Marketing FMCG to the Rural Customers

Presented by:Group 15Gangotri V Naik (1311017)Makesh Kumar M (1311028)Priyadarshini K (1311035)Raja S K (1311040)Anurag Kumar (1311078)

Company

• India's Largest FMCG Company

• Subsidiary of Unilever; holds 52% equity

• Unilever is world's largest FMCG Company

• Worldwide revenue of US$ 55 billion

• Annual Turnover: INR 110 billion

Indian Market

• World’s 2nd largest market after China

• 2 out of 3 Indians: HUL user

• Rural Population: 750 million

• Below Poverty Line: 250 million

Traditional Approach: Product Category

• 100+ brands

• Each profit centre- own sales force and stockists

• Regional offices for product categories

• Not Appropriate for small markets

Modern Trade: Channel Approach

• Rise of self-service stores in urban parts

• Sales force- Customized to suit channel

• ASM negotiating on part of all HUL categories

Manufacturer

Depot / CFA

Redistribution Stockists

Retail Outlets

Wholesalers

>= 1 per state

>= 1 per town

Profit Center Based Sales Teams(70%)

Modern Trade(10%)

Rural Markets

(20%)

Rural Distributors and Star Seller

Manufacturer

Depot / CFA

Rural Distributors

Rural Outlets/ consumers

SHG / Shakti Entrepreneur

MACTS

• Explore the unexplored market – Edge over competition

• Improving effectiveness through SHGs, NGOs, microfinance and Government support

• Operates in inaccessible markets with low market potential

First of its kind rural initiative with a direct reach

• Brand ambassador in rural areas with one to one communication for Shakti

• Made effective use of SHGs through MACTS

Build brand through local influences

• RSP’s Impart training & knowledge to women –makes them innovative& entrepreneurial

• Vani – a communication initiative for primary awareness of best practices

Focus on Women

Potential

Acc

ess

ibili

ty

Positives

• Opportunity for efficient low cost supply chain

• Profit initiative with Social Impact

• Sustainable Livelihood for unprivileged rural women

• More margins for Shakti entrepreneur

• Low unit packets – sachet model

• iShakti enabled internet connection and technology penetration

• Higher costs of training

• Packaging price of smaller sachets adds to cost per unit

• Shakti entrepreneurs who drop out will become financially strained

• Dropping out also adds to the costs of HUL

• Destroying local initiatives, multinational tapping into rural markets

• Loans taken lock in the people with HUL

Negatives

Existing Markets

• Growing Competition

• Price wars

• Entry of Local firms and MNCs

• Saturated Markets

• Exhausted available options

– Product Innovation

– Efficiency

– Trimmed to power brands

• Competitive advantage?

• 500 million in 500000 villages

• Huge potential Vs Need for new markets

• Lack of

– Access/ reach

– Advertising media

• Huge scattered market

• Low per capita consumption

• Existing stockist structure?

Unexplored Markets

Reach for HUL, Brand Image

One-one influencers

Demand generation

Opportunity to innovate – small

sachets

Shakti Entrepreneurs

Capable of running a

business/ i Shakti /

Vani Sakti

Job training, health

literacy/ Social

awareness,

Technology, soft skills

Bank Loans, Micro

Finance – enabled by

HUL

Reduction in Poverty,

Improvements in living

standards/ per capita income,

Women empowerment

• 10% of HLL’s rural turnover

• Ease of switching – through Low Unit price Packs(LUPs)

• Income of 500-700 INR for about 12000 women

• Promoted micro-finance with investment opportunity

• New life for rural women

• Learn while you earn

• Intellectual capability

• Creating a network

• Passing margins

• Credit to patrons

• Exposure to computers and internet / information

• Better health and hygiene practices

• Access to Inaccessible market

• 500 million rural people

• When market was mature source of increased revenue

• Local influencers and one to one endorsers

• Improved effectiveness and Efficiency

• Direct reach to final customers

Economic Value Social Value HUL’s Bottom Line

Government regulations &support

Language BarriersCultural barriers suppressed women

Exploitative perception about MNCs

Absence of self help groups Acceptance of HUL

against traditional products

Availability of financing options

Local/State terrorism

Expansion Costs Bearing the

promotional and training costs for human resources

Increasing the confidence of women

in rural India

Preserving the social motive while

expansion

Increasing the effectiveness and efficiency of the existing Shakti

entrepreneur

Convince successful brand managers with effectiveness and efficiency of Shakti

HLL representative visits consumer home with demos/ trials

Establish a standardized training platform which is replicable across different states based on language and culture

Streamline iShakti as a CSR initiative with government and explore it as a medium for data collection

Help with extending credits and passing on margins to customers

Promote the concept through Local Opinion leaders in areas where acceptability is low

Use conventional methods of communication like puppet shows/ dramas to convey success of Women Entrepreneurs

Involve the family members in order to overcome entry level gender constraints

Use mobile trends, SMS and calls for training