Executive Summary

Hindustan Unilever Limited, formerly Hindustan Lever Limited, is Indias largest consumer product company and was formed in 1933 as Lever Brothers India Limited. The objective is to understand and analyze an FMCG organization with respect to its current distribution and logistics functioning. We have collected primary and secondary data for the purpose of making the project report. Interviews of distributor and retailer of HUL were taken to get the primary data, secondary data was collected from various web sites using internet, and detailed company profile along with the product profile of HLL is given. Hindustan Unilever Limited has a 5 level channel distribution which shows a very wide level of network distribution. There are 17 distributors in Delhi region & 88 all over India. The selection of the distributor is based on his financial position and his level of experience in FMCG sector.

In brief we have observed that the distributors are working on a very large scale but they dont use advanced technology like SAP. They are only concerned with their returns on Investment i.e. 30%. Distributor is rewarded with incentives on quarterly basis, if the distributor achieves the target fixed by the company & a distributor has to maintain a minimum of 7 days stock i.e. 25% of monthly sales because they deliver goods to wholesale market. We suggest the company to change the stock of damaged products from its retailers. Since the distributor is working on such a large scale so, we suggest them to use latest technology such as SAP (MIS) system in order to maintain accounts and inventory properly. Retailers should inform about various schemes given by the company to the customer.

TABLE OF CONTENTS
Pageno.
Research Methodology.. 9-10 Company Background ...............11-29
Company Profile & History............ Brands.......................... Hindustan Lever Network... Corporate Purpose........... Mission & Management Structure... Businesses................... Shareholders & Safety Principles...................

Findings, Data Analysis & Conclusions..30-36

Conclusion..

Recommendations... 37 Bibliography..38 Annexure... 39

RESEARCH METHODOLOGY
It refers to the method adopted to collect the relevant data and other information, which forms the basis of report writing. So for the effective writing of report, the data must be quality oriented.

Information sources
(RETAIL SHOPS, TERRITORY SALES INCHARGE, AREA SALES MANAGER, DELIVERY BOY & STOCKIST DEALER)

Primary Data

Primary data has been collected through observation method and by taking the interviews of employees of the organization in sales and marketing department; we have gone for 2 retail outlets and met with 3 wholesalers and vendors & one Distributor of HUL. Secondary data has been collected through relevant marketing Books, journals, magazines, company annual reports and websites via internet.
www.hll.com www.pg.com www.google.com

COMPANY BACKGROUND

COMPANY BACKGROUND
Hindustan Unilever Limited, erstwhile Hindustan Lever Limited (also called HLL), headquartered in Mumbai, is India's largest consumer products company, formed in 1933 as Lever Brothers India Limited but this was not the first time Lever Brothers were marketing their products in India. In 1888, Lever Brothers Exported its Sunlight Soap Bars in India embossed with the words "Made in England by Lever Brothers". Soon after followed Lifebuoy in 1895 and other famous brands like Pears, Lux and Vim. Vanaspati was launched in 1918 and the famous Dalda brand came to the market in 1937. The erstwhile Brooke Bond's presence in India dates back to 1900. By 1903, the company had launched Red Label tea in the country.

Tata Oil Mills Company (TOMCO) merged with HLL, effective from April 1, 1993. In 1995, HLL and yet another Tata company, Lakme Limited, formed a 50:50 joint venture, Lakme Lever Limited, to market Lakme's market-leading cosmetics and other appropriate products of both the companies. Subsequently in 1998, Lakme Limited sold its brands to HLL and divested its 50% stake in the joint venture to the company.

HLL formed a 50:50 joint venture with the US-based Kimberly Clark Corporation in 1994, Kimberly-Clark Lever Ltd, which markets Huggies Diapers and Kotex Sanitary Pads. HLL has also set up a subsidiary in Nepal, Nepal Lever Limited (NLL).

In January 2000, in a historic step, the government decided to award 74 per cent equity in Modern Foods to HLL, thereby beginning the divestment of government equity in public sector undertakings (PSU) to private sector partners. HLL's entry into Bread is a strategic extension of the company's wheat business. In 2002, HLL acquired the government's remaining stake in Modern Foods.

In 1931, Unilever set up its first Indian subsidiary, Hindustan Vanaspati Manufacturing Company, followed by Lever Brothers India Limited (1933) and United Traders Limited (1935). These three companies merged to form HLL in November 1956. Unilever now holds 51.55% equity in the company. The rest of the shareholding is distributed among about 380,000 individual shareholders and financial institutions. Today its 41,000 employees are headed by Mr. Harish Manwani, the non-executive chairman of the board. HLL is the market leader in Indian products such as tea, soaps, detergents, as its products have become daily household name in India. The Anglo-Dutch company Unilever owns a majority stake in Hindustan Lever.

Hindustan Lever Limited (HLL) has recorded a Profit After Tax of Rs 1,855.37 crores in the quarter ending March 31, 2006, an increase of 31.76 % over the corresponding period of 2005. HLL's turnover at Rs 12,103.39 crores, grew by 9.42 %. The operating profit of the company was INR 17,100.2 million (approximately $410.4 million) during fiscal year 2006, an increase of 16.2% over 2005.The net profit was INR18, 553.7 million (approximately $445.3 million) in fiscal year 2006, an increase of 31.8% over 2005.
Turnover

3,300.00

3,200.00

3,100.00 Figure in Rs.(Crore)

3,000.00
Series2

2,900.00

2,800.00

2,700.00

2,600.00 1 2006 2007 2

TURNOVER OF HUL FOR YEAR 2006 & 2007

Net Profit
2,300.00

2,250.00

2,200.00

Figure In Rs.(Crore)

2,150.00

2,100.00

Series1

2,050.00

2,000.00

1,950.00

1,900.00 1 2006 2007 2

NET PROFIT OF HUL FOR YEAR 2006 & 2007

Corporate Social Responsibility (CSR) in Hindustan Lever Limited (HLL) is rooted in its Corporate Purpose - the belief that "to succeed requires the highest standards of corporate behaviour towards our employees, consumers and the societies and world in which we live". HLL's CSR philosophy is embedded in its commitment to all stakeholders - consumers, employees, the environment and the society that the organisation operates in. HLL believes that it is this commitment which will deliver sustainable, profitable growth.

Market Share Of Oral Products

14%
COLGATE HUL OTHERS

48 % 38 %

Market Share Of Hair Products

35 %

13 % 23 %
Other Garnier P&G HUL

29 %

Market Share Of Personal Wash

44 % 23 %

Others Fa Dettol Nirma Godrej

12 %

14 %

6%

1%

HUL

Market Share Of Skin Products

Others

55%
25% 3% 8% 4% 5%

Spa Shehnaz Hussain Emami P&G HUL

Ice Creams 1% Food s 3% Beverage s 11 %

Export s 12 %

Other s 3%

Soaps & Detergent s 44 %

Personal Product s 26 %

Turnover PBIT

2,464 328

Mn $

HLL's key CSR initiatives are undertaken with a long-term view. Initiatives that are sustainable, have long-term benefits and an ongoing business purpose linked to them are accorded priority focus. As early as in the 1950s, HLL focused on import substitution when balance of payments was an issue.

Since the 1980s, most of HLL's investments have been in designated backward areas and zero-industry districts, spreading industrialisation. HLL has revived sick industries and has developed local entrepreneurship.

Furthering this rich tradition of contributing to the community, HLL is focusing on health & hygiene education, women empowerment, and water management. In addition to these important platforms, HLL is also involved in a number of community support activities, like education and rehabilitation of special or underprivileged children.

In recognition of these initiatives, HLL received the prestigious TERI-CSR Special Award for the year 2002-03 from The Energy and Resources Institute (TERI). As is well-known, TERI, which was established in 1974, is world famous for its commitment to and initiatives in every aspect of sustainable development.

Brands

Some of its brands include Kwality Walls ice cream, Lifebuoy, Lux, Breeze, Dove, Liril, Rexona, Axe, Ayush, Hamam, Moti soaps, Pureit Water Purifier ,Lipton tea, Brooke Bond tea, Bru Coffee, Knorr, Pepsodent and Close Up toothpaste and brushes, Surf Excel, Rin, Wheel laundry detergents, Kissan squashes and jams, Annapurna salt and atta, Pond's talcs and creams, Vaseline lotions, Fair & Lovely creams, Lakm beauty products, Clinic Plus, Clinic All Clear, Sunsilk and Lux shampoos, Vim dishwash, Ala bleach and Domex disinfectant.

Hindustan Lever Network

In February 2003 Hindustan Lever Limited has launched a new division called Hindustan Lever Network . This division markets a wide range of Fast Moving Consumer Goods through Network Marketing. Network Marketing was pioneered in the United States of America in the 1940s by companies like Amway Corporation and operates by recruiting individuals as consultants. These consultants are paid a commission on the purchases made by them and on the purchases made by those recruited by them

Hindustan Lever Network (HLN) is HLL's Direct Selling arm. It already has about 3.5 lakh consultants - all independent entrepreneurs, trained and guided by HLN's expert managers and trainers.

Among them, there are over 10 consultants who are earning at over a rate of Rs.1 million per annum. Over 25 consultants earn over Rs.50,000 per month. What is encouraging is that they all started their business with earnings of less than Rs.500 per month!

HLN offers you to build a business with different categories of Home & Personal Care (HPC) and Food products. They are all essential household needs. And they are all exclusive to HLN, specifically developed for the Direct Selling channel, and not available in the retail channel.

HLN has already spread to 1500 towns and cities, backed by 42 offices and over 250 service centres across the country.

HLN's vision is to be amongst the top 2 players in the Direct Selling Channel by 2008 with a base of 1 million consultants.

CORPORATE PURPOSE
Unilever's mission is to add 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. 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 and learn continuously. To succeed also requires, we believe, the highest standards of corporate behaviour towards everyone we work with, the communities we touch, and the environment on which we have an impact. This is our road to sustainable, profitable growth, creating long-term value for our shareholders, our people, and our business partners.

MISSION
Unilever's mission is to add 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.

MANAGEMENT STRUCTURE
Hindustan UniLever Limited is India's largest Fast Moving Consumer Goods (FMCG) company. It is present in Home & Personal Care and Foods & Beverages categories. HUL and Group companies have about 16,000 employees, including 1200 managers. The fundamental principle determining the organisation structure is to infuse speed and flexibility in decision-making and implementation, with empowered managers across the company's nationwide operations. For this, HLL is organised into two self-sufficient divisions - Home & Personal Care & Foods - supported by certain central functions and resources to leverage economies of scale wherever relevant.

Businesses

Home & Personal Care

Personal Wash Fabric Wash Home Care Oral Care Skin Care Hair Care

Foods
Tea Coffee Branded Staples Culinary Products Ice Creams Modern Foods ranges

New Ventures
Hindustan Lever Network Ayush ayurvedic products & services Sangam Pureit water purifiers

Exports
HPC Beverages Marine Products Rice Castor

Shareholders
Unilever will conduct its operations in accordance with

internationally accepted principles of good corporate governance. We will provide timely, regular and reliable information on our activities, structure, financial situation and performance to all shareholders

Safety Principles
These Principles have the same status as the Company's Code of Business Principles: All injuries and occupational illnesses are preventable All operational exposures can be safeguarded Safety evaluation of all business processes is vital Working safely is a condition of employment Training all employees to work safely is essential Management audits are a must Employee involvement is essential All deficiencies must be reported and corrected promptly

Findings, Data Analysis & Conclusions

DISTRIBUTION LEVEL OF HUL. HUL has 5 level distribution channel, i.e. Manufacturer, C&FA, Distributor, Wholesale market, Retailer, consumer.

Manufacturer

C & FA

Distributor

Wholesale Market

Retailer

Consumer

Distributor dont select any salesman becoz they distribute to the wholesalers.

Discount is given to retailer if he pays his dues before time. Discount for 2% is allotted to the retailer if he pays dues before time.

INTEREST LEVIED ON EXCEEDING THE CREDIT PERIOD. There is no such penalties levied on wholesalers in regard to credit period, Defaulters in the payment process are not supplied with the goods in the future and hence they stop doing business with them, But this possibility is very low.

DEALER MEETS. Dealer meets usually on quarterly basis and also on the event of prize ceremony.

PROCEDURE FOR THE CHALLANS. The goods which are transported to wholesale market are listed in a slip which includes the detail information about the goods to be transported to various wholesale dealers.

 MODES OF TRANSPORTATION FOR DELIVERY OF GOODS. Vikram and rickshaw for small retailers & for big wholesale market they used truck and toilers, transportation cost is borne by the company while the products are coming from the go down to the stock point and all are insured by the company.

ROUTE PLANS FOR TAKING ORDERS AND MAKING DELIVERY. Company delivered to their warehouses and there on they delivered goods to wholesale market.

OWNERSHIP OF THE WAREHOUSES. All the warehouses are privately owned and this one of the criteria of selecting a distributor. RANGE OF MARGINS. They calculate their profits according to returns on investment and that is 30% on the investment done by the distributor and retailer earns 8% -10%.

NUMBER OF TERRITORY SALES IN CHARGE. WEST DELHI (peera garhi) & SOUTH DELHI (chatarpur).

 NUMBER OF DISTRIBUTOR IN DELHI FOR SALES IN CHARGE. There are 17 distributors in Delhi which includes 6 major distributors which caters to the big wholesales (north, west, south, east & central) and the rest 11 caters to the general trade /retailers. PROCEDURE TO TAKE FEEDBACK FROM RETAILERS. Distributors dont have any scheme for taking any feedback only co. needs to reach to the retailers to get feedback, only demand is focused. BASIS OF DIVISION (soaps, tea, detergents, cosmetics, etc.). Personal care (cosmetics, soaps) Food and beverages (kissan, brook bond tea) Detergents (surf excel, rin) BASIS OF TARGETS (area wise, stockiest wise) The targets are fixed according to channel distribution, There are value targets involved in this business and not the quantity of the business.

 Tracking the targets of the salesmen and bridging the gaps between the actual & the targets. Distributor dont play any important role in it bcoz they delivered goods to wholesale market.
STOCK ASSESSMENT CYCLE. They replenished all the goods on daily basis therefore there stock assessment cycle rotates daily. LEVEL OF MINIMUM STOCK A STOCKIEST SHOULD MAINTAIN. The minimum level of stock a stockiest keeps is for 7 days i.e 25% of monthly sales. COSTS INVOLVED AND THE MONITORING SYSTEM. They appoint a proper agency of 4 people who are always on field to inspect the functioning of the system. PLACEMENTS OF THE PRODUCTS IN THE OUTLETS. A proper guidelines is given to retailers for promotion & display of their goods.

 REWARDING PATTERNS OF A STOCKIEST. Rewarding patterns of a stockiest are as follows:Company fixes the targets for the distributor. They are given incentives on quarterly basis. For e.g. after scoring 100 points they would be awarded a watch and the points are given on the basis of total value earned by the distributor.

CONCLUSION
HUL is one of the old MNCs to enter into Indias FMCG sector and become one of the early movers to enjoy the benefits such as Huge Network Of Suppliers & distributors, to enter a New geographical market, to tap the key resources and gain a Significant market share. HUL has an open Communication channel with its consumers to Improve its product quality. The company is committed to fulfill its legal and statutory obligations and international standards of product safety and hygiene with its consumers and customers company periodically reviews its quality policy for its effectiveness. HUL has a Competitive edge over its competitors, i.e. it has a very strong Supply & distribution network through which it is able to penetrate in the Indian rural market also. Its major Competitors are P & G and Colgate but in the near future HUL is likely to face a tough competition from Garnier & Godrej also. So the Conclusion is that market is expanding and HUL will continue to grow by leaps & bounds. We wish the company to be the pioneer in the FMCG sector and all the best.

RECOMMENDATIONS

After the whole findings and proper search we came to know that the distributors are not using latest technologies to reduce cost and time there are still continuing to use the obsolete technologies no management information system techniques are used in this channel.

What we suggest them is that they are working on very large scale without I.T help this may cause some troubles or chance to theft or chance of wrong calculation which can further cause a problem in near future so they should go for BAAN (MIS) system which helps in maintaining proper accounts and inventories.

Each input or transaction made in the firm would be recorded and thereon the probability of any failure or chance of mistake will minimize and the profits will be maximized.

Packaging of some of the products is of sub-standard quality which should improved so that the product doesnt gets damaged. HUL should replace the damaged material from the retailers so as to maintain loyalty among them.

BIBLIOGRAPHY

www.hll.com www.google.com www.pg.com

References covered : - Business World Magazines. - Economic Times.