hul vs p&g

Download HUL vs P&G

Post on 08-May-2015




5 download

Embed Size (px)


HUL and P&G Marketing Management


  • 1.Contents1 About The Company2 India FMCG Market3 Our Strategy4 Financial Information, Share5 Corporate Governance

2. Indian FMCG sector 4th Largest sector in the economy with anestimated size of Rs.1,300 billion. The sector has shown an average annual growthof about 11% per annum over the last decade. Characteristics: Strong MNC Pressure, Wellestablished distribution network, intensecompetition between the organized andunorganized players, Easy availability of rawmaterial, cheaper labor cost 3. THE TOP 10 COMPANIES IN FMCG SECTOR 1. Hindustan Unilever Ltd. 2. ITC (Indian Tobacco Company) 3. Nestl India 4. GCMMF (AMUL) 5. Dabur India 6. Asian Paints (India) 7.Cadbury India 8. Britannia Industries 9. Procter & Gamble Hygiene and Health Care 10. Marico Industries 4. FMCG Market Opportunity13762 875828FY 10 E FY15P FY20PBase caseHigh case 5. Key growth drivers to the Industry are as follows:Robust growth in Indias GDPGrowing urbanizationEvolving consumer life styleIncreased income in rural areasSpending PatternChanging Profile and Mind Set of ConsumerGrowth of modern retail 6. Presented by: Sourabh, Laltendu & ShwetaDate: 11th Aug 2012MPE Batch IV 7. Introduction to Hindustan Unilever Limited 8. Mission And Vision We work to create a better future everyday.We help people feel good, look good and get more out of life withbrands and services that are good for them and good for others.We will inspire people to take small everyday actions that can addup to a big difference for the world.We will develop new ways of doing business that will allow us todouble the size of our company while reducing our environmentalimpact. 9. Indias Largest FMCG Company More than 75 yearsof experience in India Products touch thelives of 2 out of 3Indians everyday Direct distributionreach of > 2 Mn stores7 brands > Rs. 1000 crs; 13 brands > Rs. 500 crs No.1 and strong17 out of top 100 most trusted brands in India^ No.2 in more than 95% of the business 10. Portfolio straddling the pyramidFabric Cleaning Skin Cleansing Hair SkincareTooth Paste Soaps & Detergents: 48% Personal Products: 31% 11. Portfolio straddling the pyramidTeaCoffee Processed Foods Ice CreamsWaterBeverages: 12% Packaged Foods: 6%Others: 3% 12. Our StrategyStrategic framework Sustainable Living PlanOur GoalsConsistent GrowthCompetitive GrowthProfitable GrowthResponsible Growth 13. Winning PrinciplesOur first priority is to our consumers, then customers, employeesand communities. When we fulfill our responsibilities to themour shareholders will be rewarded. 14. How Will We Win 15. How Will We Win30 million people reached with Lifebuoy soap handwashingprogrammes in 2010-1130 million people have gained access to safe drinking water byusing Pureit in-home water purifier, since 2005Around 60%of our major food and beverage brands Brooke Bond,Bru, Knorr, Kissan and Kwality Walls comply with the HealthyChoice guidelinesReduced CO2 emissions by 14.7%, water use by 21.5% and wasteby 52.8% in our factories, over 2008 baselineImproved CO2 efficiency in transportation by 17.8%60% of tomatoes in Kissan Ketchup are sourced sustainably 16. Unilever Sustainable Living Plan - Three big goals 17. How Will We Win 18. HUL Financial Performance 19. Corporate Governance 20. Financial year 2011-2012 - Results 21. StrengthHLL enjoys a formidable distribution network covering over 3400 distributors and 16million outlets. This helps them maintain heavy volumes, and hence, filth shelves of mostoutlets.The new sales organization named One HLL brings "Household and Personal Care" andfoods distribution networks together, thereby aligning all the units towards the commongoal 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 seriousdistribution challenge for FMCG Cos.HLL has come up with a unique and successful initiative wherein the women from therural sector market HLL products, and hence, are able to reach the same wavelength as ofthe common man in village.Apart from product reach, the initiative also creates brand awareness amongst the lowerstrata of society. This has brought about phenomenal results. 22. WeaknessHLLs 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 earnmore profits. But higher margins attracted competition in areas of operations.HLLs strategy remained focused on creating power brands and earning higher margins. Itwas not left with any other option but to try cutting down the costs in order to protectvolumes, if not increase it.The key differentiators for an FMCG player are ability to call shots and pricing power, andHLL has shown weakness over both these factors.HLLs weakness was its inability to transform its strategies at the right time. Theycontinued with the same old strategy which helped them gain profits but was not genuinein this changed environment.HLLs risk aversion and market myopia led to stagnation of business, andferocity ofcompetition forced it into a defensive mode. 23. OpportunityIndia is one of the worlds largest producer of FMCG goods but its exports areminiscule ascompared to production.Though Indian Cos. have been going global, their focus is more towards Asian countriesbecause of the similar preferences.HLL is one of the top companies exporting FMCG goods from India. An expansion ofhorizons towards more and more countries would help HLL grow its consumer base andhenceforth the revenues.Opportunity in Food Sector - The advent of modern trade has opened up greateropportunities for HLL to diversify its brand and strength its food division. It could look atintroducing products from its parents stable like margarines and could also look atexpanding its Knorr range of products.Well-placed to take advantage of future FMCG Growth - HLL reach out 80% of 207 millionhouseholds in the country through various brands. It has a very well-defined productportfolio 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 greatgrowthopportunities products 24. ThreatsITC has reduced its dependence on the cigarettes business - Contributionof 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 likefoods, retailing, hotels, greetings, agro, paper, etc. These are businessesthat can give it growth impetus in the long run.With ITC gaining momentum in each of these businesses, it is turning intoa consumer monolith, and hence, the greatest threat to HLLs Business.SSKI India has gone on to say, "We maintain Out performer on ITC with aprice target of Rs.2200, while our Under performer call on HLL remainsunaltered (price target of Rs. 160)." 25. Two billion times a day, P&G brands touch thelives of peoplearound the world. P&G people work to makesure those brands liveup to their promise to make everyday life just alittle bit better.At P&G, we see big potential in the little moments of life.Touching lives, improving life. 26. 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 listedentities Procter & Gamble Hygiene and Health CareLimited and Gillette India Limited, as well as one100% subsidiary of the parent company in the U.S.called Procter & Gamble Home Products. 27. Vision:Be, and be recognized as, the best consumer productsand services company in the world. Mission:We will provide branded products and services ofsuperior quality and value that improve the lives of theworlds consumers. As a result, consumers will reward uswith leadership sales, profit, and value creation, allowingour people, our shareholders, and the communities inwhich we live and work to prosper." 28. 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 29. P&G SWOT AnalysisStrengthsWeakness Product innovation Views Product performance only Offers multiple Products Increased promotional spending to Strong Brand Image keep health sales Strong Customer Loyalty Customer concentration Diversified Business StructureOpportunitiesThreats Going Green Eco Friendly High levels of competition Emerging Markets Raw material and energy price Selling directly to consumersincreases Better Product Experience Potential Gillette integration Vicks banned in US market Slow down in consumer spending Substitute products have cheaper price 30. Porters 5 forces model Threat of Competition Threat of New Entrants Threat of Substitutes Power of Suppliers Power of Buyers 31. Threat of Competition: HIGH P&Gs market environment is highly competitive, with global, regional, and localcompetitors. In many of the markets and industry segments in which P&G sellsits products, P&G competes against other branded products as well as retailersprivate-label brands. There are many different options for consumer products. Consumers can choosenot solely based on price but also brand strength and now there is even a pushfor environmentally friendly products. Although the options are abundant, thethreat is still more moderate because of the brand equity in most products.Advertising and marketing are a large