Download - HLL (Supply Chain)

Retailers Satisfaction and Expectation towards HLL Distributor

EXECUTIVE SUMMARY

Hindustan lever limited is India’s largest fast moving consumer goods company and it

also having largest distribution channel, with a leader in Home & personal care products

and also foods & Beverages, having its reach to around 1 million retail outlets. These

retailers form an important link between manufacturer, distributor and customer.

The project assigned me was to access the satisfaction level of retailers and their

expectation towards HLL distributor in Belgaum rural. This project taken up by me is a

part of academic assignment to find out the attributes that affect the satisfaction level of

retailers and suggestions to the distributor for improving quality of service.

PROBLEM STATEMENT: “Retailers Satisfaction and Expectation towards HLL Distributor” in Belgaum rural.

OBJECTIVES OF THE RESEARCH:

o To know the perceptions of retailer regarding distributor.

o Find out the attributes that affects the satisfaction level of rural retailer.

o Ascertain the opinion about merchandising activity.

o To measure the behavior of sales person during visit.

METHODOLOGY

1. Personal Interaction with TSI, RSP and interviews with retailer.

2. A research survey (using questionnaire) would be conducted.

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OUTCOME & BENEFITS OF THE STUDY:

1. This study would bring into light on the expectation and perception of the retailers

with respect to the distributors functioning.

2. It will help distributor to take the necessary steps to improve quality of service.

3. It will help distributor to know the attributes that affect satisfaction level of

retailers.

4. Finally, it will help me understand (in practical) HLL distribution as whole and thus

enriching my knowledge.

SCOPE OF THE STUDY:

My study is restricted to only Belgaum rural retailers. The whole study and analysis is

done to measure the level of satisfaction and expectations of retailers towards their

distributor and to find out the attributes and factors that affect the satisfaction level.



FMCG INDUSTRY IN INDIA



FMCG INDUSTRY IN INDIA

As the name suggests, products of daily usage under the heads of personal care, fabric

care, household care, packaged foods, beverages and tobacco characterize the sector.

These are part of the monthly purchase basket. Such products generally have a non-

cyclical consumer demand, low unit value, are mostly branded products, involve high

marketing expenditure and have to be widely distributed. This sector has observed a 2%

decline in the past 4 year period. FMCG pundits attribute this to various theories like

FMCG commanding lower share of the wallet, what with several other newer

expenditures in mobiles, computers, automobile etc. Other reasons to the decline may be

down trading in brands or lower rural off takes. The Industry has a lot of potential since

the product penetration and the per capita use is still low in India. As a matter of fact TV,

which is the major source of information, reaches out to 80% of urban and 46% of the

rural population. The key entry barriers into this section are the Brand, Supply Chain

Management and the complexity involved in managing SKU’s (Stock Keeping Units).

Also an Indian FMCG Company faces strong competition from the existing MNC-owned

brands.

SUPPLY CHAIN

The primary objective of supply chain management is to fulfill customer demands

through the most efficient use of resources. A supply chain, logistics network, or supply

network is a coordinated system of entities, activities, information and resources involved

in moving a product or service from the supplier to the customer.


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Typically a simple supply chain model will be as follows:-

There are several stages through which the money circulates. The distribution

intermediaries make the whole system of supply chain economically viable. Each “layer

of intermediaries” implies fewer transaction complexities for all the “layers”, augmenting

the reach. The experience, specialization and knowledge of local conditions, contacts and

scale through such a network help achieve Operational Efficiency.

Without having to focus upon distribution, the brand managers can concentrate on their

core activity of product development, sourcing and marketing. The companies get a cost

advantage since most intermediaries are family owned businesses with low overhead and

operational costs. The brand owners get a better return on capital employed as

intermediaries hold the inventories.


Factory C&FA Distributor Retailer Consumer

Super-Stockist

Sub-Stockist

Secondary (Retailing)

Primary (Shipment)

Consumer Purchase (Off take)

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THE CHALLENGE INVOLVED

India has around 7.3 million retail outlets of which 3.0 million are in the 3768 towns and

4.3 are in the 627,000 villages. This fact is significant since the biggest challenge is to

reach out to every nook of such a huge and diverse nation as India. As aptly said by Mr.

Pusalkar, Supply Chain can be well learnt here.

For a typical mid-size FMCG company, the numbers would be as…

C&FA (Carrying & Forwarding Agent) 30

Distributors & Super-stockiest 1,200

Sub-stockiest 1,000

Retailers reached

Retailers directly covered 500,000

Retailers via wholesalers 1,000,000

TOTAL 1,500,000

Consumers 10,000,000

The 7.3 million outlet strong retailing industry provides direct employment to more than

18 million people which roughly means one in every 25 families in India is engaged in

the business of retailing.

The rural markets are emerging to be the growth drivers of the future. The industry seeks

to cater to a large rural population of the order of 700 million people. Of the 7.3 million

retailers 58% are in rural areas. In most categories penetration is low and innovative

packaging such as sachets and promotion is required. Achieving cost effectiveness to

make the products reach rural outlets is essential.


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THE ECONOMICS

For an FMCG company, the direct customer is the distributor. The several intermediaries

between the company and the actual consumers ( C&FA, Distributors, Super-stockiest,

Sub-stockiest, Wholesalers, and Retailers ) need compensation for the costs incurred,

namely the inventory holding costs, manpower costs, credit provided to the next

intermediary, transportation costs, overheads, and entrepreneur’s risks and efforts. The

remuneration is provided as a combination of gross margin (mark-up) on sales,

commission on sales, and reimbursements.

Typical Margins in such Supply Chain are:-

Distributor – 5%

Retailer – 7-15%

Wholesaler – 1-1.5%

Super-stockiest – 2%

Sub-stockiest – 5%

A distributor’s investment consists of inventory, Accounts receivable and accounts

payable. He draws his income from gross margin or commission on sales. The expenses

include discount expense, distribution expense and overheads. Typically an FMCG

distributor expects a 25% ROI.

EMERGING TRENDS IN FMCG BUSINESS


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The industry has lately observed a rise of regional stalwarts such as Ghadi detergent,

Baagh Bakri Tea etc. who are very strong in their respective geographical areas. Another

emerging trend has been the rush to design products for the mass market in villages. C.K.

Prahlad’s famous “Bottom of the Pyramid” theory is the guiding principle.

The market is moving really fast as constant innovations are required in product,

packaging and distribution. With the growth of information technology, the retailer has

transformed from the old “gala owner” to a much better informed businessman. Direct

Selling (e.g. Amway) as a parallel way of marketing is picking up. Increasing role of

influencers (such as “Shakti Amma”, a famous concept in Andhra) has also emerged.

There has been an influx of imports and ever increasing presence of multinational

companies in this sector.

The retailing business is also becoming more organized. Organized retailing comprises

professionally managed single or chain of self-service stores. This has implications such

as shorter supply-chain, move from inventory build-up method to collaborative planning,

forecasting, and replenishment system, greater dependence on few ‘sophisticated’ buyers,

customer management strategy etc.

To sum up all

A ‘world-class’ FMCG Sales & Distribution system.

Ensures product availability

At the right place

In the right quantity

Ensures product replenishment

Ensures ‘profit’ for all intermediaries

At a minimal cost

GROWTH IN SALES OF FMCG COMPANIES:


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All top 10 categories record growth, the only exception being packaged tea. Spurred by

high rural demand and retail sales, the fast-moving consumer goods (FMCG) sector

posted 10.6 per cent growth year on year in February, the highest in the past five years,

according to data provided by market research agency AC Nielsen.

The rise does not come on a low base since the sales growth in February 2005 was 8.1

per cent year on year. And what is more, the growth has been broad-based with all the top

10 categories growing, the only exception being packaged tea.

Besides, five of these categories have posted double-digit growth. And for the first time

in four years, all the companies tracked by AC Nielsen have posted a growth in sales.

The revival in the sector has been evident for some time now and the December quarter

saw strong top line growth.

For example, Dabur saw its revenue grow 26 per cent year on year, while Colgate’s sales

grew 21 per cent. Besides, most companies now have far more pricing power than they

did a year ago, which is reflected in the better operating margins last quarter.

Colgate’s margin, for instance, was up 10 percentage points at 23 per cent, while that of

Godrej consumer Products was up 270 basis points at 23.8 per cent.

According to analysts, Hindustan Lever in February experienced the highest growth in

five years while others such as Tata Tea and Dabur saw sales grow at a much faster pace

compared with the December quarter. Tata Tea’s sales rise, for instance, is the highest

since June 2005 while Britannia’s is the highest in 27 months.

Analysts believe that the pick-up in the larger categories such as biscuits, washing

powder, detergent cakes, shampoos and tea indicates a rise in demand for such categories

in rural areas.

This, they point out, is the main driving force behind the performance of companies such

as Hindustan Lever, which recorded double-digit top line growth last quarter, the first

time in six years. Very few segments in the FMCG space were now seeing a deceleration

in growth and the momentum was expected to continue, analysts added.



Even as the sector continues its strong run, the BSE FMCG index hit an all-time high of

2,103.5 on Friday with three of its components, ITC, Nestle and McDowell hitting all-

time highs.

ITC, incidentally, has the highest weight of 48 per cent in the index. The FMCG index

has outperformed the Sensex for the better part of 2005 and has been a big out performer

so far in 2006.



RETAILING AND RURAL MARKET

RETAILING AND RURAL MARKET



Retailing is very diverse and sometimes the edges start to blur with other type of

business. The word retail comes from the Old French retaille “to cut off”. So a

wholesaler or manufacturer sells bulk lots while the retailer is willing to sell off smaller

or individual pieces. Of course this definition only takes us so far because many

wholesalers also sell retail and many retailers also sell wholesale in larger lots.

Further, the common usage of retail is based more on whether the business deals directly

with the public. .

A local physical location is not even necessary for the definition of retail anymore now

that etailing and eBay selling can be retail businesses into themselves. The best

definition of retail might be any business whose product or service is made for, and

targeted to, the consuming public.

Visual merchandising in Retailing.

Selling goods using visual stimuli is an old age practice, but with increasing growth of

retail industry, the art or arguably the science of visual merchandising has come to

occupy a new found fancy. Marketers especially retailers, consider it as an inspirable part

of their overall branding effort. But even as it continues to grow, like all other branding

efforts, the understanding of its impact and effectiveness is still in its infancy.

What makes Rural Markets Attractive?



Rural Consumer Insights:

Rural India buys….

Products more often (mostly weekly).

Buys small packs, low unit price more important than economy.

In rural India, brands rarely fight with each other; they just have to be present at the

right place.

Many brands are building strong rural base without much advertising support.

Fewer brand choices in rural: number of FMCG brand in rural is half that of urban.

Buy value for money, not cheap products

Some Myths:

Rural Market Is a Homogeneous Mass

Reality: It’s a heterogeneous population. Various Tiers are present depending on the

incomes like Big Landlords, Traders, small farmers; Marginal farmers: Labors, artisans.

State wise variations in rural demographics are present viz. Literacy (Kerala 90%, Bihar

44%) and Population below poverty line (Orissa 48%, Punjab 6%)

Disposable Income Is Low

Reality: Number of middle class HHs (annual income Rs 45,000- 2, 15,000) for rural

sector is 27.4 million as compared to the figure of 29.5 million for urban sector. Rural

incomes CAGR was 10.95% compared to 10.74% in urban between 1970-71 and 1993-

94.

Individuals Decide About Purchases

Reality: Decision making process is collective. Purchase process- influencer, decider,

and buyer, one who pays can all be different. So marketers must address brand message

at several levels. Rural youth brings brand knowledge to Households (HH).

Why Different Strategies?

Rural markets, as part of any economy, have untapped potential. There are several

difficulties confronting the effort to fully explore rural markets. The concept of rural



markets in India is still in evolving shape, and the sector poses a variety of challenges.

Distribution costs and non availability of retail outlets are major problems faced by the

marketers. The success of a brand in the Indian rural market is as unpredictable as rain.

Many brands, which should have been successful, have failed miserably. This is because,

most firms try to extend marketing plans that they use in urban areas to the rural markets.

The unique consumption patterns, tastes, and needs of the rural. Consumers should be

analyzed at the product planning stage so that they match the needs of the rural people.

Therefore, marketers need to understand the social dynamics and attitude variations

within each village though nationally it follows a consistent pattern. The main problems

in rural marketing are:

Understanding the rural consumer

Poor infrastructure

Physical Distribution

Channel Management

Promotion and Marketing Communication

Dynamics of rural markets differ from other market types, and similarly rural marketing

strategies are also significantly different from the marketing strategies aimed at an urban

or industrial consumer.

Strategies to be followed:

Marketing Strategy:

Marketers need to understand the psyche of the rural consumers and then act accordingly.

Rural marketing involves more intensive personal selling efforts compared to urban

marketing. Firms should refrain from designing goods for the urban markets and

subsequently pushing them in the rural Areas. To effectively tap the rural market a brand

must associate it with the same things the rural folks.

It can be done by utilizing the various rural folk media to reach them in their own

language and in large numbers so that the brand can be associated with the myriad rituals,

celebrations, festivals, “melas” and other activities where they assemble.



Distribution Strategy:

One of the ways could be using company delivery vans which can serve two purposes- it

can take the products to the customers in every nook and corner of the market and it also

enables the firm to establish direct contact with them and thereby facilitate sales

promotion. However, only the bigwigs can adopt this channel. The companies with

relatively fewer resources can go in for syndicated distribution where a tie-up between

non-competitive marketers can be established to facilitate distribution. Annual “melas”

organized are quite popular and provide a very good platform for distribution because

people visit them to make several purchases. According to the India n Market Research

Bureau, around 8000 such melas are held in rural India every year. Rural markets have

the practice of fixing specific days in a week as Market Days (often called “Haats’) when

exchange of goods and services are carried out. This is another potential low cost

distribution channel available to the marketers. Also, every region consisting of several

villages is generally served by one satellite town (termed as “Mandis” or Agri-markets)

where people prefer to go to buy their durable commodities. If marketing managers use

these feeder towns they will easily be able to cover a large section of the rural population.

Promotional Strategy:

Firms must be very careful in choosing the vehicle to be used for communication. Only

16% of the rural population has access to a vernacular newspaper. So, the audiovisuals

must be planned to convey a right message to the rural folk. The rich, traditional media

forms like folk dances, puppet shows, etc with which the rural consumers are familiar and

comfortable, can be used for high impact product campaigns.



INTRODUCTION TO THE COMPANY

INTRODUCTION TO THE COMPANY



Hindustan Lever Limited (HLL) and its constituent companies have been in India since

1931. Over these decades, while HLL has benefited from the developments in the

country, it has contributed equally to these developments.

Unilever's mission is to add Vitality to life. We meet everyday needs for nutrition,

hygiene, and personal care with brands that help people feel good, look good and get

more out of life.

Their deep roots in local cultures and markets around the world give us their strong

relationship with consumers and are the foundation for their future growth. We will bring

their wealth of knowledge and international expertise to the service of local consumers - a

truly multi-local multinational.

Their long-term success requires a total commitment to exceptional standards of

performance and productivity, to working together effectively, and to a willingness to

embrace new ideas and learn continuously.

To succeed also requires, we believe, the highest standards of corporate behavior towards

everyone we work with, the communities we touch, and the environment on which we

have an impact.

This is their road to sustainable, profitable growth, creating long-term value for their

shareholders, their people, and their business partners

In the summer of 1888, visitors to the Kolkata harbor noticed crates full of Sunlight soap

bars, embossed with the words "Made in England by Lever Brothers". With it began an

era of marketing branded Fast Moving Consumer Goods (FMCG).Soon after followed

Lifebuoy in 1895 and other famous brands like Pears, Lux and Vim. Vanaspati was

launched in 1918 and the famous Dalda brand came to the market in 1937.

In 1931, Unilever set up its first Indian subsidiary, Hindustan Vanaspati Manufacturing

Company, followed by Lever Brothers India Limited (1933) and United Traders Limited

(1935). These three companies merged to form HLL in November 1956; HLL offered

10% of its equity to the Indian public, being the first among the foreign subsidiaries to do



so. Unilever now holds 51.55% equity in the company. The rest of the shareholding is

distributed among about 380,000 individual shareholders and financial institutions.

The erstwhile Brooke Bond's presence in India dates back to 1900. By 1903, the

company had launched Red Label tea in the country. In 1912, Brooke Bond & Co. India

Limited was formed. Brooke Bond joined the Unilever fold in 1984 through an

international acquisition. The erstwhile Lipton's links with India were forged in 1898.

Unilever acquired Lipton in 1972 and in 1977 Lipton Tea (India) Limited was

incorporated.

Pond's (India) Limited had been present in India since 1947. It joined the Unilever fold

through an international acquisition of Chesebrough Pond's USA in1986.

Since the very early years, HLL has vigorously responded to the stimulus of economic

growth. The growth process has been accompanied by judicious diversification, always in

line with Indian opinions and aspirations.

The liberalization of the Indian economy, started in 1991, clearly marked an inflexion in

HLL's and the Group's growth curve. Removal of the regulatory framework allowed the

company to explore every single product and opportunity segment, without any

constraints on production capacity.

Simultaneously, deregulation permitted alliances, acquisitions and mergers. In one of the

most visible and talked about events of India's corporate history, the erstwhile Tata Oil

Mills Company (TOMCO) merged with HLL, effective from April 1, 1993. In 1995,

HLL and yet another Tata company, Lakme Limited, formed a 50:50 joint venture,

Lakme Lever Limited, to market Lakme's market-leading cosmetics and other appropriate

products of both the companies. Subsequently in 1998, Lakme Limited sold its brands to

HLL and divested its 50% stake in the joint venture to the company.

HLL formed a 50:50 joint venture with the US-based Kimberly Clark Corporation in

1994, Kimberly-Clark Lever Ltd, which markets Huggies Diapers and Kotex Sanitary



Pads. HLL has also set up a subsidiary in Nepal, Nepal Lever Limited (NLL), and its

factory represents the largest manufacturing investment in the

Himalayan kingdom. The NLL factory manufactures HLL's products like Soaps,

Detergents and Personal Products both for the domestic market and exports to India.

The 1990s also witnessed a string of crucial mergers, acquisitions and alliances on the

Foods and Beverages front. In 1992, the erstwhile Brooke Bond acquired Kothari General

Foods, with significant interests in Instant Coffee. In 1993, it acquired the Kissan

business from the UB Group and the Dollops Ice cream business from Cadbury India.

As a measure of backward integration, Tea Estates and Doom Dooma, two plantation

companies of Unilever, were merged with Brooke Bond. Then in July 1993, Brooke

Bond India and Lipton India merged to form Brooke Bond Lipton India Limited

(BBLIL), enabling greater focus and ensuring synergy in the traditional Beverages

business. 1994 witnessed BBLIL launching the Wall's range of Frozen Desserts. By the

end of the year, the company entered into a strategic alliance with the Kwality Ice-cream

Group families and in 1995 the Milk food 100% Ice-cream marketing and distribution

rights too were acquired.

Finally, BBLIL merged with HLL, with effect from January 1, 1996. The internal

restructuring culminated in the merger of Pond's (India) Limited (PIL) with HLL in 1998.

The two companies had significant overlaps in Personal Products, Specialty Chemicals

and Exports businesses, besides a common distribution system since 1993 for Personal

Products. The two also had a common management pool and a technology base. The

amalgamation was done to ensure for the group, benefits from scale of economies both

domestic and export market.

In January 2000, in a historic step, the government decided to award 74 per cent equity in

Modern Foods to HLL, thereby beginning the divestment of government equity in public

sector undertakings (PSU) to private sector partners. HLL's entry into Bread is a strategic

extension of the company's wheat business. In 2002, HLL acquired the government's

remaining stake in Modern Foods.



In 2003, HLL acquired the Cooked Shrimp and Pasteurized Crabmeat business of the

Amalgam Group of Companies, a leader in value added Marine Products exports.

Hindustan Lever Limited, 51.6% subsidiary of Unilever Plc, is the largest FMCG

Company in the country, with a turnover of Rs118bn. The company’s business sprawls

from personal and household care products to foods, beverages and specialty chemicals.

The company has a dominating market share in most categories that it operates in such as

toilet soaps, detergents, skincare, hair care, color cosmetics, etc. It is also the leading

player in food products such as packaged tea, coffee, ice cream and other culinary

products.

. Brand equities are built over a period of time by technological innovations, consistent

high quality, aggressive advertisement and marketing. Availability near the consumer

through a wide distribution network is another crucial success factor, as products are of

small value, frequently purchased, daily use items. HLL is strong on both these fronts

with leading brands, which are market leaders in their respective categories, and a 1mn

strong direct retail reach.

HLL is the market leader in the detergent and toilet soap industry with market share

of 60% and 40% respectively. Nirma is a close competitor in detergents and has been

slowly gaining ground in toilet soaps too. The other significant competitor in detergents

is P&G. In oral care segment, HLL has emerged as a strong No 2 player with 36% market

share. In the hair care segment, HLL dominates the shampoo market with a 64.5% share

and is the No 2 player in hair oils. HLL has a 54% market share in skin creams. In the

foods business, Tata Tea in packet tea, Nestle in coffee and culinary products, GCMMF

(Amul) in ice creams, and Godrej Pillsbury in staple food are the main competitors.

HLL grew at a fast pace in the mid 90’s driven by its aggressive acquisition spree. From

Rs38bn turnover (contributed 70% by soaps, detergents and personal products), HLL’s

turnover has now grown to Rs118bn, with soaps and personal products contributing 57%



to turnover and beverages and food products contributing to 29% of turnover. Growth

during the last few years has largely been driven by the personal products business.

However the pace of growth has slackened significantly in the last two years with several

key segments registering a growth in 2001 soaps business (Rs21bn) de-grew by 1% and

detergent sales (Rs20bn) grew by 7%. Other personal products (household care, oral acre,

skin care, hair care, color cosmetics) registered a 14% yo-yo growth to Rs24.6bn.

Expansion of the foods business, which has been identified as a major growth area, has

not been as fast as anticipated. Beverage sales move largely with commodity price trends,

which have remained on a downtrend. Branded tea business degree by 10% in F12/01 to

rs16bn, while the Rs3bn coffee business registered a 7% yo-yo growth. Ice-cream

business has failed to takeoff registering a 3% growth. The staple food business, once

considered a high potential growth area witnessed a decline of 10% yoy to Rs2.4bn.

Profitable growth has been the new mantra of the FMCG major’s Chairman, M S Banga,

who took over the reins from Keki Dadiseth 2 years ago. In contrast to Dadiseth’s

strategy of expansion through acquisition, Mr. Banga’s strategy revolves around

rationalization. A focus on 30 power brands, which are major contributors to profitability,

seeking new avenues of expanding distribution reach, improving profitability of foods

businesses have been the thrust areas. Non-FMCG businesses are either being are hived

off or are being strengthened by partnerships with players who have the technological

expertise in those businesses. The strategy has paid results with profits registering a 24%

yo-yo growth in 2001, despite a flat top line growth.

PRESENT STRUCTURE

Hindustan Lever Limited (HLL) is India's largest Fast Moving Consumer Goods

Company, touching the lives of two out of three Indians with over 20 distinct categories

in Home & Personal Care Products and Foods & Beverages. They have the company with

a scale of combined volumes of about 4 million tones and sales of Rs.10, 000 cores.



HLL is also one of the country's largest exporters; it has been recognized as a Golden

Superstar Trading House by the government of India.

The mission that inspires HLL's 36,000 employees, including over 1,350 managers, is to

"add vitality to life." HLL meets everyday needs for nutrition, hygiene, and personal care

with brands that help people feel good, look good and get more out of life. It is a mission

HLL shares with its parent company, Unilever, which holds 51.55% of the equity. The

rest of the shareholding is distributed among 380,000 individual shareholders and

financial institutions.

HLL's brands - like Lifebuoy, Lux, Surf Excel, Rin, Wheel, Fair & Lovely, Pond's,

Sunsilk, Clinic, Pepsodent, Close-up, Lakme, Brooke Bond, Kissan, Knorr-Annapurna,

Kwality Wall's – are household names across the country and span many categories -

soaps, detergents, personal products, tea, coffee, branded staples, ice cream and culinary

products. They are manufactured in close to 80 factories. The operations involve over

2,000 suppliers and associates. HLL's distribution network, comprising about 7,000

redistribution stockiest, directly covers the entire urban population, and

HLL has traditionally been a company, which incorporates latest technology in all its

operations. The Hindustan Lever Research Center (HLRC) was set up in 1958, and now

has facilities in Mumbai and Bangalore.

HLRC and the Global Technology Centers in India have over 200 highly qualified

scientists and technologists, many with post-doctoral experience acquired in the US and

Europe.

HLL believes that an organization’s worth is also in the service it renders to the

community. HLL is focusing on health & hygiene education, women empowerment, and

water management. It is also involved in education and rehabilitation of special or

underprivileged children, care for the destitute and HIV-positive, and rural development.

HLL has also responded in case of national calamities / adversities and contributes

through various welfare measures, most recent being the village built by HLL in



earthquake affected Gujarat, and relief & rehabilitation after the Tsunami caused

devastation in south India.

Over the last three years the company has embarked on an ambitious program, Shakti.

Through Shakti, HLL is creating micro-enterprise opportunities for rural women, thereby

improving their livelihood and the standard of living in rural communities. Shakti also

includes health and hygiene education through the Shakti Vani Program, and creating

access to relevant information through the Shakti community portal. The program now

covers about 50,000 villages in 12 states. HLL's vision is to take this program to 100,000

villages impacting the lives of over 100 million rural Indians.

HLL is also running a rural health program – Lifebuoy Swasthya Chetana. The program

endeavors to induce adoption of hygienic practices among rural Indians and aims to bring

down the incidence of diarrhea. It has already touched 70 million people in approximately

15000 villages of 8 states. The vision is to make a billion Indians feel safe and secure.

If Hindustan Lever straddles the Indian corporate world, it is because of being single-

minded in identifying itself with Indian aspirations and needs in every walk of life.

MANAGEMENT STRUCTURE

Hindustan Lever Limited is India's largest Fast Moving Consumer Goods (FMCG)

Company. It is present in Home & Personal Care and Foods & Beverages categories.

HLL and Group companies have about 36,000 employees, including 1350 managers.

The fundamental principle determining the organization structure is to infuse speed and

flexibility in decision-making and implementation, with empowered managers across the



company's nationwide operations. For this, HLL is organized into two self-sufficient

divisions - Home & Personal Care & Foods - supported by certain central functions and

resources to leverage economies of scale wherever relevant.

Board

Divisions

Central functions

Businesses

Board At the apex is the Board, headed by the Chairman, and comprising 5 whole time

Directors and 5 independent non-executive Directors. The day to day operations are

supervised by the National Management comprising the Vice Chairman, Managing

Director (HPC), Managing Director (Foods) and the Finance Director.

Divisions Each division is self-sufficient with dedicated resources and assets in sales, marketing,

commercial, and manufacturing. The two divisions are further reorganized into

categories.

Typically, each category and each function - Sales, Commercial, Manufacturing - is

headed by a Vice President. They with their respective Managing Director comprise that

Division's Management Committee.

For managing sales operations, HLL divides the country into four regions, with regional

branches in Delhi, Kolkata, Chennai and Mumbai. Headed by a Regional Manager, they

comprise Regional Sales Managers and Area Sales Managers, assisted by dedicated field

forces, comprising Sales Officers and Territory Sales In charges. In Marketing, each

category has a Marketing Manager who heads a team of Brand Managers dedicated to

each or a group of brands.

The commercial team of a Division is responsible for its supply chain management.


http://www.hll.com/knowus/#four

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There are teams dedicated to sourcing, planning and logistics. Each Division has a

nationwide manufacturing base, with each factory peopled by teams of Production,

Engineering, Quality Assurance, Commercial and Personnel Managers.

Central functionsHLL's Central Functions are Finance, Human Resources, Technology, Research,

Information Technology, Legal & Secretarial, and Corporate Affairs. Their services are

shared across the company. But, wherever necessary, managerial resources are dedicated

exclusively to a business. For example, each Division now has dedicated HR managers.

HLL believes that while it leverages the scale of a large corporate, it must also retain the

soul of a small company. Its organization structure, which has and will continue to evolve

with time, is aimed at achieving this knitting.

Businesses

Home & Personal Care• Personal Wash

• Fabric Wash

• Home Care

• Oral Care

• Skin Care

• Hair Care



• Deodorants & Talc’s

• Color Cosmetics

Foods• Tea

• Coffee

• Branded Staples

• Culinary Products

• Ice Creams

• Modern Foods ranges

New Ventures• Hindustan Lever Network

• Ayush ayurvedic products & services

• Saga

• Purest water purifiers

Exports• HPC

• Beverages

• Marine Products

• Rice

• Castor

Products of HLL

BRANDS OF HLL:

HOME AND PERSONAL CARE:

Lux

Breeze

Liril

Dove



Lifebuoy

Pears

Hamam

Rexona

LAUNDRY:

Surf Excel

Rin

Wheel

SKIN CARE:

Fair and Lovely

Ponds

HAIR AND CARE

Sun silk Natural

Clinic

ORAL CARE:

Pepsodent

Close-Up

DEODRANTS:

Axe

Rexona

COLOUR COSMETIC:

Lakme

AYURVEDIC PERSONAL AND HEALTH CARE:

Ayush



TEA:

Brooke bond

Lipton

COFFEE

Bru

FOODS

Kissan

Knorr Annapurna

ICE CREAM

Kwality Wall’s

M/S NAGA TRADERS

(RURAL DISTRIBUTOR)

BELGAUMNaga traders are the rural distributors for Hindustan Lever Limited and also they are

supplying the products to the Shakti dealer, they are supplying retailer in rural area like.

Bagewadi

M.K Hubli

Hukkeri

Itagi pariswad



Kanapur

Nesargi

Piranwadi

Ganeshpur

Sambra

Yamaknamma etc......

Shakti dealer1. S C.Hubli (munushikatti)

2. S A.Kaktikar (Belagundi)

3. S A.Tigodoli (Shindoli)

They deal in products of HLL

Lux, Pears, Hamam, Rexona, Liril,Life bouy

Surf excel, Rin, Wheel

Sunsilk, Clinic plus

Pepsodent, Close-up

Fair and lovely, Pond’s

Brooke bond, Lipton Bru etc…..

HLL's INITIATIVE IN RURAL DEVELOPEMENT:

Hindustan Lever Limited (HLL) and its constituent companies have been in India since

1931. Over these decades, while HLL has benefited from the developments in the

country, it has contributed equally to these developments.

HLL has consciously woven India's imperatives with the company's strategies and

operations. The company’s main contributions include developing and using relevant

technologies, stimulating industrialization, boosting exports, adding value to agriculture

and generating productive employment and income opportunities.



HLL has been proactively engaged in rural development since 1976 with the initiation

of the Integrated Rural Development Program in the Etah district of Uttar Pradesh,

in tandem with the company’s dairy operations. This Program now covers 500 villages in

the district. Subsequently, the factories that HLL continued establishing in less-

developed regions of the country have been engaged in similar program in adjacent

villages.

These factory-centered activities mainly focus on training farmers, animal husbandry,

generating alternative income, health & hygiene and infrastructure development.

The company has acquired a wealth of experience and learning from these activities.

KEY LEARNINGS ON RURAL DEVELOPEMENT:

The principal issue in rural development is to create income-generating opportunities

for the rural population. Such initiatives are successful and sustainable when linked with

the company’s core business and is mutually beneficial to both the population for whom

the program is intended and for the company.

Based on these insights, HLL launched Project Shakti in the year 2001, in keeping

with the purpose of integrating business interests with national interests

SHAKTI - Changing Lives in Rural India



Shakti is HLL's rural initiative, which targets small villages with population of less

than 2000 people or less. It seeks to empower underprivileged rural women by providing

income-generating opportunities, health and hygiene education through the Shakti Vani

program, and creating access to relevant information through the Shakti community

portal.

In general, rural women in India are underprivileged and need a sustainable source of

income. NGOs, governmental bodies and other institutions have been working to

improve the status of rural women. Shakti is a pioneering effort in creating livelihoods

for rural women, organized in Self-Help Groups (SHGs), and improving living standards

in rural India. Shakti provides critically needed additional income to these women and

their families, by equipping and training them to become an extended arm of the

company's operation.

Shakti started in 2001 and has already been extended to about 50,000 villages in 12 states

- Andhra Pradesh, Karnataka, Gujarat, Madhya Pradesh, Tamil Nadu, Chattisgarh, Uttar

Pradesh, Orissa, Punjab, Rajasthan, Maharashtra and West Bengal. The respective state

governments and several NGOs are actively involved in the initiative.

Why Shakti?EMPOWERING WOMEN IN RURAL INDIA

The objective of Project Shakti is to create income-generating capabilities for

underprivileged rural women, by providing a sustainable micro enterprise opportunity,

and to improve rural living standards through health and hygiene awareness.

A crucial lesson learnt was that rural up liftmen depended not on successful infusion

of credit, but on its guided usage for better investment opportunities this is where

HLL's Project Shakti is playing a role in creating such profitable micro enterprise

opportunities for rural women.



CATALYSING PROSPERITY IN INDIAN VILLAGES Under the project, HLL offers a range of mass-market products to the SHGs, which are

relevant to rural customers. HLL is investing significantly in resources that work with

the women on the field and provide them with on-the-job raining and support. This is a

key factor in ensuring the stabilization of the fledgling businesses.

HLL imparts the necessary training to these groups on the basics of enterprise

management, which the women need to manage their enterprises. For the SHG women,

this translates into a much-needed, sustainable income contributing towards better living

and prosperity. Armed with micro-credit, women from SHGs become direct-to-home

distributors in rural markets.

RISK-FREE MICRO ENTERPRISE THAT YIELDS HIGH RETURNS

A typical Shakti entrepreneur conducts a steady business which gives her an income in

excess of Rs.1, 000 per month on a sustainable basis. As most of these women live below

the poverty line, and hail from extremely small villages (with populations of less than

2000), this earning is very significant, and almost twice the amount of their previous

house hold income. For most of these families, Project Shakti is enabling families to live

with dignity.

In addition to money, there is a marked change in the woman's status within the

household, with a much greater say in decision-making. This results in better health and

hygiene, education of the children, especially the girl child, and an overall betterment

in living standards.

The most powerful aspect about this model is that it creates a win-win partnership

between HLL and the consumers, some of whom will depend on the organization for

their livelihood, and builds a self-sustaining cycle of growth for all.

Shakti already has about 13,000 women entrepreneurs in its fold. A typical Shakti

entrepreneur earns a sustainable income of about Rs.700 -Rs.1, 000 per month, which is

double their average household income. Shakti is thus creating opportunities for rural



women to live in improved conditions and with dignity, while improving the overall

standard of living in their families. In addition, it involves health and hygiene program,

which help to improve the standard of living of the rural community. Shakti's ambit

already covers about 15 million rural populations. Plans are also being drawn up to bring

in partners involved in agriculture, health, insurance and education to catalyze overall

rural development.

HLL's vision for Shakti is to scale it up across the country, covering 100,000 villages and

touching the lives of 100 million rural consumers by 2005.

Shakti, the Internet-based rural information service, has been launched in Andhra

Pradesh, in association with the Andhra Pradesh Government's Rajiv Internet Village

Program. The service is now available in Nalgonda, Vishakapatnam, West Godavari and

East Godavari districts. Shakti has been developed to provide information and services to

meet rural needs in medical health and hygiene, agriculture, animal husbandry, education,

vocational training and employment and women's empowerment. The vision is to have

3,500 kiosks across the state by 2005.

HLL-DISTRIBUTION NETWORKBabasabpatilfreepptmba.com


HLL DISTRIBUTION NETWORK

The company salesman grouped all these orders and placed an indent with the Head

Office. Goods were sent to these markets, with the company salesman as the consignee.

The salesman then collected and distributed the products to the respective wholesalers,

against cash payment, and the money was remitted to the company.

The focus of the second phase, which spanned the decades of the 40s, was to provide

desired products and quality service to the company's customers. In order to achieve this,

one wholesaler in each market was appointed as a "Registered Wholesaler," a stock point

for the company's products in that market. The company salesman still covered the

market, canvassing for orders from the rest of the trade. He would then distribute stocks

from the Registered Wholesaler through distribution units maintained by the company.



The Registered Wholesaler system, therefore, increased the distribution reach of the

company to a larger number of customers.

The highlight of the third phase was the concept of "Redistribution Stockiest" (RS)

who replaced the RWs. The RS was required to provide the distribution units to the

company salesman. The RS financed his stocks and provided warehousing facilities to

store them. The RS also undertook demand stimulation activities on behalf of the

company.

The second characteristic of this period we realized that the RS would be able to

provide customer service only if he was serviced well. This knowledge led to the

establishment of the "Company Depots" system. This system helped in transshipment,

bulk breaking, and as a stock point to minimize stock-outs at the RS level.

In the recent, a significant change has been the replacement of the Company Depot

by a system of third party Carrying and Forwarding Agents (C&FAs). The C&FAs act as

buffer stock-points to ensure that stock-outs did not take place. The C&FA system has

also resulted in cost savings in terms of direct transportation and reduced time lag in

delivery. The most important benefit has been improved customer service to the RS.

The role performed by the Redistribution Stockiest has also undergone changes over

the years. Financing stocks, providing manpower, providing service to retailers,

implementing promotional activities, extending indirect coverage, reporting sales and

stock data, screening for transit damages are some of the functions performed by the RS

today.

HLL has grown manifold over the years. In the process, the number of factories and

the number of SKUs too have increased. In order to rationalize the logistics and planning

task, an innovative step has been the formation of the Mother Depot and Just in Time

System (MD-JIT). Certain C&FAs were selected across the country to act as mother

depots. Each of them has a minimum number of JIT depots attached for stock



requirements. All brands and packs required for the set of markets which the MD and

JITs service in a given area are sent to the mother depot by all manufacturing units. The

JITs draw their requirements from the MD on a weekly or bi-weekly basis.

At present, HLL's products, manufactured across the country, are distributed through

a network of about 7,000 redistribution stockiest covering about one million retail outlets.

The distribution network directly covers the entire urban population.

In addition to the ongoing commitment to the traditional grocery trade, HLL is building a

special relationship with the small but fast emerging modern trade. Our scale enables us

to provide superior customer service including daily servicing, improving their range

availability whilst reducing inventories. We are using the opportunity of interfacing more

directly with our consumers in this retail environment through specially designed

communication and promotions. This is building traffic into the stores while yielding

high growth for our business.

An IT-powered system has been implemented to supply stocks to redistribution

stockiest on a continuous replenishment basis. The objective is to catalyze HLL’s growth

by ensuring that the right product is available at the right place in right quantities, in the

most cost-effective manner. For this, stockiest have been connected with the company

through an Internet-based network, called RS Net, for online interaction on orders,

dispatches, information sharing and monitoring. RS Net covers about 80% of the

company's turnover. Today, the sales system gets to know every day what HLL stockiest

have sold to almost a million outlets across the country. RS Net is part of Project Leap,

HLL's end-to-end supply chain, which also includes a back-end system connecting

suppliers, all company sites and stretching right up to stockiest.

RS Net has come as a force multiplier for HLL Way, the company's action-plan to

maximize the number of outlets reached and to achieve leadership in every outlet, by

unshackling the field force to solely focus on secondary sales from the stockiest to

retailers and market activation. HLL Way has also led to implementing best practices in



customer management and common norms and processes across the company. Powered

by the IT tools it has further improved customer service, while ensuring superior

availability and impact visibility at retail points.

THE CHALLENGE OF THE RURAL MARKETS 70% of India's population resides in villages. Penetrating the rural markets is, therefore,

one of the key challenges for any marketer. While rural markets present a great

opportunity to companies, they also impose major challenges. At HLL, they have been at

the forefront of experimenting with innovative methods to reach the rural consumer.

Indirect coverageUnder the Indirect Coverage (IDC) method, company vans were replaced by vans

belonging to Redistribution Stockiest, which serviced a select group of neighboring

markets.

Operation Harvest The reach of conventional media and, therefore, awareness of different products in

rural markets is weak. It was also not always feasible for the Redistribution Stockiest to

cover all these markets due to high costs involved. Yet, these markets are important since

growth opportunities are high.

Operation Harvest endeavored to supplement the role of conventional media in rural

India and, in the process, forge relationships and loyalty with rural consumers. Operation

Harvest also involved conducting of product awareness programs on vans.

Cinema van operations these are typically funded by the Redistribution Stockiest. Cinema

Van Operations have films and audio cassettes with song and dance sequences from



popular films, also comprising advertisements of HLL products Single Distribution

Channel

For rural India, HLL has established a single distribution channel by consolidating

categories. In a significant move, with long-term benefits, HLL has mounted an initiative,

Project Streamline, to further increase its rural reach with the help of rural sub-stockiest.

It has already appointed 6000 such sub-stockiest. As a result, the distribution network

directly covers about 50,000 villages, reaching about 250 million consumers.

Distribution will acquire a further edge with Project Shakti, HLL's partnership with Self

Help Groups of rural women. The project, started in 2001, already covers over 5000

villages in 52 districts of Andhra Pradesh, Karnataka Madhya Pradesh and Gujarat, and is

being progressively extended. The vision is to reach over 100,000 villages,

There by touching about 100 million consumers. The SHGs have chosen to adopt

distribution of HLL's products as a business venture, armed with training from HLL and

support from government agencies concerned and NGOs. A typical Shakti entrepreneur

conducts business of around Rs.15000 per month, which gives her an income in excess of

Rs.1000 per month on a sustainable basis. As most of these women are from below the

poverty line, and live in extremely small villages (less than 2000 population), this earning

is very significant, and is almost double of their past household income

For HLL, the project is bringing new villages under direct distribution coverage. Plans

are being drawn up to cover more states, and provide products/services in agriculture,

health, insurance and education. This will both catalyze holistic rural development and

also help the SHGs generate even more income. This model creates a symbiotic

partnership between HLL and its consumers, some of whom will also draw on the

company for their livelihood, and helps build a self-sustaining virtuous cycle of growth



CHANNEL STRUCTURE

CARRY AND RE-DISTRIBUTOR STOCKIEST

RE-DISTRIBUTOR STOCKIEST



Supermarkets- Self- service stores where there is a room for shoppers to browse and interact with the products.

Family grocer- Over the counter store mainly for monthly household shopping

Kiosk- A tiny over the counter store, easily accessible for emergency purchases. It stocks solely low unit packs.

Wholesale- Sells stock to small retailer and end user.

DISTRIBUTION CHANNEL

Old distribution channel of HLL:

Manufacturer (Chennai)

C & F (Hubli)

RD

Wholesalers



Retailers

End customer

Notation:

1) C & F: Carriage Forward

2) RD: Rural Distributor

NEW DISTRIBUTION CHANNEL OF HLL:

Manufacturer (Chennai)

C & F (Hubli)

RD

Lab RS

SS

Retailers SE



End customer

Notation:

3) C & F: Carriage Forward

4) RD: Rural Distributor

5) Lab RS: Lab Regional Stockiest

6) SS: Star Seller

7) SE: Shakti Entrepreneur

RESEARCH METHODOLOGY



TITLE OF THE PROJECT

“Retailers Satisfaction and Expectation towards HLL Distributor”

MAIN OBJECTIVES:

1) To know the perception of retailers regarding distributor.

2) Find out the attributes that affects the satisfaction level of rural retailers.

3) Ascertain the opinion about merchandising activity.

4) To measure behavior of sales representative during Retailers visit.

SUB OBJECTIVES:



1) Study the FMCG market in India and distribution system.

2) To know HLL initiatives in Indian rural market.

SAMPLE DESIGN

POPULATION;Population for this research is 800 retailers of Belgaum Rural.

SAMPLE AREA: Belgaum Rural

Khanapur Nandgad Londa Hukkeri Yamakanamma Ganeshpur Peeranwadi Bagewadi Sambra

SAMPLING METHOD: The process of drawing sample units from the population is called sampling method.



In order to have the unbiased results in the survey, the appropriate method

of sampling i.e. “stratified sampling” adopted. It also includes

convenience sampling.

DURATION OF THE PROJECT: Two Months

FIELD WORKThis market research involved a field work of 3 weeks where in I have administered pre-

tested questionnaire to retailers. I have carried out the survey to 60 respondents by having

the personal interaction with them.

TOOLS USED FOR ANALYSIS:

1. Hypothesis testing

2. Graphical Representation of Analysis:

a. Pie charts

b. Bar Diagrams

DATA COLLECTION APPROACH:

Primary data has been used to carry out the research successfully. The secondary

data has been collected from various journals and publications. For the purpose of

gathering primary data a structure and non-disguised questionnaire was designed to

collect data from the retailer. The questionnaire contains both open-ended and close-

ended questions.



Method of Communication:

In order to minimize the bias in data collection, the method of personal interview was

adopted.

THE SOURCES OF THE DATA ARE AS FOLLOWS

The study relies to a great extent on primary data and to some extent on secondary data:

PRIMARY DATA: Questionnaire

Observation and interview technique

SECONDARY DATA: Information is collected through internet

From various text books

Journals and magazines

IMITATION OF THE STUDY;

LIMITATIONS:

The study is restricted in the scope owing to the following limitations:

1. The study is limited to a particular geographical area that is Belgaum rural only.

2. The information and data collected and analyzed is restricted to the researchers’

knowledge and ability.

3. The answers that I have got from the retailers cannot be considered as totally

perfect because of various personal and other limitations.



4. Cost and time was also another limiting factor that affected the study.

As retailer expectations and experiences include more of psychological aspects the

survey made during a particular time period will give the information about the retailers

during that particular time period. In order to be up-to-date in understanding the level of

satisfaction periodic surveys are necessary.

ANALYSIS AND INTERPRETATION



Q1.Type of Store

Table-No-1.

Type of Store No.of.Retailers Percentage (%)Grocery store 52 86Medical store 1 2Stationary store 6 10others 1 2

TOTAL 60 100

Graph-No-1



Grocery store86%

Others2%

Medical store2%

Stationary store10%

Grocery storeMedical storeStationary storeOthers

Z

INFERENCES:

The above graph shows that out of 60 Retail outlets visited 86% are Grocery

stores, 10% Stationary stores and 2% each Medical and other stores.

Here others consist of super market run by the co-operative society.

From the inference it can conclude that major portion of the type of retail store is

Grocery stores.

Q2.Type of Outlet

Table-No-2

Type of outlet No.of.Retailers Percentage (%)Vijeta outlet 10 17Star outlet 5 8General outlet 45 75

TOTAL 60 100

Graph-No-2



Vijeta outlet17%

Star outlet8%

General outlet75%

Vijeta outlet

Star outlet

General outlet

INFERENCES: Among 60 outlets 75% are General outlets.

10 vijeta outlets were visited, who come under the merchandising activity of

HLL.

Remaining 8% consist of star outlets that enjoy gifts and offers on the bases of

their sales point.

Q3. If Vijeta outlet: How would you rate the Merchandising activity of your HLL Distributor?

Table-No-3

Merchandising activity No.of.Retailers Percentage (%)Excellent 3 30Good 5 50Fair 2 20Poor 0 0Very Poor 0 0



TOTAL 10 100

Graph-No-3

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

5

Series1 3 5 2 0 0Excelent Good Fair Poor Very poor

INFERENCES:

Out of 10 vijeta outlets 30% of retailers’ rated merchandising activity as

excellent, 50% are rated it as good and remaining 20% rated fair.

All the vijeta retailers have shown a positive response towards merchandising

activity.

Q4.How frequently you place the order?

Table-No-4

Particulars No.of.Retailers Percentage (%)Daily 0 0

Once in a week 32 53Monthly 2 3

Any other 26 44TOTAL 60 100



Graph-No-4

0

5

10

15

20

25

30

35

Series1 0 32 2 26

Daily Once in a week Monthly Any other

INFERENCES:

Above graph shows that more than 50% of retailers place there order weekly, 3%

of retailers on monthly and 44% of retailers place order on every 15 days.

Here any other option represents every 15 days.

Q5.What is the contribution of HLL products to your total Sales?Table-No-5

Particulars No.of.Retailers Percentage (%)Less than 5% 7 12Between 5-10% 25 41Between 10-20% 25 42More than 20% 3 5

TOTAL 60 100

Graph-No-5Babasabpatilfreepptmba.com


Less than 5%12%

Between 5-10%41%

Between 10-20%42%

More than 20%5%

Less than 5%

Between 5-10%

Between 10-20%

More than 20%

INFERENCES:

Among 60 retailers, 12% retailers said HLL products contribution to total sales is

less than 5%.

41%said between 5-10%, 42% said it’s between 10-20% and for 5% retailers it is

more than 20%.

Graph indicates that contribution of HLL products to more than 80% of retailers

total Sales is between 5-20%.

Q6.Choice of stocking depends on…..

Table-No-6Particulars No.of.Retailers Percentage (%)

Demand 55 86Margin 3 5Shelf space 2 3Schemes and offers 4 6Advertisement 0 0

TOTAL 64 100

Graph-No-6



0

10

20

30

40

50

60

Series1 55 3 2 4 0

Demand Margin Shelf space Schemes and offers Advertisement

INFERENCES:

Out of 60 retail outlets 86% retailers’ stocking decision depends upon consumer

demand. 5%retailers said margin, for 3% retailers’ shelf space is important.

6% said schemes and offers factor is crucial and advertisement doesn’t matter

while making the stocking decision.

Above graph indicates that consumer demand is the first choice in making

stocking decision but it also concludes that retailers margin and schemes and

offers for retailers and consumers also matters a lot.

Q7.During the visit was the sales representative…..

Table-No-7

Particulars No.of.Retailers Percentage (%)Courteous 54 90Aggressive 6 10Rude 0 0Offhand 0 0

TOTAL 60 100

Graph-No-7



Courteous90%

Aggressive10%

Rude0%

Offhand0%

CourteousAggressiveRudeOffhand

INFERENCES:

90% of retailers said during the visit sales person is courteous and 10% said they

are aggressive.

There is no any negative response found. All retailers are satisfied with the

behavior of sales representative during visit.

Q8. How would you rate the sales representative explanation during visit?

Table-No-8

Particulars No.of.Retailers Percentage (%)Excellent 4 7Good 29 48Satisfactory 26 43Poor 1 2

TOTAL 60 100

Graph-No-8



Excellent7%

Good48%

Saticefactory43%

Poor2%

Excellent

Good

Saticefactory

Poor

INFERENCES:

7% of retailers’ rated sales representative explanation as excellent, 48 % rated

good, for 43% retailers’ representative explanation during visit is satisfactory and

2% rated it as poor.

Above graph indicates that 98% of retailers are satisfied with the sales

representative explanation during visit.

Q9. Were you given the opportunity to put your point of view during visit?


Yes 20 33No 40 67

TOTAL 60 100

Graph-No-9



Yes33%

No67%

Yes No

INFERENCES:

Above graph indicates that 67% of retailers are not satisfied with sales

representative in respect to collecting feedback and giving opportunity to put

there point of view during visit.

33% of retailers viewed they have given enough opportunity to put there point of

view during visit.

Q10. How do you rate the delivery process of your HLL distributor?


Prompt delivery 27 45Ok 32 53Not in time 1 2

TOTAL 60 100



Graph-No-10

Prompt Delevery45%

Ok53%

Not in time2%

Prompt Delevery

Ok

Not in time

INFERENCES:

Among 60 retailers 45% of retailers rated delivery is on the time and prompt.

53% of retailers rated it as ok and 2% of retailers are not satisfied with the

delivery process.

Q11. Are you satisfied with the schemes and discounts offered by the distributor?


Highly satisfied 2 4Satisfied 29 48Neutral 18 30Dissatisfied 8 13Highly dissatisfied 3 5

TOTAL 60 100



Graph-No-11

0

5

10

15

20

25

30

Series1 2 29 18 8 3

Highly saticefied Saticefied Neutral Dissatisfied Highly Dissaticefied

INFERENCES:

Above bar graph depicts that out 60 retailers 48% retailers are satisfied with the

schemes and discounts offered by the distributer.30% of the retailers remained

neutral in rating there satisfaction.13 and 5% retailers are satisfied and highly

dissatisfied towards there distributor.

It can be seen from the above that the satisfaction level is very low in respect to

schemes and discounts offered by the distributor.

Q12.How do you rate your HLL distributor…….

Order processing timeTable-No-12Ratings No.of.Retailers Percentage (%)Very good 17 28Good 40 67Not good 2 3Bad 1 2Worst 0 0

TOTAL 60 100



Graph-No-12

Very good28%

Good67%

Bad2%Not good

3%Worst

0%

Very goodGoodNot goodBadWorst

INFERENCES:

67% of retailers rated order processing time taken by the distributor is good

(short) and 28% of the retailers are highly satisfied.

3% said order processing time taken by distributor is not good and 2% of the

retailers are highly dissatisfied.

From the graph it can conclude that 5% of retailers are not satisfied with the order

processing factor of distributor.

Billing

Table-No-13Ratings No.of.Retailers Percentage (%)Very good 14 23Good 45 75Not good 1 2Bad 0 0Worst 0 0

TOTAL 60 100

Graph-No-13



Very good23%

Good75%

Bad0%

Not good2%

Worst0%


INFERENCES:

Above graph indicates that 75% retailers rated billing process as good,23%

retailers rated it as very good and only 2% of retailers are dissatisfied and rated

not good.

It also indicates that most of the retailers are satisfied with the billing process of

distributor.

Promotional activities


TOTAL 60 100

Graph-No-14



Very good7%

Good63%

Not good28%

Worst0%Bad

2%


INFERENCES:

Above graph shows overall 70% of 60 retailers are satisfied and 30% of retailers

dissatisfied with the promotional activities carried out by distributor.

It can be conclude from graph that many a retailers are dissatisfied with

promotional activity of the distributor.

Safe Delivery


TOTAL 60 100

Graph-No-15



Very good23%

Good70%

Not good7%

Bad0%

Worst0%


INFERENCES:

23 and 70% of retailers rated safe delivery factor is very good and good

respectively.

Out of 60 retailers 7% are rated safe delivery is not good.

Overall there is a greater satisfaction towards safe delivery.

Sales person presentation


TOTAL 60 100



Graph-No-16

Good82%

Very good15%

Not good3%

Bad0%

Worst0%


INFERENCES:

Above graph indicates 82% of the retailers are said sales person presentation is

good.

15% of retailers rated it as very good.3% of retailers are not satisfied with sales

person presentation during visit.

Availability of ordered stock


TOTAL 60 100

Graph-No-17



Good28%

Not good64%

Very good3%

Worst0%

Bad5%


INFERENCES:

It clearly seen from above graph that 64% of retailers among total of 60 retailers

are rated availability of ordered stock as not good.5% retailers rated it as bad and

only 28 and 3% of retailers rated it good and very good respectively.

A major proportion of the retailers are not satisfied towards availability of ordered

stock.

HypothesesFor the purpose of analyzing the gathered information few marketing hypotheses

were the major issues in a successful conclusion of the research.

1. Issue: Contribution of HLL products to the total sales of

retailers……….H0: Contribution of HLL products to the total sales of more than 50% retailers is below

10%.



H1: Contribution of HLL products to the total sales of more than 50% retailers is more

than 10%

Using Z test can prove this

Computation of Z value

Z= P-P/ sigma P

P=0.50 q = (1-P) =0.50

N=60 (N-1) =59

where P= X/N = Respondents favoring Ho

Total sample size

P=32/60=0.53

Sigma P= P (1-P)/ (N-1) =0.00423

Z= 0.53-0.5/0.00423

Z =6.97

K=1.64 (table value of Z)

Conclusion;

Since the calculated Z value (6.97) is more than the critical value (k=1.64) null

hypothesis (Ho) is rejected.

Result

Contribution of HLL products to the total sales of more than 50% retailers is more

than 10%

2. Issue: Availability of ordered stock……

H0: More than 40% of retailers are satisfied with the availability of ordered stock.

H1: Less than 40% of retailers are satisfied with the availability of ordered stock

Using Z test can prove this



Computation of Z value

Z= P-P/ sigma P

P=0.40 (1-P) =0.60

N=60 (N-1) =59

where P= X/N = Respondents favoring Ho

Total sample size

P=19/60=0.32

Sigma P= P (1-P)/ (N-1) = 0.00406

Z= 0.32-0.40/0.00406

Z = - 4.43

K=1.64 (referring table value of Z)

Conclusion;

Since critical value (K=1.64) is less than calculated Z value (- 4.43) null hypothesis is

rejected.

Result

Less than 40% of retailers are satisfied with the availability of ordered stock.



FINDINGS

FINDINGS

Research has been made on the topic “Retailers Satisfaction and Expectations towards

HLL distributor” to identify the level of satisfaction of retailers at Belgaum Rural.

Whole study only depends upon Belgaum rural retailers.

Based on the analysis and the interpretation of the data given in the previous chapter

findings and suggestions are recorded which are as follows



In Belgaum rural most of the retail stores are grocery stores. Only few stationary

and medical stores sell HLL products to the ultimate consumer.

The number of Vijeta and Star outlets is very less. Most of the retailers are come

under General outlet.

All the Vijeta outlets are highly satisfied with the merchandising activity. There

is no single negative response to the merchandising activity.

It is found that most of the retailers place the order every week and once in 15

days .It shows that many of the retailers frequently place the order.

Among 60 retailers 50 retailers said contribution of HLL products to there

total sales lies between the range 5-20%.Only few retailers’ sales exceed 20%.

There is no doubt that customer demand is first preference while making

stocking decision and it is justified by study , 86% of retailers first choice is

customer demand in making stocking decision. But still 14% of retailers stocking

decision influenced by margin, shelf space, schemes and offers.

It’s totally a positive feedback towards the sales representative behavior during

the visit.90% of retailers rated during the visit sales representative is courteous

and 10% of retailers rated they are aggressive.

Most of the retailers are satisfied with the sales representative explanation

during visit.

Most of the retailers are not satisfied with the sales representative in collecting

feedback and listening queries of retailers.



When I asked the retailers how you rate delivery process of distributor, all the

retailers surveyed were respond they are satisfied with the timely supply of

products from their Rural Distributor.

Only few retailers are satisfied with the schemes and discounts offered by the

distributor.

When I asked how you rate HLL distributor in terms of order processing time

taken, among 60 retailers 17 were replied very good and 40 as good.2 and 1

retailer replied not good and bad respectively.

The billing process followed by the Distributor also gains favor of the rural

retailers, they in-fact quote it to be very efficient.

Among 60 retailers 38 retailers considered promotional activities carried by

distributor is good. 18 retailers feel it is not good and they are dissatisfied with the

distributor.

Most of the retailers rated safe delivery factor as good. Retailers are satisfied

towards safe delivery factor.

Among 60 retailers 97% retailers are happy with the sales person presentation.

Only few retailers are satisfied with the availability of ordered stock. Most of

the retailers considered it as not good.

Most of the retailers are expecting schemes and offers for retailers and they are

dissatisfied with their margin.



SUGGESTIONS

Suggestions to HLL Distributor through this reportBased on the findings of the study I would like to suggest few points.

Retailers viewed that display of the products has influenced their sale and many

people in rural area recognize the product not by its name but by its external

appearance. As all the Vijeta retailers have appreciated and are satisfied with the

merchandising activity it is suggested that merchandising activity should be

extended to all General retailers.

Modernization and standardization of rural retailers’ network must be carried out

in order to exchange ideas on successful selling strategies and identifying areas of



improvements “Sales through Services” and a Retailer Development Program

must be carried out.

It is advised to the sales representative, to give an opportunity to retailers to put

their point of view during visit.

Still few of the rural retailers’ choice of stocking depend upon the factors like

schemes, discounts, offers and margin and it attracts bulk orders to distributor.

Distributor must satisfy retailers in respect to above factors.

Distributor should maintain stock of all HLL products.

Discount and company incentive should be passed on to the retailer by the

distributors and distributor should periodically review the performance of their

retailer.

CONCLUSIONBabasabpatilfreepptmba.com


Conclusion

To conclude, it is very much limited time to clearly understand the retailer satisfaction.

Apart from this we need to focus on each retailers view carefully in regular time intervals

(periodically) so to the best possible is presented here. Still there is a lot of scope for

developing on this subject, as excellence is not limited always.

Thus in brief, we can conclude that managing and measuring retailer satisfaction can

bring about positive benefits to distributor, company and sales people as well as



customers. Retailer satisfaction boosts more sales and loyal customer to distributor and in

turn helps to produce more satisfied ultimate customers to the company.

Thus the significance of retailers’ satisfaction stretches from introducing more and more

promotional activities, good margin and better services from distributor.

BIBLIOGRAPHY

ICFAI Journal

Marketing Management by Philip kotler

Marketing Research by Parshu Raman



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ANNEXURE



QUESTIONNAIRE

Dear Sir/ Madam,

1. Type of store:

Grocery store Medical store

Stationary store If any specify……….

2. Type of outlet:

Vijeta outlet Star outlet General outlet

3. If Vijeta outlet:

How would you rate the merchandising activity of your HLL Distributor?

Excellent Good Fair Poor Very poor

4. How frequently you place the order? Daily Once in a week

Monthly Any other………

5. What is the contribution of HLL products to your total sales?


Name of the outlet :

Proprietor :

Address :

Telephone :


Less than 5% Between 5-10% Between 10-20% More than 20%

6. Choice of stocking depends on….

Demand Margin shelf space Schemes and offers Advertisement

7. During the visit was the Sales representative…

Courteous Aggressive Rude Off hand

8. How would you rate the Sales representative explanation during visit?

Excellent Good Satisfactory Poor

9. Were you given the opportunity to put your point of view during visit?

Yes No

10. How do you rate the delivery process of your HLL Distributor? Prompt delivery Ok Not in time 11. Are you satisfied with the schemes and discounts offered by the Distributor?

Highly Satisfied Satisfied Neutral

Dissatisfied Highly dissatisfied

12. How do you rate your HLL Distributor?



FACTOR Very good Good Not Good Bad WorstOrder processing timeBillingPromotional activitiesSafe DeliverySales person presentationAvailability of ordered stock

13. Do you expect any additional service from Distributor? If yes state the additional services-----

14. Any suggestion……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

Thanks for your Assistance


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