Sales and Distribution Case Study

New Distribution Initiatives at HLL

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Abstract:
This case analyses the distribution strategy of Hindustan Lever Limited (HLL), the 51.6% subsidiary of Unilever and the largest FMCG Company in India. Traditionally HLL’s distribution network consisted of wholesalers and retailers. HLL had presence in 80 lakhs retail outlets and there was ‘one size fit for all’ distribution strategy to serve all those outlets. But due to change in consumer demography, consumer behavior and market structure, the traditional distribution system failed to deliver the results. Urban customers wanted products with unique, value added and customized offerings with convenient shopping. Apart from this, emergence of rural market also forced HLL to change its distribution system. HLL dealt with these two issues differently. For urban market it developed different distribution system cater to different type of customers. Along with this, it provided value added service, convenience and customized offering to urban customers. On the other hand, in rural markets, to increase brand awareness and product availability, it introduced alternative distribution systems. Through these changes, HLL brought its brands closer to customers. HLL’s approach to distribution was holistic and developed a three-way convergence of product availability, brand communication and brand experience.

Pedagogical Objectives:

• To understand the supply chain management and logistics system in FMCG market
• To understand the effectiveness of logistics system in rural market
• To understand the evolution of market logistics system
• To understand how effective implementation of information technology helps a company to make its supply chain an efficient one
• To understand the importance of supply chain
• To understand the different types, nature of the supply chain.

Keywords : Hindustan Lever Ltd (HLL), FMCG (fast moving consumer goods) industry, Lever Brothers, Hindustan Lever Research Centre, HLL’,s joint ventures, Soap business, Distribution network, Marketing Strategies Case Study, Channel management, Rural India, Efficient consumer response, Project Shakti

Contents:

• Background
• The Evolution of HLL's Distribution Network
• The Shifting Paradigm
• Strategy devised for Urban India
• The Hurdles in the Race of Distribution: The Sustainability Factor
• Conclusion