About The Company

India FMCG Market

Our Strategy

Financial Information, Share

Contents

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Corporate Governance5

Indian FMCG sector

• 4th Largest sector in the economy with an estimated size of Rs.1,300 billion.

• The sector has shown an average annual growth of about 11% per annum over the last decade.

• Characteristics: Strong MNC Pressure, Well established distribution network, intense competition between the organized and unorganized players, Easy availability of raw material, cheaper labor cost

THE TOP 10 COMPANIES IN FMCG SECTOR

1. Hindustan Unilever Ltd.2. ITC (Indian Tobacco Company) 3. Nestlé India 4. GCMMF (AMUL) 5. Dabur India 6. Asian Paints (India)7.Cadbury India8. Britannia Industries9. Procter & Gamble Hygiene and Health Care

10. Marico Industries

28

87

58

62

137

FY 10 E FY15P FY20P

Base case

High case

FMCG Market Opportunity

Key growth drivers to the Industry are as follows:

• Robust growth in India’s GDP • Growing urbanization • Evolving consumer life style • Increased income in rural areas • Spending Pattern • Changing Profile and Mind Set of Consumer • Growth of modern retail

Hindustan Uni Lever Vs. Proctor & Gamble

Presented by: Sourabh, Laltendu & ShwetaDate: 11th Aug 2012MPE Batch IV

Introduction to Hindustan Unilever Limited

Mission And Vision

We work to create a better future everyday.

We help people feel good, look good and get more out of life with brands and services that are good for them and good for others.

We will inspire people to take small everyday actions that can add up to a big difference for the world.

We will develop new ways of doing business that will allow us to double the size of our company while reducing our environmental impact.

More than 75 years of experience in

India

Products touch the lives of 2 out of 3 Indians everyday

Direct distribution reach of > 2 Mn

stores

No.1 and strong No.2 in more than

95% of the business

7 brands > Rs. 1000 crs; 13 brands > Rs. 500 crs 17 out of top 100 most trusted brands in India^

India’s Largest FMCG Company

Portfolio straddling the pyramid Fabric Cleaning Skin Cleansing Hair Skincare Tooth Paste

Soaps & Detergents: 48% Personal Products: 31%

Portfolio straddling the pyramid Tea Coffee Processed Foods Ice Creams Water

Beverages: 12% Packaged Foods: 6% Others: 3%

Our Strategy

Consistent Growth

Competitive Growth

Profitable Growth

Responsible Growth

Strategic framework Sustainable Living Plan Our Goals

Our first priority is to our consumers, then customers, employees and communities. When we fulfill our responsibilities to them our shareholders will be rewarded.

Winning Principles

How Will We Win

How Will We Win

30 million people reached with Lifebuoy soap handwashing programmes in 2010-11

30 million people have gained access to safe drinking water by using Pureit in-home water purifier, since 2005

Around 60%of our major food and beverage brands – Brooke Bond, Bru, Knorr, Kissan and Kwality Wall’s – comply with the ‘Healthy Choice’ guidelines’

Reduced CO2 emissions by 14.7%, water use by 21.5% and waste by 52.8% in our factories, over 2008 baseline

Improved CO2 efficiency in transportation by 17.8%

60% of tomatoes in Kissan Ketchup are sourced sustainably

Unilever Sustainable Living Plan - Three big goals

How Will We Win

HUL Financial Performance

Corporate Governance

Financial year 2011-2012 - Results

Strength

HLL enjoys a formidable distribution network covering over 3400 distributors and 16 million outlets. This helps them maintain heavy volumes, and hence, filth shelves of most outlets.

The new sales organization named 'One HLL' brings "Household and Personal Care" and foods distribution networks together, thereby aligning all the units towards the common goal of achieving success.

HLL has been continuously able to grow at a rate more than growth rate for FMCG Sector, thereby reaffirming its future stronghold in Indian market.

Project Shakti - Rural India is spread across 627,000 villages and possesses a serious distribution challenge for FMCG Cos.

HLL has come up with a unique and successful initiative wherein the women from the rural sector market HLL products, and hence, are able to reach the same wavelength as of the common man in village.

Apart from product reach, the initiative also creates brand awareness amongst the lower strata of society. This has brought about phenomenal results.

Weakness

HLL's market dominance, originating from its extensive reach and strong brand presence, allowed it to raise the prices even as raw materials were getting cheaper.

Hence, though the volumes decreased, the margins grew, and company was able to earn more profits. But higher margins attracted competition in areas of operations.

HLL's strategy remained focused on creating power brands and earning higher margins. It was not left with any other option but to try cutting down the costs in order to protect volumes, if not increase it.

The key differentiators for an FMCG player are ability to call shots and pricing power, and HLL has shown weakness over both these factors.

HLL's weakness was its inability to transform its strategies at the right time. They continued with the same old strategy which helped them gain profits but was not genuine in this changed environment.

HLL's risk aversion and market myopia led to stagnation of business, andferocity of competition forced it into a defensive mode.

Opportunity

India is one of the world's largest producer of FMCG goods but its exports areminiscule as compared to production.

Though Indian Cos. have been going global, their focus is more towards Asian countries because of the similar preferences.

HLL is one of the top companies exporting FMCG goods from India. An expansion of horizons towards more and more countries would help HLL grow its consumer base and henceforth the revenues.

Opportunity in Food Sector - The advent of modern trade has opened up greater opportunities for HLL to diversify its brand and strength its food division. It could look at introducing products from its parents stable like margarines and could also look at expanding its Knorr range of products.

Well-placed to take advantage of future FMCG Growth - HLL reach out 80% of 207 million households in the country through various brands. It has a very well-defined product portfolio spread across many product categories.

Penetration levels for some major categories like skin-cream (22%), shampoo(38%), toothpaste (48%) and processed foods, continue to remain low offerings but great growthopportunities products

Threats

ITC has reduced its dependence on the cigarettes business - Contribution of the core business in revenues has come down from 87% in FY 99 to 70% in FY 05.

Over a period of five years, ITC has extended its presence into areas like foods, retailing, hotels, greetings, agro, paper, etc. These are businesses that can give it growth impetus in the long run.

With ITC gaining momentum in each of these businesses, it is turning into a consumer monolith, and hence, the greatest threat to HLL's Business. SSKI India has gone on to say, "We maintain Out performer on ITC with a price target of Rs.2200, while our Under performer call on HLL remains unaltered (price target of Rs. 160)."

Touching lives, improving life.

Two billion times a day, P&G brands touch the lives of peoplearound the world. P&G people work to make sure those brands liveup to their promise to make everyday life just a little bit better.

At P&G, we see big potential in the little moments of life.

Some Key Facts

• Founded in 1837 by William Proctor & James Gamble.• Headquartered in Cincinnati, Ohio, USA• Operations in 80 countries. • Brand available in more than 180 countries worldwide.• Established in India in 1964.• P&G operates under three entities in India - two listed

entities “Procter & Gamble Hygiene and Health Care Limited” and ‘Gillette India Limited’, as well as one 100% subsidiary of the parent company in the U.S. called ‘Procter & Gamble Home Products’.

• Vision:

Be, and be recognized as, the best consumer products and services company in the world.

• Mission:

We will provide branded products and services of superior quality and value that improve the lives of the world's consumers. As a result, consumers will reward us with leadership sales, profit, and value creation, allowing our people, our shareholders, and the communities in which we live and work to prosper."

Our Principles• We Show Respect for All Individuals

• The Interests of The Company and The Individual Are Inseparable

• We Are Strategically Focused in Our Work

• Innovation Is The Cornerstone of Our Success

• We Are Externally Focused

• We Value Personal Mastery

• We Seek to Be The Best

• Mutual Interdependency Is a Way of Life

P&G SWOT AnalysisStrengths Weakness• Product innovation• Offers multiple Products• Strong Brand Image• Strong Customer Loyalty• Diversified Business Structure

• Views Product performance only• Increased promotional spending to

keep health sales• Customer concentration

Opportunities Threats

• Going Green Eco Friendly• Emerging Markets• Selling directly to consumers• Better Product Experience

High levels of competition• Raw material and energy price increases• Potential Gillette integrationVicks banned in US marketSlow down in consumer spendingSubstitute products have cheaper price

Porter's 5 forces model

Threat of Competition Threat of New Entrants Threat of Substitutes Power of Suppliers Power of Buyers

Threat of Competition: HIGH

P&G’s market environment is highly competitive, with global, regional, and local competitors. In many of the markets and industry segments in which P&G sells its products, P&G competes against other branded products as well as retailers’ private-label brands.

There are many different options for consumer products. Consumers can choose not solely based on price but also brand strength and now there is even a push for environmentally friendly products. Although the options are abundant, the threat is still more moderate because of the brand equity in most products. Advertising and marketing are a large part of swaying consumers to purchase one product over another and the economies of scale that are presented with large companies (P&G) favor them in the advertising. Advertising also helps establish the brand loyalty.

Although the consumer has many options to choose from it all comes down to the value and quality of the product. Product quality and performance are important and P&G focuses on providing a quality offering to the consumer. Competition is even present with the non-branded products and with consumer spending and disposable income low, competition is increasing.

Threat of New Entrants: LOW-MODERATE

The threat of new entrants seems to be low overall but it depends on which business segment of Procter & Gamble the threat is coming from. It is a low probability for a new entrant to become as big and as well capitalized as P&G. The biggest barriers to entry are derived from research and development. Since competition is somewhat intense, a new entrant must enter the market with a product that is differentiated. Again, reputable companies with successful brand names have established relationships with retailers and have advantages when competing for shelf space. Nearly all the markets that P&G participates in are mature markets making it less attractive for new entrants.

Threat of Substitutes: LOW-MODERATE

The threat of substitutes is moderate and not high because most of the products that P&G sells are necessities. There is no substitute for laundry detergent besides different types of laundry detergent. The only true substitute is to not wash your clothes or wash them without laundry detergent. It is similar for shaving and using diapers. However, some of the business segments i.e. snacks and beauty do have substitute products. That is why the threat of substitutes is low to moderate.

Power of Suppliers: LOW

Procter & Gamble does not seem to have any reliance on specific suppliers and P&G forms joint ventures and partnerships for new products. The sheer size of P&G also helps it deal with suppliers in delivering the product because companies want to work with P&G.

Power of Buyers: MODERATE

The power of buyers is moderate because as mentioned, 15% of P&G’s sales are to Wal-Mart who is a very demanding buyer. There are two tiers of buyers, the retailers and the end consumer. The retailers have more power in dealing with P&G because they have large contracts for many stores (Wal-Mart stores, Albertsons). Yet, many of these retailers enjoy having P&G products because of the profit potential they bring. The end consumer has moderate to high power. Although they have the decision on choosing substitutes or the competition, the success of P&G’s brands and the brand loyalty they have created thus far have shown that the consumers enjoy its products.

Product Categories of P&GSegment CategoriesBeauty Antiperspirant and Deodorant, Cosmetics, Hair Care, Hair

Color, Hair Styling, Personal Cleansing, Prestige Products, Salon Professional, Skin Care

Grooming Blades and Razors, Electronic Hair Removal Devices, Shave Products, Home Small Appliances

Health Care Feminine Care, Gastrointestinal, Incontinence, Rapid Diagnostics, Respiratory, Toothbrush, Toothpaste, Water Filtration, Other Oral Care

Product Categories of P&G Cont.

Segment CategoriesFabric Care & Home Care Laundry Additives, Air Care, Batteries,

Dish Care, Fabric Enhancers, Laundry Detergents, Surface Care

Baby Care and Family Care Baby Wipes, Diapers, Paper Towels, Tissues, Toilet Paper

P&G Global Brands- More than 300 brands23 brands with annual sales of a billion dollars or more.

Actonel- A prescription medication to treat and prevent postmenopausal osteoporosis. Always/Whisper- Women around the world count on Always and Whisper feminine

protection. Ariel- Fabric cleaning and care at its best. Bounty- Spills happen. With the Quilted Quicker Picker-Upper paper towel, cleanup is

easy. Braun Electric Razor- Keeping millions of men well-shaved and well-groomed. Charmin- America’s favorite bathroom tissue. Crest- Oral care products creating beautiful, healthy smiles every day. Dawn- No matter what your dishwashing need, Dawn has a product that’s right for you. Downy/Lenor- Laundry feels soft and smells fresh because of Downy and Lenor. Duracell- You can depend on powerful, long-lasting Duracell batteries.

P&G Global Brands- More than 300 brands23 brands with annual sales of a billion dollars or more.

Folgers-Millions of Americans wake up with Folgers coffee every day. Gain- Laundry detergent that delights scent-seekers. Gillette Gel- Get a close shave, with comfort. Gillette MACH3 Razor- Battery-powered shaving. Push the button, feel the power. Head & Shoulders- Smooth, beautiful, flake-free hair. It’s not what you’d expect in a

dandruff shampoo. Head & Shoulders has 12 customized formulas – one just for you. Iams - Nutrition for every life stage and lifestyle of your pet. Olay- Designed for women of all ages to “love the skin they’re in.” Oral-B- Dental hygiene products used by dentists themselves. Pampers- Millions of babies experience the comfort and dryness of Pampers diapers. Pantene- Hair around the world shines because of Pantene hair care products. Pringles- Potato chips: Once you “pop,” the fun doesn’t stop! Tide- Tough cleaning power that gets out laundry stains. Wella- Hair care products used in salons and at home.

P&G India BrandsThough we strive hard to keep our homes and our cars clean and tidy, the results are rarely satisfactory. Odours that linger in our homes just before guests arrive, or a persistent stench that never leaves the car, not only adversely affect our mood, but also that of our guests. With this in mind, P&G experts have bottled the fragrance of freshness with the new Ambi Pur range for both homes and cars.

Introduced in 1991, Ariel was the first to bring the 'compact detergent' technology, the enzyme technology for safe and superior stain-removing power and the 'smart eyes' technology into India, with an aim of becoming India's best stain removal detergent. Ariel contains safe ingredients for all fabrics under recommended usage conditions for laundry. The Ariel product range in India includes different variants to meet your specific needs like Ariel OxyBlu, Ariel Oxyblu Ultramatic, Ariel Front O Mat, Ariel 2in1.

Duracell batteries have a history of providing dependable power when and where you need it the most. Our range of Batteries gives you the right power for all your device needs, providing up to 10x performance. The product range in India includes Duracell and Duracell Ultra. Duracell is available in sizes AAA, AA, C, D, and 9-volt while Duracell Ultra is available in sizes AA and AAA sizes.

P&G India Brands Cond…Oral-B continuously strives to work closely with the dental professionals and deliver high quality products, which make us leaders* in the $ 4.5 billion toothbrush category.In India, Oral-B has an innovative range of toothbrushes including Cross Action Pro-health 7 Benefits, CrossAction Pro-health Superior Clean and Advantage Sensitive toothbrush. Oral-B’S floss range includes Ultra Floss & Essential Floss.

As a result of constant research and innovation in understanding the needs of babies at various stages of development, Pampers Active Baby has been voted as the best diaper by Indian moms with the guarantee of superior dryness for an uninterrupted sleep of 12 hours. Pampers has an answer for all your needs with its innovative product range that includes Pampers, Pampers Active Baby, Pampers Active Baby Pants, all designed especially for providing a night of Golden Sleep for the baby.

The New Pantene Amino Pro-V Complex range of shampoo & conditioner comes in three variants suited for individual needs - Pantene Nourished Shine, Pantene Hair Fall Control & Pantene Smooth & Silky. Enriched with the goodness of pro-vitamins and three essential aminos, Pantene restores your hair with its lost beauty while making your hair ten times stronge.

P&G India Brands Cond…Gillette’s innovative razors and shaving products designed for the unique needs of men – helping them to look, feel and be their best every day. The razor range in India includes Gillette Vector, Gillette Mach3, Gillette Mach3 Turbo, Gillette Guard and Gillette Mach3 Turbo Sensitive and Gillette Fusion. The Shave Care range includes Gillette Fusion HydraGel, Gillette Series Sensitive Skin Foam, Gillette Series After Shave & Gillette Classic Shave Foam Sensitive Skin. Gillette Skincare Foaming Wash, Gillette Skincare Scrub, Gillette Skincare Facial Moisturizer with Aloe Vera, Gillette Skincare Facial Moisturizer with SPF and Gillette Skincare Lotion 100ml.

Since 1950, Head & Shoulders has been at the forefront of scalp and hair science, significantly advancing the treatment of dandruff and scalp problems. Along with professional advice and expert insight we have a wide range of products to care for your scalp and nurture your hair. Head & Shoulders is available in 8 variants in India including Men Hair Retain, Complete Care for Dry Scalp, Anti Hair fall, Smooth & Silky, Cool Menthol, Clean & Balanced, Thick & Long & Silky Black.

Help women look and feel beautiful and Challenge what’s possible with their skin. The Olay portfolio in India covers Base Moisturizer, Anti Ageing and Olay Whitening. The Anti Aging range includes Olay Regenerist, Olay Total Effects, and Olay Age Protect. The Olay Whitening range includes Olay White Radiance and Olay Natural White. The Base Moisturizer includes Olay Moisturizing Lotions and Creams.

P&G India Brands Cond…Tide is the World’s Oldest & Most Trusted Detergent brand and is the Market Leader in 23 Countries around the world. Launched in India in mid-2000, Tide provides ‘Outstanding Whiteness’ on white clothes & excellent cleaning on coloured clothes as well. Tide’s Fabric Whitening Agents clean clothes without bleaching or removing colour from a garment. The Tide range in India includes Tide (Detergent) and Tide (Bar with Whiteons). Tide Naturals was launched in India in December 2009. Packed with the benefits of lemon and chandan, it provides great cleaning while keeping the hands soft.

Vicks has long been invested in the science and research of respiratory health and through that dedication has developed a wide range of therapeutic products that offer effective relief for all the major signs and symptoms of the common cold, flu and sinus pain and pressure. The Vicks product range in India includes Vicks Cough drops, Vicks Vaporub, Vicks Inhaler, Vicks Vapocool, and Vicks Action 500 Extra.

Whisper understands that we're each very different, and offers a wide range of sanitary napkins to suit every girl or woman's needs. With the right menstrual pad, you could take the first step to having a Happy Period. Whisper has a wide range of products in India which includes Whisper Ultra Regular Wings,Whisper Ultra XL Wings, Whisper Ultra Heavy Flow Overnights Wings, Whisper Maxi Regular, Whisper Maxi XL Wings, Whisper Choice Regular, Whisper Choice Wings and Whisper Choice Ultra Wings.

P&G India Brands Cond…

Wella Kolestint with it deep, long lasting colour has mesmerized Indian women. No doubt, 96% Indian women say that it is the best hair colour they have ever used. Wella Kolestint packs are available in 12 vibrant shades in beauty stores across India. Each pack comes with a complete hair colour kit to give deep, long lasting colour.

P&G Strategies

Structure

• Organizational structure composed of three Global Business Units (GBUs) and a Global Operations group. The Global Operations group consists of the Market Development Organizations (MDOs) and Global Business Services (GBS).

• GBU’s are: Beauty, Health and Well-Being, Household Care.

Structure

• Global OperationsThe MDOs develop go-to-market plans at the local level, leveraging their understanding of the local consumer and customer. MDOs are organized along seven geographic regions. (See next page for map.) • Global Business ServicesGBS operates as the “back office” for the GBU and MDO organizations, providing world-class technology, processes and standard data tools to better understand the business and better serve consumers and customers. GBS personnel, or highly efficient and effective third-party partners, provide these services.