product diversification of dabur vs hul
TRANSCRIPT
MINOR PROJECTON
MARKETING MIX OF NESTLE
SUBMITTED IN PARTIAL FULLFILMENT OF THEAWARD OF THE
DEGREE OF BACHELOR OF BUSINESSADMINISTRATION 2010-13
UNDER THE GUIDANCE OF
SUBMITTED BY:
Maharaja Agrasen Institute of Management StudiesAffiliated to Guru Gobind Singh Indraprastha University,
Delhi PSP Area, Plot No.1, Sector 22, Rohini, Delhi-110086
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 “TEACHRE’S 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
i
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 Marketingmix of NESTLE India” is an academic work done By “student’s 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
Ii
4
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.
iii
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CHAPTER 1
INTRODUCTION
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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
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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. It’s 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
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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 bunch—in
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).
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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
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house, and then 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
International Business Division (IBD)
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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 Listed on the Bombay Stock Exchange
1998 Professional team inducted to run the company
2000 Crosses Rs 1000 Crore Turnover
2003 Pharmaceutical Business de-merged to focus on core FMCG
2004 Profit exceeds Rs.100 Crore
2006 Acquires Balara strengthening Oral care & provided entry into Home care segment
2007 Dabur Figures in Top 10 Great Places To Work
2008 Dabur ranked among 'Asia's best under a Billion' enterprises by Forbes
2009 Acquired Fem Care Pharma entering the mainstream Skin care segment
2010 Strong growth momentum continued in spite of general economic downturn
1.1.4 Founding thoughts
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"What is that life worth which cannot bring comfort to others"
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"
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Principles:
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 Brands Turnover Market Share Major Competitors
1 Dabur Amla Oil 300 crores
(approx.)
70 % Marico’s Shanti Amla, Bajaj Bramhi
Amla
2
-
-
Dabur Vatika
(Dabur Vatika
Oil)
110 crores 6.4 % Marico, Keo Karpin, HUL, Bajaj
(Dabur Vatika
Shampoo)
120 crores 6.8 % HUL, P&G
3 Dabur Real Juice 200 crores 56.9 % Pepsi Tropicana, Godrej Xs, NDDB
Safal, Parle Appy
1.1.8 Dabur’s Brand New Architecture
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(Umbrella (Naughty & (Mass ( Herbal beauty ( Health
Brand for tasty market, premium care
Juice & digestive) value for image) products)
Other foods money)
Aimed at up
Market consumer)
1.1.9 AWARDS & ACHIEVEMENTS (2008-09)
Dabur India Ltd placed in the
List of “20 Stocks you must
own”, for FMCG Prepared by
Forbes India
Dabur ranked 28th in ET-
Brand Equity Most Trusted
Brands 2009 list
NDTV profit
Business Leadership
awards 2008
Fig 1.3 Achievements
1.1.10 STRATEGIC BUSINESS UNITS
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Dabur India Ltd. is mainly divided into 3 major strategic business units as under:
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
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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
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
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(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.
1.1.13 BRAND REJUVENATION
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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) (THE NEW LOGO - YOUNGER LOOKING BANYAN TREE)
Fig 1.16
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
Company’s 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, 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
26
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.
POSITIONING:
Dabur through its diversified brands has tapped various target segments like the:
Youth
Health Conscious People
27
School Children
Mothers
Existing Old age group
28
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
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(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.
HUL’s 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
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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. 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
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1.2.2 Products and Brands of Hindustan Unilever Ltd
Food:
HUL is one of India’s 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 conversation…there’s 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 Wall’s - 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 world’s 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.
Vim - Created in 1885, the Vim brand is still innovating and using the magic of natural
ingredients to create unbeatable results.
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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.
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.
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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 World’s 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!
Pears – Pears, the purest and most gentle way to skincare!
Pepsodent - Pepsodent India is committed to improve the overall Oral health of Indians.
Pond’s - 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.
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1.2.3 Water Brand – Pureit
Fig 1.23
Pureit is the world’s 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. Pureit’s 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. What’s more, it doesn’t 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 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 Centre’s 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.
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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 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. HUL’s 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.
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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.
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.
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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
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 for
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themselves or others through misuse of their positions. This is our road to sustainable, profitable
growth, creating long- term value for our shareholders, our people, and our business partners.
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.
That’s 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 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 children’s 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 low-
margin shrimps and castor business.
Others: This section includes Chemicals, Water purifiers, Agri seeds, Property
Development, Water business, Ayush services etc.
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1.2.6 Market Share of Hindustan Unilever Ltd. Brands
PARTICULARS KEY BRANDS MARKET SHARE (in cr.) MARKET SHARE RANK
FABRIC WASH Surf Excel, Wheel 8988 37.5% 1
PERSONAL WASH Dove, Lux ,Lifebuoy 6632 54.3% 1
DISH WASH - - 57.3% 1
SKIN Ponds 2792 54.5% 1
SHAMPOO Sunsilk , Clinic Plus 2168 47.8% 1
TALCUM POWDER - - 59.7% 1
PACKET TEA Red label 4452 22.7% 1
COFFEE Bru 708 44.0% 1
JAMS - - 67.5% 1
TOOTHPASTE Pepsodent , Close up 2764 29.5% 2
KETCHUP - - 28.1% 2
Fig 1.24
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.
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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: Lux, Lifebuoy, Liril, Hamam, Breeze, Dove, Pears and Rexona
Laundry items: Surf Excel, Rin and Wheel
Skin care: Fair & Lovely, Pond's and Vaseline
Hair care: Sunsilk and Clinic
Oral care: Pepsodent and Close up
Deodorants: Axe and Rexona
Colour cosmetics: Lakme
Ayurvedic: Ayush
Tea: Brooke Bond and Lipton
Coffee: Bru
Foods: Kissan, Annapurna and Knorr
Ice cream: Kwality Wall's
Fig 1.25
PRICING
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.
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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
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.
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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
Company’s internet site
Other relevant studies material and websites.
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.
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CHAPTER 3
FINDINGS AND ANALYSIS
46
3.1 COMPARISON OF DABUR INDIA LTD. vs. HINDUSTAN UNILEVER LTD.
DABUR INDIA LTD. HINDUSTAN UNILEVER 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,
7) Janam ghunti,
8) Honey
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,
Pond’s, 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
7) Kissan
8) Kwality walls
9) Lipton
10) Knor
11) Annapurna
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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 Consumer’s Horlicks and Boost, Cadbury’s 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
children’s 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 children’s 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 parent’s 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 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,
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and L’Oreal. Analysts said Dabur’s shampoo brands have eaten into HUL’s 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 company’s 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%.
HUL’s segments haven’t 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 Unilever’s (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 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%.
HUL’s segments haven’t 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
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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, HUL’s 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 Group’s sales were up by 27%. HUL’s 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 fast-moving consumer goods (FMCG) companies mainly because raw
material prices were sharply down in that quarter. For instance, Emami’s raw material cost was
down by 35% and even Godrej Consumer Products Limited’s (GCPL’s) raw material cost was
down by 15%. Both these companies took advantage of lower cost of raw materials and steady
demand for their products. Emami’s operating profit was up by as much as 65%. On the other
hand, even though HUL’s raw material cost was down by 9%, it had no profit growth. Dabur’s
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 September quarter Dabur’s operating profit jumped by
21% compared to the same quarter last year.
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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. 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.
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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 HUL’s share stands at 28% by value. On the
company’s 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 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
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which are mentioned on the 200 gm and 100 gm packs of Colgate dental cream. Last week,
Colgate–Palmolive 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 entry-
level 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 account only for 5% of total market, HUL expects it to touch 10% by 2011 and
15% by 2015. In fact, HUL’s Modern Trade (MT) shares are higher than its General
Trade (GT) shares in many categories. The company’s presence across all channel of
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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 company’s 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 company’s future leverage ratios
3.7 CATEGORY WISE SALE GROWTH OF FMCG SECTOR OF HUL IN INDIA:
CATEGORY %AGE
Soaps & Detergents 19.3
Personal Products 22.4
Ice Cream 15.7
Processed Foods 13.7
Beverages 13.6
Others 19.4
Fig 1.31 Source: www.google.com
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Below is a table representing the growth in products of Dabur in different divisions:
DIFFERENT DIVISIONS GROWTH (%) COMMENTS
Consumer Care Division 17.2
Hair Care 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). Dabur’s brands have gained further share in the normal shampoo category, with a market share (value) of 7.3%.
Oral Care 6.6 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.
Health Supplements 20.6 Glucose grew its strongest at 55.6% and Honey grew 15%. Chyawanprash sales were moderate at 12.4% during the quarter.
Digestives 12.6 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.
Skin Care 42.7 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.
Home Care 8.3 Odomos grew 22.8%. Odonil declined marginally, Odopic grew 23.5%, Sanifresh reported 25% growth. Odomos sales grew 23%.
Foods Division 22.7 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.
Consumer Health Division 15.1 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%.
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International Business Division
38.2 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 division’s 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 product namely, Nasarel for the treatment of Endometeriosis for use in assisted
reproduction. Overall, the segment recorded a growth of 12%.
Hair Care Segment
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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 company’s 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 –
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 fruit
juices, 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
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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 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
58
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.
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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
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 Company’s
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
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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
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.
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Fig1.34
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. Nestlé India
4. GCMMF (AMUL)
5. Dabur India
6. Asian Paints (India)
7. Cadbury India
8. Britannia Industries
9. Procter & Gamble Hygiene and Health Care
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10. Marico Industries
3.14 PROMOTION STRATEGY
Project Shakti: This project was started for Company’s 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. HUL’s 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
Centre’s provide easy access to authentic Ayurvedic treatments and products.
3.15 TRENDS 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
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care, deodorants, convenience foods, health foods etc.Rural India, where penetration
levels are 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
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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 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 Pond’s 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. India’s competitive advantages of good quality leather and the ability to
service small orders were neutralized by China’s 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:
StrengthsThe strengths of a company or group and value to it, and can be what gives it the edge in some areas over the competitors. The following section will outline main strengths of Dabur India.
Being a market leader, as Dabur India is, is key to their success as it boosts reputation, profit and market share.
Dabur India’s marketing strategy has proved to be effective, helping to raise profiles and profits and standing out as a major strength.
Experienced employees are key to the success of Dabur India helping to drive
Strengths Variety of products
Distribution Network
Brand image
Quality Management
Innovation and R&D strength
66
themforward with expertise and knowledge.
Being financially strong helps Dabur India deal with any problems, ride any dip in profits and out perform their rivals.
Dabur India’s distribution chain can be listed as one of their strengths and links to success.
Dabur India’s position in the market is high and strong – a major strength in this industry as they are ahead of many rivals.
WeaknessesWeaknesses of a company or organisation are things that need to be improved or perform better, which are under their control.
Reputation is important, and a damaged one like Dabur India’s is a major weakness as consumers will not trust the firm enough to spend money with them.
A serious weakness for Dabur India is the fact their products/services are of low quality, meaning people will have better-quality 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 India’s 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 ororganisation’s strategic position, or which could be of a benefit to them. This section will outlineopportunities that Dabur India is currently
Weaknesses
Not able to compete with local competitor in the rural market.
Not focus on upper class population
Pricing policy is not good
Opportunities Huge Market
Increasing per capital income
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facing. 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.
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.
Increasing consumption pattern
Potential for making more impact of brand image.
Coming in technology e.g. in water purifiers
ThreatsThreats are factors which may restrict, damage or put areas of the business or organisation atrisk. They are factors which are outside of the company's control. Being aware of the threats and being able to prepare for them makes this section valuable when considering contingency plans and strategies. This section will outline main threats Dabur India is currently facing.
Consumer lifestyle changes could lead to less of a demand for Dabur India products/services.
Tax increases placing additional financial burdens on Dabur India could be a threat.
Change in demographics could threaten Dabur India.
The financial burden of increasing interest rates could be a threat to Dabur India.
Regulations requiring money to be spent 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.
Threats
From High Class Competitor
Proctor & Gamble
Pantene
Dabur
Babool
Dabur lal Dent Manjan
Dettol
Palmolive
Colgate, Nirma
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Fig 1.36
3.18 HUL - Sales growth turns positive as volume growth picks up
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
long-term 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:
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Fig 1.37
Market Share trends –
Hul vs Dabur India ltd From April (2009 – 2010)
HUL
- Soaps
- Detergents
- Shampoo
- Toothpaste
- Skincare
- Tea
Apr-09 Aug-09 Dec-09 Apr-10
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
Dabur
- Toothpaste
- Shampoo
9.6
6.1
10.1
6.4
10.5
5.9
10.6
5.5
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- Chyawanprash 59.6 64.2 62.5 60.9
Fig 1.38
71
CHAPTER 4
CONCLUSIONS
72
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 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 India’s 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.
73
• 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.
This is a try to change the fickle minds of consumers towards rival brands.
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CHAPTER 5
RECOMMENDATIONS /
SUGGESTIONS
75
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 .
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
76
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
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.
77
CHAPTER 6:
LIMITATIONS OF THE
STUDY
78
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.
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.
79
80
MAHARAJA AGRASEN INSTITUTE OF MANAGEMENT STUDIESATTENDANCE FOR PROJECT REPORT
Name of the student :Class :Roll No. :Name of the Supervisor :
S.No. Date Time Progress Report
Signature of the student
Signature of Supervisor
1
2
3
4
5
6
7
8
9
10
*Minimum (8out of 10) 80% attendance compulsory. Coordinator
81
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 booksName 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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