MARKET RESEARCH

SUMMER INTERNSHIP PROGRAMME 2009-2011

A report submitted in fulfillment of the requirementsof PGDM Programme of

Jagan Inastitute Of Management Studies.

“ANALYSING POTENTIAL IN INSTITUTIONS FOR HUL

PRODUCTS AND DEVELOPING STRATEGY FOR ITS
DISTRIBUTION NETWORK.”
Submitted to:

Faculty Guidance: Company Guidance:

Ms. Deepti Kakkar Mr. Ankit Puri
JIMS Sec-5, Rohini,Delhi SE-IBS
Hindustan Unilever Ltd.
Submitted by:

Jyotsana Jain
Roll no: FC09143
Batch: 2009-2011
Jagan Institute of Management Studies

Name of the Orgnisation: Hindustan Unilever Ltd., Gurgaon

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CERTIFICATE

This is to certify that the project work done on “ANALYSING POTENTIAL IN

INSTITUTIONS FOR HUL PRODUCTS AND DEVELOPING STRATEGY FOR ITS
DISTRIBUTION NETWORK.” is an original work carried out by Ms. JYOTSANA JAIN
under my supervision and guidance. The project report is submitted towards the partial
fulfillment of two – year, full time Post Graduate Diploma in Management.

This work has not been submitted anywhere else for any other degree/diploma. The work
was carried out from May 1st, 2010 to June 30th, 2010 in Hindustan Unilever Ltd.
(HUL).

Date: Name & Sign of Faculty

Student’s Name and

Sign

Roll No.

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Acknowledgement

I wish to place on record my deep sense of gratitude to Hindustan Unilever Ltd. For providing
me an opportunity to take up this project and giving me a platform which is the first step of my
professional career.

This summer project, From the very beginning to the tail end has been carried out under the
guidance of Mr. Ankit Puri, SE-IBS, HUL. I am indebted to my guide Ms. Deepti Kakkar for
extending her untiring guindace to me, discussing the project matter and helping me in clarifying
my thinking in several pertinent issues and providing a meaningful insight into the subject.

In the end, I would like to thank many unknown individuals, whom I interacted with for end
number of my needs. All of them with their due cooperation and at times with detachment taught
me the real lessons of the business world.

Jyotsana Jain

(FC09143)

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DECLARATION

I hereby declare that the project work entitled “ANALYSING POTENTIAL IN

INSTITUTIONS FOR HUL PRODUCTS AND DEVELOPING STRATEGY FOR ITS
DISTRIBUTION NETWORK.” submitted to Jagan Institute of Management

Studies is a solemn representation of my work completed under the guidance

of Ms. Deepti Kakkar

Jyotsana Jain

(FCO9143)

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PREFACE

Marketing plays pivotal role in today’s business scenario in consumer product Company, when
there is such a high competition in the market.

The emphasis in the project is providing the study an insight into Indian FMCG Business
Scenario. The Summer Project is designed to provide participation of MBA program as on the
job experience. This has given a chance to try and apply the academic knowledge and gain
insight into corporate culture. This helps in developing decision-making abilities and emphasizes
on active participation by the student.

I undertook my Project in Hindustan Unilever Ltd, No. 1 FMCG company in the FMCG sector.
The project that I worked upon was basically a market research project in IBS(Institutional Bulk
Supply) division of HUL which was later supplemented by Deep and thorough of its distribution
network.

I gained valuable experience & knowledge during the project.The Project consists of my findings
regarding potential for HUL products in the Institutional channel in Varansi(unexplored IBS
market) and Delhi(explored IBS market) regions, strategy development for its distribution
network, SWOT analysis, conclusions and finally recommendations were put forward.

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CONTENT

Executive Summary ……………………………………………………………………9

Introduction to project…………………………………………………………………11

Chapter-1 INTRODUCTION

1.1 Industry Overview………………………………………………………………....12

1.1.1 Scope of sector…………………………………………………………….......12

1.1.2 Growth Prospect……………………………………………………………….13

1.1.3 Indian competitiveness & comparision with world market…………………...14

1.2 Intorduction to Organisation

1.2.1 Company profile……………………………………………………………….15

1.2.2 History…………………………………………………………………………17

1.2.3 Purpose & Principles…………………………………………………………..20

1.2.4 Vision…………………………………………………………………………..21

1.2.5 HUL Product range & Brands…………………………………………….…...22

1.3 Top Ten FMCG Companies in India………………………………………….…..31

1.4Introduction to Project
1.4.1 Out-of- home Business(OOH)……………….……………………………….32

1.4.2 Institutional Business Channel…………………………………………….…34

1.4.3 Strategy development in IBS Marketing………………………………………35

1.5Distribution Network Of HUL

1.5.1 Distribution network in General trade………………………………………….41

1.5.2 Distribution network in IBS…………………………………………………….44

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Chapter-2 PROJECT RESEARCH

2.1 Objective of project………………………………………………………………..45

2.2 Research methodology…………………………………………………………….48

2.3 Sample Size………………………………………………………………………..48

2.4 Sample unit………………………………………………………………………..48

2.5 Sample Design…………………………………………………………………….49

2.6 Outcome and Analysis Channelwise

2.6.1 Hotels……………….…………………………………………………..……....51

2.6.2 Hospitals……………………………………………….…………….…………54

2.6.3 Railways Caterers……………………………………………….……………...57

2.6.4 Pharmaceutical Companies…………………………………………………….60

2.7 Concusion………………………………………………………………………...63

2.8 Recommendations………………………………………………………………..64

2.9 Limitations……………………………………………………………………….65

2.10 My Gains & Learnings………………………………………………………...66

Chapter-3 ANNEXURES
3.1 SWOT Analyis…………………………………………………………………..67

3.2 Questionnare………………………………………………………………….....68

BIBLIOGRAPHY……………………………………………………………….....72

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EXECUTIVE SUMMARY

Hindustan Unilever ltd. has been a major player in Indian FMCG market with its strong brands
like Kisaan, Knorr, Kwality walls, Brook bond, Lipton, Bru etc. in Food & bevarages division;
Wheel, Rin, Surf Excel, Lifebuoy, Dove, Sunsilk etc in Home & Personal care division.

Institutional Business i.e. IBS as this market is termed has Nestle and Johnson Diversy as the
major players in bevarages and home care categories respectively for the last few decades, HUL
has entered in this market segment in the last two years and is expected to gain a good market
share down the line in next few decades.

Assigned in Varanasi and Delhi region, the main objective was to understand the corporate
accounts in different distribution channels in IBS market segment and working out strategy for
its distribution network. For the fulfillment of this objective, I first studied the IBS market
structure and its different components and channels followed by visits to different accounts. In
the initial phase, visit was scheduled to the existing accounts in order to gain firsthand
experience of IBS market, its trends, intricacies and its modus operandi followed by
independent visits to new and prospective accounts and sales lead generation and management
thereon.

In order to understand the market potential for HUL products in IBS market segment, I designed
a questionnaire with a lot of subjective elements and conducted survey in Varanasi and Delhi
regions.

The survey revealed critical facts about demand structure of different institutes in different
channels on the basis of which potential for HUL products was analysed in these channels and
their distribution network was worked out.

This survey for market potential holds its importance in the sense that these results can be further
utilized by the company to design different strategies and package for different type of institutes
belonging to different channels.

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The survey in explored(Delhi) as well as unexplored(Varanasi) markets revealed a very lucrative

opportunity for the company to develop and grow in this business . Recommendations to achieve
leadership position in these regions were given.

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INTRODUCTION TO PROJECT

Hindustan unilever ltd. Has its presence in india for the last many decades,and with its iconic
brands, and dedication towards serving its consumers with quality products had made it not only
the leading FMCG company, but also a very respected one.

HUL being the leader in the FMCG industry, has always been a dream company for marketers
and having got an opportunity to do summer internship in such a reputed organisation for a
marketing student like me proved to be an obvious choice.

Designated in OOH- Food & bevarages division(FAB) , Home & personal care division(HPC), I
worked in explored and unexplored market of Institutional business(IBS) i.e. Delhi and
Varanasi(UP) respectively with the primary objective of “"Analysing Potential In Institutions
For HUL Products & Developing Strategy For Its Distribution Network"
Having got an opportunity to utilize my theoretical knowledge of B2B marketing with practical
application in field, this topic gave me full scope to understand the market and more importantly
understand the behavior of the large corporate customers.

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Chapter 1
Introduction

1.1 Industry Overview

Fast Moving Consumer Goods (FMCG) goods are popularly named as consumer packaged
goods. Items in this category include all consumables (other than groceries/pulses) people buy at
regular intervals. The most common in the list are toilet soaps, detergents, shampoos, toothpaste,
shaving products, shoe polish, packaged foodstuff, and household accessories and extends to
certain electronic goods. These items are meant for daily of frequent consumption and have a
high return.
A major portion of the monthly budget of each household is reserved for FMCG products. The
volume of money circulated in the economy against FMCG products is very high, as the number
of products the consumer use is very high. Competition in the FMCG sector is very high
resulting in high pressure on margins.
FMCG companies maintain intense distribution network. Companies spend a large portion of
their budget on maintaining distribution networks. New entrants who wish to bring their products
in the national level need to invest huge sums of money on promoting brands.
Manufacturing can be outsourced. A recent phenomenon in the sector was entry of
multinationals and cheaper imports. Also the market is more pressurized with presence of local
players in rural areas and state brands.

1.1.2 Scope of the Sector

The Indian FMCG sector with a market size of US$13.1 billion is the fourth largest sector in the
economy. A well-established distribution network, intense competition between the organized
and unorganized segments characterizes the sector. FMCG Sector is expected to grow by over

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60% by 2010. That will translate into an annual growth of 10% over a 5-year period. It has been
estimated that FMCG sector will rise from around Rs 56,500 crores in 2005 to Rs 92,100 crores
in 2010. Hair care, household care, male grooming, female hygiene, and the chocolates and
confectionery categories are estimated to be the fastest growing segments, says an HSBC report.
Though the sector witnessed a slower growth in 2002-2004, it has been able to make a fine
recovery since then.
For example, Hindustan Levers Limited (HUL) has shown a healthy growth in the last quarter.
An estimated double-digit growth over the next few years shows that the good times are likely to
continue.

1.1.3 Growth Prospects

With the presence of 12.2% of the world population in the villages of India, the Indian rural
FMCG market is something no one can overlook. Increased focus on farm sector will boost rural
incomes, hence providing better growth prospects to the FMCG companies. Better infrastructure
facilities will improve their supply chain. FMCG sector is also likely to benefit from growing
demand in the market. Because of the low per capita consumption for almost all the products in
the country, FMCG companies have immense possibilities for growth. And if the companies are
able to change the mindset of the consumers, i.e. if they are able to take the consumers to
branded products and offer new generation products, they would be able togenerate higher
growth in the near future. It is expected that the rural income will rise in 2007, boosting
purchasing power in the countryside. However, the demand in urban areas would be the key
growth driver over the long term. Also, increase in the urban population, along with increase in
income levels and the availability of new categories, would help the urban areas
maintain their position in terms of consumption. At present, urban India accounts for 66% of
total FMCG consumption, with rural India accounting for the remaining 34%. However, rural
India accounts for more than 40% consumption in major FMCG categories such as personal care,
fabric care, and hot beverages. In urban areas, home and personal care category, including skin
care, household care and feminine hygiene, will keep growing at relatively attractive rates.

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Within the foods segment, it is estimated that processed foods, bakery, and dairy are long-term
growth categories in both rural and urban areas.

1.1.4 Indian Competitiveness and Comparison with the World Markets

The following factors make India a competitive player in FMCG sector:

• Availability of raw materials:

Because of the diverse agro-climatic conditions in India, there is a large raw material base
suitable for food processing industries. India is the largest producer of livestock, milk, sugarcane,
coconut, spices and cashew and is the second largest producer of rice, wheat and fruits
&vegetables. India also produces caustic soda and soda ash, which are required for the
production of soaps and detergents. The availability of these raw materials gives India the
location advantage.

• Labor cost comparison:

Low cost labor gives India a competitive advantage. India's labor cost is amongst the lowest in
the world, after China & Indonesia. Low labor costs give the advantage of low cost of
production. Many MNC's have established their plants in India to outsource for domestic and
export markets.

• Resence across value chain:

Indian companies have their presence across the value chain of FMCG sector, right from the
supply of raw materials to packaged goods in the food-processing sector. This brings India a
more cost competitive advantage. For example, Amul supplies milk as well as dairy products like
cheese, butter, etc.

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1.2 INTRODUCTION TO ORGANISATION

1.2.1 COMPANY PROFILE

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

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

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

the company with a scale of combined volumes of about 4 million tonnes and sales of Rs.10,000

crores. The mission that inspires HUL's 36,000 employees, including about 1,350 managers, is to

"add vitality to life". With 35 Power Brands, 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. A

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

100 countries worldwide.

Hindustan Unilever Limited considers quality as one of the principal strategic objectives to

guarantee its growth and leadership in the markets in which it operates. The company is

committed to respond creatively and competitively to the changing needs and aspirations of our

consumers through relentless pursuit of technological excellence, innovation and quality

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management across our businesses, and offer superior quality products and services that are

appropriate to the various price points in the market as well as to our commitment to building

shareholder value. The company recognises that its employees are the primary source 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.

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1.2.2 History

In the summer of 1888, visitors to the Kolkata harbour 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
52.10% equity in the company. The rest of the shareholding is distributed among about 360,675
individual shareholders and financial institutions.

The erstwhile Brooke Bond's presence in India dates back to 1900. By 1903, the company had
launched Red Label tea in the country. In 1912, Brooke Bond & Co. India Limited was formed.
Brooke Bond joined the Unilever fold in 1984 through an international acquisition. The erstwhile
Lipton's links with India were forged in 1898. Unilever acquired Lipton in 1972, and in 1977
Lipton Tea (India) Limited was incorporated.

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

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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 liberalisation of the Indian economy, started in 1991, clearly marked an inflexion in HUL's
and the Group's growth curve. Removal of the regulatory framework allowed the company to
explore every single product and opportunity segment, without any constraints on production
capacity.

Simultaneously, deregulation permitted alliances, acquisitions and mergers. In one of the most
visible and talked about events of India's corporate history, the erstwhile Tata Oil Mills
Company (TOMCO) merged with HUL, effective from April 1, 1993. In 1996, HUL and yet
another Tata company, Lakme Limited, formed a 50:50 joint venture, Lakme Unilever Limited,
to market Lakme's market-leading cosmetics and other appropriate products of both the
companies. Subsequently in 1998, Lakme Limited sold its brands to HUL and divested its 50%
stake in the joint venture to the company.

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

The 1990s also witnessed a string of crucial mergers, acquisitions and alliances on the Foods and
Beverages front. In 1992, the erstwhile Brooke Bond acquired Kothari General Foods, with
significant interests in Instant Coffee. In 1993, it acquired the Kissan business from the UB
Group and the Dollops 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 1994, Brooke Bond India and Lipton India
merged to form Brooke Bond Lipton India Limited (BBLIL), enabling greater focus and

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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, Speciality Chemicals and Exports businesses,
besides a common distribution system since 1993 for Personal Products. The two also had a
common management pool and a technology base. The amalgamation was done to ensure for the
Group, benefits from scale economies both in domestic and export markets and enable it to fund
investments required for aggressively building new categories.

In January 2000, in a historic step, the government decided to award 74 per cent equity in
Modern Foods to HUL, thereby beginning the divestment of government equity in public sector
undertakings (PSU) to private sector partners. HUL's entry into Bread is a strategic extension of
the company's wheat business. In 2002, HUL acquired the government's remaining stake in
Modern Foods.

In 2003, HUL acquired the Cooked Shrimp and Pasteurised Crabmeat business of the Amalgam
Group of Companies, a leader in value added Marine Products exports.

HUL launched a slew of new business initiatives in the early part of 2000’s. Project Shakti was
started in 2001. It is a rural initiative that targets small villages populated by less than 5000
individuals. It is a unique win-win initiative that catalyses rural affluence even as it benefits
business. Currently, there are over 45,000 Shakti entrepreneurs covering over 100,000 villages
across 15 states and reaching to over 3 million homes.

In 2002, HUL made its foray into Ayurvedic health & beauty centre category with the Ayush
product range and Ayush Therapy Centres. Hindustan Unilever Network, Direct to home
business was launched in 2003 and this was followed by the launch of ‘Pureit’ water purifier in
2004.

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In 2007, the Company name was formally changed to Hindustan Unilever Limited after
receiving the approval of share holders during the 74th AGM on 18 May 2007. Brooke Bond and
Surf Excel breached the the Rs 1,000 crore sales mark the same year followed by Wheel which
crossed the Rs.2,000 crore sales milestone in 2008.

1.2.3 Purpose & principles:

HUL says: “Our corporate purpose states that to succeed requires the highest standards of
corporate behaviour towards everyone we work with, the communities we touch, and the
environment on which we have an impact."

“Always working with integrity”

Conducting operations with integrity and with respect for the many people, organisations and
environments HUL’s business touches has always been at the heart of our corporate
responsibility.

Positive impact:

HUL aim to make a positive impact in many ways: through its brands, its commercial operations
and relationships, through voluntary contributions, and through the various other ways in which
it engage with society.

Continuous commitment:

HUL is also committed to continuously improving the way it manage its environmental impacts
and is working towards its longer-term goal of developing a sustainable business.

Setting out aspirations:

HUL’s corporate purpose sets out its aspirations in running its business. It's underpinned by its
code of business Principles which describes the operational standards that everyone at Unilever

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follows, wherever they are in the world. The code also supports its approach to governance and
corporate responsibility.

Working with others:

HUL want to work with suppliers who have values similar to its own and work to the same
standards it do. Its Business partner code, aligned to its own Code of business principles,
comprises ten principles covering business integrity and responsibilities relating to employees,
consumers and the environment.

1.2.4 Vision:

Unilever products touch the lives of over 2 billion people every day – whether that's through
feeling great because they've got shiny hair and a brilliant smile, keeping their homes fresh and
clean, or by enjoying a great cup of tea, satisfying meal or healthy snack.

“A clear direction”

The four pillars of its vision set out the long term direction for the company – where it want to go and
how it is going to get there:

• It work to create a better future every day

• It help people feel good, look good and get more out of life with brands and services that
are good for them and good for others.
• It will inspire people to take small everyday actions that can add up to a big difference for
the world.
• It will develop new ways of doing business with the aim of doubling the size of our company
while reducing our environmental impact.

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HUL has always believed in the power of its brands to improve the quality of people’s lives and
in doing the right thing. As its business grows, so do its responsibilities. HUL recognise that
global challenges such as climate change concern us all. Considering the wider impact of its
actions is embedded in its values and is a fundamental part of who HUL is.

1.2.5 HUL Product Range and Brands:

Food and Bevarages (FAB) division:

HUL is one of India’s leading food companies. Our passion for understanding what people want
and need from their food - and what they love about it - makes our brands a popular choice

Brooke Bond 3 Roses

Playful banter, a little mischief, serious conversation… there’s no

time for young couples like the time spent sharing a cup of 3 Roses.

Annapurna

Partnering with the mom in nurturing her dreams, Annapurna Atta is aimed at
helping her provide wholesome tasty nutrition to her family.

Red Label

India’s favourite cup of tea, the great taste of Red Label brings people closer
together and strengthens relationships.

Brooke Bond Taaza

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Brooke Bond Taaza lifts me and unshackles my mind, allowing me to see and realize
possibilities.

Taj Mahal

Brooke Bond Taj Mahal is an exclusive selection of teas for the discerning
consumer.

Bru

Ek cup Bru aur mood ban jae…

Kissan

With Kissan, good food is loved not shoved!

Knorr

Knorr helps families make meal times special, nutritious, tasty and healthy.

Kwality Wall’s

A good honest scoop of daily pleasure.

Lipton

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Lipton has a range of vitality teas that truly encompass the goodness of tea.

Home care brands:

HUL has a diverse portfolio of brands offering home care solutions for millions of consumers
across India.

Active Wheel

Active Wheel de "Mehnat se Aazadi" Freedom from painful & tiring laundry

Cif

Cif- the best cleaner to let you shine.

Comfort

The world’s largest fabric conditioner brand.

Domex

The sheer power of Domex bleach gives you the confidence you need,
eradicating all known germs.

Rin
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Rin provides ‘best in class whiteness’ which is demonstrable.

Sunlight

Sunlight is a color care brand

Surf Excel

Giving your kids the freedom to get dirty and experience life, safe in the
knowledge that Surf Excel will remove those stains

Vim

Created in 1885, the Vim brand is still innovating and using the magic of
natural ingredients to create unbeatable results over a hundred years later.

Personal care brands:

Our personal care brands, including Axe, Dove, Lux, Pond's, Rexona and Sunsilk, are recognised
and love by consumers across India. They help consumers to look good and feel good – and in
turn get more out of life.

Aviance

Aviance enables women actualize their unique potential through expert

customized beauty solutions.

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Axe

Axe with Best Quality Fragrance

LEVER Ayush Therapy

LEVER Ayush aims to help a new generation of Indians rediscover

everyday health and vitality through customized Ayurvedic solutions.

Breeze

Breeze, with the goodness of glycerine gives soft, fragrant and smooth skin.

Clear

New Clear with Essential Oils, guarantees Zero dandruff and leaves your hair
feeling fabulous.

Clinic Plus

Clinic Plus is India’s largest selling shampoo and has won the trust the
millions of families across India.

Closeup

Freshness that brings you Closer

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Dove

Dove stands for real beauty. All around the world, Dove is making real
women feel more beautiful!

Fair & Lovely

More than 30 years ago, a unique brand was born. Wrapped within a humble
lavender tube, it went on to become the World’s No.1 Fairness cream.

Hamam

Holistic skin care experiences perfected over the ages to deliver healthy,
beautiful skin

Lakme

Lakme is an ally to the Indian Woman and inspires her to express her unique
beauty and sensuality. Thus, enabling her to realize the potency of her beauty.

Lifebuoy

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Lifebuoy is available in multiple variants in soaps and specialist formats such as liquid
handwash, catering to the entire family.

Liril

Awaken, and enliven your senses with a Liril bath.

Lux

Lux believes in passion for beauty. It continues to be a favorite with

generations of users for a sensuous experience of luxury.

Pears

Pears – the purest and most gentle way to skincare!

Pepsodent

Pepsodent India is committed to improve the overall Oral health of Indians.

Pond’s

Get the expert to look after your skin

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Rexona

Rexona gives you 24 hr protection from sweat and body odour and therefore
the confidence to handle whatever the day has in store.

Sunsilk

Sunsilk encourages young women in India to live for today. Sunsilk helps you
transform the beauty of your hair instantly because LIFE CAN'T WAIT!!

Vaseline

Your skin is amazing. It deserves to be treated as such.

1.2.5 Innovation in Unilever

Innovation is the engine of Unilever’s growth; the lifeblood of our business. Our future depends
on our ability to bring bigger & better innovations to market more quickly than our competitors.

Our R&D leadership

Professor Geneviève Berger, Chief Research & Development Officer and

Vindi Banga, President Foods, Home & Personal Care outline how our R&D teams create unique
products with proven benefits for consumers around the world.

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Research & development in Unilever

Research & development plays a key role in delivering proprietary

breakthrough innovations. At Unilever, R&D is treated as an investment aligned closely with our
overall business strategy.

The science behind success

The common thread running through all our R&D activities is a direct
connection between science, technology and consumer needs.

Areas of innovation

Unilever is recognised as a world leader in R&D, both in terms of

innovation (new products and mixes) and renovation (refreshing existing products).

How we work

We employ more than 6000 R&D professionals in six global research

centres, 13 global product development centres and regional development & country
implementation centres.

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MARKET RESEARCH

Responsible innovation

We believe our products make a real contribution to an individual’s wellbeing and that of their
community, while having the least possible adverse effect on the environment at every stage in
the product lifecycle.

Top Ten FMCG Companies in India

S. NO. Companies
1. Hindustan Unilever Ltd.
2. ITC (Indian Tobacco Company)
3. Nestlé India
4. GCMMF (AMUL)
5. Dabur India
6. Asian Paints (India)
7. Cadbury India
8 Britannia Industries
Procter & Gamble Hygiene and
9.
Health Care
10. Marico Industries

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MARKET RESEARCH

OUT – OF – HOME BUSINESS

Out – of – home branding is the new buzzword sweeping indian stores. Brands that stubbornly
remain indoors through their positioning and segmentation strategies are in a jolt!

Consider the facts,The indian population is a young population. Life expectation is longer than
before. Income standards are high. Except for ayear of aberration, the Indian monsoon has
largely behaved! Good monsoon means a good crop. Larger part of Indian economy is a non tax-
paying economy. Goo rains spell good crops and good crops in turn spell a good amount of
disposable income.

The average Indian is spending a lot more time out of home than before. Eight hours at work, two
hours at travel and two hours of outdoor entertainment and eating out. And that a lot of time
spent out of home. The brand in his life has to appeal to his senses more Out-of-home than when
in home.

OOH is an arm of HUL that caters to the on-premise FAB requirements using state of the art
vending machines, with branded product mixes enabling people to sip their favorite beverages
when outside the homes.

OOH division also supplies products directly to caterers, confectionary manufacturers, ship
candlers and others to meet their bulk requirement that forms the basis of Institutional business.

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MARKET RESEARCH

OOH in Non-vending Solutions:

OOH deals with large customers for their non-vending requirements and help them choose from a
wide basket of HUL products.

It also offer bulk packs for the factories / caterers/ ship candlers/ to provide greater value.

OOH division currently is supplying BRU instant coffee to almost all the leading confectionary
manufacturers in the country for their confectionary requirements.

Besides this OOH division also provides services to choose products from their food or home&
personal care basket to gift to patrons and customers. It has supplied products like Taj mahal packet
Tea, Lifebuoy handwash, Lakme Skincare range etc. to pharmaceutical companies at attractive prices
to gift it to the doctors.

OOH division has a very basic disribution network, with materials dirctly coming from factory to
depot and from there to distributors. From distributors it directly goes to customers.

Haryana region has 16 distributors, Delhi has 4 distributors.

As far as sales lead generation and acquisition of accounts is concerned, that is done by HUL OOH
division’s personnel, and later those accounts are alloted to distributors depending on their size and
capability of handling an account.

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MARKET RESEARCH

OOH division can be shown graphically as follows:

Institutional Business Channel

Institional Sales is similar as corporate sales, here we sell products/Services/Solutions to other

organisations. its also called B2B Sells.

For an eg. we sell one AC to a customer for his personel uses its B2C Selling, where as in
instituional sales we sell in bulk quantities for eg. selling 300-1000 AC to one new opening
hotel.

Institutional Sales does not involve the channel of dealers/distributors, its the direct sales for
company to company. Though HUL does involve an intermediary in its IBS distribution channel

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MARKET RESEARCH

i.e. an exclusive distributor for IBS which supplies order directly from factory depot to the
customers.

Steps for Strategy Development in IBS marketing:

1.Define your product range.

2. Define your institutional market

-hospitals
-schools
-business house
-electrical contractors
-factories

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MARKET RESEARCH

3.List the prospects for each market segments.

4. Profile each prospect with information like

-name
-location
-purchasing people
-their requirements of product range
-method of buying [ proposal/tender etc]

5.Study and Understand the buying process in market segment:

1.BUYING BEHAVIOR
-needs are identified
-purchases are planned
-systematic / cost benefits are done
-technical specifications
-proposals / bids are solicited
-comparisons are made of suppliers
-after sales service is considered

2. SUPPLIER EVALUATED
-products brand image
-products availability / range
-service offered
-order cycle time
-installation support
-trade terms

3.PRODUCTS EVALUATION
-price

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MARKET RESEARCH

-warranty
-durability
-quality
-technical specifications
-performance
-physical characteristics

6.Develop a good quality brochure [ products/service]

and list of market segments you service.

7.Identify the buyers in the listed customers.

8.Direct mail the brochure / email it

and follow up with a phone call.
and take appointments.

9.Make an effective presentation -audio/video.

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MARKET RESEARCH

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MARKET RESEARCH

HIERARCHY IN IBS:

Hierarchy in GT(general trade- retail network)

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MARKET RESEARCH

Rate list of HUL FAB Products for IBS Channel:

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MARKET RESEARCH

S.no. Product/brand Weight MRP(Rs.) Discount rate TUR(Rs.)

BEVARAGES

1. Bru sachet 1.2 gm 1 15% 0.85

2. Bru tripti 1kg 552 12% 485.5

3. Brooke bond 2kg 360 3.26% 348.25

4. Taaza Dust tea 1kg 182 13.73% 157

5. Red Label 1kg 240 6.5% 224.30

6. Taj Mahal 1kg 345 6.5% 322.43

7. Taj Mahal Tea bags 200bags/pkt 199 13.5% 172

8. Brooke bond Tea bags 25bags/pkt 55 14.5% 47

FOOD

1. Kissan Ketchup 1kg 99 8.3% 90.82

2. Kissan Squeeze 1kg 79 8.3% 72.5

3. Kissan Jam 1/2kg 97 10.3% 87

4. Kissan Jam LUP Pack 18gm 2 8.5% 1.83

5. Kissan Ketchup LUP 18gm 2 8.5% 1.83

Pack

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MARKET RESEARCH

1.5 DISTRIBUTION NETWORK OF HUL:

The distribution network of HUL is one of the key strengths that help it to supply most products

to almost any place in the coutry from Srinagar to Kanyakumari. This includes, maintaining

favorable trade relations, providing innovative incentives to retailers and organizing demand

generation activities among a host of other things. Each business of HUL portfolio has

customized the network to meet its objectives. The most obvious function of providing the

logistics support is to get the company’s product to the end customer.

Hindustan Lever Limited (HUL) has two types of channel selling:

i. Regular (traditional) retail channel,

ii. Direct Selling Channel in the name of Hindustan Lever Network (HLN).

Hindustan Lever Network (HLN)

It is the company's arm in the Direct Selling channel, one of the fastest growing in India today. It

already has about several 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.

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MARKET RESEARCH

The New Compensation plan for HLN partners provides new exciting ways of earning

substantial income in addition to offering rewrds like revenue sharing through the innovative

concept of “pools”Mother.

Depot and Just in Time System:

In order to rationalise the logistics and planning task, an innovative step has been the formation

of the Mother Depot and Just in Time System (MD‐JIT). Certain C&FAs were selected across

the country to act as mother depots. Each of them has a minimum number of JIT depots attached

for stock requirements. All brands and packs required for the set of markets which the MD and

JITs service in a given area are sent to the mother depo by all manufacturing units. The JITs

draw their requirements from the MD on a weekly or bi‐weekly basis.

HUL has a well entrenched high distribution model which comprises of C&FAs, Redistribution

Stockists, wholesalers and retailers (as shown earlier). Hindustan Unilever's distribution network

is recognized as one of its key strengths. Its focuses on Product availability, Brand

communication, and higher levels of brand experience.

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MARKET RESEARCH

Redistribution Stockist:

Sales Margin: 4.76% which includes cash discount, unloading expenses from depot, distribution

expenses to retailers,incentive schemes & other incidental expenses.

lModes of transport used: Rickshaw, tempo.

Incentive schemes: Before 2000 holiday packages and tours but after 2000 no non monetary

incentive for RS.

Software systems and Information System: UNIFY 8.3 (Developed by IBM & CMC). This

software needs to be synchronized daily and the system updates any information/ incentive

schemes / sales figures etc to and from the common shared platform.

Areas of Operations: Marked for each of the RS.

Selling Operations: RSs sells the goods to Wholesaler (gets 1.5 % max. discount from RS )

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MARKET RESEARCH

Distribution Network in IBS:

IBS has a very basic disribution network, with materials dirctly coming from factory to depot

and from there to distributors. From distributors it directly goes to customers.

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MARKET RESEARCH

Chapter 2:

Project Research

2.1 Objective of the research:

The main objective of this project lies in studying and understanding the market potential for

HUL products in the institutional business market , analyzing the latest and emerging trends.

This project aims at studying distribution network also for IBS market. This is relatively a new

emerging market with lots of growth opportunities for FMCG players. Few of the major players

are Nestle, HUL, Godrej etc.

This project also probes the purchase decision behavior of many institutes or corporate which

forms majority of the customer base. Customer purchase behavior analysis will provide valuable

insight to the company for deciding its sales and distribution strategies. And hence, will give it a

competitive edge.

This is the reason why HUL-OOH division is focusing on institutional customers with special

stress on schools, college and other educational institutes and this project is trying to provide a

database for demand and potential in IBS market for HUL.

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MARKET RESEARCH

In order to simplify the project objectives, I have divided it into following sub-headings:

1) Study and analysis of potential in Institutional business for HUL products in

explored(Delhi) and unexplored(Varanasi) institutional markets.

2) Exploring opportunities for FAB & HPC products of HUL in institutes belonging to

different institutional channels.

3) Sale lead generation and management

4) Analyzing Distribution network of the company with respect to the institutional business.

To analyze sales potential of HUL products in the Institutes, a survey was conducted aimed at

collecting data regarding demand and requirement of FAB and HPC products by the institutes.

Basic focus was on:

• Brands used by institutions in each category

• Their purchase size

• Purchase frequency

• Price quotations at which products are being purchased

• Details of their suppliers

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MARKET RESEARCH

Sales Lead gaeneration and management:

Sales lead generatin through cold calling and generating market information was a major part of my
project. Since, market for IBS is highly scattered and is not confined to a particular area, therefore
the sample was divided on the basis of operating channels vis-à-vis hotels, hospitals, pharmaceautical
companies, railways and airport caterers, office caterers etc.

These sales lead were initially forwarded to prospective officers who then would follow up on the
leads, although after a week of initial study of the market, sales lead generation as well as their
follow up, meeting with the customers and subsequent closure of the deals was handled by me along
with the distributor and the company executive and my mentor.

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MARKET RESEARCH

2.2 Research Methodology:

In order to find new opportunity for HUL products in the institutional business market by

storming the sales and demand of products belonging to such different categories as FAB(Food

& bevarages), HPC( home & personel care) in different types of institutions and for providing

the inputs for fine tuning the selling and marketing strategy, a research was conducted.

2.3 Sample Size:

Respondents were Purchase manager of the concerned institutes/organization.

Sample size: 45 (comprising each institute belonging to different institutional channels)

2.4 Sample Unit:

Institutes belonging to different institutional chnnels that have potential for placing an order in

bulk for HUL products are the sample units.

1. Hospitality sector including

Hotels – set into different strata depending upon their level of operations ranging from

small lodge to 5-star hotels

Hospitals – categorized as government and private hospitals.

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MARKET RESEARCH

2. Railways – canteen and caterers

3. Airport

4. Educational and research institutes

5. Pharmaceutical companies

6. Cooperative societies

2.5 Sample Design:

Stratified Sampling Method:

In this method, the institutes were divided into different strata. The member institutes in each

stratum have a similar characteristics.

In this project, the institutes are categorized on the basis of their area of operation and each

category defines a stratum and institutes belonging to that category/channel represents

corresponding member of that stratum. Hence, there are different strata viz the institutes from

hotel industry, hospitals,airport,educational institutes etc. Institutes were selected randomly to

form a sample.

Market research:

This is essentially an institutional or B2B market, where a company’s customers are HR/Admin.

Managers, Purchase managers, Café managers, and canteen/ Cafetaria owners. These are the

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MARKET RESEARCH

people who have the authority to make decision on behalf of the company’s employees,

institutes’ students and faculty etc. on the basis of factors such as price, brand image, product

offerings etc.

Geographical Area of Research:

Delhi city – It is an explored IBS market.

Varanasi - Unexplored IBS market.

Outcome and Analysis:

• Identification of major factors which affects customers’ purchase decision and

formulation of customized offerings on the basis of those factors.

• Insight into the mind of customers as to what extent brand image matters, and how
various brands fared against each other.

• Formulation of steps to strengthen HUL’s brand image in various product categories

depending on the above stated outcome.

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MARKET RESEARCH

2.6 OUTCOME & ANALYSIS CHANNELWISE:

2.6.1 Institutional Channels 1- Hotels:

Data collected from the survey revealed following points:

Hotels were segmented into different strata depending on their Capacity and number of stars

possessed by them-

• Strata-1: Small lodge with capacity of 20-50 guests – Since level of operation is

lower and institute is smaller in terms of size and revenue generation, therefore,

purchasing and usage of HUL products is expensive. They prefer local brands that

are available to them at cheaper rates.

• Strata-2: 3 – 5 star hotels with capacity of 50 or above guests – Since level of

operation is high and institute show good revenue figures , therefore, these institutes

prefer good brands although demand for local brands is always there. Demand keep

on increasing and decreasing depending on the holiday season.

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MARKET RESEARCH

Also, maintaining brand equity is necessary, therefore, all 3-5 star hotels prefer branded

products irrespective of their prices being higher than that of local brands.

Thus, it is inferred that this segment i.e. Strata-2 is the target segment for HUL products.

Data collected from survey revealed:

• Nestle and TATA stands as a major competitor for HUL in FAB division.

• Johnson Diversy stand as major competitor in home care division.

Analysis:

Strata – 1 has very low or negligible potential for HUL products in IBS market, pricing being the

major factor.

Strata – 2 is the target segment and shows higher potential for HUL products.

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MARKET RESEARCH

100

80

60
strata-1

40 strata-2

20

Competitors in Bevarages division in Hotel Channel:

bevarage HUL Brand Brand Company

Tea Taaza, Red label Tata premium tea, Tata TATA

Agni

dunken Dunken & co.

Bagh bakri

Nesta Nescafe

Loose tea Local vendors

Tea bags(upper segment) Taj Mahal Tea bags Tetley tea bags TATA

Nesta Nescafe

Tea bag(lower segment) Brooke bond Classic twinings ITC

Coffee Bru Nescafe Sunrise Nescafe

Ketchup Kissan Maggie Maggie

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MARKET RESEARCH

Cremica Cremica & Co.

Cross ‘n’ well Nescafe

Institutional Channel 2- Hospitals

A hospital, in the modern sense of the word, is an institution for health care providing patient treatment
by specialized staff and equipment, and often, but not always providing for longer-term patient stays.

Hospitals were categorized as government and private hospitals.

Demand Structure:

Demand structure in hospitals for products offered by HUL is very limited. It is mostly confined to HPC
products. Brands preferred by hospitals in this category are:

• Wheel, Rin, Domex – for Floor cleaning and OT cleaning.

• Lifebuoy handwash and Lifebuoy hand sanitiser- For washing hands before and after visiting
patients in OPD and OT.

Demand structure in Private Hospitals:

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MARKET RESEARCH

Private hospitals are more conscious in maintaining hygiene and sanitation in the premises. Also, they are
very brand conscious. The reason being tough competition between private players in the hospital sector.
Maintaining good reputation and hygiene & sanitary conditions are of prime importance for this sector as
these are the factors that attract customers and assure them of good services.

Government Hospitals

A public hospital or government hospital is a hospital which is owned by a government and receives
government funding. This type of hospital provides medical care free of charge, the cost of which is
covered by the funding the hospital receives.

Data collected from the survey revealed:

• Irrespective of bed capacity, private hospitals prefer using renowned brands over local brands.

• Hygiene and sanitation is important but more or less it remain neglected by the management of
the institutions in majority of the cases in Government hospitals though exceptions do exist.

Market potential for HUL products in Hospital Channel:

100%

80%

60%

40% institutional demand(in %)

20%

0%
LBsoap LBhand wheel Rin Surf VIM
wash excel

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MARKET RESEARCH

Analysis:

From the chart, it is inferred:

Highest demand is shown by Lifebuoy soap followed by LB hand wash and sanitizers. Since

Lifebuoy has positioned itself as a soap associated with health and well-being and claims to

protect from germs and infections, this product category has gained preferences of doctors and

hospital administration.

The soap is kept in wards and toilets for washing hands for patients and visitors, likewise, one

can easily find LB soap in the doctors clinic.

With the advent of liquid hand washes by launched by dettol, a significant change in taste and

preferences of doctors as well as retail consumer also came in. Now-a-days, doctors prefer liquid

handwash and sanitizers over disinfecting soap. Thus, changing with the market demand

structure, company launches LB handwash & sanitizers which are in their introduction phase of

product life cycle. These products do grab demand and show high potential in hospital channel.

Similarly, for house-keeping that include floor cleaning, toilet cleaning etc. Rin, Wheel, surf

Excel and Domex are being preferred by the institutions.

Competitiors of HUL in Hospital Channel:

Division Brand Company

Antiseptic Soap Dettol soap Reckitt Benckiser(India)

Handwash Dettol handwash Reckitt Benckiser(India)

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MARKET RESEARCH

Savlon Johnson & Johnson

Power cleaners Cilit bang Reckitt Benckiser(India)

Lysol

Toilet cleaners Harpic Reckitt Benckiser(India)

phenyl Local manufacturers

detergents Ghari Ghari group of companies

Local brands Local manufacturers

2.6.3 Institutional Channel 3 - Railway caterers

IRCTC is in charge of catering services on trains and railway stations across India.

Depending on the distance covered by the train and average passenger load factor, the

railways either equips trains with their own pantry cars or provides meals at select stations en

route.

Demand structure:

(i) Taj Mahal Tea Bags- for catering to AC first, second and third class passengers i.e.
customers belonging to elite, upper & middle middle class commuters.

(ii) Brooke Bond Tea bags – for catering to lower middle class commuters travelling in
sleeper class

(iii)Brooke bond 2 kg gunny Bag – For preparing tea in pantry cars and railway station.

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MARKET RESEARCH

(iv) Kissan Tomato ketchup sachet – For providing along with the packed food or with
ready-to-eat snacks.

(v) Taaza Special dust Tea: For giving instant colour to tea. It doesn’t require much boiling
and is used in very less quantity but colour intensity is high.

These caterers capture a major share of institutional business.

Railway caterers in Delhi regions:

Accounts Name RS Name Town

Qwality Caterer Laxmi Enterprises Delhi
Oteek Caterer Laxmi Enterprises Delhi
Rohit Caterer Laxmi Enterprises Delhi
Giridhar Caterer Laxmi Enterprises Delhi
Corporate Caterers A/c Laxmi Enterprises Delhi

Data collected from the survey revealed:

Market share of different players in FAB division:

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MARKET RESEARCH

Market Share

Dunkens
TATA
Prime Tea
Nesta
HUL
others

Analysis:

It is inferred from the pie chart that market share of HUL is hardly 10% .

Major players in this channel are lower level and cheaper brands like Dunken & Prime

Tea( holding approx 30% of the total market share); the basic reason for such a scenario being

the price factor. As the orders are in bulk and the caterers have to pay a handsome amount to get

the licence and run their business, cost is an important aspect that they focus upon. Thus,

preferring brands with lower or cheaper prices is obvious.

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MARKET RESEARCH

Recommendation:

In order to capture this channel, HUL should come up with brands with cheaper prices so as to

pose tough competition to mediocre brands like Dunken and Prime Tea.

Brooke bond 2 kg gunny bag tea, and brooke bond Tea bags are the product variants that are

launched by the company so as to capture this institutional channel.

2.6.4 Institutional Channel 4- Pharmaceutical Companies

Physicians, physician assistants, and nurse practitioners are perhaps the most important players
in pharmaceutical sales because they write the prescriptions that determine which drugs will be
used by the patient.

Influencing the physician is often seen as the key to prescription pharmaceutical sales. For this
purpose, Pharma companies gift medical practitioners a variety of products belonging to every
possible category.

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MARKET RESEARCH

Demand Structure:

Pharma companies gift HPC products to doctors especially to lady practitioners in customised
packs. To serve the purpose, customised packing is done and the order is supplied accordingly.

Few product samples that are demanded by pharma accounts:

Customized packing of Dove:

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MARKET RESEARCH

Customized Packing of AXE:

Lakme products:

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MARKET RESEARCH

Lifebuoy Handsanitizar( sample):

Analysis:

Outcome of the survey indicates high potential for HUL products belonging to personal care

division in pharma institutional channel.

2.7 CONCLUSION:

• On the basis of findings out of the research project, following conclusion were drawn:

• HUL is a new entrant in the IBS market segment.Therefore it is facing tough competition

from the exisiting players of this market segment like Nestle & Tata( FAB division)and

Johnson Diversy(Home Care division).

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MARKET RESEARCH

• There is a lot more scope and potential in metropolitan cities as these cities possess larger

accounts that has potential to purchase products in bulk as compared to Tier-1 & Tier-2

cities.

• IBS market is bullish for HUL Products especially in Food & Beverages division and

show high potential.

• Hindustan Unilever, 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.

• Company is coming up with newer products especially for IBS channel so as to compete

with competitiors. These products are different and cheaper from GT(general trade)

products. Example are: Taaza dust tea and Dippy ketchup.

• Distribution netwrk is different from GT network in terms of intermediaries. And

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MARKET RESEARCH

2.8 RECOMMENDATIONS

• Margin to distributors is low. Company should focus in this direction to

pass on more benefit to the distributors. If margins are increased from

4.76%, distributors will be more motivated.

• In order to compete with local and cheaper brands, company should come up with

competitive products that can cater institutes more effectively and efficientl with a

basic Focus on pricing strategy.

• Field force is very limited for this channel, therefore more distributor should be set

up in order to enhance its distribution network.

• Since HUL is new in institutional market, Company should come up with

promotional strategies in order to make customers aware and penetrate the market.

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MARKET RESEARCH

2.9 LIMITATIONS

• The study is limited to geographical area of Varanasi city and Delhi.

• Time limit is one of the biggest constraints as the time period of 8 weeks is not

sufficient to the whole catchment area.

• The sample size of this study is too small as compared to the total consumer base of

HUL. Therefore, a complete picture of the whole market pattern can,t be expected

through this study.

• Trustworthiness of the data is also a great deal of concern.

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MARKET RESEARCH

2.10 MY LEARNINGS AND GAINS

• Good understanding of the channel flow of products.

• Practical approach to the problem.

• Developing a better communication and negotiation skills.

• Knowledge of business etiquettes.

• Rich experience in sales and marketing functions.

• Appreciation from company guide for the job.

• Gained self-belief and confidence.

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MARKET RESEARCH

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MARKET RESEARCH

3.1 SWOT ANALYSIS:

Strengths:

HLL enjoys a formidable distribution network covering over 3400 distributors and 16 million
outlets. This helps them maintain heavy volumes, and hence, fill the shelves of most outlets. The
new sales organization named 'One HLL' brings "Household and Personal Care" and foods
distribution networks together, thereby aligning all the units towards the common goal of
achieving success. HLL has been continuously able to grow at a rate more than growth rate for
FMCG Sector, thereby reaffirming its future stronghold in Indian market. Project Shakti - Rural
India is spread across 627,000 villages and possesses a serious distribution challenge for FMCG
Cos. HLL has come up with a unique and successful initiative wherein the women from the rural
sector market HLL products, and hence, are able to reach the same wavelength as of the common
man in village. Apart from product reach, the initiative also creates brand awareness amongst the
lower strata of society. This has brought about phenomenal results.

Weakness:

HLL's market dominance, originating from its extensive reach and strong brand presence,
allowed it to raise the prices even as raw materials were getting cheaper. Hence, though the
volumes decreased, the margins grew, and company was able to earn more profits. But higher
margins attracted competition in areas of operations. HLL's strategy remained focused on
creating power brands and earning higher margins. It was not left with any other option but to try
cutting down the costs in order to protect volumes, if not increase it. As shown in above figure,
the key differentiators for an FMCG player are ability to call shots and pricing power, and HLL
has shown weakness over both these factors. HLL's weakness was its inability to transform its
strategies at the right time. They continued with the same old strategy which helped them gain
profits but was not genuine in this changed environment. HLL's risk aversion and market myopia

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MARKET RESEARCH

led to stagnation of business, and ferocity of competition forced it into a defensive mode. Lack of
pricing power in core business and absence of growth drivers have put HLL on a deflationary
mode.

Opportunities:

India is one of the world's largest producer of FMCG goods but its exports are miniscule as
compared to production. Though Indian Cos. have been going global, their focus is more towards
Asian countries because of the similar preferences. HLL is one of the top companies exporting
FMCG goods from India. An expansion of horizons towards more and more countries would
help HLL grow its consumer base and henceforth the revenues. Opportunity in Food Sector - The
advent of modern trade has opened up greater opportunities for HLL to diversify its brand and
strength its food division. It could look at introducing products from its parents stable like
margarines and could also look at expanding its Knorr range of products. Well-placed to take
advantage of future FMCG Growth - HLL reach out 80% of 207 million households in the
country through various brands. It has a very well- defined product portfolio spread across many
product categories. Penetration levels for some major categories like skin-cream (22%), shampoo
(38%), toothpaste (48%) and processed foods, continue to remain low offerings but great
growthopportunities products.

Threats:

ITC has reduced its dependence on the cigarettes business - Contribution of the core business in
revenues has come down from 87% in FY99 to 70% in FY05. Over a period of five years, ITC
has extended its presence into areas like foods, retailing, hotels, greetings, agri, paper, etc. These
are businesses that can give it growth impetus in the long run. With ITC gaining momentum in
each of these businesses, it is turning into a consumer monolith, and hence, the greatest threat to
HLL's Business. SSKI India has gone on to say, "We maintain Out performer on ITC with a

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MARKET RESEARCH

price target of Rs. 2200, while our Under performer call on HLL remains unaltered (price target
of Rs.160)

QUESTINNARE

1. Name Of
Organisation………………………………………………………………………

2. Institutional Channel……………………………………………………………………….

3. Demand Structure:

Product Category

(a) Food

Brand using at present………………………………………………………………….

Purchase Frequency……………………………………………………………………

Purchase Size( monthly) ……………………………………………………………….

Purchase Size (annually) …………………………………………………………...…..

Price /unit…………………………………………………………………………......…

Discount availing…………………………………………………………………..……

Supplier………………………………………………………………………….………

(b) Bevarages

(i)Tea:

Brand using at present…………………………………………………………………

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MARKET RESEARCH

Purchase Frequency……………………………………………………………………

Purchase Size( monthly) ………………………………………………………………

Purchase Size (annually) …………………………………………………………...…

Price /unit………………………………………………………………………………

Discount availing………………………………………………………………………

Supplier………………………………………………………………………………..

(ii) Coffee:

Brand using at present………………………………………………………………….

Purchase Frequency……………………………………………………………………

Purchase Size( monthly) ……………………………………………………………….

Purchase Size (annually) …………………………………………………………...…..

Price /unit…………………………………………………………………………......…

Discount availing…………………………………………………………………..……

Supplier………………………………………………………………………….………

(c) Home Care:

Brand using at present………………………………………………………………….

Purchase Frequency……………………………………………………………………

Purchase Size( monthly) ……………………………………………………………….

Purchase Size (annually) …………………………………………………………...…..

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MARKET RESEARCH

Price /unit…………………………………………………………………………......…

Discount availing…………………………………………………………………..……

Supplier………………………………………………………………………….………

(d) Personal Care:

Brand using at present………………………………………………………………….

Purchase Frequency……………………………………………………………………

Purchase Size( monthly) ……………………………………………………………….

Purchase Size (annually) …………………………………………………………...…..

Price /unit…………………………………………………………………………......…

Discount availing…………………………………………………………………..……

Supplier………………………………………………………………………….………

Additional Information:

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MARKET RESEARCH

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MARKET RESEARCH

BIBLIOGRAPHY:

• www.hul.co.in

• www.yahooanswers.com

• www.scribd.com

• www.ibef.com

• Company brochure on IBS

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