HINDUSTAN UNILEVERS PUREIT WATER PURIFIER By: Team Piyush Introduction

The water initiative was a global Unilever project aiming to provide clean drinking water to the people of the world. When India was selected to be the lead country, HUL was given the task of developing the product for this initiative. For HUL, apart from developing a product that met the international standards they also had to build a product that would cope with many constraints like equipment that would work without electricity and running water. Here HUL followed a radically different process in developing the Pureit than what is considered the usual norm of the company.

Hindustan Unilever Ltd.

HUL is part of the $58 billion Unilever group and was set up as Hindustan Vanaspati Manufacturing Company in 1931. It merged with lever brothers India Ltd in 1933 and with United Traders Ltd to form Hindustan Lever Ltd in 1935. In 2007 HLL was renamed to Hindustan Unilever Ltd (HUL) to leverage Unilevers global name and Indias heritage and aimed to gain the love and respect of India by making a difference to every Indian. With sales of $3.8 billion and $468 million in profit, HUL was a market leader having over 35 brands across 20 consumer non-durables serving about 700 million consumers across India. It had 15,000 employees including 1400 managers. With the water initiative, HUL ventured into the consumer durables market aiming to provide a method for its consumers to get clean drinking water

The Team
Yuri Jain headed the water team as the Vice president and reported to the CEO for India operation and to the chief marketing officer for the global operations. He built the team from ground up and unlike HULs traditional teams, the water team was a cross functional team to enable the team to operate like a startup company would. The members of the team were also given exception from the HUL policy of moving people every few years to broaden their experience base.

Water Problems in India

Indias water supply was greatly dependent on monsoons and increased demand, developmental pressures and socio economic activities have led to unsustainable water consumption resulting in the lack of water for agriculture and drinking. According to UNICEF, in 2006 no city in India had 24-hour domestic water supply even though 89% of India has access to drinking water sources.

Apart from quantity, the quality of the water was also an issue. In 2002, 7.5% of the deaths in India were caused by diseases related to unclean water. Other issues like receding ground water levels, decreasing water quality due to contamination and lack of awareness towards water usage were also contributing to the drinking water problem in India.

The Birth of the Water Purifier

In the beginning of the year 2000, HUL started to venture outside its traditional products and markets. One such venture was to create a water purification and storage system for use at the point of water usage. HUL felt that while boiling water was the best way to make it safe from germs, it was time consuming and tended to change the taste of the water. Existing technology was too expensive and using bottled water was not a viable option. The dependence on electricity and pressurized water also proved a challenge. Hence HUL decided to develop a water purifier that would cater to the needs of the low end population while addressing the problems in the existing system. After many collaborations and intensive R&D what resulted was the HULs PureIt. The classic variant which was a 23 liter device with a 9 liter water output mechanism was launched in 2008 at the price of $44 and soon became a market leader. Later other variants like Auto-fill, Compact, Marvella were launched to cater to the wide spectrum of consumers.

Market Competition
Eureka Forbes Ltd EFL was the first mover in the water purifier market and therefore, reaped the benefits of being the first mover. EFL launched its first water purifier in 1984. It used large field sales force specialized in door to door service for selling its product. It is the market leader in the urban area. It has an extensive support organization to assist both sales and support forces. It has different brands for retail and DTH marketing. Kent RO Kent RO has a mission of, producing innovative health care product that purifies water we drink, the food we eat and air we breathe, thus helping people live healthier. It launched its first water purifier in 1995. All the Kent products are based on RO technology. It uses a franchise based model for selling its product. It has 3 brands under it: Kent Grand, Kent Excel and Kent Elite. Phillips India Ltd It is Multinational Company with an Indian heritage of several decades. The company has a vast loyal distributors network just like HUL. It has come up with partnership Initiatives with real estate developers. It entered the UV segment of the market in 2007 with its product in the price range of INR8500 to INR12500.

Packaged Drinking Water Packaged drinking water though a different market in itself is giving a tough competition to Water purifier market.

Selling Strategy Adopted

HUL chose Direct Selling as well as retail marketing to have a wider reach and penetration in the market. Sales person in its water division were known as PWEs (Pureit Water Experts). It had three streams of selling i.e cold calls (door to door selling), outreach (KIOSK) and clinic (Hospital).

SWOT Analysis
Strength: HUL has more than 100 million customers .It is the largest FMCG in India and 4 th largest in the world. The Company has covered the entire Indian nation with its product hence has a trusted and vast distribution network Pureit is an advanced purifier, its USP of no electricity or gas required can attract the mass market. HUL are in all the segment of water purifier and has a competitive price.

To reach its target consumer HUL followed a strategy of pricing the product at what the consumer could afford rather than following a cost based approach. Weakness: Sales team of Pureit. Dont have experience in durable goods. Very low margin rate for distributer and retailer. Opportunity HUL has the advantage of being the first mover for the mass market and bottom of the pyramid consumer The Company can make the base product available in rural areas in India through distribution channel in partnership with NGOs and self-help groups. HUL can make the people aware of safe drinking water in towns and rural area, adds goodwill to the company and also creates the market.

Threats: Tata Swach for the mass market.

 No regulatory body to check the purity of water in India.

4Ps of marketing
Product Mix Product available in all the segment of water purifier. Easy to handle. Product available nationwide. Price Mix Product price ranged from 22$ to 150$ for different target consumer. Best price offered when compared to some other competitors. Place(Distribution) Mix Urban and Semi Urban area was the target audience. Plans to penetrate the rural market. Initially adopted the DTH marketing strategy to demonstrate the benefit of the product. Promotion mix Focus on educating customers and building awareness among the doctors. Outsourced the task of scaling up its DTH to external partners. In the retail sales, HUL offered 8% margins to retailers and 7% to distributors (Received poor product placement). In the rural areas, apart from having rural network they are planning to tie up with NGOs, banks and govt. agencies.

Recommendation
Pricing Depending on the market conditions/competition from others competitors there should be a flexible. Branding and Positioning in market The company should focus on mass market segment which has brought the maximum sales. The Premium consumer market is dominated by Aquaguard. Start DTH marketing:DTH marketing was stopped by pure it in the year 2009. Most of the salespersons (PWEs) were outsourced. Form a team of sales person who are employed to HUL. Untapped Rural Market:Reach the rural market through NGOs, government health organizations and create awareness about safe drinking market.