
for co-ordinating environmental activities at unit, collating
environmental statistics and providing / arranging for expert
advice.
Agree with the Management Committee Member responsible for
the unit, specific environmental improvement objectives and
targets for the unit and ensure that these are incorporated in the
annual objectives of the concerned managers and officers and
are reviewed periodically.

Ensure that the unit complies with Unilever and HUL mandatory
standards and the relevant national and state regulations with
respect to environment.

Ensure

formal

environmental

risk

assessment

to

identify

associated environmental aspects and take appropriate steps to

control risks at acceptable levels.
Ensure that all new operations are subjected to a systematic and
formal analysis to assess environmental impact. Findings of such
exercises should be implemented prior to commencement of the
activity.

38

 Manage change in People, Technology and Facilities through a

planned approach based on training, risk assessment, precommissioning audits and adherence to design codes.
Regularly review environment performance of the unit against
set objectives and targets and strive for continual improvement.
Sustain a high degree of environmental awareness through
regular

promotional

campaigns

and

employee

participation

through training, safety committees, emergency drills etc.

Ensure dissemination of relevant information on environment
within the unit and to outside bodies, and regularly interact with
Government authorities concerned for protection of environment.
Maintain appropriate emergency procedures consistent with
available

technologies

to

prevent

control

environmental

incidents.
Provide appropriate training to all employees.
Ensure periodic audits to verify compliance with environment
management

systems

and

personally

carry

out

sample

environment audits to check efficacy of the systems.

Report environmental statistics to HUL Corporate Safety &

Environment Group on a monthly basis.

Research and Innovation Centres

Since most new products and processes are developed in these Units,
certain additional

39

responsibilities devolve on them to ensure implementation of the

Environment Policy of the company. In addition to the Unit Head's
responsibilities outlined above, the heads of these units will:
Ensure that a formal and systematic risk assessment exercise is
undertaken during the process/product development stage with
specific reference to environmental impact.
Transfer technology to the pilot plant and main production
through a properly documented process specification which will
clearly define environmental impact and risks associated with
processes, products, raw material and finished product handling,
transport and storage.
Ensure that treatment techniques are developed for any wastes
generated as a result of the new product/process and is
incorporated into the process specifications.
QUALITY POLICY:
Hindustan Unilever Limited

considers quality as one of the principal

strategic objectives to guarantee its growth and leadership in the

markets in which it operates.
The company is committed to respond creatively and competitively to
the changing needs and aspirations of their consumers through
relentless pursuit of technological excellence, innovation and quality
management across their businesses, and offer superior quality
products and services that are appropriate to the various price points
in the market as well as to their commitment to building shareholder
value.

40

The company recognises that its employees are the primary stheirce of
success in its operations and is committed to training and providing
them the necessary tools and techniques as well as empowering them
to ensure broad base compliance of this policy in the organisation at all
levels.
The company is committed to fulfill its legal and statutory obligations
and international standards of product safety and hygiene and will not
knowingly

sell

product that

is

harmful

belongings. It will institute systems

to

and

consumers
measures

to

or their
monitor

compliance in order to meet its responsibilities to consumers.

The company will maintain an open communication channel with its
consumers and customers and will carefully monitor the feedback to
continuously improve its products and services and set quality
standards to fulfill them. The company is committed to extend its
quality standards to its contract manufacturers, key suppliers and
service providers and by entering into alliances with them, to jointly
improve the quality of its products and services. This policy is
applicable to production from its own facilities as well as to production
that is outsourced.
The company will periodically review this quality policy for its
effectiveness and consistency with business objectives.
The company delegates authority and responsibility for dissemination
and implementation of this policy to each Business and Unit Head.

41

SAFETY AND HEALTH POLICY

Introduction
Hindustan Unilever Limited

(HUL) supplies high quality goods and

services to meet the daily needs of consumers and customers. In doing

so, the Company is committed to exhibit the highest standards of
corporate behavior towards its consumers, employees, the societies
and the environment in which we operate.
Towards this, the Company recognizes its responsibility to ensure
safety and protection of health of its employees, contractors and
visitors in all its operating sites, which include manufacturing, sales
and distribution, research laboratories and offices during work and
work related travel.
This Policy document defines the vision, principles, aim, required
actions and scope of the policy application as well as the responsibility
for execution.
Their Vision
Their vision is to be an injury free organization.
HUL NEWS:We will bring safety on top of mind for all employees and
will integrate it with all business processes. We will realize their Vision
through an Integrated Safety Management approach, which focuses on
People, Processes, Systems, Technology and Facilities, supported by
demonstrated leadership and employee commitment at all levels as
the prime drivers for ensuring a safe and healthy work environment.

42

Safety Principles:
HUL's Occupational Safety and Health Policy is based on and supported
by the following eight Principles.
These Principles have the same status as the Company's Code of
Business Principles:
All injuries and occupational illnesses are preventable
All operational exposures can be safeguarded
Safety evaluation of all business processes is vital
Working safely is a condition of employment
Training all employees to work safely is essential
Management audits are a must
Employee involvement is essential
All deficiencies must be reported and corrected promptly
In order to facilitate operationalisation of the Safety Principles, a
separate document has been prepared, which covers:
a) Safety Principles
b) Success Criteria
c) Illustrative KPI

43

 Consumer satisfaction

Indira is 20 years old, a tribal woman at Kondegaon village in Bastar

district. She is just back from the nearby jungles, collecting firewood.
After attending to her baby son, she will go to the village well to take a
quick wash. Yesterday her husband brought her a white soap, with pink
petals in it. Indira had requested him to buy one, for the festival later
this evening.
Indira is among millions of consumers in rural India who use Hindustan
Lever's products. She came to know about Lux through the TV set at the
community centre. It is not very costly, and also available nearby.
Home to over 700 million people, rural India comprises not only over
70% of India's billion-strong population, but also over 12% of the
world's population. The rural population already accounts for substantial
consumption of Fast Moving Consumer Goods and also consumer
durables. About 50% of the sales of soaps & detergents are generated
in rural India. Similarly, almost half the demand for black & white
television sets, pressure cookers, table fans, sewing machines also
comes from there.

44

Cost management:
But the potential is even larger, both in terms of consumption and
penetration. The fact that 70% of the population accounts for only 50%
of even relatively well-penetrated categories, like soaps & detergents,
indicates the enormous scope of consumption-led growth in these
categories. Therefore such categories will derive growth out of increased
usage. In categories, which are relatively less penetrated, like personal
products, rural India offers an even bigger growth opportunity through
greater penetration and then consumption. For example only three out
of 10 consumers in rural markets use shampoo or skin care products.
Therefore growth in such categories will emerge, as more consumers
purchase these products, and then continue to use them regularly.
Hindustan Lever has taken many initiatives over the decades to create
markets in the rural hinterlands. By marketing relevant products, at
affordable prices.
A unique example is Hindustan Lever's Lifebuoy soap. In rural India,
health is of paramount importance, because indisposition is very directly
related to loss of income. Lifebuoy, whose core equity is health and
hygiene , has for decades now been synonymous with soap in rural
India.
At the same time, if products have to come up the order in the rural
purchase hierarchy, they have to be affordable. If rural India today
accounts for about half of detergents sales, it is because HUL has
developed low-cost value-for-money branded products, like Wheel. The
company has also taken initiatives to create markets even for
apparently premium products, by offering them in pack sizes, like
sachets, whose unit prices are within the reach of rural consumers. For
example, initiated in the 1980s, sachets (Rs.2, Re.1, or 50 paise) today

45

constitute about 55% of Hindustan Lever's shampoo sales. With media

reach gradually increasing, rural consumers today, where the media has
its footprints, share the same aspirations with their urban counterparts.
HUL has responded to the trend with low unit price packs of even other
products - Lux at Rs.5, Lifebuoy at Rs.2, Surf Excel sachet at Rs.1.50,
Pond's Talc at Rs.5, Pepsodent toothpaste at Rs. 5, Fair & Lovely Skin
Cream at Rs.5, Pond's Cold Cream at Rs.5, Brooke Bond Taaza tea at
Rs.5.

Other marketing strategies:

For decades now, Hindustan Lever has also taken initiatives to
circumvent the limitation in communication channels, by innovatively
leveraging non-conventional media. Among them are wall paintings,
cinema vans, weekly markets (haat), fairs and festivals. Given the rural
consumer's fascination for cinema, the cinema vans show popular
movies, interspersed with products advertisements. Weekly markets,
fairs and festivals are parts and parcel of rural life. They give an
opportunity to address consumers, spread over many tiny hamlets, at
one location. The occasions are used to demonstrate product benefits
and also sell such products. Such demonstrations have played a
significant role in creating, for example, the detergents market in rural
India. In recent times, such demonstrations are being deployed to
illustrate how visible clean is not hygienic clean, and how using soap is
essential to prevent easily avoidable infections.
Communication through fairs and festivals are backed by direct
consumer contact. For example, in 1998-99, Hindustan Lever
implemented a major direct consumer contact, called Project Bharat,
which covered 2.2 crore homes. Each home was given a box, at a
special price of Rs.15, comprising a low unit price pack of shampoo,

46

talcum powder, toothpaste and skin cream, along with educational

leaflets and audio-visual demonstrations. The project has helped
eliminate barriers to trial, and has strengthened salience of both
particular categories and brands. Similarly in 2002, Hindustan Lever has
launched a similar large-scale direct contact, called Lifebuoy Swasthya
Chetana, which already covers 70 million people in 18,000 villages of 8
states. The project is intended at generating awareness about good
health and hygiene practices, and specifically how a simple habit of
washing hands is essential to maintaining good health. The initiative will
involve interaction with students and senior citizens, who act as change
agents.

Availability of HULs Product:

Generating awareness pays dividends only when steps are taken to
ensure constant availability of products. In rural India particularly,
availability determines volumes and market share, because the
consumer usually purchases what is available at the outlet, influenced
very largely by the retailer.
Therefore, over the decades, Hindustan Lever has progressively
strengthened its distribution reach in rural India, which today has about
33 lakh outlets. Direct rural distribution in Hindustan Lever began with
the coverage of villages adjacent to small towns. The company's
stockists in these towns were made to use their infrastructure to
distribute products to outlets in these villages. But this distribution
mode could only be extended to villages connected with motorable
roads, and it could cover about 25% of the rural population by 1995.
Therefore in 1998, Hindustan Lever launched Project Streamline to
further extend its distribution reach. Under this initiative, the company

47

identifies sub-stockists in a large village, connected by motorable road

to a small town. This sub-stockist in turn distributes the company's
products to outlets in adjacent smaller villages using transportation
suitable to interconnecting roads, like cycles, scooters or the age-old
bullock cart. Hindustan Lever is thus trying to circumvent the barrier of
motorable roads. As a result, the distribution network, as of now,
directly covers about 50,000 villages, reaching about 250 million
consumers. The company simultaneously uses the wholesale channel,
suitably incentivising them to distribute company products.
HUL has in the recent past established a common distribution system in
rural areas for all its products. Given the number of brands and their
packs the rural retailer usually requires, one HUL representative can
take all the products from the company portfolio that he needs. This
common distribution system is now fully operational, under one
Regional Sales Manager exclusively dedicated to rural markets of each
region of the country.
Over time, Hindustan Lever will further strengthen its rural distribution
through mutually beneficial alliances with rural Self Help Groups (SHGs).
Over the last five years, financial institutions, NGOs and government
organisations are working closely to establish SHGs, whose objective is
to alleviate poverty through sustainable income-generating activities.
Since 2001, Hindustan Lever is implementing Project Shakti, whereby
SHGs are being offered the option of distributing relevant products of
the company as a sustainable income-generating activity. The model
hinges on a powerful win-win relationship; the SHG engages in an
activity which brings sustainable income, while Hindustan Lever gets an
interface to interact and transact with the rural consumer. HUL's vision
for Project Shakti is to scale it up across the country by 2005, creating
about 25000 Shakti entrepreneurs, covering 100,000 villages, and

48

touching the lives of 100 million rural consumers. Begun with 50 groups
in Nalgonda district of Andhra Pradesh, with the support of local
authorities, the project has been extended, as of now, to about 50,000
villages in 12 states. A typical Shakti entrepreneur conducts business of
around Rs.10,000 - Rs 15,000 per month, which gives her an income of
about Rs 700 - Rs.1000 per month on a sustainable basis. As most of
these women are from below the poverty line, and live in extremely
small villages (less than 2000 population), this earning is very
significant, and is almost double of their past household income. The full
benefit of Project Shakti will be realised after some years.

49

HUL DISTRIBUTION NETWORK

MANUFACTURING UNITS ALL ACROSS INDIA

C&F 1

STOCKISTS

C&F 2

STOCKISTS

C&F 3

C&F 4

C&F 5

C&F 6

STOCKISTS

STOCKISTS

STOCKISTS

STOCKISTS

C&F 7

STOCKISTS

WHOLESALERS
RETAILERS

CUSTOMERS

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.

50

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.

C&F

STAGE 2WHOLESALERS

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.

51

NATION WIDE MANUFACTURING:

80 factories, across India

The year was 1923. Lord Leverhulme, the legendary founder of Lever
Brothers, was visiting India. The nationalist sentiment in India was for
locally manufactured products. Lord Leverhulme, who believed that
what is good for a country is equally good for the company, responded
to that aspiration because he too shared that dream.
His dream ultimately was realised in 1934. In September 1934, after
more than a decade of discussions in London and in India, a Lever
factory was allowed to sprout on the land that had been reclaimed by
the Bombay Port Trust at Sewri. From here, a month later rolled out the
first cake of Sunlight soap to be manufactured in India. The same year,
Lever Brothers took over the Garden Reach Factory in Kolkata.
These two factories were the first in a manufacturing base, which today
literally dots the length and breadth of India. From Assam to Gujarat,
from Uttaranchal to Kerala.
Hindustan Lever's diverse product range is today manufactured in about
80 factories. In addition, the company outsources from 150 other units.
The operations involve 2,000 suppliers and associates.

52

DEVELOPING BACKWARD AREAS

Several HUL factories are situated in backward areas. The company has
consciously responded to the national policy of development of
backward areas by setting up manufacturing units in these places, which
provide several direct and indirect employment opportunities for these
areas, and leads to general economic development of these regions
through industrialisation. In fact, all major investments of HUL, in recent
years, have been either in A-Category backward areas or No-Industry
Districts. These include factories in Khamgaon and Yavatmal
(Maharashtra), Chhindwara (Madhya Pradesh), Orai, Sumerpur and
Khalilabad (Uttar Pradesh), Haldia (West Bengal), Silvassa (Dadra &
Nagar Haveli), Pondicherry, Goa, Doom Dooma (Assam), Haridwar
(Uttaranchal) and Barotiwala (Himachal Pradesh). Since 2001 itself, HUL
has set up nine new factories in backward areas.
Equally, HUL has an enviable track record in taking over sick
enterprises, in response to requests from Government, and converting
them into viable operations. The company's units at Mangalore and
Rajpura all bear testimony to this achievement. In the process, HUL has
saved precious jobs and developed local economies. HUL's
manufacturing facilities, like the Khamgaon soap plant and the
Sumerpur detergent bar unit, are recognised as among the best in the
Unilever world.
HUL has adopted Total Productive Maintenance (TPM) for achieving
manufacturing excellence since 1994. As on date, TPM is in different
stages of implementation in 28 factories. Four HUL factories have

53

already received the TPM Consistency Award, and 14 factories have

been awarded with the TPM Excellence Award.

Marketing needs every where

How do you ensure that Mr. Ramesh in Kanyakumari gets his Lifebuoy
soap and Mrs. Kulkarni in Jammu gets to know how Bru coffee tastes
even before she has bought it? Well, you need to have a cutting edge
distribution network in place.
Hindustan Lever's distribution network is recognised as one of its key
strengths. Its focus is not only to enable easy access to our brands,
but also to touch consumers with a three-way convergence - of
product availability, brand communication, and higher levels of brand
experience.
HUL's products, manufactured across the country, are distributed
through a network of about 7,000 redistribution stockists covering
about one million retail outlets. The distribution network directly covers
the entire urban population.
The general trade comprises grocery stores, chemists, wholesale,
kiosks and general stores. Hindustan Lever services each with a tailormade mix of services. The emphasis is equally on using stores for
direct contact with consumers, as much as is possible through in-store
facilitators.

54

AT THE SUPERMARKETS
Self-service stores and supermarkets are fast emerging in metros and
large towns. To service modern retailing outlets in the metros, HUL has
set up a full-scale sales organisation, exclusively for this channel. The
business system delivers excellent customer service, while driving
growth for the company and the store. At the same time, innovative
marketing initiatives are taken to provide consumers with experience
of our brands at the store itself, through product tests and in-store
sampling.

In the villages
HUL has also revamped its sales organisation in the rural markets to
fully meet the emerging needs and increased purchasing power of the
rural

population.

The

company

has

brought

all

markets

with

populations of below 50,000 under one rural sales organisation. The

team comprises an exclusive sales force and exclusive redistribution
stockists, under the charge of dedicated managers. The team focuses
on building superior availability, while enabling brand building in the
deepest interiors. HUL's distribution network in rural India already
directly covers about 50,000 villages, reaching about 250 million
consumers, through about 6000 sub-stockists.
Harnessing Information Technology
An IT-powered system has been implemented to supply stocks to
redistribution stockists on a continuous replenishment basis. The
objective is to catalyse HUL's growth by ensuring that the right product

55

is available at the right place in right quantities, in the most costeffective manner. For this, stockists have been connected with the
company through an Internet-based network, called RSNet, for online
interaction on orders, despatches, information sharing and monitoring.
RS Net covers about 80% of the company's turnover. Today, the sales
system gets to know every day what HUL stockists have sold to almost
a million outlets across the country. RS Net is part of Project Leap,
HUL's end-to-end supply chain, which also includes a back-end system
connecting suppliers, all company sites and stretching right upto
stockists.
SHAKTI - Changing Lives in Rural India
Shakti is HUL's rural initiative, which targets small villages with
population of less than 2000 people or less. It seeks to empower
underprivileged

rural

women

by

providing

income-generating

opportunities, health and hygiene education through the Shakti Vani

programme, and creating access to relevant information through the
iShakti community portal.
In general, rural women in India are underprivileged and need a
sustainable source of income. NGOs, governmental bodies and other
institutions have been working to improve the status of rural women.
Shakti is a pioneering effort in creating livelihoods for rural women,
organised in Self-Help Groups (SHGs), and improving living standards
in rural India. Shakti provides critically needed additional income to
these women and their families, by equipping and training them to
become an extended arm of the company's operation.
Started in 2001, Shakti has already been extended to about 80,000
villages in 15 states - Andhra Pradesh, Karnataka, Tamilnadu,
Maharashtra, Gujarat, Madhya Pradesh, Chattisgarh, Uttar Pradesh,
56

Rajasthan, Punjab, Haryana, West Bengal, Orissa, Bihar & Jharkhand.

The respective state governments and several NGOs are actively
involved in the initiative.
Shakti already has about 25,000 women entrepreneurs in its fold. A
typical Shakti entrepreneur earns a sustainable income of about
Rs.700 -Rs.1,000 per month, which is double their average household
income. Shakti is thus creating opportunities for rural women to live in
improved conditions and with dignity, while improving the overall
standard of living in their families. In addition, it involves health and
hygiene programmes, which help to improve the standard of living of
the rural community. Shakti's ambit already covers about 15 million
rural population. Plans are also being drawn up to bring in partners
involved in agriculture, health, insurance and education to catalyze
overall rural development.
HUL's vision for Shakti is to scale it up across the country, covering
100,000 villages and touching the lives of 100 million rural consumers
by 2005.
Shakti Vani is a social communication programme. Women, trained in
health and hygiene issues, address village communities through
meetings at schools, village baithaks, SHG meetings and other social
fora. In 204, Shakti Vani has covered 10,000 villages in Madhya
Pradesh, Chattisgarh and Karnataka. The vision is to cover 80,000
villages in 2005.
iShakti, the Internet-based rural information service, has been
launched in Andhra Pradesh, in association with the Andhra Pradesh
Government's Rajiv Internet Village Programme. The service is now
available in Nalgonda, Vishakapatnam, West Godavari and East

57

Godavari districts. iShakti has been developed to provide information

and services to meet rural needs in medical health and hygiene,
agriculture, animal husbandry, education, vocational training and
employment and women's empowerment. The vision is to have 3,500
kiosks across the state by 2005.

Pioneering New Channels

Hindustan Lever is simultaneously creating new channels, designed on
the same principle of holistic contact with consumers.
Project Shakti, HUL's partnership with Self Help Groups of rural
women, is becoming an extended arm of the company's operation in
rural hinterlands. Started in 2001, Project Shakti has already been
extended to about 50,000 villages in 12 states - Andhra Pradesh,
Karnataka, Gujarat, Madhya Pradesh, Tamil Nadu, Chattisgarh, Uttar
Pradesh, Orissa, Punjab, Rajasthan, Maharashtra and West Bengal.
The respective state governments and several NGOs are actively
involved in the initiative. The SHGs have chosen to partner with HUL
as a business venture, armed with training from HUL and support from
government agencies concerned and NGOs.
Hindustan Lever Network (HLN) is the company's arm in the Direct
Selling channel, one of the fastest growing in India today. It already
has about 3.5 lakh consultants - all independent entrepreneurs,
trained and guided by HLN's expert managers. HLN has already spread
to over 1500 towns and cities, covering 80% of the urban population,
backed by 42 offices and 240 service centres across the country. It

58

presents a range of customised offerings in Home & Personal Care and

Foods.
Out-of-Home consumption of products and services is a growing
opportunity in India, as elsewhere in the world. Hindustan Lever is
already the largest player in the hot beverages out-of-home segment,
with over 15000 tea and coffee vending points. The company is
expanding the network aggressively, in the education, entertainment,
leisure and travel segments. HUL's allaince with Pepsi will significantly
strengthen

this

channel.

Health & Beauty Services are Hindustan Lever's simultaneous foray to

meet the increasing consumer need for such products and services.
Lakme Salons provide specialised beauty services and solutions, under
the recognised authority of the Lakme brand. The Ayush Therapy
Centres provide easy access to authentic Ayurvedic treatments and
products.
Hindustan Lever, which once pioneered distribution in India, is today
reinventing distribution - creating new channels, and redefining the
way current channels are serviced. In the process it is converging
product availability, with brand communication and brand experience.

59

NOVEL PRODUCT NEW PROCESS

Hindustan Lever's mission is to meet everyday needs for nutrition,
hygiene, and personal care, with brands that help people feel good,
look good and get more out of life. HUL's research & development
base, one of the largest in Indian industry, helps achieve this mission,
with novel products and new processes. The company has over 380
patents, demonstrating its leading edge in consumer-relevant R&D.
The Hindustan Lever Research Centre (HLRC), with facilities in Mumbai
and Bangalore, and global technology centres in India have over 200
highly qualified scientists and technologists, many with post-doctoral
experience acquired in the US and Europe. Set up in 1958, HLRC's aim
is to develop new products and processes, improving benefits and
quality of existing products, and optimal use of resources.
Major innovations have taken place, down the decades, in every
category in which HUL is present. From Home Care to Personal care,
Beverages to Foods.
Better cleaning, lesser water consumption
Consider

for

example,

HUL's

development

of

water-saving

technology for its detergents. One of the most severe problems that
India faces today is shortage of water. Water scarcity affects one in
every three Indians. In a typical Indian home, at least 20% of the
water consumed goes behind washing of clothes. HUL decided that it
would be of immense benefit to an Indian household, if a technology

60

could be developed, which would help reduce water consumed in

washing of clothes. HUL's scientists have innovated a path-breaking
technology - it reduces water consumption and time taken for rinsing
by 50%. The technology has already been introduced.
World's most advanced water purifier
People in cities and towns spend enormous amounts, either in fuel or
devices, to ensure safe drinking water. HUL's scientists have developed
a breakthrough device, called "Pureit", which purifies water as safe as
boiled

water,

providing

100%

protection

from

all

water-borne

diseases; it also removes pesticides that may be present in drinking

water. Its operation does not require electricity, running tap water and
plumbing or expensive maintenance. It thus provides water at a cost
of just Re.1 for every six litres - or less than 20 paise a litre.
Iodine In Salt - the vital ingredient
Iodine, it is well-known, is important for the mental development of
young children. Iodised salt is a well-accepted mode of ensuring
appropriate iodine intake. Yet Iodine added to salt is lost in transport,
storage as well as in the process of cooking. HUL scientists have
developed a patented breakthrough technology to stabilise iodine in
salt, following work on the stability of iodine under Indian conditions of
storage and cooking. The technology has made it possible to actually
realise the purpose of iodised salt - that people get appropriate iodine
intake through the food they eat.
Technology of skin lightening
Research in the biology of skin pigmentation has led to the formulation
of a product like Fair & Lovely Skin Cream and Lotion. The product has
been periodically updated through new patented actives. It has now

61

become a global success through exports to over 30 countries. The

product is equally used by the local population of these countries,
apart from those of Indian origin.

HUL has equally developed new processes.

In-house machine development
The company has the capability to design and manufacture machines
in-house. This enables the company to set up plants at half the cost of
others. Such technological developments have also led to significant
improvement in productivity.

Energy conservation
In the past, one of the most significant breakthroughs of HUL's
research initiative has been the development of a technology to use
non-conventional forest seed oils for soap-making which, since the
1970s, has helped save around $1.2 billion in foreign exchange. HUL
had received the Government of India's prestigious award for import
substitution.

Development

of

Structurant

Technology

for

soap

manufacturing also helped save costly conventional oils without any

compromise on product performance and quality. The latest technology
to produce Distilled Fatty Acid for soap making and the resultant plant
capacity expansion has drastically brought down specific energy
consumption while improving distillation yields. The evolution of
continuous soap processing technology has also reduced energy
consumption.
HUL believes that technology is critical to delight consumers. Creative
application of technology has made Hindustan Lever successful in
launching products and services, which raise the quality of life.

62

HELPING HANDS:

HUL

COMMITS

Rs.

CRORES

FOR

IMMEDIATE

RELIEF,

REHABILITATION TO TSUNAMI-HIT COMMUNITIES

MUMBAI, January 7, 2005: Hindustan Unilever Limited

(HUL) today

announced to commit, a total outlay of Rs.8 crores for immediate relief

and helping people to rehabilitate themselves so that they can resume
their livelihood, in the tsunami-hit areas of Pondicherry, Tamil Nadu
and Kerala. Of this, Rs.5 crores (absolute value terms) is being utilized
for distribution of the Company's nutritional & personal hygiene
products for immediate relief to the needy. Another Rs.3 crores will be
raised partly by contributions from company employees and the
balance contribution from the Company to be used in collaboration
with NGOs working with the community to provide the people, notably
fishermen, with means of livelihood and help them back on their feet.
Since December 26, employees of HUL factories and offices in
Pondicherry, Tamil Nadu and Kerala have been providing necessary
relief to the tsunami-hit people. The relief operations include,
distribution of bread and biscuits to over 2000 families in Pondicherry,
12,000 cooked meals for families in Chennai, Nagapattinam, Cuddalore
and Andamans. Over 12,000 dry relief packs, comprising of Company's
dry rations and personal hygiene products have already
distributed.

63

been

HUL's employees are donating a day's salary, matched equally by the

Company for exclusive use in rehabilitation.
The biggest concern is, that people/ fishermen have lost their means
of livelihood. HUL plans to focus its rehabilitation efforts to restore
their means of livelihood so that the local communities can quickly get
back

to

their

lives

at

the

earliest.

HUL has always been a front runner in its call for national duty and
caring for the community. Its employees not only donate generously,
but volunteer to take part in relief operations by committing their time
and physical effort. This is in line with our corporate value of care
and our CSR mission which has become an integral part in our way of
doing business.
Earlier

during

the

Gujarat

earthquake,

HUL

had

adopted

and

reconstructed a new village, Yashodadham, in Bhachau Taluka of Kutch

district. Yashodadham, spread over 25 acres, comprises 289 homes,
school building, an exclusive playground for children and a multipurpose community centre, including an anganwadi (creche), health
centre, community room and panchayat office, an underground
reservoir and an overhead tank for water. All the dwelling units have
electricity, and piped water and are now fully occupied.
HUL is India's largest Fast Moving Consumer Goods company, touching
the lives of two out of three Indians. HULs mission is to add vitality to
life" through its presence in over 20 distinct categories in Home &
Personal Care Products and Foods & Beverages. The company meets
everyday needs for nutrition, hygiene, and personal care, with brands
that help people feel good, look good and get more out of life.

64

Special Education & Rehabilitation

Under the Happy Homes initiative, HUL supports special education and
rehabilitation of children with challenges.
Asha Daan:
The initiative began in 1976, when HUL supported Mother Teresa and
the Missionaries of Charity to set up Asha Daan, a home in Mumbai for
abandoned, challenged children, and the destitute. Subsequently, Asha
Daan has also become a home to the HIV-positive. The objective in
supporting Asha Daan was and continues to be to share the
organsation's prosperity in supporting the Mother's mission of serving
the "poorest of the poor". Asha Daan has been set up on a 72,500square feet plot belonging to HUL, in the heart of Mumbai city. HUL
bears the capital and revenue expenses for maintenance, upkeep and
security of the premises. The destitute and the HIV-positive are
provided with food, shelter and medication for the last few days of
their lives. The needs of the abandoned challenged children are also
met through special classes of basic skills, physiotherapy and, if
possible, corrective surgery. At any point of time, it takes care of over
300 infants, destitute men and women and HIV-positive patients.
Over the years, HUL has opened schools for challenged children with a
sharper objective of supporting families of such children, helping the
children become self-reliant by learning appropriate skills to be
productive

members

of

the

household.

Ankur:
In 1993, HUL's Doom Dooma Plantation Division set up Ankur, a centre
for special education of challenged children. The centre takes care of

65

children with challenges, aged between 5 and 15 years. Ankur provides

educational, vocational and recreational activities to over 35 children
with a range of challenges, including sight or hearing impairment, polio
related disabilities, cerebral palsy and severe learning difficulties.
These physically and mentally challenged children are taught skills,
such as cookery, painting, embroidery, bamboo crafts, weaving,
stitching,

etc

depending

on

their

aptitudes.

The

centre

has

rehabilitated 10 children, including self-employment for 6 children by

providing

them

with

shops,

and

girls

have

been

provided

employment as creche attendants. It has also moved to normal

schools 18 children. Since inception it has covered about 80 children.
Ankur received the Lawrie Group Worldaware Award for Social
Progress

in

1999

from

HRH

Princess

Royal

in

London.

Kappagam:
Encouraged by Ankur's success, Kappagam ("shelter"), the second
centre for special education of challenged children, was set up in 1998
on HUL Plantations in South India. It has 17 children. The focus of
Kappagam is the same as that of Ankur. The centre has 17 children,
being taught self-help skills, useful vocational activities like making of
paper covers, greeting cards, wrapping papers, fancy stationery,
napkins, brooms made out of coconut leaves, candles, and also some
home care products. About 12 of the children have become relatively
self-reliant by earning through crafts learnt at the centre. Since
inception, it has covered about 28 children.
Anbagam:
Yet another day care center, Anbagam ("shelter of love"), has been
started in 2003 also in the South India Plantations. It takes care of 11

66

children. Besides medical care and meals, they too are being taught
skills such that they can become self-reliant and elementary studies.
Over 20,000 individuals have benefitted from the Happy Homes
initiatives since inception. HUL is wholeheartedly involved with all four
centres and will continue to be involved in the future.

HINDUSTAN UNILEVER LIMITED

DECEMBER QUARTER 2005

RESULTS

Total Sales grow by 14.4%; FMCG Sales growth at 15.8%

HPC and Foods grow by 17% and 9% respectively; Broad based

growth across categories

PBIT grows 13.5%; Net Profit increases by 56%

EPS for 2005 grows 17.6%; Final Dividend Rs 2.50 per share of

Re 1/- each; Total Dividend Rs 5.00 per share for 2005

Mumbai, February 14, 2006: Hindustan Unilever Limited

(HUL)

announced its results for December Quarter 2005. Growth momentum

achieved in the last three quarters has been sustained with total sales
growing by 14.4%. Domestic FMCG sales were higher by 15.8% with
both Home and Personal Care (HPC) and Foods performing well.
HPC business grew by 17.3% driven by strong performance in all
categories. Significant sales growth was achieved in the highly
competitive categories of Laundry and Shampoo. Soaps recorded good
growth, with Lux growing handsomely reflecting in market share gains.

67

All the brands in Skin category maintained their strong performance

leading to a double digit growth for the category. Consumer relevant
innovations continue to drive off-take and key innovations during the
quarter include the re-launch of Thick and Strong Sunsilk Pink, Lux
variants for the 75-year celebrations, and the national launch of
Jasmine Fresh Rin Advanced Powder.
In Foods business, Tea achieved a modest growth despite a declining
market and falling commodity prices; Coffee continued to perform well.
Processed Foods business grew strongly, albeit on a low base. The
Icecream business also achieved a 33% increase in sales, led by the
impulse category. Relaunch of Knorr soup with a superior mix and
introduction of new variants was the key Foods innovation during the
quarter.
Profit before Interest and Taxes (PBIT) increased by 13.5% after
absorbing a 50% higher spend in Advertising and Promotions. Higher
crude oil price led cost pressures continued, particularly in Laundry
category,

but

were

mitigated

by

aggressive

cost

effectiveness

programs. Profit after tax (PAT) grew by 22.7% due to a lower

effective tax rate and Net profit, including the impact of exceptional
items was higher by 56%.
For full year 2005, total sales were 11.4% higher than in the
previous year, with broad based growth across categories leading to
both HPC and Foods businesses growing by 14% and 8%, respectively.
Judicious price increases coupled with robust cost saving initiatives
partly neutralised the impact of both cost escalations, particularly in
the Laundry category, and the higher investments behind brands.

68

Consequently, PBIT increased by 1.1%. A lower tax charge for the year
resulted in a PAT growth of 12.9%. Net Profit and Earnings Per Share
at Rs 6.40, grew by 17.6%.
Mr Harish Manwani, Chairman commented: We have sustained the
growth momentum in December quarter and it continues to be broad
based across HPC and Foods categories, particularly, in the competitive
categories of Laundry and Shampoo.

This was driven by higher

investment behind our brands with exciting innovations, excellent

activation,

new

initiatives

in

Customer

significantly higher levels of A&P spends.

Management

and

with

The double digit sales

growth of over 11% for the year 2005 has been achieved after a gap
of six years.
Our strategic priority remains unchanged. We will continue to leverage
our focused portfolio of powerful brands to sustain market leadership
and grow our market position across strategic brands and categories.
In a competitive landscape, we shall continue to deliver consumer
value and invest behind our brands.

We recognize the challenge of

inflationary cost pressures driven by crude oil prices and, in the

competitive context, achieving cost leadership across the extended
supply chain continues to be a key priority.

DIVIDEND
The Board of Directors at their meeting held on February 14th, 2006
has proposed a final dividend of Rs 2.50 per share of Re 1 each,
subject to the approval of the shareholders at the annual general
meeting. This along with the interim dividend of Rs 2.50 per share
amounts to a total dividend of Rs 5.00 per share for the year 2005.

69

HUL is India's largest Fast Moving Consumer Goods company, touching

the lives of two out of three Indians.

HULs mission is to add vitality

to life through its presence in over 20 distinct categories in Home &

Personal Care Products and Foods & Beverages. The company meets
everyday needs for nutrition, hygiene, and personal care, with brands
that help people feel good, look good and get more out of life.
HUL TRANSFERS TEA ESTATES INDIA TO MAXWELL GOLDEN
TEA PRIVATE LIMITED
Mumbai, March 01, 2006: Hindustan Unilever Limited

(HUL) has

transferred its entire shareholding in its 100% subsidiary Tea Estates

India Limited (TEIL) to Maxwell Golden Tea Private Limited (MGT), a
Woodbriar Group company on March 1, 2006. TEIL owns 8 tea estates
and 6 factories for processing tea in the high-yielding belt of
Tamilnadu with an average annual output of approx. 10,500 metric
tons.
Woodbriar Group has interests in plantations, insurance services and
real estate. The Groups gardens are spread across the premium tea
growing regions in Tamilnadu and Kerala. HUL management believes
that the proposed transfer to Woodbriar Group is in the best interest of
the tea plantation business and all its stakeholders. Existing terms and
conditions of services of all TEIL employees will be fully protected in
accordance with applicable laws and terms of their employment.

70

The acquisition of TEIL by Woodbriar Group will provide scale and bring
in synergy benefits to Woodbriar Group, as a large portion of TEIL
gardens are contiguous to the existing tea gardens of Woodbriar
Group. Canara Bank, Madurai Circle has funded the debt component to
Woodbriar Group for this acquisition.
With this disposal of shareholding in TEIL, HUL has completed its exit
from its tea plantations business both in South India and Assam. It
may be recalled that HUL had sold its interests in Rossell Industries
Limited and Doom Dooma Tea Company Limited in Assam during the
last 12 months.
DSP Merrill Lynch Limited acted as financial advisor to Hindustan
Unilever Limited .
About HUL:
HUL is India's largest Fast Moving Consumer Goods Company, touching
the lives of two out of three Indians. HUL's mission is to "add vitality to
life" through its presence in over 20 distinct categories in Home &
Personal Care Products and Foods & Beverages. The company meets
everyday needs for nutrition, hygiene, and personal care, with brands
that help people feel good, look good and get more out of life. For
more information visit www.HUL.com

71

COMPETITORS
The Procter & Gamble Company Company Profile
The Procter & Gamble Company (P&G) is a brand behemoth. The
world's #1 maker of household products courts market share and
billion-dollar brands. P&G's products fall into three categories:
global beauty care; global health, baby, and family care; and
global household care. It also makes pet food and water filters
and produces soap operas (As the World Turns). More than 20 of
P&G's

brands

are

billion-dollar

sellers

(including

Actonel,

Always/Whisper, Bounty, Charmin, Crest, Downy/Lenor, Folgers,

Iams, Olay, Pampers, Pantene, Pringles, Tide, and Wella).
Acquisitive P&G bought Clairol in 2001 and a majority of Wella in
2003. Its purchase of Gillette in late 2005 was its biggest buy in
company history.
Financial Highlights
Fiscal Year End:
Revenue (2005):
Revenue Growth (1 yr):
Employees (2005):
Employee Growth (1 yr):

June
56741.00 M
10.40%
110,000
0.00%

RESEARCH METHODOLOGY

72

The section includes the overall research design, the sampling

procedure, the data collection method, the field method, and analysis
and procedure.
RESEARCH DESIGN
For this research project exploratory method is using
DATA COLLECTION METHOD
The data collect for the research can be classified as primary data and
secondary data.

Primary data is by visiting existing customer and

expected customer of Hindustan Unilever Limited and making them fill

up the questionnaire. Secondary data is from internet, books,
magazine etc.

RESEARCH INSTRUMENT
The instrument use for data collection is structured questionnaire.
Question is open and close ended depending upon the information that
needed to be elicited. I am also using the scaling technique to assess
the attitude of the customer.
SAMPLING PLAN
Keeping all the constrains in mind a sample size of 100 people .The
sampling procedure is systematic sampling

73

SCOPE
The Indian FMCG market currently appears to be at a crossroads, and
HUL

are attempting to change customer perceptions of their brands

and where

specific

buying motivations appear to be replacing

generalities.
This meanwhile, is quite unlike the west where buyers consider
aesthetics, comfort and safety, not necessarily in that order, before
finalising a purchase. Its smarter to think about emotions and
attitudes, if marketers are to do a better job of marrying what a HUL
offers to the consumers image of the offerings. Another important
outcome of the research is the believability of the claims. Most of the
claims are realistic and easy to understand. Most of the people dont
understand the quality claims by HUL.
The mindset of the Indian consumer is such that he is delighted if he
buys a pen a little cheaper than his neighbour. Things are, however,
slowly changing and customers at the upper end of the market are
now ready to pay more for more. I hope that this approach will soon
enter the new era, maybe not with the same intensity .
Success will largely be determined to the extent a company can
differentiate itself in terms of intangibles that go with a Product. Thus,
success could well hinge on the best of bundle of services that HUL
provides.HUL grew from zero to the 2,268 Million $, mark and the
number One FMCG company in India this year. Looking at the present
scenario it can be said that though there is lot of competition in the
market but HUL is picking up well. The landmark achievement comes
in 74 years in India after clinching its first overseas sale.

74

FINDINGS, DATA ANALYSIS AND CONCLUSIONS

COMPARED WITH PROCTER AND GAMBLE LTD.

WHEN

Findings
On the basis of research, we found that there is a nominal difference in
the efficiency of Hindustan leaver limited. vis--vis Procter and Gamble
Ltd. I have reached to this conclusion on the basis of following
findings. They are as follows.

Product line
Hindustan leaver limited
HUL Home & Personnel Care
> In personal Wash they have Lux , Lifebuoy, Liril, Hamam,
Breeze, Dove, Pears and
Rexona .

In
In
In
In
In
In
In

Laundry they have Surf Excel, Rin and Wheel.

skin care their brands are Fair N Lovely and Ponds.
hair Care they have Sunsilk Naturals and Clinic All clear.
Oral Care their brands are Pepsodent and Close-up.
Deodorants they have Axe and Rexona.
Colour Cosmetics they have Lakeme.
Ayurvedic Personal And Health Care they have Ayush.

75

FOODS

In
In
In
In

tea they have the brand name brook bond and lipton.
coffee they have bru.
foods they have kissan and kinnor annpuran.
ice creams they have the kwality walls.

WATER
Hindustan Unilever Limited has launched pueit, the most
advanced in home water purifier in the world.

Procter and Gamble P&G Hygiene and Health care ltd. markets
several leading brands: Whisper sanitary napkins in the Feminine
Hygiene category; Health care products such as Vicks VapoRub, vicks
action 500, Vicks Cough Drops, Vicks Inhaler; skin care and cosmetic
products viz. Old Spice.
P&G Home Products Ltd. markets several leading brands. In Fabric
Care P&G has two of its world leading detergents Tide and Ariel, in Hair
Care they have Pantene Pro V, Head & Shoulders and Rejoice. In Baby
Care they have Pampers.

CONCLUSIONAs Hindustan Unilever Limited has more brands in

its basket then Procter and gamble so it is more close to common man
and touching his or her daily life in a more comprehensive manner.

76

DEALERS
Hindustan leaver limited
While choosing the dealers HUL mainly
emphasizes on the market potential of that area, dealers financial
position, and dealers back ground (previous business), present
business, goodwill and risk taking capabilities ,by the good
responsibility of the dealer.

Procter and Gamble there is no difference as such in the process of

selection of dealers in Procter and Gamble also. Like HUL, P&G also
considers dealers financial position; present business, goodwill and
risk taking capabilities.

Conclusion: Dealers of HUL are satisfied by the companies support in

there sales because the company provides them with various schemes
and discounts, whereas satisfaction of P&G dealers lies in good
promotional activities, advertisement and the flexibility that the
company provides them. According to the senior officials of P&G it was
found that its a volume based company, hence all the above stated
parameters helps the dealer to attract more and more customers.
MODE OF TRANSPORTATION
Hindustan leaver limited; HUL uses modified trucks and rails to
deliver the products from various production sites to the dealers. They
are using new state of the art technology so that they can even track
every single bottle of shampoo. Transportation cost is shared by HUL
and the dealer.
Procter and Gamble P&G is also using road and railway
transportation system to deliver product from various production sites
to the dealers. They are also using latest Information Technology to
track there consignment whose backend is managed by infosys. Each
dealer has to keep the Good Receipt Note (GRN) number and report of
the whole items of delivered products. Transportation cost is paid by
P&G.

77

Conclusion: Both P&G and HUL uses advanced tracking technology to

track the goods and both companies use railways and roadways for
transporting there products. In HUL transportation cost is shared by
HUL and the dealer, where as at P&G, transportation cost is paid by
P&G.

FLEXIBILITY

Hindustan leaver limited As far as flexibility is concerned; our group

found that HUL provides more flexibility in terms of delivery of
produce. HUL has there own warehouses in every state and if the
dealer orders more , he is supplied with the products in time.
Procter and Gamble As far as flexibility is concerned; our group
found that P&G does not provides more flexibility in terms of delivery
of produce and in taking order from dealers.

Conclusion: our group has found that Dealers of HUL are more
satisfied than the dealers of P&G and therefore HUL is a step ahead in
terms of flexibility of placing orders and accepting orders from the
dealers.

78

DISTRIBUTION CHANNEL STRUCTURE

Hindustan Unilever limited- Hindustan Unilever Limited

channel

structures consist of whole seller, mass retailers, rural and modern

trade. Their new approach to distribution is holistic and seeks a three
way convergence of product availability brand communication and
brand experience. They are reinventing distributioncreating new
channels and redefining the way current channels are serviced. They
are building new capabilities in training the large number of people
involved in these initiatives.
Procter and gamble- Procter and gambles channel structure also
have whole sellers, mass retailers. They are revamping the companys
distribution system using efficient consumer response {E C R}
principles. The new distribution system has given the company
considerable cost and process efficiencies while significantly availability
and visibility of the companys product in the stores.

Conclusion- Our group has found that H.L.L. has more effective and
efficient distribution network as compared to P & G, which increases
the availability and presence of HUL product. HUL is also given
emphasis on penetrating the rural market as well.

79

DEALING WITH UNSOLD & DAMAGED MERCHANDISE

Hindustan Unilever Limited-It depends on the condition and type of

the product. If company feels that it is not the fault of the dealer then
company would return it, unsold products are mostly taken back by
HUL
Procter And Gamble- P & G replaces the damaged product with the
new one, it means that the damaged product are replaced by new
product.
Conclusion- Our group has found that both the companies take back
the unsold product however P & G is more flexible in returning the
damaged product as compared to the HUL. Hence P & G is more
flexible here.

80

PERFORMANCE APPRAISAL SYSTEM

Hindustan Unilever Limited- The performance appraisal system in

Hindustan Unilever Limited

is done under the supervisory of the

Appraisal supervisor. The supervisor keep track of the performance of

the employees

and based on their performance he choose the right

method of performance appraisal. The main method of performance

appraisal that have been adopted by Hindustan Unilever Limited are
360 degree appraisal and supervisory appraisal methods. it is done as
an early exercise and performance appraisal parameter is the past
performance of the employees.

Procter And Gamble- the performance appraisal system in Procter

and gamble is also done under the supervisory officer

and almost

same method are used as in the Hindustan Unilever Limited .

Conclusion- the conclusion that our group has found that there is
hardly any differences is the performance appraisal methods in both
the companies .both the companies are taking almost the same
measures and same parameters for performance appraisal , however
both the company were not willing to disclosed any changes brought in
performance appraisal system during the past five years .both of the
companies said that there have been change in some areas and which

81

has shown positive results, but not willing to give any reasons and
what changes have been brought.

TARGETS
Hindustan Unilever Limited : HUL has different channel members
with specified targets and they are intended to increase sales, HUL has
also made changes in channel members during 2001-2006 to increase
sales of the company. Every channel member has to fulfill there given
targets, channel members expect the company of ROI. Every channel
member gets credit period of two weeks. There was also change in
performance appraisal system during 2001-2006 to improve sales. HUL
has also made changes in commercial terms intended to increase the
sales in different channels and also to increase profit margins to
company.
Procter And Gamble- P&G also has different channel members with
specified targets and they are intended to increase sales .P&G also
made changes in channel members during 2001-2006 to increase sales
of the company. The channel members expect ROI depending on there
knowledge and on there performance to. Channel members get credit
period of 30 days. Payment terms of P&G are also flexible to the
channel members and P&G also has flexible payment terms P&G also
offers many discounts to these channel members. P&G has made many
changes to there commercial terms during 2001-2006 to increase
sales.
Conclusion-Both HUL and P&G are flexible to channel members, but
HUL runs some monopoly over the market by offering a credit period
of only two weeks where as P&G offers credit period of 30 days. HUL

82

also sets targets to there channel members and provides very less
margins to dealers compared to P&G.

SALES FUNCTIONING
Hindustan Unilever Limited : HUL is emphasizing on rural areas
through project Shakti these days and sales also have been increased
and HUL does not have any sales outlets HUL assigns sales territory to
there sales persons according to there skill and experience and assigns
targets to them. Performance appraisal of sales force is done by
appraisal supervisor and it is done through 360 degree appraisal
method, parameter used is performance of the sales personnel . HUL
adopts on the job and off the job training system to there sales force it
is emphasized on improving skill and experience of the sales
personnel. Sales personnel are motivated through incentives and
promotions.
Procter And Gamble: P&G has increased the number of outlets in the
country and the population in the area also increased and there is no
effect on sales. P&G sets targets to there sales force on the basis of
increase or decrease in demand and also according to the previous
sales , sales territories are assigned according to the capabilities of the
sales personnel, responsibility of the sales personnel is to clarify the
doubts of the customer and make sales of the product. Performance
appraisal of sales force is done by the manager by doing meeting with
them parameters of appraisal is increase or decrease in sales it is done
on monthly basis. P&G trains their sales force by on the job training
and training process is emphasized on skill and experience, P&G has
also brought many changes in the training system that has affected its

83

sales too. P&G motivates their sales force by providing them with
targets and incentives.

Conclusion; Both P&G and HUL trains their sales force and has a good
performance appraisal system, P&G does appraisal on a monthly basis
depending on increase and decrease of sales where as HUL does it
once in a year.

84

RECOMMENDATIONS
Both the companies having good market share in India and it keep on
increasing. Both the co. i.e. HUL and P&G should open exclusive shop.
HUL is already having exclusive shop in Mumbai called SANGAM
STORE. But it is only in India so it should be increased. The employee
should be given uniforms in which the name of the company should be
printed, by doing this the sales people get motivated. These shops
should be opened for 24 hours. They should offer 24 hours free home
delivery system. The delivery vehicle should be attractive the name of
the company should be printed in that so that it becomes the sources
of advertisement.
The companies should emphasis on its advertisement, there should be
BRAND FIT in that. For example when lux launch its advertisement
with sharukh khan with girls. It was heavily criticized because it was
not fit with the brand. It adversely affect the opinion of the customer
and it results in decrease in sales.
Both companies should emphasis their business in areas. They should
penetrate their business in the rural areas. 69% of the Indian
population lives in rural areas. There is huge market there and very
less market has been penetrated. Both these companies should
concentrate on rural areas. P&G has been hardly been seen in the rural
areas.
So they should increase their presence.

85

They should increase their CSR activities in northern India. At present

they are currently doing their CSR in southern India. So they should
increase their activities in north India also.

SUGGESTIONS
Key attribute components:
Value for money and Customer Care
Operational attributes.
Physical attributes.
Brand Image.
Customer Specific Details.
In any correspondence with the customers the message should be sent
in these components only to have the maximum benefit from the
advertisement.

Also

these

components

should

be

dealt

with

independently. The advertisements should speak only of the believable

concepts rather than glorifying the pretentious ones. The basic need of
the customer need to be addressed which is actually not much
expensive and better quality.
HUL sales growth in june 2004 was decreased due to the problem
with promotion and pricing. Although being the most competitive
product on the basis of the Market Operating Price (MOP), the
shampoos are still not selling much. This is perhaps due to the
bargaining stress on the customer and the weak push given by the
dealer to the particular item, when actually it should be sold like a high
volume product.
Another serious suggestion is that HUL must give good attention to
their all the products rice and all are not getting much attention. The

86

dealers dont provide much support to the customers in making them

understand the real Quality behind them. Either, the technical details
should be presented in a clearer manner or the dealers need to be
educated properly.

LIMITATIONS
Everything in this world has its own advantages and disadvantages
which shows nothing is perfect.
Following are the problems faced but its a part of game:
1. TIME CONSUMING: It is very much obvious that it is a time
consuming process. So much time has been spent for this purpose.
2. LOW PARTICIPATION: Obviously many respondents have not
participated in this and have also created some problems which
simply shows that they were not interested.
3. BIASNESS: Sometimes interested customers were also biased so
the collected figures involve both positive and negative figures.
4. It does not cover all the aspects of the company.
5. SUBJECTIVE: This project only tells you what it is all about.

87

BIBLIOGRAPHY
1. The Times of India and Hindustan Times
2. The Economic Times
3. Companys brochure
4. www.google.co.in
5. www.HUL.com

88

ANNEXURE

SPECIMEN
CUSTOMER SURVEY QUESTIONNAIRE

Name
Age
Address

Q1. How many members are there in your family?

Q2. Have you ever heard of HUL (Hindustan Unilever Limited )?

YES ______

NO ______

If Yes, from where?

Newspaper

Magazines

Television

Others

Q3. Are you using any HUL product?

89

_______

YES

NO

Q4. If Yes, then are you satisfied?

YES

NO

Q5. If No, then reason being

Poor quality

High prices

No services

Others

Q6. Which brand do you use in the following categories :

Personal Wash
Lux

__________

Breeze

___________

Dove __________

Others

___________

Laundary

Surf Excel _______

Rin

Wheel

Others

________

Skin Care
Fair&Lovely
Sunslik Naturals

________
________

Oral Care

90

Ponds ________
Others

________

Pepsodent ________
Others

Close-up ________

________

91

Deodorants
Axe

________

Lakme ________

Rexona ________
Colour Cosmetics
Lakme ________

Q7.

Others

________

What Recommendations or suggestions would you like to

give for improvement of our products?

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RETAILER SURVEY QUESTIONNAIRE

1. Do you keep products of Parle in your shop? ( please tick mark

on the appropriate answer)
a).Yes
.

b). No

(If the answer is yes then go to question number: 3 )

2. Why dont you keep the products of Parle in your shop or why
did you stop keeping its products?
Yes

No

a). erratic supply

b). lack of demand
c). low margin
d). no supplier
e). dont know about the company
3.

Which products of HUL do you keep?

Personal Wash
Lux

__________

Breeze

___________

Dove __________

Others

___________

Laundary

Surf Excel _______

Rin

Wheel

Others

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________

Skin Care
Fair&Lovely

________

Sunslik Naturals

________

Ponds ________
Others

________

Oral Care
Pepsodent ________
Others

Close-up ________

________

Deodorants
Axe

________

Lakme ________

Rexona ________
Colour Cosmetics
Lakme ________

Others

4. What is the sales/demand of the product?

1.

Very High

2.

High

3.

Average

4.

Rarely

5.

Very Rarely

6.

Never

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________

5. From whom do you purchase your product?

1).
2).
3).
4).

Distributor
Dealer
Agency
Wholesaler

6. How do you rate the delivery process by the dealer?

1.

Excellent

2.

Above Average

3.

Average

4.

Below Average

5.

Extremely Poor

7. How many dealers are there in the district?

a).One

b)Two.

c)Three.

d)More than three.

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8. Which vehicle do they mainly use for delivery?

1). Two wheeler

a). scooters__ , b). motorbike__.

2) Three wheeler
3) Four wheeler

a) van__ ,b) truck__,c) others__.

13.

What are the other schemes and incentives offered by

them?

___________________________________________________
___________________________________________________.
14.

What improvements would you like to have in the

distribution process?

_________________________________________________
_________________________________________________

PERSONAL DETAILS:
Name: ___________________________________________
Address: _________________________________________
Cont. No.: ________________________________________
Signature: ________________________________________

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