Marketing Strategies of Hindustan Unilever Limited: A Report

This report provides a comprehensive analysis of Hindustan Unilever Limited (HUL), a leading FMCG company, focusing on its marketing strategies, financial performance, and ethical considerations. The report begins with a brief history of HUL and then evaluates its activities using modern marketing models, including Porter's Five Forces and the Ansoff Matrix. It examines the company's competitive landscape, supplier power, and the threat of substitution and new entrants. The report also assesses HUL's financial status and its ethical, social, and sustainability performance. Furthermore, it compares HUL with its competitor, Nestle, highlighting key market and financial indicators. The analysis aims to understand HUL's strengths and weaknesses, offering insights into its strategic approach to consumer needs and market challenges. The report concludes with a summary of findings and recommendations.

Running Head: MARKETING
Hindustan unilever limited
PRINCIPLES OF MANAGEMENT
REPORT
Student
6/15/2019

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Executive Summary
Marketing is a way of satisfying the needs and wants of the customers by delivering the best
quality products to them. To reach the consumer at the right time, the company practices various
marketing strategies. In a similar way, HUL, which most powerful company of FMCG, has
adopted a marketing model of Porter’s Five Forces and Ansoff Matrix. Through its assistance,
the company has evaluated its strengths and weakness and while following the model it
compared its strategies with its biggest rival Procter and Gamble.
Therefore, the focus of the report is to evaluate the performance of HUL in comparison to the
current marketing system and what are innovating ways, which a company can adopt to fulfill
the needs of the consumer while achieving its economic goal.

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Contents
Introduction............................................................................................................................................3
History of the largest consumer goods company – HUL..................................................................3
Sustainability Mission and Vision.....................................................................................................4
A. Modern Marketing Models to analyze the strategies of HUL.........................................................5
1. Porters 5 Forces:..........................................................................................................................6
I. Competitive Rivalry:...............................................................................................................7
I. Supplier Power:.......................................................................................................................9
II. The Threat of Substitution:....................................................................................................10
III. The Threat of New Entry:......................................................................................................11
IV. Buyers Behavior:...................................................................................................................11
V. Segment and Targeting..........................................................................................................12
B. The Financial status of HUL......................................................................................................13
C. Analysis of Ethical, Social and Sustainability...............................................................................15
D. Comparison of HUL and Nestle....................................................................................................17
HUL.................................................................................................................................................17
NESTLE..........................................................................................................................................17
Conclusion...........................................................................................................................................19
Bibliography........................................................................................................................................20

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Introduction
History of the largest consumer goods company – HUL
Started as a subsidiary by the Unilever, HUL is ruling the market of consumer’s goods from a
span of 80 years in India. It is addressed as the largest consumer goods company that is putting
an effort to bring effective changes in the lives of more than 2.5 billion humans’ beings. This
company has touched and created a unique place life of an individual. With more than 18,000
employees, the company is working with 400 brands and has acquired the market across 190
countries (Anon., 2019). In the Financial year of 2018, the Company has presented the statistics
with a great level of an annual turnover of 51 billion Euros and has shown an exceptional rise by
INR 37,660 Crores (Anon., 2019).
Thus, the company has taken an initiative to fulfill the expectations of the consumers, by
uplifting every section and to make them look most exquisite,
However, the beginning of the company was different and unique from other well-established
companies. This diversified company is a combination of three subsidiary companies that is
Hindustan Vanaspati, Level Brother and United Trader Limited, of Unilever. In 1956, since all
three companies were targeting the needs of the consumers, therefore the companies jointly
merged into one largest company that is HUL. Since Unilever is the holding company of HUL, It
holds a great level of 67.25% equity shares in the company (Anon., 2019).
This company manufactures and has attained a share in the market and distribution of consumer
goods. It serves a variety of innovative products starting from the category of home care to self-

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care products to food and beverage related products (Anon., 2019). This British-Dutch
production company is acquiring the great heights in the final good sector with the diverse
collection of various popular brands like Lux the beauty soap, Surf Excel that comes with the
famous tag line “Daag Achhe Hain”, and Clinic plus- the best shampoo for strong hairs it has.
There are many other famous brands, which are being endorsed by HUL and, today have become
the top preference of the consumers. As per the report published by the IBEF organization in
2017, HUL has taken over the market of shampoo with 54% (Anon., 2018). 2018, HUL has
collaborated with Vijaykant Dairy and Food products Limited and further bought their frozen
desserts commodity market, which was once used to available to the customers in the form of its
premium brand “Adityaa Milk” (Anon., 2018)
Sustainability Mission and Vision
By 2030, HUL wants to develop the business in such a way that it can leave a long lasting
impression on the environment and on society.
Like the company, its logo also symbolizes the way the company is promoting the sustainable
nourishment of human beings through its eco-friendly products (Anon., 2019). Its every word
signifies the importance of sustainable development. Attributing to this program, the company is
focusing on its consistent growth. To provide assistance in the expansion of rural areas, HUL is
creating an ample of job opportunities for the people over there so that they not only attain
financial stability but also prosper in their life.
To further, promote the program of overall development of society, the company has started
Unilever’s Sustainable Living Plan in which the raw material for the production shall be supplied
in a sustainable form (Anon., 2019). Along with the stakeholders, the company is putting

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emphasis on the exploration of innovative ways to deal with the issues related to the misuse of
plastic in India. By 2025, to curb the usage in plastic, the company commits to improve the
packaging system by 100% reusing and recycling the plastic material used by the product-
manufacturing department (Anon., 2019).
Unquestionably, HUL is the most popular and renowned brand that has prospered in the field of
consumer goods. Through its innovative strategy, it is giving a competitive edge to other
companies. However to enhance its market strategy and to aware and encourage the society to
adopt a healthy lifestyle and sustainable living, the company has to analysis the current market
strategies, and evaluate the production capacity and financial performance of the company.

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Source: (Anon., 2019)
A. Modern Marketing Models to analyze the strategies of HUL
To examine the activities of the organization, two models have been used:
 Porter’s Five Forces
 Ansoff Matrix
In this model with Porter’s five forces, Ansoff marketing and segment and targeting
technique is followed to perform the analysis.
1. Porters 5 Forces:
Proposed by M. Porter in 1979, it is a combination of 5 industry areas that influences the
marketing strategy of any company. It highlights the magnitude of the competitive situation and
its profitability in the sector. The purpose of applying this model is to identify the competition
level and environment of the company so that it can identify the debility and strength. The five
key areas, which are used to determine the strategy of HUL, are:

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Source: (Anon., 2019)
I. Competitive Rivalry:
HUL is one of the powerful companies that have a portfolio of several brands. However, like
every company, HUL also operates in the market where competition is on the higher side. Hence,
one of the strong competitors of the company is Procter and Gamble products as both of them
manufactures and operates in similar categories that are demanded in every retail outlet. Its other
rivals are L’Oreal, ITC limited, and Colgate-Palmolive.
 Products and Services:
To reach its customers and to attain the overall market of consumer goods, HUL is has
been working with most demanded brands like Lux, Sunsilk, and Magnum. It is giving its

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services in more than 20 categories ranges from home care to food and beverages.
However, its competitor Procter and Gamble who has empowered more than 4.4 billion
people are majorly focusing on home care and personal care products (Anon., 2019). In
December 2018, to promote the sports activities among the youth, Hul has merged with
GSK health care consumer company (Anon., 2019), which endorses famous brands like
Horlicks and Boost. To make the products available in the global market, HUL
manufactures and distributes its products through the retail outlets. This strategy has been
performed with the support of 3500 consumer who has, through their positive review and
mouth publicity help the HUL in the marketing of its product.
Source: (Anon., 2019)

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Source: (Anon., 2019)
 Pricing strategy:
Hindustan Unilever Limited understands its responsibility towards its consumers by serving the
best quality product. Moreover, it can be observed that, to cover the entire market company it has
launched a sashes system in personal care products as it is economical and a customer can
demand more as per his /her requirement. To give the cutthroat competition and to target every
segment, it has adopted a unique pricing strategy like offering a 20% discount on Surf Excel
detergent on the 2kg pack. Its strong rival Procter and Gamble have followed low pricing
strategies to outreach the consumers.
 Consumer Loyalty and Quality services: Since Company fosters the idea of enhancing
the standard of living, therefore it targets all segments and classes. Furthermore, it has
proposed the strategy, which is suitable for the audience and introduced products into
different sizes like Lux at Rs 5. HUL, for the consistent growth, manufactures user-

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friendly products at the feasible rates without making any compromises in its. Procter and
Gamble are serving various healthy products to consumers.
I. Supplier Power:
No. of Suppliers and its Size:
One of the main objectives of Hul is to promote and achieve 100% sustainability through its
products. To attain this practice, the company is obtaining raw materials like tea from Kenya. To
promote and develop rural India, the company has been working with the marginal and small
farmers. The products of the company are demanded on the Global level and through its
initiative and best quality consumer goods until now it has attracted more than 1,50,000
customers through is 60,000 products. Around 250 factories are employed in the activities of the
production who are with their exceptional speed are manufacturing 1, 30,000 tea bags as every
minute counts (Anon., 2019).
II. The Threat of Substitution:
Source: (Pengonda, 2019)

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Its biggest threats are Patanjali and P&G products.
 Procter and Gamble
In the market of personal Hygiene care, Procter and Gamble have shown a tremendous growth
by 8%. During the quarter, it has done progress in female sanitation and health maintenance
products (Anon., 2019). To give a competitive edge to the other entities, the firm believes in
delivering innovative products, which can improve the lifestyle and strengthen the relationship
with the culture. To eradicate the cultural differences, it is running a campaign “My Black is
Beautiful” and is promoting the interest of black consumers (Graham, 2019).
 Dabur
Dabur has also improved its performance and with the average production of 14% in the
beginning quarters of 2019, the company might outperform other FMCG companies. To fulfill
the needs of the consumers in a more economical way, it has adopted the strategy of procuring
the raw material in the most feasible way.
III. The Threat of New Entry:
However, Hul has taken over the market of consumers sector, but with the expansion of this
industry and variations in preference of the consumers, the competition has risen. The new
competitor of Hul is Patanjali.
 Patanjali:
Patanjali Ayurveda is an Indian consumer goods company, which has entered with a natural and
organic product to give the essence of natural ingredients. The company has launched various
herbal products, and covered the entire product categories like homecare, and health care. In the