hindustan liver limited

8/21/2019 Hindustan Liver Limited

1/83

CERTIFICATE

Certified that this project report MARKETING STRAREGY OF

HINDSTAN !E"ER !IMITED #is the $o%afide &or' of (( # &ho

carried o)t the project &or' )%der the s)per*isio% of (( +

SIGNATRE SIGNATRE

DR+ R+ K G,TA MISS+ ANKITA DHAMI-A

HEAD OF THE DE,ARTMENT ,roject I%char.e

//A //A

!!DIMS !!DIMS


2/83

DEC!ARATION

I here$0 dec1are that the project &or' e%tit1ed MARKETING

STRATEGY OF HINDSTAN !E"ER !IMITED# s)$2itted to theGGS INDRA,RASTHA NI"ERSITY3 is a record of a% ori.i%a1 &or'

do%e $0 2e )%der the .)ida%ce of 3 Fac)1t0 Me2$er3 !INGAYA4S

!A!ITA DE"I INSTITTE OF MANAGEMENT AND SCIENCE3

a%d this project &or' has %ot perfor2ed the $asis for the a&ard of a%0

De.ree to the $est of 20 '%o&1ed.e+

5sa*i%a06 56

5SIGNATRE OF STDENT6


3/83

ACKNO7!EDGEMENT

I owe a great many thanks to a great many people who helped and supported

me during the writing of this report. My deepest thanks to Lecturer, Ankita

Dhamija for correcting various documents of mine with attention and care.

He has taken pain to go through theprojectand make necessary correction

as and when needed. I epress my thanks to the H!D of ""A, for

etending his support. #hanks and appreciation to the helpful people at our

Institute, for their support. I would also like to thank my Institute and my

faculty mem$ers without whom this project would have $een a distant

reality.
http://www.blurtit.com/q6229703.htmlhttp://www.blurtit.com/q6229703.html


4/83

E8ECTI"E SMMARY

Hindustan Lever Limited %HLL& is India's largest (ast Moving )onsumer *oods

company, touching the lives of two out of three Indians with over + distinct categories in

Home - ersonal )are roducts and (oods - "everages. #hey endow the company with

a scale of com$ined volumes of a$out / million ecog and sales of 0s.1, crores.

HLL is also one of the country's largest eporters2 it has $een recogni3ed as a *olden

4uper 4tar #rading House $y the *overnment of India.

Hence, research aims is that to study the eisting marketing practices, emerging

marketing plans and understanding companies $usiness strategy with its profile.

#he main recommendations have $een made on the addressing of the advertising message

to the customers. An attempt has $een made to formulate the communication in a way to

$uild it on a platform of the $asic need for $uying HLL products. In another

recommendation the suggestions towards $etter dealer interest in HLL products has $een

given a chance.

#he research is $ased primarily on primary data2 however few references to industry

figures from secondary data have $een made. Data has $een collected through in depth

interviews and administered 5uestionnaires.

#he study has given the researchers an inside of the )onsumer dura$le Industry and an

opportunity to use the theoretical knowledge in live project.


5/83

TA/!E OF CONTENTS

9 INTRODCTION 9

(M)* 46)#!0 I7 I7DIA 18+

: RESEARCH METHODO!OGY ;

0646A0)H !"96)#I:64 ;

0646A0)H M6#H!D!L!*< ;

0646A0)H I74#0=M67# ;

0646A0)H D64I*7>8 ;

DA#A )!LL6)#I!7 M6#H!D>8 ;

0IMA0< DA#A ;

; COM,ANY ,ROFI!E /I/!IOGRA,HY @9


7/83

INTRODCTION

FMCG SECTOR IN INDIA

)onsumer Dura$le $rands may $e strong and have a good recall value $ut whether and to

what etent that results in incremental sales for the company is a de$ata$le issue. A

consumer's preference for )olgate or 7escafe, which results in incremental sales to the

respective companies. "ut at the time of $uying a television or a refrigerator, although the

strong $rand attachment is there, $etter product features, discountechangefree$ie

schemes going on at that point of time, a perception of superior value for money

proposition and most importantly the dealers push, finally leads to the decision which

may not necessarily $e the $rand with highest recall value.

)ompetition may $e as intense in the (M)* sector as the )onsumer Dura$le sector, so

are the $rands as strong. "ut (M)* companies' inspite of the intense competition

including the competition from imports still have reasona$le amount of pricing power.

ricing power is the a$ility of a company to increase prices without significantly

affecting the demand of the product. !ften aggressive price increases $y (M)*

companies go unnoticed $ecause of the small unit value of the product. "ut the same

cannot $e said a$out )onsumer Dura$les. 4everal $rands are fighting it out in the

fragmented market $ut all either have wafer thin margins %most are into huge losses& or

are competing at the cost of their profita$ility

(M)* companies and )onsumer Dura$les have strong $rands, the difference lies in

"rand ull among most (M)* companies as against "rand ush for )onsumer

Dura$le companies. If a consumer has a preference for *illette it is $rand pull. "ut in the

$uying decision of a consumer dura$le the dealers opinion and his push plays a very

important role to an etent that it is the dealer who decides what $rand you will $uywithin the parameters of $udget and product features. #herefore it is the $rand push $y

the dealer.

"rand ull in a consumer dura$le would come, when a consumer develops a preference

for a particular $rand. (or e.g. say an owner of a direct8cool refrigerator, later $uys the

same $rand of frost8free refrigerator, or $uys other products of the same company like

washing machine or television etc. (or this to happen the product attri$utes and the after


8/83

sales services play a very important role. hile some companies lately have $een taking

lot of initiatives in improving the after sales service and $etter product performance

whether it has resulted in $uilding $rand loyalty is yet unclear. #o my knowledge no

study has yet $een conducted on repeat purchase of consumer dura$le $rands across

products. #he day it is esta$lished that $rand loyalty in this sector results in incremental

sales, then may$e )onsumer Dura$le )ompanies should command $etter valuations.

#he (M)* sector has shown splendid resilience in recent times. :arious companies

continue to go ahead with large investments in capacity augmentation despite stagnation

in the industry, a poor monsoon in +?8F and conse5uent dip in rural incomes. "esides,

on the anvil are $rand launches and entry into new product categories. #he performance

of large players apart, even medium and smaller companies are now dictating terms and

redefining the market. (M)* is an interesting and very eisting industry to work on, and

hence I was fascinated to my research work on this industry.


9/83

RESEARCH METHODO!OGY

RESEARCH O/-ECTI"ES

#he $asic o$jective $ehind carrying out this research study is

#o study and analy3e the present marketing strategy followed $y HLL and

ropose effective strategies to HLL for greater market share

RESEARCH METHODO!OGY

#he section includes the overall research design, the sampling procedure, the datacollection method, the field method, and analysis and procedure.

RESEARCH DESIGNB(

(or this research project eploratory method is using

DATA CO!!ECTION METHODB(

#he data collect for the research can $e classified as primary data and secondary data.

rimary data is $y visiting eisting customer and epected customer of Hindustan Lever

Limited. And making them fill up the 5uestionnaire.4econdary data is from internet, $ooks, maga3ine etc.

RESEARCH INSTRMENT

#he instrument use for data collection is structured 5uestionnaire. Guestion is open and

close ended depending upon the information that needed to $e elicited. I am also using

the scaling techni5ue to assess the attitude of the customer.

4ampling plan>8

Ceeping all the constrains in mind a sample si3e of 1 people .#he sampling procedure

is systematic sampling


10/83

HINDSTAN !E"ER !IMITED TO /ECOME HINDSTAN

NI!E"ER !IMITED

(M)* major Hindustan Lever on Monday said it has received governmentJs approval to

change its name to Hindustan =nilever Ltd following which, its new corporate identity

represented $y a new logo will come into effect.

#he identity sym$oli3es the $enefits we $ring to our consumers and the communities we

work in. !ur new identity will help us confidently position ourselves in every aspect of

our $usiness, Hindustan =nilever )6! Doug "aillie said. #he new logo is sym$olic of

the companyJs mission of JAdding :itality to life.J It comprises of + different icons

representing the organisation, its $rands and the idea of vitality, Hindustan =nilever said

in a communi5ue to the "om$ay 4tock 6change %"46&.

#he shareholders of the company had approved the proposal on May 1B. (or us this is

really an opportunity, collectively as an organisation, to renew and strengthen our

commitment to continue our endeavour to earn the love and respect of India, $y making a

real difference to every Indian, "aillie added.

6arlier in (e$ruary, the company said the proposed name change would provide optimum

$alance $etween maintaining its heritage and synergies of glo$al alignment with the

corporate name of =nilever. Anglo8Dutch (M)* giant =nilever owns a majority stake in

Hindustan Lever. =nilever set up its first Indian su$sidiary Hindustan :anaspati

Manufacturing )ompany in 1@;1, followed $y Lever "rothers India Ltd %1@;;& and

=nited #raders Ltd %1@;&. #hese three companies were merged to form HLL in

7ovem$er 1@?. 4hares of Hindustan =nilever were trading at 0s 1@+.F, up .F per

cent on "46 in early morning trade.


11/83

COM,ANY ,ROFI!E


12/83


13/83

/RIEF HISTORY


14/83

!ver 1 yearsJ link with India

In the summer of 1BBB, visitors to the Colkata har$their noticed crates full of 4unlight

soap $ars, em$ossed with the words Made in 6ngland $y Lever "rothers. ith it, $egan

an era of marketing $randed (ast Moving )onsumer *oods %(M)*&.

4oon after followed Life$uoy in 1B@ and other famous $rands like ears, Lu and :im.

:anaspati was launched in 1@1B and the famous Dalda $rand came to the market in 1@;F.

In 1@;1, =nilever set up its first Indian su$sidiary, Hindustan :anaspati Manufacturing

)ompany, followed $y Lever "rothers India Limited %1@;;& and =nited #raders Limited

%1@;&. #hese three companies merged to form HLL in 7ovem$er 1@?2 HLL offered

1K of its e5uity to the Indian pu$lic, $eing the first among the foreign su$sidiaries to do

so. =nilever now holds 1.K e5uity in the company. #he rest of the shareholding is

distri$uted among a$out ;B, individual shareholders and financial institutions.

#he erstwhile "rooke "ondJs presence in India dates $ack to 1@. "y 1@;, the

company had launched 0ed La$el tea in the country. In 1@1+, "rooke "ond - )o. India

Limited was formed. "rooke "ond joined the =nilever fold in 1@B/ through an

international ac5uisition. #he erstwhile LiptonJs links with India were forged in 1B@B.

=nilever ac5uired Lipton in 1@F+, and in 1@FF Lipton #ea %India& Limited was

incorporated.

ondJs %India& Limited had $een present in India since 1@/F. It joined the =nilever fold

through an international ac5uisition of )hese$rough ondJs =4A in 1@B?.

4ince the very early years, HLL has vigorously responded to the stimulus of economic

growth. #he growth process has $een accompanied $y judicious diversification, always in

line with Indian opinions and aspirations.

#he li$eralisation of the Indian economy, started in 1@@1, clearly marked an infleion in

HLLJs and the *roupJs growth curve. 0emoval of the regulatory framework allowed the

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

constraints on production capacity.

4imultaneously, deregulation permitted alliances, ac5uisitions and mergers. In one of the

most visi$le and talked a$out events of IndiaJs corporate history, the erstwhile #ata !il

Mills )ompany %#!M)!& merged with HLL, effective from April 1, 1@@;. In 1@@, HLL

and yet another #ata company, Lakme Limited, formed a > joint venture, Lakme

Lever Limited, to market LakmeJs market8leading cosmetics and other appropriate


15/83

products of $oth the companies. 4u$se5uently in 1@@B, Lakme Limited sold its $rands to

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

HLL formed a > joint venture with the =48$ased Cim$erly )lark )orporation in

1@@/, Cim$erly8)lark Lever Ltd, which markets Huggies Diapers and Cote 4anitary

ads. HLL has also set up a su$sidiary in 7epal, 7epal Lever Limited %7LL&, and its

factory represents the largest manufacturing investment in the Himalayan kingdom. #he

7LL factory manufactures HLLJs products like 4oaps, Detergents and ersonal roducts

$oth for the domestic market and eports to India.

#he 1@@s also witnessed a string of crucial mergers, ac5uisitions and alliances on the

(oods and "everages front. In 1@@+, the erstwhile "rooke "ond ac5uired Cothari *eneral

(oods, with significant interests in Instant )offee. In 1@@;, it ac5uired the Cissan

$usiness from the =" *roup and the Dollops Icecream $usiness from )ad$ury India.

As a measure of $ackward integration, #ea 6states and Doom Dooma, two plantation

companies of =nilever, were merged with "rooke "ond. #hen in 9uly 1@@;, "rooke "ond

India and Lipton India merged to form "rooke "ond Lipton India Limited %""LIL&,

ena$ling greater focus and ensuring synergy in the traditional "everages $usiness. 1@@/

witnessed ""LIL launching the allJs range of (ro3en Desserts. "y the end of the year,

the company entered into a strategic alliance with the Cwality Icecream *roup families

and in 1@@ the Milkfood 1K Icecream marketing and distri$ution rights too were

ac5uired.

(inally, ""LIL merged with HLL, with effect from 9anuary 1, 1@@?. #he internal

restructuring culminated in the merger of ondJs %India& Limited %IL& with HLL in 1@@B.

#he two companies had significant overlaps in ersonal roducts, 4pecialty )hemicals

and 6ports $usinesses, $esides a common distri$ution system since 1@@; for ersonal

roducts. #he two also had a common management pool and a technology $ase. #he

amalgamation was done to ensure for the *roup, $enefits from scale economies $oth in

domestic and eport markets and ena$le it to fund investments re5uired for aggressively

$uilding new categories.

In 9anuary +, in a historic step, the government decided to award F/ per cent e5uity in

Modern (oods to HLL, there$y $eginning the divestment of government e5uity in pu$lic

sector undertakings %4=& to private sector partners. HLLJs entry into "read is a strategic

etension of the companyJs wheat $usiness. In ++, HLL ac5uired the governmentJs

remaining stake in Modern (oods.


16/83

In +;, HLL ac5uired the )ooked 4hrimp and asteurised )ra$meat $usiness of the

Amalgam *roup of )ompanies, a leader in value added Marine roducts eports.

#he mission that inspires HLLJs ;?, employees, including over 1,; managers, is to

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

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

HLL shares with its parent company, =nilever, which holds 1.K of the e5uity. #he

rest of the shareholding is distri$uted among ;B, individual shareholders and

financial institutions.

HLLJs $rands 8 like Life$uoy, Lu, 4urf 6cel, 0in, heel, (air - Lovely, ondJs,

4unsilk, )linic, epsodent, )lose8up, Lakme, "rooke "ond, Cissan, Cnorr8Annapurna,

Cwality allJs are household names across the country and span many categories 8soaps, detergents, personal products, tea, coffee, $randed staples, ice cream and culinary

products. #hey are manufactured in close to B factories. #he operations involve over

+, suppliers and associates. HLLJs distri$ution network, comprising a$out F,

redistri$ution stockists, directly covers the entire ur$an population, and a$out + million

rural consumers.

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

operations. #he Hindustan Lever 0esearch )entre %HL0)& was set up in 1@B, and now

has facilities in Mum$ai and "angalore. HL0) and the *lo$al #echnology )entres in

India have over + highly 5ualified scientists and technologists, many with post8doctoral

eperience ac5uired in the =4 and 6urope.

HLL $elieves that an organisationJs 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 reha$ilitation of special or

underprivileged children, care for the destitute and HI:8positive, and rural development.

HLL has also responded in case of national calamities adversities and contri$utes

through various welfare measures, most recent $eing the village $uilt $y HLL in

earth5uake affected *ujarat, and relief - reha$ilitation after the #sunami caused

devastation in 4outh India.

!ver the last three years the company has em$arked on an am$itious programme, 4hakti.

#hrough 4hakti, HLL is creating micro8enterprise opportunities for rural women, there$y

improving their livelihood and the standard of living in rural communities. 4hakti also


17/83

includes health and hygiene education through the 4hakti :ani rogramme, and creating

access to relevant information through the i4hakti community portal. #he programme

now covers a$out , villages in 1+ states. HLLJs vision is to take this programme to

1, villages impacting the lives of over a 1 million rural Indians.

HLL is also running a rural health programme Life$uoy 4wasthya )hetana. #he

programme endeavtheirs to induce adoption of hygienic practices among rural Indians

and aims to $ring down the incidence of diarrhoea. It has already touched F million

people in approimately 1 villages of B states. #he vision is to make a $illion Indians

feel safe and secure.

If Hindustan Lever straddles the Indian corporate world, it is $ecause of $eing single8

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

HI7D=4#A7 L6:60 LIMI#6D I7DIA'4 LA0*64# (M)* )!MA7>>

4unlight soap introduced in India.

9>

Dr. A. 4. *anguly takes over as )hairman from Mr. #. #homas2 =nilever shareholding in

the company comes down to 1K.

9>:

*overnment allows 1K =nilever shareholding.

9>=

(oods, Animal (eeds $usinesses transferred to Lipton.

9>?

Agri8products unit at Hydera$ad starts functioning 8 first range of hy$rid seeds comes

out2 Chamgaon 4oaps unit and


25/83

9>>

Launch of Lipton #aa3a tea.

9

Mr. 4. M. Datta takes over as )hairman from Dr. A. 4. *anguly.

1@@1

4urf =ltra detergent launched.

9:

HLL recognised $y *overnment of India as 4tar #rading House in 6ports.

9;

HLLJs largest competitor, #ata !il Mills )ompany %#!M)!&, merges with the company

with effect from April 1, 1@@;, the $iggest such in Indian industry till that time. Merger

ultimately accomplished in Decem$er 1@@/2 Launch of :im $ar2 Cissan ac5uired from

the =" *roup.

9=

HLL forms 7epal Lever Limited, HLL and =48$ased Cim$erley8)lark )orporation form

> joint venture 8 Cim$erley8)lark Lever Ltd. 8 to market Huggies diapers and Cote

feminine care products. (actory set up at une in 1@@2 HLL ac5uires Cwality and

Milkfood 1K $randnames and distri$ution assets. HLL introduces allJs.

9 joint venture 8 Lakme Lever

Ltd.2 HLL enters $randed staples $usiness with salt2 HLL recognised as 4uper 4tar

#rading House.

9?

Mr. C. ". Dadiseth takes over as )hairman from Mr. 4. M. Datta2 Merger of *roup

company, "rooke "ond Lipton India Limited, with HLL, with effect from 9anuary 12

HLL introduces $randed atta2 4urf 6cel launched.

9@

=nilever sets up International 0esearch La$oratory in "angalore2 new 0egional

Innovation )entres also come up.

9>

*roup c4ompany, ondJs India Ltd., merges with HLL with effect from 9anuary 1, 1@@B.

HLL ac5uires Lakme $rand, factories and Lakme Ltd.Js K e5uity in Lakme Lever Ltd.


26/83

:

Mr. M. 4. "anga takes over as )hairman from Mr. C. ". Dadiseth, who joins the =nilever

"oard2 HLL ac5uires F/K stake in Modern (ood Industries Ltd., the first pu$lic sector

company to $e disinvested $y the *overnment of India.

::

HLL enters Ayurvedic health - $eauty centre category with the Ayush range and Ayush

#herapy )entres.

:;

Launch of Hindustan Lever 7etwork2 ac5uisition of the Amalgam *roup

:

HLL has earned a reputation for conducting its $usiness with integrity and with respect

for the interests of those their activities can affect. #his reputation is an asset, just as real

as their people and $rands.#heir first priority is to $e a successful $usiness and that means investing for growth and

$alancing short8term and long8term interests. It also means caring a$out their consumers,

employees and shareholders, their $usiness partners and the world in which we live.

(rom HLL 4pokesperson N#o succeed re5uires the highest standards of $ehavior from all

of us. #he general principles contained in this )ode set out those standards. More detailed

guidance tailored to the needs of different countries and companies will $uild on these

principles as appropriate, $ut will not include any standards less rigorous than those

contained in this )ode.

e want this )ode to $e more than a collection of high8sounding statements. It must have

practical value in their day8to8day $usiness and each one of us must follow these

principles in the spirit as well as the letterO.ref: business world magazine.

)ode of "usiness rinciples

4tandard of )onduct

HLL conduct their operations with honesty, integrity and openness, and with respect for

the human rights and interests of their employees.

#hey similarly respect the legitimate interests of those with whom we have relationships.

!$eying the Law

HLL companies and employees are re5uired to comply with the laws and regulations of

the countries in which they operate.

6mployees

HLL is committed to diversity in a working environment where there is mutual trust and


29/83

respect and where everyone feels responsi$le for the performance and reputation of the

company.

HLL will recruit, employ and promote employees on the sole $asis of the 5ualifications

and a$ilities needed for the work to $e performed.

HLL are committed to safe and healthy working conditions for all employees. e will not

use any form of forced, compulsory or child la$our.

HLL are committed to working with employees to develop and enhance each individualJs

skills and capa$ilities.

HLL respect the dignity of the individual and the right of employees to freedom of

association.

HLL will maintain good communications with employees through company $ased

information and consultation procedures.

)onsumers

HLL is committed to providing $randed products and services which consistently offer

value in terms of price and 5uality, and which are safe for their intended use. roducts

and services will $e accurately and properly la$elled, advertised and communicated.

4hareholders

HLL will conduct its operations in accordance with internationally accepted principles of

good corporate governance. #hey will provide timely, regular and relia$le information on

their activities, structure, financial situation and performance to all shareholders.

"usiness artners

HLL is committed to esta$lishing mutually $eneficial relations with their suppliers,

customers and $usiness partners.

In their $usiness dealings they epect their partners to adhere to $usiness principles

consistent with their own.

)ommunity Involvement

HLL strives to $e a trusted corporate citi3en and, as an integral part of society, to fulfill

their responsi$ilities to the societies and communities in which they operate.

u$lic Activities

HLL companies are encouraged to promote and defend their legitimate $usiness interests.

HLL will co8operate with governments and other organisations, $oth directly and through

$odies such as trade associations, in the development of proposed legislation and other

regulations which may affect legitimate $usiness interests.


30/83

HLL neither supports political parties nor contri$utes to the funds of groups whose

activities are calculated to promote party interests.

#he 6nvironment

HLL is committed to making continuous improvements in the management of their

environmental impact and to the longer8term goal of developing a sustaina$le $usiness.

HLL will work in partnership with others to promote environmental care, increase

understanding of environmental issues and disseminate good practice.

Innovation

In their scientific innovation to meet consumer needs they will respect the concerns of

their consumers and of society. #hey will work on the $asis of sound science, applying

rigorous standards of product safety.

)ompetition

HLL $elieves in vigorous yet fair competition and supports the development of

appropriate competition laws. #heir companies and employees will conduct their

operations in accordance with the principles of fair competition and all applica$le

regulations.

"usiness Integrity

HLL does not give or receive, whether directly or indirectly, $ri$es or other improper

advantages for $usiness or financial gain. 7o employee may offer, give or receive any

gift or payment which is, or may $e construed as $eing, a $ri$e. Any demand for, or offer

of, a $ri$e must $e rejected immediately and reported to management.

HLL accounting records and supporting documents must accurately descri$e and reflect

the nature of the underlying transactions. 7o undisclosed or unrecorded account, fund or

asset will $e esta$lished or maintained.

)onflicts of Interests

All HLL employees are epected to avoid personal activities and financial interests which

could conflict with their responsi$ilities to the company.

HLL employees must not seek gain for themselves or others through misuse of their

positions.

)ompliance Monitoring 0eporting

)ompliance with these principles is an essential element in their $usiness success. #he

=nilever "oard is responsi$le for ensuring these principles are communicated to, and

understood and o$served $y, all employees.


31/83

Day8to8day responsi$ility is delegated to the senior management of the regions and

operating companies. #hey are responsi$le for implementing these principles, if

necessary through more detailed guidance tailored to local needs.

Assurance of compliance is given and monitored each year. )ompliance with the )ode is

su$ject to review $y the "oard supported $y the Audit )ommittee of the "oard and the

)orporate 0isk )ommittee.

Any $reaches of the )ode must $e reported in accordance with the procedures specified

$y the 9oint 4ecretaries. #he "oard of =nilever will not criticise management for any loss

of $usiness resulting from adherence to these principles and other mandatory policies and

instructions.

#he "oard of =nilever epects employees to $ring to their attention, or to that of senior

management, any $reach or suspected $reach of these principles. rovision has $een

made for employees to $e a$le to report in confidence and no employee will suffer as a

conse5uence of doing so.

In this )ode the epressions J=nileverJ and J=nilever companiesJ are used for convenience

and mean the =nilever *roup of companies comprising =nilever 7.:., =nilever L) and

their respective su$sidiary companies. #he "oard of =nilever means the Directors of

=nilever 7.:. and =nilever L)'.ref>#H6 764

EN"IRONMENT ,O!ICY

Hindustan Lever Limited %HLL& supplies high 5uality goods and services to meet the

daily needs of consumers and industry. In doing so, the )ompany is committed to ehi$it

the highest standards of corporate $ehaviour towards its consumers, employees, the

societies and the world in which we live.

#he company recognises its joint responsi$ility with the *overnment and the u$lic to

protect environment and is committed to regulate all its activities so as to follow $est

practica$le means for minimising adverse environmental impact arising out of its

operations.

#he company is committed to making its products environmentally accepta$le, on a

scientifically esta$lished $asis, while fulfilling consumersJ re5uirements for ecellent

5uality, performance and safety.

#he aim of the olicy is to do all that is reasona$ly practica$le to prevent or minimise,

encompassing all availa$le knowledge and information, the risk of an adverse


32/83

environmental impact arising from processing of the product, its use or foreseea$le

misuse.

#his olicy document reflects the continuing commitment of the "oard for sound

6nvironment Management of its operations. #he olicy applies to development of a

process, product and services, from research to full8scale operation. It is applica$le to all

company operations covering its plantations, manufacturing, sales and distri$ution,

research - innovation centres and offices. #his document defines the aims and scope of

the olicy as well as responsi$ilities for the achievement of the o$jectives laid down.

THE "ISION

#heir vision is to continue to $e an environmentally responsi$le organisation making

continuous improvements in the management of the environmental impact of their

operations.

HLL will achieve this through an Integrated 6nvironment Management approach, which

focuses on eople, #echnology and (acilities, supported $y Management )ommitment as

the prime driver.

#he 6nvironment olicy

Hindustan Lever Ltd. %HLL& is committed to meeting the needs of customers and

consumers in an environmentally sound manner, through continuous improvement inenvironmental performance in all their activities. Management at all levels, jointly with

employees, is responsi$le and will $e held accounta$le for companyJs environmental

performance.


33/83

,RICING ACTION IN :?B

,rice red)ctio%

rice reduction %"ottles& - :alue improvement %4achets&


34/83

IN"ESTMENT /EHIND /RANDS

I%%o*atio% S)perior )a1it0

(amily safe etalsoft Guick wash 8 K 7o mud 0in Advance

from germs ater - effort

saving

erfect 0adiance N in 1O hair #otal )are hiter teeth (resher $reath

health $enefits

CRRENT MARKET CONTE8T


35/83

Actio%s

P ricing

Laundry> rice 0eduction

4hampoos> :alue Improvement - Lower rice oints

#oothpaste> :alue )orrections - 4C= rationali3ation

P Investments $ehind $rands

Innovations

Guality

Higher A-

P )orrective actions in processed

,rocessed Foods

P )orrective actions

hased stock reduction

ithdrawl of Q; innovation

Defocus of Atta in unvia$le geographies

P 4ales decline of +?K arising from a$ove actions

P Market shares held improved

:alue 4hares MG '/ 9G '/ 4G '/ DG Q/

9ams FB.B FB.F F@. FB./

Cetchup +@ +F.B +@.@ ;.;

4alt 1./ 1.+ 1?.1 1.F


36/83

,RODCTS

Lu "ree3eLife$uoy DoveLiril earsHamam 0eona

4urf 6cel (air - Lovely 0in ondJs heel

4unsilk 7aturals epsodent )linic )lose8up

Ae Lakme

0eona

Ayush

"rooke "ond

"ruLipton

CissanCwality allJs

Cnorr Annapurna
http://www.hll.com/brands/lux.asphttp://www.hll.com/brands/breeze.asphttp://www.hll.com/brands/lifebuoy.asphttp://www.hll.com/brands/dove.asphttp://www.hll.com/brands/liril.asphttp://www.hll.com/brands/pears.asphttp://www.hll.com/brands/hamam.asphttp://www.hll.com/brands/rexona.asphttp://www.hll.com/brands/surf_excel.asphttp://www.hll.com/brands/fairnlovely.asphttp://www.hll.com/brands/rin.asphttp://www.hll.com/brands/ponds.asphttp://www.hll.com/brands/wheel.asphttp://www.hll.com/brands/sunsilk.asphttp://www.hll.com/brands/pepsodent.asphttp://www.hll.com/brands/clinicallclear.asphttp://www.hll.com/brands/close_up.asphttp://www.hll.com/brands/axe_magnet.asphttp://www.hll.com/brands/lakme.asphttp://www.hll.com/brands/rexona_deo.asphttp://www.hll.com/brands/ayush_range.asphttp://www.hll.com/brands/brook_bond.asphttp://www.hll.com/brands/bru.asphttp://www.hll.com/brands/lipton.asphttp://www.hll.com/brands/kissan.asphttp://www.hll.com/brands/kwality_walls.asphttp://www.hll.com/brands/annapurna.asphttp://www.hll.com/brands/lux.asphttp://www.hll.com/brands/breeze.asphttp://www.hll.com/brands/lifebuoy.asphttp://www.hll.com/brands/dove.asphttp://www.hll.com/brands/liril.asphttp://www.hll.com/brands/pears.asphttp://www.hll.com/brands/hamam.asphttp://www.hll.com/brands/rexona.asphttp://www.hll.com/brands/surf_excel.asphttp://www.hll.com/brands/fairnlovely.asphttp://www.hll.com/brands/rin.asphttp://www.hll.com/brands/ponds.asphttp://www.hll.com/brands/wheel.asphttp://www.hll.com/brands/sunsilk.asphttp://www.hll.com/brands/pepsodent.asphttp://www.hll.com/brands/clinicallclear.asphttp://www.hll.com/brands/close_up.asphttp://www.hll.com/brands/axe_magnet.asphttp://www.hll.com/brands/lakme.asphttp://www.hll.com/brands/rexona_deo.asphttp://www.hll.com/brands/ayush_range.asphttp://www.hll.com/brands/brook_bond.asphttp://www.hll.com/brands/bru.asphttp://www.hll.com/brands/lipton.asphttp://www.hll.com/brands/kissan.asphttp://www.hll.com/brands/kwality_walls.asphttp://www.hll.com/brands/annapurna.asp


37/83

I%dias !ar.est /ra%ded FMCG Eporter

It was 1@?+. #he reality of India then was very different from what it is today. IndiaJs

economy then suffered from foreign echange shortage. Hindustan Lever voluntarily

decided to take up 6ports to support the countryJs economy.

#oday, HLL is IndiaJs largest eporter of $randed (ast Moving )onsumer *oods. It has

$een recognised $y the *overnment of India as a *olden 4uper 4tar #rading House.

!ver time, HLL has developed appropriate capa$ilities to $e glo$ally competitive in cost

and 5uality for a via$le 6ports $usiness.

(ocus Areas

HLLJs 6ports focuses on two $road areas. It is a sourcing $ase for =nilever $rands in

Home - ersonal )are %H)& and #ea for supplies to other =nilever companies. It also

focuses on $ecoming a preferred supplier to $oth non8=nilever and =nilever clients in

three categories in which India, as a country, has competitive advantage 8 Marine

roducts, )astor and its Derivatives and 0ice. HLL enjoys international recognition

within =nilever and outside for its 5uality, relia$ility and speed of customer service.

HLLJs 6ports geography comprises, at present, countries in Asia, Australia, Africa,

7orth America and 6urope.

HLLJs 6ports portfolioH)>

#he categories are soaps, skin care products and oral care products. #he $rands are Lu,

Life$uoy, ears, (air - Lovely, Dove, :aseline, )lose8=p, epsodent, 4ignal. HLL is the

only source of ears soap across the world.

#ea>

#he categories are $randed packet tea, and instant tea for =nileverJs ready8to8drink tea

$usiness. #he $randed teas are "rooke "ond, "rooke "ond 0ed la$el, "rooke "ond #aj

Mahal, Lipton, Lipton


38/83

seafoods for 6urope too. HLLJs Marine roducts $rands are !cean Diamond, !cean

6cellence, 4hogun, Hima, *old 4eal, #ara and rima.

0ice>

#he categories are "asmati 0ice and "asmati 0ice8$ased ready8to8eat rice meals. #he

$rands are *old 4eal Indus :alley, 0o3ana and Annapurna.

)astor>

#he categories are )astor !il, )astor8oil $ased products, like hydrogenated castor oil, 1+

8 Hydroy 4tearic Acid, 0icinoleic Acid %used in grease and lu$ricant industry, paints and

surface coatings, cosmetics, emulsifiers&, and 4peciality )astor !ils %=4 grade, "

grade, DA" 1& etc used in pharmaceutical preparations. HLLJs )astor $rand is #opsol.

#oday, 6ports is a su$stantial $usiness in HLL, accounting for a$out 1+K of the

companyJs turnover. HLL $elieves that its competitive advantages of cost

competitiveness, process competitiveness and economies of scale $oth at the company

and country level, hold it in good stead. #hey position the company to $ecome one of the

hu$s for sourcing $y =nilever companies in H) and #ea, and also simultaneously

$ecome a preferred partner to glo$al customers in Marine roducts, )astor and 0ice.

Direct 4elling>

roduct 0ange

P Lever home range

P Male grooming

P !ral )are

P Ayurveda

P ersonal ash

P (oods

0each 8 1/ towns %Largest in India&

)onsultant $ase 8 ;;,


39/83


40/83

ACCORDING!Y3 H!!S AIMS ARE TOB

6nsure safety of its products and operations for the environment $y using

standards of environmental safety, which are scientifically sustaina$le and

commonly accepta$le.

Develop, introduce and maintain environmental management systems across the

company to meet the company standards as well as statutory re5uirements for

environment. :erify compliance with these standards through regular auditing.

Assess environmental impact of all its activities and set annual improvement

o$jectives and targets and review these to ensure that these are $eing met at the

individual unit and corporate levels.

0educe aste, conserve 6nergy and eplore opportunities for reuse and recycle.

Involve all employees in the implementation of this olicy and provide

appropriate training. rovide for dissemination of information to employees on

environmental o$jectives and performance through suita$le communication

networks.

6nctheirage suppliers and co8packers to develop and employ environmentally

superior processes and ingredients and co8operate with other mem$ers of the

supply chain to improve overall environmental performance.

ork in partnership with eternal $odies and *overnment agencies to promote

environmental care, increase understanding of environmental issues and

disseminate good practice.


41/83

RES,ONSI/I!ITIES

COR,ORATE

#he "oard and the Management )ommittee of HLL is committed to conduct the

company operations in an environmentally sound manner. #he Management )ommittee

will>

Mandatory standards and esta$lish environmental improvement o$jectives and targets

for HLL as a whole and for individual units, and ensure these are included in the annual

operating plans.

(ormally review environment performance of the company once every 5uarter.

0eview environment performance when visiting units and recognise eemplary

performance.

7ominate>

A senior line manager responsi$le for environmental performance at the individual HLL

site.

H!! EN"IRONMENTA! COORDINATOR+

#he Management )ommittee, through the nominated environmental coordinator will>

6nsure implementation of HLL olicy on environment and compliance with =nilever

and HLL environmental standards and the standards stipulated under relevant national

local legislation. hen $elieved to $e appropriate, apply more stringent criteria than

those re5uired $y law.

Assess environmental impact of HLL operations and esta$lish strategies for sound

environment management and key implementation steps.6nctheirage development of inherently safer and cleaner manufacturing processes to

further raise the standards of environment performance.

6sta$lish appropriate management systems for environment management and ensure

regular auditing to verify compliance.

6sta$lish systems for appropriate training in implementation of 6nvironment

Management 4ystems at work.


42/83

6nsure that all employees are made aware of individual and collective responsi$ilities

towards environment.

Arrange for epert advice on all aspects of environment management.

articipate, wherever possi$le, with appropriate industry and *overnment $odies

advising on environmental legislation and interact with national and local authorities

concerned with protection of environment.

Individual =nits

#he overall responsi$ility for environment management at each unit will rest with the

=nit Head, who will ensure implementation of HLL olicy on environment at unit level.

)oncerned line managers heads of departments are responsi$le for environmental

performance at department levels.

In order to fulfill the re5uirements of the 6nvironment olicy at each site, the =nit Head

will>

Designate a unit environment coordinator who will $e responsi$le for co8ordinating

environmental activities at unit, collating environmental statistics and providing

arranging for epert advice.

Agree with the Management )ommittee Mem$er responsi$le for the unit, specific

environmental improvement o$jectives and targets for the unit and ensure that these are

incorporated in the annual o$jectives of the concerned managers and officers and are

reviewed periodically.

6nsure that the unit complies with =nilever and HLL mandatory standards and the

relevant national and state regulations with respect to environment.

6nsure formal environmental risk assessment to identify associated environmental

aspects and take appropriate steps to control risks at accepta$le levels.

6nsure that all new operations are su$jected to a systematic and formal analysis to assess

environmental impact. (indings of such eercises should $e implemented prior to

commencement of the activity.

Manage change in eople, #echnology and (acilities through a planned approach $ased

on training, risk assessment, pre8commissioning audits and adherence to design codes.

0egularly review environment performance of the unit against set o$jectives and targets

and strive for continual improvement.


43/83

4ustain a high degree of environmental awareness through regular promotional

campaigns and employee participation through training, safety committees, emergency

drills etc.

6nsure dissemination of relevant information on environment within the unit and to

outside $odies, and regularly interact with *overnment authorities concerned for

protection of environment.

Maintain appropriate emergency procedures consistent with availa$le technologies to

prevent control environmental incidents.

rovide appropriate training to all employees.

6nsure periodic audits to verify compliance with environment management systems and

personally carry out sample environment audits to check efficacy of the systems.

0eport environmental statistics to HLL )orporate 4afety - 6nvironment *roup on a

monthly $asis.

0esearch and Innovation )entres

4ince most new products and processes are developed in these =nits, certain additional

0esponsi$ilities devolve on them to ensure implementation of the 6nvironment olicy of

the company. In addition to the =nit HeadJs responsi$ilities outlined a$ove, the heads of

these units will>

6nsure that a formal and systematic risk assessment eercise is undertaken during the

processproduct development stage with specific reference to environmental impact.

#ransfer technology to the pilot plant and main production through a properly

documented process specification which will clearly define environmental impact and

risks associated with processes, products, raw material and finished product handling,

transport and storage.

6nsure that treatment techni5ues are developed for any wastes generated as a result of

the new productprocess and is incorporated into the process specifications.


44/83

A!ITY ,O!ICYB

Hindustan Lever Limited considers 5uality as one of the principal strategic o$jectives to

guarantee its growth and leadership in the markets in which it operates.

#he company is committed to respond creatively and competitively to the changing needs

and aspirations of their consumers through relentless pursuit of technological ecellence,

innovation and 5uality management across their $usinesses, and offer superior 5uality

products and services that are appropriate to the various price points in the market as well

as to their commitment to $uilding shareholder value.

#he company recognises that its employees are the primary stheirce of success in its

operations and is committed to training and providing them the necessary tools and

techni5ues as well as empowering them to ensure $road $ase compliance of this policy in

the organisation at all levels.

#he company is committed to fulfill its legal and statutory o$ligations and international

standards of product safety and hygiene and will not knowingly sell product that is

harmful to consumers or their $elongings. It will institute systems and measures to

monitor compliance in order to meet its responsi$ilities to consumers.

#he company will maintain an open communication channel with its consumers and

customers and will carefully monitor the feed$ack to continuously improve its productsand services and set 5uality standards to fulfill them. #he company is committed to

etend its 5uality standards to its contract manufacturers, key suppliers and service

providers and $y entering into alliances with them, to jointly improve the 5uality of its

products and services. #his policy is applica$le to production from its own facilities as

well as to production that is outstheirced.

#he company will periodically review this 5uality policy for its effectiveness and

consistency with $usiness o$jectives.

#he company delegates authority and responsi$ility for dissemination and

implementation of this policy to each "usiness and =nit Head.


45/83

SAFETY AND HEA!TH ,O!ICY

I%trod)ctio%

Hindustan Lever Limited %HLL& supplies high 5uality goods and services to meet the

daily needs of consumers and customers. In doing so, the )ompany is committed toehi$it the highest standards of corporate $ehavior towards its consumers, employees, the

societies and the environment in which we operate.

#owards this, the )ompany recognises its responsi$ility to ensure safety and protection of

health of its employees, contractors and visitors in all its operating sites, which include

manufacturing, sales and distri$ution, research la$oratories and offices during work and

work related travel.

#his olicy document defines the vision, principles, aim, re5uired actions and scope of

the policy application as well as the responsi$ility for eecution.

Their "isio%

#heir vision is to $e an injury free organisation.

HLL 764>Oe will $ring safety on top of mind for all employees and will integrate it

with all $usiness processes. e will realise their :ision through an Integrated 4afety

Management approach, which focuses on eople, rocesses, 4ystems, #echnology and

(acilities, supported $y demonstrated leadership and employee commitment at all levels

as the prime drivers for ensuring a safe and healthy work environmentO.

Safet0 ,ri%cip1esB

HLLJs !ccupational 4afety and Health olicy is $ased on and supported $y the followingeight rinciples.#hese rinciples have the same status as the )ompanyJs )ode of "usiness rinciples>

All injuries and occupational illnesses are preventa$le

All operational eposures can $e safeguarded

4afety evaluation of all $usiness processes is vital

orking safely is a condition of employment

#raining all employees to work safely is essential

Management audits are a must

6mployee involvement is essential


46/83

All deficiencies must $e reported and corrected promptly

In order to facilitate operationalisation of the 4afety rinciples, a separate document has

$een prepared, which covers>

a& 4afety rinciples

$& 4uccess )riteria

c& Illustrative CI


47/83

CONSMER SATISFACTION

Indira is + years old, a tri$al woman at Condegaon village in "astar district. 4he is just$ack from the near$y jungles, collecting firewood. After attending to her $a$y son, she

will go to the village well to take a 5uick wash.


48/83

Life$uoy, whose core e5uity is health and hygiene , has for decades now $een

synonymous with soap in rural India.

At the same time, if products have to come up the order in the rural purchase hierarchy,

they have to $e afforda$le. If rural India today accounts for a$out half of detergents sales,

it is $ecause HLL has developed low8cost value8for8money $randed products, like heel.

#he company has also taken initiatives to create markets even for apparently premium

products, $y offering them in pack si3es, like sachets, whose unit prices are within the

reach of rural consumers. (or eample, initiated in the 1@Bs, sachets %0s.+, 0e.1, or

paise& today constitute a$out K of Hindustan LeverJs shampoo sales. ith media reach

gradually increasing, rural consumers today, where the media has its footprints, share the

same aspirations with their ur$an counterparts. HLL has responded to the trend with low

unit price packs of even other products 8 Lu at 0s., Life$uoy at 0s.+, 4urf 6cel sachet

at 0s.1., ondJs #alc at 0s., epsodent toothpaste at 0s. , (air - Lovely 4kin )ream

at 0s., ondJs )old )ream at 0s., "rooke "ond #aa3a tea at 0s..

!ther marketing strategies>

(or decades now, Hindustan Lever has also taken initiatives to circumvent the limitation

in communication channels, $y innovatively leveraging non8conventional media. Among

them are wall paintings, cinema vans, weekly markets %haat&, fairs and festivals. *iven

the rural consumerJs fascination for cinema, the cinema vans show popular movies,

interspersed with products advertisements. eekly markets, fairs and festivals are parts

and parcel of rural life. #hey give an opportunity to address consumers, spread over many

tiny hamlets, at one location. #he occasions are used to demonstrate product $enefits and

also sell such products. 4uch demonstrations have played a significant role in creating,

for eample, the detergents market in rural India. In recent times, such demonstrations are

$eing deployed to illustrate how visi$le clean is not hygienic clean, and how using soap is

essential to prevent easily avoida$le infections.

)ommunication through fairs and festivals are $acked $y direct consumer contact. (or

eample, in 1@@B8@@, Hindustan Lever implemented a major direct consumer contact,

called roject "harat, which covered +.+ crore homes. 6ach home was given a $o, at a

special price of 0s.1, comprising a low unit price pack of shampoo, talcum powder,

toothpaste and skin cream, along with educational leaflets and audio8visual

demonstrations. #he project has helped eliminate $arriers to trial, and has strengthened

salience of $oth particular categories and $rands. 4imilarly in ++, Hindustan Lever has


49/83

launched a similar large8scale direct contact, called Life$uoy 4wasthya )hetana, which

already covers F million people in 1B, villages of B states. #he project is intended at

generating awareness a$out good health and hygiene practices, and specifically how a

simple ha$it of washing hands is essential to maintaining good health. #he initiative will

involve interaction with students and senior citi3ens, who act as change agents.

Availa$ility of HLL's roduct>

*enerating awareness pays dividends only when steps are taken to ensure constant

availa$ility of products. In rural India particularly, availa$ility determines volumes and

market share, $ecause the consumer usually purchases what is availa$le at the outlet,

influenced very largely $y the retailer.

#herefore, over the decades, Hindustan Lever has progressively strengthened its

distri$ution reach in rural India, which today has a$out ;; lakh outlets. Direct rural

distri$ution in Hindustan Lever $egan with the coverage of villages adjacent to small

towns. #he companyJs stockists in these towns were made to use their infrastructure to

distri$ute products to outlets in these villages. "ut this distri$ution mode could only $e

etended to villages connected with motora$le roads, and it could cover a$out +K of the

rural population $y 1@@.

#herefore in 1@@B, Hindustan Lever launched roject 4treamline to further etend its

distri$ution reach. =nder this initiative, the company identifies su$8stockists in a large

village, connected $y motora$le road to a small town. #his su$8stockist in turn distri$utes

the companyJs products to outlets in adjacent smaller villages using transportation

suita$le to interconnecting roads, like cycles, scooters or the age8old $ullock cart.

Hindustan Lever is thus trying to circumvent the $arrier of motora$le roads. As a result,

the distri$ution network, as of now, directly covers a$out , villages, reaching a$out

+ million consumers. #he company simultaneously uses the wholesale channel,

suita$ly incentivising them to distri$ute company products.

HLL has in the recent past esta$lished a common distri$ution system in rural areas for all

its products. *iven the num$er of $rands and their packs the rural retailer usually

re5uires, one HLL representative can take all the products from the company portfolio

that he needs. #his common distri$ution system is now fully operational, under one

0egional 4ales Manager eclusively dedicated to rural markets of each region of the

country.

!ver time, Hindustan Lever will further strengthen its rural distri$ution through mutually


50/83

$eneficial alliances with rural 4elf Help *roups %4H*s&. !ver the last five years,

financial institutions, 7*!s and government organisations are working closely to

esta$lish 4H*s, whose o$jective is to alleviate poverty through sustaina$le income8

generating activities. 4ince +1, Hindustan Lever is implementing roject 4hakti,

where$y 4H*s are $eing offered the option of distri$uting relevant products of the

company as a sustaina$le income8generating activity. #he model hinges on a powerful

win8win relationship2 the 4H* engages in an activity which $rings sustaina$le income,

while Hindustan Lever gets an interface to interact and transact with the rural consumer.

HLLJs vision for roject 4hakti is to scale it up across the country $y +, creating a$out

+ 4hakti entrepreneurs, covering 1, villages, and touching the lives of 1

million rural consumers. "egun with groups in 7algonda district of Andhra radesh,

with the support of local authorities, the project has $een etended, as of now, to a$out

, villages in 1+ states. A typical 4hakti entrepreneur conducts $usiness of around

0s.1, 8 0s 1, per month, which gives her an income of a$out 0s F 8 0s.1

per month on a sustaina$le $asis. As most of these women are from $elow the poverty

line, and live in etremely small villages %less than + population&, this earning is very

significant, and is almost dou$le of their past household income. #he full $enefit of

roject 4hakti will $e realised after some years.

H!! S,,!Y CHAIN


51/83

NATION 7IDE MANFACTRING>

B factories, across India

#he year was 1@+;. Lord Leverhulme, the legendary founder of Lever "rothers, was

visiting India. #he nationalist sentiment in India was for locally manufactured products.

Lord Leverhulme, who $elieved that what is good for a country is e5ually good for the

company, responded to that aspiration $ecause he too shared that dream.

His dream ultimately was realised in 1@;/. In 4eptem$er 1@;/, after more than a decade

of discussions in London and in India, a Lever factory was allowed to sprout on the land

that had $een reclaimed $y the "om$ay ort #rust at 4ewri. (rom here, a month later

rolled out the first cake of 4unlight soap to $e manufactured in India. #he same year,Lever "rothers took over the *arden 0each (actory in Colkata.

#hese two factories were the first in a manufacturing $ase, which today literally dots the

length and $readth of India. (rom Assam to *ujarat, from =ttaranchal to Cerala.

Hindustan LeverJs diverse product range is today manufactured in a$out B factories. In

addition, the company outsources from 1 other units. #he operations involve +,

suppliers and associates.

Ma%)fact)ri%.

Company SupplyPersons




WholesellerFamily GrocerKioskSupermarkets


52/83

De*e1opi%. $ac'&ard areas

4everal HLL factories are situated in $ackward areas. #he company has consciously

responded to the national policy of development of $ackward areas $y setting up

manufacturing units in these places, which provide several direct and indirect

employment opportunities for these areas, and leads to general economic development of

these regions through industrialisation. In fact, all major investments of HLL, in recent

years, have $een either in A8)ategory $ackwad areas or 7o8Industry Districts. #hese

include factories in Chamgaon and


53/83

How do you ensure that Mr. 0amesh in Canyakumari gets his Life$uoy soap and Mrs.

Culkarni in 9ammu gets to know how "ru coffee tastes even $efore she has $ought itR

ell, you need to have a cutting edge distri$ution network in place.

Hindustan LeverJs distri$ution network is recognised as one of its key strengths. Its focus

is not only to ena$le easy access to our $rands, $ut also to touch consumers with a three8

way convergence 8 of product availa$ility, $rand communication, and higher levels of

$rand eperience.

HLLJs products, manufactured across the country, are distri$uted through a network of

a$out F, redistri$ution stockists covering a$out one million retail outlets. #he

distri$ution network directly covers the entire ur$an population.

#he general trade comprises grocery stores, chemists, wholesale, kiosks and general

stores. Hindustan Lever services each with a tailor8made mi of services. #he emphasis is

e5ually on using stores for direct contact with consumers, as much as is possi$le through

in8store facilitators.

AT THE S,ERMARKETS

4elf8service stores and supermarkets are fast emerging in metros and large towns. #o

service modern retailing outlets in the metros, HLL has set up a full8scale salesorganisation, eclusively for this channel. #he $usiness system delivers ecellent

customer service, while driving growth for the company and the store. At the same time,

innovative marketing initiatives are taken to provide consumers with eperience of our

$rands at the store itself, through product tests and in8store sampling.

IN THE "I!!AGES

HLL has also revamped its sales organisation in the rural markets to fully meet the

emerging needs and increased purchasing power of the rural population. #he company

has $rought all markets with populations of $elow , under one rural sales

organisation. #he team comprises an eclusive sales force and eclusive redistri$ution

stockists, under the charge of dedicated managers. #he team focuses on $uilding superior

availa$ility, while ena$ling $rand $uilding in the deepest interiors. HLLJs distri$ution


54/83

network in rural India already directly covers a$out , villages, reaching a$out +

million consumers, through a$out ? su$8stockists.

HARNESSING INFORMATION TECHNO!OGY

An I#8powered system has $een implemented to supply stocks to redistri$ution stockists

on a continuous replenishment $asis. #he o$jective is to catalyse HLLJs growth $y

ensuring that the right product is availa$le at the right place in right 5uantities, in the

most cost8effective manner. (or this, stockists have $een connected with the company

through an Internet8$ased network, called 047et, for online interaction on orders,

despatches, information sharing and monitoring. 04 7et covers a$out BK of the

companyJs turnover. #oday, the sales system gets to know every day what HLL stockists

have sold to almost a million outlets across the country. 04 7et is part of roject Leap,

HLLJs end8to8end supply chain, which also includes a $ack8end system connecting

suppliers, all company sites and stretching right upto stockists.

,IONEERING NE7 CHANNE!S

Hindustan Lever is simultaneously creating new channels, designed on the same principle

of holistic contact with consumers.

roject 4hakti, HLLJs partnership with 4elf Help *roups of rural women, is $ecoming an

etended arm of the companyJs operation in rural hinterlands. 4tarted in +1, roject

4hakti has already $een etended to a$out , villages in 1+ states 8 Andhra radesh,

Carnataka, *ujarat, Madhya radesh, #amil 7adu, )hattisgarh, =ttar radesh, !rissa,

unja$, 0ajasthan, Maharashtra and est "engal. #he respective state governments and

several 7*!s are actively involved in the initiative. #he 4H*s have chosen to partner

with HLL as a $usiness venture, armed with training from HLL and support from

government agencies concerned and 7*!s.

Hindustan Lever 7etwork %HL7& is the companyJs arm in the Direct 4elling channel, one

of the fastest growing in India today. It already has a$out ;. lakh consultants 8 all

independent entrepreneurs, trained and guided $y HL7Js epert managers. HL7 has

already spread to over 1 towns and cities, covering BK of the ur$an population,


55/83

$acked $y /+ offices and +/ service centres across the country. It presents a range of

customised offerings in Home - ersonal )are and (oods.

!ut8of8Home consumption of products and services is a growing opportunity in India, as

elsewhere in the world. Hindustan Lever is already the largest player in the hot $everages

out8of8home segment, with over 1 tea and coffee vending points. #he company is

epanding the network aggressively, in the education, entertainment, leisure and travel

segments. HLLJs allaince with epsi will significantly strengthen this channel.

Health - "eauty 4ervices are Hindustan LeverJs simultaneous foray to meet the

increasing consumer need for such products and services. Lakme 4alons provide

specialised $eauty services and solutions, under the recognised authority of the Lakme

$rand. #he Ayush #herapy )entres provide easy access to authentic Ayurvedic treatments

and products.

Hindustan Lever, which once pioneered distri$ution in India, is today reinventing

distri$ution 8 creating new channels, and redefining the way current channels are

serviced. In the process it is converging product availa$ility, with $rand communication

and $rand eperience.

NO"E! ,RODCT NE7 ,ROCESS

Hindustan LeverJs mission is to meet everyday needs for nutrition, hygiene, and personal

care, with $rands that help people feel good, look good and get more out of life. HLLJs

research - development $ase, one of the largest in Indian industry, helps achieve this

mission, with novel products and new processes. #he company has over ;B patents,

demonstrating its leading edge in consumer8relevant 0-D.

#he Hindustan Lever 0esearch )entre %HL0)&, with facilities in Mum$ai and "angalore,

and glo$al technology centres in India have over + highly 5ualified scientists and

technologists, many with post8doctoral eperience ac5uired in the =4 and 6urope. 4et up

in 1@B, HL0)Js aim is to develop new products and processes, improving $enefits and

5uality of eisting products, and optimal use of resources.


56/83

Major innovations have taken place, down the decades, in every category in which HLL

is present. (rom Home )are to ersonal care, "everages to (oods.

"etter cleaning, lesser water consumption

)onsider for eample, HLLJs development of a water8saving technology for its

detergents. !ne of the most severe pro$lems that India faces today is shortage of water.

ater scarcity affects one in every three Indians. In a typical Indian home, at least +K of

the water consumed goes $ehind washing of clothes. HLL decided that it would $e of

immense $enefit to an Indian household, if a technology could $e developed, which

would help reduce water consumed in washing of clothes. HLLJs scientists have

innovated a path8$reaking technology 8 it reduces water consumption and time taken for

rinsing $y K. #he technology has already $een introduced.

orldJs most advanced water purifier

eople in cities and towns spend enormous amounts, either in fuel or devices, to ensure

safe drinking water. HLLJs scientists have developed a $reakthrough device, called

ureit, which purifies water as safe as $oiled water, providing 1K protection from all

water8$orne diseases2 it also removes pesticides that may $e present in drinking water. Its

operation does not re5uire electricity, running tap water and plum$ing or epensive

maintenance. It thus provides water at a cost of just 0e.1 for every si litres 8 or less than

+ paise a litre.

Iodine In 4alt 8 the vital ingredient

Iodine, it is well8known, is important for the mental development of young children.

Iodised salt is a well8accepted mode of ensuring appropriate iodine intake.


57/83

HLL has e5ually developed new processes.

In8house machine development

#he company has the capa$ility to design and manufacture machines in8house. #his

ena$les the company to set up plants at half the cost of others. 4uch technological

developments have also led to significant improvement in productivity.

6nergy conservation

In the past, one of the most significant $reakthroughs of HLLJs research initiative has

$een the development of a technology to use non8conventional forest seed oils for soap8

making which, since the 1@Fs, has helped save around 1.+ $illion in foreign echange.

HLL had received the *overnment of IndiaJs prestigious award for import su$stitution.

Development of 4tructurant #echnology for soap manufacturing also helped save costly

conventional oils without any compromise on product performance and 5uality. #he latest

technology to produce Distilled (atty Acid for soap making and the resultant plant

capacity epansion has drastically $rought down specific energy consumption while

improving distillation yields. #he evolution of continuous soap processing technology

has also reduced energy consumption.

HLL $elieves that technology is critical to delight consumers. )reative application of

technology has made Hindustan Lever successful in launching products and services,

which raise the 5uality of life.


58/83

HE!,ING HANDSB

HLL )!MMI#4 0s. B )0!064 (!0 IMM6DIA#6 06LI6(, 06HA"ILI#A#I!7 #!

#4=7AMI8HI# )!MM=7I#I64

M=M"AI, 9anuary F, +> Hindustan Lever Limited %HLL& today announced to

commit, a total outlay of 0s.B crores for immediate relief and helping people to

reha$ilitate themselves so that they can resume their livelihood, in the tsunami8hit areas

of ondicherry, #amil 7adu and Cerala. !f this, 0s. crores %a$solute value terms& is

$eing utili3ed for distri$ution of the )ompanyJs nutritional - personal hygiene products

for immediate relief to the needy. Another 0s.; crores will $e raised partly $y

contri$utions from company employees and the $alance contri$ution from the )ompany

to $e used in colla$oration with 7*!s working with the community to provide the

people, nota$ly fishermen, with means of livelihood and help them $ack on their feet.

4ince Decem$er +?, employees of HLL factories and offices in ondicherry, #amil 7adu

and Cerala have $een providing necessary relief to the tsunami8hit people. #he relief

operations include, distri$ution of $read and $iscuits to over + families in

ondicherry, 1+, cooked meals for families in )hennai, 7agapattinam, )uddalore and

Andamans. !ver 1+, dry relief packs, comprising of )ompanyJs dry rations and

personal hygiene products have already $een distri$uted.

HLLJs employees are donating a dayJs salary, matched e5ually $y the )ompany for

eclusive use in reha$ilitation.

#he $iggest concern is, that people fishermen have lost their means of livelihood. HLL

plans to focus its reha$ilitation efforts to restore their means of livelihood so that the localcommunities can 5uickly get $ack to their lives at the earliest.

HLL has always $een a front runner in its call for national duty and caring for the

community. Its employees not only donate generously, $ut volunteer to take part in relief

operations $y committing their time and physical effort. #his is in line with our corporate

value of NcareO and our )40 mission which has $ecome an integral part in our way of

doing $usiness.


59/83

6arlier during the *ujarat earth5uake, HLL had adopted and reconstructed a new village,


60/83

!ver the years, HLL has opened schools for challenged children with a sharper o$jective

of supporting families of such children, helping the children $ecome self8reliant $y

learning appropriate skills to $e productive mem$ers of the household.

ANKRBIn 1@@;, HLLJs Doom Dooma lantation Division set up Ankur, a centre for special

education of challenged children. #he centre takes care of children with challenges, aged

$etween and 1 years. Ankur provides educational, vocational and recreational

activities to over ; children with a range of challenges, including sight or hearing

impairment, polio related disa$ilities, cere$ral palsy and severe learning difficulties.

#hese physically and mentally challenged children are taught skills, such as cookery,

painting, em$roidery, $am$oo crafts, weaving, stitching, etc depending on their aptitudes.

#he centre has reha$ilitated 1 children, including self8employment for ? children $y

providing them with shops, and ; girls have $een provided employment as creche

attendants. It has also moved to normal schools 1B children. 4ince inception it has

covered a$out B children. Ankur received the Lawrie *roup orldaware Award for

4ocial rogress in 1@@@ from H0H rincess 0oyal in London.

KA,,AGAMB

6ncouraged $y AnkurJs success, Cappagam %shelter&, the second centre for specialeducation of challenged children, was set up in 1@@B on HLL lantations in 4outh India.

It has 1F children. #he focus of Cappagam is the same as that of Ankur. #he centre has 1F

children, $eing taught self8help skills, useful vocational activities like making of paper

covers, greeting cards, wrapping papers, fancy stationery, napkins, $rooms made out of

coconut leaves, candles, and also some home care products. A$out 1+ of the children

have $ecome relatively self8reliant $y earning through crafts learnt at the centre. 4ince

inception, it has covered a$out +B children.

AN/AGAMB


61/83

inception. HLL is wholeheartedly involved with all four centres and will continue to $e

involved in the future.


62/83

HINDSTAN !E"ER !IMITED DECEM/ER ARTER : #his is in line with our ortfolio

rationali3ation strategy, while at the same time creating value for our shareholders.


66/83

Am$it )orporate (inance acted as Marico's advisors in this transaction.


67/83

COM,ETITORS

The ,rocter Ga2$1e Co2pa%0 Co2pa%0 ,rofi1e

#he rocter - *am$le )ompany %-*& is a $rand $ehemoth. #he worldJs T1 maker of

household products courts market share and $illion8dollar $rands. -*Js products fall into three

categories> glo$al $eauty care2 glo$al health, $a$y, and family care2 and glo$al household care. It

also makes pet food and water filters and produces soap operas %As the orld #urns&. More than

+ of -*Js $rands are $illion8dollar sellers %including Actonel, Alwayshisper, "ounty,

)harmin, )rest, DownyLenor, (olgers, Iams, !lay, ampers, antene, ringles, #ide, and

ella&. Ac5uisitive -* $ought )lairol in +1 and a majority of ella in +;. Its purchase of

*illette in late + was its $iggest $uy in company history.Fi%a%cia1 Hi.h1i.hts(iscal 9une0evenue %+&> ?F/1. M0evenue *rowth %1 yr&> 1./K6mployees %+&> 11,6mployee *rowth %1 yr&> .K


68/83

DATA ANA!YSIS

FMCG MARKETS

4lowdown in growth - then + years of decline


69/83

FMCG MARKETS

+/ 8 0evival after + years of decline

FMCG Mar'et H!! Cate.ories)Gro&thJ

-1.1 -2. -2.!

".!2."

#.1

-$

-2"

2

$

#!

"2 "% &1 '"$&2 '"$&% '"$&$ '"$


70/83

IN"ESTMENTS /EHIND /RANDS

STE, , IN H,C A, S,ENDS


71/83

CRRENT ,ERFORMANCE

H,C( GRO7TH

"o1)2eGro&thJSa1esGro&thJ


72/83

C)rre%t ,erfor2a%ce

(a$ric 7ash

Actions takenrice reduction

Additional investment

in 5uality

Higher A - spends

"rand repositioning


73/83

Actio%s ta'e%

rice reduction

Additional investment

in 5uality

Higher

A - spends

"rand

repositioning


74/83

:? ( Fi%a%cia1 Hi.h1i.hts

P Co%ti%)i%. sa1es f1at

H,C

H) grows ?K in :olumes2 growth across categories

ricing actions lead to +K value growth

:alue growth momentum picking up

:olume market shares gains in Laundry and 4hampoo

Foods

4trong growth in "rooke"ond, Lipton and Instant )offee

Decline $y FK impacted largely due to planned discontinuation2 stock reduction

and one8 offs

POperati%. ,rofits ,/ITL dec1i%es :J

Co2petiti*e strate.0 i% !a)%dr0 Hair

Additio%a1 A, spe%ds i% H,C

Hi.her foods 1osses


75/83


76/83

CONC!SION

#he Indian (M)* market currently appears to $e at a crossroads, and HLL are

attempting to change customer perceptions of their $rands and where specific $uying

motivations appear to $e replacing generalities.

#his meanwhile, is 5uite unlike the west where $uyers consider aesthetics, comfort and

safety, not necessarily in that order, $efore finalising a purchase. NIt's smarter to think

a$out emotions and attitudes, if marketers are to do a $etter jo$ of marrying what a HLL

offers to the consumer's image of the offerings. Another important outcome of the

research is the $elieva$ility of the claims. Most of the claims are realistic and easy to

understand. Most of the people don't understand the 5uality claims $y HLL.

#he mindset of the Indian consumer is such that he is delighted if he $uys a pen a little

cheaper than his neigh$our. #hings are, however, slowly changing and customers at the

upper end of the market are now ready to pay more for more. I hope that this approach

will soon enter the new era, may$e not with the same intensity .

N4uccess will largely $e determined to the etent a company can differentiate

itself in terms of intangi$les that go with a roductO. #hus, success could well hinge onthe $est of $undle of services that HLL provides.HLL grew from 3ero to the +,+?B

Million , mark and the num$er !ne (M)* company in India this year. Looking at the

present scenario it can $e said that though there is lot of competition in the market $ut

HLL is picking up well. #he landmark achievement comes in F/ years in India after

clinching its first overseas sale.


77/83

SGGESTIONS

Ke0 Attri$)te co2po%e%tsB

:alue for money and )ustomer )are

!perational attri$utes.

hysical attri$utes.

"rand Image.

)ustomer 4pecific Details.

In any correspondence with the customers the message should $e sent in these

components only to have the maimum $enefit from the advertisement. Also these

components should $e dealt with independently. #he advertisements should speak only of

the $elieva$le concepts rather than glorifying the pretentious ones. #he $asic need of the

customer need to $e addressed which is actually not much epensive and $etter 5uality.

HLL sales growth in june +/ was decreased due to the pro$lem with promotion and

pricing. Although $eing the most competitive product on the $asis of the Market

!perating rice %M!&, the shampoos are still not selling much. #his is perhaps due to

the $argaining stress on the customer and the weak push given $y the dealer to the

particular item, when actually it should $e sold like a high volume product.

Another serious suggestion is that HLL must give good attention to their all the products

rice and all are not getting much attention. #he dealers don't provide much support to the

customers in making them understand the real Guality $ehind them. 6ither, the technical

details should $e presented in a clearer manner or the dealers need to $e educated

properly.


78/83


79/83

!IMITATIONS

6verything in this world has its own advantages and disadvantages which shows Qnothing

is perfect'.

(ollowing are the pro$lems faced $ut it's a part of game>

1. #IM6 )!74=MI7*> It is very much o$vious that it is a time consuming process. 4o

much time has $een spent for this purpose.

+. L! A0#I)IA#I!7> !$viously many respondents have not participated in this

and have also created some pro$lems which simply shows that they were not

interested.

;. "IA47644> 4ometimes interested customers were also $iased so the collected figures

involve $oth positive and negative figures.

/. It does not cover all the aspects of the company.

. 4="96)#I:6> #his project only tells you what it is all a$out.


80/83

A,,ENDI8

C)sto2er S)r*e0 )estio%%aire

7ame

Age

Address

G1. How many mem$ers are there in your familyR

G+. Have you ever heard of HLL %Hindustan Lever Limited&R


81/83

G?. hich $rand do you use in the following categories >

ersonal ash

Lu UUUUUUUUUU "ree3e UUUUUUUUUUU

Dove UUUUUUUUUU !thers UUUUUUUUUUU

Laundary

4urf 6cel UUUUUUUUU 0in UUUUUUUUUU

heel !thers

4kin )are

(air-Lovely UUUUUUUU ond's UUUUUUUU

4unslik 7aturals UUUUUUUU !thers UUUUUUUU

!ral )are

epsodent UUUUUUUU )lose8up UUUUUUUU

!thers UUUUUUUU

Deodorants

Ae UUUUUUUU Lakme UUUUUUUU

0eona UUUUUUUU

)olour )osmetics

Lakme UUUUUUUU !thers UUUUUUUU


82/83

GF. hat 0ecommendations or suggestions would you like to give for

improvement of our productsR


83/83

/I/!IOGRA,HY

1. #he #imes of India and Hindustan #imes

+. #he 6conomic #imes

;. )ompany's $rochure

/. www.google.co.in
http://www.google.co.in/http://www.google.co.in/

hindustan liver limited

Documents