Hindustan Lever Limited (HLL)


0

About  HLL

HLL has over 36,000 employees, and has created 2 lakhs indirect jobs. Its operations are spread across 70 locations in India. There are over 50 factories, of which 28 are in backward areas. The operations involve 2000 suppliers and associates and 7000 stockists and agents. HLL has emerged as a major Exporter.

 

Corporate Profile

HLL, a 51.6% subsidiary of Unilever Plc, is the largest FMCG Company in the country, with a turnover of Rs. 118 bn. The company’s business sprawls from personal and household care products to foods, beverages and specialty chemicals. The company has a dominating market share in most categories that it operates in such as toilet soaps, detergents, skincare, hair care, color cosmetics, etc. It is also the leading player in food products such as packaged tea, coffee, ice cream and other culinary products.

Market Share

HLL grew at a fast pace in the mid 90’s driven by its aggressive acquisition spree. From Rs. 38 bn turnover (contributed 70% by soaps, detergents and personal products), HLL’s turnover has now grown to Rs. 118 bn, with soaps and personal products contributing 57% to turnover and beverages and food products contributing to 29% of turnover. Growth during the last few years has largely been driven by the personal products business. However the pace of growth has slackened significantly in the last two years with several key segments registering a degrowth in 2001.

Even as Hindustan Lever is armed with two brands — Nihar and Cococare — positioned to take on Parachute, the clear strategy adopted by HLL is to attack Parachute indirectly by targeting the loose oil consumer.

HLL’s overall share in the Rs 500-crore coconut hair oil market is about 24 %. Marico leads with a 53 % share. HLL’s Nihar has appreciated its market share to 17.2 % in May 2000, from 12 % in end-1999, as per ORG-Marg All-India retail audit. The brand’s share in the beginning of 1999 stood at 9.5 %.

Performance of HLL in 2001

Turnover for the year increased by 3.42 % gross and 3.47 % net.

Product Categories:

Soap and Detergent

The overall market growth for Soap & Detergent was sluggish during the year with a sharp decline in the Popular & Premium segment of the market. In particular, rural market where the business had a traditionally strong presence performed poorly following decline in the agricultural growth. The discount segment continued to face severe price led competition. Against this background, the business registered a relatively better performance in term of growth. Major investment were made behind quality enhancement of key brand like Lux, Surf and Wheel during the year with clear consumer benefit. These were backed by some strong consumer promotion during the year including multi pack. Lifebuoy Active was launched during the year and in short time, the brand grew handsomely with a 3.7 % share of the segment. This helped offset the decline of Lifebuoy Carbolic. Major investment had been planned to retain and grow the Lifebuoy franchise in 2002.

Overall, Power Brand grew significantly ahead of the market and are poised well for a strong performance once the market turn around with the impending economic revival. Innovation will continue to drive growth in the following year, with several projects in the pipeline.

Major initiative to improve distribution reach, particularly in the rural market, were undertaken during the year to build upon the competitive advantage that the business currently hold in sales and distribution. Significant investment were also made in networking and Information Technology IT to manage supply chain more efficiently and make a quantum improvement in the customer service level. Project LEAP which bring together the combined strength of IT, Sales and Commercial to deliver better customer service and make the entire supply chain including the back end system connected with supplier of material respond faster to the short term change in the market place, had been implemented toward the end of the year in the Soap Business and the initial result were encouraging. The focus in 2002 will be to stabilise the system and prepare for rolling it out to other businesses.

A few highlight of the 2001 brand performance are:

  • With Wheel and Rin, the business not only recorded brand leadership again after a decade but also captured No 2 in Laundry.
  • Lux recorded it highest ever share in the last 24 month.
  • Wheel Green Powder share are at their highest in 24 month.
  • Surf Excel had recorded it highest value share ever.
  • The business also created new benchmark in capacity creation with 4 new plants 2 for NSD Bar, 1 for Soap for NSD Powder being commissioned in record time. These factories had stabilised very quickly giving significant supply chain and tax benefit to the business.
  • Superior Technology in the business repertoire will be leveraged to deliver improved quality at lower cost to achieve profitable growth. The Business sees a big opportunity in market growth in the medium to long term, particularly in the rural area, and had initiated programme to drive consumption of soap in the context of the increased awareness of health and hygiene. For the year 2002, market growth, which is linked to the turnaround of the economy, remains the major risk factor.

Personal Product:

Personal Product had led a good year in 2001, with double-digit growth. This was achieved by focusing on the core brand and investing in building their equity. In spite of slow market growth, your Company increased it investment in innovation, research and advertising on it big brand resulting in growth ahead of the market.

The Hair Category had another year of growth, with high quality relaunches of Clinic Plus, Clinic All Clear bottle were changed in line with international development, while a new stand up pack was launched in the mid price segment. Your Company entered the nascent category of hair colourant, with the launch of Sunsilk hair colour in the metro. In order to address the opportunity at the low price end of sachet, Lux sachet were launched at price of Re1 and Re0.50, and these had met expectation.

The Skincare Category had a very good year, with Fair & Lovely as star performer in 2001. In Fair & Lovely, the launches in 2001 included a fairness soap, a dark circle under eye cream, and sachet with a recloseable cap. The main Fair & Lovely cream brand was also relaunched with improved packaging and communication. All these initiative, along with investment in advertising and rural penetration, led to high growth for the franchise through the year.

The Pond brand returned to double-digit growth after a slowdown for 2 year, with comprehensive relaunches to it talc as well as skincare range. The growth was achieved by improvement in the functionally of product, packaging and impactful market activity. A new talc variant, pond Light n Fresh, and a new mini Clod Cream jar priced at Rs5 were successfully launched in 2001. The skin range of Lakme was renovated and strengthened and a premium new product, Lakme Fair Perfect, was introduced toward the end of 2001.

In the Oral Category, Pepsodent was relaunched and emerged much stronger in 2001 as a result of innovation, advertising and marketplace activation. The introduction of value pack as well as new advertising helped increase market share of Pepsodent. Your Company decided to deprioritize the toothpaste brand Aim, in order to focus all effort on Pepsodent and Close Up this strategy had been successful as demonstrated by the growth and brand building that had been achieved in the second half of 2001.

In the Deodorant business, Axe continued on a high growth plan, with many imaginative market activities and new introduction in 2001. Rexona was relaunched with international packaging and had achieved salience on the 24 hours delivery of deo benefit.

Colour cosmetics saw many innovation on both Lakme and Elle 18 including a new range of colour based on the Lakme India Fashion Week.

HLL acquired the asset and liabilities of it colour cosmetics, fragrances and personal care business from Lakme Lever Ltd at net book value, with effect from 31/3/2001. Post merger, Aviance business continued to focus on direct marketing of personal care product to gain better understanding of this channel .

Supply chain and souring efficiencies led to significant cost reduction, whilst quality improvement came through technologies and innovation. Your Company continues to focus on low unit price pack, which provide the consumer with quality product at low put down price. A new Personal Product factory was commissioned in Doom Dooma in Assam, to cater to the growing market demand.


Like it? Share with your friends!

0
BMS Team

We, at BMS.co.in, believe in sharing knowledge and giving quality information to our BMS students. We are here to provide and update you with every details required by you BMSites! If you want to join us, please mail to [email protected].

0 Comments


Warning: Undefined array key "html5" in /home/bmsnewco/public_html/wp-content/plugins/facebook-comments-plugin/class-frontend.php on line 140

Facebook comments:

This Website Is For Sale. Email us an offer we cannot refuse on [email protected] :)

X
Choose A Format
Personality quiz
Series of questions that intends to reveal something about the personality
Trivia quiz
Series of questions with right and wrong answers that intends to check knowledge
Poll
Voting to make decisions or determine opinions
Story
Formatted Text with Embeds and Visuals
List
The Classic Internet Listicles
Countdown
The Classic Internet Countdowns
Open List
Submit your own item and vote up for the best submission
Ranked List
Upvote or downvote to decide the best list item
Meme
Upload your own images to make custom memes
Video
Youtube and Vimeo Embeds
Audio
Soundcloud or Mixcloud Embeds
Image
Photo or GIF
Gif
GIF format