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Assignment

Unilever in India: Hindustan Lever’s Project Shakti—


Marketing FMCG to the Rural Consumer

Q1) Strength of distribution channel used by HLL

HLL Distribution Channels


Shakti Channel

A. Traditional method

Strength Supporting Facts

● Able to cover all outlets in a town


● Priortized SKUs in

Channel Strength Supporting Fact

Tradition Channel Accessibility- It was able to ● Local Manufacturing


(Sales Channel based on cover all outlets in the town Capacity and Supply
Geography and Product Chain
Category) Cost- It was costly as HLL ● HLL vast sales and
had to appoint many people distribution system
to reach and maintain the ● Developed profit
distribution channel. center with its own
sales force and
stockists which led to
an increase in the
number of HLL’s
stockists in a given
town
● HLL launched 2 low
priced brand: Wheel
and Breeze to tackle
competition

Diamond Approach

Self-service store and retail Accessibility ● Accounted for 10% of


Chain FMCG market

Profit center based sales ● Continued to cultivate,


team penetrate, and grow
markets

Rural Markets Direct Coverage(40% of rural ● Appointed a common


Market) stockist(around 7000)
to service all the
Accounts for 20% of HLL’s outlets within the town
business ● Rolling out of IDC.
● Targeted retailers in
Indirect Coverage rural market who were
Streamline close to urban market
● Targeted unviable and ● It ensured service of
inaccessible market villages once a
● Utilized rural fortnight
wholesale channel to ● For streamline, HLL
reach markets appointed rural
distributors which in
turn appointed star
sellers among the
wholesalers in the
neighbouring market

Using Women Power Acceptability ● Appointed 10-15
women in a particular
● Personal selling village working as
through residents of agents
the village has also ● It provided livelihood
been promoted enhancing the
● They have pioneered opportunity to over
the concept of “Shakti 65000 shakti
amma” entrepreneurs in each
of 50 choose village
● Improved per capita
income of Shakti
Women
Project Shakti Rural Empowerment ● Job Training
● Health Literacy
● Provided bank loans
and microfinance -
repayments has to
done in monthly
installments at 0.75%-
2% of principal ,
enabled by HLL
● Reduction in poverty-
shakti women get a
regular income of Rs
700.
● HUL has given
distributorships to the
paan beedi outlets
(very small kiosks
selling beedis a cheap
type of cigarettes and
the Indian favourite
paan which are found
in every nook and
corner of rural India).

Cost ● HUL has thus


revolutionised the rural
markets in India with
their single serve
sachets,
which costs Rs 2-Rs 4
(equivalent to 2pence to 4
pence) in India
● Low cost of products
for rural population
1) Even though HLL had greater access to rural markets than its competition, its direct
reach was restricted to a mere 16% of rural markets.
2) A member of a SHG in each of 50 chosen villages was appointed as Shakti entrepreneur.
3) This partnership enabled Project Shakti to expand rapidly across districts and states. By
December 2004, 12,151 entrepreneurs covered more than 50,405 villages across 310 districts in
12 states.

Approach to Rural Markets Based on Business Potential and Accessibility

Accessible Markets-Low Business Potential- Indirect Coverage ~ 25% of rural business, High Business
Potential-Direct Coverage ~ 40% of rural business

Inaccessible Markets-Low Business Potential- Space for Shakti to operate- High Business Potential-Streamline
~ 35% of rural business

Rural Marketing Strategy and Initiatives of HUL


Sales Promotions

Affordability : To make the products Cost Effective for consumers


Higher income consumers would buy a big bottle of shampoo to avoid several trips to the shop
but for the poor who live hand to mouth and who subsist on daily wages, this assumption would
not hold true and they buy only what they need for that day. HUL has thus revolutionised the
rural markets in India with their single serve sachets,
which costs Rs 2-Rs 4 (equivalent to 2pence to 4 pence) in India.

HUL has built a strong rural presence without much advertising support. In effect, there are
fewer brand choices in rural India. HUL has made effective use of prevailing infrastructure in
the rural areas.

Distribution Channels(Accessibility)
HUL choose these ways to make their products easily accessible and visible to rural customers:
1) It has also used unconventional channels of marketing like haats and shandies which
are
weekly markets in the villages, where it gets a captive audience.
2) It has followed a policy of consciously setting up small stalls close to public distribution
shops where majority of the villagers visit for their daily needs.
3) HUL has given distributorships to the paan beedi outlets (very small kiosks selling beedis
a cheap type of cigarettes and the Indian favourite paan which are found in every nook
and corner of rural India).
4) In addition to these outlets, men gather daily and chat at the local vegetable and
grocery store and buy products like chocolates soaps, shampoos and similar products
spontaneously.

Visibility
To spread awareness and increase visibility of HUL products they used the following platforms :

1) India has 50000 “melas” (fairs) every year where villagers gather in one place for
shopping. HUL has taken full advantage of these “melas”.It has used “melas” to reiterate its
products, expose them to a far wider audience and make people aware and familiar with HUL
packaging.

2) It has used vans and road shows to popularise its products. Its road show “Khushiyo ki
Doli” (which means bundles of happiness and is some kind of a puppet show) has become very
popular.
3) All this has cleverly been done in the local languages and dialects. (In India each region
speaks different dialects). Very often the same van is used for advertising and Marketing.
4) The company has used wall hoardings, tin plates on trees and stickers on water
pumps as highly cost-effective yet very noticeable avenues of advertising.
5) Cricketers enjoy immense popularity in India and HUL has used them effectively for
common advertising campaigns in rural India.

Using woman power effectively - Acceptability

Personal selling through residents of the village has also been promoted. In rural India
women are the home makers: they are the ones who influence the buying pattern of rural
households. The soap the detergent etc. would be chosen by them. HUL identified some women
in the village and trained them to be effective saleswomen for their brands. c. Shakti means
strength and amma means elder woman. Earlier these women were sent door-to-door to sell HUL
products. But this became a bit of a social stigma in rural India. Later on, these women were
stationed near river outlets where all the rural women gather in the evenings to wash their dirty
linen.

Rural Marketing Strategy of Dabur


a) Promotion Strategy-
● Video vans
● Sales promotion
● A contest in melas/haats
b) Distribution strategy-
● Dealer
● Wholesaler
● Agents
● Retailers
● Kirana Store
c) Dabur uses ASTRA to boost rural sales
(ASTRA- Advanced sales training for retail Ascendance)- Shopkeepers selling Dabur
India’s consumer product would now learn marketing through role-plays. Dabur has
divided its sales & distribution channel into finer segments, like key grocers, wholesale,
chemist, modern trade, etc. The program is designed to focus on specific needs
expectations and the working of each of these channels.
d) Trends-
● IOC, Dabur to tie up for rural marketing- IOC’s 1000 retail outlets across the
country will stock a range of Dabur’s Ayurvedic product
e) Different strategies-
● Health camps in school to boost sales of toothpaste and chavanprash
● It also came up with beauty pigeon to promote its beauty products
● It emphasized on word of mouth publicity asking rural forks to use and
experience products themselves
● It came up with Regional Branding Strategy to attract consumers by launching
products with a regional twist for eg, It launched Dabur Lal Dant Manjan as
Sivappu Pal Podi in South India while Dabur Red Tooth Powder in North India

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