INTRODUCTION TO LUX

Lux stands for the promise of beauty and glamour as one of India's most trusted personal
Care brands. Since its launch in India in the year 1929, Lux has offered a range of soaps in
different colors and world class fragrances. Lux is a beauty soap of film stars.
Lux soaps first slaunched in 1916 as laundry soap targeted specifically delicate. Lever Brothers
encouraged women to home launder their clothes without fear of satins and silks being turned
yellow by harsh leys that were often used in soaps at the time. The flake-type soap allowed the
manufacturer some leeway from lye because it did not need to be shaped into traditional cakeshaped loaves as other soaps were. The result was a gentler soap that dissolved more readily and
was advertised as suitable for home laundry use. Lux toilet soap was introduced in 1925 as
bathroom soap. The name 'Lux' was chosen as a play on the word "luxury." Lux has been
marketed in several forms, including bar and flake and liquid (hand wash, shower gel and cream
bath soap). 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.
Onecanchoosearange of skincare benefits like firming, fairness and moisturizing. From the 1930s
rightthrough to the 1970s, Lux soap colors and packaging were altered several times to reflect
fashion trends. In 1958 five colors made up the range: pink, white, blue, green and yellow.
People enjoyed matching their soap with their bathroom colors. In the early 1990s, Lux
responded to the growing trend away from traditional soap bars by launching its own range of
shower gels, liquid soaps and moisturizing bars. Lux beauty facial wash, Lux beauty bath and
Lux beauty shower were launched in 1992.In 2004, the entire Lux range was re-launched in the
UK to include five shower gels, three bath products and two new soap bars. In 2005 they launch
of three exciting new variants with dreams names such as Wine & Roses bathcream, Glowing
Touch and Sparkling Morning shower gels.

HISTORY
Lux soap was first launched in the UK in 1899 as a flaked version of Sunlight soap.Subsequently
it was launched in the US in 1916, and marketed as laundry soap targeted specifically at
'delicates'. Lever Brothers encouraged women to home launder their clothes without fear of
satins and silks being turned yellow by harsh lyes that were often used in soaps at the time. The
flake-type soap allowed the manufacturer some leeway from lye because it did not need to be
shaped into traditional cake-shaped loaves as other soaps were. The result was a gentler soap that
dissolved more readily and was advertised as suitable for home laundry use Lux is currently a
product of Unilever. The name "Lux" was chosen as the Latin word for "light" and because it
was suggestive of "luxury." Lux soap was introduced as bathroom soap in the US in 1925 and in
the UK in 1928 as a brand extension of Lux soap flakes. Subsequently Lux soap has been
marketed in several forms, including hand wash, shower gel and cream bath soap. Lux soap was
1

launched in India in 1929. The very first advertisement in 1929 featured LeelaChitnis as its brand
ambassador. It was branded in India as "the beauty soap of film stars'. As of June 2009 Lux is
sold in over 100 countries . Today, the focus is back on beauty which has been the roots of the
product. The fruit versions of the soap Strawberry and cream, Peach and cream are quite
popular. New variants Purple lotus and cream, and Aqua Sparkle had been launched at reality
shows on televisions which are a new development in the basket of marketing strategies of the
soap.

COMPANY OVERVIEW Hindustan Unilever Limited at a glance

(HUL) is India's largest fast company, touching the lives of two out of three Indians with over 20
distinct categories in home & personal care products and food & beverages. They endow the
company with a scale of combined volumes of about 4 million tones and sales of over PRs.
13,000 crore. 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. HUL was formed in 1933 as
Lever Brothers India Limited and came into being in 1956 as Hindustan Lever Limited through a
merger of Lever Brothers, Hindustan Vanaspati Mfg. Co.Ltd And United Traders Ltd.
It is head quartered in Mumbai, India and has employee strength of over 15,000 employees and
contributes for indirect employment of over 52,000 people. The company was renamed in June
2007 to Hindustan Unilever Limited.
In 2007, Hindustan Unilever was rated as the most respected company in India for the past
25years by Business one of Indias leading business magazines
.The rating was based on a compilation of the magazines annual survey of Indias Most Reputed
Companies over the past 25 years. 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 HULs brands featured in the ACNielsen Brand Equity list of
100 Most Trusted Brands Annual Survey (2008). According to Brand Equity, HUL has the largest
number of brands in the Most Trusted Brands List. Its a company that has consistently had the
largest number of brands in the Top 50 and in the Top 10 (with 4 brands).Hindustan Unilever's
distribution covers over 1 million retails outlets across India directly and its products are
available in over 6.3 million outlets in India, i.e., nearly 80% of the retail outlets in India. It has
39 factories in the country. Two out of three Indians use the companys products and HUL
products have the largest consumer reach being available in over 80 per cent of consumer homes
acrossIndia.TheAnglo-DutchcompanyUnilever owns a majority stake (52%) in Hindustan
Unilever Limited. HUL was one of the eight Indian companies to be featured on the Forbes list
of Worlds Most Reputed companies in 2007.

Products of Hindustan Unilever Ltd:

Personal wash:Lux. Lifebuoy, Liril ,Hamam, Breeze, Moti , Dove, Pears and Rexona
Laundry:Surf Excel, sun light, Rin ,Wheel&Alableech
Dishwasher:Vim
Disinfectants:Domex, Cif
Foods:Kissan(Jam,Ketchup,Squashes), Annapurna(Aata and salt), Knorr Soups, ModernBread
Ice-cream:Quality Wall's
Beverages:Tea:Brooke Bond, Lipton, TajMahal
Coffee:Brooke Bond Bru
Beauty Products
Fair & Lovely, Lakme, Ponds, Vaseline
Hair-Care:Sunsilk Naturals, Clinic Plus , Dove
Oral-Care:Pepsodent and Close-up
Deo spray
3

Axe and Rexona

Water Purifier:
Pureit
Ayurvedic Personal & health care:Ayush

PROMOTIONAL STRATEGIES
Sale Promotion
Sales promotion, a key ingredient in marketing campaigns, consists of a collection of incentive
tools, mostly short term, designed to stimulate quicker or greater purchase of particular products
or services by consumers or the trade. Whereas advertising offers a reason to buy, sales
promotion offers an incentive to buy.
Prominent Sales Promotion Schemes Used by LUX.
Lux presented 30 gm gold each to the first three winners of the Lux Gold Star offer from Delhi.
According to the promotional offer that Lux unveiled in October 2000, a consumer finding a 22carat gold coin in his or her soap bar got an opportunity to win an additional 30gm gold. The first
10 callers every week got a 30 gm gold each. The offer could be availed only on 100 gm and 150
gm packs of Lux soap.
Lux Star Bano, AishKaro contest: All one needed to do was buy a special promotional pack of
Lux soap. The pack comes with a special scratch card. The 50 lucky winners and their spouses
were flown down to Mumbai to live a day like AishwaryaRai would. They could also be given
gift vouchers worth Rs 50,000 from Shoppers' Stop along with an exclusively designed Neeta
Lulla sari and a beauty makeover by Michelle Tung, Aishwarya's preferred designer and stylist.
The pice de rsistance was a dinner date with AishwaryaRai herself.
Lux celebrated 75 years of stardom with the Her Star Lucky Star activity. All wrappers of Lux
had a star printed inside them. If the consumer found written inside the star, any number from1
to 5, she would get an equivalent discount (in rupees) on her purchase from hershopkeeper. If
the consumer found 75 years written inside the star, she will get a years supply of Lux free.
Online Contests:
Play the supercharged version of the hit puzzle game, Bejeweled. Create rows of 3 or more
identical stones and you could win a trip for two to a five-star Resort in Goa.
Promotion:
4

Hindustan Unilever undertakes huge promotional activities to promote LUX which has topped
the beauty soap industry of India. Since the 1930s, over 400 of the worlds most stunning and
sensuous women have been proudly associated with LUX advertisements. They do not
only promote LUX in India for the beauty conscious females, it also promotes the brand for
males and the company proved that, by including world famous male celebrity Shahrukh Khan
for their advertising campaign. Hindustan Unilever Ltd spends a huge amount of money
for promoting LUX through TV commercials, newspaper advertisements and billboards.
Till now promotional activities of LUX has always been successful which has made it a
household common name and helped it reach almost one billion take a sale value in the year
2004.
Point of Purchases:
The LUX is not given a notable placement on the shelves of different retail shops &departmental
stores for its sales promotion. Usually the company goes for wide display in the stores where it
potential for its product. Different eye-catching decorations are made inside the store and in the
showcase for outside display. These arrangements are made with the assistance of the sales
people of the company.
Advertisements:
The message that the product reflects in its advertisements is the one that is usually narrated by
the corporate itself
Selection of Media:
There are number of Sources available for passing the product message. These are as follows;
1.
2.
3.
4.
5.
6.

Television
Outdoor (Billboards)
Magazines
Newspapers
Brochures
Internet

Impact on Sales:
The company believes that ads do have adequate impact on sales. In order to meet the
company policy of maintaining and strengthening the corporate image, the ads are shown on
television. There is a long-term strategy in the books of Unilever to disturb the loose Soap
market. They usually show documentary from time to time regarding the flaws in loose Soap
quality. It is usually shown without any discrimination, i.e., without mentioning any Soap name
or company name in the documentary.
5

Analyzing the Market for LUX:

In India, soaps are available in five million retail stores, out of which, 3.75 million retail stores
are in the rural areas. Therefore, availability of these products is not an issue. 70% of
India's population resides in the rural areas; hence around 50% of the soaps are sold in the rural
markets.
Conclusion
The beauty soap industry of India consists of a few producers in the industry. The Demand for
this product is very much vulnerable in terms of pricing. Hindustan Unilever is providing LUX at
a price which is affordable to most of the people in the country. Beauty soap is an uprising
product in India as a greater portion of the population, both male and female, are now getting
more beauty conscious. As a multinational company Hindustan Unilever with heavy promotional
activities, has been able to penetrate the market. With six different fragrances, three different
sizes, international standard and high quality design, as a product, LUX has been highly
successful over the years. Its distribution process is highly efficient. Its promotional activities,
like the beauty contest has been a milestone in attracting a huge number of customers. Overall
with its marketing activities LUX has been a successful brand.

MISSION STATEMENT:
Mission Is To Add Vitality to Life
Adding Vitality to life:
150 million times a day, in 150 countries, people use our products at key moments of their day.
In the future, our brands will do even more to add vitality to life. Our vitality mission will focus
our brands on meeting consumer needs arising from the biggest issues around the world today
ageing populations, urbanization, changing diets and lifestyles.

FIG: 01
Scale and geographic reach:
Our deep roots in local cultures and markets around the world give us our strong relationship
with consumers and are the foundation for future growth. We will bring our wealth of
knowledge and international expertise to the service of local consumers - a truly multi-local
multinational - extract from Unilevers corporate purpose.
Goals and Objectives
Their main objective is to have a double-digit growth and resultant cash flows will be
utilized in improving the product quality and contents to enhance the value to customer and final
users. Lever Brothers Hindustan Limited has an objective to have a responsive supply chain and
technological based processes.
They want to have consumer connectivity, i.e. they want to know what they eat, drink, how they
spend their lives, what are their preferences. So in this way they want to be very close to
customer, to know their real insight and desires so they can develop new strategy for product
design and can implement their strategy in better manner i.e. avoidance of hit and trial approach
and hitting the right target with right strategy at right time in right and accurate manner.
They want to be cost efficient i.e. they want to reduce in their cost of production, cost of
transportation, distribution and packaging cost and finally reducing all the human cost to offer a
competitive price to customer maintain the high standards of quality.
1. To have a partnership with their suppliers to enable them to provide high quality low cost
material.
2. Have entered and will be aggressively developing new mark.
3. Be exciting to their customers with stream of innovative products.
4. To be no in all their existing markets.

Attainment of Objectives:
Lever Brothers India Limiteds strategy to attain the objectives is:

Maximum coverage of outlets

Desirable sales volume
Display and merchandizing of products
Developing quality and want satisfying product.

Since every company is formed to accomplish certain objectives. There is no company, which
had no goals. So Lever Brothers Hindustan Limited also has targets before it.
7

These main targets and objectives are:

Profits
Consumerism
Welfare of consumer

VISION STATEMENT:
We meet every day Needs for Nutrition, Hygiene and Personal Care With Brands That Help
People Feel Good, Look Good and Get More Out Of Life.

MARKET FOUR PC S OF LUX:

Product:
LUX is an internationally renowned beauty soap brand of Unilever. Though manufactured in
Hindustan for the local market by Unilever Hindustan Ltd, as an international brand, it maintains
an international quality for the product. Formula given by Research and Development
departments in foreign countries, LUX is produced in Hindustan from imported raw materials
like sodium soap, glycerol and different extracts according to flavors, coming from Unilever
plants situated abroad.
LUX is offered in Hindustan in six different flavors which are: LUX Energizing Honey, LUX
Golden Glow, LUX Nature Pure, LUX Orchid Touch, LUX Almond Delight and LUX Aqua
Sparkle. Taking into account the convenience of its customers, the company manufactures all
flavors of LUX in three different sizes, 40gm, 80gm and 120gm.
Price:
Though Unilever Hindustan gives its LUX customers a lot in terms of the product itself, it cannot provide
a better pricing. This is due to some constraints in the beauty soap industry. Beauty soap is a product with
a vulnerable demand in Hindustan. A change in price has a high risk of creating price war among the
rivals which will eventually cause a loss of profit. Its prices are almost equal to its competitor compares
Luxs price with its major competitor. Company carries out research on competitors price and brand
loyalty when it feels extreme necessity of changing price. The brand loyalty test is an exploratory
research which is known as Brand Health Check-Up (BHCU).
Place:
Unilever Hindustan Ltd. has a huge distribution channel for LUX all over the country as its sales reach
more than 10 million pieces a year. The company has six huge warehouses, one in each division of
Hindustan, where the product goes after they are manufactured at Kalurghat factory shows the location of
its six warehouses in Hindustan.

The company does not use its own fleet of transport for distributing its product. However, it has
outsourced its distribution process to various third party distributors, exclusively dedicated to Unilever
Hindustan Ltd. These distributors then supply the product all over Hindustan to a huge number of
retailers. Even though LUX targets the urban and sub urban middle and upper middle class people they
are distributing their products all over Hindustan because of a recent increase in demand of its product to
all segments of the population.

Promotion:
Unilever Hindustan undertakes huge promotional activities to promote LUX which has topped
the beauty soap industry of Hindustan. It spends almost 20% to 25% of its Net Proceeds from
Sales (NPC) of LUX for promotional activities for LUX 1
Its certain annual promotional campaigns like LUX Channel i Superstar and LUX Channel i
Annual Cinema Awards has made the product a part of the glamour world. Since the 1930s, over
400 of the worlds most stunning and sensuous women have been proudly associated with Lux
advertisements. They do not only promote LUX in Hindustan for the beauty conscious females,
it also promotes the brand for males and the company proved that, by including world famous
male celebrity Shahrukh Khan for their advertising campaign.
Unilever Hindustan Ltd spends a huge amount of money for promoting LUX through TV
commercials, newspaper advertisements and billboards. Moreover it also undertakes small
promotional campaigns at different schools, colleges, universities and recreational parks with
winners of its Zonal Beauty Contests. Till now promotional activities of LUX has always been
successful which has made it a household common name and helped it reach almost one billion
taka sale value in the year 2004.

INTERNAL ASSESSMENT OF LUX

The internal assessment consists of different points which should be discussed upon the different
information we had which is as follows:
a.
b.
c.
d.
e.
f.
g.

Cultural product
Management
Marketing
Finance
Operations/production
Research and development
Management information system.

Cultural product:
Purchasing of Lux soap affect from movie star because people think that if it is good
enough for a film star, it is good for me.
9

 Purchasing of Lux soap affect from income of people. Rural people will not purchase
Lux generally due to its high price.
Generally use in Asia like India and Hindustan.
MANAGEMENT:
It is a structured method of formally and objectively evaluating employees performance with
respect to their objectives. It addresses the issue of an employees development by providing
them with structured and in-depth analysis of strengths and areas of improvement. It provides
with input for annual increments, training and development. For an organization the aim should
not be just to have the best people, but also to retain them and get best out of them. Employee
Performance management includes planning work and setting expectations, developing the
capacity to perform, continuously monitoring performance and evaluating it.
Most organizations focus on an annual evaluation process for employees and call that
Performance Management. However, annual evaluations are often subjective and can lack
specific measurements and supportive data to help the employee truly improve their
behaviour.Simply putting, a Performance Management System is essential to the success of any
organization because it influences the effort expended by employees, which in turn, drives
bottom-line business results. Furthermore, the Performance Management System helps an
Organization identifies, recruit, motivate, and retain key employees.
MARKETING:
One of the longest running campaigns the world over, Lux, an international venture of Levers
Brothers, featured Hollywood stars in most parts of the world. Lux entered India in 1929 and
while its early advertisements would feature Hollywood actresses, they would eventually be
replaced almost completely by local stars.

10

FIG: 02
The very fact that right from Devika Rani onwards every film star from Indian film industry has
been starring in the advertisement has perhaps made it a must-do thing. Every aspiring starlet
has been making it her career goal to appear in the Lux ad. In that sense it has become a kind of a
benchmark for success and a way of announcing her arrival in the industry.
Devika Rani may have been one of the foremost stars of early talkies cinema but in 1941 the
distinction of being the first Lux model went to her contemporary, LeelaChitnis.

FIG: 03

11

Lux can be seen as one of the earliest forms of celebrity endorsements. The vast majority of
actresses who appeared in the Lux advertisements were drawn from the Bombay film industry.
As a product, however, that reached the entire country, regional advertising was critical to the
success of Lux. Thus well-known stars of Bengali, Tamil, and Telegu cinema also regularly
found place in Lux advertisements inFilm fare.

FIG: 04
A Lux appearance would be predicated not just on a lead appearance but on glamorous and
iconic performances of different kinds. All the leading "vamps" of the Bombay film industry
appeared in the advertisement as well.
In this sense the campaign highlighted and awarded female performance of all kinds. Diverse
stars jostled for attention in the world of Lux, featuring known and bankable actresses but also
those who appeared in fleeting iconic roles or remained on the margins of success.

12

FIG: 05
The Lux campaign was a product of complex negotiations between advertisers and the industry,
between stars, their publicists or agents, secretaries and producers. Its success was predicated on
the fact that it was mutually beneficial to all these players.
Stars actively solicited the Lux campaign. At a time when film journalism was not as prolific as
it became later, Lux was probably one of the best ways for the stars to get publicity outside of
big urban cities and towns. Levers advertised throughout the year and its adverts traveled all over
the country, printed not just in magazines but on soap wrappers, boxes, in posters and on
billboards. Like autographed postcards, Lux with its signed endorsements could be seen as a
form of circulating star portraiture but with a much wider reach.

13

FIG: 06
Moreover the stars looked their best in these pictures as their portraits were taken by skilled
photographers. Worked on by equally skilled artists, in later years they involved stylists and
makeup artistes to create the glamorous star persona of Lux. Lux campaign was the company
acknowledging that the actress had become a star and the star saying thank you.

FIG: 07
This prolific campaign was possible because stars did not get paid for an appearance in the initial years.
For the film producers, the campaign worked as free publicity for their new productions. By the late
fifties the advertisements would feature information about the name, production credits and costume of
the current film that the actress endorsed. By the 1970s Lux seemed to have lost its exclusive edge with
competition from various other brands. Photographic advertising would eventually turn other kinds of
faces into celebrities, but Lux toilet sap continued to remain faithful to its cinematic subjects.

14

The cultural life of the soap would however be constantly updated. Finding a space outside the
pages of magazines to a presence in cinema trailers and television, Lux had become a key brand
sponsoring beauty and fashion contests by the 1990s. One thing has not changed however: The
Lux campaign continues to be predicated on the aura of the female star and its one-time attempt
to change this using Shahrukh Khan in a bathtub of petals was not very successful.
FINANCE:
The Groups financial strategy provides the financial flexibility to meet strategic and day-to-day
needs. Our current long-term credit rating is A+/A1 and our current short-term credit rating is
A1/P1. We aim to maintain a competitive balance sheet which we consider to be the equivalent
of a credit rating of A+/A1.
We believe this provides us with:
appropriate access to equity and debt markets;
sufficient flexibility for acquisitions;
sufficient resilience against economic and financial uncertainty ensuring ample liquidity;
and
Optimal weighted average cost of capital, given the above constraints.
Unilever aims to concentrate cash in the parent and central finance companies in order to ensure
maximum flexibility in meeting changing business needs. Operating subsidiaries are financed
through the mixture of retained earnings, third-party borrowings and loans from parent and
central finance companies. Unilever maintains access to global debt markets through an
infrastructure of short-term debt programmed (principally US domestic and euro commercial
paper programmed) and long-term debt programmed (principally a US Shelf Registration
programmer and a European markets Debt Issuance Programmed). Debt in the international
markets is, in general, issued in the name of NV, PLC, Unilever Finance International BV or
Unilever Capital Corporation. NV, PLC and Unilever United States Inc. will normally guarantee
such debt where they are not the issuer.
Approximately 1.3 billion (or 59%) of the Unilever Groups cash and cash equivalents balances
are held in foreign subsidiaries. We generally repatriate distributable reserves from our
subsidiaries on a regular basis. In the majority of countries we are able to repatriate funds to
Unilever N.V. and Unilever PLC through dividends free of tax. In a few countries we face crossborder foreign exchange controls and/or other legal restrictions that prevent balances being
available in any means for general use by the parent companies or subsidiaries. In each of the last
three years the amount of cash held in these countries was less than 250 million.
We closely monitored all our exposures and counter-party limits.Unilever has committed credit
facilities in place for general corporate purposes. The undrawn bilateral committed credit
facilities in place on 31 December 2013 were US $6,400 million. Further details are given in
note 16A in the financial statements.
On 11 February 2013 we redeemed a US $450 million four-year bond which was issued in 2009
at 3.125%. On 21 May 2013 we redeemed a 750 million five-year bond which was issued in
15

2008 at 4.875%. On 5 August 2013 we issued a seven-year 750 million bond at 1.75%. On 6
September 2013 we issued US $750 million 2.20% fixed rate notes due March 2019.
PRODUCTION:
Unilever is increasingly seeking their experience of handling a diverse and complex market like
India to crack other markets, and it is assigning them roles that are more important in its present
scheme of things.
Managers of Hindustan Unilever (HUL) are on the move, literally and figuratively. There's a
spike in the number of HUL managers who have moved out of India to join its parent's
operations elsewhere: 40 in 2008, 140 in 2009 and 195 in 2010 (till April).

Faced with stagnancy in the US and Western Europe, Unilever, the world's third-largest food and
consumer-goods Company, is looking at Asia, Africa, Central and Eastern Europe (AAC) as its
prime growth driver. In 2009, these markets accounted for 50% of Unilever's revenues of $39
billion.
Unilever is looking to further increase this share, which is where its HUL managerial exports
come in. The majority of HUL managers who have moved out of India in recent times have gone
to Asia (Hindustan, China, Indonesia, Singapore, Sri Lanka, Thailand , Vietnam), East Europe
(Poland and Russia) and Africa (South Africa); some have gone to the regional headquarters in
Singapore, or to West Europe.
Says Leena Nair, executive director-HR of HUL: "Talent from HUL has always been valued for
the diversity of experience that it brings from having worked in a big and complex market like
India. This has only increased in the recent years with developing and emerging markets being
among the highest growth markets for Unilever."
The well-rounded external orientation of Indian managers, as compared to their peers from most
other geographies, is being seen favorably at Unilever. In India, brand managers of, say, Lux
soap deal with a consumer who changes from city to town to village, from state to state; further,
they deal with a competition that is multinational, homegrown and local.
Similarly, a factory manager, say, in Rohtak has to deal with multiple stakeholders such as local
communities, the political system and the bureaucracy. This sharpens their exposure to complex
situations early on.
Unilever is looking to export some of these learnings to other markets, some of which
demonstrate similar complexity as India. "Managers from other countries are also moving," says
a senior HUL manager. "But more than any other geography, Indian managers are being sought
by the parent for the biggest challenges."
Among the more high-profile moves, DhavalBuch, previously executive director for supply
chain in HUL, has become senior VP at Unilever Global. Sanjay Dube, formerly executive
16

director-sales and customer development in HUL, is now chairman, Unilever, Poland and the
Baltics.
Unlike earlier, when such movement happened out of HUL at relatively senior levels only, it is
now happening at every level. Says Ms Nair: "Presently, HUL managers outside India include a
crosssection across all levels senior, middle and junior management." Unlike earlier , when it
primarily happened to give international exposure to the executive, it is now happening with
Unilever's business interests in the foreign country in mind.
The change in mindset is partly the result of the 'one Unilever' plan initiated by its previous CEO
Patrick Cescau. The plan, aimed at achieving greater cohesion among the multinational's
geographies, calls for greater sharing of ideas and resources. So, for instance, Project Shakti
one of HUL's Indian initiatives, which involves the company selling goods though village
women is being transplanted in Sri Lanka, Vietnam and Hindustan, and is also being
considered for Latin American and African markets.
Similarly, current Unilever CEO Paul Polman is encouraging other markets to replicate HUL's
strategy of having an array of brands at various price points for example, in detergents , HUL
offers Wheel, Rin, Surf and Surf Ultra. This lets consumers trade down or up, depending on their
reading of the economy. In an interview to ET earlier this year, MrPolman said: "We are trying to
do the same in other markets."
Although London and Rotterdam remain Unilever's two main offices, Singapore is emerging as
the third power centre, in what is a sign of AAC's growing importance. Unilever has about 800
employees in its Singapore office, including key regional decision-makers in functions like
marketing, supply chain, finance and customer development. A new office is being constructed in
Singapore to house all these teams.
A large presence in Singapore has offered many Indian managers the opportunity to move into
regional roles based out of Singapore. Several senior functional heads and their teams are located
in Singapore, as also the category teams and brand-development teams. For example, in home
and personal products, about one-third of Unilever's brand-development team draws up the
global outline of a brand plan, which countries then localize are now in the developing world.
Unilever posts job openings on its intranet, and managers in other geographies are free to apply.
Even as HUL sees more of its Indian managers move to other geographies, the company doesn't
see a transition issue. Says a senior HUL manager: "Replacements are decided eight quarters in
advance for every role so that any change does not impact business continuity.
RESEARCH AND DEVELOPMENT:
Bangalore is the research and development centre for a number of our brands including Lux,
Lifebuoy, Ponds, Fair & Lovely, Vim, Radiant, Omo, Brooke Bond, Lipton, Walls and Knorr. A
number of breakthrough innovations, such as the Fair & Lovely cream and Pureit water
purification system, were also driven from this laboratory.

17

FIG: 08
MAIN ACTIVITIES
In skin care, we work on advanced formulations for lotions and creams that deliver photoprotection along with exceptional sensory experiences. Our programmed in tea looks at aroma,
taste and nutrition benefits through understanding the bio-chemistry of the tea plant and tea
processing to improve blends.
Our research on naturals develops products with proven efficacy for the body and mind. In
cleaning, for laundry and household care, we focus on areas such as minimizing water usage
while not compromising on cleanliness. And an important aspect of our health and hygiene
programmed is to translate hygiene benefits across our products for personal and home care and
ensure that clean, safe drinking water can be provided to the masses.
PEOPLE
Around 300 employees work at the site including 75 scientists (bio-scientists, chemical
engineers, material scientists, physicists and chemists), 150 research associates and 50 support
staff specializing in Microbiology, Human and Plant Biology, Materials Chemistry and Process
Science. While we have internal expertise in many areas, we also collaborate extensively with
leading international experts, research groups and academic institutions.
HISTORY
Unilever set up its first India R&D facility in Mumbai in 1958 to carry out research on soaps,
infant foods and perfumes. In 1997, the research efforts moved to Bangalore. Over the years, the
team has been responsible for delivering innovations such as bar soaps, fortified salt and instant
tea.
A MODEL OF SUSTAINABILITY
The research campus was built to complement and enhance its surroundings, retaining as much
green cover across the site as possible and working in harmony with the rare local flora and
fauna. There are also ongoing programmers to reduce its carbon footprint through energy saving
measures and to improve water sustainability through recycling.

18

MANAGEMENT INFORMATION SYSTEM:

The world is considerably very small because of globalization. The virtual closeness of the
countries has made the trade and commerce an international event. Global businesses make every
community more closely around the world. The discussion in this report shall involve the
strategic role and analyze the information requirements of an organization operating in a
competitive global environment, decision making at each of the managerial levels, the critical
relationship between the Business strategies, Information System (IS) strategy and the
Information Technology (IT) strategy in an organization and the latent ethical issues of
information systems. In this case, the situation surrounding Unilever will be taken into
consideration. The following annotations and propositions discussed in this discussion are
supported by claims on journals, books and Unilever website.
The modern technology is really helping those businesses where is using a Management
Information System in the various level of managerial approach. The chosen company is
Unilever to describe in this report how Unilever is benefitting using Management Information
System in various level of the company.
Recommended Information Systems
The following cross-functional system concepts and how they can provide significant business
value to Unilever will be discussed in this document:
The operational level is for taking day to day decision. Transaction Processing System can help
to take operation level decision like supermarket, Biometric device etc.
The knowledge level of decision is takes for research, design and procurement. Knowledge Work
System can help to take knowledge level decision.
The tactical or managerial control level decision takes for 1 to 3 years, it is for resource
allocation. Management Information System or Decision Support System can help to take the
managerial level decision.
The strategic level decision takes for 3 to 10 years, it is for long term. Executive Information
System can help to take the strategic level decision.
Strategic Level
Complex Mathematical Model: Unilever can use a Complex Mathematical Model for monitoring
operations, costs, revenues, market shares, share prices etc. Unilever is categorized as fast
moving consumer goods, quick acquisition, processing of market information. The information
of market is usually collect from research companies, historical data and individual analysis.
Enterprise Data Warehouse and Business Intelligence Solution: In order to gain a clear view of
business performance across Unilevers companies in around the world.

19

Unilever Information Program: When transformation is taking place in the organization,

information systems are inevitably involved. Currently Unilever is reshaping operational
responsibilities for greater clarity between what is better done by the local company, at regional
level or global organizations. The Unilever Information Program (UIP) is to develop an
infrastructure to support the Path to Growth strategy, with the key priority of finding a quick data
integration solution to allow user access to any number of data sources for in-depth analysis.
Management Level
Supply Management Information System: Unilever can integrated a supply management
information system which will helps local, regional and global supply managers make
appropriate sourcing of decisions, allowing them to collate and analyze informations more
quickly and easily. The system enables managers to negotiate with suppliers in a transparent and
efficient way where benefiting both parties.
Knowledge Level
Procurement System: The procurement is inevitability for future supply chain optimization the
supply market, particularly in Europe is still suffering from under-development. The
Procurement System can help total supply chain operation rather than just transactional activity.
The Procurement System provides a catalyst for positive improvement in supply management
profiles.
Supply-Chain Management Systems: The using of a variety information system and several other
supply chain management technologies, Unilever can enhance the usability of the supply chain.
Research & Development System: Used for formula development
Operational Level
Specifications System: Specification System will help in packaging, formula, raw material,
finished products and process specification.
Manufacturing Planning System: Manufacturing Planning System can help in production orders,
purchase orders, standard costs, inventory, financial transactions, and production reporting.
Planning System: Planning system can help in Demand Planning (DP), Demand Requirement
Planning (DRP), Constrained Product Planning (CPP), and Finite Scheduling.
Order and Cash System: Order and Cash system can help in order entry management, terms of
sale, deduction tracking, stock allocation and invoicing.
Finished Goods Management System: Finished good management system can be used for
shipping, warehouse, transportation, production and traceability.
Ethical issues related in using Information System at Unilever

20

A new technology introduces some new ethical dilemmas. Computer technology is used for
gathering, storing, manipulating data and spread the processed data which is information.
Information system uses local and global networks, databases, programs for processing
information. Information is a key to prosperity and it is a source of power also. This is very
important to think about ethical considerations, how information will be used in an information
system because there is social and political issues involved. There are severe social problems
exist today because government and business organizations have failed to uphold the highest
ethics standard in Management Information System use. These problems exist in such forms as
invasion of privacy and software piracy. The most widely publicized classification of human
rights in the computer area is Richard O. Masons PAPA. The letters in PAPA stand for Privacy,
Accuracy, Property and Accessibility. (McLeod and Schell, 2001)
Privacy: The right of privacy is threatened by two forces. One is increasing ability is of the
computer to be used for surveillance and other one is the increasing value of information in
decision making. Decision maker sometime invade someones privacy to get the information.
Unilever need to do market research in need to know what type of products customers really
need or what they use. There is a ethical issue concerned because of Data Protection Act, UK
1998.
Accuracy: The Management Information System is given credit for making possible a level of
accuracy and which is not unachievable in manual system. Most of the time errors cost much
greater.
Property: There is some intellectual property like computer programs. The software or the
systems Unilever using are they copyrighted, agreed to use from the vendors.
Access: There are some information is available to the general public in the form of printed
documents or microform of images stored in libraries which includes news stories, results of
scientific experiments, government statistics and so on. Access right is required to access some
other databases to get information. A right to access is a Modern-day ethical issue.

EXTERNAL ASSESSMENT OF LUX

The Lux has conducted Marketing Research System for their external assessment through this
they gathered external information and also find out or try to control the external impact at
certain limit that it harms the organization.

SWOT Analysis:
SWOT analysis is done to know what the strength and weaknesses of the brand are and what are
the opportunities and threats that company has to face from the environment.
Strength:

21

Brand image
Number of verities
Excellent marketing department
Assisted by a highly regarded
Marketing research unit
Financial backing
Large scale force
Effective and attractive packaging
The brand has innovative sale promotions tactics
Unilever is a big multinational company.
Lux has a very wide range of products to offer.
Strong market research (Door to door sampling once in a year Rural and Urban areas
Many variants (Almond oil, Orchid extracts, Milk cream, Fruit extracts, Saffron
sandalwood oil and Honey)

Dynamically continuous innovations New variants and innovative promotions (22 carat
gold coin promotion Chance Hai)
Strong brand promotion but relatively lower prices Winning combination. Lux soap
brand is sold in over 100 countries.
Weakness:
Mainly positioned as beauty soap targeted towards women, lack unisex.
Some variation like the sunscreen, international variant did not do well in the market.
Not much popular in rural areas.
Loss of market share to some of its own product as Rexona.
Tall structure.
Huge cost and expenses.
Emphasizing only few products while ignoring others which could give them potential
market share e.g beverages section.
The wear rate of the soap is very high it gets mushy and soggy quickly.
Some of its advertisements have been quite controversial.

Opportunities:
Soap industry is growing by 10% in India
Liquid body wash is currently in growth stage Lux should come out with more variants
in this segment
Large market share Strong hold over the market. High rate of population growth.
People are becoming more conscious.
Innovation in unilever may create opportunity to more penetrate in the market.
22

 Unilever Hindustan has opportunity to develop new markets by identifying the needs of
customer.
Products diversification would also help the brand greatly.
Explore new markets.
Threats:
High internal competition (Pears Beauty segment)
New entrants in this segment
Maturity stage threat of slipping down to decline stage if constant reinvention is not
carried out.
Possible increase of market share of pears etc.
Rising inflation.
Reduces personal disposable of consumer.
There may be imitation of products in India which may damage the goodwill of unilever
Hindustan limited.
Purchase the products of foreign companies
Local companies.

PEST ANALYSIS:
Political & Legal Factors:
As far as the Lever Brothers Hindustan Limited concerns according to them that political
instability have do affect but not particularly Lever Brothers Hindustan Limited same as it affects
any other organization around and specially they are in consumer products business which never
make them out of business.
In case of legal factors, any trade policy or import duties are not affecting particularly Lever
Brothers Hindustan Limited. In Hindustan right now following liberalization policy under SAP
by IMF made which they have to waive off all restrictions and moreover due to huge investment
by Lever Brothers Hindustan Limited no government can afford to create hurdles in the way of
an organization like Lever Brothers Hindustan Limited. And they dont have to go for only
lobbying or what so ever as not action of Hindustan government has affected them adversely as
such.
Economic Factors:
Economic factors affect Lever Brothers Hindustan Limited in the same way as it affect any other
organization like current economic situation in Hindustan and inflation has reduced consumers
disposable income too, which in turn has reduced the purchasing power of consumer but affect is
same for every organization and according to them Lever Brothers Hindustan Limited have edge
that they have targeted all possible segments through their vast product category i.e. the width
23

and length too. So one way or other they find way to cover it up.In other economic factors like
interest rates and inflation has affected the borrowing ability of organization but Lever
Brothers Hindustan Limited stayed unaffected as a company having business in billions and
when in need of financing no single bank can fulfill the need, they have to make a consortium to
finance Lever Brothers Hindustan Limited and with very good credit standing and very low risk
definitely they get the lowest or justified interest rate as well.
Socio-Cultural Factors:
In socio-cultural factors, factors like lifestyle changes and level of education affects an
organization. In case of change in lifestyle, the world has converted into global town now and
people have readily access to every sort of information and they are becoming more quality
conscious. Now more concerned towards environmental issues now and demand more social
responsibility on the part of organizations now. To cope up with all these factors now Lever
Brothers Hindustan Limited which always maintained the quality standards needs to work
towards other social factors like social responsibility and environmental concerns like P&G did
in its Arial campaign and image of a society responsible organization.
Technological Factors:
In technological factors comes R&D first and foremost that how much an organization spending
in terms of product improvement or development of new products or improvement in production
process or in the raw material etc. and what is the trend in the industry as Hindustan is not that
big and not very much innovation seeking as the other developed countries. Yet they keep on
finding new ways of doing things and new things as well they continuously launched variants in
brands etc. and moreover in the market like Hindustan in product categories of consumer
products rates of obsolescence is not very high rather very slow so no great pressure to launch
new products.

PROPOSED STRATEGIES:
Mainly four strategies I would use in the further analysis which are as follows:
Concentric Diversification.
Horizontal Diversification.
Product Development.
Forward Integration.

CHOOSE STRATEGIES AND ANALYSIS:

After done with whole process of internal and external assessment. Now we will move towards
the selection of strategies which we studied in detail in our course upon which we now made
matrixes for it as we studied that it can be measured.
24

There are mainly three stages involved in it which are as follows:

The Input stage.

The Matching stage.
The Decision stage.

THE INPUT STAGE:

In this stage we analyzed the influences of the factors that how much they can bare the
influences. It also has three stages which are as follows:

The Internal factor evaluation matrix (IFE).

The External factor evaluation matrix (EFE).
Competitive profile matrix (CPM).

THE INTERNAL FACTOR EVALUATION MATRIX (IFE):

IFE Matrix provides strategy formulation tool summarizes and evaluates the major strengths and
weakness in the functional areas of a business and it also provides a basis for identifying and
evaluates relationship among those areas.
THE EXTERNAL FACTOR EVALUATION MATRIX (EFE):
An EFE Matrix allows strategies to summarizes and evaluate economic, social, cultural,
demographics, environmental, political, government, legal, technological, and competitive
information.
COMPETITIVE PROFILE MATRIX (CPM):
The CPM identifies a firms major competitor and its particular strengths and weakness in
relation to a sample firms strategic position.

THE MATCHING STAGE:

In matching stage we had four matrixes which are as follows and this stage would be done when
you are completed with the input stage.
SWOT Matrix
SPACE Matrix

25

 BCG Matrix
G.E Matrix
SWOT MATRIX:
Proposed Strategies
1. Concentric
Diversification
2. Horizontal
Diversification
3. Product Development
4. Forward Integration

Strength-S

Weaknesses-W

1. Brand Image

1. Tall Organization Structure

2. Number of Products

2. High Operating Expenses

3. Excellent marketing dept.

& marketing research
unit

3. High Cost of Production

4. Increasing Number of Small
Competitors

4. Financial Backing
5. Unbranded Products
5. Experience Top
Management

6. Gets mushy and soggy quickly

Opportunities-O
1. Hygiene Consciousness

SO Strategies

WO Strategies

2. Increasing Population

Introduce product for gents and

kids.

Introduce lux Shampoo

3. Innovation (R&D)

And lux face wash

(S1,S3,S4,O3,O4)

4. Product Diversification

(W4,W5,O2,O3,O5)

5. Explore New Market

Threat-T
1. Rising inflation,
decrease in purchasing
power

ST Strategies

WT Strategies

They must have their own

They should improve the quality of

26

2. High taxation

distribution channel(S4,T3)

their soap(W6,T5)

3. Distribution and retailer

ship can create problems
any time
4. Possible negative
publicity
5. Competitors Soap
FIG: 09
Strategies in Action:

Related Diversification.
Horizontal Diversification.
Forward Integration.
Product Development.

SPACE MATRIX:
The Strategic Position and Action Evaluation (SPACE) Matrix is another implementing stage 2
matching tool.
Ranking: FS & IS (+1 worst TO+ 6 best) , ES & CA (-1 best TO -6 worst).

Internal Strategic Position

External Strategic Position

Financial strength (FS)

Environmental Stability (ES)

ROI (35% )

+2

Technological changes

-1.5
-2.0

Leverage (1414537)

+2

Rate of inflation

Cash flow ( 137005)

+4

Competitive pressure

-3.5

Earnings per share (116.14)

+4

Barrier to entry into market

-3.0

Total
Average
Competitive Advantage(CA)

12
3

Total

-10

Average

-2.5

Industry Strengths(IS)
27

Market share

-4

Growth potential

+3

Product Quality

-3

Profit Potential

+4

Customer Loyalty
Technology know-how

-3
-2

Total

12

Average

-3

Resource utilization

+4

Financial stability

+4

Total

15

Average

TABLE: 01

X-axis: -3+ 3.75 = +0.75

Y-axis: 3+ (-2.5) = +0.5

28

+3.75

1.
2.

Product
Development
Concentric
Diversification

FIG: 10

PROPOSED STRATEGIES FOR SPACE MATRIX:

1. Product Development
2. Concentric Diversification
3. Horizontal Diversification
4. Forward Integration

29

BCG MATRIX (BOSTON CONSULTING GROUP):

The Boston consulting group a leading management consulting firm develops and popularized
the growth share matrix as shown in figure

Market Share of Lux

Lux
Others

40%
60%

FIG: 11
BCG Matrix

LUX

FIG: 12
Proposed
Strategies for BCG:

As the growth is declining in the existing market so the company can go for Concentric
diversification and make soap for gents and kids as well through which they can
increase their growth and can generate more revenues,
30

The company can also go for Horizontal Diversification i.e. they can produce shampoo
in order to earn more amount.

G.E MATRIX (GENERAL ELECTRIC):

In this model we have three conditions on the bases of which we decided
that what position you are standing. The conditions are as follows:
Green Zone
Yellow Zone
Red Zone
Green Zone
Consists of the three cells in the upper left corner. If your enterprise falls in this zone you are in a
favorable position with relatively attractive growth opportunities. This indicates a "green light"
to invest in this product/service.
Yellow Zone
Consists of the three diagonal cells from the lower left to the upper right. A position in the yellow
zone is viewed as having medium attractiveness. Management must therefore exercise caution
when making additional investments in this product/service. The suggested strategy is to seek to
maintain share rather than growing or reducing share.
Red Zone
Consists of the three cells in the lower right corner. A position in the red zone is not attractive.
The suggested strategy is that management should begin to make plans to exit the industry.

GENERAL ELECTRIC MODLE

31

BUSINESS UNIT STRENGTH

Sale
margin profit
primary demand
brand image
quality
product innovation
market share
TOTAL

RATE

LUX

6
5
6
5
4
5
6

5
5
4
4
4
4
5

37

31

4
4
4
5
3
4
5
6
4
4
4
5
5
6
63

4
4
2
5
5
4
4
5
6
5
4
4
4
5
61

MARKET ATTRACTIVNESS

competition
historical profit margin
environmental situation
economic situation
customer specification
size of market
profit margin
impact of technology
environmental impact
market share
management profile
R&D
quality of service
branding & promotion
TOTAL

TABLE:
02

Business unit strength of LUX= 94%

Market Attractiveness of LUX=92%
So after the calculation of SBU & Market Attractiveness of LUX we concluded that according to
the GE model LUX lies in the Green zone of GE model.
GE MATRIX FOR LUX:
Industry Attractiveness

Business Unit Strength

32

Strong

Average

High

Grow

Grow

Medium

Grow

Hold

Low

Hold

Harvest

Weak

Hold

Harvest

Harvest

FIG: 13

THE DECISION STAGE:

QSPM:
QSPM (Quantitative Strategic Planning Matrix).The QSPM is a tool that allows strategists to
evaluate alternative strategies objectively, based on previously identified external and critical
success factors. Like other strategy-formulation analytical tools, the QSPM requires good
intuitive judgment.
QSPM Matrix for LUX:

33

Strategic Alternatives

Key Factors:

Weight

Product
Dev

Con.
Div

Forward
Integ.

Horizontal
Div

distribution 5

Fix
EXTERNAL FACTORS
1 Develop the product quality
2 Should have
channels

Own

3 An increase in products for kids

4 The local companies

5 Rising inflation, this reduces 5

disposable income of consumers

6 Gents are also brand and skin 5

conscious

7 Rural area market to expand

1 Consumer loyalty

2 Market share is 64%

3 Strong financial position

4 Good promotion strategies

focus
female,
should 5
5 Only
introduce products for gents and
kids

6 Gets mushy and soggy quickly

65

50

38

29

40

FIG:14

Plan A

INTERNAL FACTOR

34

Plan B

Decision on the basis of QSPM:

From the analysis we conclude that the company should choose Product development as Plan
A and if any problem lies in implementation, they can go for Horizontal Diversification Plan
B.

35

REFERENCES

www.google.com
www.shildeshare.com
www.scrbid.com
www.perzi.com.

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