A

Summer Training Project Report

On
MARKETING STRATEGIES
OF HINDUSTAN UNILEVER LTD.
Submitted for partial fulfillment of BBA Program of requirement for the award of degree
Of

Bachelor of Business Administration

Of
GRAPHIC ERA UNIVERSITY DEEMED, DEHRADUN
(UTTARAKHAND)

SUPERVISION BY SUBMITTED BY
Mr. DEEPAK KAUSHAL JATIN KAKKAR
Roll No _________
Enrolment No GE-_______

GRAPHIC ERA DEEMED UNIVERSITY,

DEHRADUN
 CERTIFICATE

This is to certify that the report titled MARKETING STRATEGIES OF

HINDUSTAN UNILEAVER LTD IN DEHRADUN has been prepared
and Submitted by JATIN KAKAR Student of BBA Vth semester, for the
fulfillment of BBA degree under my supervision and guidance.

This work is original and has not been published or submitted elsewhere for
any purpose what so ever. All sources of information have been mentioned
and duly acknowledged.

DATE: ………………………
Faculty : MR. DEEPAK KAUSHAL
SIGNATURE :……………………..

2
 DECLARATION

I hereby declare that Dissertation titled “MARKETING STRATEGIES IN

HINDUSTAN UNILEVER , DEHRAUDN is submitted as a requirement
for partial Fulfillment of Bachelor of Business Administration (BBA) degree
from GEU DEEMED, UNIVERSITY, Dehradun.

The empirical findings in the Report are based on the data collected by
myself. While preparing this Report I have not copied anything from any
source or the project.

JATIN KAKKAR
BBA – VTH SEM.
GEU DEEMED UNIVERSITY

3
 ACKNOWLEDGEMENT
I take the profound privilege to express most sincere gratitude and indebtedness to
all those, who provided us the opportunity to do the project in their esteemed
organization. We owe debt of gratitude for them for the valuable guidance in the
course of our project study. It has been a great pleasure and enlightening to work
under them for their timely assistance and valuable suggestion through fruitful
discussion.

This project would not have been possible without the full support of my parents. I
sincerely express my gratitude to them.

4
 TABLE OF CONTENTS

 Executive Summary 6
 Introduction 7-9
 Company Profile 10-21
 Current Market Context 22-24
 Exports Portfolios 25-28
 Corporate Management 28-30
 Research & Innovation Centre 31-32
 Safety & Health Policy 33-35
 Market Strategies 35-37
 HUL Distribution Network 38-44
 Pioneering Channels 44-50
 Hindustan Unilever Ltd. 51-53
 Competitors 54
 Literature Review 55-60
 Research Methodology 61-62
 Future Scope 63-65
 Findings, Data Analysis & Conclusion 66-70
 Recommendations 71
 Suggestions 72
 Limitations 73
 Bibliography 74
(Annexure) Questionnaire 75-79

5
 EXECUTIVE SUMMARY

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. They endow the company with a
scale of combined volumes of about 4 million units and sales of Rs.10,
000 crores.
HUL is also one of the country’s largest exporters; it has been
recognized as a Golden Super Star Trading House by the Government
of India. Hence, research aims is that to study the existing marketing
practices, emerging marketing plans and understanding companies
business strategy with its profile. The main recommendations have
been made on the addressing of the advertising message to the
customers. An attempt has been made to formulate the
communication in a way to build it on a platform of the basic need for
buying HUL products. In another recommendation the suggestions
towards better dealer interest in HUL products has been given a
chance.
The research is based primarily on primary data; however few
references to industry figures from secondary data have been made.
Data has been collected through in depth interviews and administered
questionnaires.
The study has given the researchers an inside of the Consumer
durable Industry and an opportunity to use the theoretical
knowledge in live project.

6
 INTRODUCTION

Over 100 years' link with India. In the summer of 1888, visitors to the
Kolkata harbor & noticed crates full of Sunlight soap bars, embossed
with the words "Made in England by Lever Brothers". With it, began an
era of marketing branded. Fast Moving Consumer Goods (FMCG).

Soon after followed Lifebuoy in 1895 and other famous brands like
Pears, Lux and Vim. Vanaspati was launched in 1918 and the famous
Dalda brand came to the market in 1937.

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

Vanaspati Manufacturing Company, followed by Lever Brothers India
Limited (1933) and United Traders Limited (1935). These three
companies merged to form HUL in November 1956; HUL offered 10%
of its equity to the Indian public, being the first among the foreign
subsidiaries to do so. Unilever now holds 51.55% equity in the
company. The rest of the shareholding is distributed among about
380,000 individual shareholders and financial institutions.

The erstwhile Brooke Bond's presence in India dates back to 1900. By

1903, the company had launched Red Label tea in the country. In
1912, Brooke Bond & Co. India Limited was formed. Brooke Bond
joined the Unilever fold in 1984 through an international acquisition.
The erstwhile Lipton's links with India were forged in 1898. Unilever
acquired Lipton in 1972, and in 1977 Lipton Tea (India) Limited was
incorporated.

Pond's (India) Limited had been present in India since 1947. It joined
the Unilever fold through an international acquisition of Chesebrough
Pond's USA in 1986.

Since the very early years, HUL has vigorously responded to the
stimulus of economic growth. The growth process has been
accompanied by judicious diversification, always in line with Indian
opinions and aspirations.

The liberalization of the Indian economy, started in 1991, clearly

marked an inflexion in HUL's and the Group's growth curve. Removal
of the regulatory framework allowed the company to explore every
single product and opportunity segment, without any constraints on
production capacity.

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Simultaneously, deregulation permitted alliances, acquisitions and
mergers. In one of the most visible and talked about events of India's
corporate history, the erstwhile Tata Oil Mills Company (TOMCO)
merged with HUL, effective from April 1, 1993. In 1995, HUL and yet
another Tata company, Lakme Limited, formed a 50:50 joint venture,
Lakme Lever Limited, to market Lakme's market-leading cosmetics
and other appropriate products of both the companies. Subsequently
in 1998, Lakme Limited sold its brands to HUL and divested its 50%
stake in the joint venture to the company.

HUL formed a 50:50 joint venture with the US-based Kimberly Clark
Corporation in 1994, Kimberly-Clark Lever Ltd, which markets Huggies
Diapers and Kotex Sanitary Pads. HUL has also set up a subsidiary in
Nepal, Nepal Lever Limited (NLL), and its factory represents the
largest manufacturing investment in the Himalayan kingdom. The NLL
factory manufactures HUL's products like Soaps, Detergents and
Personal Products both for the domestic market and exports to India.

The 1990s also witnessed a string of crucial mergers, acquisitions and

alliances on the Foods and Beverages front. In 1992, the erstwhile
Brooke Bond acquired Kothari General Foods, with significant interests
in Instant Coffee. In 1993, it acquired the Kissan business from the UB
Group and the Dollops Icecream business from Cadbury India.

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

two plantation companies of Unilever, were merged with Brooke Bond.
Then in July 1993, Brooke Bond India and Lipton India merged to form
Brooke Bond Lipton India Limited (BBLIL), enabling greater focus and
ensuring synergy in the traditional Beverages business. 1994
witnessed BBLIL launching the Wall's range of Frozen Desserts. By the
end of the year, the company entered into a strategic alliance with the
Kwality Icecream Group families and in 1995 the Milkfood 100%
Icecream marketing and distribution rights too were acquired.

Finally, BBLIL merged with HUL, with effect from January 1, 1996. The
internal restructuring culminated in the merger of Pond's (India)
Limited (PIL) with HUL in 1998. The two companies had significant
overlaps in Personal Products, Specialty Chemicals and Exports
businesses, besides a common distribution system since 1993 for
Personal Products. The two also had a common management pool and
a technology base. The amalgamation was done to ensure for the
Group, benefits from scale economies both in domestic and export

8
markets and enable it to fund investments required for aggressively
building new categories.

In January 2000, in a historic step, the government decided to award

74 per cent equity in Modern Foods to HUL, thereby beginning the
divestment of government equity in public sector undertakings (PSU)
to private sector partners. HUL's entry into Bread is a strategic
extension of the company's wheat business. In 2002, HUL acquired the
government's remaining stake in Modern Foods.

In 2016, HUL acquired the Cooked Shrimp and Pasteurised Crabmeat

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

9
 COMPANY PROFILE

The mission that inspires HUL's 36,000 employees, including over

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

HUL's brands - like Lifebuoy, Lux, Surf Excel, Rin, Wheel, Fair &
Lovely, Pond's, Sunsilk, Clinic, Pepsodent, Close-up, Lakme, Brooke
Bond, Kissan, Knorr-Annapurna, Kwality Wall's – are household names
across the country and span many categories - soaps, detergents,
personal products, tea, coffee, branded staples, ice cream and culinary
products. They are manufactured in close to 80 factories. The
operations involve over 2,000 suppliers and associates. HUL's
distribution network, comprising about 7,000 redistribution stockists,
directly covers the entire urban population, and about 250 million rural
consumers.

HUL has traditionally been a company, which incorporates latest

technology in all its operations. The Hindustan Lever Research Centre
(HLRC) was set up in 1958, and now has facilities in Mumbai and
Bangalore. HLRC and the Global Technology Centres in India have over
200 highly qualified scientists and technologists, many with post-
doctoral experience acquired in the US and Europe.

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

renders to the community. HUL is focusing on health & hygiene
education, women empowerment, and water management. It is also
involved in education and rehabilitation of special or underprivileged
children, care for the destitute and HIV-positive, and rural
development. HUL has also responded in case of national calamities /
adversities and contributes through various welfare measures, most
recent being the village built by HUL in earthquake affected Gujarat,
and relief & rehabilitation after the Tsunami caused devastation in
South India.

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

10
and hygiene education through the Shakti Vani Programme, and
creating access to relevant information through the iShakti community
portal. The programme now covers about 50,000 villages in 12 states.
HUL's vision is to take this programme to 100,000 villages impacting
the lives of over a 100 million rural Indians.

HUL is also running a rural health programme – Lifebuoy Swasthya

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

HINDUSTAN UNILEVER LIMITED INDIA’S LARGEST FMCG COMPANY

11
FINANCIAL OVERVIEW

12
 Hindustan Lever Limited Shareholding
Pattern
Flls
13.7

Domestic
Fls
14.8 Unilever
51.6

Individual
19.9
HUL Equity Capital - 50 Mn $
Market Capitalisation - 7,300 Mn $

13
 PRESENT MARKETING STRATEGY:

Mission:

Hindustan Unilever Limited mission is to add Vitality to life. We meet everyday

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

Policy:

HUL has earned a reputation for conducting its business with integrity and with
respect for the interests of those their activities can affect. This reputation is an
asset, just as real as their people and brands.

Their first priority is to be a successful business and that means investing for
growth and balancing short-term and long-term interests. It also means caring
about their consumers, employees and shareholders, their business partners and
the world in which we live.

From HUL Spokesperson “To succeed requires the highest standards of

behavior from all of us. The general principles contained in this Code set out
those standards. More detailed guidance tailored to the needs of different
countries and companies will build on these principles as appropriate, but will not
include any standards less rigorous than those contained in this Code.

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

must have practical value in their day-to-day business and each one of us must
follow these principles in the spirit as well as the letter”.ref: business world
magazine.

Obeying the Law

HUL companies and employees are required to comply with the laws and
regulations of the countries in which they operate.

Employees

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

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

14
  HUL are committed to safe and healthy working conditions for all
employees. We will not use any form of forced, compulsory or child
labour.

 HUL are committed to working with employees to develop and

enhance each individual's skills and capabilities.

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

 HUL will maintain good communications with employees through

company based information and consultation procedures.

Consumers
HUL is committed to providing branded products and services which consistently
offer value in terms of price and quality, and which are safe for their intended
use. Products and services will be accurately and properly labelled, advertised
and communicated.

Shareholders
HUL will conduct its operations in accordance with internationally accepted
principles of good corporate governance. They will provide timely, regular and
reliable information on their activities, structure, financial situation and
performance to all shareholders.

Business Partners

HUL is committed to establishing mutually beneficial relations with their suppliers,

customers and business partners.

In their business dealings they expect their partners to adhere to business

principles consistent with their own.

Community Involvement

HUL strives to be a trusted corporate citizen and, as an integral part of society, to

fulfill their responsibilities to the societies and communities in which they operate.

Public Activities

HUL companies are encouraged to promote and defend their legitimate business
interests. HUL will co-operate with governments and other organisations, both
directly and through bodies such as trade associations, in the development of
proposed legislation and other regulations which may affect legitimate business
interests.

HUL neither supports political parties nor contributes to the funds of groups
whose activities are calculated to promote party interests.

15
The Environment

HUL is committed to making continuous improvements in the management of

their environmental impact and to the longer-term goal of developing a
sustainable business.

HUL will work in partnership with others to promote environmental care, increase
understanding of environmental issues and disseminate good practice.

Innovation
In their scientific innovation to meet consumer needs they will respect the
concerns of their consumers and of society. They will work on the basis of sound
science, applying rigorous standards of product safety.

Competition
HUL believes in vigorous yet fair competition and supports the development of
appropriate competition laws. Their companies and employees will conduct their
operations in accordance with the principles of fair competition and all applicable
regulations.

Business Integrity

HUL does not give or receive, whether directly or indirectly, bribes or other
improper advantages for business or financial gain. No employee may offer, give
or receive any gift or payment which is, or may be construed as being, a bribe.
Any demand for, or offer of, a bribe must be rejected immediately and reported to
management.

HUL accounting records and supporting documents must accurately describe

and reflect the nature of the underlying transactions. No undisclosed or
unrecorded account, fund or asset will be established or maintained.

Conflicts of Interests

All HUL employees are expected to avoid personal activities and financial
interests which could conflict with their responsibilities to the company.

HUL employees must not seek gain for themselves or others through misuse of
their positions.

Compliance – Monitoring – Reporting

Compliance with these principles is an essential element in their business

success. The Unilever Board is responsible for ensuring these principles are
communicated to, and understood and observed by, all employees.

16
Day-to-day responsibility is delegated to the senior management of the regions
and operating companies. They are responsible for implementing these
principles, if necessary through more detailed guidance tailored to local needs.

Assurance of compliance is given and monitored each year. Compliance with the
Code is subject to review by the Board supported by the Audit Committee of the
Board and the Corporate Risk Committee.

Any breaches of the Code must be reported in accordance with the procedures
specified by the Joint Secretaries. The Board of Unilever will not criticise
management for any loss of business resulting from adherence to these
principles and other mandatory policies and instructions.

The Board of Unilever expects employees to bring to their attention, or to that of

senior management, any breach or suspected breach of these principles.

Provision has been made for employees to be able to report in confidence and
no employee will suffer as a consequence of doing so.

In this Code the expressions 'Unilever' and 'Unilever companies' are used for
convenience and mean the Unilever Group of companies comprising Unilever
N.V., Unilever PLC and their respective subsidiary companies. The Board of
Unilever means the Directors of Unilever N.V. and Unilever PLC’.ref:THE NEWS

Envoirment policy

Hindustan Unilever Limited (HUL) supplies high quality goods and services to
meet the daily needs of consumers and industry. In doing so, the Company is
committed to exhibit the highest standards of corporate behaviour towards its
consumers, employees, the societies and the world in which we live.

The company recognises its joint responsibility with the Government and the
Public to protect environment and is committed to regulate all its activities so as
to follow best practicable means for minimising adverse environmental impact
arising out of its operations.

The company is committed to making its products environmentally acceptable,

on a scientifically established basis, while fulfilling consumers' requirements for
excellent quality, performance and safety.

The aim of the Policy is to do all that is reasonably practicable to prevent or

minimise, encompassing all available knowledge and information, the risk of an
adverse environmental impact arising from processing of the product, its use or
foreseeable misuse.

This Policy document reflects the continuing commitment of the Board for sound
Environment Management of its operations. The Policy applies to development of
a process, product and services, from research to full-scale operation. It is

17
applicable to all company operations covering its plantations, manufacturing,
sales and distribution, research & innovation centres and offices. This document
defines the aims and scope of the Policy as well as responsibilities for the
achievement of the objectives laid down.

The Vision

Their vision is to continue to be an environmentally responsible organisation

making continuous improvements in the management of the environmental
impact of their operations.

HUL will achieve this through an Integrated Environment Management approach,

which focuses on People, Technology and Facilities, supported by Management
Commitment as the prime driver.

FMCG Markets
Slowdown in growth & then 2 years of decline

FMCG Market (HLL Categories)

Growth%

00 01 02 03
8
6
4
6.7
2 3.4
0
-1.1
-2.5
-2
-4

18
 FMCG Markets
2016 - Revival after 2 years of decline

FMCG Market (HLL Categories)

Growth%

02 03 Q1 '04 Q2 '04 Q3 '04 Q4 '04

8
6
4
6.1
2
2.0
0 0.8
-1.1
-2.5 -2.8
-2
-4

19
Pricing action in 2017:

Price reduction

Price reduction (Bottles) & Value improvement (Sachets)

20
Investment Behind Brands

Innovation & Superior Quality

Family – safe Petalsoft Water & effort saving Quick wash - 50% No mud Rin
Advance from germs

Perfect Radiance “5 in 1” hair Total Care Whiter teeth Fresher breath

health benefits

21
 Current Market Context
Actions
• Pricing
–Laundry : Price Reduction
–Shampoos: Value Improvement & Lower Price Points
–Toothpaste: Value Corrections & SKU rationalization
• Investments behind brands
– Innovations
– Quality
– Higher A&P
• Corrective actions in processed

Processed Foods

• Corrective actions
– Phased stock reduction
– Withdrawl of ‘03 innovation
– Defocus of Atta in unviable geographies
• Sales decline of 26% arising from above actions
• Market shares held / improved

Sales Growth%
22
 BRANDS

23
 PRODUCTS

Lux   Breeze

Lifebuoy   Dove

Liril   Pears

Hamam   Rexona

     

Surf Excel     Fair & Lovely  

Rin     Pond's  
Wheel

     

Sunsilk Naturals     Pepsodent  

Clinic     Close-up  

     

Axe     Lakme  

Rexona    

Ayush          
           
     
Brooke Bond   Bru    

Lipton         

     
Kissan   Kwality Wall's    
Knorr Annapurna
 

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 India's Largest Branded FMCG Exporter

It was 1962. The reality of India then was very different from what it is today.
India's economy then suffered from foreign exchange shortage. Hindustan
Lever voluntarily decided to take up Exports to support the country's economy.

Today, HUL is India's largest exporter of branded Fast Moving Consumer Goods.
It has been recognized by the Government of India as a Golden Super Star
Trading House.

Over time, HUL has developed appropriate capabilities to be globally

competitive in cost and quality for a viable Exports business.

Focus Areas

HUL's Exports focuses on two broad areas. It is a sourcing base for Unilever
brands in Home & Personal Care (HPC) and Tea for supplies to other Unilever
companies. It also focuses on becoming a preferred supplier to both non-
Unilever and Unilever clients in three categories in which India, as a country,
has competitive advantage - Marine Products, Castor and its Derivatives and
Rice. HUL enjoys international recognition within Unilever and outside for its
quality, reliability and speed of customer service.

HUL's Exports geography comprises, at present, countries in Asia, Australia,

Africa, North America and Europe.

HUL's Exports portfolio

HPC:
The categories are soaps, skin care products and oral care products. The brands
are Lux, Lifebuoy, Pears, Fair & Lovely, Dove, Vaseline, Close-Up, Pepsodent,
Signal. HUL is the only source of Pears soap across the world.

Tea:
The categories are branded packet tea, and instant tea for Unilever's ready-to-

25
drink tea business. The branded teas are Brooke Bond, Brooke Bond Red label,
Brooke Bond Taj Mahal, Lipton, Lipton Yellow Label, Lipton Green Label, Lipton
Brisk, Lipton 3-in-1 premix, Chinese Rickshaw.

Marine Products:

HUL offers a comprehensive portfolio, ranging from Surimi, Crabsticks to

Shrimps and several value-added products. Among its customers is Icelandic,
the world's third largest seafood company. In addition, HUL has also become a
part of Unilever's supply chain in seafoods for Europe too. HUL's Marine
Products brands are Ocean Diamond, Ocean Excellence, Shogun, Hima, Gold
Seal, Tara and Prima.

Rice:
The categories are Basmati Rice and Basmati Rice-based ready-to-eat rice
meals. The brands are Gold Seal Indus Valley, Rozana and Annapurna.

Castor:
The categories are Castor Oil, Castor-oil based products, like hydrogenated
castor oil, 12 - Hydroxy Stearic Acid, Ricinoleic Acid (used in grease and
lubricant industry, paints and surface coatings, cosmetics, emulsifiers), and
Speciality Castor Oils (USP grade, BP grade, DAB 10) etc used in
pharmaceutical preparations. HUL's Castor brand is Topsol.

Today, Exports is a substantial business in HUL, accounting for about 12% of

the company's turnover. HUL believes that its competitive advantages of cost
competitiveness, process competitiveness and economies of scale both at the
company and country level, hold it in good stead. They position the company to
become one of the hubs for sourcing by Unilever companies in HPC and Tea,
and also simultaneously become a preferred partner to global customers in
Marine Products, Castor and Rice.
Direct Selling:

Product Range
• Lever home range
• Male grooming
• Oral Care
• Ayurveda
• Personal Wash
• Foods
Reach - 1400 towns (Largest in India)
Consultant base - 330,000

26
27
Accordingly, HUL's aims are to:
 Ensure safety of its products and operations for the environment
by using standards of environmental safety, which are
scientifically sustainable and commonly acceptable.

 Develop, introduce and maintain environmental management

systems across the company to meet the company standards as
well as statutory requirements for environment. Verify
compliance with these standards through regular auditing.

 Assess environmental impact of all its activities and set annual

improvement objectives and targets and review these to ensure
that these are being met at the individual unit and corporate
levels.

 Reduce Waste, conserve Energy and explore opportunities for

reuse and recycle.

 Involve all employees in the implementation of this Policy and

provide appropriate training. Provide for dissemination of
information to employees on environmental objectives and
performance through suitable communication networks.

 Enctheirage suppliers and co-packers to develop and employ

environmentally superior processes and ingredients and co-
operate with other members of the supply chain to improve
overall environmental performance.

 Work in partnership with external bodies and Government

agencies to promote environmental care, increase understanding
of environmental issues and disseminate good practice.

Responsibilities

Corporate

 The Board and the Management Committee of HUL is committed

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

 Set mandatory standards and establish environmental

improvement objectives and targets for HUL as a whole and for
individual units, and ensure these are included in the annual
operating plans.

28
  Formally review environment performance of the company once
every quarter.

 Review environment performance when visiting units and

recognise exemplary performance.

Nominate:

- A senior line manager responsible for environmental performance at

the individual HUL site.

- HUL environmental coordinator.

 The Management Committee, through the nominated

environmental coordinator will:

 Ensure implementation of HUL Policy on environment and

compliance with Unilever and HUL environmental standards and
the standards stipulated under relevant national / local
legislation. When believed to be appropriate, apply more
stringent criteria than those required by law.

 Assess environmental impact of HUL operations and establish

strategies for sound environment management and key
implementation steps.

 Enctheirage development of inherently safer and cleaner

manufacturing processes to further raise the standards of
environment performance.

 Establish appropriate management systems for environment

management and ensure regular auditing to verify compliance.

 Establish systems for appropriate training in implementation of

Environment Management Systems at work.

 Ensure that all employees are made aware of individual and

collective responsibilities towards environment.

 Arrange for expert advice on all aspects of environment

management.

 Participate, wherever possible, with appropriate industry and

Government bodies advising on environmental legislation and
interact with national and local authorities concerned with
protection of environment.

29
Individual Units

 The overall responsibility for environment management at each

unit will rest with the Unit Head, who will ensure implementation
of HUL Policy on environment at unit level. Concerned line
managers / heads of departments are responsible for
environmental performance at department levels.

 In order to fulfill the requirements of the Environment Policy at

each site, the Unit Head will:

 Designate a unit environment coordinator who will be

responsible for co-ordinating environmental activities at unit,
collating environmental statistics and providing / arranging for
expert advice.

 Agree with the Management Committee Member responsible for

the unit, specific environmental improvement objectives and
targets for the unit and ensure that these are incorporated in the
annual objectives of the concerned managers and officers and
are reviewed periodically.

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

 Ensure formal environmental risk assessment to identify

associated environmental aspects and take appropriate steps to
control risks at acceptable levels.

 Ensure that all new operations are subjected to a systematic and

formal analysis to assess environmental impact. Findings of such
exercises should be implemented prior to commencement of the
activity.

 Manage change in People, Technology and Facilities through a

planned approach based on training, risk assessment, pre-
commissioning audits and adherence to design codes.

 Regularly review environment performance of the unit against

set objectives and targets and strive for continual improvement.

 Sustain a high degree of environmental awareness through

regular promotional campaigns and employee participation
through training, safety committees, emergency drills etc.

30
  Ensure dissemination of relevant information on environment
within the unit and to outside bodies, and regularly interact with
Government authorities concerned for protection of environment.

 Maintain appropriate emergency procedures consistent with

available technologies to prevent / control environmental
incidents.

 Provide appropriate training to all employees.

 Ensure periodic audits to verify compliance with environment

management systems and personally carry out sample
environment audits to check efficacy of the systems.

 Report environmental statistics to HUL Corporate Safety &

Environment Group on a monthly basis.

Research and Innovation Centres

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

responsibilities devolve on them to ensure implementation of the

Environment Policy of the company. In addition to the Unit Head's
responsibilities outlined above, the heads of these units will:

 Ensure that a formal and systematic risk assessment exercise is

undertaken during the process/product development stage with
specific reference to environmental impact.

 Transfer technology to the pilot plant and main production

through a properly documented process specification which will
clearly define environmental impact and risks associated with
processes, products, raw material and finished product handling,
transport and storage.

 Ensure that treatment techniques are developed for any wastes

generated as a result of the new product/process and is
incorporated into the process specifications.

QUALITY POLICY:

Hindustan Unilever Limited considers quality as one of the principal

strategic objectives to guarantee its growth and leadership in the
markets in which it operates.

31
The company is committed to respond creatively and competitively to
the changing needs and aspirations of their consumers through
relentless pursuit of technological excellence, innovation and quality
management across their businesses, and offer superior quality
products and services that are appropriate to the various price points
in the market as well as to their commitment to building shareholder
value.

The company recognises that its employees are the primary stheirce of
success in its operations and is committed to training and providing
them the necessary tools and techniques as well as empowering them
to ensure broad base compliance of this policy in the organisation at
all levels.

The company is committed to fulfill its legal and statutory obligations

and international standards of product safety and hygiene and will not
knowingly sell product that is harmful to consumers or their
belongings. It will institute systems and measures to monitor
compliance in order to meet its responsibilities to consumers.

The company will maintain an open communication channel with its

consumers and customers and will carefully monitor the feedback to
continuously improve its products and services and set quality
standards to fulfill them. The company is committed to extend its
quality standards to its contract manufacturers, key suppliers and
service providers and by entering into alliances with them, to jointly
improve the quality of its products and services. This policy is
applicable to production from its own facilities as well as to production
that is outsourced.

The company will periodically review this quality policy for its
effectiveness and consistency with business objectives.

The company delegates authority and responsibility for dissemination

and implementation of this policy to each Business and Unit Head.

32
SAFETY AND HEALTH POLICY

Introduction

Hindustan Unilever Limited (HUL) supplies high quality goods and

services to meet the daily needs of consumers and customers. In
doing so, the Company is committed to exhibit the highest standards
of corporate behavior towards its consumers, employees, the societies
and the environment in which we operate.

Towards this, the Company recognizes its responsibility to ensure

safety and protection of health of its employees, contractors and
visitors in all its operating sites, which include manufacturing, sales
and distribution, research laboratories and offices during work and
work related travel.

This Policy document defines the vision, principles, aim, required

actions and scope of the policy application as well as the responsibility
for execution.

Their Vision

Their vision is to be an injury free organization.

HUL NEWS:”We will bring safety on top of mind for all employees and
will integrate it with all business processes. We will realize their Vision
through an Integrated Safety Management approach, which focuses on
People, Processes, Systems, Technology and Facilities, supported by
demonstrated leadership and employee commitment at all levels as
the prime drivers for ensuring a safe and healthy work environment”.

SAFETY PRINCIPLES:
HUL's Occupational Safety and Health Policy is based on and supported
by the following eight Principles.

These Principles have the same status as the Company's Code of

Business Principles:

 All injuries and occupational illnesses are preventable

 All operational exposures can be safeguarded
 Safety evaluation of all business processes is vital
 Working safely is a condition of employment

33
  Training all employees to work safely is essential
 Management audits are a must
 Employee involvement is essential
 All deficiencies must be reported and corrected promptly

In order to facilitate operationalisation of the Safety Principles, a

separate document has been prepared, which covers:
a) Safety Principles
b) Success Criteria
c) Illustrative KPI

Consumer satisfaction

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

district. She is just back from the nearby jungles, collecting firewood.
After attending to her baby son, she will go to the village well to take a
quick wash. Yesterday her husband brought her a white soap, with pink
petals in it. Indira had requested him to buy one, for the festival later
this evening.
Indira is among millions of consumers in rural India who use Hindustan
Lever's products. She came to know about Lux through the TV set at the
community centre. It is not very costly, and also available nearby.
Home to over 700 million people, rural India comprises not only over
70% of India's billion-strong population, but also over 12% of the
world's population. The rural population already accounts for substantial
consumption of Fast Moving Consumer Goods and also consumer
durables. About 50% of the sales of soaps & detergents are generated
in rural India. Similarly, almost half the demand for black & white
television sets, pressure cookers, table fans, sewing machines also
comes from there.
COST MANAGEMENT:
But the potential is even larger, both in terms of consumption and
penetration. The fact that 70% of the population accounts for only 50%
of even relatively well-penetrated categories, like soaps & detergents,
indicates the enormous scope of consumption-led growth in these
categories. Therefore such categories will derive growth out of increased
usage. In categories, which are relatively less penetrated, like personal
products, rural India offers an even bigger growth opportunity through
greater penetration and then consumption. For example only three out
of 10 consumers in rural markets use shampoo or skin care products.
Therefore growth in such categories will emerge, as more consumers

34
purchase these products, and then continue to use them regularly.
Hindustan Lever has taken many initiatives over the decades to create
markets in the rural hinterlands. By marketing relevant products, at
affordable prices.
A unique example is Hindustan Lever's Lifebuoy soap. In rural India,
health is of paramount importance, because indisposition is very directly
related to loss of income. Lifebuoy, whose core equity is health and
hygiene , has for decades now been synonymous with soap in rural
India.
At the same time, if products have to come up the order in the rural
purchase hierarchy, they have to be affordable. If rural India today
accounts for about half of detergents sales, it is because HUL has
developed low-cost value-for-money branded products, like Wheel. The
company has also taken initiatives to create markets even for
apparently premium products, by offering them in pack sizes, like
sachets, whose unit prices are within the reach of rural consumers. For
example, initiated in the 1980s, sachets (Rs.2, Re.1, or 50 paise) today
constitute about 55% of Hindustan Lever's shampoo sales. With media
reach gradually increasing, rural consumers today, where the media has
its footprints, share the same aspirations with their urban counterparts.
HUL has responded to the trend with low unit price packs of even other
products - Lux at Rs.5, Lifebuoy at Rs.2, Surf Excel sachet at Rs.1.50,
Pond's Talc at Rs.5, Pepsodent toothpaste at Rs. 5, Fair & Lovely Skin
Cream at Rs.5, Pond's Cold Cream at Rs.5, Brooke Bond Taaza tea at
Rs.5.
OTHER MARKETING STRATEGIES:
For decades now, Hindustan Lever has also taken initiatives to
circumvent the limitation in communication channels, by innovatively
leveraging non-conventional media. Among them are wall paintings,
cinema vans, weekly markets (haat), fairs and festivals. Given the rural
consumer's fascination for cinema, the cinema vans show popular
movies, interspersed with products advertisements. Weekly markets,
fairs and festivals are parts and parcel of rural life. They give an
opportunity to address consumers, spread over many tiny hamlets, at
one location. The occasions are used to demonstrate product benefits
and also sell such products. Such demonstrations have played a
significant role in creating, for example, the detergents market in rural
India. In recent times, such demonstrations are being deployed to
illustrate how visible clean is not hygienic clean, and how using soap is
essential to prevent easily avoidable infections.
Communication through fairs and festivals are backed by direct

35
consumer contact. For example, in 1998-99, Hindustan Lever
implemented a major direct consumer contact, called Project Bharat,
which covered 2.2 crore homes. Each home was given a box, at a
special price of Rs.15, comprising a low unit price pack of shampoo,
talcum powder, toothpaste and skin cream, along with educational
leaflets and audio-visual demonstrations. The project has helped
eliminate barriers to trial, and has strengthened salience of both
particular categories and brands. Similarly in 2002, Hindustan Lever has
launched a similar large-scale direct contact, called Lifebuoy Swasthya
Chetana, which already covers 70 million people in 18,000 villages of 8
states. The project is intended at generating awareness about good
health and hygiene practices, and specifically how a simple habit of
washing hands is essential to maintaining good health. The initiative will
involve interaction with students and senior citizens, who act as change
agents.

AVAILABILITY OF HUL’S PRODUCT:

Generating awareness pays dividends only when steps are taken to
ensure constant availability of products. In rural India particularly,
availability determines volumes and market share, because the
consumer usually purchases what is available at the outlet, influenced
very largely by the retailer.
Therefore, over the decades, Hindustan Lever has progressively
strengthened its distribution reach in rural India, which today has about
33 lakh outlets. Direct rural distribution in Hindustan Lever began with
the coverage of villages adjacent to small towns. The company's
stockists in these towns were made to use their infrastructure to
distribute products to outlets in these villages. But this distribution
mode could only be extended to villages connected with motorable
roads, and it could cover about 25% of the rural population by 1995.
Therefore in 1998, Hindustan Lever launched Project Streamline to
further extend its distribution reach. Under this initiative, the company
identifies sub-stockists in a large village, connected by motorable road
to a small town. This sub-stockist in turn distributes the company's
products to outlets in adjacent smaller villages using transportation
suitable to interconnecting roads, like cycles, scooters or the age-old
bullock cart. Hindustan Lever is thus trying to circumvent the barrier of
motorable roads. As a result, the distribution network, as of now,
directly covers about 50,000 villages, reaching about 250 million
consumers. The company simultaneously uses the wholesale channel,
suitably incentivising them to distribute company products.
HUL has in the recent past established a common distribution system in

36
rural areas for all its products. Given the number of brands and their
packs the rural retailer usually requires, one HUL representative can
take all the products from the company portfolio that he needs. This
common distribution system is now fully operational, under one
Regional Sales Manager exclusively dedicated to rural markets of each
region of the country.
Over time, Hindustan Lever will further strengthen its rural distribution
through mutually beneficial alliances with rural Self Help Groups (SHGs).
Over the last five years, financial institutions, NGOs and government
organisations are working closely to establish SHGs, whose objective is
to alleviate poverty through sustainable income-generating activities.
Since 2001, Hindustan Lever is implementing Project Shakti, whereby
SHGs are being offered the option of distributing relevant products of
the company as a sustainable income-generating activity. The model
hinges on a powerful win-win relationship; the SHG engages in an
activity which brings sustainable income, while Hindustan Lever gets an
interface to interact and transact with the rural consumer. HUL's vision
for Project Shakti is to scale it up across the country by 2005, creating
about 25000 Shakti entrepreneurs, covering 100,000 villages, and
touching the lives of 100 million rural consumers. Begun with 50 groups
in Nalgonda district of Andhra Pradesh, with the support of local
authorities, the project has been extended, as of now, to about 50,000
villages in 12 states. A typical Shakti entrepreneur conducts business of
around Rs.10,000 - Rs 15,000 per month, which gives her an income of
about Rs 700 - Rs.1000 per month on a sustainable basis. As most of
these women are from below the poverty line, and live in extremely
small villages (less than 2000 population), this earning is very
significant, and is almost double of their past household income. The full
benefit of Project Shakti will be realised after some years.

37
 HUL DISTRIBUTION NETWORK

MANUFACTURING UNITS ALL ACROSS INDIA

C&F 1 C&F 2 C&F 3 C&F 4 C&F 5 C&F 6 C&F 7

STOCKISTS STOCKISTS STOCKISTS STOCKISTS STOCKISTS STOCKISTS

STOCKISTS

WHOLESALERS

RETAILERS

CUSTOMERS

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

38
to cover and are established by the company. These C&F units then
supply the products to the various Wholesalers confined to their area
only and according to the wholesalers demand. The wholesalers then
supply the products to the semi-wholesalers and the retailers as per the
volume of their order. Then the semi-wholesalers deliver the products to
the retailers and customers.

STAGE 1- MANUFACTURER

C&F

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

C&F
STAGE 2-
WHOLESALERS

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

39
NATION WIDE MANUFACTURING:

80 factories, across India

The year was 1923. Lord Leverhulme, the legendary founder of Lever
Brothers, was visiting India. The nationalist sentiment in India was for
locally manufactured products. Lord Leverhulme, who believed that
what is good for a country is equally good for the company, responded
to that aspiration because he too shared that dream.
His dream ultimately was realised in 1934. In September 1934, after
more than a decade of discussions in London and in India, a Lever
factory was allowed to sprout on the land that had been reclaimed by
the Bombay Port Trust at Sewri. From here, a month later rolled out the
first cake of Sunlight soap to be manufactured in India. The same year,
Lever Brothers took over the Garden Reach Factory in Kolkata.

These two factories were the first in a manufacturing base, which today
literally dots the length and breadth of India. From Assam to Gujarat,
from Uttaranchal to Kerala.

Hindustan Lever's diverse product range is today manufactured in about

80 factories. In addition, the company outsources from 150 other units.
The operations involve 2,000 suppliers and associates.

DEVELOPING BACKWARD AREAS

Several HUL factories are situated in backward areas. The company has
consciously responded to the national policy of development of
backward areas by setting up manufacturing units in these places, which
provide several direct and indirect employment opportunities for these
areas, and leads to general economic development of these regions
through industrialisation. In fact, all major investments of HUL, in recent
years, have been either in A-Category backward areas or No-Industry
Districts. These include factories in Khamgaon and Yavatmal
(Maharashtra), Chhindwara (Madhya Pradesh), Orai, Sumerpur and
Khalilabad (Uttar Pradesh), Haldia (West Bengal), Silvassa (Dadra &
Nagar Haveli), Pondicherry, Goa, Doom Dooma (Assam), Haridwar
(Uttaranchal) and Barotiwala (Himachal Pradesh). Since 2001 itself, HUL

40
has set up nine new factories in backward areas.
Equally, HUL has an enviable track record in taking over sick
enterprises, in response to requests from Government, and converting
them into viable operations. The company's units at Mangalore and
Rajpura all bear testimony to this achievement. In the process, HUL has
saved precious jobs and developed local economies. HUL's
manufacturing facilities, like the Khamgaon soap plant and the
Sumerpur detergent bar unit, are recognised as among the best in the
Unilever world.
HUL has adopted Total Productive Maintenance (TPM) for achieving
manufacturing excellence since 1994. As on date, TPM is in different
stages of implementation in 28 factories. Four HUL factories have
already received the TPM Consistency Award, and 14 factories have
been awarded with the TPM Excellence Award.

Marketing needs every where

How do you ensure that Mr. Ramesh in Kanyakumari gets his Lifebuoy
soap and Mrs. Kulkarni in Jammu gets to know how Bru coffee tastes
even before she has bought it? Well, you need to have a cutting edge
distribution network in place.

Hindustan Lever's distribution network is recognised as one of its key

strengths. Its focus is not only to enable easy access to our brands,
but also to touch consumers with a three-way convergence - of
product availability, brand communication, and higher levels of brand
experience.

HUL's products, manufactured across the country, are distributed

through a network of about 7,000 redistribution stockists covering
about one million retail outlets. The distribution network directly
covers the entire urban population.

The general trade comprises grocery stores, chemists, wholesale,

kiosks and general stores. Hindustan Lever services each with a tailor-
made mix of services. The emphasis is equally on using stores for
direct contact with consumers, as much as is possible through in-store
facilitators.

41
42
AT THE SUPERMARKETS
Self-service stores and supermarkets are fast emerging in metros and
large towns. To service modern retailing outlets in the metros, HUL
has set up a full-scale sales organisation, exclusively for this channel.
The business system delivers excellent customer service, while driving
growth for the company and the store. At the same time, innovative
marketing initiatives are taken to provide consumers with experience
of our brands at the store itself, through product tests and in-store
sampling.

In the villages
HUL has also revamped its sales organisation in the rural markets to
fully meet the emerging needs and increased purchasing power of the
rural population. The company has brought all markets with
populations of below 50,000 under one rural sales organisation. The
team comprises an exclusive sales force and exclusive redistribution
stockists, under the charge of dedicated managers. The team focuses
on building superior availability, while enabling brand building in the
deepest interiors. HUL's distribution network in rural India already
directly covers about 50,000 villages, reaching about 250 million
consumers, through about 6000 sub-stockists.

Harnessing Information Technology

An IT-powered system has been implemented to supply stocks to

redistribution stockists on a continuous replenishment basis. The
objective is to catalyse HUL's growth by ensuring that the right
product is available at the right place in right quantities, in the most
cost-effective manner. For this, stockists have been connected with
the company through an Internet-based network, called RSNet, for
online interaction on orders, despatches, information sharing and
monitoring. RS Net covers about 80% of the company's turnover.
Today, the sales system gets to know every day what HUL stockists
have sold to almost a million outlets across the country. RS Net is part
of Project Leap, HUL's end-to-end supply chain, which also includes a
back-end system connecting suppliers, all company sites and
stretching right upto stockists.

SHAKTI - Changing Lives in Rural India

43
Shakti is HUL's rural initiative, which targets small villages with
population of less than 2000 people or less. It seeks to empower
underprivileged rural women by providing income-generating
opportunities, health and hygiene education through the Shakti Vani
programme, and creating access to relevant information through the
iShakti community portal.

In general, rural women in India are underprivileged and need a

sustainable source of income. NGOs, governmental bodies and other
institutions have been working to improve the status of rural women.
Shakti is a pioneering effort in creating livelihoods for rural women,
organised in Self-Help Groups (SHGs), and improving living standards
in rural India. Shakti provides critically needed additional income to
these women and their families, by equipping and training them to
become an extended arm of the company's operation.

Started in 2001, Shakti has already been extended to about 80,000

villages in 15 states - Andhra Pradesh, Karnataka, Tamilnadu,
Maharashtra, Gujarat, Madhya Pradesh, Chattisgarh, Uttar Pradesh,
Rajasthan, Punjab, Haryana, West Bengal, Orissa, Bihar & Jharkhand.
The respective state governments and several NGOs are actively
involved in the initiative.

Shakti already has about 25,000 women entrepreneurs in its fold. A

typical Shakti entrepreneur earns a sustainable income of about
Rs.700 -Rs.1,000 per month, which is double their average household
income. Shakti is thus creating opportunities for rural women to live in
improved conditions and with dignity, while improving the overall
standard of living in their families. In addition, it involves health and
hygiene programmes, which help to improve the standard of living of
the rural community. Shakti's ambit already covers about 15 million
rural population. Plans are also being drawn up to bring in partners
involved in agriculture, health, insurance and education to catalyze
overall rural development.

HUL's vision for Shakti is to scale it up across the country, covering

100,000 villages and touching the lives of 100 million rural consumers
by 2005.

Shakti Vani is a social communication programme. Women, trained in

health and hygiene issues, address village communities through
meetings at schools, village baithaks, SHG meetings and other social
fora. In 204, Shakti Vani has covered 10,000 villages in Madhya

44
Pradesh, Chattisgarh and Karnataka. The vision is to cover 80,000
villages in 2005.

iShakti, the Internet-based rural information service, has been

launched  in Andhra Pradesh, in association with the Andhra Pradesh
Government's Rajiv Internet Village Programme. The service is now
available in Nalgonda, Vishakapatnam, West Godavari and East
Godavari districts. iShakti has been developed to provide information
and services to meet rural needs in medical health and hygiene,
agriculture, animal husbandry, education, vocational training and
employment and women's empowerment. The vision is to have 3,500
kiosks across the state by 2005.

PIONEERING NEW CHANNELS

Hindustan Lever is simultaneously creating new channels, designed on
the same principle of holistic contact with consumers.

Project Shakti, HUL's partnership with Self Help Groups of rural

women, is becoming an extended arm of the company's operation in
rural hinterlands. Started in 2001, Project Shakti has already been
extended to about 50,000 villages in 12 states - Andhra Pradesh,
Karnataka, Gujarat, Madhya Pradesh, Tamil Nadu, Chattisgarh, Uttar
Pradesh, Orissa, Punjab, Rajasthan, Maharashtra and West Bengal.
The respective state governments and several NGOs are actively
involved in the initiative. The SHGs have chosen to partner with HUL
as a business venture, armed with training from HUL and support from
government agencies concerned and NGOs.

Hindustan Lever Network (HLN) is the company's arm in the Direct

Selling channel, one of the fastest growing in India today. It already
has about 3.5 lakh consultants - all independent entrepreneurs,
trained and guided by HLN's expert managers. HLN has already spread
to over 1500 towns and cities, covering 80% of the urban population,
backed by 42 offices and 240 service centres across the country. It
presents a range of customised offerings in Home & Personal Care and
Foods.

Out-of-Home consumption of products and services is a growing

opportunity in India, as elsewhere in the world. Hindustan Lever is
already the largest player in the hot beverages out-of-home segment,
with over 15000 tea and coffee vending points. The company is
expanding the network aggressively, in the education, entertainment,

45
leisure and travel segments. HUL's allaince with Pepsi will significantly
strengthen this channel.

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

meet the increasing consumer need for such products and services.
Lakme Salons provide specialised beauty services and solutions, under
the recognised authority of the Lakme brand. The Ayush Therapy
Centres provide easy access to authentic Ayurvedic treatments and
products.

Hindustan Lever, which once pioneered distribution in India, is today

reinventing distribution - creating new channels, and redefining the
way current channels are serviced. In the process it is converging
product availability, with brand communication and brand experience.

NOVEL PRODUCT NEW PROCESS

Hindustan Lever's mission is to meet everyday needs for nutrition,
hygiene, and personal care, with brands that help people feel good,
look good and get more out of life. HUL's research & development
base, one of the largest in Indian industry, helps achieve this mission,
with novel products and new processes. The company has over 380
patents, demonstrating its leading edge in consumer-relevant R&D.

The Hindustan Lever Research Centre (HLRC), with facilities in Mumbai

and Bangalore, and global technology centres in India have over 200
highly qualified scientists and technologists, many with post-doctoral
experience acquired in the US and Europe. Set up in 1958, HLRC's aim
is to develop new products and processes, improving benefits and
quality of existing products, and optimal use of resources.
Major innovations have taken place, down the decades, in every
category in which HUL is present. From Home Care to Personal care,
Beverages to Foods.

Better cleaning, lesser water consumption

Consider for example, HUL's development of a water-saving
technology for its detergents. One of the most severe problems that
India faces today is shortage of water. Water scarcity affects one in
every three Indians. In a typical Indian home, at least 20% of the
water consumed goes behind washing of clothes. HUL decided that it
would be of immense benefit to an Indian household, if a technology
could be developed, which would help reduce water consumed in
washing of clothes. HUL's scientists have innovated a path-breaking

46
technology - it reduces water consumption and time taken for rinsing
by 50%. The technology has already been introduced.

World's most advanced water purifier

People in cities and towns spend enormous amounts, either in fuel or
devices, to ensure safe drinking water. HUL's scientists have
developed a breakthrough device, called "Pureit", which purifies water
as safe as boiled water, providing 100% protection from all water-
borne diseases; it also removes pesticides that may be present in
drinking water. Its operation does not require electricity, running tap
water and plumbing or expensive maintenance. It thus provides water
at a cost of just Re.1 for every six litres - or less than 20 paise a litre.

Iodine In Salt - the vital ingredient

Iodine, it is well-known, is important for the mental development of
young children. Iodised salt is a well-accepted mode of ensuring
appropriate iodine intake. Yet Iodine added to salt is lost in transport,
storage as well as in the process of cooking. HUL scientists have
developed a patented breakthrough technology to stabilise iodine in
salt, following work on the stability of iodine under Indian conditions of
storage and cooking. The technology has made it possible to actually
realise the purpose of iodised salt - that people get appropriate iodine
intake through the food they eat.

Technology of skin lightening

Research in the biology of skin pigmentation has led to the formulation
of a product like Fair & Lovely Skin Cream and Lotion. The product has
been periodically updated through new patented actives. It has now
become a global success through exports to over 30 countries. The
product is equally used by the local population of these countries,
apart from those of Indian origin.

HUL has equally developed new processes.

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

Energy conservation
In the past, one of the most significant breakthroughs of HUL's
research initiative has been the development of a technology to use
non-conventional forest seed oils for soap-making which, since the

47
1970s, has helped save around $1.2 billion in foreign exchange. HUL
had received the Government of India's prestigious award for import
substitution. Development of Structurant Technology for soap
manufacturing also helped save costly conventional oils without any
compromise on product performance and quality. The latest
technology to produce Distilled Fatty Acid for soap making and the
resultant plant capacity expansion has drastically brought down
specific energy consumption while improving distillation yields. The
evolution of continuous soap processing technology has also reduced
energy consumption.
HUL believes that technology is critical to delight consumers. Creative
application of technology has made Hindustan Lever successful in
launching products and services, which raise the quality of life.

HELPING HANDS:

HUL COMMITS Rs. 8 CRORES FOR IMMEDIATE RELIEF,

REHABILITATION TO TSUNAMI-HIT COMMUNITIES

MUMBAI, January 7, 2005: Hindustan Unilever Limited (HUL) today

announced to commit, a total outlay of Rs.8 crores for immediate relief
and helping people to rehabilitate themselves so that they can resume
their livelihood, in the tsunami-hit areas of Pondicherry, Tamil Nadu
and Kerala. Of this, Rs.5 crores (absolute value terms) is being utilized
for distribution of the Company's nutritional & personal hygiene
products for immediate relief to the needy. Another Rs.3 crores will be
raised partly by contributions from company employees and the
balance contribution from the Company to be used in collaboration
with NGOs working with the community to provide the people, notably
fishermen, with means of livelihood and help them back on their feet.

Since December 26, employees of HUL factories and offices in

Pondicherry, Tamil Nadu and Kerala have been providing necessary
relief to the tsunami-hit people. The relief operations include,
distribution of bread and biscuits to over 2000 families in Pondicherry,
12,000 cooked meals for families in Chennai, Nagapattinam, Cuddalore
and Andamans. Over 12,000 dry relief packs, comprising of Company's
dry rations and personal hygiene products have already been
distributed.

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

Company for exclusive use in rehabilitation.

48
The biggest concern is, that people/ fishermen have lost their means
of livelihood. HUL plans to focus its rehabilitation efforts to restore
their means of livelihood so that the local communities can quickly get
back to their lives at the earliest.

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

Earlier during the Gujarat earthquake, HUL had adopted and

reconstructed a new village, Yashodadham, in Bhachau Taluka of
Kutch district. Yashodadham, spread over 25 acres, comprises 289
homes, school building, an exclusive playground for children and a
multi-purpose community centre, including an anganwadi (creche),
health centre, community room and panchayat office, an underground
reservoir and an overhead tank for water. All the dwelling units have
electricity, and piped water and are now fully occupied.

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

the lives of two out of three Indians. HUL’s mission is to “add vitality
to life" through its presence in over 20 distinct categories in Home &
Personal Care Products and Foods & Beverages. The company meets
everyday needs for nutrition, hygiene, and personal care, with brands
that help people feel good, look good and get more out of life.

49
Special Education & Rehabilitation

Under the Happy Homes initiative, HUL supports special education and
rehabilitation of children with challenges.

Asha Daan:

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

Over the years, HUL has opened schools for challenged children with a
sharper objective of supporting families of such children, helping the
children become self-reliant by learning appropriate skills to be
productive members of the household.

Ankur:
In 1993, HUL's Doom Dooma Plantation Division set up Ankur, a centre
for special education of challenged children. The centre takes care of
children with challenges, aged between 5 and 15 years. Ankur
provides educational, vocational and recreational activities to over 35
children with a range of challenges, including sight or hearing
impairment, polio related disabilities, cerebral palsy and severe
learning difficulties. These physically and mentally challenged children
are taught skills, such as cookery, painting, embroidery, bamboo
crafts, weaving, stitching, etc depending on their aptitudes. The centre
has rehabilitated 10 children, including self-employment for 6 children
by providing them with shops, and 3 girls have been provided
employment as creche attendants. It has also moved to normal
schools 18 children. Since inception it has covered about 80 children.
Ankur received the Lawrie Group Worldaware Award for Social

50
Progress in 1999 from HRH Princess Royal in London.
Kappagam:
Encouraged by Ankur's success, Kappagam ("shelter"), the second
centre for special education of challenged children, was set up in 1998
on HUL Plantations in South India. It has 17 children. The focus of
Kappagam is the same as that of Ankur. The centre has 17 children,
being taught self-help skills, useful vocational activities like making of
paper covers, greeting cards, wrapping papers, fancy stationery,
napkins, brooms made out of coconut leaves, candles, and also some
home care products. About 12 of the children have become relatively
self-reliant by earning through crafts learnt at the centre. Since
inception, it has covered about 28 children.

Anbagam:
Yet another day care center, Anbagam ("shelter of love"), has been
started in 2003 also in the South India Plantations. It takes care of 11
children. Besides medical care and meals, they too are being taught
skills such that they can become self-reliant and elementary studies.

Over 20,000 individuals have benefitted from the Happy Homes

initiatives since inception. HUL is wholeheartedly involved with all four
centres and will continue to be involved in the future.

HINDUSTAN UNILEVER LIMITED – DECEMBER QUARTER 2005

RESULTS

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

 HPC and Foods grow by 17% and 9% respectively; Broad
based growth across categories
 PBIT grows 13.5%; Net Profit increases by 56%
 EPS for 2005 grows 17.6%; Final Dividend Rs 2.50 per share of
Re 1/- each; Total Dividend Rs 5.00 per share for 2005

Mumbai, February 14, 2006: Hindustan Unilever Limited (HUL)

announced its results for December Quarter 2005. Growth momentum
achieved in the last three quarters has been sustained with total sales
growing by 14.4%. Domestic FMCG sales were higher by 15.8% with
both Home and Personal Care (HPC) and Foods performing well.

HPC business grew by 17.3% driven by strong performance in all

categories. Significant sales growth was achieved in the highly
competitive categories of Laundry and Shampoo. Soaps recorded good
growth, with Lux growing handsomely reflecting in market share gains.

51
All the brands in Skin category maintained their strong performance
leading to a double digit growth for the category. Consumer relevant
innovations continue to drive off-take and key innovations during the
quarter include the re-launch of “Thick and Strong” Sunsilk Pink, Lux
variants for the 75-year celebrations, and the national launch of
“Jasmine Fresh” Rin Advanced Powder.

In Foods business, Tea achieved a modest growth despite a declining

market and falling commodity prices; Coffee continued to perform
well. Processed Foods business grew strongly, albeit on a low base.
The Icecream business also achieved a 33% increase in sales, led by
the impulse category. Relaunch of Knorr soup with a superior mix and
introduction of new variants was the key Foods innovation during the
quarter.

Profit before Interest and Taxes (PBIT) increased by 13.5% after

absorbing a 50% higher spend in Advertising and Promotions. Higher
crude oil price led cost pressures continued, particularly in Laundry
category, but were mitigated by aggressive cost effectiveness
programs. Profit after tax (PAT) grew by 22.7% due to a lower
effective tax rate and Net profit, including the impact of exceptional
items was higher by 56%.

For full year 2005, total sales were 11.4% higher than in the
previous year, with broad based growth across categories leading to
both HPC and Foods businesses growing by 14% and 8%, respectively.
Judicious price increases coupled with robust cost saving initiatives
partly neutralised the impact of both cost escalations, particularly in
the Laundry category, and the higher investments behind brands.
Consequently, PBIT increased by 1.1%. A lower tax charge for the
year resulted in a PAT growth of 12.9%. Net Profit and Earnings Per
Share at Rs 6.40, grew by 17.6%.

Mr Harish Manwani, Chairman commented: “We have sustained the

growth momentum in December quarter and it continues to be broad
based across HPC and Foods categories, particularly, in the
competitive categories of Laundry and Shampoo. This was driven by
higher investment behind our brands with exciting innovations,
excellent activation, new initiatives in Customer Management and with
significantly higher levels of A&P spends. The double digit sales
growth of over 11% for the year 2005 has been achieved after a gap
of six years.

52
Our strategic priority remains unchanged. We will continue to
leverage our focused portfolio of powerful brands to sustain market
leadership and grow our market position across strategic brands and
categories. In a competitive landscape, we shall continue to deliver
consumer value and invest behind our brands. We recognize the
challenge of inflationary cost pressures driven by crude oil prices and,
in the competitive context, achieving cost leadership across the
extended supply chain continues to be a key priority.”

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

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

the lives of two out of three Indians. HUL’s mission is to “add vitality
to life” through its presence in over 20 distinct categories in Home &
Personal Care Products and Foods & Beverages. The company meets
everyday needs for nutrition, hygiene, and personal care, with brands
that help people feel good, look good and get more out of life.

HUL TRANSFERS TEA ESTATES INDIA TO MAXWELL GOLDEN

TEA PRIVATE LIMITED
Mumbai, March 01, 2006: Hindustan Unilever Limited (HUL) has
transferred its entire shareholding in its 100% subsidiary Tea Estates
India Limited (TEIL) to Maxwell Golden Tea Private Limited (MGT), a
Woodbriar Group company on March 1, 2006. TEIL owns 8 tea estates
and 6 factories for processing tea in the high-yielding belt of
Tamilnadu with an average annual output of approx. 10,500 metric
tons.

Woodbriar Group has interests in plantations, insurance services and

real estate. The Group’s gardens are spread across the premium tea
growing regions in Tamilnadu and Kerala. HUL management believes
that the proposed transfer to Woodbriar Group is in the best interest of
the tea plantation business and all its stakeholders. Existing terms and
conditions of services of all TEIL employees will be fully protected in
accordance with applicable laws and terms of their employment.

53
The acquisition of TEIL by Woodbriar Group will provide scale and
bring in synergy benefits to Woodbriar Group, as a large portion of
TEIL gardens are contiguous to the existing tea gardens of Woodbriar
Group. Canara Bank, Madurai Circle has funded the debt component to
Woodbriar Group for this acquisition.

With this disposal of shareholding in TEIL, HUL has completed its exit
from its tea plantations business both in South India and Assam. It
may be recalled that HUL had sold its interests in Rossell Industries
Limited and Doom Dooma Tea Company Limited in Assam during the
last 12 months.

DSP Merrill Lynch Limited acted as financial advisor to Hindustan

Unilever Limited .

About HUL:
HUL is India's largest Fast Moving Consumer Goods Company,
touching the lives of two out of three Indians. HUL's mission is to "add
vitality to life" through its presence in over 20 distinct categories in
Home & Personal Care Products and Foods & Beverages. The company
meets everyday needs for nutrition, hygiene, and personal care, with
brands that help people feel good, look good and get more out of life.
For more information visit www.HUL.com

54
 COMPETITORS

The Procter & Gamble Company Company Profile

The Procter & Gamble Company (P&G) is a brand behemoth. The

world's #1 maker of household products courts market share and
billion-dollar brands. P&G's products fall into three categories:
global beauty care; global health, baby, and family care; and
global household care. It also makes pet food and water filters
and produces soap operas (As the World Turns). More than 20 of
P&G's brands are billion-dollar sellers (including Actonel,
Always/Whisper, Bounty, Charmin, Crest, Downy/Lenor, Folgers,
Iams, Olay, Pampers, Pantene, Pringles, Tide, and Wella).
Acquisitive P&G bought Clairol in 2001 and a majority of Wella in
2003. Its purchase of Gillette in late 2005 was its biggest buy in
company history.

Financial Highlights
Fiscal Year End: June
Revenue (2005): 56741.00 M
Revenue Growth (1 yr): 10.40%
Employees (2005): 110,000
Employee Growth (1 yr): 0.00%

55
 LITRATURE RIVIEW

1. {Customer-based Brand Equity and Improvement Strategy for

Mobile Phone Brands : Hao Liaogang1, Gao Chongyan2, Liu Zi’an}
Brand equity practically boils down to the word of mouth and purchase behaviour of
customers. Brand-knowledge structures in the minds of customers are the source or
foundation of brand equity. Customer-level brand equity can be captured by five aspects:
awareness, associations, attitude, attachment, and activity. In this article, we measure the
brand equity of six major mobile phone brands in the Chinese market which include four
foreign and two local ones. A total of 174 respondents from one major university in
Beijing were surveyed for data collection. The survey was conducted to obtain insights
on how consumers form attitudes towards different mobile phone brands. In the study, we
attempt to understand the attributes to which customers give greater focus. Furthermore,
we create the brand perceptual map and the ideal line in order to understand the
advantages and disadvantages of different brands. The data analysis results show that
international brands outperform local brands in terms of customer-based brand equity in
the Chinese market.
Based on the two studies, we further explore and discuss how local brands should
improve their brand equities to compete with international brands.
[Keywords] Brand equity; brand improvement; mobile phone; Chinese market

Introduction
Since China’s accession to the World Trade Organization (WTO) in 2001, many local
brands have been facing mounting challenges from foreign competition. This is most
obvious in the industries that the government has entirely opened to foreign participation,
such as the mineral water industry and the mobile phone industry. In this research, we
focus on the mobile phone industry. In the Chinese mobile phone market, an interesting
phenomenon is worth examination: as a result of fierce competition, the landscape of
market share ranking has been dramatically changing amongst competitors. For a long
period in the 1990s, three foreign mobile phone brands, namely, Motorola, Nokia, and
Ericsson, nearly dominated the whole Chinese market. This situation changed soon after
the local brands, including Bird and TCL, started to size up. However, the situation has
been undergoing another flip since 2005 when foreign brands have adjusted their
competition strategies.
Both foreign and local brands take turns capitalizing their competitive position in the
Chinese mobile phone market. Essentially, this entails the need for both local and foreign
brands to gain a clear understanding of their customers’ preferences in terms of mobile
phone features.
Theoretical Background
Building and properly managing brand equity has become essential for most companies.
More and more companies have already realized that brand equity is one of their most
valuable intangible assets. Maintaining and enhancing the strength of company brands
has therefore become an important management imperative (Keller & Lehmann, 2006).

56
In relation to this, Keller (1993) defined the term customer-based brand equity (CBBE) as
“the differential effect of brand knowledge on customer response to the marketing of the
brand.”
Brand equity is widely accepted as a multidimensional concept that consists of brand
loyalty, brand awareness, perceived quality, brand associations, and other proprietary
assets (Aaker, 1996). The rewards for building strong brand equity are obvious. However,
the problem lies in the fact that only a few managers are able to objectively assess the
strengths and weaknesses of their brands.
How to measure brand equity is very important in assessing the value of brands. Rather
than taking the more traditional approach of measuring brand equity for accounting or
strategic reasons, the approach employed in this article focuses on optimizing brand
equity through parsimonious manipulation of the marketing mix. Yoo and Donthu (2001)
adopted four dimensions to measure brand equity, namely, brand loyalty, brand
awareness, perceived quality, and brand associations. Similar dimensions are observed by
other researchers. For instance, Shocker and Weitz (1998) proposed that brand loyalty
and brand associations are dimensions of brand equity. Meanwhile, Yoo, Donthu, and
Lee (2000) proposed and tested a model in which perceived quality, brand loyalty, and
band associations all contribute to brand equity. For the purpose of our study, we adopt
four dimensions to measure brand equity: brand loyalty, brand awareness, perceived
quality, and brand image. Strong brand equity means that customers have high brand
awareness, maintain a favourable brand image, perceive high quality, and are loyal
towards the brand.

2. Mobile Handset Buying Behavior of Different Age and Gender Groups

Jagwinder Singh (Corresponding author)
Abstract
The prime objective of the study was to understand the variation in the importance given
by different age and gender groups to the select factors while buying mobile handsets in
India. The study concludes that the mobile handset users of age group of 18-30 years are
less price sensitive than consumers of other groups; rather they consider ‘physical
appearance’, ‘brand’, ‘value added features’, and ‘core technical features’ more important
than users of any other age groups. On the contrary, the consumers of age group 50 years
and above have given greater importance to ‘price’ than consumers of other age groups.
There were significant differences between different age groups as regards to the
importance given to all the factors except ‘post - purchase services’. The difference was
highest for the ‘brand’ closely followed by ‘core technical features’ of the handset.
Gender differences have also existed for these factors.
Keywords: Buying behaviour, Mobile handsets, Age groups, Gender groups, Factors,
GSM
1. Introduction
India is the world’s 12th largest consumer market. It is projected that by 2025, it will be
ahead of Germany and will become the fifth largest economy of the world. There is an
explosive growth in almost all the areas of consumer goods
and services. Communication that accounts for 2 percent of consumer’s spending today
will be one of the fastest expanding categories with growth of about 13 percent
(McKinsey, 2007). Mobile telecommunication industry has shown a tremendous growth

57
over the last few years and at present there are about twenty crore (1 crore = 10 million)
subscribers of the mobile telecom services in the country. The market for the mobile
handset is also growing with the growing demand for mobile telecom services. This
demand will continue to grow in future also. India at present is the second largest market
for mobile handsets (Indian Brand Equity Foundation, 2005). The growth in this sector
has been improved due to liberalization of telecommunication laws and policies. The
consumers of both rural and urban areas, from college - going students to mature elders,
of almost all income groups have started using mobile telecom services.
The growth is fastest in mobile services as compared to fixed lines where it is modest
(The World Factbook, 2008). Some of the consumers particularly college - going students
have to rely on their parents for the buying of products like mobile handset and
automobile. This is so because large majority of such people are not economically
independent till the age of 22-24 years. Therefore, they have to satisfy themselves with
what their parents buy for them. But now-a-days, these people have become more able to
influence their parents in buying the products of their choice. This is probably due to
small family size of one or two children these days, where parents comply more with the
requests of their
children as compared to the past.
The increasing competition between the telecom service providers has increased demand
for both mobile telecom services as well as the handsets. According to Indian Brand
Equity Foundation (2005), the mobile handset market, which was worth about $ 2 Billion
two years ago, had shown a growth of 60% per annum. The GSM (Global System for
Mobile Communications) handsets had 84% share and CDMA (Code Division Multiple
Access) handsets has 16% market share. There are various players in the GSM market.
Nokia was leading the market with 59% market share.

3. Sabnavis (2002) identified three different consumer types of three generations in

India. Traditional consumers of pre-liberalization phase (1960-70s) were, stable,
inward looking and had limited choices. They kept their family needs on the top
and their own personal needs were subordinate to their family needs. They
avoided risk. In the transient phase (1980-90s), the consumers were more risk
taking than their predecessors. They had experienced multi-choices and had a
tendency to be better off than their parents. Economically, they had no fears or
concerns. The new millennium consumer tends to enjoy life. He has greater self-
control, and looks for personal style and pleasure. Exposures to variety of
products and enhancement of economic status have changed the attitudes of the
upper middle – class consumers towards brands. Indian society being hierarchical
in nature is therefore, status conscious (Sahay and Walsham, 1997).
Indians give very high value to brands. In India, a brand is a cue to quality because the
quality of the unbranded products varies widely (Johansson, 1997). According to study
conducted by Maxwell (2001) on testing of homogeneity
versus heterogeneity of global consumption in a cross-cultural price/brand effect model;
Indian consumers in comparison to Americans are tougher for the marketers to sell their
products. However he found Indian consumers more
price and less brand conscious.

58
Technological innovations such as cellular phones and digital televisions have attracted
the attention of marketing researchers as regards to their adoption process (Saaksjarvi,
2003). Rogers (1976) has provided a classification of
adopters in terms of innovators, early adopters, early majority, late majority and laggards.
But now consumers are also looking into the compatibility of the new products to their
self-image and life style (Saaksjarvi, 2003). Funk and Ndubisi (2006) observed a
considerable association between color and the choice of an automobile. The study
further identifies the gender moderation on the relationship between different color
dimensions and the product choice.
According to Barak and Gould (1985), younger consumers are greater fond of
fashionable/stylish products than older ones. Young consumers are normally more
willing to try new products and they are interested in asking more information than older
ones. It makes them self-confident and that is why they are more likely to be opinion
leaders and less hesitant in brand switching. But one should not ignore the older
consumers also. The studies have revealed that the older consumers are wealthy,
innovative and they also have a tendency to be the part of a typical consumption system
(Szmigin and Carrigan, 2001). They can be a prime market for the luxury products.
However they give more preference to comfort or convenience than any other feature of
the product. It also needs to be recognized that most older people accept and enjoy their
life stage, and are as willing to spend their money as any other generation, but only if the
product and the message are relevant (Carrigan and Szimigin, 1999). On the other hand,
the youth, which is more informed, pragmatic, opportunistic, demanding and restless, will
always seek excitement in products and services (Sharma, 2004). It is normally perceived
that young buyers try new products, seek greater information and are more self-confident
in decision-making. Elderly consumers are selectively innovative and they accept only
those innovations that provide exclusive benefits (Nam et al, 2007). Therefore, age and
life cycle can be the delicate variables (Kotler and Keller, 2006)
in the consumer behavior process.
H1: The importance of factors varies among different age groups.
Men and women purchase and relate products for different reasons (Dittmar et al, 1996).
They are subjected to different social pressures (Darley and Smith, 1995). Male and
female have a propensity to be right and left hemisphere reliant
respectively (Meyers-Levy, 1994). Males are generally self-focused while females are
responsive to the needs of both self and others (Meyers-Levy, 1988). Coley and Burgess
(2003), in their empirical study on wide range of products such as clothing, consumer
electronics and books etc. had found significant differences between men and women
with respect to both affective and cognitive process components. Rocha et al (2005) had
also experienced different requirements for clothing and fashion products based upon age
and gender. Laroche et al (2000) had found gender differences in relation to acquisition
of in-store information for buying Christmas clothing gifts. Vankatesh and Morris (2000)
studied the moderating role of gender in the adoption of a new software system. They
revealed that the determinants of adoption vary between genders; perceived usefulness of
the technology was the major factor considered by men for the acceptance of new
software. In contrast, the perceived ease of use of the software and the normative
influence (i.e. influence of peers and superior perception) were found key determinants
for women. Ease of use and normative influence had not been found significant for men.

59
Men consider the most prominent sign; they are more likely to focus on task effectiveness
of a technology without considering risk. In contrast, women are detailed processors and
consider all information available including the ones that are understated and potentially
disconfirming.
Women are then more likely to incorporate risk and other secondary information in their
decisions and behaviour (Graham et al, 2002). Williams (2002) investigated the effect of
social class, income and gender effects on the buying perceptions, attitudes and behavior.
The products like dress clothing, garden tools, automobiles, wedding gifts, living room
furniture, children’s play clothing, kitchen appliances, casual clothing and stereos were
selected that varied in durability, necessity, expressiveness and gender orientation. The
study emphasized on understanding the evaluation criteria, which correspond to product
attributes and the benefits expected by the consumers. Both men and women rated
utilitarian criterion high over the subjective criterion. Women attached importance to all
criteria across all products, while men gave importance to only price. However
Goldsmith (2002) found consistency for both men and women while examining personal
characteristics of frequent clothing buyers.

Brand equity has received a great deal of research interest in the past 15 years and
continues to be one of the most appealing fields of marketing for private sector firms.
Brand equity issues are important in the design and development of a company and its
product or service offerings. However, academics have not achieved a robust or widely
accepted methodology of measuring a firm‟s brand equity or the effect of different
variables on the valuation of a brand.
The purpose here is not to develop an acceptable methodology for valuating
brand equity, but rather to make observations based on the correlation of brand equity
with selected variables in order to better understand the constructs. The importance of
evaluating brand equity is clearly visible in recent merger and acquisition activity. The
2005 acquisition of Gillette Company by Proctor and Gamble illustrated this as the
purchase price of $57 billion was 19 times Gillette‟s earnings before interest, taxes, and
depreciation (Byrnes 2005). Why was the acquisition price so large? The value and
perceived future earnings of the brands acquired in the deal – Gillette, Duracell, Braun
and Oral-B played a large part in the determination of the purchase price. Researchers
have also found that brands with high brand equity receive a considerable purchase price,
even when a company has declared bankruptcy (Kaikati and Kaikati 2003). Converse,
Bugle Boy, and Schwinn are noted examples of this, selling for $117.5 million, $68.6
million, and more than $60 million respectively, suggesting that high brand equity can
provide rewards even when a company is in a poor financial position. Brand equity is
recognized in the name and symbols associated with a company, and the very act of
social responsibility is believed to be a significant driver for building brand equity (Wood
2004). The direction a company takes in assisting the general public, or dealing with a
corporate mistake, assist consumers in building attitudes and associations towards a
specific brand and results in reinforcing their purchase behaviors.
What does all of this research mean? Brand equity is felt in all areas of the production
and promotion of a product, and improved insight of the factors that build brand equity
will provide financial rewards to companies. This has been an important research topic
for the production of goods for centuries, and is now receiving attention in the field of

60
services. Berry (2000) concluded that branding will be the cornerstone of services
marketing for the twenty-first century. Mahajan et al. (1994) described the results of
brand equity as:

 Enhanced performance (for example, increase in market share or increase in revenues

due to the firm‟s ability to charge a premium price) and/or marketing efficiency (for
example, reduced advertising and promotional expenditures) associated with the brand.
 Longevity (or vulnerability) of a brand due to its loyal customer base and distribution
relationships, and
 Carryover potential (or extensibility) to other brands and markets of the acquiring
firm .

61
 RESEARCH METHODOLOGY
The section includes the overall research design, the sampling procedure, the data
collection method, the field method, and analysis and procedure.

PROBLEM FORMULATION:
1. HUL is one of the leading company in india origin is cowing a big share of Indian market in
FMCG but the company has to study the competitors also ,this research is conducting to
identifying the competitors position to survive in a long run.
2. All progress is born inquiry doubt is better than over confidence, for it leads to inquiry and
inquiry leads to investigation.

Objectives

 Achieving a sustainable competition advantage.

 It include all the basic and long term activities in the field of marketing.
 It deals with the analysis of the strategic initial situation of the company.

RESEARCH DESIGN
For this research project exploratory method is using

DATA COLLECTION METHOD

The data collect for the research can be classified as primary data and secondary data.
Primary data is by visiting existing customer and expected customer of Hindustan
Unilever Limited and making them fill up the questionnaire. Secondary data is from
internet, books, magazine etc.

RESEARCH INSTRUMENT
The instrument use for data collection is structured questionnaire. Question is open and
close ended depending upon the information that needed to be elicited. I am also using
the scaling technique to assess the attitude of the customer.

SAMPLING PLAN
Keeping all the constrains in mind a sample size of 100 people .The sampling procedure
is systematic sampling
Sampling Area: Dehradun

62
SCOPE
The Indian FMCG market currently appears to be at a crossroads, and HUL are
attempting to change customer perceptions of their brands and where specific buying
motivations appear to be replacing generalities.

This meanwhile, is quite unlike the west where buyers consider aesthetics, comfort and
safety, not necessarily in that order, before finalising a purchase. “It’s smarter to think
about emotions and attitudes, if marketers are to do a better job of marrying what a HUL
offers to the consumer’s image of the offerings. Another important outcome of the
research is the believability of the claims. Most of the claims are realistic and easy to
understand. Most of the people don’t understand the quality claims by HUL.

The mindset of the Indian consumer is such that he is delighted if he buys a pen a little
cheaper than his neighbour. Things are, however, slowly changing and customers at the
upper end of the market are now ready to pay more for more. I hope that this approach
will soon enter the new era, maybe not with the same intensity .

“Success will largely be determined to the extent a company can differentiate

itself in terms of intangibles that go with a Product”. Thus, success could well hinge on
the best of bundle of services that HUL provides.HUL grew from zero to the 2,268
Million $, mark and the number One FMCG company in India this year. Looking at the
present scenario it can be said that though there is lot of competition in the market but
HUL is picking up well. The landmark achievement comes in 74 years in India after
clinching its first overseas sale.

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 DATA ANALYSIS
CUSTOMER SURVEY QUESTIONNAIRE

Are you using any HUL product?

Yes 70
No 30

If Yes, then are you satisfied?

YES 75
NO 25

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Which brand do you use in the following categories :
PERSONAL WASH

LUX 40
BREEZE 20
DOVE 20
OTHER 20

Laundary
Surf Excel 50
Rin 40
Wheel 5
Others 0

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Skin Care

Fair & Lovely 40

Ponds 50
Sunsilk Naturals 10
Others 0

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 LIMITATIONS

Everything in this world has its own advantages and disadvantages which shows ‘nothing
is perfect’.

Following are the problems faced but it’s a part of game:

1. TIME CONSUMING: It is very much obvious that it is a time consuming process. So

much time has been spent for this purpose.

2. LOW PARTICIPATION: Obviously many respondents have not participated in this

and have also created some problems which simply shows that they were not
interested.

3. BIASNESS: Sometimes interested customers were also biased so the collected figures
involve both positive and negative figures.

4. It does not cover all the aspects of the company.

5. SUBJECTIVE: This project only tells you what it is all about.

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 FINDINGS, DATA ANALYSIS AND CONCLUSIONS WHEN COMPARED
WITH PROCTER AND GAMBLE LTD.
Findings
On the basis of research, we found that there is a nominal difference in the efficiency of
Hindustan leaver limited. vis-à-vis Procter and Gamble Ltd. I have reached to this
conclusion on the basis of following findings. They are as follows.
Product line
Hindustan leaver limited
HUL Home & Personnel Care
> In personal Wash they have Lux , Lifebuoy, Liril, Hamam, Breeze, Dove, Pears and
Rexona .
 In Laundry they have Surf Excel, Rin and Wheel.
 In skin care their brands are Fair N Lovely and Ponds.
 In hair Care they have Sunsilk Naturals and Clinic All clear.
 In Oral Care their brands are Pepsodent and Close-up.
 In Deodorants they have Axe and Rexona.
 In Colour Cosmetics they have Lakeme.
 In Ayurvedic Personal And Health Care they have Ayush.
FOODS
 In tea they have the brand name brook bond and lipton.
 In coffee they have bru.
 In foods they have kissan and kinnor annpuran.
 In ice creams they have the kwality walls.
WATER
 Hindustan Unilever Limited has launched pueit, the most advanced in home
water purifier in the world.
Procter and Gamble P&G Hygiene and Health care ltd. markets several leading brands:
Whisper sanitary napkins in the Feminine Hygiene category; Health care products such as
Vicks VapoRub, vicks action 500, Vicks Cough Drops, Vicks Inhaler; skin care and
cosmetic products viz. Old Spice.
P&G Home Products Ltd. markets several leading brands. In Fabric Care P&G has two
of its world leading detergents Tide and Ariel, in Hair Care they have Pantene Pro V,
Head & Shoulders and Rejoice. In Baby Care they have Pampers.

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CONCLUSION- As Hindustan Unilever Limited has more brands in its basket then
Procter and gamble so it is more close to common man and touching his or her daily life
in a more comprehensive manner.

DEALERS

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

Procter and Gamble there is no difference as such in the process of selection of dealers
in Procter and Gamble also. Like HUL, P&G also considers dealer’s financial position;
present business, goodwill and risk taking capabilities.

Conclusion: Dealers of HUL are satisfied by the companies support in there sales
because the company provides them with various schemes and discounts, whereas
satisfaction of P&G dealers lies in good promotional activities, advertisement and the
flexibility that the company provides them. According to the senior officials of P&G it
was found that it’s a volume based company, hence all the above stated parameters helps
the dealer to attract more and more customers.

MODE OF TRANSPORTATION

Hindustan leaver limited; HUL uses modified trucks and rails to deliver the products
from various production sites to the dealers. They are using new state of the art
technology so that they can even track every single bottle of shampoo. Transportation
cost is shared by HUL and the dealer.

Procter and Gamble P&G is also using road and railway transportation system to
deliver product from various production sites to the dealers. They are also using latest
Information Technology to track there consignment whose backend is managed by
infosys. Each dealer has to keep the Good Receipt Note (GRN) number and report of the
whole items of delivered products. Transportation cost is paid by P&G.

Conclusion: Both P&G and HUL uses advanced tracking technology to track the goods
and both companies use railways and roadways for transporting there products. In HUL
transportation cost is shared by HUL and the dealer, where as at P&G, transportation cost
is paid by P&G.

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FLEXIBILITY

Hindustan leaver limited As far as flexibility is concerned; our group found that HUL
provides more flexibility in terms of delivery of produce. HUL has there own warehouses
in every state and if the dealer orders more , he is supplied with the products in time.

Procter and Gamble As far as flexibility is concerned; our group found that P&G does
not provides more flexibility in terms of delivery of produce and in taking order from
dealers.

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

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 DISTRIBUTION CHANNEL STRUCTURE

Hindustan Unilever limited- Hindustan Unilever Limited channel structures consist of

whole seller, mass retailers, rural and modern trade. Their new approach to distribution is
holistic and seeks a three way convergence of product availability brand communication
and brand experience. They are reinventing distribution—creating new channels and
redefining the way current channels are serviced. They are building new capabilities in
training the large number of people involved in these initiatives.

Procter and gamble- Procter and gamble’s channel structure also have whole sellers,
mass retailers. They are revamping the company’s distribution system using efficient
consumer response {E C R} principles. The new distribution system has given the
company considerable cost and process efficiencies while significantly availability and
visibility of the company’s product in the stores.

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

DEALING WITH UNSOLD & DAMAGED MERCHANDISE

Hindustan Unilever Limited-It depends on the condition and type of the product. If
company feels that it is not the fault of the dealer then company would return it, unsold
products are mostly taken back by HUL

Procter And Gamble- P & G replaces the damaged product with the new one, it means
that the damaged product are replaced by new product.

Conclusion- Our group has found that both the companies take back the unsold product
however P & G is more flexible in returning the damaged product as compared to the
HUL. Hence P & G is more flexible here.

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 SALES FUNCTIONING
Hindustan Unilever Limited : HUL is emphasizing on rural areas through project
Shakti these days and sales also have been increased and HUL does not have any sales
outlets HUL assigns sales territory to there sales persons according to there skill and
experience and assigns targets to them. Performance appraisal of sales force is done by
appraisal supervisor and it is done through 360 degree appraisal method, parameter used
is performance of the sales personnel . HUL adopts on the job and off the job training
system to there sales force it is emphasized on improving skill and experience of the sales
personnel. Sales personnel are motivated through incentives and promotions.

Procter And Gamble: P&G has increased the number of outlets in the country and the
population in the area also increased and there is no effect on sales. P&G sets targets to
there sales force on the basis of increase or decrease in demand and also according to the
previous sales , sales territories are assigned according to the capabilities of the sales
personnel, responsibility of the sales personnel is to clarify the doubts of the customer
and make sales of the product. Performance appraisal of sales force is done by the
manager by doing meeting with them parameters of appraisal is increase or decrease in
sales it is done on monthly basis. P&G trains their sales force by on the job training and
training process is emphasized on skill and experience, P&G has also brought many
changes in the training system that has affected its sales too. P&G motivates their sales
force by providing them with targets and incentives.

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

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 RECOMMENDATIONS
Both the companies having good market share in India and it keep on increasing. Both
the co. i.e. HUL and P&G should open exclusive shop. HUL is already having exclusive
shop in Mumbai called SANGAM STORE. But it is only in India so it should be
increased. The employee should be given uniforms in which the name of the company
should be printed, by doing this the sales people get motivated. These shops should be
opened for 24 hours. They should offer 24 hours free home delivery system. The delivery
vehicle should be attractive the name of the company should be printed in that so that it
becomes the sources of advertisement.

The companies should emphasis on its advertisement, there should be BRAND FIT in
that. For example when lux launch its advertisement with sharukh khan with girls. It was
heavily criticized because it was not fit with the brand. It adversely affect the opinion of
the customer and it results in decrease in sales.

Both companies should emphasis their business in areas. They should penetrate their
business in the rural areas. 69% of the Indian population lives in rural areas. There is
huge market there and very less market has been penetrated. Both these companies
should concentrate on rural areas. P&G has been hardly been seen in the rural areas.

So they should increase their presence.

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

73
 SUGGESTIONS
Key attribute components:
 Value for money and Customer Care
 Operational attributes.
 Physical attributes.
 Brand Image.
 Customer Specific Details.
In any correspondence with the customers the message should be sent in these
components only to have the maximum benefit from the advertisement. Also these
components should be dealt with independently. The advertisements should speak only of
the believable concepts rather than glorifying the pretentious ones. The basic need of the
customer need to be addressed which is actually not much expensive and better quality.

HUL sales growth in june 2004 was decreased due to the problem with promotion and
pricing. Although being the most competitive product on the basis of the Market
Operating Price (MOP), the shampoos are still not selling much. This is perhaps due to
the bargaining stress on the customer and the weak push given by the dealer to the
particular item, when actually it should be sold like a high volume product.
Another serious suggestion is that HUL must give good attention to their all the products
rice and all are not getting much attention. The dealers don’t provide much support to the
customers in making them understand the real Quality behind them. Either, the technical
details should be presented in a clearer manner or the dealers need to be educated
properly.

74
 BIBLIOGRAPHY
1. Schiff mar Leon G. (2010), “consumer behavior”,(10th Edition),Pearson
Edition Publication ,new Delhi.
2. Saunders Mark (2007), “Research Methodology for business student”,
Research methodology,(third Edition), ), Dorling Kindersley publication ,new
Delhi.
3. Kotler Philip (2009), “Marketing man”,(13th Edition ),Pearson education
publication ,delhi.
4. Malhotra Naresh K. (2007), “Marketing Research- An Applied Oriented” ,
(second Edition), Dorling Kindersley publication ,new Delhi.
5. Rao V. S. P. (2003), “Strategic Management” ,(First Edition),Anurag Jain for
excel books publication new delhi.
6. Beri G. C. (2009), “Marketing Research”,(Forth Edition), Tata Mc Graw-hill
publishing company Ltd new Delhi.
7. Statistical method-Gupta S.P
8. Research methodology-Kothari-C.R
9. www.HUL.com
10. The Economic Times
11. Company’s brochure
12. The Times of India and Hindustan Times
13. Company’s Handouts & Bulletins.

75
 ‘ANNEXURE

SPECIMEN

CUSTOMER SURVEY QUESTIONNAIRE

Name
Age
Address

Q1. How many members are there in your family?

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

YES ______ NO ______
If Yes, from where?
Newspaper Magazines
Television Others _______
Q3. Are you using any HUL product?
YES NO
Q4. If Yes, then are you satisfied?
YES NO
Q5. If No, then reason being
Poor quality High prices
No services Others
Q6. Which brand do you use in the following categories :

Personal Wash

Lux __________ Breeze ___________

Dove __________ Others ___________

Laundary
Surf Excel _______ Rin ________

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 Wheel Others

Skin Care

Fair&Lovely ________ Pond’s ________

Sunslik Naturals ________ Others ________

Oral Care
Pepsodent ________ Close-up ________
Others ________

Deodorants

Axe ________ Lakme ________

Rexona ________

Colour Cosmetics
Lakme ________ Others ________

Q7. What Recommendations or suggestions would you like to give for

improvement of our products?

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 RETAILER SURVEY QUESTIONNAIRE
1. Do you keep products of Parle in your shop? ( please tick mark on the
appropriate answer)

a).Yes b). No .

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

2. Why don’t you keep the products of Parle in your shop or why did you stop
keeping its products?

Yes No

a). erratic supply

b). lack of demand
c). low margin
d). no supplier
e). don’t know about the company

3. Which products of HUL do you keep?

Personal Wash

Lux __________ Breeze ___________

Dove __________ Others ___________

Laundary

Surf Excel _______ Rin ________

Wheel Others

Skin Care

Fair&Lovely ________ Pond’s ________

Sunslik Naturals ________ Others ________
Oral Care
Pepsodent ________ Close-up ________
Others ________

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 Deodorants
Axe ________ Lakme ________
Rexona ________

Colour Cosmetics
Lakme ________ Others ________

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

1. Very High 
2. High 
3. Average 
4. Rarely  
5. Very Rarely 
6. Never 
5. From whom do you purchase your product?

1). Distributor 
2). Dealer 
3). Agency 
4). Wholesaler 

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

1. Excellent 
2. Above Average  
3. Average  
4. Below Average  
5. Extremely Poor  
7. How many dealers are there in the district?
a).One 
b)Two. 
c)Three. 
d)More than three. 

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8. Which vehicle do they mainly use for delivery?

1). Two wheeler 

a). scooters__ , b). motorbike__.

2) Three wheeler 
3) Four wheeler 
a) van__ ,b) truck__,c) others__.

13. What are the other schemes and incentives offered by them?
___________________________________________________
___________________________________________________.

14. What improvements would you like to have in the distribution process?

_________________________________________________
_________________________________________________

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

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