Minor Project Final Draft Submitted
Minor Project Final Draft Submitted
Minor Project Final Draft Submitted
A project report
On
THE ANALYSIS OF GO GREEN CONCEPT FOLLOWED BY FMCGS
Submitted in the partial fulfilment of degree of bachelors of business administration
(2013-2016)
UNDER THE GUIDANCE OF
Ms Jyoti Gupta
Assistant professor, RDIAS
Submitted by
Suhani Mehta
00915901713
BBA semester III
INSTITUTE OF ADVANCED STUDIES
NAAC accredited, A grade
Category A+ institute, an ISO 9001:2008 certified institute
(Approved by AICTE, ministry of HRD, govt. of India)
Affiliated to guru Gobind Singh Indraprastha University, Delhi
2A &2B, Madhuban Chowk, Rohini, delhi-110085
Phone no.: 011-27867301 fax: 011- 27867212
E-mail: admin@rdias.ac.in, website: www.rdias.ac.in
Member of AMDISA, AIMA, CSI
RUKMINI DEVI
2
STUDENTS DECLARATION
This is to certify that I have completed the project titled MINOR
PROJECT under the guidance of Ms Jyoti Gupta in partial fulfilment
of degree of bachelors of business administration from Rukmini Devi
Institute of Advanced Studies, New Delhi.
This is the original work and I havent submitted it earlier elsewhere.
Suhani Mehta
00915901713
BBA semester III
3
CERTIFICATE OF GUIDE
This is to certify that report entitled The analysis of go green concept
in the FMCG sector which is submitted by Suhani Mehta in partial
fulfilment of the requirement for the award of degree of bachelors of
business administration at GGSIPU, Kashmiri gate, Delhi is a record of
the candidate own work carried out by her under my supervision. The
matter embodied in this is original and has not been submitted for the
award of any other degree
Ms Jyoti Gupta
Assisstant Professor, RDIAS
4
ACKNOWLEDGEMENT
I take this opportunity to convey my sincere thanks and gratitude to all
those who have directly or indirectly helped and contributed towards the
completion of this project. First and foremost, I would like to thank Ms
Jyoti Gupta, for her consistant guidance and support throughout this
project. I would also like to thank the people who helped me analyse the
questionnaires and also for the discussions that we had with them. All
these have resulted in the enrichment of our knowledge and their inputs
have helped us to incorporate relevant issues into our project. During the
project, we realized that the degree of relevance of the learning being
imparted in the class is very high. The learning enabled us to get a better
understanding of the nitty-gritty of the subject which we studied. Last but
not the least we would like to thank God and our parents for their
cooperation and help.
A very hearty thanks to all those helped in the success of the project.
5
TABLE OF CONTENTS
S.NO. TOPIC
PAGE
NO.
1
CHAPTER 1
PLAN OF THE STUDY
Introduction to the topic
Objective of the study
Literature review
2
CHAPTER 2
COMPANY PROFILE
3
CHAPTER 3
RESEARCH METHODOLOGY
Universe and sources of data
Sample size (proper justification)
Method of data collection testing of
questionnaire
4
CHAPTER 4
DATA ANALYSIS AND INTERPRETATION
Questionnaire
5
CHAPTER 5
FINDING AND CONCLUSION
6
CHAPTER 6
SUGGESTIONS AND RECOMMENDATIONS
67-69
7 BIBLIOGRAPHY 70
8 ANNEXURES 71-72
6
CHAPTER 1
PLAN OF THE STUDY
7
1.1 INTRODUCTION TO THE TOPIC:
Consumers say they increasingly prefer to purchase products that are free of toxins,
produced with a minimum of pollution, and with a minimal environmental impact.
But in many cases a significant gulf exists between consumers green claims and their
actual purchasing power, mainly driven by the price difference of green products.
Companies that successfully adopt a green policy can generate profits, provide
positive social impact, and reduce environmental impact.
Growing pressure from non-governmental organisations (NGOs) and activists.
Greenpeace for instance publishes a digital Guide to Greener electronics. The
guide ranks the 18 top manufacturers of personal computers, mobile phones, TVs and
games consoles according to their policies on toxic chemicals, recycling and climate
change.
The media notices companies that show their green stripes. Positive publicity for
going green is not reserved for large companies. Companies taking voluntary steps
to become greener will gain visibility, earn credibility, and develop a reputation for
leadership.
Employee loyalty and retention are less tangible, but equally important benefits to
going green. A sincere sustainability strategy will help your company attract top
talent.
Last but not least, many supply chains have already been affected by physical and
economic impacts of the changing climate and growing demand from Asia. These
include global shortages of water, grain, timber, and metals. Improving all forms of
resource efficiency lessens exposure to these risks.
What is Go Green?
Going Green refers to an individual action that a person can consciously take to
reduce harmful effects on the environment through consumer habits, behaviour,
and lifestyle. This can be attained by using green products and services.
A green product or service is one that delivers comparable or superior performance,
utility, or other benefits to a non-green alternative.
8
It utilizes fewer resources, contains fewer toxic materials, and/or boasts a longer
lifecycle.
DEFINITION OF GO GREEN CONCEPT:
Going green is a popular term used to describe the process of changing one's lifestyle
for the safety and benefit of the environment. People who "go green" make decisions
about their daily lives while considering what impact the outcome of those decisions
may have on global warming, pollution, loss of animal habitats, and other
environmental concerns.
o There are 3 changes most people make to "go green." They begin sustainable living,
use environmentally friendly (or green) products, and they begin recycling and/or
reusing as many products as possible.
Sustainable living
o Sustainable living involves limiting your use of natural resources and increasing self-
sufficiency. This is usually achieved by altering modes of transportation, conserving
energy, changing one's diet, and buying locally produced items over imported items.
"Green" Products
o Buying and using only environmentally friendly products--such as recycled paper
products, nontoxic household cleaners and personal products, and organic foods--is a
major part of "going green." Green products minimize the damage or harm some
production methods can have on our air, water, soil, animal life, and plants.
Recycling and reusing
o By recycling all that is possible (glass, plastic, paper, metal, leftover food, and grease)
and reusing useful items, a person can minimize her waste. This helps decrease the
need for landfill space and conserve energy. Composting plant matter also helps in
these endeavors.
9
1.2 OBJECTIVES OF THE STUDY:
The purpose of the study is :
To know more about the Go Green practices.
To study the go Green strategies of HUL Ltd.
To study the competitors of HUL Ltd. regarding Go Green
practices.
To study the acceptability of the Go Green concept.
To study Strengths,weaknesses, opportunities and threats of HUL
Ltd.
1.2.1 A Quick Introduction to Green Productivity
Green Productivity (GP) is a strategy for simultaneously enhancing productivity
and environmental performance for overall socio-economic development that
leads to sustained improvement in the quality of human life. It is the combined
application of appropriate productivity and environmental management tools,
techniques and technologies that reduce the environmental impact of an
organization's activities, products and services while enhancing profitability and
competitive advantage.
Having a good green productivity programme -
increases profitability
improves health and safety
promotes environmental protection
enhances company image
raises morale
leads to sustainable development
10
1.2.2 A Quick Introduction to Green Consumerism
Green consumerism creates a balance between the expectations of consumer behaviour and
businesses' profit motives.
Key issues for the future include:
Health: A sentry lifestyle combined with health impacts of environmental pollution and
emissions, use and abuse of pesticides, anti-biotic etc.
Population and consumption: Population increases, aging populations, consumption
patterns - living beyond means, etc.
Globalization: Trans boundary effect and free trade have both advantages (efficiency,
profits, opportunities, demand) and disadvantages (unemployment, footloose companies,
weaker controls, unfair trade, small scale loses out) etc.
Energy: Every source of energy has an environmental impact. Energy efficiency is not
just technology, but also cutting back. There are enough cars to create a six-lane traffic
jam to the moon.
Water: Water use is increasing at twice the rate of population increase. Much can be done
at the individual level.
Chemicals: Use of pesticides and other hazardous chemicals. PCB? DDT has been found
in mother's milk too! Ozone depleting chemicals, hormone-disrupting chemicals
have long-term effects on human health and well-being.
Natural World: Considerable pressures put on the natural world due to population
increases and rise in consumption. 40% of all plant growth consumed by humans!
Somewhere, something should stop.
Ethics: The treatment of other peoples. Issues of gender, children, animal welfare. Ethics
of cloning, fertility et al.
Fair Trade: Nee to look into working conditions (child labour, low wages, long hours,
lack of safety, mass production v/s craft industries.
Neighbourhoods: Development of a sense of community. Increase in financial wealth,
but also of quality of life. Measure "gross national happiness"!!
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Childhood: Loss of 'childhood' due to societal pressures and expectations, knowledge and
The Year 2000 - Creating a future we want:
make intelligent life choices
use people power for positive change
set clear priorities
understand the bigger picture
1.2.3 A Quick Introduction to Green Procurement
A business' green procurement policy should strive to purchase products and
services that have less negative impact on the environment. Environmental
considerations forms part of the evaluation and selection criteria, which could
cover, depending on goods and services to be purchased, their manufacture,
transport, packaging and disposal.
"Sustainable Development" was the key concept of the 1992 Earth Summit in Rio, as
governments and international organizations committed themselves to take action to protect the
environment as in integral part of long-term economic development. Environmentally-
responsible consumption and production is seen as an essential part of the strategy to
improve environmental quality, reduce poverty and bring about economic growth, with
resultant improvements in health, working conditions, and sustainability, and is highlighted in
Chapter 4 of Agenda 21.
In many developing countries public procurement of goods and services forms the major part of
government expenditure. Economic activity of such magnitude has far-reaching implications
and governments, international organizations, and donors have a responsibility to take the
environmental impacts of their activities into account.
Since Rio, the response of the private sector has been impressive, with many multinational
organizations developing effective environmental management policies. Green procurement
(also called 'environmentally responsible procurement) is now no longer new to Europe, North
America, and developed countries. The public sector has lagged behind somewhat, although
many local authorities in developed countries have now introduced environment
management systems which include procurement policies.
12
Two Approaches to Green Procurement
Business has evolved two approaches to integrating environmental considerations into
procurement decisions. These can be termed a "Product Approach", which examines goods and
services and attempts to rate them according to environmental impacts, and a "Supplier
Approach", which looks at the supplier (preferably a manufacturer or service provider) and rates
the organization as a whole.
Companies employ both approaches with differing degrees of thoroughness. Some devote
considerable resources to environmental "policing", sending environmental auditors to carry out
in-depth examinations of suppliers, operations and supplies, whilst for others it is little more
than a token gesture.
Integration with existing procurement regulations
Green procurement does not seek to re-write the book on procurement, but merely to add an
environmental dimension to the decision-making process. The standard purchasing criteria, of
price, quality and availability, remain paramount. The environmental impacts of a good or
service procured can be seen as part of the "quality" criterion.
Whilst every organization should establish a "de minimums" - a list of items which they will not
purchase, green procurement should not normally be seen as being prescriptive, and restrictive to
procurement staff. There will be occasions where a product's exceptionally competitive price
will be an over-riding factor in a procurement decision, despite negative environmental
factors. On the other hand, there will be occasions where a product's negative environmental
impact, or particular environmental advantage, prove to be decisive in a procurement decision.
The importance of a green procurement policy is that procurement staff are asked to consider
environmental impacts, and are allowed to make decisions accordingly. It can make a significant
difference to an organization's environmental performance, as well as send a powerful
message to businesses that the environment is taken seriously.
13
1.2.4 A Quick Introduction to Green Labelling
Eco-labelling schemes help consumers make decisions about the products they
buy and whether they are environmentally friendly. There are several existing
eco-label schemes around the world including the German Green Spot, the
Nordic Swan and the US Green Seal. Most current eco-label programs are cradle
to grave, that is, they involve some form of analysis based on the environmental
consequences of their manufacture, use and disposal
Eco-labelling makes a form of positive statement that identifies a certain product or service as less
harmful to the environment than other similar products or services.
Eco-labels can cover a range of environmental attributes, which may include health issues,
atmospheric impacts or other environmental impacts, packaging and other industrial issues to
name few. Labels allow consumers to make comparisons among products/services in the category
and essentially vote their preferences in the market when making purchasing decisions.
An eco-label is a graphic symbol and/or a short descriptive text applied on a product, package, or
inserted in a brochure or in another informative document that accompanies the product and offers
information about at least one and at most these environmental impacts generated by the
respective product.
Based on overseas experience, appropriate eco-labelling with associated verification and
certification procedures is a driver for the increased uptake of recycled content and/or sustainable
products. Eco-labels belong to the class of "new environmental policy instruments" (Naples)
together with voluntary agreements, eco-taxes and tradable permits. Eco-labels are
complementary policy instruments relative to traditional regulation but also to other market based
instruments.
Eco-labels may be distinguished by whether they are government sponsored or managed by the
private sector. Currently, there is no universal standard for eco-labels. To date, approximately 28
countries have established national eco-labelling programs. A large number of these are
voluntary. The voluntary, private sponsored labelling scheme do not involve the government and
have two sub-categories: those with criteria imposed by third parties and those based on self-
14
declaration by manufacturers. Eco-labels may address different types of products, which is the
case of most of the existing eco-labelling schemes, may address the services sector or both.
1.3 Literature review and other theoretical information:
LITERATURE REVIEW OF GO GREEN CONCEPT IN FMCG
Going green has been in the spot light for companies and consumers since the whole
idea of the world coming to an end gave a terrorizing thought to the majority of
people. People are might become prone to purchasing something that is more
ecologically friendly in the hope of keeping our existence going. Companies are
seeing that even with the consumers and laws of conservation pushing them to go
green there is other upsides to this outcome. There are many good tributes to the
world being green, not only the feel that the company and the human kind are doing
their part in the relief of global annihilation but also the money consuming options
that going against nature will no longer be theirs. the go green concept was founded
in 2002 by The Go Green Initiative (GGI) is an environmental
& Stewardship Program located in all 50 states and in 13 countries. It's free to all
schools and operating in pre-schools through universities. I conducted a series of
questions that asked people a multitude of questions on the subject of going green.
First I started with asking them if they (the surveyor) and their family took going
green into an everyday life style. There were two majority answers which were rarely
and sometimes. The next one from those two popular response was not at all and in
last place came yes which meant that out of 11 people that decided to take my survey
only one answered that they take going green seriously. The next question that came
was a short answered question which was what does going green mean to you? In this
case most people put an answer having to do with recycling, global warming and the
saving of the environment. The next one is the one that I found alarming which
was:the last question which I had on the survey was how important do you think
it is for companies and the world to become green. Most responses came back as a
10 which was the highest of importance with only two responses coming back at
under a 5 and the rest over. Questions are being brought to the media for the
companies that before were non environmental oriented and to see what these
15
companies are going to do about their production methods on how to make it more
environmentally healthy. Simple questions like why is going green important
illustrate a great example of not enough education on this material are being presented
to regular folks. Now when the companies go green questions arise like, is it cost
efficient for them and is it going to be a better result to make a commercial plant
green? Companies sometimes go green because they choose to do their part in the
saving of the environment. Some companies are forced to go to a more green aspect
of production that their previous state due to laws that go into effect that band a
certain amount of pollution. Some companies use the image of being green like a
public relation campaign since they know people that lean the green side will be
more likely to buy a product that is not hurting the environment. A question that
should be being asked is if companies that go green save money by doing so then why
is it that they dont pass on their savings on to the consumers? It seems to be that a lot
of the items that are being brought to use by renewable sources are staying the same
price or still rising. The article by the magazine engineering & technology is
named Counting the costs of going green were it goes into the account of cost
of a company going green. They show that to make a company green with renewable
sources like wind, water and sun then have to invest money into the company in order
to achieve the system of either wind turbines or water generator or solar photovoltaic
material. They go into the whole cost of how much the bill for making the link up for
the wind farms and end up the total of the end of build. This is an interesting point
that not a lot of consumers think about that was mentioned in the article:
Renewable power is perceived as clean and virtually free by the public. In fact, the
reality is quite different. Though the raw fuel in the form of wind, water or solar are
free, the costs involved of transforming the energy into usable electricity and
delivering it to the customer are not.
Then we got the article Going Greens Unexpected Advantage by the magazine
Business Week. The main point of the article has to do with the fact that going
green does help companies save money in one point or another. Not to bother with
the fact that the government is imposing much stricter laws making them virtually get
to the green stage. You are going to have to go green. The only question is when.
Our recommendation? It is always better to have the breeze at your
back.(Maddock .Vitn) This letting the companies know that it is better to do it on
16
their own account than having to be forced to do it. Then the go and support the
decision on going green by saying: It can save you a lot of money. Although some
companies still see an eco-friendly overhaul as an added cost of doing business
without any substantial financial benefit, that thinking is, for the most part,
pass. Adding a green tint to your business doesnt have to cost more. This being
said letting the companies know that it doesnt have to be major changes just simple
ones like putting things closer to the consumers so it wont travel that far or even
trying to save resources its all a part on becoming green. The next article was done
by Environmental Health Perspectives and is named Bringing Green Homes within
Reach: Healthier Housing for More People. In this article it shows people that
going green not only falls on big companies but every day houses can be made to
be greener or if building a house be green. With the material on building the house
or even re-modulation this can lead to saving valuable resources. Merely sitting a
house so that the longest walls and largest windows face south (in the Northern
Hemisphere) is the single most important thing a builder can do to keep homes
naturally warm in colder climates.(Schmidt. A27) Showing that simple things that
can be done during construction or during re-modulation can help in a sense of
maintaining a resource down. In the article Going Green on Campus and Saving
Money Using Web Forms done by Community College Week it even shows how it
can save money and troubles to any type of system including a university or college:
The last article I chose was Industry lured by the gains of going green by
Nature. The main millennium assessment report, released in March, stressed that
more than half of the ecosystem services that support human activities are being
tapped in an unsustainable way. The new supplement argues that corporations should
be preparing now for the depletion of those natural services (Gewin. 173) This
shows how immensely the human race is consuming natural resources and if
companies dont put a stop to this then its them that are going to have to face the
stricter laws that will be placed in order to keep a balance for the resources.
Going green is in the benefit of everyone in the world. In order for our world to be
able to survive for the generations to come we have to take care and prevent further
destruction of our ecological system. Going green is something that has been around
for decades but know in our time is where companies have to shine and come out with
actions that will change the view of the consumer. Change it to the point where they
17
see that green is good and safe and reliable. For the good of humanity and for the
good of plainly everything that inhabits this earth, going green will be the beginning
of the remedy.
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CHAPTER 2
COMPANY PROFILE
19
INTRODUCTION
IN INDIA FMCG is the 4th largest sector in Indian economy with a market size of
more than $13.1 bn. And expected to become $33.4bn in 2015.200 million people are
expected to shift towards processed food. India needs Rs 28bn investment in food
sector. In the recession period FMCG industry recorded a growth of 14.5%.
Hindustan UniLever Limited (HUL) is India's largest Fast Moving Consumer
Goods Company, touching the lives of two out of three Indians with over 20 distinct
categories in Home & Personal Care Products and Foods & Beverages. They endow
the company with a scale of combined volumes of about 4 million tonnes and sales of
Rs.10, 000 crores.
HUL is also one of the country's largest exporters; the Government of India has
recognized it as a Golden Super Star Trading House.
The mission that inspires HUL's 36,000 employees, including over 1,350 managers,
is to "add vitality to life." HUL meets every day 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 HUL share 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.
HUL's brands - like Lifebuoy, Lux, Surf Excel, Rin, Wheel, Fair & Lovely, Pond's,
Sunsilk, Clinic, Pepsodent, Close-up, Lakme, Brooke Bond, Kissan, Knorr-
Annapurna, Quality Walls 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. HUL's distribution network,
comprising about 7,000 redistribution stockiest, directly covers the entire urban
population, and about 250 million rural consumers.
HUL has traditionally been a company, which incorporates latest technology in all its
operations. 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.
20
HUL is also one of the country's largest exporters; it has been recognized as a Golden
Super Star Trading House by the Government of India. The mission that inspires
HUL's over 15,000 employees, including over 1,300 managers, is to "add vitality to
life." HUL meets every day needs for nutrition, hygiene, and personal care with
brands that help people feel good, look good and get more out of life. It is a mission
HUL shares with its parentcompany, Unilever, which holds 52.10% of the equity. The
rest of the shareholding isdistributed among 360,675 individual shareholders and
financial institutions.
Vision
Unilever products touch the lives of over 2 billion people every day whether that's
through feeling great because they've got shiny hair and a brilliant smile, keeping
their homes fresh and clean, or by enjoying a great cup of tea, satisfying meal or
healthy snack.
The four pillars of our vision set out the long term direction for the company where
we want to go and how we are going to get there:
We work to create a better future every day
We help people feel good, look good and get more out of life with brands and services
that are good for them and good for others.
We will inspire people to take small everyday actions that can add up to a big
difference for the world.
We will develop new ways of doing business with the aim of doubling the size of our
company while reducing our environmental impact.
We've always believed in the power of our brands to improve the quality of peoples
lives and in doing the right thing. As our business grows, so do our responsibilities.
We recognise that global challenges such as climate change concern us all.
Considering the wider impact of our actions is embedded in our values and is a
fundamental part of who we are.
Brands
HUL is the market leader in Indian consumer products with presence in over 20
consumer categories such as soaps, tea, detergents and shampoos amongst others with
21
over 700 million Indian consumers using its products. Eighteen of HUL's brands
featured in the ACNielsen Brand Equity list of 100 Most Trusted Brands Annual
Survey (2012), carried out by Brand Equity, a supplement of The Economic Times.
The Most Trusted Brands from HUL in the top 100 list (their rankings in brackets)
are: Clinic Plus (4), Lifebuoy (10), Fair & Lovely (11), Rin (12), Surf Excel (13), Lux
(14), Pepsodent (17), Closeup (19), Ponds (20), Sunsilk (26), Dove (37), Vim (43),
Pears (79), Lakme (81), Vaseline (86), Wheel (87), Hamam (95) and Rexona (96).
The latest launches for Hindustan Unilever include: Surf Excel Easywash; Lakm
eyeconic range; Vim Anti Germ bar;Pureit Marvella UV with Advance Alert System;
TRESemm: For Salon style hair at home every day; Clinic Plus: Milk Protein
Formula A++; Comfort 1 Rinse; Bru Exotica Guatemala; Closeup: Deep Action;
Dove Hair Fall Rescue Treatment; Taaza: Taazgi bhari chaai, dimaag khul jaaye.
The company has a distribution channel of 6.3 million outlets and owns 35 major
Indian brands.
[9]
Its brands include:
Awards and recognition
As per the latest Nielsen Campus Track-Business School Survey released in February
2013, Hindustan Unilever Limited has emerged as the No.1 employer of choice for B-
School students who will graduate in 2013, across functions. HUL also retained the
'Dream Employer' status for the 4th year running and continues to be the top
company considered for application by B-School student in India.
In 2012, HUL was recognised as one of the world's most innovative companies by
Forbes. With a ranking of number 6, it was the highest ranked FMCG Company.
Hindustan Unilever Limited (HUL) won the first prize at FICCI Water Awards 2012
under the category of 'community initiatives by industry' for Gundar Basin Project, a
water conservation initiative.
Hindustan Unilever Limited won 13 awards at the Envies 2012 Media Awards
organised by the Advertising Club Bombay in September 2012.the Company bagged
22
four awards at the Spikes Asia Awards 2012, held in September. The awards included
one Grand Prix one Gold Award and two Silver Awards.
HULs Chhindwara Unit won the National Safety Award for outstanding performance
in Industrial Safety. These awards were instituted by the Union Ministry of Labour
and Employment in 1965.
HUL was one of the eight Indian companies to be featured on the Forbes list of
World's Most Reputed companies in 2007.
In July 2012 Hindustan Unilever Limited won the Golden Peacock Occupational
Health and Safety Award for 2012 in the FMCG category for its safety and health
initiatives and continuous improvement on key metrics.
Pond's Talcum Powder's packaging innovation has bagged a Silver Award at the
prestigious 24th DuPont Global Packaging Award, in May 2012.The brand was
recognised for cost and waste reduction.
In May 2012, HUL & Star Bazaar bagged the silver award for 'Creating Consumer
Value through Joint Promotional and Event Forecasting' at the 13th ECR Efficient
Consumer Response Asia Pacific Conference.
In 2011, HUL was named the most innovative company in India by Forbes and
ranked 6th in the top 10 list of most innovative companies in the world.
Hindustan Unilever Ltd received the National Award for Excellence in Corporate
Governance 2011 of the Institute of Company Secretaries of India (ICSI) for
excellence in corporate governance
In 2012, Hindustan Unilever emerged as the No. 1 employer of choice for B-School
students who will graduate in 2012. In addition, HUL also retained the 'Dream
Employer' status for the 3rd year running
Hindustan Unilever ranked No. 2 in Fortune India's Most Admired Companies list,
which was released by Fortune India in partnership with the Hay Group. The
company received the highest scores for endurance and financial soundness
HUL was ranked 39th in The Brand Trust Report (2011) published by Trust Research
Advisory. Seven HUL brands also featured in the list: Lux, Ponds, Dove, Lakme,
Axe, Sunsilk and Pepsodent.
23
HUL emerged as the top 'Dream Employer' as well as the top company considered for
application in the annual B-School Survey conducted by Nielsen in November 2010.
This was the second successive year that HUL has been rated as the top 'Dream
Employer' in India. HUL has also emerged as the top employer of choice among the
top six Indian Institutes of Management (IIMA, B, C, L, K and I).
Research facilities
The Hindustan Unilever Research Centre (HURC) was set up in 1967 in Mumbai, and
Unilever Research India in Bangalore in 1997. Staff at these centres developed many
innovations in products and manufacturing processes. In 2006, the company's
research facilities were brought together at a single site in Bangalore.
Sustainable Living
Unilever launched Sustainable Living Plan in on 15 November 2010 at
London, Rotterdam, New York and New Delhi simultaneously.
The Unilever Sustainable Living Plan has three major goals, which Unilever aims to
achieve by 2020:
Help more than one billion people improve their health and well-being
Halve the environmental impact of their products
Source 100% of their agricultural raw materials sustainably
The plan also sets out over 50 social, economic and environmental targets.
In 2012 Hindustan Unilever featured in BSE's Greenex India's first environmental
friendly equity index the first environmental friendly equity index, which will enable
investors take more informed decisions in the green theme of India.
Water
The company has reduced water usage in manufacturing operations by 10.1% when
compared with 2010 and by 21.5% compared to 2008 baseline. Rainwater harvesting
has been implemented in more than 50% of units. More than 75% of the company's
manufacturing sites are zero discharge.
24
HUL has also been working for more than a decade in the area of water conservation
in locations which face acute water shortage. By 2015, the Company expects hundred
billion litres of water to be harvested through the projects they have undertaken. One
million people in 180 villages across India will benefit. Most projects are expected to
see a 50% rise in crop production.
[57]
India Water Body
In May 2011, the company launched the India Water Body, an initiative aimed to
address the challenge of water scarcity in India.
[58][59]
HUL has been working in the
area of water conversation for more than a decade and has initiated projects in several
states across India with the aim to create capacity towards conserving more than 50
billion litres of water in the next four years (by 2015).Water conservation has been a
focus area for the company across its value chain. The company has not only reduced
water consumption in its operations but also developed product innovations such
as Surf Excel quick-wash that helps consumers use less water while washing clothes.
Plastic Recycling Project
In July 2011, HUL and Bharti Retail started a three-month campaign called "Go
Recycle" to promote plastic recycling among consumers in the National Capital
Region (NCR) in 2011. Consumers were encouraged to bring empty plastic bottles
and pouches, for which they were given discount coupons in return.
Creating financial inclusion
The company joined forces with the State Bank of India (SBI) to introduce banking
services to people from low-income groups in rural areas.
[62]
The project was piloted
in the states ofMaharashtra and Karnataka.
HUL also renders services to the community, focusing on health & hygiene education,
empowerment of women, and water management. It is also involved in education and
rehabilitation of underprivileged children, care for the destitute and HIV-positive,
and rural development. HUL has also responded to national calamities, for instance
with relief and rehabilitation after the 2004 tsunami caused devastation in South India.
Health and Hygiene
25
Lifebuoy took handwashing messages to remote areas, reaching out to 30million
people directly in 201011 through HUL's rural outreach programme,Khushiyon Ki
Doli (Caravan of Happiness). The Company entered into a partnership with
UNICEF and Department of Rural Development, Government of Madhya Pradesh,
to implement hygiene awareness programmes in over 5,000schools in 2012. This will
further strengthen the Lifebuoy handwash programme in India and contribute to the
global target of reaching one billion consumers by 2015 across Asia, Africa and Latin
America
As many as 30 million people in India have gained access to safe drinking water from
Pureit, in-home purifier which provides water 'as safe as boiled water', without
needing electricity, or running water. Pureit is affordable with an upfront cost
starting at Rs.900, and an ongoing cost that provides approximately four litres of safe
drinking water for about one rupee. Globally, Unilever aims to reach 500 million
people through Pure it by 2020.
Nutrition
The company's food and beverage brand labels carry information on energy,
protein carbohydrate, sugars, fat, and where relevant, on saturated fat, fibre and
sodium. HUL also participates in The Choices Programme. It is a front-of-pack
labelling programme aimed to help consumers make a healthier choice. Around 60%
of our major food and beverage brands comply with the guidelines as against the
global target of 100% by 2015.
Greenhouse Gases
The Company is on track to meet the global 2012 target, which is to reformulate the
products to reduce GHG emissions by 15%. The process of reformulating products
started in 2009. A significant reduction has been achieved with the reduction in
detergent powders of Sodium Tri Poly Phosphate, an ingredient that neutralises
the impact of water hardness.
In 2011, the Company reduced C02 emissions per tonne of production in India by
9.9% compared to 2010 and by 14.7% compared to the 2008 baseline. This was
achieved due to the installation of biomass. boilers to reduce CO2 emissions at
Chiplun, Pondicherry, Goa, Nasik and Mysore factories. The biggest challenge was to
deliver reduction in CO2 emissions from transport despite significant volume
26
increase. In 2011, the Company delivered 17.8% improvement in CO2 efficiency in
logistics over 2010.
Sustainable Sourcing
In 2011, 60% of tomatoes used in Kissan Ketchup in India were from sustainable
sources. The Company is working with a select group of tomato farmers to help
reduce water usage through drip irrigation and at the same time reduce the use of
fertiliser and pesticides while improving yields.
More than 16% of the tea sourced from India for Unilever's brands was from
sustainable sources in 2011 Trials have produced average water saving of 40%.
Unilever now aims to help up to 1,000 gherkin farmers transition to drip irrigation by
2015.Unilever also focuses on helping farmers use composting to cut water use. By
2020, we will source 100% of the raw materials sustainably.
Enhancing Livelihoods
Project Shakti, a unique initiative by the Company to build and support a network of
women entrepreneurs in small villages was strengthened in 201011 with the
Shaktimaan initiative, under which men from Shakti households were given a bicycle
to cover a cluster of villages in their vicinity. There are now 30,000 Shaktimaans
across India.
The company's Kwality Wall's mobile vending operations provide entrepreneurship
opportunities to over 6,500 migrant labourers across India.
Marketing Initiatives
Khushiyon Ki Doli
The company launched a multi-brand rural marketing initiative called Khushiyon Ki
Doli, in 2010 in three states Uttar Pradesh, Andhra Pradesh and Maharashtra.
Through this initiative more than 10 million consumers were contacted directly in
more than 28,000 villages across these three states. Through this initiative, the
27
company also reached out to 170,000 retailers in these villages. Through this initiative
HUL engaged with 25 million rural consumers in media dark areas in 2011.
In 2011, HUL extended this initiative to cover five states West Bengal, Bihar,
Maharashtra, Andhra Pradesh and Uttar Pradesh, covering over fifty thousand villages
across these five states.
In 2012, Khushiyon Ki Doli has been extended to Karnataka to cover a total of
six States: Maharashtra, UP, Bihar, West Bengal, Andhra Pradesh and Karnataka.
The initiative aims to cover over Fifty five thousand villages in 2012.
Various personal care and home care brands of HUL have participated in this
initiative including: Wheel, Surf Excel, FAL, Sun silk, Vim, Lifebuoy and Close-up.
The first step of spreading awareness is achieved through a team of promoters who
head to each village and invite the villages to what is known as Mohallas to make
them aware of the company and its products. In every village, there are about 45
teams that conduct these events in local language for small focused groups so that it
allows for greater engagement and involvement for the consumers. During this
activity, brands are introduced with the help of TVCs that are played
continuously. And the promoters by way of live demonstrations bring alive the
hygiene benefits of using such brands and improving the quality of daily life. To
increase the fun element and enhance involvement, promoters also conduct
simple quizzes and games around the brands and daily hygiene habits. As part of
this activation, the company offers schemes both for the participating consumers and
also local retailers for generating trial among consumers as well enhancing
availability at retail. Post the Mohallas activity, the promotes go home to home
and conduct consumer home visits to generate trial where they offer attractive
promotions to the consumers. Similarly, there is another team which visits all the
shops in the village which ensures improved availability and visibility of HUL brands.
Perfect Stores
The Perfect Stores initiative was launched by HUL in May 2010 with the aim to
increase the availability and visibility of its products in retail stores across the
country. In May 2010, four thousand HUL employees from across functions launched
28
the initiative through 'Project Bushfire' and created 16,000 'Perfect Stores' in 130
towns in India in a span of 6 days. The employees not only laid out various products
on the stores shelves but also dusted them, thereby increasing the public appeal of the
stores retailing their brands. The company is constantly increasing the number of
stores included in the 'Perfect Stores' programme.
Technology has played a key role in this initiative. The company's salesmen have
been provided with a hand held terminal called iQ, which gives customised
recommendations for each store which products to sell, when to sell them and in
what quantity. The salesman just has to sync the iQ device when visiting the
distributor and download data from the centre to retrieve information on the market.
Headquarters
Hindustan Unilever's corporate headquarters are located at Andheri (E), Mumbai. The
campus is spread over 12.5 acres of land and houses over 1,600 employees. Some of
the facilities available for the employees include a convenience store, a food court, an
occupational health centre, a gym, a sports & recreation centre and a day care
centre.
[82]
Mercury pollution
Main article: Kodaikanal#Mercury_pollution
In 2001 a thermometer factory in Kodaikanal run by Hindustan Unilever was accused
of dumping glass contaminated with mercury in municipal dumps, or selling it on to
scrap merchants unable to deal with it appropriately.
Skin lightening creams
Hindustan Unilever's "Fair and Lovely" is the leading skin-lightening cream for
women in India. The company had to cease television advertisements for the product
in 2007. Advertisements depicted depressed, dark-complexioned women, who had
been ignored by employers and men, suddenly finding new boyfriends and glamorous
careers after the cream had lightened their skin. In 2008 Hindustan Unilever made
former Miss World Priyanka Chopra a brand ambassador for Pond's, and she then
appeared in a mini-series of television commercials for another skin lightening
product, 'White Beauty', alongside Saif Ali Khan and Neha Dhupia; these
advertisements, showing Priyanka's face with a clearly darker complexion against the
29
visibly fairer Neha Dhupia, were widely criticised for perpetuating racism and
lowering the self-esteem of women and girls throughout India who were misled by
HUNL to believe that they needed to be white to be beautiful.
Corporate Social Responsibility
HUL shows more interest in CSR also as from 2004 to 2008 it has reduced the
emission of Carbon di-oxide by more than 25% in the manufacturing.
HUL follows 5 R strategies to deal with the Green House Gases (GHG):
Reduce
Re-Use
Recycle
Recover
Renew
HUL uses Agriculture wastages as the fuel (Ground nut shells, bagasse, saw dust,
Coconut shells, and cashew) DOMEX, a product of HUL is planning to sponsor the
world toilet day on the 19th November every year.
PROJECT SHAKTI
ICICI bank is the financial partner of HUL in the project Shakti
As competition is increasing day by day, its difficult to maintain the leader position
& to further strengthen the distribution network HUL made a project
Called project SHAKTI which will serve the following purpose:
A) Small, scattered settlements and poor infrastructure make distribution difficult.
To reach: Over 500,000 villages not reached directly by HUL.
B)
media-reach: 500 million Indians lack TV& radio.
C) Low category penetration, consumption. To Influence:
D) Per capita consumption in Unilever categories is 33% of urban level.
30
HUL soon realized that although it was enjoying a greater penetration in the rural
market when compared with its competitor such as Nirma and ITC, its direct reach
was restricted to only 16%. The FMCG giant was desperate to increase this share.
HUL saw its dream fulfilment in the vast Indian rural market. The company was
already engaged in rural development with the launch of the Integrated Rural
Development Programme in 1976 in the Etah district of Uttar Pradesh. This program
was in tandem with HUL's dairy operations and covered 500 villages in Etah.
Subsequently, the company introduced similar programs in adjacent villages. These
activities mainly aimed at training farmers, animal husbandry, generating
alternative income, health & hygiene and infrastructure development. The main
issue in rural development was to create income- generating prospects for the poor
villagers. Such initiatives, linked with the company's core business, became
successful and sustainable and proved to be mutually beneficial to both the
company and its rural customers. However much more remained to be done.
HUL offered a wide range of products to the SHGs, which were relevant to rural
customers. HUL invested significantly in resources who work with the women on
the field and provide them with on-the-job training and support. HUL provided
the necessary training to these groups on the basics of enterprise management, which
the women need to manage their enterprises. For the SHG women, this translated
into a much-needed, sustainable income contributing towards better living and
prosperity. Armed with micro-credit, women from SHGs become direct-to-home
distributors in rural markets.
COMPETITION IN THE FMCG MARKET
Five main competitive strategies are:
Overall low cost leadership strategy
Best cost provider's strategy
Broad differentiation strategy
Focused low cost strategy
Focused differentiation strategy
31
Here competitive strategy varies from sector to sector and company to company.
Thus, it is not easy to predict a single or to find a single strategy for the whole sector.
When we come on to FMCG Sector main strategies lay behind market strategies, cost,
and quality strategies. Here in this report you are going to get information about such
type of strategies of FMCG giants.
Competitive Strategies and Comparison with ITC
This Company is earlier known as Hindustan Lever Ltd. This is India's largest FMCG
sector company with all type of household products available with it. It has Home &
Personal Care products, and also food and Water Purifier available with it. According
to Brand Equity,
HUL has largest no of brands in most trusted brands list 16 of HUL's brands
featured in AC-Nielson Brand Equity list of 100 most trusted brands in 2008 in
an annual survey. For the entire year ending March - 2009 net turnover of company
is Rs. 20'239.33 Crore which is 47.99% higher than 31st December 2007's Rs.
13675.43 Crore driven mainly by domestic FMCG's with net profit stood at Rs.
2'496.45 Crore.
HUL
This Company was earlier known as Imperial Tobacco Company of India Ltd. It
is currently headed by Yogesh Chander Deveshwar. Company mainly operates in the
industry like Tobacco, Foods, Hotels, Stationary and Greeting Cards with the major
products constitutes Cigarettes, packed foods, hotels, and apparels. For the entire year
ending Mar- 2009 the turnover of company is at Rs. 15388 Crore which is 10.3%
higher than previous year's Rs. 13947.53 Crore, driven mainly by robust 20% growth
in non-cigarette FMCG business with net profit stood at Rs. 3324 Crore.
ITC Limited
Analysis of Both Companies
HUL & ITC are major companies in FMCG market in India. When we compare
both companies on the basis of their strategies i.e., their competitive strategies in the
present market. When we look at the present segment breakup for both of the
32
companies then we came to know that their different products vary too much in
the market.
Now let us take a comparative analysis of both the companies under some heads:
HUL
Hindustan Unilever (HUL) is the largest pure- play FMCG Company in the
country and has one of the widest portfolio of products sold via a strong
distribution channel. It owns and markets some of the most popular brands in the
country across various categories, including soaps, detergents, shampoos, tea and face
creams.
ITC
ITC is not a pure-play FMCG company, since cigarettes is its primary business.
It is diversifying into non-tobacco. FMCG segments like foods, personal care, paper
products, hotels and agri-business to reduce its exposure to cigarettes.
Performance
After stagnating between 1999 and '04, the company is back on the growth track. In
the past three years, till 2008 HUL's net sales have witnessed a CAGR of 11%, while
net profit has posted a CAGR of 17%.
Despite diversification, ITC's reliance on cigarettes is still huge. The tobacco business
contributes 40% to its revenues, and accounts for over 80% of its profit. This cash-
generating business has enabled it to take ambitious, but expensive bets in new
segments and deliver modest profit growth.
Overall Strategy:
HUL always believes in customer friendly products with major emphasis on low
cost overall without compromising on the quality of the product. They are
leveraging the capabilities and scale of the parent company and focusing on the value
of execution. The entire product portfolio is also being tweaked to include premium
offerings such as Pond's Age Miracle and dove shampoo in skin and hair care. HUL
introduced Project Shakti to penetrate the rural market.
33
ITC is focusing on delivering value at competitive prices. Its tremendous reach
through extensive distribution chain has been a competitive advantage. Additionally,
the company's e-choupal model for direct
Procurement is well known under which ITC partners with over 100,000 farmers
for spices and wheat procurement and an even larger number for oilseeds. This
kind of rural pedigree is hard to beat.
Growth Drivers
HUL has been launching new products and brand extensions, with investments
being made towards brand-building and increasing its market share. HUL is also
streamlining its various business operations, in line with the One Unilever'
philosophy adopted by the Unilever group worldwide. Introduction of premium
products and addition of new consumers via market expansion will be HUL's growth
drivers.
ITC's backward integration to ensure that its products pass efficiently from the farms
to consumers has helped it to cut down supply and procurement costs. ITC's non-
cigarette FMCG business leverages the large distribution network the company has
developed by selling cigarettes over the years. A rich product mix, along with ramp-
up of investments in its new sectors, will be instrumental in charting ITC's growth
path.
Risk for both the companies
Being an MNC operating in India, HUL is more conservative in its strategies
than its Indian counterparts. Moreover, given increasing competition, it faces the
risk of being overtaken by domestic players in various categories. Prolonged inflation
may lead to margin contraction, in case HUL is not able to pass on this burden to
consumers. The company's large size also poses a problem, since it does not give
HUL the agility to address the competition it faces from national and regional players.
For HUL Increased regulatory clamps on tobacco, along with rising tax burden, pose a
business risk for ITC. So, it has started an ambitious diversification plan, which has its
34
own set of risks. With its foray into the conventional FMCG space, ITC has entered
the high-clutter branded products market. This will burden its resources in terms of ad
spend and brand- building. Creating brand recall and building market share in new
products are ITC's key challenges. Export ban and rising crop prices pose a threat for
its agri-business, taxing its margins.
DISTRIBUTION NETWORK OF HUL:
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 UniLever's distribution network is recognized as one of its key strengths.
Its focus is not only to enable easy access to our brands, but also to touch.
TO MEET THE EVERYDAY NEEDS OF PEOPLE EVERYWHERE.
Way convergence - of product availability, brand Communication and higher
levels of brand experience. HUL's products, manufactured across the country, are
distributed through a network of about 7,000 redistribution stockiest 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 UniLever 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.
Supermarkets
Self-service stores and supermarkets are fast emerging in metros and large
towns. To service modern retailing outlets in the metros, HUL has set up a full-
scale sales organization, exclusively for this channel. The business system delivers
excellent customer service, while driving growth for the company and the store. At
35
the same time, innovative marketing initiatives are taken to provide consumers with
experience of its brands at the store itself, through product tests and in-store sampling.
Villages
HUL has also revamped its sales organization 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 organization. The team comprises an exclusive sales force and Exclusive
redistribution stockiest, under the charge of dedicated managers. The team focuses
on building superior availability, while enabling brand building in the deepest
interiors. HUL's distribution network in rural India already directly covers about
50,000 villages, reaching about 250 million consumers, through about 6000 sub-
stockiest.
IT
An IT-powered system has been implemented to supply stocks to redistribution
stockiest on a continuous replenishment basis. The objective is to catalyse HLL'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, stockiest have been connected
with the company through an Internet-based network, called RS Net, for online
interaction on orders, dispatches, information sharing and monitoring. RS Net covers
about 80% of the company's turnover. Today, the sales system gets to know every day
what HLL stockiest have sold to almost a million outlets across the country. RS Net is
part of Project Leap, HLL's end-to-end supply chain, which also includes a back-end
system connecting suppliers, all company sites and stretching right up to stockiest.
CHANNELS
Hindustan UniLever is simultaneously creating new channels, designed on the same
principle of holistic contact with consumers.
36
CHAPTER 3
RESEARCH METHODOLOGY
37
Purpose of the study
The Purpose of study is to know about the competitive strategies of Hindustan
unilever ltd. to their competitors and to study the marketing strategies of HUL for
green production.. This study is very important in order to know the consumers in
Indian context and what they prefer to purchase in the product.
Through this study we can know the thinking of the consumers and what they actually
want the product and service from the companies. This study is really going to help
me for getting too much knowledge about the retail industry.
This study will help me understanding the factors which are affecting the consumer
and study about how the companies provide better services to the customer.
Market research is the investigation of the structure and development of the market
for the purpose of formulating efficient policies for purchasing, production and
sales.
Research Objectives of the study
1. To study competitors HUL in respect to Go Green practices
3. To study the marketing strategies of HUL for green production.
4. To study the strength, weakness, opportunity, and threats (swot analysis) of HUL
Ltd.
5. To study the customer satisfaction regarding new technique of go green.
Research methodology of the study
Research methodology is considered as the nerve of the project. Without a proper
well-organized research plan, it is impossible to complete the project and reach to any
conclusion. The project was based on the survey plan. The main objective of survey
was to collect appropriate data, which work as a base for drawing conclusion and
getting result.
Therefore, research methodology is the way to systematically solve the research
problem. Research methodology not only talks of the methods but also logic behind
38
the methods used in the context of a research study and it explains why a particular
method has been used in the preference of the other methods.
Sample Survey Design and Analysis
Overview
Researchers often use sample survey methodology to obtain information about a
large aggregate or population by selecting and measuring a sample from that
population. Due to the variability of characteristics among items in the population,
researchers apply scientific sample designs in the sample selection process to reduce
the risk of a distorted view of the population, and they make inferences about the
population based on the information from the sample survey data. In order to make
statistically valid inferences for the population, they must incorporate the sample
design in the data analysis.
Traditional SAS