HUL-Introduction to India's Largest FMCG Company

Introduction to HUL Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods Company with a heritage of over 75 years in India and touches the lives of two out of three Indians. HUL works to create a better future every day and helps people feel good, look good and get more out of life with brands and services that are good for them and good for others. With over 35 brands spanning 20 distinct categories such as soaps, detergents, shampoos, skin care, toothpastes, deodorants, cosmetics, tea, coffee, packaged foods, ice cream, and water purifiers, the Company is a part of the everyday life of millions of consumers across India. Its portfolio includes leading household brands such as Lux, Lifebuoy, Surf Excel, Rin, Wheel, Fair & Lovely, Pond’s, Vaseline, Lakmé, Dove, Clinic Plus, Sunsilk, Pepsodent, Closeup, Axe, Brooke Bond, Bru, Knorr, Kissan, Kwality Wall’s and Pureit. The Company has over 16,000 employees and has an annual turnover of around Rs.19, 401 crores (financial year 2010 - 2011). HUL is a subsidiary of Unilever, one of the world’s leading suppliers of fast moving consumer goods with strong local roots in more than 100 countries across the globe with annual sales of about €44 billion in 2011. Unilever has about 52% shareholding in HUL. Management Committee The day-to-day management of affairs of the Company is vested with the Management Committee which is subjected to the overall superintendence and control of the Board. The Management Committee is headed by Mr. Nitin Paranjpe and has functional heads as its members representing various functions of the Company Mr. Nitin Paranjpe - CEO and Managing Director Mr. Nitin Paranjpe (48) joined the Company as a Management Trainee in 1987. In his early years in the Company, Mr. Paranjpe worked as Area Sales Manager - Detergents and then Product Manager - Detergents. Mr. R. Sridhar - Chief Financial Officer Mr. Sridhar Ramamurthy (46) joined the Company in 1989 and worked in a number of finance and commercial roles in India till December 2002 spanning Internal Audit, Factory Commercial, Post-acquisition Integration of TOMCO with HLL, Supply Chain and Corporate Accounts. Mr. Gopal Vittal - Executive Director, Home & Personal Care Mr. Gopal Vittal (44) has 21 years experience in Marketing & Sales in the FMCG market, including Skin Care, Soaps and Laundry. Mr. Hemant Bakshi - Executive Director Mr. Hemant Bakshi (44) joined the Company in June 1989 and has worked in various sales and marketing assignments spanning across Personal Products and Home Care categories. Mr Pradeep Banerjee - Executive Director, Supply Chain Mr. Pradeep Banerjee (52) joined the Company as a Management Trainee in 1980. Ms. Leena Nair - Executive Director, HR Ms. Leena (40) is an Electronic Engineer who discovered her passion for people and HR and switched lanes. She is a gold medalist and MBA in HR from XLRI, Jamshedpur. Mr Dev Bajpai – Executive Director, Legal and Company Secretary Mr Dev Bajpai (44) is a Fellow Member of the Institute of Company Secretaries of India and has a law degree from University of Delhi. Our history In the summer of 1888, visitors to the Kolkata harbour noticed crates full of Sunlight soap bars, embossed with the words quot;
Made in England by Lever Brothersquot;
. 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. 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. 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. 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. On 17th October 2008 , HUL completed 75 years of corporate existence in India. Brands HUL is the market leader in Indian consumer products with presence in over 20 consumer categories such as soaps, tea, detergents and shampoos amongst others with over 700 million Indian consumers using its products. Sixteen of HUL’s brands featured in the ACNielsen Brand Equity list of 100 Most Trusted Brands Annual Survey (2008). According to Brand Equity, HUL has the largest number of brands in the Most Trusted Brands List. It has consistently had the largest number of brands in the Top 50, and in the Top 10 (with 4 brands). The company has a distribution channel of 6.3 million outlets and owns 35 major Indian brands.[4] Its brands include HYPERLINK quot;
http://en.wikipedia.org/wiki/Kwality_Wall%27squot;
quot;
Kwality Wall'squot;
Kwality Wall's ice cream,Knorr soups & meal makers, Lifebuoy, HYPERLINK quot;
http://en.wikipedia.org/wiki/Lux_(soap)quot;
quot;
Lux (soap)quot;
Lux, Pears, Breeze, HYPERLINK quot;
http://en.wikipedia.org/wiki/Lirilquot;
quot;
Lirilquot;
Liril, HYPERLINK quot;
http://en.wikipedia.org/wiki/Rexonaquot;
quot;
Rexonaquot;
Rexona, HYPERLINK quot;
http://en.wikipedia.org/wiki/Hamam_(soap)quot;
quot;
Hamam (soap)quot;
Hamam and Moti soaps, HYPERLINK quot;
http://en.wikipedia.org/wiki/Pureitquot;
quot;
Pureitquot;
Pureit water purifier, Lipton tea, Brooke Bond (Roses, Taj Mahal, Taaza, Red Label) tea, HYPERLINK quot;
http://en.wikipedia.org/wiki/Bruquot;
quot;
Bruquot;
Bru coffee, HYPERLINK quot;
http://en.wikipedia.org/wiki/Pepsodentquot;
quot;
Pepsodentquot;
Pepsodent and Close Up toothpaste and brushes, and Surf, HYPERLINK quot;
http://en.wikipedia.org/wiki/Rinquot;
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Rinquot;
Rin and HYPERLINK quot;
http://en.wikipedia.org/wiki/Wheel_(detergent)quot;
quot;
Wheel (detergent)quot;
Wheellaundry detergents, HYPERLINK quot;
http://en.wikipedia.org/wiki/Kissanquot;
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Kissanquot;
Kissan squashes and jams, Annapurna salt and atta, Pond's talcs and creams, Vaseline lotions, Fair and Lovely creams,Lakmé beauty products, Clear, Clinic Plus, Clinic All Clear, HYPERLINK quot;
http://en.wikipedia.org/wiki/Sunsilkquot;
quot;
Sunsilkquot;
Sunsilk and Dove shampoos, Vim dishwash, Ala bleach, HYPERLINK quot;
http://en.wikipedia.org/w/index.php?title=Domex&action=edit&redlink=1quot;
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Domex (page does not exist)quot;
Domex disinfectant,Modern Bread, Axe deosprays and Comfort fabric softeners. 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. A remarkable history William Hesketh Lever was determined to revolutionise Victorian England's standards of cleanliness and hygiene: so he created Vim Soap. His revolutionary product was the first one ever created by the company that is now Unilever, and today's hand dishwashing products build on this illustrious heritage. The power of nature Whereas other products are only just beginning to realise the importance and power of natural ingredients, Vim's use of the power of lemons to provide its unbeatable degreasing power is well-established. We also use other natural products, such as lime, vinegar and green tea to maximise the results, and minimise the number of chemicals in our products and in the environment. Key Facts Vim was the original hand dishwashing brand: so we invented the whole category! Vim is sold in four continents, is the leading hand dishwashing brand in twenty countries, and is available to more than 2 billion people around the world. Vim began life as a soap (both in England, and in Thailand, where King Rama V asked Unilever to supply his household with soap), but is now available as a complete range of hand dishwashing – including bars, powders and liquids. From Our Range *Vim Plastic Coated Bar *Vim Anti-Bactria Bar with Plastic Coat *Vim Ultra Powder *Vim Popular *Vim Drop Active Gel Lemon *Vim Drop Active Gel Lime *Vim Drop Active Gel Orange *Vim Drop Active Gel Pouch INTRODUCTION In 1993 Vim Bar was launched. This product had many benefits including better clean, ease of handling and easy storage. 114300210820Vim Bar was re-launched in 1997 with an improved formulation and new communication, which tackled economy and performance. Much appreciated by the mass market, it resulted in conversions not just from powder users, but also from proxy users who did not upgrade to powders but preferred to use Vim Bar instead. Vim Dishwash Bar is the market leader with 60 per cent share in the Rs 400 crore branded dishwash market The brand has grown significantly registering strong double-digit growths in both volume and value terms. Vim Bar was relaunched a second time in 2002, with a unique “Stain Cutter” formulation that removes the toughest stains such as burnt milk and ghee stains. This new formulation evolved through research and is now setting benchmarks in tough stain removal. New Vim offers the consumer a superior performance at a great value. . New Vim with its contemporary packaging illustrates dynamism and swift stain cutting powers. HLL is focused on research and development for consistent delivery of superior products. Thus, New Vim has been developed with a unique stain-cutter formulation that removes the toughest stains such as burnt milk and ghee stains. New Vim offers the consumer a superior performance at a great value”. The new Vim has a totally new mix, right from the packaging to the formulation of the product. New Vim with improved formulation that solves the housewife’s yet unsolved problem of tough stain removal of burnt milk/ghee stain. Vim is the market leader in the dishwash category. Today Vim is available in powder, bar and liquid form. Vim continuously strives to innovate its products to enhance the lives of its consumers. Whether it be through its new 'Stain Cutter' formula in its Vim Bar or it's the stain busters in its powders, Vim stands for the best quality in dishwash products. Vim as a Brand 480060066040Vim, among Hindustan Lever's 30 power brands, is looking at scouring the competition further. Though the brand — led by the flagship Vim bar — remains the market leader in the overall Rs 1,000-crore dishwashing market, HLL `complete kitchen cleaner' Vim (utensil cleaner), which is ranked the fourth most preferred brand in urban market, doesn’t find a place in the top ten in the rural market On brand equity ranking. Though it was a market leader Vim Dishwash Bar is the market leader with 60 per cent share in the Rs 400 crore branded dishwash market The brand has grown significantly registering strong double-digit growths in both volume and value terms HUL planned for brand extension Another brand extension was planned is that of an `applicator', to be priced at parity with nylon scrubbers. Currently, Scotchbrite is the only branded applicator in the market, priced at a premium. HLL has projected a Rs 260-crore turnover for Vim this year, which translates to a 21 per cent growth over the previous year. Vim bar, which accounts for over three-fourths of the Vim brand's sales, is expected to be the key driver of growth. quot;
Of the projected Rs 260 crore, we expect Vim bar to be a Rs 240-crore brand by the year-end, with Vim detergent powder and Vim liquid accounting for the remaining Rs 20 crore,quot;
the official sa Vim liquid, meanwhile, would continue to be a slowburn brand. Vim also planned to extend the brand by introducing Detergent liquids . detergent liquids is a small, though emerging market and has a limited presence of brands such as Vim, Teepol and Pril. The market is estimated at 600 tonnes, or roughly Rs 200 crore. Vim liquid was rolled out recently in cities and towns with 10-lakh-plus population. Market Size: The total size of the dish wash market, estimated at Rs1,000-crore, recorded a 40 per cent growth over last year. Over 60 per cent of the market is dominated by bars, while dish wash powders accounts for 32 per cent. The penetration levels are, however, still very low. Estimates show that nearly 50 per cent of the urban population and 80 per cent of the rural one still use proxy products like ash and other cheap detergents for dishwashing purposes. HLL is the leading player, with its Vim Bar. MARKET SHARE Of the overall Rs 1,000-crore diswashing market, the branded sector accounts for Rs 400 crore. According to AC Nielsen data, within the dishwashing bar segment, Vim's market share is estimated at 82 per cent share. Competitors The brand faces tough competition from Nirma (in the North and West), Odopic (in the West) and Sabena (in the South) it was the strongest in maharashtra. Marketing strategy adapted by HUL The company handed over the marketing for vim to O&M in Maharashtra and Andhrapradesh .O&M rural marketers adopted unique strategy in the initial stages to market the product in rural areas Maharashta and Andhrapradesh. As the marketers knew that it was the initial stage in rural areas and to provide a niche in the rural markets was difficult as the product itself was not available in this areas.First to target the market in rural areas they saw to it that the market which they are targeting was in the 2 to 3 km range from the highways because they knew it wont create sense to market the product in those areas which are away from the high ways as the product was not available in those areas. The overall marketing was based on district-to-district level. They had thought to enter in other areas beyond the 2to3km range after making the product available to the initial targeted market Marketing segmentation The market segmentation was in those areas was done on the basis of the houses that the people were living into. As the people in rural villages lived in different types of houses. The type of the houses they lived were kaccha ghar, kaccha-pukka, pukka ghar the marketers also surveyed the per capita income of individual in rural areas. Challenge The challenge for marketers was to convince the rural consumer and ask them to spend money on a product where they use to spend no money on a particular product. As the consumer used proxy products to clean their vessels, which was available to them at, free of cost. The real challenge was to transform the prospect to the consumer of the product. The other challenge was to communicate to the rural people. It was difficult for the marketers to communicate to the rural people unless they were communicated in their own regional or local language of the rural consumer. After the survey done it was found that the rural consumer used aluminum vessel to cook their food this made the company to change their entire communication. Earlier the company use to communicates as, “apka chehra bhi dekhega saf”. Now seeing that the rural consumers were using aluminum vessel. It was a challenge for the marketers to appeal and communicate the product to the rural consumer and as it wont be sensible to communicate them with the same communication or base line. To come with new communication or tag line which the rural consumer can relate with their usage and behavioral pattern. Target consumer Target consumer for “vim” were Households wives Restaurants Shops and hotel that offer cooked food products Advertisement: HLL to advertise the vim used both medium of communicating that formal as well as informal. Formal advertising was done through: Newspapers and magazines Television Radio Cinema Outdoor advertisement through: Signboards Wall painting Local bus boards Product display boards between villages 6) Point of purchase used were Streamers Tinplates Hangings Promotion strategy This strategy was used at village to village basis Use of audio- video vans Door to door marketing Mohalla’s Retail contact Central location In the process of promoting “vim” in rural areas. Keeping into mind The dynamics of rural consumer and distribution infrastructure, the marketer had adopted a different promotion strategy to promote the vim in rural areas. The formal media used to communicate the product was T.V, radio cinema ,print proportionately depending upon their reach and their influence on rural masses. The informal promotion strategy was formulated. The steps involved to promote the product in rural areas. The first step was the usage of audio- visual publicity vans. This publicity vans were covered by beautiful banners, this banners were embossed with the product photos, the base or tagline of the product and colorful picture that can attract the rural consumer. The audible material used were a tunes of current filmy songs, which were composed with new lyrics, this lyrics gave the special features about the vim. This step was used as an introduction of the product vim in rural markets. The second step in the promotion strategy was to do Door-to-door marketing. This step was very well designed. To do Door- to- door marketing the marketer employed the young local youths who can communicate with rural people in the local language. This youth carried along with them flip charts as a substitute medium to T.V. This flipchart contained a story. The story used in the flip chart was about two female named “ Kamala” and “bimla”. Explaining that kamala used vim and bimla used other proxy product. Kamala showed bimla the benefit of using vim in compare to other proxy product and explaining the features of the product. The Door-to-door marketing step was complementary to other step that involved the participation of the rural housewives, which contained games. This games were strategically designed so as to position the product and the price of the product in the minds of consumer. The games used were Spotting the right price. Match the pairs. Turn the wheel This games were used to entice the people and pull them to “mohalla” the small place between the houses so as to do mass marketing as much as possible. This all was done as process of mass marketing. Vim liquid sets new Guinness World Record HYDERABAD: Vim liquid has set a new Guinness World Record for ‘World’s Longest Line of Washed Plates’ in Tamilnadu. Vim entered this record by creating a 3.86 kilometer long line of 15180 washed plates, said Hindustan Unilever Limited (HUL) in a press note.HUL’s leading dish-wash liquid brand washed 15,295 plates in just 500 ml liquid to create the ‘Guinness World Record of longest line of washed plates.Guinness World Records adjudication authority, Mike Janela from USA attended Vim’s attempt and under the stringent guidelines of Guinness World Records, it was proved that Vim dish wash liquid has created a new Guinness World Record for Longest line of washed plates.Mr Janela expressed his satisfaction on following all the protocols required to create this record and congratulated Vim brand and India for achieving this unique record.This Guinness World Record proves Vim’s supremacy in the liquid dish wash category and will certainly highlight it as a value for money brand as only 500 ml of its liquid can clean 15,295 plates. The fourth step in promotion was Retail contact In this step the marketers gave scratch coupons to the consumers who came to purchased vim with incentive packages (i.e. packages one for two). The price given were on the. The prizes distributed to whom so ever won was 12months soaps. Prizes were distributed on the spot so to create better perception of the company and product in the mind of the consumer. The same was made applicable for the retailers on the bulk purchase. This retailers were also given special discount on their bulk purchase. The final step was that all the people were invited to the central location. This central location was usually a place were all the village people assembled so that becomes easy to communicate at large to the masses. The activity undertaken at the central location was cleaning up the sweet makers vessels, which was the toughest to do. It was communicated as “ Saf kare mitaheewale ki kadai” This exercise of promoting the product was one of the best as when it was proved in front of the consumer as vim cleaned “ the mitaheewale ki kadai” without living any greasiness. The advantages of the Vim were also shown to them. The advantages of vim were that it relieved from the hardship of scrubbing the vessel, which was done with ease with the help of “vim”. The other advantage was that it would certainly save their lot of time, which can be utilized effectively for some other work. This created a clear perception about the product. This process was used again and again in capturing different markets. The other promotion strategy to promote the product Roadshows comprising attractively designed floats will traverse the length and breadth of the country during the time span of the offer. The carnival, which will cover hundreds of small towns and villages apart from the metros and is part of a massive rural promo initiative that HLL plans to unleash. The company even had to promoted the product in Haats & Melas of different villages. To promote the vim HLL planned to distribute gold as prize IN a bid to promote vim one of its leading dishwash soap, Vim Gold Bar, HLL had launched a below-the-line advertisement. This medium proposes to bring Vim to the rural households via direct interaction between customer and producer. This promotional blitzkrieg across the country includes giving away gold worth Rs 5 crore. The offer gives; customers stand a chance to win gold in different denominations by just scratching a card received on every purchase of a Vim bar. Each scratch card carries an 8-digit number. Every Sunday, one such number will be announced on Sony Entertainment TV between 8-9 p.m. and this number will be valid for the entire period of the offer. If the number on the scratch card of the consumer matches with the number announced on TV, they would be eligible for a 400 gm gold bar - the weight of the Vim bar in gold. In case of fewer digits matching, the consumer stands to win 100 gm, 10 gm, or 1 gm of gold or Rs 100 off on purchase of HLL products from the retailer Communication Vim Bar has always created an impact in the market with its path-breaking communication. The communication has been designed to powerfully communicate the tough stain removal properties of the Vim Bar. HLL created a new consumer lingo for the tough stain problem with the campaign baseline of Vim being the “Khar Khar ka moh tod jawab”. HUL had to completely change its communication when it entered into rural it had to completely changed its communication from the previous one that was that after cleaning the vessel with bar you can see your fac(apka chehra Bhi dekha ga saf) to (khar khar ka moh tod jawab) just because the rural consumers used aluminum vessels to cook their food. It wont create sense to appeal them to buy that product that did not suit their living. Pricing Initially Vim bar was priced at Rs 14 for 400 gm. An entry-level Rs 200-gm Vim bar priced at R s 7 also exists. But with the launch of new vim it was priced at Rs 13 for a 400 gms pack and Rs 6.50 for a 200 gms pack. But with their foray into the rural areas the price was changed to Rs4 for 200gm and Rs7.50 for400gm. The prices were revised by keeping the consumer behavior, income, and consumption pattern of rural people. Packaging The rural customers are usually daily wage earners and they don’t have monthly incomes like the ones in the urban areas have. So the packaging was done in smaller units and lesser-priced packs that they can afford given their kind of income stream. Another important factor is Convenience. Since many households don’t have proper bathrooms and only have a window or things like that to keep such things The packaging of “ VIM” done keeping in mind the rural characteristic. The paper wrapped to vim bar was in yellow colors showing the brand name vim and containing the picture of lime clearly to show that it got lime contents in it. The colures used are red, yellow and green. This sort of packaging what made vim to be the market leader in the dish wash market . Distribution: Mother depot C&Fa’s Rural distributors Sub-stockiest Retailers Consumers HLL distribution system is the best amongst FMCG companies. At present, HLL's products, manufactured across the country, are distributed through a network of about 7,000 redistribution stockists covering about one million retail outlets. Extending availability Data on rural consumer buying behaviour indicates that the rural retailer influences 35% of purchase occasions. Therefore, sheer product availability can determine brand choice, volumes and market share. HUL used the principle of project stream line .The principle of Project Streamline is to leverage our scale and organizational synergy to increase reach in rural markets. The pivot of Streamline is the Rural Distributor (RD), who has15-20 rural sub-stockiest attached to him. Each of these sub-stockiest is located in a rural market. The sub-stockiest then performs the role of driving distribution. Project Streamline was conceptualized to significantly enhance control on the rural supply chain through a network of rural sub-stockiest, who are based in these very villages. As part of the project, higher quality servicing, in terms of frequency, credit and full-line availability, would be provided to rural trade. Thereby, giving us a substantial competitive edge over the next decade The role performed by the Redistribution Stockiest has also undergone changes over the years. Financing stocks, providing manpower, providing service to retailers, implementing promotional activities, extending indirect coverage, reporting sales and stock data, screening for transit damages are some of the functions performed by the RS today. The RS was required to provide the distribution units to the company salesman. The RS financed his stocks and provided warehousing facilities to store them. The RS also undertook demand stimulation activities on behalf of the company.The RS would be able to provide customer service only if he was serviced well. This knowledge led to the establishment of the quot;
Company Depotsquot;
system. This system helped in transshipment, bulk breaking, and as a stock point to minimize stock-outs at the RS level. In the recent past, a significant change has been the replacement of the Company Depot by a system of third party Carrying and Forwarding Agents (C&FAs). The C&FAs act as buffer stock-points to ensure that stock-outs did not take place. The C&FA system has also resulted in cost savings in terms of direct transportation and reduced time lag in delivery. The most important benefit has been improved customer service to the RS. 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 depot by all manufacturing units. The JITs draw their requirements from the MD on a weekly or bi-weekly basis. The other distribution system used was Project Shakti and Project Bharat . Our rural growth engine raises incomes of rural families by channel intervention through rural Self-Help Groups (SHG), which operate like direct-to-home distributors. The model consists of groups of (15-20) villagers below the poverty line (Rs.750 per month) taking micro-credit from banks, and using that to buy our products, which they will then directly sell to consumers. In the process, generating employment and incomes for themselves, and increasing the reach of our products.

HUL-Introduction to India's Largest FMCG Company

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