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Case Analysis
Company overview
Largest FMCG company in India in terms of revenue Unilever Plc holds 51.6% stake in it Company set up in 1956 Owns 35 major Indian brands
Time line
Until 1960s remained as medium sized player, choosing to market high end brands. P.L.Tandon took over as its first Indian chairman In 1970s emerged as prominent advertiser on radio,in magazines and daily press. Spent over 10% of its annual turnover on advertising and media.
1980s
Quickly captured the imagination of public with clever use of characters Liril waterfall girls, Lalita-ji of Surf and leading stars of bollywood became the face of HUL. Making of High quality ,mostly premium priced products continued to influence HULs marketing strategy.
Nirma,launched in 1969, was priced at Rs.3/Kg against HULs surf at Rs.15/kg. By 1977,Nirma emerged as second largest selling detergent in india. By 1985,Nirma became the highest selling detergent in India (with 58% market share) against HLLs surf (with 8.4%). Propelled HLLs to target lower income segment. Launched Ala and Rinso,which were priced 35% less than Surf.
Relaunch of product Sunlight in the form of Washing powder Emphasized surfs superior quality through Lalita-ji campaign Highlighted skin damaging effects of Nirma Launched Wheel in the bottom end segment.
1990s
Liberalisation era: Removal of regulatory framework and constraints on production capacity Merger with Tata Oil Mills Co. (Tomco) in 1993 Joint venture with Tata Group on Lakme Unilever Limited in 1996 before acquiring it in 1998 Setting up of Nepal Unilever Merger with Kimberley Clark corporations to form Kimberley Clark Lever limited. Brands made available: Kotex Sanitary pads and Huggies Diapers
Merger of Brook Bond and Lipton in 1994 and finally merger of BBLIL into HUL in 1996 Acquired Kissan business from UB group in 1993 and Dollops Ice cream in 1993 Launch of Walls range of frozen foods and strategic alliance with Kwality Ice cream group families in 1995 Getting 74% in Modern foods a PSU in 2000 before finally acquiring in 2002 Acquired Cooked shrimp and Pasteurised Crabmeat business of Amalgam group of companies Foray into ayurvedic products with its ayush range of products in 2002 and into water purifier segment with pureit in 2003
Brand Portfolio
Food Brands
Power Brands
Failed brands
Denim Deodorant Impulse Deodorant Moti soap Jai soap Revel washing powder Close up- Renew,Oxy fresh Savlon Aim toothpaste Lifebouy liquid Lifebouy gold Pears Naturals Liril talc,Liquid Ponds toothpaste
Strategies to succeed
Focus on Consumer value ( including competitive pricing) at all times Playing the full portfolio across categories Competitive brand support Increased execution rigour Step-up in cost efficiency programs
Project Shakti
Started in 2001 with the aim of increasing distribution channels in rural india and help women setting up their own business. The recruitment of a Shakti Entrepreneur or Shakti Amma (SA) begins with the executives of HUL identifying the uncovered village The products are sold door-to-door or through petty shops at home. On an average a Shakti Amma makes a 10% margin on the products she sells.
Shakti Ammas are able to reach far flung areas and become brand ambassador for the company. Ready consumers in the SAs who become users of the products besides selling them. Half of HULs FMCG sales come from rural markets. The Shakti network at the end of 2008 was 45,000 Ammas covering 100,000+ villages across 15 states reaching 3 m homes. The long term aim of the company is to have 100,000 Ammas covering 500,000 villages and reaching 600 m people.
Incremental turnover
Product innovations include knor,Intelligent Deodorants,Cool icecreams. Goals to achieve by 2020 include 1)Halve the environmental footprint of its products. 2)Help more than 1 billion people to imrove their health and well being. 3)Source 100% of its agriculture raw materials sustainably.