1
A BRIEF STUDY ON
MARKET SRUCTURE AND DEMAND ANALYSIS
OF HINDUSTAN UNILEVER
PROJECT REPORT
SUBMITTED TO:
MS. Meghnaa Sharma
Accman Institute of Management
Greater noida, knowledge park-3
U.P
Prepared by:
MOHD.ARISH
UPMA JOSHI
KAPIL
2
TABLE OF CONTENT
Sl.no Content Page no.
1.
2.
3.
4.
5.
6.
Executive summary
Introduction
Objectives and Methodology
Findings
Product Line
SWOT Analysis
Competitors Analysis
Performance Analysis
Future Opportunities
Future Projects of HUL
Conclusion
Bibliography
3
4-5
6
7
8
9-12
13-15
15-18
19
20
21
3
EXECUTIVE SUMMARY
Hindustan Unilever Limited is the Indian arm of the Anglo-Dutch company –Unilever.
Both Unilever and HUL have established themselves well in the Fast Moving Consumer
Goods (FMCG) category. In India, the company offers many households brands
like, Dove,Lifebuoy, Lipton,Lux, Pepsodent, Ponds, Rexona, Sunsilk, Surf, Vaseline etc.
Some of its efforts were also rewarded when four of HUL brands found place in the ‘Top
10 brands’ list for the year 2008 published in The Economic Times.
Unilever was a result of the merger between the Dutch margarine company, Margarine
Unie, and the British soap-maker, Lever Brothers, way back in 1930. For 70 years,
Unilever was the undisputed market leader but now faces tough competition from
Proctor & Gamble and Colgate-Palmolive.
HUL is also known for its strong distribution network in India. In order to further
strengthen its distribution in the rural areas and to empower the local women, HUL
launched a project Shakti in 2000 in a district in Andhra Pradesh. The idea behind this
project was to create women entrepreneurs and provide them with micro-credit and
training in enterprise management, which would enable them to create self-help groups
and become direct-to-home distributors of HUL products. Today Shakti is present
across 80,000 villages in 15 states and is helping many underprivileged women earn
their livelihood.
As the per capita income of India increasing along with the Indian population. So, the
future for the FMCG Companies is bright. To analysis the past performance & the future
demand of HUL, FMCG products we have considered following points:
? We have a listed the different FMCG product lines of HUL.We have done
competitor’s analysis in which the market share of top FMCG companies are
analayised & the market share of HUL’S different categories product are
analayised with comparison to its competitors.
? Then we have done SWOT analysis to know the threat & opportunities of HUL in
present market.
? Then performance analysis is made by taking 10 year financial data from 1998-
2007. The profit & sales growth is analysed.
? Then the future opportunities for FMCG products are taken into consideration by
analyzing the increased percapita income & increased disposable income to
forecast the future demand of HUL.
? INTRODUCTION
4
Hindustan Unilever Limited (abbreviated to HUL), formerly Hindustan Lever
Limited, is INDIAs largest consumer products company and was formed in 1933 as
Lever Brothers India Limited. It is currently headquartered in Mumbai, India and
its 41,000 employees are headed by Harish Manwani, the non-executive chairman
of the board. HUL is the market leader in Indian products such as tea, soaps,
detergents, as its products have become daily household name in India. The
Anglo-Dutch company Unilever owns a majority stake in Hindustan Unilever
Limited.
The company was renamed in late June 2007 as "Hindustan Unilever Limited".
Some of its brands include Kwality Wall's ice cream, Lifebuoy, Lux, Breeze, Liril,
Rexona, Hamam, Moti soaps, Pureit Water Purifier, Lipton tea, Brooke Bond tea,
Bru Coffee, Pepsodent and Close Up toothpaste and brushes, and Surf, Rin and
Wheel laundry detergents, Kissan squashes and jams, Annapurna salt and atta,
Pond's talcs and creams, Vaseline lotions, Fair & Lovely creams, Lakme beauty
products, Clinic Plus, Clinic All Clear, Sunsilk and Dove shampoos, Vim dish wash,
Ala bleach and Domex disinfectant,Rexona,Modern Bread and Axe deospray.HUL
has produced many business leaders for corporate India. It is referred to as a ‘CEO
Factory' in the Indian press for the same reasons. It’s leadership building potential
was recognized when it was ranked 4th in the Hewiit Global Leadership Survey
2007 with only GE, P&G and Nokia ranking ahead of HUL in the ability to
produce leaders with such regularity
Today, HUL is one of India’s largest exporters of branded Fast Moving
Consumer Goods. It has been recognized by the Government of India as a Golden
SuperStarTradingHouse.
Over time HUL has developed into a viable & competitive sourcing base for
Unilever world wide in Home and Personal Care & Foods & Beverages category of
products. HUL is also a global marketing arm for select licensed Unilever brands
and also works on building categories with core country advantage such as
brandedbasmatirice.
HUL Exports offers high level of service with flexibility and responsiveness
thorough out the supply chain. It has a dedicated organization structure to
5
support this endeavor and this has helped in growth of these businesses in
particular. Intrinsic cost competitiveness in the end to end Supply chain with
appropriate technology and competitive capital investment operations while
delivering best in class quality enables HUL to position itself as a key sourcing hub
for Unilever and also become a preferred partner for Global customers in
categories we operate.
HUL’s key focus in the exports business is on two broad categories. It is a sourcing
base for Unilever brands in Home & Personal Care (HPC) and Food and Beverages
(F&B) for supplies to other Unilever companies. It also focuses on becoming a
preferred supplier to both non-Unilever and Unilever clients in three categories in
which India, as a country, has competitive advantage – Branded Rice, Marine
Products and Castor and its Derivatives. HUL enjoys international recognition
within Unilever and outside for its quality, reliability and speed of customer
service.
HUL's Exports geography comprises, at present, countries in Europe, Asia, Middle
East, Africa, Australia, and North America etc.
? HUL’s products touches two out of three Indian everyday
? Reach 80% Households
? Direct Coverage of 1mln outlets
? 2000 Suppliers and Associates
? 71 Manufacturing locations
? 15000 Employees
? 1100 managers
? Shelf availability 84% outlets in India
6
OBJECTIVES AND METHODOLOGY
OBJECTIVE
? Primary objective
? To find the past sale growth and demand analysis
? Secondary Objective
? Market structure analysis
? SWOT analysis
? Competitor analysis
? Performance evaluation
Methodology
In this project we have followed descriptive method of study.
Research instrument
Here project analysis is made by collecting secondary data from different
websites, journals, etc.
? Secondary data’s are pre published and research data’s collected from
different websites, journals, newspapers, company research papers.
? These documents and data’s are very useful for the theoretical, conceptual
and organizational background analysis.
? Detailed analysis of data’s is made by plotting different graphs and tables
which can be easily understandable.
? Then by observing these graphs we have made our conclusions and
recommendations.
7
PRODUCT LINE
A) HOME AND PERSONAL CARE:
1) Personal wash
Lux Breeze
Lifebuoy Dove
Liril Pears
Hamam Rexona
2) Laundry 3) Skin Care
Surf Excel Fair and lovely
Rin Pond’s
Wheel Aviance
4) Hair care 5) Oral care
Sunsilk naturals Pepsodent
Clinic Close up
6) Deodorants 7) Colour Cosmetics
Axe Lakme
Rexona
8) Ayurvedic Personal and health care: Ayush
B) FOODS
1) Tea 2) Coffee 3) Foods 4) Ice cream
Brooke Bond Brooke Bond Bru Kissan Kwality walls
Lipton Knor
Annapurna
C) WATER PURIFIER
Pureit
8
SWOT ANALYSIS
STRENGTH
? Variety of products
? Distribution Network
? Brand image
? Quality Management
? Innovation and R&D strength
THREATS
? From High Class Competitor
? Proctor & Gamble
? Pantene
? Dabur
? Babool
? Dabourlal Dent Manjan
? Reckitt Benckiser
? Dettol
? Palmolive
? Colgate, Nirma
OPPORTUNITIES
? Huge Market
? Increasing per capital income
? Increasing consumption pattern
? Potential for making more impact of brand image.
? Coming in technology e.g. in water purifiers
9
WEAKNESS
? Not able to compete with local competitor in the rural market
? Not focus on upper class population
? Pricing policy is not good
COMPETITORS ANALYSIS
According to the market survey done by BUSINESS TODAY the top 10 companies
of FMCG sector are given below.
1. Hindustan Unilever Ltd.
2. ITC (Indian Tobacco Company)
3. Nestlé India
4. GCMMF (AMUL)
5. Dabur India
6. Asian Paints (India)
7. Cadbury India
8. Britannia Industries
9. Procter & Gamble Hygiene and Health Care
10. Marico Industries
10
THE COMPARATIVE DATA OF % MARKET SHARE OF HUL AND ITS COMPETITOR
IN QUARTER ENDED JUN’08
(Above graph showing %age Market share of HUL and its competitor in different
categories of FMCG products)
As mentioned in the above graph, HUL is enjoying the leader position in the
market and is having highest market shares which are followed by the market
challengers like Dabur India Ltd, Nestle India Ltd, and ITC LTD, ETC…..In different
categories of FMCG products like shampoo, skincare , deo, jams, coffee, etc
In some category these market challengers are giving high level competition in
different product lines such as ketchup and toothpaste (As shown in the graph
below).
11
(Above graph showing the two category of products in which HUL percentage
market share is less than its competitor in Quarter ended JUN’08)
So we can see that in overall FMCG business HUL is distantly ahead of rest of the
companies as far as market share of different products are concerned.
12
In the above pie chart we see the position of various FMCG companies doing
business in India. We can see that HUL is enjoying the position of market leader
and is followed by ITC as close second in the market share of FMCG products.
PERFORMANCE ANALYSIS
13
Hindustan Unilever Ltd is one of the leading FMCG company in India which having
the following past financial records we have taken for the analysis as follows:
Table showing past 10 years financial data
DATA ANALYSIS:
900000
1000000
1100000
1200000
1300000
1400000
1500000
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Sales growth of last 10 years
sal es(Rs. Lakhs)
14
We have the sales and profit figures of HUL from the year 1998 to 2007 in the
10year past data from Yr1998-2007, after plotting two graph one of sales & other
of profit as shown in here we can see that both profit and sales of the company
rose from the year 1998 till 2001, but in the year 2002 we see that the sales fell
but there was actually rise in the profit of the company . In the year 2004 we see
that there was a steep fall in the profit of the company and from the year 2005
onwards there was a slow but steady rise in the profit of the company, but a rapid
rise in the sales of the company in the given years.
Reason for the steep fall in the profit of the company in the year 2004:-
? The FMCG market in Urban India was attaining the
saturation level and so companies had to expand its market in rural India.
This resulted in the downfall in the profit of HUL. There was very aggressive
advertising campaign by ITC in that year to set itself in the market this
affected HUL who was enjoying the position of market leader and resulted
in the fall in the profit of the company.
In the following graph we can see the percentage growth in FMCG sales of HUL
from March quarter ’07 to March quarter ’08.
15
(Graph showing the FMCG trend through last quarters)
FUTURE OPPORTUNITIES
India is a fast developing country with a huge population whose per capita income
is growing rapidly and there is huge opportunity for FMCG companies.
The opportunities are as follows:
? Increasing per capita income is driving FMCG growth in India
? India’s consuming class is growing rapidly
? Changing consumption pattern: Per capita income of Indian customer is
increasing and FMCG products are relatively elastic in nature hence the
expected sale should increase.
By the following three graphs(data collected from a research made by govt. of
INDIA) we can expect increase future demand of FMCG products, the graphs
16
showing the increasing percapita income, percapita disposable income and
population of India respectively are as follows:
(Above graph showing percapita income of INDIANS through out Yr2000-2008)
As shown in the above graph the percapita income of an INDIAN increased
throughout years, and if this trend will continue in future the people can purchase
more FMCG products.
17
(Above graphs showing increased percapita disposable income from Yr2002-
2007)
(Above graph shows the past population and expected future population rise,
data are collected from the research made by govt. of INDIA)Here by the above
graphs we can see that there is huge scope for FMCG products and since HUL is
the market leader in India hence it can gain the most out of it.
18
CATEGORY WISE SALE GROWTH OF FMCG SECTOR OF HUL IN INDIA:
CATEGORY %AGE
Soaps & Detergents 19.3
Personal Products 22.4
Ice Cream 15.7
Processed Foods 13.7
Beverages 13.6
Others 19.4
(Above graph shows the data of MAR’08 Quarter %growth of different products of
HUL)
FUTURE PROJECTS OF HUL:
19
As competition is increasing day by day, it’s difficult to maintain the leader
position & to further strengthen the distribution network HUL made a project
called project SHAKTI which will serve the following purpose:
A) To Reach:
? Small, scattered settlements and poor infrastructure make
distribution difficult.
? Over 500,000 villages not reached directly by HUL.
B) To Communicate:
? Low literacy hampers effectiveness of print media.
? Poor media-reach: 500 million Indians lack TV & radio.
C) To Influence:
? Low category penetration, consumption.
C) Awareness:
? Per capita consumption in Unilever categories is 33% of urban
level.
20
CONCLUSION
Hindustan Unilever ltd. Is a leading FMCG company in India and from last three
consecutive years has shown accelerated growth in FMCG portfolio. Customers in
India are also spending more in FMCG as their standard of living is growing. HUL
has placed itself successfully in the position of market leader in FMCG products.
Though there was some downfall in sales and profit of the company in the
beginning of this decade but after that HUL has shown considerable rise in both
sales and profit. The future of the company is also looking bright as FMCG market
in India is still expanding and so we can safely conclude that HUL will be able to
secure its number one position in FMCG product.
HUL has also started project SHAKTI that has provided it direct reach to rural
market. This may be considered a revolutionary step since the urban market is
reaching its saturation level and there is a huge scope exploring rural market. This
will also be helpful not only increasing its market share but also fight competition.
BIBLIOGRAPHY
21
In order to make this project we have taken the help of the following websites &
books:
? www.wikipedia.com
? www.oppapers.com
? www.hul.co.in
? www.scribd.com
Besides it various books are also consulted to prepare project report.
AUTHOR’S NAME BOOKS
Ashish Benerjee Principle of economics
H.L. Ahuja Modern Microeconomics
Theory and Application
C.K.Kothari Research Methodology
22
SWOT Analysis
Strength
1. HUL is a part of the Unilever group, hence strong brand equity
2. It has over 15000 employees
3. Reach 6.4 million retail outlets which includes direct reach to over 1.5 million retail outlets
4. Two R&D centres in India in Mumbai and Bangalore
5. Products with presence in over 20 consumer categories with over 700 million Indian
consumers using its products
6. As a part of CSR, HUL has initiatives like project Shakti, plastic recycling, women
empowerment etc
Weakness
1. Market share is limited due to presence of other strong FMCG brands
2. HUL products has stiff competition from big domestic players and international brands
Opportunity
1. Tap rural markets and increase penetration in urban areas
2.Mergers and acquisitions to strengthen the brand
3.Increasing purchasing power of people thereby increasing demand
Threats
1. Intense and increasing competition amongst other FMCG companies
2.FDI in retail thereby allowing international brands
3. Competition from unbranded and local products
Competition
Competitors
1. Marico
2. L'Oréal
3. Nirma Ltd
4. ITC
5. Colgate-Palmolive
6. Procter and Gamble
7. Dabur
http://www.academia.edu/4618590/hindustanunileverprojectfinal_100406165215_phpapp02
doc_426560604.docx
A BRIEF STUDY ON
MARKET SRUCTURE AND DEMAND ANALYSIS
OF HINDUSTAN UNILEVER
PROJECT REPORT
SUBMITTED TO:
MS. Meghnaa Sharma
Accman Institute of Management
Greater noida, knowledge park-3
U.P
Prepared by:
MOHD.ARISH
UPMA JOSHI
KAPIL
2
TABLE OF CONTENT
Sl.no Content Page no.
1.
2.
3.
4.
5.
6.
Executive summary
Introduction
Objectives and Methodology
Findings
Product Line
SWOT Analysis
Competitors Analysis
Performance Analysis
Future Opportunities
Future Projects of HUL
Conclusion
Bibliography
3
4-5
6
7
8
9-12
13-15
15-18
19
20
21
3
EXECUTIVE SUMMARY
Hindustan Unilever Limited is the Indian arm of the Anglo-Dutch company –Unilever.
Both Unilever and HUL have established themselves well in the Fast Moving Consumer
Goods (FMCG) category. In India, the company offers many households brands
like, Dove,Lifebuoy, Lipton,Lux, Pepsodent, Ponds, Rexona, Sunsilk, Surf, Vaseline etc.
Some of its efforts were also rewarded when four of HUL brands found place in the ‘Top
10 brands’ list for the year 2008 published in The Economic Times.
Unilever was a result of the merger between the Dutch margarine company, Margarine
Unie, and the British soap-maker, Lever Brothers, way back in 1930. For 70 years,
Unilever was the undisputed market leader but now faces tough competition from
Proctor & Gamble and Colgate-Palmolive.
HUL is also known for its strong distribution network in India. In order to further
strengthen its distribution in the rural areas and to empower the local women, HUL
launched a project Shakti in 2000 in a district in Andhra Pradesh. The idea behind this
project was to create women entrepreneurs and provide them with micro-credit and
training in enterprise management, which would enable them to create self-help groups
and become direct-to-home distributors of HUL products. Today Shakti is present
across 80,000 villages in 15 states and is helping many underprivileged women earn
their livelihood.
As the per capita income of India increasing along with the Indian population. So, the
future for the FMCG Companies is bright. To analysis the past performance & the future
demand of HUL, FMCG products we have considered following points:
? We have a listed the different FMCG product lines of HUL.We have done
competitor’s analysis in which the market share of top FMCG companies are
analayised & the market share of HUL’S different categories product are
analayised with comparison to its competitors.
? Then we have done SWOT analysis to know the threat & opportunities of HUL in
present market.
? Then performance analysis is made by taking 10 year financial data from 1998-
2007. The profit & sales growth is analysed.
? Then the future opportunities for FMCG products are taken into consideration by
analyzing the increased percapita income & increased disposable income to
forecast the future demand of HUL.
? INTRODUCTION
4
Hindustan Unilever Limited (abbreviated to HUL), formerly Hindustan Lever
Limited, is INDIAs largest consumer products company and was formed in 1933 as
Lever Brothers India Limited. It is currently headquartered in Mumbai, India and
its 41,000 employees are headed by Harish Manwani, the non-executive chairman
of the board. HUL is the market leader in Indian products such as tea, soaps,
detergents, as its products have become daily household name in India. The
Anglo-Dutch company Unilever owns a majority stake in Hindustan Unilever
Limited.
The company was renamed in late June 2007 as "Hindustan Unilever Limited".
Some of its brands include Kwality Wall's ice cream, Lifebuoy, Lux, Breeze, Liril,
Rexona, Hamam, Moti soaps, Pureit Water Purifier, Lipton tea, Brooke Bond tea,
Bru Coffee, Pepsodent and Close Up toothpaste and brushes, and Surf, Rin and
Wheel laundry detergents, Kissan squashes and jams, Annapurna salt and atta,
Pond's talcs and creams, Vaseline lotions, Fair & Lovely creams, Lakme beauty
products, Clinic Plus, Clinic All Clear, Sunsilk and Dove shampoos, Vim dish wash,
Ala bleach and Domex disinfectant,Rexona,Modern Bread and Axe deospray.HUL
has produced many business leaders for corporate India. It is referred to as a ‘CEO
Factory' in the Indian press for the same reasons. It’s leadership building potential
was recognized when it was ranked 4th in the Hewiit Global Leadership Survey
2007 with only GE, P&G and Nokia ranking ahead of HUL in the ability to
produce leaders with such regularity
Today, HUL is one of India’s largest exporters of branded Fast Moving
Consumer Goods. It has been recognized by the Government of India as a Golden
SuperStarTradingHouse.
Over time HUL has developed into a viable & competitive sourcing base for
Unilever world wide in Home and Personal Care & Foods & Beverages category of
products. HUL is also a global marketing arm for select licensed Unilever brands
and also works on building categories with core country advantage such as
brandedbasmatirice.
HUL Exports offers high level of service with flexibility and responsiveness
thorough out the supply chain. It has a dedicated organization structure to
5
support this endeavor and this has helped in growth of these businesses in
particular. Intrinsic cost competitiveness in the end to end Supply chain with
appropriate technology and competitive capital investment operations while
delivering best in class quality enables HUL to position itself as a key sourcing hub
for Unilever and also become a preferred partner for Global customers in
categories we operate.
HUL’s key focus in the exports business is on two broad categories. It is a sourcing
base for Unilever brands in Home & Personal Care (HPC) and Food and Beverages
(F&B) for supplies to other Unilever companies. It also focuses on becoming a
preferred supplier to both non-Unilever and Unilever clients in three categories in
which India, as a country, has competitive advantage – Branded Rice, Marine
Products and Castor and its Derivatives. HUL enjoys international recognition
within Unilever and outside for its quality, reliability and speed of customer
service.
HUL's Exports geography comprises, at present, countries in Europe, Asia, Middle
East, Africa, Australia, and North America etc.
? HUL’s products touches two out of three Indian everyday
? Reach 80% Households
? Direct Coverage of 1mln outlets
? 2000 Suppliers and Associates
? 71 Manufacturing locations
? 15000 Employees
? 1100 managers
? Shelf availability 84% outlets in India
6
OBJECTIVES AND METHODOLOGY
OBJECTIVE
? Primary objective
? To find the past sale growth and demand analysis
? Secondary Objective
? Market structure analysis
? SWOT analysis
? Competitor analysis
? Performance evaluation
Methodology
In this project we have followed descriptive method of study.
Research instrument
Here project analysis is made by collecting secondary data from different
websites, journals, etc.
? Secondary data’s are pre published and research data’s collected from
different websites, journals, newspapers, company research papers.
? These documents and data’s are very useful for the theoretical, conceptual
and organizational background analysis.
? Detailed analysis of data’s is made by plotting different graphs and tables
which can be easily understandable.
? Then by observing these graphs we have made our conclusions and
recommendations.
7
PRODUCT LINE
A) HOME AND PERSONAL CARE:
1) Personal wash
Lux Breeze
Lifebuoy Dove
Liril Pears
Hamam Rexona
2) Laundry 3) Skin Care
Surf Excel Fair and lovely
Rin Pond’s
Wheel Aviance
4) Hair care 5) Oral care
Sunsilk naturals Pepsodent
Clinic Close up
6) Deodorants 7) Colour Cosmetics
Axe Lakme
Rexona
8) Ayurvedic Personal and health care: Ayush
B) FOODS
1) Tea 2) Coffee 3) Foods 4) Ice cream
Brooke Bond Brooke Bond Bru Kissan Kwality walls
Lipton Knor
Annapurna
C) WATER PURIFIER
Pureit
8
SWOT ANALYSIS
STRENGTH
? Variety of products
? Distribution Network
? Brand image
? Quality Management
? Innovation and R&D strength
THREATS
? From High Class Competitor
? Proctor & Gamble
? Pantene
? Dabur
? Babool
? Dabourlal Dent Manjan
? Reckitt Benckiser
? Dettol
? Palmolive
? Colgate, Nirma
OPPORTUNITIES
? Huge Market
? Increasing per capital income
? Increasing consumption pattern
? Potential for making more impact of brand image.
? Coming in technology e.g. in water purifiers
9
WEAKNESS
? Not able to compete with local competitor in the rural market
? Not focus on upper class population
? Pricing policy is not good
COMPETITORS ANALYSIS
According to the market survey done by BUSINESS TODAY the top 10 companies
of FMCG sector are given below.
1. Hindustan Unilever Ltd.
2. ITC (Indian Tobacco Company)
3. Nestlé India
4. GCMMF (AMUL)
5. Dabur India
6. Asian Paints (India)
7. Cadbury India
8. Britannia Industries
9. Procter & Gamble Hygiene and Health Care
10. Marico Industries
10
THE COMPARATIVE DATA OF % MARKET SHARE OF HUL AND ITS COMPETITOR
IN QUARTER ENDED JUN’08
(Above graph showing %age Market share of HUL and its competitor in different
categories of FMCG products)
As mentioned in the above graph, HUL is enjoying the leader position in the
market and is having highest market shares which are followed by the market
challengers like Dabur India Ltd, Nestle India Ltd, and ITC LTD, ETC…..In different
categories of FMCG products like shampoo, skincare , deo, jams, coffee, etc
In some category these market challengers are giving high level competition in
different product lines such as ketchup and toothpaste (As shown in the graph
below).
11
(Above graph showing the two category of products in which HUL percentage
market share is less than its competitor in Quarter ended JUN’08)
So we can see that in overall FMCG business HUL is distantly ahead of rest of the
companies as far as market share of different products are concerned.
12
In the above pie chart we see the position of various FMCG companies doing
business in India. We can see that HUL is enjoying the position of market leader
and is followed by ITC as close second in the market share of FMCG products.
PERFORMANCE ANALYSIS
13
Hindustan Unilever Ltd is one of the leading FMCG company in India which having
the following past financial records we have taken for the analysis as follows:
Table showing past 10 years financial data
DATA ANALYSIS:
900000
1000000
1100000
1200000
1300000
1400000
1500000
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Sales growth of last 10 years
sal es(Rs. Lakhs)
14
We have the sales and profit figures of HUL from the year 1998 to 2007 in the
10year past data from Yr1998-2007, after plotting two graph one of sales & other
of profit as shown in here we can see that both profit and sales of the company
rose from the year 1998 till 2001, but in the year 2002 we see that the sales fell
but there was actually rise in the profit of the company . In the year 2004 we see
that there was a steep fall in the profit of the company and from the year 2005
onwards there was a slow but steady rise in the profit of the company, but a rapid
rise in the sales of the company in the given years.
Reason for the steep fall in the profit of the company in the year 2004:-
? The FMCG market in Urban India was attaining the
saturation level and so companies had to expand its market in rural India.
This resulted in the downfall in the profit of HUL. There was very aggressive
advertising campaign by ITC in that year to set itself in the market this
affected HUL who was enjoying the position of market leader and resulted
in the fall in the profit of the company.
In the following graph we can see the percentage growth in FMCG sales of HUL
from March quarter ’07 to March quarter ’08.
15
(Graph showing the FMCG trend through last quarters)
FUTURE OPPORTUNITIES
India is a fast developing country with a huge population whose per capita income
is growing rapidly and there is huge opportunity for FMCG companies.
The opportunities are as follows:
? Increasing per capita income is driving FMCG growth in India
? India’s consuming class is growing rapidly
? Changing consumption pattern: Per capita income of Indian customer is
increasing and FMCG products are relatively elastic in nature hence the
expected sale should increase.
By the following three graphs(data collected from a research made by govt. of
INDIA) we can expect increase future demand of FMCG products, the graphs
16
showing the increasing percapita income, percapita disposable income and
population of India respectively are as follows:
(Above graph showing percapita income of INDIANS through out Yr2000-2008)
As shown in the above graph the percapita income of an INDIAN increased
throughout years, and if this trend will continue in future the people can purchase
more FMCG products.
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(Above graphs showing increased percapita disposable income from Yr2002-
2007)
(Above graph shows the past population and expected future population rise,
data are collected from the research made by govt. of INDIA)Here by the above
graphs we can see that there is huge scope for FMCG products and since HUL is
the market leader in India hence it can gain the most out of it.
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CATEGORY WISE SALE GROWTH OF FMCG SECTOR OF HUL IN INDIA:
CATEGORY %AGE
Soaps & Detergents 19.3
Personal Products 22.4
Ice Cream 15.7
Processed Foods 13.7
Beverages 13.6
Others 19.4
(Above graph shows the data of MAR’08 Quarter %growth of different products of
HUL)
FUTURE PROJECTS OF HUL:
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As competition is increasing day by day, it’s difficult to maintain the leader
position & to further strengthen the distribution network HUL made a project
called project SHAKTI which will serve the following purpose:
A) To Reach:
? Small, scattered settlements and poor infrastructure make
distribution difficult.
? Over 500,000 villages not reached directly by HUL.
B) To Communicate:
? Low literacy hampers effectiveness of print media.
? Poor media-reach: 500 million Indians lack TV & radio.
C) To Influence:
? Low category penetration, consumption.
C) Awareness:
? Per capita consumption in Unilever categories is 33% of urban
level.
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CONCLUSION
Hindustan Unilever ltd. Is a leading FMCG company in India and from last three
consecutive years has shown accelerated growth in FMCG portfolio. Customers in
India are also spending more in FMCG as their standard of living is growing. HUL
has placed itself successfully in the position of market leader in FMCG products.
Though there was some downfall in sales and profit of the company in the
beginning of this decade but after that HUL has shown considerable rise in both
sales and profit. The future of the company is also looking bright as FMCG market
in India is still expanding and so we can safely conclude that HUL will be able to
secure its number one position in FMCG product.
HUL has also started project SHAKTI that has provided it direct reach to rural
market. This may be considered a revolutionary step since the urban market is
reaching its saturation level and there is a huge scope exploring rural market. This
will also be helpful not only increasing its market share but also fight competition.
BIBLIOGRAPHY
21
In order to make this project we have taken the help of the following websites &
books:
? www.wikipedia.com
? www.oppapers.com
? www.hul.co.in
? www.scribd.com
Besides it various books are also consulted to prepare project report.
AUTHOR’S NAME BOOKS
Ashish Benerjee Principle of economics
H.L. Ahuja Modern Microeconomics
Theory and Application
C.K.Kothari Research Methodology
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SWOT Analysis
Strength
1. HUL is a part of the Unilever group, hence strong brand equity
2. It has over 15000 employees
3. Reach 6.4 million retail outlets which includes direct reach to over 1.5 million retail outlets
4. Two R&D centres in India in Mumbai and Bangalore
5. Products with presence in over 20 consumer categories with over 700 million Indian
consumers using its products
6. As a part of CSR, HUL has initiatives like project Shakti, plastic recycling, women
empowerment etc
Weakness
1. Market share is limited due to presence of other strong FMCG brands
2. HUL products has stiff competition from big domestic players and international brands
Opportunity
1. Tap rural markets and increase penetration in urban areas
2.Mergers and acquisitions to strengthen the brand
3.Increasing purchasing power of people thereby increasing demand
Threats
1. Intense and increasing competition amongst other FMCG companies
2.FDI in retail thereby allowing international brands
3. Competition from unbranded and local products
Competition
Competitors
1. Marico
2. L'Oréal
3. Nirma Ltd
4. ITC
5. Colgate-Palmolive
6. Procter and Gamble
7. Dabur
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