MINOR PROJECTON

MARKETING MIX OF NESTLE

SUBMITTED IN PARTIAL FULLFILMENT OF THEAWARD OF THE

DEGREE OF BACHELOR OF BUSINESSADMINISTRATION 2010-13

UNDER THE GUIDANCE OF

SUBMITTED BY:

Maharaja Agrasen Institute of Management StudiesAffiliated to Guru Gobind Singh Indraprastha University,

Delhi PSP Area, Plot No.1, Sector 22, Rohini, Delhi-110086

CONTENTS

TABLE OF CONTENTS PAGE NO.

Student Declaration……………………………………………………..……..i

Certificate from Guide………………………………………………………...ii

Acknowledgement…………………………………………………………….iii

CHAPTER -1 INTRODUCTION

CHAPTER -2 RESEARCH OBJECTIVES

CHAPTER -3 RESEARCH METHODOLOGY

CHAPTER -4 SECONDARY DATA

CHAPTER -5 FINDINGS AND ANALYSIS

CHAPTER -6 SUGGESTIONS

CHAPTER -7 LIMITATION

BIBLIOGRAPHY

STUDENT UNDERTAKING

This is to certify that I have completed the Minor Project titled “To Study the Marketing mix of

NESTLE India” under the guidance of “TEACHRE’S NAME” in partial fulfillment of the

requirement for the degree of Bachelor of Business Administration at Maharaja Agrasen Institute

of Management Studies, Delhi. This is an original piece of work and I have not submitted it

earlier elsewhere.

Name of the Student

i

CERTIFICATE

Maharaja Agrasen Institute of Management Studies

Affiliated to Guru Gobind Singh Indraprastha University, Delhi PSP Area, Plot No.1, Sector 22,

Rohini, Delhi-110086

This is to certify that the minor project titled “To Study the Marketingmix of NESTLE India” is an academic work done By “student’s name” submitted in the partial

fulfillment of the requirement for the degree of Bachelor of Business Administration at Maharaja Agrasen Institute of Management Studies, Delhi, under my guidance and direction. To the best

of my knowledge and belief the data and information presented by her in the project has not been submitted earlier.

Name of the Faculty Guide

Ii

4

ACKNOWLEDGEMENT

The satisfaction and euphoria that accompany the successful completion of any task is

incomplete without the mention of people who made it possible. So I take this as a great

opportunity to pen down a few lines about the people to whom my acknowledgement is due.

It is with the deepest sense of gratitude that I wish to place on record my sincere thanks to

teacher , my project guide for providing me inspiration, encouragement, guidance, help and

valuable suggestions throughout the project.

I would also like to thank all my respondent for giving me their valuable time and information.

iii

5

CHAPTER 1

INTRODUCTION

6

Fig 1.1 Logo of Dabur India

1.1 Introduction of Dabur India Limited

The evolution of Dabur is quite interesting and its root takes us back to the 19th century where it

all started in Bengal by a visionary by name Dr. S.K Burman, a physician by profession. His

mission was to provide effective and affordable cure for ordinary people in far-flung villages.

With missionary zeal and fervour, Dr. Burman undertook the task of preparing natural cures for

the killer diseases of those days, like cholera, malaria and plague. Soon the news of his

medicines travelled, and he came to be known as the trusted 'Daktar' or Doctor who came up

with effective cures. And that is how his venture Dabur got its name - derived from the

Devanagri rendition of Daktar Burman. Dabur India Limited is the fourth largest Company in

India with interests in Health Care, Personal Care and Food Products. The name is formed by

joining the first half of Daktar and Burman. Dabur India Ltd. is the co-owner of the IPL team

Kings XI Punjab. Some of the features of Dabur India Ltd are:

Largest Herbal & Natural Portfolio

4000 Distributors in India

Retail Reach 2,500,000

5 Umbrella Brands

350+ products

4000 employees

15 Manufacturing Plants

7

8

1.1.1 Dabur India Ltd: Company Profile

The company was founded by Dr. S. K. Burman in 1884 as a small pharmacy in Calcutta (now

Kolkata), West Bengal, India, and is now led by his great-grandson V.C. Burman. Vatika Hair

Oil and Shampoo are the high growth brand. The company, through Dabur Pharma Ltd. does

toxicology tests and markets ayurvedic medicines in a scientific manner. The company has been

around as a corporate entity for the past 35 years having been brought to life in 1975. It is most

famous for Dabur Chyawanprash and Hajmola. Dabur operates in more than 5 countries and

distributes its products worldwide. The market penetration of Dabur is of about 1.5 million retail

outlets all over India with 47 C& F agents and more than 5000 distributors. 17 ultra-modern

manufacturing units spread around the globe. Products are marketed in over 60 countries.Wide

and deep market penetration with 50 C&F agents, more than 5000 distributors and over 2.8

million retail outlets all over India. Dabur has 13 ultra-modern manufacturing units.

Brand Dabur - In the 125th anniversary of its founding, as brand Dabur, the

management has gone ballistic through its annual report, over its achievements.

But the comparative dates for the purpose of rating its achievements are between the

base year 2000 and the latest completed accounting year. The company has been

around as a corporate entity for the past 35 years having been brought to life in 1975.

It may not be out of place to mention here that the company really got wings after the

promoter management put in place a very professional set up, which largely included

the exit of the family members from active management.

Largest home spun FMGC company - Dabur ltd is today anointed as India's largest

home spun FMCG Company. It’s only other visible challenger to this crown, Nirma,

lost the plot years ago. In between the expansion of its product portfolio, and the

launch of new manufacturing capacities both within and without the country, Dabur

has expanded its presence across 60 countries, with 19 manufacturing plants to boot.

(However, if the international business division could crank up a turnover of only Rs

6 bn, then the company must be quite stretched, figuratively speaking, as its footprint

extends to 60 countries around the globe. And, somehow, the group earned forex of

only Rs 1.2 bn). The company is also busy acquiring brands to rapidly build up both

size and competence. It acquired the Balsara brand in FY06 and the Fem Care brand

9

in FY10. So far so good.

Product line - Its current sizeable brand portfolio extends from Real juices, to Dabur

Chyavanprash, Dabur Honey and Glucose D, the Vatika, Uveda and Amla range, the

toothpaste brands Babool, Meswak and Dabur Red, and, Hajmola, Odomos, Gulabari,

and, several over the counter healthcare products. These products are grouped under 3

strategic business units. The business units being, the Consumer Care Division,

International Business Division, and, the Consumer Health Division. The three

divisions currently account for 68%, 17.6%, and 8% respectively, of consolidated

revenues. But for purposes of segmental results, the company has grouped its

operations under 4 heads. The operations are clubbed under Consumer Care,

Consumer Health, Foods, and others. Why it chooses to adopt so many convoluted

routes to reveal its true colors is difficult to comprehend.

The HUL saga - This frenetic pace of growth reminds one of a similar mindset that

enveloped the FMCG industry top gun, Hindustan Unilever, especially when it was

operating under the wings of Susim Mukul Datta and then Keki Dadiseth. The latter

went on record to state that the company was in the market to acquire brands. Today

HUL is in the market, and for the second time at that, buying back its shares in the

open market, in a desperate attempt to prop up its share price! One is not making any

inferences here, but merely making a point.

Its sales dissected - For sure, the group's consolidated sales have clocked the highest

percentile growth for the decade in FY10. Total revenues excluding other income

growing 43% over that of the preceding year to Rs 34.2 bn. The sales push has been

driven by growth in manufacturing, in traded sales, the value addition from its 11

subsidiaries, and in the contribution of its brand (Fem Care Pharmacy) acquired

during the year. The subsidiaries collectively rang up sales of Rs 8.4 bn, but after

deducting the inter-se transactions with the parent; their contribution to overall

revenue was Rs 5.4 bn or 16% of total revenues. But the profit margins generated by

the subsidiaries did not keep pace though. The subsidiaries are a colorful bunch—in

the manner of their spread of operations that is. The most interesting revelation is that

Dabur ltd has operations emanating out of Pakistan (which along with its operations

in Nepal is disclosed as 'operations in neighboring countries' in the directors' report).

10

Dabur ltd must rank as one of the few listed Indian companies brave enough to do

so, and win the approval of the two governments to do so too. This subsidiary is

called Asian Consumer care (Pak) Pvt. Ltd. But this operation accounts for nothing

really, ringing in sales of Rs 181 m and recording a loss before tax of Rs 23 m. It

even makes a tax provision on this book loss, so the loss after provision of tax is 28 m.

A few of the other subsidiaries also appear to making tax provisions on book losses.

The subsidiaries - Collectively, its biggest operations are out of the UAE, where it

has three entities flogging brand Dabur ltd. These three together also account for

close to 50% of total sales generated by all the subsidiaries. But just one of the three,

Dabur International, brings home the bacon with the other two having their bottom-

line seeped in red ink. Individually, it is the Nepalese subsidiary which contributes

the most, at 33% of all sales, but it does not make a dime for its troubles. The only

other company of significance is Dabur Egypt ringing in 10% of all subsidiary sales

and contributing healthily to profits too. The operations based out of the UK and the

USA is an embarrassment to say the least, and they appear to be around only for

cosmetic purposes, and merely to add to the number of units in operation. All the

subsidiaries barring H&B Stores appear to be under the umbrella control of Dabur

International. The parent has grand plans for H&B Stores, the retail wing, but for the

present, it is a gonner, what with losses exceeding its turnover. This company will

most definitely be sucking up a lot of money before it turns operationally profitable.

However, cumulatively its international operations have been a grand success going

by the accumulated profits of Rs 598 m that the subsidiaries have generated to date.

Reviving up for action - It is in the domestic sector that the company is really

revving up for action. It is expanding manufacturing capacity at a fast clip. So much

so that the fixed asset to turnover ratio is showing signs of strain on the one hand, and

on the other, the market for what it produces is not able to grow fast enough to cater

to the expanded facilities. The company also sees sufficient value in outsourcing

finished goods and then flogging it to customers. So much so that the re-sale of

bought out goods contributed to 17% of overall standalone sales, or Rs 4.9 bn in

rupee terms. It also brought in a gross margin of Rs 972 m or a percentile return of

20%. The 5 items of traded goods that are bought out and sold are also produced in

11

house, and then flogged in the markets. The biggest revenue earner is a Fruits,

Nectars and drinks, closely followed by an item called 'Others'. The most perplexing

part of manufactured sales (as is in traded sales) is that the biggest contributor to

income is an item called 'Others' with revenues of Rs 8 bn. No capacities or

production details of this omnibus item is available in the annual report. (In the

segmental results tabulation, the 'Others' category has revenues of only Rs 827 m and

brings in very low margins. It probably does not make any money at the net level.)

But of the 8 other items that are shown as being produced, the top dog is Hair Oils,

ringing in sales of Rs 5.7 bn, followed by toothpaste with sales of Rs 4 bn. Next in

line is Chyawanprash with sales of Rs 2.2 bn. All these 8 items have added

substantially to capacity and hence the average utilization of capacity ranges from a

high of 81% In the case of honey to a low of 25% for vegetable pastes. The capacity

utilization of the three biggies averaged between 33% and 42%.

A tightly run ship - In spite of the frantic expansion of capacities and seeking greater

market share, the company is a very tightly run ship alright. Though its investments in

its subsidiaries bring no dividend returns (it also makes do without any royalties), and

its expansion of gross block is yet to bloom, the company was able to manage its

working capital fund flow most admirably. With borrowings under strict control,

interest costs are also minimized. It is also one of the few companies that I have

studied which rolls large sums in the secondary markets and turns a large profit on the

purchase / sale of securities.

1.1.2 Dabur At-a-Glance

Dabur India Limited has marked its presence with significant achievements and today commands

a market leadership status. Our story of success is based on dedication to nature, corporate and

process hygiene, dynamic leadership and commitment to our partners and stakeholders. The

results of our policies and initiatives speak for themselves. Some of the results are :-

Leading consumer goods company in India with a turnover of Rs. 2834.11 Crore.

3 major Strategic Business Units (SBU) –

Consumer Care Division (CCD),

Consumer Health Division (CHD) and

International Business Division (IBD)

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3 Subsidiary Group companies –

Dabur International, Fem Care Pharma and newu and 8 step down subsidiaries:

Dabur Nepal Pvt Ltd (Nepal), Dabur Egypt Ltd (Egypt), Asian Consumer Care

(Bangladesh), Asian Consumer Care (Pakistan), African Consumer Care (Nigeria), Naturelle

LLC (Ras Al Khaimah-UAE), Weikfield International (UAE) and Jaquline Inc. (USA).

17 ultra-modern manufacturing units spread around the globe.

Products marketed in over 60 countries.

Wide and deep market penetration with 50 C&F agents, more than 5000 distributors and

over 2.8 million retail outlets all over India. Dabur has 13 ultra-modern manufacturing

units. In 2006, Dabur won the ICSI (Institute of Chartered Secretaries of India) National

Award for excellence in Corporate Governance.

1.1.3 History

Journey so far . . .

1884 The birth of Dabur

1972 The company shifts base to Delhi from Kolkata

1986 Registered as Public Limited Company

1994 Listed on the Bombay Stock Exchange

1998 Professional team inducted to run the company

2000 Crosses Rs 1000 Crore Turnover

2003 Pharmaceutical Business de-merged to focus on core FMCG

2004 Profit exceeds Rs.100 Crore

2006 Acquires Balara strengthening Oral care & provided entry into Home care segment

2007 Dabur Figures in Top 10 Great Places To Work

2008 Dabur ranked among 'Asia's best under a Billion' enterprises by Forbes

2009 Acquired Fem Care Pharma entering the mainstream Skin care segment

2010 Strong growth momentum continued in spite of general economic downturn

1.1.4 Founding thoughts

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"What is that life worth which cannot bring comfort to others"

The Doorstep 'Daktar' - The story of Dabur began with a small, but visionary endeavour by Dr.

S. K. Burman, a physician tucked away in Bengal. His mission was to provide effective and

affordable cure for ordinary people in far-flung villages. With missionary zeal and fervour, Dr.

Burman undertook the task of preparing natural cures for the killer diseases of those days, like

cholera, malaria and plague.Soon the news of his medicines traveled, and he came to be known

as the trusted 'Daktar' or Doctor who came up with effective cures. And that is how his venture

Dabur got its name - derived from the Devanagri rendition of Daktar Burman. Dr. Burman set up

Dabur in 1884 to produce and dispense Ayurvedic medicines. Reaching out to a wide mass of

people who had no access to proper treatment. Dr. S. K. Burman's commitment and ceaseless

efforts resulted in the company growing from a fledgling medicine manufacturer in a small

Calcutta house, to a household name that at once evokes trust and reliability.

1.1.5 Dabur group

With a basket including personal care, health care and food products, Dabur India Limited has

set up subsidiary Group Companies across the world that can manage its businesses more

efficiently. Given the vast range of products, sourcing, production and marketing have been

divested to the group companies that conduct their operations independently:

Fig 1.2 Dabur all over the world

1.1.6 Vision – "Dedicated to the health and well being of every household"

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Principles:

Ownership - This is our company. We accept personal responsibility, and accountability

to meet business needs.

Passion for Winning - We all are leaders in our area of responsibility, with a deep

commitment to deliver results. We are determined to be the best at doing what matters

most.

People Development- People are our most important asset. We add value through result

driven training, and we encourage & reward excellence.

Consumer Focus - We have superior understanding of consumer needs and develop

products to fulfill them better.

Team Work - We work together on the principle of mutual trust & transparency in a

boundary-less organisation. We are intellectually honest in advocating proposals,

including recognizing risks.

Innovation - Continuous innovation in products & processes is the basis of our success.

Integrity - We are committed to the achievement of business success with integrity. We

are honest with consumers, with business partners and with each other.

1.1.7 Top 3 brands of Dabur India Ltd:

Sno Brands Turnover Market Share Major Competitors

1 Dabur Amla Oil 300 crores

(approx.)

70 % Marico’s Shanti Amla, Bajaj Bramhi

Amla

2

-

-

Dabur Vatika

(Dabur Vatika

Oil)

110 crores 6.4 % Marico, Keo Karpin, HUL, Bajaj

(Dabur Vatika

Shampoo)

120 crores 6.8 % HUL, P&G

3 Dabur Real Juice 200 crores 56.9 % Pepsi Tropicana, Godrej Xs, NDDB

Safal, Parle Appy

1.1.8 Dabur’s Brand New Architecture

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(Umbrella (Naughty & (Mass ( Herbal beauty ( Health

Brand for tasty market, premium care

Juice & digestive) value for image) products)

Other foods money)

Aimed at up

Market consumer)

1.1.9 AWARDS & ACHIEVEMENTS (2008-09)

Dabur India Ltd placed in the

List of “20 Stocks you must

own”, for FMCG Prepared by

Forbes India

Dabur ranked 28th in ET-

Brand Equity Most Trusted

Brands 2009 list

NDTV profit

Business Leadership

awards 2008

Fig 1.3 Achievements

1.1.10 STRATEGIC BUSINESS UNITS

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Dabur India Ltd. is mainly divided into 3 major strategic business units as under:

Consumer Care Division

Consumer Health Division

International Business Division

Following is the share of each division in the market:-

CONSUMER CARE DIVISION (CCD)

CCD addresses consumer needs across the entire FMCG spectrum through four distinct business

portfolios of Personal Care, Health Care, Home Care & Foods.

Master brands:

Dabur - Ayurvedic healthcare products

Vatika - Premium hair care

Hajmola - Tasty digestives

Real - Fruit juices & beverages

Fem - Fairness bleaches & skin care products

Fig 1.4

9 Billion- Rupee brands: Dabur Amla, Dabur Chyawanprash, Vatika, Real, Dabur Red

Toothpaste, Dabur Lal Dant Manjan, Babool, Hajmola and Dabur Honey.

Market Size-33 Billion

Dabur Brands- 5.6 Billion

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Fig 1.6

Dabur Amla Hair Oil witnessed one of the strongest years reporting 20.4% growth during the

year driven by on ground activations and marketing support. Vatika Hair Oil had a resurgent

year with a growth of 12.2% during 2008 backed by a brand re-launch, new packaging and

communication.

Anmol Coconut Oil recorded a growth of 42.2% for 2008 with gains in key markets. Dabur

Mustard Amla Hair oil grew at 22.7% followed by re-staging under the Dabur brand.

Strategic positioning of Honey as food product, leading to market leadership (over 75%) in

branded honey market. Some of the achievements till date:

Dabur Chyawanprash the largest selling Ayurvedic medicine with over 65% market

share.

Vatika Shampoo has been the fastest selling shampoo brand in India for three years in a

row.

Hajmola tablets in command with 60% market share of digestive tablets category. About

2.5 crore Hajmola tablets are consumed in India every day.

Leader in herbal digestives with 90% market share.

SHAMPOOS

Market Size - 21 Billion

Dabur Brands - 1.3 Billion

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Fig1.7

Shampoos continued its strong performance recording 31.5% growth for 2008. Vatika

continues to be fastest growing shampoo brand in the country with volume growth of

37.5% for 2008 vs. 14.4% for the category as per AC Neilson April-March, 2008 update.

The Vatika range gained market share which went up to 6.8% vs. 5.7% in the previous

year.

DIGESTIVES

Market Size-5 Billion

Dabur Brands- 1.5 Billion

Fig 1.8

The Digestives category witnessed a growth of 11.8% during 2008 resulting from an

excellent growth of 31% witnessed in 2009.

New variants and innovative consumer activations added to the momentum. Pudin Hara

brand has been shifted to CHD for increased focus on distribution through chemists 2009

onwards.

FOODS

Market Size-5 Billion

Dabur Brands- 2.5 Billion

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Fig1.9

Foods category growth of 14.4% for 2010.

Brand growth in 2010

· Real Fruit Juices: 14.9

· Homemade: 19.6%

Real franchise growing at a healthy rate with Ad campaigns establishing its superiority

over competition.

Active Brand received a boost with the ‘No Added Sugar’ campaign.

CONSUMER HEALTH DIVISION (CHD)

CHD offers a range of classical Ayurvedic medicines and Ayurvedic OTC products that deliver

the age-old benefits of Ayurveda in modern ready-to-use formats. Has more than 300 products

sold through prescriptions as well as over the counter.

Major categories in traditional formulations include:

Asav Arishtas

Ras Rasayanas

Churnas

Medicated Oils

Proprietary Ayurvedic medicines developed by

Fig 1.10

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Dabur include:

- Nature Care

-Isabgol

-Madhuvaani

- Trifgol

Division also works for promotion of Ayurveda through organised community of

traditional practitioners and developing fresh batches of students. 

CHD STRUCTURE OTC (57%), Generics, Branded Products, ETHICAL (43%), Tonics,

Classical, Branded Ethical

Fig 1.11

CHD registered strong 19% growth during 2010

Investments in brand building and new OTC launch driving growth

Janma Ghunti, Hingoli, Sat Isabgol & Gripe

Water transferred to CHD from CCD for greater focus.

INTERNATIONAL BUSINESS DIVISION (IBD)

IBD caters to the health and personal care needs of customers across different international

markets, spanning the Middle East, North & West Africa, EU and the US 

with its brands Dabur & Vatika. 

Growing at a CAGR of 33% in the last 6 years and contributes to about 20% of total

sales.

Leveraging the 'Natural' preference among local consumers to increase share in personal

care categories

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Focus markets: GCC, Egypt, Nigeria, Bangladesh, Nepal,

US

High level of localization of manufacturing and sales &

marketing.

Fig 1.12

DABUR AYURVEDIC PRODUCTS

Dabur India Limited is the fourth largest FMCG (fast moving consumer goods) Company in

India with interests in Health care, Personal care and Food products. Building on a legacy of

quality and experience for over 100 years. Dabur's Ayurvedic Specialities Division has over 260

medicines for treating a range of ailments and body condition from common cold to chronic

paralysis.

Fig 1.13

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1.1.11 DABUR WORLDWIDE

Fig 1.14

Dabur's mission of popularising a natural lifestyle transcends national boundaries.

Today, there is growing global awareness on alternative medicine, nature-based and

holistic lifestyles and an interest in herbal products. Dabur has been in the forefront of

popularising this alternative way of life, marketing its products in more than 60 countries

all over the world. Over the years, Dabur's overseas business has successfully

transformed from being a small operation into a multi-location business spreading

through the Middle East, North Africa, West Africa and South Asia. 

1.1.12 Our Products Worldwide

We have spread ourselves wide and deep to be close to our overseas consumers. Our overseas

product portfolio is tailor-made to suit the needs and aspirations of our growing consumer base

in the international markets. 

Offices and representatives in Europe, UK, America and Africa

AA special herbal health care and personal care range successfully selling in markets

ranging from the Middle East, Far East, North Africa and Europe

Inroads into several European and American markets that have good potential due to

resurgence of the back-to-nature movement. Export of Active Pharmaceutical Ingredients

23

(APIs), manufactured under strict international quality benchmarks to Europe, Latin

America, Africa, and other Asian Countries.

Export of food and textile grade natural gums, extracted from traditional plant sources.

Partnerships & Production

Strategic partnerships with leading multinational food and health care companies to

introduce innovations in products and services. 

Six modern manufacturing facilities spread across South Asia, Middle East and Africa to

optimise production by utilising local resources and the most modern technology

available.

Strategic Indent

We intend to significantly accelerate profitable growth. To do this, we will:

Focus on growing our core brands across categories, reaching out to new geographies,

within and outside India, and improve operational efficiencies by leveraging technology.

Be the preferred company to meet the health and personal grooming needs of our target

consumers with safe, efficacious, natural solutions by synthesizing deep knowledge of

ayurvedic and herbs with modern science.

Provide our consumers with innovative products within easy reach.

Build a platform to enable Dabur to become a global ayurvedic leader.

Be a professionally managed employer of choice, attracting, developing and retaining

quality personnel.

Be responsible citizens with a commitment to environmental protection.

Provide superior returns, relative to our peer group, to our shareholders.

1.1.13 BRAND REJUVENATION

24

With youth forming a major population of India, Dabur decided to revamp its brand identity.

Dabur associated itself with Amitabh Bachchan, Vivek Oberoi, Rani Mukherjee and Virender

Sehwag for endorsements. New packaging and advertising campaign saw the sales of

Chyawanprash grow by 8.5 % in 2003-04.The year 2004-05 saw a whole new brand identity of

Dabur. The old Banyan tree was replaced with a new, fresh Banyan tree.

(THE OLD LOGO) (THE NEW LOGO - YOUNGER LOOKING BANYAN TREE)

Fig 1.16

The logo was changed to a tree with a younger look. The leaves suggesting growth, energy and

rejuvenation, twin colors reflecting perfect combination of stability and freshness, the trunk

represented three people raising their hands in joy, the broad trunk symbolized stability, multiple

branches were chosen to convey growth, and warmth and energy were displayed through the soft

orange color. ‘Celebrating Life’ was chosen as a new tag that completely summarized the whole

essence. The Chairman in his annual report message said, “If I were to summarize your

Company’s performance during the year under review (2004-2005), it would be ‘Pursuit of

Profitable Growth”.

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1.1.14 DABUR AND MARKETING MIX - Marketing Mix

Fig 1.17

PRODUCT

The product is the physical good or service offered to the consumer. The product is the most

visible element of the marketing mix. When a firm introduces a number of products over time

gradually, its offerings become many. That is, the firm becomes a multi product firm.Dabur's

diverse product range is today manufactured in 9 manufacturing facilities within India and 5

other worldwide. Dabur's Ayurvedic Specialties Division has over 260 medicines for treating a

range of ailments and body conditions-from common cold to chronic paralysis. Over the past two

years, Dabur's product portfolio has been systematically overhauled through re-launches and

brand extensions, even as fresh forays have been made into new categories such as hair, skin care

and home care. Recently two new products, disinfectant cleaner and kitchen cleaner under

Dazzle brand. All these launches of new kinds of products will help the company to capture the

potential market arising from the growing needs of the fast expanding market, especially the

aspiring and affluent Indian household categories. Dabur has a variety of products in key

26

consumer products categories like Hair Care, Oral Care, Health Care, Skin Care, and Home Care

& Foods.

PRICE:

• As Dabur had different sub-categories, it came out with variable pricing to reach out to each

and every target segment. (E.g. One- litre bottle of Real (juice) was priced at Rs.50)

• Selective Price Reduction to increase Demand (E.g. Dabur came out with Rs.1 sachet of Vatika

Shampoo/ Amla Hair Oil to increase market share). Cutting Price to stand out against

competition (E.g. Dabur joined the shampoo price war in Aug 2004 and slashed prices of its

Vatika shampoo.)

PLACE:

• Dabur constantly kept on increasing its geographic spread to increase its sales revenues

• Entered the South Indian Market

• Expanding in the International Market, Presence in over 50 countries.

• Subsidiaries established in Nepal, Nigeria, Bangladesh and Pakistan

• Focus areas: Asia Pacific, Middle East, West Africa, and North Africa, US

PROMOTION:

• Different brands have their own marketing and advertising team

• Dabur utilized the popularity of Indian films in the domestic and global markets to promote its

brands. In order to further deepen the brand's penetration in the rural pockets, the company also

announced the launch of special low-priced packs.

• Dabur heavily advertised its products through various contests

• Dabur Amla ‘Sunder aur Susheel pratiyogita’

• Dabur Amla 'Banke Dikhao Rani'- In an attempt to give better exposure to rural women, 'Dabur

Amla' is going to conduct 'Rural Beauty Pageant' across 52 distritcts in Madhya Pradesh, Uttar

Pradesh and Bihar, covering 2,000 villages.

• Dabur Gulabari ‘Miss U.P. Fresh Face 2009’ beauty contest.

POSITIONING:

Dabur through its diversified brands has tapped various target segments like the:

Youth

Health Conscious People

27

School Children

Mothers

Existing Old age group

28

Fig 1.18

1.2 Introduction of Hindustan Unilever Limited (HUL)

Hindustan Unilever Limited also called Hindustan Lever Limited (HLL) was established in 1933

as Lever Brothers India Limited. Hindustan Lever Limited (HLL) is India's largest Fast Moving

Consumer Goods Company, with a customer base of 2 out of every 3 Indian in the category of

Home & Personal Care Products and Foods & Beverages. The company has combined volumes

of about 4 million tonnes and sales of Rs.10, 000 crores. The Company has more than 400 brands

spanning 14 categories of home, with leadership in Home & Personal Care Products and Foods

& Beverages. HUL's brands, spread across 20 distinct consumer categories, touch the lives of

two out of three Indians. It operates in various business segments. Soaps and Detergents

include soaps, detergent bars, detergent powders, detergent liquids and scourers. Personal

Products include products in the categories of oral care, skin care, hair care, deodorants, talcum

powder, color cosmetics and Ayush services. Beverages include tea and coffee. Foods include

branded staples, (atta and salt), culinary products (tomato-based products, fruit-based products

and soups). Ice Creams include ice creams and frozen desserts. Others include chemicals and

water business. They endow the company with a scale of combined volumes of about 4

million tonnes and sales of Rs.13,718 crores. The mission that inspires HUL's over 15,000

employees is to "add vitality to life". With 35 Power Brands, HUL meets every day needs for

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

more out of life. It is a mission HUL shares with its parent company, HUL, which holds 52.10%

of the equity. A Fortune 500 transnational, HUL sells Foods and Home and Personal Care

brands in about 100 countries worldwide. Hindustan Unilever Ltd. (Bombay Stock Exchange:

500696) makes fast-moving consumer goods (FMCG) such as detergents, toiletries, and food

staples. The company has a distribution channel of 6.3 million outlets and 30 major Indian

brands. HUL recorded 20.02 year over year (yoy) growth in revenue at Rs 16660.38 crores

during the year ended Dec'08. Its Soaps and Detergents business was its largest contributor to

revenues with 46% of total revenues where as Personal Care products contributed the most

29

(46%) towards EBIT (Earnings before Income Tax). Increase in per capita income in urban, as

well as rural areas, of India has a positive effect on demand of consumer goods along with a shift

in demand towards high end lifestyle products. Long a provider of low cost consumer goods,

HUL has recently launched products in its high end segments.

1.2.1 Company Profile

HUL, the largest FMCG Company in India by revenues was formed by merging three

subsidiaries of Unilever in 1956. At present, Unilever Plc holds a 51.6% stake in the company.

HUL’s portfolio of products covers a wide spectrum including soaps, detergents, skin creams,

shampoos, toothpastes, tea, coffee and branded flour. HUL's brands, spread across 20 distinct

consumer categories. It owns 35 major Indian brands. HUL has consistently had the most

number of brands in the Top 10 list for the most trusted brands in India from 2004 to 2010. Surf

Excel, Pepsodent and Ponds in Home and Personal Care segment and Lipton, Kissan and Brooke

Bond in Foods and Beverages Segment are some of its top brands. It launched Ponds Age

Miracle,Vaseline range of products in skin care category and Axe-Dark Temptation in personal

care segment as part of their expansion into higher end products. It was formed in 1933 as Lever

Brothers India Limited and came into being in 1956 as Hindustan Lever Limited through a

merger of Lever Brothers, Hindustan Vanaspati Mfg. Co. Ltd. and United Traders Ltd.. It is

headquartered in Mumbai, India and has an employee strength of over 15,000 employees and

contributes for indirect employment of over 52,000 people. The company was renamed in late

June 2007 to 'Hindustan Unilever Limited'. HUL distribution covers over 1 million retails outlets

across India directly and its products are available in over 6.3 million outlets in India, i.e. nearly

80% of the retail outlets in India. It has 39 factories in the country. The Anglo-Dutch company

Unilever owns a majority stake (52%) in Hindustan Unilever Limited. HUL was one of the eight

Indian companies to be featured on the Forbes list of World's Most Reputed companies in 2007.

It has been recognized as a Golden Super Star Trading House by the Government of India.

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

a customer base of 2 out of every 3 Indian in the category of Home & Personal Care Products

and Foods & Beverages. The company has combined volumes of about 4 million tonnes and

sales of Rs.10, 000 crores. The Company has more than 400 brands spanning 14 categories of

home, with leadership in Home & Personal Care Products and Foods & Beverages. The company

has a distribution channel of 6.3 million outlets and 30 major Indian brands. It was formed in

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1933 as Lever Brothers India Limited and came into being in 1956 as Hindustan Lever Limited

through a merger of Lever Brothers, Hindustan Vanaspati Mfg. Co. Ltd. and United Traders Ltd.

It is headquartered in Mumbai, India and has an employee strength of over 15,000 employees

and contributes for indirect employment of over 52,000 people. In 2001, the company embarked

on an ambitious programme, Shakti. Through Shakti, HUL is creating micro-enterprise

opportunities for rural women, thereby improving their livelihood and the standard of living in

rural communities. HUL is also running a rural health programme, Lifebuoy Swasthya Chetana.

The programme endeavors to induce adoption of hygienic practices among rural Indians and

aims to bring down the incidence of diarrhea. Hindustan Unilever Ltd. is spread all over India at

different places shown below:

Fig 1.19

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1.2.2 Products and Brands of Hindustan Unilever Ltd

Food:

HUL is one of India’s leading food companies. Our passion for understanding what people want

and need from their food - and what they love about it - makes our brands a popular choice.

Fig 1.20

Brooke Bond 3 Roses - Playful banter, a little mischief, serious conversation…there’s no

time for young couples like the time spent sharing a cup of 3 Roses.

Annapurna - Partnering with the mom in nurturing her dreams, Annapurna Atta is aimed

at helping her provide wholesome tasty nutrition to her family.

Red Label - Brooke Bond Red Label… 'Chuskiyaan Zindagi ki'

Brooke Bond Taaza - Brooke Bond Taaza lifts me and unshackles my mind, allowing

me to see and realize possibilities.

Taj Mahal - Brooke Bond Taj Mahal is an exclusive selection of teas for the discerning

consumer.

Bru - Bru se hoti hain khushiyaan shuru…

Kissan - With Kissan, good food is loved not shoved!

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Knorr - Knorr helps families make meal times special, nutritious, tasty and healthy.

Kwality Wall’s - A good honest scoop of daily pleasure

Lipton - Lipton has a range of vitality teas that truly encompass the goodness of tea.

Home Care Brands

HUL has a diverse portfolio of brands offering home care solutions for millions of consumers

across India.

Fig 1.21

Active Wheel - Active Wheel de "Mehnat se Aazadi" Freedom from painful & tiring

laundry

Cif- Cif- the best cleaner to let you shine.

Comfort - The world’s largest fabric conditioner brand.

Domex - The sheer power of Domex bleach gives you the confidence you need,

eradicating all known germs.

Rin - Rin provides ‘best in class whiteness’ which is demonstrable.

Sunlight - Sunlight is a color care brand

Surf Excel - Giving your kids the freedom to get dirty and experience life, safe in the

knowledge that Surf Excel will remove those stains.

Vim - Created in 1885, the Vim brand is still innovating and using the magic of natural

ingredients to create unbeatable results.

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Personal care brands

Our personal care brands, including Axe, Dove, Lux, Pond's, Rexona and Sunsilk, are recognised

and love by consumers across India. They help consumers to look good and feel good and in turn

get more out of life.

Fig 1.22

Aviance - Aviance enables women actualize their unique potential through expert

customized beauty solutions.

Axe - Axe with Best Quality Fragrance

Lever Ayush Therapy - LEVER Ayush aims to help a new generation of Indians

rediscover everyday health and vitality through customized Ayurvedic solutions.

Breeze - Breeze, with the goodness of glycerin gives soft, fragrant and smooth skin.

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Clear - New Clear with Essential Oils, guarantees Zero dandruff and leaves your hair

feeling fabulous.

Clinic Plus - Clinic Plus makes hair inside strong, outside long!

Close up - Freshness that brings you Closer

Dove - Dove stands for real beauty. All around the world, Dove is making real women

feel more beautiful!

Fair & Lovely - More than 30 years ago, a unique brand was born. Wrapped within a

humble lavender tube, it went on to become the World’s No.1 Fairness cream.

Hamam - Holistic skin care experiences perfected over the ages to deliver healthy,

beautiful skin

Lakme - Lakme is an ally to the Indian Woman and inspires her to express her unique

beauty and sensuality. Thus, enabling her to realize the potency of her beauty

Lifebuoy - Lifebuoy is available in multiple variants in soaps and specialist formats such

as liquid hand wash, catering to the entire family.

Liril 2000 - Presenting nature's best kept secret-Tea tree oil, known for protection from

germs. Liril 2000 now with Tea tree oil gives you touchable clean skin. Now, you can

come close and stay closer

Lux – For soft and smooth skin!

Pears – Pears, the purest and most gentle way to skincare!

Pepsodent - Pepsodent India is committed to improve the overall Oral health of Indians.

Pond’s - Get the expert to look after your skin

Rexona - Rexona gives you 24 hr protection from sweat and body odour and therefore

the confidence to handle whatever the day has in store.

Sunsilk - Sunsilk has had a re-style!

Vaseline - Your skin is amazing. It deserves to be treated as such.

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1.2.3 Water Brand – Pureit

Fig 1.23

Pureit is the world’s most advanced in-home water purifier. Pureit, a breakthrough offering of

Hindustan Unilever (HUL), provides complete protection from all water-borne diseases,

unmatched convenience and affordability. Pureit’s unique Germ kill Battery technology kills all

harmful viruses and bacteria and removes parasites and pesticide impurities, giving you water

that is "as safe as boiled water". It assures your family 100% protection from all water-borne

diseases like jaundice, diarrhea, typhoid and cholera. What’s more, it doesn’t need gas,

electricity or continuous tap water supply. Pureit not only renders water micro-biologically safe,

but also makes the water clear, odourless and good-tasting. Pureit does not leave any residual

chlorine in the output water. The output water from Pureit meets stringent criteria for

microbiologically safe drinking water, from one of the toughest regulatory agencies in the USA,

EPA (Environmental Protection Agency). The performance of Pureit has also been tested by

leading scientific and medical institutions in India and abroad. This patented technological

breakthrough has been developed by HUL. This state-of the art engineering developed by a team

of over 100 Indian and international experts from HUL and Unilever Research Centre’s has

made Pureit possible at the consumer price of just Rs. 2000. Pureit runs with a unique ‘Germ kill

Battery Kit' that typically lasts for 1500 litres of water. The ‘Germ kill Battery Kit' is priced at

Rs.365. This means consumers will get 4 litres of water that is as safe as boiled water’ for just

one rupee, which works out to an extremely affordable 24 paise per litre. Pureit in-home

purification system uses a 4 stage purification process to deliver “as safe as boiled water”

without the use of electricity and pressurized tap water.

Pureit purifies the input drinking water in some stages, namely:

1. Micro - fiber Mesh - Removes visible dirt

2. Compact Carbon Trap - removes remaining dirt, harmful parasites & pesticide impurities

3. Germ kill Processor – uses programmed chlorine release chlorine technology and its stored

germ kill process targets and kills harmful virus and bacteria.

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4. Polisher – removes residual chlorine and all disinfectant by-products, giving clear odourless

and great tasting water

5. Battery Life Indicator - Ensures total safety because when the germ kill power is exhausted,

the indicator turns red, warning you to replace the battery

6. Advanced Auto-Switch off - In case, the battery is not changed when it turns fully red, as an

additional assurance of safety, the advanced Auto-Switch off will automatically switch-off the

flow of water.

1.2.4 ORGANIZATION CULTURE

Mission

HUL's mission is adding Vitality to life. We meet everyday needs for nutrition, hygiene, and

personal care with brands that help people feel good, look good and get more out of life.

Corporate Purpose

Our deep roots in local cultures and markets around the world give us our strong relationship

with consumers and are the foundation for our future growth. We will bring our wealth of

knowledge and international expertise to the service of local consumers - a truly multi-local

multinational. Our long-term success requires a total commitment to exceptional standards of

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

embrace new ideas and learn continuously. To succeed also requires, we believe, the highest

standards of corporate behavior towards everyone we work with, the communities we touch, and

the environment on which we have an impact.

Codes of Business Principles

HUL has earned a reputation for conducting its business with integrity and with respect for the

interests of those their activities can affect. This reputation is an asset, just as real as their people

and brands. HUL’s first priority is to be a successful business and that means investing

for growth and balancing short term and long term interests. It also means caring about their

consumers, employees and shareholders, their business partners and the world in which they live.

Standard of Conduct

HUL conducts their operation with honesty, integrity and openness, and with respect for

the human rights and interests of their employees. They similarly respect the legitimate interests

of those with whom they have relationships.

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Obeying the Law

HUL companies and their employees are required to comply with the laws and regulations of the

countries in which they operate.

Employees

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

and where everyone feels responsible for the performance and reputation of their company. They

recruit, employ and promote employees on the sole basis of the qualifications and abilities

needed for the work to be performed. They are committed to safe and healthy working conditions

for all employees. They do not use any form of forced, compulsory or child labor. They are

committed to working with employees to develop and enhance each individual's skills and

capabilities. They respect the dignity of the individual and the right of employees to freedom of

association. They maintain good communications with employees through company based

information and consultation procedures.

Consumers

HUL is committed to providing branded products and services which consistently offer value in

terms of price and quality, and which are safe for their intended use. Products and

services are accurately and properly labeled, advertised and communicated.

Shareholders

HUL conducts its operations in accordance with internationally accepted principles of

good corporate governance. They provide timely, regular and reliable information on their

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

Business Partners

HUL is committed to establishing mutually beneficial relations with their suppliers, customers

and business partners. In their business dealings they expect their business partners to adhere to

business principles consistent with their own.

Community Involvement

HUL strives to be a trusted corporate citizen and, as an integral part of society, to fulfill their

responsibilities to the societies and communities in which they operate.

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Public Activities

HUL companies are encouraged to promote and defend their legitimate business interests. HUL

co-operates with governments and other organizations, both directly and through bodies such as

trade associations, in the development of proposed legislation and other regulations which

may affect legitimate business interests. HUL neither supports political parties nor

contributes to the funds of groups whose activities are calculated to promote party interests.

The Environment

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

environmental impact and to the longer-term goal of developing a sustainable business. HUL

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 respect the concerns of their

consumers and of society. HUL works on the basis of sound science applying rigorous standards

of product safety.

Competition

HUL believes in vigorous yet fair competition and supports the development of

appropriate competition laws. HUL companies and employees will conduct their operations in

accordance with the principles of fair competition and all applicable regulations.

Business Integrity

HUL does not give or receive whether directly or indirectly bribes or other improper advantages

for business or financial gain. No employee may offer give or receive any gift or payment which

is, or may be construed as being, a bribe. Any demand for, or offer of, a bribe are rejected

immediately and reported to management. HUL accounting records and supporting documents

are accurately described and reflect the nature of the underlying transactions. No undisclosed or

unrecorded account, fund or asset are established or maintained.

Conflicts of Interests

All HUL employees are expected to avoid personal activities and financial interests which could

conflict with their responsibilities to the company. HUL employees must not seek gain for

39

themselves or others through misuse of their positions. This is our road to sustainable, profitable

growth, creating long- term value for our shareholders, our people, and our business partners.

1.2.5 BUSINESS SEGMENTS

Soaps and Detergents: This segment includes Laundry and Personal Wash products like

soaps, detergent bars, detergent powders, detergent liquids, scourers, etc.

Personal Care Products: This business which comprises mainly skin care, hair care and

oral care is the most profitable segment for HUL.

Beverages: HUL's beverages business is operated through the Brooke Bond and Lipton

brands for packet tea and Bru brand for coffee. With the aggressive relaunch of Brooke

Bond, Taj Mahal and Taaza, the company has been able to arrest the decline in its market

share.

Foods: In spite of having one of the best distribution networks (coverage of 6.3 mn

outlets) in the country, the food business has never constituted a big part of revenues.

That’s why this is the current focus area for the company. Presence in the foods category

is mainly through soup mix, Chinese meal maker, jams, ketchups and salts. HUL is

clearly keeping a low profile in the staples category, which is low margin business. Foods

margin dipped partly due to launch related costs for Amaze brain foods.

Ice Cream: This segment includes include Ice Creams and Frozen Desserts. Kwality

Wall's, launched in 1995, is the company's master brand for ice cream. It has launched

Moo brand that boosts children’s calcium levels.

Exports: Exports include sales of Marine Products, Castor, etc. as well as sales of soaps

and detergents, personal products, beverages and foods etc. by the Exports Division.

Exports are the lowest-margin business for the company. It has already exited the low-

margin shrimps and castor business.

Others: This section includes Chemicals, Water purifiers, Agri seeds, Property

Development, Water business, Ayush services etc.

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1.2.6 Market Share of Hindustan Unilever Ltd. Brands

PARTICULARS KEY BRANDS MARKET SHARE (in cr.) MARKET SHARE RANK

FABRIC WASH Surf Excel, Wheel 8988 37.5% 1

PERSONAL WASH Dove, Lux ,Lifebuoy 6632 54.3% 1

DISH WASH - - 57.3% 1

SKIN Ponds 2792 54.5% 1

SHAMPOO Sunsilk , Clinic Plus 2168 47.8% 1

TALCUM POWDER - - 59.7% 1

PACKET TEA Red label 4452 22.7% 1

COFFEE Bru 708 44.0% 1

JAMS - - 67.5% 1

TOOTHPASTE Pepsodent , Close up 2764 29.5% 2

KETCHUP - - 28.1% 2

Fig 1.24

1.2.7 Hindustan Unilever Ltd. Market Segmentation

Market place for any product is comprised of many different segments of consumers, each with

different needs and wants. Markets segmentation can be defined in a number of ways such as:

Demographic variables (e.g. Consumers are groups, gender, material states income etc), the

lifestyle of consumers (i.e. their interests and activities) the benefits which consumers look for in

a product or on the occasions when the product might be consumed. Hindustan Unilever (Ltd)

takes into account all these factors when producing a range of products. It targets different

segments within the market, such as the:

Break segment - products which are normally consumed as a snatched break and often

with tea and coffee.

Impulse segment - these products are often purchase on impulse, used these and then.

They include product such as close up.

Take home segment – this describes product that are normally purchased in

supermarkets, taken home consumed at a later stage.

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1.2.8 MARKETING MIX

PRODUCT

Satisfaction suffices. But delight dazzles the average company will compete for customer by

conforming to her expectation consistently. But the winner will surpass them by constantly

exceeding her expectation, delivering to her door step additional benefits which she would never

have imagined possible. Hindustan Unilever Ltd (HUL) offers such product.

The wide variety products offered by the company include:

Bathing soaps: Lux, Lifebuoy, Liril, Hamam, Breeze, Dove, Pears and Rexona

Laundry items: Surf Excel, Rin and Wheel

Skin care: Fair & Lovely, Pond's and Vaseline

Hair care: Sunsilk and Clinic

Oral care: Pepsodent and Close up

Deodorants: Axe and Rexona

Colour cosmetics: Lakme

Ayurvedic: Ayush

Tea: Brooke Bond and Lipton

Coffee: Bru

Foods: Kissan, Annapurna and Knorr

Ice cream: Kwality Wall's

Fig 1.25

PRICING

Make no mistake. Second P of marketing is not another name for blindly lowering prices and

relying on this strategy alone to increase sales dramatically. The strategy used by Hindustan

Unilever Ltd (HUL) is for matching the value that customer pays to buy the product with the

expectation they have about what the production is worth to them. Hindustan Unilever Ltd(HUL)

has launched various products which cater to all customer segments.So every customer

segmenthas different price expectation from the product. Therefore maximizing the returns

involves identifying right price level for each segment, and then progressively moving through

them.

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PLACE

Hindustan Unilever Ltd (HUL) distribution network has expanded. Beside use of improved

logistics, Hindustan Unilever Ltd (HUL) is also attempting to improve the distribution quality.

To address the issue of product stability, it has installed visi colors at several outlets. This helps

in maintaining consumption in summer when sales usually drops due to the fact that the heal

effects product quality and thereby off takes. Hindustan Unilever Ltd (HUL) distribution

network has expanded. Beside use of improved logistics, Hindustan Unilever Ltd (HUL) is also

attempting to improve the distribution quality. To address the issue of product stability, it has

installed visi colors at several outlets. This helps in maintaining consumption in summer when

sales usually drops due to the fact that the heal effects product quality and thereby off takes.

PROMOTION

If an advertisement is to communicate effectively, the receiver must at least half want it to, and

be prepared to take step toward the sender. Effective advertising is rarely hectoring or loudly

explicit. It often both attracts and generates arm feelings. More often than not, a successful

campaign has a stronger element of the unexpected a quality that good advertising shares with

much worthwhile literature.

POSITIONING

Positioning is simply concentrating on an idea or even a word defines that company in the mind

of the consumer. It is more efficient to market one successful concept to one large group of

people than 50 product or service ideas to 50 separate group« repositioning is a must when

customer attitude have changed and product have strayed away from the consumer's long

standing perception of them.

Positioning of individual product:

1) Lifebuoy is one of Unilever's oldest brands with more than a hundred-year history.

Lifebuoy has become more than just a red bar of soap today the brand provides hygiene

and health solutions for families.

2) Fair & Lovely, a hot-selling fairness cream which promises a lighter skin tone for many

of India's complexion-conscious consumers.

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CHAPTER 2:

METHODOLOGY

44

2.1 RESEARCH DESIGN

2.1.1 RESEARCH METHODOLOGY

Achieving accuracy in any research requires a deep study regarding the subject. As the prime

objective of the project is to compare Dabur India with the existing competitor Hindustan

Unilever in the market. The research methodology adopted is basically based on secondary data.

2.1.2 TYPE OF RESEARCH METHODLOGY

EXPLORATORY:

Type of research carried out was exploratory in nature; the objective of such research is to

compare the products of Dabur India vs Hindustan Unilever and check the need, availability of

different products in the market. For this purpose the information proved useful for giving right s

2.1.3 DATA COLLECTION METHOD

SECONDARY DATA:

Secondary data refers to the data that has been already collected. Secondary data is data that has

already been collected and collated by somebody for some reason other than the current study. It

can be used to get a new perspective on the current study, to supplement or compare the work or to

use parts of it, as another study may prove costly and time consuming.

The secondary data, which has been used to carry out this study, are as follow:

Books, newspapers

Company’s internet site

Other relevant studies material and websites.

2.1.4 METHOD OF COLLECTION:

Analysis is done for gathering secondary data included internet search, using online resources to

gather data for research purposes. This method is not usually very reliable and requires

appropriate citation and critical analysis for findings. News papers and other similar periodicals

are also used.

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CHAPTER 3

FINDINGS AND ANALYSIS

46

3.1 COMPARISON OF DABUR INDIA LTD. vs. HINDUSTAN UNILEVER LTD.

DABUR INDIA LTD. HINDUSTAN UNILEVER LTD.

PRODUCT LINE

A) HOME AND PERSONAL CARE:

1) Personal wash, Herbal and medicated soaps,

2) Skin care, Gulabari rose, cold cream, Dabur

Lal Tel, Uveda, Fem

4) Hair care, Anmol Coconut Oil, Dabur Amla

Oil, Vatika Hair Oil, Vatika Shampoos

5) Oral care, Dabur Babool, Dabur Meswak,

Dabur Red toothpaste

6) Ayurvedic and Health care, Glucose, Honey,

Chyawanprash,

7) Homecare, Odomos, Odonil, Sanifresh

B) FOODS

1) Real juice,

2) Hajmola,

3) Homemade,

4) Activ,

5) Burrst,

6) Pudin hara,

7) Janam ghunti,

8) Honey

PRODUCT LINE

A) HOME AND PERSONAL CARE:

1) Personal wash, Lux, Breeze, Lifebuoy, Dove,

Liril, Pears, Rexona

2) Skin Care, Surf Excel, Fair and lovely, Rin,

Pond’s, Wheel, Aviance

4) Hair care

5) Oral care, Sunsilk naturals, Pepsodent, Clinic,

Close up

6) Deodrants, Colour, Cosmetics, Axe, Lakme,

Rexona

8) Ayurvedic, Personal and health care

B) FOODS

1) Tea

2) Coffee

3) Foods

4) Ice cream

5) Brooke Bond

6) Brooke Bond Bru

7) Kissan

8) Kwality walls

9) Lipton

10) Knor

11) Annapurna

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C) WATER PURIFIER

1) Pureit

Fig 1.28

3.2 Dabur, HUL to stir up milk beverage market- Foods sector:

Dabur India, which launched its milk beverage mix brand Chyawan Junior four months ago, is

planning a national-level rollout for it by September. According to the company, Chyawan

Junior received good response in Maharashtra and West Bengal, where it is being test-marketed.

It has already gained 1 per cent market share in these states. Another company to foray into this

market is fast-moving consumer goods heavyweight Hindustan Unilever with its Kissan Amaze

brain food range, which is a milk beverage mix product, biscuits and snacks. The company is

test-marketing its product in Tamil Nadu and Karnataka. The Rs 1,500-crore milk beverage mix

market is dominated by Glaxo Smith Consumer’s Horlicks and Boost, Cadbury’s Bournvita and

Heinz’ Complan. The two new entrants — HUL and Dabur - however, have unique propositions.

They will differentiate themselves through new formulations such as the promise of boosting

children’s intelligence. K K Rajesh, executive vice-president Dabur India, said: “The USP of

Chyawan Junior is that it is an ayurveda-based malted food drink. It contains herbs which

improve immunity and stamina, while preventing cough and cold. It also contains vital herbal

ingredients required for a healthy-living.” “Amaze offers a nutritious option to the mothers who

find it difficult to feed their children with vitamin-rich foods. It is an alternative to unhealthy

snacks which children tend to get attracted,” said Siddhartha Singh, category head, processed

foods, HUL. Experts said in the children’s food category the target consumer is a child but the

buying decision is often made by the mother. Hence, it is important to connect both the child and

the mother. Hence, Dabur may promote its product with the chocolate taste, which kids crave

for, and the goodness of Chyawanprash, which parent’s desire. GSK Consumer, On the other

hand, has decided to target the mother with its Horlicks-variant for women named Women

Horlicks. This makes it difficult for HUL and Dabur to break into the market. However, it would

be crucial for both the companies to succeed in this space as both claim to have invested heavily

in the research and development. While Hindustan Unilever Ltd has witnessed the highest loss in

market share, Procter & Gamble gained the most among the top ten companies which include,

apart from them, Godrej Consumer Products, Nestle, Marico, ITC, Dabur, Colgate, Britannia,

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and L’Oreal. Analysts said Dabur’s shampoo brands have eaten into HUL’s spoils, while ITC

gained in toilet soaps. HUL continued to lose market share in all categories except coffee. In

noodles, Nestle remains top of the heap with the ubiquitous Maggie offerings. HUL and

GlaxoSmithKline Consumer are yet to launch their noodle brands nationally, though they have

rolled it out in various pockets. “The recent price cuts in the detergents segment by HUL and

P&G means consumers are paying less for their products,” an analyst with another domestic

brokerage said. HUL has reduced toilet soap prices, Marico has cut hair oil prices and Dabur has

gone for discounting (through free sachets and more quantity). “Sales in the personal care

category, therefore, has been impacted,” the analyst said. As a result, in January-February, the

FMCG industry saw a sales growth of 10.5% year on year compared to 12% in calendar 2010.

The top 10 players have grown by 5% in the period compared with 7.2% in 2010. A Dabur

spokesperson said the company’s skincare business (Gulabari) was growing at 40% annually,

while shampoo and hair oil categories were showing growths of 30% and 15%, respectively.

3.3 Dabur vs. HUL: Which FMCG co performed better?

Dabur, the segments of consumer care and health have seen growth upwards of 20% or 15%.

HUL’s segments haven’t done so well because the personal product segment group is just 2% in

this quarter. For mid-tier companies like Dabur with a lower base, and a lower scale of

operations, it is a bit easier to adjust to the market, to adjust to the dynamics of the FMCG sector.

With HUL having to cater to a larger scale, there would generally be a lag effect in the kind of

performance they report. Hindustan Unilever’s (HUL) numbers that came in yesterday saw a

muted topline at 5%. The margin expansion was higher than the expected 320 basis points. The

profit growth for the company was also much higher than expected. The topline performance has

been a disappointment. However, there is better than expected performance on the bottomline

and the margin front. There is an alarm bell kind of a situation where one be tempted to change

their strategy to boost volumes. Mr. Harish Manwani, said that the company was not looking at

any change in strategy in terms of volume growth. He said they continued to focus on value, and

on their pricing and improving their margins. “We will not give way to margins to boost

volumes. That is the kind of strategy HUL is essentially looking at,” he said.

Dabur, the segments of consumer care and health have seen growth upwards of 20% or 15%.

HUL’s segments haven’t done so well because the personal product segment group is just 2% in

this quarter. For mid-tier companies like Dabur with a lower base, and a lower scale of

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operations, it is a bit easier to adjust to the market, to adjust to the dynamics of the FMCG sector.

With HUL having to cater to a larger scale, there would generally be a lag effect in the kind of

performance they report.

3.4 HUL continues to suffer from poor sales and profit growth

Despite endless restructuring of its business portfolios and continuous high-profile change of its

top management, Hindustan Unilever is unable to generate any traction on its sales and profits.

For the September quarter, HUL’s revenues were up by 4% while operating profit was

completely flat. Compare this with the performance of Dabur India whose revenues were up by

15% while Emami Group’s sales were up by 27%. HUL’s revenue growth has been stagnant for

many quarters now. Over the past three quarters, average top line growth has ranged between

4%-6% which does not even cover inflation. Revenue growth has been continuously declining

from a high of 20% it recorded in September 2008. The recent September quarter has been

especially good for fast-moving consumer goods (FMCG) companies mainly because raw

material prices were sharply down in that quarter. For instance, Emami’s raw material cost was

down by 35% and even Godrej Consumer Products Limited’s (GCPL’s) raw material cost was

down by 15%. Both these companies took advantage of lower cost of raw materials and steady

demand for their products. Emami’s operating profit was up by as much as 65%. On the other

hand, even though HUL’s raw material cost was down by 9%, it had no profit growth. Dabur’s

raw material cost has gone up by 3% and yet it has reported a sales growth of 15% compared to

the same quarter last year. What is remarkable about HUL is that it had to spend 41% more on

advertising compared to same quarter last year to get only a 4% growth in turnover. Another key

issue with HUL is that it would maintain its high operating profit margin (39% in September 09)

rather than creating growth in sales and operating profit. Interestingly, Dabur also enjoys an

OPM of 36% which is as high as HUL but Dabur is able to increase its operating profit and

revenues virtually every quarter. In the September quarter Dabur’s operating profit jumped by

21% compared to the same quarter last year.

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3.5 DATA ANALYSIS & INTERPRETATION

Fig 1.29

Amit Burman, vice chairman of Dabur India said the company is investing in brand building and

advertising plans to promote its Fem Care and Gulabari range in FY 10. “We are in the process

of integrating our acquired brand Fem Care with our personal care range. Our core strategy is to

promote our Fem care and Gulabari brands this year,” he added. On the subject of growth,

Sandeep Kaul, chief executive, personal care products business, ITC, said, “We are in the

process of developing new categories as well as new products in existing categories. ‘Consumer

insight based innovation’ will be the key fulcrum driving our consumer engagement strategy,”

explained Kaul. ITC personal care products include Fiama Di Wills, Vivel range of hair care

products and soaps and Superia. According to Kaul, ITC will invest in all aspects of brand

building to promote personal care brands. Given the portfolio, marketing to consumers in rural

markets as well as urban markets is a key strategy driver,” he said.

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Meanwhile, Hindustan Unilever Ltd (HUL) is promoting its flagship brands in shampoos and

skin care products. To do so HUL has recently launched a high-voltage television campaign to

promote its new shampoo variant ‘Clear’. Created by Lowe India, the television campaign

3.6 Dabur Ltd takes on Hindustan Unilever, Production & Growth:

In a bid to expand its shampoo brand Vatika, especially in the anti-dandruff category, fast

moving consumer goods (FMCG) company Dabur India has upped the ante by introducing new

variants with specific benefits. The move will put the company in the same league as other big-

ticket multinational players in the market, such as Hindustan Unilever (HUL) and P&G, which

already offer different variants of their anti-dandruff shampoo brands. Competition is tightening

between local and global players in the Rs 4500 crore branded oral care sector. Even as

Hindustan Unilever Ltd (HUL) is drawing up ‘strategic plans’ to drive the performances of its

oral care brands in 2009, Dabur India Ltd is expanding its ‘manufacturing capacity and

distribution network’ to pump up volumes. Colgate-Palmolive India is sharpening its focus on

‘consumer promotions and brand building’. “Indian oral care majors are pumping in a breath of

freshness in marketing strategies. Despite the economic recession, this sector is expected to clock

in 20% growth in 2009," said an analyst based in Mumbai. Currently, Colgate-Palmolive leads

the pack with a 52% volume market share and HUL’s share stands at 28% by value. On the

company’s strategy, Sunil Duggal, chief executive officer of Dabur India Ltd said, “We are

expanding the manufacturing capacity at our plant in Himachal Pradesh and are installing new

machines there. Also, we are extending our distribution network to target wider audience.”

Incidentally, Dabur is gearing up to launch a new variant of its flagship brand Babool in August

this year. “We are investing in all our brands to woo consumers. To announce the new variant,

we will be launching a new ad campaign next month”, he added. On the other side of the

spectrum, HUL has recently re-launched its brand Pepsodent Germi check plus with new

formulations. “In the branded oral category, Close-Up performed very well led by its re-launch

last year. Pepsodent underperformed and appropriate actions are being taken to drive the

performance of the brand in 2010.” As part of its ‘cause-related’ marketing strategy, Colgate-

Palmolive has just launched an aggressive consumer promotion ‘learn and earn’ across the

country. To participate in this promotion, consumers have to learn the five simple oral care tips

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which are mentioned on the 200 gm and 100 gm packs of Colgate dental cream. Last week,

Colgate–Palmolive reported its net sales for the quarter ended June 30, 2009 at Rs 468 crore, an

increase of 15% over the same period of the previous year. “During the quarter ended June 30,

2009, the company continued to support its brand and equity building activities with advertising

and sales promotion expenditure at Rs. 58.3 crore,” said a company spokesperson. With diverse

marketing strategies, dental care majors are now fighting tooth and nail to gain market share in

the overcrowded category.

Powerful brands: HUL has a presence in all categories in the FMCG sector, something

no other company can boast about. It is the market leader or holds the 2nd podium in

almost all segments it operates in like personal care, household care, beverages, foods

and ice creams. HUL at one time had a brand portfolio in the range of 110 brands. It then

planned to prune its brand portfolio to 35, known as 'Power Brands’. It has extremely

strong brands like Lux, Surf excel, Lifebuoy, Closeup, Bru, Axe etc across its business

segments. Thus, with such strong franchises, HUL offers one of the best exposures to

increasing consumption trends in India. These 35 key brands accounted for around 100%

of its profits and have always been the main growth drivers in their respective segments

and will continue in the future. Further, the parent's portfolio has many other renowned

brands, which have not yet come to India and will launch them at the appropriate time.

Consequently, its product portfolio across price points is a key strategic advantage for

HUL. It is the only consumer company in India that is as well geared to serve the entry-

level customers, as it is to serve the top end of the market.

Markets reach: HUL's distribution network is a benchmark for its peers, given its

penetration levels. 70% of India's population lives in 638,000 villages, creating a huge

market for FMCG companies. HUL has set up a strong and efficient distribution network,

which includes 6.3 m retail outlets and 2,700 stockiest. The markets reach spans across

50,000 cities and villages, the largest amongst its competitors. It reaches 80% of the

households. Further, HUL is set to benefit from the expansion of the modern retail on

account of its strong portfolio across price points. Though currently modern trade

channels account only for 5% of total market, HUL expects it to touch 10% by 2011 and

15% by 2015. In fact, HUL’s Modern Trade (MT) shares are higher than its General

Trade (GT) shares in many categories. The company’s presence across all channel of

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distribution right from family grocer to rural to modern trade makes it a strong player as

increased penetration and reach plays a very important role.

Restructuring and new segments: HUL in recent times has been restructuring its

business. It is exiting from the non-core businesses to concentrate on its main portfolio. It

sold off its non-store home delivery retail business Sangam to Wadhwan Foods, as it was

not coming up to the expectations. It even merged Modern Food Industries (MFIL), a

100% subsidiary of the company with itself. With strong brand equity and a countrywide

distribution network, Modern Food would provide strong synergies with the foods

business.

Strong balance sheet: HUL is one of the better-placed companies on this front as a

study of its historical financial gearing reveals that the company’s debt to equity ratio has

always remained well below alarming levels. Such a long period of prudent capital

structure lends comfort with regards to the company’s future leverage ratios

3.7 CATEGORY WISE SALE GROWTH OF FMCG SECTOR OF HUL IN INDIA:

CATEGORY %AGE

Soaps & Detergents 19.3

Personal Products 22.4

Ice Cream 15.7

Processed Foods 13.7

Beverages 13.6

Others 19.4

Fig 1.31 Source: www.google.com

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Below is a table representing the growth in products of Dabur in different divisions:

DIFFERENT DIVISIONS GROWTH (%) COMMENTS

Consumer Care Division 17.2

Hair Care 22.0 Hair oils recorded a growth of 15.2%, led by Anmol Coconut Oil (grew 34.8%) and Dabur Amla Oil (grew 13.5%). Vatika Hair Oil registered 15.7% growth; Shampoo category performed well, boosted by Vatika Shampoos (47% growth). Dabur’s brands have gained further share in the normal shampoo category, with a market share (value) of 7.3%.

Oral Care 6.6 Dabur Red grew 16.7%, Meswak grew 23.4% and Babool toothpaste grew 15%.. Overall, the toothpaste portfolio grew 15%. Launched Babool Mint Fresh in August, entering the Gel segment at economy pricing.

Health Supplements 20.6 Glucose grew its strongest at 55.6% and Honey grew 15%. Chyawanprash sales were moderate at 12.4% during the quarter.

Digestives 12.6 Hajmola, including tablets and candies, grew 14.8%. New variants, along with aggressive touch point activations launch of 50 paisa SKU and new positioning has led to this growth.

Skin Care 42.7 Gulabari Rose water grew 33.7% and Gulabari Cold cream grew 71.3%. Dabur Lal Tel grew 3.9%. The new Gulabari face freshener continues to do well. The new Uveda range was test-marketed in Delhi & Maharashtra.

Home Care 8.3 Odomos grew 22.8%. Odonil declined marginally, Odopic grew 23.5%, Sanifresh reported 25% growth. Odomos sales grew 23%.

Foods Division 22.7 Growth largely led by juices and culinary range. Real Juices grew 21%, Hommade registered a strong growth of 40.2%. Activ Brand continues to focus on ‘No Added Sugar’ campaign. Test marketing of Burrst completed.

Consumer Health Division 15.1 OTC portfolio grew by 14.8% and Ethicals by 15.6%. Pudin Hara grew 28.3%. Pudin Hara, Janam Ghunti, Hingoli, Satisabgol & Gripe Water transferred to CHD from CCD, for greater focus posted robust growth of 22.5%.

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International Business Division

38.2 Growth was across all focus and potential markets, led by Egypt (47.9%), Bangladesh (80%), Nepal local sales (45%), GCC (40%) and Bangladesh (40%). The key categories accelerating the division’s growth are Hair Creams, Toothpastes, Hair oils and conditioners.

Fig 1.32

3.8 Business Overview of Dabur India

Fig 1.33

Healthcare Segment

Healthcare segment is one of the major revenue contributors for Dabur India Ltd. Brands such as

Chyavanprash, Hajmola, Pudin Hara, Hingoli, Janam Gutti, Lal Tail, and Madhuvanni fall under

this stable. For the 250 Crore-chavanprash markets, the company is facing tough competition

from Zandu, Hamdard and Baidyanath. However, as per org data the market for chavanprash is

expected to double in a couple of years.Chyavanprash sales stood stagnant during the previous

year contributing to 10% of the total revenue. In the pediatric segment the company has products

like Janam Gutti, Lal Tel gripe waters, and Madhuvanni cough syrup. DIL has also introduced a

new product namely, Nasarel for the treatment of Endometeriosis for use in assisted

reproduction. Overall, the segment recorded a growth of 12%.

Hair Care Segment

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DIL is a major player in the hair oil segment with extended brand equity in Vatika. The range of

products includes Dabur Amla, Dabur Special, Vatika, Vatika Shampoo, the newly introduced

Vatika anti- dandruff shampoo and Vatika Heena Cream Conditioning Shampoo. Dabur Amla

enjoys a 28% market share in the perfumed oil market. The total sales of the segment for the year

ended march 2000 were 218 cr. The segment grew by 16 % during the year. The company has

undertaken the repositioning of Dabur Amla hair oil and Dabur Vatika Oil. The hair oil segment

contributes 21% to the company’s turnover as on 31st March 2000. In the hair Care segment the

company is poised to have a strong growth of 10% predominantly on account of strong brand

image.

Oral Care Segment

Seeing the future market move, DIL has purchased the BINACA brand for Rs.3 cr. The move

was on account of the company-identifying shift in market preferences. The total sales for the

segment were 116 cr. with a marginal growth of 3%. The company views the growth through the

Binaca brand. DIL is also repositioning the lal dant manjan in shrink sleeves wrap. We expect

the segmental growth to be around 5% henceforth.

Pharmaceuticals segment

Dabur has around 300 ayurvedic medicines sold through ayurvedic practitioners. The company

has 80% market share in this segment. All the products are outside the purview of the DPCO.

The division grew by 20% during the year. The company is majorly into Oncology and branded

Formulations. The company launched Topotel (Topotecan), the first camptothecin derivative for

ovarian and lung cancer in India and Amiphos (Amiphostin) for various anti-cancer regiments in

India. DIL is only the second in the world to manufacture anti-cancer drugs Paclitaxel and

Docetaxel acquired from Pfizer in 1996. The company has established a subsidiary in UK

namely Axol Labs, for manufacture of generic oncology products. However, global acceptance is

a major sensitivity factor.

Other Segments –

Other segments include food products division, which has beer restructured into a 100%

subsidiary company. The division has brands like Honey, Lemoneez lemon Juice, Real fruit

juices, Hommade pastas and sauces. The subsidiary netted a loss of 11.55 cr on sales of 29.67 cr.

This was on account of stiff competition faced by the company and wafer thin margins on

trading goods. The company however has a strong nationwide distribution network. The skin

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care division with brands like Gulabari and Samara also grew by 19% during the year. The

company has entered into a 50:50 JV with Bongrain of France for manufacture and marketing of

Cheese and speciality dairy products. The brands launched by the company include Delicieux

and Le Bon.

Company Restructuring –

With lack of growth coming in, company realized the need for corporate restructuring.

The initiative undertaken looks to be very positive. Some of the measures initiated are: -

Dabur, being a closely held company, was initially a family run organization. However,

subsequent to restructuring, the day-to-day management is under professional

management and the promoters undertake only the strategic management decisions. The

company has decided on higher investment on Brand building rather than on product

building. This fact is evident from the sale of GDC Ltd. and Excelcia Foods Ltd. The

company has also entered into JV with Bongrain under the same initiative. The company

has discontinued the merchant exports, herbal intermediaries and Generic

pharmaceuticals business.With an effect to stress upon core competence the company has

decided to put off plans for foray into the newly opened Insurance sector for which it had

entered into a JV with Allstate of Finland. The promoters hold 70% of the paid up capital

of the company. Hence, to increase the liquidity of the stock in the market the company

has introduced a stock split of 1/10th at Re.1/- per share paid up.

3.9 Research

Dabur's main asset is its knowledge base and the backup of research initiatives through

modern science.

Dabur deals mainly with traditional Ayurvedic products. We take care to conduct rigorous trials

and authentication of processes so that our consumers get the best. Dabur Research Foundation

(DRF), set up in 1979 as an independent research organisation, spearheads the R&D activity of

the Company. DRF is well equipped with the most modern research facilities and more than 125

highly qualified scientists from diverse fields like Ayurvedic doctors, chemists and phyto

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chemists, botanists, agronomists, clinical pharmacologists, microbiologists, food technologists,

bio-technologists, oil technologists, oncologists, and so on. We have been involved in developing

products for consumer applications as well as highly specialized areas of genomics, proteomics

and bio-informatics. Through the ceaseless quest of our scientists in frontier areas, Dabur has

been able to mark a presence even in critical aspects of health care like cancer therapy.

Our Research Areas

Dabur Research Foundation is not only limited to conducting tests and trials, but carries

out research in over 10 diverse areas: 

Ayurvedic Research - relating traditional knowledge with modern science

Pharmaceutical Research - developing and testing drugs

Phytopharmaceuticals - getting better resources from nature 

Biotechnology - scientific techniques for preservation

Agronomy -- scientific regeneration and propagation 

Personal Care Products - developing natural solutions

Analytical - studying and testing active chemicals

Synthetic Chemistry - developing new molecules and intermediates

Oncology Research and Molecular Biology - researching new anti-cancer remedies 

New Drug & Peptide Research - developing new drugs and delivery systems 

Food Research - developing healthy and natural foods 

Clinical Research - studies and tests for total safety of drugs.

Recent initiatives made by DABUR .Following its plans, Dabur made significant changes in the time period 2002-2007.

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HR Initiaves

The culture at Dabur gives full autonomy to its employees. Various training and development

programs like Young Manager Development Program, Prayas, Leading and Facilitating

Performance, Campus to Corpora and a Balanced scorecard approach to performance evaluation,

helps employees realize their potential. Recently, Dabur has adopted an innovative HR program

of offering ESOPs to new engineering and management trainees at the time of joining. Also in

2005, Dabur gave Bonus to its employees after 12 years. This boosted the employee morale

further. Dabur was listed as a “Great Place to Work”, in a survey conducted by Grow Talent &

Company and Great Place to Work Institute, USA. Dabur was listed as the 10th “Great Place to

Work”. The results were published in Business World dated February 2006.

IT initiatives

Dabur installed centralized SAPERP system from 1st April 2006 for all business units. It also

implemented a country wide new WAN Infrastructure for running centralized ERP system.

Further it set up new Data Center at KCO Head Office.

Supply chain Initiatives

Dabur Ltd. has undertaken e-procurement in a big way. In 2003-04 Dabur India procured Rs.210

crore of raw materials through e-sourcing — or almost 50 per cent of total raw material

expenditure — and in the process, considerably controlled raw material costs which were on a

rise. For better production and operation management, Dabur included automation,

debottlenecking, Kaizen and wastage control. It set up production units in locations providing tax

holidays to reduce cost and improve efficiency.

Conservation of Energy

Dabur has been undertaking a host of energy conservation measures. Successful implementation

of various energy conservation projects have resulted in a 13.8% reduction in the Company’s

energy bill in the 2008-09 fiscal alone. The host of measures, key among them being use of bio-

fuels in boilers, generation of biogas and installation of energy efficient equipment – helped

lower the cost of production, besides reduce effluent and improve hygiene conditions &

productivity.

Health Safety & Environmental

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Renewing the commitment to Health Safety and Environment, Dabur has formulated a policy

focusing on People, Technology and Facilities. A dedicated “Safety Management Team” has also

been put in place to work towards the prevention of untoward incidents at the corporate and unit

level, besides educate & motivate employees on various aspects of Health, Safety and

Environment. The Company is also continuously monitoring its waste in adherence with the

pollution control norms. In pursuance of its commitment towards the society, efforts have also

been initiated to conserve and maintain the ground water level. The efforts include

implementation of rainwater harvesting, which has delivered encouraging results and has put the

company on the path to becoming a Water-Positive Corporation.

3.10 Market Share of HUL Products

As mentioned above, HUL is enjoying the leader position in the market and is having highest

market shares which are followed by the market challengers like Dabur India Ltd, Nestle India

Ltd, and ITC LTD, ETC .In different categories of FMCG products like shampoo, skincare , deo,

jams, coffee, etc. In the below pie chart we see the position of various FMCG companies doing

business in India. We can see that HUL is enjoying the position of market leader and is followed

by ITC as close second in the market share of FMCG products.

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Fig1.34

3.11 BCG MATRIX – HINDUSTAN UNILEVER LTD

Soap & Detergent and Tea are Cash Cow for the company. It has high relative market share and

low growth rate. Personal Products and Coffee are stars for the company as it have high relative

market share as well as high market growth rate. Only food is a segment which is a Question

Mark for the company. The company have a low relative market share where as it is under high

market growth rate. HUL is taking several steps to capture more market share so that food

segment can also be a part of Star.

3.12 OVERVIEW

The Company is the largest FMCG player and market leader in most of the product category.

The Company has registered a robust growth rate over last few years and has wide market

coverage. HUL believe in product innovation and entrance into niche market. Recently company

has launch Pureit, a water purifier, received a good response from the market. The company has

a good growth rate.

3.13 COMPETITORS ANALYSIS

According to the market survey done by BUSINESS TODAY the top 10 companies of FMCG

sector are given below.

1. Hindustan Unilever Ltd.

2. ITC (Indian Tobacco Company)

3. Nestlé India

4. GCMMF (AMUL)

5. Dabur India

6. Asian Paints (India)

7. Cadbury India

8. Britannia Industries

9. Procter & Gamble Hygiene and Health Care

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10. Marico Industries

3.14 PROMOTION STRATEGY

Project Shakti: This project was started for Company’s promotion in rural market as

well as women empowerment. HUL's partnership with Self Help Groups of rural women.

It was started in 2001; Project Shakti has already been extended to about 50,000 villages

in 12 states - Andhra Pradesh, Karnataka, Gujarat and others.

Hindustan Unilever Network (HUN): It is the company's arm in the Direct Selling

channel. It presents a range of customised offerings in Home & Personal Care and Foods.

Lifebuoy Swasthya Chetana: The program endeavors to induce adoption of hygienic

practices among rural Indians and aims to bring down the incidence of diarrhea.

Out-of-Home: This deals in providing vending machines for hot beverages like tea and

Coffee. HUL’s alliance with Pepsi Co. has significantly strengthened the channel.

Health and Beauty services: Lakme Salons provide specialized beauty services and

Solutions, under the recognized authority of the Lakme brand. The Ayush Therapy

Centre’s provide easy access to authentic Ayurvedic treatments and products.

3.15 TRENDS AND FORCES

Increasing raw material prices drives HUL to raise its prices - Raw materials

constitute a big chunk (around 60%) of input cost for FMCG sector companies. For

HUL- Palm Oil and Chemicals contribute 59% of total raw material cost. Due to inflated

input cost in Soap and Detergents division EBITDA (Earnings before income tax and

Depreciation) margins have suffered. The first steep increase in the prices of key raw

materials such as palm oil, LAB - Linear Alkyl Benzene, caustic soda, soda ash, raw tea,

coffee and crude oil derivatives has led the company to implement price hikes in

competitive segments like toothpaste, soaps, detergents and shampoo. But recently

softening Inventories - Raw Materials prices in the last 2-3 months have provided respite

to FMCG sector companies. Raw material and packaging materials have fallen sharply

from their highs recorded in Sep'08. The benefit of fall in raw material prices will be

accured later when high cost inventory will be replaced by a cheaper inventory.

Increasing per capita income drives FMCG sector growth - Per capita Income in

India has doubled in 4 years. As their incomes and standards of living improve, Indian

customers for FMCGs are shifting towards higher lifestyle categories like skin care, hair

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care, deodorants, convenience foods, health foods etc.Rural India, where penetration

levels are low as compared to urban areas, has a large consuming class with 41 per cent

of India's middle-class and 58% of the total disposable income. Factors like loan waiver

of farmers, hike in minimum support price for crops and flood inflation has helped

farmers with rise in income. The purchasing power in rural areas has increased and

spending behavior is also changing which shows a high growth potential for FMCG

companies here. HUL has adapted itself to changing consumer spending patterns. Among

many product launches, Dove hair care products, re-launch of Axe deodrants and launch

of Ponds Anti Ageing cream are few to be mentioned in high end price spectrum in

Personal care. Targeting low income group people, HUL has launched 50 paise shampoo

sachets. Along with these, Company's premium products are now sold thorugh Modern

Trade. Also it has entered into a Joint venture with Smollons Holdings of South Africa to

increase its capabilities to meet the merchandising demands in Modern Trade.

Per Capita consumption of personal care products in India is one of the lowest

among developing economies of the world - India has one of the lowest levels in per

capita consumption of consumer goods among developing economies of the world. It has

per capita consumtion levels of 1.4,0.3,0.2 and 0.3 US$ in detergents, shampoo, ice-

creams and skin care segments respectively which are lower than that of China, Brazil

and Indonesia. Consumption levels in the U.S., a developed country, are 16.6, 6.7, 49.4

and 36.6 in categories mentioned before. Low consumption coupled with increase in per

capita income poses as a growth opportunity for consumer products companies.

Highly Competitive FMCG Sector limits profit margins of HUL - In a volume driven

and competitively intense environment with competition also from local players FMCG

players are aggressively promoting their brands to gain product awareness, customer

base, and their shares of the customers’ wallets. To facilitate launch new products and

relaunch of existing products companies are increasing their research and development

expenditure. These factors eat up the profitability margins of the companies. Pricing

scenario in current time is in favor of companies but in past due to pricing war with P&G

in Soaps and Detergents.

3.16 Competition

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The Indian FMCG sector is the fourth largest sector in the economy with a total market size of

$18 billion. As the name suggests FMCG products are frequently used and bought by the

customers so there are large numbers of players supplying same products. HUL is the only

company in Indian consumer goods market that has products in more segments than any other

company of the same sector.HUL is the largest FMCG Company in terms of revenues. Procter

and Gamble (P&G) India: HUL faces a fierce competition from P&G India in its key segments

i.e. Detergents and Personal Care. It operates in India through three subsidiaries: Procter and

Gamble Home Products (100% subsidiary of the company), Procter and Gamble Hygiene and

Health care Ltd. (PGHH) and Gillette India Ltd. It has in its portfolio some of P&G's Billion

dollar brands such as Vicks & Whisper in health care and Ariel and Tide in detergents segments.

Product Development - HUL made a strategic acquisition aimed at development of new

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

equity in Modern Foods to HUL, there by beginning the divestment of government equity

in public sector undertakings (PSU) to private sector partners. HUL's entry into Bread is a

strategic extension of the company's wheat business. In 2002, HUL acquired the

government's remaining stake in Modern Foods. In 2003, HUL acquired the Cooked

Shrimp and Pasteurised Crabmeat business of the Amalgam Group of Companies, a

leader in value added Marine Products exports.

HUL puts its leather business sale on hold

Hindustan Unilever (HUL) has put the sale of its leather business on hold as it failed to find a

suitable buyer. The business is run by Pond’s Exports, a wholly-owned subsidiary of HUL. The

annual report said leather exports had a difficult year due to forex volatility and recessionary

conditions in Europe. India’s competitive advantages of good quality leather and the ability to

service small orders were neutralized by China’s significant cost advantages and a well-

developed market for components.

Conglomerate Diversification

In 1993, it acquired the Kissan business from the UB Group and the Dollops Ice cream business

from Cadbury India. As at that time both of the business concerns were on peak & the best

promising businesses.

Consumption pie – Consumption in the market

65

Fig 1.35

3.17 SWOT ANALYSIS - SWOT stands for Strengths, Weaknesses, Opportunities and Threats,

and is an important tool often used to highlight where a business or organisation is, and where it

could be in the future. It looks at internal factors, the strengths and weaknesses of a business, and

external factors, the opportunities and threats facing the business. The process can give you on

overview of where the business, and the environment it operates in, is strategically. This is an

important, yet to simple to understand, tool used by many students, businesses and organizations

for analysis.

SWOT Analysis of Dabur India Ltd: SWOT Analysis of Hindustan Unilever Ltd:

StrengthsThe strengths of a company or group and value to it, and can be what gives it the edge in some areas over the competitors. The following section will outline main strengths of Dabur India.

Being a market leader, as Dabur India is, is key to their success as it boosts reputation, profit and market share.

Dabur India’s marketing strategy has proved to be effective, helping to raise profiles and profits and standing out as a major strength.

Experienced employees are key to the success of Dabur India helping to drive

Strengths Variety of products

Distribution Network

Brand image

Quality Management

Innovation and R&D strength

66

themforward with expertise and knowledge.

Being financially strong helps Dabur India deal with any problems, ride any dip in profits and out perform their rivals.

Dabur India’s distribution chain can be listed as one of their strengths and links to success.

Dabur India’s position in the market is high and strong – a major strength in this industry as they are ahead of many rivals.

WeaknessesWeaknesses of a company or organisation are things that need to be improved or perform better, which are under their control.

Reputation is important, and a damaged one like Dabur India’s is a major weakness as consumers will not trust the firm enough to spend money with them.

A serious weakness for Dabur India is the fact their products/services are of low quality, meaning people will have better-quality substitutes.

Not reducing costs in the same way as their competitors means Dabur India is outlaying more of their profits. Having higher costs than competitors is a major weakness.

Dabur India’s R&D work is low and insignificant, which is a major weakness in FMCG as it is constantly creating new products.

The lack of staff experience is a major downfall for Dabur India as it could lead to mistakes or negligence.

Old and outdated technologies hold Dabur India back and limits success, as other firms are making use of better and more reliable technologies.

Opportunities Opportunities are external changes, trends or needs that could enhance the business ororganisation’s strategic position, or which could be of a benefit to them. This section will outlineopportunities that Dabur India is currently

Weaknesses

Not able to compete with local competitor in the rural market.

Not focus on upper class population

Pricing policy is not good

Opportunities Huge Market

Increasing per capital income

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facing. Dabur India could benefit from

Governmental support, in the form of grants, allowances, training etc.

Looking at export opportunities is a way for dabur india to raise profits.

Changes in technology could give dabur india an opportunity to bolster future success. Dabur India could benefit from expanding their online presence and making more money from online shoppers/internet users.

The changes in the way consumers spend and what they buy provides a big opportunity for Dabur India to explore.

Dabur India is in good financial position, which is an opportunity for them to explore in terms of investment in new projects.

Increasing consumption pattern

Potential for making more impact of brand image.

Coming in technology e.g. in water purifiers

ThreatsThreats are factors which may restrict, damage or put areas of the business or organisation atrisk. They are factors which are outside of the company's control. Being aware of the threats and being able to prepare for them makes this section valuable when considering contingency plans and strategies. This section will outline main threats Dabur India is currently facing.

Consumer lifestyle changes could lead to less of a demand for Dabur India products/services.

Tax increases placing additional financial burdens on Dabur India could be a threat.

Change in demographics could threaten Dabur India.

The financial burden of increasing interest rates could be a threat to Dabur India.

Regulations requiring money to be spent or measures to be taken could put financial or other pressure on Dabur India.

Price wars between competitors, price cuts and so on could damage profits for Dabur India.

Threats

From High Class Competitor

Proctor & Gamble

Pantene

Dabur

Babool

Dabur lal Dent Manjan

Dettol

Palmolive

Colgate, Nirma

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Fig 1.36

3.18 HUL - Sales growth turns positive as volume growth picks up

HUL saw sales growth of ~4% after four months of decline. Pick up in volume growth was the

key driver. Barring Tea & Coffee, all other categories had positive growth. Detergents continue

to do well with 24% volume growth. This reflected in value growth as well, with an across-the-

board improvement, as only Coffee is still witnessing decline. We await sustainability of this

trend before revisiting our view.

3.19 HUL – Market share trend still a mixed bag

Though sales growth picked up for HUL, it failed to beat market growth, as market shares did

not show much improvement. Declines were seen in Soaps, Laundry and Toothpaste, with slight

gains in Skin Care. However, gains in Shampoos, Tea, Coffee and Ketchups were healthy. On a

long-term basis though, market shares are still lower across most categories vs. their last year

Levels. Unless HUL consistently outperforms market growth, a sustained market share gain is

difficult.

3.20 Dabur – Sales growth remains weak; Market shares mixed

Despite recovery, sales growth remained weak at 8%. Market shares were largely neg, with

losses in Shampoos, Toothpowder and Chyawanprash, and gain in Toothpaste. Overall trend

over the last one year has been positive, with share gains in Toothpaste, Toothpowder and

Chyawanprash, and losses in Shampoos.

3.21 Market share of FMGC companies in India

HUL is enjoying the leader position in the market and is having highest market shares

which are followed by the market challengers like Dabur India Ltd, Nestle India Ltd, and ITC

LTD, ETC…..In different categories of FMCG products like shampoo, skin care, deo, jams,

coffee, etc.

Market share of FMCG companies in India is represented by the pie chart given below:

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Fig 1.37

Market Share trends –

Hul vs Dabur India ltd From April (2009 – 2010)

HUL

- Soaps

- Detergents

- Shampoo

- Toothpaste

- Skincare

- Tea

Apr-09 Aug-09 Dec-09 Apr-10

47.0

37.4

45.3

27.9

46.5

22.4

44.5

36.2

45.6

27.1

46.4

22.3

44.8

36.7

45.1

25.9

47.4

20.7

43.8

36.8

46.9

25.7

45.4

21.0

Dabur

- Toothpaste

- Shampoo

9.6

6.1

10.1

6.4

10.5

5.9

10.6

5.5

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- Chyawanprash 59.6 64.2 62.5 60.9

Fig 1.38

71

CHAPTER 4

CONCLUSIONS

72

Dabur India, being a closely held company, was initially a family run organization. However,

subsequent to restructuring, the day-to-day management is under professional management and

the promoters undertake only the strategic management decisions. The company has decided on

higher investment on Brand building rather than on product building. This fact is evident from

the sale of GDC Ltd. and Excelcia Foods Ltd. The company has also entered into JV with

Bongrain under the same initiative. The company has discontinued the merchant exports, herbal

intermediaries and Generic pharmaceuticals business. The promoters hold 70% of the paid up

capital of the company. Hence, to increase the liquidity of the stock in the market the company

has introduced a stock split of 1/10th at Re.1/- per share paid up. There are segments that Dabur

India doesn't feel it can do much with, like laundry, where the company would not wish to enter,

even if the brand is lucrative enough. The same goes for soaps, where Dabur had attempted an

extension of the Vatika brand into the soap category, which they have exited as of now. Being

slow and steady has its virtues, and Dabur has indeed proven a point in various segments where

it has entered. So Dabur may not be headed for the same fate as HUL in the 1990s, which

actually expanded rather recklessly then. But, if Dabur has to come to the league of an HUL

(compare its quarter ending September sales at Rs.40.27 billion with Rs.5.8 billion for Dabur), it

might want to consider acquiring some of the qualities of the hare. When a war has to be fought

for lasting glory, it sometimes becomes imperative to take some bloodshed in your stride. Slow

and steady may win the race.

Hindustan Unilever was the most preferred Brand in India. It has wide range of products varying

from Home care to food care and Other FMCG categories. It has also launched water purifier. It

was listed in ET-500 ranking of India’s biggest Companies and its ranking was number 32.

Though HUL, as a brand have good perception from its consumers, following are the major

threats waiting for any FMCG company in the market. So those things have to be considered in

order to posses the same consumer perception towards HUL.

• Private Label/In-house Branding: Ongoing increase in the number of supermarkets,

hypermarkets & other such concept business results in the promotion of their own brands. So

there is a possibility of change in behavior of consumers towards HUL.

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• Quality Management: Because of multi production centers, the quality of the same brand

product has to be maintained to retain the consumer. Introduction of variants has to be done only

by keeping flagship product without any change.

• Brand Loyalty: Essential aspect to be considered in this rival competitive world! Recently “Rin

& Tide” comparative advertisement made it clear even big giants like HUL finds no way to

Dominate the market without gaining the loyalty of tits consumers.

This is a try to change the fickle minds of consumers towards rival brands.

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CHAPTER 5

RECOMMENDATIONS /

SUGGESTIONS

75

Following are the few suggestions to Dabur India Ltd for improving the market share and

image of the products concerned.

1. PRODUCT

Modification must be brought about in Dabur Ltd in terms of quality with passage of

time .

2. PLACE

The brands must be made available easily in, PCO & general stores.

3. PROMOTION

Company must undertake extensive promotional activities like advertisements must be

released in different media to create brand awareness.

Free samples should be distributed among the prospects. Sales promotion tools like gifts,

contests and coupons must be given to retailers as well as customers and prospects.

Catalogues should be distributed among customers.

Dabur India could benefit from Governmental support, in the form of grants, allowances,

training etc.

Looking at export opportunities is a way for dabur india to raise profits.

Changes in technology could give dabur india an opportunity to bolster future success.

Dabur India could benefit from expanding their online presence and making more money

from online shoppers/internet users.

Following are the few suggestions to Hindustan Unilever Ltd for improving the market

share and image of the products concerned. Variety of products, large distribution

network, Brand image, Quality Management Innovation and R&D strength are some of

the opportunities of Hindustan Unilever ltd. But some of the suggestions are to be needed

for the future scale of operations of Hindustan Unilever ltd.

(1) PRODUCT

76

Improvement must be brought in Hindustan Unilever Ltd in terms of quality with passage

of time, changes in customer needs .

(2) PLACE

The brands must be made available easily in, PCO & general stores.

(3) PROMOTION

Increasing per capital income and Increasing consumption pattern will benefit the

company.

Potential for making more impact of brand image.

Coming in technology e.g. in water purifiers, can promote its sales as well.

Company must undertake extensive promotional activities like advertisements must be

released in different media to create brand awareness it will help in increasing a huge

market for customers.

Free samples should be distributed among the prospects. Sales promotion tools like gifts,

contests and coupons must be given to retailers as well as customers and prospects.

77

CHAPTER 6:

LIMITATIONS OF THE

STUDY

78

Limitations of the Study

No project is without limitations and it becomes essential to figure out the various constraints

that we underwent during the study.

1. Project is based on secondary data.

2. The research is conducted in a limited area. No universal application

3. The internet information can be irrelevant.

4. Time will be a major constraint.

79

80

MAHARAJA AGRASEN INSTITUTE OF MANAGEMENT STUDIESATTENDANCE FOR PROJECT REPORT

Name of the student :Class :Roll No. :Name of the Supervisor :

S.No. Date Time Progress Report

Signature of the student

Signature of Supervisor

1

2

3

4

5

6

7

8

9

10

*Minimum (8out of 10) 80% attendance compulsory. Coordinator

81

BIBLIOGRAPHY

Word or list of the words referred in a text or consulted by you for writing report. It should be arranged in alphabetical order by name of the authors.

For booksName of the author (last name first) Title of the book, Edition, year of publication, No of Vol. (if any) Name and place of publisher.

Example:Kothari, C.R. Research methodology, 3rd edition, 1997, Vikas Publishing House Pvt. Ltd, New Delhi.

For Research Papers, Published articles, Magazines, Periodicals, Journals, Newspaper etc.Name of the author(last name first), Title of the article, (in quotation mark) Name of the Journals/ Periodicals/ Magazines etc in italics, Volume number, year, Page numbers.

Example: Wortman,Maxs (Jr.) “Entrepreneurship : An Integrating Typology and Evaluation of the Empirical Research in the field”, Journal of Management, Vol.13(2), 1967,pp 259-279.

Online published material on World Wide Web (Alphabetically arranged Webliography)

Name of the Website, Date and time of referring the Website, Name of the Author, Title/Topic

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