A PROJECT REPORT

ON
STUDY OF CONSUMER PERCEPTION
REGARDING THE DISTRIBUTION CHANNEL
USED BY

(A report submitted in Partial Fulfillment of the requirement

for the Bachelor of Business Administration)

PROJECT GUIDE: SUBMITTED BY:

Mr.Vishal Sharma Abhishek Anand
BBA – VI Sem.

MJP ROHILKHAND UNIVERSITY, BAREILLY

2010-11
 CERTIFICATE

Date………………

This is to certify that Abhishek Anand has carried out the Market Survey
Report titled “Study of consumer perception regarding the distribution
channel used by HUL ” in partial fulfillment of requirement of under graduate
degree in BBA VI Semester under my supervision

Vishal Sharma
Lecturer
BBA Department
KCMT, BAREILLY.
 STUDENT DECLARATION

I, ABHISHEK ANAND, hereby declare that the Project work titled “ Study of
consumer perception regarding the distribution channel used by HUL ” is
the original work done by me and is submitted to the MJP Rohilkhand
University in partial fulfillment of requirement for the award of degree of
Bachelor of Business Administration under the supervision of Mr.Vishal
Sharma.

Date : (Abhishek Anand)

Roll No.
Enroll. No.
 ACKNOWLEDGEMENT.

I also express my gratitude towards the entire faculty of Khandelwal College of

Management Science & Technology, Bareilly who gave me their expert advice
to enhance the quality of the project and gave me valuable insights for the
project.
I give my special thanks to Dr. Peeyoosh Sharma, HOD and Mr.Vishal
Sharma, Faculty, BBA Department, KCMT who appreciated and encouraged
me to make the project in marketing and helped me while preparing the project
report.
I am very grateful to my parents and my friends who helped me a lot in one or
the other way in completion of my project.

(Abhishek Anand )
 PREFACE

The training provides an opportunity to a student to demonstrate application of his

knowledge, skill and competencies required during the technical session. Training also helps
the student to devote his skill to analyze the problem to suggest alternative solutions, to
evaluate them and to provide feasible recommendations on the provided data.

The project report is on the topic of “TO STUDY CONSUMER PERCEPTION

REGARDING THE DISTRIBUTION CHANNEL USED BY HUL IN BAREILLY
CITY” Although I have tried my level best to prepare this report an error free report every
effort has been made to offer the most authenticate position with accuracy.

v
 CONTENTS

Chapter-1 Introduction
- Background of the study
- Identification Of Problem Area
- Justification/ Relevance of the Study
Chapter-II Objectives of the Study
Chapter-III Review of Literature
Chapter-IV Scope & Research Methodology
- Scope of Study
- Research Design
- Type of Study
- Area of the study
- Period of the study
- Sample Design
- Tools of analysis
- Limitations of Study
Chapter-V Data Analysis & Interpretation
Chapter-VI Observations & Findings
Chapter-VII Conclusions & Suggestions
Bibliography
Annexure
- Questionnaire
- curriculum vitae
 LIST OF TABLES

TABLE NO. TITLE PAGE

NO.
TABLE 5.1 SOURCE OF AWARENESS
TABLE 5.2 AWARENESS OF ADVERTISEMENT
TABLE 5.3 BEST MEDIUM OF ADVERTISEMENT
TABLE 5.4 REASON FOR USING HUL PRODUCTS
TABLE 5.5 FACTORS FOR PURCHASING
TABLE 5.6 SATISFACTION LEVEL
TABLE 5.7 PERCEPTION AS COMPARED TO OTHER BRANDS
TABLE 5.8 PERCEPTION AS COMPARED TO OTHER BRANDS
TABLE 5.9 BRANDS WHICH OFFER ATTRACTIVE SCHEMES
TABLE 5.10 BRAND IMAGE OF HUL PRODUCTS
 LIST OF GRAPHS

GRAPH NO. TITLE PAGE

NO.
GRAPH V.1 SOURCE OF AWARENESS
GRAPH V.2 AWARENESS OF ADVERTISEMENT
GRAPH V.3 BEST MEDIUM OF ADVERTISEMENT
GRAPH V.4 REASON FOR USING HUL PRODUCTS
GRAPH V.5 FACTORS FOR PURCHASING
GRAPH V.6 SATISFACTION LEVEL
GRAPH V.7 PERCEPTION AS COMPARED TO OTHER BRANDS
GRAPH V.8 PERCEPTION AS COMPARED TO OTHER BRANDS
GRAPH V.9 BRANDS WHICH OFFER ATTRACTIVE SCHEMES
GRAPH V.10 BRAND IMAGE OF HUL PRODUCTS
 CHAPTER – I
INTRODUCTION
 INTRODUCTION

Hindustan Lever Limited (HUL) is India's largest fast moving consumer goods company,
with
leadership in Home & Personal Care Products and Foods & Beverages. HUL's brands spread
across 20 distinct consumer categories, touch the lives of two out of three Indians. They
endow the company with a scale of combined volumes of about 4 million tonnes and sales of
Rs.10,000 crores.
The leading business magazine, Forbes Global, has rated Hindustan Lever
as the best consumer household products company. Far Eastern Economic Review has rated
HUL as India’s most respected company. Asiamoney has rated HUL as one of India’s best
managed companies. Leading national publications, like The Economic Times, Business
World, and Business Today have also rated HUL as one of India’s most respected companies
and the number one in Market Value Added and EVA.The vision that inspires HUL's 32,400
employees (40,000 including Group Companies), including about 1,425 managers, is to
“meet everyday needs of people everywhere - to anticipate the aspirations of our consumers
and customers and to respond creatively and competitively with branded products and
services which raise the quality of life.” This objective is achieved through the brands that the
company markets.It is an ethos HUL shares with its parent company, Unilever, which holds
51.55% of the equity. A Fortune 500 transnational, Unilever sells Foods and Home and
Personal Care brands through 300 subsidiary companies in about 100 countries worldwide
with products on sale in a further 50.
BUSINESS NATURE
HUL is India's largest marketer of Soaps, Detergents and Home Care products. It has the
country’s largest Personal Products business, leading in Shampoos, Skin Care Products,
Colour Cosmetics,and Deodorants. HUL is also the market leader in Tea, Processed Coffee,
branded Wheat Flour,Tomato Products, Ice cream, Soups, Jams and Squashes.HUL is also
one of the country's biggest exporters and has been recognised as a Golden Super StarTrading
House by the Government of India; it is a net foreign exchange earner. HUL is India's largest
exporter of branded fast moving consumer goods. The company's Exports portfolio includes
HUL's brands of Soaps and Detergents, Personal Products, Home Care Products, Tea and
Coffee.HUL is also driving exports in chosen areas where India has a competitive advantage
– Marine Products, Basmati Rice, Castor Oil and its Derivatives. It is India's largest exporter
of Marine Products, and one of the largest global players in castor.
 MARKET LEADING BRANDS

HUL’s brands have become household names. The company’s strategy is to concentrate its
resources on 30 national power brands, and 10 other brands which are strong in certain
regions.The top five brands together account for sales of over Rs.3000 crores. Each of these
mega brands has a potential scale of Rs.1000 crores in the foreseeable future.
Some of the big brands in Soaps and Detergents are Lifebuoy, Lux, Liril, Hamam, Breeze,
Dove,(all soaps), Surf Excel, Surf, Rin, Wheel (the number one detergent brand in India, and
HUL's largest), 501, Sunlight (all detergents). HUL also markets the Vim and Domex range
of Home Care Products.In the Personal Products business, HUL's Hair Care franchises are
Clinic, Sunsilk and Lux shampoos; the company markets Nihar oil. In Oral Care, the
portfolio comprises Close-up and Pepsodent toothpastes and toothbrushes. In Skin Care,
HUL markets Fair & Lovely Skin Cream and Lotion, the largest selling Skin Care Product in
India; a brand developed in India, it is now exported to over 30 countries. It has been
extended as an Ayurvedic cream, an under-eye cream, a soap and a talc, in line with the
strategy to take brands across relevant categories. The other major Skin Care franchises are
Pond’s, Vaseline, Lakme and Pears. In Colour Cosmetics, HUL markets the Lakme and Elle-
18 ranges. In Deodorants, the key brands are Rexona, Axe, Denim and Pond's, while the Talc
brands are Pond's, Liril, Fair & Lovely, Vaseline and Lifebuoy. Axe and Denim are HUL’s
franchises for Men’s toiletries. HUL has recently launched Lever Ayush Ayurvedic Health &
Personal Care Products. Health Care is among the new businesses HUL has chosen to enter.
The product range comprises Cough Naashak Syrup, Headache Naashak Roll-on, Dandruff
Naashak Shampoo, Hair Rakshak Oil and Body Rakshak Soap. The purity of the Ayurvedic
ingredients in Lever Ayush is endorsed by the renowned Arya Vaidya Pharmacy (AVP) of
Coimbatore. It is for the first time that rigorous testing procedures of the pharmaceutical
industry have been applied to Ayurvedic products. That is why the brand seal is ‘Truth of
Ayurveda; Proof of Science’.HUL has started franchised Lakme Beauty Salons, offering
standardised services, in line with the strategy to add a service dimension to relevant brands.
The company has set up the Hindustan Lever Network, a direct selling channel, offering the
Lever Home range of Laundry and Home Care products and the Aviance Personal Care
range.The company has also begun an e-tailing service, called Sangam, which can home-
deliver on order by phone or through the Net, a diverse range of about 5000 branded and
unbranded products. The service is now available in select areas of Mumbai and Navi
Mumbai, besides Thane.HUL is one of the world’s largest packet Tea marketer. Its Tea
brands – Taj Mahal, Red Label,Taaza, A1, 3Roses - are among the top brands in the country;
it also markets Lipton Ice Tea.HUL and Pepsi have formed an alliance to distribute a full
range of tea and coffee and soft beverages through vending machines; HUL already has a
base of around 15000 such machines. The coffee business comprises Bru Instant Coffee and
Deluxe Green Label Roast & Ground Coffee. The Kissan and Knorr Foods range comprises
Spreads & Jams, Biscuit Sticks, Soups, Squashes,Tomato Ketchup, Sauces, Puree, and
Cooking Aids.Popular Foods, like Wheat Flour and Iodized Edible Salt, under the Knorr
Annapurna brand name,have met with remarkable success. The range has been expanded
with ready-to-eat 10-second chapatis. The innovative offerings are changing consumer habits
into using processed, hygienic,healthy and convenient products.The Kwality-Wall's Ice
Cream range comprises exotic Sundaes, Viennetta Desserts, popular ‘Impulse’ segment
products like Max, Cornetto and Feast, and Cornetto Ripple Softies.
Max was extended in 2001 as sugar confectioneries, because children are a key consumer
segment in confectioneries too. This is among the new businesses HUL has chosen to enter.
HUL has acquired Modern Food Industries (India) Limited, entering the bread market.
Modern
Foods was the first Public Sector Undertaking to be disinvested. Besides upgrading the
existing
Modern products, HUL has launched new products, among them biscuits.HUL is liberating
its brands from their existing category mindset. Historically, brands originated and stayed
within a category format. HUL sees its Power Brands as being able to occupy a unique
position in the consumer's mind and therefore being able to stretch into other product formats
and categories. All such initiatives have had a promising start, and there are more to come.
 BACKGROUND OF THE STUDY

Hindustan Lever Limited Hi

• 42,000 employees
• 1425 managers
• 80 company factories
• 150 outsourcing units
• 2000 suppliers & associates
 OVER 100 YEARS’ LINK WITH INDIA

The expertise and commitment of HUL's employees, coupled with Lever's more than 100
years' link with India, gives the company a formidable competitive advantage. The first
Unilever product came to India in 1888, when Sunlight soap was introduced through imports.
Lifebuoy was introduced in 1895 and other famous brands like Pears, Lux and Vim followed.
Vanaspati was launched in 1918 and the famous Dalda brand came to the market in 1937.In
1931, Unilever set up its first Indian subsidiary, Hindustan Vanaspati Manufacturing
Company,
followed by Lever Brothers India Limited (1933) and United Traders Limited (1935). These
three companies merged to form HUL in November 1956; HUL offered 10% of its equity to
the Indian public, being the first among the foreign subsidiaries to do so. Unilever, which
gradually divested its stake in HUL, now holds 51.55% equity in the company. The rest of
the shareholding is distributed among about 380,000 individual shareholders and financial
institutions. The erstwhile Brooke Bond's presence in India dates back to 1900. By 1903, the
company had launched Red Label tea in the country. In 1912, Brooke Bond & Co. India
Limited was formed.Brooke Bond joined the Unilever fold in 1984 through an international
acquisition.The erstwhile Lipton's links with India were forged in 1898. Unilever acquired
Lipton in 1972, and in 1977 Lipton Tea (India) Limited was incorporated. Pond’s (India)
Limited had been present in India since 1947. It joined the Unilever fold through an
International acquisition of Chesebrough Pond’s USA in 1986. Since the very early years,
HUL has vigorously responded to the stimulus of economic growth. The growth process has
been accompanied by judicious diversification, always in line with Indian opinions and
aspirations.
Unparalleled Distribution Un
 Nationwide distribution with 7000 stockists
 Directly covers
 Entire urban population through 1 million outlets
 50,000 villages

Power Brands
HUL has identified 30 power brands out of its 110 portfolio. These 30 brands, covering key
product segments contribute to over 75% of profits. In 2001, company concentrated on these
profitable brands and has defocused on the others. Power brands registered a 6.5% yoy
growth in 2001, as against a 1.1% degrowth in other brands. Overall, net sales grew by 3.5%
yoy. Operating profit on power brands was higher by 9.7% as against a 8.1% growth in
operating profit of other brands. The main power brand of HUL is given as follows:

Surf Clinic Modern

Rin Sunsilk Knorr
Wheel Nihar Kwality Walls
Vim Fair & Lovely Brooke Bond
Lux Ponds Taj Mahal
Pears Lakme A1
Breeze Pepsodent 3 Roses
Lifebuoy Closeup Lipton Taaza
Liril Kissan Bru
Rexona Annapurna Dalda

Mergers, Acquisitions and Divestments

 • 74 % equity stake in Modern Foods was acquired in Jan 2000, the balance 26% stake
would be acquired in 2002 at an approx cost of Rs450mn.
• Rossell Industries became a subsidiary of HUL, post acquisition of 59% stake by
100% subsidiary Lipton India Exports.
• Bestfoods India, acquired through global acquisition of Bestfoods Inc by Unilever
was merged into HUL in 2001.
• 100% subsidiary Aviance was merged into HUL. Also the assets and liabilities of the
color cosmetics, fragrances and personal care business of subsidiary Lakme Lever Ltd
were acquired by HUL.
• AFS business through subsidiary Gold Mohur Foods was divested to Godrej Agrovet
in two tranches (74% in Jan 2001, 26% in Sep 2001)
• Adhesive and Nickel Catalyst business divested to ICI. JV formed for Quest Flavors
and Fragrances business.
• A new JV – Toc Disinfectants has been formed with SC Johnson wherein the
disinfectant business of erstwhile Lever Johnson has been transferred. Over a period
of time, HUL will assume control over the disinfectant company – Toc, while SC
Johnson will completely take over other businesses of insect control and air care..
New ventures
HUL has launched confectionery under the well know Children brand Max in 2001. HUL is
the first Unilever subsidiary to have entered the Confectionery business and forms part of the
initiative to leverage global brands to create local businesses.
An entry into the Healthcare segment is being considered and test marketing will be
undertaken in 2002.
An e-tailing initiative Sangam Direct, to meet bulk grocery needs of consumers (through
website/ call centers) has been undertaken
Royalty
HUL entered into a 24-year royalty payment agreement with its parent Unilever in F12/98
under which HUL pays a 1% royalty on net ex-factory sales, in lieu of technology support
provided by the parent. No royalty is paid on turnover from oral care products, laundry soaps,
hair oil, staple foods, specialty chemicals, animal feed and dairy products.
Earnings sensitivity factors
 • Volume growth in personal products (skin care, oral acre, hair care, and cosmetics),
and ability to protect market share
• Competition activity, in particular the pricing and advertising strategies of main
competitors.
• Success of new launches and improving profitability of the foods business, which has
been identified as the thrust area.
• Raw material (oil, soda ash, LAB etc) prices, as cost increases cannot be passed on
fully, in a competitive scenario.
Background
Three Unilever companies were merged in 1956 to form HUL. These companies were
Hindustan Vanaspati Manufacturing Company -edible oil (established in 1931), Lever
Brothers India Limited- soaps (1933) and United Traders-personal products (1935). About
10% of the equity was offered to the public by way of an IPO in 1956. To comply with
FERA, Unilever's stake was further diluted to 51% in the late 70's. To retain 51% foreign
holding, HUL complied with stringent export and other stipulations imposed by the
government, and diversified into businesses such as chemicals, fertilizers and exports. Ponds
joined the Unilver fold through a global acquisition in 1986. In the last decade, HUL has
expanded its operations by the merger and takeover route. It acquired TOMCO - an ailing
Tata group company (1993), merged Unilever group companies Brooke Bond Limited (1996)
and Ponds' India (1998), and has acquired cosmetic business of another Tata group company
Lakme (1998). Shareholding pattern

Unilever 51.55 %
Mutual Funds and UTI 3.78 %
Banks, Financial Institutions, Insurance Companies, other institutions 10.09 %
Foreign Institutional Investors 12.83 %
Indian public 21.57 %

COMMODITISATION OF BRANDS

The Indian Market Place: Let us see what is happening. Lakme Moisturisers (60 ml Bottle)
free with Lipton Green Label Tea, Rs. 35 off on buying Gillette series Deo Body Spray, Kaun
Banega Crorepati Britannia offer, Pears soap free with every 200-ml Lakme Moisturisers,
150 gm Palmolive extra care worth Rs. 27 on buying 250 gm Colgate Dental Cream, 200 gm
Kissan Tom-Tom free with every % Kg pack of Kissan Fortified Atta, 500 grams of Kissan
Annapurna Iodised Salt free with One kg of Kissan Annapurna fortified Atta, 15% off on
Bombay Dying clothing…Oh a very long-unending list.

Am I really talking about one of the most successful brands in the Indian marketplace. Aren't
a brand is the sum of expectations that a stakeholder or customer has when purchasing a
product or dealing with an organization, or is the mental image generated when exposed to a
product or company name. Why brands are important for customers, whether they work for
customers, or they simplify everyday choices or they reduce the risk of complicated buying
decisions or they provide emotional benefits or they offer a sense of community. Well the
obvious answer Yes but after looking at these offers I can only say "I guess so".

Why am I saying that company's are increasingly relying on a variety of sales promotion
offers and because of that customer is getting trained to buy on price, in effect the world is
turning back to hundred years to the time when commodities, not brands, filled the shopping
basket. Commodities are undifferentiated and are sold on price competition. Many brand
managers seem to aim for a "me-to" position reflecting their desire to be all things to all
people. Lack of uniqueness is commoditisation, and it makes a brand vulnerable. But why is
that happening, all these tactics given above used by the companies to increase their market
share results in lack of uniqueness of a brand, which is commoditisation.

So what do we need to do, The industry needs a "common change language" regardless of
channel or segment. We must address and resolve the burning issues for long-term survival.
The real issues that retailers and manufacturers must confront and resolve is that most
branded companies are working to maintain and build consumption demand not
brand/shareholder equity. The "commoditisation" of categories and products is forcing
suppliers to shift financial resources to support cost reductions in manufacturing and existing
product formulations (therefore impacting quality) in an effort to lower prices and maintain
desired margins and market share. Less support for brands and new product development is a
dangerous sign of commoditisation, where costs and price, not "value-added" products or
services, drive decision-making.

The advertising Guru David Ogilvy has said in 1986 in New York on the occasion of 50th
anniversary of Advertising Research Foundation "Any damn fool can put on a deal, but it
takes a genius, faith and perseverance to create a brand."

He has addressed the problem and its solution in one of his speech in 1955, also he said, "The
time has come to sound an alarm! To warn what is going to happen to brands if so much is
spent on deals that there is no money left to advertise them."

"Deals don't build the kind of indestructible image which is the only thing that can make your
brand part of the fabric of a persons life".

"The manufacturer who dedicate their advertising to building a favourable image, the most
sharply defined personality for their brand, are the ones who will get the largest share of
market at the highest profits."

To sum it up with a real life story let me elaborate the fight between an FMCG giant HUL's
Fair & Lovely and a new entrant CavinKare Limited's (CKL) Fairever fairness cream. Fair &
Lovely has dominated the fairness beauty cream market since its launch in 1975, it has a
market share of 90% in 1998, when CKL has launched its Fairever cream in January 1998,
with a unique proposition of "Saffron", which has quietly got the customer's attention, who
was looking for a new product since years. Fairever even after being priced higher then F&L
was catching the market-share. HUL attacked with its promotional offers of price cut and
extra cream but the rise in Fairever remain continued and today it has market share of 15%. It
is surprising to know that Fairever is just a me-too brand of F&L with similar formulation. So
why was HUL loosing the market share. F&L was just like a commodity brand and when
Fairever has offered value of Saffron, customers tend to accept that and HUL lost, even with
its promotional offers.
The bottom-line is Brands are products that are distinguished from others. Brands constantly
evolve. Successful brand proprietors manage to anticipate market shifts and reposition and
develop their brands accordingly.
 HINDUSTAN LEVER LTD - STILL THE BEST OR GLORY DAYS OVER

For the motion - A must for every portfolio, says The Bull
Still the best stock, says the Bull. Hindustan Lever has underperformed despite almost no
change in fundamentals. This is the best time to buy.
Against the motion - Yesterday's hero, tomorrow's ???, says The Bear
The Bear begs to differ. It is an excellent company, agreed. But the market has changed.
Your views on the topic
Hindustan Lever- A must for every portfolio
The largest FMCG player with a presence in almost every FMCG product category; market
leadership or #2 position in most of these categories, a strong brand portfolio, unmatched
distribution network; a business with a vast growth potential - given India's population size &
current per capita consumption levels; and the most respected management in the country -
What more can you ask for?
Hindustan Lever Ltd (HUL) - the largest personal products company in the country with a
63% market share in toilet soaps, 38% share in detergent powders, 48% in detergent bars,
60% share in dish cleaning segment, 72% share in shampoo, 60% share in skin care and 37%
share in oral care. In the foods business also, where the focus has increased in last few years,
HUL has established a significant presence in all segments. Market share figures for major
foods businesses are Packet Tea (41%), Coffee (45%), Jams (75%), Ketchup (38%),
Vanaspati (28%), Staple foods (20%).
Average sales CAGR in the last ten years has been 29.5%, driven partly by successful
acquisitions like Kwality, Dollops, TOMCO, BrookeBond and Lakme. But even sans the
mergers, HUL would have maintained an average of 18% yoy growth pa. Net profit has
grown at a compounded rate of 37% during the same period
The company has constantly improved return on capital employed as well as returns to
shareholders. Infact, the Indian subsidiary has been Unilever's largest success story in any
Asian country.
HUL's key strength in a vast country such as ours has been its unmatched distribution reach
through a stockist network of 7000 and a retail reach of over 1mn outlets. It is the only
company which distributes its products to more than 50000 villages. Innovative programmes
like Project Bharat have been undertaken which aim to make available to every consumer in
the remotest corner of the country, products that meet his day to day requirements.
Also the management is well known for its marketing savvy. It has over the years studied and
understood the Indian markets as no other MNC player has. It has adapted its products to suit
the Indian tastes. A lot of wars have been played and won on the price front, acknowledging
that the Indian consumer is extremely price sensitive. The financial strength to cross
subsidize new initiatives with existing profitable businesses has enabled the company to
achieve its zeal of being the dominating player in all markets that it enters into.
While the personal products business has been the revenue driver during the last few years,
growth rates in the category (specially like detergents and toilet soaps) are likely to taper off
once certain penetration levels are reached. The company has been therefore consiously
building up an extended product range which are at various stages of the growth cycle. As Mr
Dadi Seth emphasizes, "The building of the personal products business was started 10 years
ago, and the benefits are being reaped now. Similarly we are investing in the foods business
today - as that will be the revenue driver in the future." Although profitability in the foods
business may still be a few years away, once the branded foods market really matures, the
potential for volume growth in the business are enormous.
Nor has the company ever given loyal shareholders a reason to be unhappy about its
performance in the bourses. The stock market performance has year after year been more
than satisfactory. Just look at the comparison of annualized returns earned by major food and
personal products companies viz a viz Sensex returns in the last ten years.

Market MNC's Indian

Sensex HUL Britannia Colgate Nestle Dabur Nirma Marico
Dec-90 46.4 39.4 1.2 43.8 16.9 - - -
Dec-91 82.1 70.7 131.0 79.0 81.4 - - -
Dec-92 37.0 124.2 (1.0) 60.0 50.0 - - -
Dec-93 27.9 55.4 50.0 112.8 13.2 - - -
Dec-94 17.4 2.6 (9.7) (7.9) 12.7 (7.5) 74.4 -
Dec-95 (20.8) 5.8 (51.4) (36.0) (24.8) (37.3) (22.4) -
Dec-96 (0.8) 29.5 45.6 (12.7) 5.0 6.9 (32.2) (16.8)
Dec-97 18.6 71.3 75.5 9.3 29.1 (17.3) 31.0 8.9
Dec-98 (16.5) 20.2 116.0 (23.6) 68.0 107.8 (18.4) 36.8
Dec-99 63.8 35.2 18.6 9.2 (5.9) 177.0 132.6 (5.4)

10 year 21.5 41.6 25.9 15.2 20.7 19.8 14.7 4.0

CAGR
Only one company has had no red marks (negative returns) in any single year. Even when
market as a whole plunged by 21% in 1995, investments in HUL earned investors 6% returns.
And the average return over the last ten years has been 41.6%. Compare this with the average
market return of 21.5%. A Rs100 investment made in the Sensex in Dec '90 would have
grown to Rs699 by Dec '99. The same investment made in Hindustan Lever would have
grown to Rs3247 in the same period!

HUL – yesterday’s best, tomorrow’s????

My friend, the Bull has given a data heavy argument for buying HUL. I have one big problem
- it is all historical. Agreed that it was the bluest of blue chips and loyal shareholders have
made a lot of money in it. But I ask you, is there no change in the environment which makes
HUL unattractive now? We take a look at some such changes
• Emergence of alternatives: Two years back, most funds had two stocks accounting for
more than 30% of the value- HUL and ITC. Ask the fund manager and he would say-
there is no other large and liquid stock worth buying with earnings growth, high
ROCE and good management. Well, their complaints have been answered with the
emergence of companies like Infosys, NIIT, Zee , Hughes, etc. The funds have
responded by switching stocks very fast. And why should they return as long as
exciting stocks keep coming up?
• Cost push will squeeze margins- It is common knowledge that the FMCG sector picks
the tail of a recession and we are close to that stage. The last year has probably been
 the worst in terms of consumer demand. Currently, indications are that the industrial
sector is picking up which would signal a revival in consumer demand in the next
year or so. But this time could also be the worst for FMCG companies because
increasing commodity prices will push costs while price increases have to be low.
Margins will be squeezed.
• The big leap is over- I remember the stock being rerated in 1997 when it jumped from
Rs 700 to almost Rs1600 (it was a big jump during those times) and the primary
driver was the leap in ROCE from 46% to 61%. A similar jump will not happen in the
next three- five years. So, where is the kick in the stock?
• HUL is not attracting the best people anymore. Globalisation has meant that dollar
salaries and stock options are luring the brightest in campuses. Though HUL is still
amongst the top, it is not the same. And it also affecting the middle and top rung
management.
• The reducing power of brands- If you have visited supermarkets, you will realise that
lower priced generics are making headway. And they are not of bad quality also. It is
again a question of alternatives. Indians are known to be probably the most value
conscious consumers and it is inevitable that the price premium enjoyed by brands
will come down. Another revolution is of course internet. P&G US has already started
a new website in which you input your hair colour, texture, your income, etc. It then
designs, manufactures and delivers a custom made shampoo with even your name on
it. Such a concept is a direct attack on creating brands and the competitive advantage
arising out of those brands. Over the years, product quality will be the only deciding
factor- packaging and communication will lose relevance.
Well, I could give ten more reasons why it is still not late to exit the stock, but I’ll leave that
to some other time. I have the highest regard for the company and its people. But times are a
changing.
Hindustan Lever Ltd
HUL's profit growth in Q4 F12/04 was significantly below our expectations, largely due
to unanticipated write off's for Modern Foods and discontinued confectionery business
(cumulatively ~ Rs1.2bn). Sales registered a decline of 2.1% yoy at Rs99.3bn during the
year. Net profit recording a huge degrowth of 32.4% yoy to Rs12bn as margins dipped
500bps. Lower treasury income and increased interest burden further depressed profitability.
Continuing sales increased marginally by 0.3% yoy due to sharp 7.4% yoy degrowth in foods
segment. Sales from HPC segment grew by 2.2% yoy to Rs68.8bn. Exports for the year grew
by 2% yoy to Rs12.5bn.

The management of HUL held its analyst meet to discuss Q4 F12/04 and F12/04 performance
and the outlook for the industry and the company in the years to come. The key takeaways
from the meet were as follows:
HPC
HPC segment grew by 4.9% in volume and 3.4% yoy in value terms to Rs18.3bn during the
quarter under review. While, for the full year sales from HPC segment increased by 2.2% yoy
to Rs68.8bn.

• Laundry and Personal Wash (44.4% of sales, 44.5% of profit)

Soaps & detergent sales grew 2.1% yoy to Rs44.7bn in F12/04. In Q4, HUL’s laundry
segment registered more than 8% growth in value and volume terms. Rin, Surf and Wheel all
have registered a good growth. Laundry market share has improved in volume terms and
maintained in value terms during the year.
In the personal wash category, Lifebuoy achieved good sales growth with highest market
share however, revenues from Lux declined in Q4. HUL launched Petalsoft soap during the
year. The company has lost over 2.3% market share during the year.

• Personal products (24.6% of sales, 46.4% of profit)

Personal products sales grew by 2.6% yoy to Rs24.7bn in F12/04. In Q4 F12/04, sales grew
by 1.2% yoy to Rs7bn while, volumes increased sharply by 8.7%.
i) Skin: The company managed to maintain its growth rate of 8%+ in the skin care category
on a larger base. HUL’s all brands have recorded good growth and increase in market share.
ii) Toothpaste

The company was able to increase its market share and sales in the toothpaste category
despite stiff competition from low priced brands.
iii) Shampoo
The shampoo volumes were marginally lower while, the value share decreased to 47.1%
during Q4 F12/04.

• Beverages (12% of sales, 13.7% of profits)

Beverages sales increased marginally by 0.9% yoy to Rs11.9bn in F12/04. However in Q4,
sales grew by 7.1% yoy to Rs3.3bn aided by strong 15.5% growth in Brooke Bond, which
gained 4.5% market share during the year. Lipton recorded a strong double-digit growth
during the year. Tea market share has risen from 29% to 30.2%. Coffee value market share
has declined to 41.2% in Q4 FY04, but has improved share during the year.
 •

• Processed foods (2.8% of sales, loss of Rs818mn)

Processed food revenues dropped by 52.7% yoy to Rs2.9bn in F12/04. While, during Q4,
revenues declined by 42.4% to Rs622mn due to phased stock reduction, withdrawal of ’03
innovation and defocusing of Atta in unviable geographies. The company was able to
maintain market share of jams, ketchup and salt categories. The company has completed the
restructuring of the foods segment and expects the food business to move into a positive
growth trajectory in the future.

Financial Highlights

Period to 12/04 12/03 Growth 12/04 12/03 Growth

(Rs mn) (3) (3) (%) (12) (12) (%)
Sales 26,008 25,835 0.7 99,270 101,384 (2.1)
Expenditure (21,809) (19,732) 10.5 (84,896) (81,617) 4.0
Operating profit 4,199 6,103 (31.2) 14,374 19,767 (27.3)
Other income 916 1,011 (9.4) 3,188 4,598 (30.7)
Interest (323) (323) 0.0 (1,300) (668) 94.7
Depreciation (331) (329) 0.5 (1,209) (1,248) (3.1)
PBT 4,461 6,461 (31.0) 15,053 22,449 (32.9)
Tax (886) (838) 5.7 (3,060) (4,406) (30.5)
PAT 3,575 5,623 (36.4) 11,993 18,043 (33.5)
Extraordinary items (238) (676) (64.7) (19) (325) (94.1)
APAT 3,337 4,947 (32.6) 11,974 17,718 (32.4)
OPM (%) 16.1 23.6 - 14.5 19.5 -
Equity 2,201 2,201 - 2,201 2,201 -
EPS (Rs) Annualized 6.1 9.0 - 5.4 8.0 -
P/E 24 - 27 -
Mirror mirror on the wall which product makes me fairest of all!
Years of British rule have made Indians obsessed with white skin and so has been the
preoccupation with fair skin and the desire to have it. This obsession coupled with the
increasing awareness among the Indian women towards skin protection has resulted in the
spurt in the fairness products market. Be it a fairness cream or a soap or a tablet, every
product in this segment is witnessing growth larger than the overall personal care product
category. The fairness cream market has been galloping at 25% p.a. as compared to the
overall cosmetic market growth of 15% p.a.
Background
In the past, the market for fairness products was not at all developed as people used
homemade products only viz. besan, multani mitti, etc. because we Indians have been under a
strong influence of herbal products and have habit of using "desi nuskhe". The companies
used to sell their fairness products under the categories of sunscreen lotions, vanishing
creams, cold creams etc. Usage of Talcum powder for fairness purposes was quite prevalent
in earlier days.
The Fairness products market over the years
It was in1975 when HUL launched its first fairness cream under the Fair and Lovely (F&L)
brand. With launch of F&L, the market, which was dominated by Ponds and Lakme started
undergoing a change. The dominance of HUL's F&L continued till 1998 when for the first
time CavinCare launched its Fairever cream pitted directly against F&L. Fairever too proved
to be a big success capturing more than 6% of market share within six months of its launch.
The success of Fairever has prompted many more players to test waters and they too have
proved to be successful. Today there are 7 main brands in the fairness product market
available across the country and there would be many more in the regional market but the
market seems to have a place for everybody.
Table 1: Major players

Players Brand Product category

HUL Fair & Lovely Cream, soap

Emami Naturally Fair Cream
Cavin Care Fairever Cream
Paras Freshia Cream
Godrej Fair Glow Soap, Cream
Ponds fairness cream,
Ponds Cream, Lotion
Ponds cold cream
Lakme SunScreen lotion,
Lakme Cream, Lotion
Lakme sunscreen cream
Source: India Infoline
The strong growth in the demand and success of new players in the market has prompted
existing players to venture into cross categorization. Ponds did attempt cross categorization
when it launched its Fairness cream under the same brand as its vanishing and cold cream but
it failed to do big. The market however continued to be dominated by F&L with more than
80% share.
Cross Categorization … A rising trend
During FY00, Godrej Soaps came out with a new product category, fairness soaps. Till then
the concept of fairness products was limited to something that is supposed to be applied to the
skin, something that forms a layer on the skin. The company launched its Fair Glow brand of
fairness soap at a discount price of Rs10/- per cake. The product was a tremendous success
and it registered a sale of more than Rs700mn in the first year of its launch. The brand is still
growing in double digits, which is much more than the growth rate of 3-4% of the entire soap
market. Seeing the success of this new product Godrej soaps also tried cross categorization
and launched a fairness cream under the same brand, Fair Glow. This product is also selling
like hot cakes in the market. Add to this, the company's strategy of launching smaller SKUs
in the market. This has made the entire Fair Glow brand to develop strong equity in just one
year.
The success story of Fair Glow along with aggressiveness of other fairness creams in the
market led to threat of erosion F&L's market share. In order to restrict this erosion of share
HUL introduced discount schemes on F&L purchases, which failed to create the desired
euphoria. Finally in March'01 HUL decided to leverage the brand equity of its F&L brand
and launched its F&L fairness soap.
With so many success stories in cross categorization and new product in the fairness cream
market, the success of F&L soap too seems likely and I think other players would also
follow to increase their share in this market.
Though most of these fairness products are based on one simple formula of controlling
dispersion of Melanin (the pigment that controls the skin colour), different companies are
adding a number of other additives to position themselves differently from others and it is
this positioning that makes the difference.
As of now, the scenario is encouraging for a number of players who have the opportunity to
cash on. The market is not restricted to an HUL or a Godrej alone. What is important is their
positioning and the style of their appeal for "making consumers fairest of all" that will make
the difference.
 THE CHANGING FACE OF FMCG MARKETING

FMCG (Fast Moving Consumer Goods) marketing is no more going to be the same again!
The changing consumer mindset thanks to more knowledgeable and discerning customers
coupled with changing competition and saturated market is giving a tough time to the FMCG
marketers. The changed scenario not only demands a new game plan with a sharp and
decisive strategy but also a lot of creativity and insight. Some of the players in Indian FMCG
industry have already taken a lead and are smartly moving to chart a success story for their
brands. Some brands that reaped magnificent dividend from adopting a new strategy are
Fairever, Ujala, Ghadi detergent, Chik, and Dandi namak. If we analyze the success story of
these brands, it will be self evident that their marketing strategy is not a jargon filled new
model of marketing. It is more of common sense marketing. But then, common sense is not
so common!

Razor Sharp Focus

A common thread that binds the strategy adopted by these brands is razor sharp focus. They
clearly see their target market. They know their customers well. They are not targeting
consumers who already have built-in perceptions. They are reaching out to untapped market
within a well known product category. Their primary focus is on millions of lower middle
class families in small towns and rural segment. They are doing what legendry management
guru C K Prahlad advocates when he says in his published paper, "Raising the Bottom of the
Pyramid: Strategies for Sustainable Growth" that the greatest challenge for managers is to
visualize an active market when what exists is abject poverty. These successful brands are
just doing that- focusing on untapped markets. Take the example of Dandi namak. Who
would have advised them to enter the branded salt market when Tata and HUL virtually share
the whole market among them? But they entered this category when conventional wisdom
said no. And they became a success story overnight. How? The answer is focus. They entered
the market not to compete with Tata and HUL, but with the focus to take branded salt to rural
and semi-urban areas. With this narrow focus, they not only captured a large rural and semi-
urban market but also got some share of the urban market due to rub off effect.
Moreover, these small players fully realize that in today’s world, marketing needs money. So
they don’t shy away from investing in marketing. Again take the example of Dandi namak.
They splashed out money on their lengthy TV commercials to ensure that the message gets
ingrained in the mind of the prospect. Fairever and Ujala adopted the same strategy. Of
course they don’t spend as much as the MNCs do but they do spend enough to get attraction.
The best part is when they get attention and a little success, MNC Goliaths retaliate back with
huge spending and these little Davids piggyback on that!

Communicating 2 Consumers

One of the important aspects of the strategy being adopted is effective communication about
product. These wannabe marketers are sending just the right message to the consumers. If the
advertisements of these brands are analyzed, it will be evident that they don’t go for blitz but
instead try to relate themselves with their target customers. To achieve this object, they are
not shying away from being unconventional. Take the case of Dandi namak. The TV
advertisement was bland and uninteresting. However, without any glitz, it was able to
connect to its target customers because it talked in the language of its target customers. These
brands send a powerful message to their target customers that they are made for each other.
Dandi namak, Ujala, Ghadi detergent, and Chik, projected that they belonged to the lower
middle class! And this worked wonders.

Selecting a narrow terrain to fight!

The stratagem of this new breed of marketing is deciding the opponent to fight! In case of
most of these brands, it is seen that they fight their marketing battle by selecting a particular
company and in many cases a particular brand, which often is the market leader! Then they
deploy their entire marketing arsenal on this selected competitor. Ujala applied this tactic to
full advantage against Robin Blue and now it commands nearly three-fourth of the Rs2bn
ultra marine blue market, Fairever did the same to Fair & Lovely, Ghadi detergent is doing it
now to Nirma and Wheel, and Chik is going shoulder to shoulder with Clinic Plus, the market
leader in shampoo. The case of Dandi namak is different only in the sense that it selected its
battlefield instead of opponent. The battlefield, rural and semi-urban market, was such that no
major marketing war was fought on it before. Even the advertising strategy is designed with
an eye on its opponent. This hurts the big companies badly. They wake up from their
complacent sleep to realize that they are being brutally attacked. And by the time they
retaliate, it’s too late and they only succeed in helping these brands get more attention. HUL
realized that it’s brand Fair & Lovely was in danger only after Fairever had garnered a
healthy market share within months of its launch. Retaliatory advertising by Fair & Lovely
only helped Fairever gain more attention!

The way these homegrown marketers are inducing insomnia to Kotler fed B-school grads is
really amazing. By their ability to be flexible, innovative, and being close to their customers,
they are conquering Indian market, which many MNCs find a tough nut to crack. The secret
of their success is not hard to guess. It is connecting with the heart and soul of India- the
lower middle class and the rural consumers. Are the FMCG giants listening?
 IDENTIFICATION OF PROBLEM AREA

• If we look at the market ,we find majority of brands are homogenous, little in
differentiation there are no more value proposition.
• Almost every country is trying hard to differentiate their image both tangibility &
intangibility.
• In this Report the main intention is to analyze the consumer behavior in HUL Infos.
• Lack of consumer awareness about HUL
• The advertisement of HUL is satisfactory but it is not widely. It need more
advertising.
 JUSTIFICATION OF THE STUDY

Although faced with the limitations mentioned a sincere effort was made to minimize
these limitations. I have tried my best to accomplish the primary objective as well as the
secondary objective of my study. My report remained within the framework of scientific
study as I opted sample method for my project. I made use of questionnaire method for
collecting the data. Field investigation and interviews were done personally. As regards to the
study the questionnaire was formulated systematically and in scientific manner so as to cover
all aspects of the subject and to obtain accurate data from the respondents. The analysis were
made on the data's given by the consumer whom when contacted were ready to give their
response and other valuable information. Thus the interpretation and analysis of the data will
fully justify the report prepared and the same can be considered as a genuine one. This report
Helped me to increase my practical knowledge of the management field and help in my
summer training project
 CHAPTER – II
OBJECTIVES OF THE
STUDY
 OBJECTIVE OF THE STUDY

The are mainly two objectives namely

Primary objectives & Secondary objectives
Primary objectives
To study the various series of Hindustan lever limited in market.
Secondary objectives
To find out the factors that would increase the efficiency and strength of H.L.L. product.
To know the problems confronted by the customers.
Main Objectives
The main objective behind this report was to get insight into the marketing related activities.

 To know about the various activities of company.

 To know the consumer behavior while purchasing the product.

 To know the problem confronted by the company to beat the competition.

 Examine the taste of consumer that what they want in the product of H.L.L.

 Examine the satisfaction level of the consumer with product of H.L.L.

 To know the market share and mind share of the customer.

 To know actually what is a market.

 DISTRIBUTION
CHANNELS OF HUL
 Distribution Strategy of HUL for Rural Market

HULconsidered as the most Prominent Company of the FMCG market as it contains long
product line and most of the product from these are market leaders. Distribution in HULis
unique and totally different from ITC.
HULhas divided the market into two segments i.e. Rural & Urban. Trade Market Practice is
different and separate policy of Distribution for both the market. Distributor who
distribute the products into rural market is Known to be as Rural Distributor (R.D). In HUL ,
Goods & services in Rural market is covered by Rural distributor while in upcountry or urban
market, goods & services are supplied by urban distributor i.e. W.D of urban market.
Stockiest in rural area is known as Star sellers and Shakti dealers are situated in that area
where there are no star sellers to cover villages having population below 2000.

The objective of Project Shakti is to create income-generating capabilities for

underprivileged rural women, by providing a sustainable micro enterprise opportunity,
and to improve rural living standards through health and hygiene awareness.

For merchandising work, company has different strategy. Unlike I.T.C, HUL appoints
Merchandising supervisor and merchandiser at Rural Distributor for merchandising
purpose.
Distribution Channel of HULfor Rural Market

Production Unit

C&F

R.D

Star seller Shakti Dealer

Wholesaler Retailer Village Door to Door

Outlets Service

Retailer

Consumer
Production unit:
Production unit is the place where raw material transforms into value added goods.

The product lines of HUL are as following:

1. PERSONAL WASH (lux,breeze, liril, pears, hammam, life buoy, rexona, dove)
2. HAIR & CARE ( sun silk, lux,all clear, clinic plus,ayush)
3. LAUNDARY (wheel, rin surf excel .etc)
4. SKIN CARE (fair & lovely ponds, telcom powder etc.)
5. OAL CARE (pepsodent, close up.)
6. BEVERAGES ( lipton, brook bond, taaza, bru )
7. COLOUR COSMETICS(lakme)
8. DEODERANTS( axe, rexona)
9. ARYUVEDIC PERSONAL & HEALTH CARE (ayush)
10. FOODS (knor, annapurna, kissan)
11. ICECREAMS (kwality walls)

Ready stock moves from factory to C & F agent godown through trucks to Rural Distributor
godown. Now R.D is responsible for distribution at its allotted region and
Ready stock moves to Star sellers and Shakti dealers

ENTITY RESPONSIBLE:
1. C&F godown to Rural Distributor : Territory sales in charge (T.S.I).
2. Rural Distributor to Star Sellers : R.D, its Sale executive.
3. Star Sellers to Retail outlets : Sales executive of the R.D & self Star
sellers.
4. Rural Distributor to Shakti dealers : R.D & Rural sales promoter (R.S.P).
5. Merchandising work at star sellers region : M.supervisor & merchandiser.
6. Merchandising work at shakti dealers : Rural Sale Promoter (R.S.P)
MARKET CLASSIFICATION of H.L.L

1. Rural distributor is placed at towns having population 20000 to 30000.

2. Star seller are situated in small towns having population 10000 to 15000
and villages having population 5000 to 10000
3. Shakti dealers are appointed for villages having population below 2000.

RURAL DISTRIBUTOR OF HUL :

Distribution policy of H.L.L. for rural market differs from other FMCG companies like I.T.C,
Parle to cover rural market both intensely & extensily, company has appointed Rural
Distributors in towns with population 20000 to 30000 and in villages with population 10000
to 15000.
The R.D stores the ready stock in bulk at their godown and serve their
allotted region through star sellers and shakti dealers with a certain margin of profit.
At least 35 to 40 Star sellers and more than 100 Shakti dealers serve the rural market
through Rural Distributor.

BASIC ROLE OF R.D:

A. Inventory management:

1. To store & maintain Stock on regular basis for smooth flow in the rural market i.e. to
maintain 15 to 20 days of ready stock in their warehouse. For this purpose R.D make
advance payment to company in form of Demand Draft.

2. Ensure availability & visibility of stock at serviced outlets of allotted region.

B. Distribution:

1. To take order & supply ready stock to Star Sellers and Shakti Dealers
throughput the region allotted by the company.
2. To cover more and more retail outlets & wholesalers of Star sellers as possible in
a day through salesman by fixing their targets on TLSD, QOCI, and FOCUS packs

C. Sales Target :

To achieve sales target of the month and provide weekly, monthly & quarterly
sales report to company. Every R.D has sales executive working under them
to cover market and conduct trade service calls for all outlets in their region
by fixing their targets on TLSD, QOCI, FOCUS packs

D: Reimbursements

To claim expenses from company. Various expenses reimbursed by company are :

1. Travel expenses of delivery vans, auto, tempo, bikes, and scooters
2. To claim salaries/ commission of salesman’s
3. To claim salaries of merchandising supervisors
4. To claim for expired & damaged stock

E. To maintain various books of accounts & stationary:

1. On-line D.S.R (daily sales report) of each salesman is send to company branch office
2. P.O.P register: which records various merchandising material issued to S.S, and retail
outlets by merchandiser.
3. Monthly sales report which is send to company branch office
4. Claims register, in which they record the details of expired stock and claims.
5. Opening and closing stock register which records daily stock inflow & outflow.
6. Every Ten days sales report is also submitted at branch office.

F. Trade marketing practices :

1. Marketing and distribution of ready stock through Salesman to all Star Sellers
Outlets and to their wholesalers & retailers .
2. To ensure ready stock supply, availability, visibility, freshness, POP material,
Trade promotion schemes, across all retail outlets of his allotted region.
3. To ensure value added services of salesman at retail outlets of his allotted region.
4. To ensure that all routes are getting proper and regular service by salesman
5. Distribute ready stock to Shakti dealers and cooperate & coordinate with company
Rural Sales Promoter.
SALES FORCE STUCTURE OF Rural Distribution

RURAL DISTRIBUTOR

Sales executive Merchandising supervisor

Merchandiser

STOCK FLOW in Towns & Villages:

R.D

Star sellers

Wholesale outlets Retail outlets

Retail outlets

Consumers
SALESMEN OF HUL :

Sales executive of Rural Distributor play a key role in distribution process. They are
appointed by R.D for products marketing & distribution. Work of sales man is different from
other FMCG company. Sales executive of R.D along with star seller salesman take & book
order and than the star seller of that region supply the goods next day. Sale executive are
allotted different routes where star sellers are located. He performs the work of order booking
and gives trade service calls weekly on serviced outlets of star sellers & spend 10 to 12 min.
at each outlets. Salesman are assigned monthly sales target and are supervised by territory
sales in charge which they achieve by covering serviced outlets of rural market and also
assist merchandiser for merchandise promotion on serviced outlets.

Role of salesmen:

A. Distribution:
It is the responsibility of salesman to book order at serviced outlets and ensure
delivery of ready stock without delay.

B. Trade marketing practice:

1. To visit weekly on assigned routes & made trade service calls on wholesale &
Retail outlets
2. To check stock of star sellers and its availability & freshness.
3. To make aware about new schemes & offers to all serviced outlets
4. Make marketing plans with star sellers.
5. Maintain trade service cards, weekly S.S stock report & daily note dairy
6. Monitor the working of star sellers
7. Submit daily sales report at R.D office.
8. To achieve assigned sales target on the TLSD, QOCI & Focus packs.
9. To ensure availability, visibility & freshness of stock at serviced outlets.
10. Give business advices to retail & wholesale outlets.
11. Take market feedback and follow up amended services and response

Compensation of salesman:
Basic salary : Rs.2000/ month
Traveling allowance : Rs. 50/day
Fuel expenses : Rs. 1.10 / km
Commission a. TLSD: Rs.500
b. Focus Pack: Rs 500
 Star Sellers (S.S) of H.U.L :
Star sellers are the most important entity and play a vital role in distribution of goods
& service in towns and villages. Every star seller has their own salesman who takes order
from serviced outlets and delivers the ready stock on next day through three wheelers,
rickshaw trolley.
Mostly the star sellers are located in small town with population 10000 – 20000
And villages, with population 5000 – 10000. These S.S further serve the surrounding local
market and villages.
S.S provides goods and services to serviced outlets and provides all type of
merchandising material to serviced outlets.
Territory sales incharge and areas executive visit them thrice a month and check their trade
practices. All S.S work under rural distributor and he controls their working & provide ready
stock on time through delivery van.

Basic role of S.S :

1. Store the ready stock in their warehouse so as to serve their allotted region for atleast
15 day
2. Take orders from & distribute ready stock to wholesalers and retailers.
3. Ensure availability and visibility of stock on retail outlets.
4. To achieve the monthly target on T.S.L.D, FOCUS, QOCI PACKS.
5. Provide all type of merchandising material to the serviced outlets.
6. Maintain order book and sales receipts
7. Submit weekly sales & stock report to distributor.
8. To facilitate the serviced outlets with new schemes & offers of the company
9. To provide customer feedback to company.
10. Cover more and more retail outlets of local area & surrounding villages.
CHAPTER – III
REVIEW OF
LITERATURE
 REVIEW OF LITERATURE

I. REVIEW OF BOOKS

1. Sharma,D.D(2002):’Marketing Research’,Sultan Chand Sons, New Delhi

The customer market consists of all the individuals and householders who can buy or acquire
goods and service for personal consumption. Customers are tremendously in age, income,
education level, mobility pattern and taste. Marketers find it useful to distinguish different
customer groups and to develop products and services tailored to their need.
The areas of customer perception in marketing research are important because about 80% of
national income are constituted by expenditure incurred by the customer. The study of the
customer behaviour is a part of sociology economics and politics. Marketing is Concerned
with the inter exchange of goods and services between the producer and customer. Customer
behavior constitutes at least in part environment in which the producer operates. And in
which the management has to make decision and implement them.

Basically the research follows a truism, the customer are always bright therefore the needs of
the customer are of prime importance and must be investigated the customer and reports on
his habits, his likes and dislikes, to the manufacturer or to the advertiser.
 CHAPTER – IV
RESEARCH
METHODOLOGY
 RESEARCH METHODOLOGY

The research approach for this study was conclusive research. Conclusive research is
designed to help executives to choose among various possible alternatives to make a viable
business decision. Further this research on perception was of descriptive type, which is an
offshoot of conclusive research. This research was designed to describe prospect of customer
perception of HUL. This was undertaken and data was collected to find actual perception of
HUL.

The problem for this research was non-operating in nature i.e. special situation
peculiar to particular company's marketing department. The data both primary and secondary
data, the source was one hundred respondents.

For the proper analysis of data simple statistical techniques such as percentage were
use. It helped in making more accurate generalization from the data available. The data,
which was collected from a sample of population, was assumed to be representing entire
population was interest. Demographic factors like age, income and educational background
was used for the classification purpose.
 SCOPE OF THE STUDY

This study is made to determine the degree of perception felt by the customers of
HUL. To know their attitude towards the problem related to HUL and to understand the
perception or disperception of the customers.
The students are highly benefited as the purpose if this research is to get acquainted
with the practical side of marketing research, in addition to the theoretical studies in course of
the academic year. This research also gives a chance for application and testing of the
theoretical study on the real work situation. The students got the lessons of experience by
meeting various sections of people conducting on interview knowing opinion of people
tabulating interpreting and analyzing the data collected and this will help the researcher in.
future for career building.
The study also provided a great significance to the company find out how much the
customers are satisfied with the product. The suggestions that were given by the customers
are great help to the company to look the real drawback of the product.
The study helps the customers to evaluate the perception level on the product. They
got a chance to suggest for the improvement of the product.
The project is written with an aim to draw forth the intelligence and problem solving
activities within oneself by exposure to real work situation.
 TYPES OF STUDY

The study conducted is a conclusive descriptive statistical study. Conclusive because

after conducting the study, the researcher comes to a decision which is precise and rational.
The study is descriptive because it is in the descriptive study, that the data is collected for a
definite purpose and here the purpose is definite i.e. the data is collected, to find out the
perception of the customers with the brand. The study is conclusive because after doing the
study the researcher comes to a conclusion regarding the position of the brand in the minds of
respondents of different age groups. The study is statistical because throughout the study all
the similar samples are selected and grouped together (similarity of ages thus forming a
group). All the similar responses are taken together as one and their percentages are
calculated.

Thus, this, conclusive descriptive statistical study is the best study for this purpose as
it provides the necessary information which is utilized to arrive at a concrete decision.
 AREA OF THE STUDY

This study was based on the customer satisfaction of HUL hence I have done the survey of 50
respondents in BAREILLY city.
The areas which we have studied are
• Rajendra Nagar
• D.D. Puram
• Koharapeer
• Rampur Garden
• Qutub Khana
• Civil Lines

PERIOD OF THE STUDY

The period of study was 25 days.

 TOOLS OF ANALYSIS

To know the response, I have used the questionnaire method in sample survey. If one
wishes to find what people think or know, the logical procedure is to ask them. This has led
marketing researchers to use the questionnaire technique for collecting data more than any
other method.

In this method questionnaire were distributed to the respondents and they were asked
to answer questions in the questionnaire. The questionnaires were structured non-disguised
questionnaire because the questions, which the questionnaire contained, were arranged in a
specific order besides every question asked was logical for the study; no question can be
termed as irrelevant.

The questionnaire, were non-disguised because the questionnaire were constructed so

that the objective is clear to the respondent. The respondents were aware of the objective.
They knew why they were asked to fill the questionnaire.
 SAMPLE DESIGN

BAREILLY has a population of approximately 20 lakhs. For carrying out any research or
study on any subject it is very difficult to cover even 10% of the population. Therefore the
sample size has to be decided for a meaningful conclusion. For designing the sample size, it
was thought proper to cover a very small percentage of population in various age groups.

The method used for sample technique was non probability convenience sampling
method. This method was used because it was not known previously as to whether a
particular person will be asked to fill the questionnaire. Convenient sampling is used because
only those people were asked to fill the questionnaires that were easily accessible and
available to the researcher.

Considering the constraints, it was decided to conduct the study based on sample size
of 100 people in specific age groups. Scientific method was not adopted in this study because
of financial constraints and also because of lack of time, also the basic aim of doing the
research was academic, hence most convenient way was selected.
 LIMITATIONS OF STUDY

Precautions used in comparative Method: -

1. Physical verification of material of study:

It should also be kept in mind that, unnecessary facts are not collected and only those facts
should be adopted, which is useful in comparative method.

2. Assessing the existing and non-existing factors:

The existing and non-existing factors pertaining to the subject of comparative study should be
noted down. It should not be that only existing factors are taken note of and non-existing
factors are ignored.

3. Deriving Conclusions:

Due care should be taken in drawing conclusions. If the comparison is faulty there is every
chance of arriving at faulty conclusions.

4. Study Reports:

It is necessary to prepare a report of the comparative study. This will enable, the reader to
know the exact nature of the comparative study.

5. Difficulties faced by Research worker:

The comparative method appears to be an easy method of study but actually is very difficult.
No conclusion can be drawn very easily from the data and details collected by this method.
Varied conclusions can be drawn in a study of one and the same group, community and
circumstances and if the groups, communities are different the results are bound to differ.
 HYPOTHESIS OF THE STUDY

H0 - Respondents use HUL Products because of Quality

Options No. of Respondents

Quality 18
Price 8
Brand Image 16
Offers 5
Others 3

The above table shows that the hypothesis is approved.

H1 - Brand image of HUL makes the customer to buy HUL products

Options No. of Respondents

Brand Image 18
Brand Loyalty 8
Price 16
Others 8

The above table shows that the above hypothesis is approved.

H2 - Most of the respondents were satisfied with HUL Products

Options No. of Respondents

Highly Satisfied 35
Satisfied 10
Dissatisfied 5

The above table shows that the hypothesis is approved.

 CHAPTER – V
DATA ANALYSIS
&
INTERPRETATION
 GRAPH -12

CHAPTER – VI
OBSERVATIONS
&
FINDINGS
 OBSERVATIONS & FINDINGS

This project report is a partial fulfillment of our studies M.B.A has helped me
tremendously in knowing how marketing activities are carried out in a real situation. In
classroom lectures, I was able to understand only the theoretical work I have the practical
experience about the marketing activities.
Marketing is more an art than science. Successful decision making in marketing
depends upon the skills and judgement of the individual involved and cannot be reduced to an
organized body of principles. The decision making mainly depends upon the experience of
the people, but if the manager finds it difficult to make decision on certain points, he make
use of research they are applying the methods of science tot he art of marketing.
As far as my study on marketing on consumer's perception of HUL Products. I feel I
was more on art than a science, although scientific techniques and tools were made use for
the collection of data.
Inspite of some limitations like less samples, less time and finance I could accomplish
my objectives. The analysis of the data collected vividly states that the consumers are
satisfied with the product. As every position has some opposition. The sample feels that this
product also has some problems as nothing is perfect.
CHAPTER – VII
CONCLUSIONS
&
SUGGESTIONS
 CONCLUSION

This quotation is very important for every business organization and every one should
keep in mind this thing.

The route of all companies wishing to survive and prosper into the Millennium should
be ‘onwards and upwards’. Some companies may however have lost the way and
adopted a ‘wait and see’ strategy. Companies most likely to survive increasingly
competitive markets must be flexible, adaptive and prepared to plan for the
future. These factors suggest some key strategic actions which should be taken to
improve business performance and the competitive position of individual firms and
the sector as a whole.
These strategic actions include:
• The preparation of a Mission Statement and formal Business, Marketing
and Training Plans for executives.
• The establishment of Objectives and Targets and a Monitoring System.
• The acquisition of in-depth knowledge about Customers and Competitors.
• Further enhancements in relationships with Suppliers.
• A review of all business activities which might be outsourced.
• The creation and continuous improvements in Customer-Care programmes.
• The building of good relationships with customers.
• Keeping eye on the activities of competitors action and quickly react on that
action.
Customers are giving a very good response to HUL Products and they are fully
satisfied with the products of HUL
 SUGGESTIONS

• REPRESENTATIVES
• Visit at each and every retail shop.
• Regular visits every week should be there.
• RESEARCH/ SURVEY
• More emphasis on research and survey
• Better understanding of market demand
• More emphasis on product diversification
• No. of new inventions in detergent category should be there.
• PROMOTIONAL ACTIVITIES
• Promotional activities for sale should be increased i.e. gift items should be
provided to consumers.
• Promotional activities like posters, dangler, and hoardings should be
enhanced.
• Hindustan Level Ltd. Have to advertise well their products as the Proctor &
Gamble is doing.
• T.V. advertisements should be increased.
• Local newspaper advertisement should be there i.e. advertisement in Dainik
Bhaskar, Nav Bharat etc.
• Some gift items and gift coupon should be given to the retailer for achieving
maximum sales target of Surf detergent brand.
• SERVICES
• Service is not so good and fast, so HUL should improve it, like product should
be easily available in each shop.
• Damaged product should be taken care of efficiently and seriously.
BIBLIOGRAPHY
 BIBLIOGRAPHY

Books:-
• Kotler, Philip (1996): ‘Marketing Management’ Analysis, Planning,
Implementation &Control. 8th edition, prentice hall of India, New Delhi.
• Kothari.C.R. (1994): ‘Research Methodology’ Wishwa prakashan.
• Kaynak, E & Savitt.R (1984): ‘Comparative Marketing Systems’. Praegar,
New York.
• Neil Wearne& Alison M (1996): ‘Hospitality Marketing’. Butterworth-
Hinmenn Ltd, Oxford.
• Page Limited, London.
• Zeithaml, V.A (1996): ‘Service Marketing’ McGraw Hill New York.
Websites:
• www.google.com
• www.HUL.com
• www.indiainfoline.com
ANNEXURES
 QUESTIONNAIRE
Name : ______________________________________________
Address : ______________________________________________

Q1. How do you come to know about the HUL Products ?

a. Advertisement
b. Friends
c. Colleagues
d. Neighbours
e. Others

Q2. Have you seen the advertisement of HUL Products ?

a. Yes
b. No

Q3.Have you seen the advertisement of HUL Products, If yes then in which media :
a. Television
b. Newspaper
c. Magazines
d. Banners / Hoarding
e. Road Show
Q4. Why you are using the HUL Products ?
a. Quality
b. Price
c. Brand Image
d. Offers
e. Others
Q5. What factors do you consider before purchasing these product ?
a. Brand Image
b. Brand Loyalty
c. Price
d. Others

Q6. How did you felt after purchasing it ?

a. Highly satisfied
b. Satisfied
c. Dissatisfied

Q7. According to your perception, what characteristics it has better than other Alternatives
brands available in the market.
a. Brand Image
b. Price
c. Quality
d. Others

Q8. Which Brand offers you the value for your money ?
a. HUL
b. P&G
c. Ajanta Health
d. Others

Q9. Which brand offers you the more attractive schemes ?

a. HUL
b. P&G
c. Ajanta Health/ Oral Care
d. Others
Q10 What do you think about the brand image of HUL Products.
a. Excellent
b. Good
c. Average
d. Poor
e. Can’t Say

Q11. Your suggestions to improve the brands image of HUL Products ?

a. Advertisement
b. Quality
c. Competitive Prices
d. Others

Q12. Who in your family would decide about purchasing a particular brand?
a. Father
b. Mother
c. Brother
d. Yourself
e. Don’t Know