Distribution System of Hindustan Unilever Ltd.

(HUL)

Introduction Earlier known as Hindustan Lever Limited Was formed in 1933 as Lever Brothers India

Limited. Headquartered in Mumbai, HUL is the market leader in Indian products such

as tea, soaps, detergents etc. The company’s statement of corporate purpose is

to “meet the everyday needs of people, everywhere.”

Introduction (contd.)

The company was renamed in late June 2007 to "Hindustan Unilever Limited“, to provide the optimum balance between maintaining heritage of the company and future benefits.

HUL holds 100 factories across India for manufacturing its diverse product range.

Distribution System – Meaning

Distribution system’s 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.

Distribution System of HUL 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.

Hindustan Unilever provide tailor made services to each of its channel partners.

Distribution System of HUL (Contd.) HUL is using the point of purchase method for

much higher level of direct contact, through in-store facilitators, sampling, education and experience.

It has developed customer management and supply chain capabilities for partnering emerging self-service stores and supermarkets.

2,000 suppliers and 7,500 distributors serve HLL’s 100 factories 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 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 the Supermarkets

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

Product tests and in-store sampling is provided to consumers.

Pioneering 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 2000, Project Shakti has already been extended to about 80,000 villages in 12 states - Andhra Pradesh, Karnataka, Gujarat and others.

Contd…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.

3) Out-of-Home : this deals in providing vending

machines for hot beverages like tea and coffee. HUL’s alliance with Pepsi Co. has significantly strengthened the channel.

Contd…

4) Health and Beauty 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.

Harnessing Information Technology An IT-powered system has been implemented to

supply stocks to redistribution stockists. The objective is to make the product available at

the right place and right time in the most cost effective manner.

For this, stockists have been connected through an Internet-based network, called RS Net, for online interaction.

RS Net is part of Project Leap, HUL's end-to-end supply chain.

Initiatives to Improve Distribution System (Contd.)

Launching of Project Shakti through which the company is able to extend its operations in villages.

Delayering of sales force to improve response times and service levels.

Revamping of its sales organisation in the rural markets .

Initiatives to Improve Distribution System (contd.)

Setting up of a full‐scale sales organisation 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.

Starting of franchised Lakme Beauty Salons and Ayush Therapy centres to offer standardised services

Initiatives to Improve Distribution System (Contd.)

Initiating the concept of Super Value Stores (SVS) in urban areas to partner traditional stores to provide a range of services ranging from managing their inventory to setting up POS (point of sale) banners

Launching of several promotional schemes for existing wholesalers and distributors

Conclusion

Hindustan Unilever, 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.

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