HLL (Supply Chain)

Retailers Satisfaction and Expectation towards HLL Distributor
EXECUTIVE SUMMARY
Hindustan lever limited is Indias largest fast moving consumer goods company and it
also having largest distribution channel, with a leader in Home & personal care products
and also foods & Beverages, having its reach to around 1 million retail outlets. These
retailers form an important link between manufacturer, distributor and customer.
The project assigned me was to access the satisfaction level of retailers and their
expectation towards HLL distributor in Belgaum rural. This project taken up by me is a
part of academic assignment to find out the attributes that affect the satisfaction level of
retailers and suggestions to the distributor for improving quality of service.
PROBLEM STATEMENT: Retailers Satisfaction and Expectation towards HLL
Distributor in Belgaum rural.
OBJECTIVES OF THE RESEARCH:
o To know the perceptions of retailer regarding distributor.
o Find out the attributes that affects the satisfaction level of rural retailer.
o Ascertain the opinion about merchandising activity.
o To measure the behavior of sales person during visit.
METHODOLOGY
1. Personal Interaction with TSI, RSP and interviews with retailer.
2. A research survey (using questionnaire) would be conducted.
Babasabpatilfreepptmba.com
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OUTCOME & BENEFITS OF THE STUDY:

1. This study would bring into light on the expectation and perception of the retailers
with respect to the distributors functioning.
2. It will help distributor to take the necessary steps to improve quality of service.
3. It will help distributor to know the attributes that affect satisfaction level of
retailers.
4. Finally, it will help me understand (in practical) HLL distribution as whole and thus
enriching my knowledge.
SCOPE OF THE STUDY:

My study is restricted to only Belgaum rural retailers. The whole study and analysis is
done to measure the level of satisfaction and expectations of retailers towards their
distributor and to find out the attributes and factors that affect the satisfaction level.
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FMCG INDUSTRY IN INDIA
FMCG INDUSTRY IN INDIA

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As the name suggests, products of daily usage under the heads of personal care, fabric
care, household care, packaged foods, beverages and tobacco characterize the sector.
These are part of the monthly purchase basket. Such products generally have a noncyclical consumer demand, low unit value, are mostly branded products, involve high
marketing expenditure and have to be widely distributed. This sector has observed a 2%
decline in the past 4 year period. FMCG pundits attribute this to various theories like
FMCG commanding lower share of the wallet, what with several other newer
expenditures in mobiles, computers, automobile etc. Other reasons to the decline may be
down trading in brands or lower rural off takes. The Industry has a lot of potential since
the product penetration and the per capita use is still low in India. As a matter of fact TV,
which is the major source of information, reaches out to 80% of urban and 46% of the
rural population. The key entry barriers into this section are the Brand, Supply Chain
Management and the complexity involved in managing SKUs (Stock Keeping Units).
Also an Indian FMCG Company faces strong competition from the existing MNC-owned
brands.
SUPPLY CHAIN
The primary objective of supply chain management is to fulfill customer demands
through the most efficient use of resources. A supply chain, logistics network, or supply
network is a coordinated system of entities, activities, information and resources involved
in moving a product or service from the supplier to the customer.
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Typically a simple supply chain model will be as follows:-
Primary
(Shipment)
Factory
Secondary
(Retailing)
Distributo
r
C&FA
SuperStockist
Consumer
Purchase (Off take)
Retailer
Consumer
SubStockist
There are several stages through which the money circulates. The distribution
intermediaries make the whole system of supply chain economically viable. Each layer
of intermediaries implies fewer transaction complexities for all the layers, augmenting
the reach. The experience, specialization and knowledge of local conditions, contacts and
scale through such a network help achieve Operational Efficiency.
Without having to focus upon distribution, the brand managers can concentrate on their
core activity of product development, sourcing and marketing. The companies get a cost
advantage since most intermediaries are family owned businesses with low overhead and
operational costs. The brand owners get a better return on capital employed as
intermediaries hold the inventories.
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THE CHALLENGE INVOLVED

India has around 7.3 million retail outlets of which 3.0 million are in the 3768 towns and
4.3 are in the 627,000 villages. This fact is significant since the biggest challenge is to
reach out to every nook of such a huge and diverse nation as India. As aptly said by Mr.
Pusalkar, Supply Chain can be well learnt here.
For a typical mid-size FMCG company, the numbers would be as
C&FA (Carrying & Forwarding Agent) 30
Distributors & Super-stockiest 1,200
Sub-stockiest 1,000
Retailers reached
Retailers directly covered 500,000
Retailers via wholesalers 1,000,000
TOTAL 1,500,000
Consumers 10,000,000
The 7.3 million outlet strong retailing industry provides direct employment to more than
18 million people which roughly means one in every 25 families in India is engaged in
the business of retailing.
The rural markets are emerging to be the growth drivers of the future. The industry seeks
to cater to a large rural population of the order of 700 million people. Of the 7.3 million
retailers 58% are in rural areas. In most categories penetration is low and innovative
packaging such as sachets and promotion is required. Achieving cost effectiveness to
make the products reach rural outlets is essential.
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THE ECONOMICS
For an FMCG company, the direct customer is the distributor. The several intermediaries
between the company and the actual consumers ( C&FA, Distributors, Super-stockiest,
Sub-stockiest, Wholesalers, and Retailers ) need compensation for the costs incurred,
namely the inventory holding costs, manpower costs, credit provided to the next
intermediary, transportation costs, overheads, and entrepreneurs risks and efforts. The
remuneration is provided as a combination of gross margin (mark-up) on sales,
commission on sales, and reimbursements.
Typical Margins in such Supply Chain are:
Distributor 5%
Retailer 7-15%
Wholesaler 1-1.5%
Super-stockiest 2%
Sub-stockiest 5%
A distributors investment consists of inventory, Accounts receivable and accounts

payable. He draws his income from gross margin or commission on sales. The expenses
include discount expense, distribution expense and overheads. Typically an FMCG
distributor expects a 25% ROI.
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EMERGING TRENDS IN FMCG BUSINESS

The industry has lately observed a rise of regional stalwarts such as Ghadi detergent,
Baagh Bakri Tea etc. who are very strong in their respective geographical areas. Another
emerging trend has been the rush to design products for the mass market in villages. C.K.
Prahlads famous Bottom of the Pyramid theory is the guiding principle.
The market is moving really fast as constant innovations are required in product,
packaging and distribution. With the growth of information technology, the retailer has
transformed from the old gala owner to a much better informed businessman. Direct
Selling (e.g. Amway) as a parallel way of marketing is picking up. Increasing role of
influencers (such as Shakti Amma, a famous concept in Andhra) has also emerged.
There has been an influx of imports and ever increasing presence of multinational
companies in this sector.
The retailing business is also becoming more organized. Organized retailing comprises
professionally managed single or chain of self-service stores. This has implications such
as shorter supply-chain, move from inventory build-up method to collaborative planning,
forecasting, and replenishment system, greater dependence on few sophisticated buyers,
customer management strategy etc.
To sum up all
A world-class FMCG Sales & Distribution system.
Ensures product availability
At the right place
In the right quantity
Ensures product replenishment
Ensures profit for all intermediaries
At a minimal cost
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GROWTH IN SALES OF FMCG COMPANIES:
All top 10 categories record growth, the only exception being packaged tea. Spurred by
high rural demand and retail sales, the fast-moving consumer goods (FMCG) sector
posted 10.6 per cent growth year on year in February, the highest in the past five years,
according to data provided by market research agency AC Nielsen.
The rise does not come on a low base since the sales growth in February 2005 was 8.1
per cent year on year. And what is more, the growth has been broad-based with all the top
10 categories growing, the only exception being packaged tea.
Besides, five of these categories have posted double-digit growth. And for the first time
in four years, all the companies tracked by AC Nielsen have posted a growth in sales.
The revival in the sector has been evident for some time now and the December quarter
saw strong top line growth.
For example, Dabur saw its revenue grow 26 per cent year on year, while Colgates sales
grew 21 per cent. Besides, most companies now have far more pricing power than they
did a year ago, which is reflected in the better operating margins last quarter.
Colgates margin, for instance, was up 10 percentage points at 23 per cent, while that of
Godrej consumer Products was up 270 basis points at 23.8 per cent.
According to analysts, Hindustan Lever in February experienced the highest growth in
five years while others such as Tata Tea and Dabur saw sales grow at a much faster pace
compared with the December quarter. Tata Teas sales rise, for instance, is the highest
since June 2005 while Britannias is the highest in 27 months.
Analysts believe that the pick-up in the larger categories such as biscuits, washing
powder, detergent cakes, shampoos and tea indicates a rise in demand for such categories
in rural areas.
This, they point out, is the main driving force behind the performance of companies such
as Hindustan Lever, which recorded double-digit top line growth last quarter, the first
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time in six years. Very few segments in the FMCG space were now seeing a deceleration
in growth and the momentum was expected to continue, analysts added.
Even as the sector continues its strong run, the BSE FMCG index hit an all-time high of
2,103.5 on Friday with three of its components, ITC, Nestle and McDowell hitting alltime highs.
ITC, incidentally, has the highest weight of 48 per cent in the index. The FMCG index
has outperformed the Sensex for the better part of 2005 and has been a big out performer
so far in 2006.
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RETAILING AND RURAL MARKET
RETAILING AND RURAL MARKET

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Retailing is very diverse and sometimes the edges start to blur with other type of
business. The word retail comes from the Old French retaille to cut off. So a
wholesaler or manufacturer sells bulk lots while the retailer is willing to sell off smaller
or individual pieces. Of course this definition only takes us so far because many
wholesalers also sell retail and many retailers also sell wholesale in larger lots.
Further, the common usage of retail is based more on whether the business deals directly
with the public. .
A local physical location is not even necessary for the definition of retail anymore now
that etailing and eBay selling can be retail businesses into themselves. The best
definition of retail might be any business whose product or service is made for, and
targeted to, the consuming public.
Visual merchandising in Retailing.

Selling goods using visual stimuli is an old age practice, but with increasing growth of
retail industry, the art or arguably the science of visual merchandising has come to
occupy a new found fancy. Marketers especially retailers, consider it as an inspirable part
of their overall branding effort. But even as it continues to grow, like all other branding
efforts, the understanding of its impact and effectiveness is still in its infancy.
What makes Rural Markets Attractive?

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Rural Consumer Insights:

Rural India buys.
Products more often (mostly weekly).
Buys small packs, low unit price more important than economy.
In rural India, brands rarely fight with each other; they just have to be present at the
right place.
Many brands are building strong rural base without much advertising support.
Fewer brand choices in rural: number of FMCG brand in rural is half that of urban.
Buy value for money, not cheap products
Some Myths:
Rural Market Is a Homogeneous Mass
Reality: Its a heterogeneous population. Various Tiers are present depending on the
incomes like Big Landlords, Traders, small farmers; Marginal farmers: Labors, artisans.
State wise variations in rural demographics are present viz. Literacy (Kerala 90%, Bihar
44%) and Population below poverty line (Orissa 48%, Punjab 6%)
Disposable Income Is Low
Reality: Number of middle class HHs (annual income Rs 45,000- 2, 15,000) for rural
sector is 27.4 million as compared to the figure of 29.5 million for urban sector. Rural
incomes CAGR was 10.95% compared to 10.74% in urban between 1970-71 and 199394.
Individuals Decide About Purchases
Reality: Decision making process is collective. Purchase process- influencer, decider,
and buyer, one who pays can all be different. So marketers must address brand message
at several levels. Rural youth brings brand knowledge to Households (HH).
Why Different Strategies?
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Rural markets, as part of any economy, have untapped potential. There are several
difficulties confronting the effort to fully explore rural markets. The concept of rural
markets in India is still in evolving shape, and the sector poses a variety of challenges.
Distribution costs and non availability of retail outlets are major problems faced by the
marketers. The success of a brand in the Indian rural market is as unpredictable as rain.
Many brands, which should have been successful, have failed miserably. This is because,
most firms try to extend marketing plans that they use in urban areas to the rural markets.
The unique consumption patterns, tastes, and needs of the rural. Consumers should be
analyzed at the product planning stage so that they match the needs of the rural people.
Therefore, marketers need to understand the social dynamics and attitude variations
within each village though nationally it follows a consistent pattern. The main problems
in rural marketing are:
Understanding the rural consumer
Poor infrastructure
Physical Distribution
Channel Management
Promotion and Marketing Communication
Dynamics of rural markets differ from other market types, and similarly rural marketing
strategies are also significantly different from the marketing strategies aimed at an urban
or industrial consumer.
Strategies to be followed:
Marketing Strategy:
Marketers need to understand the psyche of the rural consumers and then act accordingly.
Rural marketing involves more intensive personal selling efforts compared to urban
marketing. Firms should refrain from designing goods for the urban markets and
subsequently pushing them in the rural Areas. To effectively tap the rural market a brand
must associate it with the same things the rural folks.
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It can be done by utilizing the various rural folk media to reach them in their own
language and in large numbers so that the brand can be associated with the myriad rituals,
celebrations, festivals, melas and other activities where they assemble.
Distribution Strategy:
One of the ways could be using company delivery vans which can serve two purposes- it
can take the products to the customers in every nook and corner of the market and it also
enables the firm to establish direct contact with them and thereby facilitate sales
promotion. However, only the bigwigs can adopt this channel. The companies with
relatively fewer resources can go in for syndicated distribution where a tie-up between
non-competitive marketers can be established to facilitate distribution. Annual melas
organized are quite popular and provide a very good platform for distribution because
people visit them to make several purchases. According to the India n Market Research
Bureau, around 8000 such melas are held in rural India every year. Rural markets have
the practice of fixing specific days in a week as Market Days (often called Haats) when
exchange of goods and services are carried out. This is another potential low cost
distribution channel available to the marketers. Also, every region consisting of several
villages is generally served by one satellite town (termed as Mandis or Agri-markets)
where people prefer to go to buy their durable commodities. If marketing managers use
these feeder towns they will easily be able to cover a large section of the rural population.
Promotional Strategy:
Firms must be very careful in choosing the vehicle to be used for communication. Only
16% of the rural population has access to a vernacular newspaper. So, the audiovisuals
must be planned to convey a right message to the rural folk. The rich, traditional media
forms like folk dances, puppet shows, etc with which the rural consumers are familiar and
comfortable, can be used for high impact product campaigns.
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INTRODUCTION TO THE COMPANY
INTRODUCTION TO THE COMPANY

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Hindustan Lever Limited (HLL) and its constituent companies have been in India since
1931. Over these decades, while HLL has benefited from the developments in the
country, it has contributed equally to these developments.
Unilever's mission is to add Vitality to life. We meet everyday needs for nutrition,
hygiene, and personal care with brands that help people feel good, look good and get
more out of life.
Their deep roots in local cultures and markets around the world give us their strong
relationship with consumers and are the foundation for their future growth. We will bring
their wealth of knowledge and international expertise to the service of local consumers - a
truly multi-local multinational.
Their long-term success requires a total commitment to exceptional standards of
performance and productivity, to working together effectively, and to a willingness to
embrace new ideas and learn continuously.
To succeed also requires, we believe, the highest standards of corporate behavior towards
everyone we work with, the communities we touch, and the environment on which we
have an impact.
This is their road to sustainable, profitable growth, creating long-term value for their
shareholders, their people, and their business partners
In the summer of 1888, visitors to the Kolkata harbor noticed crates full of Sunlight soap
bars, embossed with the words "Made in England by Lever Brothers". With it began an
era of marketing branded Fast Moving Consumer Goods (FMCG).Soon after followed
Lifebuoy in 1895 and other famous brands like Pears, Lux and Vim. Vanaspati was
launched in 1918 and the famous Dalda brand came to the market in 1937.
In 1931, Unilever set up its first Indian subsidiary, Hindustan Vanaspati Manufacturing
Company, followed by Lever Brothers India Limited (1933) and United Traders Limited
(1935). These three companies merged to form HLL in November 1956; HLL offered
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10% of its equity to the Indian public, being the first among the foreign subsidiaries to do
so. Unilever now holds 51.55% equity in the company. The rest of the shareholding is
distributed among about 380,000 individual shareholders and financial institutions.
The erstwhile Brooke Bond's presence in India dates back to 1900. By 1903, the
company had launched Red Label tea in the country. In 1912, Brooke Bond & Co. India
Limited was formed. Brooke Bond joined the Unilever fold in 1984 through an
international acquisition. The erstwhile Lipton's links with India were forged in 1898.
Unilever acquired Lipton in 1972 and in 1977 Lipton Tea (India) Limited was
incorporated.
Pond's (India) Limited had been present in India since 1947. It joined the Unilever fold
through an international acquisition of Chesebrough Pond's USA in1986.
Since the very early years, HLL has vigorously responded to the stimulus of economic
growth. The growth process has been accompanied by judicious diversification, always in
line with Indian opinions and aspirations.
The liberalization of the Indian economy, started in 1991, clearly marked an inflexion in
HLL's and the Group's growth curve. Removal of the regulatory framework allowed the
company to explore every single product and opportunity segment, without any
constraints on production capacity.
Simultaneously, deregulation permitted alliances, acquisitions and mergers. In one of the
most visible and talked about events of India's corporate history, the erstwhile Tata Oil
Mills Company (TOMCO) merged with HLL, effective from April 1, 1993. In 1995, HLL
and yet another Tata company, Lakme Limited, formed a 50:50 joint venture, Lakme
Lever Limited, to market Lakme's market-leading cosmetics and other appropriate
products of both the companies. Subsequently in 1998, Lakme Limited sold its brands to
HLL and divested its 50% stake in the joint venture to the company.
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HLL formed a 50:50 joint venture with the US-based Kimberly Clark Corporation in
1994, Kimberly-Clark Lever Ltd, which markets Huggies Diapers and Kotex Sanitary
Pads. HLL has also set up a subsidiary in Nepal, Nepal Lever Limited (NLL), and its
factory represents the largest manufacturing investment in the
Himalayan kingdom. The NLL factory manufactures HLL's products like Soaps,
Detergents and Personal Products both for the domestic market and exports to India.
The 1990s also witnessed a string of crucial mergers, acquisitions and alliances on the
Foods and Beverages front. In 1992, the erstwhile Brooke Bond acquired Kothari General
Foods, with significant interests in Instant Coffee. In 1993, it acquired the Kissan
business from the UB Group and the Dollops Ice cream business from Cadbury India.
As a measure of backward integration, Tea Estates and Doom Dooma, two plantation
companies of Unilever, were merged with Brooke Bond. Then in July 1993, Brooke Bond
India and Lipton India merged to form Brooke Bond Lipton India Limited (BBLIL),
enabling greater focus and ensuring synergy in the traditional Beverages business. 1994
witnessed BBLIL launching the Wall's range of Frozen Desserts. By the end of the year,
the company entered into a strategic alliance with the Kwality Ice-cream Group families
and in 1995 the Milk food 100% Ice-cream marketing and distribution rights too were
acquired.
Finally, BBLIL merged with HLL, with effect from January 1, 1996. The internal
restructuring culminated in the merger of Pond's (India) Limited (PIL) with HLL in 1998.
The two companies had significant overlaps in Personal Products, Specialty Chemicals
and Exports businesses, besides a common distribution system since 1993 for Personal
Products. The two also had a common management pool and a technology base. The
amalgamation was done to ensure for the group, benefits from scale of economies both
domestic and export market.
In January 2000, in a historic step, the government decided to award 74 per cent equity in
Modern Foods to HLL, thereby beginning the divestment of government equity in public
sector undertakings (PSU) to private sector partners. HLL's entry into Bread is a strategic
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extension of the company's wheat business. In 2002, HLL acquired the government's
remaining stake in Modern Foods.
In 2003, HLL acquired the Cooked Shrimp and Pasteurized Crabmeat business of the
Amalgam Group of Companies, a leader in value added Marine Products exports.
Hindustan Lever Limited, 51.6% subsidiary of Unilever Plc, is the largest FMCG
Company in the country, with a turnover of Rs118bn. The companys business sprawls
from personal and household care products to foods, beverages and specialty chemicals.
The company has a dominating market share in most categories that it operates in such as
toilet soaps, detergents, skincare, hair care, color cosmetics, etc. It is also the leading
player in food products such as packaged tea, coffee, ice cream and other culinary
products.
. Brand equities are built over a period of time by technological innovations, consistent
high quality, aggressive advertisement and marketing. Availability near the consumer
through a wide distribution network is another crucial success factor, as products are of
small value, frequently purchased, daily use items. HLL is strong on both these fronts
with leading brands, which are market leaders in their respective categories, and a 1mn
strong direct retail reach.
HLL is the market leader in the detergent and toilet soap industry with market share
of 60% and 40% respectively. Nirma is a close competitor in detergents and has been
slowly gaining ground in toilet soaps too. The other significant competitor in detergents
is P&G. In oral care segment, HLL has emerged as a strong No 2 player with 36% market
share. In the hair care segment, HLL dominates the shampoo market with a 64.5% share
and is the No 2 player in hair oils. HLL has a 54% market share in skin creams. In the
foods business, Tata Tea in packet tea, Nestle in coffee and culinary products, GCMMF
(Amul) in ice creams, and Godrej Pillsbury in staple food are the main competitors.
HLL grew at a fast pace in the mid 90s driven by its aggressive acquisition spree. From
Rs38bn turnover (contributed 70% by soaps, detergents and personal products), HLLs
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turnover has now grown to Rs118bn, with soaps and personal products contributing 57%
to turnover and beverages and food products contributing to 29% of turnover. Growth
during the last few years has largely been driven by the personal products business.
However the pace of growth has slackened significantly in the last two years with several
key segments registering a growth in 2001 soaps business (Rs21bn) de-grew by 1% and
detergent sales (Rs20bn) grew by 7%. Other personal products (household care, oral acre,
skin care, hair care, color cosmetics) registered a 14% yo-yo growth to Rs24.6bn.
Expansion of the foods business, which has been identified as a major growth area, has
not been as fast as anticipated. Beverage sales move largely with commodity price trends,
which have remained on a downtrend. Branded tea business degree by 10% in F12/01 to
rs16bn, while the Rs3bn coffee business registered a 7% yo-yo growth. Ice-cream
business has failed to takeoff registering a 3% growth. The staple food business, once
considered a high potential growth area witnessed a decline of 10% yoy to Rs2.4bn.
Profitable growth has been the new mantra of the FMCG majors Chairman, M S Banga,
who took over the reins from Keki Dadiseth 2 years ago. In contrast to Dadiseths
strategy of expansion through acquisition, Mr. Bangas strategy revolves around
rationalization. A focus on 30 power brands, which are major contributors to profitability,
seeking new avenues of expanding distribution reach, improving profitability of foods
businesses have been the thrust areas. Non-FMCG businesses are either being are hived
off or are being strengthened by partnerships with players who have the technological
expertise in those businesses. The strategy has paid results with profits registering a 24%
yo-yo growth in 2001, despite a flat top line growth.
PRESENT STRUCTURE
Hindustan Lever Limited (HLL) is India's largest Fast Moving Consumer Goods
Company, touching the lives of two out of three Indians with over 20 distinct categories
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in Home & Personal Care Products and Foods & Beverages. They have the company with
a scale of combined volumes of about 4 million tones and sales of Rs.10, 000 cores.
HLL is also one of the country's largest exporters; it has been recognized as a Golden
Superstar Trading House by the government of India.
The mission that inspires HLL's 36,000 employees, including over 1,350 managers, is to
"add vitality to life." HLL meets everyday 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
HLL shares 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.
HLL'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 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. HLL's distribution network, comprising about 7,000
redistribution stockiest, directly covers the entire urban population, and
HLL has traditionally been a company, which incorporates latest technology in all its
operations. The Hindustan Lever Research Center (HLRC) was set up in 1958, and now
has facilities in Mumbai and Bangalore.
HLRC and the Global Technology Centers in India have over 200 highly qualified
scientists and technologists, many with post-doctoral experience acquired in the US and
Europe.
HLL believes that an organizations worth is also in the service it renders to the
community. HLL is focusing on health & hygiene education, women empowerment, and
water management. It is also involved in education and rehabilitation of special or
underprivileged children, care for the destitute and HIV-positive, and rural development.
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HLL has also responded in case of national calamities / adversities and contributes
through various welfare measures, most recent being the village built by HLL in
earthquake affected Gujarat, and relief & rehabilitation after the Tsunami caused
devastation in south India.
Over the last three years the company has embarked on an ambitious program, Shakti.
Through Shakti, HLL is creating micro-enterprise opportunities for rural women, thereby
improving their livelihood and the standard of living in rural communities. Shakti also
includes health and hygiene education through the Shakti Vani Program, and creating
access to relevant information through the Shakti community portal. The program now
covers about 50,000 villages in 12 states. HLL's vision is to take this program to 100,000
villages impacting the lives of over 100 million rural Indians.
HLL is also running a rural health program Lifebuoy Swasthya Chetana. The program
endeavors to induce adoption of hygienic practices among rural Indians and aims to bring
down the incidence of diarrhea. It has already touched 70 million people in approximately
15000 villages of 8 states. The vision is to make a billion Indians feel safe and secure.
If Hindustan Lever straddles the Indian corporate world, it is because of being singleminded in identifying itself with Indian aspirations and needs in every walk of life.
MANAGEMENT STRUCTURE
Hindustan Lever Limited is India's largest Fast Moving Consumer Goods (FMCG)
Company. It is present in Home & Personal Care and Foods & Beverages categories.
HLL and Group companies have about 36,000 employees, including 1350 managers.
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The fundamental principle determining the organization structure is to infuse speed and
flexibility in decision-making and implementation, with empowered managers across the
company's nationwide operations. For this, HLL is organized into two self-sufficient
divisions - Home & Personal Care & Foods - supported by certain central functions and
resources to leverage economies of scale wherever relevant.
Board
Divisions
Central functions
Businesses
Board
At the apex is the Board, headed by the Chairman, and comprising 5 whole time
Directors and 5 independent non-executive Directors. The day to day operations are
supervised by the National Management comprising the Vice Chairman, Managing
Director
(HPC),
Managing
Director
(Foods)
and
the
Finance
Director.
Divisions
Each division is self-sufficient with dedicated resources and assets in sales, marketing,
commercial, and manufacturing. The two divisions are further reorganized into
categories.
Typically, each category and each function - Sales, Commercial, Manufacturing - is
headed by a Vice President. They with their respective Managing Director comprise that
Division's Management Committee.
For managing sales operations, HLL divides the country into four regions, with regional
branches in Delhi, Kolkata, Chennai and Mumbai. Headed by a Regional Manager, they
comprise Regional Sales Managers and Area Sales Managers, assisted by dedicated field
forces, comprising Sales Officers and Territory Sales In charges. In Marketing, each
category has a Marketing Manager who heads a team of Brand Managers dedicated to
each or a group of brands.
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The commercial team of a Division is responsible for its supply chain management.
There are teams dedicated to sourcing, planning and logistics. Each Division has a
nationwide manufacturing base, with each factory peopled by teams of Production,
Engineering, Quality Assurance, Commercial and Personnel Managers.
Central functions
HLL's Central Functions are Finance, Human Resources, Technology, Research,
Information Technology, Legal & Secretarial, and Corporate Affairs. Their services are
shared across the company. But, wherever necessary, managerial resources are dedicated
exclusively to a business. For example, each Division now has dedicated HR managers.
HLL believes that while it leverages the scale of a large corporate, it must also retain the
soul of a small company. Its organization structure, which has and will continue to evolve
with time, is aimed at achieving this knitting.
Businesses
Home & Personal Care
Personal Wash
Fabric Wash
Home Care
Oral Care
Page 25

Skin Care
Hair Care
Deodorants & Talcs
Color Cosmetics
Foods
Tea
Coffee
Branded Staples
Culinary Products
Ice Creams
Modern Foods ranges
New Ventures
Hindustan Lever Network
Ayush ayurvedic products & services
Saga
Purest water purifiers
Exports
HPC
Beverages
Marine Products
Rice
Castor
Products of HLL
BRANDS OF HLL:
HOME AND PERSONAL CARE:
Lux
Breeze
Page 26

Liril
Dove
Lifebuoy
Pears
Hamam
Rexona
LAUNDRY:
Surf Excel
Rin
Wheel
SKIN CARE:
Fair and Lovely
Ponds
HAIR AND CARE
Sun silk Natural
Clinic
ORAL CARE:
Pepsodent
Close-Up
DEODRANTS:
Axe
Rexona
COLOUR COSMETIC:
Lakme
Page 27

AYURVEDIC PERSONAL AND HEALTH CARE:
Ayush
TEA:
Brooke bond
Lipton
COFFEE
Bru
FOODS
Kissan
Knorr Annapurna
ICE CREAM
Kwality Walls
M/S NAGA TRADERS

(RURAL DISTRIBUTOR)
BELGAUM
Naga traders are the rural distributors for Hindustan Lever Limited and also they are
supplying the products to the Shakti dealer, they are supplying retailer in rural area like.
Bagewadi
M.K Hubli
Page 28

Hukkeri
Itagi pariswad
Kanapur
Nesargi
Piranwadi
Ganeshpur
Sambra
Yamaknamma etc......
Shakti dealer
1. S C.Hubli (munushikatti)
2. S A.Kaktikar (Belagundi)
3. S A.Tigodoli (Shindoli)
They deal in products of HLL
Lux, Pears, Hamam, Rexona, Liril,Life bouy
Surf excel, Rin, Wheel
Sunsilk, Clinic plus
Pepsodent, Close-up
Fair and lovely, Ponds
Brooke bond, Lipton Bru etc..
HLL's INITIATIVE IN RURAL DEVELOPEMENT:

Hindustan Lever Limited (HLL) and its constituent companies have been in India since
1931. Over these decades, while HLL has benefited from the developments in the
country, it has contributed equally to these developments.
HLL has consciously woven India's imperatives with the company's strategies and
operations. The companys main contributions include developing and using relevant
Page 29

technologies, stimulating industrialization, boosting exports, adding value to agriculture
and generating productive employment and income opportunities.
HLL has been proactively engaged in rural development since 1976 with the initiation
of the Integrated Rural Development Program in the Etah district of Uttar Pradesh,
in tandem with the companys dairy operations. This Program now covers 500 villages in
the district. Subsequently, the factories that HLL continued establishing in less-developed
regions of the country have been engaged in similar program in adjacent villages.
These factory-centered activities mainly focus on training farmers, animal husbandry,
generating alternative income, health & hygiene and infrastructure development.
The company has acquired a wealth of experience and learning from these activities.
KEY LEARNINGS ON RURAL DEVELOPEMENT:

The principal issue in rural development is to create income-generating opportunities
for the rural population. Such initiatives are successful and sustainable when linked with
the companys core business and is mutually beneficial to both the population for whom
the program is intended and for the company.
Based on these insights, HLL launched Project Shakti in the year 2001, in keeping
with the purpose of integrating business interests with national interests
Page 30
SHAKTI - Changing Lives in Rural India

Shakti is HLL's rural initiative, which targets small villages with population of less
than 2000 people or less. It seeks to empower underprivileged rural women by providing
income-generating opportunities, health and hygiene education through the Shakti Vani
program, and creating access to relevant information through the Shakti community
portal.
In general, rural women in India are underprivileged and need a sustainable source of
income. NGOs, governmental bodies and other institutions have been working to
improve the status of rural women. Shakti is a pioneering effort in creating livelihoods
for rural women, organized in Self-Help Groups (SHGs), and improving living standards
in rural India. Shakti provides critically needed additional income to these women and
their families, by equipping and training them to become an extended arm of the
company's operation.
Shakti started in 2001 and has already been extended to about 50,000 villages in 12 states
- Andhra Pradesh, Karnataka, Gujarat, Madhya Pradesh, Tamil Nadu, Chattisgarh, Uttar
Pradesh, Orissa, Punjab, Rajasthan, Maharashtra and West Bengal. The respective state
governments and several NGOs are actively involved in the initiative.
Why Shakti?
EMPOWERING WOMEN IN RURAL INDIA
The objective of Project Shakti is to create income-generating capabilities for
underprivileged rural women, by providing a sustainable micro enterprise opportunity,
and to improve rural living standards through health and hygiene awareness.
A crucial lesson learnt was that rural up liftmen depended not on successful infusion
of credit, but on its guided usage for better investment opportunities this is where
Page 31

HLL's Project Shakti is playing a role in creating such profitable micro enterprise
opportunities for rural women.
CATALYSING PROSPERITY IN INDIAN VILLAGES

Under the project, HLL offers a range of mass-market products to the SHGs, which are
relevant to rural customers. HLL is investing significantly in resources that work with
the women on the field and provide them with on-the-job raining and support. This is a
key factor in ensuring the stabilization of the fledgling businesses.
HLL imparts 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 translates 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.
RISK-FREE MICRO ENTERPRISE THAT YIELDS HIGH RETURNS

A typical Shakti entrepreneur conducts a steady business which gives her an income in
excess of Rs.1, 000 per month on a sustainable basis. As most of these women live below
the poverty line, and hail from extremely small villages (with populations of less than
2000), this earning is very significant, and almost twice the amount of their previous
house hold income. For most of these families, Project Shakti is enabling families to live
with dignity.
In addition to money, there is a marked change in the woman's status within the
household, with a much greater say in decision-making. This results in better health and
hygiene, education of the children, especially the girl child, and an overall betterment
in living standards.
The most powerful aspect about this model is that it creates a win-win partnership
between HLL and the consumers, some of whom will depend on the organization for
their livelihood, and builds a self-sustaining cycle of growth for all.
Page 32

Shakti already has about 13,000 women entrepreneurs in its fold. A typical Shakti
entrepreneur earns a sustainable income of about Rs.700 -Rs.1, 000 per month, which is
double their average household income. Shakti is thus creating opportunities for rural
women to live in improved conditions and with dignity, while improving the overall
standard of living in their families. In addition, it involves health and hygiene program,
which help to improve the standard of living of the rural community. Shakti's ambit
already covers about 15 million rural populations. Plans are also being drawn up to bring
in partners involved in agriculture, health, insurance and education to catalyze overall
rural development.
HLL's vision for Shakti is to scale it up across the country, covering 100,000 villages and
touching the lives of 100 million rural consumers by 2005.
Shakti, the Internet-based rural information service, has been launched in Andhra
Pradesh, in association with the Andhra Pradesh Government's Rajiv Internet Village
Program. The service is now available in Nalgonda, Vishakapatnam, West Godavari and
East Godavari districts. Shakti has been developed to provide information and services to
meet rural needs in medical health and hygiene, agriculture, animal husbandry, education,
vocational training and employment and women's empowerment. The vision is to have
3,500 kiosks across the state by 2005.
Page 33
HLL-DISTRIBUTION NETWORK
HLL DISTRIBUTION NETWORK

The company salesman grouped all these orders and placed an indent with the Head
Office. Goods were sent to these markets, with the company salesman as the consignee.
The salesman then collected and distributed the products to the respective wholesalers,
against cash payment, and the money was remitted to 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. In order to achieve this,
one wholesaler in each market was appointed as a "Registered Wholesaler," a stock point
Page 34

for the company's products in that market. The company salesman still covered the
market, canvassing for orders from the rest of the trade. He would then distribute stocks
from the Registered Wholesaler through distribution units maintained by the company.
The Registered Wholesaler system, therefore, increased the distribution reach of the
company to a larger number of customers.
The highlight of the third phase was the concept of "Redistribution Stockiest" (RS)
who replaced the RWs. The RS was required to provide the distribution units to the
company salesman. The RS financed his stocks and provided warehousing facilities to
store them. The RS also undertook demand stimulation activities on behalf of the
company.
The second characteristic of this period we realized that the RS would be able to
provide customer service only if he was serviced well. This knowledge led to the
establishment of the "Company Depots" system. This system helped in transshipment,
bulk breaking, and as a stock point to minimize stock-outs at the RS level.
In the recent, a significant change has been the replacement of the Company Depot
by a system of third party Carrying and Forwarding Agents (C&FAs). The C&FAs act as
buffer stock-points to ensure that stock-outs did not take place. The C&FA system has
also resulted in cost savings in terms of direct transportation and reduced time lag in
delivery. The most important benefit has been improved customer service to the RS.
The role performed by the Redistribution Stockiest has also undergone changes over
the years. Financing stocks, providing manpower, providing service to retailers,
implementing promotional activities, extending indirect coverage, reporting sales and
stock data, screening for transit damages are some of the functions performed by the RS
today.
HLL has grown manifold over the years. In the process, the number of factories and
the number of SKUs too have increased. In order to rationalize the logistics and planning
Page 35

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. All brands and packs required for the set of markets which the MD and
JITs service in a given area are sent to the mother depot by all manufacturing units. The
JITs draw their requirements from the MD on a weekly or bi-weekly basis.
At present, HLL'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.
In addition to the ongoing commitment to the traditional grocery trade, HLL is building a
special relationship with the small but fast emerging modern trade. Our scale enables us
to provide superior customer service including daily servicing, improving their range
availability whilst reducing inventories. We are using the opportunity of interfacing more
directly with our consumers in this retail environment through specially designed
communication and promotions. This is building traffic into the stores while yielding
high growth for our business.
An IT-powered system has been implemented to supply stocks to redistribution stockiest

on a continuous replenishment basis. The objective is to catalyze HLLs 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.
Page 36

RS Net has come as a force multiplier for HLL Way, the company's action-plan to
maximize the number of outlets reached and to achieve leadership in every outlet, by
unshackling the field force to solely focus on secondary sales from the stockiest to
retailers and market activation. HLL Way has also led to implementing best practices in
customer management and common norms and processes across the company. Powered
by the IT tools it has further improved customer service, while ensuring superior
availability and impact visibility at retail points.
THE CHALLENGE OF THE RURAL MARKETS

70% of India's population resides in villages. Penetrating the rural markets is, therefore,
one of the key challenges for any marketer. While rural markets present a great
opportunity to companies, they also impose major challenges. At HLL, they have been at
the forefront of experimenting with innovative methods to reach the rural consumer.
Indirect coverage
Under the Indirect Coverage (IDC) method, company vans were replaced by vans
belonging to Redistribution Stockiest, which serviced a select group of neighboring
markets.
Operation Harvest
The reach of conventional media and, therefore, awareness of different products in
rural markets is weak. It was also not always feasible for the Redistribution Stockiest to
cover all these markets due to high costs involved. Yet, these markets are important since
growth opportunities are high.
Page 37

Operation Harvest endeavored to supplement the role of conventional media in rural
India and, in the process, forge relationships and loyalty with rural consumers. Operation
Harvest also involved conducting of product awareness programs on vans.
Cinema van operations these are typically funded by the Redistribution Stockiest. Cinema
Van Operations have films and audio cassettes with song and dance sequences from
popular films, also comprising advertisements of HLL products Single Distribution
Channel
For rural India, HLL has established a single distribution channel by consolidating
categories. In a significant move, with long-term benefits, HLL has mounted an initiative,
Project Streamline, to further increase its rural reach with the help of rural sub-stockiest.
It has already appointed 6000 such sub-stockiest. As a result, the distribution network
directly covers about 50,000 villages, reaching about 250 million consumers.
Distribution will acquire a further edge with Project Shakti, HLL's partnership with Self
Help Groups of rural women. The project, started in 2001, already covers over 5000
villages in 52 districts of Andhra Pradesh, Karnataka Madhya Pradesh and Gujarat, and is
being progressively extended. The vision is to reach over 100,000 villages,
There by touching about 100 million consumers. The SHGs have chosen to adopt
distribution of HLL's products as a business venture, armed with training from HLL and
support from government agencies concerned and NGOs. A typical Shakti entrepreneur
conducts business of around Rs.15000 per month, which gives her an income in excess of
Rs.1000 per month on a sustainable basis. As most of these women are from below the
poverty line, and live in extremely small villages (less than 2000 population), this earning
is very significant, and is almost double of their past household income
For HLL, the project is bringing new villages under direct distribution coverage. Plans
are being drawn up to cover more states, and provide products/services in agriculture,
health, insurance and education. This will both catalyze holistic rural development and
also help the SHGs generate even more income. This model creates a symbiotic
Page 38

partnership between HLL and its consumers, some of whom will also draw on the
company for their livelihood, and helps build a self-sustaining virtuous cycle of growth
CHANNEL STRUCTURE
Page 39

CARRY AND RE-DISTRIBUTOR STOCKIEST
RE-DISTRIBUTOR STOCKIEST
Supermarkets- Self- service stores where there is a room for shoppers to browse and
interact with the products.
Family grocer- Over the counter store mainly for monthly household shopping
Kiosk- A tiny over the counter store, easily accessible for emergency purchases. It
stocks solely low unit packs.
Wholesale- Sells stock to small retailer and end user.
DISTRIBUTION CHANNEL
Old distribution channel of HLL:
Manufacturer (Chennai)
C & F (Hubli)
RD
Page 40
Wholesalers
Retailers
End customer
Notation:
1) C & F: Carriage Forward
2) RD: Rural Distributor
NEW DISTRIBUTION CHANNEL OF HLL:

Manufacturer (Chennai)
C & F (Hubli)
RD
Lab RS
SS
Page 41
Retailers
SE
End customer
Notation:
3) C & F: Carriage Forward
4) RD: Rural Distributor
5) Lab RS: Lab Regional Stockiest
6) SS: Star Seller
7) SE: Shakti Entrepreneur
Page 42
RESEARCH METHODOLOGY
TITLE OF THE PROJECT
Retailers Satisfaction and Expectation towards HLL

Distributor
Page 43
MAIN OBJECTIVES:
1) To know the perception of retailers regarding distributor.
2) Find out the attributes that affects the satisfaction level of rural retailers.
3) Ascertain the opinion about merchandising activity.
4) To measure behavior of sales representative during
Retailers visit.
SUB OBJECTIVES:
1) Study the FMCG market in India and distribution system.
2) To know HLL initiatives in Indian rural market.
SAMPLE DESIGN
POPULATION;
Population for this research is 800 retailers of Belgaum Rural.
SAMPLE AREA:
Belgaum Rural
Page 44
Khanapur
Nandgad
Londa
Hukkeri
Yamakanamma
Ganeshpur
Peeranwadi
Bagewadi
Sambra
SAMPLING METHOD:
The process of drawing sample units from the population is called sampling method.
In order to have the unbiased results in the survey, the appropriate method
of sampling i.e. stratified sampling adopted. It also includes
convenience sampling.
DURATION OF THE PROJECT: Two Months

FIELD WORK
This market research involved a field work of 3 weeks where in I have administered pretested questionnaire to retailers. I have carried out the survey to 60 respondents by having
the personal interaction with them.
TOOLS USED FOR ANALYSIS:

1. Hypothesis testing
2. Graphical Representation of Analysis:
a. Pie charts
Page 45

b. Bar Diagrams
DATA COLLECTION APPROACH:

Primary data has been used to carry out the research successfully. The secondary
data has been collected from various journals and publications. For the purpose of
gathering primary data a structure and non-disguised questionnaire was designed to
collect data from the retailer. The questionnaire contains both open-ended and closeended questions.
Method of Communication:
In order to minimize the bias in data collection, the method of personal interview was
adopted.
THE SOURCES OF THE DATA ARE AS FOLLOWS

The study relies to a great extent on primary data and to some extent on secondary data:
PRIMARY DATA:
Questionnaire
Observation and interview technique
SECONDARY DATA:
Information is collected through internet
From various text books
Journals and magazines
Page 46
IMITATION OF THE STUDY;

LIMITATIONS:
The study is restricted in the scope owing to the following limitations:
1. The study is limited to a particular geographical area that is Belgaum rural only.
2. The information and data collected and analyzed is restricted to the researchers
knowledge and ability.
3. The answers that I have got from the retailers cannot be considered as totally
perfect because of various personal and other limitations.
4. Cost and time was also another limiting factor that affected the study.
As retailer expectations and experiences include more of psychological aspects the
survey made during a particular time period will give the information about the retailers
during that particular time period. In order to be up-to-date in understanding the level of
satisfaction periodic surveys are necessary.
Page 47
ANALYSIS AND INTERPRETATION
Q1.Type of Store
Table-No-1.
Page 48
Type of Store
Grocery store
Medical store
Stationary store
others
TOTAL
No.of.Retailers
52
1
6
1
60
Percentage (%)
86
2
10
2
100
Graph-No-1
INFERENCES:
The above graph shows that out of 60 Retail outlets visited 86% are Grocery
stores, 10% Stationary stores and 2% each Medical and other stores.
Here others consist of super market run by the co-operative society.
From the inference it can conclude that major portion of the type of retail store is
Grocery stores.
Q2.Type of Outlet
Table-No-2
Page 49

Type of outlet
Vijeta outlet
Star outlet
General outlet
TOTAL
No.of.Retailers
10
5
45
60
Percentage (%)
17
8
75
100
Graph-No-2
INFERENCES:
Among 60 outlets 75% are General outlets.
10 vijeta outlets were visited, who come under the merchandising activity of
HLL.
Remaining 8% consist of star outlets that enjoy gifts and offers on the bases of
their sales point.
Q3. If Vijeta outlet: How would you rate the

Merchandising activity of your HLL Distributor?
Table-No-3
Page 50
Merchandising activity
Excellent
Good
Fair
Poor
Very Poor
TOTAL
No.of.Retailers
3
5
2
0
0
10
Percentage (%)
30
50
20
0
0
100
Graph-No-3
INFERENCES:
Out of 10 vijeta outlets 30% of retailers rated merchandising activity as excellent,
50% are rated it as good and remaining 20% rated fair.
All the vijeta retailers have shown a positive response towards merchandising
activity.
Q4.How frequently you place the order?

Table-No-4
Page 51

Particulars
Daily
Once in a week
Monthly
Any other
TOTAL
No.of.Retailers
0
32
2
26
60
Percentage (%)
0
53
3
44
100
Graph-No-4
INFERENCES:
Above graph shows that more than 50% of retailers place there order weekly, 3%
of retailers on monthly and 44% of retailers place order on every 15 days.
Here any other option represents every 15 days.
Q5.What is the contribution of HLL products to

your total Sales?
Table-No-5
Page 52

Particulars
Less than 5%
Between 5-10%
Between 10-20%
More than 20%
TOTAL
No.of.Retailers
7
25
25
3
60
Percentage (%)
12
41
42
5
100
Graph-No-5
INFERENCES:
Among 60 retailers, 12% retailers said HLL products contribution to total sales is
less than 5%.
41%said between 5-10%, 42% said its between 10-20% and for 5% retailers it is
more than 20%.
Graph indicates that contribution of HLL products to more than 80% of retailers
total Sales is between 5-20%.
Q6.Choice of stocking depends on..

Table-No-6
Particulars
Demand
Margin
Shelf space
No.of.Retailers
55
3
2
Percentage (%)
86
5
3
Page 53

Schemes and offers
Advertisement
TOTAL
4
0
64
6
0
100
Graph-No-6
INFERENCES:
Out of 60 retail outlets 86% retailers stocking decision depends upon consumer
demand. 5%retailers said margin, for 3% retailers shelf space is important.
6% said schemes and offers factor is crucial and advertisement doesnt matter
while making the stocking decision.
Above graph indicates that consumer demand is the first choice in making
stocking decision but it also concludes that retailers margin and schemes and
offers for retailers and consumers also matters a lot.
Q7.During the visit was the sales representative..

Table-No-7
Particulars
Courteous
Aggressive
Rude
No.of.Retailers
54
6
0
Percentage (%)
90
10
0
Page 54

Offhand
TOTAL
0
60
0
100
Graph-No-7
INFERENCES:
90% of retailers said during the visit sales person is courteous and 10% said they
are aggressive.
There is no any negative response found. All retailers are satisfied with the
behavior of sales representative during visit.
Q8. How would you rate the sales representative explanation

during visit?
Table-No-8
Particulars
Excellent
Good
Satisfactory
No.of.Retailers
4
29
26
Percentage (%)
7
48
43
Page 55

Poor
1
60
TOTAL
2
100
Graph-No-8
INFERENCES:
7% of retailers rated sales representative explanation as excellent, 48 % rated
good, for 43% retailers representative explanation during visit is satisfactory and
2% rated it as poor.
Above graph indicates that 98% of retailers are satisfied with the sales
representative explanation during visit.
Q9. Were you given the opportunity to put your point of view
during visit?
Table-No-9
Particulars
Yes
No
TOTAL
No.of.Retailers
20
40
60
Percentage (%)
33
67
100
Graph-No-9
Page 56
INFERENCES:
Above graph indicates that 67% of retailers are not satisfied with sales
representative in respect to collecting feedback and giving opportunity to put
there point of view during visit.
33% of retailers viewed they have given enough opportunity to put there point of
view during visit.
Q10. How do you rate the delivery process of your HLL

distributor?
Table-No-10
Particulars
Prompt delivery
Ok
Not in time
TOTAL
No.of.Retailers
27
32
1
60
Percentage (%)
45
53
2
100
Page 57

Graph-No-10
INFERENCES:
Among 60 retailers 45% of retailers rated delivery is on the time and prompt.
53% of retailers rated it as ok and 2% of retailers are not satisfied with the
delivery process.
Q11. Are you satisfied with the schemes and discounts offered
by the distributor?
Table-No-11
Particulars
Highly satisfied
Satisfied
Neutral
Dissatisfied
Highly dissatisfied
TOTAL
No.of.Retailers
2
29
18
8
3
60
Percentage (%)
4
48
30
13
5
100
Page 58

Graph-No-11
INFERENCES:
Above bar graph depicts that out 60 retailers 48% retailers are satisfied with the
schemes and discounts offered by the distributer.30% of the retailers remained
neutral in rating there satisfaction.13 and 5% retailers are satisfied and highly
dissatisfied towards there distributor.
It can be seen from the above that the satisfaction level is very low in respect to
schemes and discounts offered by the distributor.
Q12.How do you rate your HLL distributor.

Order processing time
Table-No-12
Ratings
Very good
Good
Not good
Bad
Worst
TOTAL
No.of.Retailers
17
40
2
1
0
60
Percentage (%)
28
67
3
2
0
100
Graph-No-12
Page 59
INFERENCES:
67% of retailers rated order processing time taken by the distributor is good
(short) and 28% of the retailers are highly satisfied.
3% said order processing time taken by distributor is not good and 2% of the
retailers are highly dissatisfied.
From the graph it can conclude that 5% of retailers are not satisfied with the order
processing factor of distributor.
Billing
Table-No-13
Ratings
Very good
Good
Not good
Bad
Worst
TOTAL
No.of.Retailers
14
45
1
0
0
60
Percentage (%)
23
75
2
0
0
100
Graph-No-13
Page 60
INFERENCES:
Above graph indicates that 75% retailers rated billing process as good,23%
retailers rated it as very good and only 2% of retailers are dissatisfied and rated
not good.
It also indicates that most of the retailers are satisfied with the billing process of
distributor.
Promotional activities
Table-No-14
Ratings
Very good
Good
Not good
Bad
Worst
TOTAL
No.of.Retailers
4
38
17
1
0
60
Percentage (%)
7
63
28
2
0
100
Graph-No-14
Page 61
INFERENCES:
Above graph shows overall 70% of 60 retailers are satisfied and 30% of retailers
dissatisfied with the promotional activities carried out by distributor.
It can be conclude from graph that many a retailers are dissatisfied with
promotional activity of the distributor.
Safe Delivery
Table-No-15
Ratings
Very good
Good
Not good
Bad
Worst
TOTAL
No.of.Retailers
14
42
4
0
0
60
Percentage (%)
23
70
7
0
0
100
Graph-No-15
Page 62
INFERENCES:
23 and 70% of retailers rated safe delivery factor is very good and good
respectively.
Out of 60 retailers 7% are rated safe delivery is not good.
Overall there is a greater satisfaction towards safe delivery.
Sales person presentation

Table-No-16
Ratings
Very good
Good
Not good
Bad
Worst
TOTAL
No.of.Retailers
9
49
2
0
0
60
Percentage (%)
15
82
3
0
0
100
Page 63
Graph-No-16
INFERENCES:
Above graph indicates 82% of the retailers are said sales person presentation is
good.
15% of retailers rated it as very good.3% of retailers are not satisfied with sales
person presentation during visit.
Availability of ordered stock

Table-No-17
Ratings
Very good
Good
Not good
Bad
Worst
TOTAL
No.of.Retailers
2
17
38
3
0
60
Percentage (%)
3
28
64
5
0
100
Graph-No-17
Page 64
INFERENCES:
It clearly seen from above graph that 64% of retailers among total of 60 retailers
are rated availability of ordered stock as not good.5% retailers rated it as bad and
only 28 and 3% of retailers rated it good and very good respectively.
A major proportion of the retailers are not satisfied towards availability of ordered
stock.
Hypotheses
For the purpose of analyzing the gathered information few marketing hypotheses
were the major issues in a successful conclusion of the research.
1. Issue: Contribution of HLL products to the total sales of

retailers.
H0: Contribution of HLL products to the total sales of more than 50% retailers is below
10%.
Page 65

H1: Contribution of HLL products to the total sales of more than 50% retailers is more
than 10%
Using Z test can prove this
Computation of Z value
Z=
P-P/ sigma P
P=0.50
q = (1-P) =0.50
N=60
(N-1) =59
where P= X/N = Respondents favoring Ho

Total sample size
P=32/60=0.53
Sigma P= P (1-P)/ (N-1)
=0.00423
Z= 0.53-0.5/0.00423
Z =6.97
K=1.64 (table value of Z)
Conclusion;
Since the calculated Z value (6.97) is more than the critical value (k=1.64) null
hypothesis (Ho) is rejected.
Result
Contribution of HLL products to the total sales of more than 50% retailers is more
than 10%
2. Issue: Availability of ordered stock

H0: More than 40% of retailers are satisfied with the availability of ordered stock.
H1: Less than 40% of retailers are satisfied with the availability of ordered stock
Using Z test can prove this
Page 66

Computation of Z value
Z=
P-P/ sigma P
P=0.40
(1-P) =0.60
N=60
(N-1) =59
where P= X/N = Respondents favoring Ho

Total sample size
P=19/60=0.32
Sigma P= P (1-P)/ (N-1)
Z=
= 0.00406
0.32-0.40/0.00406
Z = - 4.43
K=1.64 (referring table value of Z)
Conclusion;
Since critical value (K=1.64) is less than calculated Z value (- 4.43) null hypothesis is
rejected.
Result
Less than 40% of retailers are satisfied with the availability of ordered stock.
Page 67
FINDINGS
FINDINGS
Research has been made on the topic Retailers Satisfaction and Expectations towards
HLL distributor to identify the level of satisfaction of retailers at Belgaum Rural. Whole
study only depends upon Belgaum rural retailers.
Based on the analysis and the interpretation of the data given in the previous chapter
findings and suggestions are recorded which are as follows
Page 68

In Belgaum rural most of the retail stores are grocery stores. Only few stationary
and medical stores sell HLL products to the ultimate consumer.
The number of Vijeta and Star outlets is very less. Most of the retailers are come
under General outlet.
All the Vijeta outlets are highly satisfied with the merchandising activity. There
is no single negative response to the merchandising activity.
It is found that most of the retailers place the order every week and once in 15
days .It shows that many of the retailers frequently place the order.
Among 60 retailers 50 retailers said contribution of HLL products to there
total sales lies between the range 5-20%.Only few retailers sales exceed 20%.
There is no doubt that customer demand is first preference while making
stocking decision and it is justified by study , 86% of retailers first choice is
customer demand in making stocking decision. But still 14% of retailers stocking
decision influenced by margin, shelf space, schemes and offers.
Its totally a positive feedback towards the sales representative behavior during
the visit.90% of retailers rated during the visit sales representative is courteous
and 10% of retailers rated they are aggressive.
Most of the retailers are satisfied with the sales representative explanation
during visit.
Most of the retailers are not satisfied with the sales representative in collecting
feedback and listening queries of retailers.
Page 69

When I asked the retailers how you rate delivery process of distributor, all the
retailers surveyed were respond they are satisfied with the timely supply of
products from their Rural Distributor.
Only few retailers are satisfied with the schemes and discounts offered by the
distributor.
When I asked how you rate HLL distributor in terms of order processing time
taken, among 60 retailers 17 were replied very good and 40 as good.2 and 1
retailer replied not good and bad respectively.
The billing process followed by the Distributor also gains favor of the rural
retailers, they in-fact quote it to be very efficient.
Among 60 retailers 38 retailers considered promotional activities carried by

distributor is good. 18 retailers feel it is not good and they are dissatisfied with the
distributor.
Most of the retailers rated safe delivery factor as good. Retailers are satisfied
towards safe delivery factor.
Among 60 retailers 97% retailers are happy with the sales person presentation.
Only few retailers are satisfied with the availability of ordered stock. Most of
the retailers considered it as not good.
Most of the retailers are expecting schemes and offers for retailers and they are
dissatisfied with their margin.
Page 70
Page 71
SUGGESTIONS
Suggestions to HLL Distributor through this report

Based on the findings of the study I would like to suggest few points.
Retailers viewed that display of the products has influenced their sale and many
people in rural area recognize the product not by its name but by its external
appearance. As all the Vijeta retailers have appreciated and are satisfied with the
merchandising activity it is suggested that merchandising activity should be
extended to all General retailers.
Modernization and standardization of rural retailers network must be carried out
in order to exchange ideas on successful selling strategies and identifying areas of
Page 72

improvements Sales through Services and a Retailer Development Program
must be carried out.
It is advised to the sales representative, to give an opportunity to retailers to put
their point of view during visit.
Still few of the rural retailers choice of stocking depend upon the factors like
schemes, discounts, offers and margin and it attracts bulk orders to distributor.
Distributor must satisfy retailers in respect to above factors.
Distributor should maintain stock of all HLL products.
Discount and company incentive should be passed on to the retailer by the
distributors and distributor should periodically review the performance of their
retailer.
Page 73
CONCLUSION
Conclusion
To conclude, it is very much limited time to clearly understand the retailer satisfaction.
Apart from this we need to focus on each retailers view carefully in regular time intervals
(periodically) so to the best possible is presented here. Still there is a lot of scope for
developing on this subject, as excellence is not limited always.
Thus in brief, we can conclude that managing and measuring retailer satisfaction can
bring about positive benefits to distributor, company and sales people as well as
Page 74

customers. Retailer satisfaction boosts more sales and loyal customer to distributor and in
turn helps to produce more satisfied ultimate customers to the company.
Thus the significance of retailers satisfaction stretches from introducing more and more
promotional activities, good margin and better services from distributor.
BIBLIOGRAPHY
ICFAI Journal
Marketing Management by Philip kotler
Marketing Research by Parshu Raman
Page 75
www.hll.com
www.hllshakti.com
Page 76
ANNEXURE
Page 77
QUESTIONNAIRE
Dear Sir/ Madam,
Name of the outlet
Proprietor
Address
Telephone
1. Type of store:
Grocery store
Medical store
Stationary store
If any specify.
2. Type of outlet:
Vijeta outlet
Star outlet
General outlet
3. If Vijeta outlet:
How would you rate the merchandising activity of your HLL Distributor?
Excellent
Good
Fair
Poor
Very poor
4. How frequently you place the order?

Daily
Once in a week
Monthly
Any other
5. What is the contribution of HLL products to your total sales?

Less than 5%
Between 5-10%
Page 78

Between 10-20%
More than 20%
6. Choice of stocking depends on.

Demand
Margin
shelf space
Schemes and offers
Advertisement
7. During the visit was the Sales representative

Courteous
Aggressive
Rude
Off hand
8. How would you rate the Sales representative explanation during visit?
Excellent
Good
Satisfactory
Poor
9. Were you given the opportunity to put your point of view during visit?
Yes
No
10. How do you rate the delivery process of your HLL Distributor?
Prompt delivery
Ok
Not in time
11. Are you satisfied with the schemes and discounts offered by the Distributor?
Highly Satisfied
Satisfied
Neutral
Dissatisfied
Highly dissatisfied
12. How do you rate your HLL Distributor?

FACTOR
Order processing time
Very good
Good
Not Good
Bad
Worst
Page 79

Billing
Promotional activities
Safe Delivery
Sales person presentation
Availability of ordered
stock
13. Do you expect any additional service from Distributor?

If yes state the additional services14. Any suggestion
Thanks for your Assistance
Page 80

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Retailers Satisfaction and Expectation towards HLL Distributor

Retailers Satisfaction and Expectation towards HLL Distributor

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SCOPE OF THE STUDY:

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