Hindustan Lever's Foray into Network Marketing

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Case Details:

Case Code : MKTG093
Case Length : 30 Pages
Period : 1996-2004
Pub Date : 2004
Teaching Note :Not Available
Organization : Hindustan Lever India Ltd. (HLL)
Retail
Countries : India

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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"HLL Network is going to be a powerful source of growth. Our objective is to build steadily so that we have more than one million entrepreneurs."

- M.S. Banga, Chairman, Hindustan Lever in 2003.¹

"Not only are there commission based incentives but above a certain level of sales one is entitled to a share of the company's overall profits as well."

- Priti Loyalka, the first consultant president of the Hindustan Lever Network (HLN) in 2003.²

"We need more serious players in direct selling. HLL has brand awareness and visibility. However, one is not sure about its core competency in the industry."

- Peter Hauggaard, Regional Manager-India, Oriflame India Pvt. Ltd.³

"Today the growth rates are healthy due to the success of a player like Amway, and Lever obviously sees the potential of this channel and believes in being a part of it."

- Nirav Sheth, Vice-President, Research, SSKI Securities.⁴

HLL Joins the Direct Marketing Bandwagon

Ms. Garg shopped for her household items like shampoos and cosmetics in the cluttered shops in her suburban locality in Mumbai.

Then, one day, a consultant from Hindustan Lever Network (HLN) brought along a range of products made exclusively for door-to-door sales.

Among other things, the salesperson dipped a litmus paper in a facial cleanser to show its mildness and provided expert advice on a range of beauty and hygiene related queries from alpha hydroxy⁵ creams to nail polishes. Ms. Garg bought two lipsticks, one facial cream and a bottle of cleanser from the salesperson.

Marketing Management Case Studies | Case Study in Management, Operations, Strategies, Marketing Management, Case Studies

The Indian division (Hindustan Lever Limited (HLL) of the consumer goods conglomerate, Unilever, has in this way been creating a new channel for the sale of products across the country.The salesperson in this case, 29-year-old Priti Loyalka went on to become the highest achiever and the first consultant president of HLN.

Together with her team of entrepreneurs, she was involved in the direct marketing of a range of HLL products under the brand names 'Lever Home' and 'Aviance'.

HLL made its foray into direct marketing in 1999 with the launch of a range of personal care products under the brand name Aviance. Though Aviance was not a roaring success in absolute sales numbers, it laid the foundation for HLN which was launched on January 27, 2003.

In terms of market share, HLL is India's largest consumer goods company and the leader in beauty, personal hygiene and home care products in the country.

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1] "Hindustan Lever Network- Partnering Your Success", go4hll.tripod.com.

2] "Hindustan Lever Network- Partnering Your Success", go4hll.tripod.com.

3] "HLL seeks a Direct Contact", www.thehindubusinessline.com, 2003.

4] "HLL seeks a Direct Contact", www.thehindubusinessline.com, 2003.

5] Alpha hydroxyl acids are naturally occurring acids derived from certain plants and fruits. Alpha hydroxyl acids work as a skin cleanser by decreasing the compounds that hold dead skin on the surface.