Submitted to:- submitted by:-

p.s. kalsi nisha rialch

roll no.-
r315 a27
MBA-1
HINDUSTAN UNILEVER LIMITED (HUL)
Introduction:-

Hindustan Unilever Limited (HUL) is India’s largest fast moving consumer goods company,
with leadership in Home & Personal Care Products and Foods & Beverages. HUL’s brands,
spread across 20 distinct consumer categories, touch the lives of two out of three Indians. They
endow the company with a scale of combined volumes of about 4 million tonnes and sales of
Rs.13,718 crores.

The mission that inspires HUL’s over 15,000 employees is to “add vitality to life”. With 35
Power Brands, HUL 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 HUL shares with its parent company, Unilever, which holds 52.10% of the equity.
A Fortune 500 transnational, Unilever sells Foods and Home and Personal Care brands in about
100 countries worldwide.

Corporate Purpose:-

Unilever’s mission is to add Vitality to life. They 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 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, they believe, the highest standards of corporate behaviour towards
everyone they work with, the communities they touch, and the environment on which they have
an impact.

This is their road to sustainable, profitable growth, creating long-term value for their
shareholders, their people, and their business partners.
Price:-Price is the amount of money charged for a product
or service or the value exchanged for the benefits of the
product or service.

For a new product, one must understand positioning before setting a

pricing. Make sure it is not too low, or the product will not be taken
seriously. If it is too high, the potential customer will not take the PRICING
risk.
STRATEGY
Different pricing strategies which can be OF HLL IN
adopted by the firm are explained below:
-

1. PREMIUM PRICING:- Also known as “Prestige

Pricing”, the company charges high price for its products / services when it
has a competitive advantage, there is uniqueness about the product,
exceptional The quality / quantity or flawless performance.

2. PENETRATION PRICING: - When the

company keep the prices for the product / services artificially low in
order to gain market share, increase customer interest and establish a
hold in the market it is known as the Penetration Price.

3. SKIMMING PRICE: - In this strategy the company

charges a high price in the beginning and then gradually lowers its
prices over a period of time. This method is generally used by the
early adopters, where the product demand is relatively inelastic.

4. PREDATORY PRICING: - In Predatory Pricing

Strategy (also known as Destroyer Pricing), the company sells the
product at a very low price to destroy the competitors product;
however; in many countries it is banned as it is considered illegal and
anti-competitive.

5. PSYCHOLOGICAL PRICING: - When the

seller wants the consumers to respond on the emotional basis and
have a psychological impact it is termed as Psychological Pricing.

6. PRODUCT LINE PRICING: - When the seller

links one product/brand with another brand / product to increase its
sales it is termed as Product Line Pricing. e.g.: - If a company has
two products namely “X” and “Y”, it offers each product for Rs.
100/- and jointly sell both the product at Rs. 170/ - it is known as the
Product Line Pricing.

7. PROMOTIONAL PRICING: - It is a
segmentation process where the company offers special discounts,
reward points; freebies to its customers; like buy one get one free,
50% off and so on. It is done by the company to encourage trail for
the new customers and retain the existing one.

8. GEOGRAPHICAL PRICING: - Factors like

competition; shipping/airline cost; high cost of manpower, raw
TOOTHPASTE INDUSTRY:-
Company’s approach to pricing is competitive and value-adding. With strong leadership
position, market development will continue to be a major source of growth. Company focuses on
sustaining competitive growth in the core categories and selectively building new categories
HLL has a 36% share in toothpaste categories and continues to trail behind the market leader
Colgate having market share of 49%.

Sensing vast potential in the toothpaste market, Hindustan Lever Limited (HLL) has launched a
new product targetted at undertapped rural and small towns.

Around 50 per cent of the country’s population does not use toothpaste, offering a huge
opportunity for the company’s new toothpaste.

The company is eyeing ten per cent of the market through the new product in the next five years.
The company’s other two brands, Close Up and Pepsodents, enjoy 35.4 per cent share at present.

Because of the price, sensitive nature of customers in rural and small towns, the product is priced
aggressively, about 40 per cent lower than the typical toothpaste.

PEPSODENT’s pricing strategy:-

Pepsodent, launched in 1993, was the first toothpaste with a unique antibacterial agent to
address the consumer need of checking germs even hours after brushing.

Now Pepsodent followed the penetration pricing. They priced pepsodent lower to their
competetors prices. Pepsodent costs Rs 48 for a 200 gm pack which much lower than as
compared to the other toothpastes such as Colgate and close-up.

HLL positioned pepsodent in terms of some unique features. In oct. 2002, Pepsodent offered
Dental Insurance to all its consumers to demonstrate the confidence the company has in technical
superiority of the Pepsodent. Pepsodent connects directly with kids and their parents. Pepsodent
has always worked in the direction of an overall awareness of dental health. The relaunch
campaign in oct.2003 widened the content of “sweet and sticky” food and leveraged the truth
that children do not rinse their mouths every time they eat, demonstrating that this makes their
teeth vulnerable to germ attack. This all comes under value pricing.

Description of six step procedure of setting a price for

pepsodent:-
(1)SELECTING PRICING OBJECTIVE:-

HLL in case of Pepsodent is having the objective of maximum current profit and maximum
market share. The company has set the price that produces maximum current profit, cash flow, or
rate of return on investment. On the other hand they are working on making maximum market
share. Since now colgate is having the highest market share.

(2)DETERMINING DEMAND:-

Now the second step is to determine the demand. The company studies whether the product
is price sensitive or not. For example the company has now decided to move towards the rural
market. Since the rural market is very much price sensitive, so the company now would set the
price somewhat low.

(3)ESTIMATING COST:-

The company wants to charge a price that covers its cost of producing, distributing, and
selling the product, including a fair return for effort and risk.

(4)ANALYZING COMPETITOR’S COST, PRICES, AND OFFERS:-

Company takes into concentration the prices of the competitors i.e the price of colgate. It
priceses less than the competitors price if it lags behind from the competitors product in terms of
features.

(5)SELECTING A PRICING METHOD:-

The HLL company is adopting PERCEIVED-VALUE PRICING. They deliver the value
promised by their value preposition, and the customer perceives this value.

(6)SELECTING THE FINAL PRICE:-

In selecting the final price, the company considers additional factors, including the impact of
other marketing activities, company pricing polies, gain-and-risk-sharing pricing, and the impact
of price on other parties
Pricing strategy of pepsodent with respect to colgate and
close-up:-

HLL has entered the kids segment in the toothpaste category under a new sub-
brand Pepsodent kinds. Creating three new variants under the segment , the FMCG
company has brought in Barbie, Superman and Tom and Jerry to entice children.

Sporting pepsodent kinds in a tube format, the production has been pegged at
Rs 45 for 80 gm. However Colgate , its nearest competetors, has already entered
this segment with a Rs for 40 gm with two flavours.
In fact , HLL has been steadily expanding it’s Pepsodent franchise. Early this
year, it launched Pepsodent centre fresh, a germ fighting gel with mouth wash.
“Pepsodent is positioned as a family health and protection brand and it makes
sense to extend it as kid’s toothpaste.”
Considering its nearest competetors Colgate has already entered in this
segment, HLL has been adopting a wait-and-watch approach instead of trying to be
pioneer in this segment. Both HLL and colgate have introduced single SKU in the
kids segment with their respective brands sporting cartoon characters.
At the same time, HLL has also extended its Close-up franchise by introducing
two new flavours-Tangerine Burst and Luscious Lychee- both priced at Rs 30 for 80
gm.
Colgate total is the most expensive product in the category priced at Rs 59 for
150 gm. Close-up 150 gm pack sells Rs 48, while Pepsodent cost Rs 48 for a 200 gm
pack. Colgate’s basic white toothpaste, priced at Rs 79 for 300 gm, is the costliest
option in the main segment.
HLL has been pushing Close-up with aggressive marketing innovations and
communications.
DIFFERENCES IN PRICES:-
There is a difference in the prices of pepsodent, colgate and close-up. It is due
to the reason that colgate and close-up are spending more on advertisement and
charging high.

BIBLIOGRAPHY:-
(1)Marketing MANAGEMENT book by KOTLER,KELLER,KOSHY JHA.
(2)www.hll.co.in

(3)www.google.com