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Hul project

  1. 1. BRIEF HISTORYOver 100 years link with India. In the summer of 1888, visitors to the Kolkata harbor & noticedcrates full of Sunlight soap bars, embossed with the words "Made in England by Lever Brothers".With it, began an era of marketing branded. Fast Moving Consumer Goods (FMCG).Soon after followed Lifebuoy in 1895 and other famous brands like Pears, Lux and Vim. Vanaspatiwas launched in 1918 and the famous Dalda brand came to the market in 1937.In 1931, Unilever set up its first Indian subsidiary, Hindustan Vanaspati Manufacturing Company,followed by Lever Brothers India Limited (1933) and United Traders Limited (1935). These threecompanies merged to form HUL in November 1956; HUL offered 10% of its equity to the Indianpublic, being the first among the foreign subsidiaries to do so. Unilever now holds 51.55% equityin the company. The rest of the shareholding is distributed among about 380,000 individualshareholders and financial institutions.The erstwhile Brooke Bonds presence in India dates back to 1900. By 1903, the company hadlaunched Red Label tea in the country. In 1912, Brooke Bond & Co. India Limited was formed.Brooke Bond joined the Unilever fold in 1984 through an international acquisition. The erstwhileLiptons links with India were forged in 1898. Unilever acquired Lipton in 1972, and in 1977Lipton Tea (India) Limited was incorporated.Ponds (India) Limited had been present in India since 1947. It joined the Unilever fold through aninternational acquisition of Chesebrough Ponds USA in 1986.Since the very early years, HUL has vigorously responded to the stimulus of economic growth.The growth process has been accompanied by judicious diversification, always in line with Indianopinions and aspirations. 1
  2. 2. The liberalization of the Indian economy, started in 1991, clearly marked an inflexion in HULsand the Groups growth curve. Removal of the regulatory framework allowed the company toexplore every single product and opportunity segment, without any constraints on productioncapacity.Simultaneously, deregulation permitted alliances, acquisitions and mergers. In one of the mostvisible and talked about events of Indias corporate history, the erstwhile Tata Oil Mills Company(TOMCO) merged with HUL, effective from April 1, 1993. In 1995, HUL and yet another Tatacompany, Lakme Limited, formed a 50:50 joint venture, Lakme Lever Limited, to market Lakmesmarket-leading cosmetics and other appropriate products of both the companies. Subsequently in1998, Lakme Limited sold its brands to HUL and divested its 50% stake in the joint venture to thecompany.HUL formed a 50:50 joint venture with the US-based Kimberly Clark Corporation in 1994,Kimberly-Clark Lever Ltd, which markets Huggies Diapers and Kotex Sanitary Pads. HUL hasalso set up a subsidiary in Nepal, Nepal Lever Limited (NLL), and its factory represents the largestmanufacturing investment in the Himalayan kingdom. The NLL factory manufactures HULsproducts like Soaps, Detergents and Personal Products both for the domestic market and exports toIndia.The 1990s also witnessed a string of crucial mergers, acquisitions and alliances on the Foods andBeverages front. In 1992, the erstwhile Brooke Bond acquired Kothari General Foods, withsignificant interests in Instant Coffee. In 1993, it acquired the Kissan business from the UB Groupand the Dollops Icecream business from Cadbury India.As a measure of backward integration, Tea Estates and Doom Dooma, two plantation companiesof Unilever, were merged with Brooke Bond. Then in July 1993, Brooke Bond India and LiptonIndia merged to form Brooke Bond Lipton India Limited (BBLIL), enabling greater focus andensuring synergy in the traditional Beverages business. 1994 witnessed BBLIL launching the 2
  3. 3. Walls range of Frozen Desserts. By the end of the year, the company entered into a strategicalliance with the Kwality Icecream Group families and in 1995 the Milkfood 100% Icecreammarketing and distribution rights too were acquired.Finally, BBLIL merged with HUL, with effect from January 1, 1996. The internal restructuringculminated in the merger of Ponds (India) Limited (PIL) with HUL in 1998. The two companieshad significant overlaps in Personal Products, Specialty Chemicals and Exports businesses, besidesa common distribution system since 1993 for Personal Products. The two also had a commonmanagement pool and a technology base. The amalgamation was done to ensure for the Group,benefits from scale economies both in domestic and export markets and enable it to fundinvestments required for aggressively building new categories.In January 2000, in a historic step, the government decided to award 74 per cent equity in ModernFoods to HUL, thereby beginning the divestment of government equity in public sectorundertakings (PSU) to private sector partners. HULs entry into Bread is a strategic extension ofthe companys wheat business. In 2002, HUL acquired the governments remaining stake inModern Foods.In 2003, HUL acquired the Cooked Shrimp and Pasteurised Crabmeat business of the AmalgamGroup of Companies, a leader in value added Marine Products exports. 3
  4. 4. COMPANY PROFILEHindustan Unilever Limited Type Public Founded 1933 Headquarters Mumbai, India Harish Manwani Chairman Key people Nitin Paranjpe, CEO Industry Fast moving consumer goods Products tea, soap, detergents Employees 41,000 Parent Unilever Website 4
  5. 5. Hindustan Unilever Limited (abbreviated to HUL), formerly Hindustan Lever Limited , isIndias largest consumer products company and was formed in 1933 as Lever Brothers IndiaLimited. It is currently headquartered in Mumbai, India and its 41,000 employees are headed byHarish Manwani, the non-executive chairman of the board. HUL is the market leader in Indianproducts such as tea, soaps, detergents, as its products have become daily household name in India.The Anglo-Dutch company Unilever owns a majority stake in Hindustan Unilever Limited.Unilevers mission is to add “Vitality to life”. HUL meets everyday needs for nutrition, hygiene, andpersonal care with brands that help people feel good, look good and get more out of life. It is a mission HUL shareswith its parent company, Unilever, which holds 51.55% of the equity. The rest of the shareholding is distributedamong 380,000 individual shareholders and financial institutions.HULs brands - like Lifebuoy, Lux, Surf Excel, Rin, Wheel, Fair & Lovely, Ponds, Sunsilk, Clinic, Pepsodent, Close-up, Lakme, Brooke Bond, Kissan, Knorr-Annapurna, Kwality Walls – are household names across the country andspan many categories - soaps, detergents, personal products, tea, coffee, branded staples, ice cream and culinaryproducts. They are manufactured in close to 80 factories. The operations involve over 2,000 suppliers andassociates. HULs distribution network, comprising about 7,000 redistribution stockists,directly covers the entire urban population, and about 250 million rural consumers.HUL has traditionally been a company, which incorporates latest technology in all itsoperations. The Hindustan Lever Research Centre (HLRC) was set up in 1958, and now hasfacilities in Mumbai and Bangalore. HLRC and the Global Technology Centres in India haveover 200 highly qualified scientists and technologists, many with post-doctoral experienceacquired in the US and Europe.HUL believes that an organisations worth is also in the service it renders to the community.HUL is focusing on health & hygiene education, women empowerment, and watermanagement. It is also involved in education and rehabilitation of special or underprivilegedchildren, care for the destitute and HIV-positive, and rural development. HUL has alsoresponded in case of national calamities / adversities and contributes through various welfaremeasures, most recent being the village built by HUL in earthquake affected Gujarat, andrelief & rehabilitation after the Tsunami caused devastation in South India. 5
  6. 6. Over the last three years the company has embarked on an ambitious programme, Shakti. ThroughShakti, HUL is creating micro-enterprise opportunities for rural women, thereby improvingtheir livelihood and the standard of living in rural communities. Shakti also includes healthand hygiene education through the Shakti Vani Programme, and creating access to relevantinformation through the iShakti community portal. The programme now covers about 50,000villages in 12 states. HULs vision is to take this programme to 100,000 villages impacting thelives of over a 100 million rural Indians.HUL is also running a rural health programme – Lifebuoy Swasthya Chetana. The programmeendeavtheirs to induce adoption of hygienic practices among rural Indians and aims to bringdown the incidence of diarrhoea. It has already touched 70 million people in approximately15000 villages of 8 states. The vision is to make a billion Indians feel safe and secure. IfHindustan Lever straddles the Indian corporate world, it is because of being single-minded inidentifying itself with Indian aspirations and needs in every walk of life.CORPORATE PURPOSEUnilevers mission is to add Vitality to life. We meet everyday needs for nutrition , hygiene andpersonal care with brands that help people feel good, look good and get more out of life. 6
  7. 7. Our deep roots in local cultures and markets around the world give us our strong relationship withconsumers and are the foundation for our future growth. We will bring our wealth of knowledgeand 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 andproductivity, to working together effectively, and to a willingness to embrace new ideas and learncontinuously.To succeed also requires, we believe, the highest standards of corporate behaviour towardseveryone we work with, the communities we touch, and the environment on which we have animpact.This is our road to sustainable, profitable growth, creating long-term value for our shareholders,our people, and our business partners.MANAGEMENT STRUCTUREHindustan Unilever Limited is Indias largest Fast Moving Consumer Goods (FMCG) Company. Itis present in Home & Personal Care and Foods & Beverages categories. HUL and Groupcompanies have about 16,000 employees, including 1200 managers. 7
  8. 8. The fundamental principle determining the organization structure is to infuse speed and flexibilityin decision-making and implementation, with empowered managers across the company’snationwide operations.BOARDThe Board of Directors as repositories of the corporate powers act as a guardian to the Company asalso the protectors of shareholder’s interest.This Apex body comprises of a Non- Executive Chairman, four whole time Directors and fiveindependent Non – Executive Directors. The Board of the Company represents the optimum mixof professionalism, knowledge and experience.MANAGEMENT STRUCTURE 8
  9. 9. Mr Harish ManwaniChairmanMr. Douglas Baillie - Mr. D Sundaram – Mr. Nitin Paranjpe –Chief Executive Officer Director Finance Executive Directorand Managing Director and IT Home & Personal CareMr. Shreejit Mishra – Mr. Sanjiv Kakkar – Mr. Dhaval Buch –Executive Director Executive Director Executive DirectorFoods Sales and Customer Development Supply ChainMr. Ashok Gupta – Ms Leena Nair –Executive Director Executive DirectorLegal HR.HINDUSTAN UNILEVER LIMITED INDIA’S LARGEST FMCGCOMPANY 9
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  14. 14. Hindustan Lever Limited Shareholding Pattern Flls 13.7 Domestic Fls 14.8 Unilever 51.6 Individual 19.9 HUL Equity Capital - 50 Mn $ Market Capitalisation - 7,300 Mn $ 14
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  16. 16. CODE OF BUSINESS PRINCIPLESMISSION:Hindustan Unilever Limited mission is to add strength to life. We meet everyday needs fornutrition, hygiene, and personal care with brands that help people feel good, look good and getmore out of life.INTRODUCTIONHUL has earned a reputation for conducting its business with integrity and with respect forthe interests of those their activities can affect. This reputation is an asset, just as real astheir people and brands.Their first priority is to be a successful business and that means investing for growth andbalancing short-term and long-term interests. It also means caring about their consumers,employees and shareholders, their business partners and the world in which we live.From HUL Spokesperson “To succeed requires the highest standards of behavior from all of us. The generalprinciples contained in this Code set out those standards. More detailed guidance tailored to the needs of differentcountries and companies will build on these principles as appropriate, but will not include any standards less rigorousthan those contained in this Code.We want this Code to be more than a collection of high-sounding statements. It must have practical value in their day-to-day business and each one of us must follow these principles in the spirit as well as the letter”. ref: businessworld magazine.CODE OF BUSINESS PRINCIPLES 16
  17. 17. STANDARD OF CONDUCTWe conduct our operations with honesty, integrity and openness, and with respect for the humanrights and interests of our employees.We shall similarly respect the legitimate interests of those with whom we have relationships.OBEYING THE LAWHUL companies and employees are required to comply with the laws and regulations of thecountries 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 the company. HUL will recruit, employ and promote employees on the sole basis of the qualifications and abilities needed for the work to be performed.• HUL are committed to safe and healthy working conditions for all employees. We will not use any form of forced, compulsory or child labour.• HUL are committed to working with employees to develop and enhance each individuals skills and capabilities.• HUL respect the dignity of the individual and the right of employees to freedom of association.• HUL will maintain good communications with employees through company based information and consultation procedures.CONSUMERSHUL is committed to providing branded products and services which consistently offer value interms of price and quality, and which are safe for their intended use. Products and serviceswill be accurately and properly labelled, advertised and communicated. 17
  18. 18. SHAREHOLDERSHUL will conduct its operations in accordance with internationally accepted principles of goodcorporate governance. They will provide timely, regular and reliable information on theiractivities, structure, financial situation and performance to all shareholders.BUSINESS PARTNERSHUL is committed to establishing mutually beneficial relations with their suppliers, customersand business partners.In their business dealings they expect their partners to adhere to business principlesconsistent with their own.COMMUNITY INVOLVEMENTHUL strives to be a trusted corporate citizen and, as an integral part of society, to fulfill theirresponsibilities to the societies and communities in which they operate.PUBLIC ACTIVITIESHUL companies are encouraged to promote and defend their legitimate business interests.HUL will co-operate with governments and other organizations, both directly and throughbodies such as trade associations, in the development of proposed legislation and otherregulations which may affect legitimate business interests.HUL neither supports political parties nor contributes to the funds of groups whose activitiesare calculated to promote party interests.THE ENVIRONMENTHUL is committed to making continuous improvements in the management of theirenvironmental impact and to the longer-term goal of developing a sustainable business.HUL will work in partnership with others to promote environmental care, increaseunderstanding of environmental issues and disseminate good practice. 18
  19. 19. INNOVATIONIn their scientific innovation to meet consumer needs they will respect the concerns of theirconsumers and of society. They will work on the basis of sound science, applying rigorousstandards of product safety.COMPETITIONHUL believes in vigorous yet fair competition and supports the development of appropriatecompetition laws. Their companies and employees will conduct their operations in accordancewith the principles of fair competition and all applicable regulations.BUSINESS INTEGRITYHUL does not give or receive, whether directly or indirectly, bribes or other improperadvantages for business or financial gain. No employee may offer, give or receive any gift orpayment which is, or may be construed as being, a bribe. Any demand for, or offer of, a bribemust be rejected immediately and reported to management.HUL accounting records and supporting documents must accurately describe and reflect thenature of the underlying transactions. No undisclosed or unrecorded account, fund or assetwill be established or maintained.CONFLICTS OF INTERESTSAll HUL employees are expected to avoid personal activities and financial interests whichcould conflict with their responsibilities to the company.HUL employees must not seek gain for themselves or others through misuse of theirpositions.COMPLIANCE – MONITORING – REPORTING 19
  20. 20. Compliance with these principles is an essential element in their business success. The UnileverBoard is responsible for ensuring these principles are communicated to, and understood andobserved by, all employees.Day-to-day responsibility is delegated to the senior management of the regions and operatingcompanies. They are responsible for implementing these principles, if necessary through moredetailed guidance tailored to local needs.Assurance of compliance is given and monitored each year. Compliance with the Code is subjectto review by the Board supported by the Audit Committee of the Board and the Corporate RiskCommittee.Any breaches of the Code must be reported in accordance with the procedures specified by theJoint Secretaries. The Board of Unilever will not criticize management for any loss of businessresulting from adherence to these principles and other mandatory policies and instructions.The Board of Unilever expects employees to bring to their attention, or to that of seniormanagement, any breach or suspected breach of these principles.Provision has been made for employees to be able to report in confidence and no employeewill suffer as a consequence of doing so.ENVIRONMENT POLICYHindustan Lever Limited (HUL) supplies high quality goods and services to meet the daily needsof consumers and industry. In doing so, the Company is committed to exhibit the highest standardsof corporate behavior towards its consumers, employees, the societies and the world in which welive. 20
  21. 21. The company recognizes its joint responsibility with the Government and the Public to protectenvironment and is committed to regulate all its activities so as to follow best practicable meansfor minimizing adverse environmental impact arising out of its operations.The company is committed to making its products environmentally acceptable, on a scientificallyestablished basis, while fulfilling consumers requirements for excellent quality, performance andsafety.The aim of the Policy is to do all that is reasonably practicable to prevent or minimize,encompassing all available knowledge and information, the risk of an adverse environmentalimpact arising from processing of the product, its use or foreseeable misuse.This Policy document reflects the continuing commitment of the Board for sound EnvironmentManagement of its operations. The Policy applies to development of a process, product andservices, from research to full-scale operation. It is applicable to all company operations coveringits plantations, manufacturing, sales and distribution, research & innovation centers and offices.This document defines the aims and scope of the Policy as well as responsibilities for theachievement of the objectives laid down.THE VISIONTheir vision is to continue to be an environmentally responsible organization making continuousimprovements in the management of the environmental impact of their operations.HUL will achieve this through an Integrated Environment Management approach, which focuseson People, Technology and Facilities, supported by Management Commitment as the prime driver.INVESTMENT BEHIND BRANDSInnovation & Superior Quality 21
  22. 22. Family – safe Petalsoft Water & effort saving Quick wash - 50% No mud RinAdvance from germsPerfect Radiance “5 in 1” hair Total Care Whiter teeth Fresher breath BRANDS 22
  24. 24. • Lifebuoy• Liril• Hamam• Breeze• Dove• Pears• RexonaLAUNDRY• Surf Excel• Rin• WheelSKIN CARE• Fair & Lovely• Pond’s• VaselineHAIR CARE• Sunsilk Naturals• ClinicORAL CARE• Pepsodent• Close-upDEODRANTS• Axe• Rexona 24
  26. 26. • Lever home range• Male grooming• Oral Care• Ayurveda• Personal Wash• FoodsReach - 1400 towns (Largest in India)Consultant base - 330,000ACCORDINGLY,HULS AIMS ARE TO: 26
  27. 27.  Ensure safety of its products and operations for the environment by using standards of environmental safety, which are scientifically sustainable and commonly acceptable. Develop, introduce and maintain environmental management systems across the company to meet the company standards as well as statutory requirements for environment. Verify compliance with these standards through regular auditing. Assess environmental impact of all its activities and set annual improvement objectives and targets and review these to ensure that these are being met at the individual unit and corporate levels. Reduce Waste, conserve Energy and explore opportunities for reuse and recycle. Involve all employees in the implementation of this Policy and provide appropriate training. Provide for dissemination of information to employees on environmental objectives and performance through suitable communication networks. Enctheirage suppliers and co-packers to develop and employ environmentally superior processes and ingredients and co-operate with other members of the supply chain to improve overall environmental performance. Work in partnership with external bodies and Government agencies to promote environmental care, increase understanding of environmental issues and disseminate good practice. RESPONSIBILITIES Corporate 27
  28. 28.  The Board and the Management Committee of HUL is committed to conduct the company operations in an environmentally sound manner. The Management Committee will: Set mandatory standards and establish environmental improvement objectives and targets for HUL as a whole and for individual units, and ensure these are included in the annual operating plans. Formally review environment performance of the company once every quarter. Review environment performance when visiting units and recognise exemplary performance. NOMINATE: - A senior line manager responsible for environmental performance at the individual HUL site. - HUL environmental coordinator. The Management Committee, through the nominated environmental coordinator will: Ensure implementation of HUL Policy on environment and compliance with Unilever and HUL environmental standards and the standards stipulated under relevant national / local legislation. When believed to be appropriate, apply more stringent criteria than those required by law. Assess environmental impact of HUL operations and establish strategies for sound environment management and key implementation steps. Enctheirage development of inherently safer and cleaner manufacturing processes to further raise the standards of environment performance. Establish appropriate management systems for environment management and ensure regular auditing to verify compliance. Establish systems for appropriate training in implementation of Environment Management Systems at work. 28
  29. 29.  Ensure that all employees are made aware of individual and collective responsibilities towards environment. Arrange for expert advice on all aspects of environment management. Participate, wherever possible, with appropriate industry and Government bodies advising on environmental legislation and interact with national and local authorities concerned with protection of environment. INDIVIDUAL UNITS The overall responsibility for environment management at each unit will rest with the Unit Head, who will ensure implementation of HUL Policy on environment at unit level. Concerned line managers / heads of departments are responsible for environmental performance at department levels. In order to fulfill the requirements of the Environment Policy at each site, the Unit Head will: Designate a unit environment coordinator who will be responsible for co-ordinating environmental activities at unit, collating environmental statistics and providing / arranging for expert advice. Agree with the Management Committee Member responsible for the unit, specific environmental improvement objectives and targets for the unit and ensure that these are incorporated in the annual objectives of the concerned managers and officers and are reviewed periodically. Ensure that the unit complies with Unilever and HUL mandatory standards and the relevant national and state regulations with respect to environment. Ensure formal environmental risk assessment to identify associated environmental aspects and take appropriate steps to control risks at acceptable levels. 29
  30. 30.  Ensure that all new operations are subjected to a systematic and formal analysis to assess environmental impact. Findings of such exercises should be implemented prior to commencement of the activity. Manage change in People, Technology and Facilities through a planned approach based on training, risk assessment, pre-commissioning audits and adherence to design codes. Regularly review environment performance of the unit against set objectives and targets and strive for continual improvement. Sustain a high degree of environmental awareness through regular promotional campaigns and employee participation through training, safety committees, emergency drills etc. Ensure dissemination of relevant information on environment within the unit and to outside bodies, and regularly interact with Government authorities concerned for protection of environment. Maintain appropriate emergency procedures consistent with available technologies to prevent / control environmental incidents. Provide appropriate training to all employees. Ensure periodic audits to verify compliance with environment management systems and personally carry out sample environment audits to check efficacy of the systems. Report environmental statistics to HUL Corporate Safety & Environment Group on a monthly basis. 30
  31. 31. RESEARCH AND INNOVATION CENTERS Since most new products and processes are developed in these Units, certain additional responsibilities devolve on them to ensure implementation of the Environment Policy of the company. In addition to the Unit Heads responsibilities outlined above, the heads of these units will: Ensure that a formal and systematic risk assessment exercise is undertaken during the process/product development stage with specific reference to environmental impact. Transfer technology to the pilot plant and main production through a properly documented process specification which will clearly define environmental impact and risks associated with processes, products, raw material and finished product handling, transport and storage. Ensure that treatment techniques are developed for any wastes generated as a result of the new product/process and is incorporated into the process specifications. QUALITY POLICY: Hindustan Lever Limited considers quality as one of the principal strategic objectives to guarantee its growth and leadership in the markets in which it operates. The company is committed to respond creatively and competitively to the changing needs and aspirations of their consumers through relentless pursuit of technological excellence, innovation and quality management across their businesses, and offer superior quality products and services that are appropriate to the various price points in the market as well as to their commitment to building shareholder value. 31
  32. 32. The company recognizes that its employees are the primary stheirce of success in its operationsand is committed to training and providing them the necessary tools and techniques as well asempowering them to ensure broad base compliance of this policy in the organization at all levels.The company is committed to fulfill its legal and statutory obligations and international standardsof product safety and hygiene and will not knowingly sell product that is harmful to consumers ortheir belongings. It will institute systems and measures to monitor compliance in order to meet itsresponsibilities to consumers.The company will maintain an open communication channel with its consumers and customers andwill carefully monitor the feedback to continuously improve its products and services and setquality standards to fulfill them. The company is committed to extend its quality standards to itscontract manufacturers, key suppliers and service providers and by entering into alliances withthem, to jointly improve the quality of its products and services. This policy is applicable toproduction from its own facilities as well as to production that is outsourced.The company will periodically review this quality policy for its effectiveness and consistency withbusiness objectives.The company delegates authority and responsibility for dissemination and implementation of thispolicy to each Business and Unit Head. 32
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  34. 34. SAFETY AND HEALTH POLICYINTRODUCTIONHindustan Lever Limited (HUL) supplies high quality goods and services to meet the daily needsof consumers and customers. In doing so, the Company is committed to exhibit the higheststandards of corporate behavior towards its consumers, employees, the societies and theenvironment in which we operate.Towards this, the Company recognizes its responsibility to ensure safety and protection of healthof its employees, contractors and visitors in all its operating sites, which include manufacturing,sales and distribution, research laboratories and offices during work and work related travel.This Policy document defines the vision, principles, aim, required actions and scope of the policyapplication as well as the responsibility for execution.THEIR VISIONTheir vision is to be an injury free organization.HUL NEWS:”We will bring safety on top of mind for all employees and will integrate it with allbusiness processes. We will realize their Vision through an Integrated Safety Managementapproach, which focuses on People, Processes, Systems, Technology and Facilities, supported bydemonstrated leadership and employee commitment at all levels as the prime drivers for ensuring asafe and healthy work environment”. 34
  35. 35. SAFETY PRINCIPLES: HULs Occupational Safety and Health Policy is based on and supported by the following eight Principles. These Principles have the same status as the Companys Code of Business Principles: All injuries and occupational illnesses are preventable All operational exposures can be safeguarded Safety evaluation of all business processes is vital Working safely is a condition of employment Training all employees to work safely is essential Management audits are a must Employee involvement is essential All deficiencies must be reported and corrected promptly In order to facilitate operationalisation of the Safety Principles, a separate document has been prepared, which covers: a) Safety Principles b) Success Criteria c) Illustrative KPI 35
  36. 36. Consumer satisfactionIndira is 20 years old, a tribal woman at Kondegaon village in Bastar district. She is just back fromthe nearby jungles, collecting firewood. After attending to her baby son, she will go to the villagewell to take a quick wash. Yesterday her husband brought her a white soap, with pink petals in it.Indira had requested him to buy one, for the festival later this evening.Indira is among millions of consumers in rural India who use Hindustan Levers products. Shecame to know about Lux through the TV set at the community centre. It is not very costly, and alsoavailable nearby.Home to over 700 million people, rural India comprises not only over 70% of Indias billion-strongpopulation, but also over 12% of the worlds population. The rural population already accounts forsubstantial consumption of Fast Moving Consumer Goods and also consumer durables. About 50%of the sales of soaps & detergents are generated in rural India. Similarly, almost half the demandfor black & white television sets, pressure cookers, table fans, sewing machines also comes fromthere. 36
  37. 37. COST MANAGEMENT:But the potential is even larger, both in terms of consumption and penetration. The fact that 70% ofthe population accounts for only 50% of even relatively well-penetrated categories, like soaps &detergents, indicates the enormous scope of consumption-led growth in these categories. Thereforesuch categories will derive growth out of increased usage. In categories, which are relatively lesspenetrated, like personal products, rural India offers an even bigger growth opportunity throughgreater penetration and then consumption. For example only three out of 10 consumers in ruralmarkets use shampoo or skin care products. Therefore growth in such categories will emerge, asmore consumers purchase these products, and then continue to use them regularly.Hindustan Lever has taken many initiatives over the decades to create markets in the ruralhinterlands. By marketing relevant products, at affordable prices.At the same time, if products have to come up the order in the rural purchase hierarchy, they haveto be affordable. If rural India today accounts for about half of detergents sales, it is because HULhas developed low-cost value-for-money branded products, like Wheel. The company has alsotaken initiatives to create markets even for apparently premium products, by offering them in packsizes, like sachets, whose unit prices are within the reach of rural consumers. For example,initiated in the 1980s, sachets (Rs.2, Re.1, or 50 paise) today constitute about 55% of HindustanLevers shampoo sales. With media reach gradually increasing, rural consumers today, where themedia has its footprints, share the same aspirations with their urban counterparts. HUL hasresponded to the trend with low unit price packs of even other products - Lux at Rs.5, Lifebuoy at 37
  38. 38. Rs.2, Surf Excel sachet at Rs.1.50, Ponds Talc at Rs.5, Pepsodent toothpaste at Rs. 5, Fair &Lovely Skin Cream at Rs.5, Ponds Cold Cream at Rs.5, Brooke Bond Taaza tea at Rs.5.OTHER MARKETING STRATEGIES:For decades now, Hindustan Lever has also taken initiatives to circumvent the limitation incommunication channels, by innovatively leveraging non-conventional media. Among them arewall paintings, cinema vans, weekly markets (haat), fairs and festivals. Given the rural consumersfascination for cinema, the cinema vans show popular movies, interspersed with productsadvertisements. Weekly markets, fairs and festivals are parts and parcel of rural life. They give anopportunity to address consumers, spread over many tiny hamlets, at one location. The occasionsare used to demonstrate product benefits and also sell such products. Such demonstrations haveplayed a significant role in creating, for example, the detergents market in rural India. In recenttimes, such demonstrations are being deployed to illustrate how visible clean is not hygienic clean,and how using soap is essential to prevent easily avoidable infections.Communication through fairs and festivals are backed by direct consumer contact. For example, in1998-99, Hindustan Lever implemented a major direct consumer contact, called Project Bharat,which covered 2.2 crore homes. Each home was given a box, at a special price of Rs.15,comprising a low unit price pack of shampoo, talcum powder, toothpaste and skin cream, alongwith educational leaflets and audio-visual demonstrations. The project has helped eliminatebarriers to trial, and has strengthened salience of both particular categories and brands. Similarly in2002, Hindustan Lever has launched a similar large-scale direct contact, called Lifebuoy SwasthyaChetana, which already covers 70 million people in 18,000 villages of 8 states. The project isintended at generating awareness about good health and hygiene practices, and specifically how a 38
  39. 39. simple habit of washing hands is essential to maintaining good health. The initiative will involveinteraction with students and senior citizens, who act as change agents.AVAILABILITY OF HUL’S PRODUCT:Generating awareness pays dividends only when steps are taken to ensure constant availability ofproducts. In rural India particularly, availability determines volumes and market share, because theconsumer usually purchases what is available at the outlet, influenced very largely by the retailer.Therefore, over the decades, Hindustan Lever has progressively strengthened its distribution reachin rural India, which today has about 33 lakh outlets. Direct rural distribution in Hindustan Leverbegan with the coverage of villages adjacent to small towns. The companys stockists in thesetowns were made to use their infrastructure to distribute products to outlets in these villages. Butthis distribution mode could only be extended to villages connected with motorable roads, and itcould cover about 25% of the rural population by 1995.Therefore in 1998, Hindustan Lever launched Project Streamline to further extend its distributionreach. Under this initiative, the company identifies sub-stockists in a large village, connected bymotorable road to a small town. This sub-stockist in turn distributes the companys products tooutlets in adjacent smaller villages using transportation suitable to interconnecting roads, likecycles, scooters or the age-old bullock cart. Hindustan Lever is thus trying to circumvent thebarrier of motorable roads. As a result, the distribution network, as of now, directly covers about50,000 villages, reaching about 250 million consumers. The company simultaneously uses thewholesale channel, suitably incentivising them to distribute company products. 39
  40. 40. HUL has in the recent past established a common distribution system in rural areas for all itsproducts. Given the number of brands and their packs the rural retailer usually requires, one HULrepresentative can take all the products from the company portfolio that he needs. This commondistribution system is now fully operational, under one Regional Sales Manager exclusivelydedicated to rural markets of each region of the country.Over time, Hindustan Lever will further strengthen its rural distribution through mutuallybeneficial alliances with rural Self Help Groups (SHGs). Over the last five years, financialinstitutions, NGOs and government organizations are working closely to establish SHGs, whoseobjective is to alleviate poverty through sustainable income-generating activities. Since 2001,Hindustan Lever is implementing Project Shakti, whereby SHGs are being offered the option ofdistributing relevant products of the company as a sustainable income-generating activity. Themodel hinges on a powerful win-win relationship; the SHG engages in an activity which bringssustainable income, while Hindustan Lever gets an interface to interact and transact with the ruralconsumer. HULs vision for Project Shakti is to scale it up across the country by 2005, creatingabout 25000 Shakti entrepreneurs, covering 100,000 villages, and touching the lives of 100 millionrural consumers. Begun with 50 groups in Nalgonda district of Andhra Pradesh, with the supportof local authorities, the project has been extended, as of now, to about 50,000 villages in 12 states.A typical Shakti entrepreneur conducts business of around Rs.10,000 - Rs 15,000 per month,which gives her an income of about Rs 700 - Rs.1000 per month on a sustainable basis. As most ofthese women are from below the poverty line, and live in extremely small villages (less than 2000population), this earning is very significant, and is almost double of their past household income.The full benefit of Project Shakti will be realised after some years. 40
  41. 41. GROWTH AND ACHIEVEMENTS:19301888, less than four years after William Hesketh Lever launched Sunlight Soap in England, hisnewly-founded company, Lever Brothers, started exporting the revolutionary laundry soap toIndia. By the time the company merged with the Netherlands-based Margarine Unie in 1930 toform Unilever, it had already carved a niche for itself in the Indian market. Coincidentally,Margarine Unie also had a strong presence in India, to which it exported Vanaspati (hydrogenatededible fat).1933- Incorporated on 17th October, under the name of a Lever Brothers (India) Pvt., Ltd. (LBIL) wasthe wholly owned subsidiary of Unilever Ltd. London, UK.- 1933 Lever Brothers India Limited (LBIL) incorporated in India to manufacture Soaps.1935- On 11th May a subsidiary Co. was incorporated under the name United Traders Pvt. Ltd. formarketing the products of the Co. or imported from the parent Co.1956 -- On 27th October, the Company was converted into a Public Ltd. Co.- On 1st November, Hindustan Vanaspati Mfg. Co. Pvt. Ltd., William Gossage & Sons (India) Pvt.Ltd. and Joseph Crosfield & Sons Unilever Ltd. were amalgamated with LBIL and the name waschanged to Hindustan Lever Ltd. From 23rd october onwards activities of subsidiary Co. weretaken over by its holding Co.- On 17th November Unilever Ltd. Offered to the public 557,000 No. of equity shares of Rs.10each.1976- The company had set up plants at Taloja in Maharshtra for the manufacture of ossein and di-calcium phosphate. In August these plants were commissioned. 41
  42. 42. 1980- In order to reduce the non-resident holding in the Co. to 51%, Uniliver Ltd. offered for saleduring Feb. out of its shareholding in the Co. 4239523 No. of equity shares of Rs.10 each at apremium of Rs.9.50 per share in the following manner;- i) 10,00,000 shares to public financial institutions. - ii) 25,12,702 shares to the existing residentIndian shareholders on a pro-rata basis in the ratio of 1:4.- iii) 726,821 shares to employees and Indian directors.1983- A new fine chemical unit was commissioned.- As consideration, Indian shareholders of HL Ltd. were offered 62,20,576 No. of equity shares ofRs.10 each of Lipton India Ltd., at par in proportion of 2:8. ie 2 Lipt:8 HL equity. 1985- A project for the manufacture of 500 tonnes per day of diammonium phosphate wascommissioned.1986- Lux toilet soap was launched.1987Lifebouy Personal and Breez soaps launched.1989- Synthetic Detergent plant at Sumerpur in UP & Tiolet soap plant in Orai in UP werecommissioned.- Cracking catalyst plant at Haldia commissioned.- Vegetable oil plant commissioned at Kandla free trade zone.1991 42
  43. 43. - Company proposed to set up a 17,000 tpa. film sulphonation plant at Taloja to manufacture arange of detergent actives.1992- Entered in dental product market by introducing Pepsodent, Mentadent G etc.- A factory to manufacture leather garments and other leather based products including wool-on-leather garments and wool-on-leather was set up in Chennai.- The Company undertook to set up a large scale acquaculture centre at Tanjavur in Tamil Nadufor farming and processing catfish for the U.S. markets in technical collaboration with FFDA,Florida, USA who also provide a full buy-back guarantee.1993- Tata Oil Mills Co. Ltd. (TOMCO) was merged with Hindustan Lever Ltd with effect from 1stApril. As per the scheme of amalgamation, shareholders of TOMCO were allotted withoutPayment in cash 2 equity shares of Rs.10 each of HL for 15 equity shares of Rs.10 each held inTOMCO. After the amalgamation Unilever PLC London were allotted on a preferencial basis29,84,347 equity shares of Rs.10 each at a premimium of Rs.95 per share for maintain their shareholding at 51% in the Co.- The Company entered into joint venture agreement with Lakme Lever Ltd. to undertake themanufacturing and distribution of colour cosmetics and other personal care products.- The Company received the Presidents Award for Outstanding performance in AgriCommodities for the year 1994-95.1995HUL and Indian cosmetics major, Lakme Ltd, form 50:50 joint venture, Lakme Lever Ltd. HULacquires Kwality and Milkfood 100% brandnames and distribution assets. - HUL and US-basedS.C. Johnson & Son Inc. form 50:50 joint venture, Lever Johnson (Consumer Products) Pvt.Ltd.HUL Soaps and Detergent sales cross one million tonnes.1996- Brooke Bond India Ltd. was amalgamated with the Company. As per the scheme ofamlgamation, the Company allotted 533,28,713 equity shares to the share holders of Brooke BondIndia Ltd. in the proportion 9 shares of the company for 20 shares held in Brooke Bond India Ltd. 43
  44. 44. - The Company entered into joint venture S C Johnson & Son USA. The Joint Venture namedLever Johnson Consumer products Pvt. Ltd.1998- The Directors of Hindustan Lever Limited at their meeting held on 16th March, considered andapproved the proposal for amalgamation of Ponds India Limited with Hindustan Lever Limited.HULs tea business is among the biggest in the world.- HUL has signed a memorandum of understanding with Tata Housing Development Company fordeveloping some of its properties into residential and commercial complexes.- HUL has a world-class information technology infrastructure to enable the businesses to respondfaster and perform better.- Hindustan Lever Limiteds Bangalore factory has received National Productivity Award for thefourth year in a row from National Productivity Council. The factor has also received ISO 9002certification.1999- Hindustan Lever Ltd (HUL), has joined hands with the Institute for Social and Economic Change(Isec) for a rural development programme in Karnataka.- Hindustan lever Ltd, has decided to merge its subsidiary Industrial Perfumes Ltd with thecompany. The merger would be effective from January 1.- Hindustan Lever Limited (HUL) has decided to dispose of its dairy business to Nutricia (India)Pvt Ltd and spin off its animal and poultry feeds into a separate subsidiary.2000- The Company will be the largest e-tailer in the next two years.- The Company has launched a new brand of toopaste -- Aim.- The Company launched the International Lux Skincare range, "Sunscreen Formula".- The Company has launched a cooking medium New Dalda Active.- Kwality Walls, a division of Hindustan Lever Ltd., has launched softy ice cream and haspositioned it as a mass market product and Head of the ice cream business. 44
  45. 45. - Hindustan Lever Ltds Pepsodent toothpaste has introduced games at McDonalds outlets.- The Company has launched the new Nutririch Fair & Lovely fairness reviving lotion.2001- HUL has over 36,000 employees, and has created 2 lakh indirect jobs. Its operations are spreadacross 70 locations in India. There are over 50 factories, of which 28 are in backward areas. Theoperations involve 2000 suppliers and aassociates and 7000 stockists and agents. HUL hasemerged as a major Exporter.- Hindustan Lever has entered into a joint venture with Godrej Agrovet a subsidiary of GodrejSoaps.- In October 2000 HUL acting in concert with Unilever made an open tender offer for theremaining 24.62%of the IBL equity at price Rs 173.00 per share.2001- The Board of Hindustan Lever Ltd (HUL) had approved the transfer of its undertaking engagedin seeds business to its subsidiary Paras Extra Growth Seeds Ltd.- The company has signed an agreement with ICI India, a subsidiary of ICI plc, UK, for sale ofNickel Catalyst business and Adhesives business, a sub-unit of Specialty Chemicals Division ofthe companys Chemicals and Agri operations for a consideration of Rs.21 crore and Rs 9 croresrespectively.2002-Opto Circuits enters into an agreement with HUL to buy the business line of DigitalThermometers.- Comes out from the premium (prestige) fragrances segment by stopping distribution of CalvinKlein in the country2003- Ties up with Pepsi for distribution, signs a memorandum of understanding with Pepsi, to leverageeach others strengths in distribution. The agreement provides Pepsi access to the HULsinstitutional accounts.-HUL extended its Knorr Annapurna range into soup powders at Rs 5. Sporting flavours such asTomato Tease, Spicy Vegetable, Chicken Punch and Peppery Chicken 45
  46. 46. -The companty has introduced a new mango drink Mr Fruit.2004-Relaunches Rin Shakti Powder and Rin Shakti Bar-Mr. Harish Manwani appointed president, home and personal care, North America , a businessworth 5bn euros in sales turnover for 02-HUL unveils new schemes to lure customers in Tamil Nadu-Hindustan Lever Ltd has introduced its new active Gel Close Up in the market-Hindustan Unilever launches `Perfect Radiance, range of 12 premium skincare products underbrand name Fair & Lovely on May 26, 2004-HUL enters into kids personal care market-Unilever, the parent company of Hindustan Lever and one of the worlds largest consumerproducts companies, has set up a global sourcing arm, that will have a large presence in India tobuy products and raw materials from low-cost locations for its subsidiaries across the world-Launches Dove Ultra Moisturizing Body Wash-HUL inks pact with Pepsi in beverage segment2005-HUL introduce iced tea in glass bottles-HUL rolls out Brooke Bond brand variation-Mcleod Russel & HUL signs MoU2007-Hindustan Unilever Ltd. has appointed Mr. Ashok K. Gupta as "Officer who is in default" for thepurposes of Compliance with section 5(f) of the Companies Act, 1956. 46
  47. 47. HUL DISTRIBUTION NETWORK MANUFACTURING UNITS ALL ACROSS INDIA C&F 1 C&F 2 C&F 3 C&F 4 C&F 5 C&F 6 C&F 7STOCKISTS STOCKISTS STOCKISTS STOCKISTS STOCKISTS STOCKISTS STOCKISTS WHOLESALERS RETAILERS CUSTOMERS This is the whole Distribution Chain of HUL to cover the Rural market. The company have remarkably worked upon to make the supply chain from manufacturers to retailers simple with very few number of mediators and jobbers. It has helped them to maintain the transparency in the cycle and also have let them established a prompt delivery process. The products are manufactured in the factories all across India and then is supplied from there to the various Carriage and Forwarding (C&F) units which are 5-10 per state depending on the area they have to cover and are established by the company. These C&F units then supply the products to the various Wholesalers confined to their area only and according to the wholesalers demand. The wholesalers then supply 47
  48. 48. the products to the semi-wholesalers and the retailers as per the volume of their order. Then thesemi-wholesalers deliver the products to the retailers and customers. MANUFACTURERSTAGE 1- C&FIn this stage the products reach to the Carriage and Forwarding unit from various manufacturingunits established all across India. The volume of the delivery depends upon the quantityrequired/ordered by the C&F unit. The depot sends the request of the volume of the products to theHead Office, which then order the various factories to supply the products to the mentioned depot.The supply is met within a week. HUL has 45 C&F’s with 7000 stockists and 2000+ suppliers andassociates to target the market. C&FSTAGE 2- WHOLESALERSThe C&F then supplies the products according to the demand of various wholesalers. Each of thedepot cover a region assigned to them.Each C&F acquires 5-7 trucks and hire 4-5 more trucks to supply products everyday.They work on the concept of advance payment by DD by the wholesalers and deposit them in thebank which is transferred to the head office. 48
  49. 49. HUL DISTRIBUTION NETWORK IN RURAL MARKET MANUFACTURING UNITS ALL ACROSS INDIA C&F 1 C&F 2 C&F 3 C&F 4 C&F 5 C&F 6 C&F 7STOCKISTS STOCKISTS STOCKISTS STOCKISTS STOCKISTS STOCKISTS STOCKISTS WHOLESALERS AGENTS RETAILERS CUSTOMERS IN Rural Geographic Regions of India the product which should be made by the manufactures can be delivered through by C & F unit and these unit provide stock in the hand of the merchant wholesalers. Wholesaler delivers the product or stock to the different retailers (who sales stock in 49
  50. 50. breaking bulk) through by agents. The main difference in urban and rural areas distributionnetworks are the agent who made relation between merchant wholesalers to retailers. Retailers cansell stock in small quantity to the ultimate consumers. 50
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  53. 53. NATION WIDE MANUFACTURING:80 factories, across IndiaThe year was 1923. Lord Leverhulme, the legendary founder of Lever Brothers, was visiting India.The nationalist sentiment in India was for locally manufactured products. Lord Leverhulme, whobelieved that what is good for a country is equally good for the company, responded to thataspiration because he too shared that dream.His dream ultimately was realised in 1934. In September 1934, after more than a decade ofdiscussions in London and in India, a Lever factory was allowed to sprout on the land that hadbeen reclaimed by the Bombay Port Trust at Sewri. From here, a month later rolled out the firstcake of Sunlight soap to be manufactured in India. The same year, Lever Brothers took over theGarden Reach Factory in Kolkata.These two factories were the first in a manufacturing base, which today literally dots the lengthand breadth of India. From Assam to Gujarat, from Uttaranchal to Kerala.Hindustan Unilevers diverse product range is today manufactured in about 80 factories. Inaddition, the company outsources from 150 other units. The operations involve 2,000 suppliers andassociates.DEVELOPING BACKWARD AREASSeveral HUL factories are situated in backward areas. The company has consciously responded tothe national policy of development of backward areas by setting up manufacturing units in theseplaces, which provide several direct and indirect employment opportunities for these areas, andleads to general economic development of these regions through industrialization. In fact, all majorinvestments of HUL, in recent years, have been either in A-Category backward areas or No-Industry Districts. These include factories in Khamgaon and Yavatmal (Maharashtra), Chhindwara 53
  54. 54. (Madhya Pradesh), Orai, Sumerpur and Khalilabad (Uttar Pradesh), Haldia (West Bengal),Silvassa (Dadra & Nagar Haveli), Pondicherry, Goa, Doom Dooma (Assam), Haridwar(Uttaranchal) and Barotiwala (Himachal Pradesh). Since 2001 itself, HUL has set up nine newfactories in backward areas.Equally, HUL has an enviable track record in taking over sick enterprises, in response to requestsfrom Government, and converting them into viable operations. The companys units at Mangaloreand Rajpura all bear testimony to this achievement. In the process, HUL has saved precious jobsand developed local economies.HULs manufacturing facilities, like the Khamgaon soap plant and the Sumerpur detergent barunit, are recognized as among the best in the Unilever world.HUL has adopted Total Productive Maintenance (TPM) for achieving manufacturing excellencesince 1994. As on date, TPM is in different stages of implementation in 28 factories. Four HULfactories have already received the TPM Consistency Award, and 14 factories have been awardedwith the TPM Excellence Award. 54
  55. 55. MEETINGS NEEDS EVERY WHEREHow do you ensure that Mr. Ramesh in Kanyakumari gets his Lifebuoy soap and Mrs. Kulkarni inJammu gets to know how Bru coffee tastes even before she has bought it? Well, you need to havea cutting edge distribution network in place.Hindustan Levers distribution network is recognized as one of its key strengths. Its focus is notonly to enable easy access to our brands, but also to touch consumers with a three-wayconvergence - of product availability, brand communication, and higher levels of brandexperience.HULs products, manufactured across the country, are distributed through a network of about 7,000redistribution stockists covering about one million retail outlets. The distribution network directlycovers the entire urban population.The general trade comprises grocery stores, chemists, wholesale, kiosks and general stores.Hindustan Lever services each with a tailor-made mix of services. The emphasis is equally onusing stores for direct contact with consumers, as much as is possible through in-store facilitators.AT THE SUPERMARKETSSelf-service stores and supermarkets are fast emerging in metros and large towns. To servicemodern retailing outlets in the metros, HUL has set up a full-scale sales organization, exclusivelyfor this channel. The business system delivers excellent customer service, while driving growth forthe company and the store. At the same time, innovative marketing initiatives are taken to provideconsumers with experience of our brands at the store itself, through product tests and in-storesampling. 55
  56. 56. IN THE VILLAGESHUL has also revamped its sales organization in the rural markets to fully meet the emergingneeds and increased purchasing power of the rural population. The company has brought allmarkets with populations of below 50,000 under one rural sales organization. The team comprisesan exclusive sales force and exclusive redistribution stockists, under the charge of dedicatedmanagers. The team focuses on building superior availability, while enabling brand building in thedeepest interiors. HULs distribution network in rural India already directly covers about 50,000villages, reaching about 250 million consumers, through about 6000 sub-stockists.HARNESSING INFORMATION TECHNOLOGYAn IT-powered system has been implemented to supply stocks to redistribution stockists on acontinuous replenishment basis. The objective is to catalyze HULs growth by ensuring that theright product is available at the right place in right quantities, in the most cost-effective manner.For this, stockists have been connected with the company through an Internet-based network,called RSNet, for online interaction on orders, dispatches, information sharing and monitoring. RSNet covers about 80% of the companys turnover. Today, the sales system gets to know every daywhat HUL stockists have sold to almost a million outlets across the country. RS Net is part ofProject Leap, HULs end-to-end supply chain, which also includes a back-end system connectingsuppliers, all company sites and stretching right upon stockists.PIONEERING NEW CHANNELSHindustan Unilever is simultaneously creating new channels, designed on the same principle ofholistic contact with consumers.Project Shakti, HULs partnership with Self Help Groups of rural women, is becoming anextended arm of the companys operation in rural hinterlands. Started in 2001, Project Shakti hasalready been extended to about 50,000 villages in 12 states - Andhra Pradesh, Karnataka, Gujarat,Madhya Pradesh, Tamil Nadu, Chattisgarh, Uttar Pradesh, Orissa, Punjab, Rajasthan, Maharashtraand West Bengal. The respective state governments and several NGOs are actively involved in the 56
  57. 57. initiative. The SHGs have chosen to partner with HUL as a business venture, armed with trainingfrom HUL and support from government agencies concerned and NGOs.Hindustan Unilever Network (HUN) is the companys arm in the Direct Selling channel, one ofthe fastest growing in India today. It already has about 3.5 lakh consultants - all independententrepreneurs, trained and guided by HLNs expert managers. HLN has already spread to over1500 towns and cities, covering 80% of the urban population, backed by 42 offices and 240 servicecentres across the country. It presents a range of customized offerings in Home & Personal Careand Foods.Out-of-Home consumption of products and services is a growing opportunity in India, aselsewhere in the world. Hindustan Unilever is already the largest player in the hot beverages out-of-home segment, with over 15000 tea and coffee vending points. The company is expanding thenetwork aggressively, in the education, entertainment, leisure and travel segments. HULs alliancewith Pepsi will significantly strengthen this channel.Health & Beauty Services are Hindustan Unilevers simultaneous foray to meet the increasingconsumer need for such products and services. Lakme Salons provide specialized beauty servicesand solutions, under the recognized authority of the Lakme brand. The Ayush Therapy Centersprovide easy access to authentic Ayurvedic treatments and products.Hindustan Unilever, which once pioneered distribution in India, is today reinventing distribution -creating new channels, and redefining the way current channels are serviced. In the process it isconverging product availability, with brand communication and brand experience. 57
  58. 58. SHAKTI - CHANGING LIVES IN RURAL INDIAShakti is HULs rural initiative, which targets small villages with population of less than 2000people or less. It seeks to empower underprivileged rural women by providing income-generatingopportunities, health and hygiene education through the Shakti Vani programme, and creatingaccess to relevant information through the iShakti community portal.In general, rural women in India are underprivileged and need a sustainable source of income.NGOs, governmental bodies and other institutions have been working to improve the status ofrural women. Shakti is a pioneering effort in creating livelihoods for rural women, organized inSelf-Help Groups (SHGs), and improving living standards in rural India. Shakti provides criticallyneeded additional income to these women and their families, by equipping and training them tobecome an extended arm of the companys operation.Started in 2001, Shakti has already been extended to about 80,000 villages in 15 states - AndhraPradesh, Karnataka, Tamilnadu, Maharashtra, Gujarat, Madhya Pradesh, Chattisgarh, UttarPradesh, Rajasthan, Punjab, Haryana, West Bengal, Orissa, Bihar & Jharkhand. The respectivestate governments and several NGOs are actively involved in the initiative.Shakti already has about 25,000 women entrepreneurs in its fold. A typical Shakti entrepreneurearns a sustainable income of about Rs.700 -Rs.1,000 per month, which is double their averagehousehold income. Shakti is thus creating opportunities for rural women to live in improvedconditions and with dignity, while improving the overall standard of living in their families. Inaddition, it involves health and hygiene programmes, which help to improve the standard of livingof the rural community. 58
  59. 59. Shaktis ambit already covers about 15 million rural population.Plans are also being drawn up to bring in partners involved in agriculture, health, insurance andeducation to catalyze overall rural development.HULs vision for Shakti is to scale it up across the country, covering 100,000 villages and touchingthe lives of 100 million rural consumers by 2005.Shakti Vani is a social communication programme. Women, trained in health and hygiene issues,address village communities through meetings at schools, village baithaks, SHG meetings andother social fora. In 204, Shakti Vani has covered 10,000 villages in Madhya Pradesh, Chattisgarhand Karnataka. The vision is to cover 80,000 villages in 2005.iShakti, the Internet-based rural information service, has been launched in Andhra Pradesh, inassociation with the Andhra Pradesh Governments Rajiv Internet Village Programme. The serviceis now available in Nalgonda, Vishakapatnam, West Godavari and East Godavari districts. iShaktihas been developed to provide information and services to meet rural needs in medical health andhygiene, agriculture, animal husbandry, education, vocational training and employment andwomens empowerment. The vision is to have 3,500 kiosks across the state by 2005. 59
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  62. 62. LIFEBUOY SWASTHYA CHETNA HEALTH & HYGIENE EDUCATION Lifebuoy Swastya Chetna (LBSC) is a rural health and hygiene initiative which was started in 2002. LBSC was initiated in media dark villages (in UP, MP, Bihar, West Bengal, Maharashtra, Orissa) with the objective of spreading awareness about the importance of washing hands with soap. The need for a program of this nature arose from the fact that diarrhoeal diseases are a major cause of death in the world today. It is estimated that diarrhoea claims the life of a child every 10 seconds and one third of these deaths are in India. According to a study done by the London School of Hygiene and Tropical Medicine, the simple practice of washing hands with soap and water can reduce diarrhoea by as much as 47%. However, ignorance of such basic hygiene practices leads to high mortality rates in rural India. Being India’s leading personal wash health brand, Lifebuoy saw a role for itself in propagating the message of hygiene and health in villages. We launched our Lifebuoy Swasthya Chetna initiative keeping this rationale in mind. LBSC is a multi-phased activity which works towards effecting behaviour change amongst the rural population it touches. It demonstrates that “visible clean is not really clean” thereby proving the importance of washing hands with soap. It targets children as they are the harbingers of change in society and mothers since they are the custodians of health. 62
  63. 63. As stated above, the campaign has been divided into various phases. In the initial phase, a HealthDevelopment Facilitator (HDF) and an assistant initiates contact and interacts with students andinfluencers of the community, i.e. village community representatives, medical practitioners, schoolteachers etc. A number of tools such as a pictorial story in a flip chart format, a "Glo-germdemonstration" and a quiz with attractive prizes to reinforce the message are used. The "Glo-Germdemonstration" is a unique tool to make unseen germs visible and emphasize the need to use soapto wash hands and kill germs. The first interaction with students is then replicated with the womenand finally the rest of the community. The various stages reinforce the message and learnings,which is crucial in order to effect awareness and behaviour change in favour of hand washhygiene.The programme has touched 27000 villages and 80 mn people over the last four years. In 2006alone LBSC contacted 10,000 villages in UP, MP, Jharkhand and Bihar. This on-going project iscommitted to spreading the message of health and hygiene and touching more lives in rural Indiaover 2007. 63
  64. 64. FAIR & LOVELY FOUNDATIONEconomic Empowerment of WomenThe Fair & Lovely Foundation is HULs initiative which aims at economic empowerment ofwomen across India. It aims to achieve this through providing information, resources, inputs andsupport in the areas of education, career and enterprise. It specifically targets women from low-income groups in rural as well as urban India. Fair & Lovely, as a brand, stands on the economicempowerment platform and the Foundation is an extension of this promise. The Foundation hasrenowned Indian women, from various walks of life, as its advisors. Among them areeducationists, NGO activists, physicians. The Foundation is implementing its activities inassociation with state governments.In India, low-income families, albeit unwillingly, tend to discriminate against girl children, inproviding opportunities for education and enterprise, because of resource constraints. The supportprovided by Fair & Lovely Foundation will help girl children avail opportunities of highereducation and acquire skills in appropriate professions. The series of projects that have been drawnup to achieve the vision include the following:Careers:Career guidance is provided by organising career fairs. About 500,000 students have benefitedfrom these career fairs in 150 towns and cities in till 2004, getting acquainted with over 200 careeroptions. The programme offers workshops for career guidance, resume-writing skills, personalitydevelopment. A career guidance programme has also been specially designed for television, and isrunning on three TV channels. Career columns are being written and sponsored in differentmagazines. 64
  65. 65. Education:Scholarships for education such that it opens career avenues, specifically targeting low-incomegroups are being provided. 2003 was the first year of scholarships - 147 students have receivedscholarships in 2003. The 2004 scholarships for urban students have been announced; 72 womenhave received the scholarships. The scholarships for rural students are yet to be announced.Enterprise:Vocational traininga. a three-month Home Health Care Nursing Assistants Courseb. skill development in the areas of embroidery and garment designingc. professional course for aspiring beauticians.In all, 400 women have been trained till 2004.The Foundation has also begun to train "Balwadi" teachers. About 1000 teachers have been trainedin Maharashtra and a pilot has begun in Bihar.Launched in 2003, Fair & Lovely Foundation seeks to impact the lives of about 5000 women by2005. This will be done through scholarships and enterprise initiatives. For career guidance, itseeks to touch millions of aspiring women and students in an ongoing programme. 65
  67. 67. LIST OF COMPETITORS:1. Procter & Gamble2. ITC Ltd.3. Nirma4. Colgate Palmolive Company5. Nestle6. Britannia7. Dabur8. Wal-Mart 67
  68. 68. 9. Marico10. Tata tea11. GSK12. GCPL13. Gillette RESEARCH METHODOLOGYResearch in common parlance prefers to a search for knowledge. Once can also define research asa scientific and systematic search for pertinent information on a specific topic. In fact research isan art of scientific investigation. Research is an academic activity and as such the term should beused in a technical sense.Research Problem:In every organization “Distribution channel” makes its own place. All Business organizations areusing Distribution Channel to provide its goods to manufactures to the end users. Because ofwhich our study is going on to describe the “Distribution Channel of Hindustan Unilever Limitedin rural market”.Research Objective: 68
  69. 69. The purpose of the research is to discover answers to question through the application of scientificprocedures. The main aim of the research is to find out the truth which is hidden and which has notbeen discovered as yet. Though each research study has its own specific purpose we may think ofresearch objectives as falling into a number of following broad grouping:• Study of Distribution channel of “Hindustan Unilever Limited” in rural market .• Market survey of different retailers who provided the Hindustan Unilever Limited products to the end consumers in Rural Market.RESEARCH PLAN:Research Design:“Research design is the arrangement of conditions for collection and analysis of data in a mannerthat aims to combine relevance to the research purpose with economy in procedure”.In this research project we can take Descriptive Research for collection and analysis of Data.Descriptive Research:Descriptive research includes surveys and fact-finding enquiries of different kinds. The majorpurpose of descriptive research is description of the state of affairs as it exists at present. The main 69
  70. 70. characteristics of this method are that the researcher has no control over the variables; he can onlyreport what has happened or what is happening.SAMPLE DESIGN:A sample is only a portion of the universe or population. A sample design is a definite plan forobtaining a sample from a given population. It refers to the technique or procedure or theresearchers adopts in selective items of the sample so that the data collected may be therepresentative of the population.Method of Sampling:Probability Sampling:-It is also known as random sampling. Here, every item of the universe has an equal chance orprobability of being chosen for sample.Probability sampling may be taken in form of: • Simple Random Sampling • Systematic Random Sampling • Stratified Random Sampling • Cluster and area Sampling • Sequential Random Sampling 70
  71. 71. Non-Probability Sampling:-It is also known as deliberate or purposive or judge mental sampling. In this type of sampling,every item in the universe does not have an equal, chance of being included in a sample.Non- Probability sampling may be taken in form of: • Convenience Sampling. • Quota Sampling. • Judgement Sampling.We choose Simple Random Sampling method here for analysis of data.Simple Random Sampling: - As it is very difficult to meet each and every respondent. So, werandomly select the sample and in this type of sampling every member has an equal chance ofselection so that data has been collected randomly.Sample Size:This refers to the number of items to be selected from the universe to constitute a sample. The sizeof the sample should not be too larger or too smaller. It should be optimum. An optimum sample isone which fulfills the requirements of efficiency, representatives, reliability and flexibility 100 retail units or outlets are the SAMPLE SIZE.Sample Universe:Lucknow City, Barabanki etc. 71
  72. 72. RESEARCH INSTRUMENT:Questionnaire:Questionnaire are formal set of question prepare to collect the required information. This is one ofthe most effective and popular techniques used in surveys. However one has to be careful whiledrawing up questionnaire before deciding on the questions it is important to understand the exactnature of the information required and who should be interviewed.The content, phrasing and the sequence of the questionnaire should also be clear and unambiguous.The knowledge levels of the target of respondent should also be kept in mind while drawing up thequestions.Data Collection Methods:In dealing with any problem, once the sample has been selected data must be collected from thesample population. There are several ways of collecting the appropriate data, which deferconsiderably in the context of cost, time and other resources.Questionnaires, Personnel Interview, Open ended, Close ended & multiple Questions in thequestionnaire have been asked from the sample to draw a useful conclusion.They can be broadly divided into two into two categories: • Primary Source • Secondary Source 72
  73. 73. Primary Data:Primary data is a data which is collected from a fresh for the first time. There are several methodsof collecting the primary data are as follows: • Observation Method • Interview Method • Questionnaire Method • Depth Interview Method • Content Analysis MethodThe data collected in this project is primary data and they could be made through by Questionnaireand Observation method.Secondary Data:There are those data which have already been collected by someone else and have panel throughstatistical power. When the researcher utilizes secondary data, he has to look into various sourcesfrom where he can obtain data usually published data is available in:• Technical and trade journals.• Books, Magazines & newspapers.• Public records & statistics.• Historical Documents and other resources.• Website journals, etc. 73
  74. 74. ANALYSIS OF DATA:1. (A) Do you keep products of HUL in your outlet/shop? a).Yes 88 b). No 12 . Do you keep products of HUL in your outlet/shop? 100 88 90 80 70 60 50 40 30 20 12 10 74 0 Yes No
  75. 75. 1 B) Why don’t you keep the products of HUL in your shop or why did you stop keeping itsproducts? a). erratic supply 4 b). lack of demand 2 c). low margin 2 d). no supplier 3 e). don’t know about the company 1 75
  76. 76. Why don’t you keep the products of HUL in your shop? 4.5 4 4 erratic supply 3.5 3 3 lack of demand 2.5 low margin 2 2 2 no supplier 1.5 1 1 don’t know about the company 0.5 0 12. From whom do you purchase your product? 1). Distributor 25 2). Dealer/ Agent 40 3). Agency 18 4). Wholesaler 17 76
  77. 77. From whom do you purchase your product? 17 253. Distributor Dealer/ Agent 18 Agency Wholesaler 40How do you rate the delivery process of the distributor/dealer? a) Excellent 25 b) Above Average 33 c) Average 38 d) Below Average 4 e) Extremely Poor 0 77
  78. 78. How do you rate the delivery process of the distributor/dealer? 4 0 25 Excellent Above Average 38 Average Below Average Extremely Poor 334. Are you satisfied with the distributor/dealer behavior? Yes 68 No 32 Are you satisfied with the distributor/dealer behavior? 80 68 70 60 50 Yes 40 32 No 30 20 10 78 0 1
  79. 79. 5. Are you satisfied with the delivery of the goods supplied by distributor/ dealer? Yes 71 No 29 Are you satisfied with the delivery of the goods supplied by distributor/ dealer? 29 Yes No 71 79
  80. 80. 6. Are they providing you adequate supply of goods? Yes 76 No 24 Are they providing you adequate supply of goods? 80 76 70 60 50 Yes 40 No 30 24 20 10 0 1 80
  81. 81. 7. Is the distributor taking the damages/ compensation regularly? Yes 78 No 22 Is the distributor taking the damages/ compensation regularly?90 7880706050 Yes40 No30 222010 0 1 81
  82. 82. 8. What is the mode of payment to the distributor/ Dealer by Retailer? Cash 62 Credit 24 Cheque 14 What is the mode of payment to the distributor/ Dealer by Retailer? 14 Cash Credit 24 Cheque 62 82
  83. 83. 9. Are they providing you any discount on cash payment? Yes 52 No 48 Are they providing you any discount on cash payment? 53 52 52 51 50 Yes No 49 48 48 47 46 1In the case of Hindustan Unilever Limited the company is providing Rs.800 per month for aWindows display along with 1% cash discount and 2% on the sales amount on quarterly basisgiven to his retailers. 83
  84. 84. 10. Any extra benefit for the increment of the sales given by them? Windows Display 75 Long term sales plan 20 Canopy 5 Any extra benefit for the increment of the sales given by them? 5 20 Windows Display Long term sales plan Canopy 75 84
  85. 85. 11. Can agents regularly make aware you about the new products of HUL regular or not? Yes 72 No 28 Can agents regularly make aware you about the new products of HUL regular or not? 80 72 70 60 50 Yes 40 No 28 30 20 10 0 1 85
  86. 86. FINDINGS1. In case of sales agent behaviors the HUL agents are more efficient and focused.2. Due to 4 Distributors in Lucknow it is easier for the retailers to give orders because of small payments.3. There are many schemes given by the HUL in small quantity to his retailers i.e., Cash discount on every sales order.4. Experience salesman easily influences the super value store.5. HUL are providing much benefit to the retailer to increase their sales i.e., windows display, canopy etc. 86
  87. 87. RECOMMENDATIONThese are some of the recommendation which can be given in case of Hindustan UnileverLimited:-1. Sales agent who is in rural market should be experience person because they are easily made relationship with her retailers.2. HUL can provide a various new schemes to his retailers for making potential retailers.3. There should be some visit of the Area Manager from time to time arrange by the company.4. The employee should be given uniforms in which the name of the company should be printed, by doing this the sales people get motivated. These shops should be opened for 24 hours. They should offer 24 hours free home delivery system.5. The delivery vehicle should be attractive the name of the company should be printed in that so that it becomes the sources of advertisement.6. The companies should emphasis on its advertisement; there should be BRAND FIT in that. For example when lux launch its advertisement with sharukh khan with girls. It was heavily criticized because it was not fit with the brand. It adversely affects the opinion of the customer and it results in decrease in sales.7. Company should emphasis on their business areas. They should penetrate their business in the rural areas. 69% of the Indian population lives in rural areas. There is huge market there and very less market has been penetrated. 87
  88. 88. CONCLUSIONWith the study of the topic we can know about the distributor relationship with the retailers of thelargest firm in retail Sector are:HINDUSTAN UNILEVER LIMITED.With the study it can be easily known how the retailers are been selected HINDUSTANUNILEVER LIMITED (Super value store) and what the terms and conditions regarding theselection of the retailers and what are the benefits being provided to the retailers and what are thevarious benefits being provided to the retailers in order to increase their sales.The company is making there strategies regarding the customer and the various product assortmentbeing provided to the retailers and whether the distributor is helping the retailers in managing thedemand of the retailers and also the sales agent behavior and delivery man behavior affects the saleof the retailers as well as the distributor.So, my study is visualize the distribution channel of the HINDUSTAN UNILEVER LIMITED inrural areas and they say that retailers liked LIMITATIONS 88