MARKETING METRICS CIA – 3

BRAND VALUATION

HINDUSTAN UNILEVER
Submitted To:

PROF. PRABHA KIRAN

Submitted By:

AMAN RAJ 1828103

ARTHI CHOUDHARY 1828137

NIKITHA SHARMA 1828148

RITHU S LEWIS 1828151

SHRUTHI O 1828155
INTRODUCTION

Hindustan Unilever Limited (HUL) is India’s promising and a Mammoth FMCG Company,
making a place in every second Indian’s home and hearts. Formed in 1933 as Lever Brothers
India Limited it has become an Age-Old Family housing 20+ diverse product categories
ranging from in personal & home care products up to food products. It is currently
headquartered in Mumbai, India. It has 41,000 employees who are currently headed by Mr
Sanjiv Mehta, the non-executive chairman of the board.

HUL is the market leader in Indian products such as

tea, soaps, detergents. This is because its products
have become daily household name in India. The
Anglo-Dutch company Unilever owns a majority
stake in Hindustan Unilever Limited. The company
was renamed in late June 2007 as "Hindustan
Unilever Limited".

Today, HUL is one of India’s largest exporters of branded Fast-Moving Consumer Goods. It
has been recognized by the Government of India as a Golden Super-Star Trading House. Over
time, HUL has developed into a viable & competitive sourcing base for Unilever worldwide in
Home and Personal Care & Foods & Beverages category of products. HUL is also a global
marketing arm for select licensed Unilever brands and also works on building categories with
core country advantage such as 5 branded basmati rice. HUL Exports offers high level of
service with flexibility and responsiveness thorough out the supply chain. It has a dedicated
organization structure to support this endeavour and this has helped in growth of these
businesses in particular.
HUL’s key focus in the exports business is on two broad categories. It is a sourcing base for
Unilever brands in Home & Personal Care (HPC) and Food and Beverages (F&B) for supplies
to other Unilever companies. It also focuses on becoming a preferred supplier to both non-
Unilever and Unilever clients in three categories in which India, as a country, has competitive
advantage – Branded Rice, Marine Products and Castor and its Derivatives. HUL enjoys
international recognition within Unilever and outside for its quality, reliability and speed of
customer service.

HUL's Exports geography comprises, at present, countries in Europe, Asia, Middle East,
Africa, Australia, and North America etc.

➢ HUL’s products touches two out of three Indian everyday

➢ Reach 80% Households  Direct Coverage of 1mln outlets
➢ 2000 Suppliers and Associates
➢ 71 Manufacturing locations
➢ 15000 Employees
➢ 1100 managers
➢ Shelf availability 84% outlets in India.

LOGO OF THE COMPANY

Unilever is committed to making sustainable living

commonplace and our logo is a visual expression of
that commitment. Each icon has a rich meaning at its
core, and represents some aspect of our effort to
make sustainable living commonplace.
 SWOT ANALYSIS

Strength Weakness
Strong Brand Equity HUL is a part of Unilever group. Limited Market Share Market share is limited due to
Large Employees Base It has over 18000 employees. presence of other strong FMCG brands.

Strong Distribution Hindustan Unilever has a reach of Controversies in India Hindustan Unilever faced

6.4 million retail outlets which includes direct reach to over controversies like skin lightening creams, pollution etc.

1.5 million retail outlets.

Research & Development Departments Two R&D
centres in India in Mumbai and Bangalore.
Daily Household Name Products with presence in over
20 consumer categories with over 700 million Indian
consumers using its products.
CSR Activities As a part of CSR, HUL has initiatives like
project Shakti, plastic recycling etc
Strong History Strong legacy of the HUL brand since its
inception in 1934.

Opportunity Threats
Huge Competition from Private Label HUL’s Market
Rural Distribution HUL can tap rural markets and
can be affected by regional & local players.
increase penetration in urban areas.
Huge competition from big branded players
Brand Acquisitions Mergers and acquisitions to
Competitive strategies adopted by other big players is
strengthen the brand.
reducing firm’s Market Share.
Rise is Standard of Living Increasing purchasing
FDI in Retail FDI in retail is allowing international players
power of people thereby increasing demand.
to enter into India.
 BRAND SUMMARY

Hindustan Unilever Limited is not just another

regular Brand but a household name since ages. A
brand that sits as the fine diamond on the crown of
its Anglo Dutch Mother Brand Unilever – HUL has
been a brand flourishing commendably on Indian soil. Being a market leader in Consumer
goods domain it canopies some of the promising and tall Brands across categories.

The Brand has undoubtedly earned the title of ‘Most valued FMCG Goliath’ with consistent
distribution of sources into growing brands and acquiring potential brands to fill gaps in its
Brand Portfolio.

The Beauty, Personal Care and Toiletries Segment of HUL

although shelters many brands under it, three most Prominent
Brands; Dove, Lux and Pears – known to be Beauty Soap Bar
Brands sail on the waters of success.

Rise of Brand Dove – A brand promising moisturisation and

nourishment of skin it’s a brand well-conceived as Natural
Beauty. The brand at its nascent phase advocated trial and
associate with the promotional tagline ‘dove is different.’ From that very stage of inception, it
has always been a solution to aging female adults and caring about dryness. Women Centric
Personal Care Dove has revamped its promotional advocacy over years but the brand yet
highlights Real Beauty.
 Throwing light on Brand Lux – Originally launched in the 18th
century as a ‘Sunlight Flaked laundry soap brand’ Lux
International today is a brand that blends luxury and beauty.
Known to be a brand worthy to be used by eternal and beautiful female celebrities in India Lux
as dawned the throne of Beauty Soap Brand that brings out the star in you. The brand strives
to aspire women to ignore societal judgements and celebrate their opinion on beauty.

Sneak-Peak into Brand Pears - Globally recognized translucent

soap bar brand Pears was a pioneer to be a global mass market
producer of such soap bars. It was in the early 19th century that it
found shade under the Lever Brothers Brand today well-known as HUL in India. The oldest
brand of soap bars known to the world Pears as a brand Pure and Gentle across the globe.
BRAND VALUATION

Before understanding Brand Valuation, let’s first understand several other concepts so that we
have a clear picture of what Brand Valuation exactly is.

➢ Brands:
Brand infers to names, terms, signs, symbols and logos that identify goods, services and
companies. Brands have three primary functions – Navigation, Reassurance and
Engagement.
 Navigation is when the brands help customers to select from the bewildering array of
alternatives.
 Reassurance ensures that they communicate the intrinsic quality of the product or service
and assure consumers at the point of purchase.
 Engagement communicates a distinctive imagery and associations that encourage
identification of the brand by customers.

➢ Brand Value:
Brand Value is a measure of several factors like loyalty of customers, the ability of a brand
to keep offering newer products and technology, and the connect with consumers, who give
it a premium.

➢ Brand Valuation:
Brand valuation is the process used to calculate the value of brands. Historically, most of a
company’s value was in tangible assets such as property, stock, machinery or land. This
has now changed and the majority of most company’s value is in intangible assets, such as
their brand name or names. Brands are valued for many different reasons, such as for legal
disputes, strategic management, internal communications, business management, brand
securitisation and M&A.
Brand valuation models follow standard guidelines. Models for valuing brands follow the
same principles of valuation that are used for valuing other tangible assets – economic
income approach, market approach and cost approach.
Importance of Brand Valuation:

Brand valuation has been by far used for many purposes by companies.

 Mergers and Acquisitions: Usually, a company or an organization does not pay the
book value while acquiring another business entity. Now the difference between the
paid acquisition price and book value is known as Goodwill. Goodwill can be defined
as the value of a business entity which is not directly attributable to its tangible assets
and liabilities. Estimating the financial value using brand valuation of a brand helps us
to determine the premium over book value that a buyer should be paying.
 Licensing: One of the approaches to take advantage of the value of a solid brand is by
broadening or permitting the brand. It is feasible for both the licensor and the licensee
to profit financially from an authorizing course of action. The licensor profits by another
wellspring of income that requires minimal capital speculation. The licensee benefits
by having a lower channel, publicizing and client obtaining costs.

 Financing: While companies don't convey marks on their monetary records as long-
term resources, money related markets perceive the commitment brands have on
investor esteem. Organizations with solid brands consistently acquire preferable
budgetary terms over organizations with poor brands. The higher the estimation of the
brand through brand valuation, the better the terms.

 Brand Reviews: Usually, brand investment reviews entail the comparison, across
brands and against competitors of hard measures, such as sales and market share, and
soft measures, such as reputation and awareness. For some brands, it is also important
to determine financial value. Brand valuations allow companies to gauge their return
on brand investment and to develop appropriate investment strategies across a portfolio
of brands.

 Budget Allocations: The marketing mix is utilized by advertisers who must settle on
choices about the assignment of spending plan and assets. Organizations can now more
precisely gauge the blend of promoting vehicles required to expand both spending
proficiency and advertising viability. For a few organizations, brand valuations are a
basic component of the marketing mix.
BRAND VALUATION METRICS

➢ Brand Equity Ten (Aaker)

As defined by Aker Brand Equity could be explained as a set of liabilities and assets of a
given brand. He enlisted five components that make up Brand Equity – brand awareness,
brand loyalty, brand association, perceived quality and other proprietary assets.

Brand equity = Brand awareness + Brand loyalty + Brand association + Perceived

quality + Other proprietary assets

BRAND EQUITY

Perceieved other propriotery

Brand loyalty Brand awareness Brand Association
Quality assets

1)anchor to 1) quality offered

1)reduced 1) contribute to
which association by the product
marketing cost brand
can be attached
2)level of differnciation
2)Trade leverage 2)familiarity and differciation 2)role in business
3) attracting new linking
3)price process
customers 3) commitements
4)availibility of 3)create positive
4)time to to the brand
different sales attitude
respond to 4) brand to be channel
competative 4) brand
considered
threats 5)brand extention in the
during purchasing
extension market
products

➢ Brand Asset Valuator (Young &Rubicam)

differntiation
brand vitality
relevance
Brand value
esteem
brand
structure knowledge
  Differentiation What sets you apart from the rest?
 Relevance Is your brand touching the hearts of the masses?
 Esteem Do you as brand keep up your promises?
 Knowledge Do your customers identify your brand and recall your brand?

Relevance and Differentiation combined can speak volumes about the brand’s promising
growth while knowledge and esteem put together reveal a lot about its current power.

➢ Brand Equity Index

Penned down by Bill Moran a Marketing Executive, brand equity index is the product made of
three factors - Effective market share, Relative price and Durability

Brand Equity Index = Effective Market Share (%) * Relative Price (I) * Durability (%)

 Effective Market Share (weighted average) a brand’s sum total market share that it
has across all competing segments, weighed by brand’s each segment’s slice of that
brand’s entire sales.
 Relative Price (ratio) the price of a given brand divided by the comparative average
price of rival brands of a same category.
 Durability measures customer loyalty and the extent a brand can retain its customer.

➢ Brand Finance

The methodology of Brand Finance adapts Royalty Relief technique to estimate a Brand’s
Value. Under this method the valuation of brand is constructed on discounted cash flow. The
method points out at three approaches to brand valuation - the market, cost and income.

➢ BrandZ (Millward brown)

Developed by Marketing Research Giant Millward Brown, BrandZ a database of brand equity.
It accounts a customer base of 650000+ and professionals spanning over 31 countries
comparing over 23,000 brands.
Initiated in the late 1990s BrandZ is the tool used for brand valuation that stays away from
traditional components used in estimating the brand value and seeps a layer under, and uses the
question - how much does the brand on its own contribute to the total corporate value. This
question could be summed up into a term Brand Contribution which is the essential component
under BrandZ and also its differentiating factor from rest of the techniques.

Calculating financial Calculation brand Calculating brand

value contribution value

➢ Brand Valuation Model (inter brand)

The key components of brand evaluation methodology:

FINANCIAL ANALYSIS
ROLE OF BRAND
BRAND STRENGTH

APPROACHES TO BRAND VALUATION

 EVALUATING BRAND VALUE OF HINDUSTAN UNILEVER

i. Valuating Brand Hindustan Unilever using Brand Asset Valuator Model

Using a survey questionnaire that answered brand differentiation, relevance, knowledge and
esteem we were able to assess the Brand Value of HUL under the method of Brand Valuator
Model.

Questionnaire

According to you does Dove as beauty soap offer you a uniqueness among other competing
Yes/No
soap brands?
As a beauty soap brand Dove is a very relevant product for me? Yes/No
Dove is a beauty soap brand that I would always want to buy or prefer to buy? Yes/No
As a Brand assuring Softer Glowing Skin, I believe in Brand Dove? Yes/No
According to you does Lux as beauty soap offer you a uniqueness amongst other competing
Yes/No
soap brands?
As a beauty soap brand Lux is a very relevant product for me? Yes/No
Lux is a beauty soap brand that I would always want to buy or prefer to buy? Yes/No
As a Brand known as International Bar of Beauty do. You believe in Brand Lux? Yes/No
According to you does Pears as beauty soap offer you a uniqueness amongst other competing
Yes/No
soap brands?
As a beauty soap brand Pears is a very relevant product for me? Yes/No
Pears is a beauty soap brand that I would always want to buy or prefer to buy? Yes/No
As a brands promising Pureness and Gentleness do you believe in Pears? Yes/No
Rate the following in terms of relevant unique features provided by the following brands
Dove 1 2 3 4 5
Lux 1 2 3 4 5
Pears 1 2 3 4 5
Rate the following brands in terms of creating a connect with you (even via advertisements)
Dove 1 2 3 4 5
Lux 1 2 3 4 5
Pears 1 2 3 4 5
Rate the following in terms of Brand loyalty and Brand Respect
Dove 1 2 3 4 5
Lux 1 2 3 4 5
Pears 1 2 3 4 5
How well do you recall the Brand and aware of the brand? Rate the following
Dove 1 2 3 4 5
Lux 1 2 3 4 5
Pears 1 2 3 4 5

The response was collected from 20 random respondents and the results are portrayed as below

 Brand Differentiation

Each Brand has a differentiating statement. The collected data show that the brand that well
advocates Brand Differentiation is Dove. The Brand gained highest positive response when
questioned about its differentiation and product uniqueness.

16

14

12

10

Dove Lux Pears

This clearly indicates that Brand Dove outgrows the other two Brands in terms of offering
unique features and rightly communicates it differential statement.
 Brand Relevance

Not every brand captures the heart of the masses. The collected data denotes Dove to be a
Brand that has managed to find relevance in the crowd. Dove as a brand had the highest count
of votes in terms of questions that relate to its relevance as a brand.

14

12

10

Dove Lux Pears

The above graphs demonstrate that Brand Dove surpass the other two brands however Brand
Pears loses by a mere margin.

 Brand Esteem
Brands often promise lot many things yet not all are always fulfilled. The collected Data
clearly depicts that Dove and Pears stand true to their said promises and deliver them. The
two brands were rewarded with highest positive response for the questions that highlight
the esteem of the brand.
 14

12

10

Dove Lux Pears

The Brands Dove and Pears clearly stand winner in being a preferred brand. Preference
only is developed when the said promises of the brand is delivered.

 Brand Knowledge
Customers may fail to understand a Brand, identify who they are or recall the brands. Not
often all brands enjoy top of my recall. The collected data indicates that Brand Dove is a
clear winner with customer’s ability to identify and recall the Brand. The brand was chosen
on the basis of questions that answered the knowledge of the given Brand.
 18

16

14

12

10

Dove Lux Pears

The Brand Dove exceeds the other two brands with a major difference of count and thus
enjoys greater recall among the masses
 18

16

14

12

10

0
Strong (Lux) Growing (Pears) Declining (Dove)

Diffrentiation Relevance Esteem Knowledge

Brand Name Reason Why

Strong Brand Lux Consistently the Brand has managed to have a

count that were close to each other thus can be
considered a money minting Personal Care
Brand of HUL
Growing Brand Pears This brand shows lesser count in terms of brand
knowledge and esteem, and thus has great
potential for growth while delivering its said
promises.
Declining Brand Dove The HUL Brand that once stood tall now only
serves its loyal consumer base and really hasn’t
pushed its boundaries in attracting a newer set of
audiences.

Under Hindustan Unilever Brand Lux that it canopies comes across to be a strong brand.
Brand Lux is a promising brand which shows potential growth. However, it is Brand Dove
that has a consistent set of customer base and a slowed down conversion rate of new
customers sum up to the reason why it turned out to be a Declining brand.
ii. Valuating Brand Hindustan Unilever using Brand Equity Model

Formula: Brand Equity Index = Effective Market Share (%) *Relative Price (I) *Durability (%)

 Effective Market Share:

Market Share – HUL enjoys 51% of the total skin and personal care market share in India
across all the segments. (Individual Segment Market share is not known) (Source: Statista)
Market Size of Personal Care is close to about 61.60 % (Source: Statista)
Thus, Effective Market Share of HUL is,
51%*61.60% = 31.41%

 Relative Price:
Price of a Hindustan Unilever Brand of Soap (Lux/Dove/Pears) – Rs 50 (75g) (Source: Internet)
Price of Santoor (competing Brand) – Rs 40 (75g) (Source: Internet)
Price of Mysore Sandal (competing Brand) – Rs 40 (75g) (Source: Internet)
Price of Godgrej No 1 Soap (competing Brand) – Rs 30 (125g) (Source: Internet)

Therefore, a conclusion could be drawn by the above Price Comparison that HUL charges a
premium price for its soap bars as compared to other dominant players in the market,
There is a price premium of Rs 10

Since HUL is one among the leading FMCG Giants, the brand has established huge customer
base and an enormous count of loyal consumers. Taking this as an assumption we assume
that the durability rate of HUL to be at a rate of 70%

Calculation:
Effective Market Share – 0.314
Relative Price – 10
Durability – 0.70

→ 0.314 * 10 * 0.70 = 2.198

INTERPRETATION AND CONCLUSION

The Valuation of Brand HUL portrays the Brand Equity and the efforts put across by the
mammoth in establishing such a Brand Name.

The First Method gives us an In-depth picture of each Brand sheltered under the Umbrella
Name of Hindustan Unilever. It throws light on which Brand is strong, has potentialities for
growth and which are in its crumbling state. This method however is time consuming and the
collected data may not always translate the full truth about the Brand Value.

The Study made under this method gives a glimpse of assurance that people do know Brand
HUL and its Sub-Brands yet know exact estimated number is delivered via this method.

The Second Method throws light on a particular number after calculating Brand Equity. The
Value is equal to that number and thus is a clearer picture when compared to the former
technique. The method consumes lesser time and is more efficient than the Brand Asset
Valuator Method. The accuracy level is much higher. But the method needs a lot of
information, fictious and obsolete information would generate a value that is not accurate.

A Brand thus must be assessed using the latter method i.e., Brand Equity Index Method to show
a numerical evidence of Brand Value and Performance.