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RATION
MARKETING STRATERGIES OFHINDUSTAN UNILEVER LIMITED
SUBMITTED IN PARTIAL FULLFILLMENT OF THE REQUIREMENTS FOR THE
AWARD OF THE M.COM DEGREE OF
MASTER IN COMMERCE -1MANAGEMENT)SUBMITTED TO
UNIVERSITY OF MUMBAILALA LAJPAT RAI COLLEGE, MAHALAXMI, MUMBAI
SUBMITTED BY
ZISHAN SIDDIQUI Roll no: 670
SUPERVISED BYPROF. RAHUL SHETTY
PROF. Dr. POOJA RAMCHANDANI
15thOctober 2013
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CERTIFICATE
I hereby certify that the work which is being presented in the
M.Com internal project report entitled MARKETING STRATERGIES
OF HINDUSTAN UNILEVER LIMITED in partial fulfilment of the
requirements for the award of the Master of Commerce and
Economics, in MANAGEMENT and submitted to the LALA
LAJPATRAI COLLEGE OF COMMERCE AND ECONOMICS, Mahalaxmi,
Mumbai-400034 is an authentic record of my own work carriedout under the supervision of PROF. RAHUL SHETTY &
PROF.Dr.POOJA RAMCHANDANI. The matter has not been
presented by me for the award of any other degree elsewhere.
SIGNATURE OF THE STUDENT:
SIGNATURE OF SUPERVISORS:
INTERNAL EXAMINER:
EXTERNAL EXAMINER:
COLLEGE STAMP PRINCIPAL
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acknowledgement
I would like to place on record my deep sense of
gratitude to Prof. RAHUL SHETTYof m-com departmentfor her generous guidance help and useful suggestions
I am extremely thankful to Dr.Suryakant Kasune co-ordinator and Principal Neelam Arorafor providing meinfrastructural facilities to work in without which this
work would not have been possible
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Contents
INTRODUCTION .............................................................. 5
HINDUSTAN UNILIVER LIMITED ....................................... 6
HISTORY OF HINDUSTAN UNILEVER LTD ......................... 7
Vision ........................................................................ 9
A clear direction ................................................... 9
BRANDS .................................................................... 10
AWARDS AND RECOGNITION ........................................ 13
MARKETING STRATERGIES OF HINDUSTAN UNILEVER
LIMITED ...................................................................... 16
Unilever takes HUL strategies like small packs,
cheaper variants to developed markets ................ 33
CONCLUSION ................................................................ 44
BIBLIOGRAPHY ............................................................ 45
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INTRODUCTION
Hindustan Unilever Limited (HUL) is an Indianconsumer
goodscompany based inMumbai, Maharashtra. It is owned by
Anglo-Dutch companyUnileverwhich owns a 67% controllingshare in HUL. HUL's products include foods, beverages,cleaning
agentsandpersonal 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 betweenLever Brothers,Hindustan Vanaspati Mfg. Co.Ltd. and United Traders Ltd. It is headquartered inMumbai,India
http://en.wikipedia.org/wiki/Fast_moving_consumer_goodshttp://en.wikipedia.org/wiki/Fast_moving_consumer_goodshttp://en.wikipedia.org/wiki/Fast_moving_consumer_goodshttp://en.wikipedia.org/wiki/Fast_moving_consumer_goodshttp://en.wikipedia.org/wiki/Mumbai,_Maharashtrahttp://en.wikipedia.org/wiki/Mumbai,_Maharashtrahttp://en.wikipedia.org/wiki/Unileverhttp://en.wikipedia.org/wiki/Unileverhttp://en.wikipedia.org/wiki/Unileverhttp://en.wikipedia.org/wiki/Cleaning_agenthttp://en.wikipedia.org/wiki/Cleaning_agenthttp://en.wikipedia.org/wiki/Cleaning_agenthttp://en.wikipedia.org/wiki/Cleaning_agenthttp://en.wikipedia.org/wiki/Personal_care_productshttp://en.wikipedia.org/wiki/Personal_care_productshttp://en.wikipedia.org/wiki/Personal_care_productshttp://en.wikipedia.org/wiki/Lever_Brothershttp://en.wikipedia.org/wiki/Lever_Brothershttp://en.wikipedia.org/wiki/Lever_Brothershttp://en.wikipedia.org/wiki/Mumbaihttp://en.wikipedia.org/wiki/Mumbaihttp://en.wikipedia.org/wiki/Mumbaihttp://en.wikipedia.org/wiki/Mumbaihttp://en.wikipedia.org/wiki/Lever_Brothershttp://en.wikipedia.org/wiki/Personal_care_productshttp://en.wikipedia.org/wiki/Cleaning_agenthttp://en.wikipedia.org/wiki/Cleaning_agenthttp://en.wikipedia.org/wiki/Unileverhttp://en.wikipedia.org/wiki/Mumbai,_Maharashtrahttp://en.wikipedia.org/wiki/Fast_moving_consumer_goodshttp://en.wikipedia.org/wiki/Fast_moving_consumer_goods -
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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.
Lever Brothers first commenced operations in India in the summer
of 1888, when crates full of Sunlight soap bars, embossed with
the words "Made in England by Lever Brothers" were shipped to
the Kolkata harbour and it began an era of marketing branded
Fast Moving Consumer Goods (FMCG).[4]
Hindustan Unilever's distribution covers over 2 million retail
outlets across India directly and its products are available in over
6.4 million outlets in the country. As per Nielsen market research
data, two out of three Indians use HUL products.
HINDUSTAN UNILIVER LIMITED
Hindustan Unilever Limited (HUL) is India's largest Fast Moving
Consumer Goods Company with a heritage of over 75 years in
India and touches the lives of two out of three Indians.
HUL works to create a better future every day and helps people
feel good, look good and get more out of life with brands and
services that are good for them and good for others.
With over 35 brands spanning 20 distinct categories such as
soaps, detergents, shampoos, skin care, toothpastes, deodorants,
cosmetics, tea, coffee, packaged foods, ice cream, and water
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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, Ponds, Vaseline, Lakm, Dove, Clinic Plus, Sunsilk,Pepsodent, Close-up, Axe, Brooke Bond, Bru, Knorr, Kissan,
Kwality Walls and Pureit.
The Company has over 16,000 employees and has an annual
turnover of around Rs.25, 206 crores (financial year 2012 -
2013). HUL is a subsidiary of Unilever, one of the worlds leading
suppliers of fast moving consumer goods with strong local rootsin more than 100 countries across the globe with annual sales of
51 billion in 2012. Unilever has about 52% shareholding in HUL.
HISTORY OF HINDUSTAN UNILEVER LTD
It was in the summer of 1888 that Unilever of England first
marketed Sunlight soap in India. This was followed by brands
like Pears and Vim. Vanaspati was launched in 1918 and
Dalda 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
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Limited (1935). These three companies merged to form HUL
in November 1956.
A number of prominent companies came into the HUL fold as
result of Unilevers international acquisitions. These included
Brooke Bond (1984), Lipton (1972) and Ponds (1986).
In 1993, Tata Oil Mills Company (TOMCO) merged with HUL.
Two years later, HUL and yet another Tata company, Lakme
Limited, formed a 50:50 joint venture, Lakme Lever Limited.
Subsequently in 1998, Lakme Limited sold its brands to HUL
and divested its 50 per cent stake in the joint venture to the
FMCG giant.
HUL formed a 50:50 joint venture with the US-based
Kimberly Clark Corporation in 1994, Kimberly-Clark Lever
Ltd, which markets Huggies diapers and Kotex sanitary pads.
HUL has also set up a subsidiary in Nepal, Nepal Lever
Limited (NLL), and its factory represents the largest
manufacturing investment in the Himalayan kingdom. In a
historic step, HUL picked up 74 per cent of the equity of
Modern Foods from the Indian government.
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In 2002, HUL acquired the government s remaining stake in
Modern Foods.
FMCG major Hindustan Unilever Limited (HUL), formerly
known as Hindustan Lever Limited, employs 36,000 people,
including over 1,350 managers. It is one of the earliest MNCs
to have entered India
Vision
Unilever products touch the lives of over 2 billion people every
day whether that's through feeling great because they've got
shiny hair and a brilliant smile, keeping their homes fresh and
clean, or by enjoying a great cup of tea, satisfying meal or healthy
snack.
A clear direction
The four pillars of our vision set out the long term
direction for the company where we want to go
and how we are going to get there:
We work to create a better future every day
We help people feel good, look good and get more
out of life with brands and services that are good
for them and good for others.
We will inspire people to take small everyday actions that can add
up to a big difference for the world.
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We will develop new ways of doing business with the aim of
doubling the size of our company while reducing our
environmental impact.
We've always believed in the power of our brands to improve thequality of peoples lives and in doing the right thing. As our
business grows, so do our responsibilities. We recognise that
global challenges such as climate change concern us all.
Considering the wider impact of our actions is embedded in our
values and is a fundamental part of who we are
BRANDS
HUL is the market leader in Indian consumer products with
presence in over 20 consumer categories such as soaps, tea,
detergents and shampoos amongst others with over 700 million
Indian consumers using its products.
Eighteen of HUL's brands featured in the ACNielsen Brand Equitylist of 100 Most Trusted Brands Annual Survey (2012), carried out
by Brand Equity, a supplement ofThe 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), Ponds (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; Lakm eyeconic range; Vim Anti Germ bar;Pureit
Marvella UV with Advance Alert System; TRESemm: For Salon
style hair at home everyday; Clinic Plus: Milk Protein Formula
A++; Comfort 1 Rinse; Bru Exotica Guatemala; Closeup: Deep
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Action; Dove Hair Fall Rescue Treatment; Taaza: Taazgi bhari
chaai, dimaag khul jaaye.
The company has a distribution channel of 6.3 million outlets and
owns 35 major Indian brands. Its brands include:
Food brands: Annapurna salt and atta
Bru coffee
Brooke Bond(3 Roses, Taj Mahal, Taaza, Red Label) tea
Kissan squashes, ketchups, juices and jams
Liptontea
Knorrsoups & meal makers and soupy noodles
Kwality Wall'sfrozen dessert
Modern Bread,ready to eat chapattis and other bakery items
Magnum (ice cream)
Homecare Brands ActiveWheeldetergent
CifCream Cleaner
Comfortfabric softeners
Domestosdisinfectant/toilet cleaner
Rindetergents and bleach
Sunlight detergent and colour care
Surf Exceldetergent and gentle wash
Vimdishwash
Magic Water Saver
Personal Care Brands: Aviance Beauty Solutions
http://en.wikipedia.org/wiki/Brooke_Bondhttp://en.wikipedia.org/wiki/Liptonhttp://en.wikipedia.org/wiki/Liptonhttp://en.wikipedia.org/wiki/Knorr_(brand)http://en.wikipedia.org/wiki/Knorr_(brand)http://en.wikipedia.org/wiki/Kwality_Wall%27shttp://en.wikipedia.org/wiki/Kwality_Wall%27shttp://en.wikipedia.org/wiki/Modern_Food_Industrieshttp://en.wikipedia.org/wiki/Modern_Food_Industrieshttp://en.wikipedia.org/wiki/Magnum_(ice_cream)http://en.wikipedia.org/wiki/Magnum_(ice_cream)http://en.wikipedia.org/wiki/Wheel_(detergent)http://en.wikipedia.org/wiki/Cifhttp://en.wikipedia.org/wiki/Cifhttp://en.wikipedia.org/wiki/Comfort_(fabric_softener)http://en.wikipedia.org/wiki/Comfort_(fabric_softener)http://en.wikipedia.org/wiki/Domestoshttp://en.wikipedia.org/wiki/Domestoshttp://en.wikipedia.org/wiki/Surf_(detergent)http://en.wikipedia.org/wiki/Surf_(detergent)http://en.wikipedia.org/wiki/Surf_Excelhttp://en.wikipedia.org/wiki/Surf_Excelhttp://en.wikipedia.org/wiki/Vim_(cleaning_product)http://en.wikipedia.org/wiki/Vim_(cleaning_product)http://en.wikipedia.org/wiki/Vim_(cleaning_product)http://en.wikipedia.org/wiki/Surf_Excelhttp://en.wikipedia.org/wiki/Surf_(detergent)http://en.wikipedia.org/wiki/Domestoshttp://en.wikipedia.org/wiki/Comfort_(fabric_softener)http://en.wikipedia.org/wiki/Cifhttp://en.wikipedia.org/wiki/Wheel_(detergent)http://en.wikipedia.org/wiki/Magnum_(ice_cream)http://en.wikipedia.org/wiki/Modern_Food_Industrieshttp://en.wikipedia.org/wiki/Kwality_Wall%27shttp://en.wikipedia.org/wiki/Knorr_(brand)http://en.wikipedia.org/wiki/Liptonhttp://en.wikipedia.org/wiki/Brooke_Bond -
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Axedeodorant and after shaving lotion and soap
LEVER Ayush Therapyayurvedichealth care and personal care
products
Breeze beauty soap
Clear anti-dandruff hair products
Clinic Plus shampoo and oil
Close Uptoothpaste
Doveskin cleansing & hair care range: bar, lotions, creams and
anti-perspirant deodorants
Denim shaving products
Fair & Lovely skin-lightening products
Hamam
Lakmbeauty products and salons
Lifebuoysoaps and hand wash range
Liril2000 soap
Luxsoap, body wash and deodorant
Pearssoap Pepsodenttoothpaste
Pond'stalcsand creams
Rexonasoap
Sunsilkshampoo
Sure anti-perspirant
Vaselinepetroleum jelly, skin care lotions
TRESemm
Water Purifier Brand: Pureit Water Purifier
http://en.wikipedia.org/wiki/Axe_(brand)http://en.wikipedia.org/wiki/Axe_(brand)http://en.wikipedia.org/wiki/Ayurvedichttp://en.wikipedia.org/wiki/Ayurvedichttp://en.wikipedia.org/wiki/Ayurvedichttp://en.wikipedia.org/wiki/Close-Up_(toothpaste)http://en.wikipedia.org/wiki/Close-Up_(toothpaste)http://en.wikipedia.org/wiki/Dove_(toiletries)http://en.wikipedia.org/wiki/Dove_(toiletries)http://en.wikipedia.org/wiki/Hamam_(soap)http://en.wikipedia.org/wiki/Hamam_(soap)http://en.wikipedia.org/wiki/Lakm%C3%A9_Cosmeticshttp://en.wikipedia.org/wiki/Lakm%C3%A9_Cosmeticshttp://en.wikipedia.org/wiki/Lifebuoy_(soap)http://en.wikipedia.org/wiki/Lifebuoy_(soap)http://en.wikipedia.org/wiki/Lirilhttp://en.wikipedia.org/wiki/Lirilhttp://en.wikipedia.org/wiki/Lux_(soap)http://en.wikipedia.org/wiki/Lux_(soap)http://en.wikipedia.org/wiki/Pears_soaphttp://en.wikipedia.org/wiki/Pears_soaphttp://en.wikipedia.org/wiki/Pepsodenthttp://en.wikipedia.org/wiki/Pepsodenthttp://en.wikipedia.org/wiki/Pond%27shttp://en.wikipedia.org/wiki/Pond%27shttp://en.wikipedia.org/wiki/Rexonahttp://en.wikipedia.org/wiki/Rexonahttp://en.wikipedia.org/wiki/Sunsilkhttp://en.wikipedia.org/wiki/Sunsilkhttp://en.wikipedia.org/wiki/Vaselinehttp://en.wikipedia.org/wiki/Vaselinehttp://en.wikipedia.org/wiki/TRESemm%C3%A9http://en.wikipedia.org/wiki/TRESemm%C3%A9http://en.wikipedia.org/wiki/TRESemm%C3%A9http://en.wikipedia.org/wiki/Vaselinehttp://en.wikipedia.org/wiki/Sunsilkhttp://en.wikipedia.org/wiki/Rexonahttp://en.wikipedia.org/wiki/Pond%27shttp://en.wikipedia.org/wiki/Pepsodenthttp://en.wikipedia.org/wiki/Pears_soaphttp://en.wikipedia.org/wiki/Lux_(soap)http://en.wikipedia.org/wiki/Lirilhttp://en.wikipedia.org/wiki/Lifebuoy_(soap)http://en.wikipedia.org/wiki/Lakm%C3%A9_Cosmeticshttp://en.wikipedia.org/wiki/Hamam_(soap)http://en.wikipedia.org/wiki/Dove_(toiletries)http://en.wikipedia.org/wiki/Close-Up_(toothpaste)http://en.wikipedia.org/wiki/Ayurvedichttp://en.wikipedia.org/wiki/Axe_(brand) -
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AWARDS AND RECOGNITION
As per the latestNielsenCampus Track-Business SchoolSurveyreleased in February 2013, Hindustan Unilever Limited has
emerged as the No.1 employer of choice for B-School students
who will graduate in 2013, across functions. HUL also retained
the 'Dream Employer' status for the 4th year running and
continues to be the top company considered for application by B-
School student in India.
In 2012, HUL was recognised as one of the world's most
innovative companies by Forbes. With a ranking of number 6, it
was the highest ranked FMCG company.
Hindustan Unilever Limited (HUL) won the first prize at FICCI
Water Awards 2012 under the category of 'community initiatives
by industry' for Gundar Basin Project, a water conservation
initiative.Hindustan Unilever Limited won 13 awards at the Emvies 2012
Media Awards organised by the Advertising Club Bombay in
September 2012.
The company bagged four awards at the Spikes Asia Awards
2012, held in September. The awards included one Grand Prix
one Gold Award and two Silver Awards.
HULs Chhindwara Unit won the National Safety Award for
outstanding performance in Industrial Safety. These awards were
instituted by the Union Ministry of Labour and Employment in
1965.
HUL was one of the eight Indian companies to be featured on the
Forbes list of World's Most Reputed companies in 2007.
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In July 2012 Hindustan Unilever Limited won the Golden Peacock
Occupational Health and Safety Award for 2012 in the FMCG
category for its safety and health initiatives and continuous
improvement on key metrics.
Pond's Talcum Powder's packaging innovation has bagged a Silver
Award at the prestigious 24th DuPont Global Packaging Award, in
May 2012.The brand was recognised for cost and waste
reduction.
In May 2012, HUL & Star Bazaar bagged the silver award for
'Creating Consumer Value through Joint Promotional and EventForecasting' at the 13th ECREfficient Consumer ResponseAsia
Pacific Conference.
In 2011, HUL was named the most innovative company in India by
Forbes and ranked 6th in the top 10 list of most innovative
companies in the world.
Hindustan Unilever Ltd received the National Award for Excellence
in Corporate Governance 2011 of the Institute of Company
Secretaries of India (ICSI) for excellence in corporate governance.
In 2012, Hindustan Unilever emerged as the No. 1 employer of
choice for B-School students who will graduate in 2012. In
addition, HUL also retained the 'Dream Employer' status for the
3rd year running.
Hindustan Unilever ranked No. 2 in Fortune India's Most AdmiredCompanies list, which was released by Fortune India in
partnership with the Hay Group. The company received the
highest scores for endurance and financial soundness.
HUL was ranked 39th inThe Brand Trust Report(2011) published
by Trust Research Advisory. Seven HUL brands also featured in
the list: Lux, Ponds, Dove, Lakme, Axe, Sunsilk and Pepsodent.
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HUL emerged as the top 'Dream Employer' as well as the top
company considered for application in the annual B-School Survey
conducted by Nielsen in November 2010. This was the second
successive year that HUL has been rated as the top 'DreamEmployer' in India. HUL has also emerged as the top employer of
choice among the top sixIndian Institutes of Management(IIMA,
B, C, L, K and I).
HUL won three awards at the 'CNBC AwaazStoryboard Consumer
Awards in 2011 Most Recommended FMCG Company of the
Year; Most Consumer Conscious Company of the Year and Digital
Marketer of the Year.
The company was felicitated in April 2010 for receiving the
highest number of patents in the year 2009 at Annual Intellectual
Property Awards 2010.
In 2007, Hindustan Unilever was rated as the most respected
company in India for the past 25 years byBusinessworld, one of
India's leading business magazines. The rating was based on acompilation of the magazine's annual survey of India's most
reputed companies over the past 25 years.
HUL is one of the country's largest exporters; it has been
recognised as a Golden Super Star Trading House by the
Government of India.
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MARKETING STRATERGIES OF HINDUSTAN
UNILEVER LIMITED
1. GROWTH STRATERGY
2. COMPETITIVE STRATERGY
3. SWOT ANALYSIS
4. PAN PYRAMID PORTFOLIO
5. PUSHING CONSUMER FOR MORE USAGE
6. HIGHLITING BENEFITS
7. BRAND STRATERGY
8. INNOVATIVE PRICING STRATERGY
9. INCREASE CONSUMPTION IN RURAL MARKET10. DIGITAL ADVERTISING
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1. GROWTH STRATERGY
After having fought a bitter price battle for market share with its
rivals, Hindustan Unilever Ltd (HUL), Indian subsidiary of the
Anglo-Dutch consumer goods company Unilever Plc, is now
working on a new growth strategy for its laundry business.
Price cutor hike is not a long-term growth strategy. Pricing, in
fact, is now passe, insists Sudhanshu Vats, category head, home
care.
Our strategy for growth, now is focused on product innovation,
new consumer and retail trends and aggressive marketing and
promotions, he said.
This comes even as Unilever is scouting for a potential buyer for
its laundry business in the US.
HUL says it is quite upbeat about the segment and says the
laundry segment is one of its key growth areas.
We have done key innovationsacross the product portfolio and it
is working for us, says Vats. We successfully migrated from Rin
Supreme to Surf Excel and Wheel Smart Srimatiwhich was
rolled out in 2006is also on the right track.
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HULs market share in the laundry segment grew toaround
37.8% in the quarter ended June from 35.5% in the same period
last year, according the market research firm ACNielsen.
However, this time, the increase was not at the expense of price
war with its multinational rival Procter & Gamble Co. P&G also
gained 0.5 percentage points, up to a 7.6% share. Nirma Ltd, the
Ahmedabad-based manufacturer, however, saw its market share
dip by 1.7% percentage points to 13.5%.
Wheel, a value brand that, according to Vats contributes around
50% of HULs laundry segmentrevenues, increased its market
share by 2 percentage points in the same period, with a total
share of about 18%.
According to ACNielsen, the laundry industry in India was worth
Rs7,908 crore in 2006 and rose 8.4% over 2005. HUL doesnt
report its laundry revenues separately but puts them under the
soaps and detergent category.
In 2006, HULs soaps and detergents segment contributed
around Rs5,596 crore to the companys total sales of Rs12,103
crore.
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Laundry has been an attractive segment in the past and is likely
to keep growing in the near future. The recent price war between
companies led to erosion in their profitability but now, the
industry is stabilizing, says Unmesh Sharma, an analyst at
Macquarie Securities here.
According to Vats, the laundry business is witnessing a surge in
demand from cities and HUL is focusing on Tier I and II cities to
tap that demand.
Consumers today are buying more clothes, says Vats. Trends
suggest that the usage of detergents has gone up as a result.
Also, with premium quality of clothes, people want to use better
and branded products.
Still, analysts remain cautious. Some of HULs recent moves,
such as promotional campaigns and advertising, seem right,
says Macquaries Sharma. Still, it is too early to say what result
their new strategies will yield.
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2. COMPETITIVE STRATEGY
As Competition Heats Up, Indias Top Consumer-Products
Company Woos Affluent Shoppers With Global Brands Like Dove,
While Cooking Up Its Foods Biz
The middle-aged Briton strolling the aisles and checking out the
products doesnt attract much notice from other shoppers in
Mumbais Hypercity, the India hypermarket chain. Thats how
Douglas Baillie likes it. Baillie, the managing director of Hindustan
Unilever, Indias premier consumer-products company, wants to
see how his products are stocked, what consumers are buying, and
how shoppers are reacting to competitive brands. Its primary
market research at its most elemental, and its best done incognito.
Hindustan Unilever has traditionally relied on small traders and
mom-and-pop corner stores to retail its products. But Indias
recent retail boom has created large stores and malls, so the
company wants to make sure its in with the new marketing crowd.
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Hence Baillies Hypercity visits, and the calls he makes on the
headquarters of the big retail chains.
This is quite a change for Hindustan Unilever, whose executives
used to have emissaries make obeisance at Lever house in
downtown Mumbai. I cant imagine any head from Lever House
ever visiting other company offices like this, says an amazed
Damodar Mall, chief executive of innovation and incubation at
Pantaloon Retail, Indias largest retailer and a former manager at
Hindustan Unilever.
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3. SWOT ANALYSIS
Strength
1.Hindustan Unilever Limited (HUL) is India's largest Fast
Moving Consumer Goods company, touching the lives of
two out of three Indians with over 20 distinct categories in
Home & Personal Care Products and Foods & Beverages..
2. Due to its long presence in Indiahas deep penetration
20 consumer product category, over 15,000 employees,
including over 1,300 managers, is to "add vitality to life."
3.The company derives 44.3% of its revenues from soaps and
detergents, 26.6% from personal care products, 10.5%
from beverages, and the rest from foods, ice creams,
exports, and other products.
4.Low cost of production due to economic of scale. That
means higher profits and / or more competitioners. Better
market penetration.
5.HUL is also one of the country's largest exporters; it has
been recognised as a Golden Super Star Trading House by
the Government of India.
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4. PAN PYRAMID PORTFOLIO
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5. PUSHING CONSUMER FOR MORE USAGE
LOW COST SACHETS, MINI PACKETS, NEW INNOVATION AND
ATTRACTIVE PACKAGING IN PRODUCTS IN THE SAME PRICE,
ADVERTISING THE PRODUCTS TO AN EXTENT THAT PEOPLE
DEVELOP A DESIRE, A NEED TO BUY THE PRODUCT, THUS PUSHING
THE CONSUMER FOR MORE USAGE.
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6.HIGHLIGHTING BENEFITS
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7. BRAND STRATERGY
The 1980s witnessed a revolution in the understanding of the
working of the brands. Marketers depict brands as a reflection ofcustomers own personalities, so that they can relate to their
products well. In fact the distinguishing aspect of the modern
marketing has been its focus upon the creation of differentiated
brands and using them as weapons for launching multi-level
attacks on competition. Market research has been used to help
identify and develop bases of brand differentiation. A brand
identifies a product and its sources, but it does even more. Along
came brand extension. Today brand extension strategies are
widely employed because of beliefs that they build and
communicate strong brand positioning, enhance awareness and
increase profitability.
Brands are often extended beyond their original categories to
include new product categories. Research has proved that thesuccess of brand extension depends on the transfer of parent
brand awareness and associations to the extension. The transfer
of these quality perceptions is the key in umbrella branding. An
umbrella brand is a brand that covers diverse kinds of products
which are more or less related. It applies also to any company
that is identified only by its brand and history. It is contrasted
with individual branding in which each product in a portfolio is
given a unique identity and brand name.
Mr. K.R.Senthilvelkumar, a professor at Jansons School of
Business offers the most pragmatic of reasons behind an
umbrella brand strategy, with scarce financial resources, firms
cannot afford to allocate huge budgets for building and
maintaining several brands.
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Nowadays consumers have become quite unpredictable in their
newspaper-reading or TV-viewing habits, it is very difficult to
assure the reach of messages to the target audiences. The
advertiser has to use many broadcast and print media with high
frequency to create the desired effect for every brand, which
ultimately puts huge burden on the budget. Hence, companies
consider it wise to maintain a minimum number of brands in their
portfolio so that they can do justice to each by effectively
distributing their investment for promotion purpose.
Yes, umbrella branding is widely practiced. The Confederation ofIndian Industry's second FMCG (fast moving consumer goods)
conclave in 2003 almost declared that umbrella branding was the
way to go in a competitive market environment. In an interesting
anecdote, R S Sodhi, GM Marketing (Gujarat Cooperative Milk
Marketing Federation l), compared the umbrella brand and
individual brands to an Indian family, where in umbrella brands -
like the Indian family, the father is the head, looking over the
children. When they grow up and become independent, they hold
the umbrella for the family. Individual brands on the other hand
are like a western family, who grow up fast and leave the father
behind. Amuls strategy of using umbrella branding has really
paid off. Amuls advertising and marketing spend has never
exceeded 1% of its revenues. Most other food companies spend
6-7% of revenues on advertising and marketing. They (GCMMF)
are not big spenders compared to Britannia or Nestle. Despite a
limited budget, Amuls creativesin the form of billboards or the
Taste of India campaignhave always managed to evoke a
larger-than-life brand feel, consistency and spirit of Indian
culture in a contemporary way.Companies phase out the brands which have become redundant
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and retain one or two umbrella brands for every category with
necessary variations under each. For example consumer goods
major Reckitt & Colman India Ltd. chalked out an expansion
strategy to introduce 20 new brands in the year 1999-2000. The
strategy also involved repositioning its existing brands and
consolidating sub-brands under its main umbrella brands -
Dispirin, Dettol, Harpic and Cherry Blossom. The strategy was
designed to vault Reckitt & Colman, in terms of sales, into the big
league. With the launch of new brands and the repositioning of its
existing brands, the company aimed to achieve expected salesgrowth. The strategy worked well as Dettol as an antiseptic lotion
provided brand support to Dettol soap, which was re-launched in
a fragrant form called Dettol Fresh to take on HLL's Liril. Cherry
Blossom acted as a mother brand for several easy-to-use home
products.
Hindustan Unilever Ltds (HUL) beverage brands have been
amalgamated under two umbrella brands Brooke Bond and
Lipton and in the fabric wash category, the company has retained
only Rin, Surf and Wheel, HUL has withdrawn brands such as
Sunlight, 501, Dalda and Nihar; it plans to withdraw some more
brands and group them under a few umbrella brands. HUL is
currently focusing on 35 power brands.
Nivea cosmetics brand has a presence in huge number of product
categories and countries. Once upon a time Nivea's performance
prompted a yahoo.com news article to name it the 'Queen of
Mega Brands.' This title was appropriate since the brand was
present in over 14 product categories and was available in more
than 150 countries. Nivea was reportedly believed to be a brand
of local origin - having been present in them for many decades.This fact went a long way in helping the brand attain the
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leadership status in many categories and countries. According to
analysts, the brand was the single largest factor for the 4.4%
increase in the company's (Beiersdorf) revenues ( 4.74 billion)
and 10.7% increase in after-tax profit ( 290 million) for the year
2002. Beiersdorf never tried to disturb the umbrella branding of
Nivea and got fruitful results.
Today as organized retailing is gaining popularity, we can see
that popularity of private labels owned by retailers. Retailers do
not feel the need to develop many brands for various categories
because it is the loyalty towards their store name which drawsand retains the customers. Hence it is the umbrella retail store
name which will be the brand for various product categories and
not individual names for each. Customers prefer these brands
over that of manufacturers, due to the fact that they address their
functional needs well. The retailers also enjoy high margins for
private labels. Today a retail chain like Shoppers Stops 20%
apparel section is driven by private labels. There are others like
Trent from the TATAs which has developed its business model
purely on private labels.
From Asian Paints in 2003 to Electrolux, Onida and Airtel in 2004,
they have all made a move from individual product branding to
umbrella branding. Just a few year ago Bharti Televentures had
brand Airtel for mobile services, Touchtel for land line and India
One for long distance calls. But with Airtel dominating the group's
ad spends, the company figured that the other brands were
hardly making their presence felt. The unified licensing regime in
December 2003 - which means that only one license is required
to offer fixed, mobile and other services - acted as a catalyst (new
Airtel logo/ Airtel outlets). So come September 2004 and thecompany started selling all its services under one brand name -
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They also launched E-series phones (which serve business users)
and N-series (which have multimedia features).
While some players say that the naming trend will be restricted to
the high-end, feature-led phones(for example- LG is also
banking on the name game but in that case it is confined to the
high-end range of designer phones), others like Motorola are
banking on names irrespective of price slabs. Motorola believes
that consumers don't look at these names in an abstract manner
and therefore names convey a message to consumers.
A few umbrella brands or individual brands? According toexperts, independent brands only make sense when the product
clearly has a different proposition from the company brand; like
Lexus from Toyota and Swatch from Omega. In the case of Asian
Paints, there were so many sub-brands, there was a reduction of
media weights for advertising each entity. Then, the company
shifted to a brand-centric portfolio, which involved a change of
logo, product names, packaging and advertising. But the
response from the trade and consumers has been positive, overall
brand synergy and shop presence have increased, and the
advertising is more effective.
Most probably in near future the media environment will make it
impossible to create newer brand names and the conditions at the
consumer level, as well as the environment. So unless the product
is clearly different in the mind of the consumer, umbrella
branding is the way to go. Umbrella brands are going to rule!
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8. INNOVATIVE PRICING STRATERGY
Unilever takes HUL strategies like small packs,
cheaper variants to developed marketsDuring a 2009 India visit, Paul Polman, CEO ofAnglo-Dutch consumer goods major Unilever,
couldn't conceal his delight with the Indian
subsidiary's strategy of offering brands with
multiple price and packaging options, helping
consumers trade down or up depending on the
state of the economy.
"If we had that (such options) in the United States,
there is no reason why we would be hit in a
recession. We have seen that we tend to do well in
markets that have a wide portfolio of brands in a
category. So, we are trying to do the same in
other markets," Polman had said.
Three years on, theUnileverCEO's words are ringing true in
developed markets. The home &personal careand foods giant is
now dipping into the sales strategies being deployed by outposts
in developing and emerging (D&E) markets, such as
India'sHindustan Unilever Ltd(HUL), to appeal to recession-
ravaged consumers in the US and Europe.
These include selling smaller pack sizes, affordable variants of
best-selling brands for the developed world's bottom of the
pyramid consumer, and single-serve sachet variants.
Company officials say consumers indeveloped marketsplagued
byunemploymentand shrinkingdisposable incomeare displaying
similar habits of thrift as those in developing markets.
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The maker of brands such as Axe, Dove, Knorr and Lipton is
selling small packs of its brands in markets such as Spain, Greece
and the US. In Spain, for instance, Unilever sells Surf detergent in
packs offering five washes, and offers mashed potatoes and
mayonnaise in small packages in Greece. It has also launched a
low-cost brand for tea and olive oil for the euro markets.
Confirming the move, a Unilever spokesperson said: "We have
'reverse-engineered' products from D&E markets - where we have
big, long-established businesses - starting with a price point that
people can afford and then working our way backwards along the
supply and manufacturing chain to make sure that we can make it
a profitable business model. We know that this works as a way of
meeting the needs and aspirations of consumers who struggle to
make ends meet - be that through low-price sachets of
shampoos or basic bouillons."
Across Europe, Unilever has noted that the recession drives more
consumers to packed lunches and home-baking. The company
has now introduced new baking products like Stork baking liquid
as an option to the more expensive butter as well as in packs that
can be re-used as lunch boxes.
The spokesperson also points out that Unilever runsmarketing
campaignson mayonnaise that seek to inspire people to make
the most of their leftovers. "Groups of consumers see value
differently. The 'cash strapped' are really about spending the least
out of pocket as possible; whilst 'smart shoppers' might be
looking for the best price per portion; and 'bargain hunters' the
best possible promotional deal," explains the spokesperson. One
way Unilever is trying to meet consumer needs is by positioningspecific brands as value-for-money alternatives. Example: the
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spreads portfolio has 'I can't Believe it's not Butter' in the United
Kingdom, Homa in Germany and Delma in Poland. Unilever is also
rolling out Saga, a strong value-for-money tea brand in central
European markets.
The consumer goods giant has also dramatically increased the
number of products that retailers can choose to sell at euro 1 or
1.
Within the Knorr Bouillon range, Unilever has
launched Knorr Economica with an entry-level
stock cube that's priced some 60% lower than
the normal line. Another strategy involves
offering more at an affordable price: like ice-
creams in mega packs, large jars of mayo, and
PG Tips in '240 Tea Bag' formats.
Much of what Unilever is replicating in the
developed world has originated in India. For
instance,HUL had launched a sachet blitz
across such power brands as Close-Up,
Pepsodent, Sunsilk, Ponds, Vaseline, Brooke
Bond Taj Mahal and Bru to increase product
penetration at the bottom of the pyramid.
Innovations that add value, particularly at the lower end of the price
spectrum, are being shipped to developed markets.
What we have been able to do better as a business is take some of the
techniques we use in one part of the world and apply them where they are
appropriate elsewhere," adds the Unilever spokesperson.
Kannan Sitaram, operating partner at India Equity Partners, a New York-
based private equity firm, says with Unilever adopting value-for-money
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strategies in the developed world, the bottom of the pyramid term has now
got a new dimension.
"Bottom of the pyramid does not mean poor consumers; it includes those
who want a particular value at a price, across categories."
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9. INCREASE CONSUMPTION IN RURAL MARKET
a. Project Shakti
Project Shaktiis a rural distribution initiative that targetssmall villages.
HUL identifies underprivileged women in villages and these
women are trained to be entrepreneurs.
Shakti started with 17 women in two states. Today, it
provides livelihood enhancing opportunities to about 45,000
women in 15 Indian states and provides access to quality
products across 100,000+ villages and over 3 million
households every month.
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1. To Reach:Small, scattered settlements and poor infrastructure make
distribution difficult
Over 50,000 villages not reached directly by HUL
2. To Communicate:Low literacy hampers effectiveness of print media
Poor media-reach: 500 million Indians lack TV and radio
Khushiyon Ki DoliThe company launched a multi-brand rural marketing initiative
called Khushiyon Ki Doli, in 2010 in three states Uttar Pradesh,
Andhra Pradesh andMaharashtra.Through this initiative more
than 10 million consumers were contacted directly in more than
28,000 villages across these three states. Through this initiative,
the company also reached out to 170,000 retailers in these
villages.Through this initiative HUL engaged with 25 million rural
consumers in media dark areas in 2011.
In 2011, HUL extended this initiative to cover five states West
Bengal, Bihar, Maharashtra, Andhra Pradesh and Uttar Pradesh,
covering over fifty thousand villages across these five states.
In 2012, Kushiyon Ki Doli has been extended to Karnataka to
cover a total of six States: Maharashtra, UP, Bihar, West Bengal,
Andhra Pradesh and Karnataka. The initiative aims to cover over
Fifty five thousand villages in 2012.
Various personal care and home care brands of HUL have
participated in this initiative including: Wheel, Surf Excel, FAL,
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Sunsilk, Vim, Lifebuoy and Closeup. The module follows a three-
step process, starting with awareness, moving on to consumer
engagement and finally retail contact. The first step of spreading
awareness is achieved through a team of promoters who head to
each village and invite the villages to what is known as Mohallas
to make them aware of the company and its products. In every
village, there are about 45 teams that conduct these events in
local language for small focused groups so that it allows for
greater engagement and involvement for the consumers. During
this activity, brands are introduced with the help of TVCs that areplayed continuously. And the promoters by way of live
demonstrations bring alive the hygiene benefits of using such
brands and improving the quality of daily life. To increase the
fun element and enhance involvement, promoters also conduct
simple quizzes and games around the brands and daily hygiene
habits. As part of this activation,the company offers schemes
both for the participating consumers and also local retailers for
generating trial among consumers as well enhancing availability
at retail. Post the mohalla activity, the promotes go home to
home and conduct consumer home visits to generate trial where
they offer attractive promotions to the consumers. Similarly, there
is another team which visits all the shops in the village which
ensures improved availability and visibility of HUL brands.
Technology has been used to advertise and market HUL's brands.
At the same time, the company has utilised traditional symbols to
bolsterPublic Relations.For example, the brand films and
hygiene messages are shown to the consumers through the use
ofPalki.
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10. DIGITAL ADVERTISING
Sometime in mid 2011, Nitin Paranjpe, CEO of the Rs 22,000-
crore HindustanUnilever,found himself taking some unusual
lessons: on how to tag a person onFacebook,and tweet.
Teaching the digitally challenged Paranjpe the ropes of social
media was Karthik Perumal, the 32-yearold media services
manager of HUL. "Today, there is a generation of consumers
growing up only in the digital space," Paranjpe told ET in
December 2012. "As the CEO of a company whose business
revolves around the consumer, how can I not be clued in to it?"
Its learning and in many cases, unlearning that
everyHULmarketing manager is going through, though in less
personalised settings.
While Paranjpe has a personal coach, HUL managers have trainersfrom Google teaching them the vocabulary of the online world,
acquainting them with technologies involved, and giving them a
digital certification. That's at the back end. The back end is meant
to pump the front end, which is fast changing in character.
HUL is acquiring momentum in its online and digital drive. In
FY13, it is expected to triple ad spends in those mediums, takingtheir share to 7% of its total ad spend, which was Rs 2,635 crore
in FY12, according to analyst estimates.
In FY14, this is expected to cross 10%. In HUL's media spend,
online is now number two, after television.
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In 2012, HUL launched a massive India-
specific initiative, BE Digital, which draws a
complete digital road map for premium brands
such as Tresamme, Sunsilk, Lakme, Close-up
and Surf, for which the target audience online
is high.
So, against the old approach of thinking about digital after
exhausting TV spending on a brand, HUL is integrating social
media and mobile into the brands' marketing at the planning
stage itself, as it did with Tresamme, a hair care brand.
HUL created Tresamme Style Studio, a digital-styling website
loaded with 100-odd videos on hair styling, a webcam mirror that
lets women style along in real-time, and a tool that lets women
test new lengths and looks on their own hair virtually.
The company is also working on a semi-digital roadmap for its
other brands, which will eventually be scaled up depending on a
brand's requirement.
"For some brands, the time has already come now, and others will
catch up," says Hemant Bakshi, executive director home &
personal care, HUL.
"Fact is, no brand can today escape being digital." According toBakshi, young consumers say they spend three to four hours daily
in the digital space, and there are more people accessing the
Internet via the mobile than through computers. "The digital
space has reached an inflexion point," he says.
"A young girl I met in Bangalore said the phone was the first thing
she checked every morning, and that she was more on theInternet than on television. The reality is that consumers in the
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digital space have moved on much faster than companies have."
HUL, which has 35 brands in 20 categories, is pulling multiple
levers in an attempt to catch up. It is training its brand managers.
It has set up a 'digital experimentation fund' to encourage
employees to pitch ideas for the online space, five of which have
been rolled out. The company is seeking partnerships outside of
its traditional advertising agencies.
Marketing consultant Suman Srivastava says HUL still has to
master the art of doing something unconventional to make an
impression online. "Currently, HUL's digital strategy is
complementing its television strategy, while the Internet is all
about engaging consumers in a different way," says Srivastava,
founder of Marketing Unplugged, marketing consultancy firm.
Part of that re-orientation, adds Srivastava, involves HUL looking
beyond traditional ad agencies. "A lot of real innovations are
being done by smaller firms," he says.
In HUL's case, Srivastava cites the example of Wheel's 'missed call'
campaign as impact. In December 2011, an ad of Active Wheel on
All India Radio in Uttar Pradesh and Bihar asked listeners to give a
missed call from their mobiles. When they did so, they promptly
got a call back with a recording of actor Salman Khan's dialogues
from his film Ek Tha Tiger and his endorsement of Wheel.
According to company estimates, HUL got 16-million missed calls
in four months and that, by the end of the campaign, brand
awareness scores for Wheel had increased 25% and sales by three
times in the region. "We have a number of measurement
techniques in place, but ultimately digital must lead to our brands
becoming stronger and this should be reflected in sales," saysBakshi. An HUL internal research study showed that
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YouTubedelivered the highest return on investment (RoI) in terms
of building a brand's awareness.
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CONCLUSION
This company project has demonstrated HINDUSTAN
UNILEVERS MARKETING STRATEGIES AND POLICIES that has
proved to be extensive through, and of great benefit to the company
in furthering its competitive advantage.
In this project it possible to see the success of Hindustan Unilevers
in its indorse its strong potential to continue to dowell.
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BIBLIOGRAPHY
A L Ries (1996), Focus Harper Collins Publishers Ltd.
David A. Aaker (1991), Managing Brand Equity, The FreePress.
David A. Aaker (1996) Building Strong Brands, The FreePress.
Philip Kotler (Eighth Edition) Marketing Management,Prentice Hall of India Ltd.
The Economic TimesBrand Equity
Market survey and questionnaires
www.unilever.com