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ASP Case study

A case study of HUL


ON
Advertising & sale promotion in rural India

Submitted To: Dr. Jyotsna Mukherjee


Submitted by: Sumit Singh
Chetan Gupta

Name of subject: - Advertising and promotion

IILM INSTITUTE FOR HIGHER EDUCATION

Sector 53, DLF Golf Course Road, Gurgoan-122003

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ASP Case study
Table of contains
Executive summery

Introduction of HUL

IMC objective of the company

Target audience

The advertising challenge and strategy adopted.

Critical success factors.

Present scenario with company report.

Competitive scanning.

Future scenario.

Analysis the study.

Recommendations

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Executive summery

T his case study is gives the insight of advertising and sale promotion strategies of
HUL in rural Indian. Challenges in rural market, Strategies adopted, target
audience, Competitors, current scenario, future of company. HUL is number one in case
of advertising and sale promotional strategies for rural Indian. It is also a leader in
distribution network in rural India. Every two of three people are using the products of
HUL. HUL is working on tag line, Add vitality to life. With the help of right kind of
sales and promotional activities HUL is very successful in rural India. With the help of
sale and promotion like print media television , rural campaign, environment concerned,
holdings, van campaign, wall painting, radio HUL has tried to make a reach in every
nook and corner of rural India . Hul have almost 25 brands in India and the market share
of rural market is twice in comparison of urban India. And tool of integrated marketing
communication have played a prominent role in achieving this market leaderships.
Innovations are the engine of Unilever’s growth and the lifeblood of HUL business. The
common thread running through all HUL’S R&D activities is a direct connection
between science, technology and consumer needs. Company is making plans for
advertising and sale after understanding the needs and wants of consumer. This is why
almost 95% sale of hair care shampoos comes from rural Indian is from sachet Since
Indian is very vast country then advertising and sale promotion is not an easy task. The
are certain challenge for HUL if it is going to do advertising and sale promotion, like
advertising expenditure, Geographic, Rural infrastructure. It is using so many strategies
to make brand loyalty, awareness like Project Shakti, I Shakti, Shakti vahini, Swasthya
Chetna, and effective communication, clear brand identity, markets reach, unique
selling proposition, segmentation.

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HUL in a glimpse
Hindustan Unilever Limited (‘HUL’), formerly Hindustan Lever Limited (it was
renamed in late June 2007 as HUL), is India's largest Fast Moving Consumer Goods
company, touching the lives of two out of three Indians with over 20 distinct categories
in Home & Personal Care Products and Foods & Beverages. HUL is also one of the
country's largest exporters; it has been recognized as a Golden Super Star Trading House
by the Government of India.

"Add vitality to life." HUL meets everyday needs for nutrition, hygiene, and personal
care with brands that help people feel good, look good and get more out of life. It is a
mission HUL shares with its parent company, Unilever, which holds 52.10% of the
equity. The rest of the shareholding is distributed among 360,675 individual
shareholders and financial institutions. HUL's brands‐ like Lifebuoy, Lux, Surf Excel,
Rin, Wheel, Fair & Lovely, Pond's, Sunsilk, Clinic, Pepsodent, Close‐up, Lakme,
Brooke Bond, Kissan, Knorr‐Annapurna, Kwality Wall's – are household names across
the country and span many categories‐ soaps, detergents, personal products, tea, coffee,
branded staples, ice cream. These products are manufactured over 40 factories across
India. The operations involve over 2,000 suppliers and associates. HUL's distribution
network comprises about 4,000 redistribution stockiest, covering 6.3 million retail
outlets reaching the entire urban population, and about 250 million rural consumers.

IMC objective of the company

The main objectives of IMC tools used in HUL with their objectives are as follows:-

Objective of advertising: -

The objective of advertisement of HUL is to make people aware about their products,
the utility of products, Features of products, availability of the products, size of the
products, prices in rural India.

Broadcasting: -

TV and radio are the main effective way of communication in rural area. Because In
rural area the main source of entertainment. TV and radio and this is why HUL is trying

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to grab the market by these channels to communicate about company’s products, brand,
features of products, and prices of products to reach the target audience of rural market.

Print media:-

In rural area news paper and magazines are the source of communicating Deinik jagran,
amar ujala, Hindustan ,and other local state wise and city wise newspapers in which
HUL company tries to gives the information. And main objective is that people in rural
area interested to read these Hindi news papers which are the good source of information
for the target audience of HUL.

Public relation: - The objective of public relation is to connect and associate more and
more people by company and its products and brands as well. Because in rural area the
customers are brand loyal they want interaction by the products and brands of the
company. It comes in the foam of new story, editorial, announcement its products and
services. It gains the creditability. Because the rural consumer tends to be more skeptical
towards favorable information when it comes from a source which the perceived as
unbiased

Exhibitions in fairs and melas:-

The objective of exhibitions in fairs and mella’s is basically to make people aware about
the products features, need in practical life prices and other relevant information about
different brands and products of company. Because in such kind of locations the foot fall
of rural customers is high. And many of them may be the target audience of HUL

Wall painting: -

HUL strategy for rural and urban India is wall painting because this is the most one of
the most effective promotion tool which is adopted by HUL. Because in rural area
peoples are price sensitive and they want visual images graphs of the products where TV
communication is not feasible then Wall painting is a good way. And comparatively is
cost effective also. We still have 50 million people who don’t even have television. So
for those it is very effective war with visual communication.

Van campaign: - It is such an effective way of sale HUL uses different vehicles like
four wheels, auto, and rekshway to inform about and announce about the products and
brands of the company.

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The target audience of HUL
HUL has targeted to all segmented. There is no any segment which is untouched by
HUL. In food products of HUL,3 roses,lopton, red level, Taj mahal, kwality wall’s,
Kissan, all these products more or less targeting all segment weather it is child , young
and old people segment. In case of Home care products of HUL like vim, wheel, and
surf excel, rin, for all these products the target audience customers are mainly house
wives. And in care of personal care products HUL is targeting all segment of India.

Advertising challenges and strategies adopted:-


Advertising challenges: - HUL is number one in India in case of advertising and sale
promotion. But in today’s cut throat competition and after globalization HUL is also
facing so many challenges.

Advertising expenditures:-

The advertising expenses are major point of concern for HUL. Company pays huge
amount on advertising every year. According to livemint.com article HUL is the
country’s largest advertiser that spent a record Rs630 crore, or 14% of net sales, on
advertising and promotion in the quarter to December so continuous increment in
advertising expenses is really a point of concern for HUL.

The challenge is to provide both scale and focus to all HUL brands: -

It is a challenge for HUL to do advertising and sale promotion for all the products in
rural area more or less HUL has 35 brands so have an advertising and sale and
promotion for all 35 brands in every state, district. City and village is quite difficult for
HUL.

Geographic:-

The geographic diversity of Indian rural market is a challenge in the way of advertising
for HUL. Since the target (70%) population is villagers and it is very hard to reach every
village of advertising and sale promotion for company.

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Rural infrastructure:-

The infrastructure is not good if company want to use broad cast media for advertising
and sale promotion then there is problem of power. And if they are going for print media
then literacy rate is not so good. And if the company is going for fair and van campaign
the there is a lack of transport facilities and good road which is quiet a challenge for
HUL in case of rural advertising.

Communication: -

Languages and communication is the major challenge for rural India because in
different states and religions people speak different language. So HUL have to change
the advertising and sale promotion to communicate in an effective manner. There are 22
National Languages have been recognized by the Constitution of India, Besides these,
there are 844 different dialects that are practiced in various parts of the Country, Which
is a challenge of advertising.

Strategy adopted by HUL


Since rural market is very green where country’s almost 70% population reside. And in
rural area the penetration level is also low, life of people is going to be changed day by
day, and consumption level is high so this is why HUL is adopted so many sales and
promotion strategy to make brand image, for advertising, promote sale, attract people,
gain brand loyalty.

Project Shakti: - This project was started for Co’s promotion in


rural market as well as women empowerment. HUL's partnership with
Self help Groups of rural women. It was started in 2001; Project Shakti
has already been extended to about 50,000 villages in 12 states
- Andhra Pradesh, Karnataka, Gujarat and others.

The recruitment of a Shakti Entrepreneur or Shakti Amma (SA)


begins with the executives of HUL identifying the uncovered village. The representative
of the company meets the panchayat and the village head and identify the woman who
they believe will be suitable as a SA. After training she is asked to put up Rs 20,000 as
investment which is used to buy products for selling. The products are then sold door-to-

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door or through petty shops at home. On an average a Shakti Amma makes a 10%
margin on the products she sells.

The objectives of the project Shakti: - The objectives of Project Shakti are as

A) To reach:-
Small scattered, settlement and poor infestrucutre, makes distribution difficult,
Over 5000000 villages are not reached directly by HUL.
B) To communicate :-
Low literacy rate hamper effectiveness of print media.
Poor media reach: ML. of people lack TV and radio.
C) To influence:-
Low category penetration consumption.
D) Awareness:-

To make people aware about the products of the company.

 Providing rural women with income-generating opportunities.


 Shakti entrepreneurs encourage rural women to become direct-to-home
distributors in rural markets
 Providing them with micro-credits
 To make brand loyalty with local distributors of home care, and personal care, and
food brands.

Project I- Shakti Vahini and programme: - HUL Launches I-


Shakti Rural Information Service in Association with
Andhra Pradesh Government. The I-Shakti service is
an extension of HLL’s Project Shakti these both
programme also started with the starting of project
Shakti. These two takes the initiatives to train them,
nurturing them to grow as a competent and confident entrepreneur.
Shakti Vahni programme works as a complement to this
programme instilling into rural populace the concept of staying healthy and leading a
hygienic life, thereby creating a demand for FMCG items. The Shakti entrepreneur
programme creates livelihood opportunities for underprivileged rural women. It has

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already improved the lives of over 45,000 families of Shakti entrepreneurs, Vanis and
Shakti kiosk entrepreneurs.

Objective of projects:-
 HLL hopes to cover 1000 I-Shakti kiosks across the state.
 Creates income-generating capabilities for underprivileged rural women.
 Provides a sustainable micro enterprise opportunity.
 Improve rural living standards through health and hygiene awareness.

Lifebuoy Swasthya Chetna (LBSC):- is the largest


private rural health and hygiene educational
programme ever undertaken in India. A large
percentage of rural population in India does not wash
their hands on important occasions.
The focus is on rural communities, starting with
school children, influential figures such as mothers and village elders as they are
more likely to carry the hygiene message to their families and communities. This
helps drive a change in behaviour throughout the community. The programme
involves a range of engaging activities, including quizzes, games and songs and
the popular 'glo-germ' demonstration kit, which shows up germs on the hands,
even after they've been rinsed with water - proving that soap is essential to staying
healthy. The project has touched more than 150 million Indians.

Objective of projects:-
Educate people about basic hygienic habits such as washing hands with soap.
Drives the message that hand washing with soap.
Creates awareness about life-threatening diseases, particularly diarrhoeal and
respiratory infections.
To ensure that the message of hygiene awareness

Appointment of a penal by HUL: - It is a panel of experts who are available to


the villagers through a specially developed online query mailing system. This
allows villagers to post questions to the experts in their local language. The

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experts answer all questions, taking additional care to ensure that information is
locally relevant and making it available to the user on the kiosk when they return
the next day. Farmer from a village can obtain solution to a pest problem with his
crops from an expert on Agriculture. Or a worried mother could get hygiene tips
for her new-born.

Operation Bhrat: - Under this operation it passed out low priced sample packets
of its tooth paste fairness cream, clinic plus shampoo, and ponds cream to 20
millions house and these brands have a flourishing rural market.

Critical success factor of HUL


The critical success factors of HUL in rural area are as follows:-

Effective communication:-
An important tool to reach out to the rural audience of HUL is through effective
communication. ‘A rural consumer is brand loyal and understands symbols better.
Television has been a major effective communication system for rural mass and, as a
result. Advertisements touching the emotions of the rural folks, it is argued, could drive
a quantum jump in sales.

Clear brand identity: -

Visible element of a brand (color design logotype name symbol). That together
identifies and distinguishes the brand in the consumer’s mind.

Markets reach: -

HUL is number one in case of sale and distribution management in rural India. For
Distribution in the villages the company has brought all market with population of below
50000 under one rural sale organization.

Unique selling proposition: -

USP’S of HUL makes it a successful brand in India not in urban India but in rural India
also HUL got such USP’S after a long period and now people have reliability and most
of the brands and products of HUL are on the top of the mind of customer like red label,

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Taj mahal, kwality wall’s, surf excel, wheel, lux, lifebuoy, dove, lakme, fair & lively and
many more.

Operational effectiveness: -

Effectiveness of all operations of HUL makes it a different in this cut throat competition.
HUL have almost 200 scientists who are working research and improving the quality of
existing products of company constantly.

The four factors which influence demand in rural India is - access, attitude, awareness
and Affluence. HUL has successfully used this to influence the rural market for its
shampoos in sachets. The sachet strategy has proved so successful that, according to an
ORG - MARG data, 95 per cent of total shampoo sales in rural India is by sachets.

Segmentation: -

The segmentation of products is an ingredient of success for HUL. Market segmentation


is clearly identified as the lower income segment comprising hard working people, who
are price sensitive. HUL rural market product prices are very low and hence products are
with in the reach of the common man.

Contain low cost competition

Focus on achieving cost competitiveness to counter low cost competition. Right good
right time right quality @ right cost.

Present scenario:-
At present HUL is doing lots of advertising sale promotions campaign, road shows
hoardings , TV shows to maintain its leadership in rural India some of the are :-

Dirt is good campaign:- A pioneer in the Indian detergent powder


market Surf Excel conducted children’s festival and brought alive
“Dirt is good” campaign More than 40,000 children participated In
order to deal with the water crisis surf excel launched Surf excel quick
wash. “Do bucket paani ab rozana hai bachana.”

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Wheel smart shrimati:-It is a campaign which is prime time show on
national channel. This is targeting to females house wife’s of rural Indian
market. And the objective of media is to attract house wives.

Soap cum sachet free offer: - HUL IS adopting this strategy of late to bust the sale of
many products like with Lux soaps a shampoo or oil sachet will be free. And with fair &
lovely 5 rupees sachet of Vatika hair oil sachet will be free.

HUL Breeze 2-in-1


HUL developed a combined soap and shampoo.

HUL has been pepping up its rural distribution systems and has launched low unit price
variants of its popular brands to draw in new users in the rural areas.

HUL has been pepping up its rural distribution systems and has launched low unit price
variants of its popular brands to draw in new users in the rural areas.

Competitive analysis
Dabur, ITC, Ayur, Immami, Himalayan, and global brands like P&G, These all are the
competitors of HUL. The country’s largest advertiser that spent a record Rs630 crore, or
14% of net sales, on advertising and promotion in the quarter to December,
HUL ITC

Project in Indian rural market. Lunched E-Choupal project.


HUL Shakti project is for developing HUL Basically E-choupal project was lunched for
market in Rural market. Improving the ITC- ABD profit.
HUL is creating microenterprise E-choupal project helps farmers to sell our
opportunities for rural women, thereby they corps in higher rate.
can become entrepreneur.
It has already touched 120 million people in The network of 6,500 e-Choupal
approximately 50, 676 villages across India. centres spread across 40,000 villages in
India.
Hindustan Unilever Limited (HUL) launched At present time ITC lunches new company
a water conservation project in Nialayur ITC green paper. It works to plant new tree,
(Tamil Nadu). use old paper for recycling and make new
paper for different purpose.

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Competitive Situation of HUL with Its Competitors
600% HUL COMPETITSeries 3
FABRIC W 38% 14% 2
500%
PERSONAL 54% 10% 2
DISH WAS
400% 57% 9% 3
SKIN 55% 7% 5
300%
SHAMPOO 48% 24%
TALCUM
200% P 60% 15% HUL
PACKET TE 23% 21% COMPETITOR
100%
COFFEE 44% 39% Series 3

0%

Future scenario of HUL


In future there will be a great opportunities for HUL in rural market which
will be of because of followings.
 Large rural (70%) market.
 Changing life style of consumer.
 Increment in disposable income.
 Increasing per capita income of rural consumers.
 Changing consumer pattern.
 Changing lifestyle.
If company will use the innovation and product design and packaging of
the products and will decrease the cost of production then the future is
bright of company. HUL, Pureit water purifier brand will provide a good
return in future and companies advertising and sales promotion will lead towards a
bright future to the company. The TV shows and campaign will pave the way of
success of HUL. Various cooperate social responsibility initiatives like water
harvesting plan, Project Shakti, Project I Shakti and many other are the ingredient
of success for HUL in future.

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Analysis of case
 The distribution network of the HUL is so strong and it is a leader in network.
 The rural market is growing two times as compare to urban India.
 For getting attention and brand loyalty it is running so many CSR work.
 Every third person out of three is using HUL’S products.
 In India HUL paid largest sales and promotional expenses in India.
 TV, radio wall painting, van campaign word of mouth are good ASP strategies
 For effective communication with rural audience it is important inspirations fear
and hope.

Suggestions & Recommendation

 HUL should understand the price sensitivity of a consumer in a rural area.


 Company should understand the social dynamics and attitude variations.
 Language and rural behaviours variations should be considers while developing
rural communication strategy.
 Company should understand the psyche of rural customer and act accordingly.
 Brands should be associated with myriad, rituals, celebrations, festivals, and
melas
 Company should emphasis on Wall painting and van campaign.
 Company should avoid the marketing myopia.
 Company should understanding rural customer’s needs and aspirations.
 A fair amount of research is required to understand the latent needs and desires of
rural customers.
 Company should use psychological tricky pricing strategies.
 Use local language in advertising and sale promotion.
 Company should start the production in rural areas.
 Tie up with public distribution system (Fair Price Shops).
 Development of rural shopping malls

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References:-
www.hul.co.in

http://retail.franchiseindia.com/magazine/magazineArticlesView.php?
artTitle=Rural+market++fast+track+for+FMCG&magzid=31&artid=31-2-
2&title=Retailer+October+2009+Vol.+4.+No.+7&p1=&p2=&year=all

http://www.livemint.com/2010/02/15213817/The-challenge-is-to-provide-bo.html

http://www.languageinindia.com/nov2001/1991Languages.html

http://www.hul.co.in/mediacentre/news/2004/HLLLaunchesIShaktiRuralInfoServiceInA
ssociationWithAPGovt.aspx

http://www.nextbillion.net/news/hindustan-lever-to-take-water-purifiers-to-villages

www.forbes.com

www.ezinearticles.com

www.oppappers.com

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