PRESENTED BY:-

• Avick Biswas I.S.B&M, BANGALORE

MANAGERIAL

ECONOMICS

MISSION STATEMENT

Unilever's mission is to add Vitality to life.

LOGO

This is the logo of“UNILEVER”

INTRODUCTION TO HUL• Lever brothers is founded by WILLIAM HESKETH LEVER in 1890

• Key player in food & household product industry

• Historically grew through acquisitions

• LEVER BROTHERS, THE OLD NAME WAS CHANGED INTO UNILEVER AFTER THE MERGER OF LEVER BROTHERS & MARGARINE UNIE IN 1930

• UNILEVER IS A MULTI NATIONAL COMPANY

• IT IS ONE OF THE LARGEST CONSUMER GOODS COMPANIES IN THE WORLD

• ITS BRANDS ARE ON SALE IN 151 COUNTRIES

PRODUCT OF FOCUSSURF EXCEL

• It is the oldest detergentTo be present in INDIA

Since 1960.• It believes that children must be free to experience their LIFE for themselves…

BRAND EVALUTION HISTORY:-

• Launched in 1959 & first in Indian detergent powder market.

• It was the first Fast Moving Consumer Goods (FMCG) for Detergent.

• Brand to set up a one-stop shop - called Care line - for people seeking solutions to their varied laundry problems.

• Surf was the first brand of detergent that was advertised on TV. It is advertise on more than 300 channels across the globe .

• Introduced the concept of bucket wash to housewives who were used to washing clothes with laundry soap bars.

PRODUCT

• SURF EXCEL• Advance• Tropical • Small & mighty • Automatic • Blue detergent• Quick wash

RANGE & PRICEOF PRODUCT

2KG 1KG 500G 115G 50G 25G Rs405 Rs210 Rs115 Rs20 RS10 Rs5

A comparison of cost price with sale price of Products in product line

• Quantity Cost Price in Rupees Sale Price in Rupees

25 grams 4.7 5 50 grams 9.5 10 115 grams 19 20 500 grams 110.50 115 1000 grams 199.50 210 2000 grams 385 405

PROFIT RATIO

DEMAND ANALYSISFactors affecting demand:

Price of the product,

Price of substitutes and complements,

Income of the household,

Taste and preference of the household, and

The amount annually spent on advertisement of the product.

Law of demand : Law of demand states that the amount demanded of a commodity and its prices are inversely related, other remaining constant.

CAUSES OF CHANGES IN DEMAND

Increase in demand decrease in demand

Consumers income rises Consumers income fall.

Prices of substitute good rises Prices of substitute good fall

Prices of complements fall Prices of complements rise

Taste and preference change Taste and preference change

• in favor of the commodity in against of the commodity

SUPPLY FOR THE PRODUCT• Supply channel : Distributers. wholesalers. Retailers.• Cheaper price range of Rs.450 to Rs.2• Very good geographical distribution across

whole India.• Both Urban and Rural market segment covered.

Distribution channel

PRICING STRATEGY• Primary :1. Cost-plus pricing : Mark-up to the cost of the product2. Competitive Pricing : Price dependent upon price of the competitors.

• Secondary : 1. Customer-Segment Pricing.

DISTRIBUTION PRICING STRATEGY:

FOR EXAMPLE:

List price Rs. 100Add: Distributor price (5%) Rs. 105Add: Trade price (5%) Rs. 110.25Final Retail price (10%) Rs. 121

CROSS ELASTICITY OF DEMAND :

•Cross Elasticity of the demand is defined as the ratio of the percentage change in the demand for one good to the percentage change in the price of some other goods.

•Substitute goods: Tide, Ariel, Rin, ghadi etc. Cross Elasticity will be positive in this case

•Complement goods: detergent cake, liquid soap . Cross Elasticity will be Always negative.

SWOT FOR SURF EXCEL• STRENGTH

• India’s largest selling detergent company.

• Brand innovation and renovation.

• Reach of the product.

• Competitive advantage.

• Supply chain & distribution.

WEAKNESSES

• Labour and input cost.

• Finance.

• Managing scale.

• Raw material.

OPPORTUNITIES

• Indian market for FMCG is growing @ 20%

• Niche target market.

• Market penetration

• Geographical export

THREAT• Cheaper product eat into HUL market share.

• Competitor trade strategy.

• Urban consumer are shopping less.

• Product from it’s own stable.

DEMAND FORCAST IN SHORT RUN:

• Increase the promotion and marketing of surf excel .

• Reduce the price of quick wash surf excel to wither the competition from P&G

• ( TIDE )

• Investment of rupees 150 core in distribution network .(Specially on Wednesday and Thursday )

• Work on R & D to find tune Cost reduction to make the pricing more competitive.

IN LONG RUN• Introduce existing products into a new market, build on a strength.

• Identify key sustainability issue for detergent market in India , as well as bench marking current sustainability.

• Increase the production to 10 -12 tones / hour.

• Maximize the share in 5000 Crore in detergent market.

• Wider geographic coverage than rivals.

• Recognition as a leader in technology and/or product innovation

MARKET STRUCTURE• Type of market : OLIGOPOLY• Oligopoly = An oligopoly is a market form in which a market or industry is

dominated by a small number of sellers (oligopolists)

• Because there are few sellers, each oligopoliest is likely to be aware of the actions of the others. The decisions of one firm influence, and are influenced by, the decisions of other firms.

• REASONS – FEW PLAYERS LIKE : HUL ( blue,matic) Nirma P&G ( Tide,Aerial) Henkel India (Mir, persil, porwall, vernel,purex)

Reckitt Benckiser ( Varnish)

• RESTRICTED MARKET.

• AVAILABILITY OF VARITIES.

• SELLING COST.

• SIMILAR PRODUCTS.

• STABLE MARKET.

• PRICING.

Break Even Analysis of SurfBreak Even Analysis of Surf

Total SalesTotal Variable CostTotal Fixed Cost

Total SalesTotal Variable CostTotal Fixed Cost

Break Even Analysis Break Even Analysis

Break Even Point = Total Fixed Cost S.P per unit- V.C per unit

= 1,205,298

14,474,25518,119,110

1-

 Break even(2005) =

Fixed cost

Variable costSales

1-

= RS 5,991,714

Break Even(2004) = Rs 7,521,253

Break Even (2003) = Rs 6,808,887

Break-Even AnalysisBreak-Even Analysis

FC

VC

TC

2004 20032005 Sales

Revenue

Break-Even AnalysisBreak-Even Analysis

Costs

Sales

FC

VC

TC

2004

Loss

T H A N KU !