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UNILEVER IN INDIA RURAL MARKETING

INITIATIVES

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FMCG in India

• Fast moving consumer goods are the goods purchased by the consumers for their own use and purchased repeatedly.

• the FMCG market potential has always been very big. However, from the 1950’s to the 80’s investments in the FMCG industries were very limited due to low purchasing power and the government’s favouring of the small-scale sector.

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VISION OF THE COMPANY

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History of HLL

• HLL is a subsidiary of Unilever Ltd., England• Found in 1885 by Lever Bothers. At that time

company was known as “William Hesketh Lever”

• The company entered Indian market in 1888 with a laundry soap “Sunlight”.

• In 1956 William Hesketh Lever formed a fully owned subsidiary “Hindustan Lever Ltd.” with 10% of the equity to the Indian public.

• Few of the prominent products launched by HLL

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product Year of launch

Rin 1969

Bru 1969

Clinic shampoo 1971

Liril 1974

Close-up 1975

Fair and lovely 1978

lifebuoy 1888

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Mergers and accusations

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M&As

• In 1930, the company merged with• "Margarine Unie" (a Netherlands-based

company which exported vanaspati to India), to form Unilever.

• In 1951, HLL purchased plants at Trichy, Shamnagar and Ghaziabad to expand its vanaspati production capacity.

• In November 1956, the three Indian subsidiaries merged to form Hindustan Lever Ltd. (HLL).

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• In April 1993, HLL's largest competitor, Tata Oil Mills Company (TOMCO), merged with the company.

• In 1994 HLL n US based Kimberley Clark corp. formed 50:50 joint venture.

• In 1996 Brooke Bond Lipton India ltd (BBLIL) merged.

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Turning point came when…??

• Nirma used a sharp penetration pricing strategy and severely undercut HLL’s brands.

• “Liril” ruled freshness segment at Rs.13.50, Nirma entered “Fary” with lime variant at Rs.6.50, then HLL retaliated with its own discount brand “Jai Lime”. 

• HLL brand “Fair n Lovely” faced attack from “Fairever”

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HLL later realized that its future lies in

tapping the huge rural population and began

concentrating its efforts in that

direction

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HLL’s move towards rural market

As stated by M.K. Gandhi : “India lives in villages”• 70% of Indian population lives in rural

areas. Also known as “The Bottom Line Of The Pyramid”

• It produces huge opportunities for companies like HLL.

• HLL derives around 60% of its sales from the rural areas.

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• In 1998 HLL conceptualized “Project Streamline” to enhance control over the rural distribution and increases the rural retail penetration from 50,000 to 100,000 retailers.

• Also in 1998, “Project Bharat” was launched.

• In 2001, “Project Shakti” was launched.

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For long term benefits, HUL started Project Streamline in 1998.

MARKETING STRATEGIES OF HULFOR RURAL INDIA

Project Shakti, partnership with Self help groups of Rural women & covers 5000 villages in 52 districts in different states.

In the same year HUL started “project Bharat” as a massive rural home-to-home exercise.

Integrate Economic, Environment & Social objectives with Business agenda.

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Project streamline

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Project Streamline

• In 1998 HLL conceptualized “Project Streamline” from 50000 to 100000 retail outlets by 1999. Project aimed at covering 50%of rural population by 2003.

• HLL appointed rural distributors(RD) under them 15-20 sub stockists they were expected to drive distribution in neighbouring villages through unconventional modes like tractors, bullock carts, etc.

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Project Bharat

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Project Bharat

• HLL’s Project Bharat was the first and largest rural home-to-home operation to have ever been mounted by any company.

• Its vans visited villages across the country and distributed sample packs comprising a low-unit-price pack.

• Project Bharat concentrated on raising penetration and awareness levels.

• Idea of microcredit to villagers began with “Project Bharat”.

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Project Shakti

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SHAKTI ENTREPRENEUR PROGRAMME

• It helps women in rural India set up small businesses as direct-to-consumer retailers.

• The scheme equips women with business skills and a way out of poverty as well as creating a crucial new distribution channel for Unilever products in the large and fast-growing global market of low-spending consumers.

• By 2010 the Shakti network aims to have reached 600 million consumers.

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EVERYDAY I WILL SELL.EVERYDAY I WILL EARN.MONEY. RESPECT

Started in 2001, Shakti is HLL's rural initiative, which targets small villages with population of less than 2000 people or less.

micro-enterprise opportunities for rural women

Providing health n hygiene education through shaktivani program

i shakti portal

Shakti has already been extended to about 15 states ,80,000 villages in with 45,000 women entrepreneurs and generating Rs.700-1000 per month to each women.

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HOW IT WORKS?• Villages with a population of about 2000-3000 are

selected.• Personnel from HLL approach SHGs.

• Selection of the Shakti Amma.

• HLL vouches for Shakti Ammas with banks from credit.• One Shakti entrepreneur is appointed for one village &

villages that are about 2 kilometres apart from her village.

• The Shakti dealer places initial orders worth Rs.15000(principal customer of HLL

• The Shakti dealer organizes a “Shakti Day” in the village(display of products & free gifts)

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• The recruitment of a Shakti Entrepreneur or Shakti Amma (SA) begins with the executives of HLL identifying the uncovered village.

• The representative of the company meets the panchayat and the village head and identify the woman who they believe will be suitable as a SA.

• After training she is asked to put up Rs 20,000 as investment which is used to buy products for selling. The products are then sold door-to-door or through petty shops at home.

• On an average a Shakti Amma makes a 10% margin on the products she sells.

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The role of micro-financeThe self-help group• Grameen Bank: mutual thrift societies of village

women • A rapidly spreading movement: 6 million groups

in India• 70% of rural households in APA micro-finance revolution• 8 million families have received micro-credit• 76% of micro-credit recipients have crossed the

poverty line• 95% of micro-credit recipients are women• Effectiveness depends on opportunities for

micro-enterprise

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Future plans

• Project Shakti plans to extend to the states of West Bengal, Punjab and Rajasthan.

• Partnership with other non-competitor companies to sell their products through the Shakti network.

• Nippo, TVS Motor for mopeds, insurance companies for LIC policies.

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PRICING AND PACKAGING

• Rural consumers are price sensitive• Sachets and small packs of premium products.• Price doesn’t exceed Rs.5 per sachet.• Lux at Rs.5,• Lifebuoy at Rs.2, • Surf Excel sachet at Rs.1.50, • Pond's Talc at Rs.5, • Pepsodent toothpaste at Rs. 5, • Fair & Lovely Skin Cream at Rs.5,• Pond's Cold Cream at Rs.5, • Brooke Bond Taaza tea at Rs.5.

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SOME OF THE PRODUCTS SOLD THROUGH PROJECT

SHAKTI

ATRS.2

AT RS.5 AT

RS.1.50

AT RS.6

AT RS.5

AT RS.5

ATRS.5

AT RS.5

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Distribution

It is the combination of the 3 ways:• Door to door selling (11% margin on

sales)• Sells from own home (11% margin on

sales)• Retailers (3% margin)• averages sales :• Rs. 10,000 - Rs. 15,000/month, • profit - Rs.1,000 per month

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Why all these program

To take people aware To increase the consumption.To increase the income.To increase behavior in – Awareness & living standard

Lifestyle Self consciousness.

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Direct coverage

Factory Depot Stockiest / Distributor Trade

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Project i-shakti

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i - Shakti• In 2010, they started “i-Shakti” an IT-enabled

community portal across the state of Andhra Pradesh. i-Shakti is designed to give rural people access to information via a network of village “kiosks” containing internet linked computers run by entrepreneurs.

• Villagers can access free content, developed in their local language, or email questions on a wide range of topics, including Unilever products, health and hygiene, agriculture, education, finance and employment.

• The aim is to have 3000 i-Shakti kiosks on stream by the end of 2010 covering 9500 villages and 18m people.

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i-Shakti Contd……• Rural community portal that creates access to

information

• Villagers can register as users and surf content areas:– Agriculture, health, veterinary services, education,

employment opportunities, education, personal grooming, entertainment, games

• All content backed by local language voice-over

• On all content areas, users can pose queries

• 1,000 kiosks in AP, partnership with government

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Looking ahead

• India’s rural population comprises of 14% of world population, thereby presenting a huge untapped market.

• Development of project “Shakti-II” is in the pipeline.

• Constant product development for rural market.

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Recommendations

• HLL should open exclusive shops. HLL is already having exclusive shop in Mumbai  called SANGAM STORE. But it is only in Mumbai, so it should be increased.

• The employees should be given uniforms in which the name of the company should be printed, by doing this the sales people get motivated.

• They should increase their CSR activities.• The delivery vehicle should be attractive the

name of the company should be printed in that so that it becomes the sources of advertisement.

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• They can advertise by sending SMS.• They can organize some “HLL fests” to promote

their products.• They can organize some contests for the public

to attract the public.• They can use kiosks for advertisement.• Some interesting schemes can be given to the

customers like gold coin in products.• They can organize and sponsor some “Ramlila,

kushti, kabaddi” matches to increase awareness about their products.

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Marketing strategies used

• Cost management.

• Leveraging non conventional media like cinema vans, wall paintings, weekly mart.

• Direct marketing.

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*MIND SET

*LIFE-STYLE

*ASPIRATIONS

*DEMAND

*CONSUMER BASKET

CHANGE

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Thanks you for your time....