GL BAJAJ INSTITUTE

OF

MANAGEMENT AND RESEARCH

GREATER NOIDA

Minor Project (PG34)

ON
ITC LTD.

POST GRADUATE DIPLOMA IN MANAGEMENT

TERM -2
BATCH: 2019-21

Submitted by Submitted to
BHAVYA BHARTI Dr. Parul Yadav

1
 Roll No. GM19O49 (Assistant Professor)

GL BAJAJ INSTITUTE OF MANAGEMENT AND RESEARCH

GREATER NOIDA

CERTIFICATE

This is to certify that Ms BHAVYA BHARTI (GM19049) PGDM 2019-21 ,

Term – 2 , work exemplified in minor project (PG34) on ITC LTD. under my
mentorship in GL BAJAJ INSTITUTE OF MANAGEMENT AND
RESEARCH , GREATER NOIDA (U.P)

MENTOR Section in Charge Faculty in Charge

Dr. Parul Yadav Dr. Arvind Bhatt Dr. Dileep Singh
(Assitant Professor ) (Assistant Professor) ( Professor)

2
 TABLE OF CONTENT

S CHAPTER PAGE No.

No.
1. Industry Analysis 4–7

8 – 10
2. Competitor Analysis
11– 25
3. About HUL

Marketing Analysis of ITC 26 - 32

4.

5. Marketing Analysis of HUL 33 – 38

6. International Business of ITC 39 – 40

41 - 44
7.
International Business of HUL

Findings
8.
45
Recommendations
9. 46

References 47
10.

CHAPTER 1
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 INDUSTRY ANALYSIS
INTRODUCTION TO SECTOR
Fast-moving consumer goods (FMCG) sector is the 4th largest sector in the Indian
economy with Household and Personal Care accounting for 50 per cent of FMCG sales in
India. Growing awareness, easier access and changing lifestyles have been the key growth
drivers for the sector. The urban segment (accounts for a revenue share of around 55 per cent)
is the largest contributor to the overall revenue generated by the FMCG sector in India
However, in the last few years, the FMCG market has grown at a faster pace in rural India
compared with urban India. Semi-urban and rural segments are growing at a rapid pace and
FMCG products account for 50 per cent of total rural spending.

There are three main segments in the sector – food and beverages which accounts for 19 per
cent of the sector, healthcare which accounts for 31 per cent and household and personal care
which accounts for the remaining 50 per cent.
The FMCG sector has grown from Rs 2,20,852.4 crore (US$ 31.6 billion) in 2011 to Rs
3,68,669.75 crore (US$ 52.75 billion) in 2017-18. The sector is further expected to grow at a
Compound Annual Growth Rate (CAGR) of 27.86 per cent to reach Rs 7,24,759.3 crore (US$
103.7 billion) by 2020. The sector is projected to grow 11-12 per cent in 2019. It witnessed
growth of 16.5 per cent in value terms between June–September 2018; supported by moderate
inflation, increase in private consumption and rural income. FMCG’s urban segment is
expected to have a steady revenue growth at 8 per cent in FY19 and the rural segment is
forecasted to contribute 11-12 per cent of total income in FY19. Post GST and
demonetisation, modern trade share grew to 10 per cent of the overall FMCG revenue, as of
August 2018.
Accounting for a revenue share of around 45 per cent, rural segment is a large contributor to
the overall revenue generated by the FMCG sector in India. Demand for quality goods and
services have been going up in rural areas of India, on the back of improved distribution
channels of manufacturing and FMCG companies. Urban segment accounted for a revenue
share of 55 per cent in the overall revenues recorded by FMCG sector in India.
FMCG Companies are looking to invest in energy efficient plants to benefit the society and
lower costs in the long term. Patanjali will spend Rs 5,197.85 crore (US$ 743.72 million) in
various food parks in Maharashtra, Madhya Pradesh, Assam, Andhra Pradesh and Uttar
Pradesh. Dabur is planning to invest Rs 250-300 crore (US$ 38.79-46.55 million) in FY19 for
capacity expansion and is also looking for acquisitions in the domestic market. Tata’s are also
planning to expand its home and personal care products in FMCG sector. In FY19, ITC made

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more than 60 launches in the fast-moving consumer goods (FMCG) segment in India.
Investment intentions, related to FMCG sector, arising from paper pulp, sugar, fermentation,
food processing, vegetable oils and vanaspathi, soaps, cosmetics and toiletries industries,
worth Rs 91,613 crore (US$ 15.55 billion) were implemented between January–December
2018. In 2019, RP-Sanjiv Goenka Group to invest capital fund of Rs 103.01 crore (US$ 14.74
million) in FMCG start-ups. Nestle plans to invest Rs 700 crore (US$ 100.16 million) to open
a new plant in Sanand for Maggi.
Growing awareness, easier access, and changing lifestyles are the key growth drivers for the
consumer market. The focus on agriculture, MSMEs, education, healthcare, infrastructure and
tax rebate under the Union Budget 2019-20 is expected to directly impact the FMCG sector.
These initiatives are expected to increase the disposable income in the hands of the common
people, especially in the rural area, which will be beneficial for the sector.

Current Market Scenario

The three main segments of the FMCG industry are Food & Beverages, Household Care, and
Personal Care. Unilever, P&G, Marico, Nestle are some of the leading FMCG companies in
the world. 
The growing Indian economy has opened doors to well-paying employment opportunities in
every sector. This has resulted in a population with greater purchasing power. Most of these
high-income earners are interested in spending on a variety of FMCG products including
luxury products, to lead a good lifestyle. 
Brands in India are spending the enormous amount of money on marketing and branding
campaigns to lure these spenders who are among their target audience. 
 
Future Growth

New production facilities are equipped with machinery to reduce the wastage of products
during production. Transport and infrastructure development are improving the methods of
distribution to even the remotest areas of India. 
There are economical packages and one-time use packs for the people who have less spending
power or who want the ease of unit packs. With the latest packaging technologies, FMCG
companies are able to innovate and manufacture long-lasting products with the minimum
damage of packages during transportation.

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 SWOT analysis of FMCG Industry
Strengths:

1. Low operational costs

2. Presence of established distribution networks in both urban and rural areas

3. Presence of well-known brands in FMCG sector

4. Deep roots in local culture & great understanding of consumer needs

Weaknesses:

1. Lower scope of investing in technology and achieving economies of scale, especially in

small sectors

2. Low exports levels

3. Counterfeit Products. These products narrow the scope of FMCG products in rural and
semi-urban market.

Opportunities:

1. Untapped rural market

2. Rising income levels, i.e. increase in purchasing power of consumers

3. Large domestic market- a population of over one billion.

4. Export potential

5. High consumer goods spending

Threats:

1. Removal of import restrictions resulting in replacing of domestic brands

2. Slowdown in rural demand

3. Tax and regulatory structure.

List of Top 10 FMCG Leading Companies in India (2020)
 Hindustan Unilever Limited (HUL)
 Colgate-Palmolive.
 ITC Limited.
 Nestlé

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 Parle Agro.
 Britannia Industries Limited.
 Marico Limited.
 Procter and Gamble.

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 CHAPTER 2
COMPETITORS ANALYSIS
ITC LTD

1) HUL
Hindustan Unilever Limited (HUL) is the largest Fast Moving Consumer Goods Company
located in India. It has a rich 80 years of legacy in this field. Almost, nine out of ten Indian
households make use of the products of HUL.

The company works daily for a better future to make people feel and look good with their
various brands and services. The main product includes cleaning agents, food products,
personal care products, and water purifiers. It has about 35 brands which span across 20
distinct categories like detergents, soaps, skin care, deodorants, tea, coffee, ice cream,
packaged food, and many more. The main strength of this company is its innovation. The
company’s research center continuously works and develops innovative products which make
HUL lead the consumer goods market. As HUL is considered as a market leader in consumer
goods, it is indeed a top ITC competitor.

2) P&G

A popular American multinational consumer goods corporation, P&G is headquartered in

Ohio, United States. It manufactures a wide range of consumer goods. The company has its
business operations in five main segments, Grooming, Health Care, Fabric & Home Care,
Beauty, and Baby, Feminine & Family Care.

8
The company sells their products in about 180 countries and territories mainly through
grocery stores, department stores, merchandisers, membership club stores, baby stores, online
store and through many other channels. It is one of the major providers of hygiene and
healthcare consumables.

One of the main strength of P&G is that it has its own brands which are valued by them and
customers. It has a huge product portfolio and due to which the economy of the sales
increases. Due to their excellent R&D and brand value, P&G is considered a top ITC
competitor.

3) Nestle

Nestle is a food processing industry located in Switzerland. Established in the year 1866,
Nestle is the largest food company in the world based on revenue. The various products of
Nestle include medical food, baby food, breakfast cereals, bottled water, tea, coffee, dairy
products, confectionery, frozen food, ice cream, snacks, and pet foods.

The company has about eight factories and many co-packers. It is a lively company which
provides their consumers with various products of global standards. The company has about
200 brands that range from global to local ones and their products are available in almost 191
countries. The research and development center of Nestle is the world’s largest food and
nutrition research organization. Due to their broad portfolio of products, Nestle is considered
a top ITC competitor.

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4. Godrej Consumer Products
Indian Consumer Goods, Godrej Consumer Products Limited (GCPL) is based out in
Mumbai. It is engaged in manufacturing of various products which includes hair colorants,
soap, liquid detergents, and toiletries.

The company has many brands which include, Godrej Fair Glow, Cinthol, Godrej No.1, and
many more. At present, the Group has about 1.1 billion consumers worldwide and across
various businesses. The company is ranked the largest in household insecticide and hair care
players.The company is also at the top in producing the hair care needs of the consumers.
GCPL creates own strong brands in various business segments. It focuses on innovation and
expands their product portfolio by introducing many new products. Due to their strong market
position in many categories, GCPL is considered a top ITC competitor.

5) Godfrey Philips India Ltd

Godfrey Phillips India Limited is a lead company of the Modi Enterprises. It is one of the
largest cigarette manufacturers in India. The company produces some of the best cigarette
brands in the country which includes Red & White, FourSquare, and Cavanders. Over the
years, Godfrey Phillips India has expanded its portfolio of
products outside cigarettes and tobacco.The company started
producing mouth freshener and confectionery segments with
Pan Vilas Silver Dewz, Pan Vilas pan masala, and
FundaGoli candies. In the global market, it collaborated with
some leading players to offer product support, tailor-made
services, and professional services. Due to their service and product portfolio, Godfrey
Phillips India Limited is considered a top ITC competitor.

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 CHAPTER 3
ABOUT HUL

 About Unilever
On any day, 2.5 billion people use Unilever products to look good, feel good and get more out
of life – giving us a unique opportunity to build a brighter future.

 A sustainable business plan

We want our business to grow but we recognise that growth at the expense of people or the
environment is both unacceptable and commercially unsustainable. Sustainable growth is the
only acceptable model for our business.

Our Unilever Sustainable Living Plan (USLP) is central to our business model. It sets out how
we’ll decouple our growth from our environmental impact, while at the same time increasing
our positive social impact.

Our USLP has three big goals:

 Help more than a billion people to improve their health and wellbeing. 
 Halve the environmental footprint of our products. 
 Source 100% of our agricultural raw materials sustainably and enhance the livelihoods
of people across our value chain.

 Working with others to build a brighter future

We know that our products must be sustainable at every stage in their life-cycle, not just in
our factories. That means working with others, including our suppliers, consumers,
governments, NGOs and other businesses to help create the major changes that are needed to
address the biggest challenges facing our world.

ABOUT HUL

Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods company
with a heritage of over 80 years in India. On any given day, nine out of ten Indian households

11
use our products to feel good, look good and get more out of life – giving us a unique
opportunity to build a brighter future.

HUL works to create a better future every day and helps people feel good, look good and get
more out of life with brands and services that are good for them and good for others.

With over 35 brands spanning 20 distinct categories such as soaps, detergents, shampoos, skin
care, toothpastes, deodorants, cosmetics, tea, coffee, packaged foods, ice cream, and water
purifiers, the Company is a part of the everyday life of millions of consumers across India. Its
portfolio includes leading household brands such as Lux, Lifebuoy, Surf Excel, Rin, Wheel,
Fair & Lovely, Pond’s, Vaseline, Lakmé, Dove, Clinic Plus, Sunsilk, Pepsodent, Closeup,
Axe, Brooke Bond, Bru, Knorr, Kissan, Kwality Wall’s and Pureit.

The Company has about 18,000 employees and has sales of INR 37660 crores (financial year
2018-19). HUL is a subsidiary of Unilever, one of the world’s leading suppliers of Food,
Home Care, Personal Care and Refreshment products with sales in over 190 countries and an
annual sales turnover of €51 billion in 2018. Unilever has over 67% shareholding in HUL.

 Our vision

Our vision is to grow our business, while decoupling our environmental footprint from our
growth and increasing our positive social impact.

 Sense of purpose

Our business has always been driven by a sense of purpose, a thread that connects us to our
founding companies and their social missions to improve health, hygiene and livelihoods in
their communities.We continue to believe that business must make a positive contribution to
addressing the challenges the world faces and that this is the only way a business will
succeed. In 2009, we launched The Compass – our strategy for sustainable growth, setting out
our determination to build a sustainable business for the long term.

 Sustainability targets

The Unilever Sustainable Living Plan, launched in 2010, laid the blueprint for achieving this
strategy. We continue to work towards the ambitious targets we have set ourselves for halving

12
our environmental impact, improving the health and wellbeing of 1 billion people, and
enhancing the livelihoods of millions.

We will grow our business by building on our strengths – combining our scale and expertise
with our understanding of consumers in diverse markets to continue providing brands and
services that people want and need. Our sustainable business model is making a difference to
millions of people’s lives and to our environmental impact, and we will keep working to make
these contributions greater. We’re also already seeing evidence that it is strengthening our
business by helping to drive growth and trust, and reduce risk and cost.

 Purpose, values & principles

Our Corporate Purpose states that to succeed requires "the highest standards of corporate
behaviour towards everyone we work with, the communities we touch, and the environment
on which we have an impact."

Always working with integrity

Conducting our operations with integrity and with respect for the many people, organisations
and environments our business touches has always been at the heart of our corporate
responsibility.

Positive impact

We aim to make a positive impact in many ways: through our brands, our commercial
operations and relationships, through voluntary contributions, and through the various other
ways in which we engage with society.

Continuous commitment

We're also committed to continuously improving the way we manage our environmental
impacts and are working towards our longer-term goal of developing a sustainable business.

Setting out our aspirations

Our Corporate Purpose sets out our aspirations in running our business. It's underpinned by
our Code of Business Principles which describes the operational standards that everyone at

13
 Unilever follows, wherever they are in the world. The Code also supports our approach to
governance and corporate responsibility.

Working with others

We want to work with suppliers who have values similar to our own and work to the same
standards we do. Our Supplier Code, aligned to our own Code of Business Principles,
comprises eleven principles covering business integrity and responsibilities relating to
employees, consumers and the environment.

 |DownloadsLegalOur ‘start a little good’ philosophy



Because we can’t change the world unless we first change ourselves.

Switch off the lights when not needed. Don’t litter. Twist that tap shut till it stops dripping
completely. If it still doesn’t stop, get it fixed. Walk short distances instead of driving. Keep
our houses clean. Teach our kids the same.

So how does one change the world?

Simple. Begin with yourself.

We, at Hindustan Unilever have started in a small way.

We have launched numerous initiatives to improve hygiene and access to sanitation across
India. Our rainwater harvesting and other water saving initiatives have helped us save billions
of litres of water. We are creating thousands of job opportunities in remote villages, especially
for women. We have also set up a system of waste management and recycling to curb plastic
waste from polluting the oceans.

The world is facing a crisis today because too many of us didn’t care about how we affected
things. If that is true, then the reverse is also true.

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If too many of us start caring about how we affect things, we can make the world cleaner,
greener, safer and better.We believe we can do so. We hope you do too.

Together, let’s Start A Little Good .

THE ‘LITTLE GOOD’ WE HAVE STARTED

SWOT analysis of Hindustan Unilever

Strengths
1) Brand visibility – From soap to mineral water, HUL is shaping the life of 1.3
billion people daily. Being in consumer goods market with its 20 consumer categories such as
soap, tea, detergents, shampoo etc. & each having large assortments, helped HUL in
occupying the large shelf space of Grocery /departmental stores which itself explains the
acceptance/demand of their products in the market.

2) Market leader in consumer goods: According to Nielsen data 2 out of three Indian

consumers use HUL products. HUL used selective targeting strategy to emerge as a market
leader in the Indian market.

3) Innovative FMCG Company: Hindustan Unilever Research center (HURC),Mumbai &

Unilever Research India, Bangalore ,both research facilities were bought together in a single
site in Bangalore in 2006.Employees in this facility continuously  working & developing
innovations in products & manufacturing processes which is helping the HUL to set it as
front-runner in the consumer goods market.

5) High Brand awareness: By signing popular celebrities for the advertisements of their

products HUL has created positive word of mouth over the ages which helped them in social
acceptance of their products intelligently targeted & meant for different income groups.

6) Product line: It offers product categories namely oral care, personal care, household
surface, fabric care and pet nutrition etc. having deep assortments across the product
categories.

8) Market share: Through high penetration in the market, HUL had managed to hold their
high market share in different product categories.

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Weaknesses
1) Decreasing Market share: Competitors focusing on a particular product & eating up
HUL’s share, like Ghadi & Nirma detergent eating up HUL’s wheel detergent market share.

2) Large number of brands in different product categories: Sometimes having broad

brand portfolio can lead to confused positioning. Price positioning in some categories allows
for low price competition like AMUL captured Kwality’s market share.

Opportunities 

1) Expanding market: By penetrating more in the rural markets through its project Shakti
AMMA and transition of unorganized business to organized one will lead to further expansion
of the consumer goods market.

2) Awareness in usage rate of consumer goods: People getting more aware and conscious
about the usage may be through advertising /word of mouth /doctor prescription ,is resulting
in increase in usage rate of the these products.

3) Increasing Income levels: Due to stable political scenario, improved literacy rate &
controlled inflation, disposable income of the people is increasing thereby resulting into
upsurge in demand & changing their lifestyle

Threats
1) Competition in the market: With increasing number of local & national players it’s
becoming very hard for the companies to differentiate themselves from others. There is also
threat from counterfeit products destroying its brand image in the market.

2) Price of commodities: Increasing price of commodities will result in further increase in

the price. Further increase in price will result in decrease in sales, margins & brand switching.

16
3) Buyers power: With highly diversified consumer goods market where there are lots of
brands claiming different sorts of benefits, it’s very difficult for consumers to stick to a
particular brand & hence results into brand switching where consumer got power to select a
brand based on several factors  like availability, reference group recommendation, preference.

KEY PEOPLE OF HUL

Name Designation

Aditya Narayan Independent Director

B P Biddappa Executive Director – HR
Dev Bajpai Co. Secretary & Compl. Officer
Dev Bajpai Secretary
Dev Bajpai Executive Director
Kalpana Morparia Independent Director
Leo Puri Independent Director
O P Bhatt Independent Director
Pradeep Banerjee Executive Director
Priya Nair Executive Director
Sandeep Kohli Executive Director
Sanjiv Mehta CEO
Sanjiv Mehta Chairman & Managing Director
Sanjiv Misra Independent Director
Srinandan Sundaram Executive Director
Srinivas Phatak Executive Director & CFO
Sudhir Sitapati Executive Director

TURNOVER

As of 2019 Hindustan Unilever portfolio had 35 product brands in 20 categories and

employs 18,000 employees with sales of Rs. 34,619 crores in 2017-18.

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PRODUCT & SERVICE OF HUL

Food

 Annapurna salt and Atta (formerly known as Kissan Annapurna)

 Bru coffee
 Brooke Bond (3 Roses, Taj Mahal, Taaza, Red Label) tea
 Kissan squashes, ketchups, juices and jams
 Lipton ice tea
 Knorr soups & meal makers and soupy noodles
 Kwality Wall's frozen dessert
 Modern Bread, ready to eat chapattis and other bakery items (now sold to Everstone
Capital)
 Magnum (ice cream)

Homecare brands
 Active Wheel detergent
 Cif Cream Cleaner
 Comfort fabric softeners
 Domex disinfectant/toilet cleaner
 Rin detergents and bleach
 Sunlight detergent and colour care
 Surf Excel detergent and gentle wash
 Vim dishwash
 Magic – Water Saver

Love & Care fabric gentle wash

 Aviance Beauty Solutions
 Axe deodorant and aftershaving lotion and soap
 LEVER Ayush Therapy ayurvedic health care and personal care products
 International breeze
 Brylcreem hair cream and hair gel
 Clear anti-dandruff hair products
 Clinic Plus shampoo and oil
 Close Up toothpaste
 Dove skin cleansing & hair care range: bar, lotions, creams and anti-perspirant
deodorants
 Denim shaving products
 Fair and Lovely, skin lightening cream
 Hamam

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 Indulekha ayurvedic hair oil
 Lakmé beauty products and salons
 Lifebuoy soaps and handwash range
 Liril 2000 soap
 Lux soap, body wash and deodorant
 Pears soap, body wash
 Pepsodent toothpaste
 Pond's talcs and creams
 Rexona
 Sunsilk shampoo
 Sure anti-perspirant
 Vaseline petroleum jelly, skin care lotions
 TRESemmé[14]
 TIGI
 Vaseline
 lifebuoy hand wash and soaps

Water purifier brand

The Pureit Water Purifier

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RECENT ACQUISITION BY HUL

Hindustan Unilever NSE -0.56 % Ltd (HUL), the Indian unit of Unilever Plc, will merge
GlaxoSmithKline Consumer Healthcare with itself in an allstock deal that will give the
country’s largest pure-play consumer goods company access to Horlicks, Boost and Maltova
malted drinks brands as well as distribution rights for a five-year period over over-the-counter
and oral care brands such as Sensodyne, Eno and Crocin.

The merger values GSK Consumer Healthcare at Rs 31,700 crore and its shareholders will get
4.39 shares of HUL for each of their share. After the merger, which is expected to be
completed in a year, Unilever’s holding in HUL will fall from 67.2% to 61.9%. GSK Plc will
become the second-largest shareholder in the merged entity with 5.7% stake. It can offload its
stake to any investor and Unilever does not have exclusive rights to buy these shares.

Boost, Viva and Maltova brands will be owned by Hindustan Unilever.

However, the Horlicks brand, which is currently owned by GSK Plc, is being acquired by
parent Unilever and HUL will pay royalty for its use in India.
“This is a very strategic and transformative move for us. Once the merger is complete, we see
significant synergies in terms of top line and costs,” said Hindustan Unilever chairman Sanjiv

“From the lens of Indian consumers, health and wellness is a big need. This (the merger)
squarely fits into that space and (it) makes immense sense to get into this category from a
strategic point of view.”

HUL shares jumped 4.12% to close at Rs 1,825.90 on the BSE. GSK Consumer Healthcare
shares rose 3.75% to close at Rs 7,542.85 apiece, translating into a market cap of Rs
31,721crore.

The merger will significantly bolster HUL’s food and refreshments portfolio.

Food for thought

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Over the years, HUL has struggled in the packaged foods segment, especially in the low-
margin business. The maker of Knorr soup and Lipton tea has been focusing on core
packaged food and beverage brands with higher margins and exited tea plantations, oil, fats
and biscuits businesses. It also moved out of the bread and bakery business under the Modern
brand.
This year, HUL combined its food and refreshments business into a single division to increase
agility. The merged business — including Knorr soup, Kissan jam, Bru coffee, Lipton tea and
Magnum ice-cream — accounted for sales worth Rs 6,328 crore, or less than a fifth of HUL’s
overall sales in FY18.

While HUL leads the market in segments such as soups, jams and tea, the size of these
categories are significantly smaller than most mass segments in the foods space.

For Unilever, though, food is a core growing business and was the secondlargest category
until last year. After Unilever merged it with the refreshments portfolio, the combined
business accounts for 41% of sales and is headed by former Hindustan Unilever CEO Nitin
Paranjpe.

PESTEL ANALYSIS OF HUL

Political Factors that Impact Hindustan Unilever Limited:

 Transition of Government and Changes in Policy – There is consistency in policy

making from one government to another. Secondly governments from all parties
adhere to the treaties made by the previous governments.

 Role of Non-Government Organization, Civil Society & Protest Groups – The

country has a vibrant civil society community and Mobile Hul should build bridges
with them and seek out areas of co-operations. Civil society groups are influential not
only in policy making but also in building a society wide narrative.

 Government Regulations and Deregulations – The government is adhering to all the

rules and regulations under World Trade Organization norms. There is consistency in
both policy making and implementations of those policies.

 Democracy & Other Democratic Institutions – According to Rakhi Thakur the

democratic institutions are needed to be strengthened further so that business such as
Mobile Hul can thrive in an open, transparent and stable political environment.

21
 Strengthening of democratic institution will foster greater transparency and reduce the
level of corruption in the country.

 Role Local Governments Play – Local governments are highly influential in the
policy making process and implementation as most of the policies and regulations are
implemented by the local government as enforcement agencies mostly report to local
government in their own states regarding various laws.

 Segregation of Political Responsibilities between Different Government Agencies –

There are numerous government agencies which reduces the risk of overwhelming
pressure by one agency. But on the flip side it does increases both time and cost of
doing business and getting certifications and clearances.

Economic Factors that Impact Hindustan Unilever Limited

 GDP Trend & Rate of Economic Growth – The higher GDP growth rate signals
growing demand in the economy. Mobile Hul can leverage this trend by expanding its
product range and targeting new customers. One way to start is by closely mapping the
changes in – consumer buying behavior and emerging value proposition.

 Financial Market Structure and Availability of Capital at Reasonable Rates – The

quantitative easing policy of Federal Reserve has led to liquidity flooding all across
the global financial markets. Mobile Hul can borrow cheaply under such
circumstances. But this strategy entails risks when interest rate will go up.

 Inflation Rate – The inflation rate can impact the demand of Mobile Hul products.
Higher inflation may require Mobile Hul to continuously increase prices in line of
inflation which could lead to lower levels brand loyalty and constant endeavors to
manage costs. Cost Based Pricing could be a bad strategy under such conditions.

 Employment Rate – If the employment rate is high then it will impact Mobile Hul
strategies in two ways – it will provide enough customers for Mobile Hul products,
and secondly it will make it expensive for Mobile Hul to hire talented & skillful
employees.

 Fiscal and Monetary Policies – The Republican government tax break culture has
increased the deficit and it can lead to fiscal trouble for the economy in coming years.

 Consumer Disposable Income – The household income of the country has increased
constantly in the last decade and half, compare to the USA market where household
income is still below 2007 levels and not increased in real terms since early 1980’s.
Mobile Hul can leverage this trend to expand the market beyond its traditional
customers by employing a differentiated marketing campaign.

22
Social Factors that Impact- Hindustan Unilever Limited

 Attitude towards Savings – The culture of saving in US and China is totally different
where savings rate in China is around 30% , it is well below 15% in United States.
This culture of consumption and savings impact both type of consumption and
magnitude of consumption.

 Types of Immigration & Attitude towards Immigrants – Given the latest developments
such as Brexit and Immigrant detention on Southern border of United States. Attitude
towards immigration has come under sharp focus. Mobile Hul should have capabilities
to navigate under this hyper sensitive environment.

 Power Structure in Society – Mobile Hul should carefully analyze both - What is the
power structure in the society? How it impacts the demand in the economy. For
example the power structure in US economy is slowly moving towards the older
generation as that generation has higher disposable income compare to the younger
generation.

 Level of Social Concerns & Awareness in Society – Higher level of social concerns in
the society often result higher consumer activism and pressure from non-governmental
organizations, & pressure groups..

 Societal Norms and Hierarchy – What sort of hierarchy and norms are acceptable in
society also influence the types and level of consumption in a society. In highly
hierarchical societies the power of decision making often reside at the top.

Technological Factors that Impact Hindustan Unilever Limited:

 Likelihood of Technology Disruption – If the country is hub of technology companies

then there is a high chance of technology disruption among various industries. Mobile
Hul has to assess whether it can live with the fast pace of technology disruption in its
industry.

 Level of Acceptance of Technology in the Society – Mobile Hul has to figure out the
level of technology acceptance in the society before launching new products. Often
companies enter the arena without requisite infrastructure to support the technology
oriented model.

23
-

 Technology transfer and licensing issues for Mobile Hul – laws and culture of
licensing of IPR and other digital assets should be analyzed carefully so that Mobile
Hul can avoid shakedowns and IPR thefts.

 Integration of Technology into Society & Business Processes – Uber failed in China
because it tried to enter before smartphone were widespread in China. Mobile Hul
should build a strategy that can integrate societal values, infrastructure, and Mobile
Hul business model.

 Empowerment of Supply Chain Partners – Mobile Hul should analyze areas where
technology can empower supply chain partners. This can help Mobile Hul to bring in
more transparency and make supply chain more flexible.

Environmental Factors that Impact Hindustan Unilever Limited:

 Influence of Climate Change – How climate change will impact Mobile Hul business
model and supply chain. For example if the supply chain is not flexible it can lead to
bottlenecks if shipments from one part of the world are delayed because of sudden
climate shift.

 Focus & Spending on Renewable Technologies – How much of the budget is spend on
renewable energy sources and how Mobile Hul can make this investment as part of its
competitive strategy.

 Influence and Effectiveness of Environmental Agencies – The role of environment

standards enforcement agencies is critical in safeguarding norms. But often in
emerging countries these agencies delay the process as a tactic to extract bribes.
Mobile Hul should be aware of presence of such practices in a country.

 Environmental Standards and Regulations both at National & Local Levels – Often the
environment policy at national and local level can be different. This can help Mobile
Hul in numerous decisions such as plant location, product development, and pricing
strategy.

Legal Factors that Impact Hindustan Unilever Limited

 Transparency in Judiciary System & Processes – Transparency is essential for fair and
consistent decision making. If the process is consistent and transparent then Mobile
Hul can plan ahead with greater conviction.

24
 Adherence to Common Law – Is the country following common law which is uniform
for all parties – whether domestic or international. If there is arbitrariness in the
judicial process then Mobile Hul can’t be sure of the judgments.

 Employment Laws – What are the employment laws in the country and are they
consistent with the business model of Mobile Hul. For example Uber employment
system is not consistent with French laws and it is facing challenges in the country.

 Securities Law – What are the securities law in the country and what are the
conditions to list the company on national or regional stock exchange.

25
 CHAPTER 4
MARKET ANALYSIS
ITC LTD.
4.1 PRODUCT AND SERVICE OF ITC LTD.

FOODS PERSONAL EDUCATION MATCHES &

1. Aashirvaad CARE 1. Classmate AGARBATTI
2. Sunfeast 2. Paperkraft
1. Essenza Di 1. AIM
3. Bingo!
Wills
4. Kitchens of 2. Mangaldeep
2. Dermafique LIFESTYLE
India
3. Fiama 3. Homelites
5. YiPPee! 1. WLS
4. Vivel
6. B Natural
5. Engage
7. mint-o
6. Superia
8. Candy man
7. Nimyle
9. Gum On
8. Savlon
10. Fabelle
9. Charmis
11. Sunbean
12. Sunfeast
13. ITC Master
Chef

26
4.2 PRICING STRATEGY OF ITC LTD

Below is the pricing strategy in ITC marketing strategy:

ITC has different price points as it has a diversified product portfolio. ITC have products in all
price brackets but more and more new products are on the premium side as they provide
higher margins. Pricing of the product depends on several things like pricing objective, the
market one is operating in, the purchasing power of the consumers, the market condition,
product’s market position etc. For instance, as Bingo was entering the market, it adopted a
very clever aggressive pricing strategy to capture the market share. They maintained their
prices as per the market leader but offered more quantity and more margin to the retailers
which gave them a competitive edge.

ITC follows different marketing mix pricing strategy for different products. Their economy
brands follow economy pricing. Marketing and manufacturing cost is kept at a minimum. ITC
had to hike the price its premium products in the industry due to hike in excise duty.
Classmate is priced over 5% over its competitors.

4.3 DISTRIBUTION CHANNEL OF ITC

DISTRIBUTION CHANNEL OF ITC

27
 ITC Ltd is revitalising its distribution strategy for fast moving consumer goods with a
greater focus on supplying products directly to retailers. The plan includes an ambitious
target of directly reaching out to the top one lakh villages which contribute 80% of India's
rural consumer goods consumption.

ITC Ltd is working on the “leanest possible" distribution model to supply products directly
from its manufacturing units to retail outlets across the country, aiming to ultimately reduce
lead time to just one day, a senior executive said.
That compares with a week to three weeks now.
The company, with interests in cigarettes, packaged food, personal care, apparel, hotels and
information technology, is changing its distribution supply chain model for cigarettes and
packaged goods such as shampoo and soap to sharpen its competitive edge and reduce costs.
“Our long-term goal is to reach the retail points directly from the manufacturing facility, so
that we are able to improve our competitiveness in the market. However, this will take time,
given the existing complexities and challenges that are inherent in the transportation norms
and regulations today. In some cities, we are already serving retailers every day,"divisional
chief executive in charge of FMCG (fast-moving consumer goods) trade marketing and
distribution, ITC.

28
ITC has one of the most extensive distribution networks in India. Its products are available at
4.3 million of the estimated eight million retail stores in India. Of this, about 2 million are
under ITC’s direct distribution network. ITC will replicate the new factory-to-retail point
distribution in phases, and eventually bring all the 2 million retail points under the new
structure.
Traditionally, ITC, like all packaged goods companies in India, stocks products at its
distribution centres. Products first go to its exclusive wholesale dealers, then distributors and
direct retailers. In some areas, mostly in rural India, the big retailers supply products to
smaller retail outlets. The entire process takes anything from one week to three weeks,
depending on the distance between the retail outlet and the factory.
The new model will be implemented across the 2 million retail stores that are touched by
ITC’s direct distribution network.
It is possible that the disintermediation the new model involves will affect some of ITC’s
1,550 exclusive wholesale dealers. The company declined comment on this facet.
ITC’s rival and India’s largest packaged goods company Hindustan Unilever Ltd reaches
about 6.3 million outlets, of which it touches 3 million through its direct distribution network.
Swiss food maker Nestle India Ltd’s total reach is 4.5 million stores of which it reaches only
1 million outlets directly.

4.4 MARKET SHARE

ITC LTD

Shareholding Pattern - ITC Ltd.

Holder's Name No of Shares % Share Holding

Foreign Institutions 1918945688 15.62%

Financial Institutions 4043786521 32.91%

Others 3954225720 32.18%

General Public 1183981982 9.64%

N Banks Mutual Funds 1165328178 9.48%

GDR 20222122 0.16%

29
COMPARISION

 FMCG shares mixed; HUL rises nearly 2%

Emami (down 0.88 per cent), ITC (down 0.77 per cent), Britannia Industries (down 0.71 per
cent) and Dabur India (down 0.36 per cent) were trading lower.

4.5 SWOT Analysis of ITC LTD

It is an analysis which talks about a company’s strengths and weaknesses and tries to figure
out opportunities and threats which a company is most likely to meet in the future on the basis
of current happenings. This analysis is conducted to improve operations and competitiveness
of the company, dealing with risks efficiently, to discover emerging opportunities for the
company and to use resources efficiently. SWOT analysis can be conducted in terms of the
points given in the template shown in the image below-

Strengths:

1. Brand image– ITC is the most valuable brand of India with net income of Rs. 10,471 crore
in 2017.

2. Competence– ITC has a track record of 100 years of presence, quality, consistency and
continuous progress, expansion and diversification.

3. Market position– ITC is dominating Indian tobacco market by selling 81% of the
cigarettes and cigar such as Gold Flake, Gold Flake Super Star, Wills Navy Cut, Premium
Lights, Classic (Regular, Verve, Menthol, Menthol Rush, Citric Twist, Ice Burst, Mild &
Ultra Mild) etc.

4. Core competency– ITC is India’s largest seller of branded foods with sales of over Rs.
4600 crore in 2012-13. Its most famous food brands are Aashirwaad, B Natural, Sunfeast,
Yippee! , Bingo! And Candyman.

5. Leader of other sectors– ITC has India’s largest hotel chain with over 90 hotels
throughout India. ITC is exclusive franchise holder of two brands owned by Sheraton
International Inc

Weaknesses:

30
1. Declining industry trend– Legal cigarette business has witnessed a 25% decline in
volumes from 2012-13 which has affected the profits of ITC Limited.

2. Tax reforms in India– Under the newly enforced Goods and Services Tax Act, 2017 tax is
charged at a higher rate than before GST which is exacerbating the business especially
cigarette business of ITC.

3. Multiple brands– ITC Limited has way too many brands and its business is expanded to
various different industries which is causing brand dilution.

4. Debt– ITC has total debt of 3.38 billion this is much higher than that of the sector and
significantly higher than that of the Total Debt Industry.

5. Dependence on tobacco products– ITC Limited is largely depending upon tobacco

products which may become detrimental to its progress in future.

Opportunities:

1. Growth rate of the economy– Growth rate of Indian economy is expected to be 7% that
means new opportunities will arise in future in different sectors and industries of the
economy.

3. Unchanged interest rate– In the meeting of the Monetary Policy Committee of the
Reserve Bank of India held in October, 2017 RBI left the repo rate unchanged (6%)
consequently, banks will not increase interest rate on the amount of loan that they will
advance to borrowers hence raising debt funds will not be expensive for further expansion or
diversification of the business.

4. Growing demand in FMCG sector– Increasing urbanization and a growing middle class
are resulting in an ever-growing demand for processed food in the FMCG sector consequently
a total investment of Rs. 68,000 crore has been proposed from various global and domestic
companies in the World Food India, 2017 out of which ITC is planning to invest Rs. 10,000
crore in food processing over the next five to seven years which will ultimately reduce the
over dependence of ITC on tobacco business.

Threat:

1. Competition– ITC Limited is facing and will face in future, intense competition from
domestic and foreign companies in various industries.

2. Compliance– GST has imposed stricter and heavier compliance regulation and filings
which will ultimately increase the cost of compliance of ITC.

3. Inflation effect– In July, 2017 fuel prices increased to 5.56% consequently freight and
transportation charges will increase.

31
4.6 Why consumer will prefer ITC over HUL?
Food has been one of the fastest growing and most attractive categories in the overall fast-
moving consumer goods (FMCG) market. This is partly reflected in the fact that six of the
eight FMCG companies that have got listed in the past 10 years are exclusively in the food
and beverages segment.

Besides, there are a large number of multinational and regional players that have come up in
the packaged and processed foods space.Food companies such as Britannia, Nestle IndiaNSE
0.47 % and GSK Consumer Healthcare have in fact given superior returns than their
diversified peers like HULNSE -0.88 %, ITCNSE -0.78 %, Colgate PalmoliveNSE -0.93 %
and Dabur India in the past five to 10 years.

However, foods is not an easy business to crack, especially for pan-Indian FMCG players,
given the regionality in tastes and preferences.There are lot of regional players doing well in
foods, but very few national ones. So, how does the space looks like for the two largest
FMCG players -HUL and ITC? If past record is any indication, then ITC as a conglomerate is
better placed than the FMCG behemoth HUL to make success of its foods business. In case of
ITC, 70% of the company's non-cigarette FMCG .

4.7 ONLINE PRESENCE OF ITC LTD

ITC LTD on Social Media

https://www.itcportal.mobi/experience-itc/itc-on-social-media.aspx

ITC LTD.

https://www.itcportal.com/about-itc/profile/history-and-evolution.aspx

ITC TWITTER

https://twitter.com/ITCCorpCom

ITC LINKDIN

https://www.linkedin.com/company/itc-limited?trk=tyah&trkInfo=clickedVertical%3Acompany
%2CclickedEntityId%3A619019%2Cidx%3A2-2-5%2CtarId%3A1463655992813%2Ctas%3Aitc

32
 CHAPTER 5
MARKETING ANALYSIS
HUL
5.1 PRODUCT AND SERVICES OFFERED BY HUL

Food Homecare brands

 Annapurna salt and Atta (formerly
known as Kissan Annapurna)
 Bru coffee
 Brooke Bond (3 Roses, Taj Mahal,
Taaza, Red Label) tea
 Kissan squashes, ketchups, juices
and jams
 Lipton ice tea
 Knorr soups & meal makers and
soupy noodles
 Kwality Wall's frozen dessert
 Modern Bread, ready to eat
chapattis and other bakery items
(now sold to Everstone Capital)
Magnum (ice cream)
Water purifier brand
 The Pureit Water Purifier
 Active Wheel detergent
 Cif Cream Cleaner
 Comfort fabric softeners
 Domex disinfectant/toilet cleaner
 Rin detergents and bleach
 Sunlight detergent and colour care
 Surf Excel detergent and gentle
wash
 Vim dishwash
 Magic – Water Saver
Love & Care fabric gentle
wash
 Aviance Beauty Solutions
 Axe deodorant and aftershaving
lotion and soap
 LEVER Ayush
Therapy ayurvedic health care and
personal care products
 International breeze
 Brylcreem hair cream and hair gel
 Clear anti-dandruff hair products
 Clinic Plus shampoo and oil
 Close Up toothpaste

33
  Dove skin cleansing & hair care
range: bar, lotions, creams and anti-
perspirant deodorants
 Denim shaving products
 Fair and Lovely, skin lightening
cream
 Hamam
 Indulekha ayurvedic hair oil
 Lakmé beauty products and salons
 Lifebuoy soaps and handwash
range
 Liril 2000 soap
 Lux soap, body wash and
deodorant
 Pears soap, body wash
 Pepsodent toothpaste
 Pond's talcs and creams
 Rexona
 Sunsilk shampoo
 Sure anti-perspirant
 Vaseline petroleum jelly, skin care
lotions
 TRESemmé[14]
 TIGI
 Vaseline
 lifebuoy hand wash and soaps

5.2 PRICING STRATEGY OF HUL

Pricing is a very powerful tool in the marketing, company use the pricing in the different way
to achieve marketing objectives. Pricing strategy adopted over the medium to long term to
achieve marketing objectives. Pricing strategy has a significant impact on marketing
strategy.HUL is a market leader in Indian consumer products they are producing the  brands
personal care, homecare and food and beverages, many variety of products they are producing
with a reasonable prices .HUL adopted pricing strategy to improve their conditions.
·        
 Simple pricing policy of low cost products-  Hindustan uniliver mainly believes in
their products they are producing the consumer friendly products so it increase huge
amount of sales so they decided to kept a simple pricing policy of low cost product for

34
 example sun silk sachets at Rs 1 like that, so that product rich a wider market. But they
have not compromised with quality of products but they are cut down the cost of the
products because of its extensive and long way reaching of distribution policy.

 Competitive pricing policy- HUL has maintained competitive pricing policy for some
of its products. Competitive pricing policy is setting the price of the product based on
competition of that particular products, this policy is used when a two company
produce the similar kind of products. As soon as increase or decrease in the
competition of the product, price is charged on the base of competition.

 Offers Brand- HUL is an a wide consumer goods producer , so it try to offer many

brand with variety of products at  numerous price .for example their personal care
brand , home care and food and beverage brands offers different verity of products. So
it will help consumer to buy any one of product according to his or her own financial
capability.
 Discount Offer- Now a day’s consumer are give the more importance to discount
before purchasing any product they first see where discount is available. In HUL tries
to maintained balance of the market in the name of discount, they offer discount for
their products, for example 200gm of surf excel free with one kg of that products. So it
automatically reduced price of the product and consumer are eager to buy the product
at discount rate so sale will increase.
 All income groups of people- HUL adopted pricing strategy it is suitable to all
income group of people like high income, low and medium income group of people,
for example low income group of people like rural people hul producing small unit of
product like small lifebuoy soap at RS 5 like that.
 Offers Volume point to Price point Packages-  Rural consumer are price sensitive
and they expect value for money, if they buy any product they expect satisfaction from
that product. Mainly rural customer are purchasing the small unit of product because
for their income level or family condition. So HUL offers small quantity of products
with a reasonable price so it attracts the rural consumer towards products. They are
purchasing the small unit of product but they are regular customer of those products.

5.3 DISTRIBUTION CHANNEL OF HUL

35
HUL has a large distribution network comprising 5000 redistribution stockists and 40 C & F
agents (Clearing and Forwarding Agents). The first phase of the HUL distribution
network had wholesalers placing bulk orders directly with the company

5.4 MARKET SHARE OF HUL

 FMCG shares mixed; HUL rises nearly 2%
Shares of Hindustan Unilever (up 1.59 per cent), United Spirits (up 1.51 per cent),
GlaxoSmithKline Consumer Healthcare (up 1.22 per cent) and United Breweries (up 1.16 per
cent) were the top performers in the index.

Shares of Hindustan Unilever (up 1.59 per cent), United SpiritsNSE -1.21 % (up 1.51 per
cent), GlaxoSmithKline Consumer Healthcare (up 1.22 per cent) and United Breweries (up
1.16 per cent) were the top performers in the index.
Emami (down 0.88 per cent), ITCNSE -0.78 % (down 0.77 per cent), Britannia Industries
(down 0.71 per cent) and Dabur India (down 0.36 per cent) were trading lower.

36
5.5 SWOT analysis of Hindustan Unilever

Strengths
1) Brand visibility – From soap to mineral water, HUL is shaping the life of 1.3
billion people daily. Being in consumer goods market with its 20 consumer categories such as
soap, tea, detergents, shampoo etc. & each having large assortments, helped HUL in
occupying the large shelf space of Grocery /departmental stores which itself explains the
acceptance/demand of their products in the market.

2) Market leader in consumer goods: According to Nielsen data 2 out of three Indian

consumers use HUL products. HUL used selective targeting strategy to emerge as a market
leader in the Indian market.

3) Innovative FMCG Company: Hindustan Unilever Research center (HURC),Mumbai &

Unilever Research India, Bangalore ,both research facilities were bought together in a single
site in Bangalore in 2006.Employees in this facility continuously  working & developing
innovations in products & manufacturing processes which is helping the HUL to set it as
front-runner in the consumer goods market.

5) High Brand awareness: By signing popular celebrities for the advertisements of their

products HUL has created positive word of mouth over the ages which helped them in social
acceptance of their products intelligently targeted & meant for different income groups.

6) Product line: It offers product categories namely oral care, personal care, household
surface, fabric care and pet nutrition etc. having deep assortments across the product
categories.

8) Market share: Through high penetration in the market, HUL had managed to hold their
high market share in different product categories.

37
Weaknesses

1) Decreasing Market share: Competitors focusing on a particular product & eating up

HUL’s share, like Ghadi & Nirma detergent eating up HUL’s wheel detergent market share.

2) Large number of brands in different product categories: Sometimes having broad

brand portfolio can lead to confused positioning. Price positioning in some categories allows
for low price competition like AMUL captured Kwality’s market share.

Opportunities 

1) Expanding market: By penetrating more in the rural markets through its project Shakti
AMMA and transition of unorganized business to organized one will lead to further expansion
of the consumer goods market.

2) Awareness in usage rate of consumer goods: People getting more aware and conscious
about the usage may be through advertising /word of mouth /doctor prescription ,is resulting
in increase in usage rate of the these products.

3) Increasing Income levels: Due to stable political scenario, improved literacy rate &
controlled inflation, disposable income of the people is increasing thereby resulting into
upsurge in demand & changing their lifestyle

Threats
1) Competition in the market: With increasing number of local & national players it’s
becoming very hard for the companies to differentiate themselves from others. There is also
threat from counterfeit products destroying its brand image in the market.

2) Price of commodities: Increasing price of commodities will result in further increase in

the price. Further increase in price will result in decrease in sales, margins & brand switching.

38
3) Buyers power: With highly diversified consumer goods market where there are lots of
brands claiming different sorts of benefits, it’s very difficult for consumers to stick to a
particular brand & hence results into brand switching where consumer got power to select a
brand based on several factors  like availability, reference group recommendation, preference

CHAPTR 6
INTERNATIONAL BUSINESS
OF ITC LTD

6.1 INTERNATIONAL MARKET GROWTH AND OPPORTUNITY

Despite economic slowdown, ITC’s lifestyle products have made major inroads into overseas
markets. “ITC Lifestyle achieved growth in spite of global economic slowdown and
contraction in
major world markets”. Stating this Atul Chand, chief executive, Lifestyle Retailing, ITC, said:
“Export business achieved a robust growth of 32 per cent in the target US and European
markets”. The company’s international customers include Calvin Klien, Armani Exchange,
Polo, Tema, Nordstrom, Maxmara and Gruppo Zanier.
“Our product mix has moved from basics to value-added premium fashion products and there
has been an increase in women’s wear, where customer requirements are for high fashion,
newer silhouettes and cuts and embellishments,” he said.
The Wills Lifestyle product portfolio caters to both women and men with women contributing
35 per cent to the overall sales compared to 20 per cent a couple of years ago, Mr. Chand said.
For the domestic market, the FMCG major has made a strategic move by launching what it
describes as ‘Ramp-to-Rack’ initiative. Under this, creations by leading Indian designers are
retailed under the ‘Wills Signature’ sub-brand, which already accounts for 10 per cent of the
store sales. Calling this the largest such initiative undertaken in the country, Mr. Chand said
that this had strengthened ITC’s product equity and added another facet to the portfolio,
besides attracting newer consumers to the stores. Besides design houses in Italy, tie-ups have
been struck with Indian designers like Rohit Bal, Rajesh Pratap Singh, Shantanu-Nikhil,
Manish Arora an Anamika Khanna.

39
On the issue of rentals, he said that discussions were on with mall and property-owners on
rental reductions as well as alternative models like revenue-sharing. This was being done to
arrive at mutually beneficial commercial arrangements.
Retail rentals have declined by 30-40 per cent in the last six months as a result of the
slowdown and footfalls have been lower.
Wills Lifestyle, which has 50 exclusive stores, now plans to leverage opportunities in new and
emerging retail markets and formats in Tier-II and Tier-III cities, Mr. Chand said. John
Players, which also launched jeans, at present has 220 exclusive stores in over 100 markets.
Additionally, it is present in over 1,200 leading large format retailers and multi-brand outlets.

6.2 Joint Venture/Merger/Acquisition of ITC

ITC would acquire Savlon with "certain attendant inventories, know-how, molds and
promotional materials" from Johnson & Johnson Private Ltd.

The FMCG major would also acquire the Shower to Shower brand along with "certain know-
how and promotional materials" from Johnson & Johnson PTE.

ITC Ltd is going to acquire up to 33.42% stake in home grown start-up Delectable

Technologies which is in the business of fabricating vending machines and application based
sale of FMCG products through such machines, the company has informed the stock
exchanges.

6.3 Overseas Market presence of ITC

ITC’s lifestyle products have made major inroads into overseas markets. “ITC Lifestyle
achieved growth in spite of global economic slowdown and contraction in
major world markets”.

The Wills Lifestyle product portfolio caters to both women and men with women contributing
35 per cent to the overall sales compared to 20 per cent a couple of years ago, The company’s
international customers include Calvin Klien, Armani Exchange, Polo, Tema, Nordstrom,
Maxmara and Gruppo Zanier.

40
 CHAPTER 7
INTERNATIONAL BUSINESS
OF HUL

7.1 INTERNATIONAL MARKET GROWTH OF HUL

Building a global enterprise

Mr Manwani spoke about how Indian businesses have built a formidable presence
domestically and urged that they must now strengthen their footprint globally to build truly
worldclass enterprises that are capable of competing with the best.

Globally leveraged locally relevant

Mr Manwani spoke about the paradox that defines this age of global connectedness. "While
trends are gaining global scale and significance, consumers are becoming more rooted in their
local cultures and identities," he said. He emphasised the need for businesses to combine
global capabilities and Research & Development (R&D) expertise with local consumer
insights. Citing the example of Unilever he spoke about how the company understands the
needs and preferences of local consumers and leverages its global R&D expertise to
customise solutions that best fit the local market.

Mr Manwani cautioned against the tendency of companies to become either ‘mindlessly

global’ or ‘hopelessly local’. He elaborated that while managing multicountry operations,
businesses should strike the right balance between seeking international leverage in terms of
innovation and R&D with local relevance for meeting consumer needs and aspirations.

Organising to win Building a global enterprise

Speaking about the importance of organizational agility in building global enterprises, Mr

Manwani said, "In an increasingly connected world and volatile environment, speed is the
currency". He spoke about the need for companies to empower local markets to focus on
consumers and customers while driving product innovation and functional excellence

41
globally. Mr Manwani said that to be a truly global enterprise, businesses need to balance
global leverage with local relevance, build an organisation that is diverse and agile, and
embrace technology to serve the fastchanging needs of consumers everywhere.

7.2 FOREGIN DIRECT INVESTMENT

HUL
Unilever plans to pay up to $5.4 billion to raise its stake in its Indian subsidiary, making its
biggest deal in 13 years a huge bet on the strength of demand for personal care and food
products in Asia’s third-largest economy.

The Anglo-Dutch giant said it planned to lift its share in Hindustan Unilever, India’s largest
consumer goods maker, known for its Dove and Lipton brands, to as much as 75 percent from
52 percent at present.
The deal, the largest single investment in the Indian consumer goods sector, is a major vote of
confidence in the Indian economy, where growth is at its lowest for a decade.

It fits Unilever’s strategy of increasing its presence in fast-growing markets. Emerging

markets, which make up 57 percent of its turnover, have contributed double-digit growth in
recent quarters.

That contrasts with rivals who have been slower to move into fast-growth regions. Unilever’s
main household products rival Procter & Gamble has been shedding jobs, while Danone is
the most exposed among the big food groups to the euro zone crisis.

7.3 JOINT VENTURE / MERGER OF HUL

HUL sells its entire stake in joint venture with Kimberly-Clark

Hindustan Unilever Ltd (HUL), India’s largest consumer packaged goods company, has sold
its 50% stake in its joint venture to partner Kimberly-Clark Corp., HUL said in stock
exchange filings.

The firm had announced its intention to exit the venture in July 2016.

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The joint venture, Kimberly Clark Lever Pvt. Ltd (KCL), sold Huggies diapers and Kotex
sanitary napkins in India.
HUL set up the venture in 1995 with the US personal care multinational that sells iconic
tissue brand Kleenex in the US along with Kotex and Huggies.
Kotex’s biggest competitor in India is Procter & Gamble (P&G) Hygiene and Health Care
Ltd’s Whisper, the largest women’s hygiene brand in the country.
HUL said it had formalized the stake sale so that it could “focus on its core business".
Its biggest business segments are soaps and detergents. Detergents made up 18.72% of the
sales in FY18, as per HUL’s latest annual report.
The step is part of the company’s long-term plan to move away from non-core businesses and
cut costs.
“This business (KCL) was extremely insignificant and it made sense to divest from it," said
Sachin Bobade, an analyst at Dolat Capital Market Pvt. Ltd.
“HUL has been pulling out of non-core businesses for a while. It divested its Modern Bread
business as well," he added. HUL bought Modern Bakery in 2000 and then sold it to private
equity firm Everstone in 2016.
“Unilever has a global mandate to raise margins by 300-400 basis points," said Abneesh Roy,
senior vice-president at Edelweiss Financial Services Ltd.
“India is 8-9% of the global business, so it would also be part of cost-cutting exercises. In
fact, HUL had said in its annual report that the feminine hygiene business is very competitive
with the No. 1 firm being P&G (Whisper). If you are No. 3 or No. 4 in a segment with a very
aggressive competitor, it doesn’t make sense to stay (invested)."

GSK Consumer Healthcare to merge with Hindustan Unilever: 

In one of the biggest deals across the consumer goods space, Hindustan Unilever Limited
(HUL) it will buy GlaxoSmithKline's India business, including the popular Horlicks, Boost
and other brands, for around $3.8 billion. With this proposed strategic merger with GSK
Consumer Healthcare India (GSK CH), HUL plans to expand its portfolio with great brands
into a new category catering to the nutritional needs of our consumers.

Here are 10 things about the deal:

1. HUL is the number one FMCG business in the country with a demonstrated track
record of delivering growth. Business has delivered growth of 10 per cent CAGR in the
last 10 years with EBIT improvement of 530 bps. The company has total assets of Rs
17,677 crore and net worth of Rs 7,004 crore as on September 30, 2018.

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2. The transaction, which is expected to be completed in one year, subject to regulatory
and shareholder approvals, is an all equity merger with 4.39 shares of HUL being allotted
for every share in GSK CH India. This transaction values the total business at Rs 31,700
crore.

3. GSK CH India is the market leader in the HFD category, with brands such as Horlicks
and Boost. Listed on BSE, the company has total assets of Rs 5,583.47 crore and net worth
of Rs 3,591 crore as on September 30, 2018.

4. The merger of GSK CH India with HUL will be on a basis of an exchange ratio of
4.39 HUL shares for each GSK CH India Share, implying a total equity value of Rs 31,700
crore for 100 per cent of GSK CH India.

5.  Following the issue of new HUL shares, Unilever's holding in HUL will be diluted
from 67.2 per cent to 61.9 per cent.

6.  Originally introduced in the 1930s, Horlicks products have a long history in India. A
leader in the malt-based beverages segment, Horlicks holds 43 per cent market share
followed by Mondelez International's Bournvita, which has around 13 per cent share.

7. The merger includes the totality of operations within GSK CH India, including a
consignment selling contract to distribute GSKCH India's Over-the-Counter and Oral
Health products in India.

8.  The GSK CH India business delivered total turnover of around Rs 4,200 crore in
FY18, primarily through its Horlicks and Boost brands.

9.  The proposed merger is in line with the strategy to build a sustainable and profitable
F&R business in India, GSK CH said in a statement. The parties expect significant
synergies through supply chain opportunities and operational improvements, go-to-market
and distribution network optimisation, scale efficiencies in areas such as marketing, and
optimisation of overlapping infrastructure.

10.  Post the acquisition, HUL expects the company's Foods and Refreshment (F&R)
business to exceed the turnover of Rs 10,000 crore.

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 Chapter 5
FINDINGS

 The consumer of ITC LTD product are very satisfied by the quality and features of the
product.

 The pricing policy of classmate is not economical according to the consumer.

 The reason of its success is its promotional strategy and quality of product.

 The demand of the product is high due to brand image of the company

 It has a huge coustomer base

 ITC knows the their strength and weekness in the personal care market ,so they are
applying new concept overcome the wekness

ITC is now providing more margines , credit facilities,exiting offers to the retailers
and wholesaler.

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 CHAPTER 6
RECOMMENDATION

 The company should come up with the idea of retail store of food product all over the
india following the the strategy of umbrella branding.

 The company can come up with new initiatives to tie up with the Retails food joints
Like Mc Donald, Pizza Hut, Dominos, Smoking Joe’s etc and other food joints so that
they use Aashirvaad atta at a discounted rate or discount coupon can be given to the
outlets if they are using this product of ITC.

 The company can launch a new idea where they can export branded Atta to other
exporting countries where they are already exporting wheat. ‘Aashirvaad ‘ brand Atta
was exported to New Zealand, Australia, US and Canada but the government has
imposed certain restrictions on such exports for ensuring food security on wheat based
products. The company can suggest that value added food products should not be
banned from exporting but some certain restrictions can be imposed on the company
to import an equivalent amount of wheat in the country.

 ITC’s growing presence in agriculture, food and personal care products is enabling a
synergy of R & D capabilities to venture into future products which can be aimed at
nutrition, health and well-being. This special attention can be used to take care of the
various health disorders in the country and several long term arenas can be created for
these unique propositions. These R & D centre can be used to address the areas of
heart related and diabetes related problems. The company is already moving in this
direction by setting up R&D centre at Bangalore which will provide the requisite
platforms to deliver such future products.

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  The company can approach the government or distribute their food products & other
categories in Military canteens and can sell them to NGO’s that gives the evening
meals to the children as part of mid-day meal scheme.

Chapter 7
REFERENCES

https://marcepinc.com/industries-detail/future-of-fmcg-sector-in-india

https://en.wikipedia.org/wiki/ITC_Limited

https://www.ibef.org/industry/Fmcg-presentation

https://economictimes.indiatimes.com/hindustan-unilever-
ltd/infocompanymanagement/companyid-13616.cms

https://en.wikipedia.org/wiki/Hindustan_Unilever

https://en.wikipedia.org/wiki/Hindustan_Unilever

https://economictimes.indiatimes.com/industry/cons-products/food/hul-approves-merger-with-gsk-
consumer-to-buy-horlicks-and-other-products-for-3-3-billion-euros/articleshow/66918300.cms

https://economictimes.indiatimes.com/industry/cons-products/food/hul-approves-merger-with-gsk-
consumer-to-buy-horlicks-and-other-products-for-3-3-billion-euros/articleshow/66918300.cms?
from=mdr

https://embapro.com/frontpage/pestelcase/12844-mobile-hul

https://economictimes.indiatimes.com/itc-ltd/shareholding/companyid-13554.cms

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THANK YOU

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