SYMBIOSIS INSTITUTE OF BUSINESS
12/19/2020
MANAGEMENT, BENGALURU
SALES & DISTRIBUTION MANAGEMENT
Submitted by:
Ameesha Khandelwal 19020841165
Kartikeya Jauhari 19020841128
Saveen Kaul 19020841142
Meet Pandit 19020841188
Priya A Saxena 19020841189
Prasham Jhaveri 19020841063
Shivani Joglekar 19020841145
Submitted to: Prof.A.Vidyasagar
GROUP 2
INTRODUCTION:
Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods Company
with a heritage of over 75 years in India and touches the lives of two out of three Indians.
HUL works to create a better future every day and helps people feel good, look good and get
more out of life with brands and services that are good for them and good for others. With
over 35 brands spanning 20 distinct categories such as soaps, detergents, shampoos, skin
care, toothpastes, deodorants, cosmetics, tea, coffee, packaged foods, ice cream, and water
purifiers, the Company is a part of the everyday life of millions of consumers across India. Its
portfolio includes leading household brands such as Lux, Lifebuoy, Surf Excel, Rin, Wheel,
Fair & Lovely, Pond’s, Vaseline, Lakmé, Dove, Clinic Plus, Sun silk, Pepsodent, Close-up,
Axe, Brooke Bond, Bru, Knorr, Kissan, Kwality Wall’s and Pure it. HUL is a subsidiary of
Unilever, one of the world’s leading suppliers of fast-moving consumer goods with strong
local roots in more than 100 countries across the globe.
HUL Product Categories
A sharp rise in
the stock price in
2020 so far has
helped
Hindustan
Unilever (HUL)
enter the list of
top 15 global
consumer staple
stocks by market
capitalization
Category Wise Quarterly Sales Forecasting – (FY 2021):
For Hindustan Unilever Limited, the three categories chosen, along with some products in
that category are:
- Personal Care: Lux, Clinic plus, Vaseline, Dove, Ponds etc. Amount to 50% in
revenue and a major portion of their profits.
- Food: Bru, Brooke Bond, Kissan etc.
- Home Care: Consists of detergents like Surf Excel, Rin, Wheel, and other products
like Cif etc.
Personal Care
The quarterly sales forecast for the personal care category, for FY 2021, based on data from
the last 5 years (2016-2020) is shown below. This also considers seasonality and the trends.
The results are as follows:
Year Quarter Forecasted Sales (M)
Q1 44690.11
Q2 42079.89
2021
Q3 44849.22
Q4 39881.71
Food:
The quarterly sales forecast for the food category, for FY 2021, based on data from the last 5
years (2016-2020) is shown below. This also considers seasonality and the trends.
The results are as follows:
Year Quarter Forecasted Sales (M)
Q1 27086.96
Q2 23853.20
2021
Q3 22649.98
Q4 38381.96
Home Care:
The quarterly sales forecast for the home care category, for FY 2021, based on data from the
last 5 years (2016-2020) is shown below. This also considers seasonality and the trends.
The results are as follows:
Year Quarter Forecasted Sales (M)
Q1 39416.75
Q2 37403.65
2021
Q3 37569.34
Q4 40460.43
Productivity of Sales Force at HUL:
We are calculating the Salesforce productivity of a HUL Sales Officer, in an urban and
rural region.
Productivity of HUL’s Sales Force in 2019 =
Total Sales revenue in 2019/Total number of salesforce hours
From the annual reports:
Total sales revenue, 2019 = 38273 Crores
Assumptions made:
Number of sales hours per week =
9 hours * 5 days = 45.
Number of working weeks per year = 50
Urban Area:
Total number of urban sales territory = 186
Number of Sales officers in urban area = 32
Rural Area:
Total number of rural sales territory = 75
Number of Sales officers in Rural area = 17
Based on the above information and assumptions, sales force productivity for urban and
rural areas is:
Urban
For 1 Urban Sales Officer:
Number of sales hours per week 45
Number of working weeks per year 50
Number of working hours/year 2250
Number of Sales officers in urban area 32
Number of working hours/year for all Sales Officer 72000
Total number of urban sales territory 186
Number of working hour/year for all Urban areas 13392000
Total Sales Revenue 2019 3.8273E+11
Total Urban Sales Share 52%
Total Urban Sales Revenue 1.9902E+11
Productivity = Sales revenue/ total working hours 14861.0812
Rural
For 1 Rural Sales Officer:
Number of sales hours per week 45
Number of working weeks per year 50
Number of working hours/year 2250
Number of Sales officers in rural area 75
Number of working hours/year for all Sales Officer 168750
Total number of urban sales territory 75
Number of working hour/year for all Rural areas 12656250
Total Sales Revenue 2019 3.8273E+11
Total Urban Sales Share 48%
Total Urban Sales Revenue 1.8371E+11
Productivity = Sales revenue/ total working hours 14515.38963
Steps taken by HUL this year to improve productivity:
“We aim to reward people fairly for the work they do, and help them find their personal
purpose so they become the best they can be at your Company”
– HUL Value Creation Model
Annual Invoice survey giving employees at all levels the chance to share views with line
managers, colleagues and leadership. In 2019, we had an 88% response rate.
Smaller pulse surveys to collect real-time insights on key issues.
Comprehensive integration and change management plan focusing on:
1) Harmonisation of talent and reward practices,
2) Real-time employee communication and
3) Building a culture that retains the best of Nutrition and amalgamates with the best of
Unilever
Ex Work Price based on MRP:
Ex work price of a product is the price when product is manufactured and out of the factory
without any addition of distributor mark-up, retailer margin and GST.
We have selected five products from the wide portfolio of HUL along with the MRP of these
products:
SR No. Product MRP
1 Lux 30
2 Fair and Lovely 98
3 Surf Excel 180
4 Axe Deodorant 200
5 Vaseline Body lotion 210
Based on the MRP for above products, we calculated ex work price considering
distributor margin as 8% and retailer margin as 25% assuming that the product
is manufactured and consumed in the same state.
1. Lux:
GST 18%
Company Selling Price 17.66 GST IGST CGST SGST
GST @18% 3.18 1.59 1.59
Distributor landed price w/o GST 17.66
Distributor landed price including GST 20.83
8% Distributor margin @8% 1.41
Retailer landed price w/o GST 19.07
GST 3.43 0.13 0.13
Retailer landed price including GST 22.50
25% Margin @25% 6.36
MRP w/o GST 25.42
GST 4.58 0.57 0.57
MRP 30.00 2.29 2.29
MRP –Rs 30 SGST – Rs 2.29
Ex Work Price – Rs 17.66 Distributor Margin – Rs 1.41
CGST – Rs 2.29 Retailer Margin – Rs 6.36
2. Fair and Lovely:
GST 18%
Company Selling Price 57.67 GST IGST CGST SGST
GST @18% 10.38 5.19 5.19
Distributor landed price w/o GST 57.67
Distributor landed price including GST 68.06
8% Distributor margin @8% 4.61
Retailer landed price w/o GST 62.29
GST 11.21 0.42 0.42
Retailer landed price including GST 73.50
25% Margin @25% 20.76
MRP w/o GST 83.05
GST 14.95 1.87 1.87
MRP 98.00 7.47 7.47
MRP – Rs 98 SGST – Rs 7.47
Ex Work Price – Rs 57.67 Distributor Margin – Rs 4.61
CGST – Rs 7.47 Retailer Margin – Rs 20.76
3. Surf Excel:
GST 18%
Company Selling Price 105.93 GST IGST CGST SGST
GST @18% 19.07 9.53 9.53
Distributor landed price w/o GST 105.93
Distributor landed price including GST 125.00
8% Distributor margin @8% 8.47
Retailer landed price w/o GST 114.41
GST 20.59 0.76 0.76
Retailer landed price including GST 135.00
25% Margin @25% 38.14
MRP w/o GST 152.54
GST 27.46 3.43 3.43
MRP 180.00 13.73 13.73
MRP – Rs 180 SGST – Rs 13.73
Ex Work Price – Rs 105.93 Distributor Margin – Rs 8.47
CGST – Rs 13.73 Retailer Margin – Rs 38.14
4. Axe Deodorant:
GST 18%
Company Selling Price 117.70 GST IGST CGST SGST
GST @18% 21.19 10.59 10.59
Distributor landed price w/o GST 117.70
Distributor landed price including GST 138.89
8% Distributor margin @8% 9.42
Retailer landed price w/o GST 127.12
GST 22.88 0.85 0.85
Retailer landed price including GST 150.00
25% Margin @25% 42.37
MRP w/o GST 169.49
GST 30.51 3.81 3.81
MRP 200.00 15.25 15.25
MRP – Rs 200 SGST – Rs 15.25
Ex Work Price – Rs 117.70 Distributor Margin – Rs 9.42
CGST – Rs 15.25 Retailer Margin – Rs 42
5. Vaseline Body Lotion:
GST 18%
Company Selling Price 123.59 GST IGST CGST SGST
GST @18% 22.25 11.12 11.12
Distributor landed price w/o GST 123.59
Distributor landed price including GST 145.83
8% Distributor margin @8% 9.89
Retailer landed price w/o GST 133.47
GST 24.03 0.89 0.89
Retailer landed price including GST 157.50
25% Margin @25% 44.49
MRP w/o GST 177.97
GST 32.03 4.00 4.00
MRP 210.00 16.02 16.02
MRP – Rs 210 Retailer Margin – Rs 44.49
Ex Work Price – Rs 123.59 SGST – Rs 16.02
CGST – Rs 16.02 Distributor Margin – Rs 9.89
DTR Working Capital & Credit Period:
The Debtors Turnover Ratio is also known as Receivables Turnover Ratio which shows how
quickly the credit sales are converted into cash.
DTR = Net Credit sales/Avg. Account Receivables
We referred the balance sheet and P&L statement of HUL in order to find net credit sales and
avg. account receivables of the company.
Net Credit Sales = Total Sales – (Sales Return + Sales Allowances + Cash Sales)
Credit Sales = (38273 Cr + 37660 Cr)/2
Sales = 37966.5 Cr
Average Accounts Receivables = (1046 Cr + 1673 Cr)/2 = 1359.5 Cr
DTR = 37966.5 Cr/1359.5 Cr = 27.93
Average Collection Period = 360/DTR = 360/27.93
=12.89 Days
