MINOR PROJECT ON MARKETING MIX OF NESTLE SUBMITTED IN PARTIAL FULLFILMENT OF THE AWARD OF THE DEGREE OF BACHELOR OF BUSINESS ADMINISTRATION

2010-13 UNDER THE GUIDANCE OF SUBMITTED BY:

Maharaja Agrasen Institute of Management Studies Affiliated to Guru Gobind Singh Indraprastha University, Delhi PSP Area, Plot No.1, Sector 22, Rohini, Delhi110086

CONTENTS

TABLE OF CONTENTS

PAGE NO.

Student Declaration....i Certificate from Guide...ii Acknowledgement.iii CHAPTER -1 INTRODUCTION CHAPTER -2 RESEARCH OBJECTIVES CHAPTER -3 RESEARCH METHODOLOGY CHAPTER -4 SECONDARY DATA CHAPTER -5 FINDINGS AND ANALYSIS CHAPTER -6 SUGGESTIONS CHAPTER -7 LIMITATION BIBLIOGRAPHY

STUDENT UNDERTAKING This is to certify that I have completed the Minor Project titled To Study the Marketing mix of NESTLE India under the guidance of TEACHRES NAME in partial fulfillment of the requirement for the degree of Bachelor of Business Administration at Maharaja Agrasen Institute of Management Studies, Delhi. This is an original piece of work and I have not submitted it earlier elsewhere.

Name of the Student

CERTIFICATE Maharaja Agrasen Institute of Management Studies Affiliated to Guru Gobind Singh Indraprastha University, Delhi PSP Area, Plot No.1, Sector 22, Rohini, Delhi-110086

This is to certify that the minor project titled To Study the Marketing mix of NESTLE India is an academic work done By students name submitted in the partial fulfillment of the requirement for the degree of Bachelor of Business Administration at Maharaja Agrasen Institute of Management Studies, Delhi, under my guidance and direction. To the best of my knowledge and belief the data and information presented by her in the project has not been submitted earlier.

Name of the Faculty Guide

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ACKNOWLEDGEMENT The satisfaction and euphoria that accompany the successful completion of any task is incomplete without the mention of people who made it possible. So I take this as a great opportunity to pen down a few lines about the people to whom my acknowledgement is due. It is with the deepest sense of gratitude that I wish to place on record my sincere thanks to teacher , my project guide for providing me inspiration, encouragement, guidance, help and valuable suggestions throughout the project. I would also like to thank all my respondent for giving me their valuable time and information.

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CHAPTER 1 INTRODUCTION

Fig 1.1 Logo of Dabur India 1.1 Introduction of Dabur India Limited The evolution of Dabur is quite interesting and its root takes us back to the 19th century where it all started in Bengal by a visionary by name Dr. S.K Burman, a physician by profession. His mission was to provide effective and affordable cure for ordinary people in far-flung villages. With missionary zeal and fervour, Dr. Burman undertook the task of preparing natural cures for the killer diseases of those days, like cholera, malaria and plague. Soon the news of his medicines travelled, and he came to be known as the trusted 'Daktar' or Doctor who came up with effective cures. And that is how his venture Dabur got its name - derived from the Devanagri rendition of Daktar Burman. Dabur India Limited is the fourth largest Company in India with interests in Health Care, Personal Care and Food Products. The name is formed by joining the first half of Daktar and Burman. Dabur India Ltd. is the co-owner of the IPL team Kings XI Punjab. Some of the features of Dabur India Ltd are: Largest Herbal & Natural Portfolio 4000 Distributors in India Retail Reach 2,500,000 5 Umbrella Brands 350+ products 4000 employees 15 Manufacturing Plants

1.1.1 Dabur India Ltd: Company Profile

The company was founded by Dr. S. K. Burman in 1884 as a small pharmacy in Calcutta (now Kolkata), West Bengal, India, and is now led by his great-grandson V.C. Burman. Vatika Hair Oil and Shampoo are the high growth brand. The company, through Dabur Pharma Ltd. does toxicology tests and markets ayurvedic medicines in a scientific manner. The company has been around as a corporate entity for the past 35 years having been brought to life in 1975. It is most famous for Dabur Chyawanprash and Hajmola. Dabur operates in more than 5 countries and distributes its products worldwide. The market penetration of Dabur is of about 1.5 million retail outlets all over India with 47 C& F agents and more than 5000 distributors. 17 ultra-modern manufacturing units spread around the globe. Products are marketed in over 60 countries.Wide and deep market penetration with 50 C&F agents, more than 5000 distributors and over 2.8 million retail outlets all over India. Dabur has 13 ultra-modern manufacturing units. Brand Dabur - In the 125th anniversary of its founding, as brand Dabur, the management has gone ballistic through its annual report, over its achievements. But the comparative dates for the purpose of rating its achievements are between the base year 2000 and the latest completed accounting year. The company has been around as a corporate entity for the past 35 years having been brought to life in 1975. It may not be out of place to mention here that the company really got wings after the promoter management put in place a very professional set up, which largely included the exit of the family members from active management. Largest home spun FMGC company - Dabur ltd is today anointed as India's largest home spun FMCG Company. Its only other visible challenger to this crown, Nirma, lost the plot years ago. In between the expansion of its product portfolio, and the launch of new manufacturing capacities both within and without the country, Dabur has expanded its presence across 60 countries, with 19 manufacturing plants to boot. (However, if the international business division could crank up a turnover of only Rs 6 bn, then the company must be quite stretched, figuratively speaking, as its footprint extends to 60 countries around the globe. And, somehow, the group earned forex of only Rs 1.2 bn). The company is also busy acquiring brands to rapidly build up both size and competence. It acquired the Balsara brand in FY06 and the Fem Care brand 9

in FY10. So far so good. Product line - Its current sizeable brand portfolio extends from Real juices, to Dabur Chyavanprash, Dabur Honey and Glucose D, the Vatika, Uveda and Amla range, the toothpaste brands Babool, Meswak and Dabur Red, and, Hajmola, Odomos, Gulabari, and, several over the counter healthcare products. These products are grouped under 3 strategic business units. The business units being, the Consumer Care Division, International Business Division, and, the Consumer Health Division. The three divisions currently account for 68%, 17.6%, and 8% respectively, of consolidated revenues. But for purposes of segmental results, the company has grouped its operations under 4 heads. The operations are clubbed under Consumer Care, Consumer Health, Foods, and others. Why it chooses to adopt so many convoluted routes to reveal its true colors is difficult to comprehend. The HUL saga - This frenetic pace of growth reminds one of a similar mindset that enveloped the FMCG industry top gun, Hindustan Unilever, especially when it was operating under the wings of Susim Mukul Datta and then Keki Dadiseth. The latter went on record to state that the company was in the market to acquire brands. Today HUL is in the market, and for the second time at that, buying back its shares in the open market, in a desperate attempt to prop up its share price! One is not making any inferences here, but merely making a point. Its sales dissected - For sure, the group's consolidated sales have clocked the highest percentile growth for the decade in FY10. Total revenues excluding other income growing 43% over that of the preceding year to Rs 34.2 bn. The sales push has been driven by growth in manufacturing, in traded sales, the value addition from its 11 subsidiaries, and in the contribution of its brand (Fem Care Pharmacy) acquired during the year. The subsidiaries collectively rang up sales of Rs 8.4 bn, but after deducting the inter-se transactions with the parent; their contribution to overall revenue was Rs 5.4 bn or 16% of total revenues. But the profit margins generated by the subsidiaries did not keep pace though. The subsidiaries are a colorful bunchin the manner of their spread of operations that is. The most interesting revelation is that Dabur ltd has operations emanating out of Pakistan (which along with its operations in Nepal is disclosed as 'operations in neighboring countries' in the directors' report). 10

Dabur ltd must rank as one of the few listed Indian companies brave enough to do so, and win the approval of the two governments to do so too. This subsidiary is called Asian Consumer care (Pak) Pvt. Ltd. But this operation accounts for nothing really, ringing in sales of Rs 181 m and recording a loss before tax of Rs 23 m. It even makes a tax provision on this book loss, so the loss after provision of tax is 28 m. A few of the other subsidiaries also appear to making tax provisions on book losses. The subsidiaries - Collectively, its biggest operations are out of the UAE, where it has three entities flogging brand Dabur ltd. These three together also account for close to 50% of total sales generated by all the subsidiaries. But just one of the three, Dabur International, brings home the bacon with the other two having their bottom-line seeped in red ink. Individually, it is the Nepalese subsidiary which contributes the most, at 33% of all sales, but it does not make a dime for its troubles. The only other company of significance is Dabur Egypt ringing in 10% of all subsidiary sales and contributing healthily to profits too. The operations based out of the UK and the USA is an embarrassment to say the least, and they appear to be around only for cosmetic purposes, and merely to add to the number of units in operation. All the subsidiaries barring H&B Stores appear to be under the umbrella control of Dabur International. The parent has grand plans for H&B Stores, the retail wing, but for the present, it is a gonner, what with losses exceeding its turnover. This company will most definitely be sucking up a lot of money before it turns operationally profitable. However, cumulatively its international operations have been a grand success going by the accumulated profits of Rs 598 m that the subsidiaries have generated to date. Reviving up for action - It is in the domestic sector that the company is really revving up for action. It is expanding manufacturing capacity at a fast clip. So much so that the fixed asset to turnover ratio is showing signs of strain on the one hand, and on the other, the market for what it produces is not able to grow fast enough to cater to the expanded facilities. The company also sees sufficient value in outsourcing finished goods and then flogging it to customers. So much so that the re-sale of bought out goods contributed to 17% of overall standalone sales, or Rs 4.9 bn in rupee terms. It also brought in a gross margin of Rs 972 m or a percentile return of 20%. The 5 items of traded goods that are bought out and sold are also produced in house, and then 11

flogged in the markets. The biggest revenue earner is a Fruits, Nectars and drinks, closely followed by an item called 'Others'. The most perplexing part of manufactured sales (as is in traded sales) is that the biggest contributor to income is an item called 'Others' with revenues of Rs 8 bn. No capacities or production details of this omnibus item is available in the annual report. (In the segmental results tabulation, the 'Others' category has revenues of only Rs 827 m and brings in very low margins. It probably does not make any money at the net level.) But of the 8 other items that are shown as being produced, the top dog is Hair Oils, ringing in sales of Rs 5.7 bn, followed by toothpaste with sales of Rs 4 bn. Next in line is Chyawanprash with sales of Rs 2.2 bn. All these 8 items have added substantially to capacity and hence the average utilization of capacity ranges from a high of 81% In the case of honey to a low of 25% for vegetable pastes. The capacity utilization of the three biggies averaged between 33% and 42%. A tightly run ship - In spite of the frantic expansion of capacities and seeking greater market share, the company is a very tightly run ship alright. Though its investments in its subsidiaries bring no dividend returns (it also makes do without any royalties), and its expansion of gross block is yet to bloom, the company was able to manage its working capital fund flow most admirably. With borrowings under strict control, interest costs are also minimized. It is also one of the few companies that I have studied which rolls large sums in the secondary markets and turns a large profit on the purchase / sale of securities. 1.1.2 Dabur At-a-Glance Dabur India Limited has marked its presence with significant achievements and today commands a market leadership status. Our story of success is based on dedication to nature, corporate and process hygiene, dynamic leadership and commitment to our partners and stakeholders. The results of our policies and initiatives speak for themselves. Some of the results are : Leading consumer goods company in India with a turnover of Rs. 2834.11 Crore. 3 major Strategic Business Units (SBU) Consumer Care Division (CCD), Consumer Health Division (CHD) and 12

 International Business Division (IBD) 3 Subsidiary Group companies

Dabur International, Fem Care Pharma and newu and 8 step down subsidiaries: Dabur Nepal Pvt Ltd (Nepal), Dabur Egypt Ltd (Egypt), Asian Consumer Care (Bangladesh), Asian Consumer Care (Pakistan), African Consumer Care (Nigeria), Naturelle LLC (Ras Al Khaimah-UAE), Weikfield International (UAE) and Jaquline Inc. (USA). 17 ultra-modern manufacturing units spread around the globe. Products marketed in over 60 countries. Wide and deep market penetration with 50 C&F agents, more than 5000 distributors and over 2.8 million retail outlets all over India. Dabur has 13 ultra-modern manufacturing units. In 2006, Dabur won the ICSI (Institute of Chartered Secretaries of India) National Award for excellence in Corporate Governance. 1.1.3 History Journey so far . . . 1884 The birth of Dabur 1972 The company shifts base to Delhi from Kolkata 1986 Registered as Public Limited Company 1994 1998 2000 2003 2004 2006 2007 2008 2009 2010 Listed on the Bombay Stock Exchange Professional team inducted to run the company Crosses Rs 1000 Crore Turnover Pharmaceutical Business de-merged to focus on core FMCG Profit exceeds Rs.100 Crore Acquires Balara strengthening Oral care & provided entry into Home care segment Dabur Figures in Top 10 Great Places To Work Dabur ranked among 'Asia's best under a Billion' enterprises by Forbes Acquired Fem Care Pharma entering the mainstream Skin care segment Strong growth momentum continued in spite of general economic downturn

1.1.4 Founding thoughts "What is that life worth which cannot bring comfort to others"

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The Doorstep 'Daktar' - The story of Dabur began with a small, but visionary endeavour by Dr. S. K. Burman, a physician tucked away in Bengal. His mission was to provide effective and affordable cure for ordinary people in far-flung villages. With missionary zeal and fervour, Dr. Burman undertook the task of preparing natural cures for the killer diseases of those days, like cholera, malaria and plague.Soon the news of his medicines traveled, and he came to be known as the trusted 'Daktar' or Doctor who came up with effective cures. And that is how his venture Dabur got its name - derived from the Devanagri rendition of Daktar Burman. Dr. Burman set up Dabur in 1884 to produce and dispense Ayurvedic medicines. Reaching out to a wide mass of people who had no access to proper treatment. Dr. S. K. Burman's commitment and ceaseless efforts resulted in the company growing from a fledgling medicine manufacturer in a small Calcutta house, to a household name that at once evokes trust and reliability.

1.1.5 Dabur group With a basket including personal care, health care and food products, Dabur India Limited has set up subsidiary Group Companies across the world that can manage its businesses more efficiently. Given the vast range of products, sourcing, production and marketing have been divested to the group companies that conduct their operations independently:

Fig 1.2 Dabur all over the world

1.1.6 Vision "Dedicated to the health and well being of every household" Principles:

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Ownership - This is our company. We accept personal responsibility, and accountability to meet business needs. Passion for Winning - We all are leaders in our area of responsibility, with a deep commitment to deliver results. We are determined to be the best at doing what matters most.

People Development- People are our most important asset. We add value through result driven training, and we encourage & reward excellence. Consumer Focus - We have superior understanding of consumer needs and develop products to fulfill them better. Team Work - We work together on the principle of mutual trust & transparency in a boundary-less organisation. We are intellectually honest in advocating proposals, including recognizing risks.

Innovation - Continuous innovation in products & processes is the basis of our success. Integrity - We are committed to the achievement of business success with integrity. We are honest with consumers, with business partners and with each other. 1.1.7 Top 3 brands of Dabur India Ltd:

Sno 1

Brands Dabur Amla Oil

Turnover 300 crores (approx.)

Market Share 70 %

Major Competitors Maricos Shanti Amla, Bajaj Bramhi Amla

Dabur Vatika - (Dabur Vatika Oil) (Dabur Vatika Shampoo)

110 crores

6.4 %

Marico, Keo Karpin, HUL, Bajaj

120 crores

6.8 %

HUL, P&G

Dabur Real Juice

200 crores

56.9 %

Pepsi Tropicana, Godrej Xs, NDDB Safal, Parle Appy

1.1.8 Daburs Brand New Architecture

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(Umbrella Brand for Juice & Other foods Aimed at up Market consumer)

(Naughty & tasty digestive)

(Mass market, value for money)

( Herbal beauty premium image)

( Health care products)

1.1.9 AWARDS & ACHIEVEMENTS (2008-09)

Dabur India Ltd placed in the

Dabur ranked 28th in ET-

NDTV profit Business Leadership awards 2008

List of 20 Stocks you must Brand Equity Most Trusted own, for FMCG Prepared by Brands 2009 list Forbes India Fig 1.3 Achievements 1.1.10 STRATEGIC BUSINESS UNITS

Dabur India Ltd. is mainly divided into 3 major strategic business units as under: 16

Consumer Care Division Consumer Health Division International Business Division

Following is the share of each division in the market:-

CONSUMER CARE DIVISION (CCD) CCD addresses consumer needs across the entire FMCG spectrum through four distinct business portfolios of Personal Care, Health Care, Home Care & Foods. Master brands: Dabur - Ayurvedic healthcare products Vatika - Premium hair care Hajmola - Tasty digestives Real - Fruit juices & beverages Fem - Fairness bleaches & skin care products

Fig 1.4 9 Billion- Rupee brands: Dabur Amla, Dabur Chyawanprash, Vatika, Real, Dabur Red Toothpaste, Dabur Lal Dant Manjan, Babool, Hajmola and Dabur Honey. Market Size-33 Billion Dabur Brands- 5.6 Billion

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Fig 1.6 Dabur Amla Hair Oil witnessed one of the strongest years reporting 20.4% growth during the year driven by on ground activations and marketing support. Vatika Hair Oil had a resurgent year with a growth of 12.2% during 2008 backed by a brand re-launch, new packaging and communication. Anmol Coconut Oil recorded a growth of 42.2% for 2008 with gains in key markets. Dabur Mustard Amla Hair oil grew at 22.7% followed by re-staging under the Dabur brand. Strategic positioning of Honey as food product, leading to market leadership (over 75%) in branded honey market. Some of the achievements till date: Dabur Chyawanprash the largest selling Ayurvedic medicine with over 65% market share. Vatika Shampoo has been the fastest selling shampoo brand in India for three years in a row. Hajmola tablets in command with 60% market share of digestive tablets category. About 2.5 crore Hajmola tablets are consumed in India every day. Leader in herbal digestives with 90% market share.

SHAMPOOS Market Size - 21 Billion Dabur Brands - 1.3 Billion

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Fig1.7 Shampoos continued its strong performance recording 31.5% growth for 2008. Vatika continues to be fastest growing shampoo brand in the country with volume growth of 37.5% for 2008 vs. 14.4% for the category as per AC Neilson April-March, 2008 update. The Vatika range gained market share which went up to 6.8% vs. 5.7% in the previous year. DIGESTIVES Market Size-5 Billion Dabur Brands- 1.5 Billion

Fig 1.8 The Digestives category witnessed a growth of 11.8% during 2008 resulting from an excellent growth of 31% witnessed in 2009. New variants and innovative consumer activations added to the momentum. Pudin Hara brand has been shifted to CHD for increased focus on distribution through chemists 2009 onwards. FOODS Market Size-5 Billion Dabur Brands- 2.5 Billion 19

Fig1.9 Foods category growth of 14.4% for 2010. Brand growth in 2010 Real Fruit Juices: 14.9 Homemade: 19.6% Real franchise growing at a healthy rate with Ad campaigns establishing its superiority over competition. Active Brand received a boost with the No Added Sugar campaign.

CONSUMER HEALTH DIVISION (CHD) CHD offers a range of classical Ayurvedic medicines and Ayurvedic OTC products that deliver the age-old benefits of Ayurveda in modern ready-to-use formats. Has more than 300 products sold through prescriptions as well as over the counter. Major categories in traditional formulations include: Asav Arishtas Ras Rasayanas Churnas Medicated Oils Proprietary Ayurvedic medicines developed by Fig 1.10

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 Dabur include: - Nature Care -Isabgol -Madhuvaani - Trifgol Division also works for promotion of Ayurveda through organised community of traditional practitioners and developing fresh batches of students. CHD STRUCTURE OTC (57%), Generics, Branded Products, ETHICAL (43%), Tonics, Classical, Branded Ethical

Fig 1.11 CHD registered strong 19% growth during 2010 Investments in brand building and new OTC launch driving growth Janma Ghunti, Hingoli, Sat Isabgol & Gripe Water transferred to CHD from CCD for greater focus.

INTERNATIONAL BUSINESS DIVISION (IBD) IBD caters to the health and personal care needs of customers across different international markets, spanning the Middle East, North & West Africa, EU and the US with its brands Dabur & Vatika. Growing at a CAGR of 33% in the last 6 years and contributes to about 20% of total sales. Leveraging the 'Natural' preference among local consumers to increase share in personal care categories

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 Focus markets: GCC, Egypt, Nigeria, Bangladesh, Nepal, US High level of localization of manufacturing and sales & marketing. Fig 1.12

DABUR AYURVEDIC PRODUCTS Dabur India Limited is the fourth largest FMCG (fast moving consumer goods) Company in India with interests in Health care, Personal care and Food products. Building on a legacy of quality and experience for over 100 years. Dabur's Ayurvedic Specialities Division has over 260 medicines for treating a range of ailments and body condition from common cold to chronic paralysis.

Fig 1.13

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1.1.11 DABUR WORLDWIDE

Fig 1.14 Dabur's mission of popularising a natural lifestyle transcends national boundaries. Today, there is growing global awareness on alternative medicine, nature-based and holistic lifestyles and an interest in herbal products. Dabur has been in the forefront of popularising this alternative way of life, marketing its products in more than 60 countries all over the world. Over the years, Dabur's overseas business has successfully transformed from being a small operation into a multi-location business spreading through the Middle East, North Africa, West Africa and South Asia. 1.1.12 Our Products Worldwide We have spread ourselves wide and deep to be close to our overseas consumers. Our overseas product portfolio is tailor-made to suit the needs and aspirations of our growing consumer base in the international markets. Offices and representatives in Europe, UK, America and Africa 23

AA special herbal health care and personal care range successfully selling in markets ranging from the Middle East, Far East, North Africa and Europe Inroads into several European and American markets that have good potential due to resurgence of the back-to-nature movement. Export of Active Pharmaceutical Ingredients (APIs), manufactured under strict international quality benchmarks to Europe, Latin America, Africa, and other Asian Countries.

Export of food and textile grade natural gums, extracted from traditional plant sources.

Partnerships & Production Strategic partnerships with leading multinational food and health care companies to introduce innovations in products and services. Six modern manufacturing facilities spread across South Asia, Middle East and Africa to optimise production by utilising local resources and the most modern technology available. Strategic Indent We intend to significantly accelerate profitable growth. To do this, we will: Focus on growing our core brands across categories, reaching out to new geographies, within and outside India, and improve operational efficiencies by leveraging technology. Be the preferred company to meet the health and personal grooming needs of our target consumers with safe, efficacious, natural solutions by synthesizing deep knowledge of ayurvedic and herbs with modern science. Provide our consumers with innovative products within easy reach. Build a platform to enable Dabur to become a global ayurvedic leader. Be a professionally managed employer of choice, attracting, developing and retaining quality personnel. Be responsible citizens with a commitment to environmental protection. Provide superior returns, relative to our peer group, to our shareholders.

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1.1.13 BRAND REJUVENATION With youth forming a major population of India, Dabur decided to revamp its brand identity. Dabur associated itself with Amitabh Bachchan, Vivek Oberoi, Rani Mukherjee and Virender Sehwag for endorsements. New packaging and advertising campaign saw the sales of Chyawanprash grow by 8.5 % in 2003-04.The year 2004-05 saw a whole new brand identity of Dabur. The old Banyan tree was replaced with a new, fresh Banyan tree.

(THE OLD LOGO) Fig 1.16

(THE NEW LOGO - YOUNGER LOOKING BANYAN TREE)

The logo was changed to a tree with a younger look. The leaves suggesting growth, energy and rejuvenation, twin colors reflecting perfect combination of stability and freshness, the trunk represented three people raising their hands in joy, the broad trunk symbolized stability, multiple branches were chosen to convey growth, and warmth and energy were displayed through the soft orange color. Celebrating Life was chosen as a new tag that completely summarized the whole essence. The Chairman in his annual report message said, If I were to summarize your Companys performance during the year under review (2004-2005), it would be Pursuit of Profitable Growth.

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1.1.14 DABUR AND MARKETING MIX - Marketing Mix

Fig 1.17 PRODUCT The product is the physical good or service offered to the consumer. The product is the most visible element of the marketing mix. When a firm introduces a number of products over time gradually, its offerings become many. That is, the firm becomes a multi product firm.Dabur's diverse product range is today manufactured in 9 manufacturing facilities within India and 5 other worldwide. Dabur's Ayurvedic Specialties Division has over 260 medicines for treating a range of ailments and body conditions-from common cold to chronic paralysis. Over the past two years, 26

Dabur's product portfolio has been systematically overhauled through re-launches and brand extensions, even as fresh forays have been made into new categories such as hair, skin care and home care. Recently two new products, disinfectant cleaner and kitchen cleaner under Dazzle brand. All these launches of new kinds of products will help the company to capture the potential market arising from the growing needs of the fast expanding market, especially the aspiring and affluent Indian household categories. Dabur has a variety of products in key consumer products categories like Hair Care, Oral Care, Health Care, Skin Care, and Home Care & Foods. PRICE: As Dabur had different sub-categories, it came out with variable pricing to reach out to each and every target segment. (E.g. One- litre bottle of Real (juice) was priced at Rs.50) Selective Price Reduction to increase Demand (E.g. Dabur came out with Rs.1 sachet of Vatika Shampoo/ Amla Hair Oil to increase market share). Cutting Price to stand out against competition (E.g. Dabur joined the shampoo price war in Aug 2004 and slashed prices of its Vatika shampoo.) PLACE: Dabur constantly kept on increasing its geographic spread to increase its sales revenues Entered the South Indian Market Expanding in the International Market, Presence in over 50 countries. Subsidiaries established in Nepal, Nigeria, Bangladesh and Pakistan Focus areas: Asia Pacific, Middle East, West Africa, and North Africa, US PROMOTION: Different brands have their own marketing and advertising team Dabur utilized the popularity of Indian films in the domestic and global markets to promote its brands. In order to further deepen the brand's penetration in the rural pockets, the company also announced the launch of special low-priced packs. Dabur heavily advertised its products through various contests Dabur Amla Sunder aur Susheel pratiyogita Dabur Amla 'Banke Dikhao Rani'- In an attempt to give better exposure to rural women, 'Dabur Amla' is going to conduct 'Rural Beauty Pageant' across 52 distritcts in Madhya Pradesh, Uttar Pradesh and Bihar, covering 2,000 villages. Dabur Gulabari Miss U.P. Fresh Face 2009 beauty contest. 27

 POSITIONING: Dabur through its diversified brands has tapped various target segments like the: Youth Health Conscious People School Children Mothers Existing Old age group

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Fig 1.18 1.2 Introduction of Hindustan Unilever Limited (HUL) Hindustan Unilever Limited also called Hindustan Lever Limited (HLL) was established in 1933 as Lever Brothers India Limited. Hindustan Lever Limited (HLL) is India's largest Fast Moving Consumer Goods Company, with a customer base of 2 out of every 3 Indian in the category of Home & Personal Care Products and Foods & Beverages. The company has combined volumes of about 4 million tonnes and sales of Rs.10, 000 crores. The Company has more than 400 brands spanning 14 categories of home, 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. It operates in various business segments. Soaps and Detergents include soaps, detergent bars, detergent powders, detergent liquids and scourers. Personal Products include products in the categories of oral care, skin care, hair care, deodorants, talcum powder, color cosmetics and Ayush services. Beverages include tea and coffee. Foods include branded staples, (atta and salt), culinary products (tomato-based products, fruit-based products and soups). Ice Creams include ice creams and frozen desserts. Others include chemicals and water business. They endow the company with a scale of combined volumes of about 4 million tonnes and sales of Rs.13,718 crores. The mission that inspires HUL's over 15,000 employees is to "add vitality to life". With 35 Power Brands, HUL meets every day needs for nutrition, hygiene, and personal care with brands that help people feel good, look good and get more out of life. It is a mission HUL shares with its parent company, HUL, which holds 52.10% of the equity. A Fortune 500 transnational, HUL sells Foods and Home and Personal Care brands in about 100 countries worldwide. Hindustan Unilever Ltd. (Bombay Stock Exchange: 500696) makes fast-moving consumer goods (FMCG) such as detergents, toiletries, and food staples. The company has a distribution channel of 6.3 million outlets and 30 major Indian brands. HUL recorded 20.02 year over year (yoy) growth in revenue at Rs 16660.38 crores during the year ended Dec'08. Its Soaps and Detergents business was its largest contributor to revenues with 46% of total revenues where as Personal Care products contributed the most 29

(46%) towards EBIT (Earnings before Income Tax). Increase in per capita income in urban, as well as rural areas, of India has a positive effect on demand of consumer goods along with a shift in demand towards high end lifestyle products. Long a provider of low cost consumer goods, HUL has recently launched products in its high end segments. 1.2.1 Company Profile HUL, the largest FMCG Company in India by revenues was formed by merging three subsidiaries of Unilever in 1956. At present, Unilever Plc holds a 51.6% stake in the company. HULs portfolio of products covers a wide spectrum including soaps, detergents, skin creams, shampoos, toothpastes, tea, coffee and branded flour. HUL's brands, spread across 20 distinct consumer categories. It owns 35 major Indian brands. HUL has consistently had the most number of brands in the Top 10 list for the most trusted brands in India from 2004 to 2010. Surf Excel, Pepsodent and Ponds in Home and Personal Care segment and Lipton, Kissan and Brooke Bond in Foods and Beverages Segment are some of its top brands. It launched Ponds Age Miracle,Vaseline range of products in skin care category and Axe-Dark Temptation in personal care segment as part of their expansion into higher end products. It was formed in 1933 as Lever Brothers India Limited and came into being in 1956 as Hindustan Lever Limited through a merger of Lever Brothers, Hindustan Vanaspati Mfg. Co. Ltd. and United Traders Ltd.. It is headquartered in Mumbai, India and has an employee strength of over 15,000 employees and contributes for indirect employment of over 52,000 people. The company was renamed in late June 2007 to 'Hindustan Unilever Limited'. HUL distribution covers over 1 million retails outlets across India directly and its products are available in over 6.3 million outlets in India, i.e. nearly 80% of the retail outlets in India. It has 39 factories in the country. The Anglo-Dutch company Unilever owns a majority stake (52%) in Hindustan Unilever Limited. HUL was one of the eight Indian companies to be featured on the Forbes list of World's Most Reputed companies in 2007. It has been recognized as a Golden Super Star Trading House by the Government of India. Hindustan Lever Limited (HLL) is India's largest Fast Moving Consumer Goods Company, with a customer base of 2 out of every 3 Indian in the category of Home & Personal Care Products and Foods & Beverages. The company has combined volumes of about 4 million tonnes and sales of Rs.10, 000 crores. The Company has more than 400 brands spanning 14 categories of home, with leadership in Home & Personal Care Products and Foods & Beverages. The company has a distribution channel of 6.3 million outlets and 30 major Indian brands. It was formed in 1933 as Lever Brothers India Limited and came into 30

being in 1956 as Hindustan Lever Limited through a merger of Lever Brothers, Hindustan Vanaspati Mfg. Co. Ltd. and United Traders Ltd. It is headquartered in Mumbai, India and has an employee strength of over 15,000 employees and contributes for indirect employment of over 52,000 people. In 2001, the company embarked on an ambitious programme, Shakti. Through Shakti, HUL is creating micro-enterprise opportunities for rural women, thereby improving their livelihood and the standard of living in rural communities. HUL is also running a rural health programme, Lifebuoy Swasthya Chetana. The programme endeavors to induce adoption of hygienic practices among rural Indians and aims to bring down the incidence of diarrhea. Hindustan Unilever Ltd. is spread all over India at different places shown below:

Fig 1.19

1.2.2 Products and Brands of Hindustan Unilever Ltd 31

 Food: HUL is one of Indias leading food companies. Our passion for understanding what people want and need from their food - and what they love about it - makes our brands a popular choice.

Fig 1.20 Brooke Bond 3 Roses - Playful banter, a little mischief, serious conversationtheres no time for young couples like the time spent sharing a cup of 3 Roses. Annapurna - Partnering with the mom in nurturing her dreams, Annapurna Atta is aimed at helping her provide wholesome tasty nutrition to her family. Red Label - Brooke Bond Red Label 'Chuskiyaan Zindagi ki' Brooke Bond Taaza - Brooke Bond Taaza lifts me and unshackles my mind, allowing me to see and realize possibilities. Taj Mahal - Brooke Bond Taj Mahal is an exclusive selection of teas for the discerning consumer. Bru - Bru se hoti hain khushiyaan shuru

Kissan - With Kissan, good food is loved not shoved!

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 Knorr - Knorr helps families make meal times special, nutritious, tasty and healthy. Kwality Walls - A good honest scoop of daily pleasure Lipton - Lipton has a range of vitality teas that truly encompass the goodness of tea. Home Care Brands HUL has a diverse portfolio of brands offering home care solutions for millions of consumers across India.

Fig 1.21 Active Wheel - Active Wheel de "Mehnat se Aazadi" Freedom from painful & tiring laundry Cif- Cif- the best cleaner to let you shine. Comfort - The worlds largest fabric conditioner brand. Domex - The sheer power of Domex bleach gives you the confidence you need, eradicating all known germs. Rin - Rin provides best in class whiteness which is demonstrable. Sunlight - Sunlight is a color care brand Surf Excel - Giving your kids the freedom to get dirty and experience life, safe in the knowledge that Surf Excel will remove those stains.

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Vim - Created in 1885, the Vim brand is still innovating and using the magic of natural ingredients to create unbeatable results.

Personal care brands Our personal care brands, including Axe, Dove, Lux, Pond's, Rexona and Sunsilk, are recognised and love by consumers across India. They help consumers to look good and feel good and in turn get more out of life.

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Fig 1.22 Aviance - Aviance enables women actualize their unique potential through expert customized beauty solutions. Axe - Axe with Best Quality Fragrance Lever Ayush Therapy - LEVER Ayush aims to help a new generation of Indians rediscover everyday health and vitality through customized Ayurvedic solutions. Breeze - Breeze, with the goodness of glycerin gives soft, fragrant and smooth skin. Clear - New Clear with Essential Oils, guarantees Zero dandruff and leaves your hair feeling fabulous. Clinic Plus - Clinic Plus makes hair inside strong, outside long! Close up - Freshness that brings you Closer Dove - Dove stands for real beauty. All around the world, Dove is making real women feel more beautiful! Fair & Lovely - More than 30 years ago, a unique brand was born. Wrapped within a humble lavender tube, it went on to become the Worlds No.1 Fairness cream. Hamam - Holistic skin care experiences perfected over the ages to deliver healthy, beautiful skin Lakme - Lakme is an ally to the Indian Woman and inspires her to express her unique beauty and sensuality. Thus, enabling her to realize the potency of her beauty Lifebuoy - Lifebuoy is available in multiple variants in soaps and specialist formats such as liquid hand wash, catering to the entire family. Liril 2000 - Presenting nature's best kept secret-Tea tree oil, known for protection from germs. Liril 2000 now with Tea tree oil gives you touchable clean skin. Now, you can come close and stay closer Lux For soft and smooth skin! 35

Pears Pears, the purest and most gentle way to skincare! Pepsodent - Pepsodent India is committed to improve the overall Oral health of Indians. Ponds - Get the expert to look after your skin Rexona - Rexona gives you 24 hr protection from sweat and body odour and therefore the confidence to handle whatever the day has in store. Sunsilk - Sunsilk has had a re-style! Vaseline - Your skin is amazing. It deserves to be treated as such.

1.2.3 Water Brand Pureit Fig 1.23

Pureit is the worlds most advanced in-home water purifier. Pureit, a breakthrough offering of Hindustan Unilever (HUL), provides complete protection from all water-borne diseases, unmatched convenience and affordability. Pureits unique Germ kill Battery technology kills all harmful viruses and bacteria and removes parasites and pesticide impurities, giving you water that is "as safe as boiled water". It assures your family 100% protection from all water-borne diseases like jaundice, diarrhea, typhoid and cholera. Whats more, it doesnt need gas, electricity or continuous tap water supply. Pureit not only renders water micro-biologically safe, but also makes the water clear, odourless and good-tasting. Pureit does not leave any residual chlorine in the output water. The output water from Pureit meets stringent criteria for microbiologically safe drinking water, from one of the toughest regulatory agencies in the USA, EPA (Environmental Protection Agency). The performance of Pureit has also been tested by leading scientific and medical institutions in India and abroad. This patented technological breakthrough has been 36

developed by HUL. This state-of the art engineering developed by a team of over 100 Indian and international experts from HUL and Unilever Research Centres has made Pureit possible at the consumer price of just Rs. 2000. Pureit runs with a unique Germ kill Battery Kit' that typically lasts for 1500 litres of water. The Germ kill Battery Kit' is priced at Rs.365. This means consumers will get 4 litres of water that is as safe as boiled water for just one rupee, which works out to an extremely affordable 24 paise per litre. Pureit in-home purification system uses a 4 stage purification process to deliver as safe as boiled water without the use of electricity and pressurized tap water. Pureit purifies the input drinking water in some stages, namely: 1. Micro - fiber Mesh - Removes visible dirt 2. Compact Carbon Trap - removes remaining dirt, harmful parasites & pesticide impurities 3. Germ kill Processor uses programmed chlorine release chlorine technology and its stored germ kill process targets and kills harmful virus and bacteria. 4. Polisher removes residual chlorine and all disinfectant by-products, giving clear odourless and great tasting water 5. Battery Life Indicator - Ensures total safety because when the germ kill power is exhausted, the indicator turns red, warning you to replace the battery 6. Advanced Auto-Switch off - In case, the battery is not changed when it turns fully red, as an additional assurance of safety, the advanced Auto-Switch off will automatically switch-off the flow of water. 1.2.4 ORGANIZATION CULTURE Mission HUL's mission is adding Vitality to life. We meet everyday needs for nutrition, hygiene, and personal care with brands that help people feel good, look good and get more out of life. Corporate Purpose Our deep roots in local cultures and markets around the world give us our strong relationship with consumers and are the foundation for our future growth. We will bring our wealth of knowledge and international expertise to the service of local consumers - a truly multi-local multinational. Our long-term success requires a total commitment to exceptional standards of performance and productivity, to working together effectively, and to a willingness to embrace new ideas 37

and learn continuously. To succeed also requires, we believe, the highest standards of corporate behavior towards everyone we work with, the communities we touch, and the environment on which we have an impact. Codes of Business Principles HUL has earned a reputation for conducting its business with integrity and with respect for the interests of those their activities can affect. This reputation is an asset, just as real as their people and brands. HULs first priority is to be a successful business and that means investing for growth and balancing short term and long term interests. It also means caring about their consumers, employees and shareholders, their business partners and the world in which they live. Standard of Conduct HUL conducts their operation with honesty, integrity and openness, and with respect for the human rights and interests of their employees. They similarly respect the legitimate interests of those with whom they have relationships. Obeying the Law HUL companies and their employees are required to comply with the laws and regulations of the countries in which they operate. Employees HUL is committed to diversity in a working environment where there is mutual trust and respect and where everyone feels responsible for the performance and reputation of their company. They recruit, employ and promote employees on the sole basis of the qualifications and abilities needed for the work to be performed. They are committed to safe and healthy working conditions for all employees. They do not use any form of forced, compulsory or child labor. They are committed to working with employees to develop and enhance each individual's skills and capabilities. They respect the dignity of the individual and the right of employees to freedom of association. They maintain good communications with employees through company based information and consultation procedures. Consumers HUL is committed to providing branded products and services which consistently offer value in terms of price and quality, and which are safe for their intended use. Products and services are accurately and properly labeled, advertised and communicated. 38

 Shareholders HUL conducts its operations in accordance with internationally accepted principles of good corporate governance. They provide timely, regular and reliable information on their activities, structure, financial situation and performance to all shareholders. Business Partners HUL is committed to establishing mutually beneficial relations with their suppliers, customers and business partners. In their business dealings they expect their business partners to adhere to business principles consistent with their own. Community Involvement HUL strives to be a trusted corporate citizen and, as an integral part of society, to fulfill their responsibilities to the societies and communities in which they operate.

Public Activities HUL companies are encouraged to promote and defend their legitimate business interests. HUL co-operates with governments and other organizations, both directly and through bodies such as trade associations, in the development of proposed legislation and other regulations which may affect legitimate business interests. HUL neither supports political parties nor contributes to the funds of groups whose activities are calculated to promote party interests. The Environment HUL is committed to making continuous improvements in the management of their environmental impact and to the longer-term goal of developing a sustainable business. HUL will work in partnership with others to promote environmental care, increase understanding of environmental issues and disseminate good practice. Innovation In their scientific innovation to meet consumer needs they respect the concerns of their consumers and of society. HUL works on the basis of sound science applying rigorous standards of product safety. Competition

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HUL believes in vigorous yet fair competition and supports the development of appropriate competition laws. HUL companies and employees will conduct their operations in accordance with the principles of fair competition and all applicable regulations. Business Integrity HUL does not give or receive whether directly or indirectly bribes or other improper advantages for business or financial gain. No employee may offer give or receive any gift or payment which is, or may be construed as being, a bribe. Any demand for, or offer of, a bribe are rejected immediately and reported to management. HUL accounting records and supporting documents are accurately described and reflect the nature of the underlying transactions. No undisclosed or unrecorded account, fund or asset are established or maintained. Conflicts of Interests All HUL employees are expected to avoid personal activities and financial interests which could conflict with their responsibilities to the company. HUL employees must not seek gain growth, creating long- term value for our shareholders, our people, and our business partners. for themselves or others through misuse of their positions. This is our road to sustainable, profitable

1.2.5 BUSINESS SEGMENTS Soaps and Detergents: This segment includes Laundry and Personal Wash products like soaps, detergent bars, detergent powders, detergent liquids, scourers, etc. Personal Care Products: This business which comprises mainly skin care, hair care and oral care is the most profitable segment for HUL. Beverages: HUL's beverages business is operated through the Brooke Bond and Lipton brands for packet tea and Bru brand for coffee. With the aggressive relaunch of Brooke Bond, Taj Mahal and Taaza, the company has been able to arrest the decline in its market share. Foods: In spite of having one of the best distribution networks (coverage of 6.3 mn outlets) in the country, the food business has never constituted a big part of revenues. Thats why this is the current focus area for the company. Presence in the foods category is mainly through soup mix, Chinese meal maker, jams, ketchups and salts. HUL is clearly keeping a

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low profile in the staples category, which is low margin business. Foods margin dipped partly due to launch related costs for Amaze brain foods. Ice Cream: This segment includes include Ice Creams and Frozen Desserts. Kwality Wall's, launched in 1995, is the company's master brand for ice cream. It has launched Moo brand that boosts childrens calcium levels. Exports: Exports include sales of Marine Products, Castor, etc. as well as sales of soaps and detergents, personal products, beverages and foods etc. by the Exports Division. Exports are the lowest-margin business for the company. It has already exited the lowmargin shrimps and castor business. Others: This section includes Chemicals, Water purifiers, Agri seeds, Property Development, Water business, Ayush services etc.

1.2.6 Market Share of Hindustan Unilever Ltd. Brands PARTICULARS FABRIC WASH PERSONAL WASH DISH WASH SKIN SHAMPOO TALCUM POWDER PACKET TEA COFFEE JAMS TOOTHPASTE KETCHUP Fig 1.24 KEY BRANDS Surf Excel, Wheel Dove, Lux ,Lifebuoy Ponds Sunsilk , Clinic Plus Red label Bru Pepsodent , Close up 41 MARKET SHARE (in cr.) 8988 6632 2792 2168 4452 708 2764 MARKET SHARE 37.5% 54.3% 57.3% 54.5% 47.8% 59.7% 22.7% 44.0% 67.5% 29.5% 28.1% RANK 1 1 1 1 1 1 1 1 1 2 2

1.2.7 Hindustan Unilever Ltd. Market Segmentation Market place for any product is comprised of many different segments of consumers, each with different needs and wants. Markets segmentation can be defined in a number of ways such as: Demographic variables (e.g. Consumers are groups, gender, material states income etc), the lifestyle of consumers (i.e. their interests and activities) the benefits which consumers look for in a product or on the occasions when the product might be consumed. Hindustan Unilever (Ltd) takes into account all these factors when producing a range of products. It targets different segments within the market, such as the: Break segment - products which are normally consumed as a snatched break and often with tea and coffee. Impulse segment - these products are often purchase on impulse, used these and then. They include product such as close up. Take home segment this describes product that are normally purchased in supermarkets, taken home consumed at a later stage. 1.2.8 MARKETING MIX PRODUCT Satisfaction suffices. But delight dazzles the average company will compete for customer by conforming to her expectation consistently. But the winner will surpass them by constantly exceeding her expectation, delivering to her door step additional benefits which she would never have imagined possible. Hindustan Unilever Ltd (HUL) offers such product. The wide variety products offered by the company include: Bathing soaps: Laundry items: Skin care: Hair care: Oral care: Deodorants: Colour cosmetics: Ayurvedic: Tea: Lux, Lifebuoy, Liril, Hamam, Breeze, Dove, Pears and Rexona Surf Excel, Rin and Wheel Fair & Lovely, Pond's and Vaseline Sunsilk and Clinic Pepsodent and Close up Axe and Rexona Lakme Ayush Brooke Bond and Lipton 42

Coffee: Foods: Ice cream: Fig 1.25 PRICING

Bru Kissan, Annapurna and Knorr Kwality Wall's

Make no mistake. Second P of marketing is not another name for blindly lowering prices and relying on this strategy alone to increase sales dramatically. The strategy used by Hindustan Unilever Ltd (HUL) is for matching the value that customer pays to buy the product with the expectation they have about what the production is worth to them. Hindustan Unilever Ltd(HUL) has launched various products which cater to all customer segments.So every customer segmenthas different price expectation from the product. Therefore maximizing the returns involves identifying right price level for each segment, and then progressively moving through them. PLACE Hindustan Unilever Ltd (HUL) distribution network has expanded. Beside use of improved logistics, Hindustan Unilever Ltd (HUL) is also attempting to improve the distribution quality. To address the issue of product stability, it has installed visi colors at several outlets. This helps in maintaining consumption in summer when sales usually drops due to the fact that the heal effects product quality and thereby off takes. Hindustan Unilever Ltd (HUL) distribution network has expanded. Beside use of improved logistics, Hindustan Unilever Ltd (HUL) is also attempting to improve the distribution quality. To address the issue of product stability, it has installed visi colors at several outlets. This helps in maintaining consumption in summer when sales usually drops due to the fact that the heal effects product quality and thereby off takes. PROMOTION If an advertisement is to communicate effectively, the receiver must at least half want it to, and be prepared to take step toward the sender. Effective advertising is rarely hectoring or loudly explicit. It often both attracts and generates arm feelings. More often than not, a successful campaign has a stronger element of the unexpected a quality that good advertising shares with much worthwhile literature. POSITIONING

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Positioning is simply concentrating on an idea or even a word defines that company in the mind of the consumer. It is more efficient to market one successful concept to one large group of people than 50 product or service ideas to 50 separate group repositioning is a must when customer attitude have changed and product have strayed away from the consumer's long standing perception of them. Positioning of individual product: 1) Lifebuoy is one of Unilever's oldest brands with more than a hundred-year history. Lifebuoy has become more than just a red bar of soap today the brand provides hygiene and health solutions for families. 2) Fair & Lovely, a hot-selling fairness cream which promises a lighter skin tone for many of India's complexion-conscious consumers.

CHAPTER 2: METHODOLOGY

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2.1 RESEARCH DESIGN 2.1.1 RESEARCH METHODOLOGY Achieving accuracy in any research requires a deep study regarding the subject. As the prime objective of the project is to compare Dabur India with the existing competitor Hindustan Unilever in the market. The research methodology adopted is basically based on secondary data. 2.1.2 TYPE OF RESEARCH METHODLOGY EXPLORATORY: Type of research carried out was exploratory in nature; the objective of such research is to compare the products of Dabur India vs Hindustan Unilever and check the need, availability of different products in the market. For this purpose the information proved useful for giving right s 2.1.3 DATA COLLECTION METHOD SECONDARY DATA: Secondary data refers to the data that has been already collected. Secondary data is data that has already been collected and collated by somebody for some reason other than the current study. It can be used to get a new perspective on the current study, to supplement or compare the work or to use parts of it, as another study may prove costly and time consuming. The secondary data, which has been used to carry out this study, are as follow: Books, newspapers Companys internet site Other relevant studies material and websites. 45

2.1.4 METHOD OF COLLECTION: Analysis is done for gathering secondary data included internet search, using online resources to gather data for research purposes. This method is not usually very reliable and requires appropriate citation and critical analysis for findings. News papers and other similar periodicals are also used.

CHAPTER 3 FINDINGS AND ANALYSIS

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3.1 COMPARISON OF DABUR INDIA LTD. vs. HINDUSTAN UNILEVER LTD. DABUR INDIA LTD. PRODUCT LINE A) HOME AND PERSONAL CARE: 1) Personal wash, Herbal and medicated soaps, 2) Skin care, Gulabari rose, cold cream, Dabur Lal Tel, Uveda, Fem 4) Hair care, Anmol Coconut Oil, Dabur Amla Oil, Vatika Hair Oil, Vatika Shampoos 5) Oral care, Dabur Babool, Dabur Meswak, Dabur Red toothpaste 6) Ayurvedic and Health care, Glucose, Honey, Chyawanprash, 7) Homecare, Odomos, Odonil, Sanifresh B) FOODS 1) Real juice, 2) Hajmola, 3) Homemade, 4) Activ, 5) Burrst, 6) Pudin hara, HINDUSTAN UNILEVER LTD. PRODUCT LINE A) HOME AND PERSONAL CARE: 1) Personal wash, Lux, Breeze, Lifebuoy, Dove, Liril, Pears, Rexona 2) Skin Care, Surf Excel, Fair and lovely, Rin, Ponds, Wheel, Aviance 4) Hair care 5) Oral care, Sunsilk naturals, Pepsodent, Clinic, Close up 6) Deodrants, Colour, Cosmetics, Axe, Lakme, Rexona 8) Ayurvedic, Personal and health care B) FOODS 1) Tea 2) Coffee 3) Foods 4) Ice cream 5) Brooke Bond 6) Brooke Bond Bru 47

7) Janam ghunti, 8) Honey

7) Kissan 8) Kwality walls 9) Lipton 10) Knor 11) Annapurna C) WATER PURIFIER 1) Pureit

Fig 1.28 3.2 Dabur, HUL to stir up milk beverage market- Foods sector: Dabur India, which launched its milk beverage mix brand Chyawan Junior four months ago, is planning a national-level rollout for it by September. According to the company, Chyawan Junior received good response in Maharashtra and West Bengal, where it is being test-marketed. It has already gained 1 per cent market share in these states. Another company to foray into this market is fast-moving consumer goods heavyweight Hindustan Unilever with its Kissan Amaze brain food range, which is a milk beverage mix product, biscuits and snacks. The company is test-marketing its product in Tamil Nadu and Karnataka. The Rs 1,500-crore milk beverage mix market is dominated by Glaxo Smith Consumers Horlicks and Boost, Cadburys Bournvita and Heinz Complan. The two new entrants HUL and Dabur - however, have unique propositions. They will differentiate themselves through new formulations such as the promise of boosting childrens intelligence. K K Rajesh, executive vice-president Dabur India, said: The USP of Chyawan Junior is that it is an ayurveda-based malted food drink. It contains herbs which improve immunity and stamina, while preventing cough and cold. It also contains vital herbal ingredients required for a healthy-living. Amaze offers a nutritious option to the mothers who find it difficult to feed their children with vitamin-rich foods. It is an alternative to unhealthy snacks which children tend to get attracted, said Siddhartha Singh, category head, processed foods, HUL. Experts said in the childrens food category the target consumer is a child but the buying decision is often made by the mother. Hence, it is important to connect both the child and the mother. Hence, Dabur may promote its product with the chocolate taste, which kids crave for, and the goodness of Chyawanprash, which parents desire. GSK Consumer, On the other hand, has decided to target the mother with its Horlicks-variant for women named Women Horlicks. This makes it difficult for 48

HUL and Dabur to break into the market. However, it would be crucial for both the companies to succeed in this space as both claim to have invested heavily in the research and development. While Hindustan Unilever Ltd has witnessed the highest loss in market share, Procter & Gamble gained the most among the top ten companies which include, apart from them, Godrej Consumer Products, Nestle, Marico, ITC, Dabur, Colgate, Britannia, and LOreal. Analysts said Daburs shampoo brands have eaten into HULs spoils, while ITC gained in toilet soaps. HUL continued to lose market share in all categories except coffee. In noodles, Nestle remains top of the heap with the ubiquitous Maggie offerings. HUL and GlaxoSmithKline Consumer are yet to launch their noodle brands nationally, though they have rolled it out in various pockets. The recent price cuts in the detergents segment by HUL and P&G means consumers are paying less for their products, an analyst with another domestic brokerage said. HUL has reduced toilet soap prices, Marico has cut hair oil prices and Dabur has gone for discounting (through free sachets and more quantity). Sales in the personal care category, therefore, has been impacted, the analyst said. As a result, in January-February, the FMCG industry saw a sales growth of 10.5% year on year compared to 12% in calendar 2010. The top 10 players have grown by 5% in the period compared with 7.2% in 2010. A Dabur spokesperson said the companys skincare business (Gulabari) was growing at 40% annually, while shampoo and hair oil categories were showing growths of 30% and 15%, respectively. 3.3 Dabur vs. HUL: Which FMCG co performed better? Dabur, the segments of consumer care and health have seen growth upwards of 20% or 15%. HULs segments havent done so well because the personal product segment group is just 2% in this quarter. For mid-tier companies like Dabur with a lower base, and a lower scale of operations, it is a bit easier to adjust to the market, to adjust to the dynamics of the FMCG sector. With HUL having to cater to a larger scale, there would generally be a lag effect in the kind of performance they report. Hindustan Unilevers (HUL) numbers that came in yesterday saw a muted topline at 5%. The margin expansion was higher than the expected 320 basis points. The profit growth for the company was also much higher than expected. The topline performance has been a disappointment. However, there is better than expected performance on the bottomline and the margin front. There is an alarm bell kind of a situation where one be tempted to change their strategy to boost volumes. Mr. Harish Manwani, said that the company was not looking at any change in strategy in terms of volume growth. He said they continued to focus on value, and on 49

their pricing and improving their margins. We will not give way to margins to boost volumes. That is the kind of strategy HUL is essentially looking at, he said. Dabur, the segments of consumer care and health have seen growth upwards of 20% or 15%. HULs segments havent done so well because the personal product segment group is just 2% in this quarter. For mid-tier companies like Dabur with a lower base, and a lower scale of operations, it is a bit easier to adjust to the market, to adjust to the dynamics of the FMCG sector. With HUL having to cater to a larger scale, there would generally be a lag effect in the kind of performance they report.

3.4 HUL continues to suffer from poor sales and profit growth Despite endless restructuring of its business portfolios and continuous high-profile change of its top management, Hindustan Unilever is unable to generate any traction on its sales and profits. For the September quarter, HULs revenues were up by 4% while operating profit was completely flat. Compare this with the performance of Dabur India whose revenues were up by 15% while Emami Groups sales were up by 27%. HULs revenue growth has been stagnant for many quarters now. Over the past three quarters, average top line growth has ranged between 4%-6% which does not even cover inflation. Revenue growth has been continuously declining from a high of 20% it recorded in September 2008. The recent September quarter has been especially good for fastmoving consumer goods (FMCG) companies mainly because raw material prices were sharply down in that quarter. For instance, Emamis raw material cost was down by 35% and even Godrej Consumer Products Limiteds (GCPLs) raw material cost was down by 15%. Both these companies took advantage of lower cost of raw materials and steady demand for their products. Emamis operating profit was up by as much as 65%. On the other hand, even though HULs raw material cost was down by 9%, it had no profit growth. Daburs raw material cost has gone up by 3% and yet it has reported a sales growth of 15% compared to the same quarter last year. What is remarkable about HUL is that it had to spend 41% more on advertising compared to same quarter last year to get only a 4% growth in turnover. Another key issue with HUL is that it would maintain its high operating profit margin (39% in September 09) rather than creating growth in sales and operating profit. Interestingly, Dabur also enjoys an OPM of 36% which is as high as HUL but Dabur is able to increase its operating profit and revenues virtually every quarter. In the

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September quarter Daburs operating profit jumped by 21% compared to the same quarter last year.

3.5 DATA ANALYSIS & INTERPRETATION

Fig 1.29 Amit Burman, vice chairman of Dabur India said the company is investing in brand building and advertising plans to promote its Fem Care and Gulabari range in FY 10. We are in the process of integrating our acquired brand Fem Care with our personal care range. Our core strategy is to promote our Fem care and Gulabari brands this year, he added. On the subject of growth, Sandeep Kaul, chief executive, personal care products business, ITC, said, We are in the process of developing new categories as well as new products in existing categories. Consumer insight based innovation will be the key fulcrum driving our consumer engagement strategy, explained Kaul. 51

ITC personal care products include Fiama Di Wills, Vivel range of hair care products and soaps and Superia. According to Kaul, ITC will invest in all aspects of brand building to promote personal care brands. Given the portfolio, marketing to consumers in rural markets as well as urban markets is a key strategy driver, he said. Meanwhile, Hindustan Unilever Ltd (HUL) is promoting its flagship brands in shampoos and skin care products. To do so HUL has recently launched a high-voltage television campaign to promote its new shampoo variant Clear. Created by Lowe India, the television campaign

3.6 Dabur Ltd takes on Hindustan Unilever, Production & Growth: In a bid to expand its shampoo brand Vatika, especially in the anti-dandruff category, fast moving consumer goods (FMCG) company Dabur India has upped the ante by introducing new variants with specific benefits. The move will put the company in the same league as other big-ticket multinational players in the market, such as Hindustan Unilever (HUL) and P&G, which already offer different variants of their anti-dandruff shampoo brands. Competition is tightening between local and global players in the Rs 4500 crore branded oral care sector. Even as Hindustan Unilever Ltd (HUL) is drawing up strategic plans to drive the performances of its oral care brands in 2009, Dabur India Ltd is expanding its manufacturing capacity and distribution network to pump up volumes. Colgate-Palmolive India is sharpening its focus on consumer promotions and brand building. Indian oral care majors are pumping in a breath of freshness in marketing strategies. Despite the economic recession, this sector is expected to clock in 20% growth in 2009," said an analyst based in Mumbai. Currently, Colgate-Palmolive leads the pack with a 52% volume market share and HULs share stands at 28% by value. On the companys strategy, Sunil Duggal, chief executive officer of Dabur India Ltd said, We are expanding the manufacturing capacity at our plant in Himachal Pradesh and are installing new machines there. Also, we are extending our distribution network to target wider audience. Incidentally, Dabur is gearing up to launch a new variant of its flagship brand Babool in August this year. We are investing in all our brands to woo consumers. To announce the new variant, we will be launching a new ad campaign next month, he added. On the other side of the spectrum, HUL has recently re-launched its brand Pepsodent Germi check plus with new formulations. In the branded oral category, Close-Up performed very well led by its re-launch last year. Pepsodent 52

underperformed and appropriate actions are being taken to drive the performance of the brand in 2010. As part of its cause-related marketing strategy, Colgate-Palmolive has just launched an aggressive consumer promotion learn and earn across the country. To participate in this promotion, consumers have to learn the five simple oral care tips which are mentioned on the 200 gm and 100 gm packs of Colgate dental cream. Last week, ColgatePalmolive reported its net sales for the quarter ended June 30, 2009 at Rs 468 crore, an increase of 15% over the same period of the previous year. During the quarter ended June 30, 2009, the company continued to support its brand and equity building activities with advertising and sales promotion expenditure at Rs. 58.3 crore, said a company spokesperson. With diverse marketing strategies, dental care majors are now fighting tooth and nail to gain market share in the overcrowded category. Powerful brands: HUL has a presence in all categories in the FMCG sector, something no other company can boast about. It is the market leader or holds the 2nd podium in almost all segments it operates in like personal care, household care, beverages, foods and ice creams. HUL at one time had a brand portfolio in the range of 110 brands. It then planned to prune its brand portfolio to 35, known as 'Power Brands. It has extremely strong brands like Lux, Surf excel, Lifebuoy, Closeup, Bru, Axe etc across its business segments. Thus, with such strong franchises, HUL offers one of the best exposures to increasing consumption trends in India. These 35 key brands accounted for around 100% of its profits and have always been the main growth drivers in their respective segments and will continue in the future. Further, the parent's portfolio has many other renowned brands, which have not yet come to India and will launch them at the appropriate time. Consequently, its product portfolio across price points is a key strategic advantage for HUL. It is the only consumer company in India that is as well geared to serve the entrylevel customers, as it is to serve the top end of the market. Markets reach: HUL's distribution network is a benchmark for its peers, given its penetration levels. 70% of India's population lives in 638,000 villages, creating a huge market for FMCG companies. HUL has set up a strong and efficient distribution network, which includes 6.3 m retail outlets and 2,700 stockiest. The markets reach spans across 50,000 cities and villages, the largest amongst its competitors. It reaches 80% of the households. Further, HUL is set to benefit from the expansion of the modern retail on account of its strong portfolio across price points. Though currently modern trade channels 53

account only for 5% of total market, HUL expects it to touch 10% by 2011 and 15% by 2015. In fact, HULs Modern Trade (MT) shares are higher than its General Trade (GT) shares in many categories. The companys presence across all channel of distribution right from family grocer to rural to modern trade makes it a strong player as increased penetration and reach plays a very important role. Restructuring and new segments: HUL in recent times has been restructuring its business. It is exiting from the non-core businesses to concentrate on its main portfolio. It sold off its non-store home delivery retail business Sangam to Wadhwan Foods, as it was not coming up to the expectations. It even merged Modern Food Industries (MFIL), a 100% subsidiary of the company with itself. With strong brand equity and a countrywide distribution network, Modern Food would provide strong synergies with the foods business. Strong balance sheet: HUL is one of the better-placed companies on this front as a study of its historical financial gearing reveals that the companys debt to equity ratio has always remained well below alarming levels. Such a long period of prudent capital structure lends comfort with regards to the companys future leverage ratios 3.7 CATEGORY WISE SALE GROWTH OF FMCG SECTOR OF HUL IN INDIA:

CATEGORY Soaps & Detergents Personal Products Ice Cream Processed Foods Beverages Others Fig 1.31

%AGE 19.3 22.4 15.7 13.7 13.6 19.4 Source: www.google.com

54

Below is a table representing the growth in products of Dabur in different divisions: DIFFERENT DIVISIONS Consumer Care Division Hair Care GROWTH (%) 17.2 22.0 Hair oils recorded a growth of 15.2%, led by Anmol Coconut Oil (grew 34.8%) and Dabur Amla Oil (grew 13.5%). Vatika Hair Oil registered 15.7% growth; Shampoo category performed well, boosted by Vatika Shampoos (47% growth). Daburs brands have gained further share in the normal shampoo category, with a market share (value) of 7.3%. Dabur Red grew 16.7%, Meswak grew 23.4% and Babool toothpaste grew 15%.. Overall, the toothpaste portfolio grew 15%. Launched Babool Mint Fresh in August, entering the Gel segment at economy pricing. Glucose grew its strongest at 55.6% and Honey grew 15%. Chyawanprash sales were moderate at 12.4% during the quarter. Hajmola, including tablets and candies, grew 14.8%. New variants, along with aggressive touch point activations launch of 50 paisa SKU and new positioning has led to this growth. Gulabari Rose water grew 33.7% and Gulabari Cold cream grew 71.3%. Dabur Lal Tel grew 3.9%. The new Gulabari face freshener continues to do well. The new Uveda range was test-marketed in Delhi & Maharashtra. Odomos grew 22.8%. Odonil declined marginally, Odopic grew 23.5%, Sanifresh reported 25% growth. Odomos sales grew 23%. Growth largely led by juices and culinary range. Real Juices grew 21%, Hommade registered a strong growth of 40.2%. Activ Brand continues to focus on No Added Sugar campaign. Test marketing of Burrst completed. 55 COMMENTS

Oral Care

6.6

Health Supplements

20.6

Digestives

12.6

Skin Care

42.7

Home Care

8.3

Foods Division

22.7

Consumer Health Division

15.1

International Business Division

38.2

OTC portfolio grew by 14.8% and Ethicals by 15.6%. Pudin Hara grew 28.3%. Pudin Hara, Janam Ghunti, Hingoli, Satisabgol & Gripe Water transferred to CHD from CCD, for greater focus posted robust growth of 22.5%. Growth was across all focus and potential markets, led by Egypt (47.9%), Bangladesh (80%), Nepal local sales (45%), GCC (40%) and Bangladesh (40%). The key categories accelerating the divisions growth are Hair Creams, Toothpastes, Hair oils and conditioners.

Fig 1.32 3.8 Business Overview of Dabur India

Fig 1.33 Healthcare Segment

Healthcare segment is one of the major revenue contributors for Dabur India Ltd. Brands such as Chyavanprash, Hajmola, Pudin Hara, Hingoli, Janam Gutti, Lal Tail, and Madhuvanni fall under this stable. For the 250 Crore-chavanprash markets, the company is facing tough competition from Zandu, Hamdard and Baidyanath. However, as per org data the market for chavanprash is expected to double in a couple of years.Chyavanprash sales stood stagnant during the previous year contributing to 10% of the total revenue. In the pediatric segment the company has products like Janam Gutti, Lal Tel gripe waters, and Madhuvanni cough syrup. DIL has also introduced a new 56

product namely, Nasarel for the treatment of Endometeriosis for use in assisted reproduction. Overall, the segment recorded a growth of 12%. Hair Care Segment DIL is a major player in the hair oil segment with extended brand equity in Vatika. The range of products includes Dabur Amla, Dabur Special, Vatika, Vatika Shampoo, the newly introduced Vatika anti- dandruff shampoo and Vatika Heena Cream Conditioning Shampoo. Dabur Amla enjoys a 28% market share in the perfumed oil market. The total sales of the segment for the year ended march 2000 were 218 cr. The segment grew by 16 % during the year. The company has undertaken the repositioning of Dabur Amla hair oil and Dabur Vatika Oil. The hair oil segment contributes 21% to the companys turnover as on 31st March 2000. In the hair Care segment the company is poised to have a strong growth of 10% predominantly on account of strong brand image. Oral Care Segment Seeing the future market move, DIL has purchased the BINACA brand for Rs.3 cr. The move was on account of the company-identifying shift in market preferences. The total sales for the segment were 116 cr. with a marginal growth of 3%. The company views the growth through the Binaca brand. DIL is also repositioning the lal dant manjan in shrink sleeves wrap. We expect the segmental growth to be around 5% henceforth. Pharmaceuticals segment Dabur has around 300 ayurvedic medicines sold through ayurvedic practitioners. The company has 80% market share in this segment. All the products are outside the purview of the DPCO. The division grew by 20% during the year. The company is majorly into Oncology and branded Formulations. The company launched Topotel (Topotecan), the first camptothecin derivative for ovarian and lung cancer in India and Amiphos (Amiphostin) for various anti-cancer regiments in India. DIL is only the second in the world to manufacture anti-cancer drugs Paclitaxel and Docetaxel acquired from Pfizer in 1996. The company has established a subsidiary in UK namely Axol Labs, for manufacture of generic oncology products. However, global acceptance is a major sensitivity factor. Other Segments fruit juices, Other segments include food products division, which has beer restructured into a 100% subsidiary company. The division has brands like Honey, Lemoneez lemon Juice, Real 57

Hommade pastas and sauces. The subsidiary netted a loss of 11.55 cr on sales of 29.67 cr. This was on account of stiff competition faced by the company and wafer thin margins on trading goods. The company however has a strong nationwide distribution network. The skin care division with brands like Gulabari and Samara also grew by 19% during the year. The company has entered into a 50:50 JV with Bongrain of France for manufacture and marketing of Cheese and speciality dairy products. The brands launched by the company include Delicieux and Le Bon.

Company Restructuring With lack of growth coming in, company realized the need for corporate restructuring. The initiative undertaken looks to be very positive. Some of the measures initiated are: -Dabur, being a closely held company, was initially a family run organization. However, subsequent to restructuring, the day-to-day management is under professional management and the promoters undertake only the strategic management decisions. The company has decided on higher investment on Brand building rather than on product building. This fact is evident from the sale of GDC Ltd. and Excelcia Foods Ltd. The company has also entered into JV with Bongrain under the same initiative. The company has discontinued the merchant exports, herbal intermediaries and Generic pharmaceuticals business.With an effect to stress upon core competence the company has decided to put off plans for foray into the newly opened Insurance sector for which it had entered into a JV with Allstate of Finland. The promoters hold 70% of the paid up capital of the company. Hence, to increase the liquidity of the stock in the market the company has introduced a stock split of 1/10th at Re.1/- per share paid up. 3.9 Research

Dabur's main asset is its knowledge base and the backup of research initiatives through modern science. Dabur deals mainly with traditional Ayurvedic products. We take care to conduct rigorous trials and authentication of processes so that our consumers get the best. Dabur Research Foundation (DRF), set up in 1979 as an independent research organisation, spearheads the R&D activity of the 58

Company. DRF is well equipped with the most modern research facilities and more than 125 highly qualified scientists from diverse fields like Ayurvedic doctors, chemists and phyto chemists, botanists, agronomists, clinical pharmacologists, microbiologists, food technologists, bio-technologists, oil technologists, oncologists, and so on. We have been involved in developing products for consumer applications as well as highly specialized areas of genomics, proteomics and bio-informatics. Through the ceaseless quest of our scientists in frontier areas, Dabur has been able to mark a presence even in critical aspects of health care like cancer therapy. Our Research Areas Dabur Research Foundation is not only limited to conducting tests and trials, but carries out research in over 10 diverse areas: Ayurvedic Research - relating traditional knowledge with modern science Pharmaceutical Research - developing and testing drugs Phytopharmaceuticals - getting better resources from nature Biotechnology - scientific techniques for preservation Agronomy -- scientific regeneration and propagation Personal Care Products - developing natural solutions Analytical - studying and testing active chemicals Synthetic Chemistry - developing new molecules and intermediates Oncology Research and Molecular Biology - researching new anti-cancer remedies New Drug & Peptide Research - developing new drugs and delivery systems

Food Research - developing healthy and natural foods Clinical Research - studies and tests for total safety of drugs. Recent initiatives made by DABUR . Following its plans, Dabur made significant changes in the time period 2002-2007. HR Initiaves The culture at Dabur gives full autonomy to its employees. Various training and development programs like Young Manager Development Program, Prayas, Leading and Facilitating 59

Performance, Campus to Corpora and a Balanced scorecard approach to performance evaluation, helps employees realize their potential. Recently, Dabur has adopted an innovative HR program of offering ESOPs to new engineering and management trainees at the time of joining. Also in 2005, Dabur gave Bonus to its employees after 12 years. This boosted the employee morale further. Dabur was listed as a Great Place to Work, in a survey conducted by Grow Talent & Company and Great Place to Work Institute, USA. Dabur was listed as the 10th Great Place to Work. The results were published in Business World dated February 2006.

IT initiatives Dabur installed centralized SAPERP system from 1st April 2006 for all business units. It also implemented a country wide new WAN Infrastructure for running centralized ERP system. Further it set up new Data Center at KCO Head Office. Supply chain Initiatives Dabur Ltd. has undertaken e-procurement in a big way. In 2003-04 Dabur India procured Rs.210 crore of raw materials through e-sourcing or almost 50 per cent of total raw material expenditure and in the process, considerably controlled raw material costs which were on a rise. For better production and operation management, Dabur included automation, debottlenecking, Kaizen and wastage control. It set up production units in locations providing tax holidays to reduce cost and improve efficiency. Conservation of Energy Dabur has been undertaking a host of energy conservation measures. Successful implementation of various energy conservation projects have resulted in a 13.8% reduction in the Companys energy bill in the 2008-09 fiscal alone. The host of measures, key among them being use of bio-fuels in boilers, generation of biogas and installation of energy efficient equipment helped lower the cost of production, besides reduce effluent and improve hygiene conditions & productivity. Health Safety & Environmental Renewing the commitment to Health Safety and Environment, Dabur has formulated a policy focusing on People, Technology and Facilities. A dedicated Safety Management Team has also been put in place to work towards the prevention of untoward incidents at the corporate and unit level, besides educate & motivate employees on various aspects of Health, Safety and 60

Environment. The Company is also continuously monitoring its waste in adherence with the pollution control norms. In pursuance of its commitment towards the society, efforts have also been initiated to conserve and maintain the ground water level. The efforts include implementation of rainwater harvesting, which has delivered encouraging results and has put the company on the path to becoming a Water-Positive Corporation.

3.10 Market Share of HUL Products As mentioned above, 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 the below 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.

Fig1.34

61

3.11 BCG MATRIX HINDUSTAN UNILEVER LTD Soap & Detergent and Tea are Cash Cow for the company. It has high relative market share and low growth rate. Personal Products and Coffee are stars for the company as it have high relative market share as well as high market growth rate. Only food is a segment which is a Question Mark for the company. The company have a low relative market share where as it is under high market growth rate. HUL is taking several steps to capture more market share so that food segment can also be a part of Star. 3.12 OVERVIEW The Company is the largest FMCG player and market leader in most of the product category. The Company has registered a robust growth rate over last few years and has wide market coverage. HUL believe in product innovation and entrance into niche market. Recently company has launch Pureit, a water purifier, received a good response from the market. The company has a good growth rate.

3.13 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. Nestl 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 3.14 PROMOTION STRATEGY

62

Project Shakti: This project was started for Companys promotion in rural market as well as women empowerment. HUL's partnership with Self Help Groups of rural women. It was started in 2001; Project Shakti has already been extended to about 50,000 villages in 12 states - Andhra Pradesh, Karnataka, Gujarat and others.

Hindustan Unilever Network (HUN): It is the company's arm in the Direct Selling channel. It presents a range of customised offerings in Home & Personal Care and Foods. Lifebuoy Swasthya Chetana: The program endeavors to induce adoption of hygienic practices among rural Indians and aims to bring down the incidence of diarrhea. Out-of-Home: This deals in providing vending machines for hot beverages like tea and Coffee. HULs alliance with Pepsi Co. has significantly strengthened the channel. Health and Beauty services: Lakme Salons provide specialized beauty services and Solutions, under the recognized authority of the Lakme brand. The Ayush Therapy Centres provide easy access to authentic Ayurvedic treatments and products. 3.15TRENDS AND FORCES

Increasing raw material prices drives HUL to raise its prices - Raw materials constitute a big chunk (around 60%) of input cost for FMCG sector companies. For HUL- Palm Oil and Chemicals contribute 59% of total raw material cost. Due to inflated input cost in Soap and Detergents division EBITDA (Earnings before income tax and Depreciation) margins have suffered. The first steep increase in the prices of key raw materials such as palm oil, LAB - Linear Alkyl Benzene, caustic soda, soda ash, raw tea, coffee and crude oil derivatives has led the company to implement price hikes in competitive segments like toothpaste, soaps, detergents and shampoo. But recently softening Inventories - Raw Materials prices in the last 2-3 months have provided respite to FMCG sector companies. Raw material and packaging materials have fallen sharply from their highs recorded in Sep'08. The benefit of fall in raw material prices will be accured later when high cost inventory will be replaced by a cheaper inventory.

Increasing per capita income drives FMCG sector growth - Per capita Income in India has doubled in 4 years. As their incomes and standards of living improve, Indian customers for FMCGs are shifting towards higher lifestyle categories like skin care, hair care, deodorants, convenience foods, health foods etc.Rural India, where penetration levels are 63

low as compared to urban areas, has a large consuming class with 41 per cent of India's middle-class and 58% of the total disposable income. Factors like loan waiver of farmers, hike in minimum support price for crops and flood inflation has helped farmers with rise in income. The purchasing power in rural areas has increased and spending behavior is also changing which shows a high growth potential for FMCG companies here. HUL has adapted itself to changing consumer spending patterns. Among many product launches, Dove hair care products, re-launch of Axe deodrants and launch of Ponds Anti Ageing cream are few to be mentioned in high end price spectrum in Personal care. Targeting low income group people, HUL has launched 50 paise shampoo sachets. Along with these, Company's premium products are now sold thorugh Modern Trade. Also it has entered into a Joint venture with Smollons Holdings of South Africa to increase its capabilities to meet the merchandising demands in Modern Trade. Per Capita consumption of personal care products in India is one of the lowest among developing economies of the world - India has one of the lowest levels in per capita consumption of consumer goods among developing economies of the world. It has per capita consumtion levels of 1.4,0.3,0.2 and 0.3 US$ in detergents, shampoo, ice-creams and skin care segments respectively which are lower than that of China, Brazil and Indonesia. Consumption levels in the U.S., a developed country, are 16.6, 6.7, 49.4 and 36.6 in categories mentioned before. Low consumption coupled with increase in per capita income poses as a growth opportunity for consumer products companies. Highly Competitive FMCG Sector limits profit margins of HUL - In a volume driven and competitively intense environment with competition also from local players FMCG players are aggressively promoting their brands to gain product awareness, customer base, and their shares of the customers wallets. To facilitate launch new products and relaunch of existing products companies are increasing their research and development expenditure. These factors eat up the profitability margins of the companies. Pricing scenario in current time is in favor of companies but in past due to pricing war with P&G in Soaps and Detergents. 3.16 Competition The Indian FMCG sector is the fourth largest sector in the economy with a total market size of $18 billion. As the name suggests FMCG products are frequently used and bought by the customers so 64

there are large numbers of players supplying same products. HUL is the only company in Indian consumer goods market that has products in more segments than any other company of the same sector.HUL is the largest FMCG Company in terms of revenues. Procter and Gamble (P&G) India: HUL faces a fierce competition from P&G India in its key segments i.e. Detergents and Personal Care. It operates in India through three subsidiaries: Procter and Gamble Home Products (100% subsidiary of the company), Procter and Gamble Hygiene and Health care Ltd. (PGHH) and Gillette India Ltd. It has in its portfolio some of P&G's Billion dollar brands such as Vicks & Whisper in health care and Ariel and Tide in detergents segments. Product Development - HUL made a strategic acquisition aimed at development of new product, In January 2000, in a historic step, the government decided to award 74 per cent equity in Modern Foods to HUL, there by beginning the divestment of government equity in public sector undertakings (PSU) to private sector partners. HUL's entry into Bread is a strategic extension of the company's wheat business. In 2002, HUL acquired the government's remaining stake in Modern Foods. In 2003, HUL acquired the Cooked Shrimp and Pasteurised Crabmeat business of the Amalgam Group of Companies, a leader in value added Marine Products exports. HUL puts its leather business sale on hold Hindustan Unilever (HUL) has put the sale of its leather business on hold as it failed to find a suitable buyer. The business is run by Ponds Exports, a wholly-owned subsidiary of HUL. The annual report said leather exports had a difficult year due to forex volatility and recessionary conditions in Europe. Indias competitive advantages of good quality leather and the ability to service small orders were neutralized by Chinas significant cost advantages and a well- developed market for components. Conglomerate Diversification In 1993, it acquired the Kissan business from the UB Group and the Dollops Ice cream business from Cadbury India. As at that time both of the business concerns were on peak & the best promising businesses. Consumption pie Consumption in the market

65

Fig 1.35

3.17 SWOT ANALYSIS - SWOT stands for Strengths, Weaknesses, Opportunities and Threats, and is an important tool often used to highlight where a business or organisation is, and where it could be in the future. It looks at internal factors, the strengths and weaknesses of a business, and external factors, the opportunities and threats facing the business. The process can give you on overview of where the business, and the environment it operates in, is strategically. This is an important, yet to simple to understand, tool used by many students, businesses and organizations for analysis. SWOT Analysis of Dabur India Ltd: SWOT Analysis of Hindustan Unilever Ltd: Strengths Strengths The strengths of a company or group and value to Variety of products it, and can be what gives it the edge in some areas over the competitors. The following section will Distribution Network outline main strengths of Dabur India. Being a market leader, as Dabur India is, Brand image is key to their success as it boosts reputation, profit and market share. Quality Management Dabur Indias marketing strategy has proved to be effective, helping to raise Innovation and R&D strength profiles and profits and standing out as a major strength. Experienced employees are key to the success of Dabur India helping to drive themforward with expertise and 66

knowledge. Being financially strong helps Dabur India deal with any problems, ride any dip in profits and out perform their rivals. Dabur Indias distribution chain can be listed as one of their strengths and links to success. Dabur Indias position in the market is high and strong a major strength in this industry as they are ahead of many rivals. Weaknesses Weaknesses of a company or organisation are things that need to be improved or perform better, Weaknesses which are under their control. Not able to compete with local competitor Reputation is important, and a damaged in the rural market. one like Dabur Indias is a major Not focus on upper class population weakness as consumers will not trust the firm enough to spend money with them. Pricing policy is not good A serious weakness for Dabur India is the fact their products/services are of low quality, meaning people will have betterquality substitutes. Not reducing costs in the same way as their competitors means Dabur India is outlaying more of their profits. Having higher costs than competitors is a major weakness. Dabur Indias R&D work is low and insignificant, which is a major weakness in FMCG as it is constantly creating new products. The lack of staff experience is a major downfall for Dabur India as it could lead to mistakes or negligence. Old and outdated technologies hold Dabur India back and limits success, as other firms are making use of better and more reliable technologies. Opportunities Opportunities are external changes, trends or needs that could enhance the business or Opportunities organisations strategic position, or which could Huge Market be of a benefit to them. This section will outline opportunities that Dabur India is currently facing. Increasing per capital income Dabur India could benefit from Governmental support, in the form of 67

grants, allowances, training etc. Looking at export opportunities is a way Increasing consumption pattern for dabur india to raise profits. Changes in technology could give dabur Potential for making more impact of brand india an opportunity to bolster future image. success. Dabur India could benefit from expanding their online presence and Coming in technology e.g. in water making more money from online purifiers shoppers/internet users. The changes in the way consumers spend and what they buy provides a big opportunity for Dabur India to explore. Dabur India is in good financial position, which is an opportunity for them to explore in terms of investment in new projects. Threats Threats Threats are factors which may restrict, damage or put areas of the business or organisation at From High Class Competitor risk. They are factors which are outside of the company's control. Being aware of the threats and Proctor & Gamble being able to prepare for them makes this section valuable when considering contingency plans and Pantene strategies. This section will outline main threats Dabur India is currently facing. Dabur Consumer lifestyle changes could lead to less of a demand for Dabur India Babool products/services. Tax increases placing additional financial Dabur lal Dent Manjan burdens on Dabur India could be a threat. Change in demographics could threaten Dettol Dabur India. The financial burden of increasing interest Palmolive rates could be a threat to Dabur India. Regulations requiring money to be spent Colgate, Nirma or measures to be taken could put financial or other pressure on Dabur India. Price wars between competitors, price cuts and so on could damage profits for Dabur India. Fig 1.36 3.18 HUL - Sales growth turns positive as volume growth picks up 68

HUL saw sales growth of ~4% after four months of decline. Pick up in volume growth was the key driver. Barring Tea & Coffee, all other categories had positive growth. Detergents continue to do well with 24% volume growth. This reflected in value growth as well, with an across-the-board improvement, as only Coffee is still witnessing decline. We await sustainability of this trend before revisiting our view. 3.19 HUL Market share trend still a mixed bag Though sales growth picked up for HUL, it failed to beat market growth, as market shares did not show much improvement. Declines were seen in Soaps, Laundry and Toothpaste, with slight gains in Skin Care. However, gains in Shampoos, Tea, Coffee and Ketchups were healthy. On a longterm basis though, market shares are still lower across most categories vs. their last year Levels. Unless HUL consistently outperforms market growth, a sustained market share gain is difficult. 3.20 Dabur Sales growth remains weak; Market shares mixed Despite recovery, sales growth remained weak at 8%. Market shares were largely neg, with losses in Shampoos, Toothpowder and Chyawanprash, and gain in Toothpaste. Overall trend over the last one year has been positive, with share gains in Toothpaste, Toothpowder and Chyawanprash, and losses in Shampoos. 3.21 Market share of FMGC companies in India 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, skin care, deo, jams, coffee, etc. Market share of FMCG companies in India is represented by the pie chart given below:

69

Fig 1.37

Market Share trends Hul vs Dabur India ltd HUL - Soaps - Detergents - Shampoo - Toothpaste - Skincare - Tea Dabur - Toothpaste - Shampoo 9.6 6.1 10.1 6.4 10.5 5.9 10.6 5.5 47.0 37.4 45.3 27.9 46.5 22.4 44.5 36.2 45.6 27.1 46.4 22.3 44.8 36.7 45.1 25.9 47.4 20.7 43.8 36.8 46.9 25.7 45.4 21.0 From April (2009 2010) Apr-09 Aug-09 Dec-09 Apr-10

70

- Chyawanprash

59.6

64.2

62.5

60.9

Fig 1.38

71

CHAPTER 4 CONCLUSIONS

Dabur India, being a closely held company, was initially a family run organization. However, subsequent to restructuring, the day-to-day management is under professional management and the promoters undertake only the strategic management decisions. The company has decided on higher investment on Brand building rather than on product building. This fact is evident from the sale of 72

GDC Ltd. and Excelcia Foods Ltd. The company has also entered into JV with Bongrain under the same initiative. The company has discontinued the merchant exports, herbal intermediaries and Generic pharmaceuticals business. The promoters hold 70% of the paid up capital of the company. Hence, to increase the liquidity of the stock in the market the company has introduced a stock split of 1/10th at Re.1/- per share paid up. There are segments that Dabur India doesn't feel it can do much with, like laundry, where the company would not wish to enter, even if the brand is lucrative enough. The same goes for soaps, where Dabur had attempted an extension of the Vatika brand into the soap category, which they have exited as of now. Being slow and steady has its virtues, and Dabur has indeed proven a point in various segments where it has entered. So Dabur may not be headed for the same fate as HUL in the 1990s, which actually expanded rather recklessly then. But, if Dabur has to come to the league of an HUL (compare its quarter ending September sales at Rs.40.27 billion with Rs.5.8 billion for Dabur), it might want to consider acquiring some of the qualities of the hare. When a war has to be fought for lasting glory, it sometimes becomes imperative to take some bloodshed in your stride. Slow and steady may win the race.

Hindustan Unilever was the most preferred Brand in India. It has wide range of products varying from Home care to food care and Other FMCG categories. It has also launched water purifier. It was listed in ET-500 ranking of Indias biggest Companies and its ranking was number 32. Though HUL, as a brand have good perception from its consumers, following are the major threats waiting for any FMCG company in the market. So those things have to be considered in order to posses the same consumer perception towards HUL. Private Label/In-house Branding: Ongoing increase in the number of supermarkets, hypermarkets & other such concept business results in the promotion of their own brands. So there is a possibility of change in behavior of consumers towards HUL. Quality Management: Because of multi production centers, the quality of the same brand product has to be maintained to retain the consumer. Introduction of variants has to be done only by keeping flagship product without any change. Brand Loyalty: Essential aspect to be considered in this rival competitive world! Recently Rin & Tide comparative advertisement made it clear even big giants like HUL finds no way to Dominate the market without gaining the loyalty of tits consumers. 73

This is a try to change the fickle minds of consumers towards rival brands.

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CHAPTER 5 RECOMMENDATIONS / SUGGESTIONS

Following are the few suggestions to Dabur India Ltd for improving the market share and image of the products concerned. 1. PRODUCT Modification must be brought about in Dabur Ltd in terms of quality with passage of time .

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2. PLACE The brands must be made available easily in, PCO & general stores.

3. PROMOTION Company must undertake extensive promotional activities like advertisements must be released in different media to create brand awareness. Free samples should be distributed among the prospects. Sales promotion tools like gifts, contests and coupons must be given to retailers as well as customers and prospects. Catalogues should be distributed among customers. Dabur India could benefit from Governmental support, in the form of grants, allowances, training etc. Looking at export opportunities is a way for dabur india to raise profits. Changes in technology could give dabur india an opportunity to bolster future success. Dabur India could benefit from expanding their online presence and making more money from online shoppers/internet users. Following are the few suggestions to Hindustan Unilever Ltd for improving the market share and image of the products concerned. Variety of products, large distribution network, Brand image, Quality Management Innovation and R&D strength are some of the opportunities of Hindustan Unilever ltd. But some of the suggestions are to be needed for the future scale of operations of Hindustan Unilever ltd. (1) PRODUCT Improvement must be brought in Hindustan Unilever Ltd in terms of quality with passage of time, changes in customer needs . (2) PLACE The brands must be made available easily in, PCO & general stores. (3) PROMOTION

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Increasing per capital income and Increasing consumption pattern will benefit the company. Potential for making more impact of brand image. Coming in technology e.g. in water purifiers, can promote its sales as well. Company must undertake extensive promotional activities like advertisements must be released in different media to create brand awareness it will help in increasing a huge market for customers.

Free samples should be distributed among the prospects. Sales promotion tools like gifts, contests and coupons must be given to retailers as well as customers and prospects.

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CHAPTER 6: LIMITATIONS OF THE STUDY

Limitations of the Study No project is without limitations and it becomes essential to figure out the various constraints that we underwent during the study. 1. Project is based on secondary data. 78

2. The research is conducted in a limited area. No universal application 3. The internet information can be irrelevant. 4. Time will be a major constraint.

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MAHARAJA AGRASEN INSTITUTE OF MANAGEMENT STUDIES

ATTENDANCE FOR PROJECT REPORT

Name of the student Class Roll No. Name of the Supervisor S.No. 1 2 3 4 5 6 7 8 Date

: : : : Time Progress Report Signature of Signature of the student Supervisor

9 10 *Minimum (8out of 10) 80% attendance compulsory. Coordinator

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BIBLIOGRAPHY
Word or list of the words referred in a text or consulted by you for writing report. It should be arranged in alphabetical order by name of the authors. For books
Name of the author (last name first) Title of the book, Edition, year of publication, No of Vol. (if any) Name and place of publisher.

Example:
Kothari, C.R. Research methodology, 3rd edition, 1997, Vikas Publishing House Pvt. Ltd, New Delhi. For Research Papers, Published articles, Magazines, Periodicals, Journals, Newspaper etc. Name of the author(last name first), Title of the article, (in quotation mark) Name of the Journals/ Periodicals/ Magazines etc in italics, Volume number, year, Page numbers. Example: Wortman,Maxs (Jr.) Entrepreneurship : An Integrating Typology and Evaluation of the Empirical Research in the field, Journal of Management, Vol.13(2), 1967,pp 259-279. Online published material on World Wide Web (Alphabetically arranged Webliography) Name of the Website, Date and time of referring the Website, Name of the Author, Title/Topic

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