Surf Exel

? HINDUSTAN LEVER LIMITEDA Project Report On SURF EXCEL ? 2. TABLE OF CONTENTS†¢ ACKNOWLEDGEMENTS†¢ INTRODUCTION†¢ EXECUTIVE SUMMARY†¢ INDUSTRY ANALYSIS†¢ COMPANY OVERVIEW†¢ FINANCIAL STATEMENT ANALYSIS†¢ MARKETING MIX OF ORISSA†¢ COMPETITORS ANALYSIS†¢ PROJECT1: o OBJECTIVES o SCOPE AND LIMITATIONS OF THE STUDY o RESEARCH METHODOLOGY o DATA ANALYSIS  § CONSUMER ANALYSIS o CONCLUSIONS†¢ APPENDIX o CONSUMER’S QUESTIONNAIRE o DETAILED FSA ? 3. EXECUTIVE SUMMARYThe project assigned to us was to study the business and marketing practice, competitorsin business and customers of Surf Excel, for Orissa market.For this a questionnaire wasprepared for the consumers. A sample of 53 consumers was surveyed. The respondentswere interviewed in market places across Bhubaneswar. After the analysis we came to the conclusion that the Surf Excel enjoys a space in the top2 positions in brand recall of the consumer. This is a positive sign for HL L. The researchalso shows that the market share of Surf Excel in Orissa’s detergent market isapproximately 66%. Also, from the survey it is evident that brand name, price andcleansing action are three of the most important attributes a consumer looks for in anydetergent brand.Surf Excel enjoys a good reputation with the consumers with respect toall these attributes. Another thing that we noted in this survey was that Television is the most usedinformation source for the consumer. The exact communication recall however, is verypoor among the consumer. This could be attributed to the ever increasing advertisementclutter, across all media. Thus, HLL should consider looking for other media likeoutdoors. It was also noted that over 50% of the consumers who used Surf Excel, would purchasepacks whose size was 1/2 – 1 kg and did not prefer purchasing the 200gm pack.We triedto find out the reason as to why this practice occurred, but to no avail. HLL shouldconsider promoting th is pack size in some way, or phase it out totally. Thus, we can conclude that Surf Excel enjoys excellent customer reviews. It gets specialrecognition for its superior cleansing action, the convenient packs it comes in, the ease it ? 4. is available with, and the fact that its price is at par with similar products available in themarket today. OBJECTIVES OF THE STUDY 1.The primary objective of the study was to understand the customers of Surf Excel ( type/ quality/ their decision making style/ source of information that they use for collecting information regarding Surf Excel) 2. The study was also aimed to understand the business and marketing practice of Surf Excel and the marketing mix used by HLL for Surf Excel. 3. Another important objective of the study was to understand the competitors of Surf Excel. 4. Efforts were also made to evaluate the financial strength and market capabilities of the parent firm, Hindustan Lever Limited. ? 5.INDIAN FMCG INDUSTRYBackgroundThe FMCG secto r has been the cornerstone of the Indian economy. Though, the sector has been in existence for quite a long time, it began totake shape only during the last fifty-odd years. The sector touches everyaspect of human life, from looks to hygiene to palate. Perhaps, defining anindustry whose scope is so vast is not easy. Generally, FMCG refers to consumer non-durable goods required for dailyor frequent use. The sector touches every aspect of human life, from looksto hygiene to palate. Perhaps, defining an industry whose scope is so vastis not easy.The FMCG sector consists mainly of sub segments viz. personal care, oral care andhousehold products. This can be further sub-divided into oral care, soaps and detergents,Health and Hygiene products, beauty cosmetics, hair care products, food and dairy-basedproducts, cigarettes, and tea and beverages. Major Indian consumer product companies (like Britannia, P&G, HLL, etc. ) have a verystrong presence through their strong brands. Diversified port folios, wide distributionnetworks and scale economies of these companies deter new players from entering.Brand equity, therefore, is an extremely important factor in FMCG industry. One of theother most critical factors is the ability to build, develop, and maintain a robustdistribution networkPost-reforms, the industrys growth has been hinging around a burgeoning ruralpopulation which has witnessed significant rise in disposable incomes. Consequently, therural markets have been witnessing intense competition in almost all the consumerproduct classes. Another reason which has led to rise in this trend is the saturation inurban markets in most of the consumer non-durable goods categories.This has led to theindustry players scrambling for greater rural penetration as a future growth vehicle, thearea which accounts for 70% of the total Indian householdsSo far, it has been a chequered graph for the MNCs operating in the Indian FMCGindustry. Domestic companies are only beginning to make t heir presence felt in theindustry. It has taken tremendous consumer insight and market savviness for the FMCGplayers to reach where they are today. But, the journey seems to have just now begun forthe players as the majority of the rural populace are yet to get access to the items of dailyusage like toothpastes, soaps and shampoos. 6. Value for moneyEver since the global recession of 1991-94, which hit consumer spending hard, value-for-money has become the buzzword for FMCG companies globally. These FMCGcompanies embarked upon major restructuring and cost rationalization exercises asbusiness continued to become fiercely competitive. Several packaging innovations werealso resorted to. India was no different. There was a paradigm shift towards value-for-money products and, to some extent, towards the rural market. What Nirma did all these years suddenly became the buzzword for many FMCG players.Price cuts became inevitable to keep the market share from shrinking. Sometimes, thecuts to uched ridiculous levels. Economic recession hit the urban pockets badly and forcedcompanies to train their guns on rural India, which was witnessing a major change in itsaspiration and lifestyles and even had an income that translated into increasing volumes. India’s agrarian economy is fundamentally strong. Rural India accounts for as much as 70per cent of the nation’s population. That means rural India can bring in the much neededvolumes and help FMCG companies to log in volume-driven growth.Companies such asHLL, Colgate and Britannia who already had a strong rural focus, stepped up the gasfurther. HLL unleashed its â€Å"Operation Bharat†. Britannia pushed its Tiger biscuits toevery nook and corner of the country, while Colgate went about wooing the rural massesby offering low-priced products in convenient packaging. Those who could not do it ontheir own went piggyback on somebody else. P&G, whose distribution is largely urban,chose to leverage Maricos retail reach. P&G and Smith Kline Beecham, nonetheless, are interesting cases.With small productportfolios like theirs, they have been able to achieve what others could not and provedthat what you need is a good product, marketed effectively and sold at the right priceOf late, an interesting trend in the Indian FMCG sector has been brand acquisitions. Thisrepresents a growing awareness among the FMCG players are talking today more andmore of product â€Å"fits† while discussing brand acquisitions. It is not just acquiringanything and everything as it was in the pastRural 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. Notsurprising that the Indian FMCG sector is busy putting in place a parallel rural marketingstrategy. Among the FMCG majors, Hindustan Lever, Marico Industries, Colgate-Palmolive and Britannia Industries are only a few of the FMCG majors who have beengung-ho about rural marketing. With reason. Certainly, rural marketing holds the key to success of FMCG companies, which aredesperate to find ways out to gain deeper penetration. Not just the rural population isnumerically large, it is growing richer by the day.Of late, there has been a phenomenalimprovement in rural incomes and rural spending power. ? 7. FMCG sector performance in last decadeThe fmcg sector in India showed a constant decline in the last decade. What started as 20-25% growth rate in year 1994-96, had reached a negative growth rate of -2. 8% in Q1’04. The FMCG sector is now mockingly called SMCG or slow moving consumer goods. ? 8. Source India Today – R K Swamy BBDO Guide to Urban Markets*Soap, Shampoo, Nail Polish, Washing Powder, Footwear, Tea, Coffee, Cigarettes, Electric Bulbs.Rank Towns States Average Monthly Spending on FMCG Products* in Rs. 1 Chandigarh Chandigarh 3,418 2 Greater Maharashtra 2,955 Mumbai 3 Chennai Tamil Nadu 2,886 4 Ahmedabad Gujarat 2, 869 5 Vadodara Gujarat 2,816 6 Pune Maharashtra 2,804 7 Coimbatore Tamil Nadu 2,684 8 Ludhiana Punjab 2,674 9 Faridabad Haryana 2,596 10 Hyderabad Andhra 2,533 Pradesh ? 9. The Fabric Care Market In IndiaDetergentsThe Indian fabric wash market consists of synthetic detergents (comprising bars, powderand liquids) and oil-based laundry soaps. The detergent powder market is furthersegmented based on price and form.It is characterised by brands from a plethora ofregional and local players competing with the national marketers primarily in the low-priced and mid-priced segmentsThe synthetic detergent market can be classified into premium (Surf, Ariel), mid-price(Rin, Wheel) and popular segments (Nirma), which account for 15%, 40% and 45% ofthe total market, respectively. The product category is fairly mature and is dominated bytwo players, HLL and Nirma. Nirma created a revolution in the market by pioneering theconcept of low-cost detergents.Currently, the market is highly segmented with thedifferential between the premium and popular segments at almost 7X. GrowthAlthough the per capita consumption of detergents in India (2. 7 kg pa) is comparable tosome countries like Indonesia, China and Thailand (around 2 kg pa), it is lower than inothers such as Malaysia, Philippines (3. 7 kg) and the USA (10 kg). High consumerawareness and penetration levels will enable the market to grow at an average 8-10% perannum with slightly higher growth in the rural areas. Higher penetration stems frompopularity of low-cost detergents.Hence, besides increase in per capita consumption,there is tremendous scope for movement up the value chain. Leading Fabricare Brands Available In IndiaSurf ExcelSurf comes from the stables of Hindustan Lever, the largest player in this market with anoffering at each price point. Surf was the first detergent powder brand to be launched in thecountry. It created the detergent powder category and introduced the concept of bucketwash to housewives hitherto u sed to washing clothes with laundry soap bars. Surf has, since,become generic to detergent market.Consumers refer to all their powders as Surf, evencompetitive powders are called Surf e. g. Nirma Surf ? 10. Selling over 60,000 tonnes per year, Surf is the market leader in the concentrate andpremium powder price segments Surf has always been the first to recognize and respond totrends. Whether it was through Surf with Easy Wash- a low lather variant, in 1994 or Surfwith Wash Boosters (1995) that provided best clean even in hard water. The brand SurfExcel now has three variants – Surf Excel Quickwash, Surf Excel Blue and Surf ExcelAutomatic – which address different laundry needs but each offers stain removal as the keybenefit.In 2003, recognising changing consumer purchase patterns, it once again redefined value forthe consumers by introducing the concept of monthly packs. Sensitive to the increasing concerns on environmental pollution and water scarcity problemsacross the country, it brought to the consumer Surf Excel Quickwash. This low lathervariant is the first eco-friendly detergent in the country, as it uses almost half the water otherdetergents require. Surf has innovated beyond the basic product into other aspects of laundry.Understandingthe need for easy-to-store packaging, tubs and jars were introduced. In order to helpconsumers dose correctly for the best possible clean, measuring scoops were built into thepacks. For convenience seekers, washing has been simplified with the ready to dose packs ofSurf Excel Automatic. Consistent innovation addressing ever-evolving consumer needs has earned the brand aplace in the hearts of consumers. Surf was rated in the top Ten Most Trusted brands in TheEconomic Times survey in 2003WheelWheel is Indias number one detergent brand.Launched in 1987, it cleans effectivelywith lesser effort, making a laborious chore like washing light and easy. Moreover,Wheel does not burn hands or harm clothes like some ot her detergents, which containa high percentage of soda. Ever since its relaunch in 2001, with the new positioning of best clean with less effort,Wheel has been growing strongly. Research showed that consumers seek a solution to heavyduty laundry, like bed sheets and curtains. Developing on this insight, wheel sought to ? 11. liminate the trouble of tough dirt or heavy-duty laundry. Mass market consumers havewelcomed the solution, making it the number one. Nirma – a home-grown product that revolutionized the detergent market in India, andsuccessfully challenged large multinational leaders in the process. The Nirma success story isa result of its founder, Dr. Karsanbhai Patels relentless focus on quality, cost and value. Thedistribution model, sustained line extensions and umbrella branding strategies have enhancedthe brands cost leadership.Today, the companys two brands, Nirma and Nima, aredistributed through more thantwo million retail outlets across the country, generating g rosssales in excess of Rs. 26,000 million. In the fabric care category, Nirma has three productsfor the lower-end market. The Nirma Yellow Washing Powder is available in pack sizes of30 gms, 200 gms, 500 gms and 1 kg, and is ranked as the largest selling single detergentbrand in the world. Nirma is one of the large st selling single detergent brands in the world.Nirma products aresold through two million retailers and reach 400 million. This brand had been ranked as the â€Å"Most widely distributed detergent powder brand in India† as per AllIndia Census of Retail Outlets carried out in 435 urban towns by the AIMS (Asian InformationMarketing & Social) Research agency [Brand Equity – The Economic Times, March 11, 1997]. As perthe ORG-MARG Rural Consumer Panel [December 1998] survey, Nirma brand has been ranked ashighest in terms of penetration in washing powder category [BT Rural Market Watch, Business Today, June22, 1999]. ? 12.World-over Ariel epitomizes ‘stain removal’ and removes even the toughest stains in the firstwash. Introduced in India in 1991, Ariel has continuously led other detergents in productinnovation. For example, it pioneered the use of enzyme technology for superior and safestain-removing power, longer-lasting perfume, and the P&G proprietary cleaningtechnology, which cleans everyday soil and dirt from garments. Over the years, the brand hasenjoyed endorsement from celebrities such as the former actress and now MP Shabana Azmiand lakhs of other homemakers in India.Tide is the World’s Oldest and Most Trusted Billion Dollar Detergent and is the marketleader in 23 Countries around the world. Tide provides outstanding whiteness on whiteclothes and provides excellent everyday cleaning for colored clothes too. Launched in Indiain mid-2000, the brand has gained popularity among Indian housewives, thanks to itssuperior whitening, creative advertising starring Shekhar Suman, and its Value-for-Moneyproposition. Both T ide and Ariel are billion dollar brands in sales for P&G globally. Now Large Packs of Tide and Ariel – World’s Best Detergents at Rs. 3/- and Rs. 50/- only Mumbai, India — March 02, 2004 — Procter & Gamble today announced that it has reduced the prices of Ariel and Tide bags (large packs) by 20-50%, while maintaining the superior quality. The superior quality ? kg pack of Tide now cleans a family’s one-month laundry in just Rs. 23/-, while a ? kg pack of Ariel cleans a family’s one-month laundry in just Rs. 50/-. This significant price reduction will now allow many more Indian consumers to experience the world-class experience of outstanding whiteness from Tide and superior stain-removal from Ariel in every wash.The new prices of Ariel and Tide are as follows: ? 13. Old Price New Price Old Price New Price Pack Size P&Gs move to slash Ariel Ariel Tide Tide detergent prices is 200gm Rs. 30 Rs. 22 Rs. 20 Rs. 10 ostensibly to get more consumers to 500gm Rs. 70 Rs. 50 Rs. 43 Rs. 23 experience its brands 1kg Rs. 135 Rs. 99 Rs. 85 Rs. 46 but the industry sees it primarily as a 1. 5kg Rs. 180 Rs. 145 N. A* N. A move to wrest the advantage from HLL 2kg N. A N. A Rs. 160 Rs. 88 in a sluggish market. The prices of sachets (20gm) of Ariel and Tide remain unchanged. N. A = Not Available in that size. Six months ago, P&G reduced the prices of Ariel and Tide sachets by 50% in order toencourage a larger number of consumers to experience their superior quality. The bettervalue offer on sachets received such an overwhelming, positive response from consumersacross India that P&G was encouraged to offer the irresistible value to Ariel and Tide bagusers as well, thereby make the world’s best detergents accessible to a larger number ofIndian consumers.P&G talked to over 3,000 consumers across the length and breadth of India and observedover 25,000 washing sessions in consumers’ homes. Consumers believed in the superiorquality of Ariel and Tide but indicated ‘pricing’ as a constraint in using Ariel and Tide on aregular basis. The drop in prices by the P&G has forced HLL to also react in a similar way thus shrinkingthe overall profit margins for the group. While the immediate impact of any price slash isbound to result in more volumes and thereby shares for the companies concerned,improving margins in the business remains doubtful. 14. Company OverviewHindustan Lever Limited (HLL) is Indias largest fast moving consumer goodscompany, with leadership in Home & Personal Care Products and Foods & Beverages. HLLs brands, spread across 20 distinct consumer categories, touch the lives of two out of 1888 Sunlight soapthree Indians. They endow the company with a scale of combined volumes of about 4 introduced inmillion tonnes and sales of Rs. 10,000 crores. India. The leading business magazine, Forbes Global, has rated Hindustan Lever as the bestconsumer household products company.Far Eastern Economic Review has rated HLL asIndia’s most respected company. Asiamoney has rated HLL as one of India’s best managedcompanies. Leading national publications, like The Economic Times, Business World, and 1895Business Today have also rated HLL as one of India’s most respected companies and the Lifebuoy soapnumber one in Market Value Added and EVA. launchedHLL is Indias largest marketer of Soaps, Detergents and Home Care products. It has thecountry’s largest Personal Products business, leading in Shampoos, Skin Care Products,Colour Cosmetics and Deodorants.HLL is also the market leader in Tea, ProcessedCoffee, branded Wheat Flour, Tomato Products, and Ice cream, Soups, Jams and 1902Squashes. Pears soap introduced inHLL is also one of the countrys biggest exporters and has been recognized as a Golden IndiaSuper Star Trading House by the Government of India; it is a net foreign exchange earner. HLL is Indias largest exporter of branded fast moving consumer goods. The companysExports portfolio includes HLLs brands of Soaps and Detergents, Personal Products,Home Care Products, Tea and Coffee.HLL is also driving exports in chosen areas whereIndia has a competitive advantage – Marine Products, Basmati Rice, Castor Oil and its 1903 Brooke BondDerivatives. It is Indias largest exporter of Marine products, and one of the largest global Red Label teaplayers in castor. launched. Market leading brandsHLL’s brands have become household names. The company’s strategy is to concentrate itsresources on 35 national power brands, and 10 other brands which are strong in certain 1905regions. The top five brands together account for sales of over Rs. 3000 crores.Each of Lux flakesthese mega brands has a potential scale of Rs. 1000 crores in the foreseeable future. introducedSome of the big brands in Soaps and Detergents are Lifebuoy, Lux, Liril, Hamam,,Pears,Rexona & Dove, (all soaps), Surf Excel, Surf, Rin, & Wheel (all detergents). HLLalso m arkets the Vim and Domex range of Home Care Products. 1913In the Personal Products business, HLLs Hair Care franchises are Clinic, Sunsilk and Lux Vim scouringshampoos. In Oral Care, the portfolio comprises Close-up and Pepsodent toothpastes and powdertoothbrushes.In Skin Care, HLL markets Fair & Lovely Skin Cream and Lotion, the introduced. largest selling Skin Care Product in India; a brand developed in India, it is now exported toover 30 countries. It has been extended as an Ayurvedic cream, an under-eye cream, soap ? 15. and talc, in line with the strategy to take brands across relevant categories. The other majorSkin Carefranchises are Pond’s, Vaseline, Lakme and Pears. In Colour Cosmetics, HLLmarkets the Lakme and Elle-18 ranges.In Deodorants, the key brands are Rexona, Axe, 1930Denim and Ponds, while the Talc brands are Ponds, Liril, Fair & Lovely, Vaseline and Unilever isLifebuoy. Axe and Denim are HLL’s franchises for Men’s toiletries. formed on January 1HLL has recently launched Lever Ayush Ayurvedic Health & Personal Care Products. Health Care is among the new businesses HLL has chosen to enter. The product rangecomprises Cough Naashak Syrup, Headache Naashak Roll-on, Dandruff NaashakShampoo, Hair Rakshak Oil and Body Rakshak Soap.The purity of the Ayurvedic 1931ingredients in Lever Ayush is endorsed by the renowned Arya Vaidya Pharmacy (AVP) of HindustanCoimbatore. It is for the first time that rigorous testing procedures of the pharmaceutical Vanaspatiindustry have been applied to Ayurvedic products. That is why the brand seal is ‘Truth of ManufacturingAyurveda; Proof of Science’. Company registered on November 27HLL has started franchised Lakme Beauty Salons, offering standardised services, in linewith the strategy to add a service dimension to relevant brands.The company has set up the Hindustan Lever Network, a direct selling channel, offering 1932the Lever Home range of Laundry and Home Care products and the A viance Personal Vanaspati manufactureCare range. starts at SewriThe company has also begun an e-tailing service, called Sangam, which can home-deliveron order by phone or through the Net, a diverse range of about 5000 branded andunbranded products. The service is now available in select areas of Mumbai and NaviMumbai, besides Thane. 1939HLL is one of the world’s largest packet Tea marketers.Its Tea brands – Taj Mahal, Red Garden ReachLabel, Taaza, – are among the top brands in the country; it also markets Lipton Ice Tea. Factory purchasedHLL and Pepsi have formed an alliance to distribute a full range of tea and coffee and soft outrightbeverages through vending machines; HLL already has a base of around 15000 suchmachines. The coffee business comprises Bru Instant Coffee and Deluxe Green LabelRoast & Ground Coffee. The Kissan and Knorr Foods range comprises Spreads & Jams, Biscuit Sticks, Soups, 1943 Personal ProductsSquashes, Tomato Ketchup, Sauces, Puree, and Cooking Aids.Popular Foods, like Wheat manufactureFlour and Iodized Edible Salt, under the Knorr Annapurna brand name, have met with begins in India atremarkable success. The range has been expanded with ready-to-eat 10-second chapatis. Garden ReachThe innovative offerings are changing consumer habits into using processed, hygienic, Factoryhealthy and convenient products. The Kwality-Walls Ice Cream range comprises exotic Sundaes, Viennetta Desserts,popular ‘Impulse’ segment products like Max, Cornetto and Feast, and Cornetto Ripple 1947Softies.Ponds Cold Cream launched. Max was extended in 2001 as sugar confectioneries, because children are a key consumersegment in confectioneries too. This is among the new businesses HLL has chosen toenter. ? 16. HLL has acquired Modern Food Industries (India) Limited, entering the bread market. Modern Foods was the first Public Sector Undertaking to be disinvested. Besides 1959 Surf launched. upgrading the existing Modern products, H LL has launched new products, among thembiscuits. HLL is liberating its brands from their existing category mindset.Historically, brandsoriginated and stayed within a category format. HLL sees its Power Brands as being able tooccupy a unique position in the consumers mind and therefore being able to stretch intoother product formats and categories. All such initiatives have had a promising start, and 1964there are more to come. Etah dairy set up, Anik ghee launched; Animal feeds plant atThe Distribution network Ghaziabad; Sunsilk shampooHLL’s distribution network is recognised as one of its key strengths — that which helps launched. each out its products across the length and breadth of this vast country. The need for astrong distribution network is imperative, since HLL’s corporate purpose is â€Å"to meet theeveryday needs of people everywhere. †HLLs products, manufactured across the country, the operations involve over 2,000 1969 Rin bar launchedsuppli ers and associates. HLLs distribution network, comprising about 7,000redistribution stockiest about one million retail outlets, directly covers the entire urbanpopulation, and about 250 million rural consumers.In addition to the ongoing commitment to the traditional grocery trade, HLL is building aspecial relationship with the small but fast emerging modern trade. HLLs scale enables itto provide superior customer service including daily servicing, improving their rangeavailability whilst reducing inventories. HLL is using the opportunity of interfacing more 1975 Close-updirectly with consumers in this retail environment through specially designed toothpastecommunication and promotions. This is building traffic into the stores while yielding high launched.. growth for the business.An IT-powered system has been implemented to supply stocks to redistribution stockistson a continuous replenishment basis. The objective is to catalyse HLL’s growth by 1978ensuring that the right pro duct is available at the right place in right quantities, in the most Fair & Lovely skin creamcost-effective manner. For this, stockists have been connected with the company through launched.. an Internet-based network, called RSNet, for online interaction on orders, dispatches,information sharing and monitoring. RS Net covers about 80% of the companys turnover. 930 Unilever is formed onHLLs foray into Network Marketing January 1 1988 Launch ofAs per the market surveys conducted it is expected that the consumer market in India is Lipton Taazaworth 13000 crores per year and in few years the network market will capture 500 crores as tea. per market surveys, considering the potential Hindustan Lever has launched HindustanLever Network (HLN), a unique Network Marketing opportunity . ? 17. 1991The Network marketing concept Surf Ultra detergent launched. In the normal marketing system, the manufacturer supplies the products through themiddle men such as brokers, wholesalers and retailers. These middle-men add theirestablishment costs and their own margin of profit or commission on the price. Thisincreases the price by approximately 45 per cent. The consumer therefore gets the productat atleast a 45 per cent markup from the manufacturers price. 1993 Tata Oil Mills CompanyIn network marketing, these middle men are eliminated. A person is invited to join and (TOMCO),become a member (also called Consultant) of the network marketing company. This merges with theperson in turn invites many more people to join under him to form a group.These group companymembers, in turn invite their acquaintance to join under them. This group is made tosteadily grow and it can grow into thousands or tens of thousands, in the course of time,depending upon the enthusiasm with which the Consultant pursue the sponsorship of newConsultants. 1994 HLL introducesThese Consultants make purchases of the products of the marketing company for self use Walls. and also for sale to other consumers. For t heir loyalty in regularly purchasing the products,the marketing co. gives discounts, handsome bonuses, rewards and special incentives.Each consultant in the group gets his shares of benefits depending upon the purchasesmade by him and also by the number of the consultant under him (called downlines). This 1995is called network marketing. HLL enters brandedThe growth in the beginning will be slow, from 1 to 2 to 4†¦Ã¢â‚¬ ¦. but later on it will be rapid, staples1000 to 2000 to 4000†¦.. and so on. Given below are the approx. benefits received, business with saltdepending upon your group strength and on the assumption that each consultant haspurchased goods worth Rs 1,000/- in the month. The benefits will be more for higherpurchases and bigger groups.Group Strength Benefits: 1996 HLL introduces253Nos(1+12+60+180) Rs17,938/- branded atta; Surf Excel launched1531Nos(1+18+216+1296) Rs64,558/-3061Nos(1+36+432+2592) Rs 1,28,818/- 2002 HLL enters Ayurvedic health & beauty centre. ? 18. Shakti-Hll Rural ProjectShakti is HLLs rural initiative, which targets smallvillages with population of less than 2000 people or less. It seeks to empower underprivileged rural women byproviding income-generating opportunities, health andhygiene education through the Shakti Vani programme,and creating access to relevant information through theiShakti community portal.Started in 2001, Shakti has already been extended to about50,000 villages in 12 states – Andhra Pradesh, Karnataka,Gujarat, Madhya Pradesh, Tamil Nadu, Chattisgarh, UttarPradesh, Orissa, Punjab, Rajasthan, Maharashtra and WestBengal. The respective state governments and several Project Shakti – By using self-helpNGOs are actively involved in the initiative. Shakti already groups, HLL has pushed its productshas about 13,000 women entrepreneurs in its fold. A typical down into the country. Into villagesShakti entrepreneur earns a sustainable income of about where people cannot spend more thanRs. 00 -Rs. 1,000 per month, which is double their average Rs 20-25 on FMCGs in a monthhousehold income. Project Shakti will expand the distribution cover bottom-up, the rural project will be top-down. Thiswill be a huge competitive advantage for Lever. The costs of expanding into these villages will betoo high for most companies, which do not have a portfolio spanning teas to detergents,In recent past Hindustan lever took some major decisions to remodel its business. These decisionshad major impact on the how distribution of lever products is managed in the market.Hindustan lever took the decision to simplify the company it merged all the different business unitsinto two large divisions: home and personal care (HPC) and foods and beverages (F&B). This gaveeach division â€Å"The advantage is that these divisions get us enormous scale,† The companydecided to whittle its brands down from 110 to 35, over the next three years. This is known asHLL’s Power Brand strategy. To identify these power brands, managers were asked to consider their growth potential, profitdelivery and the size of the opportunity.And to ensure that Lever would not lose sales, it wasdecided to migrate these brand users to the designated power brands. For one, the drastic slimmingdown of the brand portfolio which threw up huge problems in execution is now over. HLL is already combining its scale advantage to offer retailers a bigger basket of products and betterservice. Instead of different sales teams servicing the same retailer, the company has integrated bothHPC and Foods portfolios for modern trade chains like Margin Free. Once again, its large portfolio ? 19. ange helps Lever to use the power of customer relationships to corner greater shelf space and adisproportionately higher share of the branded segment. Modern trade, it reckons, is already growing at 15-20 per cent and will continue that way for a longtime. By bulking up the businesses, it is possible for Lever to service these mo dern trade outlets on adaily business. As a result, these retailers do not have to maintain high inventory levels. HINDUSTAN LEVER LIMITED — BOARD OF DIRECTORSMr. Harish Manwani Non Executive chairmanMr. M. K. Sharma Vice ChairmanMr. Arun Adhikari Managing Director (Home & Personal Care)Mr.S. Ravindranathan Managing Director (Foods)Mr. D. Sundaram Finance & IT DirectorMr. A. Narayan DirectorMr. V. Narayan DirectorMr. D. S. Parekh DirectorMr. C. K. Prahlad Director ? 20. The CompetitorsThe Indian FMCG markets have witnessed some of the classic struggles involving HLL. Sofar Levers have been able to stand their ground but times are changing. HLL’s response tothe latest challenges is being eagerly studied by the corporate India. In order to gain afoothold in Indian FMCG sector various domestic and MNC companies are using all kind ofschemes to woo customer from HLL.The major competitors of HLL are:Detergents: P&G, Nirma, Henkel SpicToothpaste: Colgate-PalmoliveBeverages: R asna, Coca-Cola (Sun fill)Tea: Tata teaCoffee: NestleIce-creams: AmulShampoo: P&G, Garnier Procter & GambleP&G Home Products Limited is a 100% subsidiary of The Procter & Gamble Company,USA. P&G Home Products Limited is one of Indias fastest growing Fast Moving ConsumerGoods Companies that has in its portfolio P&Gs global brands such as Ariel and Tide in theFabric Care segment, and in the Hair Care segment: Head & Shoulders – worlds largestselling anti-dandruff shampoo; Pantene – worlds No. beauty shampoo; and Rejoice – AsiasNo. 1 shampoo. Fabric CareProcter & Gamble has two of its world-leading detergents – Tide and Ariel, in India to caterto the main concerns of the Indian households. In India P&G has launched followingbrands: †¢ Ariel Front-O-Mat Ariel 2 Fragrances †¢ Tide Detergent †¢ Tide BarHair CareIn India, P&G’s beauty care business comprises of Pantene, the world’slargest selling shampoo, Head & Shoulders, the worldà ¢â‚¬â„¢s No. 1 Anti-dandruffshampoo and Rejoice – Asia’s No. 1 Shampoo. †¢ Pantene Pro V †¢ Head & Shoulders †¢ Rejoice ? 1. Baby Care †¢ PampersIn India, P&G will continue to be a midget, in turnover terms, when compared to HindustanLever. The two P&G subsidiaries in India (P&G Hygiene and P&G Home Products) todaygenerate a combined turnover of about Rs 1,100 crore, just a tenth of Hindustan Leverssales. P&Gs distribution network is largely urban and has a reach of 0. 4 m outlets. In 1994, Godrej entered into a strategic alliance with P&G for inter alia toilet soap business,under which Godrej used to manufacture soaps, which were marketed by a joint venturecompany.However post marketing alliance with P&G, the company lost significant part ofits market share and subsequently the arrangement was discontinued. Godrej’s entiredistribution network was then taken over by P&G. THE Procter & Gamble -Gillette deal could result in the former getting a significant boostboth to its scale of operations and range of products in the Indian market. That Gillettesportfolio of shaving razors, gels, grooming products and toothbrushes has no overlap withthat of P&G in India (shampoos, detergents, feminine hygiene, cold medication) is apositive.The addition of Gillettes businesses could help P&G expand its portfolio andacquire a more extensive distribution network; This may strengthen P&Gs hand in theongoing war for market share with Unilever arms in the Asian markets, particularly withHindustan Lever in India. NirmaNirma is one of the few names – which is instantly recognized as a true Indian brand, whichtook on mighty multinationals and rewrote the marketing rules to win the heart of princess,i. e. the consumer. It was way back in ‘60s and ‘70s, where the domestic detergent market had only premiumsegment, with very few players and was dominated by MNCs.It was 1969, when KarsanbhaiPatel started door-to-door selling of h is detergent powder, priced at an astonishing Rs. 3 perkg, when the available cheapest brand in the market was Rs. 13 per kg. In a short span,Nirma created an entirely new market segment in domestic marketplace, which is, eventuallythe largest consumer pocketand quickly emerged as dominating market player. Now, the year 2004 sees Nirma’s annualsales touch 800,000 tones, making it one of the largest volume sales with a single brandname in the world.Looking at the FMCG synergies, Nirma stepped into toilet soapsrelatively late in 1990 butthis did not deter it to achieve a volume of 100,000 per annum. This makes Nirma thelargest detergent and the second largest toilet soap brand in India with market share of 38%and 20% respectively. SoapsIn 1992, sensing a strong need to expand the market through PenetrativePricing, Nirma entered this market with the launch of ‘Nirma Bath Soap’&‘Nirma Beauty Soap’ . In 1998 Nirma expanded its product line in the soap ? 2 2. ategory by introducing ‘Nirma Lime Fresh’ & ‘Nirma Rose’. This brand had carved a nichein its segment by achieving leadership position just within two months of its launch. It isavailable in 100g and 150g pack sizes. Nirma entered the premium soap segment when itlaunched ‘Nirma Sandal’DetergentsNirma launched â€Å"Nirma Washing Powder† in Indian market in year 1969, This productwas priced at almost one third to that of the competitor brands, resulting into instant trial bythe consumers. Presently Nirma has different variants in Indian market.Nirma washing powderNirma superNirma popularEdible SaltNirma has also entered the Food market in the recent past with launch of Nirma Shudh. ? 23. FINANCIAL ANALYSISRatio Analysis ? 24. All figures in Rs cr Particulars Dec 2001 Dec 2002 Dec 2003 Dec 2004 Sales 12420. 71 10641. 15 11919. 04 11594. 65 Total assets 7089. 06 7761. 01 8104. 68 7820. 34 Net worth 3170. 86 3713. 91 2189. 22 2148. 67 Bor rowings 102. 55 86. 23 1715. 18 1604. 25 Capital Employed 3273. 41 3800 3904 3752 Debtors 1254. 38 1169. 49 1228. 55 793. 56 PAT 1576. 47 1757. 59 1687. 3 1208. 4 PBDIT 2211. 63 2461. 31 2462. 92 1875. 63 Depreciation 202. 63 192. 65 199. 99 195. 68 PBIT 2009 2269 2262. 9 1680Current liabilities & Provisions 3709. 17 3841. 92 4084. 71 3919. 71 Current assets 3505 3510 3610 3132 Current assets -Inventories 2201 2146 2120 1574 Long term Debt 102. 55 86. 23 1715. 18 1604. 25 Interest 12. 31 12. 86 69. 12 136. 25 Total Purchases 6077. 97 5389. 04 5438 5413. 77 Profitability Ratios Operating Profit Margin (%) 16. 17 21. 30 19 14. 5 Net Profit Margin Ratio (%) 12. 68 16. 51 14. 15 10. 42 ROTA (%) 28. 3 29. 23 27. 92 21. 5 ROCE 61. 37 59. 72 58 44. 77 Return on Equity (%) 49. 71 47. 3 77 56. 23 Liquidity Ratios Current ratio 0. 944 0. 91 0. 88 0. 79 Quick Ratio 0. 59 0. 55 0. 52 0. 40 Absolute Cash Ratio 0. 25 0. 254 0. 218 0. 20 Solvency Ratios Debt Equity Ratio . 032 0. 023 0. 78 0. 75 I nterest Coverage Ratio 163. 2 176 32. 74 12. 33 Efficiency Ratios Debtor Days 38. 85 40. 11 37. 62 25 Creditor days 135. 31 149. 2 131. 62 145. 23 Total assets turnover ratio 1. 75 1. 37 1. 47 1. 48 ? 25. Interpretation: †¢ Profitability Ratios:HLL earns 14. paisa on every Re. 1 of Sale before Interest and Taxes It ultimately makes 10. 42paisa on every Re. 1 of Sale after Interest and Taxes. It is visible that Hindustan Lever Ltd. has not been able to increase its Operating Profit marginconstantly over the years. We can see that the operating margin has decreased considerable in thelast year. This is mainly due to the fact that the interest cost of HLL has almost doubled from 69. 12crores to 136. 25 crores. Moreover the company’s operating expenses have increased by almost 75% in the year 2004.The efficiency has certainly decreased over the last few years mainly owing tohigh operating expenses , increased interest burden and high indirect taxes. The Net Profit Marginhas also decreased by 17. 8 % in 2004 as compared to 2001. This is mainly due to the decrease insales by Rs. 826 cr. HLL generates 21. 5% Return on Total Assets (ROTA) that it employs in its operations in theyear ended 2004. ROTA has decreased in the last year mainly due to the fact that its profit marginhas decreased. It could be ecause of high competition as a result of which profits have decreasedand the total assets of the company have increased. As we can see that the Return on Capital Employed (ROCE) for Hindustan lever Limited hasdecreased considerably during the last year mainly due to lower profit margins. The company isearning a return of 44. 77% on the funds employed by it. Though the ROCE has seen aconsiderable change, even now the company is getting good enough returns and can pay goodenough dividends to the shareholders as we saw the case in the year 2004 where the rate ofdividend was 250%.The Return on Equity Ratio (ROE) states how much profit a company earned in comparis onto total amount of shareholders equity on the balance sheet of the company. Here, we see that theROE of HLL has increased in comparison to the year 2001 but this cant be concluded as afavourable situation for the company as looking at the figures in detail we can notice that there hasbeen a near to 30% decrease in ROE in comparison to the year 2003 , also we do see that the PATof the company has fallen by about 23% and the shareholders equity has also decreased by 32% incomparison to the year 2004. But Even now an ROE of about 56. 3% is considered to be verygood. †¢ Liquidity Ratios:It can be seen from the above table that the Current Ratio for all the years is less than 1. Thissignifies that HLL has short term liabilities greater than the short term assets. It implies that thecompany would have problems in managing its short term liabilities and liquidity requirements. The company might have to resort to financing its short term liquidity requirements by long termsources of finance. We can observe that the current assets have decreased by 13 % and at the same time the currentliabilities have decreased by just 4 % in the last year.The reason is that since the company is ? 26. using long term sources of finance to fund its short term obligations therefore the interest burdenhas increased and as a result the cash balance has decreased . Other receivables have also decreasedby more than 66% leading to a fall in current assets. †¢ Solvency Ratios:The company was highly unleveraged in the years 2001 and 2002. It was risky as the company hadinvested a huge amount of its own funds as compared to debt. However in the last 2 years thecompany has changed its policy and is leveraging the advantage of debt along with equity.Thoughthe debt equity ratio of 0. 75 is not good enough as compared to industry norms of 2:1 but thecompany is moving towards a favourable debt equity mix. It has realized the importance of tradingon equity . The Company has increased its d ebt burden by 1470% in the last 4 yearsInterest Coverage Ratio(ICR) basically signifies the ability of a firm to service its interest burdenthrough the profits generated . In the initial years when the firm had not employed debt its interestburden was very low.As a result the Interest Coverage ratio is very high, gradually the companyhas employed more debt and as a result of which the interest burden has increased significantly. Moreover, due to high competition and operating inefficiency the earnings of the company havedeclined. As a result the ICR has reduced from 163. 2 to 12. 33 in the last 4 years. However an ICRof 12. 33 is still very impressive which reflects the company’s ability to pay interests on loanseasily. This is a good indicator to the various financial institutions providing long term sources offinance to HLL. Efficiency Ratios:Here, we see that the Debtors Days for the company is less than the Creditor Days of thecompany. From this we can interpret that the company has a favorable cash position as it is makingits payments long after receiving the dues from the debtors. Here, from the Asset Turnover Ratiowe can know how efficiently the firm is using its assets, the ratio for which is pretty low for thecompany. The Creditor Days as well as Debtor Days both show negative growth which reflectsnegatively on the company’s financials. The Asset Turnover Ratio also shows negative growthwhich is also not a good sign for the company.Thus, looking into these figures we can analyze thatthe efficiency level of the company has gone down vis-a-vis the previous years and hence thecompany needs to look urgently into these matters so as to improve the efficiency of the company. O DU-PONT RATIO ANALYSIS:The Du Pont ratio analysis is a combination of financial ratios in a series in order to assess theinvestment returns of the company. It combines the financial ratios of both the Income Statementas well as the Balance Sheet in order to assess either the Return on Equity or the Return onInvestment.One of the Plus points of this method is that it provides a clear understanding of howthe company generates its return. This analysis provides an insight into the importance of assetturnover as well as sales to overall return. This formula shows the relationship of profit margin andturnover how these two complement each other. ? 27. The Du Pont ratio divides the Return on equity into three parts: Net Profit Margin, total assetturnover, and the company’s use of leverage referred to as Equity Multiplier also. DU-PONT CHART FOR HLL FOR THE YEAR 2004 RETURN ON EQUITY =PAT/NETWORTH 56. 3% Equity NET PROFIT TOTAL ASSET Multiplier MARGIN TURNOVER =TA/NW =PAT/NETSALES =SALES/TA =10. 42% =1. 48 =3. 64% RETURN ON ASSETS ROA=PAT/TA =15. 44%Growth Trends Over The Years Particulars Dec-01 Dec-02 Dec-03 Dec-04 ? 28. Sales 12420. 71 10641. 15 11919. 04 11594. 65Expenditure 10627 8690 9941 10076Change InSales (%) — -14. 33 12 -2. 7Chang e InExpenditure(%) — -18. 22 14. 39 1. 35Change inPBIT (%) — 12. 94 -0. 26 -25. 75Change inPAT (%) — 11. 48 -3. 99 -28. 38Change inBorrowings(%) — -15. 91 1889 6. 46Change InInterest (%) — 4. 46 437. 48 97. 12 ? 29. COMMON MARKETING MIX FOR ALL MARKETS 1.Product consists of brand, quality, appearance, 2. Price Structure consists of prices, dealers and consumers discounts. 3. Promotional activities consist of advertising, media. 4. Placement (distribution) system consists of dealers, distributors, retailers and overall logistics. MARKETING MIX FOR RURAL MARKET 1. Product 2. Price 3. Promotion 4. Placement system 5. Packaging-Reason for putting it separately is because symbols and packaging becomes very important when literacy levels are very low. 6. Retailer is the one who gives all information about brand choice and consumer feedback. 7.Education is very important for rural sector-eg. Project Shakti 8. Empowerment Example-Project Shakti and Self He lp Groups. PRODUCTSurf derives its name from ‘Surfactant’ the basic ingredient of a detergent. After 44 years, Surf brand has been upgraded and made more modern and contemporary. Surf has changed – the entire brand is now called â€Å"Surf Excel†. Continuousimprovements in the formulation of the product and introduction of new ingredients e. g. enzymes, along with new perfumes have ensured that the product meets the evolvingconsumer needs. The brand Surf Excel now has three variants – Surf Excel Quickwash, ? 0. Surf Excel Blue and Surf Excel Automatic – which address different laundry needs buteach offers stain removal as the key benefit. Surf Excel Blue Target segment: Economic segment. Attributes:-Removes stains without fading colours. Sizes avalaible: 25gm, 200gm, 500gm, 750gm, 1. 5kg, 3kgSurf Excel Quickwash (also called as Surf Excel Easy wash)(Hitherto known as just Surf Excel) Target segment: Superior quality for washing machine users. Sizes available:- 20gm, 20gm, 500gm, 1kg, 1. 5kg Attributes:-Stain removalSurf Excel Automatic Target segment:-Washing machine owners –Top and front loading machines .Sizes available:- 600gm, 1kg Attributes: Low lather detergent, anti corrosive, stain removal, ensures longer life of fabric. PRICELatest price war between detergent majors, Hindustan Lever (HLL), Proctor and GambleIndia (P&G), Nirma and Henkel-Spic India (HSIL) has proved that price in the marketingmix is very critical for growth of HLL products. If Surf excel prices were reduced to match the price cuts of their competitor (P&G),simultaneously they had to ramp up spending on advertising and promotions to increaseconsumption and penetration in the market and retain values of premium brand ? 1. PROMOTIONSSurf communication has been pleasant, soothing and gentle, Surf Excel has had adistinctively bold ‘tongue in cheek’ style of communication. Promotions for Surf Excelare more often than not tactical w eapons. Gift is offered to the consumer to gain short-term patronage or to engineer enhanced consumption. Choice of various promotionalgifts is usually governed by what can be bought cheap rather than any brand-relatedfactors. Surf Excel has always been sensitive enough to recognise the change in the consumerchoice dynamics.In some of their promotions, they have pampered influencersconsidering that brand choice in family products is a collective exercise. Various promotions being used for Surf are: †¢ Scholarship offer –Rs five lakh scholarship. Extremely rare and intelligent use of the marketing budget. Beauty of this promotion is in its design. An innovative and clever way of underscoringthe core promise of Surf Excel — stain removal!! Visual depiction in the ad is student-focussed — there are no mothers or daughters to be seen in the ad.Most of the people inthe ad are in their teens. The protagonist himself is barely in his teens. This can be anindicatio n towards changing consumer algorithm. This was backed by Win with Stains campaign – one of the largest campaigns taken upby Surf excel. This promotion is happening in Orissa markets which is aimed at offering consumers achance to win prizes as well as give students an opportunity to pursue further studies. Theaim of the whole campaign is to drive home the point that stains are good in life and oneis not to be scared to get themselves dirty.They are not only doing road shows,advertisements but branded horoscope columns in keeping with the theme of luck andfortune. They have roped in former South African cricketer Jonty Rhodes to participate in theWin with stains washathon to wash the largest stain in town with kids of the NGO -Magic Bus †¢ 1 bucket free with 3kg of Surf Excel has really managed to increase sales revenue of Surf excel. This is the most successful consumer promotion till date in Orissa market. †¢ Surf KidStains – a roadshow that invites consume rs to get first-hand experience of using Surf.Surf has taken communication beyond mass media advertising and involved consumersin the brand’s promise in the real world. It has touched consumer’s life through schoolcontact and in-store programmes. Road shows have helped to go to the consumers anddemonstrate superior performance vis-a-vis competition. ? 32. PLACEMENT SYSTEMIn Orissa, HLL has around 100 dealers and distributors. But HLL is into the exercise ofreducing number of channels in Orissa by increasing territory size of each dealer. HLL Distribution in Rural MarketsHLL has come up with new distribution channels to cater to rural markets.For long-term benefits, HLL has mounted an initiative, Project Streamline, to furtherincrease its rural reach with the help of rural sub-stockists. It has already appointed 6000such sub-stockists. As a result, the distribution network directly covers about 50,000villages, reaching about 250 million consumers. The pivot of Streamlin e is the RuralDistributor (RD), who has 15-20 rural sub-stockists attached to him. Each of these sub-stockists is located in a rural market. The sub-stockists then performs the role of drivingdistribution in neighboring villages using unconventional means of transport such astractor, bullock cart,etc.The Streamline system has extended direct HLL reach in these markets to about 37% ofIndias rural population from 25% in 1995 and the number of HLL brands and SKUsstocked by village retailers has gone up significantly. ? 33. PACKAGINGPackaging plays a key role in rural markets. Since customers are daily wage earners andthey don’t have monthly incomes like the urban consumers have, so Surf excel ispackaged in smaller sizes of 20gm so that they can afford given their kind of incomestreams. EDUCATIONSince vast majority of rural India lacks even basic education levels and modern outlook,HLL is training their new sellers to basic education levels.This is example of ProjectShakti which is explained in detail later. EMPOWERMENTHLL runs the program of Self-Help Groups (SHG), which operate like direct-to-homedistributors. The mo del consists of groups of (15-20) villagers below the poverty line(Rs. 750 per month) taking micro-credit from banks, and using that to buy HLL products,which they will then directly sell to consumersPrices of products 20gm 25gm 200gm 500gm 600gm 750gm 1kg 1. 5kg 3 kgSurf Quickwash 2 NA 23 53 NA NA 103 153 NASurf Automatic NA NA NA NA 90 NA 145 NA NASurf Blue NA 2 16 40 NA 53 NA 103 220 ? 34.Range of productsIf we divide detergent industry into three tiers – †¢ Premium at Rs. 80-140 per kg †¢ Mid-price at Rs. 30-50 per kg †¢ Popular at Rs. 15-25 per kgPopular segment accounts for 80% of the detergent industry. HLL leads in detergent powders withPremium – Surf ExcelMid price – SunlightPopular – Rin, WheelDealers and distributorsRetail Distributor MarginsExample of various distributor discounts on sale of these variants. Sale of 200gm Surf Excel Dealer Discount of 8%Sale of 20 gm Surf Excel Dealer Discount of 12%Wholesale Distributor MarginsThey get a standard discount of 1. % on sale of any variantStrategies in Orissa market 1. Shakti ProgramWith a twin objective of creating â€Å"income-generating capabilities† for underprivilegedrural women and â€Å"improving their rural living standard† through health and hygieneawareness, the Project Shakti is implemented in Orissa. Housewives and old ladies are targeted for this project. They are trained and given basiceducation to sell products. All products which are priced below Rs 5 are sold through thisproject. The sellers which are all ladies are paid margins of 3% on their sale of products.Now out of a total of 15,454 Shakti Entrepreneurs across India, Orissa hasover 928 (6%)Shakti Entrepreneurs spread across 22 districts. They are operating through Self Help Groups (SHGs) which is makes women direct-to-home distributo rs of HLL. Partnerships with several NCOs and support from stategovernments have been key enablers for the programme. Currently women entrepenuersare earning an average income of Rs. 7007- per month, doubling their household income. For the SHG women, it provides a stable, sustainable source of income.For villagers, thischannel has become a source of genuine and correctly priced products. ? 35. SALES TREND IN BHUBANESHWARBig Bazaar ,BhubaneshwarSales figures of Surf excel and is competitors Surf Ariel TideJuly sales 1,21,000 26,246 71,672July sold quantity 1787 pieces 341 pieces 1996 pieces ? 36. MARKET SHARE OF SURF Bhubaneswar, 20% Orissa, 35% Surf Excel Surf Blue Orissa, 65% Bhubaneswar, 80%SALE OF SURF EXCEL ON BASIS OF DIFERENT SIZES 10% 25% 20gm 200gm 500gm others(1kg,1. 5kg) 15%50%SALE OF SURF BLUE ON BASIS OF DIFERENT SIZES 7% 13% 20% 500gm 750gm5% 1kg 3kg 55% others(25gm,200gm) ? 37.PERCENTAGE SHARE OF SURF IN PREMIUM DETERGENTSMARKET 25% Surf Excel Ariel 75%SALE OF SURF EX CEL ON BASIS OF SEASONSCustomers reduce their washing frequency in rains, so the sales are drastically affected. Sale of detergents is strongly affected by seasonal changes as shown in the chart below. 12% 18% Summers Winters Rains 70% ? 38. COMPETITOR ANALYSIS. In this section we compare HLL with its competitors, viz. Proctor and Gamble (Ariel, Tide) and Nirma Ltd (Nirma washing powder). We now compare these products and the companies on the various counts. Market Share: The per capita consumption of detergents in India is 2. kg per annum. The synthetic detergent market can be classified into three main categories – Premium (Surf and Ariel) – 15% of total market Mid price (Rin and Wheel) – 40% of total market Popular (Nirma) – 45% of total market. Product Comparison: HLL (market share – 40%, including all 3 segments) manufactures Surf Excel in three avatars, Surf Excel Blue, Surf Excel Automatic and Surf Excel Quick wash. The USP of Surf Excel is that it reduces soaking time and water usage by 50%. It also contains a lesser amount of bleach than Ariel or Tide. P&G (market share – 12%, including all 3 segments) produces both Ariel and Tide.Ariel is produced in three types, Ariel Front-o-mat, Ariel Spring Clean and Ariel Fresh Clean. The USP here would be removal of tough stains while taking care of cloth quality and imparting a fresh fragrance to it. Tide detergent improves washing experience while imparting a lingering lemon fragrance to clothes. Nirma (market share – 30% of popular segment) comes in three variants, Nirma washing powder, Super Nirma washing powder and Nirma popular washing powder. Its USP would be low prices and the value for money it gives to the customer. Pricing Comparison: We now compare the prices for these brands.The price of each product and its variant is shown in the table b 20gm 200gm 500gm 600gm 750gm 1kg 1. 5kg 2kg 3 kg 4kg (30sachets)Surf Quick wash 2 23 53 NA NA 103 153 NA NA NASu rf Automatic NA NA NA 90 NA 145 NA NA NA NASurf Blue NA 16 40 NA 53 NA 102 NA 220 NAAriel 2 22 50 NA NA 99 145 NA NA NATide 1 10 23 NA NA 46 NA 88 NA 186 ? 39. Place comparison:HLL’s distribution system is one of its key strengths. The delivers its finished productsto various Carrying and Forwarding Agents, via whom the goods reach differentwholesalers. From here the goods are delivered to either rural or urban retailers, viawhom they reach the consumers.HLLs scale enables it to provide superior customer service including daily servicing,improving their range availability whilst reducing inventories. An IT-powered system hasbeen implemented to supply stocks to redistribution stockists on a continuousreplenishment basis. The objective is to catalyze HLL’s growth by ensuring that the rightproduct is available at the right place in right quantities, in the most cost-effectivemanner. For this, stockists have been connected with the company through an Internet-based network , called RSNet, for online interaction.As far as distribution to rural areas is concerned, they use a process called ProjectStreamline, wherein there exist networks of rural sub-stockists, who operate in the ruralareas itself. 20-30 sub-stockists come under a rural distributor (RD). The sub-stockists arethen responsible for distributing the products in rural areas. Nirma Limited markets its products through its fully owned subsidiary Nirma ConsumerCare Limited (NCCL), which was incepted in 1985. NCCL then resells the productsthrough ‘Nirma’ and ‘Nima’. Nirma pioneered the concept of flat distribution network.Nirma Consumer Care Limited operates with two parallel distribution networks. TheNIRMA brand is marketed through the first network, which consists of about 450exclusive distributors. It is one of the lowest cost FMCG distribution channels of thecountry. The principle channel for Nirma’s Products is the lowest cost system in Indiawith in built fle xibility and speedy distribution. All NIRMA and NIMA range of productshave a retail reach of over two million retail outlets and more than 40 million loyalconsumers spread all over the country.The Company has been successful in establishingan extremely good urban as well as rural presence through the two distribution channels. The distribution channels have played a significant role in making Nirma a householdname. The efficient network has made Nirma Washing Powder the brand with highestpenetration in its product category. The network is well equipped to meet the demands ofthe loyal consumers of the Company across the country. ? 40. Promotion comparison:HLL. Advertising. Surf excel, synonymous with the catch line, ‘Surf Excel hai naa! ’ was the first nationaldetergent brand on television.It has indulged in numerous advertisement campaignswhich have gained a lot of popularity. Surf Excel and Lalitaji ad also was in news for a long time. Slice of life situations havegene rated high levels of interest in the communication. Using consumer speak in the formof testimonials has helped in building credibility in the brand. â€Å"She was a hard-headed bargain-hunting housewife who demanded value for money andnot just cheap price. Consumers faith in Surf was restored, and not just because sheoffered a rational argument. The real reason Lalitaji was believed was because she wastrusted y the Indian housewife to get her a good bargain. We showed her bargainingwith the vegetable vendor about good tomatoes and bad tomatoes †¦ `Sasti cheez orachchi cheez me farak hota hai, bhai saab. â€Å"This advertisement reversed a declining brand share trend. The currents advertisement on television shows noted actor and human rights activistShabana Azmi (who did promote Ariel once upon a time), walking with two buckets ofwater and encouraging a crowd of people to do the same. It basically plays on SurfExcel’s strength to perform with lesser amounts of water.It thus underlines th

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Formal Business Report - Term Paper Example The results of the study largely show that Yellow Pages are becoming obsolete as it is quickly being taken over by online marketing. In view of these results, the president of Glass & Mirror is recommended to adopt online marketing and to focus on building the company’s brand name. DiFeo Glass & Mirror is a wholesale and retail company owned by Michelle DiFeo, located in New York’s Westchester County. The company has used Yellow pages for advertisement campaigns since 2004 and, hence, has continued to ignore other campaign options such as internet, which have taken the centre stage in the advertisement industry. DiFeo has admitted that use of Yellow Pages is ‘a force of habit’ which is worth her investment, but it is clear that she has spent a staggering amount on them - this study will reveal how this expenditure could be ineffective (Stamoulis 4). DiFeo Glass & Mirror has used Yellow Page advertising as one of its best option for product promoting. In New York’s Westchester County, which is the DiFeo Glass & Mirror’s service area, there are tens of phone books. This means that DiFeo Glass & Mirror has to advertise in a multiple phonebooks in order to reach many of those who need its services. As a result, DiFeo Glass & Mirror spends thousands of dollars on Yellow Pages campaign. In this study, this campaign is considered absolutely ineffective. Some of the reasons cited for causing Yellow Pages ineffectiveness include the fact that customers are quickly turning to online advertisements, the cost of Yellow Pages supersedes its benefit, and because administration of Yellow Pages is extremely complex (Stamoulis 5). When estimating the benefits of Yellow pages, measurements such as cost per call, monthly calls per phone book and cost per sale are used. A company cannot achieve utmost results if this information is not available. If the company relies

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Achievement of Modern Bureaucracies - Essay Example In an extreme form bureaucratic organizations fail to do what they are supposed to because rules and regulations are applied so rigidly that employees lose sight of what their job is. Bureaucracy, as a sociological concept, was originally developed by Max Weber, one of the first sociologists to consider the role of individuals in relation to the structural determinants of social action. Much of his work was concerned with the notion of â€Å"rationality†, which he used to explain the development of Western society which was increasingly based on science and calculation. Bureaucracy, combined with the growth of large organizations throughout the nineteenth century, led Weber to conclude that the decisive reason for the advance of bureaucratic organization was its purely technical superiority over any other form of organization. In short, it was a description of an ideal type of organization. Not ideal in the sense that it was perfect or one that should be aimed for, rather that its structure contained specific elements that characterized it as a bureaucracy and which were necessary to manage the organizations of the day. This occurs in part because public bureaucracies sometimes perceive themselves as guardians of the national interest: there is the idea that they embody ideals that transcend the policies of particular government: they can develop a character of their own and become set in their ways and difficult to change. In these circumstances professionals can be more concerned with their own survival than with the broader aims of providing for needs of the consumers of their service. This can be observed in the barriers that can exist between the different wards and departments and the lack of co-operation that ensues. The study of spatial separation is called proxemics; it involves the exploration of different practices and feelings about interpersonal space within and across cultures. In the United States, general practice allows intimate communications between close friends to occur at very short range. Conversations with acquaintances are often held at a 3-4 feet personal distance. Work-related discussions between colleagues may occur at a social distance of 4 to 12 feet with more impersonal and formal conversations in public occurring at even greater distances. Not only it is important to know and observe common practice with regard to the nature of the underlying relationships (intimate, friendly, work-related or casual) between two parties; it is also imperative that these practices be adapted for cultural differences. In some societies, sharply different practices prevail. For example, Latin America and Asian cultures generally favor closer distances for personal conversations; and workers in Arab countries often maintain extremely close contact. Therefore, sender should be aware of cultural norms and the receiver's preferences, and make an effort to understand and adapt to them. Bureaucratic Power Political conflict does not end after a law has been passed by Congress and signed by the president. The arena of conflict merely shifts from Capitol Hill and the White House to the bureaucracy - to the myriad departments, agencies, and bureaus of the federal executive branch that implement the law. Despite the popular impression that policy is decided by the president and Congress and merely implemented by the federal bureaucracy, in fact policy is also made by the bureaucracy. Indeed, it is often remarked that "implementation is the continuation of policy making by other means." The Washington bureaucracy is a major base of power in the American system of government - independent of Congress, the president, the courts, and the people. Indeed, controlling the bureaucracy has become a major challenge of democratic

Stewardship and Sustainability Assignment Example | Topics and Well Written Essays - 750 words

Stewardship and Sustainability - Assignment Example 2 Sustainability has its basis on a simple principle, which is all things that we require for our survival and well-being depend, either directly or indirectly, on our natural environment. Therefore, sustainability creates and maintains the terms under which humans and nature can live in productive harmony that allows for the fulfillment of the economic social and other requirements of present and future generations. Further, sustainability may also be defined as a set of values; stewardship, respect for limits, interdependence, economic restructuring, fair distribution (Chapin et al, 2010.). 3. In this study, the Amazon rainforest is a good case study. Amazon rainforest covers most of the Amazon Basin of South America and it is a moist broadleaf forest . This basin covers seven million square kilometers, whereby five and a half million square kilometers are covered by the rainforest. Moreover, the Amazon constitute over half of the planet's remaining rainforests, and it comprises th e largest and most species-rich extend area of land of tropical rainforest in the world. However, deforestation in the Amazon Rainforest threatens many species such as tree frogs, which are very sensitive to environmental changes. Moreover, this deforestation causes a lot of damage on the general ecosystem. 4 Stewardship and sustainability take different approaches when it comes to natural resource use. Stewardship concentrates on management and planning of natural resources. Furthermore, it incorporates personal responsibility and caring of natural resources. Moreover, commitment is expected in stewardship therefore, those using the natural resources have to be accountable for the resources. Sustainability puts weight on principles and set values on existing in a way that will not compromise the future generations. For instance; Edwards (2005) studied sustainability statements from almost forty different organizations concerned with sustainability issues and developed a list of sev en common themes ;stewardship, respect for limits, interdependence, economic restructuring ,fair distribution ,intergenerational perspective and nature as a model and teacher. Here, natural resources are used to a manner that will satisfy the present generation without compromising the satisfaction of the future generation. Stewardship is interlinked to sustainability; poor stewardship definitely leads to unsustainable use of resources. Generally, sustainability entails stewardships (Edwards, 2005). 5. As much as stewardship and sustainable resource use are interlinked and good for ensuring proper environmental management. Issues arise on whether the need to use resources sustainable so as not to jeopardize future generation really holds any weight. This is because, evolution continues and the satisfaction the present generation gets from resources presently may not be needed in future due to change of lifestyles and priorities. For instance; the reliance on agriculture may be reduc ed due to the day to day advancement of technology. Therefore, not much attention will be on the agriculture sector. Furthermore, stewardship and sustainability are complex terms which cannot be understood without the necessary education (Berkowitz et al, 2012). 6. In the recent years, deforestation in Amazon Rainforest has been on the increase

Unfairly or illegally obtained evidence should always be excluded to Essay

Unfairly or illegally obtained evidence should always be excluded to uphold the integrity of the criminal justice system. Discuss - Essay Example s and jurists alike argue that if evidence is obtained unfairly or illegally it is suspect and undermines not only the integrity of the evidence but the integrity of the criminal justice system as well. This discussion examines these safeguards and whether or not they sufficiently maintain the integrity of the criminal justice system. Section 78 of the Police and Criminal Evidence Act as interpreted by the courts has a double agenda. It seeks to ensure that a defendant is afforded his Convention right to a fair trial as contained in Article 6 of the European Convention on Human Rights.1 Its second purpose is to ensure that all relevant evidence is admitted where ever possible and at the same time provide for the defendant’s right to a fair trial. Section 78 provides as follows: â€Å"In any proceedings the court may refuse to allow evidence on which the prosecution proposes to rely to be given if it appears to the court that, having regard to all the circumstances, including the circumstances in which the evidence was obtained, the admission of the evidence would have such an adverse effect on the fairness of the proceedings that the court ought not to admit it."2 In interpreting Section 78 the courts have taken a position entirely geared toward an element of fairness and in this way the discretion to include unfairly or illegally obtained evidence does not compromise the integrity of the criminal justice system. While Section 78 of the 1984 Act has given rise to a plethora of case law decisions, Professor Richard Stone maintains that the underlying approach by the courts is one of â€Å"fairness as fair play.†3 The judiciary has consistently displayed a propensity to remain loyal to the House of Lords decision in R v Sang [1980] AC 402 in its reading and interpretation of Section 78 of the Police and Criminal Evidence Act 1984. The cumulative value of the Lords’ position on the admission into evidence of unfairly or illegally obtained evidence is

Aspects and traits of different cultures and how they communicate Essay Example for Free

Aspects and traits of different cultures and how they communicate Essay Culture can be interpreted differently by different people but the general meaning of culture can be defined as people’s way of life which is passed from one generation to another and also shared among other different societies. The world has very many different societies and each of these societies have their own way of life, their beliefs and norms. The activities that people involve themselves in and the beliefs they hold is what normally forms their culture. These cultural beliefs are the ones that distinguish one society from other societies and therefore many societies hold their culture as a very important symbol of identification(Neil). This document discusses the general aspects and traits of different cultures. It also gives a detailed view of how this traits and aspects are communicated within the societies and also across to other societies The aspects of culture generally display the general way of life of most societies in the world. These aspects can be a useful base to compare how different societies in the world live. One of the most prominent aspects of culture is the government structure of the societies and the international relation ships of this society with the outside world. Government within any society refers to the way the people in any society will make their laws and how these laws are enforced to the society. It also brings out the issues of leadership and how it is passed on to others within the society. All the societies in the world have different types of governments and the way one government is run is certainly not the same as the other society. The way laws are made and enforced is also independent among the different societies. For example, the United States of America has its own way of making laws and enforcing them, which is different from the way the African countries or other European countries do it. The procedures that are followed in the US to elect a president are not the same as the procedures that will be followed in Australia, china, or any other country. The international relations between one country and other country are simply not the same. The way the government of UK relates with the government of Canada is not the same way it will relate to a country like Nigeria. The international relations ships are different between one society and other all over the world (Shapiro, p25) . Another important aspect of culture is the economies of the societies and the resources available to them. The resources that are available to one society may not be available to another society. This can be due to different geographical locations which may favor some societies with better resources than others. For example, some societies in the world have natural resources while others do not have any natural resources. The resources available define a society’s way of earning a living. For example some societies especially in the African continent have abundant natural resources and most of them may depend on agriculture for a living. Other countries such as Korea have to import the raw materials for their manufacturing industries. The resources available and the type of management will then define the type of economies the societies will have at the end of the day. The scarcity of resources within the different societies has for example brought about trade and this has formed a major characteristic of culture in the different societies(Benedict,p13). The societies have different spiritual believes and this forms the basis of religion in the different societies. People within the societies have their own believes about the supernatural powers and this has given the society a clear definition of what to worship. For example the different societies in the world have different religions. While some societies believe in Christianity, others believe in Islamic, Hindu, cults among other religions. These beliefs affect the society’s way of life very differently. The way the Islamic religion dictates life is not the same as the Christianity. Their practices and believes are different. The passing of these religions between the societies is also very different. While to some like Islam it is mandatory other societies find it a personal choice and therefore optional (Lull,p22) Literacy and technology is another aspect of culture. This aspect brings out the different ways in which different societies acquire education. For example how they attend school and the type of school curricula that is followed. The education system in most word societies are not the same. The kind of technology that is incorporated in the school programs is very different from one society to another. Some societies such as western societies have more advanced technology than societies in the African context. What is taught in the school curricula is also different from one society to another. This eventually affects the types of societies that are finally brought up in future. Some of the societies are more technologically advanced that other societies in the world(Shapiro, p27) . Community and family life forms another part of the cultural aspect. This gives an approach of how people live and how closely they are related to each other. This also defines the kind of housing that the individuals may live in. Different societies construct their houses differently according to their beliefs. While some societies believe in stone built houses, some societies may construct mud hoses thatched with grass. The shapes and finishing of the houses constructed by the different societies is also different owing to their beliefs. The way the societies are divided for example in terms of race, ethnicity, family among others is also very different. This clearly means that the defined relationships between the family members in the societies are different. For example the way the younger people relate to the elders within the society is different across the world societies. The occasions and how they are celebrated within the societies is also very unique. For example they way the Chinese embrace their culture is not the same as then Indian society(Benedict, p17). The cultural arts and crafts within the societies are diversified. The arts that you will find in America are not the same as the arts in Asia. All the societies in the world have their unique paintings, music, sculptures, and architecture. The way the societies make the pottery, carvings, baskets, mats and others is very different. The kind of music enjoyed by one culture is not the same as the other society. These cultural aspects are known to exist in every society. The only difference is that every society has a unique and independent way of approaching each aspect. Apart from the aspects of culture in the societies, another major characteristic of culture is its traits. All cultures across the different societies have common traits. One of the cultural traits in the society is that culture is learned. All of us are born and raised in different societies. One is not born with the culture of any specific society. Individuals learn the culture of the society they are born in. If a child is born in a different culture from his parents, the child is likely to learn the culture of the second society and not that of his /her parents. Another trait of culture is that it is transmitted from one generation to another. People do not form other cultures when they are born. Instead the older people normally pass the culture in their society to the younger generations within the same society(Neil). This reinforces and maintains culture within the societies. This is because, if a culture is not passed from one generation to the next, it is most likely that that culture will eventually die. The older people therefore normally hold the responsibility of teaching the younger people the beliefs , traditions, values and norms of the society. Culture is dependent on the world of symbols to communicate it from one generation to another. This means that the methods used to pass culture in one society are basically similar as methods used in another society. The symbols that are normally relied upon by the societies are the verbal and non-verbal symbols of communication. Other symbols that may be used to communicate culture include icons and images. Change is another important trait of culture. This means that there is no one culture that is not subject to change. The culture that used to be followed by our great grand parents is not the same culture that we follow today. As times change, people keep changing what they believe in and this eventually changes the culture of the society (Benedict, p18). Change of culture is normally subject to the various changes that occur in our daily lives. For example changes in the education systems, change in technological advancement of the society, discoveries and innovations that may occur as life progresses. All the societies have another important cultural trait of superiority over other cultures. This trait is referred to as ethnocentric. The societies believe that their norms, values and practices are superior and far much better than those of other societies. This trait is a major source of conflict between societies since none of the societies will accept to be put down by another society. This trait helps the individuals within any particular society to feel proud of themselves and portray the positive image of their society. The final cultural trait in the societies is the adaptive nature of culture. As the world advances the changes that come with it must readily be acceptable within the societies. For example most cultures in the past regarded women as a weaker sex and their role in the society was very minimal. As the technological advancement took ground, women have adapted different roles in the society and today they perform the roles that were previously referred as masculine roles. People keep adapting different styles of life as change is adapted within the cultural context of the societies (Neil). Culture is communicated using different methods within the society. Communication of culture is done through various methodologies of learning. Culture itself can be learnt consciously or unconscious. Unconscious methods include observation and practicing of what other people do within your culture. The younger people may for example start dressing, singing and behaving like other people do within their society by just observing and imitating them. The conscious methods include reading about the culture and being taught by the older generation about your culture (Benedict, p23) Culture is taught to the younger generation through proverbs, folktales, myths folklore, art, music, poetry and mass media. Many are the times when our grand parents would tell stories related to our culture. The younger generation is then expected to behave in a manner that suits the lessons they learn from the stories and legends they hear. Everything that we do in our lives, both in the verbal and non-verbal originates from what we learnt in our cultural back ground. Apart from the older generation, culture can also be learnt from other sources such as our families, teachers ,religious organizations and our peer groups. Within the family context, parents hold the sole responsibility of teaching their young ones how to behave in accordance to the society’s value and norms(Lull, p28). They introduce them to the religious education and also the formal education system. What a child starts learning from the beginning of child hood forms a big ground for the cultural beliefs. For example, a child introduced to Islamic faith when very young and has grown believing in it would be very difficult to change and start believing in other religions such as Hindu or Christianity. In the institutions that we grow in, peer groups are likely to result and this forms another source where culture is learnt within the society. One is eager to learn what the other knows that he/she does not know and in this way we find that culture quickly passes to other individuals (Lull, p33). Culture is not only passed within the societies but it is passed to other societies. This has become very common in today’s societies where we find that individuals do not strictly stick to the beliefs in their own society. This has resulted from the effects of globalization that takes place in the present world. Many societies today are very integrated in different aspects of life such as marriage, trade, education among others. With such integration we find that people start dressing like other societies, eating foods similar to other societies, appreciating arts and traditions of other societies among others. People learn about other cultures through adaptation of behaviors and norms of the society at interest. Trade, media, intermarriages and education have become the best mechanisms of passing the cultures from one society to another (Toomey, p10) . In conclusion culture has the same general aspects and traits within the different societies across the world. The only difference is how these characteristics are interpreted in the different world societies. Culture is no longer viewed the same as it used to be in the past. Many individuals today do not know about their culture due to the adaptation of other societal cultures which is often mixed with the native culture. This has given rise to societies with very diverse believes and many cultural conflicts within the society. Works cited Dennis ONeil. (2007). Characteristics of Culture. Available from: http://anthro. palomar. edu/culture/culture_2. htm Harry Lionel Shapir. Aspects of Culture. Ayer Publishing, 1970, p23-56 Lull, J. Media, Communication, Culture: A global approach. New York, Columbia University Press, 1995, p16-34 Ruth Benedict Patterns of Culture. Mariner Books, 2005,p13-44 Ting Toomey, S. Communicating across cultures. New York, Guilford, 1999, p4-18