Analysing the competitor factor in HUL

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A PROJECT REPORT
ON
ANALYSING THE COMPETITOR FACTOR AND BOOSTING SALES

Analyzing the competitor factor and boosting up sales PROJECT MARKETING1

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TABLE OF CONTENTS

1. STUDENT CERTIFICATE
2. ACKNOWLEDGEMENT
3. PREFACE
4. EXECUTIVE SUMMARY
5. INTRODUCTION TO INDUSTRY
6. COMPANY PROFILE
7. COMPETITOR PRODUCTS
8. OBJECTIVE OF SUMMER TRAINING
9. RESEARCH METHODOLOGY
10.SWOT ANALYSIS
11.BUSINESS OPPORTUNITY
12.BIBLIOGRAPHY
13.APPENDIX ( QUESTIONNAIRE)


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EXECUTIVE SUMMARY

This project gives a comprehensive idea about the SALES AND DISTRIBUTION
MANAGEMENT of one of the most important business sector in India, the FAST MOVING
CONSUMER DURABLES (FMCG) sector. The project was an endeavor to study the existing
Vending Business and the Lipton’s presence in it. It also tries to analyze Lipton’s pricing,
promotion, the distribution channel and alternatives.
It aims at installation of vending machine in a company and has been executed in
following three stages:
1. Cold calling
2. Meeting respective administration/human resource heads & Negotiations
3. Installation of Lipton vending machine

The task of installing a vending machine gets accomplice after several rounds of
negotiations the respective company representative is made acquainted with the benefit
his organization will get with Lipton. For this, a comprehensive cost-benefit has to be
presented to him to convert the prospect into key account of HUL.

Once an order is placed, the Lipton crew along with the distributor installs the Lipton
Vending Machine. Proper and regular technical support is provided for machine
management. The Lipton team also trains for a smooth operation of the Lipton Vending
Machine, which will help to maximize cuppage. The installation process is divided into 5
stages:

1) Pre-delivery inspection at the establishment by the manufacturer’s technician.
2) Pre-installation Survey at the establishment by the installation crew. The crew
shall check the location for Water Source, Electrical Wiring and Fittings, Earthing,
Tank and machine placement- accordingly an estimation of cost shall be provided.
3) All electrical, plumbing and water requirement are addressed before actual
installation.
4) After all the necessary checks are made, qualified technicians install the Lipton
Vending Machine.
5) Training of the machine handling personnel to ensure smooth functioning and
easy daily maintenance of the Lipton Vending Machine.

Through the vending machines Hindustan Unilever Ltd. promotes the following
three products:
Tea :


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The packet tea market continued to be extremely competitive with national, regional and
local players vying for increased share and volumes Prices of garden tea remained stable
during the year, but have begun to firm up towards the later part of the year. The
strategy of investing in building Brooke Bond as a mega brand to consolidate and
strengthen the Company's leadership in the packet tea market helped Brooke Bond
maintain its leadership during the year. In 2009, Taj Mahal and Lipton were successfully
re-launched. Aggressive Brand building support behind Lipton Natural Care has
established Natural Care as a significant variant within the portfolio. The focus on brand
building, and innovation has helped the Company to sustain its leadership position in
the overall category and exit the year with a growth momentum. Lipton continued to
grow strongly in the Out-of-Home, Vending Channel through acquisition of some major
regional and national clients, and by strong activation at key consumer points. The
business continued to record sustained profitability through its focused brand portfolio
and highly streamlined supply chain and cost management.

Coffee:

The Coffee business had another excellent year, led by strong growth in Instant Coffee.
The strategy to strengthen the brand equity of Bru through clutter breaking and highly
visible communication, coupled with world class activation led to significant share gain
further consolidating its leadership position within the branded coffee market. Bru
Cappuccino continues to help Bru recruit new consumers into its franchise and
consolidate Bru's channel leadership particularly in Modern Trade. The Re. 1 and Rs. 3
low unit price packs continue to contribute significantly to the brand's growth and drive
category expansion. The coffee category, particularly Instant Coffee, continued to be
extremely competitive with national players securing growth in volumes and market
share. Ground and Roasted coffee; predominantly confined to South India, faced
competition from local and regional players. There is a perceptible trend of increasing
number, of consumers migrating to instant coffee from roasted and ground coffee due

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to its inherent convenience.

Soups:

Knorr Soups enjoy a large share in the nascent and small soup market and held that
position during 2008. A new range of international quality soups were introduced during
the Foods business delivered a robust performance during 2008. This was on the back
of a good 2007, reflecting sustained momentum in the Kissan, Knorr and Annapurna
brands Kissan was relaunched with a new strategic positioning, improved packaging and
a superior formulation, which significantly enhanced the quality of the product.
Simultaneously, the Company focused on improving delivered freshness of processed
foods to consumers with an improved supply year. Simultaneously, a new campaign to
encourage soup consumption at various moments in the day has been well received by
consumers and customers. This will help the business to build volumes through higher
consumption.


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INTRODUCTION TO INDUSTRY
Fast Moving Consumer Goods (FMCG), also known as Consumer Packaged Goods
(CPG), are products that have a quick turnover and relatively low cost. Consumers
generally put less thought into the purchase of FMCG than they do for other products.
Though the absolute profit made on FMCG products is relatively small, they generally
sell in large numbers and so the cumulative profit on such products can be large.

FMCG Products and Categories
Personal Care, Oral Care, Hair Care, Skin Care, Personal Wash (soaps);
Cosmetics and toiletries, deodorants, perfumes, feminine hygiene, paper
products;
Household care fabric wash including laundry soaps and synthetic detergents;
household cleaners, such as dish/utensil cleaners, floor cleaners, toilet cleaners,
air fresheners, insecticides and mosquito repellents, metal polish and furniture
polish.
Food and health beverages, branded flour, branded sugarcane, bakery products
such as bread, biscuits, etc., milk and dairy products, beverages such as tea,
coffee, juices, bottled water etc, snack food, chocolates, etc.
Frequently replaced electronic products, such as audio equipments, digital
cameras, Laptops, CTVs; other electronic items such as Refrigerator, washing
machines, etc. coming under the category of White Goods in FMCG;

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Sector Outlook
FMCG is the fourth largest sector in the Indian Economy with a total market size of Rs.
60,000 crores. FMCG sector generates 5% of total factory employment in the country and
is creating employment for three million people, especially in small towns and rural
India.

Analysis of FMCG Sector

Strengths:
1. Low operational costs
2. Presence of established distribution networks in both urban and rural areas
3. Presence of well-known brands in FMCG sector

Weaknesses:
1. Lower scope of investing in technology and achieving economies of scale, especially
in small sectors
2. Low exports levels
3. “Me-too” products, which illegally mimic the labels of the established brands. These
products narrow the scope of FMCG products in rural and semi-urban market.

Opportunities:
1. Untapped rural market
2. Rising income levels i.e. increase in purchasing power of consumers
3. Large domestic market
4. Export potential
5. High consumer goods spending

Threats:
1. Removal of import restrictions resulting in replacing of domestic brands
2. Slowdown in rural demand
3. Tax and regulatory structure

Future Scenario
The Indian FMCG sector with a market size of US$13.1 billion is the fourth largest sector
in the economy. A well-established distribution network, intense competition between
the organized and unorganized segments characterizes the sector. FMCG Sector is
expected to grow by over 60% by 2010. That will translate into an annual growth of 10%

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over a 5-year period. It has been estimated that FMCG sector will rise from around Rs
56,500 crores in 2005 to Rs 92,100 crores in 2010. Hair care, household care, male
grooming, female hygiene, and the chocolates and confectionery categories are
estimated to be the fastest growing segments.

Growth Prospect
With the presence of 16.5% of the world population in the villages of India, the Indian
rural FMCG market is something no one can overlook. Increased focus on farm sector
will boost rural incomes, hence providing better growth prospects to the FMCG
companies. Better infrastructure facilities will improve their supply chain. FMCG sector is
also likely to benefit from growing demand in the market.

Because of the low per capita consumption for almost all the products in the country,
FMCG companies have immense possibilities for growth. And if the companies are able
to change the mindset of the consumers, i.e. if they are able to take the consumers to
branded products and offer new generation products, they would be able to generate
higher growth in the near future. It is expected that the rural income will rise in 2007,
boosting purchasing power in the countryside. However, the demand in urban areas
would be the key growth driver over the long term. Also, increase in the urban
population, along with increase in income levels and the availability of new categories,
would help the urban areas maintain their position in terms of consumption. At present,
urban India accounts for 66% of total FMCG consumption, with rural India accounting for
the remaining 34%. However, rural India accounts for more than 40% consumption in
major FMCG categories such as personal care, fabric care, and hot beverages. In urban
areas, home and personal care category, including skin care, household care and
feminine hygiene, will keep growing at relatively attractive rates. Within the foods
segment, it is estimated that processed foods, bakery, and dairy are long-term growth
categories in both rural and urban areas.

THE TOP 10 COMPANIES IN FMCG SECTOR
1. Hindustan Unilever Ltd.
2. ITC (Indian Tobacco Company)
3. Nestle India
4. GCMMF ( AMUL)
5. Dabur India
6. Asian Paints (India)
7. Cadbury Industries
8. Britania Industries
9. Procter and Gamble Hygine and Healthcare


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10.Marico Industries

Budget Implications on FMCG Sector
The Budget gives more focus on the agricultural/farm sector that will boost the rural
income thus providing better growth prospects to the FMCG companies. With 12.2% of
the world population living in the villages of India, the Indian rural FMCG market is
something no one can overlook. Better infrastructure facilities will improve their supply
chain. Also, with rising income and growing consumerism, FMCG sectors are likely to
benefit. Growth potential for all the FMCG companies is huge as the per capita
consumption of almost all products in the country is amongst the lowest in the world.
Further, if these companies can change consumer's mindset and offer new generation
products, they would be able to generate higher growth in the future

COMPANY PROFILE

Hindustan Unilever Limited, erstwhile Hindustan Lever Limited (also called HLL),
headquartered in Mumbai, is India's largest consumer products company, formed in


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1933 as Lever Brothers India Limited. Its 41,000 employees are headed by Mr.Harish
Manwani, the non-executive chairman of the board. HUL is the market leader in Indian
products such as tea, soaps, detergents, as its products have become daily household
name in India. The Anglo-Dutch company Unilever owns a majority stake in Hindustan
Unilever Limited.

A number of prominent companies came into the HUL fold as result of Unilever’s
international acquisitions. These included Brooke Bond (1984), Lipton (1972) and Pond’s
(1986). In 1993, Tata Oil Mills Company (TOMCO) merged with HUL. Five years later, HUL
and yet another Tata company, Lakme Limited, formed a 50:50 joint venture, Lakme
Lever Limited. Subsequently in 1998, Lakme Limited sold its brands to HUL and divested
its 50 per cent stake in the joint venture to the FMCG giant.

The leading business magazine, Forbes Global, has rated Hindustan Lever as the best
consumer household products company. Far Eastern Economic Review has rated HUL as
India’s most respected company. Asia money has rated HUL as one of India’s best
managed companies.

BUSINESS OF THE COMPANY
HUL’s business activities are divided into four broad areas:

Home & Personal Care
• Personal Wash
• Fabric Wash
• Home Care
• Oral Care
• Skin Care
• Hair Care
• Deodorants & Talcs
• Color Cosmetics

Foods
• Tea
• Coffee
• Branded Staples
• Culinary Products
• Ice Creams
• Modern Foods ranges

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New Ventures
• Hindustan Lever Network
• Ayush ayurvedic products & services
• Sangam

Exports
• HPC
• Beverages
• Marine Products
• Rice
• Castor

Brands

HUL s brands are household names across the country. They include Lifebuoy, Lux, Surf
Excel, Rin, and Wheel, Fair & Lovely, and Ponds, Sunsilk, Clinic, Pepsodent, Close-up,
Lakme, Brooke Bond, Kissan, Knorr-Annapurna and Kwality Wall’s.

LOCATION
HUL products are manufactured in 80 factories. The operations involve over 2,000
suppliers and associates. HUL s distribution network, comprising about 7,000
redistribution stockiest, directly covers the entire urban population, and about 250
million rural consumers.

Past Milestones
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; other famous brands like Pears, Lux and Vim.
Vanaspati were 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 HUL in November 1956; HUL offered
10% of its equity to the Indian public, being the first among the foreign subsidiaries to

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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 in 1986.Since the very
early years, HUL 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
HUL'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 HUL, effective from April 1, 1993. In 1995, HUL
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
HUL and divested its 50% stake in the joint venture to the company.

HUL formed a 50:50 partnership joint venture with the US-based Kimberly Clark
Corporation in 1994. Kimberly-Clark Lever Ltd, which markets Huggies Diapers and
Kotex Sanitary Pads. HUL 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 HUL'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.

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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 HUL, with effect from January 1, 1996. The internal
restructuring culminated in the merger of Pond's (India) Limited (PIL) with HUL 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 economies both in
domestic and export markets and enable it to fund investments required for
aggressively building new categories.

In January 2000, in a historic step, the government decided to award 74 per cent equity
in Modern Foods to HUL, thereby beginning the divestment of government equity in
public sector undertakings (PSU) to private sector partners. HUL's entry into Bread is a
strategic extension of the company's wheat business. In 2002, HUL acquired the
government's remaining stake in Modern Foods.
In 2003, HUL acquired the Cooked Shrimp and Pasteurized Crabmeat business of the
Amalgam Group of Companies, a leader in value added Marine Products exports.

CHRONOLOGY

YEAR MILESTONES

1888 Sunlight soap introduced in India.

1895 Lifebuoy soap launched; Lever Brothers appoints agents in Mumbai, Chennai,
Kolkata, and Karachi.

1902 Pears soap introduced in India.

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1903 Brooke Bond Red Label tea launched.

1905 Lux flakes introduced.

1913 Vim scouring powder introduced.

1914 Vinolia soap launched in India.

1918 Vanaspati introduced by Dutch margarine manufacturers like Van den Berghs,
Jurgens, Verschure Creameries, and Hartogs.

1922 Rinso soap powder introduced.

1924 Gibbs dental preparations launched.

1925 Lever Brothers gets full control of North West Soap Company.

1926 Hartogs registers Dalda Trademark.

1930 Unilever is formed on January 1 through merger of Lever Brothers and Margarine
Unie.

1931 Hindustan Vanaspati Manufacturing Company registered on November 27; Sewri
factory site bought.

1932 Vanaspati manufacture starts at Sewri.

1933 Application made for setting up soap factory next to the Vanaspati factory at
Sewri; Lever Brothers India Limited incorporated on October 17.

1934 Soap manufacture begins at Sewri factory in October; North West Soap
Company's Garden Reach Factory, Kolkata rented and expanded to produce Lever
brands.

1935 United Traders incorporated on May 11 to market Personal Products.

1937 Mr. Prakash Tandon, one of the first Indian covenanted managers, joins HVM.

1939 Garden Reach Factory purchased outright; concentration on building up Dalda
Vanaspati as a brand.

1941 Agencies in Mumbai, Chennai, Kolkata and Karachi taken over; company acquires
own sales force.

1942 Unilever takes firm decision to "train Indians to take over junior and senior
management positions instead of Europeans".

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1943 Personal Products manufacture begins in India at Garden Reach Factory.

1944 Reorganization of the three companies with common management but separate
marketing operations.

1947 Pond's Cold Cream launched.

1951 Mr. Prakash Tandon becomes first Indian Director. Shamnagar, Tiruchy, and
Ghaziabad Vanaspati factories bought.

1955 65% of managers are Indians.

1956 Three companies merge to form Hindustan Lever Limited, with 10% Indian equity
participation.

1957 Unilever Special Committee approves research activity by Hindustan Lever.

1958 Research Unit starts functioning at Mumbai Factory.

1959 Surf launched.

1961 Mr. Prakash Tandon takes over as the first Indian Chairman; 191 of the 205
managers are Indians.

1962 Formal Exports Department starts.

1963 Head Office building at Back bay Reclamation, Mumbai, opened.

1964 Etah dairy set up, Anik ghee launched; Animal feeds plant at Ghaziabad; Sunsilk
shampoo launched.

1965 Signal toothpaste launched; Indian shareholding increases to 14%.

1966 Lever's baby food, more new foods introduced; Nickel catalyst production
begins; Indian shareholding increases to 15%. Statutory price control on
Vanaspati; Taj Mahal tea launched.

1967 Hindustan Lever Research Centre, opens in Mumbai.

1968 Mr. V. G. Rajadhyaksha takes over as Chairman from Mr. Prakash Tandon; Fine
Chemicals Unit commissioned at Andheri; informal price control on soap begins.

1969 Rin bar launched; Fine Chemicals Unit starts production; Bru coffee launched

1971 Mr. V. G. Rajadhyaksha presents plan for diversification into chemicals to
Unilever Special Committee - plan approved; Clinic shampoo launched.

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1973 Mr. T. Thomas takes over as Chairman from Mr. V. G. Rajadhyaksha.

1974 Pilot plant for industrial chemicals at Taloja; informal price control on soaps
withdrawn; Liril marketed.

1975 Ten-year modernization plan for soaps and detergent plants; Jammu project
work begins; statutory price control on Vanaspati and baby foods withdrawn;
Close-up toothpaste launched.

1976 Construction work of Haldia chemicals complex begins; Taloja chemicals unit
begins functioning.

1977 Jammu synthetic Detergents plant inaugurated; Indian shareholding increases to
18.57%.

1978 Indian shareholding increases to 34%; Fair & Lovely skin cream launched.

1979 Sodium Tripolyphospate plant at Haldia commissioned.

1980 Dr. A. S. Ganguly takes over as Chairman from Mr. T. Thomas; Unilever
shareholding in the company comes down to 51%.

1982 Government allows 51% Unilever shareholding.

1984 Foods, Animal Feeds businesses transferred to Lipton.

1986 Agri-products unit at Hyderabad starts functioning - first range of hybrid seeds
comes out; Khamgaon Soaps unit and Yavatmal Personal Products unit start
production.

1988 Launch of Lipton Taaza tea.

1990 Mr. S. M. Datta takes over as Chairman from Dr. A. S. Ganguly.

1991 Surf Ultra detergent launched.

1992 HUL recognised by Government of India as Star Trading House in Exports.

1993 HUL's largest competitor, Tata Oil Mills Company (TOMCO), merges with the
company with effect from April 1, 1993, the biggest such in Indian industry till
that time. Merger ultimately accomplished in December 1994; Launch of Vim
bar; Kissan acquired from the UB Group.

1994 HUL forms Nepal Lever Limited, HUL and US-based Kimberley-Clark Corporation
form 50:50 joint venture - Kimberley-Clark Lever Ltd. - to market Huggies
diapers and Kotex feminine care products. Factory set up at Pune in 1995; HLL
acquires Kwality and Milkfood 100% brand names and distribution assets. HLL
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introduces Wall's.

1995 HUL and Indian cosmetics major, Lakme Ltd., form 50:50 joint venture - Lakme
Lever Ltd.; HUL enters branded staples business with salt; HLL recognized as
Super Star Trading House.

1996 Mr. K. B. Dadiseth takes over as Chairman from Mr. S. M. Datta; Merger of Group
company, Brooke Bond Lipton India Limited, with HLL, with effect from January 1;
HUL introduces branded aatta; Surf Excel launched.

1997 Unilever sets up International Research Laboratory in Bangalore; new Regional
Innovation Centers also come up.

1998 Group company, Pond's India Ltd., merges with HUL with effect from January 1,
1998. HUL acquires Lakme brand, factories and Lakme Ltd.'s 50% equity in
Lakme Lever Ltd.

2000 Mr. M. S. Banga takes over as Chairman from Mr. K. B. Dadiseth, who joins the
Unilever Board; HUL acquires 74% stake in Modern Food Industries Ltd., the first
public sector company to be disinvested by the Government of India.

2002 HUL enters Ayurvedic health & beauty centre category with the Ayush range and
Ayush Therapy Centers.

2003 Launch of Hindustan Lever Network; acquisition of the Amalgam Group

2005 Launch of "Pureit" water purifiers

Management Structure
Hindustan Unilever Limited is India's largest Fast Moving Consumer Goods (FMCG)
Company. It is present in Home & Personal Care and Foods & Beverages categories. HUL
and Group companies have about 16,000 employees, including 1200 managers.

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, HUL 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

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Board of Directors/ Key Personnel
Mr. Harish Manwani Chairman
Mr D. Sundaram Vice chairman
Mr Nitin Paranjpe CEO & MD
Mr Hemant Bakshi Executive Director sales & customer development

Mr C.K Prahalad Independent Director

Mr D.S Parekh Independent Director

Mr Gopal Vittal Executive Director

Mr Sridhar Ramamurthy Executive Director & CFO

Sales and income break-up from different business activities of
Hindustan Unilever Ltd. :

(Values in crores - (Source: www.hul.com))

PBIT Break-up:
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(Values in crores)
(Source: www.hul.com)

HINDUSTAN UNILEVER LOGO

Logo of Hindustan Unilever is contaning the legacy of their parent company Unilever.
Logo of Hindustan Unilever has also been changed with company name. This logo
coincides with the announcement of new corporate identity. Name HUL was approved by
shareholder at the year annual meeting on May 18 & new identity was officially
announced on 25 June following government approval.

New identity provides optimum balance between maintaining the heritage of the
company & synergies of global alignment with the corporate name of Unilever. Most
importantly it retains “Hindustan” as the first word in its name to reflect the company’s
continued commitment to local economy, consumers, partners, & employers .

New logo symbolizes the company mission of “Adding Vitality to life” & play a very
strongly in our vision of “Earning the love & respect of India by making a real difference
to every Indian”. It comprises 25 different icons representing organization, its brands &
idea of vitality.

SUN : Our primary natural resource. All life begin with this
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Ultimate symbol of vitality.

DNA : Double helix, the genetic blueprint of life & a symbol of bioscience. It is the
key to a healthy life. While the sun is the biggest source of life,dna is the
smallest
SPOON : A symbol of nutrition , tasting & cooking.

BOWL :A bowl of delicious smelling food. it can also represent a ready meal , hot
drink or soup

SPICE & FLAVOUR : Represent chillie or fresh ingredient.

FISH : Representing food, sea or fresh water.

SPARKLE : Clean healthy & sparkling with energy.

SAUCE OR SPREADS : Represents mixing or string. It suggest blending in flavor &
adding taste

BEE : Representing creation , pollination, hard work & bio diversity’s bee
symbolizes both environmental challenges and opportunities.

HAND & FLOWER : Hand symbolizes sensitivity care & need .it represent skin & touch.
& flowers , fragrance .when seen with hand , it represents moisture or cream.

ICECREAM : A treat, pleasure & enjoyment.

LIPS : represent beauty, looking good & taste.

HAIR : A symbol of beauty & good looking. Placed next to the flower it evokes
cleanliness & fragrance ; placed near the hand it suggest softness.

PALM TREE : A nurtured resources. It produces palm oil as well as many fruits –
coconuts, bananas & dates and symbolizes paradise.

BIRDS : A symbol of freedom. It suggest a relief from daily chores, & getting more out
of life.

RECYCLE : A part of our commitment to sustainability.

PARTICLES : A references to science ,bubbles & fizz.

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TEA : A plant or extract of a plant ,such as tea. Also a symbol of growing & farming.

FROZEN : The plant is a symbol of freshness, the snowflakes represent freezing. A
transformational symbol.

LIQUID : A reference to clean water & purity.

WAVE : Symbolizes packaging – a pot of cream associated with personal care.

CLOTHES : Represents fresh laundry & looking goods.

HEARTS : A symbol of love , care & health.

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OUT – OF – HOME BUSINESS
Have you caught the tail of a new trend in town? Have you as yet spotted the best of
brands running into the terrain of out-of-home consumption? Running for cover from
the meltdown in the in-home segment of consumption!

Out-of-home branding is the new buzzword sweeping Indian shores. Brands that
stubbornly remain indoors through their positioning and segmentation strategies are in
for a jolt!
Consider the facts. The Indian population is a young population. Life expectation is
longer than before. Income standards are up. Except for a year of aberration, the Indian
monsoon has largely behaved! Good monsoons mean a good crop. Large parts of the
rural economy are a non tax-paying economy. Good rains spell good crops and good
crops in turn spell a good amount of disposable income!

The metro is a happening place. We have five big ones and a whole host of 29 one
million plus population towns that are buzzing with activity. The man works. The woman
works as well.
The average Indian is spending a lot more time out of home than before. Eight hours at
work, two hours on travel and two hours of outdoor entertainment and eating out,
gobbles up half his day. And that's a lot of time spent out of home! The brand in his life
has to appeal to his senses more out-of-home than when in home.

Tea and coffee have always been very popular beverages among people. It is beyond the
class boundaries. People of all age groups relish them. With globalization and expansion
of retail business, markets etc the ready to serve food items and beverages have gained
lot of demand. One can spot the coffee tea vending machines almost everywhere- be it
Hospitals, Airports, Commercial complexes, offices, big markets and even local colony

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markets. Its popularity can be judged from the fact that in places like Pragati Maidan one
can find ready to serve tea, coffee almost everywhere. It has become a style statement to
be drinking these instead of the handmade tea/coffee.

They sell like hot cakes especially in markets and shopping places. Nowadays people are
conscious about hygiene. Many people go in for these ready to serve tea/coffee and of
course their good taste is a major drawing factor.

Lipton Yellow Label has painted many a town and cities yellow! Many a restaurant, many
a bus stop, and many a signage potential is today all yellow Lipton seems to run out of
home and focus on consumption that is outdoor while Sister Brooke Bond seems to
focus on what is happening inside the home!

“Happy people are productive people”. This is the basic rule of any company. Big or
small, every employer tries at keeping his employees, customers and clients happy.
Imagine if an organization has a wide range of refreshments to grab, at fingertips; if
they could enjoy getting a whole load of refreshments as and when they wished for it.
Lever foods service gives them this freedom in form of vending machines. Available in
hot and cold formats, they are the complete vending solutions for an organization. So,
everyone is happy at the push of a button.

Geographically, tea is widely consumed in the North, East and West of India, and is
popular with a wide variety of social classes and consumer age groups. Black standard
tea constitutes nearly 80% of value sales. In the south, coffee is bigger as a proportion of
total hot drinks than in the rest of the country though green tea has seen its popularity
rise.

It accounts for 90% of the total beverage consumption in the country. In 2007, tea
co9nstituted 70% of retail volume sales, compared to coffee and other hot drinks with
4.4% and 26% shares respectively.

Retail sales volume in year 2009
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(Source: www.answers.com)

India accounts for 26% of the total production of world’s tea and 4.6% of that of world’s
coffee.

World Coffee Production in year 2009 - (source:www.financialexpress.com)

World Tea Production in year 2009 – (source : www.answers.com)

Unilever (Brooke Bond and Lipton) is the clear leader, holding over 30% of the market
share, while Tata Tea (Tata) trails it with almost 20%. The remainder of the market is far
more fragmented and shared between numerous small players. Loose tea comprises a
45-per cent market and is a formidable challenge to the Indian packaged tea segment,
because of its lower prices.

The brand war

HUL Tata Tea

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Taj Mahal, Yellow Label
Premium leaf tea market and
(Rs 220-240/ kg) Green Label Tetley Temptations

Premium dust category Three Roses and Top
(Rs 180-200 per kg) Star Chakra Gold

Medium leaf sector
(Rs 140-180 per kg Red Label and Taaza Tata Tea Premium

Medium dust category Tata Tea Premium, Kanan Devan and
(Rs 130-180 per kg) Taaza, Super Gemini

Popular or economy
category
(Rs 120-140 per kg) A-1 and Tiger Agni Sholay

Economy dust teas
(Rs 120-130 per kg) A-1 and Ruby Agni and Leo

Packet Tea Segment in India

Consumers in different parts of the country have heterogeneous taste. Dust tea is very
popular in the south. In the western states, good quality loose tea is preferred in Gujarat,
whereas in Maharashtra, consumers provide a large market to packet as well as
unbranded tea.. The eastern states of West Bengal and Orissa consume CTC broken.
Among the northern states, CTC fanning is liked in Rajasthan and CTC broken in others
states of the North. The Central India is predominantly a dust market
CTC = Cut, Tear, Curl. CTC production is a shortened, machine automated production
process. Importance is put on a uniform leaf and a quickly colored infusion.
Hindustan Unilever Limited’s (HUL) packet tea business has strengthened its position in
the market in 2004, led by its two mega brands, Brooke Bond and Lipton.
Simultaneously HUL continues to post strong growth in coffee.

HUL has further consolidated on the successful relaunched of Brooke Bond in the second
half of 2003. The three Brooke Bond sub-brands, Taj Mahal, Red Label and Taaza, with
their distinct positioning, have expanded their presence to cover new geographies. This
has helped strengthen marketplace position.

Appropriately priced packs have been introduced to make the Brooke Bond offerings
more accessible. Coupled with high-impact market activation, these packs have
increased Brooke Bond’s market share and sustained its strong growth.
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The Lipton brand, targeted at young consumers, has been appropriately expanded in
the Out-of-Home segment. Lipton Ice Tea has been successfully test-marketed in
Bangalore and Chennai. The consumer test proven mix will now be taken national,
leveraging the alliance between HUL and Pepsi.
HUL has already identified Out-of-Home as a growth driver. The channel, which has
posted strong growth in the last two years, will be used for the entire HUL Beverages and
Foods categories.

In the Instant Coffee segment, HUL continues to post strong growth. Bru Instant Coffee
has been re-launched, with a new identity, communication and modern pack formats.
Superior activation, penetration building activities and investment in strategic channels,
like Out-of-Home, is contributing to the growth. Bru, as a franchise, has been
strengthened with the filter coffee brand, Deluxe Green Label, re-launched as Bru Roast
& Ground.

Consumption in leading producing countries- (source: ICO)

Coffee consumption in India, by and large is an urban phenomenon with an urban and
rural divide of 71% and 29% respectively. Among the type of coffee consumed it was
almost equally divided between instant (soluble) and filter (Roast and ground) coffees
though the proportion of instant coffee is very high in non-south.

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Per capita Consumption of Coffee in India (source:www.indiacoffee.org)

Attitude of Indian Coffee Consumers
(www.indiacoffee.org)

Penetration (Beverage consumed in the past 12 months) of coffee at 59% is low
compared to that of tea.

Penetration of filter coffee is highest in South India

In the Rural areas (South India) instant coffee has a higher level of penetration than
filter coffee.

Consumption of coffee is relatively lower with 19% consuming it when compared to
85% for tea. Consumption was the highest in the South at 31 % while it ranges
between just 35% in the weak coffee zones of North, East and South.

Yesterday's consumption is the highest among the 15-24 and 35-44 age group.

When compared to consumption of other beverages yesterday, coffee comes in third,
after tea and plain milk. Among other beverages, buttermilk, natural beverages and
Carbonated Soft Drink are more popular with more than 10% of respondents
consuming these beverages yesterday.

Coffee is consumed as a first cup only by 23% of coffee drinkers even in the
traditional market of the South.

Per capita consumption of coffee (among all respondents - both drinkers and non
drinkers) is 0.33 cups against 1.77 cups for tea. However, coffee consumption
among drinkers at 1.76 cups compares favorably with that of tea at 2.1 cups..

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The proportion of non-drinkers is the highest in the oldest age group of 55+ years.
Amongst coffee consumers in the rural areas, a majority (43% of all adults) is light
drinkers, consuming 1-2 cups everyday. About a fifth of rural consumers consume
coffee occasionally.

HISTORY OF VENDING MACHINES
Automated retailing through vending machines is a concept that has been exploited
by entrepreneurs around the world for over four decades. India, however, is relatively
virgin market though with huge potential. Vending may be considered as a new
concept in India, but it has been in existence for thousands of years.

Vending Details

Timeline

215 B.C. Device to dispense holy water used in temples of Egypt, described
by Mathematician Hero, who lived in Alexandria.

1076 A.D The Chinese produce a coin operated pencil vendor.

1700s Coin operated boxes appear in English taverns.

1886 U.S grants several patents for coin operated dispensers.

1888 Thomas Adams company installs Tutti Frutti gum machines on New
York elevated train platforms.

1902 Horn and Hardart Baking Company opens automatic restaurant in
Philadelphia.

1905 U.S post office begins to use stamp vendors.

1920s First commercial cigarette vending machine enters the market.

1930s Bottled soft drink machines, cooled with ice, appear on market.

1936 National Automatic Merchandising Association is founded.

1946 Invention of first coffee vendors leads to use of vending machines
for coffee breaks.

1950 First refrigerated sandwich vendors expand lunch venue.

1957 U.S Public Health Service approves Model Vending Sanitation Code,
and NAMA establishes industry’s first evaluation programmed
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certify vending equipment.

1960 Dollar bill changers are added to vending banks.

1980 Electronic components applied to vending machines.

1985 Credit card/debit card services for vending machines introduced.

1986 100th anniversary of vending machines in U.S.

1991 Flavored coffee, espresso and cappuccino introduced in machines.

1993 First remote wireless transmission of data from machines to
warehouse.

1999 New dollar coin introduced by U.S mint

A GL I MP S E OVER THE A CHI EVEMENT OF HUL VENDING DI VI S ION

More than 25000 installations across 100 towns serving over a
billion cups of beverages per annum and growing.

Customized solutions for a wide array of needs f rom mall to off ices
to factories and hotels.

Support for 24/7 operations, including some of the biggest bpo’ s,
companies and banks.

Solutions f or all off ices ranging f rom 10 to 10000 people and at
remote locations.

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PRODUCT AND MACHINE RANGE

LIPTON – THE TEA AND COFFEE RANGE
An international brand with a winning formulation, with the assurance of total hygiene
and top class quality, Lipton Tea and Coffee comes in a range of mouth-watering
flavoring:-

TEA: -
Plain Tea, Cardamom Tea, Hot Lemon, Tea Bag Tea.

COFFEE: -
Bru Plain Coffee, Choco Almond, Bru Diet Coffee, Cappuccino Special Coffee.

COLD RANGE: -
Bru Cold Coffee (Frappucino), Lipton Ice Tea (Lemon, Peach).

SOUP RANGE: - Knorr Tomato Soup

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THE LIPTON VENDING MACHINE
Lipton Vending Machines have been specially designed and are being introduced
keeping our market realities and interests in mind. Following are the variants of Vending
machines:

Mr. Dependable – The New 4 Lane U Cup Machine

1. Option of 4 ingredients in nature of coffee, tea, soup etc.
2. Staggered dispensing option for tea bag.
3. Temperature interlocking.
4. Auto cleaning
5. Water source – Online/Bubble top

Smart card Machine

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1. Option of 4 ingredients in nature of coffee, tea, soup etc.
2. Post or pre paid option through smart card
3. Option for consumption data down loading to PC for MIS processing.
4. Staggered dispensing option for tea bag.
5. Auto Cleaning
6. Temperature Interlocking
7. Water source – Built in tank/ bubble top

Thirst Quencher – Ice Tea Machine

1. Option of 2 ingredients in nature of ice tea and cold coffee.
2. Dispensing Rate:
- 3 cups/min (200ml each)
- Approx 20 cups non stop
3. Auto cleaning
4. Water source – Online/ Bubble top

High Speed Hot Machine

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1. Option of 5 ingredients in nature of coffee, dairy whitener, soup etc.
2. Option of simultaneously dispensing 3 drinks.
3. Option of cappuccino.
4. Staggered dispensing option for dairy whitener.
5. Dispensing rate:
- 15 cups/min of 100 ml each
- Approx 250 cups non-stop
6. Auto cleaning.
7. Temperature inter-locking

A Café bar at Work – Fresh bean Coffee Machine

1. Option of 4 ingredients in nature of coffee bean, dairy whitener, soup etc.
2. Providing 10 drink options including 6 options of fresh bean coffee.
3. Dispensing rate :
- 2 cups/min of 100ml each
4. Temperature interlocking
5. Water source – on-line/ Bubble top.

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A Lipton Vending Machine is the most advanced of its kind. Features like Microprocessor
controlled water temperature, inbuilt Digital Counter, Hardware Lock and Auto-Flush
system helps to maintain a low failure rate. It is also hygienic and insect proof, which
also contributes to its durability. Flexibility in cup offerings – full and half; is another
attribute that makes the Lipton Vending Machine stand out as the most convenient
vending machine. The technologically superior equipment has been put through intense
stress tests so that it can withstand the demanding local market.

WATER MANAGEMENT

The HUL Company has been known for remarkable consistency in quality for over a
hundred years. To ensure that quality beverage is served consistently, cup after cup, the
Lipton Vending Machine is fitted with any of four different types of filters :- SINGLE,
DOUBLE, TRIPLE AND RESIN filter. This makes sure that the best and safest quality of
water goes into the vended Lipton cup. The filter thus enhances the quality of water,
taste of the beverage and also increases equipment life.

SERVICE SUPPORT
For the Lipton vending machine, there shall be an authorized service center with a vast
network to cater to the needs of the customer. Three basic steps shall be undertaken to
ensure long life and smooth functioning of your Lipton Vending Machine.
1) Regular Daily Maintenance: - Proper training shall be imparted on the daily usage,
cleaning and maintenance of the Lipton Vending Machine, at the time of
installation, to your personnel.
2) Monthly Preventive Maintenance: - The Lipton crew shall make regular monthly
visits for check-ups, maintenance and smooth functioning of Lipton Vending
Machine.

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3) Breakdown and Repairs: - In case of breakdown, the Lipton crew shall address the
problem promptly and effectively. Also, a regular dispatch plan for the pre-mixes
shall be regularly communicated to you, for you to maintain an appropriate stock
inventory. An exclusive customer care phone no. is provided for any queries and
assistance on the Lipton Vending Machine.

DISTRIBUTION CHANNEL
FACTORY

DEPOT DEPOT

R.S R.S R.S R.S

CONSUMER CONSUMER CONSUMER CONSUMER

You don’t know how much people are buying pears, lux & fair & lovely but in OOH
company directly touches the customer & they know how much consumption is there. In
the distribution channel of vending machine retailer doesn’t play part after the
Redistribution Stockiest (R.S.) consumer can avail the product.

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COMPETITOR PRODUCTS
The three chief competitors of Hindustan Unilever Ltd in tea and coffee vending business
are Nescafe, Tata, Georgia and Café Coffee Day which have their presence in the market
with following products:
1) Café Coffee Day

Café Coffee Day is a chain of coffee shops in India. A division of
Amalgamated Bean Coffee Trading Company Ltd. (ABCTCL), it is
commonly known as Coffee Day. It opened its first cafe in 1996
on Brigade Road in Bangalore, and today has the largest cafe
retail chain in India - with 436 cafes in 69 cities.
Headquartered in Bangalore, a majority of its cafes are also
located in Bangalore. The cafe chain has had much success
riding, and to some extent creating, the cafe culture wave that swept across
metropolitan
Coffee Day sources coffee from 10000 acres of coffee estates, the 2nd largest in Asia,
that is owned by a sister concern and from 11,000 small growers. It is one of India’s
leading coffee exporters, with clients across the USA, Middle East Europe and Japan.

(2) FRESH & HONEST
Till recently a company selling beverages, Fresh and Honest, a part of the Sterling group,
has now added noodles and corn flakes to its product basket by signing up deals with
Indo Nissan Foods Limited (makers of Top Ramen noodles) and Kellogg's.
Fresh and Honest imports soup powder and Swiss chocolate
powder from two Swiss companies Haco and Domaco respectively.
The coffee bean, dip tea packs, milk and sugar are sourced within
India. The coffee bean is sourced from Chikmagalur, Karnataka.
Fresh and Honest imports soup powder and Swiss chocolate
powder from two Swiss companies Haco and Domaco respectively.
The coffee bean, dip tea packs, milk and sugar are sourced within
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India. The coffee bean is sourced from Chikmagalur, Karnataka.

(3) TATA TEA
Another competitor of HUL is Tata with its brand Tetley.

Tata Coffee Limited, one of the world’s largest integrated
coffee company. The company earlier known as Consolidated
Coffee was renamed as Tata Coffee with the merger of Coffee
Land and Asian Coffee.
Tetley has been a member of the Tata Group since March 2000 and today contributes
around two-thirds of the total turnover of Tata Tea. The company is a joint venture
between Tata Tea, which produces 40 million kg of tea per annum at its gardens, and
the UK-based Tetley Group, a tea blender and tea bag producer of international repute.
The Tata-Tetley combine offers a wide range of international quality products, such as
round tea bags, string and tag tea bags, and packet tea.

VENDING MACHINE & THEIR FEATURES
SINGLE OPTION—simple-sleek, detachable drip tray, hot water facility.
DOUBLE OPTION-HOT—detachable drip tray, hot water facility.
TRIPLE OPTION-HOT—built in stabilizer, auto cleaning, digital counter, temperature
interlocking.
FOUR OPTION-HOT— auto cleaning, digital counter, temperature interlocking, auto
flushing.
MULTIPLE OPTION-HOT— Provision for mineral water bubble top, auto flushing,
temperature interlocking, digital counter.

(4) NESTLE

The main competitor of HUL vending products in the market is
Nestle. And listed below are some points about Nestle.
All about Nestlé
Nestlé was founded in 1866 by Henri Nestlé, a pharmacist, who
developed a food for babies who were unable to breastfeed. The
Nestlé Company has aimed to build a business based on sound
human values and principles.
Nestlé is committed to the following Business Principles in all
countries, taking into account local legislation, cultural and
religious practices:

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Nestlé's business objective is to manufacture and market the Company's products in
such a way as to create value that can be sustained over the long term for shareholders,
employees, consumers, and business partners.

Nestlé does not favor short-term profit at the expense of successful long-term business
development.
Nestlé recognizes that its consumers have a sincere and legitimate interest in the
behavior, beliefs and actions of the Company behind brands in which they place their
trust and that without its consumers the Company would not exist.
Nestlé believes that, as a general rule, legislation is the most effective safeguard of
responsible conduct, although in certain areas, additional guidance to staff in the form
of voluntary business principles is beneficial in order to ensure that the highest
standards are met throughout the organization.

Nestlé is conscious of the fact that the success of a corporation is a reflection of the
professionalism, conduct and the responsible attitude of its management and employees.
Therefore recruitment of the right people and ongoing training and development are
crucial.

Nestlé continues to maintain its commitment to follow and respect all applicable local
laws in each of its markets.

TEA
Nestea Tea Bags, Instant Tea Premix ( Cardamom Flavor), Instant
Tea Premix (Plain Tea), Lemon Tea, Dairy Whitener, Everyday Sugar Free
COFFEE
Nescafé Premix, Nescafe Low Sugar, Cappuccino, Mochacino.
MAGGI TOMATO SOUP

COMPETITOR’S PRICES

GEORGIA

Product Name Rate Specification

Georgia Milk 110.00 Per Kg( Appx. 100 cups)

Georgia Cardamom Tea/ 220.00 Per Kg (Appx.95 Cups)
Ginger Tea/ Masala Tea

Georgia Coffee 200.00 Per Kg (Appx. 95 Cups)

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Georgia Hot Lemon Tea 190.00 Per Kg ( Appx. 125 Cups)

Georgia Without Sugar Milk 310.00 Per Kg (Appx 200 cups)

Sun fill Soup 330.00 Per Kg ( Appx. 167 Cups)

NESTLE

Product Name Rate Specification

Nescafe Coffee Premix 185.00 Per kg (Approx. 80 cups)

Nescafe Low Sugar Premix 200.00 Per Kg (Approx. 80 cups)

Nescafe Classic coffee 535.00 Per 500 Gms,

Everyday Whitener Premix 112.00 Per kg (Approx. 100 cups)

Everyday Dairy Whitener Poly 180.00 Per kg

Badam Milk Premix 220.00 Per Kg

Per 500 gm (Approx. 15
Nestea Lemon / Peach Premix 98.00
cups)

Nestea Cardamom Tea Premix 190.00 Per kg (Approx. 80 cups)

Maggie Hot Cup Soup Tomato 375.00 Per kg (Approx. 170 cups)

Tea Bags 0.70 Per Bag

Creamer 3Gm 101.83 Per Case( 24pkt)

Paper Beaker 150 Ml 0.45 Per Beaker

Plastic Beaker 150 Ml 0.50 Per Beaker

Sugar Powder 43.50 Per Kg

Sugar Cube [Economy Pack] 42.00 Per kg

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OBJECTIVE OF TRAINING

An attempt has been made to fulfill the following objectives:

(i) Finding new opportunities for the vending services of the company by making
organizations acquainted with concept.
(ii) Handling marketing and sales operations for achieving increased growth &
profitability.
(iii) Generating leads and converts them into sales for product.
(iv) Customer grievances and distributor handling.

I subdivide these objectives as:

(i) Understanding the nerve of competition in the market with major players
namely Café Coffee Day, Nestle, Georgia etc.
(ii) Understanding the pulse of the market & accordingly plan the course of action.
(iii) Interacting with clients for understanding their need and the information
required by them.
(iv) Finding the major factors that led the customers to decide on which tea/coffee
they choose.

RESEARCH METHODOLOGY

RESEARCH DESIGN
A Sample Design is definite plan for obtaining a sample from given population. it refer
to technique or procedure the research would adopt in selecting item for the sample.

SAMPLE PLAN FOR SURVEY
SAMPLE UNIT - Institutional & Factories.
SAMPLING AREA – Gurgaon
SAMPLE SIZE - 50 companies and 100 customers
DATA COLLECTION – Through Questionnaire
Further I have divided the whole gurgaon in five par
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1. INFINITY TOWERS
2. SECTOR 56
3. SECTOR 32

1. PRIMARY SOURCES

Primary data are gathered for a specific purpose or for a specific research project. In
this project, the data I have collected is regarding the use of vending machines by
having interactions with the HR person, ADMIN. HEAD, and the purchase manager
that which machine they are using whether it is nestle, Georgia, Lipton and with the
help of which market share of each company is calculated.

2. SECONDARY SOURCES
In this purpose secondary Data is useful to collecting the various information about
companies like telephone no. addresses etc. so I have consulted telephone directory &
Informative websites.

NOTES:

Primary data was collected through the survey done by the questionnaires.
Questionnaires are the most reliable method of primary data collection.
More than 150 companies were surveyed in the Gurgaon City on a random
choice basis.
Customer interaction was done at canopy, door step and in the market and
other public places.
I enumerate the data and they were converted into frequency distribution.
DATA INTERPRETATION: through these frequency distributions graphs &
charts were made for further analysis. These were used to draw the
conclusions of the survey.

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ANALYSIS AND FINDING
There are 7 channel of distribution of vending machine.

1) INSTITUTION : The main business of company is coming from institution which
includes call centers, offices, cooperates. The 70-80% of business is coming from
institutions. In institution where white collar people work you can expect decency in
using machine from them. Key institutions are Daksh, Satyam, L&T, BSNL, TCS etc

2) FACTORY: The 5-10% of business is coming from factories, govt. offices etc.
Company supply premixes in bulk. In factories blue collar people work they can’t handle
machine properly.

3) ENTERTAINMENT & LEISURE: Third channel of distribution is entertainment which
includes malls, multiplexes, cinema halls, fast food chain etc. in E&L company focus on
branding like is ties up with several accounts like PVR, CHANKYA, FUN CINEMA, etc.
Company spends 25 lakh in PVR for branding. Only 1-2% of business is coming from
this part.

4) EATING & DRNKING: In E&L company is getting only 1-2-% business. In this part
company works only work on visibility.

5) HEALTH CHANNEL: In health Channel Company mainly focus in nursing home,
hospital. Company mainly focus on hygiene factor if they find appropriate if install it
there otherwise not.

6) TRAVEL: In travel part we deal in Airport, Railway station, Bus stand, Taxi stand.
Company has ties up with Delhi Metro Corporation.

7) HOTELS: In Hotels Company focuses on mass consumption. The main business is of
Tea bags.
There is no other part where you find footfall of the consumer & you don’t find the
product of Lipton.

This is price comparison chart between the Lipton, Nescafe & Georgia. In the price of tea
bag all are approximately equal. Cost of coffee premix of nestle is slightly more than
Lipton & Georgia. Hot lemon tea is only available from Lipton & Georgia.
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PRICE COMPARATIVE CHART

A - Cost per cup of tea with tea bag
B – Per cup cost of coffee premix
C – Per cup cost of cardamom tea
D – Per cup cost of soup
E – Per cup cost of hot lemon tea

AN ANALYSIS OF THE USE OF TEA/COFFEE MACHINES IN GURGAON

From which company do you buy the beverage vending machine
services? Lipton 6 16%
Nestle 11 29%
Fresh n Honest 3 8%
Georgia 7 18%
Costa Coffee 2 5%
Coffee Day 9 24%
Express

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What is an approximate number of employees of your
organization?

Less than 9 24%
100
100-200 6 16%
200-300 5 13%
300-400 3 8%
400-500 1 3%
500-700 6 16%
700-1000 4 11%
1000-1500 0 0%
1500-2000 0 0%
2000-3000 3 8%
above 1 3%
3000

Have you ever faced any problems with your service
provider?

Delivery of the raw material was not on time 1 3%
No regular maintenance check ups were done 4 11%
Faulty machine infrastructure 0 0%

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Late response to complaints 2 5%
No Complaints 30 79%
Any other(please mention) 1 3%

Is there any company executive who pays regular visits for a
monthly check up of machines?
Yes 29 76%
No 9 24%

How do you rate the product satisfaction?
1 - Bad 0 0%
2 2 5%
3 18 47%
4 16 42%
5 - Good 2 5%

Bad Good

What kind of relations do you share with your vendor?
1 - Bad 0 0%
2 2 5%
3 20 53%
4 13 34%
5 - Good 3 8%

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Bad Good

There is cut-throat competition among the leading players in the packaged tea market
and HUL is the market leader with a share of around 30 per cent, followed by Nestle at
20 per cent.

But in out-of-home business of hot beverages, HUL and Nestle have got into this
segment in a big way. They jostle for space with players such as Tata Tea and Tata
Coffee, the Coffee Day group, which has two brands including Coffee Day Takeaway and
Coffee Day Bean to Cup, Sterling InfoTech group’s Fresh & Honest (promoted by NRI
businessman C Sivasankaran, who also controls the coffee retail chain Barista),
Coca-Cola’s Georgia Tea and Coffee and Fountain Consumer Appliances.
Accordingly, Nescafe leads in the market as shown by the collected data and, hence,
becomes the strongest competitor for Lipton.

According to a survey conducted by AC Neilson (released on March 04, 2006), Nescafe
continues to be more popular among instant coffee drinkers. The Rs 511 crores coffee
market consists of instant and roasted and ground coffee. Nescafe enjoys the larger
share of the Rs 361-crore instant coffee market. Although, their all-India retail numbers
that have just come in suggest that Bru has established market leadership with 44%
branded coffee drinkers preferring it.

The reasons for which the corporate houses prefer vending machines to manual
methods of preparing tea and coffee:
Provides options for wide variety of products
Time saving
Less cost associated
Diet, low sugar, without sugar options available for concerned groups
Options for hot and cold drinks
Keeps record of number of cups dispensed allowing the organization to
maintain budget

An activity that is closely tied to sales is distribution. You have a factory and you have
your customers in different locations, which different purchasing patterns and demands.
What is the best way to take your product to the customers so that it remains profitable
for the firm too? That is a question answered by distribution. In FMCG, generally we deal
in indirect selling, i.e., we sell to someone who then sells it to someone else.

There are various reasons for which the company operates this chain through distributor
sales management which can be summarized as follows:

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The distributors' ability to offer a more complete package of services is not only
an inventory support, but also an administrative, technical and logistic
support. This ability, together with the quick delivery of components to the
myriad of customers that manufacturers cannot afford to support, makes
distribution a marketing channel of primary consideration.
Distributors provide an increased market share for the manufacturers bringing
your message to a larger customer base.
There can be some business that is too small for you to handle, or too much
trouble because of its location. A distributor network will take this burden and
change it into on opportunity. Because the distributor is service oriented, he
makes it a point to work with business regardless of size or scope.
Distributors provide flexibility that manufacturers do not, such as delivery
reschedules and small quantity requirements

Financial Aspects:
Deal is confirmed and negotiation ends at the point where both the parties are assured
of their benefits. HUL tries to ensure a return of at least 12% on consumerables to its
distributors. So, I tried to analyze the account in the following 2 ways:

a)Monthly billing of tea and coffee in the company:
Let billing = Rs 15000
12% of Rs 15000 = Rs 1800
Here, distributor is in benefit even if he does not charge monthly maintenance
charges.
Now, the customer doesn’t enter into deal unless he is made acquainted with the
benefit available to him.
Let us consider a firm ‘A’ having 60 employees and consumption is 120 cups per
day (say, 60 cups of tea and coffee each).

TEA: 60 * 3 = Rs 180
COFFEE: 60 * 5 = Rs 300
Total = Rs 480
For 1 month = Rs 480 * 25 = 12000
[Add: salary of spot boy = Rs 1000
Add: breakage = Rs 100]
Total = Rs 13100
[Here, each cup of tea and coffee is assumed to be of Rs 3 and Rs 5 respectively]

Now, with Lipton vending machine this cost will minimized as follows:
TEA = 2.75 * 60 = Rs 165
COFFEE = 2.40 * 60 = Rs 144

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Total for 1 month = Rs 309* 25 = Rs 7725
Add: Rent = Rs 1500
Total = Rs 9225

Benefit of customer = 13100– 9225 = Rs 3875

ANALYSIS OF THE RESPONSE OF CONSUMERS TOWARDS
TEA/COFFEE VENDING MACHINES AT AIRPORTS AND METRO
STATIONS

Frequencies

Statistics
How many times Brand Wate of Time
N Valid 100 100 100
Missing 0 0 0
Mean 2.50 2.23 3.03
Median 2.00 2.00 3.00
Mode 2 2 2

Frequency Table
How many times
Cumulative
Frequency Percent Valid Percent Percent
Valid 1-2 20 20.0 20.0 20.0
2-3 31 31.0 31.0 51.0
3-4 28 28.0 28.0 79.0
more than 4 21 21.0 21.0 100.0
Total 100 100.0 100.0

Brand
Cumulative
Valid Lipton 28 28.0 28.0 28.0
Nestle 37 37.0 37.0 65.0

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Coffee Day Express 19 19.0 19.0 84.0
Georgia 16 16.0 16.0 100.0
Total 100 100.0 100.0

Waste of Time
Cumulative
Valid Strongly Disagree 15 15.0 15.0 15.0
Disagree 24 24.0 24.0 39.0
Neutral 21 21.0 21.0 60.0
Agree 23 23.0 23.0 83.0
Strongly Agree 17 17.0 17.0 100.0
Total 100 100.0 100.0

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FACTOR ANALYSIS
Factor analysis is a very important test, which helps us in identifying the factors,
which contribute maximum to a particular event. The factors, which explain the
maximum variance, are identified and depending on the value of their
coefficients they are grouped together and renamed to form a factor, which
explains the various components, contained in that factor.

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .516

Bartlett's Test of Approx. Chi-Square 210.157
Sphericity
df 36

Sig. .000

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Bartlett's test of sphericity indicates whether correlation matrix is an identity matrix,
which would indicate whether variables are unrelated. The significance level gives the
result of the test. Very small values (less than .05) indicate that there are significant
relationships among variables. Thus, we can see that as our value of Bartlett’s test is
0.000, therefore there is a significant relationship between the variables.

Also the Kaiser test shows that the variables are related as the value is 0.516. On
the basis of these two tests we can say that we can proceed with the Factor Analysis
on this data.

Communalities

Initial Extraction

Brand Preference 1.000 .791

Taste 1.000 .591

Freshness 1.000 .923

Availability 1.000 .821

Weather Dependent 1.000 .500

Price 1.000 .658

Level of Sweetness 1.000 .912

Service Quality 1.000 .221

Variety 1.000 .627

Extraction Method: Principal Component
Analysis.

Communalities indicate the amount of variance in each variable that is accounted for.
Initial communalities are estimates of the variance in each variable accounted for by all
components or factors. For principal components analysis, this is always equal to 1.0
(for correlation analyses) or the variance of the variable (for covariance analyses).
Extraction communalities are estimates of the variance in each variable accounted for by

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the factors (or components) in the factor solution. Small values indicate variables that do
not fit well with the factor solution, and should possibly be dropped from the analysis.

In our analysis, we have dropped variables whose extraction value is less than 0.5. In
the above table, there is one value below 0.5; service quality therefore, we remove
this variable from our further analysis.

Total Variance Explained

Component Initial Eigenvalues Extraction Sums of Squared Loadings

Total % of Variance Cumulative % Total % of Variance Cumulative %

1 2.156 23.955 23.955 2.156 23.955 23.955

2 1.649 18.319 42.274 1.649 18.319 42.274

3 1.159 12.880 55.155 1.159 12.880 55.155

4 1.080 11.999 67.154 1.080 11.999 67.154

di me nsi on 0
5 .999 11.105 78.260

6 .859 9.541 87.801

7 .655 7.275 95.076

8 .293 3.260 98.336

9 .150 1.664 100.000

Extraction Method: Principal Component Analysis.

This table gives Eigen-values, variance explained, and cumulative variance explained for
your factor solution. The first panel gives values based on initial eigen-values. The
"Total" column gives the amount of variance in the observed variables accounted for by
each component or factor. The "% of Variance" column gives the percent of variance
accounted for by each specific factor or component, relative to the total variance in all
the variables. The "Cumulative %" column gives the percent of variance accounted for by
all factors or components up to and including the current one. In a good factor analysis,

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there are a few factors that explain a lot of the variance. For principal components
extraction, these values will be the same as those reported under Initial Eigen-values
The total variance explained by the eleven factors is 67.154%

The scree plot helps to determine the optimal number of components. The
eigen-values of each component in the initial solution is plotted. Generally, the
components on the steep slope are extracted. The components on the shallow
slope contribute little to the solution.

The last big drop occurs between the eighth and the ninth components, so we
use the first eight components.

Component Matrixa

Component

1 2 3 4

Brand Preference .700 .442 .164 -.281

Taste .071 .215 -.048 .733

Freshness .750 -.548 -.243 .034

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SAAB MARFIN MBA

Availability .611 .592 .312 -.025

Weather Dependent -.135 -.206 .268 -.606

Price .177 .562 -.525 -.186

Level of Sweetness .756 -.530 -.244 .009

Service Quality .277 .171 .285 .185

Variety .166 -.297 .697 .160

a. 4 components extracted.
This table reports the factor loadings for each variable on the unrotated
components or factors. Each number represents the correlation between the item
and the unrotated factor.

Now we need to find those eight factors that determine the choice. So we repeat
the process by applying factor analysis on the data. The data in all iteration is
smaller in size than the previous one. To eliminate the unwanted factors we see
the rotated component matrix. We eliminate those questions wherein the
difference between the highest and the second highest value is less. We continue
this process till we can’t eliminate any factor. So writing all the iterations we get
the following results:

Factor Analysis

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .516

Bartlett's Test of Approx. Chi-Square 203.411
Sphericity
df 28

Sig. .000

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Communalities

Initial Extraction


Taste 1.000 .544




Price 1.000 .639


Variety 1.000 .739


Total Variance Explained

Component Initial Eigenvalues Extraction Sums of Squared Loadings

Total % of Variance Cumulative % Total % of Variance Cumulative %

1 2.114 26.431 26.431 2.114 26.431 26.431

2 1.636 20.445 46.876 1.636 20.445 46.876

3 1.145 14.317 61.192 1.145 14.317 61.192

4 1.076 13.445 74.638 1.076 13.445 74.638
di me nsi on 0

5 .903 11.288 85.926

6 .667 8.339 94.265

7 .309 3.861 98.126

8 .150 1.874 100.000

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Communalities

Initial Extraction


Taste 1.000 .544




Price 1.000 .639


Variety 1.000 .739


Therefore we get the eight components that are taken into consideration while
making the choice for tea and coffee while they are out of their homes and for a

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particular brand selection. These are:

1. Brand Preference towards a particular Brand.

2. Taste of the tea/ coffee.

3. Freshness of the tea/coffee.

4. Availability of the tea/coffee machine at the airport and metro station.

5. The choice of coffee and tea also depends on the weather i.e. hot or cold.

6. The price of the cup of tea/ coffee is also an important determinant of the
choice.

7. The sweetness in the tea also determines a particular brand.

8. The customers prefer a variety in the drinks like or those who drink 3-4
cups a day want

Now eliminating the negative questions we get the final factors. These are :

1. The service quality of the brand doesn’t make much of a difference to the
customers.

Therefore our result.

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SWOT ANALYSIS

STRENGTHS

Strong and well differentiated brands with leading share positions.
High quality and safe products, endorsed by the Hindustan Unilever Limited Seal of
Guarantee at affordable prices.
Strong R&D capability well linked with business ensuring better controls on the
quality and consistency of product.
Integrated and efficient supply chain and well spread manufacturing units.
Distribution structure with wide reach, high quality coverage and ability to leverage
scale.
Ongoing Product innovation and renovation, to convert consumer insights
High quality manpower resources.
Attractive design and distinctive features of the machine.
Far better preventive and break down maintenance.
The distributors are required to undergo quality checks to maintain standards.
Aggressive sales team and capable and committed manpower resources.
Good market response in Delhi and Noida
Tie up with other leading chains –DMRC, PVR, Airtel, HCL Technology, Reliance
Energy, Ansal Plaza to name a few.
Environment friendly cups.
Excellent range of tea and coffee premixes providing flexibility of sweetness and diet
option for concerned people.

WEAKNESSES

Limited success in changing consumption habits of people.
Complex supply chain configuration, unwieldy number of SKU's with dispersed
manufacturing locations.
Price positioning in some categories allows for low price competition.
Stock-out in case of much advertised flavors acts as a barrier in the retail
channels.
Much higher machine prices with lesser flexibility vis-à-vis competition which
leads to higher rentals/EMIs.
Low viability of revenue sharing model especially during off-season.
Analyzing the competitor factor and boosting up sales PROJECT MARKETING 59

SAAB MARFIN MBA

.Absence of ginger flavor in the premix range of tea and this is the most preferred
flavor in northern India especially during winters
Vending machine having customization like token system are highly priced
making it unviable for many corporate clients in a need to record/control
consumption.
After sales service not up to the “Expected Standards”.
Hot beverages are less preferred during summers.

OPPORTUNITIES

Brand growth through increased consumption depth and frequency of usage
Market growth through increased penetration in the unventured industrial areas
like Patparganj etc.
Upgrading consumers through innovation to new levels of quality and
performance.
Growing consumption in Out of Home categories and high potential market.
Changing lifestyles.
Development of alternate channels such as catering, STD/PCOs, cyber café, pump,
etc.
Involving DSAs and courier companies for lead generation on commission basis
as have access to administration department of the corporate houses.
Leveraging technology to develop more products that provide Nutrition, Health
and Wellness.
To increase acceptance of instant Tea/Coffee amongst masses by sampling
promotion etc., who still seem to be averse to it, keeping in mind the
unpredictable preference in taste especially because of the loose control of the
same in the competitor’s machines.
Introduction of a consumer finance scheme by a third party e.g. GE country
finance can widen the machine placement base without utilizing distributors
capital.
Hosting the Commonwealth Games in 2010 will influence the development of the
retail infrastructure creating opportunities for vending operators to fill the gap in
the market.

THREATS

Low priced competition now present in all categories.
Spurious/counterfeit products.
Seasonality.

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Substitutability.
Heavy competition with new entrants offering me-too products or with very little
variation with all kinds of attractive offers for getting edge in market.

BUSINESS OPPORTUNITIES
Apart from corporate world and public places like metro stations, airports and railways
stations there are some other places as well where the use of tea/ coffee machines is
prevalent. These are hospitals and educational institutions.

A short research was conducted in 5 major hospitals in the area of Karol Bagh.

Name of Machine Approximate Contractor
Hospital Address Installed Footfall Contractor Details
100 cups
Shankar Road, Karol each of tea
Kolmet Hospital Nestle and coffee NA NA

500 cups of
tea; 300-400
B.L Kapur Pusa Road, New Delhi Nestle cups of Sanjay
Hospital 110005 (3) coffee Pancholi 9212324601

Mahesh
Aram Bagh, Kumar
Delhi Heart and Jhandewalan, New Rs.30,000 (Sodexo
Lung Institute Delhi Lipton per month Facility) 9990334161
Gurudwara Road, Karol No
Bagh Machine 0 Sh. Nagesh 9818457309

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Analysing the competitor factor in HUL

Analysing the competitor factor in HUL

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