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To study and analyze the distribution channlem of hul
on refrence of tea and coffee brand and suggest solution
to clear bottleneck
A PROJECT REPORT
Submitted by
SUMIT CHATURVEDI
In partial fulfillment for the award of the diploma
Of
POST GRADGUATE DIPLOMA IN MANAGEMENT
JAGAN INSTITUTE OF MANAGEMENT
JAIPUR
JULY 2010
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Jagan institute of management studies, Jaipur
BONAFIDE CERTIFICATE
Certified that this project report TO STUDY AND ANALYSE THE DISTRIBUTION
CHANNLE OF HUL ON REFRENCE OF TEA AND COFFEE BRAND ANDSUGGEST SOLUTION TO CLEAR THE BOTTLENEACK is the bonafide workof
SUMIT CHATURVEDI of PGDM Batch 2009-2011 who carried out the
project work under my supervision.
SIGNATURE
Ms. POOJA KUDESIAAsst. Professor
Date-21/03/2010
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Acknowledgement
I am grateful to Mr.Prashant sharma whose encouragement ,guidance and support from
the initial to the final level enabled me to develop an understanding of the subject.
I am grateful to Ms.pooja kudesia whose guidance enabled me to complete the project as
per requirement.
Lastly , I offer my regards and blessing to all of those who supported me in any respect
during the completion of the project.
Thanking you,
SUMIT CHATURVEDI
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TABLE OF CONTENT PAGE NO.
1.Cover Page & Title Page .1
2.Bona fide Certificate .......2
3.Acknowledgement ..3
4.Table of Contents ..4
6.Introduction ..5
7.Resarch methodology .10
8.Analysis&finding 13
9.findings 24
10.suggestion 25
11.Bibliography 26
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INTRODUCTION OF ORGANISATION
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COMPANY PROFILE
Vision and mission of HUL
Mission
Unilevers misssion is to add vitality of life.They meet every day needs for
nutrition,hygene, and personal care with brands that help people feel good, look good and
get more out of life.
Vision
The vision of Hindustan Lever is to integrate social, economical, and environmental
considerations into its business and brands. The company also aims to focus on climate
change, water, packaging and sustainable agricultural resources as our key sustainability
themes. The company also focuses on making global partnerships on nutrition and
hygiene issues.
1. Introduction - Hindustan Unilever Limited
Hindustan Unilever Limited (HUL) formerly Hindustan Lever Limited (it was
renamed in late June 2007 as HUL) is India's largest Fast Moving Consumer Goods
company, touching the lives of two out of three Indians with over 20 distinct categories in
Home & Personal Care Products and Foods & Beverages. These products endow the
company with a scale of combined volumes of about 4 million tones and sales of nearly
Rs. 13718 crores. HUL is also one of the country's largest exporters; it has been
recognized as a Golden Super Star Trading House by the Government of India. The
mission that inspires HUL's over 15,000 employees, including over 1,300 managers, is to
"add vitality to life." HUL meets every day needs for nutrition, hygiene, and personal
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care with brands that help people feel good, look good and get more out of life. It is a
mission HUL shares with its parent company, Unilever, which holds 52.10% of the
equity. The rest of the shareholding is distributed among 360,675 individual shareholders
and financial institutions.
HUL's brands - like Lifebuoy, Lux, Surf Excel, Rin, Wheel, Fair & Lovely, Pond's,
Sunsilk, Clinic, Pepsodent, Close-up, Lakme, Brooke Bond, Kissan, Knorr-Annapurna,
Kwality Wall's are household names across the country and span many categories -
soaps, detergents, personal products, tea, coffee, branded staples, ice cream and culinary
products. These products are manufactured over40 factories across India. The operations
involve over 2,000 suppliers and associates. HUL's distribution network comprises about
4,000 redistribution stockists, covering 6.3 million retail outlets reaching the entire urban
population, and about 250 million rural consumers.
The distribution network of HUL is analyzed from the following aspects:
1. Evolution of HULs distribution network
2. Transportation & Logistics
3. Channel Design
4. Initiatives taken for channel member management.
5. Field force management
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BUSINESS MODEL OF HUL:
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Brands
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RESEARCH MEHODOLOGY
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RESEARCH
RESEARCH DESIGN
DATA COLLECTION TECHNIQUE
DATA ANALYSIS
RESEARCH
Research has its special significance in solving various operational and market planning
problems of the business and the industry.
Market research is the investigation of the structure and development of the market for the
purpose of formulating efficient policies for purchasing, production and sales.
Operational research refers to application of mathematical, logical and analytical techniques
to the cost minimization and profit maximization problems.
All these are of great help to people in business and industry.
RESEARCH DESIGN
Research Design is needed because it facilitates the smooth sailing of the various research
operations, there by making the research as efficient as possible yielding maximalinformation with minimal expenditure of effort, time & money.
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Research design stands for advanced planning of method to be adopted for collecting the
relevant data and the techniques to be used in their analysis, keeping in view the objective of
the research and the availability of staff, time and money.
Three traditional categories of research design are:
ExploratoryEXPLANTION: The study was conducted by Hindustan lever Ltd in 6-7 areas of Jaipur
mentioned below (source list) for the first time regarding market review and comparative
analysis between unorganized and organized retail stores.. Thus it is an exploratory type
of research.
DescriptiveDATA COLLECTION TECHNIQUE
The data collection technique is of two types-
I1) Primary Data Collection-
The primary data are those data, which are collected afresh, thus happens to be original in
character. It can be collected by questionnaires, interview, observation etc.
2) Secondary Data collection:
Secondary data means the one that is already available i.e. they refer to the data, which has
been collected and analyzed by someone else. In this report the secondary data has been
collected from the companies Sales Booklet, Magazines, Newspapers and form HUL
distributor ,retailer,salesman
Sample Size: Retail Outlets Which I visited in the training.
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ANALYSIS AND FINDING
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Analyze The Entire Distribution Chain
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Role of DepotDepot is not only a agent but also company own office set up at given location .Main role of Depot is following:
1. Highly equipped office with basic infrastructure like telephone, internet, generator, AC
etc.2. Proper Co-ordination with Sales Team & Head Office.3. Adequate transport facility with local cartage and destination freight services withmaterial handling labor are available. Easily operating upcountry markets with doordelivery arrangement.
4.Prompt Services, proper reporting with complete details.5.Perpetual Inventory Control with ageing of stocks.6.Payment Follow up & accounts reconciliation.7.Maintain Cleanliness & Hygiene.8.Properly execute the directions given by the company & delegate to whole channel.9.Timely Informing about market updates, sales etc through available infrastructure liketelephone, email, fax etc.In hul Depot margin is 1%
Role of DistributorDistributor main role is to distribute goods to retailer.
In hul Distributor margin is 4%1. Timely Supply to Retailer.
2. Inventory Control, According to the hul Company Norms a distributor haveminimum 15 days stock in their godown.
3. Focus on Coverage.4. Focus on sales.
5. Make good relation with retailers.6. A distributor should have appropriate godown size.
7. Should have good infrastructure.8. Give Discount timely to sws.9. Focus on institution sales .
10. Should have risk taking capability.
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Role of salesmanSalesman at least must have the following attitude :1. Serving all people as the candidates of our customer.
2. Just put in our mind that there is no second chance to meet the customer, only today.3.Make list (people or company contact details)4. Having good product knowledge.5. Pro active in making relationship with any body.
6. Open mind..7. Keep learning
8. Set written goals.9. Make a plan; how to realize the goals.
10. Work the plan.11. After all; the salesman may expect the best for the result
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Organized retail stores:
a. National Handloom.b. Reliance Retail (Reliance Fresh)c. Others
1. Sample size:- A total of410 unorganized retail stores with 30 organized retailstores and 100 consumers.
Analysis of unorganized retail outlets
1.1Coverage of the companyTable 1.1.1
BRAND Direct Indirect No Coverage
HUL 367 43 0
Chart 1.1.1
90%
10%
HUL
Direct Indirect
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Interpretation:
hul covers all the retail outlets under study and 90% were under direct coverage i.e
salesman of hul distributor (of that area) visits weekly on these stores. Rest 10% outlets
source the hul products either from wholesaler or any other retail outlet.
1.2Categorization of retail outlets based on HUL salesTable 1.2.1
CATEGORY NO. OF OUTLETS % SHARE
CATEGORY ' A ' (No Coverage) 0 0.0
CATEGORY ' B ' (1-5000) 230 56.1
CATEGORY ' C ' (5001-10000) 99 24.1
CATEGORY ' D ' (10001-15000) 33 8.0
CATEGORY ' E ' (15001-20000) 18 4.4
CATEGORY ' F ' (>20000) 30 7.3
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Chart 1.2.1
Interpretation:-
The above pie chart shows the classification of retail outlets present in areas under study.
The categorization is made on the basis of monthly sales of hul products by the retailers
and the whole sellers. It has been divided into 6 categories mentioned above.
There are no A category outlets as hul covers all the Retail outlets under study whereas
category B has highest share of 56% with 230 outlets and most of total retail outlets fall
under Category B & Category C (80%) visited by the Researchers here.
It can be seen that only 7% outlets fall under category E i.e. greater than 20000 Rs
0%
56%24%
8%
5%7%
NO. OF OUTLETS
CATEGORY ' A ' (No Coverage) CATEGORY ' B ' (1-5000)
CATEGORY ' C ' (5001-10000) CATEGORY ' D ' (10001-15000)CATEGORY ' E ' (15001-20000) CATEGORY ' F ' (>20000)
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1.3Coverage with respect to competitorsTable 1.5.1
BRAND Direct Indirect No Coverage
HUL 367 43 0
GODREJ 308 21 81
TATA 305 27 78
OTHER 281 26 103
Chart 1.5.1
Chart 1.5.2
90%
10% 0%
HUL
Direct Indirect No Coverage
75%
5%20%
GODREJ
Direct Indirect No Coverage
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Chart 1.5.3
Chart 1.5.4
74%
7%
19%
TATA TEA
Direct Indirect No Coverage
69%6%
25%
OTHER
Direct Indirect No Coverage
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Chart 1.5.5
Interpretation:
Among the competitors only hul covers most of the outlets (90%) directly, rest covers
approx. 70-75 % of outlets directly. Also tata tea, godrej & other has no presence in
approx. 20-25 % outlets but hul full coverage. This is the strength of hul company.
0
50
100
150
200
250
300
350
400
DirectIndirect
No Coverage
367
43
0
308
21
81
305
27
78
281
26
103
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FINDING
After close study of the present market situation prevailing in the areas assigned the
researchers, following are the observations.
1. Availability of all the products is not uniform in all the arias. For instance, thesupply is not meeting the demand in particular areas or shops.
2. Some of aria like wall city , sanganer where Distributor Focus On OnlyWholesale market not retail market.
3. Beat plan & Route is not there in distributor point .4. Root listing is not there in distributor point.5. Some of the distributor are not running schemes on HUL products in retail
market.
6. Supply of goods is not proper. Because in some aria like Sanganer , VKI wheredistributor is not giving timely supply.
7. BRU and 3ROSE have very less availability.8. Schemes, Discounts, offers, coupons etc. are not reaching to the retailers and
customers whereas tata tea and godrej on the other hand are successfully doing that.
8. Retailers and even wholesalers are not satisfied with the supply system of hul.9. It was found that Taza is most favored brand and is sold most.
10.TATA TEA is emerging as major Competitor in the organized retail outlets.
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RECOMMENDATIONS & SUGGESTIONS
1. Company should start a program for the loyal retailers and wholesalers to reducetheir complaints by providing timely supply and replacement. This will help in
increasing their sales.
2. The packaging of taza and 3 rose (75g and 50g packs) must be improved for itsbetter sales.
3. Salesmen should be properly dressed and should have good communication skillsto effectively promote the products, by making sure that the product reaches each
and every retailer and also increase the visibility of the products by arranging the
product clearly on the shelf or rack and show its prominence.
4. To increase the number of stock keeping units {SKU} available in the retailersstore. Each salesman should stress the retailers to keep the maximum SKUs and to
maintain these SKUs throughout. With this, the replacement of the damaged and
expired packs should be prompt and without any hassles, so that retailer can be
saved from the loss of the expired and damaged goods.
5. Company should adopt innovative packaging techniques, as they have their ownpackaging unit as consumers are highly attracted towards new packaging.
6. The company should take proper measures that the schemes and offers are notgulped by the middlemen ,and that it benefits the retailers and customers.
7. Launching of several promotional schemes for existing wholesalers anddistributors. For instance, it has started the Vijeta - Rishta Jeet Ka scheme last
year to provide a platform for the wholesaler and HUL to grow the business by
earning points and redeeming them.
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Bibl iography:
1. www.hul .com2. Search Engine www.Google.com3. Information collected by distributor and retailers.