Altius Shodh Journal of Management and Commerce ISSN 2348 – 8891 AN ANALYSIS OF MARKETING & COMPETITIVE STRATEGIES ADOPTED BY HINDUSTAN UNILEVER LIMITED IN RURAL AREAS **Prof. Rajesh Jain, **Dr. D.N. Purohit *Assistant Professor, Department of Commerce, IPS Academy, Indore **Professor, Department of Commerce, GACC, Indore Abstract Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer goods company, touching the lives of two out of three Indians with over 20 distinct categories in House & Personal Care Product and Food & Beverages. They endow the company with a scale of combined volumes of about 4 million tones and sales of Rs. 14000 crores. They are manufactured over 53 factories across India. The operations involve over 3700 suppliers and associates. HUL's distribution network comprising about 6800 redistribution stockiest, covering 8.4 million retail outlets reaching the entire urban population and about 390 million rural consumers. The main objective of this study is to find what the steps of Hindustan Unilever Ltd. are is adopting to be market leader and to differentiate itself from its competitors. Excluding the onetime gains, the company's net profit rose 21%. HUL with revenues of Rs. 6284.75 crore and a net profit of Rs. 1024.38 crore in the current year In recent years, the FMCG sector declined due to down trading. The new Hindustan Lever see an exciting opportunity for growth. They have 41 powerful brands covering all segments, with leading market positions in most. Today, these are stronger and more relevant to the consumer than ever. The scale of the business and operations gives them the resources needed. They are delivering good services and the changes they brought in the products are well taken by the customers, by this they are generating sustainable profitable growth. Keywords: stockist, segments, FMCG, sustainable, redistribution. Introduction: As competition heats up, India’s top consumer-products company woos affluent shoppers with global brands like Dove. Hindustan Unilever Limited (HUL) is India’s largest Fast Moving Consumer goods company, touching the lives of two out of three Indians with over 20 distinct categories in House & Personal Care Product and Food & Beverages. They endow the company with a scale of combined volumes of about 4 million tones and sales of Rs. 14000 crores. HUL is also one of the country’s largest exporters; it has been recognized as a Golden Super Star Trading House by the Government of India. HUL’s brandslike Lifebuoy, Lux, Surf Excel, Rin, Wheel, Fair & Lovely, and Kissan – are household names across the country and span many categories – soaps, detergents, tea and other products. They are manufactured in over 53 factories across India. The operations involve over 3700 suppliers and associates. HUL’s distribution network comprising about 6800 redistribution stockiest, covering 8.4 million retail outlets reaching the entire urban population and about 390 million rural consumers.HUL is not only focusing on health & hygiene education, women empowerment and water management but also involved in education and rehabilitation of special or underprivileged children, care for the destitute and HIVpositive and rural development. Review of Literature: According to Pradeep Tognatta (2012) , the economic growth in India’s agricultural sector in last year was over 7.28% , compared with 3.54% in the industrial sector. This implies a huge market potentiality for the marketer to meet up increasing demand. According to Kotler (2010) also defined satisfaction as a person’s feeling of pleasure or disappointment resulting comparing a products perceived performance in relation to his or her expectations. Satisfaction is an overall customer attitude towards a service provider or an emotional reaction to the difference between what the customer anticipate and what they actually receive, as far as the fulfillment of some need, goal and desire is concerned. Christopher, Payne and Ballantyne (2008) have defined service quality as the ability of the organization to meet or exceed customer expectations. Service quality is believed to depend on the gap between expected and perceived performance. Rationale of Study: HUL started project Shakti in 2001 with the aim of increasing the company’s rural distribution reach simultaneously prov iding rura l wo men with incom e- genera ting opportunities. This research study examines this marketing initiative as a case where corporate societal objectives are helping achieve business goals. In present situation not only in one industry but also all sectors are facing tough competition. It has become very difficult to grow, stabilize and excel in business performance. Over and above, business environment is changing drastically. It is very difficult to predict about future. High degree of risk is involved in it. Sincere and dedicated efforts are needed in marketing to retain the existing customers and attract the new customers. It is required to influence the attitude and behavior of buyers. A lot of promotional activates are needed. Altius Shodh Journal of Management and Commerce ISSN 2348 – 8891 Interpretation: At 66% times adopt it always condition but 34% in sometimes. Objectives: • The main objective of this study is to find out the steps Hindustan Unilever Ltd. is adopting in order to be market leader and to differentiate itself from its competitors. • • • • To study the marketing strategies of HUL. 2. Which is the best media for the promotion of your product? Table 2: Best Media for Promotion To focus on product mix of HUL. Electronic Media 22% To focus on competitive strategies of HUL. Print Media 37% To know the market and competitors of HUL. Face to Face Communication 29% Any Other 12% Research Methodology: Variables to be used: 100 Source: Primary Data Sampling Design: Sampling is the selection of some part of aggregate or totality on the basis of which a judgment or inference about the aggregate or totality is made. Interpretation: Print Media is highest (39%) contributed for promotion of Product. Sample Unit: All working people are include both the genders i.e. males and females irrespective of their education level. Sample Region: Indore Region, M.P. Tools for Data Collection: Data Collection was done in two ways: (1) Primary Data Collection 3. (2) Secondary Data Collection Primary Data has been collected through personal contact. For this purpose questionnaires were administered to and one-on-one interviews conducted with the consumers, shop owners and distributors and suppliers of the company. Secondary data has been collected from magazines, newspaper, company literature and websites. Tools for data Analysis: Analyzing codes to each question were awarded. There after every questionnaire was written. After which the data were analyzed. Tools of data analysis will be used as per data collected. Analysis and Interpretation of Results 1. Do you adopt any mass communication strategy to distribute your products? How you grade your distribution channel? Table3: Grade for Distribution Channel Good 75% Average 16% Low 9% Source: Primary Data Interpretation: Our Distribution Channel is always in Prompt position. 4. On what traits do you compare the services? Table 4: Traits to Compare Services Area Coverage 90% After Sales Services 10% Others 0% Source: Primary Data Prompt position. Interpretation: In 90% cases compare the services on the base of area coverage. 5. What are the promotional strategies you adopt? Table 5: Adopt Promotional Strategies Table 1: Mass Communication Strategy Always 66% Rarely 0% Sometimes 34% Source: Primary Data Buy one get one free 2% Discount 33% Free Coupons 39% Any Other 26% Source: Primary Data Interpretation: For promotion of product, the company adopts two major strategies - Free Coupons and Discounts. 6. Do you regularly encourage or sponsored the cultural events? Table 6: Sponsored Cultural Events Regularly Yes 80% No 20% Source : Primary Data Source: Primary Data Altius Shodh Journal of Management and Commerce ISSN 2348 – 8891 Interpretation: Company always encourages cultural events regularly. Interpretation: For competing with others, our company prepares to launch new products in the market. 7. 11. What is your primary strategy to become a market leader? Do you think a product survey is useful to your company? Table 7: Utility of Product Survey Table 11: Primary Strategy to Become Market Leader Yes 95% Low Price High Quality 55% No 5% High Price Quality 15% Low Price High Satisfaction 35% Source : Primary Data Interpretation: Survey of Product is help for Company to make a better plan for Future. 8. Do you distribute free samples to the end users? Table 8: Distribute Free Sample Yes 55% No 5% Occasionally 40% Source : Primary Data Interpretation: To become a market leader, the policy of the company is to offer high quality products at a low price. 12. What is backbone to fight the competition? Table 12: Backbone to Fight Competition Source : Primary Data Interpretation: Company provide Free Samples of Large product Line 62% Low Price of Products 29% Product Mix 9% Source : Primary Data product majority when launch new product and for old occasionally. Interpretation: To face Competition Company produce in large scale. 9. Which type of strategies do you follow when Findings launching new products in the market? • Hindustan Unilever Ltd. (HUL) has reported a 24% growth in net profit for the year 2014. This is due to not only due to price increases but also strong sales of premium products and one-time gains from sale of property and reduction in liabilities related to retirement benefits and restructuring costs. • Excluding the one-time gains, the company's net profit rose 21%. HUL with revenues of Rs. 6284.75 crore and a net profit of Rs. 1024.38 crore in the current year. • HUL took judicious price hikes, cost-saving measures and improvement product mix to offset rising input costs which increased HUL margin. • Revenue from sales of soaps and detergents which accounted for more than 48% of the company's total revenues. • Revenue from beverages registered a 14% rise although profits from this category fell by 19% due to higher advertising spend on the segment. • Revenue from sales of processed foods is 49.68% • Personal care products, another important category, 23.69%. • The company also announced the launch of a range of nutritional drinks and snacks for children, Kissan Amaze Brainfood. Table 9: Strategies to Launch New Product Push Strategy 10% Pull Strategy 80% Discount 10% Source : Primary Data Interpretation: For launch any new product company focus on Pull Strategy. 1. When your competitor launches new products, how do you face the situation? Table 10: Face to Competition Ready for the Competition with 62% launching of new product Wait for the response 10% Decrease the price of the same 2% category product Differentiation Strategy 26% Source : Primary Data Altius Shodh Journal of Management and Commerce • • HUL mainly focus on their objectives and how they define it in success. Defining success is to make sure that HLL can grow consistently, profitably and on grow competitively. HLL also changed their approach to marketing to the rural poor. Because of widely varying levels of literacy and access to television, HLL had to minimize its reliance on traditional media channels and find ways to get its message to consumers in a more personal, more direct way. Suggestions: • In the personal and home care industry, low brand awareness has a very negative impact on organized players. The organized players exploit this lacuna to push spurious products. • Most give higher margins to the retailer, who is the most expensive and important link in the supply chain. Consumer product companies are said to lose between 10-35 percent of their business to fake products. To tackle this problem, 14 FMCG companies have formed a committee to fight counterfeit and local products. • Another concern is the surge in imports of toiletry products in the unorganized market, which is eating into the revenues of the organized players. • Industry sources say that these attractively priced imports, which are flush with huge capacities. The size of the unorganized imports is estimated between 1-3 bn. And growing annually at 10%. • However, domestic players plan to combat this threat by strengthening their distribution networks, in which the organized players have a distinct disadvantage. • Quantitative restrictions on 934 items were removed through the 2012-13 Exim Policy. Products like sanitary napkins, Toothbrushes, shaving brushes; copra will now be freely imported. This is however unlikely to have a material impact on the personal care companies as import duties on most of these items are high. Limitations: Several limitations are occurred with doing survey and making report. Here we desire my limitations which occurred while preparing our report and survey includes - • Time • Large Product Line • Several Outlets • Busy schedule of officials and Executives ISSN 2348 – 8891 Conclusion: HLLs pioneering efforts to develop techniques to bring branded products to India's rural poor gradually had an impact on their entire portfolio of brands. Still, HLL also looked to exploit other growth opportunities. In developing a new salt product, HLL was hardly creating a new market. In fact, the fascinating history of salt dates back many centuries. HLL also wanted to minimize financial risk. By partnering for manufacturing capacity and sharing distribution assets with other HL products, the investment in fixed assets for the new product was near zero. Fragmentation in Indian media offered HLL the opportunity to test the product incrementally. In the first few cities in which they launched the product, HLL was gratified to discover that they were successfully upgrading consumers from unbranded to branded salts. Today they are a focused on FMCG company with our branded business accounting for over 905 of sales, consisting of 41 brands across 22 categories. In foods, there is enormous growth potential in leading the evolution of consumers to branded and processed foods. They have consolidated their portfolio and improved the gross margins by over 16% through product mix and cost reduction. As the largest FMCG player it was up to them reverse the downgrading to realize its true growth potential. Over the next 15 years, per capita income in India is likely to touch China's current levels. At those levels, the FMCG market will be over Rs. 1.48 lakhs crore from current value of Rs. 96000 crores. Their main challenges were to reverse the downgrading in the categories and reestablish the relevance of their brands in the mind of the consumer. In 2013, they had 168 brands, many undifferentiated and lacking scale. They chose to focus on 41 power brands covering all consumer appeal and price segments. The first step was to ensure that they offer world class quality and real differentiation backed by technology to give them the advantages over low priced competition. They have invested over Rs. 1300 crores, or 7.5% of sales, in the last four years to upgrade the brands. Perhaps the most significant change has been to move the brand beyond merely making functional claims to plying a bigger and deeper role in the lives of consumers. Today Lifebuoy, their oldest brand, has grown at over 18% for the last benefit of 'great clean' by saving two buckets of water with every wash. Their brands and sound understanding of the local consumer are supported by a world class Research and Development capability. They have over 450 of the brightest scientists and technologists based in India. Hindustan Lever has historically had a strong bond with its customers. This is possible because of IT connectivity across the extended supply chain of about 3500 suppliers, 190 factories and 8500 stockiest. Their entry into Water Purifiers, through Purest, shows great promise. At 17 paise per liter, it is extremely affordable for the common man. They have restructured the company, integrating eight profit centers into two Divisions-Home and Personal Care (HPC) and Foods. To ensure that Hindustan Lever remains competitive in the long-term, they have made significant investments in product quality, pricing and marketing. Recently an international competitor attacked their laundry business led Altius Shodh Journal of Management and Commerce by a price reduction of as much as 50%. In recent years, the FMCG sector declined due to down trading. Also because of presence of large number of companies trying to seize this opportunity, this force the old HLL for the change and thus, their transformation has resulted in a new HLL which has successfully faced this challenge and reversed this trend. The new Hindustan Lever sees an exciting opportunity for growth. They have 41 powerful brands covering all segments, with leading market positions in most. Today, these are stronger and more relevant to the consumer than ever. The people are energized by the scale of the opportunity and determined to seize it. The scale of the business and operations gives them the resources needed. They are delivering good services and the changes they brought in the products are well taken by the customers, by this they are generating sustainable profitable growth. ISSN 2348 – 8891 References: Books 1. Kothari, C.R. (2013). Research Methodology, Wishwa Prakashan, India 2. Marketing Management (2014), ICFAI University Press 3. Mamoria, C.B. (2012). Research Methodology 4. Desai Vasant (2012). Rural Development in India , Himalaya Publishing House Web Sources: 1. http://www.fmcg.com 2. http://www.ruralmart.com 3. http://marketwatch.com
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