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A PROJECT REPORT
ON
“BLUE OCEAN STRATEGY FOR RURAL MARKETING PROFESSIONALS FOR
HUL PRODUCTS”
Submitted in Partial Fulfillment for the Award of the Diploma of Post Graduate Diploma
in Management
(2011-2013)
SUBMITTED TO SUBMITTED BY-
MS. PARUL PURI MANISH KUMAR JHA
PGDM-PGD11049
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DEPARTMENT OF MANAGEMENT
INSTITUTE OF MANAGEMENT STUDIES, NOIDA
A UGC Recognized Institute
A-8B, Plot –C, Sector-62, Noida
DECLARATION
I, MANISH KUMAR JHA, bearing Roll No PGD11049 Class PGDM 2nd year of the
Institute of Management Studies, Noida hereby declare that the Project Report-PG407
entitled “BLUE OCEAN STRATEGY FOR RURAL MARKETING
PROFESSIONALS FOR HUL PRODUCTS” is an original work and the same has not
been submitted to any other Institute for the award of any other diploma. The suggestions as
approved by the faculty were duly incorporated.
SIGNATURE OF FACULTY GUIDE- SIGNATURE OF STUDENT-
MS. PARUL PURI MANISH KUMAR JHA
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DEPARTMENT OF MANAGEMENT
INSTITUTE OF MANAGEMENT STUDIES, NOIDA
A UGC Recognized Institute
ACKNOWLEDGEMENT
This study of “BLUE OCEAN STRATEGY FOR RURAL MARKETING
PROFESSIONALS FOR HUL PRODUCTS” could not have been possible with my
efforts only. I would like to express my deep gratitude to my faculty guide MS.
PARUL PURI and DR. VANDANA MATHUR who gave me the guidance in
various ways to make the project a reality.
Above all, I would like to express my deep gratitude to my family for providing me
moral support and help.
MANISH KUMAR JHA
ROLL NO- PGD11049
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EXECUTIVE SUMMARY
My project title was “BLUE OCEAN STRATEGY FOR RURAL MARKETING
PROFESSIONALS FOR HUL PRODUCTS” 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.
My objective was To determine the market share of HUL in rural market.To know about the
products of HUL.To know the marketing strategies employed by HUL.To find out the Factor
influencing demand of FMCG product.To know about distribution channel used by HUL
My findings was implementing its strategy to grow includes focusing on the power brands'
growth through consumer relevant information, cross category extensions, leveraging channel
opportunities and increased focus on rural growth. Hindustan Lever in India has launched a
hand-wash product, Surf Excel Quick Wash, with a low foaming formulation, reducing the
amount of water needed for rinsing by up to two buckets per wash. HUL is the world's largest
ice cream manufacturer, with successful Heart brand which includes Magnum, Cornetto, Carte
d'Or and Solero, and Ben & Jerry's and Brayers in the US
My conclusion was- With its long and luminous history HUL is India‘s true pride. It is a
company which the customers in rural as well as urban India relate to. This explains the deep
penetration of HUL in Indian market. he future for HUL is demanding newer and high level
innovations so as to cope up with increasing competition. However HUL is well equipped with
all what is needed of this Indian Giant.
My limitation was Problem in collecting secondary data due to large no. of web site. It was very
difficult to get the complete information. Lack of time for collecting data.
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INTRODUCTION
BLUE OCEAN STRATEGY
Blue ocean strategy is a set of tools and techniques which guide your thinking to enable you to
develop a strategy which makes competition irrelevant and creates high profit growth.
Blue Ocean Strategy is a series of managerial decisions that drive customer value up while
driving costs down with a series of moves that create value innovation. The well-defined
process looks at existing markets in a different way and identifies new competitive factors that
add value and eliminate head-to-head competition. When you apply the Blue Ocean
Strategy, you unlock new market demand and make the competition irrelevant.
The cornerstone of Blue Ocean Strategy is 'Value Innovation'. A blue ocean is created when a
company achieves value innovation that creates value simultaneously for both the buyer and the
company. The innovation (in product, service, or delivery) must raise and create value for the
market, while simultaneously reducing or eliminating features or services that are less valued by
the current or future market. The authors criticize Michael Porter's idea that successful
businesses are either low-cost providers or niche-players. Instead, they propose finding value
that crosses conventional market segmentation and offering value and lower cost. Educator
Charles W. L. Hill proposed this idea in 1988 and claimed that Porter's model was flawed
because differentiation can be a means for firms to achieve low cost. He proposed that a
combination of differentiation and low cost might be necessary for firms to achieve a
sustainable competitive advantage.
Companies have long engaged in head-to-head competition in search of sustained, profitable
growth. They have fought for competitive advantage, battled over market share, and struggled
for differentiation. Yet in today‘s overcrowded industries, competing head-on results in nothing
but bloody ―red oceans‖ of rivals fighting over a shrinking profit pool.
In a book that challenges everything you thought you knew about the requirements for strategic
success, W. Chan Kim and Renée Mauborgne contend that while most companies compete
within such red oceans, this strategy is increasingly unlikely to create profitable growth in the
future. Based on a study of 150 strategic moves spanning more than a hundred years and thirty
industries, Kim and Mauborgne argue that tomorrow‘s leading companies will succeed not by
battling competitors, but rather by creating ―blue oceans‖ of uncontested market space ripe for
growth. Such strategic moves—termed ―value innovations‖—create powerful leaps in value for
both the firm and its customer, rendering rivals obsolete and capturing new demand. Blue Ocean
Strategy provides a systematic approach to making the competition irrelevant.
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Examining a wide range of strategic moves across a host of industries, Blue Ocean Strategy
highlights the six principles that every company can use to successfully formulate and execute
blue ocean strategies. The six principles show how to reconstruct market boundaries, focus on
the big picture, reach beyond existing demand, get the strategic sequence right, overcome
organizational hurdles, and build execution into strategy. In this game-changing book, Kim and
Mauborgne present a proven analytical framework and the tools for successfully creating and
capturing blue oceans.
Upending traditional thinking about strategy, Blue Ocean Strategy charts a bold path to winning
the future
BLUE OCEAN STRATEGY VS RED OCEAN STRATEGY
Kim and Mauborgne argue that while traditional competition-based strategies (red ocean
strategies) are necessary, they are not sufficient to sustain high performance. Companies need to
go beyond competing. To seize new profit and growth opportunities they also need to create
blue oceans.
The authors argue that competition based strategies assume that an industry‘s structural
conditions are given and that firms are forced to compete within them, an assumption based on
what academics call the structuralism view, or environmental determinism To sustain
themselves in the marketplace, practitioners of red ocean strategy focus on building advantages
over the competition, usually by assessing what competitors do and striving to do it better. Here,
grabbing a bigger share of the market is seen as a zero-sum game in which one company‘s gain
is achieved at another company‘s loss. Hence, competition, the supply side of the equation,
becomes the defining variable of strategy. Here, cost and value are seen as trade-offs and a firm
chooses a distinctive cost or differentiation position. Because the total profit level of the
industry is also determined exogenously by structural factors, firms principally seek to capture
and redistribute wealth instead of creating wealth. They focus on dividing up the red ocean,
where growth is increasingly limited
Blue ocean strategy, on the other hand, is based on the view that market boundaries and industry
structure are not given and can be reconstructed by the actions and beliefs of industry players.
This is what the authors call ―deconstructionists view‖. Assuming that structure and market
boundaries exist only in managers‘ minds, practitioners who hold this view do not let existing
market structures limit their thinking. To them, extra demand is out there, largely untapped. The
crux of the problem is how to create it. This, in turn, requires a shift of attention from supply to
demand, from a focus on competing to a focus on value innovation – that is, the creation of
innovative value to unlock new demand. This is achieved via the simultaneous pursuit of
differentiation and low-cost. As market structure is changed by breaking the value/cost tradeoff,
so are the rules of the game. Competition in the old game is therefore rendered irrelevant. By
expanding the demand side of the economy new wealth is created. Such a strategy therefore
allows firms to largely play a non–zero-sum game, with high payoff possibilities.
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ABOUT FMCG
Fast moving consumer goods are the goods purchased by the consumers for their own use and
Purchased repeatedly. They buy these products on daily or weekly basis in small quantity. The Price
of such products per unit is low. The consumption of such products is very high due to Requirement
of every one and large in number of consumers. Indian population is a huge Population over 120
corers. A separate sector called FMCG sector is well established in India. India has always been a
country with a big chunk of world population, be it the 1950‘s or the twenty first century. In that
sense, the FMCG market potential has always been very big. However, from the 1950‘s to the 80‘s
investments in the FMCG industries were very limited due to low purchasing power and the
government‘s favoring of the small-scale Sector.
The consumer markets in India are constantly evolving. The first phase of consumer market
evolution in the 1980s and the 1990s was characterized by some major structural changes:
changes in income distribution, increased product availability (in terms of both quality and
quantity), increased competition, increased media penetration and improved advertising
(impacting lifestyle). These raised the levels of consumer awareness and propensity to consume,
etc. The late 1990s witnessed a surge in consumer finance products owing to steady financial
sector reforms in the economy and innovative marketing. The consumer markets in India have
entered the second phase of evolution with the turn of the century. The Fast Moving Consumer
Goods (FMCG) sector is the fourth largest sector in the economy with a total market size in
excess of Rs 60,000 crore. This industry essentially comprises Consumer Non Durable (CND)
products and caters to the everyday need of the population. Hindustan Lever Limited (HLL) was
probably the only MNC Company that stuck around and had its manufacturing base in India. At
the time, the focus of the organised players like HLL was largely urbane. There too, the
consumers had limited choices. However, Nirma‘s entry
Changed the whole Indian FMCG scene. The company focused on the ‗value for money‘ plank
and made FMCG products like detergents very affordable even to the lower strata of the society.
Nirma became a great success story and laid the roadmap for others to follow. MNC‘s like HLL,
which were sitting pretty till then, woke up to new market realities and noticed the latent rural
potential of India. The government‘s relaxation of norms also encouraged these companies to go
out for economies of scale in order to make FMCG products more affordable. Consequently,
today soaps and detergents have almost 90% penetration in India. Post liberalization not only
saw higher number of domestic choices, but also imported products. The lowering of the trade
barriers encouraged MNC‘s to come and invest in India to cater to 1bn Indians‘ needs. Rising
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standards of living urban areas coupled with the purchasing power of rural India saw companies
introduce everything from a low-end detergent to a high-end sanitary napkin. Their strategy has
become two-pronged in the last
decade. One, invest in expanding the distribution reach far and wide across India to enable
market expansion of FMCG products. Secondly, upgrade existing consumers to value added
premium products and increase usage of existing product ranges. So you could see all
companies be it HLL, Godrej Consumer, Marico, Henkel, Reckitt Benckiser and Colgate, trying
to outdo each other in getting to the rural consumer first. Each of them has seen a significant
expansion in the retail reach in mid-sized towns and villages. Some who could not do it on their
own, have piggy backed on other FMCG major‘s distribution network (P&G-Marico).
Consequently, companies that have taken to rural India like chalk to cheese have seen their sales
and profits expanding. For example, currently 50% of all HLL sales come from rural India, and
consequently, it is one the biggest beneficiaries of
This. There are others, like Nestle, which have till date catered mostly to urban India but have
still seen good growth in the last decade. The company‘s focus in the last decade has largely
been on value added products for the upper strata of society. However, in the last couple of
years, even these companies have looked to reach consumers at the slightly lower end. One of
the biggest changes to hit the FMCG industry was the ‗sachet‘ bug. In the last 3 years, detergent
companies, shampoo companies, hair oil companies, biscuit companies, chocolate companies
and a host of others, have introduced products in smaller package sizes, at lower price points.
This is the single big innovation to reach new users and expand market share for value added
products in urban India, and for general FMCG products like detergents, soaps and oral care in
rural India. Another interesting phenomenon to have hit the FMCG industry is the mushrooming
of regional companies, which are posing a threat to bigger FMCG Companies like HLL. For
example, the rise of Jyothi Laboratories, which has given sleepless nights to Reckitt Benckiser,
the ‗Ghari‘ detergent, that has slowly but surely built itself to take on Nirma and HLL in
detergents, and finally, the rise of ‗Anchor‘ in oral care, which has
Become synonymous with ‗cat‘, which walks away with spoils when two monkeys fight (HLL
and Colgate)? There are numerous other examples of this. What does all this mean for the future
of FMCG industry in India? Undoubtedly, all this is good for the consumers, who can now
choose a variety of products, from a number of companies, at different price points. But for the
players who cater to the Indian consumer, the future brings a lot more competition. In this
environment, only the innovators will survive. Focus will be the key to profitability (ala HLL).
From an investor‘s point of view, Indian FMCG companies do offer long-term growth
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opportunities given the low penetration and usage in most product categories. To choose the
best investment opportunities look at the Shapers (i.e. innovators) that have been constantly
proactive to market needs and have built Strong, efficient and intelligent distribution channels.
Management vision to growth is the key, as consumers going forward are likely to become even
more sophisticated in their demand. The Rs 86,000-crore FMCG industry is expected to witness
a lot of action in 2010. With the economy showing signs of revival, the industry is expected to
register a more than 12% growth in 2010 as compared to the previous year. ―The industry will
witness a spate of acquisitions & mergers in the 2010. There will be a renewed focus on rural
consumers too,‖ said an analyst based in Mumbai. The country‘s FMCG industry registered a
12% growth in 2009 despite the economic downturn. The captains of the FMCG sector are
optimistic about the industry‘s performance in the New Year. Godrej Group chairman Adi
Godrej said, ―With 8% GDP growth and GST implementation, we feel it will be a great year for
the FMCG sector in India. The focus area for the Godrej Group will be on FMCG business in
2010.‖
Sharing similar sentiments, Amit Burman, vice-chairman of Dabur India said the industry is
expected to register a 14% growth this year as India is getting out of the recessionary blues. Our
focus would be on OTC healthcare and skincare brands to sustain our growth in this sector,‖ he
added. According to Wipro Consumer Care & Lighting CEO Vineet agarwal, the industry is
expected to perform better in the new year as compared to the previous year. Even during the
economic slowdown, the FMCG industry registered a 12% growth. When you see buoyancy in
economy, the industry will further grow in 2010. Our core focus will continue to be on rural
consumers,‖ he said. Harsh Agarwal, director of Emami Ltd said Emami is looking at both
organic and inorganic growth strategy in 2010. ―The industry is poised for a double digit growth
as the overall growth rate of the country is growing,‖ he said. Echoing similar views, Saugata
Gupta, CEO,
Consumer Products, Marico Ltd said the industry will register a 15 % growth in 2010 as
compared to the previous year.‖ I expect the topline growth of the industry to register 15-20 %
this year,‖ he added. Nikhil Vora, managing director, IIDFC SSKI Securities Ltd said the top
line of the FMCG is likely to grow by 14.2% y-o-y in Q3FY2010, substantially driven by
volume growth. Despite the rise in input costs, FMCG industry is likely to sustain its robust
growth momentum aided by increased rural incomes, taxation benefits and gradual shift from
the unorganized sector/regional players. With the presence of 12.2% of the world population in
the villages of India, the Indian rural
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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 to generate 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. Within the
foods segment, it is estimated that processed foods, bakery, and dairy are long-term growth
categories in both rural and urban areas. Indian FMCG industry is expected to grow at a base
rate of at least 12% annually to become a
Rs 4,000 billion industry in 2020, according to a new report by Booz & Company. The Report
titled ―FMCG Roadmap to 2020 - The Game Changers‖ was released at the CII FMCG Forum
2010 in New Delhi Thursday. The Report noted that the positive growth drivers mainly pertain
to the robust GDP growth, opening up and increased income in the rural areas of the country,
increased urbanization and evolving consumer lifestyle and buying behavior. The report further
revealed that if some of the positive factors – driven mainly by improved and supportive
government policy to remove supply constraints – play out favourably, the industry could even
see a 17% growth over the next decade, leading to an overall industry size of Rs 6,200 Billion
by 2020. The last decade has already seen the sector grow at 12% annually as result of which the
sector has tripled in size. Releasing the report, Booz & Company Partner Abhishek Malhotra
said, ―While on an aggregate basis the industry will continue to show strong growth, we will see
huge variations at multiple levels – product category (e.g. processed foods growing faster than
basic staples), companies and geographies.‖
―Many Indian customer segments are reaching the tipping point at which consumption becomes
broad based and takes off following the traditional ―S shaped‖ curve seen across many markets.‖
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The sector is poised for rapid growth over the next 10 years and by the year 2020, FMCG
industry is expected to be larger, more responsible and more tuned to its customers,‖ he further
added. The Report identifies 9 key mega trends across consumers, markets and environment that
will have a significant impact in shaping how the industry will look like in year 2020.
(a) Increasing Premiumization
Continued income growth coupled with increased willingness to spend will see consumers‘ up-
trading, creating demand for higher priced and increased functionality (real or perceived)
products. The size of this segment will be large.
(b) Evolving Categories
Many consumers will move up the ladder and will shift from basic ―need‖ to ―want‖ based
products. In addition evolving behaviour and emphasis on beauty, health & wellness will see
increased requirements for customized and more relevant product offerings.
(c) Value at BoP
Significant majority of the population in the country, especially in the rural markets, will
become a consumption source by moving beyond the ―survival‖ mode. This segment will
require tailored product at highly affordable prices which will come with the potential of very
large volumes.
(d) Increasing Globalization
While many leading MNCs have operated in the country for years given the liberal policy
environment, the next 10 years will see increased competition from Tier 2 and 3 global players.
In addition, larger Indian companies will continue to seek opportunities internationally and also
have an access to more global brands, products and operating practices.
(e) Decentralization
Despite the complexity of the Indian market (languages, cultures, distances) the market has
mainly operated in a homogenous set-up. Increased scale and spending power will result in
more fragmented and tailored business models (products, branding, operating structures).
(f) Growing Modern Trade
Modern trade share will continue to increase and is estimated to account for nearly 30% by year
2020. This channel will complete existing traditional trade (~8 million stores which will
continue to grow) and offer both a distribution channel through its cash & carry model as well
as more avenues to interact with the consumer.
(g) Focus on Sustainability
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Global climatic changes, increasing scarcity of many natural resources (e.g. water, oil) and
consumer awareness (e.g. waste) are leading to increased concerns for the environment. The
pressure on companies to be environmentally responsible is gradually increasing due to
involvement of various stakeholders – from government (through policy) to consumers (through
brand choice) and NGOs (through awareness).
(h) Technology as a Game Changer
Increased and relevant functionality coupled with lower costs will enable technology
deployment to drive significant benefits and allow companies to address the complex business
environment. This will be seen both in terms of efficiencies in the back-end processes (e.g.
supply chain, sales) as well as the front-end (e.g. consumer marketing).
(i) Favourable Government Policy
Many government actions – in discussions as well as planned – will help in creating a more
suitable operating environment. This will be done both on the demand side by increased income
and education as well as on the supply side by removing bottlenecks and encouraging
investments in infrastructure.
The confluence of many of these change drivers – consumers, technology, government policy,
and channel partners – will have a multiplication impact and magnify both the amount as well as
the pace of change. Winning in this new world will require enhancing current capabilities and
building new ones to bridge gaps. In this new world FMCG companies will have 6 imperatives
from a business strategy perspective: disaggregating the operating model, winning the talent
wars, bringing sustainability into the strategic agenda, re-inventing marketing for ‗i-consumers‘,
re-engineering supply chains, partnering with modern trade. The report urges the need for other
stakeholders – government, retailers, NGOs and investors to play a key role and evolve in a
similar fashion to support the growth of the industry while continuing to deliver on their core
business and social mandates.
LIST OF MAJOR FMCG COMPANIES IN INDIA
The Indian FMCG sector is the fourth largest in the economy and has a market size of US$13.1
billion. Well-established distribution networks, as well as intense competition between the
organized and unorganized segments are the characteristics of this sector. FMCG in India has a
strong and competitive MNC presence across the entire value chain. It has been predicted that
the FMCG market will reach to US$ 33.4 billion in 2015 from US $ billion 11.6 in 2003. The
middle class and the rural segments of the Indian population are the most promising market for
FMCG, and give brand makers the opportunity to convert them to branded products. Most of the
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product categories like jams, toothpaste, skin care, shampoos, etc, in India, have low per capita
consumption as well as low penetration level, but the potential for growth is huge. The Indian
Economy is surging ahead by leaps and bounds, keeping pace with rapid urbanization, increased
literacy levels, and rising per capita income. The big firms are growing bigger and small-time
companies are catching up as well. According to the study conducted by AC Nielsen, 62 of the
top 100 brands are owned by MNCs, and the balance by Indian companies. Fifteen companies
own these 62 brands, and 27 of these are owned by Hindustan Lever. Pepsi is at number three
followed by Thumps Up. Britannia takes the fifth place, Followed by Colgate (6), Nirma (7),
Coca-Cola (8) and Parle (9). These are figures the soft
drink and cigarette companies have always shied away from revealing. Personal care, cigarettes,
and soft drinks are the three biggest categories in FMCG. Between them, they account for 35 of
the top 100 brands. The companies mentioned in Exhibit I, are the leaders in their respective
sectors. The personal care category has the largest number of brands, i.e., 21, inclusive of Lux,
Lifebuoy, Fair and Lovely, Vicks, and Ponds. There are 11 HLL brands in the 21, aggregating
Rs. 3,799 crore or 54% of the personal care category. Cigarettes account for 17% of the top 100
FMCG sales, and just below the personal care category. ITC alone accounts for 60% volume
market share and 70% by value of all filter cigarettes in India.
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LITERATURE REVIEW
FMCG Industry
Generally, fast moving consumer goods (FMCG) (also known as repeat-purchase
packaged goods) refer to consumer non-durable goods required for daily or frequent use (Paul
2006).
The FMCG field is very large: Advertising investments in various categories of repeat-purchase
goods are consistently extremely large (Jones and Slater 2002).
Marketing according to Bradley (2003) is a philosophy that leads to the process by which
organizations, groups, and individuals obtain what they need and want by identifying value,
providing it, communicating it and delivering it to others.
Marketing according to Proctor (2000) is about satisfying wants and needs and in the course of
doing so facilitating the achievement of an organization‘s objectives
Marketing Strategy
It integrates the activities in marketing as well as sales and advertising (Pinson 2008, p. 44).
Targeting is the process of identifying the company‘s consumers to whom the marketing
strategies will be directed. Targeting is considered as an important process
The process of positioning is all about creating a favorable position for the company and its
products or services in the market, particularly in the minds of the consumers. A company‘s
position is composed of different factors that spring up from perceptions, impressions and
feelings (Bradley, 2003).
Segmentation, Targeting, and Positioning
FMCG companies are often viewed as leaders when it comes to segmentation. These
companies seen to be able to effectively segment their markets.The FMCG sector is intensely
competitive, as the sector continues to progress, companies need to look for ways of making
money. Companies such as Unilever and Procter and Gamble are effective in segmenting
markets into groups of customers with common needs and buying motives, and then developing
solutions that appealed particularly strongly to those segments.
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A company‘s marketing strategy is influenced by the marketplace orientation that the company
adopts (Kotler 2000)
Customer is always right, they say. This leads to a challenge of always finding out what the
customer actually wants. However, one should also take into account how competitors act and
how to communicate and coordinate the information flow between business functions.
Combined, these dimensions contribute to market orientation of a company. Market orientation
is an important part of contemporary marketing thought with significant amount of research
from different perspectives available since the early 1990s.Consequently, several definitions for
this concept have also been offered, making it carefully considered (Noble, Sinha and Kumar,
2002). Importance of market orientation has not been questioned in marketing literature; Kotler
(2003) even argues that segmentation, targeting and positioning – which all can be effectively
performed in companies of high market orientation – is the essence of strategic marketing.
Narver and Slater (1990) argue a fundamental benefit of being market oriented to be the
continuous superior performance for the business. Market orientation cannot be interpreted to
exist in a vacuum from other activities and pressures in the business (Hooley , 2001). On
contrary, it can be evidenced that facing recent changes in business environment, such as
globalization, increased importance of services, information technology and relationships across
company functions and firms, have led to a situation where most industries have to be more and
more market-oriented (Walker, Mullins, Boyd, Larréché,2006). Further, without a doubt,
market orientation that stresses the importance of using both customer and competitor
information (Hunt and Morgan, 2001) should clearly be involved when formulating strategy.
Hunt and Morgan (1995) stress the importance of, in addition to current competitors and
customers, also analyzing potential competitors and market niches. This, I think, is a good and
necessary supplement to the definition of market orientation since myopic market perspective
may lead to success only in relatively short term. Market orientation, defined by Hunt and
Morgan (1995) is (1) systematic gathering of information on customers and competitors, both
present and potential, (2) systematic analysis of the information for the purpose of developing
market knowledge, and (3) systematic use of such a knowledge to guide strategy recognition,
understanding, creation, selection, implementation and modification.
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Some researchers have ended up with somewhat different, but alike, definitions for market
orientation than those described above. For example, Noble, Sinha and Kumar(2002) extend
the definition of market orientation to include brand focus as one of its dimension. On the other
hand, e.g. Ruekert’s (1992) definition for market orientation lacks the competitor component,
being ―the degree to which the business unit obtains and uses information from customers,
develops a strategy which will meet customer needs, and implements that strategy by being
responsive to customers‘ needs and wants‖. Whatever the definition, market orientation clearly
is intangible and cannot be purchased in the marketplace. It may well be also true that, as Hunt
and Morgan (2001) argue, market orientation is socially complex in its structure, has
components that are highly interconnected, and has mass efficiencies and effectives that grow in
strength in time.
Rather closely related to market orientation framework, Treacy and Wiersema (1993)
presented the idea of delivering value to customers in one of the following three ways to achieve
market leadership: operational excellence, customer intimacy or product leadership. By
operational excellence, they mean providing customers with reliable products or services at
competitive prices and delivered with minimal difficulty or inconvenience.
Customer intimacy, the second value discipline, means segmenting and targeting markets
precisely and then tailoring offerings to match exactly the demands of those niches. Product
leadership, in turn, refers to offering customers leading-edge products and services that
consistently enhance the customer‘s use or application of the product, thereby making rivals‘
goods obsolete.
Treacy and Wiersema (1993) argue that companies, to achieve leading position in their
industries, should not broaden their business focus but narrow it; while mastering one of the
disciplines, it is sufficient to meet industry standards in others. Performance impact of market
orientation can in this case be explained with commonly established argument according to
which satisfied customers are more loyal customers than unsatisfied ones (Srivastava, Shervani
and Fahey, 1998). Srivastava et al. (1998) also state that they extend their relationships with
vendors to include other products and services and buy offerings in larger quantities, and are
willing to pay higher prices and spread the good word to their circles of acquaintances. Further,
due to probably several times lower costs of customer retention compared to new customer
18. 18
acquisition (e.g. Kotler, 2003), successful market orientation rationally increases financial
performance of a firm.
The empirical research of Narver and Slater (1990) found out the U-shaped relationship
between market orientation and business profitability in numerous industries. Thus, companies
with highest market orientation seem to perform best while those least market oriented do also
relatively well; here, as with generic competitive strategies of Porter (1980) and value delivering
(Treacy and Wiersema, 1993), it does not pay to be ―stuck
in the middle‖. Narver and Slater (1990) suggest this kind of relationship to be evident
especially in basic industries and long-established technology-driven industries. To date, many
authors have found the positive relationship between market orientation and business
performance.
According to Day (1994), market-driven organizations have superior market sensing, customer
linking, and channel bonding (i.e., outside-in marketing) capabilities. When studying companies
in the UK, Hooley et al. (2005) empirically found positive relationship between market
orientation and customer linking capabilities. Also conceptually, market orientation and outside-
in market capabilities are neighboring phenomena, even partly interrelated. This fact leads us
naturally to the next ingredients of strategic marketing, namely marketing assets and
capabilities.
19. 19
HUL
In the summer of 1888, visitors to the Kolkata harbor noticed crates full of Sunlight soap
bars, embossed with the words "Made in England by Lever Brothers". With it, began an era of
marketing branded Fast Moving Consumer Goods (FMCG).Soon after followed Lifebuoy in
1895 and other famous brands like Pears, Lux and Vim. Vanaspati was launched in 1918 and the
famous Dalda brand came to the market in 1937
In 1931, Unilever set up its first Indian subsidiary, Hindustan Vanaspati Manufacturing
Company, followed by Lever Brothers India Limited (1933) and United Traders Limited (1935).
These three companies merged to form HUL in November 1956; HUL offered 10% of its equity
to the Indian public, being the first among the foreign subsidiaries to do so. Unilever now holds
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 liberalization of the Indian economy, started in 1991, clearly marked an inflexion in HUL's
and the Group's growth curve. Removal of the regulatory framework allowed the company to
explore every single product and opportunity segment, without any constraints on production
capacity.
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
20. 20
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
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
21. 21
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.
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.
In January 2010, the HUL head office shifted from the landmark Lever House, at Backbay
Reclamation, Mumbai to the new campus in Andheri (E), Mumbai.
On 15th November, 2010, the Unilever Sustainable Living Plan was officially launched in India
at New Delhi.
In March, 2012 HUL‘s state of the art Learning Centre was inaugurated at the Hindustan
Unilever campus at Andheri, Mumbai.
In April, 2012, the Customer Insight & Innovation Centre (CiiC) was inaugurated at the
Hindustan Unilever campus at Andheri, Mumbai
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.
22. 22
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. 21,736
crores (financial year 2011 - 2012). 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 €46.5 billion in 2011. Unilever has about 52%
shareholding in HUL.
23. 23
STEP TOWARD RETAIL INNOVATION FOR TAPPING RURAL MARKET
Prior to the late 1990s, HUL like any other company had traditional modes of reaching out to
the rural consumer, i.e., through wholesalers and retailers. It used van campaigns to induce the
village retailers to sell their products. Later HUL‘s vans were replaced by vans belonging to
redistribution Stockiest, who served a selected group of markets. Only 25% of the villages could
be tapped this way. Thus, HUL realized that a vast section of the rural market is still untapped.
So, in 1998 they conceptualized ―Project Streamline‖ to increase the presence in the rural
market and reach out 100,000 retail outlets by 1999. The project aimed at covering 50% of the
rural population by 2003. HUL appointed Rural Distributors (RD). These RDs were attached to
15-20 sub-stockists. These sub-stockists, who were located in the villages, were expected to
drive distribution in the neighbouring villages through unconventional modes of transport like
tractors, camel carts, bullock carts, etc. This project helped HUL in extending its rural reach to
about 37% in 1998 from 25% in 1995.
HUL realized that consumption of personal products among rural consumers was very low. For
instance, out of every ten people, only three were using toothpaste or talcum powder or
shampoo, while six out of 10 were using washing powders. Even in a category like soaps, they
found that frequency of usage was once per five bathing occasions. To increase the usage of
there product in rural market, in 1998 the Personal Products Division of HUL took an initiated
―Project Bharat‖ - a massive rural home-to-home exercise to address these issues. Company
vans visited villages across the country to educate the customers and distributed samples of low-
unit price packs of shampoos, toothpastes, talcum powder or cream among the rural people.
The retailing activities were supported by product demonstration or video shows about product
benefit and usage. In the first phase of the project, HUL targeted the villages having population
five thousand and above, while the second phase targeted the villages with population in the
range of 2,000 to 5,000. This project enabled HUL to cover 13 million households by the end of
1999. The idea of providing micro-credit to villagers began with HUL‘s Project Bharat. Groups
of villagers (15 to 20) below the poverty line were offered micro credit of Rs.750 by banks.
HUL trained them to use this credit to buy the company‘s products and sell them at a profit.
24. 24
Phase I - Operation Streamline - Accessibility
In 1998, HUL launched Operation Streamline to extend their distribution network throughout
India. Operation Streamline is one of the major initiatives undertaken by HUL in recent times to
penetrate the rural markets, i.e., to make their product accessible in rural market. In the case of
Operation Streamline, the goods are distributed from the C&F Agents to the Re-distributors,
who in turn pass the products to the Star Sellers. Being a cross-functional initiative, the Star
Seller sells everything starting from detergents to personal care products in rural areas.
Operation Streamline opened up a new distribution channel beyond the territories that were
covered by HUL‘s earlier, they appointed 7,500 new odd distributors. In less than two years, the
company doubled its reach in rural India. By implementing Operation Streamline HUL‘s
distribution network able to cover 60 per cent of the villages with population greater than 2,000
and the villages having roads.
Sell of some of the product shot up in a very short span of time, one of the greatest
achievements was the penetration levels for its Fair & Lovely cream raise nearly three times in
just three months of launch of project. Interestingly, the sell of various products appears to crack
open the rural markets. But 300,000 villages are still out of reach of HUL, so to reach them it
created a new super stockist and sub-stockist structure. The super-stockist in the bigger towns
serve these sub-stockist, who are paid 1-2 per cent more margins that the retailers. This is to
cover the sub-stockist‘s costs of servicing retailers in his area. Since the distributor cannot cover
these retailers regularly in rural areas, these sub-stockists play a very crucial role as a stock
points for the rural retailers. Then, once distributors create the necessary demand in rural
market, the sub stockists carries this process forward.
Phase II – Project Bharat - Awareness
HUL implemented a major direct consumer programme called Project Bharat, which covered
2.2 crore homes in rural areas. The primary objective of this project is to create awareness of
HUL‘s personal care products. Each home was given a combo pack, at a special price of Rs.15,
comprising a low unit-price pack of hair-care (Clinic shampoo), dental (Pepsodent toothpaste),
skin-care (Fair & Lovely) and body-care (Pond‘s Dream flower talc) products along with
leaflets to make the customer educated on different products of HUL. Close to 160 vans and
around thousand promoters (sales staff of the distributors and other private operators) were
pressed into this Operation. The cost of this project came up to be roughly Rs.13 crore. For
25. 25
demonstrating the products each van was equipped with a TV and VCR, had six ‗promoters‘.
The project helped eliminate barriers to trial, and strengthened salience of both particular
categories and brands. Supported by audio-visual demonstrations, film songs and mythological
serials interspersed with ads of Lever product, this campaign helped the company in further
penetration of the rural areas.
Phase III - Project Shakti - Action
HUL brought innovation in rural retailing through ―Project Shakti‖. To develop sustainable
market of their product in rural area they involved the rural poor. Distribution acquired further
impetus through HUL‘s ―Project Shakti‖ which was based on the successful Grameen Bank
Model of Bangladesh. The project was started in 2001 in 50 villages involving women
belonging to micro credit Self-Help Groups (SHGs) in the Naklgonda district of Andhra Pradesh
(AP). Rural women organised themselves into ―thrift and credit‖ groups and began saving one
rupee per day. By 2003 corpus fund had increased to Rs.1500cr, of which Rs.800cr had been
saved by 58 lakh women. This group continues its operation funded by the saving of the
members, bank loans and government assistance. Members may borrow from this group corpus
twice in a year, at the interest rates fixed by the group. Though such loans can also be used to
meet personal needs, the objective of the programme is to use the funds to generate more
income.
For Project Shakti, the SHGs were covered by three Mutually Aided Cooperative Thift Societies
(MACTS). Each MACTS had 14 to 15 SHGs under them. HUL along with a social service
organisation, Marketing And Research Team (MART), assisted women in getting microcredit to
set up an enterprise to distribute HUL‘s range of products. To start an enterprise initially Shakti
entrepreneurs take loan from SHGs. They take training for three month then they start selling
HUL products in six to ten villages having population from 1000 to 2000. They receive the
stock at their doorstep from the company. They then sell the products to village retailers and
customers. To start they began with four to five brands of HUL like Lifebuoy, Wheel,
Pepsodent, Clinic Plus and Annapurna salt. Later they keep on adding other brands like Lux,
Nihar etc. Shakti entrepreneur normally earn Rs.1000 on the sales of Rs.10,000. By 2005, HUL
had reached 12,000 villages in 100 districts and was able to reach 1 crore customer through
2800 Shakti entreprepeurs.
26. 26
A woman from SHGs selected as a Shakti entrepreneur receives stocks at her doorstep from the
HUL rural distributor and sells direct to consumers as well as to retailers in the village. Each
Shakti entrepreneur services 6-10 villages in the population strata of 1,000-2,000 people. A
Shakti entrepreneur sets off with 4-5 chief brands from the HUL portfolio - Lifebuoy, Wheel,
Pepsodent, Annapurna salt and Clinic Plus. These are the core brands that they layer it with
whatever else is in demand like talcum powder or Vaseline during winters.
The Shakti Model trains women from SHGs to distribute HUL products of daily consumption
such as detergents, toilet soaps and shampoos - the latter‘s penetration being only 30 per cent in
rural areas. The women avail of micro-credit through banks. The established Shakti
entrepreneurs are now selling Rs.10,000-Rs.15,000 worth of products a month and making a
gross profit of Rs.700-Rs.1,000 a month.
The company is creating demand for its products by having its Shakti entrepreneurs and
educating consumers on aspects like health and hygiene. The Shakti brand endorsers are under-
privileged rural women trained to manage businesses. Shakti project is a win-win initiative that
creates livelihoods and a social initiative that improves the standard of life and catalyses
affluence in rural India. What makes Shakti project uniquely scalable and sustainable and it
contributes not only to HUL but also to the larger interests of the community.
Phase IV - Product Innovation – Acceptable and Affordable
To tap more and more rural consumers they develop Non-Soap Detergent Powder which was
launched in the rural market in name of Wheel detergent in year 1988 to counter Nirma
detergent. Within a decade Nirma and Wheel targeting the rural consumer started sharing equal
market share of 38%.
To meet the challenge given by another company in early 1980s, i.e., CalvinKare whose early
avatar is Chik Shampoo which created a revolution in shampoo market, HUL launched Clinic
and Sunsilk shampoo in small sachets. The Low Unit Price (LUP) packs were successful in rural
market to convert the consumer from soap to shampoo. 95% of the total sales of shampoo in
rural area were through sachets till late 90s.
In early 2000s, to increase the penetration of HUL products in rural area they introduced Surf
Excel, Pond‘s talcum powder, Fair and Lovely, Pepsodent, Rexona Deo-sticks in LUP packs.
All these products are successful in winning the mind of the rural consumers. HUL‘s effort and
27. 27
Shakti entrepreneurs initiative together played an important role in making all these products
successful in rural market.
In May 2000, HUL launched ―Aim‖ toothpaste to compete with Dabur toothpaste and was
priced at Rs.3 per 20gm, Rs8 per 50gm and Rs.16 for 100 gm for the rural consumers. They
were launched in plastic flow wraps rather than traditional cartons, so that they could be hanged
alongside of the store. But within five month of its launch they decided to withdraw the product
from the market and decided to put its effort to increase the penetration of their other two
products, Pepsodent and Closeup.
To support the Shakti entrepreneur HUL engaged Ogilvy Outreach to enhance the awareness of
their products in rural markets. HUL realized that 30 seconds advertisement in the Television
may not able to create an impact in the mind of rural consumers, they have to be tapped by using
unconventional media through colourful flyers, entertaining jingles, street plays, cinema vans
etc.
Phase V – Replication
The huge success of the ―Project Shakti‖ has inspired the company to take it to the international
level. Anglo-Dutch consumer goods major Unilever has begun replicating HUL‘s rural micro-
enterprise, led by women-entrepreneurs, Project Shakti in several international markets. The
project has emerged as a successful low-cost business model and enhanced HUL‘s direct rural
reach in the so-called media-dark regions. Armed with micro-credit, rural women become
direct-to-home distributors of Unilever brands in rural markets. The Fortune 500 transnational
which sells foods and home and personal care brands in about 100 countries has stepped up
focus on the project given that emerging markets now contribute around 44% to global
revenues.
The effort is expected to help Unilever tap fresh growth avenues in emerging markets in the face
of recessionary trends in the US and Europe. Also, given the saturation of urban markets,
companies try to re-engineer their business models to derive growth from rural consumers.
28. 28
PRODUCTS
With 400 brands spanning 14 categories of home, personal care and foods products,
no other company touches so many people's lives in so many different ways. Brand
portfolio has made us leaders in every field in which we work. It ranges from much-
loved world favorites including Lipton, Knorr, Dove and Omo, to trusted local brands
such as Blue Band and Suave. From comforting soups to warm a winter's day, to
sensuous soaps that make customers feel fabulous, and products help people get
more out of life. HUL is constantly enhancing its brands to deliver more intense,
rewarding product experiences. It invests nearly €1 billion every year in cutting-edge
research and development, and has five laboratories around the world that explore new
thinking and techniques to help develop products. Consumer research plays a vital role
in its brands' development. They are constantly developing new products and
developing tried and tested brands to meet changing tastes, lifestyles and
expectations. And our strong roots in local markets also mean they can respond to
consumers at a local level. By helping improve people's diets and daily lives, can help
them keep healthier for longer, look good and give their children the best start in life.
There is a big list of products of this company and explained below:
(i) Health & personal care
• First launched in France in 1983, leading male grooming brand, Axe, now gives guys the edge
in the mating game in over 60 countries
• Oral care brands Mentadent, Peposodent and Signal have teamed up with the world's Largest
dental federation, the FDI, which represents over 750 000 dentists around the world
• Lux became the first mass-marketed soap when it launched in 1924. Today it achieves annual
global sales of over €1 billion
• Domestos is a best-selling brand in nine of the 35 countries in which it's sold
• Recent breakthroughs at Rexona include Rexona Crystal, a deodorant that eliminates unsightly
white deposits on dark garments
• Small & Mighty concentrated liquid fits into a smaller bottle, requiring half the packaging,
water and lorries to transport it, making it kinder on the environment
29. 29
• Hindustan Unilever in India has launched a hand-wash product, Surf Excel Quick Wash, with
a low foaming formulation, reducing the amount of water needed for rinsing by up to two
buckets per wash.
(ii) Foods
• Knorr is our biggest food brand with a strong presence in over 80 countries and a product
range including soups, sauces, bouillons, noodles and complete meals
• Lipton's tea-based drinks include the international Lipton Iced Tea range, the Lipton range in
North America and Lipton Yellow Label, the world's favourite tea brand
• Becel/Flora pro.activ products have been recognised as the most significant advancement in
the dietary management of cholesterol in 40 years
• In the mid-1990s it led the industry with a programme to eliminate almost all trans fat from
margarine
• World's largest ice cream manufacturer, thanks to the success of Heartbrand which includes
Magnum, Cornetto, Carte d'Or and Solero, and Ben & Jerry's and Breyers in the US.
30. 30
Food Brands
Playful banter, a little Lipton has a range India’s favorite cup Brooke Bond Taaza lifts Brooke Bond Taj Mahal
mischief, serious of vitality teas that of tea, the great me people unshackles is an exclusive selection
conversation… there’s truly encompass taste of Red Label the mind, allowing them of teas for the
no time for young the goodness of brings people closer to see and realize discerning consumer.
couples like the time tea. together and possibilities.
spent sharing a cup of strengthens
3 Roses. relationships.
Ek cup Bru aur A good honest With Kissan, good Kissan Amaze Knorr helps families Partnering with the
mood ban jae… scoop of daily food is loved not Brainfood is speci - make meal times mom in nurturing her
pleasure. shoved! fically designed special, nutritious, dreams, Annapurna
for the mental tasty and healthy. Atta is aimed at
development of helping her provide
kids. wholesome tasty
nutrition to her family.
31. 31
Home Care Brands
Sunlight is a color Cif- the best cleaner The world’s largest The sheer power of
care brand to let you shine. fabric conditioner Domex bleach gives
brand. you the confidence you
need, eradicating all
known germs.
Created in 1885, the Vim Active Wheel de Rin provides ‘best in Giving your kids the
brand is still innovating "Mehnat se Aazadi" class whiteness’ which freedom to get dirty and
and using the magic of Freedom from painful is demonstrable. experience life, safe in
natural ingredients to & tiring laundry the knowledge that Surf
create unbeatable results Excel will remove those
over a hundred years stains
later.
32. 32
Personal Care Brands
Lux believes in passion Holistic skin care Breeze, with the goodness Awaken, and enliven your
for beauty. It continues experiences perfected over of glycerine gives soft, senses with a Liril bath.
to be a favorite with the ages to deliver healthy, fragrant and smooth skin.
generations of users for a beautiful skin
sensuous experience of
luxury.
Rexona gives you 24 Dove stands for real Pears – the purest and most Lifebuoy is available in
hour protection from beauty. All around the gentle way to skincare! multiple variants in
sweat and body odour world, Dove is making soaps and specialist
and therefore the complete therapy for your formats such as liquid
confidence to handle hair. hand wash, catering to
whatever the day has the entire family.
in store.
33. 33
Personal Care Brands
New Clear with Essential Oils, Clinic Plus is India’s largest selling Sunsilk encourages young women in
guarantees Zero dandruff and shampoo and has won the trust the India to live for today. Sunsilk helps you
leaves your hair feeling fabulous. millions of families across India. transform the beauty of your hair
instantly because LIFE CAN'T WAIT!!
Dove stands for real beauty. All around Freshness that brings you Closer Pepsodent India is committed to improve
the world, Dove is making complete theoverall Oral health of Indians.
therapy for your hair.
34. 34
Personal Care Brands
Your skin is Rexona gives you 24 Axe with Best The new expansion Lakme is an ally to the
amazing. It hour protection from Quality Fragrance of fairness cream for Indian Woman and
deserves to be sweat and body men inspires her to express her
treated as such. odour and therefore unique beauty and
the confidence to sensuality. Thus, enabling
handle whatever the her to realize the potency
dayhas in store. of her beauty.
Aviance enables women LEVER Ayush aims to Get the expert to look after More than 30 years ago,
actualize their unique help a new generation your skin a unique brand was
potential through expert of Indians rediscover born. Wrapped within a
customized beauty everyday health and humble lavender tube,
solutions. vitality through it went on to become
customized Ayurvedic the World’s No.1
solutions. Fairness cream.
35. 35
PROJECT SHAKTI
Empowering womenfolk through a wired network for linkage activities or connecting the rural
with urban world is the new mantra adopted by many FMCGs to sell their products as well as
improve the lot of rural women. Indeed, a win-win partnership for both womenfolk and the
company.
This has been made possible due to the initiatives taken up by Hindustan Lever Ltd (HLL) for
an exclusive project called Shakti through which women in a remote village can access
happenings around the world. As part of this commitment, HLL is leveraging on Self-Help
Groups (SHGs) as they become direct-to-home (DTH) dealers in line with other micro credit
models to be implemented initially as a pilot project in the Nalgonda district of Andhra Pradesh,
Shakti is expected to spread its roots across all the districts of Andhra Pradesh. It will be
integrated with its Project Shakti program which is a linkage of women SHGs with private
sector companies.
There are about 300 Shakti dealers in the state with about 40 dealers in Nalgonda. Working on a
cluster approach, the Shakti program operates through Shakti dealers who market HLL products
and use their services for stocking their produce. Besides health education, there is also an
option of ‗e-learning‘ to prepare home foods like pickles and curry powders among other things.
i-Shakti will also help women to know about crop protection, weather forecasting, soil
conditions, cropping patterns in different weather besides integrated pest management practices.
The whole operation is primarily through SHGs who act as direct dealers in the rural markets of
HLL. The Project Shakti programme is facilitated by the District Rural Development Agency
(DRDA) of Nalgonda district.
36. 36
From the time HLL's new distribution model, named Project Shakti, was piloted in Nalgonda
district in 2001, it has been scaled up and extended to over 5,000 villages in 52 districts in AP,
Karnataka, Gujarat and Madhya Pradesh with around 1,000 women entrepreneurs in its fold.
The vision is ambitious: to create by 2010 about 11,000 Shakti entrepreneurs covering one lakh
villages and touching the lives of 100 million rural consumers.
How it works
Typically, a woman from a SHG selected as a Shakti entrepreneur receives stocks at her
doorstep from the HLL rural distributor and sells direct to consumers as well as to retailers in
the village.
Each Shakti entrepreneur services 6-10 villages in the population strata of 1,000-2,000 people
A Shakti entrepreneur sets off with 4-5 chief brands from the HLL portfolio - Lifebuoy, Wheel,
Pepsodent, Annapurna salt and Clinic Plus. "These are the core brands, they we layer it with
whatever else is in demand like talcum powder or Vaseline during winters. These brands apart,
other brands which find favour with a rural audience are: Lux, Ponds, Nihar and 3 Roses tea.
Typically, unit packs are small. All the brands are national and HLL is cool to the idea of
creating a rural-specific brand as it will only dissipate the advertising media effort for the
brands. To get started the Shakti woman borrows from her SHG and the company itself chooses
only one person. With training and hand-holding by the company for the first three months, she
begins her door-to-door journey selling her wares.
The future of Shakti
Having perfected the model in Nalgonda, in 2003 HLL plans to extend Shakti to a 100 districts
in Madhya Pradesh, Gujarat and UP. There are other plans brewing. One is to allow other
companies which do not compete with HLL to get onto the Shakti network to sell their products.
The most powerful aspect about this model, is that it creates a win-win partnership between
HLL and its consumers, some of whom will also draw on the organisation for their livelihood,
and it builds a self-sutaining virtuous cycle of growth for all.
The next stage of Project Shakti is even more ambitious. HLL is now in the process of piloting
`I-Shakti', an IT-based rural information service that will provide solutions to key rural
needs in the areas of agriculture, education, vocational training, health and hygiene. The project
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will be piloted in Nalgonda district again. Based on a palm pilot. Women in the rural areas are
the catalyst of change and that is why its whole program keeps women in focus. It‘s the rural
women who give Shakti its strength.
LIFEBUOY SWASTHYA CHETNA
Hindustan Lever Limited's Lifebuoy, recently announced the
launch of Lifebuoy Swasthya Chetna, the first single largest
rural health and hygiene educational program. Lifebuoy will
make multiple repeat contacts in nearly 15,000 villages in 8
states across rural India. The campaign aims to educate
children and the community about the threat of unseen germs and basic hygiene practices.
Lifebuoy has already successfully conducted pilot studies in Madhya Pradesh, Chhattisgarh,
Uttar Pradesh, West Bengal, Orissa and Bihar. This campaign teaches people about maintaining
good health through practice of basic hygienic habits including the hand wash habit.
Lifebuoy is among HLL's power brands, which the company is focusing on, selected on the
basis of their absolute size, brand strength, brand relevance, competitive advantage and
potential for growth. The new Lifebuoy range now includes Lifebuoy Active Red (125 gm, 100
gm, and 60 gm) and Lifebuoy Active Orange (100 gm). Lifebuoy Active Orange offers the
consumer a differentiated health perfume while offering the health benefit of Lifebuoy. At the
upper end of the market, Lifebuoy offers specific health benefits through Lifebuoy
International (Plus and Gold). Lifebuoy International Plus offers protection against germs
which cause body odor, while Lifebuoy International Gold helps protect against germs which
cause skin blemishes.
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HUL launched multi-brand rural activation programme:-
30/08/2010 : ―Khushiyon ki Doli‖ is a rural marketing initiative of HUL. It was launched
this year in three states – Uttar Pradesh, Andhra Pradesh and Maharashtra. During the
year itself, over 14 million consumers would be contacted through this initiative in over
35,000 villages across these three states
The main objective of the campaign is to reach out to media dark villages with HUL
Brand messages and to engage with consumers deeply to rapidly change brand adoption
metrics. The main aim is to change attitudes of the rural mass to inculcate good personal
hygiene and through this create greater preference for the company brands by association
to daily hygiene habits
Through a multi-brand approach, Khushiyon ki Doli also helps to create a cost efficient
rural activation module. It involves various personal care and home care brands of HUL
including Wheel, Surf Excel, FAL, Sunsilk, Vim, Lifebuoy and Closeup. The module
follows a 3-step process, starting with awareness, moving on to consumer engagement
and finally retail contact.
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FAILED PRODUCT
LIRIL SOAP:
If you are looking for a case of an iconic Brand that is going to be killed by poor marketing
strategy, look no further, here is Liril for you. Launched in 1975, the year I was born, this is a
brand that built a segment or should I say category for itself in the Indian market. The brand is
also the testimony to the genius of India's Ad man Alyque Padamsee. This is what he says about
the Liril Brand ―The name Liril had been registered by Hindustan Lever from a list sent to them
by Unilever in London. Levers were very keen that the soap has striations, wiggly stripes of
different colors running across the tablet. I recommended the tablet be blue – because waterfall
is blue with white striations. Hindustan Lever was very excited and produced 1,000 tablets for
testing. At this point Derk Wooller, the Marketing Controller of Hindustan Lever's soaps
Division, stepped in and suggested we add the freshness of lime to our story. He felt that though
the waterfall had tremendous emotional appeal, Liril needed a rational ingredient to clinch the
deal. I was not averse to this but suggested that we do an `As marketed' test: Blue Liril versus
Green Liril with limes. I was wrong and Wooller was right. The rest is history.
" Alyque Padamsee in his book A Double Life. The brand was a runaway success and the Liril
girl became the talk of the town. The brand has been consistent with its communication and the
effective use of brand imagery.
Waterfall with the unique jingle ensured that the freshness is experienced by the audience. Liril
can be called as an experiential brand and the communication perfectly supported that. Liril did
not change its positioning for 25 years although the models changed, the brand communication
was consistent. Then some nut in the company or the agency thought that they should change
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the communication that worked so effectively. The rest as I say it " Liril became history". Liril
has changed the imagery and the jingle in the name of freshness .The new jingle or the ad never
had that freshness. That is why Liril had to change the Ads twice within a span of five years.
Mind you Liril never changed its imagery or the Jingle for 25 years...
Reports say that Liril had to change because of its stagnant market share. I think there are
reasons for declining market share which can be that the brand failed to understand the changing
consumer expectations. There was a flurry of brand launches during the past 10 years and Liril
was sleeping all the time ―may be resting on the laurels‖. It should have hold on its positioning
of ' freshness " not by changing its communication but by communicating more, developing
variants, bringing in flanking brands or variants thus owning the whole segment for itself and
But it never happened , Liril tried to introduce the Icy mint variant very late and that too with a
different jingle and imagery. We knew that the Old Liril had died. HLL could have used the
same communication strategy. Then came the horrible experiment of Orange Liril with a stupid
Jingle OOFYUMMA.... excuse me what the hell is that? The product failed. Then came the new
campaign involving a couple and a new jingle " La-ira -ela", the ad was good but where is liril ?
Like Onida, Liril has to come back with the old imagery and old jingle that made liril what it Is
( or WAS?) [It is a prediction].
2- MOTI SOAP:
Moti was India's premium brand of soaps during the seventies. Now there is no trace of this
brand. Moti originally was a brand of Tata Oil Mills Company (TOMCO). In 1993, TOMCO
merged with HLL. Moti was a special soap which had certain differentiation. The first
differentiation point was the Shape. Unlike other soaps which came in cake form, Moti was
round soap. Moti is the vernacular term for Pearl . So the soap was also in the shape of pearl.
Another uniqueness was the size of the soap. Moti was a big soap. Often one gets bored of the
soap and it never quite finish fast. Moti came in popular fragrances like Gulab ( Rose) and
Sandal. Moti was promoted as a premium soap . The soap was expensive and during the
eighties, the soap was priced around Rs 25. Tomco also promoted this brand heavily. Most of
the campaign had a signature brand imagery the soap surrounded by pearls. Those ads were in
most of the magazines during the peak stage of this brand. Pearls formed an important role in
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the entire brand communication and pearl was an anchor which created an association with the
brand in the consumer's mind.
I was searching for an ad of Moti and thanks to Saumyadip's blog, I got a vintage ad of moti.
Moti then moved to HLL following the merger. That marked the end of this brand.
I am not sure why HLL decided to sideline Moti soap. The brand was never promoted and
slowly the brand faded into oblivion. The reason for this brand's death may be because it did not
fit into the brand portfolio of HLL. While Hamam ( another Tomco brand ) thrived, Moti was
never in the picture. Then with the Power Brand strategy, brands like Moti never had a chance to
survive.
The brand had prospects if HLL had done some serious product development. In the branding
perspective Moti had certain assets. The name and the imagery were wonderful assets for a
marketer. Moti had both these assets. The problem was with the product. There was something
missing in the soap which ultimately lead to the death of this brand. Another factor was at the
segmentation side. Now also the market for a premium soap is abysmally low in India. Now also
there is no successful premium brand of soaps in India ( Essenza de wills is trying hard ). So it
was also a tough choice for HLL. The company may have felt that Moti did not have a future as
a premium soap. And it may cannibalize some existing brands if the prices are rationalized.
Moti may had to be repositioned if it had to survive . But HLL was not prepared to invest in a
brand which had a minuscule 2% of the market. So the decision was to slowly kill the brand.
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DISTRIBUTION SYSTEM
Distribution system‘s focus to enable easy access to their brands, touch consumers with a
three-way convergence - of product availability, brand communication, and higher
levels of brand experience.
The most obvious function of distribution system is to provide the logistics support to
get the company‘s product to the end customer.
The important role of this system is to maintain the information flow between company
to consumer.
HUL's products are distributed through a network of about 7,000 redistribution stockists
covering about one million retail outlets.
The general trade comprises grocery stores, chemists, wholesale, kiosks and general
stores.
Company provides tailor made services to each of its channel partners.
HUL is using the point of purchase method for much higher level of direct contact,
through in-store facilitators, sampling, education and experience.
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RESEARCH METHODOLOGY
RESEARCH OBJECTIVES
To determine the market share of HUL in rural market.
To know about the products of HUL
To know the marketing strategies employed by HUL
To find out the Factor influencing demand of FMCG product
To know about distribution channel used by HUL
RESEARCH DESIGN:
Basically there are three of approaches
1- Exploratory Research.
It is loosely structured and the basic premise is to provide direction to subsequent, more
structured method of enquiry. Lays the foundation for the formulation of hypothesis
(hypotheses). For e.g., literature survey, experience survey.
2- Descriptive research.
The main goal of this type of research is to describe the data and characteristics about
what is being studied. The annual census carried out by the Government of India is an
example of this research. It is carried out with specific objective(s) and hence it results in
definite conclusions. For e.g., consider TV as a product. The degree of use of the TV
varies with respect to age, sex, income level and profession of the respondents as well as
place & time of use. Hence, the degree of use of television to different types of
respondents will be of importance to a researcher.
3- Experimental Research
It is characterized by much greater control over the research environment and in this
case some variables are manipulated to observe their effect on other variables.
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FINDINGS
HUL has a strong marketing strategy and distribution network is very good.
Its implementing its strategy to grow includes focusing on the power brands' growth
through consumer relevant information, cross category extensions, leveraging channel
opportunities and increased focus on rural growth.
Hindustan Lever in India has launched a hand-wash product, Surf Excel Quick Wash,
with a low foaming formulation, reducing the amount of water needed for rinsing by up
to two buckets per wash.
HUL is the world's largest ice cream manufacturer, with successful Heart brand which
includes Magnum, Cornetto, Carte d'Or and Solero, and Ben & Jerry's and Brayers in
the US
HUL is amongst the top five exporters of the country and also the biggest exporter of
tea and castor oil.
They continually developing new and improved products.
Knorr is biggest food brand with a strong presence in over 80 countries and a product
range including soups, sauces, bouillons, noodles and complete meals.
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SUGGESTIONS
HUL should start some another health program for rural people
HUL should reduce their price of soap
HUL should do more brand building to aware the rural people
HUL should motivate the rural people.
HUL should introduce new medium package of product.
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CONCLUSION
With its long and luminous history HUL is India‘s true pride.
It is a company which the customers in rural as well as urban India relate to. This
explains the deep penetration of HUL in Indian market.
The future for HUL is demanding newer and high level innovations so as to cope up with
increasing competition.
However HUL is well equipped with all what is needed of this Indian Giant.
