SUMMER INTERNSHIP PROJECT REPORT ON

A COMPARATIVE STUDY ON DISTRIBUTION CHANNEL OF

TWO FMCG COMPANIES

SUBMITTED BY: TANYA SINGH

Roll No.: 17030221060

IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR

MASTER OF BUSINESS ADMINSITRATION, 2021-23

UNDER THE GUIDANCE OF

DR. SANJIWANI KUMAR
K J SOMAIYA INSTITUTE OF MANAGEMENT

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 MARKET RESEARCH REPORT ON:

A COMPARATIVE STUDY ON DISTRIBUTION CHANNEL OF

TWO FMCG COMPANIES

Project Outline: A Comparative Study of Distribution Channel of Detergent Market of Unilever and
P&G in the Indian context.

Submitted By
TANYA SINGH
MBA IB
Roll No. 17030221060

UNDER THE GUIDANCE OF

CORPORATE GUIDE FACULTY GUIDE

Ms. Asritha Kamadana Dr. Sanjiwani Kumar

QC Analyst Associate Professor and
Market Data Forecast Area Chairperson
Department of Business
Analytics

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 K J Somaiya Institute of Management

DECLARATION

I hereby declare, to the best of my knowledge and ability that my work on the Summer
Internship Project title “Market Research Report On: A Comparative Study on
distribution channel of two FMCG Companies” is a genuine research work undertaken by
me. It has not been published anywhere earlier and is prepared after completion of the
Summer Internship Program with Market Data Forecast. In addition to this, as some of the
results/research works are confidential in nature, detail analysis of the same are not
included in this report.

Tanya Singh

Roll No. 170301200099

Master of Business Administration, 2021-23

K J Somaiya Institute of Management

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 CERTIFICATE FROM SUMMER PROJECT GUIDES

THIS IS TO CERTIFY THAT TANYA SINGH, A STUDENT OF THE MASTER

OF BUSINESS ADMINISTRATION (MBA INTERNATIONAL BUSINESS) AT K J
SOMAIYA INSTITUTE OF MANAGEMENT, HAS WORKED UNDER OUR
GUIDANCE AND SUPERVISION. THIS SUMMER PROJECT REPORT TITLE
“MARKET RESEARCH REPORT ON: A COMPARATIVE STUDY ON
DISTRIBUTION CHANNEL OF TWO FMCG COMPANIES” HAS THE
REQUISITE STANDARD AND TO THE BEST OF OUR KNOWLEDGE HAS NO
PART OF IT BEEN REPRODUCED FROM ANY OTHER SUMMER PROJECT,
MONOGRAPH, REPORT OR BOOK.

CORPORATE GUIDE FACULTY GUIDE

Ms. Asritha Kamadana Dr. Sanjiwani Kumar

QC Analyst Associate Professor and

Market Data Forecast Area Chairperson
Department of Business
Analytics

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 CERTIFICATE FROM THE COMPANY

This is to certify that Ms. Tanya Singh, a student of Master of Business

Administration (MBA- International Business) from K J Somaiya Institute of
Management has worked in our organization on a project assigned by us. To the best of
our knowledge, this report is a product of the student’s own effort on the project
conducted under our guidance and supervision.

Ms. Asritha Kamadana

QC Analyst
Market Data Forecast

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 ACKNOWLEDGEMENT

I, Tanya Singh, the student of K J Somaiya Institute of Management, am

extremely grateful to Market Data Forecast for the confidence bestowed
upon me and entrusting me with project titled “Market Research Report
On: A Comparative Study on distribution channel of two FMCG
Companies”

I am extremely honored to have worked under the leadership and

proficiency of my corporate guide Ms. Asritha Kamadana, Team Lead,
Market Data Forecast who supported and encouraged me during the
project. I also, heartily thank Dr. Sanjiwani Kumar, my project guide,
for being highly approachable and available whenever needed and for the
valuable insights leading to the successful completion of my project.

I also express my gratitude to Institute Director, Dr. Monica Khanna, and

the Placement Committee for arranging the summer training in good
schedule. Last but not the least I place a deep sense of gratitude to my
family members and my friends who have been constant source of
inspiration during the preparation of this project.

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 Table of Contents

Contents

1. Executive Summary......................................................................................................................

2. Market Data Forecast profile.........................................................................................................

3. Introduction ................................................................................................................................

4. HUL (Hindustan Unilever Limited)............................................................................................

5. P&G (Procter and Gamble).........................................................................................................

6. Product Portfolio for Indian Market............................................................................................

7. Industry Trend in India................................................................................................................

8. A comparative study of HUL and P&G India.............................................................................

9. Inventory management and replenishment policies....................................................................

10. Analysis of comparative case study............................................................................................

11. Conclusion...................................................................................................................................

12. References...................................................................................................................................

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 1. Executive Summary

Consumer packaged goods (CPG) is another name for fast moving consumer goods (FMCG)
These products have a relatively low unit value and are often and regularly consumed by end
users. They consist of food and drink, as well as products for personal and household
maintenance. The FMCG sector in India is sizable and has been expanding steadily. The
FMCG sector has poor profit margins and is volume-driven. The products are frequently
branded and backed by considerable marketing, significant advertising, appealing packaging,
and powerful distribution networks. Premium, mid-range, and popular (or economy)
categories make up the FMCG market.

The primary factor driving consumers to search for alternatives at various price points is price
sensitivity. This encourages marketers to release comparable products under the same
category in an effort to enhance market share by focusing on high-, middle-, and low-income
consumers.

Soap and Detergent are widely used FMCG products. The detergent industry in India is
primarily split into two markets: those with organized and unorganized competitors.
Detergent bars, powder, and liquid detergent are the main items offered here. The majority of
the Indian market is located in rural areas, where consumers are less brand aware, more likely
to shop at mass merchants, and more price sensitive. Additionally, if another product is being
offered at a lesser price, they can quickly switch to it. As a result, price competitiveness is a
key aspect of the detergent market in India. Urban people, on the other hand, are educated
and knowledgeable about fashion, brands, and fabric hygiene. Additionally, they buy
detergents from multi-brand retailers and online shops.

The report explains the comparative analysis of distribution channel of two FMCG
companies (HUL and P&G) with regards to their products in detergent category for the
Indian Market. Both the companies have extensive supply and distribution channels. They
cater to all segments of society with wide rage of products. The report summarizes the whole
process- manufacturing of products till they reach the end consumer.

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 2. Market Data Forecast

Market Data Forecast is a Market Research and Consulting company. They are an obligated
company where they create futuristic, cutting-edge, informative reports ranging from
industry reports, company reports to country reports. The company provides its clients not
only with market statistics unveiled by avowed private publishers and public organizations
but also with vogue and newest industry reports along with pre-eminent and niche company
profiles.

The database of market research reports that the company has, consists of market research
reports having a wide variety of reports from cardinal industries. The database is been
updated constantly in order to fulfil clients with prompt and direct online access to the
database. Keeping in mind the client’s needs, the company has included expert insights on
global industries, products, and market trends in this database. Last but not the least, they
ensure that the success of clients connected to Market Data Forecast.

Market Data Forecast publishes high quality, in-depth market research reports that help
clients in obtaining deep clarity on current business trends and future developments. They
believe that only in-depth and detailed information can help clients take efficient business
decisions.

They expertise in: Market Research, Market Sizing and Forecasts, Market Entry Strategies
and overall Industry Analysis, Researching and analyzing Trends in Niche Markets, Novel
Sustainability Trends, Innovation Trends, Customer Cognizance, Value Chain Analysis and
Distribution Channel Assessment, Primary Interviews, Primary Research, Consumer Surveys,
and Secondary Research

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 3. Introduction

Fast-Moving Consumer Goods (FMCG)

Quick Moving Customer Products are goods that sell quickly, flip over frequently, and are
typically inexpensive (FMCG). According to family and individual considerations, India's
economy currently ranks FMCG as the fourth largest sector.

The percentage of FMCG sales in India is roughly 50%. This is due to the fact that simple
availability, the development of mindfulness, and changes in lifestyle have been the main
forces driving the segment's expansion. The largest component of the overall income
generated by the FMCG sector in India is the urban section, which represents an income of
about 55%.
However, in the last ten years, rural India has seen faster growth in the FMCG sector than has
urban India. FMCG products account for 50% of total national spending in semi -
metropolitan and rural areas

Due to the rise in rural people's earnings, aspirations, and consumption, as well as a result of
a combination of rising incomes, there is an increase in demand for branded FMCG products
in rural India. India's rural FMCG market is anticipated to increase from US $23.6 billion in
FY18 to US $220 billion by 2025. 

Distribution of Fast-Moving Consumer Goods

The channel of distribution refers to the marketing intermediaries that, when connected,
enable the producers' goal. The producer needs to connect with its final consumer through a
distribution channel. In marketing, the distribution channel is crucial to ensuring a constant
flow of products and services from the point of production to the consumer. The pathway,

10
flow, content, goals, leader, and functions are only a few of the crucial components of the
distribution channel.

The distribution channel's duties include bridging the gap between the manufacturer and the
consumer, doing market research, promoting the product, tailoring offers to the needs of the
customers, and storing and moving the items. In India, Unilever and P&G are the market
leaders in the FMCG sector.

The distribution system used by HUL and Unilever has changed significantly over time.
Large retailers and wholesalers used to place orders with the corporation directly in the
beginning, and a salesman would then deliver the products. The market's sole point of sale,
registered wholesalers, were introduced in the second phase. Later, the system introduced
redistribution stockists, who further expanded the distribution route by adding depots.
Currently, the items are carried from the producer to the depots to the distributors, who then
pass them along to the wholesalers and retailers via the Market Executives (ME). The final
purchaser of the product is who the retailers finally sell it to.

Distribution Models of FMCG Companies

Source: https://www.researchgate.net/profile/Dev-Narayan-Sarkar/publication/
320035356_Conceptual_Framework_for_designing_a_Rural_Distribution_Model_for_FMCG_products_in_Ind
ia_A_Situational_Guide/links/59ca1aab45851556e97deefe/Conceptual-Framework-for-designing-a-Rural-
Distribution-Model-for-FMCG-products-in-India-A-Situational-Guide.pdf

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 4. HUL (Hindustan Unilever Limited)

The mission of HUL is to spread the practice of sustainable living

Hindustan Unilever Limited (HUL), India's largest manufacturer of fast-moving consumer

goods, has a nearly 90-year history in the country. Nine out of ten Indian households use one
or more of our products on any given day, providing us with a special chance to create a
better future. We are renowned for our outstanding brands, the beneficial social impact we
have, and our commitment to ethical business practices.

With products and services that are beneficial to both the consumer and the wider
community, HUL aims to build a better future every day and makes it easier for people to feel
good, look good, and enjoy life more.

The Company is a part of the daily lives of millions of consumers in India thanks to its 50+
brands, which cover categories like fabric solutions, home and hygiene, life necessities, skin
cleansing, skincare, hair care, color cosmetics, oral care, deodorants, tea, coffee, ice cream &
frozen desserts, foods, and health food drinks. Leading household names like Lux, Lifebuoy,
Surf excel, Rin, Wheel, Glow & Lovely, Pond's, Vaseline, Lakmé, Dove, Clinic Plus,
Sunsilk, Pepsodent, Closeup, Axe, Simple, Love Beauty Planet, TRESemmé, Brooke Bond,
Bru, Knorr, Kissan, Kwality Wall's, Horlicks, and Pureit are among the portfolio's leading
brands.

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HUL was ranked eighth globally by Forbes and as the most innovative firm in India. HUL
was named one of the greatest companies to work for by Aon Hewitt, and we are still the
"Employer of Choice" across industries.

5. P&G (Procter and Gamble)

Mission: Making each day more memorable

The brands have been passed down from generation to generation and are trusted in millions
of living rooms, kitchens, laundry rooms, and bathrooms. They have pushed the boundaries
of tradition, driven innovation, and influenced culture throughout the period of 181 years.

Personal care items and cleaning supplies are among its offerings. P&G reported sales of
$83.1 billion in 2014. In 2014, P&G restructured the business, eliminating about 100 brands
and focusing on the remaining 65 brands, which accounted for 95% of the company's income.

Six selling and marketing departments and 10 categories make up the firm structure as of July
2016. Categories include selling and market organizations, Asia Pacific, Europe, Greater
China, India, the Middle East and Africa (IMEA), South America and North America, home
care, grooming, oral care, baby care, feminine care, family care, personal health care, hair
care, skin and personal care, and fabric care.

P&G, a business that started with a bar of soap, a box of candles, and a handshake between
two men who felt commonplace things could and should be of the finest quality, thrives on
innovation. Even today, P&G employees are still motivated by this idea, which is one of the
reasons we are routinely recognized as one of the most inventive businesses in the world.

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 6. Product Portfolio for Indian Market

HUL- Hindustan Unilever Limited

The detergent brands owned by HUL are Rin, Surf Excel, Active and Sunlight. HUL controls
one-third of the country's $24,000 billion washing market. With a green product, HUL also
hopes to make a splash in the environmental arena. At an overall level, HUL has a whopping
39.1% share in India's laundry care market.

P&G - Procter and Gamble

Half of the Home and Personal Care segment of P&G is made up of Detergent and Hair Care
products. P&G holds a 7.6% market share in the laundry industry. In the detergent area, P&G
owns two brands: Tide and Ariel. Tide is their mid-segment targeted brand, and Ariel is their
premium brand.

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 7. Industry Trend in India

The detergents market in India is estimated to increase at a CAGR of 7.0 percent from 2020
to 2027, from a 2019 market value of INR 42,827.4 crore to INR 73,660.4 crore by 2027.
Expanding disposable income, increased consumer spending on personal hygiene items, and
rising consumer awareness of improving health and quality of life have all contributed to high
consumption of items like fabric softeners, hair and body care products, sanitizers, and
disinfectants in India.

The Indian detergent market is split into three categories: high-end, mid-range, and
mainstream. Ariel and Surf are in the premium market, Tide, Henko, and Rin are in the mid-
range, and Mr. White, Wheel, Nirma, and Ghari are in the popular segment. 15 percent of the
market is occupied by premium detergents, 40 percent by mid-range products, and 45 percent
by popular products. These detergent manufacturers account for 60% of the market and are
regarded as organized players in the sector. Regional and small unorganized firms dominate
the remaining 40% of the market. According to reports, India has the lowest detergent
consumption per capita in the world at 2.7 kg.

The demand for high-end, premium detergent products has increased as a result of the change
in living standards supported by rising disposable incomes among the middle-class
population. Fine granules found in premium and super premium detergent powders, which
are made specifically for front and top load washing machines, can clean garments by
penetrating into their fibers while using less water and less lather. An increasing number of
consumers in Indian households now own washing machines, which has sparked interest in
new premium and super premium detergent products and created brand loyalty for these
high-end goods. Therefore, unexplored potential for domestic and international detergent

15
makers may arise as a result of the changing customer preferences for enhanced and super
premium detergent powders in India.

India detergents market segmentation

By Type
 Anionic Detergents
 Cationic Detergents
 Non-Ionic Detergents
 Zwitterionic Detergents

By Form
 Powder
 Liquid
 Bar

By Application
 Personal Cleaning
 Laundry Cleaning
 Household Cleaning
 Dishwashing
 Others

Generally speaking, three sales channels—general retail, multi-brand retail, and online retails
—make the detergents available to the end user. There is only general retail in the rural
market, giving individuals only one purchasing option. However, urban residents benefit
from a variety of sales and holiday promotions offered by multi-brand and internet retailers.
The main multi-brand retail chains in India, including Big Bazaar, Dmart, Bansal, etc., as
well as e-commerce sites like Amazon and Flipkart, provide a variety of detergents in various
sizes and packaging.

To increase customer happiness, brands such by Ghari detergent, by Nirma, by Tide, and
detergent brand Surf Excel advertise their products for free trials and draw customers in with

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appealing taglines. Brand ambassadors also go door-to-door to show their products, which
they claim will provide the best wash satisfaction. To allow individuals to test things for the
first time, they often provide free trial packets attached to other products.

Hindustan Unilever Limited, Procter & Gamble, Jyothty Laboratories, and Nirma Limited are
the major participants in the Indian detergent business.

8. A comparative study of HUL and P&G India

The largest consumer goods company in India is Hindustan Unilever Limited (HUL),
originally known as Hindustan Lever Limited. In 1933, Lever Brothers India Limited was
established. It is the market leader in the majority of FMCG product categories, and many
Indians are familiar with its products on a daily basis. HUL has reacted vehemently to the
stimulation of India's economic expansion ever since its inception. In keeping with
consumers' tastes, opinions, and aspirations, it has carefully diversified as it has grown.

In comparison to HUL, Procter & Gamble Home Products Limited (P&G India) is a
relatively new player in the Indian FMCG market. The Procter & Gamble Company, USA
established Procter & Gamble Home Products in 1993 as a wholly owned subsidiary. It
covers matters of hygiene, health, and household goods. Its brands include Tide, Ariel,
Pamper, Pantene, Head & Shoulders, Rejoice, Oley, Whisper, and many more. P&G India
has been recognized as one of the fastest growing FMCG firms with operational profits that
are significantly greater than industry standards because to its creative marketing and supply
chain strategy and practices. As a result, the majority of established companies, like HUL, are
currently benchmarking their procedures.

HUL is India's largest FMCG company and has held the top spot in numerous product
categories. The fastest-growing company, though, is P&G India, which has severely damaged
HUL. As a result, it would be worthwhile to compare both companies' demand chain
processes based on the numerous factors listed in Table 1.

Marketing strategy: A marketing strategy aims to fulfil the overarching business goals of
expansion and sustained performance while standing out in the market. The marketing

17
strategy is designed to achieve this goal by providing higher value to all stakeholders. The
push vs. pull system, the volume vs. value mindset, and the current level of operational profit
are some of the demand chain-related marketing strategy challenges that need to be
evaluated.

HUL plays a volume game while mostly implementing the push system. The purpose of
Territory Sales Officers (TSOs) was identified during the focus group discussions as being to
sell current products and generate demand. Area Sales Managers (ASMs) and TSOs at HUL
get together each month. They examine the previous month's performance, estimate the sales
potential for the following month, and ask each TSO for a performance promise. While
ASMs provide corporate sales strategy using schemes, discounts, marketing efforts,
promotions, new items, and market intelligence, TSOs bring market input.

A sales target is eventually established, which is often more than the TSOs would like to
commit to and lower than the ASM would prefer. The branch offices then combine these
figures for every sales region, and they are then combined once more upstream before being
sent to corporate headquarters, where production planning is carried out. The end effect is
that, at the plant level, the difference between real sales and output can reach 25%.
Approximately 65 percent of HUL's products are supported by some type of point-of-sale
promotion, both intended for retailers and consumers, in terms of extra quantity, according to
analysis of data gathered from field tests on the physical verification of available stock at
retail outlets.

P&G India, on the other hand, has consciously chosen a pull and value-based marketing
approach. Sales representatives spend the majority of their time gathering orders for the
product in response to store demand. There were virtually any sales or trade promotion
campaigns for any P&G products available during the length of this investigation.
Additionally, while visiting retail establishments, SSs' sales representatives typically place
greater attention on the availability of the entire product line in small amounts rather than on
the dumping of particular products.

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 Product Category High Income Middle Income Low Income

HUL Detergent Surf Excel Rin Wheel

P&G Detergent Ariel Tide

Product Targeting Consumers of Different Income Levels

Reach and network of distribution: Distribution and its costs are one of the key success
elements for any FMCG companies in India. Because of the wide geographic diversity of
retail locations around the nation, all FMCG companies are under pressure to have the
greatest possible market penetration and coverage in order to realize economies of scale.
Companies like HUL, ITC, and P&G have carefully constructed their distribution networks.
According to these viewpoints, the Indian FMCG distribution system is one of the best and
most economical distribution systems (FMCG firms in some capacity even service a tiny
town with a population of roughly 500 people). Sales return on territory, distribution outlet
mix, sales volume per outlet, market coverage and penetration, trade promotion policy, and
ROI of channel members are a few of the essential components of distribution. Minimum
linkages in the network for product replenishment to customers, promotion plans, defective
delivery claim settlement procedures, and partnership channel relationships are all crucial
success aspects in demand chain excellence.

HUL and P&G India have quite diverse channel topologies from one another.
When moving from a plant to consumers, a product in the case of HUL typically passes
through five to six hands (links), including the Mother Warehouse (MW), RDCs, Carrying
and Forwarding (C&F) agents, RS, Wholesalers (Ws), and retailers. In contrast, there are
only two to three steps in the case of P&G India, as shown in Figure below.

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 Figure 1: Distribution Channel Structure of HUL and P&G India

The following tables provide an evaluation of various distribution system components at the
distributor (RSs and SSs), wholesaler, and retailer levels based on field studies about physical
assessment and their perspectives on operational systems.

Table 1: Comparison of distributor’s perspective of HUL and P&G India

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 Table 2: Comparison of Wholesaler’s perspectives of HUL and P&G India

Table 3: Comparison of retailer’s perspectives of HUL and P&G India

One of the first companies in the Indian FMCG sector, Hindustan Unilever Limited, has
started using IT extensively with the goal of "Connecting, Attracting, and Fulfilling" (The
Economic Times, February 12, 2009). All offices, factories, and warehouses as well as
roughly 100 vendors and 5000 stockists dispersed across 1000 locations have been

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connected.

The stockists' level is met by their current tracking system for product and stock availability.
After that, they have mechanisms in place for manually collecting paper-based data from
wholesalers and retailers. On the other side, P&G India continuously provides timely and
online information flow throughout the demand chain. In fact, P&G is the first FMCG
company in India to employ palm tops to track product availability from retail
establishments.

9. Inventory management and replenishment policies

DCM has become essential due to growing worries about difficulties with excessive finished
goods inventory holding across the network. With the exception of perishable goods, FMCG
products in India are typically available on the market between 45 and 60 days old.

This necessitates quick action to stop the loss of resources, such as storage space and working
capital, by optimizing inventories of finished goods. Firms must implement more futuristic
replenishment and inventory management systems to solve this problem. The availability of
products in accordance with normal demand, the flexibility to meet unforeseen demand,
fixed, small, and continuous replenishment cycle times, the prevention of forward buying
policies (such as promotion policies that create stock pileups), the quick conversion of
products into cash (maintaining freshness), inventory tracking across demand chains, vendor-
managed inventory systems, etc. are examples of such systems. The following table shows
the current inventory management systems and replenishment procedures for HUL and P&G
India.

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 Table 4: Inventory management and replenishment policy of HUL and P&G India

10. Analysis of comparative case study

It shows that P&G India is more pro-active than HUL based on analysis and evaluation of the
comparison research of HUL and P&G India on several aspects of demand chain
management. HUL's marketing plan successfully focuses on pushing its already-available
items with the aim of increasing both sales and profits. As a result, it dominates the market in
the majority of product categories. P&G India has adopted a noticeably different approach to
marketing, favoring the pull option in an effort to maximize value for all parties involved.

In terms of network size and distribution reach, Figure 1 shows that HUL's distribution
network has been in place longer than P&G India's. Due to a significantly higher number of
SKUs, volumes, and market penetration, industry experts in focus groups expressed the
opinion that it is very difficult for HUL to have modest distribution networks like P&G India.
However, from the standpoint of demand chain optimization, Agrawal et al. (2010) identified
that a demand chain network with too many members leads to inefficiency and subpar market

23
reactions since it increases stockpiles and handling, transportation, and product costs, which
locks up working capital.

In addition to this, it ruins connections between network participants due to inadequate

coordination, cooperation, and trust. Additionally, the tables above clearly show that P&G
India's distribution systems (distributor, wholesaler, and retailer) are far more streamlined,
systematic, transparent, regular, and hassle-free. As a result, compared to HUL, the majority
of distribution channel members are generally more satisfied with P&G India's working
system and culture. As was previously said, in order to ensure real-time market reaction, have
information flow and real-time intact availability. Given the recent tremendous advancements
in firms must use information and communication technology to their advantage in order to
effectively compete. They need data and demand signals to optimize their supply networks.
They should transmit as well. such distortion-free demand signals and data to improve their
ability to respond to market changes, moreover to reducing the bull whip effect According to
field tests, HUL tracks demand and stock information up to the stockist level while P&G
India does so at the retail outlet ends. Additionally, P&G India uses IT more frequently than
HUL.

As a result, HUL's information flow is more manual, slow, and reactive. P&G India is
increasing operational excellence through automated and online information flow, being
more pro-active and adaptable to new technology.

In light of Table 4, it is clear that P&G India has a better inventory management and
replenishment system than HUL in terms of product availability, freshness, and safeguards
against overstocking and stock-out. With fewer working capital and space needs as a result,
P&G India is able to have larger inventory turns annually than HUL, which helps to ensure
better operating profits and a higher return on investment and return on assets. Table 5
provides an overview of the entire comparative study and debates.

24
 Table 5: Summarized Demand Chain Practices of HUL and P&G India

Table 5 makes it clear that HUL's business concept is based on the "make-and-sell"
mentality. They have been using the push approach to increase sales volume in order to
obtain economies of scale. They have been engaging in price-based differentiation in the
market. As a result, it is extremely difficult to modify an entire system quickly. The majority
of the demand chain participants concurred throughout the survey that many changes have
occurred recently. They have used the pull strategy for acquiring commodities for
manufacturing in order to lower production costs, and a number of innovations for supply-
side optimization have been implemented, such as contract manufacturing and the relocation
of facilities to tax-holiday zones to develop core competencies in the supply chain. Being a
modern-age company, P&G India adopted the "sense-and-respond" business concept early
on, focusing on developing new capabilities for quicker response and providing the greatest
possible value to customers in a dynamic market environment. For better, more improved

25
market responsiveness capabilities, it has redefined the traditional FMCG distribution
network structure in India, information and knowledge sharing systems, and inventory flow
and management.

11. Conclusion

According to the aforementioned debates, demand chain management is a novel idea based
on the "sense-and-respond" mentality. The part of the value chain that interacts with
customers is what makes it possible for businesses to respond to client requests more rapidly
and cost-effectively. It suggests that companies reevaluate their standard operating
procedures with reference to relationships of partnership and collaboration among all
company participants and combine diverse supply chain and marketing processes and
activities.

26
Due to the rapid advancements in information and communication technology and the
subsequent adoption of these advances by corporate companies, the market environment has
over time become genuinely global and hypercompetitive, setting a new tempo for
globalization. Customers' expectations rose as a result of being familiar with new ways of
consuming, living, and making demands.

Due to the enormous stockpiles of finished goods throughout the supply chains as a result of
this business scenario's greater demand fluctuation and uncertainty, marketing and
distribution expenses have significantly increased. Demand chain management places a
strong emphasis on top line growth by making the most use of the company's and its business
partners' resources.
It is a new tactical instrument for generating income, maintaining income, or even halting the
loss of income amid volatile economic and market conditions. Therefore, strategic
management of demand chains is essential for enhancing market responsiveness. The
company and its demand chain participants succeed through integrated and cooperative
efforts. It would establish a brand-new working environment that promotes attentive follow-
through and prompt response to customer requests.

A detailed comparison of two top companies in the Indian FMCG sector, HUL and P&G
India, has been undertaken on a number of factors to support the rationale of best practices in
demand chain management. In this comparison analysis, P&G India was determined to have
more effective demand chain management techniques than HUL. Since P&G India is a
private limited company and not a publicly traded company in India, accurate figures for
operating and net profits are not available. However, industry insiders formally believe that
its operational profit is the greatest in the Indian FMCG sector.

The aforementioned evaluations and conversations make it abundantly evident that DCM
improves businesses' ability to respond to the market by integrating their marketing expertise
and supply chain expertise. As a result, it is important to remember the supply chain as well
as the demand chain. Firms cannot have market responsiveness based on marketing
competencies without a strong supply chain. In order to achieve this, a high level of
integration between marketing and supply chain processes and activities is required; the result
is commonly referred to as DCM.

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While DCM is driven by information-centric sense of consumer demand and the firm's
capacity to respond to them rapidly in a cost-effective manner, SCM is driven by low cost of
materials and an uninterrupted flow of goods. As a result, a "Market Responsiveness Grid" is
suggested for more precise and manageable value propositions by fusing supply chain
capabilities with marketing competences, as shown.

Market responsiveness grid

Greater market dominance and sustained corporate performance would result from these two
operating as DCM. Firms can purchase reactive responsiveness capability at an additional
expense for any increase in supply chain capability without superior marketing proficiency.
Similar to how improving supply chain competence is necessary, improving marketing
competency alone won't succeed because businesses won't be able to meet demand in real
time. Therefore, proactive market responsive demand chain management is required to
provide the best possible synchronization between them.
References

1. https://www.researchandmarkets.com/reports/5009045/india-detergent-market-
outlook-2025
2. https://www.proquest.com/docview/2158142887/fulltextPDF/1CC9F4F0ADB74E8EPQ/
1?accountid=31551&parentSessionId=zX%2FJbfOM7QIad
%2FP8azlxKxcUwOSfqNU8EJCaqSybNsw%3D

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3. https://www.researchgate.net/profile/Durgesh-Agrawal/publication/
264820692_Demand_chain_excellence_A_case_study_of_HUL_vis-a-vis_PG_India/
links/5f474cec299bf13c503b9491/Demand-chain-excellence-A-case-study-of-HUL-vis-a-
vis-P-G-India.pdf

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