Unilever in India: Hindustan Lever's Project Shakti

Marketing FMCG to the Rural Consumer

Presented By2012123 2012140 2012178 2012211 2012224 2012226 Vaishali Sharma Chetan Dattatray Kale Srijit Kumar Hardikkumar Sojitra Pranav Haldar Pratik Prakash Rao

Project Shakti: It is all about empowerment

Born in December 2000, in a district called Nalgonda in the southern Indian state of Andhra Pradesh HULs Combined initiative of social responsibility, sustainability, and business strategy It was an initiative to enter the rural market efficiently along with a social objective of empowering rural women Overcame distribution challenge Created goodwill for HUL

How Does it Work?

HUL Follows following 4 distribution models

New initiatives

iShakti Portal

ShaktiMan

Why Shakti?
Empowerment Reach Connect Mutual Growth Increased income Increased consumption Product education

Project Shakti
Features
Advantages Drawbacks
For disadvantaged women Micro credit program Opportunity to make money and develop wealth Entrepreneurial customer relationship

Helps the communities and makes goods more affordable Increased the standard of living Created health education programs Access to the internet

Tough and time consuming to build a new market Hard to maintain huge workforce

Motivation

An initiative that combines social responsibility, sustainability, and business strategy Because competitors in urban areas were increasing and rural population was almost untouched by any organization

Relevance of Shakti
Grasped Unreached Rural Consumer Segment

Better Corporate Image

Individual Social Recognition

Sales Increase

Brand Promotion

Economic Value Addition by Shakti

Shakti grew 15% of rural turnover in 2004 HLL enjoys a healthier market share in Shakti market compared to non-Shakti market The people who were with Shakti had significant income On an average, INR 500 a month which is important for people living under poverty line It has created a vast team of local, credible, one to one endorsers of the company in the rural segment which otherwise would involve a large cost to the company It also created a channel for the company to enter the rural segment effectively

Social Value Addition by Shakti

It empowered the women which is the most marginal part of the rural society through which it helps to improve the living standard and catalyzed affluences in rural India It also enabled villagers to enhance their knowledge about personal hygiene and other basic values through Shaktivani It also provided a platform through iShakti to the villagers so that they can able to know about the knowledge regarding farming, e-governance etc. Shakti is an initiative that improves the standard of life in rural India by providing quality products It was seen as an effective measure of corporate social responsibility

Solution
Solution :Distribution Systems.

Direct coverage Indirect coverage Streamline

Poor Air, Rail And Road Accessibility

Reach

Size

Obstacles

Rural Markets Spread Over Large Areas & Variable Per Capita Income.

How did Project Shakti affect HLL? Pros & cons?

Rural Households: Increased By 15-20%

Rural sales contributed around 40% to HLLs overall sales

Project Shakti extended upto 70,000 villages Average Incomes of around Rs 700 - Rs 800 per month per person.

Doubled its direct coverage in rural India

New Venture Division identified rural India as a key source of growth and competitive advantage.
Access To rural markets would be the key differentiator among competing FMCG companies.

Project Shakti helped HLL

Extend its reach into untapped markets and to develop its brands through local influencers ( Shakti Entrepreneur)
HLL s net profit increased significantly due to improved efficiencies in the supply chain & exit from non - core business

Differentiators

SHG Partnerships: 1.Micro credit 2.Micro enterprise

To fulfil its social objective provide sustainable livelihood opportunities for under privileged rural women

As a manager why will you either scale up or scrap the project?

Scale up!!!
The problem: Administration (HR) and NOT the Marketing Revenue Generating Exercise Targets Bottom of Pyramid at early stage A Brand Building Exercise The highly effective One-to-One Sales than Sales through Channels In long term this will help company because of growing competition from local FMCG players The survival approaches taken by women entrepreneurs to increase the revenues will help company in understanding the business at grass root level An affordable way to tackle low media reach & high growth A CSR activity which brings revenues to the company (Companys Bill 2012) Of all, the best alternative available in terms of Cost-Benefit Analysis

Thus, does it make Business Sense?

Increase in HUL sales by 4% YOY(New Customers)

Investment in future
Rural India growing 15% every year By 2020 Rural markets set to match urban consumption levels Competitive advantage This structure is difficult for competitors to mimic

Who is following?
Philips Panasonic Laxmi Pumps FirstEnergy BP Uninor

Thank You