CHANNEL DESIGN AND STRUCTURE: HUL

Channel Design

Hindustan Lever Limited (HUL) has two types of channel selling ‐

I. Regular (traditional) retail channel,

ii. Direct Selling Channel in the name of Hindustan Lever Network (HLN).

HUL has a well entrenched high distribution model which comprises of C&F agents, Redistribution Stockists, wholesalers and retailers (as shown earlier). Hindustan Unilever's distribution network is recognized as one of its key strengths. Its focuses on Product availability, Brand communication, and higher levels of brand experience.

Channel Structure

Typically, the goods produced in each of the HUL's 40 factories are sent to a depot with the help of a carrying and forwarding agent (C&F agents). The company has its depot in every state of the country. The C&FA is a third party and gets servicing fee for stock and delivery of the products. In each town, there is at least a redistribution stockist (RS) who takes the goods from the C&FA and sells them to retail outlets.

The HUL management realized certain problems with the existing sales model. First, the model was not viable for small towns with small population and small business. HUL found it expensive to appoint one stockist exclusively for each town. Secondly, the retail revolution in the country has changed the pattern the customers shop. Large retail self service shops are becoming commonplace.