Mm Sales &Dist

8/7/2019 Mm Sales &Dist

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Submitted by: Hiren Gadhvi

Neeraj Trivedi

Shikha Agrawal

Rahul Mehta

Sachin Patel



Introduction«..Introduction«..

Hindustan Unilever Limited (µHUL¶), formerly HindustanLever Limited (it was renamed in late June 2007 asHUL).

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 15,000employees, including over 1,300 managers, is to "addvitality to life.³

HUL meets everyday needs for nutrition, hygiene, andpersonal care with brands that help people feel good,look good and get more out of life.



Products«..Products«..



factory

Just in time depot

Customer service provider

Big box retailer

consumer

Structure for Distributionof Product



Analysis of Distribution Network of Analysis of Distribution Network of HULHUL

We have analyzed the distribution network of HUL from thefollowing aspects:

1. Evolution of HUL¶s distribution network

2. Transportation & Logistics

3. Channel Design

4. Initiatives taken for channel member management

5. Field force management

6. Analytical Framework7. Financial Analysis



Evolution of HUL¶s distributionEvolution of HUL¶s distributionNetworkNetwork

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 andquality service to the company's customers

The highlight of the third phase was the concept of "Redistribution Stockist" (RS) who replaced the Wholesalers.



Distribution at Villages«Distribution at 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 exclusiveredistribution stockists.

The team 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-stockists



Distribution at Urban Centers«Distribution at Urban Centers«

Distribution of goods from the manufacturing site to

Carrying & Forward agents take place througheither the trucks or rail roads depending on the timefactor for delivery and cost of transportation.

Generally the manufacturing site is locatedsuch that it covers a bigger geographical segment of

India.

From the Carrying & Forward agents, the goods aretransported to RS¶s by means of trucks and the

products finally make the µlast mile¶ based on the localpopular and cheap mode of transport.



Distribution at theDistribution at the

SupermarketsSupermarkets HUL has set up a full-scale sales organisation, for thischannel to serve modern retailing outlets.

Product tests and in-store sampling is provided to

consumers.



Pioneering new channelsPioneering new channels

Hindustan Unilever is simultaneously creating new

channels, designed on the same principle of holistic

contact with consumers.

1) Project Shakti :HUL's partnership with Self Help Groups of rural women. Started in 2001, Project Shakti has alreadybeen extended to about 50,000 villages in 12 states -Andhra Pradesh, Karnataka, Gujarat and others.

2) Hindustan Unilever Network (HUN): it is the company's arm

in the Direct Selling channel. It presents a range of customised offerings in Home & Personal Care and Foods.



Cont..Cont..

3) Out-of-Home : this deals in providing vending machines forhot beverages like tea and coffee. HUL¶s alliance with PepsiCo. has significantly strengthened the channel.

4) Health and Beauty services : Lakme Salons providespecialised beauty services and solutions, under therecognised authority of the Lakme brand. The AyushTherapy Centres provide easy access to authentic Ayurvedic

treatments and products.



Channel DesignChannel Design

Hindustan Lever Limited (HUL) has twotypes of channel selling

i. Regular (traditional) retail channel,

ii. Direct Selling Channel in the name of Hindustan LeverNetwork (HLN).



Channel structureChannel structureR edistribution 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: 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.

Selling Operations: RSs sells the goods to

o Wholesaler (gets 1.5 % max. discount from RS)

o Retailers (gets 1.0% max. discount from RS)



Cont..Cont..

Wholesaler:

Gets cash discounts and other schemes promoted by HUL (getspoints under Vijeta Scheme).

Retailers:

Sales Margin: Depends on the product

o Soap, detergents 8% on MRP

o Cosmetics 10% on MRP

o Food items 8% on MRP

Incentive schemes:

Company programs (Scheme Discounts + Cash Discounts)

TPR schemes based on Sales (1 % to 4 %)

Vijeta scheme is not for retailers.



Initiatives Taken to Improve TheInitiatives Taken to Improve TheDistribution NetworkDistribution Network

Setting up of a fullscale sales organization comprising key

account management and activation to impact, fully engageand service modern retailers as they emerge.

Servicing Channel partners and customers with continuous

daily replenishment.

Leveraging scale and building expertise to service ModernTrade and Rural Markets.

Delaying of sales force to improve response times andservice levels

Launching of several promotional schemes for existingwholesalers and distributors.



Non Monetary MethodsNon Monetary Methods

Based on the QOC various awards are distributed to the fieldpersons at the end of every month. These awards are alsoknown as µMOC 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 FrameworkAnalytical Framework

We tried to analyze HUL¶s distribution network in the light of 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 Impulse8. level of Involvement(LOI)

9. Purchased as a Basket of Goods

10. Speed & complexity of Decision making process



Analytical Framework cont«.Analytical Framework cont«.

11. present of Expert influencer in the decision making process

12. Element of crisis purchase exists

13. Element of risk aversion exists

14. Perish ability of the product15. Time band associated with the purchase of the product

16. Fungibility

17. Degree of customization possible

18. Negative/Positive reinforcing product

19. Value/Volume ration(value density) of the product



Financial AnalysisFinancial Analysis

M arketing Expenses

As stated earlier also, marketing expenses hereinclude the following ±

- Commissions- Rebates 29

- Discounts

- Sales promotional

- Expenses on direct selling agents

- Entertainment expenses etc.

Distribution Expenses

Distribution expenses include the outward freightcost to the company.



ConclusionConclusion

Hindustan Unilever, which once pioneereddistribution in India, is today reinventingdistribution - creating new channels, andredefining the way current channels are serviced.

In the process it is converging product availability,with brand communication and brand experience.



ThankThank--YouYou

Mm Sales &Dist

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