HUL-Eshu

INTRODUCTION TO HUL

Hindustan Unilever Limited

Type Public company BSE: 500696

Industry Fast Moving Consumer Goods FMCG)

Founded 1933

Headquarters Mumbai, India

Key people Harish Manwani (Chairman), Nitin Paranjpe (CEO and Managing Director)

Products Home & Personal Care, Food & Beverages

Revenue  20,869.57 crore (US$4.61 billion) (2008-2009) [1]

Employees Over 65,000 direct & indirect employees

Sep-2010

Parent Unilever Plc (52%)

Website www.hul.co.in

Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods Company, touching the

lives of two out of three Indians with over 20 distinct categories in Home & Personal Care Products and

Foods & Beverages. The company’s Turnover is Rs. 20, 239 crores (for the 15 month period – January 1,

2008 to March 31, 2009).

HUL is a subsidiary of Unilever, one of the world’s leading suppliers of fast moving consumer goods with

strong local roots in more than 100 countries across the globe with annual sales of €40.5 billion in 2008.

Unilever has about 52% shareholding in HUL.

Hindustan Unilever was recently rated among the top four companies globally in the list of “Global Top

Companies for Leaders” by a study sponsored by Hewitt Associates, in partnership with Fortune magazine

and the RBL Group. The company was ranked number one in the Asia-Pacific region and in India.

The mission that inspires HUL's more than 15,000 employees, including over 1,400 managers, is to “add

vitality to life". The company 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 about 52 % of the equity.

Heritage

HUL’s heritage dates back to 1888, when the first Unilever product, Sunlight, was introduced in India.

Local manufacturing began in the 1930s with the establishment of subsidiary companies. They merged in

1956 to form Hindustan Lever Limited (The company was renamed Hindustan Unilever Limited on June

25, 2007). The company created history when it offered equity to Indian shareholders, becoming the first

foreign subsidiary company to do so. Today, the company has more than three lakhs resident

shareholders.

HUL’s brands -- like Lifebuoy, Lux, Surf Excel, Rin, Wheel, Fair & Lovely, Sunsilk, Clinic, Close-up,

Pepsodent, Lakme, Brooke Bond, Kissan, Knorr, Annapurna, Kwality- Walls - are household names across

LBA –ORGANIZATION STUDY AT HUL Page 2

Sep-2010

the country and span many categories - soaps, detergents, personal products, tea, coffee, branded staples,

ice cream and culinary products. They are manufactured in over 35 factories, several of them in backward

areas of the country. The operations involve over 2,000 suppliers and associates.

HUL's distribution network covers 6.3 million retail outlets including direct reach to over 1 million. HUL

has traditionally been a company, which incorporates latest technology in all its operations. The Hindustan

Lever Research Centre (now Hindustan Unilever Research Centre) was set up in 1958.

Doing Well by Doing Good

HUL believes that an organization’s worth is also in the service it renders to the community. HUL focuses

on hygiene, nutrition, enhancement of livelihoods, reduction of greenhouse gases and water footprint. It is

also involved in education and rehabilitation of special or underprivileged children, care for the destitute

and HIV-positive, and rural development. HUL has also responded in case of national calamities /

adversities and contributes through various welfare measures, most recent being the relief and

rehabilitation of the people affected by the Tsunami disaster, in India.

HUL’s Project Shakti is a rural initiative that targets small villages populated by less than 5000 individuals.

Through Shakti, HUL is creating micro-enterprise opportunities for rural women, thereby improving their

livelihood and the standard of living in rural communities.

Shakti also provides health and hygiene education through the Shakti Vani programme. The program now

covers 15 states in India and has over 45,000 women entrepreneurs in its fold, reaching out to 100,000

villages and directly reaching to over three million rural consumers.

HUL also runs 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

diarrhoea. It has already touched 120 million people in approximately 50, 676 villages across India. If

Hindustan Unilever straddles the Indian corporate world, it is because of being single- minded in

identifying itself with Indian aspirations and needs in every walk of life.

Cultures and Values:

LBA –ORGANIZATION STUDY AT HUL Page 3

Sep-2010

Unilever's mission is to add Vitality to life. We meet everyday needs for nutrition; hygiene and personal

care with brands that help people feel good, look good and get more out of life. Our deep roots in local

cultures and markets around the world give us our strong relationship with consumers and are the

foundation for our future growth.

We will bring our wealth of knowledge and international expertise to the service of local consumers - a

truly multi-local multinational. Our long-term success requires a total commitment to exceptional

standards of performance and productivity, to working together effectively, and to a willingness to

embrace new ideas and learn continuously. To succeed also requires, we believe, the highest standards of

corporate behavior towards everyone we work with, the communities we touch, and the environment on

which we have an impact. This is our road to sustainable, profitable growth, creating long-term value for

our shareholders, our people, and our business partners.

Hindustan Unilever Limited considers quality as one of the principal strategic objectives to guarantee its

growth and leadership in the markets in which it operates. The company is committed to respond

creatively and competitively to the changing needs and aspirations of our consumers through relentless

pursuit of technological excellence, innovation and quality management across our businesses, and offer

superior quality products and services that are appropriate to the various price points in the market as well

as to our commitment to building shareholder value.

The company recognizes that its employees are the primary source of success in its operations and is

committed to training and providing them the necessary tools and techniques as well as empowering them

to ensure broad base compliance of this policy in the organisation at all levels.

The company is committed to fulfill its legal and statutory obligations and international standards of

product safety and hygiene and will not knowingly sell product that is harmful to consumers or their

belongings. It will institute systems and measures to monitor compliance in order to meet its

responsibilities to consumers.

The company will maintain an open communication channel with its consumers and customers and will

carefully monitor the feedback to continuously improve its products and services and set quality standards

to fulfill them. The company is committed to extend its quality standards to its contract manufacturers,

key suppliers and service providers and by entering into alliances with them, to jointly improve the

LBA –ORGANIZATION STUDY AT HUL Page 4

Sep-2010

quality of its products and services. This policy is applicable to production from its own facilities as well

as to production that is outsourced. The company will periodically review this quality policy for its

effectiveness and consistency with business objectives. The company delegates authority and

responsibility for dissemination and implementation of this policy to each Business and Unit Head.

Leadership

HUL has produced many business leaders for corporate India; one of these, Manvinder Singh Banga, has

become a member of Unilever's Executive (UEx).A survey conducted by International Managers

Evaluating Committee (IMEC) found that HUL has best managers in the industry and they are getting

best remuneration for their jobs. HUL's leadership-building potential was recognized when it was ranked

4th in the Hewitt Global Leadership Survey 2007 with only GE, P&G and Nokia ranking ahead of HUL

in the ability to produce leaders with such regularity.

Awards:

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

House by the Government of India. In 2007, Hindustan Unilever was rated as the most respected

company in India for the past 25 years by Business world, one of India’s leading business magazines.

The rating was based on a compilation of the magazine's annual survey of India’s most reputed

companies over the past 25 years. HUL was one of the eight Indian companies to be featured on the

Forbes list of World’s Most Reputed companies in 2007.

Research facilities

The Hindustan Unilever Research Centre (HURC) was set up in 1967 in Mumbai, and Unilever Research

India in Bangalore in 1997. Staff at these centres developed many innovations in products and

manufacturing processes. In 2006, the company's research facilities were brought together at a single site

in Bangalore.

Community services

HUL also renders services to the community, focusing on health & hygiene education, empowerment of

LBA –ORGANIZATION STUDY AT HUL Page 5

Sep-2010

women, and water management. It is also involved in education and rehabilitation of underprivileged

children, care for the destitute and HIV-positive, and rural development.

HUL has also responded to national calamities, for instance with relief and rehabilitation after the 2004

tsunami caused devastation in South India. In 2001, the company embarked on a programme called

Shakti, through which it creates micro-enterprises for rural women. Shakti also includes health and

hygiene education through the Shakti Vani Programme, which now covers 15 states in India with over

45,000 women entrepreneurs in 135,000 villages. By the end of 2010, Shakti aims to have 100,000 Shakti

entrepreneurs covering 500,000 villages, touching the lives of over 600 million people. 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 diarrhoea. So far it has reached 120 million people in over 50,000 villages.

Direct Selling Division

HUL also runs Hindustan Unilever Network (HULN), a direct selling business arm. Under HULN, health

products are marketed by AYUSH in collaboration with Arya Vaidya Pharmacy, Coimbatore; beauty

products by Aviance; home products by Lever Home, and male grooming by DIY. There are also

premium products for beauty salons and others.

LBA –ORGANIZATION STUDY AT HUL Page 6

Sep-2010

HISTORY

In the summer of 1888, visitors to the Kolkata harbor noticed crates full of Sunlight soap bars, embossed

with the words "Made in England by Lever Brothers". With it began an era of marketing branded Fast

Moving Consumer Goods (FMCG).

Soon after followed Lifebuoy in 1895 and other famous brands like Pears, Lux and Vim. Vanaspati was

launched in 1918 and the famous Dalda brand came to the market in 1937. In 1931, Unilever set up its first

Indian subsidiary, Hindustan Vanaspati Manufacturing Company, followed by Lever Brothers India

Limited (1933) and United Traders Limited (1935). These three companies merged to form HUL in

November 1956; HUL offered 10% of its equity to the Indian public, being the first among the foreign

subsidiaries to do so.

Unilever now holds 52.10% equity in the company. The rest of the shareholding is distributed among about

360,675 individual shareholders and financial institutions. The erstwhile Brooke Bond's presence in India

dates back to 1900. By 1903, the company had launched Red Label tea in the country. In 1912, Brooke

Bond & Co. India Limited was formed. Brooke Bond joined the Unilever fold in 1984 through an

international acquisition. The erstwhile Lipton's links with India were forged in 1898. Unilever acquired

Lipton in 1972 and in 1977 Lipton Tea (India) Limited was incorporated. Pond's (India) Limited had been

present in India since 1947. It joined the Unilever fold through an international acquisition of Chesebrough

Pond's USA in 1986.

Since the very early years, HUL has vigorously responded to the stimulus of economic growth. The growth

process has been accompanied by judicious diversification, always in line with Indian opinions and

aspirations. The liberalization of the Indian economy, started in 1991, clearly marked an inflexion in HUL's

and the Group's growth curve. Removal of the regulatory framework allowed the company to explore every

single product and opportunity segment, without any constraints on production capacity. Simultaneously,

deregulation permitted alliances, acquisitions and mergers. In one of the most visible and talked about

events of India's corporate history, the erstwhile Tata Oil Mills Company (TOMCO) merged with HUL,

effective from April 1, 1993.

LBA –ORGANIZATION STUDY AT HUL Page 7

Sep-2010

In 1996, HUL and yet another Tata company, Lakme Limited, formed a 50:50 joint venture, Lakme

Unilever Limited, to market Lakme's market-leading cosmetics and other appropriate products of both the

companies. Subsequently in 1998, Lakme Limited sold its brands to HUL and divested its 50% stake in the

joint venture to the company. HUL formed a 50:50 joint venture with the US-based Kimberly Clark

Corporation in 1994, Kimberly-Clark Lever Ltd, which markets Huggies Diapers and Kotex Sanitary Pads.

HUL has also set up a subsidiary in Nepal, Unilever Nepal Limited (UNL), and its factory represents the

largest manufacturing investment in the Himalayan kingdom.

The UNL factory manufactures HUL's products like Soaps, Detergents and Personal Products both for the

domestic market and exports to India. The 1990s also witnessed a string of crucial mergers, acquisitions

and alliances on the Foods and Beverages front. In 1992, the erstwhile Brooke Bond acquired Kothari

General Foods, with significant interests in Instant Coffee. In 1993, it acquired the Kissan business from

the UB Group and the Dollops Ice-cream business from Cadbury India.

As a measure of backward integration, Tea Estates and Doom Dooma, two plantation companies of

Unilever, were merged with Brooke Bond. Then in 1994, Brooke Bond India and Lipton India merged to

form Brooke Bond Lipton India Limited (BBLIL), enabling greater focus and ensuring synergy in the

traditional Beverages business. 1994 witnessed BBLIL launching the Wall's range of Frozen Desserts. By

the end of the year, the company entered into a strategic alliance with the Kwality Ice-cream Group

families and in 1995 the Milk food 100% Ice-cream marketing and distribution rights too were acquired.

Finally, BBLIL merged with HUL, with effect from January 1, 1996. The internal restructuring culminated

in the merger of Pond's (India) Limited (PIL) with HUL in 1998. The two companies had significant

overlaps in Personal Products, Speciality Chemicals and Exports businesses, besides a common distribution

system since 1993 for Personal Products. The two also had a common management pool and a technology

base. The amalgamation was done to ensure for the Group, benefits from scale economies both in domestic

and export markets and enable it to fund investments required for aggressively building new categories. In

January 2000, in a historic step, the government decided to award 74 per cent equity in Modern Foods to

HUL, thereby beginning the divestment of government equity in public sector undertakings (PSU) to

private sector partners.

LBA –ORGANIZATION STUDY AT HUL Page 8

Sep-2010

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

Pasteurized Crabmeat business of the Amalgam Group of Companies, a leader in value added Marine

Products exports. HUL launched a slew of new business initiatives in the early part of 2000’s. Project

Shakti was started in 2001. It is a rural initiative that targets small villages populated by less than 5000

individuals. It is a unique win-win initiative that catalyses rural affluence even as it benefits business.

Currently, there are over 45,000 Shakti entrepreneurs covering over 100,000 villages across 15 states and

reaching to over 3 million homes.

In 2002, HUL made its foray into Ayurvedic health & beauty centre category with the Ayush product range

and Ayush Therapy Centres. Hindustan Unilever Network, Direct to home business was launched in 2003

and this was followed by the launch of ‘Pureit’ water purifier in 2004. In 2007, the Company name was

formally changed to Hindustan Unilever Limited after receiving the approval of share holders during the

74th AGM on 18 May 2007. Brooke Bond and Surf Excel breached the Rs 1,000 crore sales mark the

same year followed by Wheel which crossed the Rs.2, 000 crore sales milestone in 2008. On 17th October

2008, HUL completed 75 years of corporate existence in India.

LBA –ORGANIZATION STUDY AT HUL Page 9

Sep-2010

YEAR MILESTONES

1888 Sunlight soap introduced in India.

1895 Lifebuoy soap launched; Lever Brothers appoints agents in Mumbai, Chennai, Kolkata, and

Karachi.

1902 Pears soap introduced in India.

1903 Brooke Bond Red Label tea launched.

1905 Lux flakes introduced.

1913 Vim scouring powder introduced.

1914 Vinolia soap launched in India.

1918 Vanaspati introduced by Dutch margarine manufacturers like Van den Berghs, Jurgens,

Verschure Creameries, and Hartogs.

1922 Rinso soap powder introduced.

1924 Gibbs dental preparations launched.

1925 Lever Brothers gets full control of North West Soap Company.

1926 Hartogs registers Dalda Trademark.

1930 Unilever is formed on January 1 through merger of Lever Brothers and Margarine Unie.

1931 Hindustan Vanaspati Manufacturing Company registered on November 27; Sewri factory site

bought.

LBA –ORGANIZATION STUDY AT HUL Page 10

Sep-2010

1932 Vanaspati manufacture starts at Sewri.

1933 Application made for setting up soap factory next to the Vanaspati factory at Sewri; Lever

Brothers India Limited incorporated on October 17.

1934 Soap manufacture begins at Sewri factory in October; North West Soap Company's Garden

Reach Factory, Kolkata rented and expanded to produce Lever brands.

1935 United Traders incorporated on May 11 to market Personal Products.

1937 Mr. Prakash Tandon, one of the first Indian covenanted managers, joins HVM.

1939 Garden Reach Factory purchased outright; concentration on building up Dalda Vanaspati as a

brand.

1941 Agencies in Mumbai, Chennai, Kolkata and Karachi taken over; company acquires own sales

force.

1942 Unilever takes firm decision to "train Indians to take over junior and senior management

positions instead of Europeans".

1943 Personal Products manufacture begins in India at Garden Reach Factory.

1944 Reorganization of the three companies with common management but separate marketing

operations.

1947 Pond's Cold Cream launched.

1951 Mr. Prakash Tandon becomes first Indian Director. Shamnagar, Tiruchy, and Ghaziabad

Vanaspati factories bought.

LBA –ORGANIZATION STUDY AT HUL Page 11

Sep-2010

1955 65% of managers are Indians.

1956 Three companies merge to form Hindustan Unilever Limited, with 10% Indian equity

participation.

1957 Unilever Special Committee approves research activity by Hindustan Unilever.

1958 Research Unit starts functioning at Mumbai Factory.

1959 Surf launched.

1961 Mr. Prakash Tandon takes over as the first Indian Chairman; 191 of the 205 managers are

Indians.

1962 Formal Exports Department starts.

1963 Head Office building at Back bay Reclamation, Mumbai opened.

1964 Etah dairy set up, Anik ghee launched; Animal feeds plant at Ghaziabad; Sunsilk shampoo

launched.

1965 Signal toothpaste launched; Indian shareholding increases to 14%.

1966 Lever's baby food, more new foods introduced; Nickel catalyst production begins; Indian

shareholding increases to 15%. Statutory price control on Vanaspati; Taj Mahal tea launched.

1967 Hindustan Unilever Research Centre opens in Mumbai.

1968 Mr. V. G. Rajadhyaksha takes over as Chairman from Mr. Prakash Tandon; Fine Chemicals

Unit commissioned at Andheri; informal price control on soap begins.

LBA –ORGANIZATION STUDY AT HUL Page 12

Sep-2010

1969 Rin bar launched; Fine Chemicals Unit starts production; Bru coffee launched

1971 Mr. V. G. Rajadhyaksha presents plan for diversification into chemicals to Unilever Special

Committee - plan approved; Clinic shampoo launched.

1973 Mr. T. Thomas takes over as Chairman from Mr. V. G. Rajadhyaksha.

1974 Pilot plant for industrial chemicals at Taloja; informal price control on soaps withdrawn; Liril

marketed.

1975 Ten-year modernization plan for soaps and detergent plants; Jammu project work begins;

statutory price control on Vanaspati and baby foods withdrawn; Close-up toothpaste launched.

1976 Construction work of Haldia chemicals complex begins; Taloja chemicals unit begins

functioning.

1977 Jammu synthetic Detergents plant inaugurated; Indian shareholding increases to 18.57%.

1978 Indian shareholding increases to 34%; Fair & Lovely skin cream launched.

1979 Sodium Tripolyphospate plant at Haldia commissioned.

1980 Dr. A. S. Ganguly takes over as Chairman from Mr. T. Thomas; Unilever shareholding in the

company comes down to 51%.

1982 Government allows 51% Unilever shareholding.

1984 Foods, Animal Feeds businesses transferred to Lipton.

1986 Agri-products unit at Hyderabad starts functioning - first range of hybrid seeds comes out;

LBA –ORGANIZATION STUDY AT HUL Page 13

Sep-2010

Khamgaon Soaps unit and Yavatmal Personal Products unit start production.

1988 Launch of Lipton Taaza tea.

1990 Mr. S. M. Datta takes over as Chairman from Dr. A. S. Ganguly.

1991 Surf Ultra detergent launched.

1992 HUL recognized by Government of India as Star Trading House in Exports.

1993 HUL's largest competitor, Tata Oil Mills Company (TOMCO), merges with the company with

effect from April 1, 1993, the biggest such in Indian industry till that time. Merger ultimately

accomplished in December 1994; Launch of Vim bar; Kissan acquired from the UB Group.

1994 HUL forms Unilever Nepal Limited, HUL and US-based Kimberley-Clark Corporation form

50:50 joint venture - Kimberley-Clark Lever Ltd. - to market Huggies diapers and Kotex

feminine care products. Factory set up at Pune in 1995; HUL acquires Kwality and Milk food

100% brand names and distribution assets. HUL introduces Wall's.

1995 HUL and Indian cosmetics major, Lakme Ltd., form 50:50 joint ventures – Lakme Lever Ltd.;

HUL enters branded staples business with salt; HUL recognized as Super Star Trading House.

1996 Mr. K. B. Dadiseth takes over as Chairman from Mr. S. M. Datta; Merger of Group company,

Brooke Bond Lipton India Limited, with HUL, with effect from January 1; HUL introduces

branded Atta; Surf Excel launched.

1997 Unilever sets up International Research Laboratory in Bangalore; new Regional Innovation

Centres also come up.

1998 Group company, Pond's India Ltd., merges with HUL with effect from January 1, 1998. HUL

acquires Lakme brand, factories and Lakme Ltd.'s 50% equity in Lakme Lever Ltd.

LBA –ORGANIZATION STUDY AT HUL Page 14

Sep-2010

2000 Mr. M. S. Banga takes over as Chairman from Mr. K. B. Dadiseth, who joins the Unilever

Board; HUL acquires 74% stake in Modern Food Industries Ltd., the first public sector

company to be disinvested by the Government of India.

2002 HUL enters Ayurvedic health & beauty centre category with the Ayush range and Ayush

Therapy Centres.

2003 Launch of Hindustan Lever Network; acquisition of the Amalgam Group

2005 Launch of "Pureit" water purifiers

2006 Brooke fields food operations moved to Mumbai

2007 Company name has been changed from Hindustan Lever Ltd to Hindustan Unilever Ltd.

2008 Hindustan Unilever Limited has informed that Mr. Sanjiv kakkar, Executive Director, Sales & Customer Development has been appointed Chairman, Unilever Russia, Ukraine and Belarus (RUB), with effect from 1st September, 2008.

HUL completes 75 years on 17th October 2008

2009 Hindustan Unilever decided to license 'Lakme' and 'Lever Ayush', brands to its subsidiary,

Lakme Lever Private Limited, for the Beauty and Wellness services business.

2010 Hindustan Unilever said it exited from BPO firm Capgemini Business Services India by selling its remaining 49% stake to IT consultancy firm Cap Gemini SA.

INDUSTRY PROFILE

LBA –ORGANIZATION STUDY AT HUL Page 15

Sep-2010

Markets all over the world have been on a roll in 2003 and the Indian bourses are no exception having

gained almost 60% in 2003. During this period, while there are sectors that have outperformed this

benchmark index, there are also sectors that have underperformed. FMCG registered gains of just 33% on

the BSE FMCG Index last year. At the macro level, Indian economy is poised to remained buoyant and

grow at more than 7%. The economic growth would impact large proportions of the population thus

leading to more money in the hands of the consumer. Changes in demographic composition of the

population and thus the market would also continue to impact the FMCG industry.

Recent survey conducted by a leading business weekly, approximately 47 per cent of India's 1 + billion

people were under the age of 20, and teenagers among them numbered about 160 million. Together, they

wielded INR 14000 Cr worth of discretionary income, and their families spent an additional INR 18500 Cr

on them every year. By 2015, Indians under 20 are estimated to make up 55% of the population - and wield

proportionately higher spending power. Means, companies that are able to influence and excite such

consumers would be those that win in the market place.

The Indian FMCG market has been divided for a long time between the organized sector and the

unorganized sector. While the latter has been crowded by a large number of local players, competing on

margins, the former has varied between a two-player-scenario to a multi-player one. Unlike the U.S.

market for fast moving consumer goods (FMCG), which is dominated by a handful of global players,

India's Rs.460 billion FMCG market remains highly fragmented with roughly half the market going to

unbranded, unpackaged home made products.

This presents a tremendous opportunity for makers of branded products who can convert consumers to

branded products. However, successfully launching and growing market share around a branded product in

India presents tremendous challenges. Take distribution as an example.

India is home to six million retail outlets and super markets virtually do not exist. This makes logistics

particularly for new players extremely difficult. Other challenges of similar magnitude exist across the

FMCG supply chain.

The fact is that FMCG is a structurally unattractive industry in which to participate. Even so, the

opportunity keeps FMCG makers trying.

LBA –ORGANIZATION STUDY AT HUL Page 16

Sep-2010

At the macro-level, over the long term, the efforts on the infrastructure front (roads, rails, power, river

linking) are likely to enhance the living standards across India. Till date, India's per capita consumption of

most FMCG products is much below world averages. This is the latent potential that most FMCG

companies are looking at.

Even in the much-penetrated categories like soaps/detergents companies are focusing on getting the

consumer up the value chain. Going forward, much of the battle will be fought on sophisticated distribution

strengths. Typically, a consumer buys these goods at least once a month. The sector covers a wide gamut

of products such as detergents, toilet soaps, toothpaste, shampoos, creams, powders, food products,

confectioneries, beverages, and cigarettes.

Typical characteristics of FMCG products are: -

1. The products often cater to 3 very distinct but usually wanted for aspects - necessity, comfort,

luxury. They meet the demands of the entire cross section of population. Price and income elasticity

of demand varies across products and consumers.

2. Individual items are of small value (small SKU's) although all FMCG products put together

account for a significant part of the consumer's budget.

3. The consumer spends little time on the purchase decision. He seldom ever looks at the technical

specifications. Brand loyalties or recommendations of reliable retailer/ dealer drive purchase

decisions.

4. Limited inventory of these products (many of which are perishable) are kept by consumer and

prefers to purchase them frequently, as and when required.

5. Brand switching is often induced by heavy advertisement, recommendation of the retailer or word

of mouth.

Distinguishing features of Indian FMCG Business

LBA –ORGANIZATION STUDY AT HUL Page 17

Sep-2010

FMCG companies sell their products directly to consumers. Major features that distinguish this sector

from the others include the following:

Design and Manufacturing

1. Low Capital Intensity - Most product categories in FMCG require relatively minor investment in

plant and machinery and other fixed assets. Also, the business has low working capital intensity as

bulk of sales from manufacturing take place on a cash basis.

2. Technology - Basic technology for manufacturing is easily available. Also, technology for most

products has been fairly stable. Modifications and improvements rarely change the basic process.

3. Third-party Manufacturing - Manufacturing of products by third party vendors is quite common.

Benefits associated with third party manufacturing include (1) flexibility in

production and inventory planning; (2) flexibility in controlling labor costs; and (3) logistic -

sometimes it’s essential to get certain products manufactured near the market.

Marketing and Distribution

Marketing function is sacrosanct in case of FMCG companies. Major features of the marketing

function include the following: -

1. High Initial Launch Cost - New products require a large front-ended investment in product

development, market research, test marketing and launch. Creating awareness and develop

franchise for a new brand requires enormous initial expenditure on launch advertisements, free

samples and product promotions.

2. Launch costs are as high as 50- 100% of revenue in the first year. For established brands,

advertisement expenditure varies from 5 - 12% depending on the categories.

3. Limited Mass Media Options - The challenge associated with the launch and/or a brand- building

initiative is that few no mass media options. TV reaches 67% of urban

consumers and 35% of rural consumers.

4. Alternatives like wall paintings, theatres, video vehicles, special packaging and consumer

promotions become an expensive but required activity associated with a successful FMCG.

LBA –ORGANIZATION STUDY AT HUL Page 18

Sep-2010

5. Huge Distribution Network - India is home to six million retail outlets, including 2 million in

5,160 towns and four million in 627,000 villages. Super markets virtually do not exist in India.

6. This makes logistics particularly for new players extremely difficult. It also makes new product

launches difficult since retailers are reluctant to allocate resources and time to slow moving

products.

7. Critical factors for success are the ability to build, develop, and maintain a robust distribution

network.

Competition

1. Significant Presence of Unorganized Sector - Factors that enable small, unorganized players with

local presence to flourish include the following:

2. Basic technology for most products is fairly simple and easily available.

3. The small-scale sector in India enjoys exemption/ lower rates of excise duty, sales tax etc. This

makes them more price competitive vis-à-vis the organized sector.

4. A highly scattered market and poor transport infrastructure limits the ability of MNCs and national

players to reach out to remote rural areas and small towns.

5. Low brand awareness enables local players to market their spurious look-alike brands.

6. Lower overheads due to limited geography, family management, focused product lines and minimal

expenditure on marketing. A general assessment of this would lead to the conclusion that FMCG is

not a Structurally Attractive Industry to Enter.

Entry barriers are high due the nightmare logistics associated with distributing a FMCG and the limited

mass media options available to build a brand. Likewise, the intensity of competition from branded and

unbranded goods and the power of retailers make the FMCG a structurally unattractive industry in

which to enter and difficult industry in which to remain a competitive player.

Blue-print for the Future

LBA –ORGANIZATION STUDY AT HUL Page 19

Sep-2010

To offer a blue-print for an industry which is one of the most dynamic and demanding is like

scheduling events in my life for the days to come. One thing in common between this two would

always be the risk of uncertainty involved is very high.

Any draft on these topics would certainly always involve issues like distributions, channel-conflict,

optimizing operations (supply chain) and if not the last, rural marketing.

This blueprint will delve 4 basic concepts and why it could be of major reckoning in the future.

These are: -

1. Excellence in operations - through Value Chain De-Verticalisation

2. Rural marketing

3. Distributions

4. Brand managers to Business managers

Excellence in operations - Value Chain De-Verticalisation

Excellence in Operations remains an illusion for most FMCG companies. This will be remaining as

long as they stay confined within the organizational structures and mindsets associated with today's

vertically integrated business model. According to a McKinsey report based on problems and

opportunities relating to operational excellence, the study comes out with the following findings: -

1. Operations issues get neglected from top-management two main business processes of

customer management and consumer management. It suggests that Operations issues get a lot less

than 20% of the Executive Committee's agenda time. To compound the problem, only around 10% of

top executives in FMCG companies have direct personal experience in Operations. It is hardly

surprising; therefore, that the commitment to drive radical change may not be as strong in Operations

as it is in the other two business processes.

LBA –ORGANIZATION STUDY AT HUL Page 20

Sep-2010

2. Organization structure of many MNC's makes it's tough to optimize decision-making or to spread

best practices across units or countries. Around 10% of FMCG companies have a global Operations

director with full responsibility for both operational improvement and strategic resource allocation.

3. Most of the top quartile talent is siphoned for handling marketing or finance functions.

Operations functions are short of management talent.

High potential generalists often find FMCG Operations too internally focused and too technical. At

the other end of the scale, senior Operations experts are often attracted to other industries - such as

electronics, automotive or engineering - where Operations is both more highly regarded and more

highly rewarded. These problems are not new. What is new is that a potential solution - the

combination of organizational separation and value chain de-Verticalisation. De-Verticalisation

Multinational FMCG companies that are able to achieve organizational separation - and functionally

organized national companies -

This effectively means outsourcing your supply chain activities to a third party. Typically this will

involve selling the existing Operations assets and activities, including procurement, manufacturing,

primary distribution, and process R&D, to a financial buyer, a third party manufacturer or a joint

venture with other FMCG companies. In essence, this leaves an 'asset light' FMCG company and an

'asset heavy' supply company.

From the perspective of the FMCG Company, the supply company of its will now be in a

position to address the above-mentioned operational issues.

A strongly incentivized management team often directly accountable to the capital markets -

will be better able to attract and motivate talented operations managers, focus 100% of its

attention on Operations issues and build operational skills.

And operational excellence will translate directly into bottom-line impact. Thus de-

Verticalisation allows the management of the FMCG company to focus entirely on

customer and consumer management - the main engines of growth - while sharing in

progressive Operations cost improvements through either an equity stake or 'open book'

supply contracts. From the financial perspective this would also help the FMCG Company get

a quantum leap in return on capital employed.

LBA –ORGANIZATION STUDY AT HUL Page 21

Sep-2010

Industry examples

A few FMCG companies have already outsourced manufacturing to some degree - including

Sara Lee, Nike and several beverage companies - or begun establishing themselves as

specialized players. But compared to industries like automotive and electronics, where much

of the industry value chain has already changed owners, FMCG is some way behind. One

reason has been a lack of willing buyers of Operations assets.

However, there certainly is a trend at present and a visible scope in the future wherein private

equity firms, raw material suppliers and specialist manufacturers, constrained by growth in

their traditional markets, are now actively exploring the FMCG de-Verticalisation opportunity.

One big challenge remains in managing the interfaces between the two companies - for

example, product development, forecasting and order processing.

However, the lesson from multinationals that have successfully implemented organizational

separation - and those that already make extensive use of co-packers or third party logistics

providers - is that this challenge is far less daunting than it may at first appear.

E-enablement technologies aid to disaggregate the value chain without losing the connectivity

between its component parts. About the new product development process - that can be

addressed by retaining a pilot plant in-house".

Rural marketing of FMCG.

Rural marketing has become the latest marketing mantra of most FMCG majors. True, rural

India is vast with unlimited opportunities. All waiting to be tapped by FMCGs. Not surprising

that the Indian FMCG sector is busy putting in place a parallel rural marketing strategy.

Among the FMCG majors, Hindustan Lever, Marico Industries, Colgate Palmolive and

Britannia Industries are only a few of the FMCG majors who have been gung-ho about rural

marketing.70% of the nation's population, that means rural India can bring in the much-needed

volumes and help FMCG companies to log in volume-driven growth. That should be music to

FMCGs who have already hit saturation points in urban India.

Not just rural population is numerically large; it is growing richer by the day.

LBA –ORGANIZATION STUDY AT HUL Page 22

Sep-2010

Food grain production touched 200 million tons during fiscal 1999 against 176 million tones logged

during fiscal 1991. Not just improved crop yields; tax-exemption on rural income too has been

responsible for this enhanced rural purchasing power. Consider this statistics from a National Council

of Applied Research (NCAER) survey: lower income group is expected to shrink from over 60

percent (1996) to 20 per cent by 2007 and the higher income group is expected to rise by more than

100 per cent.

Value-volume trade-off Rural marketing could open the doors of paradise, but the path is paved with

thorns. One major limitation here is this: most FMCG players just do not have the critical size for

going all out for rural marketing. That is why most FMCG players are expected to concentrate both on

rural and urban marketing: focus on urban markets for value and focus on rural markets for volumes.

One result-oriented marketing strategy here is this: offer value-additions to existing lines to lure the

urban consumer and alongside offer the rural consumer wide-ranging choices within a single product

category in a bid to generate high volumes.

They should not only price their products competitively, but also offer their rural prospects

maximum value for money spent. Certainly, reaching out to 3.33 million retail outlets is an uphill

task. The only way out for Indian FMCG players: put in place an aggressive cost structure that would

enable them to offer low-price and value-for-money products. But then, FMCG is a low- margin

business with a high cost of raw materials.

Consider the case of Marico: its material cost works out to a high of 59 per cent on sales. Therein lays

the rural marketing paradox. However, customer-centric and market-savvy FMCG companies have

always chased prospects when they perceive there is a latent demand. For instance, Hindustan Lever's

Rin, Surf and Lux are available even in India's most obscure villages. Hindustan Lever had given

shape to its rural strategy a few years ago when it perceived that its urban market was shrinking due to

an industrial slowdown. It’s Operation Bharat that focused on personal care products made the most

out of surging rural incomes. The result was there for all to see. The company has been able to clock

in double-digit profits every three years and log in double-digit revenues every four years.

LBA –ORGANIZATION STUDY AT HUL Page 23

Sep-2010

Britannia with its Tiger brand of biscuits and Colgate-Palmolive with its low-priced and

conveniently-packaged products designed for the rural masses have been other pioneers in rural

marketing.

Distribution of FMCG market

One of the age-old problems that FMCG has been facing not only in India but globally is that of

distribution. Integrating operations with your distributors and channel partners is a Herculean task.

Few ways to reduce pain involved in this link: -

Reducing supply chain costs by reducing intermediaries - Organized retail chains have set up systems

for inventory management and quick servicing, thereby offering the opportunity for a

company/supplier to reduce distribution cost by reducing intermediaries such as

wholesalers/distributors and supplying directly to the warehouse of retail chain.

Increasing sales by driving channel width - The relative share of grocers to FMCG

Sales have dropped from over 50% in the early 90's to 35% in the late 90's. On the other hand the

contribution of chemist outlets and pan outlets has been increasing. This has been a result of both

SKU's (sachets) and hardware (mini dispensers) being specifically designed to facilitate entry to these

outlets and increase consumer interface.

Tough market situations and a more aware and savvier demanding consumer have necessitate that

yesterday's Brand Managers be transformed into Business Managers who understand consumers and

can innovate and be flexible to move with the consumer. Gone are the days when brands could be

made to gallop with a big budget media plan, a generous dose of below-the-line and above-the-line

activities and constant promotions and schemes in the market. Consumers who have become

demanding yet inscrutable in terms of attitudes, outlook, moods and behavior have rendered

conventional Brand Management tools obsolete. This makes it all the more important for Brand

Managers to develop strong consumer insights and constantly innovate. This requires immersing

oneself in the consumer's life space and understanding her to open up new opportunities.

LBA –ORGANIZATION STUDY AT HUL Page 24

Sep-2010

These opportunities are hidden in seemingly insignificant behavioral patterns, which open up wide

new opportunities for the brand.

Developing strong consumer insight basically requires one to

a) Align oneself to the challenge, in terms of correctly identifying the key issues and objectives.

b) Leverage all that one knows and understands from available sources.

c) Immerse oneself in the consumer's life space.

d) Connect this insight to a usable platform/ idea.

e) Executing it in a format that solves the challenge he started with.

The above four are by no means an exhaustive list of new and radical approaches which

organization are re-inventing or discovering. It’s no denying that the FMCG space will be for time to

come, remain a glamorous sector, but also be testimony to new innovations and excellence through-

out the value-chain. A spate of new product launches, new schemes, brand extensions and new

marketing initiatives across companies indicate that only the fittest ideas survive "Only the Paranoid

Survive ", the famous line by Andy Grove seems relevant to this space.

LBA –ORGANIZATION STUDY AT HUL Page 25

Sep-2010

COMPANY PROFILE

Sl.no Name Designation

1 Mr. Harish Manwani Chairman

2 Mr. Gopal Vittal Executive Director

3 Mr. Pradeep Banerjee Executive Director

4 Mr. Sridhar Ramamurthy Chief Financial Officer

5 Mr. D S Parekh Independent Director

6 Mr. A Narayan Independent Director

7 Mr. S Ramadorai Independent Director

8 Dr. R A Mashelkar Independent Director

9 Mr. Nitin Paranjpe Managing Director & Chief Executive Officer

LBA –ORGANIZATION STUDY AT HUL Page 26

Sep-2010

Hindustan Unilever Limited is India's largest Fast Moving Consumer Goods (FMCG) Company. It is

present in Home & Personal Care and Foods & Beverages categories. HUL has about 15,000 employees,

including over 1400 managers The fundamental principle determining the organization structure is to

infuse speed and flexibility in decision-making and implementation, with empowered managers across the

company’s nationwide operations.

Board of Directors

The Board of Directors as repositories of the corporate powers act as a guardian to the Company as also the

protectors of shareholder’s interest.

This Apex body comprises of a Non- Executive Chairman, four whole time Directors and five Independent

Non – Executive Directors. The Board of the Company represents the optimum mix of professionalism,

knowledge and experience.

Mr. Harish Manwani - Chairman

Mr. Harish Manwani (55), assumed charge as the Non-Executive Chairman of the Company with effect

from 1st July, 2005. He is also President Asia & Africa, Central & Eastern Europe and a member of the

Unilever Executive (UEx), an 8 member team that oversees Unileverâ operations worldwide. 

DIRECTOR

LBA –ORGANIZATION STUDY AT HUL Page 27

Mr. Manwani joined the Director responsible for the

Personal Products business. In addition, he held regional

responsibility as the Category Leader for Personal

Products for the then Central Asia & Middle East (CAME)

Group.

In 2000, Mr. Manwani moved to UK as Senior Vice

President for the Global Hair Care & Oral Care Categories,

and in early 2001, he was appointed President Home &

Personal Care (HPC), Latin America Business Group.

Mr. Manwani is an Honors Graduate from the Mumbai

University and holds a Masters Degree in Management

Studies. He has also attended the Advanced Management

Program (AMP) at Harvard Business School.

Sep-2010

Mr. Nitin Paranjpe

Mr. Nitin Paranjpe (46), after obtaining a degree in BE (Mechanical) and MBA in Marketing (JBIMS)

from Mumbai, joined the Company as a management trainee in 1987. In his early years in the Company,

Mr. Paranjpe worked as Area Sales Manager – Detergents and then Product Manager-Detergents.

CEO and Managing Director

Mr. Gopal Vittal

Mr. Gopal Vittal (42), an alumnus of Madras Christian College, completed his MBA from IIM, Calcutta.

Mr. Vittal has 18 years experience in Marketing & Sales in FMCG market including Skin Care, Soaps and

Laundry.

LBA –ORGANIZATION STUDY AT HUL Page 28

Mr. Manwani joined the Director responsible for the

Personal Products business. In addition, he held regional

responsibility as the Category Leader for Personal

Products for the then Central Asia & Middle East (CAME)

Group.

In 2000, Mr. Manwani moved to UK as Senior Vice

President for the Global Hair Care & Oral Care Categories,

and in early 2001, he was appointed President Home &

Personal Care (HPC), Latin America Business Group.

Mr. Manwani is an Honors Graduate from the Mumbai

University and holds a Masters Degree in Management

Studies. He has also attended the Advanced Management

Program (AMP) at Harvard Business School.

In 2000, he moved to Unilever London, and was

involved in a review of the organization structure.

During 2001, he was an executive assistant to the

Unilever Chairman & Executive Committee in London.

On his return to India in 2002, he became the Category

Head – Fabric Wash & Regional Brand Director (Asia)

for some Laundry and Household Cleaning (HHC)

Brands.

In 2004, he became Vice President - Home Care

(Laundry & HHC) India, responsible for the Home Care

business. Mr. Paranjpe was appointed as the Executive

Director for the Home & Personal Care business in

March 2006.

Sep-2010

Executive Director, Home & Personal Care

Mr. Pradeep Banerjee

Mr. Pradeep Banerjee (51) joined HUL as a Management Trainee in 1980. 

LBA –ORGANIZATION STUDY AT HUL Page 29

He has held a series of assignments in Supply Chain,

Research & Development and categories. He became the

Vice president-Technical (HPC) in HUL in 2003 and then

moved to UK in 2005 as Vice President-Global Supply

Chain for personal care category and thereafter moved to

Singapore as Vice president for Global Procurement. 

He has worked both in India and Asia for Unilever for

over 16years, following which Mr. Vittal was the

Marketing Director at Bharti Airtel for a period of 2

years leading the Marketing and Distribution strategy

for the group.

He rejoined the Company in July, 2008 as the

Executive Director for Home & Personal Care

business.

Sep-2010

Executive Director, Supply Chain

Mr. D. S. Parekh

Mr. D. S. Parekh (64), is a B.Com graduate and holds a FCA degree from England and Wales. Mr. Parekh

has held senior positions in Grindlays and Chase Manhattan.

Executive Chairman

LBA –ORGANIZATION STUDY AT HUL Page 30

He is the Executive Chairman of Housing Development

Finance Corporation Limited and is a member of several

prestigious committees appointed by the Government of

India including on Foreign Direct Investment (FDI). Mr.

Parekh is a recipient of Padma Bhushan in recognition for

his contributions to the national economy and public policy.

He has also received several awards including the ‘Finance

Asia Lifetime Achievement Award’, in the year 2008, for

services to financial services and banking industry in India

and ‘Best Non-Executive Director 2006’ by the Asian

Centre for Corporate Governance.

Sep-2010

Mr. A. Narayan

Mr. A. Narayan (57) joined ICI India as a Management Trainee in 1973 and grew through diverse

functions and businesses before being appointed as the Managing Director of ICI India in 1996.

Independent Director

Management Committee

The day-to-day management of affairs of the Company is vested with the Management Committee which is

subjected to the overall superintendence and control of the Board.

Mr. Nitin Paranjpe - CEO and Managing Director

LBA –ORGANIZATION STUDY AT HUL Page 31

On completion of his term as the Managing Director in ICI

India, he was appointed as the Non-Executive Chairman of

ICI India. Just prior to this appointment he served as a

Corporate Planning Manager at the ICI Group Headquarters

in London. A B.Tech. From IIT Kanpur, he also has formal

qualifications in law, interdisciplinary sciences and

strategic management. He joined the Board of the Company

in 2001.

The Management Committee is headed by Mr.

Nitin Paranjpe and has functional heads as its

members representing various functions of the

Company. Mr. Nitin Paranjpe (46), after

obtaining a degree in BE (Mechanical) and

MBA in Marketing (JBIMS) from Mumbai,

joined the Company as a management trainee

in 1987.

Mr. Sridhar Ramamurthy (45) is a Chartered Accountant

(Gold Medalist) as well as a Cost Accountant and

Company Secretary. He is a Commerce graduate from R.

A. Podar College, Mumbai. He joined the Company in

Sep-2010

Mr. R. Sridhar - Chief Financial Officer

Mr. Shreejit Mishra - Executive Director, Foods

LBA –ORGANIZATION STUDY AT HUL Page 32

Mr. Sridhar Ramamurthy (45) is a Chartered Accountant

(Gold Medalist) as well as a Cost Accountant and

Company Secretary. He is a Commerce graduate from R.

A. Podar College, Mumbai. He joined the Company in

Mr. Shreejit Mishra (44), joined HUL on June 1st

1987. His 20 year experience in the company

comprises of stints in General Management,

Marketing Innovation and Activation, Brand &

Services Development, Sales Management and

Project Management. Executive Director, Foods.

Mr. Shrijeet has significant General Management and

extensive marketing experience in FMCG Industry in

a highly competitive market (Soaps, Detergents,

Personal Care and Foods) in India and Asia, Africa,

Middle East and Turkey. Currently Vice President,

Asia, Brand Activation, across Home and Personal

care brands & Foods based out of Singapore

Regional office.

Mr. Gopal Vittal (42), an alumnus of

Madras Christian College, completed

his MBA from IIM, Calcutta. Mr.

Vittal has 18 years experience in

Marketing & Sales in FMCG market

Sep-2010

Mr. Gopal Vittal - Executive Director, Home & Personal Care

Mr. Hemant Bakshi - Executive Director

LBA –ORGANIZATION STUDY AT HUL Page 33

Mr. Gopal Vittal (42), an alumnus of

Madras Christian College, completed

his MBA from IIM, Calcutta. Mr.

Vittal has 18 years experience in

Marketing & Sales in FMCG market

Mr. Hemanth Bakshi (44) joined the Company in

June 1989 and has worked in various sales and

marketing assignments spanning across Personal

Products and Home Care categories. Executive

Director, Sales and Customer Development

He has also held key stints as Business Manager

leading one of the new ventures in 2000 and later as

Regional Manager – South in 2002.

He has held a series of assignments in

Supply Chain, Research & Development

and categories. He became the Vice

president-Technical (HPC) in HUL in

2003 and then moved to UK in 2005 as

Vice President-Global Supply Chain for

Sep-2010

Mr. Pradeep Banerjee - Executive Director, Supply Chain

Ms. Leena Nair - Executive Director, HR

LBA –ORGANIZATION STUDY AT HUL Page 34

He has held a series of assignments in

Supply Chain, Research & Development

and categories. He became the Vice

president-Technical (HPC) in HUL in

2003 and then moved to UK in 2005 as

Vice President-Global Supply Chain for

Ms. Leena (40) is an Electronic Engineer who

discovered her passion for people and HR and switched

lanes. She is a gold medalist and MBA in HR from

XLRI, Jamshedpur. Executive Director, HR

She has worked with Unilever for the last 16 years in a

variety of roles like – Employee Relations Manager,

Management Development Manager, and Business

Partner for the Home & Personal Care Business.

Leena became the first woman on the Management

Committee of HUL. She is also the youngest Executive

Director to be appointed. She also leads HR for

Unilever South Asia. She has been on Business Today

“most powerful woman” list for 2 consecutive years.

She was awarded Young Woman Achiever of the year

2008 in Business by FICCI (YFLO).

Sep-2010

ORGANIZATION STRUCTURE

Board At the apex is the Board, headed by the Chairman, and comprising 5 whole time Directors and 5

independent non-executive Directors. The day to day operations are supervised by the National

Management comprising the Vice Chairman, Managing Director (HPC), Managing Director (Foods)

and the Finance Director .Divisions each division is self-sufficient with dedicated resources and assets

in sales, marketing, commercial, and manufacturing.

The two divisions are further reorganized into categories. Typically, each category and each function -

Sales, Commercial, Manufacturing - is headed by a Vice President. They with their respective

Managing Director comprise that Division's Management Committee. For managing sales operations,

HUL divides the country into four regions, with regional branches in Delhi, Kolkata, Chennai and

Mumbai. Headed by a Regional Manager, they comprise Regional Sales Managers and Area Sales

Managers, assisted by dedicated field forces, comprising Sales Officers and Territory Sales In charges.

In Marketing, each category has a Marketing Manager who heads a team of Brand Managers dedicated

to each or a group of brands. The commercial team of a Division is responsible for its supply chain

management. There are teams dedicated to sourcing, planning and logistics.

LBA –ORGANIZATION STUDY AT HUL Page 35

Sep-2010

Each Division has a nationwide manufacturing base, with each factory peopled by teams of Production,

Engineering, Quality Assurance, Commercial and Personnel Managers.

Central functions HUL's Central Functions are Finance, Human Resources, Technology, Research

Information Technology, Legal & Secretarial, and Corporate Affairs. Their services are shared across

the company.

But, wherever necessary, managerial resources are dedicated exclusively to a business. For example,

each Division now has dedicated HR managers. HUL believes that while it leverages the scale of a

large corporate, it must also retain the soul of a small company. Its organisation structure, which has

and will continue to evolve with time, is aimed at achieving this knitting.

GOVERNANCE STRUCTURE:

Grow markets in a responsible manner

Governance Execution

BRANDSDirector: home and personal care

Director : foods

Leadership team: home and personal care

Leadership team: foods

PEOPLE Director : HR Leadership team: HR

PROCESSES Director: customer development Leadership team: customer development

LBA –ORGANIZATION STUDY AT HUL Page 36

Sep-2010

Ensure sustainable practices at HUL

Governance Execution

BRANDSDirector: supply chain

Director : foods

Leadership team: supply chain management

PEOPLE

Director : legal and compliance

Director : supply chain

Leadership team: legal and compliance

Leadership team: environment and safety

PROCESSES Director: supply chain Leadership team: environment and safety

Responsible leadership

Governance Execution

BRANDSChief executive officer

Chief finance officer

Leadership team: corporate responsibility

PEOPLE Director : HR Leadership team: HR

PROCESSES Management committee Leadership team: corporate communication

LBA –ORGANIZATION STUDY AT HUL Page 37

Sep-2010

Corporate responsibility at HUL is led by the CEO and the management committee (MC) governs the

sustainability strategy with a view of key strategic approaches and seeks reports on impacts and efforts

against clear targets. Each of the above cells owned by an MC member for the execution of the strategy

there is a team of 12 sustainability governing council (SGC) members based on their respective functions.

Sustainability governing council:

The Sustainability governing council is responsible for:

Recommending Sustainability priorities for approval by the MC and monitoring its progress.

Recommending HUL’S positions on critical issues for approval by MC.

Receiving stakeholder’s feedback.

The role of the SGC is formalized, with a clear mandate and terms of reference outing its mission,

purpose, membership meeting schedule, and reporting systems.

LBA –ORGANIZATION STUDY AT HUL Page 38

Sep-2010

VISION AND MISSION

VISION:

Definition: A vision statement is sometimes called as picture of your company in the future but it’s

so much more than that. Your vision statement is your inspiration, the framework for all your strategic

playing.

A vision statement may apply to an entire company. Whether for all part of an organization, the vision

statement answers the questions “WHERE DO WE WANT TO GO?”

HUL VISION:

HLL will establish itself as the Leader in its core activities, through a process of continuous

innovation and participatory approach in order to -

Provide best value to the customer.

LBA –ORGANIZATION STUDY AT HUL Page 39

Sep-2010

Be an employer of choice.

Promote the cause of family health in general, and women's health in particular

MISSION:

Definition: A mission statement is brief description of a company’s fundamental purpose. A mission

statement answers the question, “WHY DO WE EXIST”.

The mission statement articulates the company‘s purpose both for those in the organization and for the

public.

HUL MISSION:

To accomplish the Corporate Vision, HLL has outlined a Mission to be a World Class Health

Care Company by the year 2010, with focus on five key areas, namely

* Business

* Customer

* Innovation

*Employee

* Social Sector initiatives.

Business Leadership

Attain rapid growth and global levels of operations with cost competitiveness.

Be among the top three players in each main product category.

Become the organisation to be benchmarked with.

Become an acknowledged and admired leader at industry forums.

Customer Focus

Focus on quality and customer delight at all time

LBA –ORGANIZATION STUDY AT HUL Page 40

Sep-2010

Innovation

Establish core competence through a process of learning and innovation.

Create a culture of continuous innovation resulting in at least 10% of turnover from

Research and Development initiative.

Employee Satisfaction

Strive to be the employer of choice in India with employee satisfaction levels of over

90%.

Social Sector Initiatives

Be recognized as the leading social organisation in the field of Reproductive and

Women's Health, with a commitment to the society - a partner of choice for

implementing all government and multi-lateral initiatives in these segments.

PRODUCT PROFILE

LBA –ORGANIZATION STUDY AT HUL Page 41

Sep-2010

Hindustan Unilever Limited or HUL as it is popularly known as started its journey in the Indian soil long

back in the year 1933. So, this year the company is celebrating its 75 th year’s anniversary. In the beginning

the name of the company was ‘Lever Brothers India Limited’. Then, in 1956 ‘Hindustan Lever Limited’

(or more popularly HLL) was formed with the merger of three companies namely ‘Lever Brothers’,

‘Hindustan Vanaspati Mfg. Co. Ltd.’ and ‘United Traders Ltd.’. In June 2007, the company was renamed

to ‘Hindustan Unilever Limited’. Unilever, the anglo-dutch parent of HUL has 52% stake in it.

Though in this blog we discussed ITC before HUL because of ITC’s higher market capitalization, HUL is

the undisputed market leader in the FMCG segment. This is evident from the following figures showing

HUL’s market share across categories in the FMC segment.

HUL products are a household name in India. Its brands across categories touch lives of over 700 million

Indian consumers every day. That means roughly two-third of Indian population uses HUL products. The

two biggest strengths of HUL are: its leading brands and extensive distribution network.

LBA –ORGANIZATION STUDY AT HUL Page 42

Sep-2010

a)    Brands: HUL has around 35 major brands most which are leaders in their individual categories. In the

year 2008 AC Nielsen-Brand Equity list of 100 Most Trusted Brands Annual Survey featured 16 HUL

brands. HUL consistently has highest number of brands in top 50 or top 10 Indian brand’s list.

b)    Distribution Channel: HUL products are manufactured in over 40 factories across India. Over 2000

suppliers and associates are involved in its operations. The giant HUL distribution network comprises of

around 4000 redistribution stockiest and 6.3 million retailer outlets. The wide-spread distribution network

reaches almost entire urban India and around 250 million rural consumers.

With the introduction of ‘Hindustan Unilever Network’ in 2003 - HUL is trying its hand at ‘Network

Marketing’. Lately, HUL’s Shakti program (website: www.hllshakti.com) which supports rural women to

become entrepreneurs and sell HUL products in villages increases the reach of HUL and provides it a

unique capability to tap the still unexplored bottom-of-the-pyramid opportunities.

Of late, HUL is trying to reduce the inventory requirements by unbundling the distributors. As per the pilot

project in Mumbai, number of distributors has decreased drastically from 22 in 2007 to only 5 in 2008.

As a responsible corporation of the country, HUL has adopted the triple bottom-line approach to address

environmental and social concerns. Following are the three key pillars in this approach: 

Hindustan Unilever is biggest company in the FMCG (Fast Moving Consumer Goods) sector. Its products

are divided into various categories.

Home and Personal Care : under this it is further divided into two parts:

1. Dets: all the detergents and dishwashers are covered in this. For example, Vim, Rin, Surf

Exel.

2. Personal Products: this comprises of all the products related to personal care. these are as

follows:

- Oral: toothpaste and toothbrush ( Pepsodent, Close Up)

- Skin: soaps, talcum powder, fairness cream, body lotion, winter cream ( Pears,

Vaseline, Fair & Lovely, Ponds’)

- Hair: Shampoos ( Sunsilk, Clinic All Clear)

3. Foods products:

LBA –ORGANIZATION STUDY AT HUL Page 43

Sep-2010

Food brands

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

Brooke Bond 3 Roses

Brooke Bond is one of the most promising and profiteering brands under Hindustan Lever which enjoys the

reputation of being the largest Indian tea brand since 1869. India has many Brooke Bond tea lovers and the

rate of tea consumption in the Indian market has always been high. It has been estimated that nearly 500

million households in India prefer Brooke Bond Tea Products to any other brand.

Annapurna

Annapurna brand by HUL was launched in 1997. Two main products offered under the brand are: salt and

atta (wheat flour). The target segment of the brand is Indian family and hence the ads shows Indian house-

wife who is still is in the charge of the kitchen.

The products under the brand mainly focus mainly on functional attributes: Annapurna salt stress on its

Iodine content and Annapurna Atta stresses on its extra Iron and Vitamins and resulting benefits. A famous

tagline of Annapurna atta was: ‘Extra jo kissi bhi aur atte mein nahi’.

LBA –ORGANIZATION STUDY AT HUL Page 44

Sep-2010

Red Label

India’s favorite cup of tea, the great taste of Red Label brings people closer together and strengthens

relationships. Hindustan Unilever has broad range of products in various fields like; nutrition, hygiene, and

personal care with varied brands. Hindustan Unilever offers Brooke Bond Red Label in 1903. Brooke Bond

is focusing its efforts on building four powerful sub-brands, namely, Brooke Bond Taj Mahal, Brooke

Bond Red Label, Brooke Bond Taaza & Brooke Bond 3 Roses. The range offers a full variety of

propositions as well as price points to appeal to various sections.

Brooke Bond Taaza

Brooke Bond, the 130 year-old brands from Hindustan Lever Limited has set an ambitious target to

become a Rs 1,000 crore-mega brand. As a step towards achieving this, the company has been expanding

its portfolio of brands, especially teas.

The company launched flavored tea, 'Brooke Bond Red Label Natural Care', in Bangalore market on

Tuesday. Brooke Bond presently has four sub-brands -- Brooke Bond Taj Mahal, Brooke Bond Red

Label, Brooke Bond 3 Roses and Brooke Bond Taaza, reaching out to over 500 million consumers in

India.

LBA –ORGANIZATION STUDY AT HUL Page 45

Sep-2010

Taj Mahal

Brooke Bond Taj Mahal is an exclusive selection of teas for the discerning consumer. Over the years,

Brooke Bond Taj Mahal Tea has been a choice of the discerning as a symbol of the best of India.

Our master blenders and tasters painstakingly select the finest teas to create a robust, full-bodied brew with

a lingering aroma that makes you say ….. “Wah Taj”.

Bru

Eke cups Bru aur mood ban jae…

Hindustan Unilever has extensive variety of products in diverse field like; nutrition, hygiene, and personal

care with varied brands. Hindustan Unilever offers Bru Coffee has been instrumental in virtually creating

the entire Instant Coffee category as it exists today. It has been at the forefront of most innovations in the

Instant Coffee category - whether in coffee-chicory blends, refill packaging, vending operations, or more

recently the Low-unit-price packs. The Bru franchise also includes the Bru Roast & Ground, India`s most

popular Roast & Ground Coffee brand, and Bru Malabar Roast & Ground which is available in select

geographies.

LBA –ORGANIZATION STUDY AT HUL Page 46

Sep-2010

Kissan

With Kissan, good food is loved not shoved! Kissan wants to be the brand which will help dissolve tension

between mother and the family during informal good food moments. Kissan acts as a catalyst, easing

stressful moments at the dining table. With Kissan, good food is loved not shoved!

Kissan is in its 62nd year of its existence in India.

Category leaders in Jams with an All India Share of 65%.

Knorr

Knorr helps families make meal times special, nutritious, tasty and healthy.

Knorr in India is generic to soups.

Knorr is the largest soup brand in India and has a lion’s share of the soup market in India – 70%

All Knorr products have no added preservatives and are a healthy choice option.

LBA –ORGANIZATION STUDY AT HUL Page 47

Sep-2010

Kwality Wall’s

A good honest scoop of daily pleasure.

Unilever is the world's largest ice cream manufacturer with an annual turnover of more than €5

billion.

Heart brand products are sold in more than 40 countries worldwide

Also sold as Algida in Italy & Turkey, Langnese in Germany, Kibon in Brazil, Streets in Australia

and Ola in the Netherlands

Lipton

Lipton has a range of vitality teas that truly encompass the goodness of tea. Lipton Yellow Label is a

premium, full-bodied tea, made out of the finest teas, perfect for the ‘healthy’ Indian .Lipton Yellow Label

has a unique blend that has high levels of natural Theanine, which along with other goodness of tea can

help you clear your mind.

The range also contains, Lipton Clear Green tea, which combines the goodness of antioxidants and

purifying effect of water to help cleanse your body naturally.

LBA –ORGANIZATION STUDY AT HUL Page 48

Sep-2010

Home care brands

HUL has a diverse portfolio of brands offering home care solutions for millions of consumers across India.

Active Wheel

Active Wheel de "Mehnat se Aazadi" Freedom from painful & tiring laundry. he new revolutionary Active

Wheel gives consumers less elbow effort in their daily laundry thereby enabling them to enjoy some

moments of leisure. Wheel, biggest laundry brand in India, dominates a complex mass market laundry

business in India. Sales Turnover of about 1500 crs in 2007 as per AC Nielson Data.

Wheel powder commands the market with 20 shares as per AC Nielson data.

Its contribution to HPC business in Value and Volume terms is 17% and 47% respectively.

Cif

Getting rid of tough stains in your house is not tough anymore. Cif’s unique formula with micro- particles

remove the toughest dirt making your surfaces beautiful and shiny like new.

Cif is the number 1 cream cleaner in the World.

It is the number one cleaner in various countries including France, Germany, and Russia.

It’s a 500 million Euro Brand.

Cif is sold in 51 countries around the globe.

LBA –ORGANIZATION STUDY AT HUL Page 49

Sep-2010

Comfort

The world’s largest fabric conditioner brand.

Worldwide sales of over Euro 750 million. (approx. 4,500 crore)

Comfort is the number 1 in 14 of the 23 countries in which it is sold!

Domex

The sheer power of Domex bleach gives you the confidence you need, eradicating all known germs.

Domex is the number 1 or 2 bleach in 9 countries (Croatia, Greece, Hungary, India, Ireland,

Netherlands, Philippines, Poland, and South Africa).

Domex is sold in 35 countries globally.

There are more than €250 million sales of Domex every year.

Rin

LBA –ORGANIZATION STUDY AT HUL Page 50

Sep-2010

Rin provides ‘best in class whiteness’ which is demonstrable. Rin was launched in India as a bar in

1969 with the iconic lightning mnemonic.

Rin powder was launched in 1994 as Rin Power White

Rin Matic for washing machines, launched in July 2008

Sunlight

Sunlight keeps your clothes sparkling clean besides keeping the colours bright for long and preventing any

colour loss. That’s why its patrons have elevated it to the status of the No. 1 brand in the states it is present

in, Bengal and Kerala

Sunlight is a color care brand. First Brand of uniliver in India

No 1 brand in Kerala and West Bengal

Surf Excel

Today Surf Excel offers outstanding stain removal ability on a wide range of stains. This means that

mothers now have the freedom to let their kids experience life without worrying about stains. Giving your

kids the freedom to get dirty and experience life, safe in the knowledge that Surf Excel will remove those

stains. Surf Excel quick wash is powered with a path-breaking technology- it reduces water consumption

and time taken for rinsing by 50%. It is a significant benefit, given the acute water scarcity in most of India.

Surf Excel was introduced in 1959.

LBA –ORGANIZATION STUDY AT HUL Page 51

Sep-2010

Vim

Created in 1885, the Vim brand is still innovating and using the magic of natural ingredients to

create unbeatable results over a hundred years later. Vim was the original hand dishwashing brand

Vim is sold in four continents, is the leading hand dishwashing brand in twenty countries, and is

available to more than 2 billion people around the world.

Personal care brands

Our personal care brands, including Axe, Dove, Lux, Pond's, Rexona and Sunsilk, are recognized and love

by consumers across India. They help consumers to look good and feel good – and in turn get more out of

life.

Aviance

Aviance is an exquisite range of high technology, high performance expert beauty solutions for today’s

progressive woman. The Aviance range of beauty solutions includes customized skincare, hair care and a

wide range of cosmetics that are developed using Unilever’s advanced technology to deliver results you

can see. What truly sets Aviance apart from other beauty products is the fact that Aviance products are

brought to women with professional beauty advise from trained Aviance Consultants.

LBA –ORGANIZATION STUDY AT HUL Page 52

Sep-2010

Axe

AXE is a cool, iconic, youth brand available in more than 60 countries around the world. It was launched in

India in 1999 and has already become the largest selling Male Deodorant in India.

Axe with Best Quality Fragrance. Number 1 male deodorant brand in India.

Available in over 60 countries.irst 

LEVER Ayush Therapy

LEVER Ayush aims to help a new generation of Indians rediscover everyday health and vitality

through customized Ayurvedic solutions. LEVER Ayush has five categories across health care and

personal care range

LEVER Ayush is a unique combination of the Truth of Ayurvedic with the Proof of Science.

It is also endorsed by Arya Vaidya Pharmacy, Coimbatore

Free from harmful levels of heavy metals like Arsenic, Mercury and Lead; Pesticides and Bacterial

contamination.

LBA –ORGANIZATION STUDY AT HUL Page 53

Sep-2010

Breeze

Breeze, with the goodness of glycerin gives soft, fragrant and smooth skin. Launched in 1988 as a

family beauty soap with the promise of a fresh feeling of nature

Comes in 5 attractive variants Lemon Twist, Rose Mallika, Sandal Sparsh, Rajni gandha &

Morning Muskaan

Clear

New Clear with Essential Oils, guarantees Zero dandruff and leaves your hair feeling fabulous.

Presence in countries like Indonesia, Thailand, Philippines, Vietnam, Arabia, Russia, Turkey etc

Clinic is Clear is the only brand that offers specially formulated Anti dandruff shampoo for men

Clinic All Clear also has Anti Dandruff Hair Oil that.

Fights dandruff gently and effectively, giving you dandruff free hair.

Strengthens hair from scalp to give you hair full of health.

LBA –ORGANIZATION STUDY AT HUL Page 54

Sep-2010

Clinic Plus

Clinic Plus is India’s largest selling shampoo and has won the trust the millions of families across

India. Largest selling shampoo in India.

Largest distributed shampoo in India

Its known as ‘Lifebuoy’ in Pakistan, Sri Lanka, Indonesia and Vietnam and in Philippines its

known as  ‘Vaseline’

It’s a huge $200mn brand across the 6 countries where it is present 

Close-up

First HUL offering in the oral care category

First gel toothpaste in India – launched in 1980

Market leader in the gel-segment for almost 3 decades

Making stars out of models (Present-day stars like John Abraham, Deepika Padukone, Salman

Khan, etc. are some of many who have been models of Close-up in the early days of their careers)

LBA –ORGANIZATION STUDY AT HUL Page 55

Sep-2010

Dove

Dove stands for real beauty. All around the world, Dove is making real women feel more beautiful!

Launched first in the US in 1957; is one of the leading brands of Unilever globally.

Dove has its footprint in 80 countries worldwide with a range of superior products from bar, lotions,

body washes, face care and creams.

It is the leading bar brand in UK, US and Canada.

Fastest growing hair category brand in India

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. Developed in 1975, Fair & Lovely is the world’s

first fairness cream.

It contains no bleach or harmful ingredients. Instead, it provides visible fairness in a safe and

reversible process.

In 2003, it was rated as the Twelfth Most Trusted Brand in India by ACNielsen ORG-MARG.

In 2004, it was identified as a Super Brand.

LBA –ORGANIZATION STUDY AT HUL Page 56

Sep-2010

Hamam

Hamam can best leverage this due to its heritage and natural ingredient legitimacy to claim

purification of the body and spirit.

Holistic skin care experiences perfected over the ages to deliver healthy, beautiful skinOnly 400

crore Herbal soap brand in the personal care segment

21.36% market share in the South Indian state of Tamil Nadu

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.

Lakme was the first major beauty brand in India and takes pride in being the expert on Indian

Beauty for over 50 years.

It is complete beauty brand spanning colour cosmetics, skin care & hair styling products and

extending to beauty services through the network of Lakme Beauty Salons.

LBA –ORGANIZATION STUDY AT HUL Page 57

Sep-2010

Lifebuoy

Undisputed Leader in the soaps market of India, with 18.4% share.

Turnover of €350 million a year globally, € 200 million in India.

Has a consumer base of 140 Million households in India

The iconic jingle of Lifebuoy – “tandrusti ki raksha…..” is almost like the health anthem of India

and Indians

Recent Awards: Voted in the top 10 most trusted brands in India in the “Brand Equity Survey”

(came in at No. 9 in 2008 as well)Marketing excellence awards for its recent innovations and

activations:

Liril

Awaken, and enliven your senses with a Liril bath. Liril was launched in 1977. Its 30 years old!

Liril has been a trendsetter over times. The soap & its advertising have been considered to be

revolutionary!

The first TV ad dates back to 1985. The Liril expressions, associations & the Liril ads are recalled

even till now!

LBA –ORGANIZATION STUDY AT HUL Page 58

Sep-2010

Lux

Lux stands amongst India’s top 10 most trusted brands

Recent Awards: Lux PR campaign(India): Diva Temptation awarded Gold at AME Awards , Hong

Kong, ’09, Reader’s Digest Trusted Brand ‘08, Brand Equity Most Trusted Brands ‘08, Awards

CNBC Awaaz Consumer Awards ‘07, 4Ps Power Brand Awards ‘07 

Pears

Pears – the purest and most gentle way to skincare! The story of this popular soap was first created

in 1789 by a young man called Andrew Pears. This is from whom it derived its name!

The most famous Pears 'face' is 'Bubbles', from an original painting by Sir John Everett Millais in

1866. The painting later came to be the very first advertising on the brand!

Pepsodent

Pepsodent India is committed to improve the overall Oral health of Indians. Endorsed by FDI ( the

largest dental association globally)

LBA –ORGANIZATION STUDY AT HUL Page 59

Sep-2010

Among the most trusted brands in India (Brand Equity, Economic Times, India)

Also sold as Mentadent, Zhonghua, PS and Signal in other countries

Pond’s

Get the expert to look after your skin. Pond’s, has been listening to women’s needs and desires for 150

years and this has enabled us to deliver new products customized to their needs. Pond’s accompanies them

on their journey to enhance the beauty of their 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. World’s leading Deodorant Brand

Number one Deodorant brand in more than 40 countries.

First Deodorant Brand to be launched in India, launched in 1995

LBA –ORGANIZATION STUDY AT HUL Page 60

Sep-2010

Sunsilk

Number 1 in Asia, Latin America and the Middle East

Sales of more than €1 billion a year.

Selling in 80 countries.

Also sold as Elidor, Haze line, Seda and Sedal.

Recent Awards: Holds the Guinness World Record for the most heads of hair washed and styled in

one day.

Vaseline

Your skin is amazing. It's your waterproof barrier. It's how you sense and adjust to your surroundings.

Constantly growing and replacing it.

It's easy to take skin and all of its properties for granted, but we never did. For years we've marveled at skin

and have developed products to help keep it amazing.

LBA –ORGANIZATION STUDY AT HUL Page 61

Sep-2010

Water

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, odorless and good-tasting. Pureit does not leave any

residual chlorine in the output water. The output water from Pureit meets stringent criteria for

LBA –ORGANIZATION STUDY AT HUL Page 62

Sep-2010

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 Centres 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 liters* of water. The ‘Germ

kill Battery Kit’is priced at Rs.365. This means consumers will get 4 liters of water that is ‘as safe as boiled

water’ for just one rupee, which works out to an extremely affordable 24 paise per liter. 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 four 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

4. Polisher – removes residual chlorine and all disinfectant by-products, giving clear odorless 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

LBA –ORGANIZATION STUDY AT HUL Page 63

Sep-2010

Competitors for hul brands:

HUL BRANDS COMPITATIVE BRANDS

Lux Santoor , Chandrika

Rexona Cinthol, Mysore Sandal

Breeze Godrej no. 1, Nirma

Lifebuoy Dettol

Pears Santoor , Savlon

Dove Camay

Hamam Margo

Liril Cinthol

Pepsodent Colgate , meswak

Close up Dabur red, anchor

Lakme Revlon, Maybelline, L’Oreal

Pond’s Nivea, Charmise

Sunsilk Pantene

Clinic Plus Head & Shoulders

LBA –ORGANIZATION STUDY AT HUL Page 64

Sep-2010

Dove L’Oreal , Garnier

Brooke Bond, Lipton, Brooke bond bru Tata tea

Kissan

Annapurna Tata salt

Knorr Magi

Kwality Wall’s Amul

Surf excel Ariel

Wheel Nirma

Rin Tide

Water purifier Aqua sure, Philips

LBA –ORGANIZATION STUDY AT HUL Page 65

Sep-2010

OBJECTIVES OF THE STUDY

To understand the Brand value of Hindustan Unilever Limited.

To study the organisation structure of HUL.

To study various brands of HUL.

To study the competitive brands in the market of FMCG.

To find the market share of the HUL brands and its competitive brands.

To determine the key areas of strength and weakness for HUL brands.

To understand sales techniques of the HUL products.

LBA –ORGANIZATION STUDY AT HUL Page 66

Sep-2010

FUNCTIONAL AREAS

Functional area

1. Grouping of individuals on the basis of the function each performs in the organization, such as

accounting, marketing, manufacturing.

2. Grouping of activities or processes on the basis of their need in accomplishing one or more tasks.

3. Alternative term for business unit.

DISTRIBUTION DEPRATMENT

One of the age-old problems that FMCG has been facing not only in India but globally is that of

distribution. Integrating operations with your distributors and channel partners is a Herculean task.

Reducing supply chain costs by reducing intermediaries - Organized retail chains have set up systems

for inventory management and quick servicing, thereby offering the opportunity for a

company/supplier to reduce distribution cost by reducing intermediaries such as

wholesalers/distributors and supplying directly to the warehouse of retail chain.

Increasing sales by driving channel width - The relative share of grocers to FMCG

Sales have dropped from over 50% in the early 90's to 35% in the late 90's. On the other hand the

contribution of chemist outlets and pan outlets has been increasing. This has been a result of both

LBA –ORGANIZATION STUDY AT HUL Page 67

Sep-2010

SKU's (sachets) and hardware (mini dispensers) being specifically designed to facilitate entry to these

outlets and increase consumer interface.

DISTRIBUTION NETWORK

Hindustan Unilever's distribution network is recognized as one of its key strengths. Its focus is not

only to enable easy access to their brands, but also to touch consumers with a three-way

convergence of –

product availability,

brand communication,

And higher levels of brand experience.

HUL's products, manufactured across the country, are distributed through a network of about 7,000

redistribution stockiest covering about one million retail outlets. The distribution network directly covers

the entire urban population. The general trade comprises grocery stores, chemists, wholesale, kiosks and

general stores. Hindustan Unilever services each with a tailor-made mix of services. The distribution

network in general trade is as follows:-

LBA –ORGANIZATION STUDY AT HUL Page 68

FACTORY

JUST IN TIME DEPOT

CUSTOMER SERVICE PROVIDER

BIG BOX RETAILER

CONSUMER

Sep-2010

The products that are manufactured are first brought to the JIT (Just In Time) Depot from the factory. Then

these products are delivered to the Redistribution Stockiest according to the order placed by them, this is

done through Permanent Dispatch Plan.

Then this stock is send to either retailers or wholesalers, according to the channel followed by them. From

there it reaches to the consumers.

At the supermarkets

Self-service stores and supermarkets are fast emerging in metros and large towns. To service modern

retailing outlets in the metros, HUL has set up a full-scale sales organisation, exclusively for this channel.

The business system delivers excellent customer service, while driving growth for the company and the

store. At the same time, innovative marketing initiatives are taken to provide consumers with experience of

our brands at the store itself, through product tests and in-store sampling.

This is termed as Modern Trade. It has got different distribution network and work differently. It is fast

gaining pace as more and more people are turning to malls for shopping. Today shoppers don’t just want to

buy their daily groceries but they also want a shopping experience.

They want to spend time in air conditioned store, no more they are ready to sweat for spending money.

These big box retailers provide them a platform where they can roam around, pick, compare and choose

their products. These stores provide them a whole new experience of shopping without shedding any drop

of sweat.

LBA –ORGANIZATION STUDY AT HUL Page 69

Sep-2010

LOGISTICS DEPARTMENT

DEFINITION: Logistics is considered to be the complete process involving planning, managing and

controlling the flow of goods and services, information, real-time data and human resources from the point

of origin to the point of destination. There is hardly any manufacturing or marketing activity that can be

achieved without the support of an effective logistical department.

IN HUL

The logistics process consists of the process of integration of several aspects such as material

handling, warehousing, information, transportation, packaging and inventory.

The primary duty of an effective logistics system is to ensure geographical repositioning of

unfinished goods, and it is also concerned with the finished inventories of the organization being at

the required place at the lowest possible cost.

The logistics department in HUL is entrusted with the responsibilities of ensuring that the entire

process of logistics is maintained and developed in accordance with the goals of the business at an

economical cost.

The tasks of the logistics department involve storage, distribution, warehousing, movement of

goods from one place to another (internally or externally), tracking and delivery of goods.

It includes a complete process of planning, managing, controlling and coordination to make sure

that the goods reach the right place, at the right time, for the right cost and in a right condition.

The various tasks performed by the department may be summarized as follows:

1. Ensuring all the requirements of the customers are met on time in an efficient and safe manner.

2. To coordinate with third party logistics (3PLs).

3. To ensure that there is a safe and timely dispatch of goods.

LBA –ORGANIZATION STUDY AT HUL Page 70

Sep-2010

4. To draft plans, policies and procedures for successful implementation of logistics system.

5. To ensure that the business goals of the organization are in synchronization with logistics system.

6. To create and maintain customer support.

7. To maintain coordination with vendors, service providers and transport carriers.

8. To ensure that no fraud is committed.

9. To ensure timely supply and payment of goods and reduce inventories.

Besides the performance of the above tasks, the department also performs numerous other tasks, namely:

Customer service management process. The department ensures that the goods are reached on time, in a

safe condition and at the right place. It also serves as a middleman between organization, vendors and

carriers for tracking down the geographical location of the goods and thereby provides customer support.

Procurement process Strategic plans are developed by the department to support development of fresh

product and manufacturing flow management. This helps in bringing raw materials or semi-finished goods

to the premises of the organization in a safe and proper condition at an economical cost. This also involves

interactions with 3PLs.

The department is also responsible for coordination with suppliers with regard to scheduling, hedging and

timely delivery.

Physical distribution this process is concerned with the movement of finished goods to reach the point of

destination. The department is responsible for the selection of the best mode of transportation while

delivering the goods to the place of destination.

Thus it can be rightly concluded that the logistics department does play an important role in ensuring the

delivery of goods and is therefore rightly considered as an integral part of a modern-day organization.

LBA –ORGANIZATION STUDY AT HUL Page 71

Sep-2010

DEPARTMENT OF CUSTOMER CARE:

Customer service is the provision of service to customers before, during and after a purchase. Its

importance varies by product, industry and customer; defective or broken merchandise can be exchanged,

often only with a receipt and within a specified time frame. Retail stores will often have a desk or counter

devoted to dealing with returns, exchanges and complaints, or will perform related functions at the point of

sale. Customer service is normally an integral part of a company’s customer value proposition. From the

point of view of an overall sales process engineering effort, customer service plays an important role in an

organization's ability to generate income and revenue.

LBA –ORGANIZATION STUDY AT HUL Page 72

Director of customer care

Customer care managers

Customer care officers

Team leaders

Sep-2010

HUL customer care department is head by director of customer care service. Customer care managers are

there in every region. Customer care officers are leading from the front of customer care each area. In each

zone team leaders also will be there and customer care executives are the last level staff of HUL customer

care department.

MARKETING DEPARTMENT:

Marketing

Marketing is the process by which companies create customer interest in goods or services. It generates

the strategy that underlies sales techniques, business communication, and business development. It is an

integrated process through which companies build strong customer relationships and create value for their

customers and for themselves.

Marketing is used to identify the customer, to keep the customer, and to satisfy the customer. With the

customer as the focus of its activities, it can be concluded that marketing management is one of the major

components of business management.

LBA –ORGANIZATION STUDY AT HUL Page 73

Customer care executives

Sep-2010

Marketing evolved to meet the stasis in developing new markets caused by mature markets and

overcapacities in the last 2-3 centuries. The adoption of marketing strategies requires businesses to shift

their focus from production to the perceived needs and wants of their customers as the means of staying

profitable. Marketing department of HUL is heading by marketing CEO and director. There are marketing

managers for each product line and each region. In marketing only managers are divided into database,

print media, visual media etc.

Marketing strategies for urban India

• Adopted Total Productive Maintenance (TPM) to meet zero error, zero loss.

• Focuses on short supply chain for distribution.

• To meet the every needs of people everywhere.

• Also uses Direct selling channel (HUN), franchisee to reach everyone e.g. Aviance, Ayush.

• Build segments & market for the future where Unilever has strong expertise.

Marketing strategies of hul for rural India

For long term benefits, HUL started Project Streamline in 1997.

Appointed 6000 Sub-stockiest that directly covers about 50,000 villages & 250 million customers.

Integrate Economic, Environment & Social objectives with Business agenda.

Project Shakti, partnership with Self help groups of rural women & covers 5000 villages in 52

districts in different states.

Corporate social responsibility

Providing education on health and hygiene

Women empowerment

Water management

Rehabilitation of special or underprivileged children

Care for the destitute and HIV-positive

Rural development.

Plays active role in natural calamities

LBA –ORGANIZATION STUDY AT HUL Page 74

Sep-2010

Started in 2001, Shakti is HUL's rural initiative, which targets small villages with population of less

than 2000 people or less.

micro-enterprise opportunities for rural women

Providing health n hygiene education through shaktivani program

ishakti portal

Shakti has already been extended to about 15 states, 80,000 villages in with 45,000 women

entrepreneurs and generating Rs.700-1000 per month to each woman.

Market share of HUL

TOOTHPASTE MARKET SHARE

FY04 FY05 FY06 FY07 FY080%

10%

20%

30%

40%

50%

60%

COLGATEHULDABUR

33% 32%

48% 49%

9%

LBA –ORGANIZATION STUDY AT HUL Page 75

Sep-2010

HUL’s SOAP MARKETSHARE

FY04 FY05 FY06 FY07 FY080%

10%

20%

30%

40%

50%

60%

HULNIRMAGCPL

54%

6% 9% 6%10%

MARKET SHARES FOR PURE IT:

LBA –ORGANIZATION STUDY AT HUL Page 76

Sep-2010

eureka forbse54%

pure it27%

kent11%

others8%

Market share of HUL’s pure it is standing second on the water purifier market. Eureka Forbes is pioneer in

the market and they hold the maximum share in the market with 54%. Pure it which have launched only 5

year back on 2005 it’s already holds 27% of market share. Kent is also acquired 11% of market. While

other water purifiers like Philips, whirlpool, zero-b, Tata swatch, Usha shriram.

LBA –ORGANIZATION STUDY AT HUL Page 77

Sep-2010

SALES DEPARTMENT

A sale is the pinnacle activity involved in the selling products or services in return for money or other

compensation. It is an act of completion of a commercial activity.

The seller - the provider of the goods or services - completes a sale in response to an acquisition or to an

appropriation or to a request. There follows the passing of title (property or ownership) in the item, and the

application and due settlement of a price, the obligation for which arises due to the seller's requirement to

pass ownership. Ideally, a seller agrees upon a price at which he willingly parts with ownership of or any

claim upon the item.

The purchaser, though a party to the sale does not execute the sale, only the seller does that. To be precise

the sale completes prior to the payment and gives rise to the obligation of payment.

If the seller completes the first two above stages (consent and passing ownership) of the sale prior to

settlement of the price, the sale remains valid and gives rise to an obligation to pay.

Sales department of hul

LBA –ORGANIZATION STUDY AT HUL Page 78

Sep-2010

Sales department is heading by sales director. Below sales directors there is four regional sales manager for

east, west, south and north region. Below regional sales managers there are area sales managers for retail

and DTH (direct to home) separately. Under the area sales manager of DTH there are business

development executives (BDE) and territory sales officers (TSO).

Each zone is controlled and directed by zonal sales officer (ZSO). Below ZSO there are different team

leaders for different sales activities. Team leaders will lead the senior pure it water experts (PWE), pure it

water executives and project trainees.

:

LBA –ORGANIZATION STUDY AT HUL Page 79

Sales director

Regional sales manager

Area sale manager

(Retail)

Area sales manager

(Direct to home (DTH))

Business development executives (BDE)

Territory sales officers (TSO)

Sep-2010

SALES TECHNIQUES

Now that you have understood the importance of grooming, we start with learning the basics of the selling

skills. This module will teach you the basic model of selling.

A sales process comprises of two components:

1. Selling Process

2. Buying Process

Understanding the Selling Process

O-Opening the call (Greeting, self introduction)

D-Developing the need

P-Proposing the solution (showcasing Pureit in front of the customer)

LBA –ORGANIZATION STUDY AT HUL Page 80

Zonal sales officer (ZSO) S

Team leader

Senior Pureit water executives

Pureit water executives (PWE)

Project trainee (PT)

Sep-2010

E-Eliminating the doubts (Clearing the customer’s doubts)

C-Closing the call (asking the color preference, mode of payment etc)

Understanding the Buying process

R- Recognizing the Need

E- Evaluating the option

E- Eliminating the doubts

D- Decide to buy

Comparing REED with ODPEC

R D

E P

E E

D C

Let’s start with understanding the selling skills

Opening the Sales Call:

Objectives of this stage of the call:

1. Establish a personal relationship with the customer

LBA –ORGANIZATION STUDY AT HUL Page 81

Background Questions

Specific Problem Questions

Effect Questions

Agreement Questions

Note:-Take examples of what do we ask customers when we go for Pureit Cold call)

Sep-2010

2. Take control of the call.

3. Gain the customer trust.

Developing the Need:

o Needs of the customer are identified/uncovered by utilizing different types of probes/questions

o These needs are further developed during the sales call/interaction by the sales person to reach a

point where the customer is ready to take action that directly meets his need.

o Summarize information gathered and confirm your understanding of the customer’s requirement/

need before proposing a solution

BSEA Questions:

LBA –ORGANIZATION STUDY AT HUL Page 82

Background Questions

Specific Problem Questions

Effect Questions

Agreement Questions

Sep-2010

Exercise

Divide yourself into teams. In groups, list down at least 4 different background, specific problem, effect

and agreement question and share with the other teams

Proposing the Solution

LBA –ORGANIZATION STUDY AT HUL Page 83

Sep-2010

● Presenting product/service as a solution to the buyer’s need.

● Proposing involves summarizing the buyer’s need and taking agreement from the customer.

● Suggest specific product/service, highlighting the benefits of the product. Always ask yourself how

the particular feature will help the customer.

● Buying criteria are those benefits / features that are critical to the customer.

● A customer will therefore buy that product whose profile matches his buying criteria most closely.

● Buying criteria of a customer may be channelized to produce a closer match. Channelizing ensures

that the seller remains in control; however, the buyer feels that he is taking the decisions.

FINANCE DEPARTMENT:

LBA –ORGANIZATION STUDY AT HUL Page 84

Sep-2010

Introduction:

Finance is life blood and nerve center of business, just as circulation of blood is essential for maintaining

life, finance is a very essential to smooth running of business. It has been rightly termed as universal

lubricant which keeps the enterprise dynamic. No business, whether big, medium, or small can be started

without an adequate amount of finance.

Right from the very beginning. Finance is needed to promote or establish the business, acquire fixed assets,

make investigation such as market survey, etc., develop product, keep men and machine at work,

encourage management to make progress and create values. Even an existing concern may require further

finance for making improvements or expanding the business.

Thus the importance of finance cannot be over emphasized and subject of business finance has become

almost important both to academicians and practicing managers.

LBA –ORGANIZATION STUDY AT HUL Page 85

Sep-2010

Objectives:

The main objectives of finance department are as follows:

To help in achieving the business results.

To assess the working capital requirements.

To protect the financial interest of the company.

To monitor the budget and budgetary controls.

To invest the funds judicially.

Monitoring the funds collection and payments.

To maintain adequate funds to carry on the business.

To identify and reduce the idle funds.

Controlling the inflow and outflow of cash.

To monitor the cost control and cost reduction techniques.

To maintain a liquidity position.

To see that the company doesn’t suffer from want of finance.

Competition

LBA –ORGANIZATION STUDY AT HUL Page 86

Sep-2010

Last Price Market Cap.

(Rs. cr.)

Sales

Turnover

Net Profit Total Assets

HUL 296.25 64,651.22 17,725.33 2,202.03 2,583.52

Dabur India 111.50 19,409.07 2,874.60 433.15 859.35

Godrej Consumer 443.00 14,335.04 1,267.88 248.12 839.87

Colgate 864.05 11,750.46 1,770.82 290.22 330.70

Marico 130.25 7,994.47 2,030.85 235.02 948.58

Godrej Ind 231.70 7,359.37 880.97 19.33 1,570.31

Emami 483.60 7,317.44 1,006.86 165.40 878.42

P and G 2,225.00 7,222.51 904.46 179.76 534.65

Gillette India 1,865.00 6,077.14 852.48 137.10 490.89

Jyothy Labs 292.30 2,356.87 579.87 80.05 399.10

Balance Sheet

LBA –ORGANIZATION STUDY AT HUL Page 87

Sep-2010

HUL Dabur India Godrej Consumer Colgate Marico

Mar '10Mar '10 Mar '10 Mar '10 Mar '10

Sources Of Funds

Total Share Capital 218.17 86.90 30.82 13.60 60.93

Equity Share Capital 218.17 86.90 30.82 13.60 60.93

Share Application Money 0.00 0.00 0.00 0.00 0.00

Preference Share Capital 0.00 0.00 0.00 0.00 0.00

Reserves 2,364.68662.48 796.65 312.51 510.73

Revaluation Reserves 0.67 0.00 0.00 0.00 0.00

Net worth 2,583.52749.38 827.47 326.11 571.66

Secured Loans 0.00 24.27 12.40 0.00 99.61

Unsecured Loans 0.00 85.70 0.00 4.59 277.31

Total Debt 0.00 109.97 12.40 4.59 376.92

Total Liabilities 2,583.52859.35 839.87 330.70 948.58

LBA –ORGANIZATION STUDY AT HUL Page 88

Sep-2010

RESEARCH AND DEVELOPMENT

‘If you can dream it; you can do it’

This is the anthem for the Research & Development team at Unilever. Imagination, creativity, innovation

… will be a way of life for you. Opening new vistas and delivering one-of-a-kind products that win the

market will be what you do. Unilever believes in making extraordinary products that deliver a simple

promise – Making life simple, easy and hassle-free for the consumers. So you would be part of the team

that makes products that consumers love; while providing a sustainable competitive edge to business for

long term growth.

Working with the best …

HUL R&D is the hub for the best minds. You would be working with cell biologists, chemical engineers,

physicists, molecular biologists and chemists par excellence to develop the finest and most effective

products. Bringing ideas to life to make our brands bigger, bolder and more exciting.

Collaborating with leading international experts, academic groups and other third parties; certainly a

stimulating, challenging and exciting arena to work in!

Skincare

The skincare research team stays focused on delivering skin care actives that address consumer needs.

Developing new and path-breaking lotions and creams. Yet another section explores new propositions by

taking a simple bath to a new sensory, experiential level. Transparent soaps, perfume bloom, shower gels,

mild kid’s soap and others are targeted to enable the consumer to have a bath like never before.

Have a cup of tea!

If you truly and genuinely relish your daily cup of tea… you should be thrilled at the opportunity of taking

the simple cup of tea to a higher plane … delivering high aroma, taste and additional nutrition/health

benefits? These are few key questions that the Foods Research program addresses.

Making a perfect cup of tea goes far back to the plantation and even further to the laboratories.

Understanding the bio-chemistry of the tea plant to getting the enhanced perfect blend through engineering;

the Beverages program that orchestrates a gamut of activities, expertise and skills.

LBA –ORGANIZATION STUDY AT HUL Page 89

Sep-2010

Washing clean

Be it the daily drudgery of washing clothes or kitchen utensils…addressing the washing needs of

consumers is a key challenge for the laundry Research group. Focused and determined to explore new and

exciting ways of cleaning; the program is a harmony of a spectrum of expertise.

How to minimize water usage while washing? How to impart stain repellent treatment to garments? How

to give a squeaky clean & zero bacteria cleansing to clothes and utensils? These are some of the questions

that you’ll ask and work to find answers to.

Clean & pure drinking water…

Nothing is more vital to a healthy life than clean and pure drinking water. To ensure that the same is

provided to the mass market; microbiologists, physical and inorganic chemists, chemical engineers and

design engineers work in tandem to create innovative solutions.

What is your area of interest?

Supporting various research programs within Home & Personal Care and Foods are cross-category

research teams that cut across research projects bringing expertise in microbiology, toxicology, synthesis

and separation of organic molecules, statistical mechanics, emulsification, polymer science, consumer

science and analytical measurement techniques.

Where do you think your skills and expertise fit in? Are you as excited about research as we are? If you

have the fire within to work on the wow! idea that would change lives; please contact us to explore a career

in Unilever Research Bangalore-India.

Overview of Research Centres

Hindustan Unilever Research Centre (HURC) was set up in the year 1967 at Mumbai (then known as

Bombay). The primary challenge, at that time was to find suitable alternatives to the edible oils and fats

that were being used as raw materials for soaps.

LBA –ORGANIZATION STUDY AT HUL Page 90

Sep-2010

Hindustan Unilever Research Centre (HURC) was set up in the year 1967 at Mumbai (then known as

Bombay). The primary challenge, at that time was to find suitable alternatives to the edible oils and fats

that were being used as raw materials for soaps. Later, import substitution and export obligations directed

the focus towards non-edible oil seeds, infant foods, perfumery chemicals, fine chemicals, polymers and

nickel catalyst. This facilitated creation of new brands which helped build new businesses. There were also

significant improvements made to manufacturing processes.

Over the years many break through innovations, such as structured bar soap, fairness cream, zero alcohol

soap, poly-coated scouring bar for dishwashing, fortified salt, instant tea, critical components for a water

purifying device, and value-added (nature care) tea, led to significant successes in the marketplace. At the

same time, Hindustan Unilever Research gained eminence within Unilever Global R&D and became

recognized as one of the six global R&D Centres of Unilever with the creation of Unilever Research India

in Bangalore in 1997. Towards the end of 2006, with the construction of an additional set of world class

laboratories, all the research programs in India were integrated into a single research establishment of

Unilever Research Bangalore in India.

Unilever Research Bangalore - India, in addition to its highly qualified and talented people, has world class

infrastructure and facilities for conducting world class research. These include:

State-of-art instruments, such as Nuclear Magnetic Resonance Spectrometer (NMR), Fourier

Transformed Infrared Spectrometer (FTIR), X-Ray Diffract meter (XRD), etc., essential for

carrying out world-class research, with objectives of direct business interest to the Unilever Group

of Companies.

Pilot plants to test out feasibility and scalability of various parameters of our lab-scale experiments

at a larger scale to test feasibility and scalability.

A well-stocked Information Centre with all the latest, relevant books, journals, and numerous e-

resources having desktop connectivity; accessible on a 24x7 basis.

In the true spirit of environmental sustainability, the research campus has been built around a natural

setting, in harmony with rare flora and fauna. The work environment is enlivened by a modern cafeteria,

well-equipped gymnasium, and an auditorium.

LBA –ORGANIZATION STUDY AT HUL Page 91

Sep-2010

HR-DEPARTMENT

Human resources are a term used to describe the individuals who comprise the workforce of an

organization, although it is also applied in labor economics to, for example, business sectors or even whole

nations.

Human resources is also the name of the function within an organization charged with the overall

responsibility for implementing strategies and policies relating to the management of individuals (i.e. the

human resources).

LBA –ORGANIZATION STUDY AT HUL Page 92

CEO of human resource management

Northern region human resource manager

Eastern region human resource manager

Western region human resource manager

Southern region human resource

manager

Human resource management executives

Third party

Sep-2010

This function title is often abbreviated to the initials 'HR'.HR department of HUL is headed by Miss Leena

Nair. Each region of India has one human resource manager and human resource executives will follow the

managers. For every product they have different section for human resource. Low level staffs are not

included in the HUL payroll. There are some agencies which will give staff to HUL like Ikya.

HR Roles and Responsibilities in HUL

Each modern HRM organization implements at least the basic building blocks defined by the HR Roles

model defined by Mr. Ulrich. The most common answer from the organizational point of view was the

dividing of HRM Function to main three big blocks:

HR Front Office

HR Back Office

HR Centers of Excellence

The key success factor for the implementation of such a HR Organizational Scheme is a clear definition of

Roles and Responsibilities of each of the new units. The employees have to get used to much more

complicated and complex communication channels among them. None of the new HR Function can fail in

its role and responsibilities and they have to be able to cooperate smoothly, which can be a huge issue in

the beginning of the implementation. The responsibilities must be set as the each of the main HR

organizational units can reach its own goals. The HR Front Office has to start acting as the partner to the

line management, looking for the solutions in the existing processes and procedures without interacting

with the HR Centers of Excellence.

LBA –ORGANIZATION STUDY AT HUL Page 93

Sep-2010

  The HR Centers of Excellence has to respect the HR Front Office as the main point of contact for the

line management. The HR Centers of Excellence have to follow the internal communication rules as it can

happen the line management will stop communicating with the HR Front Office as they will feel the HR

Business Partners as a redundant step in the process. The HR Back Office has to become a flexible and

important part of the HRM Function. The HR Back Office has to become an independent part of the

organization able to implement processes and procedures defined by the HR Centers of Excellence and able

to implement "exceptions" and adjustments required by the HR Front Office.

Key functions

Human Resources may set strategies and develop policies, standards, systems, and processes that

implement these strategies in a whole range of areas. The following are typical of a wide range of

organizations:

Recruitment, selection, and on boarding (resourcing)

Organizational design and development

Business transformation and change management

Performance, conduct and behavior management

Industrial and employee relations

Human resources (workforce) analysis and workforce personnel data management

Compensation, rewards, and benefits management

Training and development (learning management)

Implementation of such policies, processes or standards may be directly managed by the HR function itself,

or the function may indirectly supervise the implementation of such activities by managers, other business

functions or via third-party external partner organizations.

Training

At the organizational level, a successful Human Resources Development program prepares the individual

to undertake a higher level of work, "organized learning over a given period of time, to provide the

possibility of performance change" (Nadler 1984).

LBA –ORGANIZATION STUDY AT HUL Page 94

Sep-2010

In these settings, Human Resources Development is the framework that focuses on the organizations

competencies at the first stage, training, and then developing the employee, through education, to satisfy

the organizations long-term needs and the individuals’ career goals and employee value to their present and

future employers.

Human Resources Development can be defined simply as developing the most important section of any

business, its human resource, by attaining or upgrading employee skills and attitudes at all levels to

maximize enterprise effectiveness. The people within an organization are its human resource.

Human Resources Development from a business perspective is not entirely focused on the individual's

growth and development, "development occurs to enhance the organization's value, not solely for

individual improvement. Individual education and development is a tool and a means to an end, not the end

goal itself".

In HUL training is giving only to middle level employees. For the low level staff they are providing on the

job training in sales department. For the technicians HUL will give a thorough training. There will be

training section in between job also. For the management level candidates HUL will give three month

induction class in the regional head office.

Recruitment

Employee recruitment forms a major part of an organization's overall resourcing strategies, which identify

and secure people needed for the organization to survive and succeed in the short to medium-term.

Recruitment activities need to be responsive to the ever-increasingly competitive market to secure suitably

qualified and capable recruits at all levels. To be effective these initiatives need to include how and when to

source the best recruits internally or externally.

Common to the success of either are; well-defined organizational structures with sound job design, robust

task and person specification and versatile selection processes, reward, employment relations and human

resource policies, underpinned by a commitment for strong employer branding and employee engagement

and on boarding strategies.

LBA –ORGANIZATION STUDY AT HUL Page 95

Sep-2010

Internal recruitment can provide the most cost-effective source for recruits if the potential of the existing

pool of employees has been enhanced through training, development and other performance-enhancing

activities such as performance appraisal, succession planning and development centers to review

performance and assess employee development needs and promotional potential.

Increasingly, securing the best quality candidates for almost all organizations relies, at least occasionally if

not substantially, on external recruitment methods.

Rapidly changing business models demand skill and experience that cannot be sourced or rapidly enough

developed from the existing employee base. It would be unusual for an organization to undertake all

aspects of the recruitment process without support from third-party dedicated recruitment firms.

This may involve a range of support services, such as; provision of CVs or resumes, identifying

recruitment media, advertisement design and media placement for job vacancies, candidate response

handling, short listing, conducting aptitude testing, preliminary interviews or reference and qualification

verification. Typically, small organizations may not have in-house resources or, in common with larger

organizations, may not possess the particular skill-set required to undertake a specific recruitment

assignment. Where requirements arise, these are referred on an ad hoc basis to government job centers or

commercially run employment agencies. HUL recruit their staff directly with their own selection process.

The staff which is not there in the HUL payroll will be recruited by agencies that are providing staff.

Performance appraisal

Performance appraisal is the process of obtaining, analyzing and recording information about the relative

worth of an employee. The focus of the performance appraisal is measuring and improving the actual

performance of the employee and also the future potential of the employee. In HUL, organization will

motivate the employee with rewards and reorganization. In Bangalore water department, sales have 40

team leaders, in that 32 are got this post through promotion. This facts shows HUL have very good

performance appraisal system and rewarding the eligible employee at correct time.

LBA –ORGANIZATION STUDY AT HUL Page 96

Sep-2010

SWOT ANALYSIS

SWOT analysis is a strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities,

and Threats involved in a project or in a business venture. It involves specifying the objective of the

business venture or project and identifying the internal and external factors that are favorable and

unfavorable to achieve that objective.

The technique is credited to Albert Humphrey, who led a convention at Stanford University in the 1960s

and 1970s using data from Fortune 500 companies.

A SWOT analysis must first start with defining a desired end state or objective. A SWOT analysis may be

incorporated into the strategic planning model. Strategic Planning has been the subject of much research.

Strengths: attributes of the person or company that is helpful to achieving the objective.

Weaknesses: attributes of the person or company that is harmful to achieving the objective.

Opportunities: external conditions those are helpful to achieving the objective.

Threats: external conditions which could do damage to the objective.

LBA –ORGANIZATION STUDY AT HUL Page 97

Sep-2010

Identification of SWOTs is essential because subsequent steps in the process of planning for achievement

of the selected objective may be derived from the SWOTs. First, the decision makers have to determine

whether the objective is attainable, given the SWOTs. If the objective is NOT attainable a different

objective must be selected and the process repeated.

The SWOT analysis is often used in academia to highlight and identify strengths, weaknesses,

opportunities and threats. It is particularly helpful in identifying areas for development.

Strengths:

HLL enjoys a formidable distribution network covering over 3400 distributors and 16 million

outlets. This helps them maintain heavy volumes, and hence, fill the shelves of most outlets. The

new sales organization named 'One HLL' brings "Household and Personal Care" and foods

distribution networks together, thereby aligning all the units towards the common goal of

achieving success. HLL has been continuously able to grow at a rate more than growth rate for

FMCG Sector, thereby reaffirming its future stronghold in Indian market.

Project Shakti - Rural India is spread across 627,000 villages and possesses a serious

distribution challenge for FMCG Cos.

HLL has come up with a unique and successful initiative wherein the women from the rural sector

market HLL products, and hence, are able to reach the same wavelength as of the common man in

village.

Apart from product reach, the initiative also creates brand awareness amongst the lower strata of

society. This has brought about phenomenal results.

Weaknesses

HLL's market dominance, originating from its extensive reach and strong brand presence, allowed it

to raise the prices even as raw materials were getting cheaper. Hence, though the volumes

decreased, the margins grew, and company was able to earn more profits. But higher margins

attracted competition in areas of operations.

HLL's strategy remained focused on creating power brands and earning higher margins. It was not

left with any other option but to try cutting down the costs in order to protect volumes, if not

increase it.

LBA –ORGANIZATION STUDY AT HUL Page 98

Sep-2010

Opportunities

India is one of the world's largest producers of FMCG goods but its exports are miniscule as

compared to production.

Though Indian Cos. has been going global, their focus is more towards Asian countries because of

the similar preferences.

HLL is one of the top companies exporting FMCG goods from India. An expansion of horizons

towards more and more countries would help HLL grow its consumer base and henceforth the

revenues.

Opportunity in Food Sector - The advent of modern trade has opened up greater opportunities

for HLL to diversify its brand and strength its food division.

It could look at introducing products from its parents stable like margarines and could also look at

expanding its Knorr range of products.

Well-placed to take advantage of future FMCG Growth - HLL reach out 80% of 207 million

households in the country through various brands. It has a very well-defined product portfolio

spread across many product categories.

Penetration levels for some major categories like skin-cream (22%), shampoo (38%), toothpaste

(48%) and processed foods continue to remain low offerings but great growth opportunities

products.

Threats

LBA –ORGANIZATION STUDY AT HUL Page 99

Sep-2010

ITC has reduced its dependence on the cigarettes business - Contribution of the core business

in revenues has come down from 87% in FY99 to 70% in FY05. Over a period of five years, ITC

has extended its presence into areas like foods, retailing, hotels, greetings, agri, paper, etc.

These are businesses that can give it growth impetus in the long run. With ITC gaining

momentum in each of these businesses, it is turning into a consumer monolith, and hence, the

greatest threat to HLL's Business.

LBA –ORGANIZATION STUDY AT HUL Page 100

Sep-2010

FINDINGS

The brand HUL is well established in 75 years. It is having a right mix of products. Most of the

products of HUL are the market leaders. People have a confidence on all products of HUL. The

market structure of various products underlines the brand value of the organisation.

The hierarchy and the structure of Hindustan uniliver limited is based on merit. All top management

is proved their talent and came into that position. The structure of the organisation is also different

from the text book organisation structures.

The HUL have wide range of brands which is classified in personal care, homecare, and food. All

products in each category is having good market share. The brands included Lux, Lifeboy, Fare and

lovely, Ponds, Vaseline, Lakme, Axe, Surf, Annapurna, Pureit (water purifier) etc.

Even though there is various other company like Godrej, ITC, Procter and Gamble, HUL is

occupying big part of FMCG market.

HUL is having a very good distribution network which will cover not only India but also around the

world, for departments of water only HUL have 10 zones in Bangalore city. This show how

efficient and effective is the distribution of HUL.

The sale techniques of HUL are widely accepted. Most of the products are selling by generating the

needs according to Maslow’s need hierarchy theory.

I also realize that even though there is lots of systems and procedures in sales there are setbacks like

fraud, no proper data base, and poor motivation methods.

LBA –ORGANIZATION STUDY AT HUL Page 101

Sep-2010

SUGGESTIONS

Organization have good distribution network. That is the strength of HUL. So I am suggesting

improving the product mix of HUL.

To beat the FMCG market competition, organization has to create new strategies for acquiring the

market share.

The organization structure is well developed but in the root level it is not effective.

The training is not adequate for the fresher candidates. In sales from territory sale officer onwards

they are giving three month internship and training. Below that level only on the job training is

there for sales department. Salesmen are the people who are directly interact with the consumer. So

they are making impression on the mind of consumer. Training of the salesmen is very important.

The system following in the direct to home section (sales) is not enough to compete in the market.

In current system they are not maintaining the proper database. If the information collected by the

salesmen is documented. It will be very useful for the company and it can achieve more sales and

growth.

The training to team leader and the zonal sale officer is very important. Leadership quality should

be cultivated throughout his or her growth.

The promotions should not rely on the sales which he is doing. It should be according to soft skills

and efficiency

The motivation techniques need to be improved. Employees are not only working for money, they

should get a satisfaction from the job. The high turnover of employee shows the inactive motivation

techniques.

LBA –ORGANIZATION STUDY AT HUL Page 102

Sep-2010

CONCLUSION

The research project on study of Hindustan Uniliver Ltd was wonderful and very interesting. In this

project I have done a sincere attempt to study the organization structure and its working. Because

of the large structure, The study was too heavy. So I choose one section of HUL which is water

purifier department. After going through various materials available in the library magazines, news

papers, internet, company fact sheets and company annual reports and experience of 6 weeks I have

reached the following conclusion with respect to my objectives.

Hul is market leader in FMCG market. Out of best 50 best brands of FMCG 26 is marketed by

HUL. Company have 54% market share in personal care.54% market share in home care products.

46% market share in food products. Hul is market leader in tea market and jam. In coffee and oral

care HUL came second in the market.

The competitive organizations are giving tough completion to HUL in FMCG sector. The reason of

coming down of market share is because of the completion from ITC, GCPL etc. Some of other

company also giving tough competition to HUL in correspondent areas. For example in oral care

Colgate is the market leader but Colgate is not giving competition for other products of HUL.

Improper marketing strategies also costing loss to the HUL market share.

The financial analysis clearly states that the company had a small setback in recent years. It is

mainly due to the completion and recession in the market. Now the per capita income of the

Indian’s are improving so there is opportunity for the FMCG market and HUL to stretch its legs.

The sales techniques of the company are out dated. Direct marketing is based on Maslow’s need

hierarchy theory. The system which is used in the direct to home sales is not up to the market. The

motivational methods also not effective in HUL route level. Training is not as required for

competitive market.

LBA –ORGANIZATION STUDY AT HUL Page 103

Sep-2010

BIBILOGRAPHY

D.K.Battacharyya- Research methodology-2nd

edition

Philip Kotler and Gray Armstrong-principles of

marketing-12th edition

V.P.S.Rao- organizational behavior-1st edition

S.P.Gupta –statistical methods-1st edition

Tripathi and Reddy-principles of management-

4th edition

www.managementparadise.com

www.hul.co.in

www.scribe.com

www.timesindia.com

LBA –ORGANIZATION STUDY AT HUL Page 104

Sep-2010

LBA –ORGANIZATION STUDY AT HUL Page 105