Hindustan Unilever Limited

FMCG Industry
FMCG products are products that have quick shelf turnover, at relatively low cost and dont require a lot of thought, time and financial investment to purchase FMCG Industry mainly deals with production, distribution & marketing of packaged goods to all consumers

FMCG Industry in India

Present Fourth largest sector in the economy Size - US$13.1 billion Strong MNC Presence Well established distribution network Competition between organized and unorganized sector Low Costs of labour and Easy availability of key raw materials

FMCG Industry in India

Future Set to reach a size US$ 33.4 billion in 2015 Penetration levels in several products categories low India one of the largest economies in terms of purchasing power with a middle class of 300mn Rural India a huge market still to be tapped Urban Rural Population 2001-02 (mn) 53 135 Population 2009 -10 69 153 (mn) % Distribution 28 72 Markets (Towns/ 3768 627000 Villages) Source: SOI, NCAER

FMCG Major Domestic Players

Domestic Players

Britannia India Ltd (BIL) Dabur India Ltd Indian Tobacco Corporation Ltd (ITCL) Marico Nirma Limited

FMCG Major Foreign Players

Foreign Players

Cadbury India Ltd (CIL) Cargill Coca Cola Colgate-Palmolive India H J Heinz Co Hindustan Unilever Ltd (HUL) Nestle India Ltd (NIL) PepsiCo Procter & Gamble Hygiene and Health Care Limited

Hindustan Unilever Ltd

HUL touches the lives of two out of every three Indians everyday Part of the 40 billion Unilever Group. The Group has more than 400 brands spanning 14 categories of home, personal care and food products Presence in over 100 countries and employs more than 174,000 people worldwide The Company was incorporated in 1933 but its products have been sold in India since 1888

Hindustan Unilever Ltd

Indias largest FMCG Company Headquartered in Mumbai Over 700 million consumers More than 15,000 employees, including 1,300 managers More than 200 highly qualified scientists and technologists Shares listed at BSE (Stock code - 500696) and NSE (Stock code HINDUNILVR) Shareholder base of over 3.5 lakh

HUL Mission
Mission Unilever's mission is to add Vitality to life. We meet everyday needs for nutrition, hygiene, and personal care with brands that help people feel good, look good and get more out of life.

HUL The Journey so far

A little bit of the History of HUL formation

HUL Geographic Presence

Production More than 35 manufacturing locations across India, with major hubs being Assam, Uttaranchal, Himachal Pradesh, Pondicherry and Dadra & Nagar Haveli Marketing All States in India, Project Shakti

Critical Success Factors

Clear Brand Identity Visible elements of a brand (colours, design, logotype, name, symbol) that together identify and distinguish the brand in the consumers' mind) Market Reach Estimated number of the potential customers it is possible to reach through a an advertising medium or a promotional campaign Tangible and intangible benefits of the brand Unique Selling Proposition Differentiation

Critical Success Factors

Operational Effectiveness Contain low cost competition: Focus on achieving cost competitiveness to counter low cost competition Right goods, Right time, Right quality @ Right cost Innovate aggressively: Innovate, Growth, Mature, Innovate Ensure the future of business

Critical Success Factors

Winning Through People Attract and retain top quality talent: Business leadership programme or new category organisation structure Success will only be achieved through highly motivated and effective people

Customer and Supplier Management Satisfying customers Management of the total supply chain

Critical Success Factors

Commitment at all levels Allowing each unit to develop initiatives Providing Budgetary Support to sub groups Strategic Level Successful implementation of the strategic objectives Power brand to expand profitably to grow the business (eg: Restructure in HLL 2001) IT Systems Excellence in IT systems

HUL Product Portfolio

Segment Household Care

Sub-Segment Fabric Wash

Market Share: 38%

HUL Product Portfolio

Dish Wash Market Share: 58% Surface Cleaning Personal Wash
Market Share: 52%

Personal Products

Hair care
Market Share: 47%

Skincare
Market Share: 52%

Brand Surf Rin Sunlight Wheel Vim Domex Lifebuoy Lux Dove Pears Breeze Liril Hamam Clinic Shampoo Dove Sunsilk Ayush Ponds Fair & Lovely Lakme Skin Care Vaseline Aviance

Comment Patented Technology, Premium Segment Largest Selling detergent bar Unilevers oldest, first brand WB, Kerala Largest Selling Indian detergent First & largest selling dish washer bar Worlds largest selling Soap Global brand Global Brand: Premium, Skin friendly Premium Segment Basic Segment Focuses on young female population South Indian Regional Brand TN Indias largest selling shampoo (D,ND) Global Brand: Premium, Hair friendly Largest beauty shampoo brand Herbal - Doing well in South India Global brand, First mover (1947) Patented Formulation, Asian brand Bought from Tatas, Salon Business Global brand, Monopoly in Indian Petro-Jelly Customized Personal care Solutions

Segment Personal Products

Sub-Segment Toothpaste

HUL Product Portfolio

Food & Beverages

Pure-it Beauty and Wellness

Brand Close-up Market Share: 30% Pepsodent Toothbrush Deodorants Axe, Rexona Colour Cosmetics Lakme Market Share: 32% Infant Care Huggies Feminine Care Kortex Processed Foods Kissan Knorr Annapurna Beverages Tea Market Share: 23% Coffee Ice Cream & Gelato, Share: 45% Market Quality Walls Bakery Products Brain Food Amaze

Comment Indias first Gel, Youth brand Second largest selling toothpaste Clear leader in deodorant segment Natural Colorants Late entrant - Smaller Player Jam Squeeze, Ketchup Soups & Ready to Cook Salt, Flour 3 Roses Mindsharp, Taj, Brooke Bond, Lipton Bru

Demographic advantage of India Creating new markets Lakme Beauty Salons Moving from products to Services in Premium segments Ayush Therapy Moving from products to Services in Centres Premium segments

HUL Product Portfolio

HUL Financials

HUL Financials

HUL Porters Five Forces

HUL Porters Five Forces

HUL Porters Five Forces

HUL Porters Five Forces

HUL Porters Five Forces

HUL Porters Five Forces

SWOT Analysis

STRENGTHS

SWOT Analysis

WEAKNESSES

SWOT Analysis
OPPORTUNITIES

SWOT Analysis

Ansoff matrix: Products & Brand Strategic Framework

Existing Products New Products

Existing markets

New markets

BCG Matrix-HUL
Processed foods Colour Cosmetics

Hair Care Skin Care mium Soaps & Laundry Deodorants Water (PureIt)

Mass Soaps Beverages Oral care Laundry

Sea-food exports

Structure

Board at the apex-Headed by Chairman, comprising 5 whole time Directors and 5 independent non-executive Directors. Divisions: Each division is self-sufficient with dedicated resources and assets in sales, marketing, commercial, and manufacturing. Each category and each function - Sales, Commercial, Manufacturing - is headed by a Vice President.

For managing sales operations, HUL divides the country into four regions, with regional branches in Delhi, Kolkata, Chennai and Mumbai. In Marketing, each category has a Marketing Manager who heads a team of Brand Managers dedicated to each or a group of brands. Each Division has a nationwide manufacturing base, with each factory peopled by teams of Production, Engineering, Quality Assurance, Commercial and Personnel Managers.

Systems

Substantial investments in IT-based sales system Every salesman now books orders on a palmtop All orders are fed into a central database from the distributor point. This extensive network is installed at all 3,500 distributor pointswhich makes for accurate on-the-fly demand projections and helps avoid stock-out losses.

Style

Nitin Paranjpe- Youngest CEO & MD 'CEO Factory-Produced many business leaders HUL's leadership development model has groomed managers by providing a well-rounded view of the business through job rotation and various new assignments. The system was designed to identify fast-trackers, who were called the Lever listers and groom them for handling greater responsibilities. For every position, typically three people competed.

Shared values

Unilever's mission is to add Vitality to life. We meet everyday needs for nutrition, hygiene, and personal care with brands that help people feel good, look good and get more out of life. Unilever has earned a reputation for conducting its business with integrity and with respect for all those whom our activities affect. Singular belief that what is good for India is good for HUL. It has strategically introduced new products on think global and act local concept Deep roots in local cultures and markets around the world give it a strong relationship with consumers.

Staff
15,000 employees, including 1200 managers, 200 scientists.

HUL has a strong management bandwidth having a team of professionals for each SBU. At HUL, career paths are designed such that they will build employees into business leaders. Employees would start from a managerial level in any of the following functions: commercial , technical, sales & marketing, IT, HR

The objective of each path is however the same: to give the employee a strong foundation so that she would be in a position to take on complete ownership for a brand or a unit.

Skills

Has in-house manufacturing as well as outsourcing R&D support from parent company Large distribution network Strong management

Has the best marketing talent in the industry

HUL Strategy
1.Leverage brand portfolio and consumer understanding by

2.Winning with consumers, channels, segments/markets of tomorrow

Straddling the pyramid & deploying full portfolio Driving consumption & penetration opportunity Build markets and capabilities for the future Leverage Unilever scale and know how

3.Drive increased execution rigour 4.Step-up in cost efficiency initiatives 5.Integrate economic, environment & social objectives with business agenda

Leverage brand portfolio and consumer understanding by

Changing Pyramid Changing Income Pattern

Leverage brand portfolio and consumer understanding by

Identifying the opportunity and filling it is important

Although HUL is market leader in most of the category, its loosing its market share.

Increasing consumption: Lifebuoy Hand wash Programme

Since 2002, the project has touched 50,676 villages and 120 million people. Campaign Impact Awareness of germs - 52% to 83% Association of germs with disease 35% to 57%

Consumers of tomorrow: Dove

Lipton Tea & Taj Mahal Tea Bags

Channels of Tomorrow

Pioneering new channels

In March 2009, HUL adapted go-to-market programme First tried out in Mumbai, it was than implemented across all towns and cities with a population above eight lakh, starting with Chennai. Earlier, HUL had different distributors for its home and personal care division and food division in the same area. Now, all the products would be sold by the same distributor in any one area. The Go-to-Market model also helps to remove the enormous logistics hitherto faced by the distributors in their back-end operations, thus removing significant costs from the system. More importantly, enabling them to focus on the front-end to deliver better services to end-retail,

Pioneering new channels

Project Shakti : HUL's partnership with Self Help Groups of rural women. Hindustan Unilever Network (HUN): Direct Selling Channel - Home & Personal Care and Foods. Out-of-Home : Alliance with Pepsi Co. Vending machine for hot beverages like tea and coffee. Health and Beauty services :
Lakme Salons provide specialised beauty services and solutions. Ayush Therapy Centres easy access to authentic Ayurvedic treatments and products.

HULs distribution system

7,000 redistribution stockists covering about one million retail outlets. The general trade comprises grocery stores, chemists, wholesale, kiosks and general stores. Hindustan Unilever provide 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.

Distribution Strategy - Harnessing Information Technology

An IT-powered system has been implemented to supply stocks to redistribution stockists. The objective is to make the product available at the right place and right time in the most cost effective manner.

For this, stockists have been connected through an Internet-based network, called RS Net, for online interaction.

RS Net is part of Project Leap, HUL's end-to-end supply chain.

Distribution Strategy

Distribution at the Villages The company has brought all markets with populations of below 50,000 under one rural sales organisation. The team comprises an exclusive sales force and exclusive redistribution stockists. The team focuses on building superior availability of products. In rural India, the network directly covers about 50,000 villages, reaching 250 million consumers, through 6000 sub-stockists. Distribution at the Supermarkets HUL has set up a full-scale sales organisation, for this channel to serve modern retailing outlets. Product tests and in-store sampling is provided to consumers.

Segments of tomorrow: Hair Conditioners

Building New Market : Pure it

Progress Volume market leadership in South India >700 towns, 20 states covered Increasing penetration through retail presence in <10 L population towns More than 400 safe water zones established Growing consistently @ > 50% More than 7 million lives protected Complete protection `as safe as boiled water Meets US EPA standards Works without electricity, pressurized piped water Affordable: Device Rs 2000 ( $40) Germkill Battery Rs 350 ($7) Rs 0.35 per litre ( < 1 $ cent) (incl. initial price)

Unique Promotional Campaign

Unilever Research and Development Strengths

Location
Trumbull, US

Expertise
Skin Care, Deos, Shampoos, etc.

Port Sunlight, UK Fabric Wash, Hair Care, Deos, Oral Care, Surface Cleaners, etc. Beverages, Processed Foods, etc. Vlaardingen, NL Shanghai, China Bangalore, India Fabric Wash, Beverages, Processed Foods, etc. Shampoos, Skin Care, Ice Creams, Beverages, Processed Foods, etc. Skin Care, Fabric Wash, Beverages, Ice Creams, Processed Foods, Water etc.

Drive increased execution rigor

Enhanced Customer Service

Driving cost efficiencies

Integrate economic, environment & social objectives with business agenda

Thank You