ASSIGNMENT CASE: Unilever in India: Hindustan Levers project Shakti- marketing FMCGs to the rural consumers.

Case Questions and answers

1. What are the key features of Shakti? What are its positive and negative aspects? What was the motivation for the Shakti initiative? Was it a Corporate Social Responsibility initiative? ANSWER: Shakti provides access to untapped rural markets and develops HLLs brand through local influencers. Its target customers are the rural population, by providing micro enterprise and partnering with SHGs (self help groups) and is aimed at scaling up its operations. Shakti Vani - trained communicators address congregations to drive messages on sanitation, good hygiene practices and women empowerment. iShakti - Rural Information Service that empowers the rural community by providing access to information. i. Shakti gives a large conglomerate the ability to tap into a market so rural that no other company in their field has entered. ii. Shakti gives the individual in said remote community the opportunity to make money and develop wealth. iii. It relies on the entrepreneur to build relationships with customers and provides them the products that they require. iv. It helps the community and makes goods more affordable. v. It allows people to make a sizable wage that will increase their standard of living. vi. It has created health education programs and access to the internet for many. Drawbacks: It is very tough and time consuming to build a new market from the ground up, though it can also distribute great rewards in the long term. HLLs motivation for the Shakti initiative was its following two objectives: Business objective-HULS declining growths of profits in urban markets had identified the need of exploring the untapped rural markets and wealth. Social objective- To provide sustainable livelihood opportunities for underprivileged rural women and thus make a deep social impact. I think that it was a CSR initiative because it increases an increased level of brand equity by giving back to the community and that relates right to the consumer and how they view the products they are buying.

2. How can Shakti make a contribution to HLLs bottom line? ANSWER: By the following measures Shakti can contribute for HLL bottom line. 1) Shakti can provide a loyal customer base and a self motivated team of sales representatives which can penetrate the rural market which is largely untapped. 2 )It can contribute to their brand building through iShakti centre which will make them more interested as this scheme will provide them with the knowledge regarding all the relevant areas. 3. What is the economic value created by Shakti? What is the social value? ANSWER: Economic value- Shakti accounts for about 15% of the rural turnover where it is present with coverage of more than 50000 villages and more than 12000 women entrepreneurs. Social value- It created income-generating capabilities for underprivileged rural women, by providing a sustainable micro enterprise opportunity, and it improved rural living standards through health and hygiene awareness. 4. What are the critical challenges facing HLL in making Shakti work? What should Shaktis managers do? ANSWER: To begin with, there are Government barriers, different for every region; Language barriers, many different dialects, in addition to the fact that the areas are very rural with a really bad infrastructure. Also competition with the local retailers is inevitable. There are differing social norms with relation to women and their role in society. The knowledge of modern hygiene and medicine is low. The micro credit is different based on location. HLL has to compete across a large variety of product lines, Shakti in contrast has smaller product variety. Also, the need to develop Shaktis market, the need to create higher level of entrepreneur confidence and knowledge and to provide a high level of service is also a challenge faced by HLL. The structure of the network of Shakti is remarkable and should now try to be totally utilized. HLLs marketing and advertising budget is best spent in this area. Teaching an individual Shakti to develop additional customer basis will help a lot. Even, giving them pamphlets, brochures or even catalogs to distribute to end consumers would spread HLLs name in place where that kind of exposure is rare. But either way they need to utilize this information channel. In addition internal marketing could tremendously help the development of Shakti without much cost. Having seminar like meetings where individual success stories could be told and where best practices could be shared between multiple Shaktis could also lessen the need for a large number of RSP staff, if you got the Shaktis to basically do it themselves. Lastly an option for HLL, is to reduce their market penetration goal. This option is different in nature but should be examined. Reducing their market penetration goal would allow the company to really focus on places that Shaktis could succeed easily and maximize their profit potential. It would allow them to build in places where they could grow strong first before going into harsher environments. 5. If Shakti cannot become profitable, should HLL continue the program? Why?

ANSWER: No they should shut the program down. While it does create a lot of social good there are lots of ways to give back. They are attempting to do something very hard and sometimes things just dont work. Their company has a solid foundation and can be solid for at least the time being. The company has also succeeded in the past at developing new markets, so trying a different sector could work.