CAN Submission- Unilever in India:

Hindustan Levers Project Shakti

Marketing FMCG to the Rural Consumer

Section E: - Group_04

Submitted by: 1) Aditya Sonthalia (244)

2) Divya Nayak (254)
3) Kaustubh Tirpude (264)
4) Abhay Patade (274)
5) Seerat Gupta (284)

1. How is HUL placed in the Indian Consumer market?

Hindustan Unilever Limited is Indias largest fast moving consumer goods (FMCG) and Services
company
Global Turnover of roughly US$55 billion in 2004 and US $63 billion in 2014
Hindustan Unilever, the Indian subsidiary of Unilever contributed INR 110 Billion in 2004 and
INR 301.7 Billion in 2014.
HUL had a gross profit of 46% and net income of 11.4% in the year 2004, whereas in the year
2014, the gross profit margin and the net income were 41.4% and 16% respectively.
HUL has a broad product line, covering nearly 1000 SKUs across around 20 categories that
includes beverages, detergents, foods and personal products.
The market share of HUL varied by product category, but overall it was the market share leader in
most of the markets it competed in with an aggregated share of around 40-45%
In 2004, HLL responded to high competition by further lowering the price across categories. It
started the concept of power brands, initiated a channel-based system, supply chain efficiencies
were captured and innovations were launched
Sixteen of HUL's brands featured in the ACNielsen Brand Equity list of 100 Most Trusted Brands
Annual Survey (2014), carried out by Brand Equity, a supplement of The Economic Times.

2. What was the motivation for the Shakti initiative? Was it a CSR initiative?

The primary motivation behind the HLLs Shakti initiative was to gain an advantage in an
increasingly competitive market by tapping the low business potential, inaccessible rural market.

Also, the initiative was aiming to empower the underprivileged rural women by providing
sustainable livelihood opportunities.

No, it was definitely not a CSR initiative because the initiative was enacted with a long term
benefit and growth in view.

3. How will Project Shakti influence distribution in rural markets?

Three major initiatives taken up by HLL starting in 2001. They are as follows:
Shakti
- About 12000 women entrepreneurs had been appointed, covering nearly 50,000 villages
across 310 districts in 12 states in partnership with nearly 300 NGOs.
- Out of the 12 states that Shakti operated in, they received keen support in 5 states, followed
by varied interest in the other states. The governments also endorsed the project seeing it as a
great initiative that would help the rural community.
iShakti
- iShakti was the initiative where-in the rural community was empowered by creating access to
information.
- iShakti created a loyal customer base and improved market penetration asvisibility of HLL s
products increased.
Shakti Vani
- Shakti Vani was a branded social communication channel targeted at the rural community.
- Around 500 Vanis were trained, covering 20000 villages by February 2005.

Advertising budget of stable brands in HLL portfolio is usually 10-15% of the sales value.
Here, Vani proves to be more cost-efficient.
Also, Vani serves its purpose in creating a customer for life across several HLL brands.

Thus, the initiatives taken up by HLL in early 2000s helped in increasing its outreach to the rural
customer which will help HUL in reaching over 500,000 villages in India representing a
population over 500 million.
4. If Shakti cannot become profitable, should HUL continue the program? Why?
HUL should still continue with its Shakti program even if it ceases to be profitable because of the
following reasons:

By empowering rural underprivileged women, HUL now has an access to influencers to the rural
market.

Also HUL by the virtue of the social objective of the program have contributed immensely
towards CSR.

As of 2014, the program has created a difference in the lives of rural population by providing
entrepreneurship opportunity to 70,000 Shakti Ammas and 48,000 Shaktimans.