HUL RURAL 360 : CAPABILITY

CHANNEL DISTRIBUTION
MANAGEMENT
Submitted by :
Ankit Danda Roll no : 06
Hemanshu Kher Roll no : 13
Manish Sharma Roll no :16
Meenakshi Jaryal Roll no : 17
Ritika

RURAL VISION OF HUL

Project Shakti

Innovation in Business
Process
Changing Lives in Rural

Accessibil
ity

CHALLENGE- RURAL COVERAGE :

INTRODUCTION OF SHAKTI
In Direct
Coverage

Conventional
Distribution
Model

Direct
Coverage

Streamline

Turnover per market

Project Shakti was introduced in rural hinterland where
accessing the
market was difficult and market turnover was also less

HULS EARLIER APPROACH TO RURAL

COVERAGE

Distributor

Factory

Depo
t

Trade
Within
Town

INDIRECT COVERAGE
Village 3

Village 4
Stockist

Village 2

Village 5
Village 1

HULS CURRENT FLOW OF GOODS: RURALModel Shakti

Distributor

Factor
y

Depo
t
Shakt
i

Home To
Home

Direct
Coverag
e

Margin
al
Outlets

STREAMLINE

Star seller

Star seller

Distributor

Star seller

THE SHAKTI PROGRAM

THE MODEL
Underprivileged rural women are appointed as Shakti
Entrepreneurs (SEs) and trained to become sellers of HUL
products
Process of set-up
Long gestation,
involvement of
NGOs etc.

Underprivileged women

Dedicated Field
Force to train,
motivate and handhold

PROJECT OBJECTIVE

Providing sustainable
income generation
opportunity to under
privileged Rural women

Educating them about

Health & Hygiene to uplift
standard of living of rural
people

ELEMENTS OF PROJECT - SHAKTI

Hindustan Unilever Limited (HUL) to tap this
market conceived of Project Shakti.
An ambitious venture by HLL to spur growth
and penetration of its products in rural India
while changing lives and boosting incomes
This project was started in 2001 with the aim
of increasing the companys rural distribution
reach as well as providing rural women with
income-generating opportunities.
This is a case where the social goals are
helping achieve business goals.
Sales and Distribution initiative delivers
growth
Communication initiative build brand
Micro-enterprise initiative creates
livelihoods
Social initiative improve standard of living

HOW IT WORKS?
Villages with a population of about 2000-3000 are
selected.
Personnel from HUL approach SHGs.
Selection of the Shakti Amma.
HUL vouches for Shakti Ammas with banks from credit.
One Shakti entrepreneur is appointed for one village &
villages that are about 2 kilometres apart from her
village.
The Shakti dealer places initial orders worth
Rs.15000(principal customer of HUL
The Shakti dealer organizes a Shakti Day in the
village(display of products & free gifts)

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

PRICING AND PACKAGING

Rural consumers are price sensitive

Sachets and small packs of premium products.
Price doesnt exceed Rs.5 per sachet.
Lux at Rs.5,
Lifebuoy at Rs.2,
Surf Excel sachet at Rs.1.50,
Pond's Talc at Rs.5,
Pepsodent toothpaste at Rs. 5,
Fair & Lovely Skin Cream at Rs.5,
Pond's Cold Cream at Rs.5,
Brooke Bond Taaza tea at Rs.5.

DISTRIBUTION

It is the combination of the 3 ways:

Door to door selling (11% margin on sales)
Sells from own home (11% margin on sales)
Retailers (3% margin)
averages sales :
Rs. 10,000 - Rs. 15,000/month,
profit - Rs.1,000 per month

STATES COVERED BY PROJECT SHAKTI

THE SHAKTI PROGRAM

10%
50%
40%

Gener
al

OBC
SC/ST

50 % of SEs are from Backward

Class

FLOW OF GOODS &

MONEY

Project Shakti Consumer Marketing

channel
HLL
(Manufact
urer)

Shakti
Entrepren
eurs

Retailers

SHG

Advantages:
Access to untapped market

Consume
rs

Integrated Multichannel
System

Drawback:
Advantages:
Income Generated very small
Responsibility was not shared
No sense of belongingness
among many
Income was not shared

OVERVIEW - SHAKTI DMS

Rural outlets to get servicing matching urban outlets
Empowering Shakti
Amma
to
provide
better
servicing
to her outlets
Visibility into outlets, sales, schemes, and stocks
enabling precise planning and execution, leading to
channel growths
Change in Shakti Amma ways of working
Shakti Amma will electronically confirm receipt of
goods from RS
Shakti Amma
will use
mobile
application
to do
sales call and
record sales at outlet pack level
SE will use outlet history, current stocks, schemes, and
net rate information to drive sales

THE ROLE OF MICRO FINANCE

The self-help group
Grameen Bank: mutual thrift societies of village
women
A rapidly spreading movement: 6 million groups in
India
70% of rural households in AP
A micro-finance revolution
8 million families have received micro-credit
76% of micro-credit recipients have crossed the
poverty line
95% of micro-credit recipients are women
Effectiveness depends on opportunities for microenterprise

FUTURE PLANS

Project Shakti plans to extend to the states of West

Bengal, Punjab and Rajasthan.
Partnership with other non-competitor companies to
sell their products through the Shakti network.
Nippo, TVS Motor for mopeds, insurance companies
for LIC policies.

ISSUES
Low margins
Difficulty in acquiring finance
transportation
Low disposable income

(dependence on monsoon)

Profile of Indian rural Economy

Sector
Agriculture
Manufacturing
Service
Trade
Others

%
78.0
7.1
5.8
4.4
4.3

WHY ALL THESE PROGRAMS

To take people aware

To increase the consumption.
To increase the income.
To increase behavior in
Awareness & living standard Lifestyle
Self consciousness.

WHY SHAKTI???

It was soon felt that HUL's sales and distribution

system which had protected it from competitors
would be soon replicated by its rivals and to
maintain its edge, the company had to increase its
reach beyond the urban markets
Carrying and forwarding agents(CFA)
more than 70% of India's population lived in
villages and made a big market for the FMCG
industry

BENEFITS

Earnings about 7%, after 3% goes towards

principal and interest
Improves her per-capita income by about 50% to
100%
100,000 entrepreneurs by 2010

CHALLENGES WITH PROJECT SHAKTI

Differential pricing for rural costumers purchasing

from SHG
Two different channels of same company competing
on PRICE.
Undermining local retailers
Negligence of flooding of counterfeit products into
market place

PROGRAMMES UNDERTAKEN

SHAKTI VANI
SHAKTI ENTREPRENEUR
iSHAKTI COMMUNITY PORTAL

Shakti Vani
Social communication anchored on brands
health and hygiene
womens empowerment
Village women are recruited as Vanis and trained to
communicate
Vani audience: key opinion leaders, schools, SHG
meetings, other village gatherings
Specially designed communication material
easy-to-carry kit: flip-charts, leave-behind posters,
banners
content developed after in-depth understanding of local
context

Hand-wash demo in schools

SHAKTI ACTIVITIES

Free Health Camps in Shakti Village

FREE DENTAL CAMPS IN

PROJECT SHAKTI

i - SHAKTI

In 2010, they started i-Shakti an IT-enabled

community portal across the state of Andhra
Pradesh. i-Shakti is designed to give rural people
access to information via a network of village
kiosks containing internet linked computers run
by entrepreneurs.
Villagers can access free content, developed in
their local language, or email questions on a wide
range of topics, including Unilever products, health
and hygiene, agriculture, education, finance and
employment.

I SHAKTI Contd
Rural community portal that creates access to
information
Villagers can register as users and surf content areas:
Agriculture, health, veterinary services, education,
employment opportunities, education, personal
grooming, entertainment, games
All content backed by local language voice-over
On all content areas, users can pose queries
1,000 kiosks in AP, partnership with government

APPEARANCE OF i SHAKTI KIOSKS

OTHER ACTIVITIES
To improve the business skills of the SHG women,
extensive training programmes are being held.
Workshops have already covered a large number of
Shakti Entrepreneurs in Andhra Pradesh, Karnataka,
Gujarat, Madhya Pradesh, Uttar Pradesh, Tamilnadu,
Chattisgarh and Orissa.
As part of their training programme, all HUL
Management Trainees spend about 4 weeks on
Project Shakti in rural areas
The factories that HUL continued establishing in lessdeveloped regions of the country have been engaged
in developing rural market in adjacent villages.
These factory-centered activities mainly focus on
training farmers, animal husbandry, generating
alternative income, health & hygiene and
infrastructure development.

CONCLUSION

Project Shakti is enabling families to live with dignity

and in better health & hygiene, education of the
children and an overall betterment in living
standards.
it creates a win-win partnership between HUL and
the rural consumers for mutual benefit and growth.