Amity Business School

Bottom of Pyramid
PSDA-1

Submitted to:
Prof.(Dr.) Ritesh Dwivedi

Submitted by:
Amartya Srivastava, Roll No. 34
Navya S, Roll No. 60
MBA (Marketing & Sales)
Section - B
Organization: HUL
Industry: FMCG
Country: India
Product: Soap-lifebouy
USP: Project Shakti, Swasthya chetna etc.
Strategy:
 Building partnerships
 Leveraging science for social good
 Micro [entrepreneurship, BOP as co-producers]
About Industry:
The fast-moving consumer goods are the 4 th largest sector of the Indian
economy. The income of the consumer is increasing, which results in growth in
this sector. Foreign investment is growing due to the support of the government.
Three main segments of FMCG are:
(i) Food and beverages: (include 19% of the sector)
Fruits, vegetables, dairy items, chocolate etc.
(ii) Healthcare: (it includes 31% of the sector)
Health and OTC products
(iii) Household and Personal Care (it includes 50%)
Hair care, health and hygiene products, skincare, household cleaners.
Indian market is divided into 2 categories: Urban and Rural. Urban market
constitutes around 60% of the total market, while Indian rural or semi-urban
includes around 40% of consumption. Rural consumption is increasing due to
the rise in income and lifestyle. Dabur and HUL are the top FMCG brands for
packaged goods domestically in rural areas.
In India, the bottom of the pyramid customers goes for low price sachets of
shampoos, toothpastes, fairness creams and hair oil. Much of what Unilever is
replicating in the developed world has been initiated in India. HUL sells power
brands such as Close-Up, Pepsodent, Sunsilk, Pond’s, Vaseline, Brooke Bond
Taj Mahal and Bru to increase product penetration at the bottom of the pyramid.
Lifebuoy soap in rural markets is referred to as the ‘laal sabun’ since its red in
colour.
About Lifebuoy:
Lifebuoy is the world’s number one hygiene soap brand1, sold in nearly 60
countries. Through the Lifebuoy brand, we aim to make a difference by creating
quality, affordable products and promoting healthy hygiene habits. Our goal is
to help 1 billion people around the world improve their hygiene behaviour by
2020.
The desire to be clean, active and healthy is intrinsic to everyone – irrespective
of age or economic status. We understand this and Lifebuoy soap has
championed the cause for better health through hygiene for more than a century.

Advertising campaign:
Lifebuoy creating health awareness about bacteria on hands, the using two
person’s team that goes into the school of rural market in India and providing
education about bacteria to them. The also create a viral video that targeting the
rural markets about the important of cleanliness of hands and it is a very
touching video that create echo in the heart of BOP market.
 Lifebuoy introduced the Swasthya Chetna program, with their officers
visiting 43,000 villages and schools in rural India over the course of five
years. They spread awareness of washing hands, conducted product and
glowgerm UV demos, competitions, aired interactive AVs and overall
hammered in the importance of a simple hand-washing regime.
the result was that Since its inception in 2002, the campaign has made its
way to over 110 million rural Indians. Over 30% of Indians are more
aware about harmful germs, and soap consumption has increased by 15%.
The biggest recognition for the campaign came in from the government
of India, with its special edition postal stamp for Swasthya Chetna.
 In Gurudwara lifebuoy soups were distributed as gift. The activision
covered 156 Gurudwaras across 138 small towns in Punjab, engaging
over 35000 people with the lifebuoy health and hygiene message.
  To measure the real benefits to those who adopt the ‘Lifebouy Way of
Life. The Lifebuoy Way of Life is a plan proposed by Lifebuoy that
focuses on washing hands with Lifebuoy on 5 key occasions:
 Before breakfast
 Before Lunch
 Before dinner
 During the daily bath
Distribution of Lifebuoy soap:

With this new distribution model, the smaller markets are now being referred to
as ‘Shakti markets’. HUL follows hub and spoke distribution model. It would be
cost reduction technique for both the HUL and its dealers in rural markets. In
this distribution model, company will have distributors to place the bulk
products which covers 10 to 15 villages. Dealers get the products directly from
the hub distributors whenever they are out of stock. Distributors are the
company mediators between the company and dealers.
Segmentation in Lifebuoy:
The segmentation of the soap market can be done on the basis of 3 price ranges:
 Economy
 Popular
 Premium
 Geographic Segmentation: Behavioral Segmentation:
Targeting developing econimies like Occasion - all regular occasions
India, Africa.etc anti bacterial/ ease of use

Segmentation

Demographic Segmentation:
Psychographic Segmentation:
Middle class
Health Conscious users
Lower class

The price difference between the premium economy segment is two times the
popular economy segment it accounts for 4/5th of the entire market for soaps.
Price for 100 Gms.
 Premium (priced at Rs.15 and more)
 Popular (priced at Rs. 11 to Rs. 14)
 Economy (priced upto Rs. 10)
Lifebuoy falls in the economic category of Unilever. HUL’s premium
categories include Pears, Dove, Moti and Liril whereas Hamam, Rexona and
Lux falls in popular category it can be diagrammatically shown as follows:

Premium (priced
at Rs.15 and more)
How they
have
Popular (priced at
Rs. 11 to Rs. 14)

Economy (priced
at Rs. 10)

implemented plans for bottom of pyramid:

FMCG major Hindustan Lever has started a project named “Shakti” for rural
marketing of their products in 2000. The project is a distribution model that
HUL established in late 2000 to sell its products through women self-help
groups. HUL’s initiatives in the rural India- Project Shakti, which not only
helped their company attain some revenue but also helped the poor women of
the village to attain some money which is surely going to increase their
purchasing power.
 The Shakti model trains women from SHG to distribute HUL products of
daily consumption such as detergent, toilet soap and shampoos. Also this
will increase their brand loyalty as well as recognition in that area.
 Shakti is HUL’s r rural initiative, which targets small villages with
population of less than 2000 people or less. It seeks to empower
underprivileged rural women by providing income-generating
opportunities, health and hygiene education through the Shakti Vani
program, and creating access to relevant information through the Shakti
community portal. In general, rural women in India are underprivileged
and need a sustainable source of income. NGOs, 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 80,000
villages in 15 states - Andhra Pradesh, Karnataka, Tamilnadu,
Maharashtra, Gujarat, Madhya Pradesh, Chattisgarh, Uttar Pradesh,
Rajasthan, Punjab, Haryana, WestBengal, Orissa, Bihar and Jharkhand.
The respective state governments and several NGOs are actively involved
in the initiative. Shakti already has about 25,000 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. The Company is creating demand for its products by having its
Shakti dealers educating consumers on aspects like health and hygiene.
Shakti is thus creating opportunities for rural women to live in improved
conditions and with dignity, while improving the overall standard of
living in their families. In addition, it involves health and hygiene
program, which help to improve the standard of living of the rural
community. Shakti’s ambit already covers about 15 million rural
populations. Plans are also being drawn up to bring in partners involved
in agriculture, health, insurance and education to catalyze overall rural
development.