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Hul success in rural market
Hindustan Unilever Limited (HUL) entered the Indian market in 1888. In the 1960s, HUL recognized rural India as a huge market opportunity and began expanding its rural operations. Some key strategies HUL employed included developing affordable products through value engineering, introducing smaller product packages, establishing direct distribution networks to rural vendors/retailers, and utilizing culturally appropriate promotional methods. In 1998, HUL launched Project Streamline and Project Bhart to improve rural distribution. In 2001, HUL launched Project Shakti, a partnership with rural women's self-help groups, to directly reach consumers in villages. Project Shakti now operates in over 100,000 villages across 15 states, providing livelihood
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Hul success in rural market
- 1. Present By: Sonia Batra PGDM(Satyug Darshan Tech. Campus)
- 2. HUL’s History • HULis a subsidiary of Unilever ltd, England • Found in 1885 by lever bro. at the time company is known as William Hesketh lever • The co entered Indian market in 1888 with a laundry soap sunlight • In 1956 William Hesketh lever formed a fully owned subsidiary Hindustan Unilever ltd with 10% of its equity of the Indian peoplel
- 3. Product Year oflaunch Rin 1969 Bru 1969 Clinic shampoo 1971 liril 1974 Close-up 1975 Fair & lovely 1978 lifebuoy 1988 Few of prominent product launched
- 4. HUL’s Move TowardsRural Market • HUL enter 1960 onwards • India lives in two parts village and urban • 70% of Indian population lives in rural areas • It presented huge opportunity for companies likes HUL • HUl derives around 60% of its sales from rural areas
- 5. Why HUL Enterin Rural Market • Competition in urban Market • Changing Consumption Pattern in Rural Area • Improved Lifestyle • Huge Population Base • Rapidly Growing Market
- 6.
- 7. Rural Product Strategy •The rural markets generally prefer simple and easy to use products. • The packaging has to be convenient and cost- effective. • packaging that only adds to the cost and does not provide any additional convenience. • The products should be able to cater to the distinct needs of rural customers and provide value for money.
- 8. • For Eg: HUL developed a combined soap and shampoo that was cost-effective and also less harsh on hair than ordinary soaps. HUL launched the new soap-cum shampoo ‘Breeze 2- in-1’
- 9. Rural Pricing Strategy •The rural customer is price sensitive and expects value for money. • Therefore, the pricing has to be in line with this expectation. • Marketers have to therefore devise strategies that can make their products affordable for rural customers. • HUL have opted to offer their products in smaller units so as to make them more viable for the rural markets. • More importantly, the concept of value engineering should be applied to rural markets to make the products affordable.
- 10. • This techniqueinvolves replacing costly raw materials with cheaper ones, without sacrificing quality and functionality • For Eg. • Lux toilet soap is made available in 25 gram packs in rural areas
- 11. Rural Place (Distribution)Strategy • Direct contact with the local vendors and retailers has to be established. • Cooperative societies, public distribution system, feeder markets, village weekly markets fairs.
- 12. • Eg. • HindustanUnilever uses vans to deliver its products to local vendors and retailers in rural areas, thus vastly improving its reach. • it could cover about 25% of the rural population by 1995
- 13. Rural Promotion Strategy •The promotional activities should be undertaken through media that are comfortable and appropriate for the rural areas. • Positive word-of-mouth through local reference groups and opinion leaders is considered as the key to success in the rural markets. • Traditional art forms such as puppet shows and street plays or creating awareness through village panchayat members can prove to be fruitful. • Other methods like distribution of pamphlets, publicity vans and advertising on walls can also assist in establishing a relationship with the rural masses.
- 15. FOUR P’s ofMarketing change in Four A’s
- 16. Continue.. • "FMCG companiesinnovated on package sizes to introduce low price points. They have customized promotional strategies for rural markets using local language and talent. • HUL players continue to expand rural penetration (HUL's Project Shakti, Tata Tea's Gaon Chalo).
- 17. HUL’s Market Strategy •HUL has been at the forefront of experimenting with innovative methods to reach the rural consumer. • HUL started its first effort towards going rural 1960’s.
- 18. Reaching Out tothe Rural Market • In 1998 HUL conceptualized “PROJECT STREAMLINE” to enhance control over the rural distribution and increase the rural retail penetration 50000 to 100000 retails • Also in 1998 “PROJECT BHART” was launched • In 2001 “PROJECT SHAKTI” was launched Continue..
- 20. • Project Shakti,Partnership with self help groups of rural women & covers 5000 villages in 52 district in different state EVERY DAY I WILL SELL,EVERY DAY I WILL EARN
- 21. SHAKTI Project • Projectshakti was born in dec 2000-2001 in Nalgonda district in southern Indian state Andhra Pradesh • A Project a combination of micro credit, training in enterprise mgt & self-help • Focus of SHG-women • Shakti start 18 women • Now 45000 women 15 states 100000+ villages • Sold Door to Door • 10% margin on the product she sells
- 22. Objective Shakti Project •objective the Shakti entrepreneur program creates livelihood opportunity for underprivileged rural women. The shakti vani program works to improve the quality of life in rural India, by spreading awareness of best practice in health and hygiene. • They are studying the consumption habit of the rural people • And to improve the business skills of the SHG Women, Extensive training progrrames are being held.
- 23. Why SHAKTI • Bythe late 1990’s, Company was the market leader What need to develop SHAKTI PROJECT? • After achieving Success in urban market. it was looking for the next big opportunity. • The aim was to get to really small villages not reached by their distribution network.
- 24. • Build adistribution system through a network of women micro-entrepreneurs to get the product directly to consumers. • Help rural entrepreneurs to start businesses and improve living conditions in their regions. • The business objective was to extend our direct reach into untapped markets and to build brands through local influencers. • The social objective was to provide sustainable livelihood opportunities for underprivileged rural women. • The model proved to be an excellent way of tapping the fortune at the ‘bottom of the pyramid’.
- 25. Problem • Women wasmore inclined to stay at home and sell rather than going to Door to Door • There is a stigma attach to direct selling • Then an artificial market place was created with music “LADIES ARE ABLE TO SELL THEIR PRODUCTS WITHOUT ANY STIGMA OR BIAS”
- 26.
- 27. Success Shakti • Shktishall reach every home in every village • Create sustainable livelihood oppourtunities • Enhance the quality of life in rural india • Now shkti has extended 100000+ villages in 15 states with 45000 women entrepreneur & generating re.700-1000 per month to each women • Reaching 10 lakh homes by shakti AMMA.
- 28. Success Source – LGRural Marketing Report 2006
- 29. Conclusion shakti • Projectshakti 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
- 30. KHUSIYON KI DOLI •HUL launched a new project in 2010 is KHUSHIYON KI DOLI • Four set of dolis or palkis are moved all around the village. • Motto create awareness with the use of new product.
- 32. HUL’s strategy inthe current economic situation: • We have always taken the decision to accelerate our investments to come closer to the consumer. This is why we are outgrowing the market. • we grew 6%, while our competitors grew at 1-4%. • On the other hand, we are also trying to ensure that we have stronger rural programmers as the government invests in building better infrastructure. • So we are working on both sides of the value chain to ensure we keep growing. • We have to take cognizance of the fact that markets have slowed down and competitive intensity has gone up. • These two are not new but when they come together you have to get sharper. The good news is 70% of our agenda has not changed because it is for the medium term. • For example, in the last three years we have more than doubled our rural reach and we have stepped up our innovation drive with 30% of our portfolio getting renewed every year. we want to get sharper on managing costs, improving returns on marketing investments, or reducing overhead leverage. Sanjiv Mahta
- 33.
Editor's Notes
- #6 When we want to make mark on global stage then we need to coverage these two india rural and urban
- #18 onwards by indirect coverage of accessible rural market with high business potential through its urban network of stockists and distributors. Under this approach company vans were replaced by vans belonging to Redistribution Stockists, which serviced a select group of neighbouring markets. Rural areas with lower business potential but accessible were assigned to retail stockist accessing all villages on fortnightly basis
- #22 Respect Started in 2001, Shakti is HULs rural initiative. Which targets small villages with population of less than 2000 people or less. Micro –enterprise opportunities for rural women providing health And hygiene, education through SHAKTIVANI program. Shakti has extended to about 15 state 100000+ villages in with 45000 women entrepreneurs and generating rs. 700-1000 per month to each women
- #24 India is the second largest country in terms of population size after China and over 70% of its more than one billion people live in rural areas. While the business rationale was clear, setting up a distribution channel to reach remote parts of India was less straightforward. We were tapping into some of the rural populations through tools such as van road shows, but a large share remained outside its reach.