HUL DISTRIBUTION MODEL

HUL

CARRYING AND FORWARDING AGENTS

REDISTRIBUTION STOCKISTS

WHOLESALERS

RURAL RETAILERS CONSUMERS

URBAN RETAILERS

RURAL DISTRIBUTION MODEL

PHASE 1B PHASE 1A DIRECT COVERAGE FOR LARGE VILLAGES INDIRECT COVERAGE MODEL: DISTRIBUTOR IN A LARGE VILLAGE SUPPLIES TO NEARBY VILLAGES

PHASE 2
OPERATION STREAMLINE

PHASE 3
PROJECT SHAKTI

PHASE 1A: DIRECT COVERAGE HUL appointed a common stockist to service all outlets within a town of population 50000 people and sell a limited selection of brand portfolio

PHASE 1B: INDIRECT COVERAGE HUL targeted retailers in villages closer to urban markets. Retailers had to ensure that all the villages in the vicinity were served atleast once a fortnight. PHASE 3:PROJECT SHAKTI

PHASE 2: OPERATION STREAMLINE

Underpriveleged rural women were invited to Goods are distributed from represent hul and sell its products on a cash carrying and forwarding carry basis. Each shakti entrepreneuer covered agents to rural distributors. It around 6-10 villages with population of less than leveraged the rural wholesale 2000. In rural, hul tripled its coverage from 2.5 channel to reach markets lakh stores to 7.5 lakh stores. inaccessible by road. In a Initiatives like shakti vani program and ishakti particular village a few portal wholesalers would purchase the stock from a local distributor and distribute CARRYING AND REDISTRIBUTION SHAKTI stock to retailers in smaller FORWARDING STOCKISTS DISTRIBUTOR villages using local means of AGENTS transport

Reason for the steep fall in the profit of the company in the year 2004: The FMCG market in Urban INdia was attaining the saturation level and so companies had to expand its market in rural India. This resulted in the downfall in the profit of HUL. There was very aggressive advertising campaign by ITC in that year to set itself in the market this affected HUL who was enjoying the position of market leader and resulted in the fall in the profit of the company.

The opportunities are as follows:

Increasing per capita income is driving FMCG growth in India Indias consuming class is growing rapidly Changing consumption pattern: Per capita income of Indian customer is increasing and FMCG products are relatively elastic in nature hence the expected sale should increase. OPPORTUNITIES Huge Market Increasing per capital income Increasing consumption pattern Potential for making more impact of brand image. Coming in technology e.g. in water purifiers WEAKNESS Not able to compete with local competitor in the rural market Not focus on upper class population Pricing policy is not good