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LOVELY
PROFESSIONAL
UNIVERSITY

ASSIGNMENT
NO-3 MGT-635

TOPIC- RIN Detergent prelaunch in Orissa.

Submitted by Guided by
CHANDAN KUMAR SINGH Mr. Hitesh Jhanjhi

Section-B

Roll number –RT1902-A-27

Reg No:- 10903162

Table of Content
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S. No. Topic Page


No.
1 Acknowledgement 03
2 Objective of the study 03
3 Introduction of Orissa 04
4 Introduction of Rural Mkt in India 06
5 Why Rural India 07
6 Highlights of HLL Marketing Strategy 08
7 STP of HLL 09
8 Marketing Mix for Rin Detergent 10
9 4A’s approach of Indian Rural Market 14
10 Rural Product strategy of HLL 16
11 Conclusion 18
12 Recommendations 18
13 Bibliography 19

ACKNOWLEDGEMENT
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I provide full justice to this term paper which is prepared by visiting various web-
sites, magazines, articles etc.

I would like to take an opportunity to thank all the people in collecting the
necessary information and making of the report. I am grateful to all of them for
their time and wisdom.

My project becomes a reality only due to cooperation of many people who had
helped me in completing this project. I sincerely extend my gratitude to Mr. Hitesh
Jhanjhi who has given me this precious opportunity to have know about the
Indian Rural Market.

Objective of the study.

 Increase the knowledge about the HLL.

 Increase the knowledge about rural market in India.

 To create effective market plan for the HLL Product.

 To create effective Brand Image of the HLL Product.


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INTRODUCTION OF ORISSA
Orissa is situated in the east coastal region of the country. Its geographical area is almost
4.74% of India and its population is 36.7 million (2001census), about 3.57 per cent of
India’s population. The population density of the state is 236 persons per sq. km. (in
2001), but there is a sharp divide here between the coastal and inland districts (the inter-
district coefficient of variation in this respect is of the order of 63.56 per cent, a reflection
of a significant differential in the ‘carrying capacity’ of land). The urbanization rate, at
14.97 per cent (2001), is the lowest among the major states of India and also there is a
very marked inter-district variation (Coefficient of Variation (C. V): 73.29 %: 2001).

The rate of growth of population of Orissa during the decade 1991-2001 has been only
15.94 per cent as against 21.34 per cent for all-India, and indeed this has been the third
lowest growth rate of population among the major Indian states, higher than only Kerala
(9.42 %) and Tamil Nadu (11.94%). This has occurred not because of a normal process
of demographic transition (as in the case of Kerala and Tamil Nadu), but due to a peculiar
demographic regime, namely, a relatively faster decline in the birth rate from a relatively
low level on the one hand and a relatively slower decline in the death rate from a
relatively higher level on the other.

• Population Distribution in Orissa:

Rural Urban Combind


Male Female Male Female Male Female Total
15.7 15.5 2.9 2.6 18.6 18.6 36.7
• Percentage of Working Population: 40%

Cultivators Agriculture House hold Other workers


Industry workers
33% 39% 5% 23%
• No and Percentage of Population below the Poverty line:

Poverty line
Rural 48.0% 323.9
Urban 42.8% 473.1
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• Per capita Consumption:

Food Non Food


64.1 35.9
• Average expenditure on FMCG:

Urban Rural
5982.0 2512.0
• Village Town Distribution:

Village Town
51352 138
• Rural Household Assets:

No of Banking Electricity Radio TV Phone Bicycle Bike Car


household service
6782879 20 19 21 9 1.6 49 4.5 0.6
• Media Coverage in Orissa:

Press Satelite Raido Cinema Hatts TV


All 14 4 19 13 3445 39
Rural 11 0.9 15 30 2865 34
Urban 31 22 30 20 580 68

Facts and Figures About Orissa


Geographical area 155,707 sq. km
Total forest area 58136 sq. km.
Coastline 480 km.
Capital Bhubaneshwar
Population of Orissa 36804660 (2001 census), 3.58% of country's Population.
Population density 236 per square km. Male - 1,86,60,570,
Female - 1,81,44,090 and the sex ratio F:M is 972:1000. The
urban population is 55,17,238 whereas rural is 3,12,87,422.
Literacy rate Total 63.08 percent; 71.35 percent male and 50.51 percent
female.
Religion The majority (over 94 percent) consists of Hindus. Muslim,
Christians, Sikhs, Buddhist and Jains form a very small
minority.
Language Unilingual Oriya speaking state.
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Introduction of Rural Marketing in India


The rural India has a plethora of opportunities all waiting to be harnessed. Not
surprisingly, it has become the latest marketing buzzword for most of the FMCG majors.
Many of the FMCG companies are busy formulating their rural marketing strategy to tap
the chance .To name few companies showing deep interest in rural India are HLL, Marico
industries, Colgate – Palmolive and Britannia Industries. Rural markets are an important
and growing market for most products and services Including FMCG. The characteristics
of the market in terms of low and spread out population and limited purchasing power
make it a difficult market to capture. The Bottom of the pyramid marketing strategies
and the 4 A's model of Availability, Affordability, Acceptability and Awareness provide
us with a means of developing appropriate strategies to tackle the marketing issues for
marketing telecom services in rural area.

Why Rural India?


70 % of India’s population lives in 627000 villages in rural areas. 90 % of the rural
population is concentrated in villages with a population of less than 2000, with agriculture
being the main business. This simply shows the great potentiality rural India has to bring
the much-needed volumes and help the FMCG companies to bank upon the volume –
driven growth. This brings a boon in disguise for the FMCG Company who has already
reached the plateau of their business curve in urban India.

As per the National Council for Applied Economic Research (NCAER) study, there are as
many 'middle income and above' households in the rural areas as there are in the urban
areas. There are almost twice as many 'lower middle income' households in rural areas as
in the urban areas. At the highest income level there are 2.3 million urban households as
against 1.6 million households in rural areas.

According to the NCAER projections, the number of middle and high-income households
in rural India is expected to grow from 80 million to 111 million by 2007. In urban India,
the same is expected to grow from 46 million to 59 million. Thus, the absolute size of
rural India is expected to be double that of urban India.
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Hindustan Lever Limited


Meeting Everyday Needs of People Everywhere
Hindustan Lever Limited (HLL) is India's largest fast moving consumer goods company,
with leadership in Home & Personal Care Products and Foods & Beverages. HLL's
brands, spread across 20 distinct consumer categories, touch the lives of two out of three
Indians. They endow the company with a scale of combined volumes of about 4 million
tonnes and sales of Rs.10,000 crores.
The leading business magazine, Forbes Global, has rated Hindustan Lever as the best
consumer household products company. Far Eastern Economic Review has rated HLL as
India’s most respected company.
The vision that inspires HLL's 32,400 employees (40,000 including Group Companies),
including about 1,425 managers, is to “meet everyday needs of people everywhere - to
anticipate the aspirations of our consumers and customers and to respond creatively and
competitively with branded products and services which raise the quality of life.” This
objective is achieved through the brands that the company markets.
It is an ethos HLL shares with its parent company, Unilever, which holds 51.55% of the
equity. A Fortune 500 transnational, Unilever sells Foods and Home and Personal Care
brands through 300 subsidiary companies in about 100 countries worldwide with products
on sale in a further 50.

Business Growth of HLL


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Highlights of HLL Marketing Strategy.


There was an interview conducted with Mr. Shubramanyam Bhattacharya who is the Sales
Team Manager of HLL Belapur Branch. He highlighted on the following points connected
to rural markets where HLL serves. He said firstly that:-

Mission of HLL :- To Make it products reach to the consumer where he wants it. The
product must be such that impacts daily life and change their living standards. Their main
purpose is to provide hygienic conditions to rural consumers and upgrade their standards
with their products .

The goal is to reach 2,35,000 villages, up from the current 85,000; 75 per cent of the
population, up from 43 per cent today; and a message reach of 65 per cent, up from the
current television reach of 33 per cent. The company is expressly aiming at reaching
villages with populations less than 2,000. The rural penetration exercise is going to be
complemented by a 15-per cent hike in advertisement expenditure. HLL is trying to reach
the potential market of 75% of rural areas. This is possible only if the disposable income
in the hands of rural consumer is increased. The GDP is 26% currently of rural areas and
is need to be increased. Currently rural consumers spend 6% on household’s products
which are produced by HLL. This should be increased to 8% . This growth is possible
only with increasing disposable income of rural consumer. The Rural people need to
channelize their aspiration needs combined with functional needs. In rural areas the
Functional Need takes the First Stage.

Rin Detergent powder


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Rin is a very old and famous brand name for the detergent soups and even the detergent
powder. It cleans all the clothes nicely and has a very good smell. Now there is a new
detergent powder introduced by the same company and it is called as Rin Super detergent
powder. This detergent powder is much better than the previous one and is very effective
for cleaning the dirty clothes. I even use this powder for my washing machine, I soak all
my dirty clothes in a bucket using the Rin super detergent powder and after 20 minutes I
put it in the washing machine, just after 30 minutes the clothes get clean and come dried
from the machine and even the smell is very good.

STP Of HLL

Segmentation

As we know that HUL'S product is the most useful for every one.we use the product from
morning to till we sleep.it has many varities of product which is used by every one from
the age of 5 to 60 years.but according to me teenegers (age 14 to 30) use the product the
most.as we know that there are three class of segments(upper , middle and
lower)according to the income.so HUL has all these three segments because the price of
its product varies. they have the price accordingly.

MARKET POSITIONING
Positioning is the act of designing the company’s offerings & image so that it occupies a
distinctive place in the mind of the target segment. Positioning involves:-

1) Identifying the unique feature of the product (USP) as well as the differences of the
offer vis-à-vis the competitors offer.

2) Selecting the differences that have greater competitive advantages

3) Communicating such advantage to the target audience.


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Brand Positioning
Hindustan Unilever Limited, 51.6% subsidiary of Unilever Plc, is the largest FMCG
Company in the country, with a turnover of Rs118bn. The company’s business sprawls
from personal and household care products to foods, beverages, specialty chemicals and
animal feeds. The company has a dominating market share in most categories that it
operates in such as toilet soaps, detergents, skincare, hair care, color cosmetics, etc. It is
also the leading player in food products such as branded packaged tea, coffee, ice cream
and other culinary products.

The Marketing Mix & The 4 P's for the RIN Detergent

The Marketing Mix is the company’s “offer” to its target group. The Marketing Mix
consists of the so-called 4 P’s when we talk about physical products like the detergent
products and the 7 Ps when we talk about non-tangible products - services.
It is important for a company to mix the 4/7 Ps in a way that will satisfy its target group.

Product
They company “Detergent” sells organically grown FMCG products, for the consumer
who likes to take care of him or herself. We are talking about so-called convenience
goods with a short durability at relatively low prices.

• Surf Excel,

• sun light,

• Rin,

• Wheel & Ala bleach


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• Vim

Price
The Detergent prices are low/ medium. Based on where you by them ore what you
buy. So the products are comparatively cheap which means that many can afford them.
It is important that the company knows its target group and knows what the target
group is willing to pay for the products. Of course, prices should always be com-
petitive. Therefore it is vital for the company to have information about competitor’s
prices.

HLL pricing objectives are:

• The maximization of long term profits

• The increase in sales volume


• The growth in market share
• Company growth
• Match competitors prices
• Survival
• Enhance the image of brand and product
• Create interest and excitement about our new product Pricing strategy

Place/ distribution

The company is B2C related which means that its target group is consumers on the B2C
market. They use a mixture between intensive and selective distribution. All the shops are
run on a franchising basis.HUL's distribution network comprises about 4,000
redistribution stockists, covering 6.3 million retail outlets reaching the entire urban
population, and about 250 million rural consumers.
We have analyzed the distribution network of HUL from the following aspects:

• Evolution of HUL’s distribution network

• Transportation & Logistics

• Channel Design
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• Initiatives taken for channel member.

Project Shakti
Hindustan Lever is implementing Project Shakti since 2001, whereby SHGs are being
offered the option of distributing relevant products of the company as a sustainable income-
generating activity. The model hinges on a powerful win-win relationship; the SHG
engages in an activity which brings sustainable income, while Hindustan Lever gets an
interface to interact and transact with the rural consumer.

Distribution acquired a further edge with Project Shakti, HLL's partnership with Self Help
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Groups of rural women. The project, started in 2001, already covers over 5000 villages in
52 districts of Andhra Pradesh, Karnataka Madhya Pradesh and Gujarat, and is being
progressively extended. The vision is to reach over 100,000 villages, thereby touching
about 100 million consumers. The SHGs have chosen to adopt distribution of HLL's
products as a business venture, armed with training from HLL and support from
government agencies concerned and NGOs. A typical Shakti entrepreneur conducts
business of around Rs.15000 per month, which gives her an income in excess of Rs.1000
per month on a sustainable basis. As most of these women are from below the poverty
line, and live in extremely small villages (less than 2000 population), this earning is very
significant, and is almost double of their past household income. For HLL, the project is
bringing new villages under direct distribution coverage. Plans are being drawn up to
cover more states, and provide products/services in agriculture, health, insurance and
education. This will both catalyse holistic rural development and also help the SHGs
generate even more income. This model creates a symbiotic partnership between HLL and
its consumers, some of whom will also draw on the company for their livelihood, and
helps build a self-sustaining virtuous cycle of growth.

Promotion

The company is against promotion, so they don’t do business by promoting, but


they have their own internet site, where you can see their selection of products. So
the company supports animal and human rights, and the economically cli-mate.

• Haats or weekly markets:- where people from surrounding villages conduct


trade on fixed days. Covering the needs of a minimum of 10 to a maximum
of 50 villages, drawing as many as 51352 villagers.

• Meals:-gatherings of people for entertainment as well as the sale and


purchase of goods and services. Over 3445 melas are held in orissa annually
that hold an average of 2.6 lakh visitors.

• Wall Paintings:-one of the most widespread forms of advertising and are


quite the favorite amongst the Orissa rural masses.
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• Customer contact ‘touch points’: includes 'Home-to-Home' campaigns and


other such customer contact programs that help initiate a close interaction.

• Van Campaigns:-one of the most popular modes of communicating with


rural consumers.

• Event Management: There are several folk forms of events that are
performed in different states all over Orissa.

 Folk media: It consists of folk songs, dances, puppetry, street theatre, magic
shows etc.

 Interactive games: Many companies designs interactive games that help


draw large crowds where trials can be induced, thus facilitating spot sales.

4 A’s approach of Indian Rural Market


Opportunity
As a result of the growing affluence, fuelled by good monsoons and the increase in
agricultural output to 200 million tones from 176 million tones in 1991, rural India has a
large consuming class with 41 per cent of India's middle-class and 58 per cent of the total
disposable income. The importance of the rural market for some FMCG product because
the rural consumption increase day to day. The rural market for FMCG products is
growing much faster than the urban counterpart.
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The 4A approach for Orissa


The rural market may be appealing but it is not without its problems: Low per capita
disposable incomes that is half the urban disposable income; large number of daily wage
earners, acute dependence on the vagaries of the monsoon; seasonal consumption linked
to harvests and festivals and special occasions; poor roads; power problems; and
inaccessibility to conventional advertising media.

However, the rural consumer is not unlike his urban counterpart in many ways.

Availability
The first challenge is to ensure availability of the product or service. In Orissa there are
51352 villages are spread over 1.2 million sq km; 700 million Indians may live in rural
areas, finding them is not easy. However, given the poor state of roads, it is an even
greater challenge to regularly reach products to the far-flung villages. Any serious
marketer must strive to reach at least 13,113 villages with a population of more than
5,000. Marketers must trade off the distribution cost with incremental market saturation.
Over the years, India's largest MNC, Hindustan Lever, a subsidiary of Unilever, has built
a strong distribution system which helps its brands reach the interiors of the rural market.

To ensure full loads, the company depot supplies, twice a week, large distributors which
who act as hubs. These distributors appoint and supply, once a week, smaller distributors
in adjoining areas.

Affordability
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The second challenge is to ensure affordability of the product or service. With low
disposable incomes, products need to be affordable to the rural consumer, most of who are
on daily wages. Some companies have addressed the affordability problem by introducing
small unit packs.

(i) Affordability: The income of rural consumers is unsteady. The sources of income
as well as the size of income earned per day vary. They cannot hence make planned
purchases and large purchases. Small pack sizes help the rural consumer pick the product
at a price that he can afford.
(ii) Usage: Certain products like detergent and paste are bought in larger quantities,
whereas shampoos, toilet soaps, eatables are bought in small pack sizes. The reason for
this is: ‘The products that are common to family members are bought in large pack sizes
whereas individual-use products are preferred in small packs’.
(iii) Storability: The storage life of a product also has a bearing on this decision.
Edibles, for example, cannot last long unless preserved and kept under ideal conditions.
Further shelf space of rural consumers is also limited as they live in small huts or semi-
pucca houses.

(iv) Benefits to Retailer : The small pack sizes are convenient to the retailer to do
his business and promote the national brands. The shelf space of rural retailers is less. He
cannot afford big premises. Small pack sizes do not demand shelf space.
(v) Display : Smaller sizes are easy to display. They increase the visual appeal they
carry compared to large ones, the colors on the smaller packs are looked at with more
interest.
(vi) Implications to marketers : Manufacturers prefer producing large pack sizes.
The economies of scale indicate that small pack sizes are less feasible. However, on the
marketing side, benefits are revealing.
• They induce strongly rural consumers to buy.
• Trail sales of national brands are on the rise.
• Regular sales are growing up for many products. The regional\ local players are finding
it difficult to face competition from the big players on their home turf.

Acceptability
The third challenge is to gain acceptability for the product or service. Therefore, there is a
need to offer products that suit the rural market. The insurance companies that have tailor-
made products for the rural market have performed well. The company tied up with non-
governmental organizations and offered reasonably-priced policies in the nature of group
insurance covers. With large parts of rural India inaccessible to conventional advertising
media — only 9 per cent rural households have access to TV — building awareness is
another challenge. Fortunately, however, the rural consumer has the same likes as the
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urban consumer — movies and music — and for both the urban and rural consumer, the
family is the key unit of identity. However, the rural consumer expressions differ from his
urban counterpart. Outing for the former is confined to local fairs and festivals and TV
viewing is confined to the state-owned Doordarshan. Consumption of branded products is
treated as a special treat or luxury.

Awareness
Hindustan Lever relies heavily on its own company-organized media. These are
promotional events organized by stockiest.

The key dilemma for MNC’s ready to tap the large and fast-growing rural market is
whether they can do so without hurting the company's profit margins.

RURAL PRODUCT STRATEGIES OF HLL


The following are the product strategies for the rural market and rural consumers:
1. Small Unit Packing: This method stands a good chance of acceptance in rural markets.
The advantage is that the price is low and is easily affordable by the rural consumer.
Products like shampoos, pickles, biscuits, etc have tested this method.
2. New Product Designs: The manufacturer and the marketing men can think in terms of
new product designs, keeping in view the rural life style.
3. Sturdy Products: Sturdiness of the product either in terms of weight or appearance is
an important criterion for rural consumers. For the rural consumers, heavier weight means
that the product is more durable,
4. Utility Oriented Products: Rural consumers are more concerned with the utility of the
product and its appearance.

5. Brand Name: The rural consumers do give their own brand name on the name of an
item. A brand name or logo is very important for a rural consumer for identification
purposes.

6 Branding: Brand is the term, name, sign, symbol, design or a combination of them,
which helps to identify the seller products & identify them from competitor products. Its
primary purpose is creating an identity of the product.

7 Combi-packs: Another packaging innovation is ‘combi-packs ’. When related products


are packed together and sold at economy prices, the consumer finds it a better option to
buy. The combi-pack may become an assortment when more than two products are
packed together
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8 See-through packs: Many companies are coming up with new packages that are
attractive as well as economical.

CONCLUSION
As we know that the Indian rural market is one of the big markets in the world. Rural
Market is Gold Mine which is paved with Thorns but HLL has rightly tapped it. However
there is a long way to go to capture all the rural markets. In Rural markets company face
various problems like Underdeveloped People and Underdeveloped Markets, Lack of
Proper Physical Communication Facilities, Many Languages and Dialects, Dispersed
Market , Low Per Capita Income, Low Levels of Literacy , Different way of thinking of
Rural Consumer, etc. HLL was the first FMCG to tap rural markets and has generated
huge revenues from rural markets. We say that HLL used the effective strategy to
promote or distribute the products.
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RECOMMENDATIONS
HLL, a major FMCG to enter rural markets, but not the only one now. There are many
companies which entered rural markets. HLL needs to be competitive and keep on updating
its strategy to have a foothold in the Rural markets. For India to maintain and improve
economic growth it is imperative to improve rural markets. Even today there is imbalance
in rural development. Government and Marketers have to undertake measures to improve
the Rural markets.

BIBLIOGRAPHY
 Ramkishen.Y, (2nd Edition, 2004): Rural & Agricultural Marketing
 C.S.G. Krishnamacharyulu and Lalitha Ramakrishna, Rural Marketing,
published in 2002.
 Philip Kotler, (10th Edition) : Marketing Management
 Rajan Saxena, (2nd Edition) : Marketing Management
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Websites:

 Singh, R.L. (ed.) (1971). India: A Regional Geography, Natural


Geographical Society of India, Varanasi

 http://www.scribd.com/doc/34884904/Rural-Marketing-Strategies-Hll

 http://www.scribd.com/doc/20541418/Distribution-Strategies-in-Rural-
Markets

 http://www.slideshare.net/aashimna3/hindustan-lever

 http://www.indianmba.com/Faculty_Column/FC213/fc213.html

 http://www.oppapers.com/essays/Unilever/447582