Distribution management of

PRESENTED by :ISHANK RICHA SWATI

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Introduction..
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Hindustan Unilever Limited (HUL), formerly Hindustan Lever Limited (it was renamed in late June 2007 as HUL). India's largest Fast Moving Consumer Goods company HUL is also one of the country's largest exporters The mission that inspires HUL's over 15,000 employees, including over 1,300 managers, is to "add vitality to life. HUL meets everyday needs for nutrition, hygiene, and personal care with brands that help people feel good, look good and get more out of life.

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Food Brands

Playful banter, a little mischief, serious conversation theres no time for young couples like the time spent sharing a cup of 3 Roses.

Lipton has a range of vitality teas that truly encompass the goodness of tea.

Indias favorite cup of tea, the great taste of Red Label brings people closer together and strengthens relationships.

Brooke Bond Taaza lifts me people unshackles the mind, allowing them to see and realize possibilities.

Brooke Bond Taj Mahal is an exclusive selection of teas for the discerning consumer.

Ek cup Bru aur mood ban jae

A good honest scoop of daily pleasure.

With Kissan, good food is loved not shoved!

Kissan Amaze Brainfood is speci - fically designed for the mental development of kids.

Knorr helps families make meal times special, nutritious, tasty and healthy.

Partnering with the mom in nurturing her dreams, Annapurna Atta is aimed at helping her provide wholesome tasty nutrition to her

Home Care Brands

Sunlight is a color care brand

Cifthe best cleaner to let you shine.

The worlds largest fabric conditioner brand.

The sheer power of Domex bleach gives you the confidence you need, eradicating all known germs.

Created in 1885, the Vim brand is still innovating and using the magic of natural ingredients to create unbeatable results over a hundred

Active Wheel de "Mehnat se Aazadi" Freedom from painful & tiring laundry

Rin provides best in class whiteness which is demonstrable.

Giving your kids the freedom to get dirty and experience life, safe in the knowledge that Surf Excel will remove those stains

Personal Care Brands

Lux believes in passion for beauty. It continues to be a favorite with generations of users for a sensuous experience of luxury.

Holistic skin care experiences perfected over the ages to deliver healthy, beautiful skin

Breeze, with the goodness of glycerine gives soft, fragrant and smooth skin.

Awaken, and enliven your senses with a Liril bath.

Rexona gives you 24 hour protection from sweat and body odour and therefore the confidence to handle whatever the day has in store.

Dove stands for real beauty. All around the world, Dove is making complete therapy for your hair.

Pears the purest and most gentle way to skincare!

Lifebuoy is available in multiple variants in soaps and specialist formats such as liquid hand wash, catering to the entire family.

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New Clear with Essential Oils, guarantees Zero dandruff and leaves your hair feeling fabulous.

Clinic Plus is Indias largest selling shampoo and has won the trust the millions of families across India.

Sunsilk encourages young women in India to live for today. Sunsilk helps you transform the beauty of your hair instantly because LIFE CAN'T WAIT!!

Dove stands for real beauty. All around the world, Dove is making complete therapy for your hair.

Freshness that brings you Closer

Pepsodent India is committed to improve the overall Oral health of Indians.

Analysis of Distribution Network of HUL

We have analyzed the distribution network of HUL from the following aspects: 1. Evolution of HULs distribution network 2. Transportation & Logistics 3. Channel Design 4. Initiatives taken for channel member management 5. Field force management 6. Analytical Framework 7. Financial Analysis

Evolution of HULs distribution Network

The first phase of the HUL distribution network had wholesalers placing bulk orders directly with the company The focus of the second phase, which spanned the decades of the 40s, was to provide desired products and quality service to the company's customers The highlight of the third phase was the concept of "Redistribution Stockist" (RS) who replaced the RWs

Distribution System
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Distribution systems focus to enable easy access to their brands, touch consumers with a three-way convergence - of product availability, brand communication, and higher levels of brand experience. The most obvious function of distribution system is to provide the logistics support to get the companys product to the end customer. The another important role of this system is to maintain the information flow between company to consumer.

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HUL's products, are distributed through a network of about 7,000 redistribution stockists covering about one million retail outlets. The general trade comprises grocery stores, chemists, wholesale, kiosks and general stores. Company provides tailor made services to each of its channel partners. HUL is using the point of purchase method for much higher level of direct contact, through in-store facilitators, sampling, education and experience.

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 at Villages

RURAL DISTRIBUTION

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 substockists

Marketing Strategies for Rural Areas

For long term benefit HUL started PROJECT STREAMLINE in 1997. Appointed 6000 substockists that directly covers about 50000 villages & 250million customers. Integrate, economic, environment, & social objective with Business Agenda.

Distribution at Urban Centers

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 RSs by means of trucks and the products finally make the last mile based on the local popular and cheap mode of transport.

Marketing Strategies for Urban Areas

Focuses on short supply chain for distribution. Meet every need of people everywhere. Build segments & market for the future Emphasis on Direct selling, Franchisee to reach everyone .

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
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New distribution channels

Project Streamline

Project Streamline.

Hindustan lever Network

Mother Depot and Just in Time System Leveraging Information technology RS Net Initiative Adexa iCollaboration suite

HULs Turnover Compared with Competitors, 2006

HULs Market Leadership across various FMCG Categories

Channel Design
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Hindustan Lever Limited (HUL) has two types of channel selling

i. Regular (traditional) retail channel, ii.Direct Selling Channel in the name of Hindustan Lever Network (HLN).

Channel structure
Redistribution stockists:l

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: Before 2000 holiday packages and tours but after 2000 no nonmonetary incentive for RS. Software systems and Information System: UNIFY 8.3 (Developed by IBM & CMC). This software needs to be synchronized daily and the system updates any information/ incentive schemes / sales figures etc to and from the common shared platform. Areas of Operations: Marked for each of the RS.

Wholesaler:
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Gets cash discounts and other schemes promoted by HUL (gets points under Vijeta Scheme). Total retailer base in Jamshedpur: Approximately 1070.

Retailers:
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Sales Margin: Depends on the product

o Soap, detergents 8% on MRP o Cosmetics o Food items 10% on MRP 8% on MRP

Incentive schemes:
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Company programs (Scheme Discounts + Cash Discounts) TPR schemes based on Sales (1 % to 4 %) Vijeta scheme is not for retailers.

Initiatives Taken to Improve The Distribution Network

Setting up of a fullscale sales organization comprising key account management and activation to impact, fully engage and service modern retailers as they emerge. Servicing Channel partners and customers with continuous daily replenishment. Leveraging scale and building expertise to service Modern Trade and Rural Markets. Delaying of sales force to improve response times and service levels Launching the Unicare scheme with upmarket pharmacies and retailers to sale its premium brands. Launching of several promotional wholesalers and distributors. schemes for existing

Field Force Management

In HUL, the field force is evaluated using QOC (Quality of Contribution). It consists of 4 components 1. 2. 3. 4. Secondary Sale (Max points = 2.5) Eco (Max points = 0.5) Focus (Max points = 0.5) FCS (Max Points = 0.5)

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Non Monetary Methods

Based on the QOC various awards are distributed to the field persons at the end of every month. These awards are also known as MOC Star awards. If QOC score > 4.5 - The person is eligible for 7 star award If QOC score > 4 - The person is eligible for 5 star award

If QOC score > 3.5 -The person is eligible for 3 star award

Analytical Framework
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We tried to analyze HULs distribution network in the light of 20 most significant variables that affect the distribution part 0f channel management for any organization in the business of marketing & selling of goods. 1. No of Consumers 2. Geographic Dispersion Of Consumers 3. Frequency of purchase 4. Tendency to postpone purchase 5. Level of Familiarity/Knowledge (of consumer) 6. Degree of brand loyalty 7. Purchased on Impulse 8. level of Involvement(LOI) 9. Purchased as a Basket of Goods 10. Speed & complexity of Decision making process

Analytical Framework cont.

Financial Analysis
Marketing Expenses As stated earlier also, marketing expenses here include the following - Commissions - Rebates 29 - Discounts - Sales promotional - Expenses on direct selling agents - Entertainment expenses etc. Distribution Expenses
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Distribution expenses include the outward freight cost to the company.

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