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Symbiosis Institute of Business Management, Bengaluru
Symbiosis Institute of Business Management, Bengaluru
12/19/2020
MANAGEMENT, BENGALURU
SALES & DISTRIBUTION MANAGEMENT
Submitted by:
Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods Company
with a heritage of over 75 years in India and touches the lives of two out of three Indians.
HUL works to create a better future every day and helps people feel good, look good and get
more out of life with brands and services that are good for them and good for others. With
over 35 brands spanning 20 distinct categories such as soaps, detergents, shampoos, skin
care, toothpastes, deodorants, cosmetics, tea, coffee, packaged foods, ice cream, and water
purifiers, the Company is a part of the everyday life of millions of consumers across India. Its
portfolio includes leading household brands such as Lux, Lifebuoy, Surf Excel, Rin, Wheel,
Fair & Lovely, Pond’s, Vaseline, Lakmé, Dove, Clinic Plus, Sun silk, Pepsodent, Close-up,
Axe, Brooke Bond, Bru, Knorr, Kissan, Kwality Wall’s and Pure it. HUL is a subsidiary of
Unilever, one of the world’s leading suppliers of fast-moving consumer goods with strong
local roots in more than 100 countries across the globe.
For Hindustan Unilever Limited, the three categories chosen, along with some products in
that category are:
- Personal Care: Lux, Clinic plus, Vaseline, Dove, Ponds etc. Amount to 50% in
revenue and a major portion of their profits.
- Food: Bru, Brooke Bond, Kissan etc.
- Home Care: Consists of detergents like Surf Excel, Rin, Wheel, and other products
like Cif etc.
Personal Care
The quarterly sales forecast for the personal care category, for FY 2021, based on data from
the last 5 years (2016-2020) is shown below. This also considers seasonality and the trends.
The results are as follows:
Year Quarter Forecasted Sales (M)
Q1 44690.11
Q2 42079.89
2021
Q3 44849.22
Q4 39881.71
Food:
The quarterly sales forecast for the food category, for FY 2021, based on data from the last 5
years (2016-2020) is shown below. This also considers seasonality and the trends.
Ex work price of a product is the price when product is manufactured and out of the factory
without any addition of distributor mark-up, retailer margin and GST.
We have selected five products from the wide portfolio of HUL along with the MRP of these
products:
1 Lux 30
Based on the MRP for above products, we calculated ex work price considering
distributor margin as 8% and retailer margin as 25% assuming that the product
is manufactured and consumed in the same state.
1. Lux:
GST 18%
Company Selling Price 17.66 GST IGST CGST SGST
GST @18% 3.18 1.59 1.59
Distributor landed price w/o GST 17.66
Distributor landed price including GST 20.83
8% Distributor margin @8% 1.41
Retailer landed price w/o GST 19.07
GST 3.43 0.13 0.13
Retailer landed price including GST 22.50
25% Margin @25% 6.36
MRP w/o GST 25.42
GST 4.58 0.57 0.57
MRP 30.00 2.29 2.29
GST 18%
Company Selling Price 105.93 GST IGST CGST SGST
GST @18% 19.07 9.53 9.53
Distributor landed price w/o GST 105.93
Distributor landed price including GST 125.00
8% Distributor margin @8% 8.47
Retailer landed price w/o GST 114.41
GST 20.59 0.76 0.76
Retailer landed price including GST 135.00
25% Margin @25% 38.14
MRP w/o GST 152.54
GST 27.46 3.43 3.43
MRP 180.00 13.73 13.73
4. Axe Deodorant:
GST 18%
Company Selling Price 117.70 GST IGST CGST SGST
GST @18% 21.19 10.59 10.59
Distributor landed price w/o GST 117.70
Distributor landed price including GST 138.89
8% Distributor margin @8% 9.42
Retailer landed price w/o GST 127.12
GST 22.88 0.85 0.85
Retailer landed price including GST 150.00
25% Margin @25% 42.37
MRP w/o GST 169.49
GST 30.51 3.81 3.81
MRP 200.00 15.25 15.25
GST 18%
Company Selling Price 123.59 GST IGST CGST SGST
GST @18% 22.25 11.12 11.12
Distributor landed price w/o GST 123.59
Distributor landed price including GST 145.83
8% Distributor margin @8% 9.89
Retailer landed price w/o GST 133.47
GST 24.03 0.89 0.89
Retailer landed price including GST 157.50
25% Margin @25% 44.49
MRP w/o GST 177.97
GST 32.03 4.00 4.00
MRP 210.00 16.02 16.02
The Debtors Turnover Ratio is also known as Receivables Turnover Ratio which shows how
quickly the credit sales are converted into cash.
DTR = Net Credit sales/Avg. Account Receivables
We referred the balance sheet and P&L statement of HUL in order to find net credit sales and
avg. account receivables of the company.
Net Credit Sales = Total Sales – (Sales Return + Sales Allowances + Cash Sales)
Credit Sales = (38273 Cr + 37660 Cr)/2
Sales = 37966.5 Cr
Average Accounts Receivables = (1046 Cr + 1673 Cr)/2 = 1359.5 Cr
DTR = 37966.5 Cr/1359.5 Cr = 27.93
Average Collection Period = 360/DTR = 360/27.93
=12.89 Days