Demand & Supply analysis of Surf Excel.

1. Demand Supply Analysis of Surf Excel
➢ INTRODUCTION TO HUL -
• Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods company with a heritage of over 80
years in India.
• On any given day, nine out of ten Indian households use our products to feel good, look good and get more out of life
– giving us a unique opportunity to build a brighter future.
• HUL was established in 1931 as Hindustan Vanaspati Manufacturing Co. and following a merger of constituent groups in
1956, it was renamed Hindustan Lever Limited.
• The company was renamed in June 2007 as Hindustan Unilever Limited.
• As of 2019 Hindustan Unilever's portfolio had 35 product brands in 20 categories.
• The company has 18,000 employees and clocked sales of ₹34,619 crores in FY2017–18
➢ INTRODUCTION TO SURF –
• Surf Excel is the first detergent powder of India and Pakistan. It was launched as a replacement of bar soap,
indiscriminately used by housewives.
• The product was initially launched in Pakistan in 1948 and then in India in 1959. It was known as Surf and later in 1996 its
name was changed to Surf Excel.
• In 1990, to get an edge over its uprising competitors, Surf launched its first sub-product and named it Surf Ultra.
• The product became very much handy for the householders of India because people already used the word Surf to
denote detergent powder.
• Surf Excel totally led the monopoly stage until the 1990s.
• In 2002, to get an edge over Ariel from P&G, Surf Excel launched Matic detergent powder.
• 2004 remained the year when Surf Excel extended their product line with Quick-wash. This gave another edge to their
brand name.

2. ➢ A Comparison of cost price with sale price of product in product line
COST PRICE QUANTITY SALE PRICE PRICE P/KG
₹52.50 500 G ₹55.00 ₹55.00
₹171.00 1 KG ₹180.00 ₹180.00
₹321.00 2 KG ₹340.00 ₹170.00
₹471.00 4 KG ₹496.00 ₹124.00
❖ Conclusion of this table is If you purchase the product in more quantity the price/KG will
be low.
➢ Surf Excels as HUL’s top brand, nets over Rs 5,000 crore in sales
• Surf excel recorded sales of Rs 5,375 crore in the past year with a market share of 17.9%,
industry executives citing Nielsen data said.
• It accounted for roughly 14% of the company's net revenue and 45% of its laundry
segment sales.

3. ➢ Law of Demand - The law of demand states that if the price of commodity is high
then demand of the commodity will be low .
• For example – If the price of the product will rise then demand of the commodity
will fall down.
• Below the table states the strategy of the company between the year 2002-2004 ,
Company was facing the low demand for the surf excel 1KG Detergent , they
decided to decrease the price , that resulted increase in demand of product.
Year Price Quantity
2002 Rs.150 50
2003 Rs.135 100
2004 Rs.99 150
99
135
150
50 100 150
PriceofthecommodityX(inRs.)
Quantity Demanded of Commodity X (in units)
Demand Curve
O
➢Demand Analysis

4. • Price of the product.
• Price of substitutes and complements.
• Income of the household.
• Taste and preference of the household.
• The amount annually spent on advertisement of the
product.
• The Number of Consumers in the Market.
• The Consumer's Expectations.
• New innovations of substitute products.
➢ Factors Affecting Demand

5. • Now , If we take the Previous 5 year of data and look at the sales of HUL , It has
increased by 19.92% in which surf excel has played a big role .
• In the period of 2019-20 the sales has not increased as compared to previous
years due to continue innovation of the substitute product in the market which
has caused low increment of the sales.
• As the prediction for the sales of 2021 the sales no. of could fall down due to
COVID-19 Pandemic , Which has affected the import-export business of HUL in
large amount.
• In 2018 ,14.8 % of sales in HUL is contributed by Surf Excel Detergents .
o Sales Growth
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
MAR 2016 MAR 2017 MAR 2018 MAR 2019 MAR 2020
Sales

6. ➢ Law of supply – Law of supply states that The Higher the price of the commodity
higher the supply of the commodity .
• For example – If the price of commodity will increase the supply will also increase.
• Below the table if we look at the price increase from 100-400 simultaneously the
supply of the product also increased from 10-40 .
• When it comes to supply of detergent, it is indirectly depend on the new
innovations on detergent Like Sensitive Skin reactive detergent which is not
harmful to use , So products like grabs attention and Price & Supply of the
product will be high.
Price Quantity
100 10
200 20
300 30
400 40
100
200
300
400
10 20 30 40
a
b
c
d
The table and Supply curve is made from assumed data.
PriceofthecommodityX(inRs.)
Quantity Demanded of Commodity X (in units)
Supply Curve
O
➢ Supply Analysis

7. o Profit Growth
4,167
4,502
5,225
6,060
6,764
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
MAR 2016 MAR 2017 MAR 2018 MAR 2019 MAR 2020
Net Profit
• The profit growth has been increased immensely in last 5 years of HUL and if
we calculate that is 62.32% , that’s huge number.
• Surf Excel is the superstar product of HUL and recorded sales of INR 5375
crore in 2019 .
• If we analyse the chart below the we can say that period of 2018-19 is the
period when HUL earned the most profit in last five years.
• If we forecast the supply and profit of 2021 will be low because of the
COVID-19 Pandemic , which has restricted the consignment of the products
for safety issue.

8. • A decrease in costs of production - This means business can supply
more at each price. Lower costs could be due to lower wages,
lower raw material costs.
• Investment in capacity - Expansion in the capacity of existing firms,
e.g. building a new factory.
• Productivity of workers - If workers become more motivated and
work hard, then there will be significant increase in output and
supply.
• Government subsidies - Increase in government subsidies will also
reduce the cost of goods.
• The profitability of alternative products – If the profitability of
alternate products (Ariel, Vanish and Cascade.) increases that will
affects the supply of surf excel.
➢ Factors Affecting Supply

9. ▪ Strength
1. Strong brand name
2. Strong distribution
3. Multiple Variants
▪ Weakness
1. Low Rural penetration
2. Expensive
3. Less Biodegradable compounds
▪ Opportunities
1. Increasing disposable income
2. Growth in detergent market.
3. Increase penetration in rural
market.
▪ Threats
1. Intense competition
2. Market Cannibalization
➢ SWOT Analysis
By Nikhil Soni
(Div- A , Batch of 2020-22 )