PROJECT REPORT

ON
STUDY OF CONSUMER BEHAVIOUR TOWARDS
PRODUCTS OF HINDUSTAN UNILEVER LTD
(HUL)

SUMITTED FOR PARTIAL FULFILLMENT OF

REQUIREMENT FOR THE AWARD OF DEGREE
OF
BACHELOR OF BUSINESS ADMINISTRATION
[SESSION: 2016-2019]

UNDER THE GUIDANCE OF SUBMITTED BY

Mrs. Swati Singh Ms. Karishma Kaur

Roll No-168799034
BBA 6th SEMESTER

HIERANK BUSINESS SCHOOL

Affiliated to CCS University, Meerut
A-42, INDUSTRIAL AREA, SECTOR-62, NOIDA

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 STUDENT’S DECLARATION

I hereby declare that the project report STUDY OF CONSUMER BEHAVIOUR TWOARDS
PRODUCTS OF HUL is based my own work carried during the course of my study under the
supervision & guidance of Mrs. Swati Singh.

I further declare that the information presented in this project is true and original to the best of
my knowledge.

KARISHMA KAUR
BBA 6 T H SEMESTER
ROLL NO-168799034

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 ACKNOWLEDGEMENT

This project has been a great learning & experience for me and I would like to express my
gratitude towards all the people who guided me throughout and without whose guidance &
support this project would have not been completed successfully.

I express my sincere gratitude to my faculty guide Mrs. Swati Singh for her able and continuous
support & cooperation throughout my project without her the project work would have not been
possible.

Also I am thankful for my family, faculties and friends for their continued guidance and
immense support as well as invaluable encouragement.

KARISHMA KAUR

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S no. Particulars Page no.

• Introduction 5-47

• Literature Review 48-51

• Research Methodology 51-57

• Data Analysis 58-79

• Conclusion 80-81

• Conclusion Recommendations 82-84

• Appendices 85-88

• Bibliography 89-90

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INTRODUCTION

5
 INTRODUCTION

Over 100 year’s 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 brand 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.

6
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

7
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 Ice cream business from Cadbury India.

As a measure of backward integration, Tea Estates and Doom Dooma, two plantation companies

of Unilever, were merged with Brooke Bond. Then in 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 Ice Cream Group families and in 1995 the Milk food 100% Ice cream

marketing and distribution rights too were acquired.

Finally, BBLIL merged with HUL, with effect from January 1, 1996. The internal restructuring

culminated in the merger of Pond's (India) Limited (PIL) with HUL in 1998. The two companies

had significant overlaps in Personal Products, Specialty Chemicals and Exports businesses,

besides a common distribution system since 1993 for Personal Products. The two also had a

common management pool and a technology base. The amalgamation was done to ensure for the

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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 2006, 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 2008, HUL acquired the government's remaining stake in

Modern Foods.

In 2009, HUL acquired the Cooked Shrimp and Pasteurized Crabmeat business of the Amalgam

Group of Companies, a leader in value added Marine Products exports. In January 2010, the

company inaugurated the new corporate office of the company. In April 2010, the company

approved the scheme of amalgamation of Bon Ltd, a wholly owned subsidiary of Hindustan

Unilever Ltd., with the company. The appointed date for the above mentioned scheme was April

01, 2009 and the scheme shall be effective from April 28, 2010. Consequent to the

amalgamation, Bon Ltd ceased to be a subsidiary of the company.

During the year 2010-11, Kissan forayed into new market segment in three big categories. It

launched Kissan Fruit & Soya, a delicious blend fruit juice and soya milk, which enjoys a

differentiated proposition in this market. The brand also entered into the Indian (non-sweet)

spreads market with the launch of Kissan Creamy Spread across key towns. In Bakery division,

the company launched two new products, namely Chapi and Cream Rolls. During the year, the

company divested 43.31% stake in Hindustan Field Services Pvt Ltd in favor of Smollan Group

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(the jv partner). Thus, Hindustan Field Services Pvt. Ltd. ceased to be a subsidiary company.

Lakme Lever Pvt Ltd, a wholly owned subsidiary of HUL, expanded the network of Lakme

Beauty Salons during the year with the opening of 11 company owned and managed salons,

along with 18 franchisee salons.

In December 2011, the company demerged the FMCG exports business including specific

exports related manufacturing units of the company into its wholly owned subsidiary Unilever

India Exports Ltd (UIEL). The scheme became effective from January 1, 2012.In 2012, the

company enters into agreement with Unilever to market Brylcreem in India. During the year

under review, the company and entities of Piramal Realty (Ajay Piramal Group) signed an

agreement for assignment of HULs leasehold rights of the land and building named Gulita

situated at Worli Sea Face, Mumbai, for a transaction value of Rs. 452.5 Crores (Rupees Four

Hundred and Fifty-Two Crores and Fifty lakhs only).

On 22 January 2013, the Board of Directors of HUL approved a proposal to sign a new

agreement with its parent company Unilever for the provision of technology, trade mark license

and other services effective 1 February 2013. The new agreement envisages that the existing

royalty cost of 1.4% of turnover payable by HUL to Unilever will increase, in a phased manner,

to a royalty cost of 3.15% of turnover no later than the financial year ending 31 March 2018, i.e.

a total estimated increase of 1.75% of turnover.

The increase in royalty cost, in the period from 1 February 2013 to 31 March 2014 is estimated

to be 0.5% of turnover, and thereafter in a range of 0.3% to 0.7% of turnover in each financial

10
year, leading up to a total estimated royalty cost increase of 1.75% of turnover compared to

existing arrangements, no later than the financial year ending 31 March 2018. In 2014, Unilever

announces a partnership with Internet.org, a Facebook-led alliance of partners, to understand

better how internet access can be increased to reach millions more people across rural India. The

company also launches Prabhat initiative for community development in villages around its

factories during the year under review. The company also enters into partnership with MTV to

endorse its brands during the year under review. In 2015, the company launched The Unilever

Foundry. During the year under review, the company was recognized as the most innovative

marketer on mobile, at the Mobile Marketing Association (MMA). The company also revives

Ayush with e-launch during the year. The company also launched Swachh Aadat, Swachh Bharat

programme in India during the year under review.

On 8 September 2015, HUL announced that it has signed an agreement for the sale and transfer

of its bread and bakery business under the brand Modern to Nimman Foods Private Limited, an

investee company of the Everstone Group, for an undisclosed consideration. The transaction

includes sale and transfer of the Modern brand and business on a going concern basis.

On 17 December 2015, HUL announced that it had signed an agreement with Mosons Group to

acquire its flagship Indulekha premium Ayurvedic hair oil brand. The deal envisages the

acquisition of the trademarks Indulekha and Vayodha, intellectual property, design and

knowhow, for a consideration of Rs 330 crore, payable upon closing of the transaction and a

deferred consideration of 10% on the domestic turnover of the brands each year, payable

annually for a 5 year period commencing FY 2018.The Board of Directors of HUL at its meeting

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held on 15 January 2016 considered and approved a Scheme of Arrangement between the

company and its shareholders for payout of the entire balance of Rs 2187.33 crore standing to the

credit of the General Reserves in Balance Sheet. The Scheme of Arrangement envisages the

transfer of the entire balance of Rs 2187.33 crore standing to the credit of the General Reserves

to the Profit and Loss Account and its subsequent payout to the companys shareholders.

On 17 March 2016, Hindustan Unilever Limited (HUL) announced that it has signed an

agreement for the sale of its Rice Exports business carried out primarily under the brands Gold

Seal Indus Valley and Rozana, to LT Foods Middle East DMCC, a group company of LT Foods

Limited (owner of Daawat). The deal envisages transfer of the brands and inventory for a

consideration of Rs 25 crore, subject to adjustments on closing. HULs new personal products

factory in Doom Dooma, Assam was formally inaugurated 6 September 2017.

The new factory, that will manufacture products for leading HUL brands, such as Fair & Lovely,

Ponds, Vaseline, Sunsilk, Clinic Plus, TRESemme & Dove, commenced commercial production

on 15 March 2017. HUL, along with its partners has invested Rs 1000 crores in the project

On 29 September 2017, HUL announced that it had signed an agreement for divestment of its

entire 50% shareholding in Kimberly-Clark Lever Private Limited (KCL) in favour of its joint

venture partner Kimberly-Clark Corporation (KCC), USA. KCL sells infant care diapers as its

primary product category under the brand Huggies. It also sells feminine care products under the

brand Kotex.

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INDUSTRY PROFILE

13
Products which have a quick turnover, and relatively low cost are known as Fast Moving
Consumer Goods (FMCG). FMCG products are those that get replaced within a year. Examples
of FMCG generally include a wide range of frequently purchased consumer products such as
toiletries, soap, cosmetics, tooth cleaning products, shaving products and detergents, as well as
other non-durables such as glassware, bulbs, batteries, paper products, and plastic goods. FMCG
may also include pharmaceuticals, consumer electronics, packaged food products, soft drinks,
tissue paper, and chocolate bars.

India’s FMCG sector is the fourth largest sector in the economy and creates employment for
more than three million people in downstream activities. Its principal constituents are Household
Care, Personal Care and Food & Beverages. The total FMCG market is in excess of Rs. 85,000
Crores. It is currently growing at double digit growth rate and is expected to maintain a high
growth rate. FMCG Industry is characterized by a well-established distribution network, low
penetration levels, low operating cost, lower per capita consumption and intense competition
between the organized and unorganized segments.

The Rs 85,000-crore Indian FMCG industry is expected to register a healthy growth in the third
quarter of 2014-17 despite the economic downturn. The industry is expected to register a 15%
growth in Q3 2014-17 as compared to the corresponding period last year. Unlike other sectors,
the FMCG industry did not slow down since Q2 2016. the industry is doing pretty well, bucking
the trend. As it is meeting the every-day demands of consumers, it will continue to grow. In the
last two months, input costs have come down and this will reflect in Q3 and Q4 results. Market
share movements indicate that companies such as Marico Ltd and Nestle India Ltd, with
domination in their key categories, have improved their market shares and outperformed peers in
the FMCG sector. This has been also aided by the lack of competition in the respective
categories. Single product leaders such as Colgate Palmolive India Ltd and Britannia Industries
Ltd have also witnessed strength in their respective categories, aided by innovations and strong
distribution. Strong players in the economy segment like Godrej Consumer Products Ltd in soaps
and Dabur in toothpastes have also posted market share improvement, with revived growth in
semi-urban and rural markets.

FG SECTOR
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 Industry Category and Products

Household Care

Personal Wash: -

The market size of personal wash is estimated to be around Rs. 8,300 Cr. The personal wash can
be segregated into three segments: Premium, Economy and Popular. The penetration level of
soaps is 92 per cent. It is available in 5 million retail stores, out of which, 75 per cent are in the
rural areas. HUL is the leader with market share of 53 per cent; Godrej occupies second position
with market share of 10 per cent. With increase in disposable incomes, growth in rural demand is
expected to increase because consumers are moving up towards premium products. However, in
the recent past there has not been much change in the volume of premium soaps in proportion to
economy soaps, because increase in prices has led some consumers to look for cheaper
substitutes. Unilever

Detergents: -

The size of the detergent market is estimated to be Rs. 12,000 Cr. Household care segment is
characterized by high degree of competition and high level of penetration. With rapid
urbanization, emergence of small pack size and sachets, the demand for the household care
products is flourishing. The demand for detergents has been growing but the regional and small
unorganized players account for a major share of the total volume of the detergent market. In
washing powder HUL is the leader with 38 per cent of market share. Other major players are
Nirma, Henkel and Proctor & Gamble.

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Personal Care

Skin Care: -

The total skin care market is estimated to be around Rs. 3,400 Cr. The skin care market is at a
primary stage in India. The penetration level of this segment in India is around 20 per cent. With
changing life styles, increase in disposable incomes, greater product choice and availability,
people are becoming aware about personal grooming. The major players in this segment are
Hindustan Unilever with a market share of 54 per cent, followed by CavinKare with a market
share of 12 per cent and Godrej with a market share of 3 per cent.

Hair Care: -

The hair care market in India is estimated at around Rs. 3,800 Cr. The hair care market can be
segmented into hair oils, shampoos, hair colorants & conditioners, and hair gels. Marico is the
leader in Hair Oil segment with market share of ~33 per cent; Dabur occupies second position at
17 per cent.

Shampoos: -

The Indian shampoo market is estimated to be around Rs. 2,700 Cr. It has the penetration level of
only 13 per cent in India. Sachet makes up to 40 per cent of the total shampoo sale. It has low
penetration level even in metros. Again the market is dominated by HUL with around 47 per cent
market share; P&G occupies second position with market share of around 23 per cent.
Antidandruff segment constitutes around 15 per cent of the total shampoo market.

The market is further expected to increase due to increased marketing by players and availability
of shampoos in affordable sachets ‘

SECT OR

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Oral Care: -

The oral care market can be segmented into toothpaste - 60 per cent; toothpowder - 23 per cent;
toothbrushes - 17 per cent. The total toothpaste market is estimated to be around Rs. 3,500 Cr.
The penetration level of toothpowder/toothpaste in urban areas is three times that of rural areas.
This segment is dominated by Colgate-Palmolive with market share of 49 per cent, while HUL
occupies second position with market share of 30 per cent. In toothpowders market, Colgate and
Dabur are the major players. The oral care market, especially toothpastes, remains under
penetrated in India with penetration level 50 per cent.

Food & Beverages

Food Segment: -

The foods category in FMCG is gaining popularity with a swing of launches by HUL, ITC,
Godrej, and others. This category has 18 major brands aggregating Rs. 4,600 Cr. Nestle and
Amul slug it out in the powders segment. The food category has also seen innovations like
softies in ice creams, ready to eat rice by HUL and pizzas by both GCMMF and Godrej
Pillsbury.

Tea: -

The major share of tea market is dominated by unorganized players. More than 50 per cent of the
market share is capture by unorganized players. Leading branded tea players are HUL and Tata
Tea.

Coffee: -

The Indian beverage industry faces over supply in segments like coffee and tea. However, more
than 50 per cent of the market share is in unpacked or loose form. The major players in this
segment are Nestlé, HUL and Tata Tea

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 Growth Prospect

Large Market

India has a population of more than 1.150 Billion which is just behind China. According to the
estimates, by 2030 India population will be around 1.450 Billion and will surpass China to
become the World largest in terms of population. FMCG Industry which is directly related to the
population is expected to maintain a robust growth rate.

According to of India, the

SECTOR

Spending Pattern

An increase is spending pattern has been witnessed in Indian FMCG market. There is an upward
trend in urban as well as rural market and also an increase in spending in organized retail sector.
An increase in disposable income, of household mainly because of increase in nuclear family
where both the husband and wife are earning, has leads to growth rate in FMCG goods.

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Changing Profile and Mind Set of Consumer

People are becoming conscious about health and hygienic. There is a change in the mind-set of
the Consumer and now looking at “Money for Value” rather than “Value for Money”. We have
seen willingness in consumers to move to evolved products/ brands, because of changing
lifestyles, rising disposable income etc. Consumers are switching from economy to premium
product even we have witnessed a sharp increase in the sales of packaged water and water
purifier. Findings according to a recent survey by A. C. Nielsen shows about 71 percent of
Indian take notice of packaged goodsʹ labels containing nutritional information compared to two
years ago which was only 59 per cent.

Advantages to the Sector

• Governmental Policy

Indian Government has enacted policies aimed at attaining international competitiveness through
lifting of the quantitative restrictions, reducing excise duties, automatic foreign in-vestment and
food laws resulting in an environment that fosters growth. 100 per cent export oriented units can
be set up by government approval and use of foreign brand names is now freely permitted.

India is second largest

• Central & State Initiatives

Recently Government has announced a cut of 4 per cent in excise duty to fight with the
slowdown of the Economy. This announcement has a positive impact on the industry.

But the benefit from the 4 per cent reduction in excise duty is not likely to be uniform across
FMCG categories or players. The changes in excise duty do not impact cigarettes (ITC, Godfrey
Phillips), biscuits (Britannia Industries, ITC) or ready-to-eat foods, as these products are either
subject to specific duty or are exempt from excise. Even players with manufacturing facilities

19
located mainly in tax-free zones will also not see material excise duty savings. Only large
FMCG-makers may be the key ones to bet and gain on excise cut.

• Foreign Direct Investment (FDI)

Automatic investment approval (including foreign technology agreements within specified

norms), up to 100 per cent foreign equity or 100 per cent for NRI and Overseas Corporate Bodies
(OCBs) investment, is allowed for most of the food processing sector except malted food,
alcoholic beverages and those reserved for small scale industries (SSI).

There is a continuous growth in net FDI Inflow. There is an increase of about 150 per cent in Net
Inflow for Vegetable Oils & Vanaspati for the year 2014.

Market Opportunities
• Vast Rural Market

Rural India accounts for more than 700 Million consumers, or 70 per cent of the Indian
population and accounts for 50 per cent of the total FMCG market. The working rural population
is approximately 400 Million. And an average citizen in rural India has less than half of the
purchasing power as compare to his urban counterpart. Still there is an untapped market and
most of the FMCG Companies are taking different steps to capture rural market share. The
market for FMCG products in rural India is estimated 52 per cent and is projected to touch 60 per
cent within a year. Hindustan Unilever Ltd is the largest player in the industry and has the widest
market coverage.

• Export - “Leveraging the Cost Advantage”

Cheap labour and quality product & services have helped India to represent as a cost ad-vantage
over other Countries. Even the Government has offered zero import duty on capital goods and

20
raw material for 100% export oriented units. Multi-National Companies out-source its product
requirements from its Indian company to have a cost advantage.

India is the largest producer of livestock, milk, sugarcane, coconut, spices and cashew apart from
being the second largest producer of rice, wheat, fruits & vegetables. It adds a cost advantage as
well as easily available raw materials.

Sectoral Opportunities

Major Key Sectoral opportunities for Indian FMCG Sector are mentioned below:

• Dairy Based Products

India is the largest milk producer in the world, yet only around 15 per cent of the milk is
processed. The organized liquid milk business is in its infancy and also has large long-term
growth potential. Even investment opportunities exist in value-added products like desserts,
puddings etc.

• Packaged Food

Only about 10-12 per cent of output is processed and consumed in packaged form, thus
highlighting the huge potential for expansion of this industry

• Oral Care

The oral care industry, especially toothpastes, remains under penetrated in India with penetration
rates around 50 per cent. With rise in per capita incomes and awareness of oral hygiene, the
growth potential is huge. Lower price and smaller packs are also likely to drive potential up
trading.

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 • Beverages

Indian tea market is dominated by unorganized players. More than 50% of the market share is
capture by unorganized players highlighting high potential for organized players.

Company Prospects
• Hindustan Unilever Limited

• Unilever is lowering its expenditure on packaging across its portfolio of food brands as part of
a wider cost-cutting drive. HUL has pared down the colour palette used for printing across many
products. The system has been used to reduce printed packaging costs for Unileverʹs
products. It is also eco-friendly because it reduces waste in the printing process. HUL is taking
different steps to reduce the cost and increase the margin.

• Hindustan Unilever’s product Pure it (a water purifier) has received the UNESCO Water Digest
Water Award 2014-2015 in the category of best domestic non-electric water purifier. Pure it
received the award for outstanding contribution in the field of water in India. The product is
available across 21 Indian states and has reached more than 1 million homes in India giving them
access to microbiologically safe drinking water. Pure it’s performance has been tested by leading
international & national medical, scientific & public health institutions and meets the germ-kill
criteria of the Environmental Protection Agency, the drinking water regulatory agency in the
USA.

• Procter & Gamble Hygiene & Health Care Limited (P&G)

• The Company has 21 product categories out of which only 8 products have presence in India.
The company is planning to launch the rest 13 product in India. The company expects to see a
growth in other categories.

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• The company has an aggressive plan to set up 20 new factories across the World out of which
19 is expected to come in emerging markets and most of them would be seen in Brazil, Russia,
India, and China (BRIC) nations.

• Whisper which is one of the company’s power brands has recorded 50 per cent market share in
urban India.

• Godrej Consumer Products Limited (Godrej)

• The Board of Directors of Godrej Consumer Products Limited (GCPL) has approved the
acquisition of 50 per cent stake of its joint venture partner SCA Hygiene Products’ stake in
Godrej SCA Hygiene Limited. After the transaction, the Joint Venture which owns the ‘Snuggy’
brand of baby diapers will become a 100 per cent subsidiary of GCPL.gg

• Godrej Consumer Products Limited has acquired 100 per cent stake in the Kinky Group
Limited, South Africa. Kinky is among one of the largest brand into hair segment with product
portfolio.
2015
• Dabur India Limited (Dabur)

• Dabur has entered into the malted food drink market with the launch of a new health drink
“Dabur Chyawan Junior”. According to the company, they expect to capture a market share of
10 per cent of the Rs. 1,900 Crores malted food drink market over the next two years.

• Dabur has acquired 72.15 per cent of Fem Care Pharma Ltd (FCPL), a leading player in the
women’s skin care products market, for Rs 203.7 Crores in an all-cash deal. The Company is
expected to create synergy by this deal.

• Dabur got approval from Government of Himachal Pradesh to set up another medicine
manufacturing unit. The project has an expected investment of Rs. 130 Crores.

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 • Colgate-Palmolive (India) Limited

• Colgate Palmolive (India) Ltd, which is currently holding 75 per cent of the share capital of SS
Oral Hygiene Products Private Ltd, Hyderabad, has acquired the remaining 25 per cent share
capital from the local shareholders at an aggregate price of Rs 77.70 lakh. Consequently, SS Oral
Hygiene Products has become a wholly owned subsidiary of the company.

• Nestle India Limited

• Nestle is planning to invest Rs 6 billion in India in 2015 for expansion of its business in the
country. The company which has allotted an investment of Rs 3 billion in the Indian market in
2014, would be doubling the investment in 2015 as part of its business strategy. Nestle
International is reinvesting and expanding in India and Nestle India will have all the financial
resources to expand and grow from the parent company.

• Nestle India reported a good increase in its standalone net profit for the second quarter. During
the quarter, the profit of the company rose 26.54% to Rs 1,210.90 million from Rs 956.90
million in the same quarter, last year. The company posted earnings of Rs 12.56 a share during
the quarter, registering 26.61% growth over prior year period. Net sales for the quarter rose
23.45% to Rs 10,356.30 million, while total income for the quarter rose 23.78% to Rs 10,423.40
million, when compared with the prior year period.

24
COMPANY PROFILE

25
 COMPANY PROFILE

If Hindustan Unilever 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.

Type Public company BSE: 500696

Industry Fast Moving Consumer Goods FMCG)
Founded 1933
Headquarters Mumbai, India
Key people Sanjiv Mehta (Chairman and Managing Director)
Products Home & Personal Care, Food & Beverages
Revenue 34,487crore (US$4.8billion) (2016-2017)
Net income 4,490crore (US$620 million)
Employees Over 65,000 direct & indirect employees
Parent Unilever
Website www.hul.co.in

History of HUL

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).

26
Soon after followed Lifebuoy in 1895 and other famous brands like Pears, Lux and Vim.

Vanaspati was launched in 1918 and the famous Dalda brand came to the market in 1937.

In 1931, Unilever set up its first Indian subsidiary, Hindustan Vanaspati Manufacturing

Company, followed by Lever Brothers India Limited (1933) and United Traders Limited (1935).

These three companies merged to form HUL in November 1956; HUL offered 10% of its equity

to the Indian public, being the first among the foreign subsidiaries to do so. Unilever now holds

52.10% equity in the company. The rest of the shareholding is distributed among about 360,675

individual shareholders and financial institutions.

The erstwhile Brooke Bond's presence in India dates back to 1900. By 1903, the company had

launched Red Label tea in the country. In 1912, Brooke Bond & Co. India Limited was formed.

Brooke Bond joined the Unilever fold in 1984 through an international acquisition. The erstwhile

Lipton's links with India were forged in 1898. 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.

27
Simultaneously, deregulation permitted alliances, acquisitions and mergers. In one of the most

visible and talked about events of India's corporate history, the erstwhile Tata Oil Mills

Company (TOMCO) merged with HUL, effective from April 1, 1993. In 1996, HUL and yet

another Tata company, Lakme Limited, formed a 50:50 joint venture, Lakme Unilever Limited,

to market Lakme's market-leading cosmetics and other appropriate products of both the

companies. Subsequently in 1998, Lakme Limited sold its brands to HUL and divested its 50%

stake in the joint venture to the company.

HUL formed a 50-50 joint venture with the US-based Kimberly Clark Corporation in 1994,

Kimberly-Clark Lever Ltd, which markets Huggies Diapers and Kotex Sanitary Pads. HUL has

also set up a subsidiary in Nepal, Unilever Nepal Limited (UNL), and its factory represents the

largest manufacturing investment in the Himalayan kingdom. The UNL factory manufactures

HUL's products like Soaps, Detergents and Personal Products both for the domestic market and

exports to India.

The 1990s also witnessed a string of crucial mergers, acquisitions and alliances on the Foods and

Beverages front. In 1992, the erstwhile Brooke Bond acquired Kothari General Foods, with

significant interests in Instant Coffee. In 1993, it acquired the Kissan business from the UB

Group and the Dollops Ice-cream business from Cadbury India.

As a measure of backward integration, Tea Estates and Doom Dooma, two plantation companies

of Unilever, were merged with Brooke Bond. Then in 1994, Brooke Bond India and Lipton India

merged to form Brooke Bond Lipton India Limited (BBLIL), enabling greater focus and

ensuring synergy in the traditional Beverages business. 1994 witnessed BBLIL launching the

Wall's range of Frozen Desserts. By the end of the year, the company entered into a strategic
28
alliance with the Kwality Ice-cream Group families and in 1995 the Milk-food 100% Ice-cream

marketing and distribution rights too were acquired.

Finally, BBLIL merged with HUL, with effect from January 1, 1996. The internal restructuring

culminated in the merger of Pond's (India) Limited (PIL) with HUL in 1998. The two companies

had significant overlaps in Personal Products, Specialty Chemicals and Exports businesses,

besides a common distribution system since 1993 for Personal Products. The two also had a

common management pool and a technology base. The amalgamation was done to ensure for the

Group, benefits from scale economies both in domestic and export markets and enable it to fund

investments required for aggressively building new categories.

In January 2006, 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 2008, HUL acquired the government's remaining stake in

Modern Foods.

In 2009, HUL acquired the Cooked Shrimp and Pasteurised Crabmeat business of the Amalgam

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

HUL launched a slew of new business initiatives in the early part of 2006’s. Project Shakti was

started in 2007. It is a rural initiative that targets small villages populated by less than 5000

individuals. It is a unique win-win initiative that catalyses rural affluence even as it benefits

business. Currently, there are over 45,000 Shakti entrepreneurs covering over 100,000 villages

across 15 states and reaching to over 3 million homes.

29
In 2008 in 2008, HUL made its foray into Ayurvedic health & beauty centre category with the

Ayush product range and Ayush Therapy Centres. Hindustan Unilever Network, Direct to home

business was launched in 2009 and this was followed by the launch of ‘Pure-it’ water purifier in

2010.

In 2013, the Company name was formally changed to Hindustan Unilever Limited after

receiving the approval of share holders during the 74th AGM on 18 May 2013. Brooke Bond and

Surf Excel breached the the Rs 1,000 crore sales mark the same year followed by Wheel which

crossed the Rs.2,000 crore sales milestone in 2014.

On 17th October 2014, HUL completed 75 years of corporate existence in India

Hindustan Unilever Limited (abbreviated to HUL), formerly Hindustan Lever Limited, is

India's largest consumer products company and was formed in 1933 as Lever Brothers India

Limited. It is currently headquartered in Mumbai, India and its 41,000 employees are headed by

Harish Manwani, the non-executive chairman of the board. HUL is the market leader in Indian

products such as tea, soaps, detergents, as its products have become daily household name in

India. The Anglo-Dutch company Unilever owns a majority stake in Hindustan Unilever

Limited.

The company was renamed in late June 2013 to "Hindustan Unilever Limited" to provide the

optimum balance between maintaining the heritage of the Company and the future benefits and

synergies of global alignment with the corporate name of "Unilever".

30
Hindustan Unilever Limited (HUL) is India's largest fast moving consumer goods company, with

leadership in Home & Personal Care Products and Foods & Beverages. HUL's brands, spread

across 20 distinct consumer categories, touch the lives of two out of three Indians. They endow

the company with a scale of combined volumes of about 4 million tones and sales of Rs. 13,718

crores.

CONTROVERSY

• Mercury pollution

In 2001 a thermometer factory in Kodaikanal run by Hindustan Unilever was accused of

dumping glass contaminated with mercury in municipal dumps, or selling it on to scrap

merchants unable to deal with it appropriately. After protest by activists led by Dr Deepak

Malghan of IIM, Bangalore Hindustan Unilever admitted before court to being guilty in the case

in 2010.

• Skin lightening creams

Hindustan Unilever's "Fair and Lovely" is the leading skin-lightening cream for women in India.

The company had to cease television advertisements for the product in 2007. Advertisements

depicted depressed, dark-complexioned women, who had been ignored by employers and men,

suddenly finding new boyfriends and glamorous careers after the cream had lightened their skin.

In 2008 Hindustan Unilever made former Miss World Priyanka Chopra a brand ambassador for

Pond's and she then appeared in a mini-series of television commercials for another skin

31
lightening product, 'White Beauty', alongside Saif Ali Khan and Neha Dhupia; these

advertisements, showing Priyanka's face with a clearly darker complexion against the visibly

fairer Neha Dhupia, were widely criticised for perpetuating racism and lowering the self-esteem

of women and girls throughout India who were misled by HULN to believe that they needed to

be white to be beautiful.

• Triclosan

Several academic papers have pointed out the firm's continued use of the antibacterial agent

Triclosan ('Active B') in India because it is under review by the American Food and Drug

Administration (US FDA).

• Kumbh Mela ad

In March 2019 HUL's advertisement for its beverage Brooke Bond Red Label was criticized on

social media. A company tweet referred to Kumbh Mela as a place where elderly people get

abandoned by their family members. This resulted in a severe backlash in the form of an adverse

hashtag trending on Twitter '#BoycottHindustanUnilever'.

MISSION

Unilever's mission is to add Vitality to life. Meet every day needs for nutrition, hygiene, and

personal care with brands that help people feel good, look good and get more out of life.

32
It is a mission HUL shares with its parent company, Unilever, which holds 52.10% of the equity.

A Fortune 500 transnational, Unilever sells Foods and Home and Personal Care brands in about

100 countries worldwide.

VISION

Unilever products touch the lives of over 2 billion people every day whether that's through

feeling great because they've got shiny hair and a brilliant smile, keeping their homes fresh and

clean, or by enjoying a great cup of tea, satisfying meal or healthy snack.

A clear direction

The four pillars of our vision set out the long term direction for the company ± where we want

to go and how we are going to get there:

• We work to create a better future every day

• We help people feel good, look good and get more out of life with brands and services

that are good for them and good for others.

• We will inspire people to take small everyday actions that can add up to a big difference

for the world.

• We will develop new ways of doing business that will allow us to double the size of our

company while reducing our environmental impact. We've always believed in the power

of our brands to improve the quality of people’s lives and in doing the right thing. As our

business grows, so do our responsibilities. We recognize that global challenges such as

33
 climate change concern us all. Considering the wider impact of our actions is embedded

in our values and is a fund

• amental part of who we are.

MANAGEMENT STRUCTURE
Hindustan Unilever Limited is India's largest Fast Moving Consumer Goods (FMCG) Company.

It is present in Home & Personal Care and Foods & Beverages categories. HUL and Group

companies have about 15,000 employees, including 1200 managers.

The fundamental principle determining the organization structure is to infuse speed and

flexibility in decision-making and implementation, with empowered managers across the

company’s nationwide operations.

BOARD
The Board of Directors as repositories of the corporate powers act as a guardian to the Company

as also the protectors of shareholder’s interest.

This Apex body comprises of a Non- Executive Chairman, four whole time Directors and five

independent Non – Executive Directors. The Board of the Company represents the optimum mix

of professionalism, knowledge and experience.

Management Committee
The day-to-day management of affairs of the Company is vested with the Management

Committee which is subjected to the overall superintendence and control of the Board. The

34
Management Committee is headed by Mr Sanjiv Mehta and has functional heads as its members

representing various functions of the Company.

Leadership
HUL has produced numerous business leaders for corporate India. It is referred to as a 'CEO

Factory' in the Indian press for the same reasons. It's leadership building potential was

recognized when it was ranked 4th in the Hewitt Global Leadership Survey 2013 with only GE,

P&G and Nokia ranking ahead of HUL in the ability to churn out leaders with regularity.

BRANDS

• Food

1. Annapurna salt and Atta (formerly known as Kissan Annapurna)

2. Bru coffee

3. Brooke Bond (3 Roses, Taj Mahal, Taaza, Red Label) tea

4. Kissan squashes, ketchups, juices and jams

5. Lipton ice tea

6. Knorr soups & meal makers and soupy noodles

7. Kwality Wall's frozen dessert

8. Modern Bread, ready to eat chapattis and other bakery items (now sold to Everstone

Capital)

9. Magnum (ice cream)

35
• Homecare Brands

1. Active Wheel detergent

2. Cif Cream Cleaner

3. Comfort fabric softeners

4. Domex disinfectant/toilet cleaner

5. Rin detergents and bleach

6. Sunlight detergent and colour care

7. Surf Excel detergent and gentle wash

8. Vim dishwash

9. Magic – Water Saver

• Personal Care Brands

1. Aviance Beauty Solutions

2. Axe deodorant and after shaving lotion and soap

3. LEVER Ayush Therapy ayurvedic health care and personal care products

4. International breeze

5. Brylcreem hair cream and hair gel

6. Clear anti-dandruff hair products

7. Clinic Plus shampoo and oil

8. Close Up toothpaste

9. Dove skin cleansing & hair care range: bar, lotions, creams and anti-perspirant

deodorants

36
10. Denim shaving products

11. Fair and Lovely, skin lightening cream

12. Hamam

13. Indulekha ayurvedic hair oil

14. Lakmé beauty products and salons

15. Lifebuoy soaps and handwash range

16. Liril 2000 soap

17. Lux soap, body wash and deodorant

18. Pears soap, body wash

19. Pepsodent toothpaste

20. Pond's talcs and creams

21. Rexona

22. Sunsilk shampoo

23. Sure anti-perspirant

24. Vaseline petroleum jelly, skin care lotions

25. TRESemmé

26. TIGI

27. Vaseline

• Water Purifier Brand

1. The Pureit Water Purifier

37
 SWOT ANALYSIS

STRENGTHS

• Hindustan Unilever Limited (HUL) is India's 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...

• Due to its long presence in India – has deep penetration – 20 consumer product category,

over 15,000 employees, including over 1,300 managers, is to "add vitality to life."

• The company derives 44.3% of its revenues from soaps and detergents, 26.6% from

personal care products, 10.5% from beverages, and the rest from foods, ice creams,

exports, and other products.

• Low cost of production due to economic of scale. That means higher profits and / or more

competitions. Better market penetration.

• HUL is also one of the country's largest exporters; it has been recognized as a Golden

Super Star Trading House by the Government of India.

Weakness

• Strong competitors and availability of substitute products

• Low export levels

• High price of some products

• High advertising cost

38
Opportunities

• Increasing per capita national income resulting in higher disposable income.

• Growing middle class and growing urban population.

• Increasing gifts cultures.

• Increasing departmental stores concept – impulse @ at cash counters.

• Globalization.

Threats

• HUL's tea business has declined marginally; reason is that, cost pressure is likely due to

rising crude and freight costs.

• Tax and regulatory structure.

• Mimic of brands.

• Removal of import restrictions resulting in replacing of domestic brands.

• Temporary slowdown in economy can have an impact on FMCG in Industry.

39
 PEST ANALYSIS

P:

• since the budget range is decontrolled, no political effects are envisaged.

E:

• increasing per capita income resulting in higher Disposable income

• Growing middle class/urban population increase in Demand

• Low cost of production and better penetration

S:

• Per capita consumption expected to increase fashion

• Increasing gifts culture and increase in demand

T:

• Will have to reinforce technology to international levels Once India is a ’fully free´

economy.

40
 FIVE P’S OF MARKETING

• Product

Satisfaction suffices. But delight dazzles the average company will compete for customer by

conforming to her expectation consistently. But the winner will surpass them by constantly

exceeding her expectation, delivering to her door step additional benefits which she would never

have imagined possible. Hindustan Unilever Ltd(HUL) offer such product. The wide variety

products offered by the company include: The company’s popular product’s include:

• Bathing soaps: Lux, Lifebuoy, Liril, Hamam, Breeze, Dove, Pears and Rexona

• Laundry items: Surf Excel, Rin and Wheel

• Skincare: Fair & Lovely, Pond’s and Vaseline

• Hair care: Sunsilk and Clinic

• Oral care: Pepsodent and Close up

• Deodorants: Axe and Rexona

• Color cosmetics: Lakme

• Ayurvedic: Ayush

• Tea: Brooke Bond and Lipton

• Coffee: Bru

• Foods: Kissan, Annapurna and Knorr

• Ice cream:kwality walls

41
 • Pricing

Make no mistake. Second P of marketing is not another name for blindly lowering prices and

relying on this strategy alone to increase sales dramatically. The strategy used by Hindustan

Unilever Ltd (HUL) is for matching the value that customer pays to buy the product with the

expectation they have about what the production is worth to them. Hindustan Unilever Ltd

(HUL) has launched various products which cater to all customer segments. So every customer

segment has different price expectation from the product. Therefore maximizing the returns

involves identifying right price level for each segment, and then progressively moving through

them.

• Physical Distribution

Place´ BRAND ISN’T THE ONLY ANY MORE. Marketers and finance manager need a new

term to evaluate their business: Distribution Equity. It takes much more time and effort to build,

but once built, distribution equity is much together to erode. The fundamental axiom of Indian

consumer market is this: You can set up a state-of ±the-art manufacturing facility, hire the hottest

strategies on the block, swamp prime television with best Ads, but the end of it all, you would be

known of selling your products. The cardinal task before the Indian market is managing is to

shoe-horn its product on retail shelves. Buyers are paying for distribution equity not brand equity

and market shares. Why does the company need distribution equity more anything in India? With

technology and competitive pressure slash in it is becoming increasing difficult for marketers to

retain a unique product differentiation for ling period. In a product and price parity situation, the

brand that sells more is the one that reaches the highest number of customers. India The
42
operations involve over 2,000 suppliers and associates. HUL's distribution network, comprising

about 4,000 redistribution stockiest, covering 6.3 million retail outlets reaching the entire urban

population, and about 250 million rural consumers. Television has already primed and

population for consumption, and the marketer who can get to the consumer ahead of competition

will give hard to overtake lead. But getting their means managing wildly different terrains-

climate, language, value system, life style, transport and communication network. And your

brand equity isn’t going to help when it comes to tackling these issues. Own distribution network

consist of clearing and forwarding (C&F) agents & distribution stockiest. This network of

distribution can either contact wholesalers and which in turn retailers or the distributors can

contact to the retailers directly. Once the stock product reaches retailers, the prospective

customers can have access to the product. Hindustan Unilever Ltd (HUL) distributes the product

in the manner stated above. Hindustan Unilever Ltd (HUL) distribution network has expanded.

Beside use of improved logistics, Hindustan Unilever Ltd (HUL) is also attempting to improve

the distribution quality. To address the issue of product stability, it has installed visa colors at

several outlets. This helps in maintaining consumption in summer when sales usually drops due

to the fact that the heal effects product quality and thereby off takes. Looking at the low

penetration of few products, a distribution expansion would itself being incremental volume. The

other reason is arch rival Procter & GambleCo. reaches more than a million retailers. This

increase in distribution is going to be accompanied by reduction in channel costs. Hindustan

Unilever Ltd (HUL) marketing costs, at 18% of total costs, is much higher than Procter &

Gamble Co. The company is looking to reduce this parity level. At Hindustan Unilever

Ltd(HUL), they believe that selling FMCG is it like selling soft drinks.

43
 • Promotion

If an advertisement is to communicate effectively, the receiver must at least half want it to, and

be prepared to take step toward the sender. Effective advertising is rarely hectoring or loudly

explicit«. It often both attracts and generates arm feelings. More often than not, a successful

campaign has a stronger element of the unexpected a quality that good advertising shares with

much worthwhile literature.

To penetrate into the inner recesses of her memory, communication must first ensure exposure,

grab her attention evoke her comprehension, grab her acceptance and then extract retention

competing with thousands of other units of communication trying to do the same. Finding

showed that the adults felt too conscious to be seen consuming a product actually meant for

children. The strategic response addresses the emotional appeal of the band to the child within

the adult. Naturally, that produced just the value vacuum that Hindustan Unilever Ltd(HUL)was

looking to fill. Thereafter it was the job of the advertising to communicate customer the

wonderful feeling that he could experience by re-discoursing the careful, useful conscious,

pleasure seeking child within himself a graft these feeling onto the Ad campaign like ‘‘hasso to

khul k hasso for closeup’’, cream bathing bar for dove soap´ and daag ache hai for surf

excel´have been sure shot winner with the audience. It has also launched Pure it, a home water

purifier which supplies drinking water without boiling/need of electricity, As well as outdoor and

radio ads, ad agency contract has created communication for cinemas and even ATM machines

for the brand. All ICICI’s ATM a message flashes on the screen as soon as customer insert his

ATM card. Something familiar is planned for phone-book as well. In cinemas, Hindustan

44
Unilever(Ltd)has a message on-screen just before the lights are dimmed to give them a chance to

get their product There will also be after dinner sampling in restaurants to begin with, 30

catteries in Mumbai have been selected. Ad spend in 2000 was about 14% of sales and the

management said that plans to maintain as spend at this level in the current year also. And since

any discussion today would be incomplete without mention ‘e’ word, the management plans to

tap this new channel of marketing. Beside the company website (i.e. www.unilever.com), that

the company has launched, it had also entered into various marketing relationship with other

portals, specially targeted during festivals and events such as Valentine’s day, etc.

It’s a combination of spiffing up its key brand, researching and improving the newer products

that haven’t taken off, supported with high ad spends that Hindustan Unilever(Ltd) hopes will

see it emerges stronger after the current slowdown, as well as expand the market.

❖ Positioning

In the 1970s consumers were ready to pay more for more´, and luxury goods flourished. In the

1980s, consumers began to demand more for same´, and the discounting era grew strong.

Today’s consumer demanding more for less´, and the winner will be that super value marketers«.

Some of today’s most successful companies recognize those customers are more educated and

able to recognize true customer value “Positioning is simply concentrating on an idea or even a

word defines that company in the mind of the consumer. It is more efficient to market one

successful concept to one large group of people than 50 product or service ideas to 50separate

group Positioning is a must when customer attitude have changed and product have strayed away

from the consumer’s long standing perception of them« Hindustan Unilever(Ltd) is an anchor in

45
sea of consumer products. As a variety of competitive claims assails her senses, today customer

uses complicated decision-making process to assess the alternative before making a purchase.

Since Hindustan Unilever(Ltd) is more clearly associated with a particular set of attributes in

terms of benefits and prices, the quicker becomes her search process. Positioning of individual

product:

• Lifebuoy is µone of Unilever’s oldest brands with more than a hundred-year history, as

www.unilever.com informs. ³Lifebuoy has become more than just a red bar of soap

±today the brand provides hygiene and health solutions for families

• Fair & Lovely, a hot-selling ‘fairness´ cream, which promises a lighter skin tone for

many of India’s complexion-conscious consumers

CORPORATE SOCIAL RESPONSIBILITY

• Providing education on health and hygiene.

• Women empowerment

• Water management

• Rehabilitation of special and under privileged children’s.

• Rural development.

46
 HINDUSTAN UNILEVERS MARKET SEGMENTATION

• Market place for any product is comprised of many different segments of consumers,

each with different needs and wants. Markets segmentation can be defined in a number of

ways such as:

• Demographic variables (e.g. Consumers are groups, gender, material states income etc.)

• The lifestyle of consumers (i.e. their interests and activities) the benefits which

consumers look for in a product or on the occasions when the product might be

consumed.

• Hindustan Unilever(Ltd) takes into account all these factors when producing a range of

products. It targets different segments within the market, such as the:

1. Break segment -products which are normally consume as a snatched break and often with

tea and coffee.

2. Impulse segment - these products are often purchase on impulse, used these and then.

They include product such as close up.

3. Take home segment - this describes product that are normally purchased in supermarkets,

taken home consumed at a later stage

47
REVIEW OF LITERATURE

48
Variawa (2010)

He analyzed the influence of packaging on consumer decision making process for Fast Moving

Consumer Goods. The aim of the research was to analyze the impact of packaging for decision

making processes of low-income consumers in retail shopping. A survey method has been used in

order to reach the research objectives. In a survey conducted in Star Hyper in the town of Canterville

250 respondents participated. The findings of the research indicate that low-income consumers have

more preferences towards premium packaging as this can also be re-used after the product has been

consumed. Although the findings indicate that there is a weak relationship between the product

packaging and brand experience. However, it has been proven by the findings of the research that

low-income consumers have greater brand experience from the purchase of ‘premium’ products

when compared to their experience from purchasing ‘cheap’ brand products.

Lee (2011)

He carried out study to learn the five stages of consumer decision making process in the example of

China. The researcher focuses on the facts that affect the consumer decision making process on

purchasing imported health food products, in particular demographic effects such as gender,

education, income and marital status. The author employed questionnaire method in order to reach

the objectives of the research. Analysis of five stages of consumer decision making process indicate

that impact of family members on the consumer decision making process of purchasing imported

health food products was significant.

49
(Schiffman and Kanuk, 2013)

Information search process can be internal and external. While internal search refers to the process

where consumers rely on their personal experiences and believes, external search involves wide

search of information which includes addressing the media and advertising or feedbacks from other

people (Rose and Samouel, 2015).

Once the relevant information about the product or service is obtained the next stage involves

analyzing the alternatives. Kotler and Keller (2011) consider this stage as one of the important stages

as the consumer considers all the types and alternatives taking into account the factors such as size,

quality and also price.

Backhaus et al (2013)

He suggested that purchase decision is one of the important stages as this stage refers to occurrence

of transaction. In other words, once the consumer recognized the need, searched for relevant

information and considered the alternatives he/she makes decision whether or not to make the

decision. Purchasing decision can further be divided into planned purchase, partially purchase or

impulse purchase as stated by Kacen (2008) which will be discussed further in detail in the next

chapters.

Finally, post-purchase decision involves experience of the consumer about their purchase. Although

the importance of this stage is not highlighted by many authors Neal et al (2010) argues that this is

perhaps one of the most important stages in the consumer decision making process as it directly

50
affects the consumers’ purchases of the same product or service from the same supplier in the

future.The most noteworthy writers that serve as academic advocates of The Five Stage Model of

consumer decision making include Tyagi (2010), Kahle and Close (2012) Blackwell et al. (2012),

and others.

(Rao, 2013)

A number of researches have been carried out by academics and scholars on identifying and

analyzing those factors affecting the consumers’ buying behaviour and as a result, various types of

factors have been identified. These factors have been classified into different types and categories in

different ways by different authors. For instance, Wiedermann et al (2013) classified them into

internal and external factor. On the other hand, Winer (2015) divided them into social, personal and

psychological factors. Despite the fact that they have been classified into different groups by

different authors they are similar in scope and purpose.

51
RESEARCH METHODOLOGY

52
 OBJECTIVE OF STUDY

• The main objective of this project is to find, what are the steps Hindustan Unilever Ltd. is

adapting to be market leader and to differentiate itself from its competitors.

• What is the steps company is utilizing to find current trend in the market.

• To study various brands of HUL

• To study the competitive brands in the market of home care products, food brands, personal

care products

• To find the market share of the HUL brands and its competitive brands.

• To determine the key areas of strength and weakness for HUL brands To develop a

promotion plan for brand communication of the HUL

• To study various marketing strategies of HUL

53
 RESEARCH METHODLOGY

There is large no. of FMCG companies in the market, to find the defining strategies used, the

methodology used is interview and survey method.

Data Collection Method:

For this research study, primary data as well as secondary data was collected

Primary Data has been collected through personal contact. For this purpose both questionnaire

and one-on-one interview was considered with the consumers, shop owners and distributors &

suppliers of the company.

Secondary data has collected from magazines, newspaper, company literature and websites.

Data analysis:

Analyzing codes to each question were awarded. Thereafter which aws written and than analysed

MAJOR FINDINGS

Major competitors

1. Dabur

2. Jhandu

3. Johnson &Johnson

4. Cavin Care

5.Procter & Gamble 6. Britannia

54
7. ITC

8. Gillette

METHODOLOGY FOR RESEARCH PROBLEM

Following steps were taken in to consideration, to identify the research problem-

1. Informal investigation

• Visit to the shop owners, talked to the distributors and to the consumers in the locality and

surrounding areas.

2. External and Internal Analysis

• Understanding customer problem

• Understanding the market structure

3. Situational Analysis

• Tastes & preferences

• Needs & income

• Major Competitors

ITC

Dabur

Procter & Gamble

Cavin Care

Amul

Johnson & Johnson, etc

55
A Compressive study of Secondary and Primary data (Informal Interviews) was collected

through specific questionnaires for people and shop-owners & distributors.

SAMPLING TECHNIQUE

• LOCATION- Sector 62, Noida

• SAMPLE SIZE-100

• MALE-70 AND FEMALE-30

For my survey I used Cluster Sampling technique. I selected a sample of 100 people around the

area and interviewed them according to the questionnaire. In the survey I tried to find out their

preferences & tastes, their purchasing habit, are they brand loyal or they consider their friends

advice or some reference group during purchasing. I also tried to find out that are they satisfied

with the quality or present stature of product, did they want any change in the existing product.

I also interviewed some of the shop owner and distributors and try to find out what the company

is doing to sustain their customer and what new changes they are bringing in their product to

gain competitive advantage from other competitors

RESEARCH INSTRUMENT

Research instruments, for the purpose of primary data collection were Questionnaires. The

Questionnaires were designed in two sets, one is for customers and another is for shop-owners

and distributors.

56
• The first set is to find out about the needs and preferences of the customers and what they want

from in the product and also the level of knowledge about different products in the market.

• Second set is all about what are the steps company are taking to get about the information

about the changing preferences in the taste and needs of the customers and what company is

doing to sustain their market position as well as to tap new market.

DATA ANALYSIS

For the analysis of data collected through survey work, a series of steps were followed which are

given in a chronological order

•Each question of the questionnaire was assigned codes (coding)

•Each questionnaire was punched into Ms-excel sheet thus forming a data base (punching)

•Further the data was analyzed by using diagrams, graphs, charts etc.

•The graphic rating scale and ranking method was used to measure the response and attitude of

the customer.

Finally, an effort was made to extract meaningful information from analyzed data, which acted

as a base for the recommendations

57
DATA ANALYSIS AND
INTERPRETATION

58
DATA ANALYSIS AND INTERPRETATION

MARKET SHARE OF FMCG COMPANIES IN INDIA

19%
34%
4% hul
6% itc
nestle
8%
britania
dabur
29% others

In the above pie charts we see the position of various FMCG companies doing business in India.

We can see that HUL is enjoying the position of market leader and is following by ITC as close

second in the market share of FMCG products.

59
MARKET LEADER-HINDUSTAN UNILEVER LIMITED

80
69.7 67.5
70

60 57.3
54.3 54.5
47.8
50 44
39.1
40 37.5

30 hul
23.7 22.7
20.8 competition market share
20 13.6 14.5
9.7 8.7
10 7.4
3.4
0

As mentioned in the above graph ,hul is enjoying the leader position in the market and is having

highest market share which are followed by the market challengers like dabur India ltd ,

nestle,itc etc. in different categories of fmcg products like shampoos deos, coffee, dish wash etc.

60
HINDUSTAN UNILEVER LIMITED-COMPETITORS

60

48.8
50

40

29.5 30.3
30 28.1 hul
competition market share

20

10

0
toothpaste ketchups

In some category market challengers are giving high level competition in different product lines

such as ketchup and tooth paste.

So we can see that in overall FMCG business HUL is distantly ahead of rest of the companies as

far as market share of different product are concerned

61
CATEGORY WISE SALE GROWTH OF FMCG SECTOR OF HUL IN IN INDIA

CATEGORY PERCENTAGE

SOAPS AND DETERGENTS 19.3%

PERSONAL PRODUCTS 22.4%

ICE CREAM 15.7%

PROCESSED FOODS 13.7%

BEVERAGES 13.6%

OTHERS 19.4%

19.40% 19.30%
SOAPS AND DETERGENTS

13.60% PERSONAL PRODUCTS

22.40% ICE CREAM

13.70% PROCESSED FOODS

15.70% BEVERAGES
OTHERS

62
PORTFOLIO STRADDLING THE PYRAMID ACROSS CATEGORIES

Particulars Laundry Soaps Shampoo Skin Toothpaste tea Coffee

Market size- 2247 1658 542 698 691 1113 177

$ mln

Hul share 37.5% 54.3% 47.8% 54.5% 29.5% 22.7% 44.0%

Nearest 13.6 9.7 23.7 7.4% 48.8% 20.8% 39.1%

competitor

63
 CATEGORY LEADERSHIP: LAUNDRY

38
37.5
37 37
36.5
36

35.2
35
LAUNDRY MARKET SHARE
34.5 34.5
34.3
34 34.1

33

32
2012 2003
2002 2013 2004
2014 2015
2005 2016
2006 2017
2007 2018
2008 2009

As mentioned in the above graph, hul is enjoying the leader position in the market and is having

high market share in home care products.

64
 STRONG GLOBAL BRAND: DOVE

70%

60%

50%

40%

Series 1
30%

20%

10%

0%
MAY JUNE JUL AUG SEP OCT NOV DEC

As mentioned in the above graph, hul is enjoying the leader position in the market and is having

high market share in personal care products. Dove is a global brand and used by millions of

customers, due to various innovations made it is becoming famous among teenagers and the

sales are constantly increasing.

65
MARKET SHARE OF HINDUSTAN UNILEVER – SKIN CARE PRODUCTS

EMAMI Sales
5%
AYUR
5%

HUL
GARNIER
45%
20%

NIVEA
25%

HUL NIVEA GARNIER AYUR EMAMI

As mentioned in the above graph, hul is enjoying the leader position in the market and is having

high market share in personal care products. Nivea and garnier are strong competitors of hul in

skin care products to stay ahead it has to do advertisements and give various promotional offers.

66
FINANCIAL OVERVIEW

2018 2017 2016

REPORTED GROWTH 13.3% 9.4% 11.4%

CONTINUING SALES 13.5% 10.0% 11.5%

GROWTH

EBIT/SALES% 14.4% 14.1% 13.3%

EBIT GROWTH 15.4% 16.2% 1.1%

OPERATING CASH $365MN $489MN

FLOW

HUL FMCG SALES GROWTH%

14

12

10

6 SALES GROWTH%

0
2002 2003 2004 2005 2006 2007 2008 2009
2011 2012 2015
2014 2013 2010
2014 2015
2011 2016 20172013
2012 20182014 2016

67
RETURN ON CAPITAL EMPLOYED

70
62.3 61.1
60
53.8 52.8 53
51.8
50
40.8
40

Series 1
30

20

10

0
2012
2002 2013
2003 2014
2004 2015
2005 2016
2006 2017
2007 2018
2008

RETURN ON NET WORTH

90
82.8
80
68.1
70
61.1
60 57.2
52.7 53.9
48.4
50
Series 1
40

30

20

10

0
2012
2002 2013
2003 2014
2004 2015
2005 2016
2006 2017
2007 2018
2008

68
HUL share price

69
 Q1) Do you use FMCG products

FMCG

No
7%

Yes
93%

Yes No

Interpretation

Among 100 respondents 93 respondents prefer buying FMCG products.

Analysis

Majority people use FMCG products.

70
Q2) Which brand of FMCG products do you use?

Sales
Others
5%

Nivea
9%
P&G
10%

Hindustan Unilever
76%

Hindustan Unilever P&G Nivea Others

Interpretation

Among 100 respondents 76 respondents prefer using HUL products.

Analysis

Majority people purchase products of Hindustan Unilever.

71
 Q3) where do you buy FMCG products from?

Sales

Others
12% Super Stores
16%

Retail Stores
72%

Super Stores Retail Stores Others

Interpretation

Among 100 respondents 72 respondents prefer purchasing their FMCG

products from Retail stores.

Analysis

Majority people purchase FMCG products from Retail stores.

72
 Q4) Which Hindustan Unilever’s product do you

usually prefer or use?

Sales
Others
5%

Deodorants
16% Bathing soaps
28%

Foods
18%

Skin care
33%

Bathing soaps Skin care Foods Deodorants Others

Interpretation

Among 100 respondents 33 respondents prefer Skin care products of

HUL and 28 respondents prefer bathing soaps.

Analysis

Majority people purchase Skin care products from

HUL.

73
Q5) Do you think Hindustan Unilever’s product is

easily available in market?

Sales

No
4%

Yes
96%

Yes No

Interpretation

Among 100 respondents 33 respondents prefer Skin care products of

HUL and 28 respondents prefer bathing soaps.

Analysis

Majority people purchase Skin care products from

HUL.

74
Q6) Which factors you consider while purchasing the

FMCG products?

Sales
Schemes
7%

Company
Price image
13% 17%

Quality
63%

Company image Quality Price Schemes

Interpretation

Among 100 respondents 63 respondents prefer quality is the major

factor for them while purchasing the FMCG products.

Analysis

Majority people purchase FMCG products on bases of quality.

75
 Q7) Do you think that the advertisement

influences your buying behavior?

No Sales
3%

Yes
97%

Yes No

Interpretation

Among 100 respondents 97 respondents say that advertisement increases

buying behavior.

Analysis

Majority people believe that advertisement can influence their buying

behavior while making a purchase.

76
 Q8)Form which source you get regular information

about HUL product?

Sales

Hoardings
10%
Banners
13%

Magazines Advertise TV
17% 60%

Advertise TV Magazines Banners Hoardings

Interpretation

Among 100 respondents 66 respondents know HUL product from TV Advertising.

Analysis

Majority people get information from TV Advertising about HUL products.

77
 Q9) According to you which company packaging

attract you the most?

Sales

Others
10%

HUL
40%

P&G
33%

Dabur
17%

HUL Dabur P&G Others

Interpretation

Among 100 respondents 66 respondents find HUL packaging attracting.

Analysis

Majority people says that HUL packaging is better than other

companies.

78
 Q10) Are you satisfied with HUL product?

No Sales
3%

Yes
97%

Yes No

Interpretation

Among 100 respondents 91 respondents are satisfied with HUL

products.

Analysis

Majority people says that HUL products are good.

79
CONCLUSION

80
 CONCLUSION

In recent years, the FMCG sector declined due to down trading. Also because of presence of

large number of companies trying to seize this opportunity, this force the old HUL for the

change and thus, their transformation has resulted in a new HUL, which has successfully

faced this challenge and reversed this trend. It has done so by substantially strengthening

their brands and building capabilities. This has already begun to yield benefits and they are

returning to growth. Volume growth is being followed by value growth, which in turn is

bringing profit growth.

India is one of the most exciting markets offering great potential. Over the next 10 years, the

per capita income in India is likely to double. In FMCG, there is an opportunity to catalyze

penetration, increase usage, and upgrade consumers. As a result, the FMCG market is

expected to grow to over Rs.100,000 cores from its current base of Rs.40,000 crores.

The new Hindustan Lever see an exciting opportunity for growth. They have 35 powerful

brands covering all segments, with leading market positions in most. Today, these are

stronger and more relevant to the consumer than ever. The people are energized by the scale

of the opportunity and determined to seize it. The scale of the business and operations gives

them the resources needed. They are delivering good services and the changes they brought

in the products are well taken by the customers, by this they are generating sustainable

profitable growth

81
RECOMMENDATIONS AND

SUGGETIONS

82
 RECOMMENDATIONS AND SUGGETIONS

• As it is obvious from the study the products of HUL have approached the high water

mark of sale in the global consumer market. However, there are genuine reasons to

observe that they have yet to attain the cutting edge status on many counts. In this regard

a few suggestions can be made to give the required boost to the marketing prospects of

HUL products. These can be summed up as follows:

• An attempt should be made by HUL management to tap all the potentials offered by the

global market by devoting a more substantial, efficient and better equipped resource base.

This task can be accomplished in the first place by implementing a stronger and more

ending distribution channel for various products so that even those sections of consumers

who are not accessible so easily, can be covered with greater ease.

• Efficient infrastructural base coupled with better and more comprehensive advertising

strategies should be resorted to; though HUL is presently surfing ahead of others on the

path of taking some great initiatives it should be more concerned about it for the purpose

of corporate image building.

• The price structure for various products should be more within the limit of affordability

for consumers; the grassroots consideration in this regard should not be ignored. HUL

should go for more planned and sensible marketing and advertising strategies with a view

to accomplishing the task of global brand image buildings.

• Hyper marketing and retailing network should get special attention as vital components

of HUL’s marketing policy

83
 LIMITATIONS OF THE STUDY

In attempt to make this project authentic and reliable, every possible aspect of the

topic was kept in mind. Nevertheless, despite of fact constraints was at play during

the formulation of this project.

The main limitations are as follows:

• Due to limitation of time only few people were selected for the study. So the

sample of consumers was not enough to generalize the findings of the study.

• The main source of data for the study was primary data with the help of

self- administered questionnaires. Hence, the chances of unbiased

information are less.

• People were hesitant to disclose the true facts.

• The chance of biased response can’t be eliminated though all necessary

steps were taken to avoid the same.

84
ANNEXURE

85
 QUESTIONNAIRE

NAME: SEX:

AGE: MARITAL STATUS:

MONTHLY INCOME:

Q1) Do you use FMCG products?

1. Yes

2. No

Q2) Which brand of FMCG products do you use?

1. Hindustan Unilever

2. P &G

3. Nivea

4. Others

Q3) where do you buy FMCG products from?

1. Super stores

2. Retail Stores

3. Others

86
Q4) Which Hindustan Unilever’s product do you usually prefer or use?

1. Bathing soaps

2. Skin care

3. Foods

4. Deodorants

5. Others

Q5) Do you think Hindustan Unilever’s product is easily available in market?

1. Yes

2. No

Q6) During purchase what in influence your purchase?

1. Price

2. Quality

3. Company image

4. Schemes

Q7) Do you think that the advertisement influences your buying behavior?

1. Yes

2. No

87
Q8) Form which source you get regular information about HUL product?

1. TV Advertising

2. Magazines

3. Banners

4. Hoarding

Q9) According to you which company packaging attract you the most?

1. HUL

2. Dabur

3. P&G

4. Others

Q10) Are you satisfied with HUL product?

1. Yes

2. No

88
BIBLIOGRAPHY

89
 BIBLIOGRAPHY

WEBSITES

www.hul.co.in

www.fmcg.com

www.economictimes.com

BOOKS

Kothari, CR, research methodology

Philip Kotler, marketing management

90