A Study on Sale and Distribution

Management of
Hindustan Unilever Limited

Presented by
Group 3:
Jakir Hussain
Jaspreet Kaur
Jitendra Kumar
Introduction‐ Hindustan Unilever Limited

• Hindustan Unilever Limited (‘HUL’), formerly

Hindustan Lever Limited (it was renamed in
late June 2007 as HUL), is India's largest Fast
Moving Consumer Goods company, touching
the lives of two out of three Indians with over
20 distinct categories in Home & Personal Care
Products and Foods & Beverages.
• Products endow the company with a scale of
combined volumes of about 4 million tones
and sales of nearly Rs. 13718 corers

• 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
• Unilever, holds 52.10% of the equity and the
rest of the shareholding is distributed among
360,675 individual shareholders and financial
institutions
• HUL was formed in 1933 as Lever Brothers
India Limited, and came into being in 1956 as
Hindustan Lever Limited through a merger of
Lever Brothers, Hindustan Vanaspati Mfg. Co.
Ltd. and United Traders Ltd
• These products are manufactured over 40
factories across India. The operations involve
over 2,000 suppliers and associates
• HUL's brands‐ like Lifebuoy, Lux, Surf Excel,
Rin, Wheel, Fair & Lovely, Pond's, Sunsilk,
Clinic, Pepsodent, Close‐up, Lakme, Brooke
Bond, Kissan, Knorr‐Annapurna, Kwality Wall's
– are household names across the country
Products
 Distribution network- Overview
• The distribution network of HUL is one of the
key strengths that help it to supply most
products to almost any place in the country
from Srinagar to Kanyakumari
• This includes, maintaining favorable trade
relations, providing innovative incentives to
retailers and organizing demand generation
activities among a host of other things
• Each business of HUL portfolio has customized
the network to meet its objectives
 Distribution System of HUL
• HUL's products are distributed through a
network of 4,000 redistribution stockists,
covering 6.3 million retail outlets reaching the
entire urban population, and about 250
million rural consumers

• There are 35 C&FAs in the country who feed

these redistribution stockists regularly. The
general trade comprises grocery stores,
chemists, wholesale, kiosks and general stores
• Developed customer management and supply
chain capabilities for partnering emerging self‐
service stores and supermarkets. Around
2,000 suppliers and associates serve HUL’s 40
manufacturing plants which are decentralized
across 2 million square miles of territory
 Distribution at the Villages:

• 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 stockiest and focuses on
building superior availability of products

• In rural India, the network directly covers about

50,000 villages, reaching 250 million consumers,
through 6000 sub‐stockiests
Rural Distribution Model of HUL
• HUL approached the rural market with two
criteria‐ the accessibility and viability

• HUL appointed a Redistribution stockist who

was responsible for all outlets and all business
within his particular town

• In the 25% of the accessible markets with low

business potential, HUL assigned a sub stockist
who was responsible to access all the villages at
least once in a fortnight and send stocks to
those markets
 Distribution at the Urban centres
• Distribution of goods from the manufacturing site to C &
F agents take place through either the trucks or rail roads
depending on the time factor for delivery and cost of
transportation

• Generally the manufacturing site is located such that it

covers a bigger geographical segment of India

• From the C & F agents, the goods are transported to RS’s

by means of trucks and the products finally make the
‘last mile’ based on the local popular and cheap mode of
transport
Schematic of HUL’s Distribution Network

HUL
 New distribution channels

• Project Shakti
Started in the late 2000, Project Shakti had enabled
Hindustan Lever to access 80,000 of India's 638,000
villages .HUL's partnership with Self Help Groups(SHGs)
of rural women, is becoming an extended arm of the
company's operation in rural hinterlands
• Project Streamline
Project Streamline is an innovative and effective
distribution network for rural areas that focuses on
extending distribution to villages with less than 2000
people with the help of rural sub‐stockists/Star Sellers
who are based in these very villages. As a result, the
distribution network directly covers as of now about 40
per cent of the rural population
Project shakti

HUL
Project stremline
 Hindustan Lever Network (HLN)

• It is the company's arm in the Direct Selling

channel, one of the fastest growing in India
today
• It has about several 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
 Mother Depot and Just in Time System

• In order to rationalize the logistics and planning

task, an innovative step has been the formation
of the Mother Depot and Just in Time System
(MD‐JIT)
• Certain C&FAs were selected across the country
to act as mother depots
• Each of them has a minimum number of JIT
depots attached for stock requirements
• JITs draw their requirements from the MD on a
weekly or bi‐weekly basis
 Leveraging Information technology

• HUL customers are serviced on continuous

replenishment. This is possible because of IT
connectivity across the extended supply chain
of about 2,000 suppliers, 80 factories and 7,000
stockists. This sophisticated network with its
voice and data communication facilities has
linked more than 200 locations all over the
country, including the head office, branch
offices, factories, depots and the key
redistribution stockists
 RS Net initiative
• The RS Net initiative, launched in 2001, aims at connecting
Redistribution Stockists (RSs) through an internet based
system. It now covers stockists of the Home & Personal Care
business and Foods & Beverages in close to 1200 towns and
cities
• Together they account for about 80% of the company's
turnover
• RS Net is one of the largest B2B e‐commerce initiatives ever
undertaken in India
• It provides linkages with the RSs’ own transaction systems,
enables monitoring of stocks and secondary sales and
optimises RS’s orders and inventories on a daily basis through
online interaction on orders, despatches, information sharing
and monitoring
HUL’s Sales break up through different
channels
 40 factories

C & FA

HUL Channel
structure Redistribution
stockists

Retailers

End Users
 Diamond model
self service retail
stores (10%)

sales team

rural marketing
(20%)
 Redistribution Stockists:

• Sales Margin:4.76% which includes cash

discount, unloading expenses from depot,
distribution expenses to retailers, incentive
schemes & other incidental expenses
• Modes of transport used: Rickshaw, tempo.
• Incentive schemes
• Software systems and Information System:
UNIFY 8.3 (Developed by IBM & CMC)
• Areas of Operations: Marked for each of the
RS.
• Selling Operations: RSs sells the goods to 
Wholesaler (gets 1.5 % max. discount from RS)
Retailers (gets 1.0% max. discount from RS)
• Retailers:
Sales Margin: Depends on the product Soap,
detergents 8% on MRP, Cosmetics 10% on
MRP, Food items 8% on MRP
• Incentive schemes:
Company programs (Scheme Discounts +
Cash Discounts)
Vijeta scheme is not for retailers 
 Field Sales Force:
The important activities that HUL field sales
force does are

(i) target chasing and

(ii) reporting on a daily basis. Account
information is maintained on palmtops given
by HUL
 Field Force Management
• In HUL, the field force is evaluated using QOC
(Quality of Contribution). It consists of 4
components-
1. Secondary Sale (Max points = 2.5)
2. Eco (Max points = 0.5)
3. Focus (Max points = 0.5)
4. FCS (Max Points = 0.5)
 Target Setting Mechanism and monitoring

 
• The regional office monitors the performance
of various zones. A thorough analysis is done
at the end of each month and based on that
the weak products are identified or those for
which the demand has weakened. This is the
basis of setting ECO and FOCUS targets for the
field persons
Annual Spend in Advertising, Marketing & Distribution functions in FY ‘0
8
HUL revenue distribution
HUL Sales
THANK YOU