HELLO.. FIND IT OUT AND ULL BE LUCKY

1. Rural Marketing Strategies 1
HUL
A PROJECT REPORT ON
RURAL MARKETING STRATEGIES.
CONTEXT:- HUL
SUBMITTED TO
With Combined Efforts of:-
Kamakshi Bakshi
Neha Yadav
Bipin Khanna
Ankan Goshal
Sidhartha Maithy

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Acknowledgement
At the outset We would like to take the privilege to convey our gratitude to all
those who co-operated, supported, helped and suggested us as to how the
project could be completed. This project bears imprint of advices, from many
people who were either directly or indirectly involved in it.
We would also like to thank Mr. Mukesh Ranjan, Territory Sales Officer of HUL,
for his time and valuable inputs in the course of my research.

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Table of Contents
Topic TOPICS Page No.
No.
1. Introduction to Rural markets. 1
3. Current scenario of Rural Markets. 5
5. Introduction of Hindustan Lever 7
Limited.
6. Highlights of HUL Marketing Strategy. 8
7. Challenges faced by HUL. 9
8. Case on Wheel Strategies. 11
9. Relationship Marketing Case: HUL 15
10. Conclusion. 18
11. Recommendations. 19
12. Bibliography. 20

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Introduction to rural markets.
The rise of rural markets has been the most important phenomenon of the
1990’s, providing volume growth to all leading companies. Many
corporates have been trying to get a grip on rural market. But challenges
are many: how to make the product affordable, how to penetrate villages
with small populations, connectivity, communications, language barriers,
spurious brands, etc.
Marketers and manufacturers are increasingly aware of the burgeoning
purchasing power, vast size and demand base of the once neglected
Indian hinterland. Efforts are now on to understand the attitude of rural
consumers, and to walk their walk and talk their talk. The marketing mix
of many companies is now being tailored to rural tastes and lifestyles.

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Current Scenario of rural market.
Rural market - A world of opportunity
GONE are the days when a rural consumer went to a nearby city to buy
“branded products and services". Time was when only a select
household consumed branded goods, be it tea or jeans. There were days
when big companies flocked to rural markets to establish their brands.
Today, rural markets are critical for every marketer - be it for a branded
shampoo or an automobile. Time was when marketers thought van
campaigns, cinema commercials and a few wall paintings would suffice
to entice rural folks under their folds. Thanks to television, today a
customer in a rural area is quite literate about myriad products that are
on offer in the market place.
There is a need to differentiate the brand according to regional disparities.
The differentiation may not necessarily be in terms of product content. It
may also be in terms of packaging, communication or association with the
brand.
The brand has to be made relevant by understanding local needs. Even
offering the same product in different regions with different brand names
could be adopted as a strategy. At times it is difficult to pass on an
innovation over an existing product to the rural consumer unlike his urban

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counterpart - like increased calcium or herbal content or a germ-control
formula in toothpaste.
According to Mr. Mukesh Ranjan, of HUL, the four factors which
influence demand in rural India are - 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 survey, 95 per cent of total shampoo
sales in rural India is by sachets. The company had developed a direct
access to markets through wholesale channel and created awareness
through media, demonstration and on ground contact. This changed the
attitude of the villagers.

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Hindustan Unilever Limited.
Introduction.
Hindustan Unilever Limited (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. They endow the company with a scale of combined
volumes of about 4 million tonnes and sales of Rs.10,000 crores.
HUL is also one of the country's largest exporters; it has been recognised
as a Golden Super Star Trading House by the Government of India
HUL's brands - like Lifebuoy, Lux, Surf Excel, Rin, Wheel, Fair &
Lovely, Pond's, Sunsilk, Clinic Plus, 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 and culinary products.
They are manufactured in close to 80 factories. The operations involve
over 2,000 suppliers and associates.
HUL's distribution network, comprising about 7,000 redistribution
stockists, directly covers the entire urban population, and about 250
million rural consumers. HUL believes that an organization’s worth is
also in the service it renders to the community. HUL is focusing on health
& hygiene education, women empowerment, and water management. It is

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also involved in education and rehabilitation of special or underprivileged
children, care for the destitute and HIV-positive, and rural development.
HUL has also responded in case of national calamities / adversities and
contributes through various welfare measures, most recent being the
village built by HUL in earthquake affected Gujarat, and relief &
rehabilitation after the Tsunami caused
devastation in South India.
HUL STRATEGY.
The Rs 11,000 crore Hindustan lever (HUL) is formulating a new strategy
to expand its presence in India’s Rural markets. HUL is one among those
companies in the country that derives huge revenues (over 50%) from the
rural areas. But in the past one-year, owing to the failure of the monsoon
in many parts of the country farmers have registered a substantial fall in
incomes and consequently the purchasing power. For the company this
has resulted in a flat growth of these markets. Witnessing the flat sales
growth in rural areas. HUL has shifted its rural markets strategy. Earlier
each business division of the company dealt with the rural market on an
individual basis; now the shift in strategy means the company will deal
with rural markets as a single organization to achieve greater penetration
and sales. This approach is expected to lead to better cohesion, greater
push and deeper penetration which would eventually lead to better sales.
HUL officials say it is not enough that individual business divisions push
their own strategies for rural market; the company will have to work in
unison in order to achieve a balanced growth. Over the last three years the
company has embarked on an ambitious programme, Shakti. Through
Shakti, HUL is creating micro-enterprise opportunities for rural women,
thereby improving their livelihood and the standard of living in rural
communities. Shakti also includes health and hygiene education through

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the Shakti Vani Programme, and creating access to relevant information
through the i-Shakti community portal. The programme now covers about
50,000 villages in 12 states. HUL's vision is to take this programme to
100,000 villages impacting the lives of over a 100 million rural Indians..
Challenges faced by HUL in rural markets are:-
1) Dispersed Markets
Rural areas are scattered and it is next to impossible to ensure the
availability of a brand all over the country. Seven Indian states account for
76% of the country's rural retail outlets, the total number of which is
placed at around 3.7 million. HUL reaches their product in this dispersed
markets. Their coverage is around 85%- 90% in rural areas. District fairs
are periodic and occasional in nature. HUL prefer such occasions as they
allow greater visibility and capture the attention of the target audience for
larger spans of time. The fairs at Pushkar, Ujjain, Kota and Bulandshesher
are major sources of attention for the rural buyer but aren’t concentrated
unlike urban markets. Advertising in such a highly heterogeneous market,
which is widely spread, is very expensive.
2) No Reachibility
India's 6,27,000 villages are spread with 128 million households, the rural
population is nearly three times the urban. 700 million Indians may live in
rural areas, finding them is not easy. Many rural areas are not connected
by rail transport. At least 50 % of rural roads are poorly surfaced, many
are totally destroyed or severly damaged by the monsoon and remain
unserviceable, leaving interior villages isolated. Thus HUL faces
difficulty in reaching their products to potential rural consumers.

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3) Infrastructure in rural areas
The use of bullock carts look inevitable for many years into the future . Of
the 15 million carts in the country , 12 million are estimated to be in rural
areas ,transporting about 6 million tones of freight per year. Camel carts
operate in Rajasthan and Gujrat in both urban and rural sectors. In
Haryana, Punjab and Western Up, buffaloes also are used for carts. These
make the HUL’s product available in rural markets but very slowly as it
consumes time.
4) Prevalence of spurious brands and seasonal demand.
For HUL’s product there are a multitude of 'local variants', which are
cheaper, and, therefore, more desirable to villagers. Rural consumers are
cautious in buying and decisions are slow. They like to give a product a
trial and only after getting personal satisfaction do they buy it again.
Rural markets there is seasonal demands of products as there are crops
grown twice a year and people earn during this time and would like to
buy the products. The demand for HUL’s products during this period is
not high as rural consumers would not like to buy and store soaps and
detergent instead they would prefer consumer durables.

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`
WHEEL’s STRATEGIES
WHEEL in rural markets
Wheel was launched as an Economy segment brand by HUL. It was
launched in 1987. It belongs to Fabric wash Segment of HUL.
Wheel includes under it the following brands:-
1. Wheel Green bar
2. Wheel Active(Blue) bar
3.Wheel Green Powder
4.Wheel Active(Blue) Powder
Brand:- WHEEL, Logo is in shape of a wheel of cart i.e CHAKRA
Positioning of Wheel :- 'Best clean with less effort' .
It Cleans Effectively with lesser effort and lesser physical exertion. Wheel
makes a laborious chore like washing light and easy.
Difference :- ‘Tough on Dirt and soft on Hand.’
Wheel does not burn hands or harm clothes like some other detergents,
which contain a high percentage of soda. It has Active Radiant which

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makes it different from others. The consumers seek a solution to heavy
duty laundry, like bed sheets and curtains.
Developing on this insight, wheel sought to eliminate the trouble of tough
dirt or heavy-duty laundry. Mass market consumers have welcomed the
solution, making it the number one.
Effectiveness:- Wheel is effective as an Aspirational part at a low cost
for rural consumer.
Communicated by:- The stars of rural India promoted this brand through
Advertisements. Firstly it was advertised by a Hero who worked in the
serial Buniad and now it is communicated by famous film star
‘GOVINDA’.
Wheel is also advertised by Wall paintings in Rural areas.
Wheel is also promoted through vans demonstrating its usage and
functions to rural consumer.
Promotions:- Wheel aims at fulfilling the aspiration of this segment of
population.
Wheel follow certain promotion strategies they are;-
1. Buy Wheel and get Consumer offers as Get things free with the
product. Wheel offers to give ornaments, Gold, Scholarships for study,

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Household Utensils , White goods free with the product. It also give
chance to Get a new flat for yourself.
2. Wheel also follows a strategy to promote its products by giving an offer
to Buy 3 and get 1 free. This ensures the customer to buy more. This
forces consumer to decide and store the product for one month.
3. Wheel undergoes Rural Based Activities to promote its products.
Wheel offers demonstrations to people about How to use it? Near the
Wells and Bathing Ghaats.
Wheel also sponsors Film Shows in villages known as’Chitrahar’ to
advertise its products. The next is it also adopts Sampling operations in
villages of offering free samples to the consumers.
Pricing:- Wheel is priced at Rs 20 per Kg now. Previously , HUL priced
the blue variant of Wheel at Rs 22 per kg, just above the green variant
priced at Rs 18 per kg.
Wheel is now available even in smaller packs ranging between 1Rs – 5Rs.
The powder is available in packs of 1Rs, 2Rs, and 5Rs and Bar is
available for both 5Rs and 2Rs.
Expectation of rural areas:-Rural consumer needs smaller packs of
products as there is No Storage space in rural areas as in Urban and their
Disposable Income is also low. The Shopkeeper in rural areas provide
disposable packs by cutting the bigger pack into smaller one as needed by
the consumer.
Eg;:- The 2 Rs pack of Wheel powder is used by the rural consumer to
take it with them to the River and wash clothes. One pack cleans about 25
clothes. There is no additive required, it provides instant lather and is a
sensory Quo for Cleanlinees.
The Rural markets where there is Hard water that affects lather, they
prefer to use Wheel rather than an Oily Soap. Eg- In South and Western
India they prefer Wheel because there is Hard water.

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HUL
Wheel Jug Mug
Wheel Jug Mug was launched in the discount bars segment, by Hindustan
Lever Ltd (HUL) attempting to wade off competition that has emerged in
this price category in 2001. It is a dishwash bar in the discount segment.
PRICING:- Wheel Jug Mug was launched at a low price point of Rs 10
for a 400 gm bar. There was a competitive pricing strategy so far as the
discount dishwash bars segment is concerned.
“The strategic intent is to dominate the discount segment with Wheel Jug
Mug. The mix has the potential of becoming the branded market leader in
the dishwash category in smaller urban towns and rural India,” said Mr
Sanjay Behl, marketing manager, HUL.
The targeted consumer falls in the income level of under Rs 4,000 per
month salary, and thus price is integral to the brand strategy.
The launch of Wheel Jug Mug offered an acceptable consumer price-
value equation which is a bigger trigger to conversion in low per capita
income markets. “Wheel Jug Mug increased penetration through its
competitive price-value equation via-a-vis other available products
(brands/ proxy products) at that range.
It offer’s superior performance vis-a-vis the consumer’s current habit of
dosing detergent powder with ash to wash dishes. There are strongly
entrenched barriers to conversion amongst ash/ mud users, the mix had
performed superior at an acceptable cost vis-a-vis their practice for any
conversion to happen.
PROMOTIONS :-Incentivizing the trade channel by offering better
margins, market activation, visibility, consumer offers and such other
novel concepts are all part of the trade channel promotions
The company processed for defining new media vehicles to promote the
product in rural markets, where the only channel which is high on
visibility is Doordarshan.

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Wheel is promoted through a good communication strategy, market
activation to distribution, live product demonstrations, etc.
The marketing strategy is to exploit the full potential of the Wheel
equity into logical dish wash extension — given that consumer habit
revolves around using cheap detergent powders for washing dishes.
HUL is working on maximizing consumer value in every market segment
and this will be offered, as is appropriate, through the integrated brand
Wheel.
Relationship Marketing: The case of HUL.
Hindustan Lever had launched in 1999 its relationship marketing exercise
said to be the first of its kind in Rural India by a major FMCG
corporation. It is different from conventional campaign through media
hoardings, sponsored events, etc… It involves building relationships with
the consumers in rural areas through education programmes, home-to-
home contacts and cinema shows.
Aim:
The aim is to build sales for its personal care brands including that of
Pepsodent, its mass market toothpaste. In the toothpaste market the main
competition was between HUL and Colgate. According to the figures of
July 1999, Colgate had a 50 % share of the market (including all price
ranges ) down from 60 %. HUL had an overall share of 40 %. Pepsodent
was the fastest growing brand in its slot with annual growth rate of 22 %.

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Focus:
The objective in rural areas is to tap first time users. Statistics include low
usage patterns. In China, about 90% of the people use toothpaste
compared to 47% in India. About 27% use toothpowder and only 20 %
had visited a dentist. Even in the urban areas, where consumers have used
toothpaste right from childhood, the overwhelming majority uses
toothpaste only once in the morning whereas teeth required brushing most
at bed time.
Strategy:
1. Product: HUL introduced a 15 gm Pepsodent pack to target the first
time user. Also its up market brand Close up was introduced at retail
outlets in suburban and rural areas with a price tag of Rs. 3.50.
2. Campaign: The Operation Bharat Programme. HUL’s door-to-door
campaign in rural areas, concentrates on educating the consumer by
holding free dental camps. It also had dental education programme in
association with New York University. In India, there are scholarships
for students in dental colleges for collaborating in research at such
centers.
In Mysore, for instance, a dental check-up camp was conducted at all
schools ( where the students belong to comparatively lower SECs) in July
1999. In two years since 1996, some 12 lakh students have been covered
by such check-ups. There is Rural Hygiene Programme, a counterpart to

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the urban one. It has a target of reaching 20 crore people in 3,50,000
Villages.
3. Door-to-Door Sales: About 10 million homes in rural India have
been touched so far and target for that year was 12 million. The project
essentially involves selling a discounted personal care kit containing
mini-packs of shampoo, toothpaste, talcum powder and face cream. The
kit is sold at Rs. 15. Sold separately, the products would together cost
the consumer Rs. 27.
4. Cinema: After home-to-home contact and sales in villages during the
day. HUL concentrates on cinema time in the evenings. There are still
villages which do not have TV. Cinema shows are quite popular there.
Effects:
The strategy has highly encouraging results. The market has become
aware and responsive for personal care products. Fair and Lovely cream
was test launched in Maharashtra for a target audience. About a year
before the launch the use of the cream was less than 1 % of zero in many
illages. It shot up to 20% in one year. In the same market shampoo use
was about 6% and went up to 18% even if used once a week.

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CONCLUSION
Rural Market is Gold Mine which is paved with Thorns but HUL has
rightly tapped it. However there is a long way to go to capture all the
rural markets. In Rural markets company face various problems like
Underdeveloped People and Underdeveloped Markets, Lack of Proper
Physical Communication Facilities, Many Languages and Dialects,
Dispersed Market , Low Per Capita Income, Low Levels of Literacy ,
Different way of thinking of Rural Consumer, etc. HUL was the first
FMCG to tap rural markets and has generated huge revenues from rural
markets.
There were many other companies which entered rural markets and was
successful and gave competition to HUL some of them are Cavinkare
which launched Chik Shampoo for rural markets, ITC, Colgate, Nirma etc.
The key lies in understanding why, what and how of the rural consumer.
It would be a blunder to assume and apply the same principles as of
urban marketing. Rural marketing is completely different ball game – talk
about its consumer tastes, competition, demographics, communication
media, socio-cultural milieu, or the infrastructure. The spread and
heterogeneity further complicate matters. One can conclude that
Marketing in the urban and the rural areas is different as product may
vary in rural & urban area and the marketing strategies to market the
product is also different mainly the packaging and distribution strategy in
rural area is designed keeping in mind the rural consumer. It is therefore
apt to do a thorough groundwork before jumping headlong into the rural
markets.

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RECOMMENDATIONS
HUL, a major FMCG to enter rural markets, but not the only one now.
There are many companies which entered rural markets. HUL needs to
be competitive and keep on updating its strategy to have a foothold in
the Rural markets.
For India to maintain and improve economic growth it is imperative to
improve rural markets. Even today there is imbalance in rural
development. Government and Marketers have to undertake measures
to improve the Rural markets.

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BIBLIOGRAPHY
1. Rural & Agricultural Marketing book– Ramkishen.Y
2. Rural Marketing – C.S.G. Krishnamacharyulu and Lalitha
Ramakrishna.
3. Marketing Management (10th Edition) – Philip Kotler
4. Marketing Management (13th Edition) – Philip Kotler