Hindustan Unilever [Rural marketing]<br />Product Mix of HUL.<br />HUL is India's largest marketer of Soaps, Detergents and Home Care products. It has the country’s largest Personal Products business, leading in Shampoos, Skin Care Products, Colour Cosmetics and Deodorants. HUL is also the market leader in Tea, Processed Coffee, branded Wheat Flour, Tomato Products, and Ice cream, Soups, Jams and Squashes.<br />Home & Personal Care<br />• Personal Wash• Fabric Wash• Home Care• Oral Care• Skin Care• Hair Care• Deodorants & Talcs• Colour Cosmetics<br />Foods<br />• Tea• Coffee• Branded Staples• Culinary Products• Ice Creams• Modern Foods ranges<br />Personal Wash<br />Soaps<br />Some of the big brands in Soaps in rural markets are Lifebuoy, Lux, Liril, Hamam, Breeze, Dove, and Rexona.<br />1) Lifebuoy.<br />Making a billion Indians feel safe and secure by meeting their health and hygiene needs is the mission of Lifebuoy. The world's largest selling soap offers a compelling health benefit to the entire family. Launched in 1895, Lifebuoy, for over a 100 years, has been synonymous with health and value The brick red soap, with its perfume and popular Lifebuoy jingle, has carried the Lifebuoy message of health across the length and breadth of the country. The 2002 and 2004 relaunches have been turning points in its history. The new mix includes a new formulation and a repositioning to make it more relevant to both new and existing consumers. Lifebuoy is now milled toilet soap with a new health fragrance and a contemporary shape. The new milled formulation offers a significantly superior bathing experience and skin feel. This new mix has registered conclusive and clear preference among existing and new users.<br />The new Lifebuoy is targeted at today's discerning housewife with a more inclusive "family health protection for my family and me" positioning. Lifebuoy has made a deliberate shift from the male, victorious concept of health to a warmer, more versatile, more responsible benefit of health for the entire family. At the upper end of the market, Lifebuoy offers specific health benefits through Lifebuoy Gold and Plus. Lifebuoy Gold (also called Care) helps protect against germs which cause skin blemishes, while Lifebuoy Plus offers protection against germs which cause body odour<br />2) Lux.<br />Lux stands for the promise of beauty and glamour as one of India's most trusted personal care brands. Lux continues to be a favorite with generations of users for the experience of a sensuous and luxurious bath. Since its launch in India in the year 1929, Lux has offered a range of soaps in different sensuous colors and world class fragrances. 2003 saw one of the biggest milestones in the history of Lux. From being just a beauty soap of film stars, Lux recognized the need for a compelling message about beauty that would resonate with women of today. Lux is available in four different variants – Exotic flower petals and Jojoba Oil, Almond Oil and Milk Cream, Fruit Extracts and Honey in Milk Cream and Sandal Saffron in Milk Cream.<br />3) Liril.<br />For 28 years, freshness has been clearly identified with one name – Liril. Liril expressions have always set trends whether it is a bathing beauty in a waterfall or "Oof Yu Maa!" The energy and excitement levels associated with the brand have to be experienced to be believed with changing times. Presently, Liril Soft Aloe Vera & Lime, Liril Icy Cool and Liril Orange splash are making waves.<br />4) Hamam.<br />When it comes to soaps, Hamam is considered to be the most reliable option. Launched in 1934, Hamam has traditionally been a soap that takes care of your skin in a natural way. According to a research conducted By Indica Research in May 2003, 78% of Doctors in Tamil Nadu recommend Hamam. Besides being a perfectly balanced soap, Hamam takes on a very modern and trendy look. Hamam's enhanced fragrance now provides a longer lasting freshness. The new attractive oval shaped Hamam comes in an attractive and modern packaging. The ingredients that are used in Hamam - Neem, Tulsi and Aloe Vera - by themselves have great therapeutic values. Hamam, the brand is very true to its tagline that says, "Everything in life is about balance".<br />5) Breeze.<br />Breeze Scent Magic is the soap which fulfills the aspirations of women of rural India. Breeze has offered them 'beauty at an affordable price', making them look and feel beautiful. Research and consumer visits have shown that the desire for great fragrance featured highest in the daily beauty regime of discount-soap users. Breeze explores this through the proposition of 'scent in a soap-Scent ka kamaal, ab sabun mein' and explicitly propagates the brand promise of the "Hameshaa kuchh extra". It delivers all this and still matches consumer's needs in terms of price and quantity offered, staying true to its word.<br />Breeze has been enriched with 19 special scent oils, which ensure that one smells good fora long time through the day. Introduced in variants like Scent Magic, Scent Magic Lime,and Scent Magic Sandal, Breeze strives towards fulfilling the company's mission of beinginventive in creating value.<br />6) Dove.<br />Dove soap, which was launched by Unilever in 1957, has been available in India since1995. It provides a refreshingly real alternative for women who recognize that beauty is notsimply about how you look, it is about how you feel.<br />The skin's natural pH is slightly acidic 5.5-6. Ordinary soaps tend to be alkaline, with pHhigher than 9. Dove is formulated to be pH neutral (pH between 6.5 and 7.5) and to be mildon skin. This makes it suitable for all skin types for all seasons. While Dove soap bar iswidely available across the country, Dove Body Wash is available in select outlets. Dove isnot in much use in rural because it is very costly i.e. Rs.40. But it is made available to ruralconsumers if demanded through Urban Channels.<br />7) Rexona.<br />Rexona is one of India's pioneer brands in family soaps. Launched in 1947, it was positioned as a natural skin care soap to give silky, glowing skin. Since then the product has been constantly improved to keep up with the expectations of the consumers. Rexona is much in demand in rural markets of Southern India. In 1989 coconut was introduced in Rexona for the first time to strengthen the overall skincare appeal of the brand. Rexona has now been relaunched with cucumber extracts, in addition to coconut oil and moisturizing milk cream. Its creamy lather purifies the skin, leaving it clear and flawless. It has also been enhanced with a perfume that lingers well after a bath.<br />Fabric Wash<br />The Indian fabric wash market consists of synthetic detergents (comprising bars, powder and liquids) and oil-based laundry soaps. Some of the big brands in Detergents are Surf Excel, Surf, Rin, Wheel (the number one detergent brand in India, and HUL's largest), 501, Sunlight.<br /><ul><li>Wheel.</li></ul>Wheel is India's number one detergent brand. Launched in 1987, it cleans effectively with lesser effort, making a laborious chore like washing light and easy. Moreover, Wheel does not burn hands or harm clothes like some other detergents, which contain a high percentage of soda. Ever since its relaunch in 2001, with the new positioning of 'best clean with less effort', Wheel has been growing strongly. Research showed that 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 consumer have welcomed the solution, making it the number one<br />Wheel includes under it the following brands:-1. Wheel Green bar2. Wheel Active (Blue) bar3. Wheel Green Powder4 .Wheel Active (Blue) Powder<br /><ul><li>Surf excel.</li></ul>A pioneer in the Indian detergent powder market, Surf Excel has constantly upgraded. Today Surf Excel offers outstanding stain removal ability on a wide range of stains. This means that mothers now have the freedom to let their kids experience life without worrying about stains. Surf Excel quick wash is powered with a path-breaking technology-it reduces water consumption and time taken for rinsing by 50%. It is a significant benefit, given the acute water scarcity in most of India. Surf Excel is available in 3 variants: Surf Excel Blue, Surf Excel Quick Wash and Surf Excel Automatic. So whatever be the need, Surf Excel hai na.<br />3) Rin.<br />Every Indian woman will tell you how her clothes dazzle with the power of Rin. The lightning flash mnemonic with the famous baseline 'Whiteness Strikes with Rin' is remembered till date. The dazzling flash of light has become a synonym with the brand, ever since this iconic brand was launched in 1969. With the launch of 'Rin Advanced', the brand has elevated its relationship with its consumer to a higher plane, reaffirming their faith in the brand, by giving them superior and ingredients are all well linked to cue the overall synergy. The range comes in premium packaging and design. The accent is on "It knows you, and hence knows exactly what your hair needs".<br />2) Clinic plus.<br />Clinic plus Health shampoo was launched in India in the year 1987. It is India's largest selling shampoo, offering the five most important hair health benefits: strengthens weak hair, prevents hair breakage, softens rough dry hair, shine for thick and healthy hair, and contains anti-dandruff ingredient. The franchise also includes Clinic All Clear Total, first introduced in 1996. It is a dual shampoo – it not only fights the last dandruff flake, but also adds back lost nutrients to make hair healthy and beautiful. Clinic All Clear Total is a dandruff solution for everyday use. It is also available in 1Rs Sachets for convenience of rural consumers.<br />3) Pepsodent.<br />Pepsodent, launched in 1993, was the first toothpaste with a unique anti-bacterial agent to address the consumer need of checking germs even hours after brushing. Pepsodent packs included a Germ Indicator in February-May 2002, which allowed consumers to see the efficacy in fighting germs for themselves. As a follow-up, in October 2002, Pepsodent offered Dental Insurance to all its consumers to demonstrate the confidence the company has in the technical superiority of the product. Pepsodent connects directly with kids and their parents. Pepsodent has always worked in the direction of an overall awareness of dental health. The relaunch campaign in October 2003 widened the context to "sweet and sticky" food and leveraged the truth that children do not rinse their mouths every time they eat, demonstrating that this makes their teeth vulnerable to germ attack. Pepsodent's most recent campaign aims at educating consumers on the need for germ protection through the night. Pepsodent also includes a range of toothbrushes<br />4) Close up.<br />Close-up is the original youth brand in India – the first brand targeting youth in the oral care market. Ever since its launch in 1975, Close-up has broken every rule in the book on how toothpastes should behave! Close-up was the first gel toothpaste to be launched in India and has led the gel toothpaste segment ever since. In 2004, Close-up was relaunched with a bang. And this time it was packed with the power of Vitamin Fluoride System – a powerful mix of Vitamins, Fluoride, Mouthwash and Micro whiteners, the perfect combination of ingredients for fresher breath and stronger, whiter teeth. Close-up is now the first Gel toothpaste with Fluoride in the Indian Market! Close-up also includes toothbrushes<br />Skin care<br />The products included in skin care rang are as follows:-<br /><ul><li>Fair n lovely.</li></ul>A woman's passion for beauty is universal and catering to this strong need is Fair & Lovely. Based on a revolutionary breakthrough in skin lightening technology, Fair & Lovely was launched in 1978. Fair n lovely is also very popular among the Rural woman’s. It is selling well in rural areas. Fair & Lovely is formulated with optimum levels of UV sunscreens and Niacin amide that is known to control dispersion of melanin in the skin. It is a patented and proprietary formulation, which has been in the market for 25 years. The UV components of the formulation are scientifically chosen and used at optimum levels to provide wide spectrum protection against UV rays of the sun. Specifically, this patented formulation offers a high UVA protection, which is more relevant to Asian skin than plain SPF protection creams sold in the West. All the active ingredients in the Fair & Lovely formulation function synergistically to lighten skin colour through a process that is natural, reversible and totally safe. The brand today offers a substantive range of products, including Ayurvedic Fair & Lovely Fairness cream, Fair & Lovely Anti-Marks cream, Fair & Lovely Oil control Fairness Gel, Fair & Lovely for Deep Skin and Fair &<br />Lovely Fairness Soap. The latest has been the Perfect Radiance, a complete range of 12 premium <br />Skin care solutions from Fair & Lovely.<br />2) Ponds.<br />Pond's has been synonymous with skin care in India since1947.The impressive track record of Pond's began when Thereon the Pond, a pharmacist from Utica New York, introduced 'Pond's Golden Treasure' in 1846, a witch-hazel based wonder product. In 1914, Pond's Cold Cream and Vanishing Cream marked the brand's evolution to a beauty icon. In 1955 Pond's extract Company merged with Chesebrough Manufacturing and in 1987 Unilever purchased Chesebrough-Pond's. By this time the Pond's brand had built up a powerful international presence. From one man in a tiny home-made laboratory, to today's state of the art R&D facilities led from Bangkok, Mumbai, New York and Tokyo, the Pond's promise has remained the same across countries - to deliver products that make a real difference to women's skin and the way they live their lives.<br />Foods and Beverages<br />The food and beverages includes the following range of products:-<br />1) Brooke bond.<br />In a nation of tea drinkers, the one brand that signifies tea in India is Brooke Bond - <br />ever since the launch of Brooke Bond Red Label in 1903. It is India's single largest tea brand. It has touched millions of consumers with a range of tea offerings appealing to the diversity of their tastes. It has the strongest foothold amongst any of the tea brands in India and touches the homes of over 500 million consumers. To de-commodities the tea category, Brooke Bond is focusing its efforts on building four powerful sub-brands, namely, Brooke Bond Taj Mahal, Brooke Bond Red Label, Brooke Bond Taaza & Brooke Bond 3 Roses. The range offers a full variety of propositions as well as price points to appeal to various sections. The tea is very popular in rural markets.<br />2) BRU coffee.<br />Bru, launched in 1969, created history in the first year of launch by growing to a record market share of 21%. Ever since, it has grown from strength to strength.<br />Bru has been instrumental in virtually creating the entireInstant Coffee category as it exists today. It has been at the forefront of most innovations inthe Instant Coffee category - whether in coffee-chicory blends, refill packaging, vendingoperations, or more recently the Low-unit-price packs. Bru coffee is very famous in ruralmarkets of south. The Bru franchise also includes the Bru Roast & Ground, India's mostpopular Roast & Ground Coffee brand, and Bru Malabar Roast & Ground which isavailable in select geographies.<br />3) Kissan.<br />The Kissan range consists of ketchup and other sauces, jams, squashes and ready-to-drink products. For mothers and children, Kissan is today one of the most trusted brands in the country. Kissan products also sell in rural markets. Kissan continues to be a pioneer in the categories that it operates in.<br />4) Knorr Annapurna Salt.<br />Knorr Annapurna Salt, first introduced in 1997, was relaunched in2001 with a breakthrough technology, patented in India and several other countries. This technology helps encapsulate iodine with salt. It thereby prevents the loss of iodine from salt, either during its storage and transportation or cooking. Iodine deficiency is a serious health issue in India. About 278million people are at risk of iodine deficiency disorders. Iodine deficiency not only leads to goiter, but also has an impact on the mental development of growing children. The International Council for Control of Iodine Deficiency Disorders (ICCIDD) has endorsed Knorr Annapurna Salt. Knorr Annapurna has also taken initiatives to educate consumers about the benefits of iodine and its effect on the mental development of growing children.<br />In 2001, it was fortified with iron and vitamins. The benefit is very relevant because over 60% of <br />women and children are iron deficient. The brand is doing well in Rural market<br />Pricing strategy of HUL.<br />Hindustan Lever has taken many initiatives over the decades to create markets in the rural hinterlands. By marketing relevant products, at affordable prices. HUL aims at providing rural consumer a price which is acceptable and affordable by them. HUL adopts low unit pricing as it targets rural consumer. It sells products mostly in the price range of 1Rs –10Rs. HUL has adopted a strategy which offers rural consumer Volume point to Price point packages mostly priced at Rs 10 as it is better connected to Rural consumer. The strategic price point of HUL is Rs5 and Rs 10 and the price at these points are not hiked even with an increase in price of products. If products have to come up the order in the rural purchase hierarchy, they have to be affordable. If rural India today accounts for about half of detergents sales, it is because HUL has developed low-cost value-for-money branded products, like Wheel. The company has also taken initiatives to create markets even for apparently premium products, by offering them in pack sizes, like sachets, whose unit prices are within the reach of rural consumers. Pricing helps in synchronizing the expenditure of the Indian consumers with his daily stream of income. For example, initiated in the 1980s, sachets (Rs.2, Re.1, or 50 paisa) today constitute about55% of Hindustan Lever's shampoo sales. With media reach gradually increasing, rural consumers today, where the media has its footprints, share the same aspirations with their urban counterparts. HUL has responded to the trend with low unit price packs of even other products as follows;-<br />Lux at Rs.5,<br />Life buoy at Rs 2<br />Ponds cold cream at Rs 5<br />Promotion strategies of HUL.<br />HUL follows various media mix of conventional and Non-conventional media for promotions of its products in the rural markets. Hindustan Lever has taken initiatives to circumvent the limitation in communication channels, by innovatively leveraging non-conventional media. Among them the most commonly used forms of media by HUL are wall paintings, cinema vans, weekly markets (haat), fairs and festivals etc. The various forms include following:-<br /><ul><li>Advertisements through T.V. and Radio which provides a wider coverage of consumers.
Wall painting that are used to capture the attention of the audience and is an economic medium. It uses wall paintings for its products as Wheel, Lifebuoy etc. The wall painting of Lifebuoy is displayed.
Cinema theatre’s and vans as rural consumers fascinated by cinema and it has great impact on them and a wider reach. The cinema vans show popular movies, interspersed with products advertisements
Puppet shows where the puppets are used to communicate the ideas and values to rural consumer and is an inexpensive medium.
Folk theatre is used for informing and educating people about some products through Tamasha’s, skits and plays.
Weekly markets, fairs and festivals are parts and parcel of rural life. They give an opportunity to address consumers, spread over many tiny hamlets, at one location.
Demonstrations are done about products at various occasions which are used to demonstrate product benefits and also sell such products. Such demonstrations have played significant role in creating, for example, the detergents market in rural India. In recent times, such demonstrations are being deployed by HUL to illustrate how visible clean is not hygienic clean, and how using soap is essential to prevent easily avoidable infections. Communication through fairs and festivals are backed by direct consumer contact. For Eg: in 1998-99, Hindustan Lever implemented a major direct consumer contact, called Project Bharat, which covered 2.2 crore homes. Each home was given a box, at a special price of Rs.15, comprising a low unit price pack of shampoo, talcum powder, toothpaste and skin cream, along with educational leaflets and audio-visual demonstrations. The project has helped eliminate barriers to trial, and has strengthened salience of both particular categories and brands. In 2002, Hindustan Lever has launched a similar large-scale direct contact, called Lifebuoy Swasthya Chetana, which already covers 70 million people in 18,000 villages of 8 states. The project is intended at generating awareness about health and hygiene practices and specifically how a simple habit of washing hands is essential to maintaining good health. The initiative involves interaction with students and senior citizens who act as change agents or opinion leaders that influence rural consumer. The programme has as of now covered about 15000 villages in 8 states - Uttar Pradesh, Bihar, Jharkhand, West Bengal, Orissa, Madhya Pradesh, Chattisgarh and Maharashtra; it has already touched about 70 million people, imparting hygiene education to over 25 million children.</li></ul>Distribution strategies of HUL.<br />In rural India particularly, availability determines volumes and market share, because the consumer usually purchases what is available at the outlet, influenced very largely by the retailer.<br />Hindustan Lever Limited has a distribution network which is one of their key strengths that helps them reach their products across the length and breadth of this vast country.<br />To meet the ever-changing needs of the consumer, HUL have set up a distribution network that ensures availability of all its products, in all outlets, at all times. This includes, maintaining favorable trade relations, providing innovative incentives to retailers and organizing demand generation activities among a host of other things.<br />Therefore, over the decades, Hindustan Lever has progressively strengthened its distribution reach in rural India, which today has about 33 lakh outlets. Direct rural distribution in Hindustan Lever began with the coverage of villages adjacent to small towns. The company's stockiest in these towns were made to use their infrastructure to distribute products to outlets in these villages. But this distribution mode could only be extended to villages connected with motor able roads, and it could cover about 25% of the rural population by 1995.<br />The evolution of HUL's Distribution Network:-<br />The first phase of the HUL distribution network had wholesalers placing bulk orders directly with the company. Large retailers also placed direct orders, which comprised almost 30 per cent of the total orders collected. The company salesman grouped all these orders and placed intent with the Head Office. Goods were sent to these markets, with the company salesman as the consignee. The salesman then collected and distributed the products to the respective wholesalers, against cash payment, and the money was remitted to the company.<br />The focus of the second phase, which spanned the decades of the 40s, was to provide desired products and quality service to the company's customers. In order to achieve this, one wholesaler in each market was appointed as a "Registered Wholesaler," a stock point for the company's products in that market. The company salesman still covered the market,<br />canvassing for orders from the rest of the trade. He would then distribute stocks from the Registered Wholesaler through distribution units maintained by the company. The Registered Wholesaler system, therefore, increased the distribution reach of the company to a larger number of customers.<br />The highlight of the third phase was the concept of "Redistribution Stockiest" (RS) who replaced the RWs. The RS was required to provide the distribution units to the company salesman. The RS financed his stocks and provided warehousing facilities to store them. The RS also undertook demand stimulation activities on behalf of the company.<br />The second characteristic of this period we realized that the RS would be able to provide customer service only if he was serviced well. This knowledge led to the establishment of the "Company Depots" system. This system helped in transshipment, bulk breaking, and as a stock point to minimize stock-outs at the RS level.<br />In the recent past, a significant change has been the replacement of the Company Depot by a system of third party Carrying and Forwarding Agents (C&FAs). The C&FAs act as buffer stock-points to ensure that stock-outs did not take place. The C&FA system has also resulted in cost savings in terms of direct transportation and reduced time lag in delivery. The most important benefit has been improved customer service to the RS. The role performed by the Redistribution Stockiest has also undergone changes over the years. Financing stocks, providing manpower, providing service to retailers, implementing promotional activities, extending indirect coverage, reporting sales and stock data, screening for transit damages are some of the functions performed by the RS today. HUL has grown manifold over the years. In the process, the number of factories and the number of SKUs too have increased. In order to rationalize the logistics and planning task, an innovative step has been the formation of the Mother Depot and Just in Time System (MD-JIT). Certain C&FAs were selected across the country to act as mother depots. Each of them has a minimum number of JIT depots attached for stock requirements. All brands and packs required for the set of markets which the MD and JITs service in a given area are sent to the mother depot by all manufacturing units. The JITs draw their requirements from the MD on a weekly or bi-weekly basis. At present, HUL's products, manufactured across the country, are distributed through a network of about 7,000 redistribution stockiest covering about one million retail outlets. The distribution network directly covers the entire rural population.<br />In addition to the ongoing commitment to the traditional grocery trade, HUL is building a special relationship with the small but fast emerging modern trade. Our scale enables us to provide superior customer service including daily servicing, improving their range availability whilst reducing inventories. We are using the opportunity of interfacing more directly with our consumers in this retail environment through specially designed communication and promotions. This is building traffic into the stores while yielding high growth for our business. An IT-powered system has been implemented to supply stocks to redistribution stockiest on a continuous replenishment basis. The objective is to catalyse HUL’s growth by ensuring that the right product is available at the right place in right quantities, in the most cost-effective manner. For this, stockiest have been connected with the company through an Internet-based network, called RS Net, for online interaction on orders, dispatches, information sharing and monitoring. RS Net covers about 80% of the company's turnover. Today, the sales system gets to know every day what HUL stockiest have sold to almost a million outlets across the country. RS Net is part of Project Leap, HUL's end-to-end supply chain, which also includes a back-end system connecting suppliers, all company sites and stretching right up to stockiest. RS Net has come as a force multiplier for HUL Way, the company's action-plan tomaximise the number of outlets reached and to achieve leadership in every outlet, by unshackling the field force to solely focus on secondary sales from the stockiest to retailers and market activation. HUL Way has also led to implementing best practices in customer management and common norms and processes across the company. Powered by the IT tools it has further improved customer service, while ensuring superior availability and impactful visibility at retail points. HUL, has been at the forefront of experimenting with innovative methods to reach the rural consumer.<br />1) Indirect coverage<br />Under the Indirect Coverage (IDC) method, company vans were replaced by vansbelonging to Redistribution Stockiest, which serviced a select group of neighboringmarkets.<br />2) Operation Harvest<br />The reach of conventional media and, therefore, awareness of different products in ruralmarkets is weak. It was also not always feasible for the Redistribution Stockiest to cover allthese markets due to high costs involved. Yet, these markets are important sincegrowth opportunities are high. Operation Harvest endeavored to supplement the role of conventional media in rural India and, in the process, forge relationships and loyalty with rural consumers. Operation Harvest also involved conducting of product awareness programmes on vans.<br />3) Cinema van operations<br />These are typically funded by the Redistribution Stockiest. Cinema Van Operations have films and audio cassettes with song and dance sequences from popular films, also comprising advertisements of HUL products.<br />4) Single Distribution Channel<br />For rural India, HUL has established a single distribution channel by consolidatingcategories. In a significant move, with long-term benefits, HUL has mounted an initiative,Project Streamline, to further increase its rural reach with the help of rural sub-stockiest. Ithas already appointed 6000 such sub-stockiest. As a result, the distribution network directlycovers about 50,000 villages, reaching about 250 million consumers.<br />Project Shakti<br />Hindustan Lever is implementing Project Shakti since 2001, whereby SHGs are being offered the option of distributing relevant products of the company as a sustainable income-generating activity. The model hinges on a powerful win-win relationship; the SHG engages in an activity which brings sustainable income, while Hindustan Lever gets an interface to interact and transact with the rural consumer.<br />Distribution acquired a further edge with Project Shakti, HUL's partnership with Self Help Groups of rural women. The project, started in 2001, already covers over 5000villages in 52 districts of Andhra Pradesh, Karnataka Madhya Pradesh and Gujarat, and is being progressively extended. The vision is to reach over 100,000 villages, there by touching about 100 million consumers. The SHGs have chosen to adopt distribution of HUL's products as a business venture, armed with training from HUL and support from government agencies concerned and NGOs. A typical Shakti entrepreneur conducts business of around Rs.15000 per month, which gives her an income in excess of Rs.1000per month on a sustainable basis. As most of these women are from below the poverty line, and live in extremely small villages (less than 2000 population), this earning is very significant, and is almost double of their past household income. For HUL, the project is bringing new villages under direct distribution coverage. Plans are being drawn up to cover more states, and provide products/services in agriculture, health, insurance and education. This will both catalyse holistic rural development and also help the SHGs generate even more income. This model creates a symbiotic partnership between HUL and its consumers, some of whom will also draw on the company for their livelihood, and helps build a self-sustaining virtuous cycle of growth. Project Shakti is now operational in 12 states across the country. Currently over 13,500 women entrepreneurs cover around 60,000 villages earning an average income of Rs 700 – 1000 per month doubling their household income. By the end of 2005 there would be around 20,000 Shakti entrepreneurs reaching out to around 100,000 villages.<br />The Project Shakti now contributes a little more than Rs 100 crore to the Lever top line, and is yet to break even. By the next year-end, HUL believes Shakti's contribution could double and the project could achieve cash break-even.<br />Project Shakti Initiative in rural markets.<br />ITC<br />Product strategy<br />ITC had launched nearly all the products range off Non tobacco Products; they are very aggressive in their distribution of such products. The existing network of ITC’s Cigarettes distribution is being used extensively for the sales all products of ITC Food division. They are trying to capitalized the market by associating the products with the ITC brand.<br />ITC in FMCG<br />Cigarettes<br />ITC is the market leader in cigarettes in India. With its wide range of invaluable brands, it has a leadership position in every segment of the market. It's highly popular portfolio of brands includes Insignia, India Kings, Classic, Gold Flake, Silk Cut, Navy Cut, Scissors, Capstan, Berkeley, Bristol and Flake. The Company has been able to build on its leadership position because of its single minded focus on value creation for the consumer through significant investments in product design, innovation, manufacturing technology, quality, marketing and distribution.All initiatives are therefore worked upon with the intent to fortify market standing in thelong term. This in turns aids in designing products which are contemporary and relevantto the changing attitudes and evolving socio economic profile of the country. Thisstrategic focus on the consumer has paid ITC handsome dividends<br />Foods<br />ITC made its entry into the branded &packaged Foods business in August 2001 with the launch of the Kitchens of India brand. A more broad-based entry has been made since June 2002 with brand launches in the Confectionery, Staples and Snack Foods segments. The Foods business is today represented in 4 categories in the market. These are<br />Ready To Eat Foods<br />Staples<br />Confectionery<br />Snack foods<br />In order to assure consumers of the highest standards of food safety and hygiene, ITC is engaged in assisting outsourced manufacturers in implementing world-class hygiene standards through HACCP certification. The unwavering commitment to internationally benchmarked quality standards enabled ITC to rapidly gain market standing in all its 6brands:<br />* Kitchens of India* Aashirvaad* Sun feast* mint-o* Candyman* Bingo!<br />Lifestyle Retailing<br />ITC’s Lifestyle Retailing Business Division has established a nationwide retailing presence through its Wills Lifestyle chain of exclusive specialty stores. Wills Lifestyle, the fashion destination, offers a tempting choice of Wills Classic work wear, Wills Sport relaxed wear, Wills Club life evening wear, fashion accessories and Essenza Di Wills – an exclusive range of fine fragrances and bath & body care products and Fiama Di Wills – a range of premium shampoos and shower gels. Wills Lifestyle has also introduced Wills Signature designer wear, designed by the leading designers of the country.<br />Wills Classic work wear was launched in November 2002, providing the premium consumer a distinct product offering and a unique brand positioning. ITC forayed into the youth fashion segment with the launch of John Players in December 2002 and John Players is committed to be the No. 1 fashion brand for the youth.<br />Education & Stationary products<br />ITC made its entry into the stationery business in 2002 with its premium range of notebooks, followed in the year 2003 with the more popular range to augment its offering. ITC's stationery Brands are marketed as "Classmate" and "Paper raft", with Classmate addressing the needs of school goers and Paper raft targeted towards college students and executives.<br />Agarbattis<br />As part of ITC's business strategy of creating multiple drivers of growth in the FMCG sector, the Company commenced marketing Agarbattis (incense sticks) sourced from small-scale and cottage units in 2003.<br />Hotels<br />ITC entered the hotels business in 1975 with the acquisition of a hotel in Chennai, which was then rechristened ITC Chola. Since then the ITC-Welcome group brand has become synonymous with Indian hospitality. With over 90 hotels in 77 destinations.<br />Packaging<br />ITC's Packaging &Printing Business is the country's largest convertor of paper board into packaging. It converts over 50,000 tones of paper and paperboard per annum into a variety of value-added packaging solutions for the food &beverage, personal products, cigarette, liquor, cellular phone and IT packaging industries. It has also entered the Flexibles and Corrugated Cartons business.<br />Agri Business<br />e- Choupal<br />The unique e-Choupal model creates a significant two-way multi-dimensional channel which can efficiently carry products and services into and out of rural India, while recovering the associated costs through agri-sourcing led efficiencies. This initiative now comprises about 6500 installations covering nearly 40,000 villages and serving over 4million farmers.<br />Leaf Tobacco<br />ITC is the largest buyer, processor and exporter of leaf tobaccos in India - creating a global benchmark as the single largest integrated source of quality tobaccos. Serving customers in 50 countries across more than 70 destinations, ITC co-creates and delivers value at every stage of the leaf tobacco value chain.<br />Information Technology<br />ITC InfoTech offers IT services and solutions across five key industry verticals: Banking, Financial Services & Insurance (BFSI), Consumer Packaged Goods (CPG) & Retail, Manufacturing & Engineering Services, Travel, Hospitality & Transportation and Media& Entertainment.<br />ITC InfoTech, a global IT services company, is today one of India’s fastest growing IT services and solutions providers.<br />Pricing strategy:<br />The pricing of the ITC food division depends upon the Customers’ demand schedule, the cost function and the competitors’ price. The pricing of the company is such that it caters to the need of all income groups of people but special provision has been kept for Low and middle income group, and their pricing are competitive with respect to other players like Britannia, Parle and Brisk farm.<br />The company follows the Going rate pricing that is the price of the product depends upon the competitors price. The firm chooses pricing more or less the same as Market leader.<br />Promotional activities<br />A particular budget is allocated for the promotion of the products, the local promotion scheme is decided by the Area Sales Manager, it give its suggestion to the District office and that is forwarded to the Head Quarter in Kolkata.<br />In another promotional scheme for Biscuits a particular number of cases is given freely to the distributors according to the amount of sale they make, this was a drop down promotion i.e. of the number of free cases that a particular distributors gets, off them a certain part is reserved for the retailers and customer if they buy a certain level of biscuit quantity.<br />Distribution<br />Buoyed by a strong distribution network ITC is likely to retain its market share in the cigarettes business; the ban on advertisements is likely to work in favour of ITC thanks to the recall factor.<br />The company's reliable distribution network also ensures superior inventory turnover than its peers.<br />Future <br />Today, the Aashirvaad brand stands for atta and salt and is expected to add suji, spices and rice in the staples segment. In the ready-to-eat segment, Aashirvaad has been expanding the range and the latest offering includes its combo packs of rice and gravies. Besides, an all-purpose curry paste has also been included in the range. To make a success of any foods business, apart from understanding the palate, it would be procurement and sourcing which have to deliver on two fronts: mainly that of quality and efficiency.<br />As for its ready to eat category Kitchens of India (KOI), the company’s strategy is to expand the KOI product portfolio. In this category, the company plans to introduce new products to meet the evolving needs of consumers. This premium brand is targeted at tourists, consumers who order at home, NRIs and women in the age group 25 plus.<br />Initiatives taken – <br />Let’s put India first<br />ITC is committed to a national agenda of raising agricultural productivity and making the rural economy more socially inclusive. ITC believes that the urgency and scale of these tasks make market linked solutions and innovations more effective and sustainable than capital intensive approaches.<br />Social & farm Forestry<br />ITC has helped to bring nearly 13,000 hectares of wasteland under social forestry benefiting more than 16,000 poor households in 466 villages. ITC’s social forestry programme simultaneously addresses the livelihood problems of marginal farmers and the ecological imperative of regenerating biomass and nurturing depleted soils.<br />Watershed Development<br />ITC’s watershed initiatives have led to an improvement in soil and moisture regimes –there is more land under irrigation, water tables have risen and farmers can harvest more than one crop, making it possible to live off the land round the year.<br />Agricultural Development<br />ITC offers facilitation to farmers to form agri-business societies, pool knowledge and resources, improve productivity and quality, and reach out beyond local markets to sell at better margins.<br />Women Empowerment<br />The confidence and skills generated among women by forming credit groups and managing businesses become assets to their communities<br />Livestock Development<br />The milk marketing co-operatives represent exemplary change in rural enterprise, away from dependence on agriculture and local markets<br />Primary Education<br />School going becomes an empowering process for the child and the community. The awareness of entitlements like education and health grows, along with a sense of the community’s responsibility.<br />ITC‘s e Choupal<br />The Big Picture:<br />ITC's Agri Business Division, one of India's largest exporters of agricultural commodities, has conceived e-Choupal as a more efficient supply chain aimed at delivering value to its customers around the world on a sustainable basis.<br />The e-Choupal model has been specifically designed to tackle the challenges posed by the unique features of Indian agriculture, characterised by fragmented farms, weak infrastructure and the involvement of numerous intermediaries, among others.<br />The Value Chain - Farm to Factory Gate:<br />'e-Choupal' also unshackles the potential of Indian farmer who has been trapped in a vicious cycle of low risk taking ability > low investment > low productivity > weak market orientation > low value addition > low margin > low risk taking ability. This made him and Indian agribusiness sector globally uncompetitive, despite rich & abundant natural resources.<br />Such a market-led business model can enhance the competitiveness of Indian agriculture and trigger a virtuous cycle of higher productivity, higher incomes, enlarged capacity for farmer risk management, larger investments and higher quality and productivity.<br />Further, a growth in rural incomes will also unleash the latent demand for industrial goods so necessary for the continued growth of the Indian economy. This will create another virtuous cycle propelling the economy into a higher growth trajectory.<br />The Model in Action:<br />Appreciating the imperative of intermediaries in the Indian context, 'e-Choupal' leverages Information Technology to virtually cluster all the value chain participants, delivering the same benefits as vertical integration does in mature agricultural economies like the USA.<br />'e-Choupal' makes use of the physical transmission capabilities of current intermediaries - aggregation, logistics, counter-party risk and bridge financing -while disinter mediating them from the chain of information flow and market signals.<br />With a judicious blend of click & mortar capabilities, village internet kiosks managed by farmers - called sanchalaks - themselves, enable the agricultural community access ready information in their local language on the weather & market prices, disseminate knowledge on scientific farm practices & risk management, facilitate the sale of farm inputs (now with embedded knowledge) and purchase farm produce from the farmers' doorsteps (decision making is now information based).<br />Real-time information and customised knowledge provided by 'e-Choupal' enhance the ability of farmers to take decisions and align their farm output with market demand and secure quality & productivity. The aggregation of the demand for farm inputs from individual farmers gives them access to high quality inputs from established and reputed manufacturers at fair prices. As a direct marketing channel, virtually linked to the 'mandi' system for price discovery, 'e-Choupal' eliminates wasteful intermediation and multiple handling. Thereby it significantly reduces transaction costs.<br />'e-Choupal' ensures world-class quality in delivering all these goods & services through several product / service specific partnerships with the leaders in the respective fields, in addition to ITC's own expertise.<br />While the farmers benefit through enhanced farm productivity and higher farm gate prices, ITC benefits from the lower net cost of procurement (despite offering better prices to the farmer) having eliminated costs in the supply chain that do not add value.<br /> The Status of Execution:<br />Launched in June 2000, 'e-Choupal', has already become the largest initiative among all Internet-based interventions in rural India. 'e-Choupal' services today reach out to over 4 million farmers growing a range of crops - soyabean, coffee, wheat, rice, pulses and shrimp - in over 40,000 villages through 6500 kiosks across ten states (Madhya Pradesh, Haryana, Uttarakhand, Karnataka, Andhra Pradesh, Uttar Pradesh, Rajasthan, Maharashtra, Kerela and Tamil Nadu).<br />The problems encountered while setting up and managing these 'e-Choupals' are primarily of infrastructural inadequacies, including power supply, telecom connectivity and bandwidth, apart from the challenge of imparting skills to the first time internet users in remote and inaccessible areas of rural India.<br />Several alternative and innovative solutions - some of them expensive - are being deployed to overcome these challenges e.g. Power back-up through batteries charged by Solar panels, upgrading BSNL exchanges with RNS kits, installation of VSAT equipment, Mobile Choupals, local caching of static content on website to stream in the dynamic content more efficiently, 24x7 helpdesk etc.<br />Going forward, the roadmap includes plans to integrate bulk storage, handling & transportation facilities to improve logistics efficiencies.<br />As India's 'kissan' Company, ITC has taken care to involve farmers in the designing and management of the entire 'e-Choupal' initiative. The active participation of farmers in this rural initiative has created a sense of ownership in the project among the farmers. They see the 'e-Choupal' as the new age cooperative for all practical purposes.<br />This enthusiastic response from farmers has encouraged ITC to plan for the extension of the 'e-Choupal' initiative to altogether 15 states across India over the next few years. On the anvil are plans to channelise other services related to micro-credit, health and education through the same 'e-Choupal' infrastructure.<br />Another path-breaking initiative - the 'Choupal Pradarshan Khet', brings the benefits of agricultural best practices to small and marginal farmers. Backed by intensive research and knowledge, this initiative provides Agri-extension services which are qualitatively superior and involves pro-active handholding of farmers to ensure productivity gains. The services are customised to meet local conditions, ensure timely availability of farm inputs including credit, and provide a cluster of farmer schools for capturing indigenous knowledge. This initiative, which has covered over 70,000 hectares, has a multiplier impact and reaches out to over 1.6 million farmers.<br />