MARKETING STRATEGYOF HINDUSTAN

UNILEVER LIMITED

1)HUL’S NEW GROWTH STRATEGY:

After having fought a bitter price battle for market share

with its rivals, Hindustan Unilever Ltd (HUL), Indian

subsidiary of the Anglo- Dutch consumer goods company

Unilever Plc, is now working on a new growth strategy

for its laundry business.

“Price cut or hike is not a long-term growth strategy.

Pricing, in fact, is now passe,” insists Sudhanshu Vats,

category head, home care. “Our strategy for growth, now

is focused on product innovation, new consumer and

retail trends and aggressive marketing and promotions,”

he said.

This comes even as Unilever is scouting for a potential

buyer for its laundry business in the US.

HUL says it is quite upbeat about the segment and says

the laundry segment is one of its “key growth areas. “We

have done key innovations across the product portfolio

and it is working for us,” says Vats. “We successfully

migrated from Rin Supreme to Surf Excel and Wheel

Smart Srimati—which was rolled out in 2006—is also on

the right track.”

HUL’s market share in the laundry segment grew to

around 37.8% in the quarter ended June from 35.5% in

the same period last year, according the market research

firm ACNielsen. However, this time, the increase was not

at the expense of price war with its multinational rival

Procter & Gamble Co. P&G also gained 0.5 percentage

points, up to a 7.6% share. Nirma Ltd, the Ahmedabad-

based manufacturer, however, saw its market share dip by

1.7% percentage points to 13.5%.

Wheel, a value brand that, according to Vats contributes

around 50% of HUL’s laundry segment revenues,

increased its market share by 2 percentage points in the

same period, with a total share of about 18%.

According to ACNielsen, the laundry industry in India

was worth Rs7,908 crore in 2006 and rose 8.4% over

2005. HUL doesn’t report its laundry revenues separately

but puts them under the soaps and detergent category.

In 2006, HUL’s soaps and detergents segment contributed

around Rs5,596 crore to the company’s total sales of

Rs12,103 crore. “Laundry has been an attractive segment

in the past and is likely to keep growing in the near future.

The recent price war between companies led to erosion in

their profitability but now, the industry is stabilizing,”

says Unmesh Sharma, an analyst at Macquarie Securities

here.

According to Vats, the laundry business is witnessing a

surge in demand from cities and HUL is focusing on Tier

I and II cities to tap that demand.

2)SUSTAINABILITY STRATEGY

We have a long-standing set of values and principles that

guides our behaviour. These values underpin our

approach to sustainability.

We have always been a business driven by a strong set of

values. Today those values are as important as ever. We

now know that the well-being of society and the

environment is critical to our ability to grow.

Our Sustainability strategy

Unilever’s vision is to double the size of its business

while reducing the overall impact on environment. This

new vision recognises that the world is changing,

populations are growing and the rise in incomes is

fuelling a growth in the demand for consumer products.

Products like ours rely on an increasingly constrained set

of natural resources, whether it is fuel, water, or other raw

materials.

In Hindustan Unilever Limited (HUL), the principle of

Corporate Responsibility (CR) is an integral part of our

commitment to all our stakeholders – consumers,

customers, employees, the environment and the society

that we operate in.

Today, India is battling multiple issues like water scarcity,

poverty, and problems arising out of low awareness of

health, hygiene, and nutrition. If these issues are not

addressed soon, they will create insurmountable barriers

to business growth. We believe that helping society

prosper and ensuring a sustainable future for the planet

goes hand in hand with our goal of ensuring growth that is

competitive, profitable, and sustainable for our

organisation.
Our contributions have to be substantial and sustainable,

which is why we are not just banking on our philanthropic

programmes, but are transforming our core business

practices as well. Even the seemingly small innovations in

our brands and business processes can lead to a big

difference in society as we touch the lives of two out of

every three Indians.*

For example, if one household uses Surf Excel detergent,

it can conserve two buckets of water per wash. A million

Indian households using Surf Excel can save enough

water for meeting the basic hygiene needs of many

Indians. Thus, small individual actions multiplied with

our large consumer base will make a big difference in

combating the issues society faces.

We will further demonstrate that successful business

strategies are driven by responsible business practices.

The key to this approach is developing a CR framework

which integrates the social, economic, and environmental

agenda with our business priorities – growing markets,

maintaining the competitive edge, enjoying goodwill in

the communities we operate in, and building trust and an

exceptional reputation. Hence, in the future, the three

cornerstones for CR integration with business at HUL will

be:

Growing markets responsibly:

We will address issues related to hygiene and nutrition

through product innovations and awareness. Gathering

information about the concerns expressed by consumers,

communities, and stakeholders can help us identify

opportunities for innovation at the category, brand, and

marketing plan level. We have a very strong and trusted

position in India and we can leverage this to our

competitive advantage.

Ensuring sustainable practices in our operations:

To secure a thriving future, we need to establish

sustainable sources for raw materials. Being a company

that is heavily dependent on water, agriculture, fuels and

petrochemicals, we must plan now for a future in which

water could be scarce, agriculture could be under

pressure, and fuels will be expensive. Our consumers add

up to two-thirds of the Indian population, hence

addressing sustainability issues is a high priority.

Building a good reputation through responsible

leadership:
CR is one of the key components of reputation and trust.

A good reputation can be a major competitive advantage

and can build employer brand and consumer loyalty.

3)Engaging with our stakeholders

Listening to others and learning from our stakeholders

informs our decision-making, strengthens our

relationships and helps us succeed as a business.

Stakeholder engagement for identifying issues that are

material to us:

We appointed SustainAbility International to conduct

stakeholder engagement on our behalf. They analysed and

assimilated the expectations of stakeholders regarding

issues that matter to them. These expectations were

similar to the areas identified by us, where HUL's

contribution could create a significant impact.

Scoping the areas for intervention

While the issues are many, it is necessary to address them

in a systematic manner to make a real difference. Instead

of spreading thin across all issues, we have chosen to

work on five areas to ensure a deep impact.

These areas have been arrived at using the output from

our stakeholder engagement process and areas which we

are poised to address through our business.

Key messages from stakeholders

‘Target. Allocate resources. Achieve those targets. This

is more critical than just being visible & talking about

it.’

- ‘We feel that some Indian companies can be leaders in

their respective sectors. HUL has the potential to be such

a leader.’

- ‘Invest for your markets – don't do social work, it isn't

your ballgame.’

- ‘Please make money out of it. When you make money

out of it, things are going to change.’