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RESEARCH REPORT

                               ON

    “A STUDY A DISTRIBUTION
   CHANNEL OF UNILEAVER IN
         RURAL MARKET”


        Submitted In Partial Fulfillment for the
                Award Of Degree of
     MASTER OF BUSINESS ADMINISTRATION
       (U.P. Technical University, Lucknow)

 SUBMITTED TO:                              SUBMITTED BY-
 MR. J.N. GIRI                              SUNNY KUMAR
 (FACULTY, MIMT)                            Roll No. : 0615270112




Mangalmay Institute of Management & Technology
    Website: www.mangalmay.org, E-Mail.: info@mangalmay.org,
                       GREATER NOIDA
ACKNOWLEDGEMENT

                      “Words express everything
                         Mouth Co-ordinates,
                      When it comes to gratitude,
                        Heart comes to play.”

There is always a sense of gratitude which one expresses to other people for their
helpful and needy service they render during phases of life. I too would like to do
the same as I really wish to express my gratitude to those who have been helpful to
me in getting this project completed.
In representing this report I would like to express my gratitude to Mr. J.N.
Giri.
Center for management technology for providing me with his able guidance and
inspiration for the completion of research report
I am also indebted to all the faculty members of center for management
technology for providing consistent encouragement and congenial atmosphere to
complete the research report




                                                       SUNNY KUMAR




                                                                                  2
TABLE OF CONTENTS




 INTRODUCTION

 COMPANY PROFILE

 PRESENT MARKET STRATEGY

 RESEARCH METHODOLOGY

 FINDINGS AND CONCLUSIONS

 SUGGESTIONS

 QUESTIONNAIRE

 LIMITATIONS

 BIBLIOGRAPHY

 ANNEXURE




                              3
EXECUTIVE SUMMARY



Unilever 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.
They endow the company with a scale of combined volumes of about 4
million      units    and      sales      of    Rs.10,       000     crores.
UNILEVER 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. Hence, research aims is that to study the existing marketing
practices, emerging marketing plans and understanding companies
business strategy with its profile. The main recommendations have
been made on the addressing of the advertising message to the
customers.     An    attempt   has     been    made     to   formulate   the
communication in a way to build it on a platform of the basic need for
buying    UNILEVER     products.     In   another     recommendation     the
suggestions towards better dealer interest in UNILEVER products has
been given a chance.

The research is based primarily on primary data; however few
references to industry figures from secondary data have been made.
Data has been collected through in depth interviews and administered
questionnaires.

The study has given the researchers an inside of the Consumer
durable Industry and an opportunity to use the theoretical knowledge
in live project.




                                                                           4
INTRODUCTION
HISTORY



Over 100 years' link with India. In the summer of 1888, visitors to the
Kolkata harbor & noticed crates full of Sunlight soap bars, embossed
with the words "Made in England by Lever Brothers". With it, began an
era of marketing branded. Fast Moving Consumer Goods (FMCG).


Soon after followed Lifebuoy in 1895 and other famous brands like
Pears, Lux and Vim. Vanaspati was launched in 1918 and the famous
Dalda brand came to the market in 1937.


In 1931, Unilever set up its first Indian subsidiary, Hindustan
Vanaspati Manufacturing Company, followed by Lever Brothers India
Limited (1933) and United Traders Limited (1935). These three
companies merged to form UNILEVER in November 1956; UNILEVER
offered 10% of its equity to the Indian public, being the first among
the foreign subsidiaries to do so. Unilever now holds 51.55% equity in
the company. The rest of the shareholding is distributed among about
380,000    individual    shareholders    and     financial   institutions.


The erstwhile Brooke Bond's presence in India dates back to 1900. By
1903, the company had launched Red Label tea in the country. In
1912, Brooke Bond & Co. India Limited was formed. Brooke Bond
joined the Unilever fold in 1984 through an international acquisition.



                                                                         5
The erstwhile Lipton's links with India were forged in 1898. Unilever
acquired Lipton in 1972, and in 1977 Lipton Tea (India) Limited was
incorporated.


Pond's (India) Limited had been present in India since 1947. It joined
the Unilever fold through an international acquisition of Chesebrough
Pond's USA in 1986.


Since the very early years, UNILEVER has vigorously responded to the
stimulus   of   economic    growth.   The   growth   process   has   been
accompanied by judicious diversification, always in line with Indian
opinions and aspirations.


The liberalization of the Indian economy, started in 1991, clearly
marked an inflexion in UNILEVER's and the Group's growth curve.
Removal of the regulatory framework allowed the company to explore
every single product and opportunity segment, without any constraints
on production capacity.


Simultaneously, deregulation permitted alliances, acquisitions and
mergers. In one of the most visible and talked about events of India's
corporate history, the erstwhile Tata Oil Mills Company (TOMCO)
merged with UNILEVER, effective from April 1, 1993. In 1995,
UNILEVER and yet another Tata company, Lakme Limited, formed a
50:50 joint venture, Lakme Lever Limited, to market Lakme's market-
leading cosmetics and other       appropriate   products   of both the
companies. Subsequently in 1998, Lakme Limited sold its brands to



                                                                        6
UNILEVER and divested its 50% stake in the joint venture to the
company.


UNILEVER formed a 50:50 joint venture with the US-based Kimberly
Clark Corporation in 1994, Kimberly-Clark Lever Ltd, which markets
Huggies Diapers and Kotex Sanitary Pads. UNILEVER has also set up a
subsidiary in Nepal, Nepal Lever Limited (NLL), and its factory
represents the largest manufacturing investment in the Himalayan
kingdom. The NLL factory manufactures UNILEVER's products like
Soaps, Detergents and Personal Products both for the domestic market
and exports to India.


The 1990s also witnessed a string of crucial mergers, acquisitions and
alliances on the Foods and Beverages front. In 1992, the erstwhile
Brooke Bond acquired Kothari General Foods, with significant interests
in Instant Coffee. In 1993, it acquired the Kissan business from the UB
Group and the Dollops Icecream business from Cadbury India.


As a measure of backward integration, Tea Estates and Doom Dooma,
two plantation companies of Unilever, were merged with Brooke Bond.
Then in July 1993, Brooke Bond India and Lipton India merged to form
Brooke Bond Lipton India Limited (BBLIL), enabling greater focus and
ensuring   synergy   in   the   traditional   Beverages   business.   1994
witnessed BBLIL launching the Wall's range of Frozen Desserts. By the
end of the year, the company entered into a strategic alliance with the
Kwality Icecream Group families and in 1995 the Milkfood 100%
Icecream marketing and distribution rights too were acquired.



                                                                         7
Finally, BBLIL merged with UNILEVER, with effect from January 1,
1996. The internal restructuring culminated in the merger of Pond's
(India) Limited (PIL) with UNILEVER in 1998. The two companies had
significant overlaps in Personal Products, Specialty Chemicals and
Exports businesses, besides a common distribution system since 1993
for Personal Products. The two also had a common management pool
and a technology base. The amalgamation was done to ensure for the
Group, benefits from scale economies both in domestic and export
markets and enable it to fund investments required for aggressively
building new categories.


In January 2000, in a historic step, the government decided to award
74 per cent equity in Modern Foods to UNILEVER, thereby beginning
the divestment of government equity in public sector undertakings
(PSU) to private sector partners. UNILEVER's entry into Bread is a
strategic extension of the company's wheat business. In 2002,
UNILEVER acquired the government's remaining stake in Modern
Foods.


In 2003, UNILEVER acquired the Cooked Shrimp and Pasteurised
Crabmeat business of the Amalgam Group of Companies, a leader in
value added Marine Products exports.




                                                                   8
COMPANY PROFILE

The mission that inspires UNILEVER's 36,000 employees, including
over 1,350 managers, is to "add vitality to life." UNILEVER meets
everyday needs for nutrition, hygiene, and personal care with brands
that help people feel good, look good and get more out of life. It is a
mission UNILEVER shares with its parent company, Unilever, which
holds 51.55% of the equity. The rest of the shareholding is distributed
among 380,000 individual shareholders and financial institutions.


UNILEVER'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. They are manufactured in close to 80 factories. The
operations involve over 2,000 suppliers and associates. UNILEVER's
distribution network, comprising about 7,000 redistribution stockists,
directly covers the entire urban population, and about 250 million rural
consumers.


UNILEVER has traditionally been a company, which incorporates latest
technology in all its operations. The Hindustan Lever Research Centre
(HLRC) was set up in 1958, and now has facilities in Mumbai and
Bangalore. HLRC and the Global Technology Centres in India have over
200 highly qualified scientists and technologists, many with post-
doctoral experience acquired in the US and Europe.




                                                                       9
UNILEVER believes that an organisation's worth is also in the service it
renders to the community. UNILEVER is focusing on health & hygiene
education, women empowerment, and water management. It is also
involved in education and rehabilitation of special or underprivileged
children,   care   for   the   destitute   and   HIV-positive,   and   rural
development. UNILEVER has also responded in case of national
calamities / adversities and contributes through various welfare
measures, most recent being the village built by UNILEVER in
earthquake affected Gujarat, and relief & rehabilitation after the
Tsunami caused devastation in South India.


Over the last three years the company has embarked on an ambitious
programme, Shakti. Through Shakti, UNILEVER is creating micro-
enterprise opportunities for rural women, thereby improving their
livelihood and the standard of living in rural communities. Shakti also
includes health and hygiene education through the Shakti Vani
Programme, and creating access to relevant information through the
iShakti community portal. The programme now covers about 50,000
villages in 12 states. UNILEVER's vision is to take this programme to
100,000 villages impacting the lives of over a 100 million rural
Indians.


UNILEVER is also running a rural health programme – Lifebuoy
Swasthya Chetana. The programme endeavtheirs to induce adoption of
hygienic practices among rural Indians and aims to bring down the
incidence of diarrhoea. It has already touched 70 million people in




                                                                          10
approximately 15000 villages of 8 states. The vision is to make a
billion Indians feel safe and secure. If Hindustan Lever straddles the


Indian corporate world, it is because of being single-minded in
identifying itself with Indian aspirations and needs in every walk of life.



UNILEVER INDIA’S LARGEST FMCG COMPANY




                                                                         11
FINANCIAL OVERVIEW




                     12
Hindustan Lever Limited Shareholding
                  Pattern
           Flls
           13.7


Domestic
  Fls
  14.8                              Unilever
                                     51.6



    Individual
      19.9
                                     UNILEVER Equity Capital - 50 Mn $
                                      Market Capitalisation - 7,300 Mn $




                                                                           13
PRESENT MARKETING STRATEGY:


Mission:

Unilevermission is to add Vitality to life. We meet everyday needs for nutrition,
hygiene, and personal care with brands that help people feel good, look good
and get more out of life.

Policy:

UNILEVER has earned a reputation for conducting its business with integrity and
with respect for the interests of those their activities can affect. This reputation is
an asset, just as real as their people and brands.

Their first priority is to be a successful business and that means investing for
growth and balancing short-term and long-term interests. It also means caring
about their consumers, employees and shareholders, their business partners and
the world in which we live.

From UNILEVER Spokesperson “To succeed requires the highest standards of
behavior from all of us. The general principles contained in this Code set out
those standards. More detailed guidance tailored to the needs of different
countries and companies will build on these principles as appropriate, but will not
include any standards less rigorous than those contained in this Code.

We want this Code to be more than a collection of high-sounding statements. It
must have practical value in their day-to-day business and each one of us must
follow these principles in the spirit as well as the letter”.ref: business world
magazine.



                                                                                     14
Obeying the Law

   UNILEVER companies and employees are required to comply with the laws
   and regulations of the countries in which they operate.

   Employees

       •   UNILEVER is committed to diversity in a working environment where
           there is mutual trust and respect and where everyone feels responsible
           for the performance and reputation of the company. UNILEVER will
           recruit, employ and promote employees on the sole basis of the
           qualifications and abilities needed for the work to be performed.

       •   UNILEVER are committed to safe and healthy working conditions for
           all employees. We will not use any form of forced, compulsory or child
           labour.

       •   UNILEVER are committed to working with employees to develop and
           enhance each individual's skills and capabilities.

       •   UNILEVER respect the dignity of the individual and the right of
           employees to freedom of association.

       •   UNILEVER will maintain good communications with employees
           through company based information and consultation procedures.

Consumers
UNILEVER is committed to providing branded products and services which
consistently offer value in terms of price and quality, and which are safe for their
intended use. Products and services will be accurately and properly labelled,
advertised and communicated.



                                                                                  15
Shareholders
UNILEVER will conduct its operations in accordance with internationally
accepted principles of good corporate governance. They will provide timely,
regular and reliable information on their activities, structure, financial situation
and performance to all shareholders.

Business Partners

UNILEVER is committed to establishing mutually beneficial relations with their
suppliers, customers and business partners.

In their business dealings they expect their partners to adhere to business
principles consistent with their own.




Community Involvement

UNILEVER strives to be a trusted corporate citizen and, as an integral part of
society, to fulfill their responsibilities to the societies and communities in which
they operate.

Public Activities

UNILEVER companies are encouraged to promote and defend their legitimate
business interests. UNILEVER will co-operate with governments and other
organisations, both directly and through bodies such as trade associations, in the
development of proposed legislation and other regulations which may affect
legitimate business interests.


                                                                                  16
UNILEVER neither supports political parties nor contributes to the funds of
groups whose activities are calculated to promote party interests.




The Environment

UNILEVER      is   committed      to   making   continuous   improvements   in   the
management of their environmental impact and to the longer-term goal of
developing a sustainable business.

UNILEVER will work in partnership with others to promote environmental care,
increase understanding of environmental issues and disseminate good practice.

Innovation
In their scientific innovation to meet consumer needs they will respect the
concerns of their consumers and of society. They will work on the basis of sound
science, applying rigorous standards of product safety.

Competition
UNILEVER believes in vigorous yet fair competition and supports the
development of appropriate competition laws. Their companies and employees
will conduct their operations in accordance with the principles of fair competition
and all applicable regulations.

Business Integrity

UNILEVER does not give or receive, whether directly or indirectly, bribes or other
improper advantages for business or financial gain. No employee may offer, give
or receive any gift or payment which is, or may be construed as being, a bribe.
Any demand for, or offer of, a bribe must be rejected immediately and reported to
management.




                                                                                  17
UNILEVER accounting records and supporting documents must accurately
describe and reflect the nature of the underlying transactions. No undisclosed or
unrecorded account, fund or asset will be established or maintained.




Conflicts of Interests

All UNILEVER employees are expected to avoid personal activities and financial
interests which could conflict with their responsibilities to the company.

UNILEVER employees must not seek gain for themselves or others through
misuse of their positions.




Compliance – Monitoring – Reporting

Compliance with these principles is an essential element in their business
success. The Unilever Board is responsible for ensuring these principles are
communicated to, and understood and observed by, all employees.

Day-to-day responsibility is delegated to the senior management of the regions
and operating companies. They are responsible for implementing these
principles, if necessary through more detailed guidance tailored to local needs.

Assurance of compliance is given and monitored each year. Compliance with the
Code is subject to review by the Board supported by the Audit Committee of the
Board and the Corporate Risk Committee.



                                                                                   18
Any breaches of the Code must be reported in accordance with the procedures
specified by the Joint Secretaries. The Board of Unilever will not criticise
management for any loss of business resulting from adherence to these
principles and other mandatory policies and instructions.

The Board of Unilever expects employees to bring to their attention, or to that of
senior management, any breach or suspected breach of these principles.




Provision has been made for employees to be able to report in confidence and
no employee will suffer as a consequence of doing so.

In this Code the expressions 'Unilever' and 'Unilever companies' are used for
convenience and mean the Unilever Group of companies comprising Unilever
N.V., Unilever PLC and their respective subsidiary companies. The Board of
Unilever means the Directors of Unilever N.V. and Unilever PLC’.ref:THE NEWS




ENVOIRMENT POLICY

Unileversupplies high quality goods and services to meet the daily needs of
consumers and industry. In doing so, the Company is committed to exhibit the
highest standards of corporate behaviour towards its consumers, employees, the
societies and the world in which we live.

The company recognises its joint responsibility with the Government and the
Public to protect environment and is committed to regulate all its activities so as
to follow best practicable means for minimising adverse environmental impact
arising out of its operations.




                                                                                 19
The company is committed to making its products environmentally acceptable,
on a scientifically established basis, while fulfilling consumers' requirements for
excellent quality, performance and safety.

The aim of the Policy is to do all that is reasonably practicable to prevent or
minimise, encompassing all available knowledge and information, the risk of an




adverse environmental impact arising from processing of the product, its use or
foreseeable misuse.

This Policy document reflects the continuing commitment of the Board for sound
Environment Management of its operations. The Policy applies to development of
a process, product and services, from research to full-scale operation. It is
applicable to all company operations covering its plantations, manufacturing,
sales and distribution, research & innovation centres and offices. This document
defines the aims and scope of the Policy as well as responsibilities for the
achievement of the objectives laid down.




                                   VISION

Their vision is to continue to be an environmentally responsible organisation
making continuous improvements in the management of the environmental
impact of their operations.



                                                                                 20
UNILEVER will achieve this through an Integrated Environment Management
approach, which focuses on People, Technology and Facilities, supported by
Management Commitment as the prime driver.




  FMCG Markets
  Slowdown in growth & then 2 years of decline




                                                                        21
FMCG Market (HLL Categories)
                  Growth%

         00       01        02           03
   8
   6
   4
        6.7
   2              3.4
   0
                           -1.1
                                     -2.5
  -2
  -4




Pricing action in 2007:


                                              22
Price reduction




Price reduction (Bottles) & Value improvement (Sachets)




                                                          23
Investment Behind Brands



Innovation & Superior Quality




Family – safe        Petalsoft   Water & effort saving   Quick wash - 50%   No mud Rin
Advance from germs




                                                                                         24
Perfect Radiance “5 in 1” hair     Total Care   Whiter teeth   Fresher breath
                 health benefits




Current Market Context

Actions


• Pricing
       –Laundry : Price Reduction
       –Shampoos: Value Improvement & Lower Price Points
       –Toothpaste: Value Corrections & SKU rationalization
• Investments behind brands
       – Innovations
       – Quality
       – Higher A&P
• Corrective actions in processed




                                                                           25
Processed Foods


                • Corrective actions
                      – Phased stock reduction
                      – Withdrawl of ‘03 innovation
                      – Defocus of Atta in unviable geographies
                • Sales decline of 26% arising from above actions
                • Market shares held / improved




                                                      BRANDS

Sales Growth%




                                                                    26
PRODUCTS

Lux                Breeze
Lifebuoy           Dove
Liril              Pears
Hamam              Rexona


Surf Excel         Fair & Lovely
Rin                Pond's
Wheel


Sunsilk Naturals   Pepsodent
Clinic             Close-up


Axe                Lakme


                                   27
Rexona


 Ayush


  Brooke Bond                    Bru
  Lipton


  Kissan                         Kwality Wall's
  Knorr Annapurna


INDIA'S LARGEST BRANDED FMCG EXPORTER

It was 1962. The reality of India then was very different from what it is today.
India's economy then suffered from foreign exchange shortage. Hindustan
Lever voluntarily decided to take up Exports to support the country's economy.


Today, UNILEVER is India's largest exporter of branded Fast Moving Consumer
Goods. It has been recognized by the Government of India as a Golden Super
Star Trading House.

Over time, UNILEVER has developed appropriate capabilities to be globally
competitive   in   cost   and   quality   for   a   viable   Exports   business.


FOCUS AREAS

UNILEVER's Exports focuses on two broad areas. It is a sourcing base for
Unilever brands in Home & Personal Care (HPC) and Tea for supplies to other
Unilever companies. It also focuses on becoming a preferred supplier to both
non-Unilever and Unilever clients in three categories in which India, as a



                                                                        28
country, has competitive advantage - Marine Products, Castor and its
Derivatives and Rice. UNILEVER enjoys international recognition within Unilever
and outside for its quality, reliability and speed of customer service.

UNILEVER's Exports geography comprises, at present, countries in Asia,
Australia, Africa, North America and Europe.

UNILEVER'S EXPORTS PORTFOLIO

HPC:
The categories are soaps, skin care products and oral care products. The brands
are Lux, Lifebuoy, Pears, Fair & Lovely, Dove, Vaseline, Close-Up, Pepsodent,
Signal. UNILEVER is the only source of Pears soap across the world.


Tea:
The categories are branded packet tea, and instant tea for Unilever's ready-to-
drink tea business. The branded teas are Brooke Bond, Brooke Bond Red label,
Brooke Bond Taj Mahal, Lipton, Lipton Yellow Label, Lipton Green Label, Lipton
Brisk, Lipton 3-in-1 premix, Chinese Rickshaw.

Marine Products:

UNILEVER offers a comprehensive portfolio, ranging from Surimi, Crabsticks to
Shrimps and several value-added products. Among its customers is Icelandic,
the world's third largest seafood company. In addition, UNILEVER has also
become a part of Unilever's supply chain in seafoods for Europe too.
UNILEVER's Marine Products brands are Ocean Diamond, Ocean Excellence,
Shogun, Hima, Gold Seal, Tara and Prima.

                                       Rice:
The categories are Basmati Rice and Basmati Rice-based ready-to-eat rice



                                                                          29
meals. The brands are Gold Seal Indus Valley, Rozana and Annapurna.

                                      Castor:
The categories are Castor Oil, Castor-oil based products, like hydrogenated
castor oil, 12 - Hydroxy Stearic Acid, Ricinoleic Acid (used in grease and
lubricant industry, paints and surface coatings, cosmetics, emulsifiers), and
Speciality   Castor   Oils   (USP   grade,   BP   grade,   DAB   10)   etc        used   in
pharmaceutical preparations. UNILEVER's Castor brand is Topsol.

Today, Exports is a substantial business in UNILEVER, accounting for about
12% of the company's turnover. UNILEVER believes that its competitive
advantages of cost competitiveness, process competitiveness and economies of
scale both at the company and country level, hold it in good stead. They
position the company to become one of the hubs for sourcing by Unilever
companies in HPC and Tea, and also simultaneously become a preferred partner
to global customers in Marine Products, Castor and Rice.


DIRECT SELLING:


Product Range
• Lever home range
• Male grooming
• Oral Care
• Ayurveda
• Personal Wash
• Foods
Reach - 1400 towns (Largest in India)
Consultant base - 330,000




                                                                             30
ACCORDINGLY, UNILEVER'S AIMS ARE TO:
   Ensure safety of its products and operations for the environment
    by     using    standards    of   environmental    safety,   which   are
    scientifically sustainable and commonly acceptable.

   Develop, introduce and maintain environmental management
    systems across the company to meet the company standards as
    well      as   statutory    requirements   for    environment.   Verify
    compliance with these standards through regular auditing.

   Assess environmental impact of all its activities and set annual
    improvement objectives and targets and review these to ensure
    that these are being met at the individual unit and corporate
    levels.


                                                                          31
 Reduce Waste, conserve Energy and explore opportunities for
    reuse and recycle.

 Involve all employees in the implementation of this Policy and
    provide     appropriate   training.   Provide   for   dissemination   of
    information to employees on environmental objectives and
    performance through suitable communication networks.

 Enctheirage suppliers and co-packers to develop and employ
    environmentally superior processes and ingredients and co-
    operate with other members of the supply chain to improve
    overall environmental performance.

         Work in partnership with external bodies and Government
    agencies to promote environmental care, increase understanding
            of environmental issues and disseminate good practice.



                    RESPONSIBILITIES

                                   CORPORATE

   The Board and the Management Committee of UNILEVER is
    committed       to   conduct    the   company     operations    in    an
    environmentally sound manner. The Management Committee
    will:

   Set      mandatory     standards      and   establish    environmental
    improvement objectives and targets for UNILEVER as a whole
    and for individual units, and ensure these are included in the
    annual operating plans.




                                                                          32
 Formally review environment performance of the company once
      every quarter.

   Review     environment      performance    when      visiting   units   and
      recognise exemplary performance.

Nominate:

- A senior line manager responsible for environmental performance at
the individual UNILEVER site.

- UNILEVER environmental coordinator.

   The     Management        Committee,       through      the     nominated
      environmental coordinator will:

     Ensure implementation of UNILEVER Policy on environment and
      compliance    with   Unilever      and   UNILEVER        environmental
      standards and the standards stipulated under relevant national /
      local legislation. When believed to be appropriate, apply more
      stringent criteria than those required by law.

     Assess environmental impact of UNILEVER operations and
      establish strategies for sound environment management and key
      implementation steps.

   Enctheirage     development     of    inherently   safer      and   cleaner
      manufacturing processes to further raise the standards of
      environment performance.

   Establish appropriate management systems for environment
      management and ensure regular auditing to verify compliance.




                                                                             33
 Establish systems for appropriate training in implementation of
  Environment Management Systems at work.

 Ensure that all employees are made aware of individual and
  collective responsibilities towards environment.

 Arrange for expert advice on all aspects of environment
  management.

 Participate, wherever possible, with appropriate industry and
  Government bodies advising on environmental legislation and
  interact with national and local authorities concerned with
  protection of environment.




                                                               34
INDIVIDUAL UNITS

     The overall responsibility for environment management at each
      unit will rest with the Unit Head, who will ensure implementation
      of UNILEVER Policy on environment at unit level. Concerned line
      managers    /     heads    of   departments    are     responsible     for
      environmental performance at department levels.

   In order to fulfill the requirements of the Environment Policy at
      each site, the Unit Head will:

   Designate     a     unit    environment    coordinator    who     will   be
      responsible for co-ordinating environmental activities at unit,
      collating environmental statistics and providing / arranging for
      expert advice.

   Agree with the Management Committee Member responsible for
      the unit, specific environmental improvement objectives and
      targets for the unit and ensure that these are incorporated in the
      annual objectives of the concerned managers and officers and
      are reviewed periodically.

     Ensure that the unit complies with Unilever and UNILEVER
      mandatory standards and the relevant national and state
      regulations with respect to environment.

   Ensure     formal    environmental      risk   assessment    to   identify
      associated environmental aspects and take appropriate steps to
      control risks at acceptable levels.

   Ensure that all new operations are subjected to a systematic and
      formal analysis to assess environmental impact. Findings of such



                                                                              35
exercises should be implemented prior to commencement of the
    activity.

 Manage change in People, Technology and Facilities through a
    planned approach based on training, risk assessment, pre-
    commissioning audits and adherence to design codes.

 Regularly review environment performance of the unit against
    set objectives and targets and strive for continual improvement.

 Sustain a high degree of environmental awareness through
    regular     promotional   campaigns   and      employee    participation
    through training, safety committees, emergency drills etc.

 Ensure dissemination of relevant information on environment
    within the unit and to outside bodies, and regularly interact with
    Government authorities concerned for protection of environment.

 Maintain appropriate emergency procedures consistent with
    available    technologies   to   prevent   /   control    environmental
    incidents.

 Provide appropriate training to all employees.

 Ensure periodic audits to verify compliance with environment
    management       systems    and    personally     carry    out   sample
    environment audits to check efficacy of the systems.

   Report environmental statistics to UNILEVER Corporate Safety &
    Environment Group on a monthly basis.




                                                                          36
RESEARCH AND INNOVATION CENTRES

Since most new products and processes are developed in these Units,
certain additional

responsibilities devolve on them to ensure implementation of the
Environment Policy of the company. In addition to the Unit Head's
responsibilities outlined above, the heads of these units will:

    Ensure that a formal and systematic risk assessment exercise is
      undertaken during the process/product development stage with
      specific reference to environmental impact.

    Transfer technology to the pilot plant and main production
      through a properly documented process specification which will
      clearly define environmental impact and risks associated with
      processes, products, raw material and finished product handling,
      transport and storage.

    Ensure that treatment techniques are developed for any wastes
      generated as a result of the new product/process and is
      incorporated into the process specifications.


QUALITY POLICY:


Unileverconsiders quality as one of the principal strategic objectives to
guarantee its growth and leadership in the markets in which it
operates.


The company is committed to respond creatively and competitively to
the changing needs and aspirations of their consumers through
relentless pursuit of technological excellence, innovation and quality
management across their businesses, and offer superior quality



                                                                       37
products and services that are appropriate to the various price points
in the market as well as to their commitment to building shareholder
value.


The company recognises that its employees are the primary stheirce of
success in its operations and is committed to training and providing
them the necessary tools and techniques as well as empowering them
to ensure broad base compliance of this policy in the organisation at all
levels.


The company is committed to fulfill its legal and statutory obligations
and international standards of product safety and hygiene and will not
knowingly sell product     that is harmful     to consumers     or   their
belongings. It will institute systems and measures to monitor
compliance in order to meet its responsibilities to consumers.


The company will maintain an open communication channel with its
consumers and customers and will carefully monitor the feedback to
continuously improve its products and services and set quality
standards to fulfill them. The company is committed to extend its
quality standards to its contract manufacturers, key suppliers and
service providers and by entering into alliances with them, to jointly
improve the quality of its products and services. This policy is
applicable to production from its own facilities as well as to production
that is outsourced.


The company will periodically review this quality policy for its
effectiveness and consistency with business objectives.


The company delegates authority and responsibility for dissemination
and implementation of this policy to each Business and Unit Head.




                                                                        38
SAFETY AND HEALTH POLICY


Unileversupplies high quality goods and services to meet the daily
needs of consumers and customers. In doing so, the Company is
committed to exhibit the highest standards of corporate behavior
towards its consumers, employees, the societies and the environment
in which we operate.

Towards this, the Company recognizes its responsibility to ensure
safety and protection of health of its employees, contractors and
visitors in all its operating sites, which include manufacturing, sales
and distribution, research laboratories and offices during work and
work related travel.

This Policy document defines the vision, principles, aim, required
actions and scope of the policy application as well as the responsibility
for execution.

                                     Vision

          "Their vision is to be an injury free organization."

UNILEVER NEWS:”We will bring safety on top of mind for all
employees and will integrate it with all business processes. We will
realize   their   Vision   through   an   Integrated   Safety    Management
approach, which focuses on People, Processes, Systems, Technology
and Facilities, supported by demonstrated leadership and employee
commitment at all levels as the prime drivers for ensuring a safe and
healthy                         work                            environment”.




                                                                           39
SAFETY PRINCIPLES:

UNILEVER's Occupational Safety and Health Policy is based on and
supported by the following eight Principles.


These Principles have the same status as the Company's Code of
Business Principles:

    All injuries and occupational illnesses are preventable
    All operational exposures can be safeguarded
    Safety evaluation of all business processes is vital
    Working safely is a condition of employment
    Training all employees to work safely is essential
    Management audits are a must
    Employee involvement is essential
    All deficiencies must be reported and corrected promptly


      In order to facilitate operationalisation of the Safety Principles, a
      separate document has been prepared, which covers:
      a) Safety Principles
      b) Success Criteria
      c) Illustrative KPI




                                                                          40
 CONSUMER SATISFACTION

Indira is 20 years old, a tribal woman at Kondegaon village in Bastar
district. She is just back from the nearby jungles, collecting firewood.
After attending to her baby son, she will go to the village well to take a
quick wash. Yesterday her husband brought her a white soap, with pink
petals in it. Indira had requested him to buy one, for the festival later
this evening.

Indira is among millions of consumers in rural India who use Hindustan
Lever's products. She came to know about Lux through the TV set at the
community centre. It is not very costly, and also available nearby.

Home to over 700 million people, rural India comprises not only over
70% of India's billion-strong population, but also over 12% of the
world's population. The rural population already accounts for substantial
consumption of Fast Moving Consumer Goods and also consumer
durables. About 50% of the sales of soaps & detergents are generated
in rural India. Similarly, almost half the demand for black & white
television sets, pressure cookers, table fans, sewing machines also
comes from there.

COST MANAGEMENT:

But the potential is even larger, both in terms of consumption and
penetration. The fact that 70% of the population accounts for only 50%
of even relatively well-penetrated categories, like soaps & detergents,
indicates the enormous scope of consumption-led growth in these
categories. Therefore such categories will derive growth out of increased
usage. In categories, which are relatively less penetrated, like personal



                                                                      41
products, rural India offers an even bigger growth opportunity through
greater penetration and then consumption. For example only three out
of 10 consumers in rural markets use shampoo or skin care products.
Therefore growth in such categories will emerge, as more consumers
purchase these products, and then continue to use them regularly.

Hindustan Lever has taken many initiatives over the decades to create
markets in the rural hinterlands. By marketing relevant products, at
affordable prices.

A unique example is Hindustan Lever's Lifebuoy soap. In rural India,
health is of paramount importance, because indisposition is very directly
related to loss of income. Lifebuoy, whose core equity is health and
hygiene , has for decades now been synonymous with soap in rural
India.

At the same time, if products have to come up the order in the rural
purchase hierarchy, they have to be affordable. If rural India today
accounts for about half of detergents sales, it is because UNILEVER has
developed low-cost value-for-money branded products, like Wheel. The
company has also taken initiatives to create markets even for
apparently premium products, by offering them in pack sizes, like
sachets, whose unit prices are within the reach of rural consumers. For
example, initiated in the 1980s, sachets (Rs.2, Re.1, or 50 paise) today
constitute about 55% of Hindustan Lever's shampoo sales. With media
reach gradually increasing, rural consumers today, where the media has
its footprints, share the same aspirations with their urban counterparts.
UNILEVER has responded to the trend with low unit price packs of even
other products - Lux at Rs.5, Lifebuoy at Rs.2, Surf Excel sachet at
Rs.1.50, Pond's Talc at Rs.5, Pepsodent toothpaste at Rs. 5, Fair &
Lovely Skin Cream at Rs.5, Pond's Cold Cream at Rs.5, Brooke Bond



                                                                     42
Taaza tea at Rs.5.

OTHER MARKETING STRATEGIES:

For decades now, Hindustan Lever has also taken initiatives to
circumvent the limitation in communication channels, by innovatively
leveraging non-conventional media. Among them are wall paintings,
cinema vans, weekly markets (haat), fairs and festivals. Given the rural
consumer's fascination for cinema, the cinema vans show popular
movies, interspersed with products advertisements. Weekly markets,
fairs and festivals are parts and parcel of rural life. They give an
opportunity to address consumers, spread over many tiny hamlets, at
one location. The occasions are used to demonstrate product benefits
and also sell such products. Such demonstrations have played a
significant role in creating, for example, the detergents market in rural
India. In recent times, such demonstrations are being deployed to
illustrate how visible clean is not hygienic clean, and how using soap is
essential to prevent easily avoidable infections.
Communication through fairs and festivals are backed by direct
consumer contact. For example, in 1998-99, Hindustan Lever
implemented a major direct consumer contact, called Project Bharat,
which covered 2.2 crore homes. Each home was given a box, at a
special price of Rs.15, comprising a low unit price pack of shampoo,
talcum powder, toothpaste and skin cream, along with educational
leaflets and audio-visual demonstrations. The project has helped
eliminate barriers to trial, and has strengthened salience of both
particular categories and brands. Similarly in 2002, Hindustan Lever has
launched a similar large-scale direct contact, called Lifebuoy Swasthya
Chetana, which already covers 70 million people in 18,000 villages of 8
states. The project is intended at generating awareness about good
health and hygiene practices, and specifically how a simple habit of
washing hands is essential to maintaining good health. The initiative will
involve interaction with students and senior citizens, who act as change
agents.




                                                                      43
AVAILABILITY OF UNILEVER’S PRODUCT:
Generating awareness pays dividends only when steps are taken to
ensure constant availability of products. In rural India particularly,
availability   determines    volumes    and   market   share,    because   the
consumer usually purchases what is available at the outlet, influenced
very largely by the retailer.

Therefore,     over   the   decades,   Hindustan   Lever   has   progressively
strengthened its distribution reach in rural India, which today has about
33 lakh outlets. Direct rural distribution in Hindustan Lever began with
the coverage of villages adjacent to small towns. The company's
stockists in these towns were made to use their infrastructure to
distribute products to outlets in these villages. But this distribution
mode could only be extended to villages connected with motorable
roads, and it could cover about 25% of the rural population by 1995.

Therefore in 1998, Hindustan Lever launched Project Streamline to
further extend its distribution reach. Under this initiative, the company
identifies sub-stockists in a large village, connected by motorable road
to a small town. This sub-stockist in turn distributes the company's
products to outlets in adjacent smaller villages using transportation
suitable to interconnecting roads, like cycles, scooters or the age-old
bullock cart. Hindustan Lever is thus trying to circumvent the barrier of
motorable roads. As a result, the distribution network, as of now,
directly covers about 50,000 villages, reaching about 250 million
consumers. The company simultaneously uses the wholesale channel,
suitably incentivising them to distribute company products.

UNILEVER has in the recent past established a common distribution



                                                                           44
system in rural areas for all its products. Given the number of brands
and their packs the rural retailer usually requires, one UNILEVER
representative can take all the products from the company portfolio that
he needs. This common distribution system is now fully operational,
under one Regional Sales Manager exclusively dedicated to rural
markets of each region of the country.

Over time, Hindustan Lever will further strengthen its rural distribution
through mutually beneficial alliances with rural Self Help Groups (SHGs).
Over the last five years, financial institutions, NGOs and government
organisations are working closely to establish SHGs, whose objective is
to alleviate poverty through sustainable income-generating activities.
Since 2001, Hindustan Lever is implementing Project Shakti, whereby
SHGs are being offered the option of distributing relevant products of
the company as a sustainable income-generating activity. The model
hinges on a powerful win-win relationship; the SHG engages in an
activity which brings sustainable income, while Hindustan Lever gets an
interface to interact and transact with the rural consumer. UNILEVER's
vision for Project Shakti is to scale it up across the country by 2005,
creating about 25000 Shakti entrepreneurs, covering 100,000 villages,
and touching the lives of 100 million rural consumers. Begun with 50
groups in Nalgonda district of Andhra Pradesh, with the support of local
authorities, the project has been extended, as of now, to about 50,000
villages in 12 states. A typical Shakti entrepreneur conducts business of
around Rs.10,000 - Rs 15,000 per month, which gives her an income of
about Rs 700 - Rs.1000 per month on a sustainable basis. As most of
these women are from below the poverty line, and live in extremely
small villages (less than 2000 population), this earning is very
significant, and is almost double of their past household income. The full
benefit of Project Shakti will be realised after some years.


                                                                      45
UNILEVER DISTRIBUTION NETWORK



                        MANUFACTURING UNITS ALL ACROSS INDIA




 C&F 1       C&F 2      C&F 3          C&F 4           C&F 5       C&F 6            C&F 7




            STOCKISTS   STOCKISTS      STOCKISTS       STOCKISTS   STOCKISTS        STOCKISTS
STOCKISTS




                                    WHOLESALERS


                                       RETAILERS



                                       CUSTOMERS



This is the whole Distribution Chain of UNILEVER to cover the Rural
market. The company have remarkably worked upon to make the
supply chain from manufacturers to retailers simple with very few
number of mediators and jobbers. It has helped them to maintain the
transparency in the cycle and also have let them established a prompt
delivery process. The products are manufactured in the factories all
across India and then is supplied from there to the various Carriage and
Forwarding (C&F) units which are 5-10 per state depending on the area
they have to cover and are established by the company. These C&F
units then supply the products to the various Wholesalers confined to
their area only and according to the wholesalers demand. The
wholesalers then supply the products to the semi-wholesalers and the
retailers as per the volume of their order. Then the semi-wholesalers


                                                                               46
deliver the products to the retailers and customers.




              MANUFACTURER

STAGE 1-
                   C&F



In this stage the products reach to the Carriage and Forwarding unit
from various manufacturing units established all across India. The
volume of the delivery depends upon the quantity required/ordered by
the C&F unit. The depot sends the request of the volume of the products
to the Head Office, which then order the various factories to supply the
products to the mentioned depot. The supply is met within a week.
UNILEVER has 45 C&F’s with 7000 stockists and 2000+ suppliers and
associates to target the market.




                   C&F
STAGE 2-
               WHOLESALERS




The C&F then supplies the products according to the demand of various
wholesalers. Each of the depot cover a region assigned to them.
Each C&F acquires 5-7 trucks and hire 4-5 more trucks to supply
products everyday.
They work on the concept of advance payment by DD by the
wholesalers and deposit them in the bank which is transferred to the
head office.




                                                                     47
NATION WIDE MANUFACTURING:


80 factories, across India



The year was 1923. Lord Leverhulme, the legendary founder of Lever
Brothers, was visiting India. The nationalist sentiment in India was for
locally manufactured products. Lord Leverhulme, who believed that
what is good for a country is equally good for the company, responded
to that aspiration because he too shared that dream.

His dream ultimately was realised in 1934. In September 1934, after
more than a decade of discussions in London and in India, a Lever
factory was allowed to sprout on the land that had been reclaimed by
the Bombay Port Trust at Sewri. From here, a month later rolled out the
first cake of Sunlight soap to be manufactured in India. The same year,
Lever Brothers took over the Garden Reach Factory in Kolkata.
These two factories were the first in a manufacturing base, which today
literally dots the length and breadth of India. From Assam to Gujarat,
from Uttaranchal to Kerala.

Hindustan Lever's diverse product range is today manufactured in about
80 factories. In addition, the company outsources from 150 other units.
The operations involve 2,000 suppliers and associates.




DEVELOPING BACKWARD AREAS
Several UNILEVER factories are situated in backward areas. The


                                                                    48
company     has    consciously    responded      to   the      national    policy    of
development of backward areas by setting up manufacturing units in
these places, which provide several direct and indirect employment
opportunities     for   these   areas,    and    leads    to    general     economic
development of these regions through industrialisation. In fact, all major
investments of UNILEVER, in recent years, have been either in A-
Category backward areas or No-Industry Districts. These include
factories   in   Khamgaon       and   Yavatmal    (Maharashtra),          Chhindwara
(Madhya Pradesh), Orai, Sumerpur and Khalilabad (Uttar Pradesh),
Haldia (West Bengal), Silvassa (Dadra & Nagar Haveli), Pondicherry,
Goa, Doom Dooma (Assam), Haridwar (Uttaranchal) and Barotiwala
(Himachal Pradesh). Since 2001 itself, UNILEVER has set up nine new
factories in backward areas.

Equally, UNILEVER has an enviable track record in taking over sick
enterprises, in response to requests from Government, and converting
them into viable operations. The company's units at Mangalore and
Rajpura all bear testimony to this achievement. In the process,
UNILEVER has saved precious jobs and developed local economies.
UNILEVER's manufacturing facilities, like the Khamgaon soap plant and
the Sumerpur detergent bar unit, are recognised as among the best in
the Unilever world.

UNILEVER     has    adopted     Total    Productive      Maintenance      (TPM)     for
achieving manufacturing excellence since 1994. As on date, TPM is in
different stages of implementation in 28 factories. Four UNILEVER
factories have already received the TPM Consistency Award, and 14
factories have been awarded with the TPM Excellence Award.



MARKETING NEEDS EVERY WHERE



                                                                                    49
How do you ensure that Mr. Ramesh in Kanyakumari gets his Lifebuoy
soap and Mrs. Kulkarni in Jammu gets to know how Bru coffee tastes
even before she has bought it? Well, you need to have a cutting edge
distribution network in place.

Hindustan Lever's distribution network is recognised as one of its key
strengths. Its focus is not only to enable easy access to our brands,
but also to touch consumers with a three-way convergence - of
product availability, brand communication, and higher levels of brand
experience.

UNILEVER's      products,   manufactured   across   the   country,   are
distributed through a network of about 7,000 redistribution stockists
covering about one million retail outlets. The distribution network
directly covers the entire urban population.

The general trade comprises grocery stores, chemists, wholesale,
kiosks and general stores. Hindustan Lever services each with a tailor-
made mix of services. The emphasis is equally on using stores for
direct contact with consumers, as much as is possible through in-store
facilitators.


AT THE SUPERMARKETS

Self-service stores and supermarkets are fast emerging in metros and
large towns. To service modern retailing outlets in the metros,
UNILEVER has set up a full-scale sales organisation, exclusively for this
channel. The business system delivers excellent customer service,
while driving growth for the company and the store. At the same time,
innovative marketing initiatives are taken to provide consumers with
experience of our brands at the store itself, through product tests and


                                                                       50
in-store                           sampling.



IN THE VILLAGES

UNILEVER has also revamped its sales organisation in the rural
markets to fully meet the emerging needs and increased purchasing
power of the rural population. The company has brought all markets
with populations of below 50,000 under one rural sales organisation.
The   team   comprises   an   exclusive   sales   force   and   exclusive
redistribution stockists, under the charge of dedicated managers. The
team focuses on building superior availability, while enabling brand
building in the deepest interiors. UNILEVER's distribution network in
rural India already directly covers about 50,000 villages, reaching
about 250 million consumers, through about 6000 sub-stockists.

HARNESSING INFORMATION TECHNOLOGY

An IT-powered system has been implemented to supply stocks to
redistribution stockists on a continuous replenishment basis. The
objective is to catalyse UNILEVER's growth by ensuring that the right
product is available at the right place in right quantities, in the most
cost-effective manner. For this, stockists have been connected with
the company through an Internet-based network, called RSNet, for
online interaction on orders, despatches, information sharing and
monitoring. RS Net covers about 80% of the company's turnover.
Today, the sales system gets to know every day what UNILEVER
stockists have sold to almost a million outlets across the country. RS
Net is part of Project Leap, UNILEVER's end-to-end supply chain, which
also includes a back-end system connecting suppliers, all company




                                                                       51
sites   and   stretching   right   upto   stockists.




                                                       52
SHAKTI - CHANGING LIVES IN RURAL INDIA

Shakti is UNILEVER's rural initiative, which targets small villages with
population of less than 2000 people or less. It seeks to empower
underprivileged    rural      women   by   providing   income-generating
opportunities, health and hygiene education through the Shakti Vani
programme, and creating access to relevant information through the
iShakti community portal.

In general, rural women in India are underprivileged and need a
sustainable source of income. NGOs, governmental bodies and other
institutions have been working to improve the status of rural women.
Shakti is a pioneering effort in creating livelihoods for rural women,
organised in Self-Help Groups (SHGs), and improving living standards
in rural India. Shakti provides critically needed additional income to
these women and their families, by equipping and training them to
become an extended arm of the company's operation.

Started in 2001, Shakti has already been extended to about 80,000
villages in 15 states - Andhra Pradesh, Karnataka, Tamilnadu,
Maharashtra, Gujarat, Madhya Pradesh, Chattisgarh, Uttar Pradesh,
Rajasthan, Punjab, Haryana, West Bengal, Orissa, Bihar & Jharkhand.
The respective state governments and several NGOs are actively
involved in the initiative.

Shakti already has about 25,000 women entrepreneurs in its fold. A
typical Shakti entrepreneur earns a sustainable income of about
Rs.700 -Rs.1,000 per month, which is double their average household
income. Shakti is thus creating opportunities for rural women to live in
improved conditions and with dignity, while improving the overall



                                                                      53
standard of living in their families. In addition, it involves health and
hygiene programmes, which help to improve the standard of living of
the rural community. Shakti's ambit already covers about 15 million
rural population. Plans are also being drawn up to bring in partners
involved in agriculture, health, insurance and education to catalyze
overall rural development.

UNILEVER's vision for Shakti is to scale it up across the country,
covering 100,000 villages and touching the lives of 100 million rural
consumers by 2005.

Shakti Vani is a social communication programme. Women, trained in
health and hygiene issues, address village communities through
meetings at schools, village baithaks, SHG meetings and other social
fora. In 204, Shakti Vani has covered 10,000 villages in Madhya
Pradesh, Chattisgarh and Karnataka. The vision is to cover 80,000
villages in 2005.

iShakti, the Internet-based rural information service, has been
launched in Andhra Pradesh, in association with the Andhra Pradesh
Government's Rajiv Internet Village Programme. The service is now
available in Nalgonda, Vishakapatnam, West Godavari and East
Godavari districts. iShakti has been developed to provide information
and services to meet rural needs in medical health and hygiene,
agriculture, animal husbandry, education, vocational training and
employment and women's empowerment. The vision is to have 3,500
kiosks across the state by 2005.




                                                                       54
PIONEERING NEW CHANNELS
Hindustan Lever is simultaneously creating new channels, designed on
the same principle of holistic contact with consumers.

Project Shakti, UNILEVER's partnership with Self Help Groups of rural
women, is becoming an extended arm of the company's operation in
rural hinterlands. Started in 2001, Project Shakti has already been
extended to about 50,000 villages in 12 states - Andhra Pradesh,
Karnataka, Gujarat, Madhya Pradesh, Tamil Nadu, Chattisgarh, Uttar
Pradesh, Orissa, Punjab, Rajasthan, Maharashtra and West Bengal.
The respective state governments and several NGOs are actively
involved in the initiative. The SHGs have chosen to partner with
UNILEVER as a business venture, armed with training from UNILEVER
and support from government agencies concerned and NGOs.

Hindustan Lever Network (HLN) is the company's arm in the Direct
Selling channel, one of the fastest growing in India today. It already
has about 3.5 lakh consultants - all independent entrepreneurs,
trained and guided by HLN's expert managers. HLN has already spread
to over 1500 towns and cities, covering 80% of the urban population,
backed by 42 offices and 240 service centres across the country. It
presents a range of customised offerings in Home & Personal Care and
Foods.

Out-of-Home consumption of products and services is a growing
opportunity in India, as elsewhere in the world. Hindustan Lever is
already the largest player in the hot beverages out-of-home segment,
with over 15000 tea and coffee vending points. The company is
expanding the network aggressively, in the education, entertainment,



                                                                    55
leisure and travel segments. UNILEVER's allaince with Pepsi will
significantly strengthen this channel.

Health & Beauty Services are Hindustan Lever's simultaneous foray to
meet the increasing consumer need for such products and services.
Lakme Salons provide specialised beauty services and solutions, under
the recognised authority of the Lakme brand. The Ayush Therapy
Centres provide easy access to authentic Ayurvedic treatments and
products.

Hindustan Lever, which once pioneered distribution in India, is today
reinventing distribution - creating new channels, and redefining the
way current channels are serviced. In the process it is converging
product availability, with brand communication and brand experience.


NOVEL PRODUCT NEW PROCESS

Hindustan Lever's mission is to meet everyday needs for nutrition,
hygiene, and personal care, with brands that help people feel good,
look   good   and   get more    out   of   life.   UNILEVER's   research   &
development base, one of the largest in Indian industry, helps achieve
this mission, with novel products and new processes. The company
has over 380 patents, demonstrating its leading edge in consumer-
relevant R&D.


The Hindustan Lever Research Centre (HLRC), with facilities in Mumbai
and Bangalore, and global technology centres in India have over 200
highly qualified scientists and technologists, many with post-doctoral
experience acquired in the US and Europe. Set up in 1958, HLRC's aim
is to develop new products and processes, improving benefits and
quality of existing products, and optimal use of resources.


                                                                           56
Major innovations have taken place, down the decades, in every
category in which UNILEVER is present. From Home Care to Personal
care, Beverages to Foods.


BETTER CLEANING, LESSER WATER CONSUMPTION
Consider for example, UNILEVER's development of a water-saving
technology for its detergents. One of the most severe problems that
India faces today is shortage of water. Water scarcity affects one in
every three Indians. In a typical Indian home, at least 20% of the
water consumed goes behind washing of clothes. UNILEVER decided
that it would be of immense benefit to an Indian household, if a
technology could be developed, which would help reduce water
consumed in washing of clothes. UNILEVER's scientists have innovated
a path-breaking technology - it reduces water consumption and time
taken for rinsing by 50%. The technology has already been introduced.


WORLD'S MOST ADVANCED WATER PURIFIER
People in cities and towns spend enormous amounts, either in fuel or
devices, to ensure safe drinking water. UNILEVER's scientists have
developed a breakthrough device, called "Pureit", which purifies water
as safe as boiled water, providing 100% protection from all water-
borne diseases; it also removes pesticides that may be present in
drinking water. Its operation does not require electricity, running tap
water and plumbing or expensive maintenance. It thus provides water
at a cost of just Re.1 for every six litres - or less than 20 paise a litre.


IODINE IN SALT - THE VITAL INGREDIENT
Iodine, it is well-known, is important for the mental development of
young children. Iodised salt is a well-accepted mode of ensuring
appropriate iodine intake. Yet Iodine added to salt is lost in transport,


                                                                           57
storage as well as in the process of cooking. UNILEVER scientists have
developed a patented breakthrough technology to stabilise iodine in
salt, following work on the stability of iodine under Indian conditions of
storage and cooking. The technology has made it possible to actually
realise the purpose of iodised salt - that people get appropriate iodine
intake through the food they eat.


TECHNOLOGY OF SKIN LIGHTENING
Research in the biology of skin pigmentation has led to the formulation
of a product like Fair & Lovely Skin Cream and Lotion. The product has
been periodically updated through new patented actives. It has now
become a global success through exports to over 30 countries. The
product is equally used by the local population of these countries,
apart from those of Indian origin.


UNILEVER has equally developed new processes.
In-house machine development
The company has the capability to design and manufacture machines
in-house. This enables the company to set up plants at half the cost of
others. Such technological developments have also led to significant
improvement in productivity.


ENERGY CONSERVATION
In the past, one of the most significant breakthroughs of UNILEVER's
research initiative has been the development of a technology to use
non-conventional forest seed oils for soap-making which, since the
1970s, has helped save around $1.2 billion in foreign exchange.
UNILEVER had received the Government of India's prestigious award
for import substitution. Development of Structurant Technology for



                                                                        58
soap manufacturing also helped save costly conventional oils without
any compromise on product performance and quality. The latest
technology to produce Distilled Fatty Acid for soap making and the
resultant plant capacity expansion has drastically brought down
specific energy consumption while improving distillation yields. The
evolution of continuous soap processing technology has also reduced
energy consumption.
UNILEVER believes that technology is critical to delight consumers.
Creative   application   of   technology   has   made   Hindustan   Lever
successful in launching products and services, which raise the quality
of life.


HELPING HANDS:

UNILEVER     COMMITS      Rs.   8   CRORES   FOR   IMMEDIATE    RELIEF,
REHABILITATION TO TSUNAMI-HIT COMMUNITIES


Unilevertoday announced to commit, a total outlay of Rs.8 crores for
immediate relief and helping people to rehabilitate themselves so that
they can resume their livelihood, in the tsunami-hit areas of
Pondicherry, Tamil Nadu and Kerala. Of this, Rs.5 crores (absolute
value terms) is being utilized for distribution of the Company's
nutritional & personal hygiene products for immediate relief to the
needy. Another Rs.3 crores will be raised partly by contributions from
company employees and the balance contribution from the Company
to be used in collaboration with NGOs working with the community to
provide the people, notably fishermen, with means of livelihood and
help them back on their feet.

Since December 26, employees of UNILEVER factories and offices in
Pondicherry, Tamil Nadu and Kerala have been providing necessary


                                                                       59
relief to the tsunami-hit people. The relief operations include,
distribution of bread and biscuits to over 2000 families in Pondicherry,
12,000 cooked meals for families in Chennai, Nagapattinam, Cuddalore
and Andamans. Over 12,000 dry relief packs, comprising of Company's
dry rations and personal hygiene products have already been
distributed.


UNILEVER's employees are donating a day's salary, matched equally
by the Company for exclusive use in rehabilitation.

The biggest concern is, that people/ fishermen have lost their means
of livelihood. UNILEVER plans to focus its rehabilitation efforts to
restore their means of livelihood so that the local communities can
quickly get back to their lives at the earliest.

UNILEVER has always been a front runner in its call for national duty
and caring for the community. Its employees not only donate
generously, but volunteer to take part in relief operations by
committing their time and physical effort. This is in line with our
corporate value of “care” and our CSR mission which has become an
integral part in our way of doing business.

Earlier during the Gujarat earthquake, UNILEVER had adopted and
reconstructed a new village, Yashodadham, in Bhachau Taluka of
Kutch district. Yashodadham, spread over 25 acres, comprises 289
homes, school building, an exclusive playground for children and a
multi-purpose community centre, including an anganwadi (creche),
health centre, community room and panchayat office, an underground
reservoir and an overhead tank for water. All the dwelling units have
electricity, and piped water and are now fully occupied.



                                                                      60
UNILEVER is India's largest Fast Moving Consumer Goods company,
touching the lives of two out of three Indians. UNILEVER’s mission is to
“add vitality to life" through its presence in over 20 distinct categories
in Home & Personal Care Products and Foods & Beverages. The
company meets everyday needs for nutrition, hygiene, and personal
care, with brands that help people feel good, look good and get more
out of life.

SPECIAL EDUCATION & REHABILITATION

Under      the    Happy   Homes    initiative,   UNILEVER     supports     special
education and rehabilitation of children with challenges.

ASHA DAAN:

The initiative began in 1976, when UNILEVER supported Mother Teresa
and the Missionaries of Charity to set up Asha Daan, a home in
Mumbai for abandoned, challenged children, and the destitute.
Subsequently, Asha Daan has also become a home to the HIV-positive.
The objective in supporting Asha Daan was and continues to be to
share the organsation's prosperity in supporting the Mother's mission
of serving the "poorest of the poor". Asha Daan has been set up on a
72,500-square feet plot belonging to UNILEVER, in the heart of
Mumbai city. UNILEVER bears the capital and revenue expenses for
maintenance, upkeep and security of the premises. The destitute and
the HIV-positive are provided with food, shelter and medication for the
last few days of their lives. The needs of the abandoned challenged
children    are    also   met   through   special   classes   of   basic    skills,
physiotherapy and, if possible, corrective surgery. At any point of time,
it takes care of over 300 infants, destitute men and women and HIV-
positive patients.


                                                                                61
Over the years, UNILEVER has opened schools for challenged children
with a sharper objective of supporting families of such children,
helping the children become self-reliant by learning appropriate skills
to be productive members of the household.

ANKUR:
In 1993, UNILEVER's Doom Dooma Plantation Division set up Ankur, a
centre for special education of challenged children. The centre takes
care of children with challenges, aged between 5 and 15 years. Ankur
provides educational, vocational and recreational activities to over 35
children with a range of challenges, including sight or hearing
impairment, polio related disabilities, cerebral palsy and severe
learning difficulties. These physically and mentally challenged children
are taught skills, such as cookery, painting, embroidery, bamboo
crafts, weaving, stitching, etc depending on their aptitudes. The centre
has rehabilitated 10 children, including self-employment for 6 children
by providing them with shops, and 3 girls have been provided
employment as creche attendants. It has also moved to normal
schools 18 children. Since inception it has covered about 80 children.
Ankur received the Lawrie Group Worldaware Award for Social
Progress   in   1999    from   HRH    Princess    Royal   in   London.
KAPPAGAM:
Encouraged by Ankur's success, Kappagam ("shelter"), the second
centre for special education of challenged children, was set up in 1998
on UNILEVER Plantations in South India. It has 17 children. The focus
of Kappagam is the same as that of Ankur. The centre has 17 children,
being taught self-help skills, useful vocational activities like making of
paper covers, greeting cards, wrapping papers, fancy stationery,
napkins, brooms made out of coconut leaves, candles, and also some
home care products. About 12 of the children have become relatively


                                                                         62
self-reliant by earning through crafts learnt at the centre. Since
inception, it has covered about 28 children.

ANBAGAM:
Yet another day care center, Anbagam ("shelter of love"), has been
started in 2003 also in the South India Plantations. It takes care of 11
children. Besides medical care and meals, they too are being taught
skills such that they can become self-reliant and elementary studies.
Over 20,000 individuals have benefitted from the Happy Homes
initiatives since inception. UNILEVER is wholeheartedly involved with
all four centres and will continue to be involved in the future.




                                                                      63
UNILEVER–
            DECEMBER QUARTER 2005 RESULTS


  •   Total Sales grow by 14.4%; FMCG Sales growth at 15.8%
  •   HPC   and Foods grow by 17% and        9% respectively; Broad
      based growth across categories
  •   PBIT grows 13.5%; Net Profit increases by 56%
  •   EPS for 2005 grows 17.6%; Final Dividend Rs 2.50 per share of
      Re 1/- each; Total Dividend Rs 5.00 per share for 2005


Unileverannounced its results for December Quarter 2005. Growth
momentum achieved in the last three quarters has been sustained
with total sales growing by 14.4%. Domestic FMCG sales were higher
by 15.8% with both Home and Personal Care (HPC) and Foods
performing well.


HPC business grew by 17.3% driven by strong performance in all
categories. Significant sales growth was achieved in the highly
competitive categories of Laundry and Shampoo. Soaps recorded good
growth, with Lux growing handsomely reflecting in market share gains.
All the brands in Skin category maintained their strong performance
leading to a double digit growth for the category. Consumer relevant
innovations continue to drive off-take and key innovations during the
quarter include the re-launch of “Thick and Strong” Sunsilk Pink, Lux
variants for the 75-year celebrations, and the national launch of
“Jasmine Fresh” Rin Advanced Powder.




                                                                   64
In Foods business, Tea achieved a modest growth despite a declining
market and falling commodity prices; Coffee continued to perform
well. Processed Foods business grew strongly, albeit on a low base.
The Icecream business also achieved a 33% increase in sales, led by
the impulse category. Relaunch of Knorr soup with a superior mix and
introduction of new variants was the key Foods innovation during the
quarter.


Profit before Interest and Taxes (PBIT) increased by 13.5% after
absorbing a 50% higher spend in Advertising and Promotions. Higher
crude oil price led cost pressures continued, particularly in Laundry
category,     but   were   mitigated     by   aggressive   cost   effectiveness
programs. Profit after tax (PAT) grew by 22.7% due to a lower
effective tax rate and Net profit, including the impact of exceptional
items was higher by 56%.


The total sales were 11.4% higher than in the previous year, with
broad based growth across categories leading to both HPC and Foods
businesses growing by 14% and 8%, respectively. Judicious price
increases coupled with robust cost saving initiatives partly neutralised
the impact of both cost escalations, particularly in the Laundry
category, and the higher investments behind brands. Consequently,
PBIT increased by 1.1%. A lower tax charge for the year resulted in a
PAT growth of 12.9%. Net Profit and Earnings Per Share at Rs 6.40,
grew by 17.6%.


Mr Harish Manwani, Chairman commented: “We have sustained the
growth momentum in December quarter and it continues to be broad
based      across   HPC    and   Foods    categories,   particularly,   in   the



                                                                              65
competitive categories of Laundry and Shampoo. This was driven by
higher investment behind our brands with exciting innovations,
excellent activation, new initiatives in Customer Management and with
significantly higher levels of A&P spends.        The double digit sales
growth of over 11% for the year 2005 has been achieved after a gap
of six years.


Our strategic priority remains unchanged.          We will continue to
leverage our focused portfolio of powerful brands to sustain market
leadership and grow our market position across strategic brands and
categories.     In a competitive landscape, we shall continue to deliver
consumer value and invest behind our brands.          We recognize the
challenge of inflationary cost pressures driven by crude oil prices and,
in the competitive context, achieving cost leadership across the
extended supply chain continues to be a key priority.”



DIVIDEND

The Board of Directors at their meeting held on February 14th, 2006
has proposed a final dividend of Rs 2.50 per share of Re 1 each,
subject to the approval of the shareholders at the annual general
meeting. This along with the interim dividend of Rs 2.50 per share
amounts to a total dividend of Rs 5.00 per share for the year 2005.


UNILEVER is India's largest Fast Moving Consumer Goods company,
touching the lives of two out of three Indians.    UNILEVER’s mission is
to “add vitality to life” through its presence in over 20 distinct
categories in Home & Personal Care Products and Foods & Beverages.
The company meets everyday needs for nutrition, hygiene, and




                                                                      66
personal care, with brands that help people feel good, look good and
get more out of life.




        UNILEVER TRANSFERS TEA ESTATES INDIA TO
           MAXWELL GOLDEN TEA PRIVATE LIMITED


Unileverhas transferred its entire shareholding in its 100% subsidiary
Tea Estates India Limited (TEIL) to Maxwell Golden Tea Private Limited
(MGT), a Woodbriar Group company on March 1, 2006. TEIL owns 8
tea estates and 6 factories for processing tea in the high-yielding belt
of Tamilnadu with an average annual output of approx. 10,500 metric
tons.


Woodbriar Group has interests in plantations, insurance services and
real estate. The Group’s gardens are spread across the premium tea
growing regions in Tamilnadu and Kerala. UNILEVER management
believes that the proposed transfer to Woodbriar Group is in the best
interest of the tea plantation business and all its stakeholders. Existing
terms and conditions of services of all TEIL employees will be fully
protected in accordance with applicable laws and terms of their
employment.


The acquisition of TEIL by Woodbriar Group will provide scale and
bring in synergy benefits to Woodbriar Group, as a large portion of
TEIL gardens are contiguous to the existing tea gardens of Woodbriar
Group. Canara Bank, Madurai Circle has funded the debt component to
Woodbriar Group for this acquisition.




                                                                        67
With this disposal of shareholding in TEIL, UNILEVER has completed its
exit from its tea plantations business both in South India and Assam.
It may be recalled that UNILEVER had sold its interests in Rossell
Industries Limited and Doom Dooma Tea Company Limited in Assam
during the last 12 months.


DSP Merrill Lynch Limited acted as financial advisor to Unilever.


ABOUT UNILEVER:
UNILEVER is India's largest Fast Moving Consumer Goods Company,
touching the lives of two out of three Indians. UNILEVER's mission is to
"add vitality to life" through its presence in over 20 distinct categories
in Home & Personal Care Products and Foods & Beverages. The
company meets everyday needs for nutrition, hygiene, and personal
care, with brands that help people feel good, look good and get more
out of life. For more information visit www.Unilever.com




                                                                        68
COMPETITORS

THE PROCTER & GAMBLE COMPANY COMPANY PROFILE

The Procter & Gamble Company (P&G) is a brand behemoth. The
world's #1 maker of household products courts market share and
billion-dollar brands. P&G's products fall into three categories:
global beauty care; global health, baby, and family care; and
global household care. It also makes pet food and water filters
and produces soap operas (As the World Turns). More than 20 of
P&G's   brands   are   billion-dollar   sellers   (including   Actonel,
Always/Whisper, Bounty, Charmin, Crest, Downy/Lenor, Folgers,
Iams, Olay, Pampers, Pantene, Pringles, Tide, and Wella).
Acquisitive P&G bought Clairol in 2001 and a majority of Wella in
2003. Its purchase of Gillette in late 2005 was its biggest buy in
company history.

FINANCIAL HIGHLIGHTS
Fiscal Year End:                           June
Revenue (2007):                            56741.00 M
Revenue Growth (1 yr):                     10.40%
Employees (2007):                          110,000
Employee Growth (1 yr):                    0.00%


           RESEARCH METHODOLOGY




                                                                69
The section includes the overall research design, the sampling
procedure, the data collection method, the field method, and analysis
and procedure.
Research design:-
For this research project exploratory method is using


DATA COLLECTION METHOD:-

The data collect for the research can be classified as primary data and
secondary data.

Primary data is by visiting existing customer and expected customer of
Unilever. And making them fill up the questionnaire
Secondary data is from internet, books, magazine etc.



RESEARCH INSTRUMENT

The instrument use for data collection is structured questionnaire.
Question is open and close ended depending upon the information that
needed to be elicited. I am also using the scaling technique to assess
the attitude of the customer.
Sampling plan:-
Keeping all the constrains in mind a sample size of 100 people .The
sampling procedure is systematic sampling




                                                                     70
FUTURE SCOPE

The Indian FMCG market currently appears to be at a crossroads, and
UNILEVER        are attempting to change customer perceptions of their
brands and where specific buying motivations appear to be replacing
generalities.

 This meanwhile, is quite unlike the west where buyers consider
aesthetics, comfort and safety, not necessarily in that order, before
finalising a purchase. “It’s smarter to think about emotions and
attitudes, if marketers are to do a better job of marrying what a
UNILEVER offers to the consumer’s image of the offerings. Another
important outcome of the research is the believability of the claims.
Most of the claims are realistic and easy to understand. Most of the
people don’t understand the quality claims by UNILEVER.

The mindset of the Indian consumer is such that he is delighted if he
buys a pen a little cheaper than his neighbour. Things are, however,
slowly changing and customers at the upper end of the market are
now ready to pay more for more. I hope that this approach will soon
enter the new era, maybe not with the same intensity .

       “Success will largely be determined to the extent a company
can differentiate itself in terms of intangibles that go with a Product”.
Thus, success could well hinge on the best of bundle of services that
UNILEVER provides.UNILEVER grew from zero to the 2,268 Million $,
mark and the number One FMCG company in India this year. Looking
at the present scenario it can be said that though there is lot of
competition in the market but UNILEVER is picking up well. The




                                                                       71
landmark achievement comes in 74 years in India after clinching its
first overseas sale.




FINDINGS, DATA ANALYSIS AND CONCLUSIONS
   WHEN COMPARED WITH PROCTER AND
              GAMBLE LTD.


Findings

On the basis of research, we found that there is a nominal difference in
the efficiency of Unilever. vis-à-vis Procter and Gamble Ltd. I have
reached to this conclusion on the basis of following findings. They are
as follows.



PRODUCT LINE

Unilever

UNILEVER Home & Personnel Care

    > In personal Wash they have Lux , Lifebuoy, Liril, Hamam,
Breeze, Dove, Pears and

     Rexona .

    In Laundry they have Surf Excel, Rin and Wheel.
    In skin care their brands are Fair N Lovely and Ponds.

    In hair Care they have Sunsilk Naturals and Clinic All clear.

    In Oral Care their brands are Pepsodent and Close-up.

    In Deodorants they have Axe and Rexona.

    In Colour Cosmetics they have Lakeme.


                                                                      72
 In Ayurvedic Personal And Health Care they have Ayush.




Foods

    In tea they have the brand name brook bond and lipton.
    In coffee they have bru.

    In foods they have kissan and kinnor annpuran.

    In ice creams they have the kwality walls.



Water

    Unilever has launched pueit, the most advanced in home water

    purifier in the world.



Procter and Gamble P&G Hygiene and Health care ltd. markets
several leading brands: Whisper sanitary napkins in the Feminine
Hygiene category; Health care products such as Vicks VapoRub, vicks
action 500, Vicks Cough Drops, Vicks Inhaler; skin care and cosmetic
products viz. Old Spice.

 P&G Home Products Ltd. markets several leading brands. In Fabric
Care P&G has two of its world leading detergents Tide and Ariel, in
Hair Care they have Pantene Pro V, Head & Shoulders and Rejoice. In
Baby Care they have Pampers.

CONCLUSION-             As Unilever has more brands in its basket then
Procter and gamble so it is more close to common man and touching
his or her daily life in a more comprehensive manner.




                                                                    73
DEALERS

While choosing the dealers UNILEVER mainly emphasizes on the
‘market potential of that area, dealer’s financial position, and dealers
back ground (previous business), present business, goodwill and risk
taking capabilities ,by the good responsibility of the dealer.

PROCTER AND GAMBLE

There is no difference as such in the process of selection of dealers in
Procter and Gamble also. Like UNILEVER, P&G also considers dealer’s
financial position; present business, goodwill and risk taking
capabilities.

Finally, Dealers of UNILEVER are satisfied by the companies support in
there sales because the company provides them with various schemes
and discounts, whereas satisfaction of P&G dealers lies in good
promotional activities, advertisement and the flexibility that the
company provides them. According to the senior officials of P&G it was
found that it’s a volume based company, hence all the above stated
parameters helps the dealer to attract more and more customers.

                   MODE OF TRANSPORTATION

Unilever; UNILEVER uses modified trucks and rails to deliver the
products from various production sites to the dealers. They are using
new state of the art technology so that they can even track every
single bottle of shampoo. Transportation cost is shared by UNILEVER
and the dealer.

PROCTER AND GAMBLE

P&G is also using road and railway transportation system to deliver
product from various production sites to the dealers. They are also
using latest Information Technology to track there consignment whose
backend is managed by infosys. Each dealer has to keep the Good


                                                                      74
Receipt Note (GRN) number and report of the whole items of delivered
products. Transportation cost is paid by P&G.

In the end, both P&G and UNILEVER uses advanced tracking
technology to track the goods and both companies use railways and
roadways for transporting there products. In UNILEVER transportation
cost is shared by UNILEVER and the dealer, where as at P&G,
transportation cost is paid by P&G.

FLEXIBILITY

Unilever As far as flexibility is concerned; our group found that
UNILEVER provides more flexibility in terms of delivery of produce.
UNILEVER has there own warehouses in every state and if the dealer
orders more , he is supplied with the products in time.

As far as flexibility is concerned; our group found that P&G does not
provides more flexibility in terms of delivery of produce and in taking
order from dealers.

Our group has found that Dealers of UNILEVER are more satisfied than
the dealers of P&G and therefore UNILEVER is a step ahead in terms of
flexibility of placing orders and accepting orders from the dealers.

DISTRIBUTION CHANNEL STRUCTURE

Unilever- Unilever channel structures consist of whole seller, mass
retailers, rural and modern trade. Their new approach to distribution is
holistic and seeks a three way convergence of product availability
brand communication and brand experience. They are reinventing
distribution—creating new channels and redefining the way current
channels are serviced. They are building new capabilities in training
the large number of people involved in these initiatives.

Procter and gamble’s channel structure also have whole sellers, mass
retailers. They are revamping the company’s distribution system using
efficient consumer response {E C R} principles. The new distribution
system has given the company considerable cost and process
efficiencies while significantly availability and visibility of the
company’s product in the stores.

Our group has found that Unilever has more effective and efficient
distribution network as compared to P & G, which increases the



                                                                      75
availability and presence of UNILEVER product. UNILEVER is also given
emphasis on penetrating the rural market as well.




  DEALING WITH UNSOLD AND DAMAGED MERCHANDISE


Unilever-It depends on the condition and type of the product. If
company feels that it is not the fault of the dealer then company would
return it, unsold products are mostly taken back by UNILEVER

P & G replaces the damaged product with the new one, it means that
the damaged product are replaced by new product.

Our group has found that both the companies take back the unsold
product however P & G is more flexible in returning the damaged
product as compared to the UNILEVER. Hence P & G is more flexible
here.

PERFORMANCE APPRAISAL SYSTEM

UNILEVER - The performance appraisal system in Unilever is done
under the supervisory of the Appraisal supervisor. The supervisor keep
track of the performance of the employees         and based on their
performance he choose the right method of performance appraisal.the
main method of performance appraisal that have been adopted by
Unilever are 360 degree appraisal and supervisory appraisal
methods.it is done as an early exercise and performance appraisal
parameter is the past performance of the employees.

The performance appraisal system in Procter and gamble is also done
under the supervisory officer and almost same method are used as in
the Unilever.

the conclusion that our group has found that there is hardly any
differences is the performance appraisal methods in both the
companies .both the companies are taking almost the same measures
and same parameters for performance appraisal , however both the


                                                                     76
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shriram general insurance

  • 1. RESEARCH REPORT ON “A STUDY A DISTRIBUTION CHANNEL OF UNILEAVER IN RURAL MARKET” Submitted In Partial Fulfillment for the Award Of Degree of MASTER OF BUSINESS ADMINISTRATION (U.P. Technical University, Lucknow) SUBMITTED TO: SUBMITTED BY- MR. J.N. GIRI SUNNY KUMAR (FACULTY, MIMT) Roll No. : 0615270112 Mangalmay Institute of Management & Technology Website: www.mangalmay.org, E-Mail.: info@mangalmay.org, GREATER NOIDA
  • 2. ACKNOWLEDGEMENT “Words express everything Mouth Co-ordinates, When it comes to gratitude, Heart comes to play.” There is always a sense of gratitude which one expresses to other people for their helpful and needy service they render during phases of life. I too would like to do the same as I really wish to express my gratitude to those who have been helpful to me in getting this project completed. In representing this report I would like to express my gratitude to Mr. J.N. Giri. Center for management technology for providing me with his able guidance and inspiration for the completion of research report I am also indebted to all the faculty members of center for management technology for providing consistent encouragement and congenial atmosphere to complete the research report SUNNY KUMAR 2
  • 3. TABLE OF CONTENTS  INTRODUCTION  COMPANY PROFILE  PRESENT MARKET STRATEGY  RESEARCH METHODOLOGY  FINDINGS AND CONCLUSIONS  SUGGESTIONS  QUESTIONNAIRE  LIMITATIONS  BIBLIOGRAPHY  ANNEXURE 3
  • 4. EXECUTIVE SUMMARY Unilever 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. They endow the company with a scale of combined volumes of about 4 million units and sales of Rs.10, 000 crores. UNILEVER 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. Hence, research aims is that to study the existing marketing practices, emerging marketing plans and understanding companies business strategy with its profile. The main recommendations have been made on the addressing of the advertising message to the customers. An attempt has been made to formulate the communication in a way to build it on a platform of the basic need for buying UNILEVER products. In another recommendation the suggestions towards better dealer interest in UNILEVER products has been given a chance. The research is based primarily on primary data; however few references to industry figures from secondary data have been made. Data has been collected through in depth interviews and administered questionnaires. The study has given the researchers an inside of the Consumer durable Industry and an opportunity to use the theoretical knowledge in live project. 4
  • 5. INTRODUCTION HISTORY Over 100 years' link with India. In the summer of 1888, visitors to the Kolkata harbor & noticed crates full of Sunlight soap bars, embossed with the words "Made in England by Lever Brothers". With it, began an era of marketing branded. Fast Moving Consumer Goods (FMCG). Soon after followed Lifebuoy in 1895 and other famous brands like Pears, Lux and Vim. Vanaspati was launched in 1918 and the famous Dalda brand came to the market in 1937. In 1931, Unilever set up its first Indian subsidiary, Hindustan Vanaspati Manufacturing Company, followed by Lever Brothers India Limited (1933) and United Traders Limited (1935). These three companies merged to form UNILEVER in November 1956; UNILEVER offered 10% of its equity to the Indian public, being the first among the foreign subsidiaries to do so. Unilever now holds 51.55% equity in the company. The rest of the shareholding is distributed among about 380,000 individual shareholders and financial institutions. The erstwhile Brooke Bond's presence in India dates back to 1900. By 1903, the company had launched Red Label tea in the country. In 1912, Brooke Bond & Co. India Limited was formed. Brooke Bond joined the Unilever fold in 1984 through an international acquisition. 5
  • 6. The erstwhile Lipton's links with India were forged in 1898. Unilever acquired Lipton in 1972, and in 1977 Lipton Tea (India) Limited was incorporated. Pond's (India) Limited had been present in India since 1947. It joined the Unilever fold through an international acquisition of Chesebrough Pond's USA in 1986. Since the very early years, UNILEVER has vigorously responded to the stimulus of economic growth. The growth process has been accompanied by judicious diversification, always in line with Indian opinions and aspirations. The liberalization of the Indian economy, started in 1991, clearly marked an inflexion in UNILEVER's and the Group's growth curve. Removal of the regulatory framework allowed the company to explore every single product and opportunity segment, without any constraints on production capacity. Simultaneously, deregulation permitted alliances, acquisitions and mergers. In one of the most visible and talked about events of India's corporate history, the erstwhile Tata Oil Mills Company (TOMCO) merged with UNILEVER, effective from April 1, 1993. In 1995, UNILEVER and yet another Tata company, Lakme Limited, formed a 50:50 joint venture, Lakme Lever Limited, to market Lakme's market- leading cosmetics and other appropriate products of both the companies. Subsequently in 1998, Lakme Limited sold its brands to 6
  • 7. UNILEVER and divested its 50% stake in the joint venture to the company. UNILEVER formed a 50:50 joint venture with the US-based Kimberly Clark Corporation in 1994, Kimberly-Clark Lever Ltd, which markets Huggies Diapers and Kotex Sanitary Pads. UNILEVER has also set up a subsidiary in Nepal, Nepal Lever Limited (NLL), and its factory represents the largest manufacturing investment in the Himalayan kingdom. The NLL factory manufactures UNILEVER's products like Soaps, Detergents and Personal Products both for the domestic market and exports to India. The 1990s also witnessed a string of crucial mergers, acquisitions and alliances on the Foods and Beverages front. In 1992, the erstwhile Brooke Bond acquired Kothari General Foods, with significant interests in Instant Coffee. In 1993, it acquired the Kissan business from the UB Group and the Dollops Icecream business from Cadbury India. As a measure of backward integration, Tea Estates and Doom Dooma, two plantation companies of Unilever, were merged with Brooke Bond. Then in July 1993, Brooke Bond India and Lipton India merged to form Brooke Bond Lipton India Limited (BBLIL), enabling greater focus and ensuring synergy in the traditional Beverages business. 1994 witnessed BBLIL launching the Wall's range of Frozen Desserts. By the end of the year, the company entered into a strategic alliance with the Kwality Icecream Group families and in 1995 the Milkfood 100% Icecream marketing and distribution rights too were acquired. 7
  • 8. Finally, BBLIL merged with UNILEVER, with effect from January 1, 1996. The internal restructuring culminated in the merger of Pond's (India) Limited (PIL) with UNILEVER in 1998. The two companies had significant overlaps in Personal Products, Specialty Chemicals and Exports businesses, besides a common distribution system since 1993 for Personal Products. The two also had a common management pool and a technology base. The amalgamation was done to ensure for the Group, benefits from scale economies both in domestic and export markets and enable it to fund investments required for aggressively building new categories. In January 2000, in a historic step, the government decided to award 74 per cent equity in Modern Foods to UNILEVER, thereby beginning the divestment of government equity in public sector undertakings (PSU) to private sector partners. UNILEVER's entry into Bread is a strategic extension of the company's wheat business. In 2002, UNILEVER acquired the government's remaining stake in Modern Foods. In 2003, UNILEVER acquired the Cooked Shrimp and Pasteurised Crabmeat business of the Amalgam Group of Companies, a leader in value added Marine Products exports. 8
  • 9. COMPANY PROFILE The mission that inspires UNILEVER's 36,000 employees, including over 1,350 managers, is to "add vitality to life." UNILEVER meets everyday needs for nutrition, hygiene, and personal care with brands that help people feel good, look good and get more out of life. It is a mission UNILEVER shares with its parent company, Unilever, which holds 51.55% of the equity. The rest of the shareholding is distributed among 380,000 individual shareholders and financial institutions. UNILEVER'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. They are manufactured in close to 80 factories. The operations involve over 2,000 suppliers and associates. UNILEVER's distribution network, comprising about 7,000 redistribution stockists, directly covers the entire urban population, and about 250 million rural consumers. UNILEVER has traditionally been a company, which incorporates latest technology in all its operations. The Hindustan Lever Research Centre (HLRC) was set up in 1958, and now has facilities in Mumbai and Bangalore. HLRC and the Global Technology Centres in India have over 200 highly qualified scientists and technologists, many with post- doctoral experience acquired in the US and Europe. 9
  • 10. UNILEVER believes that an organisation's worth is also in the service it renders to the community. UNILEVER is focusing on health & hygiene education, women empowerment, and water management. It is also involved in education and rehabilitation of special or underprivileged children, care for the destitute and HIV-positive, and rural development. UNILEVER has also responded in case of national calamities / adversities and contributes through various welfare measures, most recent being the village built by UNILEVER in earthquake affected Gujarat, and relief & rehabilitation after the Tsunami caused devastation in South India. Over the last three years the company has embarked on an ambitious programme, Shakti. Through Shakti, UNILEVER is creating micro- enterprise opportunities for rural women, thereby improving their livelihood and the standard of living in rural communities. Shakti also includes health and hygiene education through the Shakti Vani Programme, and creating access to relevant information through the iShakti community portal. The programme now covers about 50,000 villages in 12 states. UNILEVER's vision is to take this programme to 100,000 villages impacting the lives of over a 100 million rural Indians. UNILEVER is also running a rural health programme – Lifebuoy Swasthya Chetana. The programme endeavtheirs to induce adoption of hygienic practices among rural Indians and aims to bring down the incidence of diarrhoea. It has already touched 70 million people in 10
  • 11. approximately 15000 villages of 8 states. The vision is to make a billion Indians feel safe and secure. If Hindustan Lever straddles the Indian corporate world, it is because of being single-minded in identifying itself with Indian aspirations and needs in every walk of life. UNILEVER INDIA’S LARGEST FMCG COMPANY 11
  • 13. Hindustan Lever Limited Shareholding Pattern Flls 13.7 Domestic Fls 14.8 Unilever 51.6 Individual 19.9 UNILEVER Equity Capital - 50 Mn $ Market Capitalisation - 7,300 Mn $ 13
  • 14. PRESENT MARKETING STRATEGY: Mission: Unilevermission is to add Vitality to life. We meet everyday needs for nutrition, hygiene, and personal care with brands that help people feel good, look good and get more out of life. Policy: UNILEVER has earned a reputation for conducting its business with integrity and with respect for the interests of those their activities can affect. This reputation is an asset, just as real as their people and brands. Their first priority is to be a successful business and that means investing for growth and balancing short-term and long-term interests. It also means caring about their consumers, employees and shareholders, their business partners and the world in which we live. From UNILEVER Spokesperson “To succeed requires the highest standards of behavior from all of us. The general principles contained in this Code set out those standards. More detailed guidance tailored to the needs of different countries and companies will build on these principles as appropriate, but will not include any standards less rigorous than those contained in this Code. We want this Code to be more than a collection of high-sounding statements. It must have practical value in their day-to-day business and each one of us must follow these principles in the spirit as well as the letter”.ref: business world magazine. 14
  • 15. Obeying the Law UNILEVER companies and employees are required to comply with the laws and regulations of the countries in which they operate. Employees • UNILEVER is committed to diversity in a working environment where there is mutual trust and respect and where everyone feels responsible for the performance and reputation of the company. UNILEVER will recruit, employ and promote employees on the sole basis of the qualifications and abilities needed for the work to be performed. • UNILEVER are committed to safe and healthy working conditions for all employees. We will not use any form of forced, compulsory or child labour. • UNILEVER are committed to working with employees to develop and enhance each individual's skills and capabilities. • UNILEVER respect the dignity of the individual and the right of employees to freedom of association. • UNILEVER will maintain good communications with employees through company based information and consultation procedures. Consumers UNILEVER is committed to providing branded products and services which consistently offer value in terms of price and quality, and which are safe for their intended use. Products and services will be accurately and properly labelled, advertised and communicated. 15
  • 16. Shareholders UNILEVER will conduct its operations in accordance with internationally accepted principles of good corporate governance. They will provide timely, regular and reliable information on their activities, structure, financial situation and performance to all shareholders. Business Partners UNILEVER is committed to establishing mutually beneficial relations with their suppliers, customers and business partners. In their business dealings they expect their partners to adhere to business principles consistent with their own. Community Involvement UNILEVER strives to be a trusted corporate citizen and, as an integral part of society, to fulfill their responsibilities to the societies and communities in which they operate. Public Activities UNILEVER companies are encouraged to promote and defend their legitimate business interests. UNILEVER will co-operate with governments and other organisations, both directly and through bodies such as trade associations, in the development of proposed legislation and other regulations which may affect legitimate business interests. 16
  • 17. UNILEVER neither supports political parties nor contributes to the funds of groups whose activities are calculated to promote party interests. The Environment UNILEVER is committed to making continuous improvements in the management of their environmental impact and to the longer-term goal of developing a sustainable business. UNILEVER will work in partnership with others to promote environmental care, increase understanding of environmental issues and disseminate good practice. Innovation In their scientific innovation to meet consumer needs they will respect the concerns of their consumers and of society. They will work on the basis of sound science, applying rigorous standards of product safety. Competition UNILEVER believes in vigorous yet fair competition and supports the development of appropriate competition laws. Their companies and employees will conduct their operations in accordance with the principles of fair competition and all applicable regulations. Business Integrity UNILEVER does not give or receive, whether directly or indirectly, bribes or other improper advantages for business or financial gain. No employee may offer, give or receive any gift or payment which is, or may be construed as being, a bribe. Any demand for, or offer of, a bribe must be rejected immediately and reported to management. 17
  • 18. UNILEVER accounting records and supporting documents must accurately describe and reflect the nature of the underlying transactions. No undisclosed or unrecorded account, fund or asset will be established or maintained. Conflicts of Interests All UNILEVER employees are expected to avoid personal activities and financial interests which could conflict with their responsibilities to the company. UNILEVER employees must not seek gain for themselves or others through misuse of their positions. Compliance – Monitoring – Reporting Compliance with these principles is an essential element in their business success. The Unilever Board is responsible for ensuring these principles are communicated to, and understood and observed by, all employees. Day-to-day responsibility is delegated to the senior management of the regions and operating companies. They are responsible for implementing these principles, if necessary through more detailed guidance tailored to local needs. Assurance of compliance is given and monitored each year. Compliance with the Code is subject to review by the Board supported by the Audit Committee of the Board and the Corporate Risk Committee. 18
  • 19. Any breaches of the Code must be reported in accordance with the procedures specified by the Joint Secretaries. The Board of Unilever will not criticise management for any loss of business resulting from adherence to these principles and other mandatory policies and instructions. The Board of Unilever expects employees to bring to their attention, or to that of senior management, any breach or suspected breach of these principles. Provision has been made for employees to be able to report in confidence and no employee will suffer as a consequence of doing so. In this Code the expressions 'Unilever' and 'Unilever companies' are used for convenience and mean the Unilever Group of companies comprising Unilever N.V., Unilever PLC and their respective subsidiary companies. The Board of Unilever means the Directors of Unilever N.V. and Unilever PLC’.ref:THE NEWS ENVOIRMENT POLICY Unileversupplies high quality goods and services to meet the daily needs of consumers and industry. In doing so, the Company is committed to exhibit the highest standards of corporate behaviour towards its consumers, employees, the societies and the world in which we live. The company recognises its joint responsibility with the Government and the Public to protect environment and is committed to regulate all its activities so as to follow best practicable means for minimising adverse environmental impact arising out of its operations. 19
  • 20. The company is committed to making its products environmentally acceptable, on a scientifically established basis, while fulfilling consumers' requirements for excellent quality, performance and safety. The aim of the Policy is to do all that is reasonably practicable to prevent or minimise, encompassing all available knowledge and information, the risk of an adverse environmental impact arising from processing of the product, its use or foreseeable misuse. This Policy document reflects the continuing commitment of the Board for sound Environment Management of its operations. The Policy applies to development of a process, product and services, from research to full-scale operation. It is applicable to all company operations covering its plantations, manufacturing, sales and distribution, research & innovation centres and offices. This document defines the aims and scope of the Policy as well as responsibilities for the achievement of the objectives laid down. VISION Their vision is to continue to be an environmentally responsible organisation making continuous improvements in the management of the environmental impact of their operations. 20
  • 21. UNILEVER will achieve this through an Integrated Environment Management approach, which focuses on People, Technology and Facilities, supported by Management Commitment as the prime driver. FMCG Markets Slowdown in growth & then 2 years of decline 21
  • 22. FMCG Market (HLL Categories) Growth% 00 01 02 03 8 6 4 6.7 2 3.4 0 -1.1 -2.5 -2 -4 Pricing action in 2007: 22
  • 23. Price reduction Price reduction (Bottles) & Value improvement (Sachets) 23
  • 24. Investment Behind Brands Innovation & Superior Quality Family – safe Petalsoft Water & effort saving Quick wash - 50% No mud Rin Advance from germs 24
  • 25. Perfect Radiance “5 in 1” hair Total Care Whiter teeth Fresher breath health benefits Current Market Context Actions • Pricing –Laundry : Price Reduction –Shampoos: Value Improvement & Lower Price Points –Toothpaste: Value Corrections & SKU rationalization • Investments behind brands – Innovations – Quality – Higher A&P • Corrective actions in processed 25
  • 26. Processed Foods • Corrective actions – Phased stock reduction – Withdrawl of ‘03 innovation – Defocus of Atta in unviable geographies • Sales decline of 26% arising from above actions • Market shares held / improved BRANDS Sales Growth% 26
  • 27. PRODUCTS Lux Breeze Lifebuoy Dove Liril Pears Hamam Rexona Surf Excel Fair & Lovely Rin Pond's Wheel Sunsilk Naturals Pepsodent Clinic Close-up Axe Lakme 27
  • 28. Rexona Ayush Brooke Bond Bru Lipton Kissan Kwality Wall's Knorr Annapurna INDIA'S LARGEST BRANDED FMCG EXPORTER It was 1962. The reality of India then was very different from what it is today. India's economy then suffered from foreign exchange shortage. Hindustan Lever voluntarily decided to take up Exports to support the country's economy. Today, UNILEVER is India's largest exporter of branded Fast Moving Consumer Goods. It has been recognized by the Government of India as a Golden Super Star Trading House. Over time, UNILEVER has developed appropriate capabilities to be globally competitive in cost and quality for a viable Exports business. FOCUS AREAS UNILEVER's Exports focuses on two broad areas. It is a sourcing base for Unilever brands in Home & Personal Care (HPC) and Tea for supplies to other Unilever companies. It also focuses on becoming a preferred supplier to both non-Unilever and Unilever clients in three categories in which India, as a 28
  • 29. country, has competitive advantage - Marine Products, Castor and its Derivatives and Rice. UNILEVER enjoys international recognition within Unilever and outside for its quality, reliability and speed of customer service. UNILEVER's Exports geography comprises, at present, countries in Asia, Australia, Africa, North America and Europe. UNILEVER'S EXPORTS PORTFOLIO HPC: The categories are soaps, skin care products and oral care products. The brands are Lux, Lifebuoy, Pears, Fair & Lovely, Dove, Vaseline, Close-Up, Pepsodent, Signal. UNILEVER is the only source of Pears soap across the world. Tea: The categories are branded packet tea, and instant tea for Unilever's ready-to- drink tea business. The branded teas are Brooke Bond, Brooke Bond Red label, Brooke Bond Taj Mahal, Lipton, Lipton Yellow Label, Lipton Green Label, Lipton Brisk, Lipton 3-in-1 premix, Chinese Rickshaw. Marine Products: UNILEVER offers a comprehensive portfolio, ranging from Surimi, Crabsticks to Shrimps and several value-added products. Among its customers is Icelandic, the world's third largest seafood company. In addition, UNILEVER has also become a part of Unilever's supply chain in seafoods for Europe too. UNILEVER's Marine Products brands are Ocean Diamond, Ocean Excellence, Shogun, Hima, Gold Seal, Tara and Prima. Rice: The categories are Basmati Rice and Basmati Rice-based ready-to-eat rice 29
  • 30. meals. The brands are Gold Seal Indus Valley, Rozana and Annapurna. Castor: The categories are Castor Oil, Castor-oil based products, like hydrogenated castor oil, 12 - Hydroxy Stearic Acid, Ricinoleic Acid (used in grease and lubricant industry, paints and surface coatings, cosmetics, emulsifiers), and Speciality Castor Oils (USP grade, BP grade, DAB 10) etc used in pharmaceutical preparations. UNILEVER's Castor brand is Topsol. Today, Exports is a substantial business in UNILEVER, accounting for about 12% of the company's turnover. UNILEVER believes that its competitive advantages of cost competitiveness, process competitiveness and economies of scale both at the company and country level, hold it in good stead. They position the company to become one of the hubs for sourcing by Unilever companies in HPC and Tea, and also simultaneously become a preferred partner to global customers in Marine Products, Castor and Rice. DIRECT SELLING: Product Range • Lever home range • Male grooming • Oral Care • Ayurveda • Personal Wash • Foods Reach - 1400 towns (Largest in India) Consultant base - 330,000 30
  • 31. ACCORDINGLY, UNILEVER'S AIMS ARE TO:  Ensure safety of its products and operations for the environment by using standards of environmental safety, which are scientifically sustainable and commonly acceptable.  Develop, introduce and maintain environmental management systems across the company to meet the company standards as well as statutory requirements for environment. Verify compliance with these standards through regular auditing.  Assess environmental impact of all its activities and set annual improvement objectives and targets and review these to ensure that these are being met at the individual unit and corporate levels. 31
  • 32.  Reduce Waste, conserve Energy and explore opportunities for reuse and recycle.  Involve all employees in the implementation of this Policy and provide appropriate training. Provide for dissemination of information to employees on environmental objectives and performance through suitable communication networks.  Enctheirage suppliers and co-packers to develop and employ environmentally superior processes and ingredients and co- operate with other members of the supply chain to improve overall environmental performance.  Work in partnership with external bodies and Government agencies to promote environmental care, increase understanding of environmental issues and disseminate good practice. RESPONSIBILITIES CORPORATE  The Board and the Management Committee of UNILEVER is committed to conduct the company operations in an environmentally sound manner. The Management Committee will:  Set mandatory standards and establish environmental improvement objectives and targets for UNILEVER as a whole and for individual units, and ensure these are included in the annual operating plans. 32
  • 33.  Formally review environment performance of the company once every quarter.  Review environment performance when visiting units and recognise exemplary performance. Nominate: - A senior line manager responsible for environmental performance at the individual UNILEVER site. - UNILEVER environmental coordinator.  The Management Committee, through the nominated environmental coordinator will:  Ensure implementation of UNILEVER Policy on environment and compliance with Unilever and UNILEVER environmental standards and the standards stipulated under relevant national / local legislation. When believed to be appropriate, apply more stringent criteria than those required by law.  Assess environmental impact of UNILEVER operations and establish strategies for sound environment management and key implementation steps.  Enctheirage development of inherently safer and cleaner manufacturing processes to further raise the standards of environment performance.  Establish appropriate management systems for environment management and ensure regular auditing to verify compliance. 33
  • 34.  Establish systems for appropriate training in implementation of Environment Management Systems at work.  Ensure that all employees are made aware of individual and collective responsibilities towards environment.  Arrange for expert advice on all aspects of environment management.  Participate, wherever possible, with appropriate industry and Government bodies advising on environmental legislation and interact with national and local authorities concerned with protection of environment. 34
  • 35. INDIVIDUAL UNITS  The overall responsibility for environment management at each unit will rest with the Unit Head, who will ensure implementation of UNILEVER Policy on environment at unit level. Concerned line managers / heads of departments are responsible for environmental performance at department levels.  In order to fulfill the requirements of the Environment Policy at each site, the Unit Head will:  Designate a unit environment coordinator who will be responsible for co-ordinating environmental activities at unit, collating environmental statistics and providing / arranging for expert advice.  Agree with the Management Committee Member responsible for the unit, specific environmental improvement objectives and targets for the unit and ensure that these are incorporated in the annual objectives of the concerned managers and officers and are reviewed periodically.  Ensure that the unit complies with Unilever and UNILEVER mandatory standards and the relevant national and state regulations with respect to environment.  Ensure formal environmental risk assessment to identify associated environmental aspects and take appropriate steps to control risks at acceptable levels.  Ensure that all new operations are subjected to a systematic and formal analysis to assess environmental impact. Findings of such 35
  • 36. exercises should be implemented prior to commencement of the activity.  Manage change in People, Technology and Facilities through a planned approach based on training, risk assessment, pre- commissioning audits and adherence to design codes.  Regularly review environment performance of the unit against set objectives and targets and strive for continual improvement.  Sustain a high degree of environmental awareness through regular promotional campaigns and employee participation through training, safety committees, emergency drills etc.  Ensure dissemination of relevant information on environment within the unit and to outside bodies, and regularly interact with Government authorities concerned for protection of environment.  Maintain appropriate emergency procedures consistent with available technologies to prevent / control environmental incidents.  Provide appropriate training to all employees.  Ensure periodic audits to verify compliance with environment management systems and personally carry out sample environment audits to check efficacy of the systems.  Report environmental statistics to UNILEVER Corporate Safety & Environment Group on a monthly basis. 36
  • 37. RESEARCH AND INNOVATION CENTRES Since most new products and processes are developed in these Units, certain additional responsibilities devolve on them to ensure implementation of the Environment Policy of the company. In addition to the Unit Head's responsibilities outlined above, the heads of these units will:  Ensure that a formal and systematic risk assessment exercise is undertaken during the process/product development stage with specific reference to environmental impact.  Transfer technology to the pilot plant and main production through a properly documented process specification which will clearly define environmental impact and risks associated with processes, products, raw material and finished product handling, transport and storage.  Ensure that treatment techniques are developed for any wastes generated as a result of the new product/process and is incorporated into the process specifications. QUALITY POLICY: Unileverconsiders quality as one of the principal strategic objectives to guarantee its growth and leadership in the markets in which it operates. The company is committed to respond creatively and competitively to the changing needs and aspirations of their consumers through relentless pursuit of technological excellence, innovation and quality management across their businesses, and offer superior quality 37
  • 38. products and services that are appropriate to the various price points in the market as well as to their commitment to building shareholder value. The company recognises that its employees are the primary stheirce of success in its operations and is committed to training and providing them the necessary tools and techniques as well as empowering them to ensure broad base compliance of this policy in the organisation at all levels. The company is committed to fulfill its legal and statutory obligations and international standards of product safety and hygiene and will not knowingly sell product that is harmful to consumers or their belongings. It will institute systems and measures to monitor compliance in order to meet its responsibilities to consumers. The company will maintain an open communication channel with its consumers and customers and will carefully monitor the feedback to continuously improve its products and services and set quality standards to fulfill them. The company is committed to extend its quality standards to its contract manufacturers, key suppliers and service providers and by entering into alliances with them, to jointly improve the quality of its products and services. This policy is applicable to production from its own facilities as well as to production that is outsourced. The company will periodically review this quality policy for its effectiveness and consistency with business objectives. The company delegates authority and responsibility for dissemination and implementation of this policy to each Business and Unit Head. 38
  • 39. SAFETY AND HEALTH POLICY Unileversupplies high quality goods and services to meet the daily needs of consumers and customers. In doing so, the Company is committed to exhibit the highest standards of corporate behavior towards its consumers, employees, the societies and the environment in which we operate. Towards this, the Company recognizes its responsibility to ensure safety and protection of health of its employees, contractors and visitors in all its operating sites, which include manufacturing, sales and distribution, research laboratories and offices during work and work related travel. This Policy document defines the vision, principles, aim, required actions and scope of the policy application as well as the responsibility for execution. Vision "Their vision is to be an injury free organization." UNILEVER NEWS:”We will bring safety on top of mind for all employees and will integrate it with all business processes. We will realize their Vision through an Integrated Safety Management approach, which focuses on People, Processes, Systems, Technology and Facilities, supported by demonstrated leadership and employee commitment at all levels as the prime drivers for ensuring a safe and healthy work environment”. 39
  • 40. SAFETY PRINCIPLES: UNILEVER's Occupational Safety and Health Policy is based on and supported by the following eight Principles. These Principles have the same status as the Company's Code of Business Principles:  All injuries and occupational illnesses are preventable  All operational exposures can be safeguarded  Safety evaluation of all business processes is vital  Working safely is a condition of employment  Training all employees to work safely is essential  Management audits are a must  Employee involvement is essential  All deficiencies must be reported and corrected promptly In order to facilitate operationalisation of the Safety Principles, a separate document has been prepared, which covers: a) Safety Principles b) Success Criteria c) Illustrative KPI 40
  • 41.  CONSUMER SATISFACTION Indira is 20 years old, a tribal woman at Kondegaon village in Bastar district. She is just back from the nearby jungles, collecting firewood. After attending to her baby son, she will go to the village well to take a quick wash. Yesterday her husband brought her a white soap, with pink petals in it. Indira had requested him to buy one, for the festival later this evening. Indira is among millions of consumers in rural India who use Hindustan Lever's products. She came to know about Lux through the TV set at the community centre. It is not very costly, and also available nearby. Home to over 700 million people, rural India comprises not only over 70% of India's billion-strong population, but also over 12% of the world's population. The rural population already accounts for substantial consumption of Fast Moving Consumer Goods and also consumer durables. About 50% of the sales of soaps & detergents are generated in rural India. Similarly, almost half the demand for black & white television sets, pressure cookers, table fans, sewing machines also comes from there. COST MANAGEMENT: But the potential is even larger, both in terms of consumption and penetration. The fact that 70% of the population accounts for only 50% of even relatively well-penetrated categories, like soaps & detergents, indicates the enormous scope of consumption-led growth in these categories. Therefore such categories will derive growth out of increased usage. In categories, which are relatively less penetrated, like personal 41
  • 42. products, rural India offers an even bigger growth opportunity through greater penetration and then consumption. For example only three out of 10 consumers in rural markets use shampoo or skin care products. Therefore growth in such categories will emerge, as more consumers purchase these products, and then continue to use them regularly. Hindustan Lever has taken many initiatives over the decades to create markets in the rural hinterlands. By marketing relevant products, at affordable prices. A unique example is Hindustan Lever's Lifebuoy soap. In rural India, health is of paramount importance, because indisposition is very directly related to loss of income. Lifebuoy, whose core equity is health and hygiene , has for decades now been synonymous with soap in rural India. At the same time, if products have to come up the order in the rural purchase hierarchy, they have to be affordable. If rural India today accounts for about half of detergents sales, it is because UNILEVER has developed low-cost value-for-money branded products, like Wheel. The company has also taken initiatives to create markets even for apparently premium products, by offering them in pack sizes, like sachets, whose unit prices are within the reach of rural consumers. For example, initiated in the 1980s, sachets (Rs.2, Re.1, or 50 paise) today constitute about 55% of Hindustan Lever's shampoo sales. With media reach gradually increasing, rural consumers today, where the media has its footprints, share the same aspirations with their urban counterparts. UNILEVER has responded to the trend with low unit price packs of even other products - Lux at Rs.5, Lifebuoy at Rs.2, Surf Excel sachet at Rs.1.50, Pond's Talc at Rs.5, Pepsodent toothpaste at Rs. 5, Fair & Lovely Skin Cream at Rs.5, Pond's Cold Cream at Rs.5, Brooke Bond 42
  • 43. Taaza tea at Rs.5. OTHER MARKETING STRATEGIES: For decades now, Hindustan Lever has also taken initiatives to circumvent the limitation in communication channels, by innovatively leveraging non-conventional media. Among them are wall paintings, cinema vans, weekly markets (haat), fairs and festivals. Given the rural consumer's fascination for cinema, the cinema vans show popular movies, interspersed with products advertisements. Weekly markets, fairs and festivals are parts and parcel of rural life. They give an opportunity to address consumers, spread over many tiny hamlets, at one location. The occasions are used to demonstrate product benefits and also sell such products. Such demonstrations have played a significant role in creating, for example, the detergents market in rural India. In recent times, such demonstrations are being deployed to illustrate how visible clean is not hygienic clean, and how using soap is essential to prevent easily avoidable infections. Communication through fairs and festivals are backed by direct consumer contact. For example, in 1998-99, Hindustan Lever implemented a major direct consumer contact, called Project Bharat, which covered 2.2 crore homes. Each home was given a box, at a special price of Rs.15, comprising a low unit price pack of shampoo, talcum powder, toothpaste and skin cream, along with educational leaflets and audio-visual demonstrations. The project has helped eliminate barriers to trial, and has strengthened salience of both particular categories and brands. Similarly in 2002, Hindustan Lever has launched a similar large-scale direct contact, called Lifebuoy Swasthya Chetana, which already covers 70 million people in 18,000 villages of 8 states. The project is intended at generating awareness about good health and hygiene practices, and specifically how a simple habit of washing hands is essential to maintaining good health. The initiative will involve interaction with students and senior citizens, who act as change agents. 43
  • 44. AVAILABILITY OF UNILEVER’S PRODUCT: Generating awareness pays dividends only when steps are taken to ensure constant availability of products. In rural India particularly, availability determines volumes and market share, because the consumer usually purchases what is available at the outlet, influenced very largely by the retailer. Therefore, over the decades, Hindustan Lever has progressively strengthened its distribution reach in rural India, which today has about 33 lakh outlets. Direct rural distribution in Hindustan Lever began with the coverage of villages adjacent to small towns. The company's stockists in these towns were made to use their infrastructure to distribute products to outlets in these villages. But this distribution mode could only be extended to villages connected with motorable roads, and it could cover about 25% of the rural population by 1995. Therefore in 1998, Hindustan Lever launched Project Streamline to further extend its distribution reach. Under this initiative, the company identifies sub-stockists in a large village, connected by motorable road to a small town. This sub-stockist in turn distributes the company's products to outlets in adjacent smaller villages using transportation suitable to interconnecting roads, like cycles, scooters or the age-old bullock cart. Hindustan Lever is thus trying to circumvent the barrier of motorable roads. As a result, the distribution network, as of now, directly covers about 50,000 villages, reaching about 250 million consumers. The company simultaneously uses the wholesale channel, suitably incentivising them to distribute company products. UNILEVER has in the recent past established a common distribution 44
  • 45. system in rural areas for all its products. Given the number of brands and their packs the rural retailer usually requires, one UNILEVER representative can take all the products from the company portfolio that he needs. This common distribution system is now fully operational, under one Regional Sales Manager exclusively dedicated to rural markets of each region of the country. Over time, Hindustan Lever will further strengthen its rural distribution through mutually beneficial alliances with rural Self Help Groups (SHGs). Over the last five years, financial institutions, NGOs and government organisations are working closely to establish SHGs, whose objective is to alleviate poverty through sustainable income-generating activities. Since 2001, Hindustan Lever is implementing Project Shakti, whereby SHGs are being offered the option of distributing relevant products of the company as a sustainable income-generating activity. The model hinges on a powerful win-win relationship; the SHG engages in an activity which brings sustainable income, while Hindustan Lever gets an interface to interact and transact with the rural consumer. UNILEVER's vision for Project Shakti is to scale it up across the country by 2005, creating about 25000 Shakti entrepreneurs, covering 100,000 villages, and touching the lives of 100 million rural consumers. Begun with 50 groups in Nalgonda district of Andhra Pradesh, with the support of local authorities, the project has been extended, as of now, to about 50,000 villages in 12 states. A typical Shakti entrepreneur conducts business of around Rs.10,000 - Rs 15,000 per month, which gives her an income of about Rs 700 - Rs.1000 per month on a sustainable basis. As most of these women are from below the poverty line, and live in extremely small villages (less than 2000 population), this earning is very significant, and is almost double of their past household income. The full benefit of Project Shakti will be realised after some years. 45
  • 46. UNILEVER DISTRIBUTION NETWORK MANUFACTURING UNITS ALL ACROSS INDIA C&F 1 C&F 2 C&F 3 C&F 4 C&F 5 C&F 6 C&F 7 STOCKISTS STOCKISTS STOCKISTS STOCKISTS STOCKISTS STOCKISTS STOCKISTS WHOLESALERS RETAILERS CUSTOMERS This is the whole Distribution Chain of UNILEVER to cover the Rural market. The company have remarkably worked upon to make the supply chain from manufacturers to retailers simple with very few number of mediators and jobbers. It has helped them to maintain the transparency in the cycle and also have let them established a prompt delivery process. The products are manufactured in the factories all across India and then is supplied from there to the various Carriage and Forwarding (C&F) units which are 5-10 per state depending on the area they have to cover and are established by the company. These C&F units then supply the products to the various Wholesalers confined to their area only and according to the wholesalers demand. The wholesalers then supply the products to the semi-wholesalers and the retailers as per the volume of their order. Then the semi-wholesalers 46
  • 47. deliver the products to the retailers and customers. MANUFACTURER STAGE 1- C&F In this stage the products reach to the Carriage and Forwarding unit from various manufacturing units established all across India. The volume of the delivery depends upon the quantity required/ordered by the C&F unit. The depot sends the request of the volume of the products to the Head Office, which then order the various factories to supply the products to the mentioned depot. The supply is met within a week. UNILEVER has 45 C&F’s with 7000 stockists and 2000+ suppliers and associates to target the market. C&F STAGE 2- WHOLESALERS The C&F then supplies the products according to the demand of various wholesalers. Each of the depot cover a region assigned to them. Each C&F acquires 5-7 trucks and hire 4-5 more trucks to supply products everyday. They work on the concept of advance payment by DD by the wholesalers and deposit them in the bank which is transferred to the head office. 47
  • 48. NATION WIDE MANUFACTURING: 80 factories, across India The year was 1923. Lord Leverhulme, the legendary founder of Lever Brothers, was visiting India. The nationalist sentiment in India was for locally manufactured products. Lord Leverhulme, who believed that what is good for a country is equally good for the company, responded to that aspiration because he too shared that dream. His dream ultimately was realised in 1934. In September 1934, after more than a decade of discussions in London and in India, a Lever factory was allowed to sprout on the land that had been reclaimed by the Bombay Port Trust at Sewri. From here, a month later rolled out the first cake of Sunlight soap to be manufactured in India. The same year, Lever Brothers took over the Garden Reach Factory in Kolkata. These two factories were the first in a manufacturing base, which today literally dots the length and breadth of India. From Assam to Gujarat, from Uttaranchal to Kerala. Hindustan Lever's diverse product range is today manufactured in about 80 factories. In addition, the company outsources from 150 other units. The operations involve 2,000 suppliers and associates. DEVELOPING BACKWARD AREAS Several UNILEVER factories are situated in backward areas. The 48
  • 49. company has consciously responded to the national policy of development of backward areas by setting up manufacturing units in these places, which provide several direct and indirect employment opportunities for these areas, and leads to general economic development of these regions through industrialisation. In fact, all major investments of UNILEVER, in recent years, have been either in A- Category backward areas or No-Industry Districts. These include factories in Khamgaon and Yavatmal (Maharashtra), Chhindwara (Madhya Pradesh), Orai, Sumerpur and Khalilabad (Uttar Pradesh), Haldia (West Bengal), Silvassa (Dadra & Nagar Haveli), Pondicherry, Goa, Doom Dooma (Assam), Haridwar (Uttaranchal) and Barotiwala (Himachal Pradesh). Since 2001 itself, UNILEVER has set up nine new factories in backward areas. Equally, UNILEVER has an enviable track record in taking over sick enterprises, in response to requests from Government, and converting them into viable operations. The company's units at Mangalore and Rajpura all bear testimony to this achievement. In the process, UNILEVER has saved precious jobs and developed local economies. UNILEVER's manufacturing facilities, like the Khamgaon soap plant and the Sumerpur detergent bar unit, are recognised as among the best in the Unilever world. UNILEVER has adopted Total Productive Maintenance (TPM) for achieving manufacturing excellence since 1994. As on date, TPM is in different stages of implementation in 28 factories. Four UNILEVER factories have already received the TPM Consistency Award, and 14 factories have been awarded with the TPM Excellence Award. MARKETING NEEDS EVERY WHERE 49
  • 50. How do you ensure that Mr. Ramesh in Kanyakumari gets his Lifebuoy soap and Mrs. Kulkarni in Jammu gets to know how Bru coffee tastes even before she has bought it? Well, you need to have a cutting edge distribution network in place. Hindustan Lever's distribution network is recognised as one of its key strengths. Its focus is not only to enable easy access to our brands, but also to touch consumers with a three-way convergence - of product availability, brand communication, and higher levels of brand experience. UNILEVER's products, manufactured across the country, are distributed through a network of about 7,000 redistribution stockists covering about one million retail outlets. The distribution network directly covers the entire urban population. The general trade comprises grocery stores, chemists, wholesale, kiosks and general stores. Hindustan Lever services each with a tailor- made mix of services. The emphasis is equally on using stores for direct contact with consumers, as much as is possible through in-store facilitators. AT THE SUPERMARKETS Self-service stores and supermarkets are fast emerging in metros and large towns. To service modern retailing outlets in the metros, UNILEVER has set up a full-scale sales organisation, exclusively for this channel. The business system delivers excellent customer service, while driving growth for the company and the store. At the same time, innovative marketing initiatives are taken to provide consumers with experience of our brands at the store itself, through product tests and 50
  • 51. in-store sampling. IN THE VILLAGES UNILEVER has also revamped its sales organisation in the rural markets to fully meet the emerging needs and increased purchasing power of the rural population. The company has brought all markets with populations of below 50,000 under one rural sales organisation. The team comprises an exclusive sales force and exclusive redistribution stockists, under the charge of dedicated managers. The team focuses on building superior availability, while enabling brand building in the deepest interiors. UNILEVER's distribution network in rural India already directly covers about 50,000 villages, reaching about 250 million consumers, through about 6000 sub-stockists. HARNESSING INFORMATION TECHNOLOGY An IT-powered system has been implemented to supply stocks to redistribution stockists on a continuous replenishment basis. The objective is to catalyse UNILEVER's growth by ensuring that the right product is available at the right place in right quantities, in the most cost-effective manner. For this, stockists have been connected with the company through an Internet-based network, called RSNet, for online interaction on orders, despatches, information sharing and monitoring. RS Net covers about 80% of the company's turnover. Today, the sales system gets to know every day what UNILEVER stockists have sold to almost a million outlets across the country. RS Net is part of Project Leap, UNILEVER's end-to-end supply chain, which also includes a back-end system connecting suppliers, all company 51
  • 52. sites and stretching right upto stockists. 52
  • 53. SHAKTI - CHANGING LIVES IN RURAL INDIA Shakti is UNILEVER's rural initiative, which targets small villages with population of less than 2000 people or less. It seeks to empower underprivileged rural women by providing income-generating opportunities, health and hygiene education through the Shakti Vani programme, and creating access to relevant information through the iShakti community portal. In general, rural women in India are underprivileged and need a sustainable source of income. NGOs, governmental bodies and other institutions have been working to improve the status of rural women. Shakti is a pioneering effort in creating livelihoods for rural women, organised in Self-Help Groups (SHGs), and improving living standards in rural India. Shakti provides critically needed additional income to these women and their families, by equipping and training them to become an extended arm of the company's operation. Started in 2001, Shakti has already been extended to about 80,000 villages in 15 states - Andhra Pradesh, Karnataka, Tamilnadu, Maharashtra, Gujarat, Madhya Pradesh, Chattisgarh, Uttar Pradesh, Rajasthan, Punjab, Haryana, West Bengal, Orissa, Bihar & Jharkhand. The respective state governments and several NGOs are actively involved in the initiative. Shakti already has about 25,000 women entrepreneurs in its fold. A typical Shakti entrepreneur earns a sustainable income of about Rs.700 -Rs.1,000 per month, which is double their average household income. Shakti is thus creating opportunities for rural women to live in improved conditions and with dignity, while improving the overall 53
  • 54. standard of living in their families. In addition, it involves health and hygiene programmes, which help to improve the standard of living of the rural community. Shakti's ambit already covers about 15 million rural population. Plans are also being drawn up to bring in partners involved in agriculture, health, insurance and education to catalyze overall rural development. UNILEVER's vision for Shakti is to scale it up across the country, covering 100,000 villages and touching the lives of 100 million rural consumers by 2005. Shakti Vani is a social communication programme. Women, trained in health and hygiene issues, address village communities through meetings at schools, village baithaks, SHG meetings and other social fora. In 204, Shakti Vani has covered 10,000 villages in Madhya Pradesh, Chattisgarh and Karnataka. The vision is to cover 80,000 villages in 2005. iShakti, the Internet-based rural information service, has been launched in Andhra Pradesh, in association with the Andhra Pradesh Government's Rajiv Internet Village Programme. The service is now available in Nalgonda, Vishakapatnam, West Godavari and East Godavari districts. iShakti has been developed to provide information and services to meet rural needs in medical health and hygiene, agriculture, animal husbandry, education, vocational training and employment and women's empowerment. The vision is to have 3,500 kiosks across the state by 2005. 54
  • 55. PIONEERING NEW CHANNELS Hindustan Lever is simultaneously creating new channels, designed on the same principle of holistic contact with consumers. Project Shakti, UNILEVER's partnership with Self Help Groups of rural women, is becoming an extended arm of the company's operation in rural hinterlands. Started in 2001, Project Shakti has already been extended to about 50,000 villages in 12 states - Andhra Pradesh, Karnataka, Gujarat, Madhya Pradesh, Tamil Nadu, Chattisgarh, Uttar Pradesh, Orissa, Punjab, Rajasthan, Maharashtra and West Bengal. The respective state governments and several NGOs are actively involved in the initiative. The SHGs have chosen to partner with UNILEVER as a business venture, armed with training from UNILEVER and support from government agencies concerned and NGOs. Hindustan Lever Network (HLN) is the company's arm in the Direct Selling channel, one of the fastest growing in India today. It already has about 3.5 lakh consultants - all independent entrepreneurs, trained and guided by HLN's expert managers. HLN has already spread to over 1500 towns and cities, covering 80% of the urban population, backed by 42 offices and 240 service centres across the country. It presents a range of customised offerings in Home & Personal Care and Foods. Out-of-Home consumption of products and services is a growing opportunity in India, as elsewhere in the world. Hindustan Lever is already the largest player in the hot beverages out-of-home segment, with over 15000 tea and coffee vending points. The company is expanding the network aggressively, in the education, entertainment, 55
  • 56. leisure and travel segments. UNILEVER's allaince with Pepsi will significantly strengthen this channel. Health & Beauty Services are Hindustan Lever's simultaneous foray to meet the increasing consumer need for such products and services. Lakme Salons provide specialised beauty services and solutions, under the recognised authority of the Lakme brand. The Ayush Therapy Centres provide easy access to authentic Ayurvedic treatments and products. Hindustan Lever, which once pioneered distribution in India, is today reinventing distribution - creating new channels, and redefining the way current channels are serviced. In the process it is converging product availability, with brand communication and brand experience. NOVEL PRODUCT NEW PROCESS Hindustan Lever's mission is to meet everyday needs for nutrition, hygiene, and personal care, with brands that help people feel good, look good and get more out of life. UNILEVER's research & development base, one of the largest in Indian industry, helps achieve this mission, with novel products and new processes. The company has over 380 patents, demonstrating its leading edge in consumer- relevant R&D. The Hindustan Lever Research Centre (HLRC), with facilities in Mumbai and Bangalore, and global technology centres in India have over 200 highly qualified scientists and technologists, many with post-doctoral experience acquired in the US and Europe. Set up in 1958, HLRC's aim is to develop new products and processes, improving benefits and quality of existing products, and optimal use of resources. 56
  • 57. Major innovations have taken place, down the decades, in every category in which UNILEVER is present. From Home Care to Personal care, Beverages to Foods. BETTER CLEANING, LESSER WATER CONSUMPTION Consider for example, UNILEVER's development of a water-saving technology for its detergents. One of the most severe problems that India faces today is shortage of water. Water scarcity affects one in every three Indians. In a typical Indian home, at least 20% of the water consumed goes behind washing of clothes. UNILEVER decided that it would be of immense benefit to an Indian household, if a technology could be developed, which would help reduce water consumed in washing of clothes. UNILEVER's scientists have innovated a path-breaking technology - it reduces water consumption and time taken for rinsing by 50%. The technology has already been introduced. WORLD'S MOST ADVANCED WATER PURIFIER People in cities and towns spend enormous amounts, either in fuel or devices, to ensure safe drinking water. UNILEVER's scientists have developed a breakthrough device, called "Pureit", which purifies water as safe as boiled water, providing 100% protection from all water- borne diseases; it also removes pesticides that may be present in drinking water. Its operation does not require electricity, running tap water and plumbing or expensive maintenance. It thus provides water at a cost of just Re.1 for every six litres - or less than 20 paise a litre. IODINE IN SALT - THE VITAL INGREDIENT Iodine, it is well-known, is important for the mental development of young children. Iodised salt is a well-accepted mode of ensuring appropriate iodine intake. Yet Iodine added to salt is lost in transport, 57
  • 58. storage as well as in the process of cooking. UNILEVER scientists have developed a patented breakthrough technology to stabilise iodine in salt, following work on the stability of iodine under Indian conditions of storage and cooking. The technology has made it possible to actually realise the purpose of iodised salt - that people get appropriate iodine intake through the food they eat. TECHNOLOGY OF SKIN LIGHTENING Research in the biology of skin pigmentation has led to the formulation of a product like Fair & Lovely Skin Cream and Lotion. The product has been periodically updated through new patented actives. It has now become a global success through exports to over 30 countries. The product is equally used by the local population of these countries, apart from those of Indian origin. UNILEVER has equally developed new processes. In-house machine development The company has the capability to design and manufacture machines in-house. This enables the company to set up plants at half the cost of others. Such technological developments have also led to significant improvement in productivity. ENERGY CONSERVATION In the past, one of the most significant breakthroughs of UNILEVER's research initiative has been the development of a technology to use non-conventional forest seed oils for soap-making which, since the 1970s, has helped save around $1.2 billion in foreign exchange. UNILEVER had received the Government of India's prestigious award for import substitution. Development of Structurant Technology for 58
  • 59. soap manufacturing also helped save costly conventional oils without any compromise on product performance and quality. The latest technology to produce Distilled Fatty Acid for soap making and the resultant plant capacity expansion has drastically brought down specific energy consumption while improving distillation yields. The evolution of continuous soap processing technology has also reduced energy consumption. UNILEVER believes that technology is critical to delight consumers. Creative application of technology has made Hindustan Lever successful in launching products and services, which raise the quality of life. HELPING HANDS: UNILEVER COMMITS Rs. 8 CRORES FOR IMMEDIATE RELIEF, REHABILITATION TO TSUNAMI-HIT COMMUNITIES Unilevertoday announced to commit, a total outlay of Rs.8 crores for immediate relief and helping people to rehabilitate themselves so that they can resume their livelihood, in the tsunami-hit areas of Pondicherry, Tamil Nadu and Kerala. Of this, Rs.5 crores (absolute value terms) is being utilized for distribution of the Company's nutritional & personal hygiene products for immediate relief to the needy. Another Rs.3 crores will be raised partly by contributions from company employees and the balance contribution from the Company to be used in collaboration with NGOs working with the community to provide the people, notably fishermen, with means of livelihood and help them back on their feet. Since December 26, employees of UNILEVER factories and offices in Pondicherry, Tamil Nadu and Kerala have been providing necessary 59
  • 60. relief to the tsunami-hit people. The relief operations include, distribution of bread and biscuits to over 2000 families in Pondicherry, 12,000 cooked meals for families in Chennai, Nagapattinam, Cuddalore and Andamans. Over 12,000 dry relief packs, comprising of Company's dry rations and personal hygiene products have already been distributed. UNILEVER's employees are donating a day's salary, matched equally by the Company for exclusive use in rehabilitation. The biggest concern is, that people/ fishermen have lost their means of livelihood. UNILEVER plans to focus its rehabilitation efforts to restore their means of livelihood so that the local communities can quickly get back to their lives at the earliest. UNILEVER has always been a front runner in its call for national duty and caring for the community. Its employees not only donate generously, but volunteer to take part in relief operations by committing their time and physical effort. This is in line with our corporate value of “care” and our CSR mission which has become an integral part in our way of doing business. Earlier during the Gujarat earthquake, UNILEVER had adopted and reconstructed a new village, Yashodadham, in Bhachau Taluka of Kutch district. Yashodadham, spread over 25 acres, comprises 289 homes, school building, an exclusive playground for children and a multi-purpose community centre, including an anganwadi (creche), health centre, community room and panchayat office, an underground reservoir and an overhead tank for water. All the dwelling units have electricity, and piped water and are now fully occupied. 60
  • 61. UNILEVER is India's largest Fast Moving Consumer Goods company, touching the lives of two out of three Indians. UNILEVER’s mission is to “add vitality to life" through its presence in over 20 distinct categories in Home & Personal Care Products and Foods & Beverages. The company meets everyday needs for nutrition, hygiene, and personal care, with brands that help people feel good, look good and get more out of life. SPECIAL EDUCATION & REHABILITATION Under the Happy Homes initiative, UNILEVER supports special education and rehabilitation of children with challenges. ASHA DAAN: The initiative began in 1976, when UNILEVER supported Mother Teresa and the Missionaries of Charity to set up Asha Daan, a home in Mumbai for abandoned, challenged children, and the destitute. Subsequently, Asha Daan has also become a home to the HIV-positive. The objective in supporting Asha Daan was and continues to be to share the organsation's prosperity in supporting the Mother's mission of serving the "poorest of the poor". Asha Daan has been set up on a 72,500-square feet plot belonging to UNILEVER, in the heart of Mumbai city. UNILEVER bears the capital and revenue expenses for maintenance, upkeep and security of the premises. The destitute and the HIV-positive are provided with food, shelter and medication for the last few days of their lives. The needs of the abandoned challenged children are also met through special classes of basic skills, physiotherapy and, if possible, corrective surgery. At any point of time, it takes care of over 300 infants, destitute men and women and HIV- positive patients. 61
  • 62. Over the years, UNILEVER has opened schools for challenged children with a sharper objective of supporting families of such children, helping the children become self-reliant by learning appropriate skills to be productive members of the household. ANKUR: In 1993, UNILEVER's Doom Dooma Plantation Division set up Ankur, a centre for special education of challenged children. The centre takes care of children with challenges, aged between 5 and 15 years. Ankur provides educational, vocational and recreational activities to over 35 children with a range of challenges, including sight or hearing impairment, polio related disabilities, cerebral palsy and severe learning difficulties. These physically and mentally challenged children are taught skills, such as cookery, painting, embroidery, bamboo crafts, weaving, stitching, etc depending on their aptitudes. The centre has rehabilitated 10 children, including self-employment for 6 children by providing them with shops, and 3 girls have been provided employment as creche attendants. It has also moved to normal schools 18 children. Since inception it has covered about 80 children. Ankur received the Lawrie Group Worldaware Award for Social Progress in 1999 from HRH Princess Royal in London. KAPPAGAM: Encouraged by Ankur's success, Kappagam ("shelter"), the second centre for special education of challenged children, was set up in 1998 on UNILEVER Plantations in South India. It has 17 children. The focus of Kappagam is the same as that of Ankur. The centre has 17 children, being taught self-help skills, useful vocational activities like making of paper covers, greeting cards, wrapping papers, fancy stationery, napkins, brooms made out of coconut leaves, candles, and also some home care products. About 12 of the children have become relatively 62
  • 63. self-reliant by earning through crafts learnt at the centre. Since inception, it has covered about 28 children. ANBAGAM: Yet another day care center, Anbagam ("shelter of love"), has been started in 2003 also in the South India Plantations. It takes care of 11 children. Besides medical care and meals, they too are being taught skills such that they can become self-reliant and elementary studies. Over 20,000 individuals have benefitted from the Happy Homes initiatives since inception. UNILEVER is wholeheartedly involved with all four centres and will continue to be involved in the future. 63
  • 64. UNILEVER– DECEMBER QUARTER 2005 RESULTS • Total Sales grow by 14.4%; FMCG Sales growth at 15.8% • HPC and Foods grow by 17% and 9% respectively; Broad based growth across categories • PBIT grows 13.5%; Net Profit increases by 56% • EPS for 2005 grows 17.6%; Final Dividend Rs 2.50 per share of Re 1/- each; Total Dividend Rs 5.00 per share for 2005 Unileverannounced its results for December Quarter 2005. Growth momentum achieved in the last three quarters has been sustained with total sales growing by 14.4%. Domestic FMCG sales were higher by 15.8% with both Home and Personal Care (HPC) and Foods performing well. HPC business grew by 17.3% driven by strong performance in all categories. Significant sales growth was achieved in the highly competitive categories of Laundry and Shampoo. Soaps recorded good growth, with Lux growing handsomely reflecting in market share gains. All the brands in Skin category maintained their strong performance leading to a double digit growth for the category. Consumer relevant innovations continue to drive off-take and key innovations during the quarter include the re-launch of “Thick and Strong” Sunsilk Pink, Lux variants for the 75-year celebrations, and the national launch of “Jasmine Fresh” Rin Advanced Powder. 64
  • 65. In Foods business, Tea achieved a modest growth despite a declining market and falling commodity prices; Coffee continued to perform well. Processed Foods business grew strongly, albeit on a low base. The Icecream business also achieved a 33% increase in sales, led by the impulse category. Relaunch of Knorr soup with a superior mix and introduction of new variants was the key Foods innovation during the quarter. Profit before Interest and Taxes (PBIT) increased by 13.5% after absorbing a 50% higher spend in Advertising and Promotions. Higher crude oil price led cost pressures continued, particularly in Laundry category, but were mitigated by aggressive cost effectiveness programs. Profit after tax (PAT) grew by 22.7% due to a lower effective tax rate and Net profit, including the impact of exceptional items was higher by 56%. The total sales were 11.4% higher than in the previous year, with broad based growth across categories leading to both HPC and Foods businesses growing by 14% and 8%, respectively. Judicious price increases coupled with robust cost saving initiatives partly neutralised the impact of both cost escalations, particularly in the Laundry category, and the higher investments behind brands. Consequently, PBIT increased by 1.1%. A lower tax charge for the year resulted in a PAT growth of 12.9%. Net Profit and Earnings Per Share at Rs 6.40, grew by 17.6%. Mr Harish Manwani, Chairman commented: “We have sustained the growth momentum in December quarter and it continues to be broad based across HPC and Foods categories, particularly, in the 65
  • 66. competitive categories of Laundry and Shampoo. This was driven by higher investment behind our brands with exciting innovations, excellent activation, new initiatives in Customer Management and with significantly higher levels of A&P spends. The double digit sales growth of over 11% for the year 2005 has been achieved after a gap of six years. Our strategic priority remains unchanged. We will continue to leverage our focused portfolio of powerful brands to sustain market leadership and grow our market position across strategic brands and categories. In a competitive landscape, we shall continue to deliver consumer value and invest behind our brands. We recognize the challenge of inflationary cost pressures driven by crude oil prices and, in the competitive context, achieving cost leadership across the extended supply chain continues to be a key priority.” DIVIDEND The Board of Directors at their meeting held on February 14th, 2006 has proposed a final dividend of Rs 2.50 per share of Re 1 each, subject to the approval of the shareholders at the annual general meeting. This along with the interim dividend of Rs 2.50 per share amounts to a total dividend of Rs 5.00 per share for the year 2005. UNILEVER is India's largest Fast Moving Consumer Goods company, touching the lives of two out of three Indians. UNILEVER’s mission is to “add vitality to life” through its presence in over 20 distinct categories in Home & Personal Care Products and Foods & Beverages. The company meets everyday needs for nutrition, hygiene, and 66
  • 67. personal care, with brands that help people feel good, look good and get more out of life. UNILEVER TRANSFERS TEA ESTATES INDIA TO MAXWELL GOLDEN TEA PRIVATE LIMITED Unileverhas transferred its entire shareholding in its 100% subsidiary Tea Estates India Limited (TEIL) to Maxwell Golden Tea Private Limited (MGT), a Woodbriar Group company on March 1, 2006. TEIL owns 8 tea estates and 6 factories for processing tea in the high-yielding belt of Tamilnadu with an average annual output of approx. 10,500 metric tons. Woodbriar Group has interests in plantations, insurance services and real estate. The Group’s gardens are spread across the premium tea growing regions in Tamilnadu and Kerala. UNILEVER management believes that the proposed transfer to Woodbriar Group is in the best interest of the tea plantation business and all its stakeholders. Existing terms and conditions of services of all TEIL employees will be fully protected in accordance with applicable laws and terms of their employment. The acquisition of TEIL by Woodbriar Group will provide scale and bring in synergy benefits to Woodbriar Group, as a large portion of TEIL gardens are contiguous to the existing tea gardens of Woodbriar Group. Canara Bank, Madurai Circle has funded the debt component to Woodbriar Group for this acquisition. 67
  • 68. With this disposal of shareholding in TEIL, UNILEVER has completed its exit from its tea plantations business both in South India and Assam. It may be recalled that UNILEVER had sold its interests in Rossell Industries Limited and Doom Dooma Tea Company Limited in Assam during the last 12 months. DSP Merrill Lynch Limited acted as financial advisor to Unilever. ABOUT UNILEVER: UNILEVER is India's largest Fast Moving Consumer Goods Company, touching the lives of two out of three Indians. UNILEVER's mission is to "add vitality to life" through its presence in over 20 distinct categories in Home & Personal Care Products and Foods & Beverages. The company meets everyday needs for nutrition, hygiene, and personal care, with brands that help people feel good, look good and get more out of life. For more information visit www.Unilever.com 68
  • 69. COMPETITORS THE PROCTER & GAMBLE COMPANY COMPANY PROFILE The Procter & Gamble Company (P&G) is a brand behemoth. The world's #1 maker of household products courts market share and billion-dollar brands. P&G's products fall into three categories: global beauty care; global health, baby, and family care; and global household care. It also makes pet food and water filters and produces soap operas (As the World Turns). More than 20 of P&G's brands are billion-dollar sellers (including Actonel, Always/Whisper, Bounty, Charmin, Crest, Downy/Lenor, Folgers, Iams, Olay, Pampers, Pantene, Pringles, Tide, and Wella). Acquisitive P&G bought Clairol in 2001 and a majority of Wella in 2003. Its purchase of Gillette in late 2005 was its biggest buy in company history. FINANCIAL HIGHLIGHTS Fiscal Year End: June Revenue (2007): 56741.00 M Revenue Growth (1 yr): 10.40% Employees (2007): 110,000 Employee Growth (1 yr): 0.00% RESEARCH METHODOLOGY 69
  • 70. The section includes the overall research design, the sampling procedure, the data collection method, the field method, and analysis and procedure. Research design:- For this research project exploratory method is using DATA COLLECTION METHOD:- The data collect for the research can be classified as primary data and secondary data. Primary data is by visiting existing customer and expected customer of Unilever. And making them fill up the questionnaire Secondary data is from internet, books, magazine etc. RESEARCH INSTRUMENT The instrument use for data collection is structured questionnaire. Question is open and close ended depending upon the information that needed to be elicited. I am also using the scaling technique to assess the attitude of the customer. Sampling plan:- Keeping all the constrains in mind a sample size of 100 people .The sampling procedure is systematic sampling 70
  • 71. FUTURE SCOPE The Indian FMCG market currently appears to be at a crossroads, and UNILEVER are attempting to change customer perceptions of their brands and where specific buying motivations appear to be replacing generalities. This meanwhile, is quite unlike the west where buyers consider aesthetics, comfort and safety, not necessarily in that order, before finalising a purchase. “It’s smarter to think about emotions and attitudes, if marketers are to do a better job of marrying what a UNILEVER offers to the consumer’s image of the offerings. Another important outcome of the research is the believability of the claims. Most of the claims are realistic and easy to understand. Most of the people don’t understand the quality claims by UNILEVER. The mindset of the Indian consumer is such that he is delighted if he buys a pen a little cheaper than his neighbour. Things are, however, slowly changing and customers at the upper end of the market are now ready to pay more for more. I hope that this approach will soon enter the new era, maybe not with the same intensity . “Success will largely be determined to the extent a company can differentiate itself in terms of intangibles that go with a Product”. Thus, success could well hinge on the best of bundle of services that UNILEVER provides.UNILEVER grew from zero to the 2,268 Million $, mark and the number One FMCG company in India this year. Looking at the present scenario it can be said that though there is lot of competition in the market but UNILEVER is picking up well. The 71
  • 72. landmark achievement comes in 74 years in India after clinching its first overseas sale. FINDINGS, DATA ANALYSIS AND CONCLUSIONS WHEN COMPARED WITH PROCTER AND GAMBLE LTD. Findings On the basis of research, we found that there is a nominal difference in the efficiency of Unilever. vis-à-vis Procter and Gamble Ltd. I have reached to this conclusion on the basis of following findings. They are as follows. PRODUCT LINE Unilever UNILEVER Home & Personnel Care > In personal Wash they have Lux , Lifebuoy, Liril, Hamam, Breeze, Dove, Pears and Rexona .  In Laundry they have Surf Excel, Rin and Wheel.  In skin care their brands are Fair N Lovely and Ponds.  In hair Care they have Sunsilk Naturals and Clinic All clear.  In Oral Care their brands are Pepsodent and Close-up.  In Deodorants they have Axe and Rexona.  In Colour Cosmetics they have Lakeme. 72
  • 73.  In Ayurvedic Personal And Health Care they have Ayush. Foods  In tea they have the brand name brook bond and lipton.  In coffee they have bru.  In foods they have kissan and kinnor annpuran.  In ice creams they have the kwality walls. Water  Unilever has launched pueit, the most advanced in home water purifier in the world. Procter and Gamble P&G Hygiene and Health care ltd. markets several leading brands: Whisper sanitary napkins in the Feminine Hygiene category; Health care products such as Vicks VapoRub, vicks action 500, Vicks Cough Drops, Vicks Inhaler; skin care and cosmetic products viz. Old Spice. P&G Home Products Ltd. markets several leading brands. In Fabric Care P&G has two of its world leading detergents Tide and Ariel, in Hair Care they have Pantene Pro V, Head & Shoulders and Rejoice. In Baby Care they have Pampers. CONCLUSION- As Unilever has more brands in its basket then Procter and gamble so it is more close to common man and touching his or her daily life in a more comprehensive manner. 73
  • 74. DEALERS While choosing the dealers UNILEVER mainly emphasizes on the ‘market potential of that area, dealer’s financial position, and dealers back ground (previous business), present business, goodwill and risk taking capabilities ,by the good responsibility of the dealer. PROCTER AND GAMBLE There is no difference as such in the process of selection of dealers in Procter and Gamble also. Like UNILEVER, P&G also considers dealer’s financial position; present business, goodwill and risk taking capabilities. Finally, Dealers of UNILEVER are satisfied by the companies support in there sales because the company provides them with various schemes and discounts, whereas satisfaction of P&G dealers lies in good promotional activities, advertisement and the flexibility that the company provides them. According to the senior officials of P&G it was found that it’s a volume based company, hence all the above stated parameters helps the dealer to attract more and more customers. MODE OF TRANSPORTATION Unilever; UNILEVER uses modified trucks and rails to deliver the products from various production sites to the dealers. They are using new state of the art technology so that they can even track every single bottle of shampoo. Transportation cost is shared by UNILEVER and the dealer. PROCTER AND GAMBLE P&G is also using road and railway transportation system to deliver product from various production sites to the dealers. They are also using latest Information Technology to track there consignment whose backend is managed by infosys. Each dealer has to keep the Good 74
  • 75. Receipt Note (GRN) number and report of the whole items of delivered products. Transportation cost is paid by P&G. In the end, both P&G and UNILEVER uses advanced tracking technology to track the goods and both companies use railways and roadways for transporting there products. In UNILEVER transportation cost is shared by UNILEVER and the dealer, where as at P&G, transportation cost is paid by P&G. FLEXIBILITY Unilever As far as flexibility is concerned; our group found that UNILEVER provides more flexibility in terms of delivery of produce. UNILEVER has there own warehouses in every state and if the dealer orders more , he is supplied with the products in time. As far as flexibility is concerned; our group found that P&G does not provides more flexibility in terms of delivery of produce and in taking order from dealers. Our group has found that Dealers of UNILEVER are more satisfied than the dealers of P&G and therefore UNILEVER is a step ahead in terms of flexibility of placing orders and accepting orders from the dealers. DISTRIBUTION CHANNEL STRUCTURE Unilever- Unilever channel structures consist of whole seller, mass retailers, rural and modern trade. Their new approach to distribution is holistic and seeks a three way convergence of product availability brand communication and brand experience. They are reinventing distribution—creating new channels and redefining the way current channels are serviced. They are building new capabilities in training the large number of people involved in these initiatives. Procter and gamble’s channel structure also have whole sellers, mass retailers. They are revamping the company’s distribution system using efficient consumer response {E C R} principles. The new distribution system has given the company considerable cost and process efficiencies while significantly availability and visibility of the company’s product in the stores. Our group has found that Unilever has more effective and efficient distribution network as compared to P & G, which increases the 75
  • 76. availability and presence of UNILEVER product. UNILEVER is also given emphasis on penetrating the rural market as well. DEALING WITH UNSOLD AND DAMAGED MERCHANDISE Unilever-It depends on the condition and type of the product. If company feels that it is not the fault of the dealer then company would return it, unsold products are mostly taken back by UNILEVER P & G replaces the damaged product with the new one, it means that the damaged product are replaced by new product. Our group has found that both the companies take back the unsold product however P & G is more flexible in returning the damaged product as compared to the UNILEVER. Hence P & G is more flexible here. PERFORMANCE APPRAISAL SYSTEM UNILEVER - The performance appraisal system in Unilever is done under the supervisory of the Appraisal supervisor. The supervisor keep track of the performance of the employees and based on their performance he choose the right method of performance appraisal.the main method of performance appraisal that have been adopted by Unilever are 360 degree appraisal and supervisory appraisal methods.it is done as an early exercise and performance appraisal parameter is the past performance of the employees. The performance appraisal system in Procter and gamble is also done under the supervisory officer and almost same method are used as in the Unilever. the conclusion that our group has found that there is hardly any differences is the performance appraisal methods in both the companies .both the companies are taking almost the same measures and same parameters for performance appraisal , however both the 76