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  2. 2. IIPM NEW DELHI Page 2 Acknowledgement We have prepared this study paper for the “DEMAND ANALYSIS OF HUL’S SURF EXCEL”. Quite frankly, we have derived the contents and approach of this study paper through discussions with colleagues who are also the students of this course as well as with the help of various Books, Magazines and Newspapers etc. I would like to give my sincere thanks to Mr.SomnathAcharya (territory manager of south delhi), friends and the teachers who, through their guidance, enthusiasm and counseling helped me enormously. As I think there will be always need of improvement. Apart from this, I hope this study paper would stimulate the need of thinking and discussion on the topics like this one. DIBYENDU DAS GAURAV MITTAL PANKAJ SINGH YASHASWI RAJ
  3. 3. IIPM NEW DELHI Page 3 Executive Summary Hindustan Unilever Limited is the Indian arm of the Anglo-Dutch company –Unilever. Both Unilever and HUL have established themselves well in the Fast Moving Consumer Goods (FMCG) category. In India, the company offers many households brands like, Dove,Lifebuoy, Lipton,Lux, Pepsodent, Ponds, Rexona, Sunsilk, Surf, Vaseline etc. Some of its efforts were also rewarded when four of HUL brands found place in the „Top 10 brands‟ list for the year 2008 published in The Economic Times. Unilever was a result of the merger between the Dutch margarine company, Margarine Unie, and the British soap-maker, Lever Brothers, way back in 1930. For 70 years, Unilever was the undisputed market leader but now faces tough competition from Proctor & Gamble and Colgate- Palmolive. HUL is also known for its strong distribution network in India. In order to further strengthen its distribution in the rural areas and to empower the local women, HUL launched a project Shakti in 2000 in a district in Andhra Pradesh. The idea behind this project was to create women entrepreneurs and provide them with micro-credit and training in enterprise management, which would enable them to create self-help groups and become direct-to-home distributors of HUL products. Today Shakti is present across 80,000 villages in 15 states and is helping many underprivileged women earn their livelihood. As the per capita income of India increasing along with the Indian population. So, the future for the FMCG Companies is bright. To analysis the past performance & the future demand of HUL, FMCG products we have considered following points:  We have a listed the different FMCG product lines of HUL. We have done competitor‟s analysis in which the market share of top FMCG companies are analogized& the market share of HUL‟S different categories product are analogized with comparison to its competitors.
  4. 4. IIPM NEW DELHI Page 4  Then we have done SWOT analysis to know the threat & opportunities of HUL in present market.  Then performance analysis is made by taking 5year financial data from 2006-2011. The profit & sales growth is analyzed.  Then the future opportunities for FMCG products are taken into consideration by analyzing the increased per capita income & increased disposable income to forecast the future demand of HUL.
  5. 5. IIPM NEW DELHI Page 5 TABLE OF CONTENTS  Chapter 1. Background……………………………………………………………6  Chapter 2. Corporate Information……………………………………………………………13  Chapter 3OBJECTIVE & METHODOLOGY…………………………………………………..16  Chapter 4PRODUCT LINE…………………………………………………………………..18  Chapter 5DEMAND FORECAST………………………………………………………….30  Chapter 6 MARKET SHARE………………………………………………………………37  Chapter 7COMPETITORS OF HUL………………………………………………………………….42  Chapter 8SWOT ANALYSIS……………………………………………………………49  Chapter9.forecasting methods……………………………………....51  Chapter10.Calculations……………………………………………...59  Chapter11.Conclusion………………………………………………62
  7. 7. IIPM NEW DELHI Page 7 History & Chronology The summer of 1888, visitors to the Kolkata harbor noticed crates 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 18 95 and other famous brands like Pears, Lux and Vim.Vanaspati was launched in 1918 and the famous Dalda brand came t o 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 three companies merged to form HUL in November 1956 ; HUL offered 10% of its equity to the Indian public, being the first among the foreign subsidiaries to do so. Unilever now holds 52.10% equity in the company. The rest of the shareholding is distributed In among about 360,675 individual shareholders and financial institutions. The erstwhile Brooke Bond's presence in India dates back to 1900. By 1903, the company had launched 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 erstwhile Lipton's links with India were forged in 1898. Unilever acquired Lipton in 1972, and in 1977 Lipton Tea (India) Limited was incorporated. Pond's (India) Limited had been present in India since 1947. It joined the Unilever fold through an international acquisition of Chesebrough Pond's 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 Indian opinions and aspirations. The liberalization of the Indian economy, started in 1991, clearly marked an inflexion in HUL's and the Group's growth curve. Removal of the regulatory framework allowed the company to explore every single product and opportunity segment, without any constraints on production capacity. Simultaneously, deregulation permitted alliances, acquisitions and mergers. In one of the most visible and talked about events of India's corporate history, the erstwhile Tata Oil Mills Company (TOMCO) merged with HUL, effective from
  8. 8. IIPM NEW DELHI Page 8 April 1, 1993. In 1995, HUL and yet another Tata company, Lakme Limited, formed a 50 :50 joint venture, Lakme to market Lakme's market-leading cosmetics and other appropriate products of both the companies. Subsequently in 1998, Lakme Limited sold its brands to HUL and divested its 50% stake in the joint venture to the company. 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 has also set up a subsidiary in Nepal, Unilever Nepal Limited (UNL), and its factory represents the largest manufacturing investment in the Himalayan kingdom. The UNL factory manufactures HUL's products like Soaps, Detergents and Personal Products both for the domestic market and exports to India. The 1990s also witnessed a string of crucial mergers, acquisitions and alliances on the Foods and Beverages front. In 1992, the erstwhile Brooke Bond acquired Kothari General Foods, with significant interests in Instant Coffee. In 1993, it acquired the Kissan business from the UB Group and the Dollops Ice cream business from Cadbury India. As a measure of backward integration, Tea Estates and Doo m Doo ma, two plantation companies of Unilever, were merged with Brooke Bond. Then in July 1993, Brooke Bond India and Lipton India merged to form Brooke Bond Lipton. India Limited (BBLIL), enabling greater focus and ensuring synergy in the traditional Beverages business. 1994 witnessed BBLIL launching the Wall's range of Frozen Desserts. By the end of the year, the company entered into a strategic alliance with the Kwality Icecream Group families and in 1995 the Milkfood 100% Icecream marketing and distribution rights too were acquired. Finally, BBLIL merged with HUL, with effect from January 1, 1996. The internal restructuring culminated in the merger of Pond's (India) Limited (PIL) with HUL in 1998. The two companies had significant overlaps in Personal Products, Specialty Chemicals and Exports businesses, besides a common distribution system since 1993 for Personal Products. The two also had a common management pool and a technology base. The amalgamation was done to ensure for the Ground benefits from scale economics both in domestic and export markets and enable it to fund investments required for aggressively building new categories. In January 2000, in a historic step, the government decided to award 74 per cent equity in Modern Foods to HUL, thereby beginning the divestment of governmentequity in public sector undertakings (PSU) to private sector partners. HUL's entryinto Bread is a strategic extension of the company's wheat business. In 2002, HULacquired the government's remaining stake in Modern Foods. In 2003, HUL acquired the
  9. 9. IIPM NEW DELHI Page 9 Cooked Shrimp and Pasteurized Crabmeat business ofthe Amalgam Group of Companies, a leader in value added Marine Products exports.
  11. 11. IIPM NEW DELHI Page 11 Hindustan Unilever Limited (abbreviated to HUL), formerly Hindustan Lever Limited, is INDIAs largest consumer products company and was formed in 1933 as Lever Brothers India Limited. It is currently headquartered in Mumbai, India and its 41,000 employees are headed by Harish Manwani, the non-executive chairman of the board. HUL is the market leader in Indian products 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. The company was renamed in late June 2007 as "Hindustan Unilever Limited". Some of its brands include Kwality Wall's ice cream, Lifebuoy, Lux, Breeze, Liril, Rexona, Hamam, Moti soaps, Pureit Water Purifier, Lipton tea, Brooke Bond tea, Bru Coffee, Pepsodent and Close Up toothpaste and brushes, and Surf, Rin and Wheel laundry detergents, Kissan squashes and jams, Annapurna salt and atta, Pond's talcs and creams, Vaseline lotions, Fair & Lovely creams, Lakme beauty products, Clinic Plus, Clinic All Clear, Sunsilk and Dove shampoos, Vim dish wash, Ala bleach and Domexdisinfectant,Rexona,Modern Bread and Axe deospray.HUL has produced many business leaders for corporate India. It is referred to as a „CEO Factory' in the Indian press for the same reasons. It‟s leadership building potential was recognized when it was ranked 4th in the Hewiit Global Leadership Survey 2007 with only GE, P&G and Nokia ranking ahead of HUL in the ability to produce leaders with such regularity. Today, HUL is one of India‟s largest exporters of branded Fast Moving Consumer Goods. It has been recognized by the Government of India as a Golden Super Star Trading House. Over time HUL has developed into a viable & competitive sourcing base for Unilever world wide in Home and Personal Care & Foods & Beverages category of products. HUL is also a global marketing arm for select licensed Unilever brands and also works on building categories with core country advantage such as brandedbasmatirice. HUL Exports offers high level of service with flexibility and responsiveness thorough out the supply chain. It has a dedicated organization structure to support this endeavor and this has helped in growth of these businesses in particular. Intrinsic cost competitiveness in the end to
  12. 12. IIPM NEW DELHI Page 12 end Supply chain with appropriate technology and competitive capital investment operations while delivering best in class quality enables HUL to position itself as a key sourcing hub for Unilever and also become a preferred partner for Global customers in categories we operate. HUL‟s key focus in the exports business is on two broad categories. It is a sourcing base for Unilever brands in Home & Personal Care (HPC) and Food and Beverages (F&B) for supplies to other Unilever companies. It also focuses on becoming a preferred supplier to both non-Unilever and Unilever clients in three categories in which India, as a country, has competitive advantage – Branded Rice, Marine Products and Castor and its Derivatives. HUL enjoys international recognition within Unilever and outside for its quality,reliability and speed of customer service. HUL's Exports geography comprises, at present, countries in Europe, Asia, Middle East, Africa, Australia, and North America etc.  HUL‟s products touches two out of three Indian everyday  Reach 80% Households  Direct Coverage of 1mln outlets  2000 Suppliers and Associates  71 Manufacturing locations  15000 Employees  1100 managers  Shelf availability 84% outlets in India
  14. 14. IIPM NEW DELHI Page 14 Corporate Information Hindustan Unilever Limited, 165/166, Backbay Reclamation Registered Office Mumbai – 400020 Tel : +91 – 22 – 39830000 Fax no. : +91 – 22 –22026712 Ashok.K.Gupta, Executive Director (Legal) and Email : Company Secretary Tel nos. : +91-22-39832567/ 39832358 /39832557 Lovelock & Lewes, Chartered Accountants Statutory Auditors 252, Veer SavarkarMarg Dadar, Mumbai- 400 028 Crawford Bayley& Co. State Bank Building Solicitors N.G.N. VaidyaMarg Mumbai – 400 023 Karvy Computershare Private Limited Unit : HINDUSTAN UNILEVERLIMITED Plot No. 17 to 24, Vittalrao Nagar, Registrar and Share Transfer Madhapur, Hyderabad – 500 081.
  15. 15. IIPM NEW DELHI Page 15 Agents Phone : +91- 40 23420818-823 Fax : +91- 40 23420814 Email : Website : Unilever India Exports Limited Bon Limited Unilever Nepal Limited Pond‟s Exports Limited Daverashola Estates Private Limited Jamnagar Properties Private Limited Subsidiary Companies Shamnagar Estates Private Limited Brooke Bond Real Estates Private Limited Hindustan Unilever Field Services Private Limited Levers Associated Trust Limited Levindra Trust LimitedHindlever Trust ltd
  17. 17. IIPM NEW DELHI Page 17 OBJECTIVES AND METHODOLOGY OBJECTIVE Primary objective To find the past sale growth and demand analysis Secondary Objective Market structure analysis SWOT analysis Competitor analysis Performance evaluation Trend Analysis Moving Average Analysis Methodology In this project we have followed descriptive method of study. Research instrument Here project analysis is made by collecting secondary data from different websites, journals, etc.  Secondary data‟s are pre published and research data‟s collected from different websites, journals, newspapers, company research papers.  These documents and data‟s are very useful for the theoretical, conceptual and organizational background analysis.  Detailed analysis of data‟s is made by plotting different graphs and tables which can be easily understandable.  Then by observing these graphs we have made our conclusions and recommendations.
  19. 19. IIPM NEW DELHI Page 19 PRODUCT LINE A) HOME AND PERSONAL CARE: 1) Personal wash Lux Breeze Lifebuoy Dove Liril Pears Hamam Rexona 2) Laundry 3) 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) Deodorants 7)Colour Cosmetics Axe Lakme Rexona 8)Ayurvedic Personal and health care:Ayush B) FOODS 1) Tea 2) Coffee 3) Foods 4) Ice cream Brooke Bond Brooke Bond Bru Kissan Kwality walls Lipton Knor Annapurna C) WATER PURIFIER Pureit
  20. 20. IIPM NEW DELHI Page 20 Most Popular Products of HUL Axe, the deodorant that is considered cool, fashionable and stylish by young men was launched in India in 1999. Available in morethan 60 countries around the world, it is a world leader in male toiletries. Axe has a mix that is completely harmonized globally from its proposition and communication to the product, as available on the shelf. Axe is available in five fragrances: Java, Pulse, Dimension, Voodoo and Phoenix. Axe has become the leading male deodorant brand in India within just one year of its launch. Consumers associate a lifestyle of cool clubs, cool music and cool fashion with Axe. The youth view it as an icon which introduces many 'firsts' to their world of music and dance – like the first "World's Longest Dance Party" and the first ever 'Axe Voodoo Island Party'
  21. 21. IIPM NEW DELHI Page 21 Closeup is the original youth brand of India. The first brand targeting youth in the oral care market, with an edgy and youthful image which stays relevant till date. Ever since its launch in 1 975, Closeup has broken every rule in the book on how tooth pastes should behave! Closeup was the first gel toothpaste to be launched in India and has led the gel toothpaste segment ever since. In 2004, Closeup was re-launched with a bang. And this time it was packed with the power of Vitamin Fluoride System – a powerful mix of Vitamins, Fluoride, Mouthwash and Micro whiteners, the perfect combination of ingredients for fresher breath and stronger, whiter teeth. Closeup became the first Gel toothpaste with Fluoride in the Indian Market! The brand umbrella also includes Closeup Lemon Mint, gel toothpaste with the whitening benefits of lemon.
  22. 22. IIPM NEW DELHI Page 22 Dove soap, which was launched by Unilever in 1957, has been available in India since 199 5. It provides a refreshingly real alternative for women who recognize that beauty is not simply about how you look, it is about how you feel. The skin's natural pH is slightly acidic 5.5-6. Ordinary soaps tend to be alkaline, with pH higher than 9. Dove is formulated to be pH neutral (pH between 6.5 and 7.5) and to be mild on skin. This makes it suitable for all skin types for all seasons. While Dove soap bar is widely available across the country, Dove Body Wash isavailable in select out lets. Globally, Dove has been extended to many other countries. Sincethe 1980s, for example, Unilever has launched a moisturizing body-wash, deodorants, body lotions,
  23. 23. IIPM NEW DELHI Page 23 facial cleansers and shampoos and conditioners, providing a comprehensive range of solutions to bring out true inner beauty. A woman's passion for beauty is universal and catering to this strong need is Fair & Lovely. Based on a revolutionary breakthrough in skin lightening technology, Fair & Lovely was launched in 1978. The Hindustan Lever Research Centre (it is among the largestresearch establishments in India's private sector, including pharmaceutical companies, with facilities in Mumbai and Bangalore) deployed technology, based on pioneering research in the science of skin lightening to develop Fair & Lovely. The formulation is patented. Its formulation acts safely and gently with the natural renewal process of the skin, making complexion fairer over a period of six weeks. Fair & Lovely is formulated with optimum levels of UV sunscreens and Niacinamide that is known to control dispersion of melanin in the skin. It is a patented and proprietary formulation, which has been in the market for 25 years. Niacinamide (Vitamin B3) is a water-soluble vitamin and is widely distributed incereals, fruits and vegetables - and its use in cosmetic formulations has been known
  24. 24. IIPM NEW DELHI Page 24 for various end benefits. The UV components of the formulation are scientifically chosen and used at optimum levels to provide wide spectrum protection against UV rays of the sun. Specifically, this patented formulation offers a high UVA protection, which is more relevant to Asian skin than plain SPF protection creams sold in the West. All the active ingredients in the Fair & Lovely formulation function synergistically to lighten skin color through a process that is natural, reversible and totally safe. The brand today offers a substantive range of products, including Ayurveda Fair& Lovely Fairness cream, Fair & Lovely Anti-Marks cream, Fair & Lovely Oil control Fairness Gel, Fair & Lovely for Deep Skin and Fair & Lovely Fairness Soap. The latest has been the Perfect Radiance, a complete range of 12 premium skincare solutions from Fair & Lovely. Half a century ago, as India took her steps into freedom, Lakme, India's first beautybrand was born. At a time when the beauty industry in India was at a nascent stage,Lakme tapped into what would grow to be amongst the leading, high consumer interest segments in the Indian Industry - that of skincare and cosmetic products.Armed with a potent combination of foresight, research and constant innovation,Lakme has grown to be the market leader in the cosmetics industry.Lakme today has grown to have a wide variety of products and services that cover all facets of beauty care, and arm the consumer with products to pamper herself from head to toe.
  25. 25. IIPM NEW DELHI Page 25 These include products for the lips, nails, eyes, face and skin, and services like the Lakme Beauty Salons Since 1929, Lux in step with the changing trends and evolving beauty needs of the consumers, offers an exciting range of soaps and Body Washes with unique elements to make bathing time more pleasurable. One can choose from a range of skincare benefits like firming, fairness and moisturizing. Lux stands for the promise of beauty and glamour as one of India's most trusted personal care brands. Lux Believes in passion for beauty .It continues to be a favorite with generations of users for the experience of a sensuous us and luxurious bath. Lux believes that femininity shouldn‟t be denied. Since its launch in India in the year 1929, Lux has offered a range of soaps in different sensuous colors and world class fragrances. Lux is a beauty soap of film stars, Lux recognized the need for a compelling message about beauty that would
  26. 26. IIPM NEW DELHI Page 26 resonate with women of today. Lux has recently launched its two fruit extract variants – New Lux Strawberry & Cream and Lux Peach & Cream contain a blend of succulent fruits & luscious Chantilly cream that melts down into your skin making it soft and smooth. Introduced in India in 1902, Pears soap has no equal. It is gentle enough, even for baby's skin. A pear is manufactured like any other soap, but unlike in conventional soaps, the glycerin is retained within the soap. That is the cause if it‟s unique transparency. After manufacturing, the soap is mellowed under controlled conditions over weeks. At the end of this maturing process, it is in dividedly polished and packed in cartons. Today Pears is available in three variants - the traditional amber variant, a green variant for oil control and a blue variant for germ protection.
  27. 27. IIPM NEW DELHI Page 27 Pepsodent, launched in 1993, was the first toothpaste with a unique anti-bacterial agent to address the consumer need of checking germs even hours after brushing. Pepsodent packs included a Germ Indicator in February-May 2002, which allowed consumers to see the efficacy in fighting germs for themselves. As a follow-up, in October 2002, Pepsodent offered Dental Insurance to all its consumers to demonstrate the confidence the company has in the technical superiority of the product. Pepsodent connects directly with kids and their parents. Pepsodent has always worked in the direction of an overall awareness of dental health. The prelaunch campaign in October 2003 widened the context to "sweet and sticky" food and leveraged the truth that children do not rinse their mouths every time they eat, demonstrating that this makes their teeth vulnerable to germ attack. Pepsodent's most recent campaign aims at educating consumers on the need for germ protection through the night. Pepsodent also includes a range of toothbrushes.
  28. 28. IIPM NEW DELHI Page 28 Pond's has been synonymous with skin care in India since 1947.The impressive track record of Pond's began when Theron T Pond, a pharmacist from Utica New York, introduced 'Pond's Golden Treasure' in 1846, a witch-hazel based wonder product. In 1914, Pond's Cold Cream and Vanishing Cream marked the brand 's evolution to a beauty icon. In 1955 Pond's Extract Company merged with Chesebrough Manufacturing and in 1987 Unilever purchased Chesebrough -Pond's. By this time the Pond's brand had built up a powerful international presence. From one man in a tiny home- made laboratory, to today's state of the art R&D facilities led from Bangkok, Mumbai, New York and Tokyo, the Pond's promise has remained the same across 58 countries - to deliver products that make a real difference to women's skin and the way they live their lives.
  29. 29. IIPM NEW DELHI Page 29 A pioneer in the Indian detergent powder market, Surf Excel has constantly upgraded itself over the years, to answer the constantly changing washing needs of the Indian homemaker. Today Surf Excel offers outstanding stain removal ability o n a wide range of stains. This means that mot hers now have the freedom to let their kids experience life without worrying about stains. Surf Excel quick wash is powered with a path -breaking technology- it reduces water consumption and time taken for rinsing by 50%. It is a significant benefit, given the acute water scarcity in most of India. Surf Excel is available in 3 variants: Surf Excel Blue, Surf Excel Quick Wash and Surf Excel Automatic. So whatever be the need, Surf Excel haina.
  31. 31. IIPM NEW DELHI Page 31 DEMAND FORECAST 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 35 major Indian brands.. HUL recorded 2 0.02% year over year (yoy) growth in revenue at Rs 16660.38 coresduring 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 (46%) towards EBIT (Earnings before Income Tax). Raw material prices for palm oil and other chemicals increased of 31% from Nov'10 -Apr'11, which led the company to implement a price hike by a weighted average of 10% from April to June 2011 in order to protect its margins. From April to October 2011, however, palm o il prices declined 62.2% so Hindustan has accrued higher revenue on lower volume sales in late 2011, early 2012. 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. Business and Financial Metrics[ Sales growth of 13.36% in CY'10 (Calendar Year 2010) and 9.38% in CY'09can be attributed to aggressive launches, re-launches of products and a hike in product prices. The net Income of the company has not increased at the same pace as revenues because of a decline in margins (from 18.5% in CY'06 to 16.7% in CY'09) in its soaps and detergents business and investment in IT and water purifier business in CY 05-06.
  32. 32. IIPM NEW DELHI Page 32 HUL Total Income and Net Profit over the years (in Rs. Crore) There is an insignificant change in company's revenue mix in CY04-07 period. Soaps and Detergents business contributes highest (46%) towards revenues followed by Personal care products (26%). Despite being highest revenue generator soaps and detergents business is not the most profitable segment. Personal care contributes highest (46.2%) towards the EBIT which is due to high margins and low penetration of the market. HUL Total Sales Revenue distribution across segments (in %) Discussion FY'09 (Financial Year 2009) : HUL has shown steady sales growth by 19-2 0 % in Jan - Sep'08 but it was largely price led due to a hike in product prices in the previous two quarters . Volume growth has decreased from 10.2 % in Q1CY08 (1st quarter Calendar Year 2008) to 6.8% in Q3CY08. EBIT margins fell by 30bps to 12.9 due to 0 1000 2000 3000 2006 2007 2008 2009 2010 2011 Profit After Tax Profit After Tax 0 2 4 6 8 10 12 14 16 18 20 2006 2007 2008 2009 2010 ColuChemical agri & Others Foods Personal Product Soap & Detergent
  33. 33. IIPM NEW DELHI Page 33 inflation of Commodities prices but net pro fit saw a raise to 34% on account of income from sale of properties. Soaps and Detergents (46% Revenue, 44% EBIT): This segment includes Personal Wash products like soaps, detergent bars, detergent powders, detergent liquids, scourers,etc.Sales of the segment grew sales by13.9% and 20.3% in CY07 and H1CY08 respectively. Fabric Wash has shown strong growth in this year with the mark et share moving up from 34.6% in Q4CY06 to 38.3% in Q2CY08 Profitability margins which declined from 25.7% in CY'02 to 13.7 % in CY'05 due to pricing actions from P&G in the Laundry segment have slightly recovered to 15 .6% (CY'07). Personal Care Products (26% Revenue, 46.2% EBIT) : This business which comprises mainly skin care, hair care and oral care is the most profitable segment for HUL.It is highest contributor to HUL‟s EBIT at 47 %. Low penetration and consumption of personal products has sustained these categories' high growth rates. This segment has shown a revenue growth of 20.9% in H1CY08 and the new launches in the Ponds and Dove range contributed to the profitability of the segment. Beverages (11% Revenue,10.3% EBIT) : 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, TajMahal andTaaza, the company has been able to arrest the decline in its market share.Overall margins have declined to 15% in CY'07 from 20% in CY'04 due to hike in Coffee bean prices. Foods (4% Revenue, 0.8% EBIT) :In spite of having one o f the best distribution networks (coverage of 6.3 mn outlets) in the country, the food business has never constituted a big part of revenues.Thatswhy 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 stap les category, which is low margin business.Foods margin dipped partly due to launch related costs for Amaze brain foods (launched in two southern states during the January– March 2008 quarter).
  34. 34. IIPM NEW DELHI Page 34 IceCream(1% Revenue, 0.6%EBIT) : This segment includes include Ice Creams and Frozen Desserts.KwalityWall' s, launched in 1995, is the company's master brand for ice cream. It has launched Moo brand that boosts children‟s calcium levels in the June quarter of CY07. Exports : Exports include sales of Marine Products, Castor, etc. as well as sales o f 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. It has seen a growth of 41.5% as Pure It (a water purifier product) increased its reach to more than 600 towns. HUL revenue distribution across segments for CY'07 [ 3]
  35. 35. IIPM NEW DELHI Page 35 Trends and Forces Increasing raw material prices drives HUL to raise its prices[ Raw materials constitute a big chunk (63%) 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 fell from 19.7% in CY03 TO 13.7% in CY07. The first steep increase in the prices (31% in No v'07-Apr'08 period) 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. The weighted average price increases were 8% in January -March 2008 period and 10%in April-June 200 8. 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. Palm oil and Brent Crude have fallen by 62.2% and 40.1% from Aril'08 prices. The benefit offall in raw material prices will be accrued 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 04-07. As their incomes and standards of living improve, Indian customers‟ for FMCGs are shifting towardshigher lifestyle categories like skin care, hair 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 disposableincome. 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
  36. 36. IIPM NEW DELHI Page 36 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 man y product launches, Dove hair care products, re-launch of Axe deodrants and launchof 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 50paiseshampoo sachets in 200 7. Along with these, Company's premium pro ducts are nowsoldthorugh Modern Trade. Also it has entered into a Joint venture with SolonsHoldings of South Africa to increase its capabilities to meet the merchandising g 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 o f consumer goods among developing economies of the world. It has per capita consumption 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 p layers 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 .HUL has consistently been the top advertisement spender over the years withexpenditure of Rs 650 cro re in the year 2008. Second largest spending is Rs 240 crore by a telecom company. P&G India and Colgate-Plamolive, other FMCGplayers, also feature in the top 10 advertisers list. HUL has increased its advertising expenses by 26.56% in CY'07.Also the money spent in Research and Development which facilitates new product launches and re-launches of existing products hasseen a raise by 38.16% in the same year. Pricing scenario in current time is in favor of companies but in past due to p ricin g war with
  37. 37. IIPM NEW DELHI Page 37 P&G in Soaps and Detergents, HUL's margins in the segment declined from a high of 25.7% in CY02 to 13.7 % in CY05. CHAPTER 6. MARKET SHARE
  38. 38. IIPM NEW DELHI Page 38 MARKET SHARE This chart explains more about t he market share o f HUL. The Total turnover o fHul was 2961 million US$ way ahead o f its competitors like Nestle, Dabur, Godrej, Marico etc. HUL or Hindustan Unilever is the number one Indian Band. It is The Market leader in number of products. In 2007, Hindustan Unilever was rated as the most respected company in India for the past 25 years by Business World, one of India‟s leading business magazines. HUL is the market leader in Indian consumer products with presence in over 20 consumer categories such as Soaps, Tea, Detergents and Shampoos amongst others with over 700 million Indian consumers using its products. It has over 35 brands. Sixteen of HUL‟s brands featured in the AC Nielsen-Brand Equity list o f 100 Most Trusted Brands Annual Survey (2008). According to Brand Equity, HUL has the largest number of brands in the Most Trusted Brands List. This is the market share of various divisions of HUL products..The above Graph indicates the gap between HUL & other competitors.The value of the graph is 100 basis points. In the division of fabric wash Surf excel and Rin are the market leaders. Its value is 37% while its competitors value is13.2%.In case os personal wash HUL brands cross majority of market share of 50%.Brands like Lux, Dove, Pears are very popular. In case of DishwshHul retains Majority with 56.4 % of market share while their competitors share was 8.6 %.In case of skin care HUL
  39. 39. IIPM NEW DELHI Page 39 was again the number one brand with market share o f 55 % while its competitors share was 7.4 %.In case of shampoos HUL was number one but Its competitors are also more. Brands like clinic all clear, sunsilk are the main products in this category. In the category o f Talcum powder Brands like Ponds and Aviancehelped HUL maintain marketshare o f 59.8 %. The market share in Packet tea category is very competitive. But HUL has an slight edge over its competitors with brands like Brooke bond & Lipton. In category o f Coffee Brooke bond Bru has majority of market share of 47.5 %, while Other competitors managed 36.8 %. Kissan jam is the market leader in category o f Jams. It has 63.6 % of market share while other brands has 5.1% o f marketshare .
  40. 40. IIPM NEW DELHI Page 40 PRESENT STATURE Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods company, touching the lives of two out of three Indians with over 20 distinctcategories in Home & Personal Care Products and Foods & Beverages. They endow the company with a scale of combined volumes of about 4 million tones and sales of nearly Rs.13718 cores. HUL is also one of the country's largest exporters; it has been recognized as a Golden Super Star Trading House by the Government of India. The mission that inspires HUL's over 15,000 employees, including over 1,300 managers, is to "add vitality to life." HUL meets everyday 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, Unilever, which holds 52.10% of the equity. The rest of the shareholding is distributed among 360,675 individual shareholders and financial institutions. HUL's brands - like Lifebuoy, Lux, Surf Excel, Rin, Wheel, Fair & Lovely, Pond's, Sunsilk, Clinic, Pepsodent, Close-up, Lakme, Brooke Bond, Kissan, Knorr-Annapurna, Kwality Wall's – are household names across the country and span many categories - soaps, detergents, personal products, tea, coffee, branded staples, ice cream and culinary products. They are manufactured over 37 factories across India. The operations involve over 2,000 suppliers and associates. HUL's distribution network, comprising about 2,500 redistribution stockists, covering 6.3 million retail outlets reaching the entire urban population, and about 250 million rural consumers. HUL has traditionally been a company, which incorporates latest technology in all its operations. The Hindustan Unilever Research Centre (HURC) was set up in
  41. 41. IIPM NEW DELHI Page 41 1958, and now has facilities in Mumbai and Bangalore. HURC and the Global Technology Centers in India have over 200 highly qualified scientists and technologists, many with post-doctoral experience acquired in the US and Europe. HUL believes that an organization‟s worth is also in the service it renders to the community. HUL is focusing on health & hygiene education, women empowerment, and water management. It is also involved in education and rehabilitation of special or underprivileged children, care for the destitute and HIV- positive, and rural development. HUL has also responded in case of national calamities / adversities and contributes thro ugh various welfare measures, most recent being the village built by HUL in earthquake affected Gujarat, and relief & rehabilitation after the Tsunami caused devastation in South India. In 2001, the company embarked on an ambitious programme, Shakti. Through Shakti, HUL is creating micro-enterprise opportunities for rural women, thereb y improving their livelihood and the standard of living in rural communities. Shakti also includes health and hygiene education through the Shakti VaniProgramme, and creating access to relevant information through the iShakti community portal. The program now covers 15 states in India and has over 45,000 women entrepreneurs in its fold, reaching out to 135,000 villages and directly reaching to 150 million rural consumers. HUL is also running a rural health programme – Lifebuoy SwasthyaChetana. The programmer endeavors to induce adoption of hygienic practices among rural Indians and aims to bring down the incidence of diarrhoea. It has already touched 120 million people in approximately 50, 676 villages across India. The vision is to make a billion Indians feel safe and secure. If Hindustan Unilever straddles the Indian corporate world, it is because of being single-minded in identifying itself with Indian aspirations and needs in every walk of life.
  43. 43. IIPM NEW DELHI Page 43 COMPETITORS PRODUCT PROFILE OF SOME OF THE COMPETITORS: The Fiama Di Wills range o f soaps has been launched under the sub - brand SkinSense. The first variant to be introduced in this range is Soft Green. This is a gentle caring soap, which helps enhance retention of sk in proteins making skin look beautiful and youthful. In February 2008, ITC launched two new ranges of soap - Vivel Di Wills and Vivel -to cater to the skincare needs of a wide range o f consumers. Backed by
  44. 44. IIPM NEW DELHI Page 44 consumer insights, the ranges offer a unique value proposition of bringing together ingredients that provide multiple benefits of Nourishment, Protection and Hydration in a single product. Hence providing the ever discerning consumer complete care. The packaging, reflecting the philosophy of the brand, fuses multiple benefits. The unique carton pack has been developed b y ITC‟s design team to provide a novel consumer experience. Although the market trend shows that these ITC brands are no competition to Pears right now. But if ITC improves its distribution network then these brands can be a threat to HUL. 'Fairone Fairness Cream' was launched jointly by Elder Pharmaceuticals and Shahnaz Husain. Elder Pharmaceuticals Ltd and Shahnaz Husain, herbal beauty specialist, had entered into an agreement to launch four skin care products during 2006-20 07. Elder undertakes the manufacturing and marketing of the products, while the conception and composition is done by Husain. Elder Pharmaceuticals Ltd. is one of the leading companies in Indi a in the skin care sector. The company is a major manufacturer o f aloe vera-based skin care products. A fair complexion has always been associated with success and popularity. Men and women alike desire fairness, it is believed to be the key to a successful life. Well for women the market is loaded with fairness cream but for men there are very few creams.
  45. 45. IIPM NEW DELHI Page 45 Emami Fair and Handsome is one such cream for men. Emami herbalists anddermatologists from India along with ActivorCorp USA, has created “Fair & Handsome” a fairness cream for Men with a breakthrough Five Power Fairness System to make skin fair and handsome in 4 weeks. Garnier is a division of L'Oréal that produces hair care products, including the Fruct is line, and most recently, skin care products under the name, Nutritioniste,that are sold around the world. One of their key ingredients is a fruit concentrate used in all their products. It is a combination of fruit acids, vitamin B3 and B6, fructose and glucose Natural Fairever was initially launched in A.P. in 1998, following that a national launch was made in 1999. Fairever is the brand of CavinKarePvtLtd(CKPL). This cream has a blend of saffron and milk. It claims to work from within to provide a distinctly fairer, glowing complexion much like that of Kashmiri beauties in just 4 weeks Trip le sunscreens also retain your fairness and reduce the harmful effects of UV rays. It comes in a pack of 50g and 100 g. The 50g pack costs Rs.55. The Fairever claims to have consumers as a woman who is the young and contemporary womano f today. She has strong values and believes in using a natural product that will help bring out her natural beauty from within. Cinthol talc is a product of GODREJ Consumer Products Ltd (GCPL). GCPL identifies Cinthol as its power brand. GCPL has launched new Cinthol range of soap, talc and deodorant
  46. 46. IIPM NEW DELHI Page 46 with Bollywood actor HrithikRoshan as its new brand ambassador. Cinthol offers a range of soaps, talc and deo sprays in three exciting fragrance - Classic, Cologne and Sport - in a new packaging Spinz talc is CavinKarePvt Ltd(CKPL) brand.Spinz Talc is packed in sizes of 20 g, 50 g, 100 g and 400 g and comes in three fragrances: Exotic Exchante Sandal The Spinz talc‟s target are girls of around 1 8 to 26 years old from SEC A and B. Easy-going and fun-loving, who lo ves to have a lo t of friends with whom she spends time. Competition The above table shows the competition among the Indian FMCG brands. HUL is the leader of the market with maximum market capitalization and maximum sales turnover. The Net Profit stood at whooping 2500 crore approximately. HUL has Dominated the FMCG market but now faces a lot of competitors like ITC , Procter & Gamble, Godrej Consumer pro ducts, Marico etc.
  47. 47. IIPM NEW DELHI Page 47 POLICIES Hindustan Unilever Limited (HUL) supplies high quality goods and services to meet t he daily needs of consumers and customers. In doing so, the Company is committed to exhibit the highest standards of corporate behavior towards its consumers, employees, the societies and the environment in which we operate. Towards this, the Company recognizes its responsibility to ensure safety and protection of health of 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 policy application as well as the responsibility for execution. Vision HUL‟s vision is to be an injury free organization. Mission We will bring safety on top of mind for all employees and will integrate it with all business processes. We will realize our Vision through an Integrated Safety Management app roach, which focuses on People, Processes, Systems, Techno logy and Facilities, supported by demonstrated leadership and employee commitment at all levels as the prime drivers for ensuring a safe and healthy work environment. Safety Principles HUL's Occupational Safety and Health Policy is based on and supported by the
  48. 48. IIPM NEW DELHI Page 48 following eight Principles. These Principles have the same status as the Company's 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 Note: In order to facilitate operationalization of the Safety Principles, a separate document has been prepared, which covers: a) Safety Principles b) Success Criteria c) Illustrative KPI This document will form the basis for the concerned Line / Organizations in developing KPI's for their respective functions / sites. Scope of Application This section defines the scope of application of this Policy (where, when and to whom is this Policy applicable). Where does this policy apply? . All own/leased sites – Manufacturing, Research/Innovation, Offices, Depots, Warehouses . In-house purchased services i.e. canteen, travel desk, IT implementation etc. Who does the policy apply to?
  49. 49. IIPM NEW DELHI Page 49 . All employees at business anywhere . Contractors and visitors while at our own sites When does it apply? . At work (our employees, contractors and visitors) . Travel between home and work o f our employees . Business related travel including stay out of headquarter . All Company organized business events i.e. training programs, conferences, business related get-togethers, annual sports etc. Implementation Responsibility HUL Management at all levels is responsible for Policy implementation. Every site shall prepare a responsibility matrix with respect to this Policy. Such SHE responsibilities shall form an integral part of overall job responsibilities of all employees. All Unilever and HUL Standards, Rules and Procedures on Occupational Safety and Health, including those that may be specific to a site are integral to this Policy and its implementation. All employees are required to ensure strict adherence. Quality is fundamental to our Business Success Unilever‟s mission is to meet everyday needs for nutrition, hygiene and personal care with brands that help people feel good, look good and get more out of life. And a key requirement is building in the quality expectations of our consumers into our products. To win consumers‟ confidence and loyalty, we need to consistently deliver branded products of excellent quality. We understand the different needs of our consumers and customers and strive to develop and deliver superior brands to ensure that they‟re the preferred choice. And by applying consistently high standards, we‟re able to do things right first time, cut waste, reduce costs and drive profitability. Our Quality Policy describes the principles that everyone in Unilever follows, wherevert hey are in the world, to ensure that we are recognized and trusted for our integrity, the quality of our brands and products, and the high standards we set.
  50. 50. IIPM NEW DELHI Page 50 Principles of the Quality Policy • Putting the safety of our products and our consumers first. We have stringent mandatory quality standards in place against which compliance is verified through regular audits and self assessments. These standards ensure we design, manufacture and supply products that are safe, of excellent quality, and conform to the relevant industry and regulatory standards in the countries in which we operate. Comprehensive management procedures are in place to mitigate risks and to protect our consumers and markets. • Putting consumers and customers at the heart of our business We actively engage our consumers and customers, translating their needs and requirements into our products and services, thus creating consumer value wherever we position our products. This is at the very heart of our innovation process. • Quality is a shared responsibility Quality and consumer safety is the responsibility of every Unilever employee and Unilever demonstrates visible and consistent leadership to meet this plicy. The drive for quality, in all that we do, is a passion reflected in our brand development, manufacturing and customer service processes and is also expected of our business partners. We partner with stakeholders to provide leadership, promote transparency and share best practice. And we‟ve forged effective working relationships with suppliers and contract manufacturers. • Building and maintaining excellent systems to ensure the quality and safety of our products We‟re proactively and continuously developing our systems and processes to ensure quality and safety throughout the whole value chain, and we‟re setting a bench mark for the business. We provide appropriate training and resources, and will ensure that we deliver our quality objectives and targets. We regularly
  51. 51. IIPM NEW DELHI Page 51 measure and improve our performance using both internal and external measures. We actively promote our Quality Policy and have a quality assurance organization in place to ensure consistency and visibility of quality standards, processes and performance indicators across all Unilever businesses at all levels, and to anticipate and develop future quality capability requirements. CHAPTER 8. SWOT ANALYSIS
  52. 52. IIPM NEW DELHI Page 52 SWOT ANALYSIS STRENGTH  Variety of products  Distribution Network  Brand image  Quality Management  Innovation and R&D strength THREATS  From High Class Competitor  Proctor & Gamble  Pantene  Dabur  Babool  Dabourlal Dent Manjan  Reckitt Benckiser  Dettol
  53. 53. IIPM NEW DELHI Page 53  Palmolive  Colgate, Nirma OPPORTUNITIES  Huge Market  Increasing per capital income  Increasing consumption pattern  Potential for making more impact of brand image.  Coming in technology e.g. in water purifiers WEAKNESS  Not able to compete with local competitor in the rural market  Not focus on upper class population  Pricing policy is not good
  54. 54. IIPM NEW DELHI Page 54 Chapter 9 Forecasting methods
  55. 55. IIPM NEW DELHI Page 55 Forecasting Forecasting is the process of making statements about events whose actual outcomes (typically) have not yet been observed. A commonplace example might be estimation of some variable of interest at some specified future date. Prediction is a similar, but more general term. Both might refer to formal statistical methods employing time series, cross-sectional or longitudinal data, or alternatively to less formal judgemental methods. In any case, the data must be up to date in order for the forecast to be as accurate as possible.[1] Usage can differ between areas of application: for example in hydrology, the terms "forecast" and "forecasting" are sometimes reserved for estimates of values at certain specific future times, while the term "prediction" is used for more general estimates, such as the number of times floods will occur over a long period. Time series methods • Time series forecasting models try to predict the future based on past data. • You can pick models based on: 1. Time horizon to forecast 2. Data availability 3. Accuracy required 4. Size of forecasting budget 5. Availability of qualified personnel Time series methods use historical data as the basis of estimating future outcomes.
  56. 56. IIPM NEW DELHI Page 56 weighted moving average? When using a moving average method described before, each of the observations used to compute the forecasted value is weighted equally. In certain cases, it might be beneficial to put more weight on the observations that are closer to the time period being forecast. When this is done, this is known as a weighted moving average technique. The weights in a weighted MA must sum to 1. Weighted MA(3) = Ft+1 = wt1(Dt) + wt2(Dt-1) + wt3(Dt-2) Advantages: It is simpler when compared to trend method by the principle of least squares. It is elastic. If a couple of values are added in the data towards the end, due to availability of latest data, the moving averages would change only towards the end of the data and can be easily calculated. It provides a true indicator of inherent trend in the data. If the data is available on monthly or quarterly basis, moving totals on yearly basis remove the seasonality from the data. Disadvantages: Trend values cannot be found in the beginning and towards the end of the data. Moving average values are not amenable to mathematical treatment for forecasting trend values obtained by method of least squares.
  57. 57. IIPM NEW DELHI Page 57 Trend analysis Trend Analysis is the practice of collecting information and attempting to spot a pattern, or trend, in the information. In some fields of study, the term "trend analysis" has more formally defined meanings. Although trend analysis is often used to predict future events, it could be used to estimate uncertain events in the past, such as how many ancient kings probably ruled between two dates, based on data such as the average years which other known kings reigned. Past data is used to make future predictions . Known or Independent variables are used for predicting Unknown or dependent variables, using the trendequation- “ Predictive analysis” Based on trend equation, we find „Line of Best Fit‟ and then it is , projected in a scatter diagram,dividing points equally on both sides. TREND EQUATION Y^ = a + bX + E Y^ = Estimated value of Y a = Constant or Intercept b = slope of trend line X = independent variable
  58. 58. IIPM NEW DELHI Page 58 E = Error term The slope, B , indicates the average rate of change in the hydrologic characteristic during each year of the time period. If the slope is significantly different from zero, the trend in the hydrologic variable is equal to the magnitude of the slope and the direction of the trend is defined by the sign of the slope: increasing if the sign is positive and decreasing if the sign is negative. If the slope is not significantly different from zero, there is no trend in the hydrologic variable. One advantage of this method of trend analysis is that it is easy to apply to a large number of sites. A disadvantage is that it can fail to detect trends that are nonlinear but still monotonic (generally in one direction). Other methods, such as the Mann-Kendall test, could be used to detect trends that are monotonic but not necessarily linear, but these only indicate the direction, and not the magnitude, of significant trends.
  60. 60. IIPM NEW DELHI Page 60 Demand Forecasting for Surf Excel Sachet For the year 2011-12 using Moving Average Method Year 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 Jan 5.76 8.2 8.5 9.33 11.66 14.84 Feb 6.6 9.6 9.6 9.45 10.98 14.97 Mar 4.9 7.1 7.9 8.66 9.8 15.08 Apr 5.75 8.6 8.9 8.45 12.38 14.96 May 5.5 8.6 7.1 9.48 10.38 15 Jun 6.3 7.9 9.4 7.89 12.66 15.01 Jul 4.7 9.9 8.5 8.95 13.02 14.99 Aug 7.1 10.6 8.1 9.02 11.11 15 Sept 6.8 11.1 7.8 10.04 13.09 15 Oct 7 9.7 11 9.75 14.45 14.99 Nov 6.3 10.8 9.8 10 14.62 14.99 Dec 6.29 12.3 6.2 10.98 15.45 14.99 Total 73 120 102 112 152 179.82 Demand Forecasting for the year 2011-12 using Trend Projection Method Month Month(t) Sales(Yt-Observed Data) Yt*t t2 Forecasted Sales Jan 1 11.66 11.66 1 10.265 Feb 2 10.98 21.96 4 10.655 Mar 3 9.8 29.4 9 11.045 Apr 4 12.38 49.52 16 11.435 May 5 10.38 51.9 25 11.825 Jun 6 12.66 75.96 36 12.215 Jul 7 13.02 91.14 49 12.605 Aug 8 11.11 88.88 64 12.995 Sept 9 13.09 117.81 81 13.385 Oct 10 14.45 144.5 100 13.775 Nov 11 14.62 160.82 121 14.165 Dec 12 15.45 185.4 144 14.555 Total 78 149.63 1029 650 148.92
  62. 62. IIPM NEW DELHI Page 62 CONCLUSION Forecasts are vital to every business organization and for every significant management decision. Forecasting is the basis of corporate long-run planning.  In Finance and accounting, it provides the basis for budgetary planning and cost control.  Marketing relies on sales forecasting to plan new products, compensate sales personnel and make other key decision.  Production and operation personnel use forecasts to make periodic decision involving process selection, capacity planning and facility layout, as well as for continual decision about production, planning, scheduling and inventory. Hence we have found from the sales of past five years data ,there is little fluctuation in sales amount from last continuous years so When the demand for a product is neither growing or declining rapidly, and if it does not have seasonal characteristics, a moving average can be useful in removing the random fluctuations for forecasting and Trend projection method is applicable to time series that shows consistent increase or decrease in value over time and exhibit and long-term linear trend.