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The rise in rural marketing provided volume growth to all leading companies in
the beginning of 90s. Rural markets are facing many challenges to target rural markets.
Higher rural incomes driven by agricultural growth have increased the purchasing power
to consume branded and value-added products in rural areas. Marketers and
manufacturers are increasingly aware of the purchasing power, size and demand base of
the Indian hinterland. Efforts are been made by them to understand the attitude of rural
consumers.
Marketers want to follow the principle of WALK THEIR WALK and TALK
THEIR TALK. Marketing mix is framed according to rural tastes and lifestyles.
For example: MIRC ELECTRONICS, which owns the Onida television brand, launched
IGO, which was positioned as a value-for-money brand targeted at rural markets,
especially customers who were upgrading their black-and-white TVs, which constitutes
65% of the total colour television buyers. The ad campaign screamed loudly in rural
lexicon: kasam se, kya TV hai!
Presently, companies operating in India are left with only two options, i.e.
either to go Global or to go Rural. The cost of going global is very high and also its
tough to penetrate markets in other countries. Rural India is emerging as a large market
for a number of goods and services. So, its better to target the rural market. Marketers
find a similarity between the criticality of rural as well as urban markets. Some reasons
for the same are listed below: -
c) Rising disposable incomes: Good monsoons during the past 10 years have raised
farmers incomes. Non-farm sectors now account for almost 50% of the total rural
incomes. It is a market that corporatists cannot afford to ignore. Another reason
for the rising disposable incomes of the villages is that Agricultural income is
non-taxable.
d) Remittances from abroad: Many households in rural India have one of their
family members abroad, mostly in Gulf countries. People working there send their
savings to their families in India, which is an additional source of income.
e) Impact of the media: The growing reach of the electronic media has created a
huge change in the lifestyles of rural consumers because of TV programmes like
soaps and other serials. Rural people are spending more on lifestyle products
these days. Modi, Revlon, for instance sells more lipsticks in the rural market than
in urban areas. Last year rural sales were Rs.25 crores; only Rs.12 crores came
from the urban market.
URBAN RURAL
RURAL URBAN
RURAL RURAL
Urban to Rural (U2R): A major part of rural marketing falls in this category. It
is the transaction where urban products are sold in the rural areas. The urban products,
which are generally sold in rural areas, are pesticides, fertilizers, seeds, FMCG, tractors,
bicycles, consumer durables, etc.
Reference Groups: Typically, in a rural area the reference groups are primary health
workers, doctors, teachers and panchayat members, the village trader or the grocer,
commonly called Baniya or Mahajan are an important influencer in the decision
making of rural customer. A marketer needs to be aware of these influences that can
effect changes in the rural customers consumption patterns.
Occupation: Consumption patterns differ according to income levels. Typically, in a
rural area the principal occupation is farming, trading, crafts, plumbing, electric
works, primary health workers and teachers.
Media Habits: Rural people are fond of music and folklore. In rural areas a popular
form of entertainment is the Tamasha and Nautanki. And then there are television,
radio and video films.
Other Variables: Culture, language, religion, caste and social customs are some other
important variables for profiling a rural customer. Rural consumers have a lot of
inhibitions and tend to be rigid in their behavior. A company has to take intense care
while targeting them.
Stimuli
Perception
a. Exposure
b. Interpretation
Attitudes
a. Changing Effect
b. Changing Beliefs
c. Changing Behavior
Needs and Motives
Demographics
Culture
Believes and Value
Social Class
Influence Groups
a. Reference Groups
b. Opinion Leaders
c. Innovations
Post-Purchase
Behavior
Need recognition: A rural customer first recognizes his needs and accordingly thinks of
purchasing the products. This is the first step in the Simple Decision Making Model.
EX: Ramlal, Sarpanch of Sonawani District, wants to purchase a color TV.
Pre-purchase Search: Once there is need recognition, the next step is to do a pre-purchase
search. EX: consider the earlier example, Ramlal may go to a nearby city and visit a
showroom that has multiple products.
Evolution of alternatives: the third step is to basically to pick up the best alternative from
the available options. EX: Ramlal may look for the products of Videocon, Onida, and LG
that are available with the dealer and may finally select one of them.
Purchase decision: This is the action that result in the purchase of the product from
among available alternatives. The customer may plan to purchase a specific product that
suits his needs and is within his budget. EX: Ramlal may plan to go for LGs Sampoorna
colour TV, as it has a vernacular on-screen display, better sound and superior picture
quality. Besides, it is priced at only Rs. 8,500.
Post-purchase behavior: This is the final step in the Simple Model of Consumer Behavior.
The buyers relationship with the seller does not come to an end with the purchase,
especially in the case of commodities like consumer durables. This is not an important
factor for FMCG. EX: Ramlal may see whether LG has a service centre nearby, in the
event of the product needing servicing.
Introduction:
The stagnation in the urban markets, cutthroat competition and shrinking product
life cycles are forcing marketers to go rural. Pioneer marketers used an insensitive
approach to their advantage. They took the urban brand, tweaked the product a wee-bit,
extended the brand to low-unit packs, modified the packaging marginally, took the urban
advertisement and dubbed it in the vernacular. That was the way rural marketing was
done.
A more sensitive approach has to be adopted to succeed in the rural markets. The
conservative approach resulted in huge losses and erasing of brands completely from the
rural landscape e.g. LUX shampoo and POLAR fans. New rules have to be framed to
succeed in the rural markets. Its a bit like handling a honeycomb; you want to take out
the honey, but you dont want to be stung by the bees!
Let us see how a company can adopt a rural marketing strategy that achieves the
desired results. A company entering the rural markets will do it as:
A new entrant: A company starts its life in markets and then ventures
in the urban areas. For example, CavinCare and Asian Paints
A mid-entrant: An organization will enter the rural markets after
tasting success in urban markets. These companies seek to earn
around fifty percent of their revenue from the rural markets. For
example, HLL and LG.
The late entrant: Companies in this category will enter the rural
markets with a lot of skepticism. After being successful in the urban
markets for a long tine, they finally decide to enter rural markets. For
example Cadbury and Nestle.
Planning Stage
Profile of Rural
Market
Segmentation,
Targeting & Profile of Rural
Positioning Consumer
Study Consumer
Behavior
Rural Product
Rural
Communication
Rural Pricing
Rural Sales
Force Rural
Management Distribution
Feedback Stage
Feedback
&Control
INTRODUCTION:
RURAL DISTRIBUTION
PHYSICAL CHANNELS OF
DISTRIBUTION DISTRIBUTION
Multiple tiers
Non-availability of dealers
Transportation
Communication
Warehousing
CWS/
SWCs Three-tier rural
Warehousing
Set-up
CO-OPERATIVES
RURAL GODOWNS
Strategies of Rural
Distribution
Although the rural market offer a vast potential but we cannot forget to
recognize the fact that it is not easy to operate there. Rural marketing is a time consuming
affair and requires considerable investments in terms of evolving appropriate strategies.
The major problems faced by companies targeting rural markets are:
3) Transport:
Many rural areas are not connected by rail transport.
At least 50% of the roads are poorly surfaced, some are totally destroyed and many
are severely damaged due to monsoons and lack of servicing during years.
This lead to isolation of the interior villages. And the use of bullock carts looks
inevitable for many years into the future.
5) Dispersed Markets:
Rural populations are scattered over a large land area and it is almost impossible to
ensure the availability of a brand all over the country.
Rural buyers arent concentrated unlike urban buyers.
Advertising in such a highly heterogeneous market, which is widely spread, is very
expensive.
INTRODUCTION:
The mission that inspires HLL's 36,000 employees, including about 1,350
managers, is to "add vitality to life".
With 35 Power Brands, HLL meets everyday needs for nutrition, hygiene, and
personal care with brands that help people feel good, look good and get more out of life.
HLLs parent company, Unilever, holds 51.55% of the equity. A Fortune 500
transnational, Unilever sells Foods and Home and Personal Care brands in about 100
countries worldwide. The rest of the share holding is distributed among 3,80,000
individual shareholders and financial institutions.
PRESENT SCENARIO:
Largest FMCG Company: Hindustan Lever Limited (HLL) is India's largest Fast
Moving Consumer Goods Company, touching the lives of two out of three Indians
with over 20 distinct categories in Home & Personal Care Products and Foods &
Beverages. They endow the company with a scale of combined volumes of about 4
million tonnes and sales of Rs.10,000 crores. HLL is also one of the country's largest
exporters. The Government of India has recognized it as a Golden Super Star Trading
House.
HLL's brands: HLLs major brands like Lifebuoy, Lux, Surf Excel, Rin, Wheel, Fair
& Lovely, Pond's, Sunsilk, Clinic, Pepsodent, Close-up, Lakme, Brooke Bond,
Kissan, Knorr-Annapurna, and Kwality Wall's are household names across the
country. They span many categories - soaps, detergents, personal products, tea,
coffee, branded staples, ice cream and culinary products.
Factories: They are manufactured in close to 80 factories. The operations involve over
2,000 suppliers and associates.
HLL's distribution network: It comprises of about 7,000 redistribution stockists, and it
directly covers the entire urban population, and about 250 million rural consumers.
HLLs distribution network is recognized as one of its key strengths which helps
reach out its products across the length and breadth of this vast country. The need for
a strong distribution network is imperative, since HLLs corporate purpose is to meet
the everyday needs of people everywhere.
Technologies: HLL has traditionally been a company, which incorporates latest
technology in all its operations. The Hindustan Lever Research Center (HLRC) was
set up in 1958, and now has facilities in Mumbai and Bangalore. HLRC and the
Global Technology Centers in India have over 200 highly qualified scientists and
technologists, many with post-doctoral experience acquired in the US and Europe.
Social Services: HLL believes that an organizations worth is also in the service it
renders to the community. HLL is focusing on health & hygiene education, women
empowerment, and water management. It is also involved in education and
rehabilitation of special or underprivileged children, care for the destitute and HIV-
positive, and rural development. HLL has also responded in case of national
calamities / adversities and contributes through various welfare measures, most recent
being the village built by HLL in earthquake affected Gujarat, and relief &
rehabilitation after the Tsunami caused devastation in South India.
Over the last three years the company has embarked on an ambitious programme,
Shakti.
Through Shakti, HLL is creating micro-enterprise opportunities for rural women,
thereby improving their livelihood and the standard of living in rural communities.
Shakti also includes health and hygiene education through the Shakti Vani
Programme, and creating access to relevant information through the I-Shakti
community portal.
The programme now covers about 50,000 villages in 12 states. HLL's vision is to take
this programme to 100,000 villages impacting the lives of over a 100 million rural
Indians.
HLL is also running a rural health programme Lifebuoy Swasthya Chetana. The
programme endeavors to induce adoption of hygienic practices among rural Indians.
It has already touched 70 million people in approximately 15000 villages of 8 states.
The vision is to make a billion Indians feel safe and secure.
If Hindustan Lever straddles the Indian corporate world, it is because of being single-
minded in identifying itself with Indian aspirations and needs in every walk of life.
And they prove it by the latest redesign done for the HLL brands LUX and Wheel:
Indias two most popular FMCG brands got a makeover recently. HLL roped in
ELEPHANT DESIGN, a Pune based design house for the redesign strategy.
One of them is Rs. 7500 crores-toilet soap LUX, which was redesigned for market
abroad.
And the second one being Rs. 1000 crores detergent brand WHEEL for which all
aspects of redesign its logo, new packaging and promotional material was done by
Elephant Design for the Indian market.
The brief for both the brands was to make them look fresh and contemporary while
maintaining their emotional connect with the user.
The design revamp is expected to provide a fresh impact of the FMCG giant in the
face of rigid competition in foreign and domestic markets.
The challenge for WHEEL was to make the brand look fresher, slicker and yet reflect
its image as a value for money soap.
The objective of redesign was to convey that an improved product was available at
the old price.
In Wheels white powder now added was the Lemon-fresh power boosters.
Redesigning of logo was done to make it look more meaningful and with the use of
more colours in the logo, Elephant tried to make it look more dynamic, fresh and
premium.
The smarter green wheel on the pack creates play of dimensions; illustration on the
backside of the pack has been made in a fresh style.
The images and expressions on the pack communicate the feeling of a good wash,
enhanced fragrance and a premium look. This all adds to the overall effect of the
revamped WHEEL.
Product Mix:
HLL
Laundry:
Surf excel
Rin
Wheel
HLL believes that it is this commitment, which will deliver sustainable, profitable
growth.
HLL's key CSR initiatives are undertaken with a long-term view. Initiatives that are
sustainable have long-term benefits and an ongoing business purpose.
HLL has revived sick industries and has developed local entrepreneurship.
HLL is also involved in a number of community support activities, like education and
rehabilitation of special or underprivileged children, care for the destitute and HIV-
positive, and rural development.
TERI is world famous for its commitment to and initiatives in every aspect of
sustainable development.
INTRODUCTION TO SHAKTI:
Hindustan Lever Limiteds (HLLs) rural self-help group initiative to push the
penetration of its products deeper has paid off.
In terms of contribution to HLLs rural sales, 10% -- 15% comes from this initiative,
which was launched two years back. The rural market constitutes over 40% of HLLs
total sales of about Rs.10,000 crores.
In terms of incremental gains, the company now reaches out to around 10,000
villages. In general, rural women in India were underprivileged and required a
sustainable source of income.
NGOs (Non-Government Organization), governmental bodies and other institutions
have been working to improve the status of rural women.
SHAKTI is a pioneering effort in creating livelihoods for rural women, organized
in Self-Help Groups (SHGs), and improving living standards in rural India.
Shakti provides critically needed additional income to these women and their
families, by equipping and training them to become an extended arm of the
company's operation.
Started in 2001, Shakti has already been extended to about 50,000 villages in 12
states - Andhra Pradesh, Karnataka, Gujarat, Madhya Pradesh, Tamil Nadu,
Chattisgarh, Uttar Pradesh, Orissa, Punjab, Rajasthan, Maharashtra and West Bengal.
The respective state governments and several NGOs are actively involved in
supporting the rural initiative of HLL.
Shakti already has about 13,000 women entrepreneurs in its fold.
A typical Shakti entrepreneur earns a sustainable income of about Rs.700 -Rs.1,000
per month, which is double their average household income.
Shakti is thus creating opportunities for rural women to live in improved conditions
and with dignity.
In addition, it involves health and hygiene programmes, which help to improve the
standard of living of the rural community.
Shakti's ambit already covers about 15 million rural population. Plans are also being
drawn up to bring in partners involved in agriculture, health, insurance and education
to catalyze overall rural development.
Shakti Vani is a social communication programme where women are trained in health
and hygiene issues; village communities are addressed through meetings at schools,
village baithaks, SHG meetings and other social fora.
In 2004, Shakti Vani has covered 10,000 villages in Madhya Pradesh, Chattisgarh and
Karnataka.
HLL has formulated a strategy for rural markets known as Operation Bharat.
OPERATION BHARAT HLLs Rural Product strategy:
HLL launched Operation Bharat in the year 1997to create brand awareness for its
rural brands.
The strategy also involved promoting the sales of its special packs for rural areas.
HLL provided hampers at discounted prices of Rs. 5, Rs. 10, Rs. 15 and Rs. 20, each
of which had a clinic shampoo bottle, a tube each of Pepsodent and Fair & Lovely,
and Ponds Dream flower Talc, in different sizes and combinations.
The idea behind this is to have a product each for hair care, dental care, skin care and
body care.
Consumers were also made aware of the benefits of using HLL products, and the
affordability of the pack sizes on offer.
The project thus successfully addressed issues of awareness, attitudes and habits.
Hopefully, as consumers in rural areas get exposed to such value-added, value-for-
money, alternatives, they will continue to buy the different categories of products.
Operation Bharat is now targeting 65,000 villages and the strategy has proved to be
successful for HLL.
Its long-term strategy is to target 1.5 lakhs villages by the year 2005.
An organization, which successfully stands the test of time, is one that transforms
itself in line with changes in the environment.
Hindustan Levers continued success in India over the past 75 years is marked by
conscious transformations, building on the past and reshaping for the future.
In Foods, they see enormous growth potentially in leading the evolution of consumers
to branded and processed foods.
Over the last few years they have focused on putting in place the building blocks of a
strong Foods business.
They recognized that changing food habits would require considerable investment,
which the current business simply could not afford. Therefore they divested the non-
value added parts like Vanaspati.
They have consolidated their portfolio and improved the gross margins by over 13%
through product mix and cost reduction.
They have also cleared the supply chain of all old stock and geared up for fresh
availability on shelf. The foods business will now invest for growth through relevant
innovation.
Over the next 10 years, per capita income in India is likely to touch Chinas current
levels. At those levels, the FMCG market will be over Rs. 1,00,000 crores from a
current value of Rs. 40,000 crores. This is an opportunity that they well poised to
seize.
They choose to focus on 35 power brands covering all consumer appeal and price
segments. They are already seeing the benefits; six brands Brooke bond, Lifebuoy,
Lux, Fair & Lovely, Rin and Wheel have emerged as mega brands in the last five
years, each with sales of more than Rs. 500 crores.
Perhaps the most significant change has been to move their brands beyond merely
making functional claims to playing a bigger and deeper role in the lives of
consumers.
Today lifebuoy, their oldest brand, has grown at over 15% for the last three years.
They have strengthened this and reinvented the way they manage their distribution
channels and customers.
The sales structure has been transformed to leverage scale and build expertise in
servicing Modern Trade and Rural Markets.
They have also delayered their sales force to improve their response times and service
levels.
It has been extended to 60,000 villages in 12 states, already touching 75 million
people. By the end of the year, Shakti will cover 100 million people.
To ensure that HLL remains competitive in the long-term, they have made significant
investments in product quality, pricing and marketing.
As mentioned earlier, the investment in product quality alone has been in excess of
Rs. 4000 crores, or 5% of their sales.
In addition there is a cost of defending their market position.
They have made this trade-off necessary that market share is the best means of
sustaining future profits.
Over time their stronger market positions will surely lead to greater long-term profit.
Despite these significant investments to strength the long-term competitiveness and
the costs of defending there strong market position, they still remain one of the most
profitable companies in the country.
HLL's vision for Shakti is to scale it up across the country, covering 100,000 villages
and touching the lives of 100 million rural consumers.
Given the success of the initiative, the company is now planning to expand Project
Shakti in 400 districts by 2006.
HLL will cover 100 districts through Project Shakti by the end of this calendar year.
I-Shakti, the Internet-based rural information service, has been launched in Andhra
Pradesh, in association with the Andhra Pradesh Government's Rajiv Internet Village
Programme.
The service is now available in Nalgonda, Vishakapatnam, West Godavari and East
Godavari districts.
I-Shakti has been developed to provide information and services to meet rural needs
in medical health and hygiene, agriculture, animal husbandry, education, vocational
training and employment and women's empowerment.
The vision is to have 3,500 kiosks across the state. HLL want to spread the use of
Internet through I-Shakti not only in Andhra Pradesh but also throughout India.
INTRODUCTION TO SHAKTI:
Hindustan Lever Limited (HLL) and its constituent companies have been in India
since 1931.
Over these decades, while HLL has benefited from the developments in the country, it
has contributed equally to these developments.
HLL has consciously woven India's imperatives with the company's strategies and
operations.
The companys main contributions include developing and using relevant
technologies, stimulating industrialization, boosting exports, adding value to
agriculture and generating productive employment and income opportunities.
HLL has been proactively engaged in rural development since 1976 with the initiation
of the Integrated Rural Development Programme in the Etah district of Uttar Pradesh,
in tandem with the companys dairy operations.
This Programme now covers 500 villages in the district. Subsequently, the factories
that HLL continued establishing in less-developed regions of the country have been
engaged in similar programmes in adjacent villages.
These factory- centered activities mainly focus on training farmers, animal husbandry,
generating alternative income, health, hygiene and infrastructure development.
The company has acquired a wealth of experience and learning from these activities.
Avail micro- credit from government/ banks/ loans for self help groups, and a
stable income- generating activity offered by HLL will stimulate wealth
creation in the village.
Women from self- help groups to operate like rural direct-to-home sales
distributors for HLL products.
GOALS: 50,000 villages25,000 Entrepreneurs by 2005
Year 2000 found Peddakaparthy village, in the Nalgonda district of Andhra Pradesh,
in the throes of a new revolution.
A revolution propelled by a vision to better the lives of rural women and support them
in their move towards economic independence. It was the inception of Project Shakti.
Today, with over 5000 entrepreneurs, Project Shakti has traversed 130 districts in
eight states.
A journey only made possible by our spirited entrepreneurs and the steadfast support
received from numerous individuals and organizations including NGOs and SHGs.
Project Shakti remains indebted to them and is hopeful of their continued patronage
and support.
They aspire to have 25,000 Shakti Entrepreneurs in their midst, covering 100,000
villages and reaching 100 million rural people, by year 2005.
As they set forth, they earnestly hope that they have made several poignant struggles
easier towards a life of dignity.
Typically, women from a SHG selected as a Shakti entrepreneur receives stocks at her
doorstep from the HLL rural distributor and sells direct to consumers as well as to
retailers in the village.
To get started the Shakti women borrows from her SHG and the company itself
chooses only one person from SHG.
Each Shakti entrepreneur services 6-10 villages in the population strata of 1000-2000
people.
Some Shakti entrepreneur selling upwards of Rs.15000 a month worth of products
can make a gross profit of over Rs.1000 a month.
Their attempt has been to educate rural consumers on the value they can derive from
an HLL product.
ACHIEVEMENT MODEL OF PROJECT SHAKTI:
A Win-Win Model:
Bank
Income/
Investment
Income Opportunity
Generating
Activities Govt. Education/
SE* Awareness
Efficiency and
Productivity Access to urban
Markets and
Information
HLL
The objective of
, especially the girl child, and an overall betterment in living standards. Project Shakti
is to create income-generating capabilities for underprivileged rural women, by
providing a sustainable micro enterprise opportunity.
It also aims to improve rural living standards through health and hygiene awareness.
Following the pioneering work carried out by Grameen Bank of Bangladesh, and
several other institutions, NGOs and government bodies have been working closely,
for nearly five years, to establish Self Help Groups (SHGs) of rural women in villages
across India.
Their experiments clearly indicate that micro-credit, when carefully targeted and well
administered can alleviate poverty significantly.
A crucial lesson learnt was that rural upliftment depended not on successful infusion
of credit, but on its guided usage for better investment opportunities.
This is where HLL's Project Shakti is playing a role in creating such profitable micro
enterprise opportunities for rural women.
Under the project, HLL offers a range of mass-market products to the SHGs, which
are relevant to rural customers.
HLL is investing significantly in resources that work with the women on the field and
provide them with on-the-job training and support. This is a key factor in ensuring the
stabilization of their fledgling businesses.
HLL imparts the necessary training to these groups on the basics of enterprise
management, which the women need to manage their enterprises.
For the SHG women, this translates into a much-needed, sustainable income
contributing towards better living and prosperity.
Armed with micro-credit, women from SHGs become direct-to-home distributors in
rural markets.
A typical Shakti entrepreneur conducts a steady business, which gives her an income
in excess of Rs.1,000 per month on a sustainable basis.
As most of these women live below the poverty line, and hail from extremely small
villages (with populations of less than 2000), this earning is very significant, and
almost twice the amount of their previous household income.
For most of these families, Project Shakti is enabling families to live with dignity,
with real freedom from want.
In addition to money, there is a marked change in the woman's status within the
household, with a much greater say in decision-making.
This results in better health and hygiene, education of the children
The most powerful aspect about this model is that it creates a win-win partnership
between HLL and the consumers, some of whom will depend on the organization for
their livelihood, and builds a self-sustaining cycle of growth for all.
The model was piloted in Nalgonda district of Andhra Pradesh in 50 villages in the
year 2000.
The Government of Andhra Pradesh took the pioneering step of supporting the
initiative by enabling linkages with the network of DWACRA Groups of rural women
set up for their development and self-employment.
Most SHG women view Project Shakti as a powerful business proposition and are
keen participants in it.
It has since been extended to in Andhra Pradesh, Karnataka, Gujarat, Madhya
Pradesh, Uttar Pradesh, Tamil Nadu, Chattisgarh and Orissa.
As part of their training programme, all HLL Management Trainees spend about 4
weeks on Project Shakti in rural areas with NGOs or SHGs.
Assignments include business process consulting for nascent enterprises engaged in
the manufacture of products such as spices and hosiery items.
HLL envisions the creation of 25,000 Shakti Entrepreneurs covering 100,000 villages,
and touching the lives of 100 million rural people by the year 2005.
In order to achieve this goal, Project Shakti plans to extend to the states of West
Bengal, Punjab and Rajasthan in addition to expanding operations in the eight
existing states.
Hindustan Lever Ltd, which had launched an Internet-based rural information service
I-Shakti in Andhra Pradesh, expects to set up over 1,000 such kiosks by the end of the
year in the state.
The company opened its 250th kiosk at Puttapaka village of Nalgonda district,
extending its services to Nalgonda, Visakhapatnam, West Godavari and East Godavari
districts.
I-Shakti is an IT-based rural information service network that has been developed to
provide information and services to meet villagers' needs in medical, health and
hygiene, animal husbandry, agriculture, education and women's empowerment among
others.
The programme is being rolled out in association with Andhra Pradesh's Rajiv
Internet Village Programme and it is an extension of HLL's Project Shakti.
Meanwhile, the company was also planning to extend its reach of Project Shakti to
over 1,00,000 villages by 2005 from the present 20,000 villages in 196 districts of
Andhra Pradesh, Karnataka, Madhya Pradesh and Tamil Nadu among others.
The scaling up will result in creating over 25,000 entrepreneurs and helping over 10
crores rural consumers.
Project Shakti is aimed at creating incomes for under-privileged rural women by
providing a sustainable micro enterprise opportunity.
A key factor that has inhibited the development of rural India has been lack of access
to critical information and services.
Given Indias large geography and weak infrastructure, it is often difficult to reach
out to the rural areas.
In order to impact both livelihood opportunities and living standards of rural
communities.
I-Shakti- an IT-based rural information service has been developed to provide
information and services to meet rural needs in agriculture, education, vocational
training, health and hygiene.
The premise of the I-Shakti model is to provide need based demand driven
information and services across a large variety of sectors that impact the daily
livelihood opportunities and living standards of the village community.
The I-Shakti kiosk will be operated by the Shakti Entrepreneur, which further
strengthens the relationship we have already cultivated and builds new capacity.
HLL expects that the information provided would improve the productivity of the
rural community and unlock economic and social progress.
To catalyze overall rural development, HLL hopes to collaborate with mainstream
institutions (both corporate and not-for-profit organizations) that are experts in
agriculture, health, insurance, financial services and education.
I-Shakti kiosks have been set up in 8 villages in Andhra Pradesh, and have been
functional since August 2003.
The kiosks have received an overwhelming response from the local populace.
During the launch of these kiosks, important village members like the Sarpanch,
schoolteacher and doctor are invited to help reinforce relationships with the villagers.
The kiosks remain open from 9 a.m. to 7 p.m., six days of the week. To enable access
to the services, users have to register themselves first and obtain the unique
registration number. An id card with the registration number is provided for use every
time they visit the kiosk.
The information provided in the above areas is culled from the best available
resources, taking additional care to ensure that information, especially in areas like
agriculture, is locally relevant and includes inputs from home-grown experts.
These experts are also available on request, to help provide solutions to problems
raised by users through a query mailing system.
Please turnover:
'I-shakti has also tied up with Azim Premji Foundation to deliver innovative
educational modules to students of classes VIII-XII through the kiosk. Local
schoolteachers have also been involved in the process.
A similar partnership is in place with Tata Adult Literacy for adult education.
Involving the locals, augments institutional knowledge with local expertise, that
greatly benefits the village community and provides them with a customized web
space on subjects of immediate relevance.
Information is updated on a regular basis and new sections are added.
Feedback is sought from the users on the quality of content based on which,
improvisations have been made to satisfy user requirements.
The system is based on an interactive dialogue technology developed & patented by
the Unilever Corporate Research Team, U.K.
The system enables a deeper understanding of individual user needs and thereby
improves the quality of services rendered to them.
Ogilvy Outreach and Interactive worked with HLL to develop the content for the
system, while Tessella provided key software development and support services.
APonline, a joint venture between TCS and the Government of Andhra Pradesh,
which has the mandate to enable e-governance, services to both urban and rural
community, has tied up with I-Shakti to launch these services in rural Andhra
Pradesh.
This is one of the first rural service delivery projects of APonline.
The services include application forms for caste, nativity, income certificates,
agricultural grievances, and utility bill collection to name a few. Over fifty new
services will be added in the next six months.
Through I-Shakti kiosks, ICICI Bank and HLL will work together to provide a new
delivery channel for rural India, which offers a multitude of products and services to
the rural customer.
In the first phase, Life and General Insurance will be offered through this channel.
Other financial services including Investment products (Equity, Mutual Funds,
Bonds) ICICI Bank Pure Gold (gold coins), Personal Credit, Rural Savings Accounts
and Remittances will be introduced subsequently.
THE EXPECTATIONS OF MARKET TOWARDS PROJECT
SHAKTI:
There are other plans brewing, one is to allow companies, which do not compete with
HLL to get onto the Shakti network to sell their products.
Talks are on with a variety of companies selling batteries, mopeds and insurance
companies for LIC policies.
They wanted to first stabilize the project before they can look at other companies.
It requires somebody with scale and size to build a platform and then invite other
companies onto this platform.
The most powerful aspect about this model is that it emphasizes in creating a win-
win partnership between HLL and its consumers, some of whom will also draw on the
organizational for their livelihood, and it builds a self sustaining virtuous cycle of
growth for all.
The next stage of project Shakti is even more ambitious. HLL is now in the process of
piloting I- SHAKTI, an IT- based rural information service that will provide
solutions to key rural needs in the areas of agriculture, education, vocational training,
health and hygiene.
The project will be piloted in Nalgonda district again.
Based on a hand held digital device, HLL is looking at sourcing appropriate low cost
hardware from Hewlett-packer while Unilever corporate research out of London is
developing the consumer interactivity software.
Women in the rural areas are the catalyst of change and that is why its whole
programme keeps women in focus.
Its like popcorn in a machine; one burst at first and then everything begins popping.
Here too, one woman as an agent of change bursts into a movement and it is
strengthen.
Generally most of the textbooks talk about the 4 level channel of distribution,
namely:
Zero level
One level
Two level
Three level
Zero level involves no middlemen, which can help companies to save upon cost.
The three level COD involves the following steps:
3 level COD:
Manufacturer
Wholesaler
Level 1
Stockist
Level 2
Retailer
Level 3
Consumer
The urban market uses this distribution channel. But in case of rural
markets, companies use a different COD, which is upto 4 levels, 6 levels or maximum, an
8 level channel. For this, we first need to understand the distance in the rural market.
City
Project Harvest
District
Project Streamline
Village
Satellite Village
Project Shakti
Tribal Areas
Forest
For example consider a city with a population of 20 million. To transport the goods
from city to the district, we have rail routes.
So, we can put a warehouse at the district level. Now consider a district with a
population of around 10 lakhs EX: Ahmednagar.
Suppose in Ahmednagar there are around 110 villages, which are accessible through
road transport. So, a warehouse can be put at a village also.
Now take into account any village (ex: Saphale with a population of around 10,000).
Villages are linked to satellite villages through kutcha roads. Ex: Nevasa with a
population of 2000.
So, companies should either use bullock carts or bicycles for transport.
Between satellite villages and tribal areas, there are only fields and the population of
tribal areas is around 200 only.
Since there are no proper transportation facilities here, companies cannot put a
warehouse.
Now, the only option left to reach satellite villages or tribal areas is on foot.
So, what companies like HLL do is that they hire SHGs to sell their products.
Women in the SHGs personally collect the products from the distributors in the
villages and sell it in their areas.
Self Help Groups (SHGs) is a group of 18-20 women coming together to market and
sell HLLs FMCG brands. These women are known as Shakti Entrepreneurs.
HLL have not created these SHGs model. They only use it. Actually, these SHGs are
MICRO CREDIT INSTITUTIONS employed by SAHARA group of companies. This
is the core business of Sahara industries.
What HLL does is that from every SHG they select one woman as Shakti
Entrepreneur to be a representative of HLL in rural areas to sell HLLs brands in and
around villages.
MART (Marketing and Research Team) a private MR agency from Delhi provides
training to these SHGs in marketing and selling products in rural areas.
RDS (Re-Distribution
Stockist)
Retailers
SHGs (Self Help
Groups)
Consumers
Now lets see the link between the distribution system applied by HLL
and the distance in the rural markets:
It is actually the logistics management but it is known as Channels of
Distribution. The reason behind this can be explained diagrammatically: -
Transportation
Communication
Logistics
Flow
Inventory Management