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A BRIEF STUDY ON

MARKET SRUCTURE AND DEMAND


ANALYSIS
OF HINDUSTAN UNILEVER

PROJECT REPORT
SUBMITTED TO:
MS. Meghnaa Sharma
Accman Institute of Management
Greater noida, knowledge park-3
U.P

Prepared by:
MOHD.ARISH
UPMA JOSHI

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KAPIL

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TABLE OF CONTENT

Sl.no Content Page no.

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1. Executive summary 3

2. Introduction 4-5

3. Objectives and Methodology 6

4. Findings
Product Line 7
SWOT Analysis 8
Competitors Analysis 9-12
Performance Analysis 13-15
Future Opportunities 15-18
Future Projects of HUL 19

5. Conclusion 20

6. Bibliography 21

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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
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.

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INTRODUCTION

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
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

Today, HUL is one of India’s largest exporters of branded


Fast Moving Consumer Goods. It has been recognized by the
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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.
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.

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 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

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
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.
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 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.

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

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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
SWOT ANALYSIS

STRENGTH
✔ Variety of products
✔ Distribution Network
✔ Brand image
✔ Quality Management
✔ Innovation and R&D strength

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THREATS
✔ From High Class Competitor
✔ Proctor & Gamble
✔ Pantene
✔ Dabur
✔ Babool
✔ Dabourlal Dent Manjan
✔ Reckitt Benckiser
✔ Dettol
✔ 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

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COMPETITORS
ANALYSIS

According to the market survey done by BUSINESS TODAY the top


10 companies of FMCG sector are given below.
1. Hindustan Unilever Ltd.
2. ITC (Indian Tobacco Company)
3. Nestlé India
4. GCMMF (AMUL)
5. Dabur India
6. Asian Paints (India)
7. Cadbury India
8. Britannia Industries
9. Procter & Gamble Hygiene and Health
Care
10. Marico Industries

THE COMPARATIVE DATA OF % MARKET SHARE OF HUL


AND ITS COMPETITOR IN QUARTER ENDED JUN’08

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(Above graph showing %age Market share of HUL and its
competitor in different categories of FMCG products)
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

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).

(Above graph showing the two category of products in which HUL


percentage market share is less than its competitor in Quarter
ended JUN’08)

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.

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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.

PERFORMANCE ANALYSIS

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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:
Table showing past 10 years financial data

DATA ANALYSIS:
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

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steady rise in the profit of the company, but a rapid rise in the
sales of the company in the given years.

Reason for the steep fall in the profit of the company in the year
2004:-
• 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.

In the following graph we can see the percentage growth in FMCG


sales of HUL from March quarter ’07 to March quarter ’08.

(Graph showing the FMCG trend through last quarters)

FUTURE OPPORTUNITIES
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.

The opportunities are as follows:


• Increasing per capita income is driving FMCG growth in India
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• India’s consuming class is growing rapidly
• 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.

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:

(Above graph showing percapita income of INDIANS through out


Yr2000-2008)

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.

(Above graphs showing increased percapita disposable


income from Yr2002- 2007)

(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

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huge scope for FMCG products and since HUL is the market leader
in India hence it can gain the most out of it.

CATEGORY WISE SALE GROWTH OF FMCG SECTOR


OF HUL IN INDIA:

CATEGORY %AGE

Soaps & Detergents 19.3

Personal Products 22.4

Ice Cream 15.7

Processed Foods 13.7

Beverages 13.6

Others 19.4

(Above graph shows the data of MAR’08 Quarter %growth of


different products of HUL)

FUTURE PROJECTS OF HUL:


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:

A) To Reach:

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 Small, scattered settlements and poor infrastructure
make distribution difficult.
 Over 500,000 villages not reached directly by HUL.

B) To Communicate:
 Low literacy hampers effectiveness of print media.
 Poor media-reach: 500 million Indians lack TV &
radio.

C) To Influence:
 Low category penetration, consumption.

C) Awareness:
 Per capita consumption in Unilever categories is 33%
of urban level.

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CONCLUSION

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.

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.

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BIBLIOGRAPHY

In order to make this project we have taken the help of the


following websites & books:

• www.wikipedia.com
• www.oppapers.com
• www.hul.co.in
• www.scribd.com

Besides it various books are also consulted to prepare project


report.

AUTHOR’S NAME BOOKS


Ashish Benerjee Principle of
economics

H.L. Ahuja Modern


Microeconomics

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Theory and
Application

C.K.Kothari Research
Methodology

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