Indian Agriculture

1. Unilever in India: Hindustan Lever’s Project Shakti –
Marketing FMCG to the rural consumer

2. Sources of Competitive Advantage
• Well-established brands
• Local manufacturing capacity and supply chain
• Vast sales and distribution system
- Large to small towns
- Urban to semi-urban
Profit Centres
• Detergents
• Personal Products
• Beverages
• Food
Competitive Environment
• Colgate – Palmolive
- Oral care, Personal Wash
• Procter & Gamble
- Hair Care, Fabric Wash, Female Hygiene
• Tata Oil Mills Company
• Godrej Goaps
Competitive Landscape

3. ORGANIZATIONAL FLOW
DELHI
GENERAL
SALES
MANAGER
Reigonal Sales
Manager 1
Area Sales
Manager (4 to
6)
Sales officer
Territory Sales
In-charge (7)
Stockists (6 to
10)
RSM 2 RSM 3 RSM 4
KOLKATA CHENNAI MUMBAI
Reigonal Sales Offices
Goods
Produced
Depot
Carrying and
Forwarding
Agent
Redistribution
Stockists
Wholesale
and Retail
Outlets
PRODUCT FLOW

4. Redesigning Sales and Distribution System (The Diamond Model)
Self-service stores
and retail chains (10%)
Profit-centre based sales teams
(Cultivate, penetrate and grow markets)
Direct distribution in rural markets (20%)
(Leveraging economies of scale)

5. ROADBLOCKS IN RURAL DISTRIBUTION
SIZE – Scattered rural markets and low per-capita consumption rates
ACCESSIBILITY – Inaccessible remote markets, Additional Costs
Poor electronic media reach and low literacy levels
Low brand consciousness, low consumption per capita for categories
a) Inaccessible Markets With High Business Potential
Appointing rural distributors
- Appointing star sellers (Purchasing stocks from RD)
- Distributing to retailers through local means of transport
Reach – Additional 220 million in 100,000 villages
b) Inaccessible Markets With Low Business Potential - ?

6. PROJECT SHAKTI
• Sales and distribution initiative delivering growth (extend reach to untapped markets)
• Communication initiative for brand building
• Micro-enterprise initiative for livelihood creation (partnering with recipients of micro-credit)
• Social initiative towards rural India
MACTS MODEL
HLL
SHG
federations
Constituent
SHGs
Retail
outlets/Shops
Issues – Low Income Generations, Federation Ownership

7. SHAKTI ENTREPRENEUR
• Member of SHG chosen from a village
• Borrowed money from SHGs and purchase HLL products
• Sell to retail outlets
Results – Significant income increase, responsibility sharing minimized
Issues – Lower profits/margins
Solution – Selling to both shops and customers
Advantages – Increased brand awareness, More earnings
PILOTING WITH WOMEN
• Target consumers for bulk of products
• Most marginalized societal group
• Valuing additional Income
• Greater access into homes of customers
• Improvements in health, hygiene and education(Social cause)
• Ability to devote time

8. PROJECT SUCCESS

9. Roadblocks
• Piling up of HLL stocks
• Paying back the loans
Rural Sales Promoter
Coach Shakti Entrepreneurs
Incentives for household visits
Incentives for specific brand sales
Negotiation with banks for allowing delay in installment repayment
Low Unit Price Packs (LUPs)
Innovative packaging solution for low income customers
Higher packaging costs per unit
Low Price point
Higher trade margins

10. SHAKTI VANI
Shakti Vani was a branded social communication program targeted at rural
community
Local women (Vani) was appointed as expert for health & hygiene
In Rural India, hygiene practices are below urban standards
She covers cluster of villages, school contact programs, SHG meetings
Pilot project in Andhra Pradesh and 2 other states, 2 programs in 2004
In long run it would be beneficial for the brand
Not restricted to Shakti villages

11. iSHAKTI
Initiative to extend benefits of technology
Dialogue interactive Software developed by HUL
Infrastructure was poor outside major cities
Dial up connection every day to update the website from central server
Scaling up is expensive; Partnered with AP Online (partly state owned
venture)
500 Kiosks were setup by 2005

12. SHAKTI
Current status
Over 1,60,000 Shakti entrepreneurs spread across 18 states. Project Shakti has
greatly impacted the livelihoods, confidence, and self-esteem of women with
enhanced skills and entrepreneurial mindsets.
https://youtu.be/n5u9jQXR-Is

13. Thank You