HULs Wheel Detergent Powders Rural Market Penetration

Unilever took its initiative in Rural Marketing concept and introduced various distribution
channels to understand the need of rural consumers. 70% of the Indian population lives in
rural areas. This segment, commonly referred to as the bottom of the pyramid, presents a
huge opportunity for companies. Unilevers Indian subsidiary, Hindustan Lever Ltd (HLL),
considered one of the best-managed companies in India, understands the importance of rural
marketing.
The trigger point came when a local firm Nirma, through its new product formulation, pricing
and distribution challenged HLLs detergent business. Nirmas attack from below made HLL
realise its vulnerability as well as identify a new opportunity. Since then, HLL has launched
various initiatives to reach out to the rural consumer. It has changed its product formulations
and deliveries.
It has begun a number of initiatives in terms of widening distribution reach through
traditional as well as unconventional channels. HLL has also empowered rural women by
assisting them in obtaining financial assistance through its project shakti.
The growing power of the rural consumer was forcing big companies to flock to rural
markets. At the same time, they also threw up major challenges for marketers.
Servicing rural markets involved ensuring availability of products through a sound
distribution network, overcoming prevalent attitudes and habits of rural customers and
creating brand awareness. Price-sensitivity was another key issue.
Rural income levels were largely dependent on the vagaries of monsoon, and demand was not
easy to predict. Thanks to TV, consumer awareness in rural areas had increased.
Rural expenditures on Fast Moving Consumer Goods (FMCG) were growing at an
impressive rate of 20 -25%.5 Several companies were taking rural marketing seriously, one of
them being Hindustan Lever Ltd (HLL), Unilevers Indian subsidiary.
In 2004, HLL was Indias largest FMCG company, with 30 power brands turnover of over Rs.
10,000 crores and 40,000 employees. HLL derived around 50% of its sales from rural areas.
HLLs rural marketing initiatives began way back in 1988, when the company had launched
Wheel for the rural and lower income urban consumer.
These efforts had intensified since the late 1990s when HLL like many other companies faced
flat growth in the urban markets. In early 2004, as it reviewed its past performance, HLL
realized that bulk of its future growth was likely to come from rural areas. The challenge for
HLL was to exploit this opportunity in a profitable manner.

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Rural Marketing

MBA

The case revolves around two companies i.e. Nirma and Wheel (An HUL product). HUL
Surf a high class branded detergent had the monopoly in till the year 1987, unless a huge
setback came to the company when from nowhere a Low Cost detergent Nirma came into
existence. It mainly focussed the lower income group which made it a regional brand and
soon the popularity of Surf started coming down. But to combat this loss HUL launched the
fighter brand Wheel which slowly grabbed the market and became equivalent to Nirma. This
case is considered to be a classic case as it covers the strategy and main idea by which the
two detergent companies competed with each other.
STP Segmentation, Target and Positioning
Segmentation:

Segmentation is dividing customer Segments into different divisions and then

focussing on it.
The product WHEEL was an INNOVATION in itself as it was the first LOW
COST HUL product.
The management understood the importance of Bottom of pyramid and thus
considered the lower income group.
They carefully examined Nirma and then designed the product WHEEL.
Wheel was the fighter brand against Nirma to combat its success and since a
branded product was coming in low price so customer got attracted towards it.

Positioning:

Positioning is an essential component -- and skill - in good marketing. It is

how use present your product in the market so that it creates a good impact
in the minds of the customers.
Earlier in comparison with the advertisement of housewives in white saari of
Surf, Nirma came out advertisement o with young people singing, dancing
and leaping to a catchy jingle. And thus positioned itself as Modern
Detergent.
Wheel was also launched earlier in the year 1987 but since it was not able to
position itself properly, it failed.
After that Levers came up with the classic Dekho Dekho Dekho jingle, a
riot of colours and wild choreography.
With the research picked up on Nirma and found high ash content in the
powder which was not the kind on hands again Wheel came with the Tagline
Maine maangi thi safaai, aur tu ne di haathon ki jalan which straight away
targeted Nirma.

Target: This is the real goal/objective in market that marketer want to reach. As understood
from the earlier points the Target customer for wheel was the lower income group.

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Rural Marketing

MBA

Maslows theory angle: if we look at the case from Maslows theory then it
says that humans one level need should be satisfied first then only it
moves to the next level. And here the main need of the customer was a low
cost detergent.
For the first time company used the third party manufacturer and WHEEL
opted for Dynamic pricing.
A proper SWOT Analysis was done by the company in order to make
wheel a successful brand.
Wheel also came up with varieties Blue Wheel, Wheel for coloured clothes
and Wheel Active Gold (which looks like P&Gs Tide Detergent) launched
in 2008.
Today with the efforts of HUL wheel holds around 11% share in the
market followed by Nirma with 10% share.

Marketing Mix of Active Wheel

Product

Wheel Lemon Powder

Active Wheel Lemon & Orange

Active Wheel Bar

Active Wheel Gold

Active Wheel Powder Foam

Price

Low Cost pricing Strategy

Penetration Pricing

MRP of Active wheel powder brought down from Rs. 75 to Rs. 67 on a 2 Kg pack

Rs. 10 Pack of Active Wheel has been raised to 275 gm. from 250 gm.

275 gm. and 500 gm. Wheel Green detergent powder to 300gm and 600 gm.

Place

Intensive Distribution

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Rural Marketing

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34,000 distributors outlet opened in 34,000 villages which is 12.56% in volume in

India

25% of HULs total sales in Volume

Promotion

Colorful flyers posters

Street performance

Jingles

Video Van Ads

Magicians Singers and Dancers

Reaching Out the Rural Consumer:

Prior to the late 1990s, HLL like any other company had used traditional modes of reaching
out to the rural consumer wholesalers and retailers
Product Development
HLLs experience with rural consumers dated back to the mid-1980s, when Nirma had been a
serious threat to HLLs detergent business. Nirmas success demonstrated that rural India did
have the money and willingness to buy packaged goods
Communication
Mass media reached only 57% of the rural population. HLL realized that it had to use
unconventional media to enhance awareness. In late 1999, HLL engaged Ogilvy Outreach, to
take care of its rural communication campaign
Active Wheel Campaigns
Project Shakti
Project Shakti is a strategy adopted by HUL to tap the rural households directly. Project
Shakti covered 62,000 villages across twelve states, through the village women
entrepreneurs, called Shakti Amma (empowered mother), who have understanding of village
needs and the products that are in demand. Project Shakti is the combination of micro credit,
training in enterprise management and self-help groups. The women guided by the companys
representative called the rural sales promoters (RSPs) were responsible for selling the
products door to door at MRP to consumers as well as to the retailers at a discount typically

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Rural Marketing

MBA

given out by a distributor. They would pocket different margin for each different sale. The
shopkeepers did not feel threatened because these women were not undercutting the MRP;
also the stocks would come to their doorstep.

Project Bharat
Project Bharat, was the first and largest rural home-to-home operation to have ever been
prepared by any company in which it covered 2.2 crore homes. During the course of
operation, HUL vans visited villages across the country distributed sample packs comprising
a low-unit price pack comprising shampoo, talcum powder, and toothpaste and skin cream
priced at Rs.15. This was to create awareness of the affordability of companys product
categories and also to eliminate barriers to trial.
Project Vani
The main aim of Project Vani was to increase the brand usage of HUL amongst the rural
consumers. The project vani promoted the concepts like health and hygiene through public
service demonstration, which in turn, increased the demand for its personal care products. In
late 1999, HUL engaged Ogilvy Outreach for planning and implementing the rural
communication campaign. Messages were presented through colourful flyers, entertaining
jingles and traveling cinema vans. The video ads were shown from the video vans with
commercial lasting from two to twenty minutes. Ogilvy Outreach recruited local dancers,
actors, magicians, who knew about the villages in which they had to perform. There were
around 50 teams of 13 performers who carried the brand message to the rural audience. The
scripts were modified according to the dialect, educational background and religion of the
people of the area. Excitement was created in the villages, many days before the event.
Missed Call Campaign
The results out of this campaign have been very encouraging. After three months of the
launching the full campaign in UP and Bihar, more than 5 million missed calls were received
from 7.7 Lakh unique numbers.
SWOT Analysis

SWOT Analysis
Strength

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1. Largest selling detergent brand in India

2. Bollywood stars as Brand Ambassadors (Salman Khan)
3. Effective Cleaning with least effort

Rural Marketing

MBA

4. Efficient distribution system by HUL

Weakness

1. People in rural areas still prefer low frills brands as this is slightly
higher priced

Opportunity

1. Further promotion campaigns to penetrate into the un-organized

rural India market.
2. Smaller packages to tap rural areas

Threats

1. Competition from local players in the market

2. Price Sensitive Market Segment
3. Presence of international detergent brands

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Rural Marketing

MBA