VERVIEW OF HINDUSTAN UNILEVER LIMITED
INTRODUCTION
Hindustan Unilever Limited (HUL) is an Indian consumer goods company based in Mumbai, Maharashtra. It is owned by Indian company Unilever which has around 67% controlling shares in it. Its products include foods, beverages, cleaning agent and water purifiers. It is the market leader in Indian consumer products with presence in over 20 consumer categories.
It owns 29 manufacturing factories and has a revenue around Rs. 30,170 Crores in 2014-2015. As per the market research of 2015, two out of three Indians use HUL products everydayOBJECTIVES
Unilever’s mission is to add vitality to life. It believes in satisfying everyday needs of customers in nutrition, hygiene and personal care.
PRODUCTS
HUL has diversified range of products in foods, beverage, cleaning agents, water purifiers. It is the market leader in Indian consumer products with presence in over 20 consumer categories including tea, soaps, shampoo, biscuits, etc. As per the market research of 2015, two out of three Indians use HUL products everyday. .
ANALYSIS OF MARKETING ENVIRONMENT OF HUL
HUL operates in a dynamic marketing environment where future is uncertain. It places equal emphasis on both micro and macro environment and react accordingly to the changes. This can be evident from the fact that despite of facing so many threats and challenges it is still able to be the market leader in consumer goods industry and is growing and diversifying rapidly by adopting new ways of doing business.
For example: Recently when HUL recognized that the sale of soup under Knorr brand is falling as consumer are shifting to Ching’s soup which are available at affordable price of Rs.10 for one serve and since HUL’s Knorr soups were directly available in large pack at higher price, it launched Ready in one-minute Cup-a-Soup for Rs.10.
.The factors affecting HUL’s Micro environment is described below:
1.Customers: HUL continuously monitors the changing customer tastes, preferences, lifestyles, changing behavior of consumers. When HUL recognized that consumers are not willing to spend so much in hair care treatments and salons, so it launched range of Professional shampoo by experts at reasonable price compared to other brands under TRESemmé which says it will give salon style hair at home.
2.Competitors: HUL follows a policy of keeping an eye on competitor’s strategies and plans, so that it can react accordingly on time. Recently in order to attain a competitive advantage, it followed an approach of Negative Selling where it made a plan to that ordinary shops can be as harsh as detergents .So, it set up kiosks at its retail store ,where customers can test the affect using its Dove brand, a detergent soap and another soap whose brand it did not mention but the consumers easily recognized that it was its rival’s brand ITC’s Vivel and as a result of which negative image of ITC was created in the minds of consumers.
3.Distributors: A company should have a proper distribution management to avoid unnecessary costs and increase efficiency. HUL has a network of 4,000 re distribution stockists, covering 6.3 million retail outlets and about 250 million rural population. It provides customized services to each of its channel partners.
4.Suppliers: Increase in supply costs can raise the prices and making consumer shift to its substitutes. HUL has been able to maintain lower supply costs as it is evident from the fact that two out of three Indians use its product in everyday life.
Conclusion: Therefore, from the above information, it can be concluded that analysis of all these micro environmental factors by HUL on time has contributed towards the progress of company.
ANALYSIS OF HUL’s MACRO ENVIRONMENT
The factors affecting HUL’s Macro Environment is described below:
PESTEL ANALYSIS
PESTEL Analysis is a vital strategic tool for understanding the market the company is operating in or are planning to launch a new product or service.
POLITICAL
Political factors affects every enterprise in every stage of business. It includes factors like taxation policy, government stability, foreign trade regulations.
In case of HUL, since it has to be dependent on imports for sourcing majority of tomatoes for manufacturing different products and producing locally was not viable due to low quality, price vitality, etc. so a PPP (Public Private Partnership) was made between HUL and Maharashtra Government in 2012 for sustainable sourcing of tomatoes which not only helped the farmers by providing employment and reducing poverty but also HUL’s production costs declined and profitability increased.
Recently as per reports in 2015, when rural economy of India was facing low economic growth due to lower production and lower wages, Government stepped in and reduces the prices of HUL’s products in rural areas, due to which it lost some of its investors but the buying interests of the consumers increased, so its sales went high but ultimately growth rate fell in quarter 4.
So, it contributed towards both progress as well as hindrance of HUL.
ECONOMIC
Every company operates in an economy which decides the growth and failure of any firm. It includes factors like interest rates, investment rates, Inflation, unemployment, price levels etc.
In the year 2012, when the whole world was facing major economic crisis, Asian countries like India, Pakistan, Sri Lanka were least hit as they had low interest based investment. And since Unilever was operating in most of foreign countries but it remained profitable in India, but overall profits declined.
Since the brands sold by HUL is everyday products and has many substitute products in market so slight rise in price levels leads to shift by consumers to its competitor’s product. In the year 2015, when HUL increased the price of its soaps like Dove, Lifebuoy Total by 2% to 4%, its demand decreased and demand of its competitor’s product ITC’s Vivel, Dettol increased.
HUL is considered as the “Top Dream Employer” but so currently the economy is growing, the employment opportunities at HUL is gradually decreasing.
Most of the economic factors are hindering the progress of HUL.
SOCIAL
The social environment is made up of population demographics, attitudes, beliefs, expectations, lifestyle, culture of people towards which any company should pay attention to sustain and grow in market.
HUL also monitors the tastes and preferences of consumers periodically to fulfil their expectations. When it discovered that Indian society are driving towards fast food but not at the stake of their health, so recently in May 2016, it launched range of easy to cook Rolls and Wraps with real veggies and soya which can be easily prepared at home and tastes like restaurant targeting children.
HUL has undertaken a number of social programmes as a result of which it has been able to attract consumer attention easily. In order to improve the lifestyle of rural women it undertook Project Shakti to improve their lifestyles and standards by creating micro enterprise opportunities for them. It also provides health and hygiene education through Shakti Vaani programme.
All such activities are leading towards the progress of the company.
TECHNOLOGICAL
Technological factors consists of new inventions and discoveries, investment on research, speed of technological
transfer rates of obsolescence.
HUL recognized that 21st century age is driving digital, use of online shopping has increased, even Nestle’s Maggi relaunch was through online sales via Snapdeal so it adopted a new technology by making partnership with various e-commerce sites like Amazon, flipkart, etc. to increase the sales of its product as it will provide access to consumers to buy its products sitting at home any time.
It also follows Digital Marketing and social media advertising techniques by using social networking sites like Facebook, twitter, etc. as the current youth is much active on those places rather than television or radio.
There is no doubt in concluding that all these factors are leading HUL to success
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