A BRIEF STUDY ON<br /> MARKET SRUCTURE AND DEMAND ANALYSIS <br /> OF HINDUSTAN UNILEVER<br /> <br /> PROJECT REPORT <br /> SUBMITTED TO:<br /> MS. Meghnaa Sharma<br /> Accman Institute of Management<br /> Greater noida, knowledge park-3<br /> U.P<br />205740098425<br /> Prepared by:<br /> MOHD.ARISH<br /> UPMA JOSHI<br />KAPIL<br />TABLE OF CONTENT<br />Sl.no ContentPage no.18.104.22.168.5.6.Executive summaryIntroductionObjectives and MethodologyFindingsProduct LineSWOT AnalysisCompetitors AnalysisPerformance AnalysisFuture OpportunitiesFuture Projects of HULConclusionBibliography34-56789-1213-1515-18192021<br />EXECUTIVE SUMMARY<br /> 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.<br />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.<br />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.<br />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:<br /><ul><li>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 analayised & the market share of HUL’S different categories product are analayised with comparison to its competitors.
Then we have done SWOT analysis to know the threat & opportunities of HUL in present market.
Then performance analysis is made by taking 10 year financial data from 1998-2007. The profit & sales growth is analysed.
Then the future opportunities for FMCG products are taken into consideration by analyzing the increased percapita income & increased disposable income to forecast the future demand of HUL.</li></ul>INTRODUCTION<br />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.<br />The company was renamed in late June 2007 as "
Hindustan Unilever Limited"
.<br />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 Domex disinfectant,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<br />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 SuperStarTradingHouse. 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 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.<br />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.<br />HUL’s products touches two out of three Indian everyday<br />Reach 80% Households<br />Direct Coverage of 1mln outlets<br />2000 Suppliers and Associates<br />71 Manufacturing locations <br />15000 Employees<br />1100 managers<br />Shelf availability 84% outlets in India<br /> OBJECTIVES AND METHODOLOGY<br />OBJECTIVE<br /><ul><li>Primary objective
To find the past sale growth and demand analysis
Performance evaluation</li></ul>Methodology<br />In this project we have followed descriptive method of study. <br />Research instrument<br />Here project analysis is made by collecting secondary data from different websites, journals, etc.<br /><ul><li>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.</li></ul> PRODUCT LINE<br />A) HOME AND PERSONAL CARE:<br />30575252724151) Personal wash<br />LuxBreeze<br />LifebuoyDove<br />LirilPears<br />HamamRexona<br />2) Laundry3) Skin Care<br />Surf ExcelFair and lovely<br />RinPond’s<br />WheelAviance<br />4) Hair care5) Oral care<br />Sunsilk naturalsPepsodent<br />ClinicClose up<br />6) Deodorants7) Colour Cosmetics<br />AxeLakme<br />Rexona<br />8) Ayurvedic Personal and health care: Ayush<br />B) FOODS<br />1) Tea2) Coffee3) Foods 4) Ice cream<br /> Brooke Bond Brooke Bond Bru Kissan Kwality walls<br /> Lipton Knor<br /> Annapurna<br />C) WATER PURIFIER <br />Pureit<br /> SWOT ANALYSIS<br />STRENGTH<br /><ul><li>Variety of products</li></ul>Distribution Network<br />Brand image<br />Quality Management<br />Innovation and R&D strength<br />THREATS<br /><ul><li>From High Class Competitor
Proctor & Gamble</li></ul>Pantene<br /><ul><li>Dabur </li></ul> Babool <br />Dabourlal Dent Manjan <br /><ul><li>Reckitt Benckiser</li></ul>Dettol <br /><ul><li>Palmolive</li></ul>Colgate, Nirma <br />OPPORTUNITIES<br /><ul><li>Huge Market</li></ul>Increasing per capital income<br />Increasing consumption pattern<br />Potential for making more impact of brand image.<br />Coming in technology e.g. in water purifiers<br />WEAKNESS<br /><ul><li>Not able to compete with local competitor in the rural market</li></ul>Not focus on upper class population<br />Pricing policy is not good<br /> COMPETITORS ANALYSIS<br />According to the market survey done by BUSINESS TODAY the top 10 companies of FMCG sector are given below.<br />1.Hindustan Unilever Ltd.2.ITC (Indian Tobacco Company)3.Nestlé India4.GCMMF (AMUL)5.Dabur India6.Asian Paints (India)7.Cadbury India8.Britannia Industries9.Procter & Gamble Hygiene and Health Care10.Marico Industries<br />THE COMPARATIVE DATA OF % MARKET SHARE OF HUL AND ITS COMPETITOR IN QUARTER ENDED JUN’08<br />(Above graph showing %age Market share of HUL and its competitor in different categories of FMCG products)<br />As mentioned in the above graph, HUL is enjoying the leader position in the market and is having highest market shares which are followed by the market challengers like Dabur India Ltd, Nestle India Ltd, and ITC LTD, ETC…..In different categories of FMCG products like shampoo, skincare , deo, jams, coffee, etc<br />In some category these market challengers are giving high level competition in different product lines such as ketchup and toothpaste (As shown in the graph below).<br />(Above graph showing the two category of products in which HUL percentage market share is less than its competitor in Quarter ended JUN’08)<br />So we can see that in overall FMCG business HUL is distantly ahead of rest of the companies as far as market share of different products are concerned.<br />In the above pie chart we see the position of various FMCG companies doing business in India. We can see that HUL is enjoying the position of market leader and is followed by ITC as close second in the market share of FMCG products.<br />PERFORMANCE ANALYSIS<br />Hindustan Unilever Ltd is one of the leading FMCG company in India which having the following past financial records we have taken for the analysis as follows:<br />-247650393700Table showing past 10 years financial data<br />190502854960<br />DATA ANALYSIS:<br />We have the sales and profit figures of HUL from the year 1998 to 2007 in the 10year past data from Yr1998-2007, after plotting two graph one of sales & other of profit as shown in here we can see that both profit and sales of the company rose from the year 1998 till 2001, but in the year 2002 we see that the sales fell but there was actually rise in the profit of the company . In the year 2004 we see that there was a steep fall in the profit of the company and from the year 2005 onwards there was a slow but steady rise in the profit of the company, but a rapid rise in the sales of the company in the given years.<br />Reason for the steep fall in the profit of the company in the year 2004:-<br /><ul><li>The FMCG market in Urban India was attaining the saturation level and so companies had to expand its market in rural India. This resulted in the downfall in the profit of HUL. There was very aggressive advertising campaign by ITC in that year to set itself in the market this affected HUL who was enjoying the position of market leader and resulted in the fall in the profit of the company. </li></ul>In the following graph we can see the percentage growth in FMCG sales of HUL from March quarter ’07 to March quarter ’08.<br />(Graph showing the FMCG trend through last quarters) <br />FUTURE OPPORTUNITIES<br />India is a fast developing country with a huge population whose per capita income is growing rapidly and there is huge opportunity for FMCG companies.<br />The opportunities are as follows:<br /><ul><li>Increasing per capita income is driving FMCG growth in India
Changing consumption pattern: Per capita income of Indian customer is increasing and FMCG products are relatively elastic in nature hence the expected sale should increase.</li></ul>By the following three graphs(data collected from a research made by govt. of INDIA) we can expect increase future demand of FMCG products, the graphs showing the increasing percapita income, percapita disposable income and population of India respectively are as follows:<br />(Above graph showing percapita income of INDIANS through out Yr2000-2008) <br />As shown in the above graph the percapita income of an INDIAN increased throughout years, and if this trend will continue in future the people can purchase more FMCG products. <br /> <br />(Above graphs showing increased percapita disposable income from Yr2002- 2007)<br /> <br />(Above graph shows the past population and expected future population rise, data are collected from the research made by govt. of INDIA)Here by the above graphs we can see that there is huge scope for FMCG products and since HUL is the market leader in India hence it can gain the most out of it.<br />CATEGORY WISE SALE GROWTH OF FMCG SECTOR OF HUL IN INDIA: <br />CATEGORY %AGE<br />Soaps & Detergents19.3<br />Personal Products22.4<br />Ice Cream15.7<br />Processed Foods13.7<br />Beverages13.6<br />Others 19.4<br /> <br />(Above graph shows the data of MAR’08 Quarter %growth of different products of HUL)<br /> FUTURE PROJECTS OF HUL:<br /> As competition is increasing day by day, it’s difficult to maintain the leader position & to further strengthen the distribution network HUL made a project called project SHAKTI which will serve the following purpose:<br />A) To Reach:<br /><ul><li>Small, scattered settlements and poor infrastructure make distribution difficult.
Over 500,000 villages not reached directly by HUL.</li></ul>B) To Communicate:<br /><ul><li>Low literacy hampers effectiveness of print media.
Poor media-reach: 500 million Indians lack TV & radio.</li></ul>C) To Influence:<br /><ul><li>Low category penetration, consumption.</li></ul>C) Awareness:<br /><ul><li>Per capita consumption in Unilever categories is 33% of urban level.</li></ul>CONCLUSION<br />Hindustan Unilever ltd. Is a leading FMCG company in India and from last three consecutive years has shown accelerated growth in FMCG portfolio. Customers in India are also spending more in FMCG as their standard of living is growing. HUL has placed itself successfully in the position of market leader in FMCG products. Though there was some downfall in sales and profit of the company in the beginning of this decade but after that HUL has shown considerable rise in both sales and profit. The future of the company is also looking bright as FMCG market in India is still expanding and so we can safely conclude that HUL will be able to secure its number one position in FMCG product.<br />HUL has also started project SHAKTI that has provided it direct reach to rural market. This may be considered a revolutionary step since the urban market is reaching its saturation level and there is a huge scope exploring rural market. This will also be helpful not only increasing its market share but also fight competition.<br />BIBLIOGRAPHY<br />In order to make this project we have taken the help of the following websites & books:<br />www.wikipedia.com<br />www.oppapers.com<br />www.hul.co.in<br />www.scribd.com<br />Besides it various books are also consulted to prepare project report.<br />AUTHOR’S NAME BOOKS<br />Ashish Benerjee Principle of economics<br />H.L. Ahuja Modern Microeconomics <br /> Theory and Application<br />C.K.Kothari Research Methodology <br /> <br />