Hindusthan Unilever Limited

Case Study

Koushik Dutta

MBA Marketing

Sem-3, ID-265113021

School of Management Sciences, IIEST Shibpur

Company overview

Hindustan Unilever Limited (HUL) is an Indian consumer goods company based in Mumbai, Maharashtra. It is owned by Anglo-Dutch company Unilever which owns a 67% controlling share in HUL. HUL's products include foods, beverages, cleaning agents and personal care products.

HUL was established in 1933 as Lever Brothers India Limited and, in 1956, became known as Hindustan Lever Limited, as a result of a merger between Lever Brothers, Hindustan Vanaspati Mfg. Co. Ltd. and United Traders Ltd. It is headquartered in Mumbai, India and employs over 16,500 workers, whilst also indirectly helping to facilitate the employment of over 65,000 people. The company was renamed in June 2007 as “Hindustan Unilever Limited”.

Brands - hul

The company has a distribution channel of 6.3 million outlets and owns 35 major Indian brands.[8] Its brands include:

Brands - hul

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. Eighteen of HUL's brands featured in the ACNielsen Brand Equity list of 100 Most Trusted Brands Annual Survey (2012), carried out by Brand Equity, a supplement of The Economic Times.

The "most trusted brands" from HUL in the top 100 list (their rankings in brackets) are: Clinic Plus (4), Lifebuoy (10), Fair & Lovely (11), Rin (12), Surf Excel (13), Lux (14), Pepsodent (17), Closeup (19), Pond’s (20), Sunsilk (26), Dove (37), Vim (43), Pears (79), Lakme (81), Vaseline (86), Wheel (87), Hamam (95) and Rexona (96).

The latest launches for Hindustan Unilever include: Surf Excel Easywash; Lakmé eyeconic range; Vim Anti Germ bar;Pureit Marvella UV with Advance Alert System; TRESemmé: For Salon style hair at home everyday; Clinic Plus: Milk Protein Formula A++; Comfort 1 Rinse; Bru Exotica Guatemala; Closeup: Deep Action; Dove Hair Fall Rescue Treatment; Taaza: Taazgi bhari chaai, dimaag khul jaaye.

© HUL

Brands - hul

The company has a distribution channel of 6.3 million outlets and owns 35 major Indian brands.[8] Its brands include:

SWOT Analysis Strengths:

•Strong brand portfolio, price quantity & variety.•Innovative Aspects.•Presence of Established distribution networks in bothurban and rural areas.•Solid Base of the company.•Corporate Social Responsibility(CSR) Weaknesses:

•"Me-too" products which illegally mimic the labels and brands of the established brands.•Strong Competitors & availability of substitute products.•Low exports levels.•High price of some products. •High Advertising Costs.

Opportunities:

•Large domestic market – over a billion populations .•Untapped rural market.•Changing Lifestyles & Rising income levels, i.e. increasing per capita income of consumers.•Export potential and tax & duty benefits for setting exports units.

SWOT Analysis

Threats: •Tax and regulatory structure.•Mimic of brands•Removal of import restrictions resulting in replacing of domestic brands.•Temporary Slowdown in Economy can have an impact on FMCG Industry.

Our first priority is to our consumers, then customers, employees and communities. When we fulfill our responsibilities to them our shareholders will be rewarded.

Question no 1strategies HUL

MARKETING STRATEGIES OF HUL FOR URBAN INDIA Adopted Total Productive Maintenance(TPM) to meet zero error, zero loss.

Focuses on short supply chain for distribution.

To meet the every needs of people everywhere.

Also uses Direct selling channel(HUN), franchisee to reach everyone e.g. Aviance, Ayush.

Build segments & market for the future where Unilever has strong expertise.

• For long term benefits, HUL started Project Streamline in 1997.• Appointed 6000 Sub-stockists that directly covers about 50,000 villages & 250 million

customers.• Integrate Economic, Environment & Social objectives with Business agenda.• Project Shakti, partnership with Self help groups of Rural women & covers 5000

villages in 52 districts in different states.• Market leader Hindustan Unilever (HUL) is setting up 14 new consumer clusters as

part of an aggressive initiative to drive growth across smaller but fast-growing markets cross India. Rural markets contribute to 55% of the total FMCG consumption in India.

MARKETING STRATEGIES OF HUL FOR RURAL INDIA

Corporate social responsibility Providing education on health and hygiene

Women empowerment

Water management

Rehabilitation of special or underprivileged children

Care for the destitute and HIV-positive

Rural development.

Plays active role in natural calamities

1

Started in 2001, Shakti is HUL's rural initiative, which targets small villages with population of less than 2000 people or less.

Micro-enterprise opportunities for rural women

Providing health n hygiene education through shaktivani program

ishakti portal

Shakti has already been extended to about 15 states ,80,000 villages in with 45,000 women entrepreneurs and generating Rs.700-1000 per month to each women.

Question no 2strategies for Pepsodent to compete with Colgate in urban market

SEGMENTATION

•Rural Areas•Urban Areas

Geographic

•Normal Use•Whitening•Complete Care

Behavioural

•Pepsodent G•Pepsodent Kids•Pepsodent Milk Teeth Strawberry

Demographic

Most of Pepsodents products are sold in the urban areas.

The sales from the Urban areas constitutes approximately 80% of their income.

Pepsodent spread awareness of the benefits of oral hygiene. This awareness would therefore help increase its sales, in the rural areas

Geographical Segmentation

The urban market for toothpaste is almost stagnant.

Hence for deeper penetration in the rural markets they have taken the following measures

Smaller 100gms packs priced at 10 rupees

Tooth campaigns at various schools in villages.

Behavioural Segmentation

Variants to suit different consumer preferences

G for Gum Care

Germicheck for Cavities

Whitening for White teeth

Age Pepsodent Kids

1. Barbie (pink color)

2. Superman (Blue color)

3. Tom & Jerry (Orange color)

TARGET MARKET SELECTION Pepsodent is currently into Selective

Specialization

Pepsodent Kids for kids

Smaller and cheaper variants for rural markets

Pepsodent complete for the educated urban consumer

This type of Targeting means targeting different markets with different prducts.

Pepsodent positioning: Pepsodent was launched in 1993 by HUL to capture the market from

Colgate.

It was launched in the platform of Germ fighting property.

Pepsodent have experimented with its positioning althrough its life.

Ad Campaigns to supplement this positioning:

Lasting Protection for hours

Germ Fighting Campaign

Dental Insurance

Dishum Dishum

Bhoot Campaign

Five Product Levels

Pepsodent has its products

which cover a large area

Their products are

Pepsodent Germicheck +

Pepsodent Whitening

Pepsodent 2 in 1

Pepsodent G

Pepsodent Kids

Colgate vs Pepsodent Colgate also has 4 other variants – Salt,

Herbal, Total and Cibaca Family Protection. Pepsodent has no equivalents (Pepsodent Complete has been discontinued).

Pepsodent has the ‘2 in 1’ variant for which Colgate doesn’t have an equivalent.

Some of the variants mentioned above have sub-variants which have a price variation of 1-2 Rs.

Overall, Pepsodent is priced at the same level as Colgate, however, they have different selling points.

Pepsodent has the ‘Offers protection against germs’ angle while Colgate has the ‘Makes teeth stronger’ angle.

Toothbrushes from Pepsodent as well as Colgate are priced Rs.30-40. Oral-B, the main competitor in this field, has toothbrushes ranging from Rs.25 to over Rs.50 due to greater product variety.

PRODUCT DISTRIBUTION CHANNEL

Strategies for Pepsodent

Along with an offer of free dental check-ups, HUL is also planning to organise health camps involving villagers to fortify its campaign.

“To promote Pepsodent, we will also offer free samples to the villagers to try out the product and offer discount coupons on wrapper redemption schemes,”

Discounts During their promotional offers, Pepsodent sells its products at a discounted price.

Else they offer products with offers. E.g Buy 1 get 1 free or 150g + 150g = Rs 40 and not Rs 50

Future Prospects to Increase Its Sales 1. A kit can be introduced along with a “Kids Stand” to hold only

the Pepsodent Kids toothpaste and toothbrush in sockets. The sockets must be made to hold only the Pepsodent products.

2. The Kids Stand can be introduced in variety of themes matching different characters. The kit can also contain a booklet/ sheet depicting a small story or characters description. The children view these as their toy and also feel proud of owning it.

3. Children generally use the toothbrush for 3 months but the toothpaste gets over in a month considering 40 gm pack. Hence once the tooth paste gets over, children refill the socket with Pepsodent Kids toothpaste in that place

Question no 3strategies for detergent power for rural mass

Indian Laundry Market - $1.3 billion

Euromonitor International:

Marketing mix

The Marketing mix is a set of four decision variables which need to be taken before launching any new product. These variables are also known as the 4 P’s of marketing. These four variables help the firm in making strategic decisions necessary for the smooth running of any product / organization. These variables are

Product: A product can be divided into three parts: the core product, the augmented product and the tertiary product. Before deciding on the product component there are some questions which we might need to ask ourselves.

What product are we selling?

What would be the quality of we product?

Which features are different from the market?

What is the USP of the product?

Whether the product will be branded as sub brand or completely new?

What are the secondary products which can be sold along with primary (Warranty, services)

Price: Pricing of a product depends on a lot of different variables and hence it is constantly updated. Major consideration in pricing is the costing of the product, the advertising and marketing expenses, any price fluctuations in the market, distribution costs etc

Place: Place refers to the distribution channel of a product. The place where the product is distributed depends on the product and pricing decisions, as well as any STP decisions taken by a firm.

Promotions: Promotions in the marketing mix includes the complete integrated marketing communications which in turn includes ATL and BTL advertising as well as sales promotions. Promotions are dependent a lot on the product and pricing decision.

Marketing mix- price india price war

Flash back to the 80’sThe first Detergent War was fought in the

80’s when a small manufacturer in Gujrat aggressively marketed a detergent powder called “Nirma” Nationally at one-fifth of the price of existing brands.

The launch changed the profile of the Indian Detergent Industry.

Loss its Market Share

Brands Launched in 1969, Rin with the power of its thunderous lightning flash has become a

household name synonymous with dazzling white clothes.

A Value added brand with different variants e.g. Rin matric & Rin advanced.

Rin has won a number of accolades, the most recent being voted as the Most Preferred Detergent brand in India at the Awaaz Consumer Awards in 2006.

Sunlight, A Heritage brand launched in 1888

In the form of detergent cake.

Value added brand i.e. priced over Wheel but below Rin.

Famous in WB & Kerala

Wheel, low priced detergent.

Introduced in 1987 to compete with Nirma.

Surf Excel, launched in 1948 under the brand name ‘Surf’ in Pakistan & in 1959 launched in India as a first detergent powder. Initially, the brand was positioned on the clean proposition of “washes whitest”.

COMPETITORS SURF EXCEL: ARIEL

WHEEL: NIRMA

RIN: TIDE

Marketing mix- price india

The pricing strategy of the company for detergents have always been in accordance with its competitor, consumers’ income level.

Surf excelLiquid Detergent

Surf Excel Bar

Marketing mix- Promotion india Quality Promotion about the products

Marketing mix- Promotion ndia Free tips about Laundry Products

Marketing mix- Promotion india Engaging their brand with people, mainly with children

Marketing mix- Promotion india

1st national detergent brand on TV

Different format of communication

Organizing various occasions like Children festival

Sales promotion through aggressive pricing

Quality centric approach i.e. Surf excel = 10 hands power.

Very much engaged with society mainly children

Providing tips for the children on outdoor games

Dag Achhe Hain – The tag line of Surf excel

Marketing mix- Promotion india CHILDREN’s Surf Excel

Marketing mix- Promotion india Why “DAG ACHHE HAIN”???

Dag of #Achaar, #Paint & #Clay are not big deal for Surf Excel to remove.So, enjoy the moment of DAG.

Dag ache hain!

Marketing mix- Promotion india

Marketing mix- Place india

HUL distribution network – key strengthwhich helps reach out its product across the length and width of the vast country.

Direct coverage in over 1 million retail

80000 stockiest

30000+ supplier and associates

Available in every shopping mall, retail stores like BIG BAZAR, MORE etc.

Network

Factory »»» Company »»» Warehouses »»» Distributor »»» Market

Factory »»» Wholesaler & Big retailers (Bulk Orders) »»» 35% Sales

Thank you