A RESEARCH REPORT On
“A study on marketing strategies of different Products of HUL Ltd.” MASTER OF BUSINESS ADMINISTRATION SUBMITTED TO U.P. TECHNICAL UNIVERSITY LUCKNOW (2008- 2010) Under the Guidance of: Mr. Prashant Sharma (Project , Guide)
Submitted By Ravindra Kumar MBA IVth SEM Roll No. 0807470066
DEWAN INSTITUTE OF MANAGEMENT STUDIES PARTAPUR, BY PASS ROAD,MEERUT
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DECLARATION
I Ravindra Kumar Student of MBA IV SEM hereby declare that this research report is an original work done by me independently and or any part of this work has not been published for the award of any other Degree or Diploma. Project I herby that the report” titled “A study on marketing strategies of different Products of HUL Ltd is the requirement of the M.B.A.,DIMS, Meerut is my own efforts information furnished in this research report, is true to the best of my knowledge.
RAVINDRA KUMAR M.B.A. VI Sem Roll No. -0807470066
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ACKNOWLEDGEMENT In the process of completing this project Marketing Strategy of HUL. I have received cooperation from many quarters. I express my sincere gratitude and indebtness to Mr. Prashant Sharma, Faculty of MBA , DIMS, Meerut.
for giving me an
opportunity to enhance my skill in the field of my project. I am thankful for his guidance, patience and consummate support. He came to our help when it counted and I extend my heartiest thanks to him form enlightening my path. Without his sincere advice this project has been impossible. Moreover, I would also like to acknowledge my profound sense of gratitude and indebtness for Dr. Gaurav kaushik (H.O.D. MBA Deptt.) for his cooperation, guidance, support and precious suggestions that motivated me to complete this project. I would also like to thank Dr.J.C.Panth (Director ) Dewan Institute Of Management Studies Meerut, for his gem guidance. I also feel greatful and elated in expressing my indebtedness to all those who have directly or indirectly helped me in accomplishing this research work.
With Regards, Ravindra kumar Master of Business Administration (2008-10)
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Contents
1.
Introduction……………………………….. 4
2.
Objective…………………………………....6
3.
Methodology………………………………..8
4.
HUL- Brief History…………………………10
5.
HUL- Advertising Strategy…………………12
6.
Personal Products …………………………30
7.
Food & Beverages……………..…………. 44
8.
Financial News…………………………….56
9.
Press Releases……………………………..60
10.
SWOT Analysis……………………………70
11.
Limitation…………………………………..73
12.
Suggestion & Recommendation……………76
13.
Conclusion………………………………….79
14.
Bibliography………………………………..82
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INTRODUCTION
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INTRODUCTION The Company being selected for study under this project report is Hindustan Unilever Ltd; The number one FMCG in India. It can be said beyond any doubt that HUL is an undisputed leader in FMCG products in urban as well as rural area. HUL caters to 850 million people in India which becomes 85% approx. of the total population. Hence the study of HUL can give us a wide knowledge in the fields like successful implementations of marketing strategy in urban and rural India cutting across so many 7 cultural, social, regional, religious, linguistic barriers. Hindustan unilever Limited (HUL) is India's largest fast moving consumer goods company. It is a leading player in home and personal care products, foods and beverages, and speciality chemicals. What differentiates HUL? The product portfolio with its wide range of products sets HUL apart! It has achieved market leadership in soaps and detergents (Surf) as well as hair and skin care products (Sun Silk, Dove, Hamam). It is the second largest manufacturer of dental care products (Close-up, Pepsodent). HUL is also market leader in tea (Taj), processed coffee (Bru), ice cream (Kwality-Walls), tomato-based products (Kissan), jams and squashes (Kissan), and branded staples (Kissan Annapurna). The leading business magazine, Forbes Global, has placed Hindustan unilever at the top among the best consumer (household) products companies worldwide for the current year. With a plethora of brands, Communication becomes imperative. Every company has to communicate the presence of its products to capture a large market share. How does a company do that? There are many tools that a marketer can use: advertising, hoardings, radio, television and internet ads! What’s missing is the freebie! Is sales promotion only made up of ‘atta free with soap’? 6
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Objective
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OBJECTIVE ♦
To have an overall knowledge of how marketing of products with regard to FMCG sector takes places with reference to HUL.
♦
To map the market share of HUL in he Indian FMCG market.
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To study the different products offered by HUL.
♦
To study the marketing strategies and public relations of HUL.
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METHODOLOGY
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METHODOLOGY
The information obtained for the study is from secondary data sources. Secondary data comprises of information obtained from annual reports, journals, brochures of different FMCG company’s. It also includes organizational manuals and other important documents maintained and published by various FMCG companies. It also includes information collected from websites, business magazines, business newspapers etc. Moreover it also contained information’s collected from the various pamphlets published by different FMCG companies.
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BRIEF HISTORY
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HUL - BRIEF HISTORY The company was incorporated on 17th October, 1933 under the name of Lever Brothers (India) Pvt. Ltd. (LBIL). It set up its manufacturing units in Bombay and Calcutta an associated company viz., Hindustan Vanaspati Mfg. Co. Pvt. Ltd. (HVM), was earlier incorporated on 27th November 1931 which set up a vanaspati factory in Bombay. Both LBILK and HVM were wholly owned subsidiaries of Unilever Ltd., London, U.K. HVM later acquired three more vanaspati factories at Shamnagar (West Bengal), Tirchirapalli (Tamil Nadu) and Ghaziabad (U.P) In order to market the toilet preparations manufactured by LBIL or imported from Unilever companies, a marketing company under the name United Traders Pvt. Ltd. (UTL) was incorporated on 11th may, 1935 as a wholly owned subsidiary of LBIL. In 1944, the management of LBIL and HVM was integrated. In November 1956, HVM and two small associated companies viz. William Gossage & Sons (India) Pvt. Ltd and Joseph Crossfield & Sons (India) Pvt. Ltd., which were wholly owned subsidiaries of Unilever Ltd., were amalgamated with LBIL and the name was changed to Hindustan Unilever Ltd. From 23rd October, 1956 activities of UTL were taken over by its holding Company LBIL. With the amalgamation of business under one company, Indian capital was introduced in this integrated business in 1956. HUL has been growing very rapidly, especially in 1996 the growth was 88.6% HUL became the second private company in India after Reliance Industries to cross the Rs 10000 crore mark in 1998. At present it’s valued at Rs. 11764.31 crore.1 Its rapid growth has given HUL place in the top 5companies regularly in annual BT-500 survey. This huge success has come due to:
Merger with Ponds India Limited
Launch of 40 new products
Doubling of rural distribution network from 50,000 to one lakh villages
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ADVERTISING STRATEGY
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HUL : ADVERTISING STRATEGY BUILDING CORPORATE IMAGE Corporate communications and public relations for building image can truly be looked upon in the context of global business and marketing as a subject about which many professionals hold firm views, but know surprisingly little about. Some see it as a menace, as an expensive flag waving exercise which their company can easily do without. Others regard it as a myth, arguing that publicity by of virtue its obvious nature, cannot hope to change perceived images in people’s minds. At the other extreme are those who view corporate communications (particularly advertising as a magic formula and an instant panacea for every corporate ill. In reality it is none of these things. it is in fact, a management tool to influence the outside world-the target group. So, the real significance of building corporate image lies in preparing and consolidating a sound global consumer base. Every company wants to have a favorable image in the global market. In case of HUL also, image-building plays the most important part in determining its marketing strategy.
Building corporate image is concerned with building confidence and
credibility by helping your target group understand you better. Familiarity in this case normally improves acceptability of who you are and what you are doing. Ignorance, on the other hand, can lead to mistrust, or even contempt in some situations. Corporate image is built through more than one strategic means, and often a combination of activities. For instance1.
Advertising —corporate and even product
2.
Public Relations—external and internal
3.
Media Relations —especially the Press
4.
Customer and Supplier Relations
5.
Community Relations — good corporate citizenship
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As India transits from a shod age-driven economy to a one propelled by competition the reputation and image of a company like HUL will make difference between whether it rules the market or merely rues it. Corporate image is what enables HUL to hold its own against rivals like IPCL And Haldia Good corporate image can be built if you treat it like one of the Ps’ of marketing— the fifth ‘P’ stands for Performance’ —professional corporate performance, doing it the right way the first time. It’s in this regard that creativity in PR comes to have a lion’s share in the entire process of corporate image building. Creativity in PR means more than just pretty pictures and good copy. It is building image with activities, which generate all-round impact and visibility for the company. ‘What’ and ‘How’ is the task here. Creative corporate advertising, is one route. With respect to positioning similarly, the image communication and image building activity must to able to find a right niche in the minds of the target group. The ‘quality of the message, and activity, is vital for this. Companies which benefit most from corporate image are those who take a long-term view and commitment towards communication and the image of their organisation through it. HUL can be presented as a striking instance of it. Image and Identity There may be nothing new in saying that the corporate image is in the eye and the mind of the receiver.
Yet it is worth saying again and again. An organisation
transmits, on a sustained basis, messages to publics. It is the reception of the message, which goes to create the intended image. In other words, corporate communication is the process that translates an identity into an image. Again, in brief, corporate image primarily refers to the image that a company has acquired with the public whereas corporate identity refers to the image a company strives to achieve, in order to build to build a reputation with its publics.
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In this context, decidedly, every company like HUL needs a mission. The mission is, in fact, a framework for business and all its activities, the value that drive the company to achieve the corporate goals. No less important is the belief the company has in itself. The mission is the glue that holds the company together. Here, the PR and its communication strategies come into distinct focus. If the mission and the objectives of the organisation have to succeed, the corporate body must communicate short-term goals, long-range objectives and even the total mission of the organisation. Inadequate communications result in an ambiguous corporate image within as well as outside and lead to breakdown in the co-ordination of all contributing elements in an organisation. Dare To Think Beyond Advertising…. In present situation to address the "The soprano problem", advertisers resort to shadow advertisement where the products become endemic to the setting of the show. Where the products are shown being consumed or brand name is exhibited in the background. In India, the first shadow advertisement was used in movie "Bobby" where motorcycle "Rajdoot" was advertised. Recently, there was shadow advertisement of Coca-Cola in Hindi blockbuster "Kaho Na pyar hai". But the problem with shadow advertisement is that positioning message of the product can't be conveyed to consumers. Hence, the concept of shadow advertisement can be extended further so that the theme of the advertising would become endemic to entertaining show. This would be no more exclusive advertising. Rather, advertising will be a part of the entertainment. But this has to be done in a delicate manner so that the information about the product is passed on to the viewers without disturbing the entertaining element of the show. If this succeeds, that would be a great break-through for advertisement. Even this should not be called advertising anymore, as that has become an irritating word in the mind of the audience. Even though advertainment seems quite close to it, but it would be more evolved. Since in advertainment we try to advertise and entertainment comes with it. But in the recommended solution Hul wants to entertain the audience only and advertisement is an integral part of the show. 16
The major question would be, whether the audience would be able to comprehend the hidden positioning message? Here are few examples on how to make the positioning message integral part of the show. Hul have programmes like "Antakshari" in which participants take part in groups. The groups can be named after some brands and the participants would be projected as such that they would be personification of brands. Suppose one group is named Lux, the participants are expected to be beautiful women who stand for Lux. So this can be done for many programmes, which has format like this. Suppose HUL produced a soap opera and the dialogue of the characters at some point would be focussed on the products of HUL. Of course the context has to be right and should be very much along the script not that it would destroy the element of entertainment. Hence the major challenge would lie before scriptwriter and director. Even a particular character of an opera becomes very popular as the opera becomes very popular. Hence building such character, which would personify the brand and both the character as well as the brand would grow in due course of time. However even if time constraint is removed, course content constraint comes in. But the scope of story telling is far greater. Attention grabbing will be replaced with attract attention and no zipping/zapping problem. Audience will be more receptive and comprehension of course would be dependent upon how it is executed. Practicability of the idea would be tested when it will be implemented. Hence unless it is tried and tested it can be concluded that whether it will click or not. Let's take the example of Coca-Cola, the scriptwriter would be creating situation in each episode of a family soap where there would be opportunity to celebrate and drink coke! To give another example, a multi utility vehicle with safe driving positioning plank could have exploited the plot of the recent movie "Road". If this concept clicks, there would be nothing like it for advertisers. If it happens, in future big advertisers like HUL would be diversifying to entertainment business! Of course the ad budget of HUL is far bigger than the total budget of many entertainment houses. Irrespective of whatever positive points or negative points it has, this concept can be tried for programmes aired in pay channels simply because there is no other 17
alternative to advertise during the programme. Besides it is expected to solve the other problems those are discussed above. Advertisement would be no more the troublemaker and irritating. Hence catching attention would be much easier. Only testing of this idea could help us to conclude whether to roll out from the concept from programmes of pay channels to programmes of free channels. Advertising “DOING BUSINESS WITHOUT ADVERTISING IS LIKE WINKING AT A GIRL IN THE DARK; YOU KNOW WHAT YOU ARE DOING, BUT NOBODY ARE DOES” According to the American Marketing Association, Chicago adverting is “any paid form of non personal presentation of ideas, goods and services by an identified spoor”. Advertising is a form of persuasive communication with the public. The communication is usually one-sided from the Advertiser to the public The object Advertising are :(1) Inform customers of the goods and services. (2) Brings out the product use P’s (3) Calls for or invites people to buy the product (4) Mass communication (5) Attract attention (6) Lousing interest (7) Building desire (8) Obtaining action. ADVERTISING PROCESS The Frozen Products Division of HUL follows the adversing procedures laid down by the company. The advertising agency also adheres to the company norms. A clear sequence of activities is followed. This has been outlined below: 1.
Usage and Attitude Study – Before a new product or advertising idea is involved, a complete quantitative research study is carried out in order to 18
fully understand the needs, wants, preferences, purchases and consumption habits of the target segment. The results of the study typically point out any opportunities that can be exploited in terms of unsatisfied consumer needs. On the basis of the above results, a new product or advertising concept is evolved. 2.
Concept Testing –Once the new concept has been thought of, it goes into qualitative research. This qualitative research primarily focuses on testing the acceptance of the concept by the target segment as well as the evolving of an appropriate positioning plank. The positioning could be attribute, cost or benefit based. Based on consumer feedback, an appropriate positioning platform is determined.
3.
Agency Brief –Once the concept testing is successfully complete, the Brand Manager prepares a brand positioning statement. This is a description of the brand and includes the product description, likely brand name, category, name, variants (if any) and key brand benefits (sensory, functional and emotional). An agency brief is then prepared for the Agency, which includes the BPS as well as answers to the following questions:
4.
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Why do we want new advertising?
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Whom are we talking to?
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What is the benefit to be perceived by the consumer?
Animating Testing: The storyboard is developed by the agency. After this has been approved by the client, the animatics go into testing. These are advertisements made from frame-by-frame shots of the storyboard with appropriate music/dialogue/voice over. This is more economical when compared to shooting the actual advertisement. The animatics are shown to the sample audience for feedback and frame-by-frame analysis. The name, product design, ambience, music and overall purchase intention after viewing
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the advertisement are measured. Brand personification may be included. If the results are positive, the advertising concept is frozen. 5.
Media Brief – This is given to the media planner and is similar to the agency brief. However, it includes media vehicles desired required awareness, frequency (number of exposures) and reach (% target segment who should view it).
6.
Post Launch Dipstick –After the advertisement is released, a post-launch study may be conducted in order to gauge advertising effectiveness. This is typically conducted among users as well as non-users. It measures advertising recall, awareness of the advertisement and the brand, intention to try after viewing the advertisement overall purchase intention, etc.
PUBLIC RELATION “ Public relations practice is the deliberate planned and sustained effort to establish and maintain mutual understanding between the organisation and its publics”. By :- Institute of Public Relation (British) 1948. To understand the definition better it in important to know as to who does the word publics refer to. Public are : Shareholder : Customers : Employees : Trade Unions Public Relations Here we try to identity the distinguishing factors between Advertising and public relations: Advertising is a commercial persuasive activity aimed at promoting a particular idea or a viewpoint product, or service, institution and so on through the mass media. As refined by the British Institution & Practitioners of Advertising:20
“ADVERTISING presents the most persuasive possible selling message to the light prospects for the product or service at the lowest possible cost on the other hand “. Public Relations demands more time and effort than advertising because advertising is limited to special selling and buying tasks.
For advertising the basis jobs of
conceptualizing , producing, space buying etc. Can be delegated folly to agencies whereas such total hiring of agencies for absolute Public Relation functions cannot be conserved. Public relations is a long-term policy measure and is not built overnight. It is also not free of cost, it is built over a period of time. “With public opinion against it nothing can succeed”. “With public opinion on its side nothing can fail” - Abraham Lincoln Public relations, taken as a component of management discipline, is of comparatively recent origin. As a concept, it was critically evolved in business and industry and subsequently spread to other areas of human activity. Applicability of this profession in government and public institutions like corporations, municipalities, universities, hospitals, social service organisation and professional institutions it truly immense. Admittedly, even before the emergence of industry, business and government, a public relation was in practice in people’s daily life. In effect, a public relations is the result of the action inherent in an individual, an institution or an organisation. Public relations is never a private monopoly of PR practitioners. In fact, members of an organisation, and especially those in leadership, management and supervisory positions have a PR role to play and often even singularly. People adept in the art of public relations stand better chances of success and survival since they can always find areas of mutual interest. They also use modern methods of communication and persuasion which go a long way in establishing mutual understanding based on truth, knowledge and complete information.
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THE SIGNIFICANCE OF PR IN HUL It may be useful to begin by first getting out of the way certain popular notions which, as with many popular beliefs are either without any basis in reality or at best express only half truths. For instance, PR men are regarded by some to be fixers, a breed of people who will wangle things for you by the most questionable methods. There is also a popular idea that PR men spend most of their time winning and dining, using for the purpose fabulous expense accounts they are supposed to have access to. While no one can prevent a charlatan from posing as a PR man or styling himself as a PR consultant he is no more a tine practitioner of PR than a quack selling magic remedies by the wayside is a physician. How deep-seated such popular misconceptions about PR can be reflected by the fact the even now one comes across articles published in well-known papers and journals airing such naive ideas about PR Again, PR is sometimes confused with publicity. Publicity is certainly one of the instruments of PR but is would be as wrong to equate publicity with PR just as it would be to equate the stethoscope with the practice of modern medicine.
To
continue the analogy, PR seeks to diagnose the ills of an organisation in its relations with the public or any segment of the public, it prescribes remedies and proceeds to administer them. It then keeps a watch on the patient to see whether the remedies prescribed are producing the desired effect so that the medicine can be changed if necessary after evaluating the results. Again, as in medicine prevention is considered more important than the cure, PR believes in maintaining the good health of the corporate body -so that drastic remedies and bitter pills may not have to be swallowed later. Analogies may be useful in giving a general idea but can never be as precise as a definition.
PR which is now a well-established discipline therefore needs to be
defined so that we may be clear about what we are discussing when we talk about PR. It is ‘the attempt by information, persuasion and adjustment to engineer public support for an activity, cause movement or institution.
‘Public relations as and
applied social and behavioral science is that function which - measures, evaluates and
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interprets the attitudes objectives for increasing public understanding and acceptance of the organization’s products, plans, policies and personnel; equates these objectives with the interests, needs and goals of the various relevant publics; and develops, executes and evaluates a programme to earn public understanding and acceptance. AN OVERVIEW Public relations today is still a very underdeveloped field.
It is growing in
prominence and has started showing results in various sectors of corporate India. More and more companies are making use of PR to solve their problems and increase their overall corporate equity. The entire process needs a closer look. To gauge the effectiveness of PR in HUL over the last decade it is necessary to examine its function and overall areas of applicability. Social Responsibility of Business and Introduction The need for PR arises also from the responsibility that an organisation owes to the society, which nurtures it and enables it to function and operate. No organisation, leave aside a modern business organisation, can function in a vacuum. It flourishes only because a particular kind of social environment exists. This environment is often taken for granted but in times of social turmoil when normal conditions are disrupted the dependence of the organisation on the social environment is brought home sharply. How often have we not seen during periods of national strife or serious political instability leading to a break down of law and order that business comes to a standstill? While these may be extreme examples they illustrate the fact that without the right social environment no business can exist. Thus every business organisation has a stake in the social environment and must contribute its mite towards its continued existence and improvement. A business organisation’s responsibilities to society cover a wide area. They range from its responsibility to supply quality products at a reasonable price and to ensure that it reaches the consumer at the right time and place to its responsibility to contribute to the development of the ‘Infrastructure, to the realization of national objectives and to the identification of its interest with the vast population of the 23
country in which it operates. The world over business organisation which are forward looking and farsighted are trying to make a contribution to social causes apart from achieving their immediate and ultimate ends of producing goods for sale and marketing them at a profit. Such contributions can range from grants to universities, scholarships of various kinds, aid to hospitals and charitable institutions to actual involvement in projects of social significance. An organisation in the USA sponsored a research fellowship to discuss the causes of student unrest and to find solutions to the problems of tension in the campuses.
In India too there are business
organizations, which are aware of their social responsibility and have made an effort to discharge it in accordance with their resources and the needs of the situation. Studies on the extent of industrial pollution and ways and means of combating it, Involvement in family planning programmes, development of low cost nutritious food for the poorer sections of the people, studies on the causes of a State’s decline and the steps needed to restore it to health are some examples of social responsibility in corporate behaviour as practiced in India in recent years. But there is little doubt that instances of such conduct are few indeed in relation to the enormity of the problems facing a country as vast as India with a burgeoning population a large part of it living below the poverty line. PR and Environmental Path of HUL The present generation has, quite understandably, made the environment a focus of attention. With growing environmental awareness, there is now a clear perception that our activities affect not only the air we breathe, but even the air which regulates our climate. More importantly, uncontrolled activities cannot be sustained without loss of plant and species, natural habitats, coast and hinterland and the decay of buildings, places of natural beauty or historic interest. Hence, the need for a genuine commitment to sustainable development which is integrated with the national policy on industry, energy, transport, trading and planning. In the above context, public relations professionals are well placed to direct attention to environmental issues and can make a unique contribution to public and professional debate, and to environmental education. In fact PR has to live up to its environment 24
education. In fact PR has to live up to its environmental responsibilities even when clear, universally agreed targets are still lacking in many issues. The responsible PR person must ensure that his organisation is greener than green on all the major issues according to current opinion, demonstrate to the world at large that this is so, and, for the future, help form opinions and set the standards for the organisation’s own as well as the common good. In a nutshell, environment is now a corporate concern and today’s PR persons have to build up comprehensive communication programmes, internal as well as external, which involve listening just as much as talking. Now, environment is no more just a slogan, it is a key consumer issue. PR today must: *
Understand ‘green’ issues and recognize the social responsibility of business.
*
Make environment matters a priority.
*
Consider the environmental impact of the company’s actions.
*
Avoid pollution of any kind.
*
Encourage environment audits to determine what the organisation has done and is doing in relation to the environment.
*
Ensure recycling of wastes.
Social Responsibility as Public Relations at HUL A citizen’s role extends beyond his or her call of duty. A responsible corporate citizen needs to look beyond the financial numbers of sales and profit growth, from year to year. HUL is committed to the development of the community around its manufacturing complexes. Over the years, HUL has not just supported communities financially, but has worked towards providing people with skills to earn a sustainable livelihood. HUL’s long-term aim is to raise economic standards of these communities, through self-sustainable measures.
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PR Role in Image and Identity It is true that corporate image concerns the industrial marketer directly as brand image is crucial for the consumer market. The ordinary consumers, while oblivious of the name of the manufacturer, can easily identify the brands of consumer products. Repeat this test for industrial goods : the same respondents are aware of the name of the manufacturers but many won’t be able to name the industrial products. Interestingly, a third set of organisation would be known both for their industrial or consumer products as well as for their distinct corporate image. Where does corporate PR stand in these diverse settings? Although easier desired than achieved, PR attempts to create the desired image by its involvement in all the factors of corporate identification programmes. GOVERNMENT RELATIONS A government relation has two facets to it. Firstly, the PR for the government (as an organisation) and Secondly, PR with the governments as the target group. Both are important and very needed by corporations. Public relations for the government involves mobilising public support for government’s activity, for instance, family planing, control, environmental protection, beautification of cites, etc. the company generally sponsors some of these activities by providing monetary help or other resources. The basic objective of the company is to build relations with the governments, and also help for the good of the community of society. Public relations with the government involves keeping the government—politicians and bureaucrats—on your side.
It envisages maintaining good links with the
government, which will be of benefit to the company in its overall business plans and operations. Public relations with the government in some ways is quite difficult and demanding.
It requires special planning and efforts for the organisation to be
successful. A government, local or national, comprises many ministries, departments, individuals and personalities. Public relations people have to acquaint themselves 26
with the working of the government, and the intricacies and people involved at various levels, and then handle things accordingly to be able to achieve what they have set out to achieve. The government should not be looked at as an adversary. In fact, you should make all efforts to help the government and support its activities and policies as far as possible. Government leaders must be kept informed from your side about the organisation’s activities and policies—especially those which are contributing to the welfare and development of the state or the nation. Such relations will be mutually beneficial in the short-term and the long-term.
Corporations should, however avoid getting
involved with politics and political issues. MEDIA RELATIONS Media relations Is a vital tool in PR. A large amount of communications and PR are conducted through the media—especially the Press. When a company gets media coverage, it is not always flattering. Business is always vulnerable to attacks by the media. Media can often aggravate problems—especially crises. As in the case of Union Carbide and HUL a few years ago. Hence, media, particularly the Press has to be handled very carefully. The media must be kept on your side. All efforts must be made to ensure this strategically. It takes years to build a good image, but to destroy it you need just a few bad reports in the media. It is important to build a working ‘rapport’ with the media. You cannot afford unnecessary reactions and distortions. If you do go to the media then always go with a strategy—be selective in the choice of media, use only influential media (especially publications in the Press), do not spread your communication too thin, go for quality rather than quantity. Selective and in-depth coverage is what you must aim at, as it is more effective and produces the desired results. let your communication be complete honest, and backed with hard facts. The organisation must be able to live up to its claims and promises in media, otherwise you can be in for further problems. The efforts made by HUL in this respect have been orchestrated well to build image as well as to counter negative publicity. 27
FINANCIAL RELATIONS With the growth of the Indian economy and the business sector, management of financial promotions and PR has taken on a new dimension. HUL is making special efforts to ensure the goodwill of their shareholders, investors, financial institutions, and the rest of the financial community. This is being done in the mass media and specialised media ranging from annual reports to special brochures to audio-visuals, video films, and even corporate advertising in the Press and television. The main target group of a company in financial PR is its shareholders and potential investors. They have to be given information they are entitled to have, and they have to be kept interested in the company. Public relations must establish, maintain, and improve the company’s image and reputation so that it can obtain funds from the public and the financial institutions on the most favorable terms when it desires so The financial and business Press, today, is very important in achieving this objective, The importance of financial PR and the need for it is seen from the number and growth of PR agencies specialising in financial promotion, advertising and PR management in India. These include well-known names like Pressman, Clea, and Sobhagya, now a host of others. They provide their clients a wide range of services and expertise in PR and advertising. CUSTOMER RELATIONS In the past PR and marketing were considered separate and unconnected activities of business in a company. Today, PR has a role to play in marketing not only to build image, but to also help solve problems concerning a company’s products Or services among consumers or other special groups, and generally protecting the company’s reputation at the marketplace. Public relations with customers, and with suppliers, in industrial products/services marketing at the institutional level is gaining more and more importance today.
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In today’s competitive market customers opt for products that are known and have an image, and are backed by quality and good after sales service. Marketing people cannot ignore public opinion on such aspects. In the long run, unfavorable opinions certainly affect sales. Public relations can help in controlling and setting right some of these opinions; it is therefore essential for companies to assign some of their attention and resources to develop PR in marketing. COMMUNITY RELATIONS Today, the relationship between corporations and the community is a vital issue in management of business organisations. It is acknowledged that business is no longer done for the sake of profits alone. Because a company functions within a community, its responsibility extends to giving back to the community something for what it makes from it. This has been the philosophy of the Tata’s in India for years, today it is accepted and is being followed by a number of other companies. This belief is now also considered important and crucial by the government, consumerists and opinion leaders. Company relations at an organisation can vary from local community welfare activities, to large-scale sustainable development programmes for the betterment of lives of people. Companies have to consider the community as one of its prime target groups. The objective of PR is to help build image of the company: as a good corporate Citizen, a good company to do business with, and a good company to work for. EMPLOYEE RELATIONS In employee relations, communicators are vital at every level. From top to bottom, also from lower level to the top management level, and even the horizontal communications among colleagues at the same level and between functions. The basic function of communications and PR in the organisation is not just better functioning, but a fostering of goodwill, trust, and togetherness among employees.
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Employee in HUL one in a large number and they include both blue collar to white collar. Internal PR must reach out to all of them. This makes the task tough and critical, requiring much thinking and planning. Before planning PR programmes, therefore, it is important to first assess the needs and requirements of employees. One of the major goals of PR is to foster the participation of employees in decisionmaking, for this PR programmes must be evolved around their motivations, job enrichment, training and development, working environment, productivity, and overall growth in the company. This, in other words, means PR for better employees, better employee morale, and better relationships, resulting in success and growth of the organisation; and therefore, a better image and reputation for it. In the case of PR with employee, the function may seen to overlap with the working of the company’s personnel department. In practice, however, it is necessary that the two departments work closely together. They can mutually reinforce each other, especially in areas like HRD. It is worth trying to integrate HRD with PR, if possible, in a company. More so when with the growth of organisations in size, the individual employee is becoming smaller and less significant, and thus losing his or her identity. Public relations with HRD can play a crucial role in building and motivating the employees on their jobs and in their contributing towards achieving the company goals. INDUSTRIAL RELATIONS This is another important area of work for PR executives. Its importance is growing, with staff and workers getting to be united, more enlightened and demanding. Whether they are unionized or not does not make a difference in the PR work, in either case, good relations have to be maintained.
In the case of unions, it is
important to realize that unions have their own goals. This makes it more difficult to deal with them in many respects. Understanding these goals, and how they will affect Industrial relations and PR efforts, is the first priority in dealing with unions. Industrial relations concern the staff and workers in their relationship, as individuals and as a group, with the management. Industrial relations are most often concerned with problems related to wages, other monetary benefits, conditions of work. 30
PERSONAL PRODUCTS
31
PERSONAL PRODUCTS : THE CORE CONCERN OF ADVERTISING 1.
Fair & Lovely
Fair & Lovely - the miracle worker Based on a revolutionary breakthrough in skin lightening technology, Fair & Lovely was test marketed in 1975 and has been nationally marketed since 1978. In fact, Fair & Lovely has been extensively tested with consumers in India and abroad, and has been proven to be superior in terms of benefit delivery to all key competitive brands. Fair & Lovely's formulation contains a unique fairness system that contains a combination of active agents and sunscreens. This has been specially designed and proven to deliver one to three shades of change in most people. Also its sunscreen system is specially optimized for Indian skin. Indian skin unlike Caucasian skin tends to 'tan' rather than 'burn' and, hence, requires a different combination of UV A & UV B sunscreens. 32
The fairness cream is marketed in over 38 countries through HUL Exports and local Unilever companies and is the largest selling skin lightening cream in the world. The brand today offers a substantive range of products to consumers including Fair & Lovely Fairness Reviving Lotion, Fair & Lovely Fairness Cold Cream and Fair & Lovely Fairness Soap. Ponds
Pond's - the beauty expert Pond's Cold Cream was launched in India in 1947 and was followed by the launch of Pond's Dream flower Talc 1956. The current skin offerings under the Pond's Brand name include Moisturising Cold Cream, All Day Oil Control Cream, Daily Face Wash, Blackhead Removal Strips and Dream flower Body Lotion. In talc’s, Pond's now has four variants. Pond's Dream flower Talc is now enhanced with 'Floral Extracts', Pond's Sandal Talc is a sandal variant with 'Natural Sunscreen', Pond's Light 'n' Fresh comes with SAM (Sweat Absorption Material), while Pond's Magic DeoTalc now has a new enhanced deodorant protection. Pond's is about beauty that reflects the times. Pond's brings superior and innovative solutions to meet all skin care needs by delivering outstanding personal beauty 33
solutions - through scientific skin expertise, extensive research and stringent product testing. Pond's track record reveals an ensemble of products that make a real noticeable difference, proving therefore that Pond's remains the most trusted beauty expert in the consumer's mind. 3.
Oral Care Product
Jee Ke Dekho Yar Close-Up
Close-Up, the youth brand, was the first gel toothpaste to be launched in India in 1975 and has remained the category leader ever since. The brand arose out of a universal need for confidence in a social situation, starting with fresh breath. In 2002, Close –Up was relaunched in two variants - Close-Up Tingly Red and Close-Up Eucalyptus Waves. Close-Up Tingly Red and Close-Up Eucalyptus Waves with their superior formulation provide superior cleaning, enhanced flavour and a freshness that extends from nose to throat. The communication for Close-Up
34
focuses on the base line, ‘Jee Ke Dekho Yaar’, which encourages young people to go out and get a life! The new flavours are in line with HUL’s endeavour to continuously innovate and offer new advanced products to the consumers. These flavours have been specially designed to win over competition consumers. Recently, Close-Up Whitening, the tooth-whitening variant, was introduced with a unique self check device called “shade card”. This helps consumers identify how “yellow” their teeth really are and also to track the improvement in teeth colour as they use the paste. The toothpaste helps teeth get whiter in 4 week of regular use. 4. Hair Care Product : •
Sunsilk
Sunsilk - the hair expert
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Launched in 1964, Sunsilk is the largest beauty shampoo brand in the country. Positioned as the 'Hair Expert,' Sunsilk has identified different hair needs and offers the consumer a shampoo that gives her the desired results. The different variants of Sunsilk - Black Shine (for dull hair), Bouncy Volume (for thin, short hair), Silky Strength (for dry hair) and Natural Nourishment (for regular oiled hair) - are based on well researched consumer needs and hair types. The benefits are more compelling and relevant since the variants are harmonised in terms of the product mix - fragrance, colour and ingredients are all well linked to cue the overall synergy. The range comes in premium packaging and design. The accent is on femininity, as captured in the tagline – “Baalon mein dhadkan, dil mein shararat.” Sunsilk was extended to hair colourants in June 2001. The colourants are available in 7 variants that are specially suited to Indian hair and skin tones and colour hair gently and safely. Clinic - for healthy hair Clinic Plus shampoo was launched in India in the year 1987 and is positioned as the 'shampoo that makes your family's hair healthy and glowing.' Clinic Plus is targeted at mothers, educated yet measuring their self-esteem through their children's achievements. In the year 1996, Hindustan unilever launched another variant of Clinic shampoo Clinic All Clear dandruff shampoo. The core proposition of Clinic All Clear is that it is "the only shampoo that gives you dandruff-free soft hair." It is targeted at the appearance conscious young adult, seeking dandruff-free, gorgeous hair to create a positive impression.
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5.
Deodorants
Axe - the magnet
Axe, the deodorant that is considered cool, fashionable and stylish by young men was launched in India in 1999. Available in more than 60 countries around the world, it is a world leader in male toiletries. Axe has a mix that is completely harmonised globally - from its proposition and communication to the product, as available on the shelf. Axe is available in four fragrances: Java, Alaska, Atlantis and Voodoo. Voodoo has become the leading male deodorant brand in India within just one and a half years from its launch. Consumers associate a lifestyle of cool clubs, cool music, and cool fashion with Axe. The youth view it as an icon which introduces many 'firsts' to their world of music and dance - like the first "World's Longest Dance Party" and the first ever “Axe Voodoo Island Party.” 37
6.
Colour Cosmestics
Lakme - on top of the world Half a century ago, as India took her steps into freedom, Lakme, India's first beauty brand was born. At a time when the beauty industry in India was at a nascent stage, Lakme tapped into what would grow to be amongst the leading, high consumer interest segments in Indian Industry - that of skincare and cosmetic products. Armed with a potent combination of foresight, research and constant innovation, Lakme has grown to be the market leader in the cosmetics industry. Lakme today, has grown to have a wide variety of products and services that cover all facets of beauty care, and arm the consumer with products to pamper herself from head to toe. These include products for the lips, nails, eyes, face and skin; and services like the Lakme Beauty Salons.
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Beauty and fashion is not only about looking good but also feeling great, which is reflected in the advertising line for Lakme, “On Top Of the World'”
SOAPS AND DETERGENTS 1. •
Fabric Wash Surf - Mummy's best friend
Launched in 1959, Surf was the first in the Indian detergent powder market. Over the years, Surf has anticipated the changing washing needs of the Indian homemaker and constantly upgraded itself. Surf Excel, India's largest selling compact detergent powder, in its newest avatar promises to tackle the toughest stains without damaging the color of the fabric. This is because only Surf Excel has smart sensors that can differentiate stains from colors. Now you don't have to worry about tackling the really tough stains, especially on your colored clothes anymore. “Surf Excel Hai Na!”
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For those who seek the Surf Excel clean in the front loaders, the specially designed low suds formulation Surf Excelmatic promises to give just that - a superlative clean. Those preferring the modern and convenient way to wash can rely on Surf Excel Liquid. The liquid form penetrates deep allowing great wash results. For the really tough stains, you can apply the liquid directly on the body of stain (through a stain treater) - you will see tough stains being tackled with ease. With
years
of
laundry
expertise,
Surf
Excel
now
has
a
Careline,
[email protected] that can answer all queries on fabric care. •
Wheel
“Mehnat kum, phir bhi dhulai No. 1.” Wheel - makes washing easy Wheel is a detergent brand that caters to the laundry needs of the mass market. It was first launched in the year 1987. Wheel Green is the single largest (No 1 by market share) detergent brand in India by value. Wheel is packed with powerful lather (power foam) that cleans even tough dirt stains on collars and cuffs with ease. It, therefore, cleans effectively with lesser effort, making a laborious chore like washing - light and easy. Moreover, Wheel does not burn hands or harm clothes like some other detergents, which contain a high percentage of soda. Wheel also has a premium variant called Active Wheel. It gives the consumer the value of 3 benefits in 1. It not only cleans effectively with less effort but also keeps the colored clothes looking bright and has a great fresh fragrance. Active Wheel gives consumers 'Quality Clean and Care' at an affordable price. In short, Wheel can be summed up as - 'Mehnat kum, phir bhi dhulai No. 1.' Wheel is, therefore, the smart housewife's choice. 40
2.
Personal Wash
Lifebuoy Lifebuoy – “Family health protection for my family and me” World’s largest selling soap offers a stronger health benefit to the entire family Launched in the year 1895, Lifebuoy, for over a 100 years, has been synonymous with health and value. The brick red soap, with its perfume and popular Lifebuoy jingle have carried the Lifebuoy message of health across the length and breadth of the country, making it the largest selling soap brand in the world. In 2002 Lifebuoy was relaunced, marking a new turning point in its history. The new mix includes a new formulation and a repositioning of the brand to make it more relevant to both new and existing consumers. Lifebuoy is no longer a carbolic soap with cresylic perfume. It is now a milled toilet soap with a new health fragrance. The new formulation has an ingredient, Active-B, which offers protection against germs, which can cause stomach infection, eye infection and infections in cuts and bruises. The new health perfume has been selected after one of the most extensive perfume hunts in the industry. The new milled formulation offers a significantly superior bathing experience and skin feel. The new formulation, new health perfume and superior skin feel, along with the popular red colour, have registered conclusive and clear preference among existing and new users. The new Lifebuoy is targeted at today’s discerning housewife with a more inclusive “family health protection for my family and me” positioning. Lifebuoy has made a deliberate shift from the male, victorious concept of health to a warmer, more versatile, more responsible benefit of health for the entire family. The new Lifebuoy range now includes Lifebuoy Active Red (125gm, 100 gm and 60 gm) and Lifebuoy Active Orange (100gm). Lifebuoy Active Orange offers the consumer a differentiated health perfume while offering the health benefit of Lifebuoy.
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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 odour, while Lifebuoy International Gold helps protect against germs, which cause skin blemishes. Lux Lux - the film stars' choice Endorsed by popular film stars, Lux is one of the biggest brands in the soap category. Lux was launched in India in the year 1905. Lux comes in 3 attractive variants - Lux Pink is a fragrant ensemble of almond oil, Lux White a rich creation of milk cream and Lux Black (in a pastel shade of lemon yellow) overflows with the goodness of honey, and is also the first of its kind in the market. The new, exotic addition includes International Lux Skin Care 'Sunscreen Formula'. A unique soap, which protects the skin's fairness against darkening by the sun. The product contains a combination of sunscreen actives, which are deposited on the skin as a protective layer, even as the soap washes away dirt and grime. This breakthrough, for the first time in the world, is the result of technology patented by HUL. In short, Lux has worked its charm on millions of women, making their dreams of beauty come true. Breeze Breeze - makes dreams a reality
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Launched in 1991, Breeze is a mass-market soap that sells in the economy segment. The fragrant ensemble from Breeze comprises 3 variants, which contain the real goodness of natural ingredients such as rose water, sandal extracts and lime extracts, giving skin a glowing radiance. Originally launched in 1989, Breeze is today perceived to be a good value for money brand - with outstanding sensory experience. Its strengths are its fragrance, lather and the soft feeling it has on the skin. A new variant, a hair-and-body soap, Breeze 2-in-1, was launched in January 2001. Enriched with coconut oil and lime extracts, it was the very first of its kind and leaves the consumer looking and feeling beautiful. The brand plays a critical role in its consumer's life, because Breeze for her is more than just soap. It is, in fact, her beauty aid, her only cosmetic, and one that she can afford. She regards Breeze as her only way of fulfilling her dream of looking beautiful. 3.
Household Care
Vim
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Vim – Khar Khar ka moh tod jawab In 1993 Vim Bar was launched. This product had many benefits including better clean, ease of handling and easy storage. Vim Bar was re-launched in 1997 with an improved formulation and new communication, which tackled economy and performance. Much appreciated by the mass market, it resulted in conversions not just from powder users, but also from proxy users who did not upgrade to powders but preferred to use Vim Bar instead. The brand has grown significantly registering strong double-digit growths in both volume and value terms. Vim Bar was relaunched a second time in 2002, with a unique “Stain Cutter” formulation that removes the toughest stains such as burnt milk and ghee stains. This new formulation evolved through research and is now setting benchmarks in tough stain removal. New Vim offers the consumer a superior performance at a great value. Vim is the market leader in the dishwash category. Today Vim is available in powder, bar and liquid form. Vim continuously strives to innovate its products to enhance the lives of its consumers. Whether it be through its new 'Stain Cutter' formula in its Vim Bar or it's the stain busters in its powders, Vim stands for the best quality in dishwash products.
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FOODS AND BEVERAGES
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FOODS AND BEVERAGES 1. •
Ice Creams Cornetto
Kwality Wall's Cornetto - bite bite mein pyar Launched in the year 1995-96, Cornetto is undoubtedly one of the most popular ice creams in India. Positioned as the icon for romance and special moments - it is targeted at young adults. However, with its rich multi-sensory eat experience, it is overwhelmingly quoted as the favourite of consumers across ages.
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•
Feast
Kwality Wall's Feast - feasting on 'the big “F” Launched in 1995-96, the Kwality Wall's Feast range of ice creams and frozen desserts has been positioned as a “Youth ice cream brand with an attitude.” Over the years, Feast has expanded its 'chocolate only' portfolio to a more diverse one by including refreshment products like Mango Zap, Calypso Punch and Jaljeera Blast. This was in keeping in line with the varied need-states of today's youth. As part of Kwality Wall's endeavour to consistently reach out to the consumer with new and exciting flavours, Feast has launched Feast Snacko. The stick product is an excellent value for money proposition. As part of Kwality Wall's endeavour to consistently reach out to the consumer with new and exciting flavours, Feast is launching a new SKU, viz. Feast Snacko.
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The stick product is expected to take the market by storm, as it is an excellent value for money proposition. Continually connecting with today's youth, Feast remains the ice cream with . . . The Big F! •
Max
Kwality Wall's Max - the 'masti' ice cream Max, launched in the year 1999 as the 'masti' ice cream, is targeted solely at children. All Max products are fortified with extra vitamins. Max Cups and Max 123 have Vitamin A, Max Orange and Max Joos have real fruit juices and Vitamin C (a single Max Orange candy offers a child 15% of his daily requirement of Vitamin C). Max says, 'Masti kar Befikar' and encourages all kids to go ahead and have lots of fun! Max has recently been extended as confectioneries (candies) - MaxMasti, MaxMagik and ChocoMax. •
Cornetto Soft
Kwality Wall's Cornetto Soft In 2002, Kwality Wall’s is introducing a host of unique product innovations under a new brand called “Cornetto Soft”. The new range includes a Super Cone (a bigger soft cone- Vanilla and other flavours like chocolate, strawberry etc), Strawberry Sundae Cup (Creamy tasty vanilla topped with rich strawberry sauce), Chocolate Sundae Cup (Creamy tasty Vanilla topped with thick chocolate sauce), Ripple Cones (Creamy tasty vanilla softy with strawberry or mango ripples) and Nutty Delight (Creamy tasty Vanilla topped with thick chocolate sauce and nuts, served in a cup.). The price ranges from Rs.7/- for a Super cone to Rs. 20/- for a Nutty Delight. At a Kwality Wall’s kiosk, the consumer will experience innovative promotions and themes that will take place regularly at and around the outlet kiosk, it will be seen as a ‘cool place to hang out and a great place to eat out.’ 48
Kwality Wall's has a perfect blend of affordability, hygiene and taste that will win over the consumer. Kwality Wall’s Softies are untouched by human hands. The first hand that touches the product is the consumer's. Kwality Wall's uses a pre-mixed liquid produced and sealed at the factory and is untouched by the operator at the outlet. The advanced Tamper Proof technology & the sophisticated softy dispensers make sure that hygiene is given the highest priority. The ingredients are pasteurized and homogenized, which ensure true quality & consistency of the end product. As a result Kwality Wall’s is the only one offering a superior and completely hygienic product. Kwality Wall's aims to ensure that the consumer gets a world class product delivered to meet local taste requirement under strict Unilever standards of hygiene and at a great price! •
Kwality Wall’s Black Currant Sundae
Irresistible
international
flavour
now
available
in
India
The exotic dessert, Kwality Wall’s Black Currant Sundae, launched in India, has a mouth-watering black currant sauce and creamy vanilla. The Black Currant sauce has been specially formulated by Kwality Wall’s, to offer a truly delectable dessert for its consumers, that leaves them yearning for more. Black currants are grown in Europe, USA and Chile, rich in vitamin C and minerals, they are used to make exotic jellies, jams, drinks and sauces the world over. There is an even more interesting history to sundaes. In the 1980s, when this delightful dish was first put together in the US, it was against the law to sell soda and consequently, ice-cream sodas on Sundays. So the trend of serving ice cream with sauces and toppings instead of soda began. Soon, ice-cream sundaes became so popular that people opted for this dessert on weekdays as well. 49
Kwality Wall’s Sundaes were launched in 2001 in India in Chocolate, Strawberry and Mango flavors. These products were a phenomenal success and are now being taken to the next level with an exotic Black Currant sauce and Black Currant Dry Fruit pieces. In a day and age, when families hardly find time to spend together, Kwality Wall’s sees its Sundaes as an offering, which helps bring families together for fun and enjoyment. 10 p.m. would henceforth stand for Kwality Wall’s Sundae time!
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2.
Beverages
Brooke Bond 3 Roses - has colour, taste & strength Brooke Bond 3 Roses, a premium dust brand was launched in 1978 in the heartland of coffee drinking households in southern India. The brand can rightfully claim credit for creating a tea drinking habit amongst these households through its highly successful positioning as the only tea with a perfect combination of colour, taste and strength the 3 most important attributes in a cup of tea. Not surprisingly, this wonderful cup of tea came to be enjoyed by a cross section of consumers giving it undisputed market leadership. Since the turn of the millennium, the brand has taken a further leap by adding a highly motivating emotional benefit - The Perfect tea for Perfect moments - amongst couples. The first step towards appropriation of this emotional mind-space started with a highly successful Perfect Couple search campaign, which saw significant strengthening of affinity and disposition towards the brand. This is being furthered by a new theme - triggering an even stronger emotive link with the consumer. 51
•
Brooke Bond Red Label - nation's cup of tea
Brooke Bond Red Label Tea was launched in the year 1903, which makes it one of the oldest brand of tea in the country. It also has the distinction of being the largest brand of tea in India and has a truly national presence. For years, Red Label has stood for good quality tea and it can be easily called as one of India's favourite tea brands. The brand was relaunched in the year 2000 with a new product formulation, wherein long Assam orthodox tea leaves were added to the base CTC tea to deliver enhanced taste. These are referred to as 'Assam Super Tasters' in the brand's communication. The new campaign highlights the irresistible taste of the new Red Label Tea through executions that revolve around a very catchy base line 'Don't Mind - Ek Cup Aur' Ready for another cup! •
Brooke Bond A1 - 'kadak chai
Brooke Bond A1 was launched in the year 1995 as HUL's offering in the discount segment of tea. It is targeted at converting consumers of loose tea and local packet tea players. Brooke Bond A1 has region specific blend formulations to meet the needs of the consumers in different regions of India. The core proposition of the brand is 'Strength'. The benefit to the consumer is 'Strong tea that charges my confidence'. Brooke Bond A1 Power, a variant of Brooke Bond A1, is fortified with Vitamins. It has initially been launched in Karnataka in March 2001. Brooke Bond A1 Power, similar to Brooke Bond A1, has the consumer offering of "Strength" but has Vitamins as a reason for the consumers to believe in the proposition. The choice of vitamins has largely been based on evidence of deficiency among the target group. Targeted at lower middle class consumers, this brand variant is expected to gain from local players and upgrade Mother brand Brooke Bond A1.
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•
Brooke Bond Taj Mahal Tea - 'Wah Taj!'
Taj Mahal Tea was launched in 1966 as a premium CTC leaf brand. Over the years, the brand has fulfilled its promise of India's best tea. The tea is carefully chosen from a thousand teas from the best gardens of Assam to give it an exquisite aroma and taste. It is endorsed by Ustaad Zakir Hussain who personifies the brand in all respects. The brand has constantly led by innovation, whether it be the first tea bag in the country in 1979 or the patented 'vacuum pack', which keeps the great quality intact. No wonder tea lovers across the country start the day by saying 'Wah Taj!' •
Lipton Taaza - the fresh cup of tea
Lipton Taaza was launched in 1988. The strategy for the launch was to convert loose tea users into packet tea. The brand was launched in a poly pouch format designed to preserve the freshness of tea. The name Taaza signified 'fresh tea'. The core benefit was refreshment. Taaza pioneered the format of pouches on a national scale. Lipton Taaza is one of the largest tea brands in the country, specially in the Hindi belt. The core proposition of the brand now is 'Fresh Taaza tea refreshes like no other tea can.' The brand commercials in the past have shown fresh tea being selected from select gardens and this in turn leading to amazing refreshment. •
Lipton Yellow Label - the global cuppa
Lipton Yellow Label is Unilever's global tea brand and sells in many countries across the world. It has pioneered the growth of tea through non-traditional formats like Tea Bags and more recently Ice Tea. Lipton Yellow Label is a brand for young minded people and offers an option to tea lovers to enjoy their favourite drink in an exciting and refreshing way.
•
Brooke Bond Bru - the instant coffee
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Brooke Bond Bru, launched in 1969, created history in the first year of launch by growing to a record market share of 21%. Ever since, it has grown from strength to strength and is now the single largest brand of Instant Coffee in India, with a dominant presence in South India (which accounts for 65% of the All India market). Initially positioned on the generic benefit of convenience, it was communicated in the late 70s as 'the favourite of coffee lovers in the South.' This evolved in the 80's to the well known 'Closest in taste to Filter Coffee' platform. Bru is one of the most salient Packaged Mass Consumption Goods (PMCG) brands, especially in Southern India. Bru has been instrumental in virtually creating the entire Instant Coffee category as it exists today. It has been at the forefront of most innovations in the Instant Coffee category - whether in coffee-chicory blends, refill packaging, vending operations, or more recently the Low-unit-price packs. Bru's popularity cuts across all sections of society - income, townclass and states, the name being synonymous with Instant Coffee in all the Southern geographies. •
Lipton Green Label - the champagne of teas
Lipton Green Label is the only popular orthodox tea in the country. Chosen from the best leaves of the best Darjeeling Gardens, the tea has an aroma and flavour that testifies to its pedigree. The tea is packed in a special toptainer that is both a container and a dispenser. Lipton Green Label tea is best when the leaves are brewed in a pot of hot water to keep the flavour intact. More and more people are discovering the delight of true orthodox tea through Lipton Green Label. 3. •
POPULAR FOODS Annapurna
Annapurna - flowering of a flour 54
Hindustan unilever's Annapurna Fortified Atta, developed through using agrarian and processing technologies, is extracted from premium quality food grains. Its richness of nutrients is not just entirely retained, but boosted through fortification. The iron in it, in particular, addresses a deficiency that 6 out of 10 Indians suffer from. A special grinding technique ensures that Annapurna absorbs more water when kneaded for chapatis. This helps keep the chapatis soft, fresh and tasty for far longer. In other words, a brand that supplies much of the daily nutrients an Indian consumer need. CULINARY PRODUCTS •
KISSAN
Kissan - the taste to grow up with Acquired by Hindustan Unilever Limited in 1994, the Kissan category consists of 'deliciously holesome products for kids to grow up.' The Kissan range consists of ketchup and other sauces, puree, jams, squashes and ready-to-drink products. For mothers and children, Kissan is today one of the most trusted processed food brands in the country. OILS AND FATS •
DALDA
Dalda - for healthy cooking Launched in 1937, Dalda Vanaspati has been the Indian housewife's trusted companion for tasty, healthy cooking. Considered as an embodiment of mother's love, Dalda has always been associated with purity, quality and trustworthiness. In 2000, Hindustan unilever launched Dalda Activ, a healthier version of Vanaspati, primarily because it contains twice the amount of healthy fat (poly unsaturated fats) and also actively reduces the unhealthy fat (saturated and trans fat). As a result, food
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cooked in Dalda Activ does not congeal on cooking and, hence, no layer of fat is formed. The product was developed through the process of interesterification, a fat modification procedure, which changes the melting and crystallisation properties of the fat. The process has been perfected for Indian conditions at Hindustan unilever's Foods Innovation Centre. In 2001, Hindustan unilever launched Dalda Classic, which with its butter aroma is targeted at consumers in the South.
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FINANCIAL NEWS
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FINANCIAL NEWS HUL Net Profit up by 20% in 2004 Total Dividend of Rs 3 per Re 1 share Mumbai, January 29, 2005 Hindustan unilever Limited (HUL) Net Profit for 2004 at Rs 2634 crores grew by 18.6% over 2003. Net Sales for the year at Rs.9955 crores grew by 3.7% led by a 6.5% growth in Power Brands. Profit Before Tax (PBT) at Rs.2197 crores, increased by 13.1% while Profit After Tax (PAT) was Rs.1716 crores, a growth of 11.3%. In December quarter 2004, sales grew by 3.7% to Rs.2634 crores with Power Brands growing twice as high at 6.1%. PBT at Rs.690 crores grew by 13.1%, while PAT at Rs.542 crores increased by 11.4%. Net Profit was Rs 466.51 crores after absorbing an exceptional item charge of Rs.76.33 crores. Operating Margin for the year improved further by 1.3 percentage points to 16.6%. Earnings Per Share (EPS) for the year improved to Rs.7.98 from Rs.7.46 in 2001. The Board has recommended a Final Dividend of Rs.3.00 for the year. The total dividend, including Interim Dividend of Rs.2.50 is Rs.5.50 compared with Rs.5.00 paid last year. This includes distribution from the exceptional income from certain divestments. On a comparable basis, after netting off the impact of businesses transferred in and out, sales growth works out to 5.8% for the quarter and 5% for the year. PAT growth amounts to 24% for the quarter and 21% for the year. Commenting on the performance, Mr.M.S.Banga, Chairman of the Company said, “In 2002, we vigorously pursued our strategy of focussing on growing our Power Brands in the face of intense competition, a depressed economy and declining market. This strategy has accelerated our FMCG topline growth to 7% in the second half compared with 3% in the first half. In fact, our Power Brands have grown by 9% in the second half led by those in Home and Personal Care group by 12%. Our emphasis on enhancing Foods profitability has doubled profit through a 5 percentage point increase in margins. We have also divested our holding either partially or fully in several non-FMCG categories and reinvested some of this income into strengthening the Foods portfolio".
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Talking about the dividend, he added, "Our dividend policy is geared towards rewarding shareholders. This year the dividend also includes distribution from the exceptional income arising from the divestment of some of our non-FMCG businesses". Review of Businesses Group sales (comprising HUL and its subsidiaries) declines by 5.4% for the year. Sales of FMCG products grew by 7% in the quarter and 5% in the year. Home and Personal Care grew by 3.4% led by a 9% growth in its Power Brands. Clinic and Lux led a 14.7% growth in the Hair category, while Pepsodent and CloseUp took toothpaste growth to 6% despite aggressive competition. Fair & Lovely and Ponds grew the Skin business by 18.6%. Despite strong growth by Breeze and reversal of the Lifebuoy decline, overall Personal Wash sales were marginally lower. Wheel grew by 18% making it the number one brand in laundry and leading a total Fabric Wash growth of 7%. The focus on profitability in the Foods portfolio led to an improvement of 8.5 percentage points in Beverages and by 1 percentage point in Foods businesses. The flagship brand, Taj Mahal recorded a sales growth of 6% while overall tea declined in a declining market. Coffee, led by Bru, grew by 15%. Food sales were up 14% with a 18% rise in Oils and Fats. Modern Foods grew by an impressive 66%. Icecream sales declined by 4%. Group Exports amounted to Rs 1829 crores, a marginal decline of 5%, mainly due to rationalisation in Traded Exports. Other Income Other income for the year rose by 11.6% from Rs.382 crores to Rs.385 crores. Proactive management of surplus funds enabled this despite a sharp fall in the interest rates. Business Restructuring The results for the year include a business restructuring cost of Rs.48 crores compared to Rs.109 crores in the previous year and Rs.14 crores for the December quarter compared to Rs.27 crores in the corresponding period. Exceptional Items The exceptional income of Rs.100 crores for the year include: •
Profit on divestment of Quest and Animal Feeds business: Rs.143 crores 59
•
One off reduction in tax liability arising from amalgamation of IBL: Rs.28 crores
•
Provision for fixed asset write-off and estimated other related costs in respect of Thermometer business: Rs.11 crores (net of deferred tax: Rs.7 crores)
In addition a charge of Rs.64 crores towards exceptional items in December quarter comprising: •
Profit on disposal of Nickel catalyst and Adhesives business: Rs.17 crores
•
Provision for fixed asset write-off in respect of the Culinary Products business: Rs.19 crores (net of deferred tax: Rs.12 crores)
•
Provision for fixed asset write-off and estimated other related costs in respect of Icecream business: Rs.43 crores (net of deferred tax: Rs.28 crores)
•
Provision for additional liability in respect of employees’ retirement benefits necessitated due to fall in interest rate: Rs.63 crores (net of deferred tax: Rs.41 crores)
Bonus Debentures The shareholders of the Company at the Extraordinary General Meeting held on 12th December 2001 have approved the restructuring of General Reserves by issue of Bonus Debentures in the ratio of 1 Bonus Debenture of Rs.6 for every share of Re.1 held in HUL and payment of special dividend of Rs. 2.76 per share. These debentures would be redeemed on the second and third anniversary following the issue and would carry a 9% interest. The proposal is now pending approval from the Honourable High Court of Bombay.
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PRESS RELEASES
61
PRESS RELEASES India can create 70 million new jobs and add 2% annually to GDP growth by global sourcing of manufactured exports, says M.S. Banga HUL gearing up for billion-dollar sourcing business out of India MUMBAI, June 26, 2002: India can double its exports growth rate to 20%, adding 2% to GDP growth rate annually and creating 70 million new jobs in the private organised sector over 10 years, if it leverages its potential to become a preferred sourcing centre for manufactured exports, Mr. M.S. Banga, Chairman of Hindustan unilever Limited (HUL), said here today. Noting that India has already demonstrated the potential to become a global sourcing centre for services, Mr. Banga highlighted, “However, India cannot rely on services alone to drive exports. Manufacturing constitutes 72% of global trade worth US$ 6 trillion. For exports to be a major platform for growth, it is imperative that we focus on and drive manufactured exports.” Mr. Banga said that HUL, already one of India’s largest exporters, has decided to make sourcing an integral part of the business strategy. “Sourcing already accounts for about half of our total exports of Rs.1500 crore. HUL’s vision is to build a billiondollar sourcing business out of India,” he said. Mr. Banga was addressing HUL’s annual general meeting. Five initiatives: He said that India must move quickly to pre-empt other countries in the race for global sourcing, and suggested five immediate initiatives, that Government and Industry will have to take. This will help overcome India’s disadvantages, in cost, image and process competitiveness, vis-à-vis other low-cost nations, like China, Korea, Thailand or Mexico, which are already ahead in the race to become global sourcing centres in manufactured exports. The five initiatives are: identifying, nurturing and promoting 2 or 3 ‘Star’ sourcing sectors; creating ‘Virtual’ Special Economic Zones; completely privatising Mumbai and Chennai ports; driving industry productivity and process excellence through the Total Process Management (TPM) tool; and an enabling fiscal and regulatory Regime. ‘Star’ Sourcing Sectors: Mr. Banga said that, within the country’s portfolio, Pharmaceuticals, FMCG and Processed Marine products have the potential to become ‘Star’ sourcing sectors in the immediate term. “There is a rationale for the choice of 62
these sectors. The US FDA requirements are stringent for pharma. Consumer involvement in food items is high. FMCG items are items of mass consumption. If we are able to successfully create a niche for ourselves in these sectors, it will give the ‘Made in India’ brand for manufactured exports a big boost, which we can then extend to other sectors,” he said. To nurture the ‘Star’ sourcing sectors, he called for the establishment of a quasigovernment Apex Sourcing Body, with strong linkages to both the Commerce and Finance ministries, and independently managed by professionals deputed from Industry. “A good role model is NASSCOM, which has played a crucial role in positioning India as a global IT services sourcing base. Manufactured goods sourcing too will gain from a similar organisation, whose focus will be on building the India Inc. brand through some key activities - attracting lighthouse global companies to establish manufacturing bases in India; continuously highlighting legal and regulatory changes required by the sector; and finally, being a knowledge repository for information and research on the sourcing potential of India,” he said. ‘Virtual’ Special Economic Zones: Welcoming the Special Economic Zone (SEZ) legislation, he pointed out that to enjoy the benefits of this legislation, a company needs to be physically located within the SEZ. This would require an exporter to spend resources in relocating facilities. This might not be feasible for many industries, which need to be located near the source of raw materials (e.g., steel) or skilled labour pools (e.g., diamonds). Secondly, an SEZ will take two to three years to begin functioning with the full infrastructure in place. Therefore as an interim action, he suggested the establishment of ‘Virtual SEZs’ (VSEZs). A VSEZ is similar in concept to the current EOUs. Any unit that exports more than 50% of its production in a block of three years, wherever it is located, will be a deemed VSEZ, enjoying all the benefits available to an SEZ, including fiscal advantages and freedom from administrative procedures. To begin with, the VSEZ facility could be extended to those companies with an export of Rs.100 crore per annum, which would kickstart sourcing without waiting till the SEZs are fully established. Privatisation of Mumbai & Chennai ports: In the light of the encouraging experience of privatising three terminals in Chennai and Mumbai ports, Mr. Banga 63
called for the complete privatisation of these two ports. This will not only enhance efficiencies and bring down costs, but also earn Rs.2000 crore, in addition to the annual revenue streams. Besides establishing world-class processes and systems in at least two ports, this will serve as a model to rapidly privatise other ports as well. Productivity & process excellence: Highlighting the need for industry to develop an obsessive commitment to productivity, he suggested the adoption of Total Process Management (TPM) as a tool. “A TPM factory is unbelievably superior to a non-TPM one – I have seen this for myself. On an average, HUL has doubled productivity through TPM and, in some cases, taken it up to three times the original levels. We have now adopted TPM in our offices and sales processes as well,” he recounted. He suggested TPM training to be included in ITI and Engineering education, which will provide more than 200,000 TPM-trained personnel annually to industry. He also proposed a JIPM (Japanese Institute of Plant Management) certification programme for exporters along the lines of SEI-CMM for IT services companies, which will add considerably to the image of India’s sourcing. Fiscal & regulatory regime: Mr. Banga pointed out that the approach to the regulatory regime for exports should be such that it actively enables exports as a growth driver. He has suggested Comprehensive VAT for exports and Simplification of Transfer Pricing rules. Pointing out that 140 out of 147 countries in the WTO already have Comprehensive VAT, he strongly suggested immediate introduction of Comprehensive VAT for the exports sector, which would also provide useful learnings for implementation subsequently in the domestic sector. On transfer pricing, he said that price fixation in international markets is subject to many variables, all of which may not be common across firms, industries or, indeed, across time. Therefore, transfer pricing rules must be less formulaic. A simple solution is to increase the margin for variance from 5 to 15 %, and simplify the administrative and documentation procedures. In order to learn, the simplified regime could first be implemented for imports, and then extended to cover exports. Mr. Banga concluded, “India must move quickly to pre-empt other countries in the race for global sourcing. Government and Industry must work together to dramatically
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improve India's Cost, Image and Process competitiveness. The time is right for us to move Exports to the top of the economic agenda and make it a national priority.” Kwality
Wall's
makes
its
consumers
'Ek
Din
Ka
Raja'
Largest consumer promotion ever by any ice cream brand! New Delhi, March 14, 2002:Kwality Wall's, the market leader in India, has today announced the launch of its most exciting consumer promotion ever. This promotion, called 'Ek Din Ka Raja' is the biggest consumer promotion by any ice cream brand across the country. The 'Ek Din Ka Raja' promo entitles 10 lucky consumers to spend Rs.10 lakhs in One Day's shopping with their family in Mumbai! They can choose to spend on consumer goods such as cars, home appliances, furnishings, garments, etc. but within 24 hours! This 'dream-come-true' offer for the ice cream lovers comes at very affordable prices. All that one needs to do is buy Kwality Wall's range of products - every pack has a certain number of points on it. The consumer needs to collect wrappers / lids upto 150 points to be eligible to participate in the 'Ek Din Ka Raja' promo. On collection of the same, they need to go to a redemption centre where they will be given a scratch card. (Call centres have been set up at each of the major cities, which will direct consumers to their nearest redemption centres as well as answer all their queries.) Upon scratching the cards, 10 consumers can win the mega prize of 10 lacs and shop till they drop with their families in Mumbai. There are over one million assured prizes for all who get a scratch card - important to note that every scratch card has a guaranteed prize (there are no try agains!)which is not very commonplace for such kind of promotions. The other prizes include microwave ovens, walkmans, gold plated watches, jigsaw puzzles, video games, fun books, zoomerangs etc. The mega prize of EDKR entitles the consumer (with his family - upto 4 members) to be flown into Mumbai with all hospitality taken care of in royal style! They will be given a chauffeur driven car, two riders and a day to go on their dream-shopping spree. The winners will get to shop at five popular categories where we are associating with the best of brands in each category - BPL, Hyundai, Tanishq, Westside, and Wipro. "The Ek Din Ka Raja promotion is an effort by Kwality Wall's to connect to our consumers in a more personal way - we have given them offerings that they love 65
and now we are giving them something that all families love doing together shopping. The time limit of one day makes this promotion very exciting and different from all others. This promo, we are confident, will go a long way in strengthening the perception of Kwality Wall's as being a brand that emotes togetherness, fun, sharing and laughter," says Mr J H Mehta, Executive Director - Ice Creams, Hindustan unilever Limited. The 'Ek Din Ka Raja' consumer promotion will be supported extensively by multimedia communication tools - in what we believe is going to be one of the biggest and certainly most innovative media support for any consumer promotion seen before in the country. Apart from this we have an exclusive tie-up with Sony TV and Indiatimes.com As part of these tie-ups, the consumers will also get to play EDKR even if they have missed out while "scratching". We will also be reaching over 20 lac consumers directly as part of our extensive consumer contact programme. In short, ensuring that the excitement of the promotion reaches one and all across the country and becomes the new mantra for families wanting to shop together! After all as someone said 'The family that shops together - stays together!' About Kwality Wall's Kwality Wall's, a brand of Hindustan Unilever Ltd, currently commands a marketshare of more than 50% of the organised Indian ice-cream sector. Kwality Wall's has combined the state-of-the-art technical know-how of Unilever-- the global leader in ice cream products--with a deep insight of the Indian market, to deliver a range of superior quality products under its international brands. It has recently revamped its complete brand portfolio and brand proposition in line with HUL's Brand focus exercise. The essence is captured in the new baseline "Ho jaaye Dil ka Connection..." a proposition which captures the fun of bonding between families and friends. And don't forget, the family that eats together, shops together. Kwality Wall's launches Super Cornetto Exotic flavours and a core of sauce in delicious new cones Bangalore, March 2002: Kwality Wall's is all set to take the Indian ice cream market by storm with the launch of Super Cornetto. To the existing range of Chocolate, Butterscotch and Strawberry cornetto, the Super Cornetto range comes in two enticing 66
combinations - Jamaican Magic and Hawaiian Bliss. The product has a core of luscious sauce that runs right through the cone, and it has beautiful rosette decoration on the top. Once again Kwality Wall's has introduced an exceedingly innovative product into the ice cream market. Jamaican Magic is an exotic combination of Rum & Raisin + Coffee flavours with a core of chocolate sauce cone topped with nuts. Hawaiian Bliss is a delicious combination of Blackcurrant and Strawberry flavours with a strawberry sauce core and cherry toppings. Both the Super Cornettos which are much bigger that the current product are priced at Rs 30/-. Cornetto has for many years been considered to be the icon of ice cream industry and the best cone not only in India, but abroad as well. It stands for romance and togetherness and appeals to young adults. It is now extended into an exotic, international offering Super Cornetto - which speaks for your heart better than any words can. Says Mr J H Mehta, Executive Director, Ice-cream Division, HUL, "With Super Cornetto, we are giving the consumer a never-before experience in a cone with delicious flavours and a sauce flowing right through the cone. The Indian ice cream market, we believe, will be taken by storm by the Super Cornetto range and this will soon become a benchmark in pre-packed cones." The launch of the new Super Cornetto range is supported by a new television commercial as well as outstanding outdoors and a press campaign. The television ad, also features the new theme music for Kwality Wall's which is truly excellent. This ad gives you that warm feeling inside and is likely to be remembered as one of the all time favourite ads for 2002. Hindustan unilever Limited's (HUL) new businesses have made robust and steady progress, all posting profitable growth. Lever Ayush, the Ayurvedic range of personal care products, has gone national. HUL launched Lever Ayush in May 2002. It is for the first time that rigorous testing procedures of the pharmaceutical industry have been applied to Ayurvedic products. Mumbai, October 09 t h 2002 Pepsodent, Hindustan Unilever Ltd's leading oral care brand, today announced the launch of Pepsodent Dental Insurance, a first of its kind 67
initiative in the oral care category in India. Undertaken through a partnership with the New India Assurance, India's largest General Insurance company, Pepsodent now offers its consumers free dental insurance of Rs. 1000/- on purchase of any pack of Pepsodent. Under this initiative Pepsodent offers its consumers insurance cover against expenses for the extraction of a permanent tooth or teeth due to severe Caries and Periodontitis including cost of medication in relation there to. Caries and Periodontitis are two of the most widespread dental ailments in India. Announcing the launch of Pepsodent Dental Insurance Pradeep Banerjee, Category Head - Oral Care, HUL, said, "Pepsodent Dental Insurance is a unique concept and first of its kind in the Oral Care category in India. The initiative not only strengthens Pepsodent's proposition of being a 'germprotector' but also displays our commitment towards improving oral hygiene for our consumers." Elaborating further on the concept of Dental Insurance, Pradeep said "Pepsodent Dental Insurance is a unique concept in this category and will further strengthen the equity of Pepsodent in the minds of the consumers." Insurance cover under Pepsodent Dental Insurance will be provided for one year, which comes into effect after a period of six months from the date of issue of the Pepsodent Dental Insurance Certificate. Pepsodent Dental Insurance forms will be soon available in all Superior Pepsodent packs of 100 and 200 gms as well as select retail outlets. The company also plans to make the forms available through advertising in the print media starting November. Mumbai, January 16, 2003 In a path-breaking tie-up, two FMCG leaders, Hindustan Unilever Ltd. and Pepsi Foods Pvt. Ltd. today formed an alliance in India to jointly market through a vending format a full range of hot beverages and soft drinks from their portfolio of world class brands.
68
HUL brings to the alliance a well established presence and brand value in hot beverages, outstanding product development and backward integrated sourcing capability, expertise in vending and an extensive institutional channel base. The partnership leverages each other's strengths with an unbeatable business model that creates a powerful distribution base to market a unified portfolio of popular hot beverages and soft drinks through a combined fountain, vending and institutional initiative. The area of collaboration for these two organisations will be in vending hot tea and coffee along with soft drinks across the country. The alliance will make available leading brands of the two FMCG giants - Lipton, Taj Mahal, Bru, Pepsi Cola, 7Up, Mirinda and other popular carbonated soft drinks through vending machines and fountains.With this alliance, HUL & Pepsi venture into offering hot beverages through the Pepsi distribution system for the first time in the country as part of their strategy to infuse new growth in the entire category of liquid refreshment beverages. HUL remains the largest spender in terms of total outlay Hindustan unilever retains its position as the largest spender in the sector with its annual advertisement expenditure in 2002 at Rs7.2bn. Are you surprised at the figure?. Don’t be. Just go back to your television set and count the HUL product ads Vs other company product ads tonight. On an average if you see 10 ads, you will find that atleast 5 out these are of HUL products. HUL jacks up advertising spend Advertising and sales promotion expenditure of the fast moving consumer goods giant (FMCG) Hindustan unilever soared to a record Rs 823.82 crore during the year ended December 2002. In the previous fiscal, the company had spent Rs 696.58 crore. The spending on advertisement sales promotion, which is up 18.27 per cent in 2002, is considered to be on the high side as FMCG companies are facing acute demand recession. The fierce competition among all personal care companies, particularly to maintain market shares in shampoo, toothpaste, detergent bath-soap and hair-dye, has compelled HUL to go for large ad spending. 69
In 2004, the spending on advertising accounted for 70.19 per cent of the net profit. In 2003, ad spend accounted for 63.17 per cent of the net profit and in 1998 it was 68.96 per cent of the net profit. The company's advertisement spend accounted for 83.06 per cent in 1997.
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SWOT ANALYSIS
-
71
SWOT ANALYSIS STRENGTH ENJOYED BY HUL
HUL distribution network is one of the best in the country this is the key strength converted to the company.
Research & Development for improvement of products, technology innovation in the production process is another major strength of HUL.
Very large spectrum of well establishes brands ensure in long run growth and above average returns. Economics of scale and economies of scope through large size and diversification. Technologically and operational support from the parent company i.e. Unilever. Weakness Suffered by HUL Inappropriate diversification resulting in higher prices (because of high variety cost is higher). Very complex organization resulting in role conflicts. Opportunities Offered by Environment: Very large population of India is tremendous opportunity for Fast Moving Consumer Goods (FMCG). Competitor effectiveness to produce high quality, low cost produces is poor. Most of the competitors are small in size that’s why the cost of production is high. Income level of customer is steadily rises there by offering by an opportunity to sell branded products as against unbranded products. Stable, legal, political environment that offers good potential for growth.
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Threats Faced by the HUL:
One of the major threat the HUL is facing is from smaller companies producing smaller companies producing products similar to HUL because the production process is not highly technically.
Most of the product of HUL are by nature low cost items therefore the risk involved on the part of customer is less this results in brand loyalties nor sustainable in long run.
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LIMITATIONS
74
LIMITATIONS Though HUL seems to be ruling the roost in various segments of household goods industry, findings suggest that its marketing strategies are not without loopholes. Let us have a look at these loopholes or limitations in brief.
One very striking limitations is the fact that even though these products with allpercasive marketing and distribution channels, flourishing increasingly in different parts of the world there appears
to be a visible lack of channels
providing them substantial access to semi-urban and rural areas. In other words, the products of HUL have a weaker grassroots bases.
The availability of these products to common people does not only depend on marketing network, but also on the advertising strategies adopted by HUL. On this count culinary products don’t seem to offer much to create any stir and betray manifest upward trends in terms of widening consumer base.
The pricing strategy adopted by HUL shows considerable fluctuation, which has led the consumer base to remain almost stagnant in many segments. Usually, the prices of these products are too high to make these affordable to the common masses and particularly those belonging to low-income groups. This phenomenon seems to be most evident in culinary goods segment, which constitutes the backbone of HUL’s industrial base.
Agricultural pursuits have not yet attained the status of industrial activities to a considerable degree. So, the supply mechanism adopted by HUL for the raw materials tends more often to suffer from a kind of unpredictability syndrome in terms of communication and planning. On certain occasions, the readily available agricultural input is too low to cater to the needs of manufacturers because ‘cultivation for industrial production’ or ‘industry-oriented farming’ is not popular concepts even today in many countries of the world including India.
Though, the facilities of transportation and logistics for the supply of raw material don’t lack substantiality as much in case of HUL as most other players in the industry even HUL is not totally luinune to the problems posed by it. On many occasions, transportation costs are too high, which affect the overall pricing strategy adopted by HUL. 75
HUL manufactures a large range of products along with those we call culinary products. This diversification in products. But culinary products are usually bracketed with other (major) products in case of these companies. So, no serious or special attention is paid to devising separate or exclusive strategies for these products. It makes their brand name rather than considerations of their qualitative excellence the most significant criterion for their survival in the impredicable and at times, precarious situation of consumer.
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SUGGESTIONS AND RECOMMENDATION S
77
SUGGESTIONS AND RECOMMENDATIONS As it is obvious from the study the products of HUL have approached the high water mark of sale in the global consumer market. However, there are genuine reasons to observe that they have yet to attain the cutting edge status on many counts. In this regard a few suggestions can be made to give the required boost to the marketing prospects of HUL products. These can be summed up as follows:
An attempt should be made by HUL management to tap all the potentials
offered by the global market by devoting a more substantial, efficient and better equipped resource base. This task can be accomplished in the first place by implementing a stronger and more ending distribution channel for various products so that even those sections of consumers who are not accessible so easily, can be covered with greater ease.
Efficient infrastructural base coupled with better and more comprehensive
advertising strategies should be resorted to; though HUL is presently surfing ahead of others on the path of taking some great initiatives it should be more concerned about it for the purpose of corporate image building. Agricultural pursuits required to meet the demands of certain agro based and culinary product segments should be more planned, systematized, efficiently viable and less cost-effective. The price structure for various products should be more within the limit of affordability for consumers; the grassroots consideration in this regard should not 78
be ignored. Here, the policy of loco-centric rather than uniform price structure would certainly be more advantageous. Industrial manufacturing units of these products should be set up at places lying nearest to the places where sources and raw materials for different products could be available in the easiest possible way.
HUL should go for more planned and sensible marketing and advertising
strategies with a view to accomplishing the task of global brand image buildings.
Hypermarketing and retailing network should get special attention as vital
components of HUL’s marketing policy.
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CONCLUSION
80
CONCLUSION A look at the contemporary profit of the global industrial segment of household goods brings it into clear focus that the situation prevailing in major markets is very much in favour of HUL. The fact that should be acknowledged on the basis of current trends betrayed by this segment tells us that HUL veritably stand out as on indisputable market leader in this field and is sure to surge way ahead of other players in future. The competitive strength, strategic acumen and ability to reach out for a considerably larger consumer base that the company has been able to attain through the years since its inception also point to this fact categorically. An extremely pertinent views that emerges out of it amply suggests that it is the dominance of HUL operating under the banner of Unilever in most of the countries that contribute in a large measure to the creation of a market situation in which consumers are nearly forced to purchase their ‘choice’ at prices that might not be in congruence with their speculations and calculative consideration of affordability – something that largely determines the phenomenon called consumer behaviour. It is absolutely doubtless to assume are incomparable in term of their qualitative excellence. It is a bit surprising to observe that HUL is the market leader even though it’s capable of manufacturing and marketing a vast range of products with an international consumer base. Moreover, the tie-up of Prima India with HUL reflects that the latter is not unwilling to share its technological expertise and infrastructural contrivances with others. So, inspite of the near monopoly situation caused by HUL’s presence in the global market, it points to a healthy flexibility in the company’s fundamental approach.
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Another very striking aspect of HUL’s global marketing strategy and operations, as it has been pointed out and dwelt upon in the present study, is its enormous ability to capitalize on the resources available to it. The company has had the distincting of taking determined steps to maximize opportunities of image building in the global market. In order to accomplish this task, the management of HUL is poised to keep infusing new spirit in its HRM wing in order that it may veritably serve as an instrument for proliferating marketing prospects for HUL products. That way both internal and external marketing are taken cognizance of with identical sense of concern. This approach draws sustenance from the comprehensive international network of overseas operation centres, associates, agents and allies.
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BIBLIOGRAPHY
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BIBLIOGRAPHY Book •
Kotler P., (2000), Marketing Management, Millennium Edition, Prentice Hall of India, New Delhi.
Magazines •
A&M
•
Business Barons
•
Business Today
•
Business World
Newspapers •
The Economic Times.
•
The Indian Express.
•
The Business Standard.
•
The Hindustan Times.
Internet website •
www.google.com
•
www.indiainfoline.com
•
www.hul.com
•
www.unilever.com
•
www.altavista.com
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