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DISTRIBUTION CHANNEL OF HUL

CHAPTER1: INTRODUCTION OF HUL

Hindustan Unilever Limited (HUL) formerly Hindustan Lever Limited (it was renamed

in late June 2007 as HUL) is India's largest Fast Moving Consumer Good company,

touching the lives of two out of three Indians with over 20 distinct categories in Home &

Personal Care Products and Foods & Beverages.

These products endow the company with a scale of combined volumes of about 4

million tones and sales of nearly Rs.13718 crores touching the lives of two out of three

Indians with over 20 distinct categories in Home & Personal Care Products and Foods &

Beverages. The companys Turnover is Rs. 20, 239 crores (for the 15 month period

January 1, 2008 to March 31, 2009).

HUL is also one of the country's largest exporters; it has been recognized as a Golden

Super Star Trading House by the Government of India. The mission that inspires HUL's

over 15,000 employees, including over 1,300 managers, is to "add vitality to life." 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, Unilever, which holds 52.10% of the equity. The rest of the

shareholding is distributed among 360,675 individual shareholders and financial

institutions.

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Hindustan Unilever Limited (HUL) (BSE: 500696) is India's largest consumer goods

company based in Mumbai, Maharashtra. It is owned by the British-Dutch company

Unileverwhich controls 52% majority stake in HUL. Its products include foods,

beverages, cleaning agents and personal care products.

HUL was formed in 1933 as Lever Brothers India Limited and came into being in 1956

as Hindustan Lever Limited through a merger ofLever Brothers, Hindustan Vanaspati

Mfg. Co. Ltd. and United Traders Ltd. It is headquartered in Mumbai, India and has

employee strength of over 16,500 employees and contributes to indirect employment of

over 65,000 people. The company was renamed in June 2007 as Hindustan Unilever

Limited.

Lever Brothers started its actual operations in India in the summer of 1888, when crates

full of Sunlight soap bars, embossed with the words "Made in England by Lever

Brothers" were shipped to the Kolkata harbour and it began an era of marketing branded

Fast Moving Consumer Goods (FMCG).

Hindustan Unilever's distribution covers over 2 million retail outlets across India directly

and its products are available in over 6.4 million outlets in the country. As per Nielsen

market research data, two out of three Indians use HUL products.

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Brands

HUL is the market leader in Indian consumer products with presence in over 20

consumer categories such as soaps, tea, detergents and shampoos amongst others

with over 700 million Indian consumers using its products. Eighteen of HULs

brands featured in theACNielsenBrand Equity list of 100 Most Trusted Brands

Annual Survey (2012).

The company has a distribution channel of 6.3 million outlets and owns 35 major Indian

brands. Its brands include:

Food brands:

Annapurna salt and atta

Bru coffee

Brooke Bond (3 Roses, Taj Mahal, Taaza, Red Label) tea

Kissan squashes, ketchups, juices and jams

Lipton tea

Knorrsoups & meal makers and soupy noodles

Kwality Wall's frozen dessert

Modern Bread, ready to eat chapattis and other bakery items

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Homecare Brands

ActiveWheel detergent

CifCream Cleaner

Comfort fabric softeners

Domex disinfectant/toilet cleaner

Rin detergents and bleach

Sunlight detergent and colour care

Surf Excel detergent and gentle wash

Vim dishwash

Magic Water Saver

Personal Care Brands:

Aviance Beauty Solutions

Axe deodorant and aftershaving lotion and soap

LEVER Ayush Therapy ayurvedic health care and personal care products

Breeze beauty soap

Clear anti-dandruff hair products

Clinic Plus shampoo and oil

Close Up toothpaste

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Dove skin cleansing & hair care range: bar, lotions, creams and anti-perspirant

deodorants

Denim shaving products

Fair & Lovely skin-lightening products

Hamam

Lakm beauty products and salons

Lifebuoy soaps and handwash range

Liril 2000 soap

Lux soap, body wash and deodorant

Pears soap

Pepsodent toothpaste

Pond'stalcs and creams

Rexona soap

Sunsilkshampoo

Sure anti-perspirant

Vaseline petroleum jelly, skin care lotions

TRESemm

Water Purifier Brand:

Pureit Water Purifier

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Hindustan Unilever Ltd

Type Public

Traded as BSE:500696

BSE SENSEX Constituent

Industry Consumer goods

Founded 1932

Headquarters Mumbai, Maharashtra,India

Key people Harish Manwani (Chairman),Nitin Paranjpe(CEO

and MD)

Products Foods, beverages,cleaning agents and personal

care products

Revenue 22,116crore(US$4.03 billion)(2011-2012)[1]

Net income 2,691crore (US$489.76 million)(2011-2012)

Employees 16,500 (2011)

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Parent UnileverPlc (52%)

Website www.hul.co.in

CHAPTER2: VISSION MISSION OF HUL

MISSION:

Unilevers mission is to add vitality of life. They meet every day needs for nutrition,

hygiene, and personal care with brands that help people feel good, look good and get

more out of life. Our mission Enthused with Vitality.

Vitality is at the heart of everything we do. It's in our brands, our people and our values.

Vitality means different things to different people. Some see it as energy, others view it

more broadly as a healthy state of body and mind of feeling alive. Whatever their

personal definition, millions of people around the world use our productsdaily to

add Vitality to their lives - whether that's through feeling great because theyve got shiny

hair and a brilliant smile, keeping their homes fresh and clean, or by enjoying a great cup

of tea, satisfying meal or healthy snack. Ever since the 19th Century when William

Hesketh Lever stated that the companys mission was "to make cleanliness common

place; to lessen work for women; to foster health and contribute to personal

attractiveness, that life may be more enjoyable and rewarding for the people who use our

products," Vitality has been at the heart of our business.

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Vitality defines what we stand for: our values, what makes us different, and how we

contribute to society. It's the common thread that links our brands and its central to the

unique way we operate around the world.

VISSION:

The four pillars of our vision set out the long term direction for the company where we

want to go and how we are going to get there:

We work to create a better future every day

We help people feel good, look good and get more out of life with brands and

services that are good for them and good for others.

We will inspire people to take small everyday actions that can add up to a big

difference for the world.

We will develop new ways of doing business with the aim of doubling the size of our

company while reducing our environmental impact.

We've always believed in the power of our brands to improve the quality of peoples

lives and in doing the right thing. As our business grows, so do our responsibilities. We

recognize that global challenges such as climate change concern us all. Considering the

wider impact of our actions is embedded in our values and is a fundamental part of who

we are.

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CHAPTER3: DISTRIBUTION CHANNEL

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Product distribution (or place) is one of the four elements of the marketing mix.

Distribution is the process of making a product or service available for use or

consumption by a consumer or business user, using direct means, or using indirect

means with intermediaries.

The other three parts of the marketing mix areproduct,pricing, andpromotion.

Thepath through which goods and servicestravel from the vendorto

theconsumerorpayments for thoseproducts travel from the consumer to the vendor.

Adistributionchannel can be as short as a directtransactionfrom the vendor to the

consumer, or may include several interconnected intermediaries along the way such

as wholesalers, distributers, agents andretailers.

Each intermediary receives the item at onepricingpoint and movies it to the next higher

pricing point until it reaches the finalbuyer. Coffee does not reach the consumer

beforefirst going througha channel involving

thefarmer,exporter,importer, distributorand the retailer. Also called the channel of

distribution.

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Channels and Intermediaries

Distribution of products takes place by means of channels. Channels are sets of

interdependent organisations (called intermediaries) involved in making the product

available for consumption. Merchants are intermediaries that buy and resell products.

Agents and brokers are intermediaries that act on behalf of the producer but do not take

title to the products.

Channel Design

A firm can design any number of channels. Channels are classified by the number of

intermediaries between producer and consumer. A level zero channel has no

intermediaries. This is typical of direct marketing. A level one channel has a single

intermediary. This flow is typically from manufacturer to retailer to consumer.

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CHAPTER4: EVOLUTION OF THE DISTRIBUTION

MODEL

To meet the ever-changing needs of the consumer, HUL has set up a

distribution network that ensures availability of all their products, in all

out lets , a t all i tems. This inc lud es , main tain ing fav ora ble t rad e

r e l a t i ons , p r ov i d i ng , i nnova t i ve i ncen t i ves t o r e t a i l e r s and

or gan i z i ng demand gener a t i on ac t i v i t i e s among hos t o f o t he r t h i ngs .

It has followed a strategy of building its distribution channels in a

transitional manner; an d in d iff e r en t s ucces s i ve phas es o f the

evo l u t i on o f i ts di str ibu tio n sys te m, ha s penetrated well into the rural

market.

Phase I

The first phase of its distribution network had wholesalers placing

bu lk order s direc tlywith the company . Large re ta il er s al so place di rect

orders, which comprised almost 30 percent of the total orders collected.Th e

company s a l e s man g r ouped a l l t hes e o r de r s and p l aced an i nden t

with the HeadOffice. Goods were sent to these markets, with the company

salesman as the consignee.The salesman then collected and distributed the

produc ts to the re spec tive wholesa le rs , agains t cash payment, and the

money was remitted to the company.

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Phase II

The focus of the second phase, which spanned the decades of the 40s, was to

providedes ired products and qua li ty se rv ice to the company s cus tomers . In

order to achieve this,one wholesaler in each market was appointed as a

Registered Wholesaler, a stock pointfor the companys products in that

market. The company salesman still covered themarket, canvassing for

orders from the rest of the trade. He would then distribute stocks from the

Registered Wholesaler through distribution units maintained by the

company.The Registered Wholesaler was given a margin of 1 per cent to

cover the cost ofwarehousing and financing the stocks held by him. The

Registered Wholesaler system,therefore, increased the distribution reach of

the company to a larger number ofcustomers.

Phase III

The highlight of the third phase was the concept of

Redistribution Stockiest (RS) whore placed the Registered Wholesalers. The

Redistribution Stockist was required to provide the distribution units to the

company salesman. The Redistribution Stockist financed hiss tocks and

provided warehous ing faci li ti es to store them.

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The Redistribution Stockist also undertook demand stimulation activities on

beha lf of the company . The second char ac teristic of th is per iod was the

changes brought in as the company realised that the Redistribution Stockist

would be able to provide customer service only if he was serviced well. This

knowledge led to the establishment of the Company Depots system.

This system helped in transshipment, bulk breaking, and acted as a

stock point to minimise stock-outs at the Redistribution Stockist level.In the

recent past, .significant change has been the replacement of the Company

Depot bya system of third party; the Carrying and Forwarding Agents

(C&FAs). The C&FAs actas buffer stock-points to ensure that stock-outs did

not take place. The C&FA system hasalso resulted in cost savings in terms of

direct transportation and reduced time lag indelivery. The most important

bene fi t has been impr oved cus tomer service to theRedis tribution Stock is t.

RSNet

An IT-powered system has been implemented to supply stocks to

redistribution stockists on a continuous replenishment basis. The objective is

to catalyze HULs growth by ensuring that the right product is available at

the right place in right quantities, in the most cost-effective manner.

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For this, stockists have been connected with the com pany through an

Internet-based network, called RSNet, for online interaction on orders,

dispatches Information sharing and monitoring. RS Net covers about 80% of

the company's turnover. Today, the sales system gets to know every day what

HUL stockists have sold to almost a million outlets across the country. RS

Ne t is pa rt of Project Leap, HUL's end- to-end supp ly chain , wh ich also

includes a back-end system connecting suppliers, all companysites an d

s t r e t ch i ng r i gh t up to s t ock i s t s . Power ed by t he I T too l s i t has

im pr o ve d customer service, while ensuring superior availability and impact

visibility at retail points.

Rural Areas and Tier 2 Cities

Lux has high penetration in the urban and semi urban areas. However, it has only

19.8% penetration in the rural areas. The rural market has great untapped potential,

which is notconcentrated on till now. Consumers are becoming more and more aware

and undergoinga surge in disposable income. This huge opportunity can be

explored by Lux. It alreadyhas a strong distribution channel in almost all regions.

What is needed here is a change inthe communica tion strategy to reach out to the

rural cus tomers . The var ious channel s o f communication should be made more

appealing to this rural segment of customers.Over the past two decades, the

company has built a remarkable distribution system thatmoves its soaps to

every corner of India.

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Now it has started to leverage tha t valuable infrastructure to expand its reach to a

huge and overlooked group of consumers: the

rural poor.For rura l In dia , H UL h as e s tab l ish ed a s i ngle dis t r ib ut io n c

hanne l by cons o l i da t i ngcategories. In a significant move, with long-term benefits,

HUL has mounted an initiative,Project Streamline, to further increase its rural reach with

the help of rural sub-stockists.As a result, the distribution network directly covers about

50,000 villages, reaching about250 million consumers.

CHAPTER5: CHANNEL OF DISTRIBUTION of HUL

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1. Manufacturer _ Customer:

This is also known as direct selling because no Middlemen are involved. A producer

may sell directly through his own retail stores, for example, Bata. This is the simplest

and the shortest channel. It is fast and economical. Small producers and producers of

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perishable commodities also sell directly to the local consumers. Big firms adopt direct

selling in order to cut distribution cost and because 274 they have sufficient facilities to

sell directly to the consumers. The producer or the entrepreneur himself performs all the

marketing activities.

2. Manufacturer _ Retailer _ Customer: This is one stage distribution channel having one

middleman, i.e., retailer. In this channel, the producer sells to big retailers like

departmental stores and chain stores who in turn sell to customer. This channel is

very popular in the distribution of consumer durables such as refrigerators, T V sets,

washing machines, typewriters, etc. This channel of distribution is very popular these

days because of emergence of departmental stores, super markets and other big retail

stores. The retailers purchase in large quantities from the producer and perform certain

marketing activities in order to sell the product to the ultimate consumers.

3. Manufacturer _ Wholesaler _ Retailer _ Customer

: This is the traditional channel of distribution. There are two middlemen in this channel

of distribution, namely, wholesaler and retailer. This channel is most suitable for the

products with widely scattered market. It is used in the distribution of consumer products

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like groceries, drugs, cosmetics, etc. It is quite suitable for small scale producers whose

product line is narrow and who require the expert services and promotional support of

wholesalers.

Cutting-edge Distribution Network

HULs distribution network is recognized as one of its key strengths -- that

which helps reach out its products across the length and breadth of this vast

country The need for a strong distribution network is imperative, since hul

has to gain the visibility and has to capture the minds of Indians every here

It has 2000+ suppliers and associates 7,000 stock list and direct coverage in

around million retail outlets across India. To meet the ever-changing needs

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of the consumer, hul has set up a distribution network that ensures

availability of all their products, in all outlets, at all times. This includes,

maintaining favorable trade relations, providing innovative incentives to

retailers and organizing demand generation activities among a host of other

things. It boasts of placing a product across the country in less than 72 hrs.

The first phase of the distribution network had wholesalers placing bulk

orders directly with the company. Large retailers also placed direct orders,

which comprised almost 30 per cent of the total orders collected.

Today, the goods are transferred from the factory to the company

warehouses and are sent to the distributor from there on a daily basis. From

the distributor, the stock reaches the market through daily sales. Typically,

these include the salesman registering the order of a retail outlet and

delivering the goods the next day. Recently it has changed its traditional way

distribution and came out with a new strategy of distribution.

Its because of the change in buying pattern of the consumer due to more

disposable income. There are different channels of distribution like Modern

Trade, which covers al chains of super markets , who get the

stocks directly from the company. Wholesalers and second leg of big retail

outlets called Super Value stores come under the surveillance of the

distributor along with the mass retail outlets. There is also this new concept

in the its distribution channel called Kiosk. Kiosk is a small shop that sells

only sachet s and low pr iced i t ems (be low Rs .10/ - ) . Kiosk

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also does not come under the surveillance of the distributor. In addition

to the ongoing commitment to the traditional grocery trade, it is building a

special relationship with the small but fast emerging modern trade. Its scale

enables it to provide superior customer service including daily

servicing, improving their range availability whilst reducing inventories. It

is using the opportunity of interfacing more

directly with consumers in this retail

environment through specially designed communication and promotions.

This is building traffic into the stores while yielding high growth for the

busines s.

CHAPTER6:THE DISTRIBUTION NETWORK IN

RURAL MARKET

The strategy of distribution should take into account the purchasing habit of

the rural people. While consumables are purchased in the village shop or

Shandies or in bigger villages, the consumer durables are purchased only in

Mandi centers, large towns or nearby cities. Hence the distribution center

has to take the purchasing habit of the rural people into account, so that

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product may be available at the appropriate location. In villages beyond the

reach of the distribution system, the shopkeepers make their own

arrangement for the procurement. Most of them commute to the nearby town

to get the supply. But the expenses incurred resulted in the village

shopkeepers charging consumer more than the maximum retail price.

Generally, the village shopkeeper invest their fund sin purchases and rarely

ever get credit facilities, which if available is made available for very short

duration only. Since the quantum of purchase by the village shopkeeper is

verysmall, the margins are also very meager. The ultimate consumer product

reflects the lack of distribution network.

Distribution Strategies in Rural Market

1. Coverage of Villages:

With improved communication facilities, it is possible to

reach distribution van to the villages. The frequency ofvisits may be fixed,

depending upon the off- takes or sales realization, so that the distribution

cost can be minimized, but not at the cost of cutting down or rural

popu la tion . These dis tribution cabs can be us ed fo r pr omot ion works al so .

For villages with very less population, the distribution can be left to the

initiative of the shop keepers and deal ers in larger villages and to the

shopkeepers ofthe small villages. The distribution arrangement requires

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serious consideration by manufacturing andmarketing men, if they have to

exploit the potential of the rural market

2. Use of Cooperative:

Over three lakh cooperative society operate in the rural are as for or

different purposes like, marketing cooperatives, dairy corporative, farmer

service corporative societies, consumer corporative and other multi purpose

corporative. Given the number ofsuch societies, there is at least one

corporative society of one form or another for every two or three villages.

These societies are linked to higher level of society like taluk, district, or

state level. Thus these corporative have an arrangement for centralized

procurement and dis tr ibut ion through thei r respect ive sta te level feder at ion.

Such state level federation cans be motivated to procure and distribute

consumables items and low level durablesitems to the member societies for

selling to the rural consumers

3.Utilization ofPublic Distribution System:

The Public Distribution System(PDS) in the country is fairly well organized.

The revamped PDS places more emphasis on reaching remote rural areas

like hills and tribal areas. Effective utilization ofthe PDS system

should be explored by the manufacturing and marketing men, since they

already have a distribution set up.

4. Distribution to Feeder Markets / Mandi Towns:

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The villagers visit these to what regular intervals not only for selling the

agricultural produce but also for the purchase of cloth, jewellery , hardware,

radios, torch cells and other durables and consumer product. Lux has

established a good distribution network in theidentified feeder market and

mandi towns. From the feeder market and manditown, the stockiest or

wholesaler arranges for distribution to the village shop in theinterior places.

Comparative analysis Rural:

Fo r r u r a l I nd i a , HUL has e s t ab l i s hed a s i ng l e d i s t r i bu t i on channe l

by cons o l id a t i ng ca tegor ie s. In a signif icant move , with long- term

benefi ts , HUL has mounted an in it ia tive, Project Streamline, to furthe r

increase its rural reach with the help of rural sub-stock lists. As a result, the

distribution network directly covers about 50,000 villages, reaching about

250 million consumers. Consolidation has to be done in the rural setup as the

road and transport facilities are not very good hence one channel is used.

Urban An IT-powered system has been implemented to supply stocks to

redis tr ibut ion s tock li sts on a con t inu ous rep leni shme nt bas is . The

obje ct iv e i s t o c ata lyze HUL s g row th b y ensur ing that the r ight

produc t is avai lable at the righ t place in right quan ti ties, in the most cost -

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effective manner. For this, stock lists have been connected with the company

through an Internet-based network, called RSNet, for online interaction on

orders, dispatches, information sharing and monitoring. RS Net covers

about 80% of the company's turnover. In the urban setup there is no

consolidation as there is fast communication and available transport and

road facilities.

CHAPTER7: HUL SET TO STREAMLINE DISTRIBUTION

NETWORK

Pune:

Hindustan Unilever Ltd (HUL), the countrys largest household and personal care

products maker by sales, is expanding its so-called go to market (GTM) initiative,

launched in Mumbai last year, in an attempt to revamp its national distribution network

and streamline its supply chain.

The project has been a success in Mumbai, where it was started in June, and will be

rolled out in 42 cities and towns across India by the end of 2009, Hemant Bakshi,

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executive director for sales and customer development at HUL, told Mint in an

interview.

Leveraging strengths: Hindustan Unilevers Hemant Bakshi.

The Mumbai pilot is now complete and has delivered significant improvements in

customer service. We are now in the process of rolling out the project in other towns

with population of eight lakh-plus, Bakshi said. It is a very important project for us

and Unilever and we will roll this out eventually in (global) markets that are at a similar

stage of development.

HULs GTM initiative in Mumbai was aimed at rationalizing its distribution network,

make it more efficient, deliver stocks to retailers faster and reduce inventory on their

product shelves. It farmed out the task of stock deliveries to logistics provider Mahindra

Logistics as part of the Mumbai project.

In Mumbai, the company consolidated its 21 distributors into four mega distributors,

who now account for sales of about Rs480 crore, another senior HUL executive said.

Bakshi said dealership reduction has been an ongoing exercise, but declined to provide

figures about the pilot project.

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The GTM initiative has been internally labelled by parent firm Unilever Plc. as one of its

10 most important initiatives said the senior HUL executive, as well as an executive with

a firm that does business with HUL. Both of them declined to be named as they were not

authorized to comment on the companys operations.

A top management team from Unilever, including outgoing chief executive officer

Patrick Cescau, his successor Paul Polman, and HUL chief executive officer Nitin

Paranjpe, are believed to have assessed the success of the pilot plan last month and given

in-principle approval to take the project to key cities in Tamil Nadu, Karnataka, Gujarat

and Madhya Pradesh.

Unilever has said it is looking at global savings of 1.5 billion (Rs9,855 crore) annually

by 2010 through the restructuring operations.

The HUL executive and the HUL business associate added that the company is

restructuring other aspects of its operations as part of the GTM project and that it would

cut back on losses and in-transit theft.

The consolidation is aimed at giving the distributors, who typically operate on a 4%

profit margin, a bigger share of the pie at a time when they are being wooed by other

sectors.

At least a couple of our distributors are now owners of close to Rs100 crore companies,

up from the Rs8-10 crore business they had just under an year ago, the HUL executive

said.

Our distribution network is changing from being one driven by entrepreneurs to

becoming large professional distribution houses with service orientation, Bakshi said.

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Our biggest strength in the market is our distribution network, our knowledge of the

market and our strong brands. We now want to leverage these, ensure that our

distributor-partners make sustainable returns and be prepared for the emerging market of

2013.

HUL had revenues of Rs13,913.40 crore in 2007like its parent company, HUL follows

a calendar year for declaring resultsand sells some of the countrys most recognized

brands such as Surf Excel detergent powder, Lux soaps, Ponds and Dove skin care

products.

As part of its effort to streamline distribution, HUL has also started outsourcing most of

the sales team to professional staffing firms. Traditionally, bookings from retailers was

the responsibility of the distributors sales team.

Distributors salesmen have generally been not very competitively paid and have no job

security and decent working conditions. While they have traditionally been paid between

Rs4,000-7,000, the new salesmen are graduates wherever available and are paid

Rs7,000-11,000 and are from a staffing services company, said the HUL business

associate, adding that HUL is now asking distributors to use their own resources to

upgrade staff offices and training.

Currently, about 2,400 distributors across the country employ 9,000 salesmen to take

weekly orders from a million retail outlets.

Enlisting Mahindra Logistics led to a system being put in place that has cut seven-day

inventory to one day .

Orders are logged in the evening by distributors staff and delivered by the company the

next evening to the distributor. Mahindra Logistics delivers stocks to retailers the next

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morning. Essentially this frees distributors resources that are otherwise tied up in

stocking excess inventory and preventing losses due to in-transit damage. Consumers get

fresher stock from retailers.

The system also ensures that products that languish on a retailers shelves are not

supplied, eliminating losses from expired stock. The shift from dependence on the

unorganized sector to an external logistics supplier will also reduce loss due to pilferage,

one HUL executive said

Mahindra Logistics managing director Sanjay Sinha declined to comment.

The GTM pilot in Mumbai, meanwhile, could make HUL distributors more visible to

retailers because sales people are required to now visit retailers regularly instead of

waiting for orders to come in.

The consumer products business works on personal relationships and it helps for

retailers to have an equation with the distributor, the HUL business associate said.

With retailers now putting a range of global products in every segment on their shelves,

HUL, a major player in the food, personal care and home segments, faces the threat of

shrinking market share.

A May report from the Federation of Indian Chambers of Commerce and industry,

before the crash in financial markets and a global economic slowdown, projected Indias

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household and consumer care products market to grow 16% this fiscal year to Rs95,150

crore.

First Published: Fri, Jan 09 2009.

CHAPTER8: FINDINGS

The new Hindustan Lever see an exciting opportunity for growth. They have

35 powerful brands covering all segments, with leading market positions in most.

Today, these are stronger and more relevant to the consumer than ever.

The people are energized by the scale of the opportunity and determined to seize

it.

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The scale of the business and operations gives them the resources needed.

They are delivering good services and the changes they brought in the products

are welltaken by the customers, by this they are generating sustainable profitable

growth.

Distribution channel of hul is systematic.

Hul is giving a good priority towards its distribution channel.

Hul sees that retailer as weel as consumer get proper benefits.

Hul believes proper channel of distribution gives an impact on the company. It

affects its growth. If the channel is not properly managed then the company may

face loss in profit.

Hul tries that to full fill the requirement of the people involves in distribution

channel.

Distribution channel is an integral part of an organization.

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Hul is giving more importants to its channel

Hul has well organized channel of distribution.

CHAPTER9: CONCLUSION

HUL works to create a better future every day and helps people feel good,

look good and get more out of life with brands and services that are good for

them and good for others.

With over 35 brands spanning 20 distinct categories such as soaps,

detergents, shampoos, skin care, toothpastes, deodorants, cosmetics, tea,

coffee, packaged foods, ice cream, and water purifiers, the Company is a part

of the everyday life of millions of consumers across India. Its portfolio

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includes leading household brands such as Lux, Lifebuoy, Surf Excel, Rin,

Wheel, Fair & Lovely, Ponds, Vaseline, Lakm, Dove, Clinic Plus, Sunsilk,

Pepsodent, Closeup, Axe, Brooke Bond, Bru, Knorr, Kissan, Kwality Walls

and Pureit.

These products are manufactured over 40 factories across India. The

operations involve over 2,000 suppliers and associates. HUL's distribution

network comprises about 4,000 redistribution stockists, covering 6.3 million

retail outlets reaching the entire urban population, and about 250 million

rural consumers.

HUL distribution is a key strength for the company to supply their products

to anywhere in the country. This includes, maintaining favourable trade

relations, providing innovative incentives to retailers and

organizing demand generation activities among a host of other things.

Each business of HUL portfolio has customized the network to meet its

objectives. The most obvious function of providing the logistics support is to

get the companys product to the end customer.

The HUL distribution network has seen a lot of evolvement over time. From

Wholesalers placing order directly with the company, to Registered

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Wholesalers, to Redistribution Stockist (RS), the network has grown to cover

a major part of the Indian urban and rural population.

In recent years, the FMCG sector declined due to down trading. Also because

ofpresence of la rge number of companies try ing to seize th is opportuni ty ,

this force the old HLL for the change and thus, their transformation has

resulted in a new HLL, which has successfully faced this challenge and

reversed this trend.

It has done so by substantially strengthening their brands and building

capabilities. This has already begun to yield benefits and they are returning

to growth. Volume growth is being followed by value growth, which in turn

is bringing profit growth. India is one of the most exciting markets offering

great potential.

Over the next 10 years, the per capita income in India is likely to double. In

FMCG, there is an opportunity to catalyze penetration, increase usage, and

upgrade consumers.

As a result, the FMCG market is expected to grow to over Rs. 100,000 crores

from its current base of Rs. 40,000 crores. The new Hindustan Lever sees an

exciting opportunity for growth. They have 35 powerful brands covering all

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segments, with leading market positions in most. Today, these are stronger

and more relevant to the consumer than ever.

The people are energized by the scale of the opportunity and determined to

seize it. The scale ofthe business and operations gives them the resources

needed. They are delivering good services and the changes they brought in

the products are well taken by the customers, by this they are generating

sustainable profitable growth.

CHAPTER 10: BIBLIOGRAPHY

www.WIkepedia.com

www.HUl.com

www.Fmcg.com

35
http://www.wikepedia.com/http://www.hul.com/http://www.fmcg.com/http://www.wikepedia.com/http://www.hul.com/http://www.fmcg.com/


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www.livemint.com/.../HUL-set-to-streamline-distribution-network.h t.

en.wikipedia.org/wiki/ Hindustan_Unilever
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