2. ROLE OF THE RURAL ECONOMY
Around 700 million people, or 70% of India's population, live in 6,27,000
villages in rural areas. 90% of the rural population is concentrated in villages
with a population of less than 2000.
The rural India offers a tremendous market potential. A mere one percent
increase in India’s rural income translates to a mind-boggling Rs 10,000
crore of buying power. Nearly two-thirds of all middle-income households
in the country are in rural India. And close to half of India’s buying potential
lies in its villages. Thus for the country’s marketers, small and big, rural
reach is on the rise and is fast becoming their most important route to
growth. Realizing this Corporate India is now investing a sizeable chunk of
its marketing budget to target the rural consumers.
Rural India accounts for over 70 per cent of the country’s population. With
urban markets saturated for most categories, it has become imperative for all
players to increase their penetration levels in rural markets. There has been a
rapid expansion of the consumer majors’ distribution networks into the rural
regions. Companies like HLL and Colgate-Palmolive (C-P) have made
sustained efforts through various programmes like ‘Operation Bharat’ (HLL)
and ‘Operation Jagruti’ (C-P) to make inroads into the rural economy, in
order to drive growth.
For the past three or four years, the bottom lines of most of the companies
have improved due, on the one hand, to reduced excise duties and, on the
other, to declining commodity and raw material prices. Besides, companies
introduced cost rationalization measures, which helped them improve their
operating margins. Reasonably high operating margins are necessary, in
order to sustain the high ad-spends. However, stabilized commodity prices
may put pressure on the margins in the future.
With increasing competition, the players have had to absorb a lot of price
cuts to boost volumes. In the past one year, however, the industry has been
reeling under a demand crunch.
3. RURAL CONSUMER’S AND INDUSTRY’S PROFILE
• The consumer product sector mainly consists of personal care,
cosmetics and home products segments. The sector can be further sub-
divided into dental care products, soaps, detergents, surface cleaning
products, skin care, and hair care products.
• India's rural markets have seen a lot of activity in the last few years.
Since urban markets are saturated in most categories, future growth
can come only from deeper rural penetration. FMCG majors are
aggressively looking at rural India since it accounts for 70% of the
total Indian households.
• The industry is volume driven and is characterized by low margins.
The products are branded and backed by marketing, heavy
advertising, slick packaging and strong distribution networks.
• Despite the strong presence of MNC players, the unorganised sector
has a significant presence in this industry.
• Brand building and extensive distribution network is a key factor. A
successful brand is a precious asset, which could fetch a price many
times the cost of assets required to make the product. A study
conducted by A&M-ORG-MARG reflects that the share of branded
goods is high for a number of daily used products. Branded goods
comprise of 65% of sales in villages and the share of non-branded
products is shrinking dramatically.
4. Personal Care & Home Products market
The size of the Indian fast-moving consumer goods (FMCG) sector is close
to Rs 600 bn. The northern and the western regions of the country account
for more than half of the market for consumer goods. Barring the fastest-
growing personal care segment, no other product segment has seen the entry
of so many players.
In the past decade, the personal care industry has witnessed a consumer
boom. This has been due to liberalization, urbanization, and an increase in
the disposable incomes, and altered lifestyles, especially a heightened level
of awareness among the rural community, consequent to the onslaught of
satellite television. Furthermore, the boom has also been fuelled by the
reduction of excise duties, dereservation from the small-scale sector and the
concerted efforts of personal care companies to woo the burgeoning affluent
segment of the middle class through product and packaging innovations.
Unlike in the past, when domestic companies were not perceived as
competitive vis-à-vis multinational corporations (MNCs), the scenario is
gradually changing, with some domestic companies, like Nirma Marico and
Jyothi Labs, standing up to their MNC counterparts. Also, competition
amongst the MNCs has intensified, leading to shrinkage of margins.
The personal and home care segment has very low entry barriers of
technology and capital requirements. This attracts new players and has
resulted in intensifying competition. Despite this, the strong distribution
networks and heavy investments needed for brand building remain key
deterrents to new players.
5. Low margins and high volumes characterize the industry. While the level of
disposable incomes determines the overall sector growth, the market has
already been segmented and sub-segmented. Companies have launched
products at a number of price points to drive up volumes. New products are
being launched in niche segments, and old products re-launched. Brand
equity drives the customer’s purchase decisions, and is the key to gaining
market share. Also, competitive pressures have hiked the advertising
budgets of most players. Besides, a profusion of promotional schemes are
being offered. Most players, including Hindustan Lever Ltd (HLL), are
struggling to maintain top line growth, despite the heavy advertising and
salespromotion (ASP) expenditure.
A lower price differential between the organized and the unorganized sectors
from reducing excise duties allows the former to grow at the expense of the
latter. The organized sector also has a superior distribution reach. Although
most of the product categories are still in the growth phase, a few broad
categories, like detergents, have reached a mature phase only in the urban
market. According to industry sources, the affluent segment in the rural
sector is growing at a faster rate than the urban one. For the past three years,
the organized sector has been focusing on the rural markets, which are
perceived to drive growth in the industry and which, to a very large extent,
are dominated by unorganized players
6. Penetration Levels in rural area
The personal and home care market is a mature one in urban.However, for
the past three years, it is witnessing a lot of changes, in terms of product and
usage patterns.
Products in the soap, detergent and hair oils categories have high penetration
level (over 70 per cent). The value growth is mainly through higher
realizations and improvements in the product mix. The popular and economy
segments currently dominate most of the product categories. With an
increase in disposable incomes, the preferences of the target market would
shift to the premium products.
For products in the hair oil and dental care market, the thrust of the
organized sector is to convert users of non-branded products to branded
ones.
The premium product categories like shampoos, skin care and cosmetics
continue to have low penetration levels even in the urban areas and have
achieved volume growth through packaging innovations and value growth
through increased realizations. In the shampoo segment, sachet packs, which
contribute to over 30 per cent of revenues, have been successfully used to
break the price barrier and have offered convenience and affordability.
In the product categories of mosquito repellents, where consumption is
dictated by need, and shaving blades, which has low penetration levels, entry
barriers are relatively high. Only players with strong brands can pass on cost
increases
7. Prudent in pricing – rural consumers:
The Indian consumer is very price sensitive. In the personal care sector,
branding allows companies to partially pass on the cost increases to the
customers. Most players have introduced products with mass-market pricing,
so as to build volumes. The increased promotional activity that is taking
place amongst players has relegated brand loyalty to the backseat. Moreover,
the increased competition has restricted not only growth rates, but also the
ability to absorb frequent price increases, thus benefiting the consumer. With
the rise in disposable incomes of consumers, players in the premium-product
categories will be able to increase volumes.
The players in the personal care industry derive their strength from high
capital turnover, strong brand equity and effective management of
distribution logistics. The strength of the distribution reach is a key element
in building a successful brand and helping it garner volumes through
increased penetration levels. Nowadays, companies with strong distribution
networks are using them successfully to distribute other companies' products
as, for instance, Marico's distribution agreement with P&G, to distribute its
brands (Ariel bar, Camay Soap, Pampers diapers, Old Spice) for a fee. Such
arrangements will enable newer players to penetrate the markets without
having to set up their own distribution networks.
However, a strong distribution network can only succeed when used in
tandem with the right packaging and pricing. In the price-sensitive rural
economy, companies have to constantly launch value-for-money products
that satisfy the needs of the rural consumer. This has brought about the mini-
pack revolution, which has become common across all product categories.
Brands like Ariel, Surf, Colgate, Sunsilk, Pantene, etc. are now available in
sachets and pouches at very low unit prices that can induce trials and push
consumption levels. Breaking the price barrier has become the key to drive
volumes, especially for companies like HLL and C-P, which derive almost
35-50 per cent of their revenues from the rural market.
8. FMCG consumption in rural areas:
Organizations like Hindustan Lever Ltd., Nirma Chemical Works, Colgate
Palmolive, Parle foods and Malhotra Marketing have carved inroads into the
heart of rural markets. Various categories of products have been able to
spread their tentacles deep into the rural market and achieved significant
recognition in the country households. And, in the process, the regional
brands, local brands and the other unbranded offerings got displaced by the
leading brands.
Company Household penetration
HLL-VIM 88%
Nirma Chemical Works 56%
Colgate Palmolive 33%
Parle Foods 31%
Malhotra marketing 27%
% volume of local
Category
brands/unbranded
Washing cakes/bars 88%
Tea 56%
Salt 33%
Of the expenditure on consumer goods in rural household, approximately,
44% is on food articles such as biscuits, tea, coffee and salt, 20% on
toiletries, 13% on washing material, 10% on cosmetics, 4% on OTC
products and 9% on other consumables. A number of category products have
established themselves firmly in the rural households.
It is evident that in the villages low-priced brands are well accepted and one
might feel that a larger proportion of the purchases made in rural market can
be attributed to local/ unbranded players. Surprisingly, however, the
unbranded/local component contributes to a substantial portion of the
volume of only a few of the highly penetrated categories.
9. Increasing brand awareness among rural consumers:
In the rural families, studies indicate a slow but determined shift in the use
of categories. There is a remarkable improvement in the form of products
used. For instance, households are upgrading from indigenous teeth-cleaning
ingredients to tooth powder and toothpastes, from traditional mosquito
repellant to coils and mats. There is also a visible shift from local and
unbranded products to national brands. From low-priced brands to premium
brands.
10. About HLL
HLL has over 36,000 employees, and has created 2 lakhs indirect jobs. Its
operations are spread across 70 locations in India. There are over 50
factories, of which 28 are in backward areas. The operations involve 2000
suppliers and associates and 7000 stockists and agents. HLL has emerged as
a major Exporter.
Corporate Profile
HLL, a 51.6% subsidiary of Unilever Plc, is the largest FMCG Company in
the country, with a turnover of Rs. 118 bn. The company’s business sprawls
from personal and household care products to foods, beverages and specialty
chemicals. The company has a dominating market share in most categories
that it operates in such as toilet soaps, detergents, skincare, hair care, color
cosmetics, etc. It is also the leading player in food products such as
packaged tea, coffee, ice cream and other culinary products.
Market Share
HLL grew at a fast pace in the mid 90’s driven by its aggressive acquisition
spree. From Rs. 38 bn turnover (contributed 70% by soaps, detergents and
personal products), HLL’s turnover has now grown to Rs. 118 bn, with
soaps and personal products contributing 57% to turnover and beverages and
food products contributing to 29% of turnover. Growth during the last few
years has largely been driven by the personal products business. However
the pace of growth has slackened significantly in the last two years with
several key segments registering a degrowth in 2001.
11. Market Capitalisation - HLL
60%
HLL
Other Brands
40%
Even as Hindustan Lever is armed with two brands -- Nihar and Cococare --
positioned to take on Parachute, the clear strategy adopted by HLL is to
attack Parachute indirectly by targeting the loose oil consumer.
HLL's overall share in the Rs 500-crore coconut hair oil market is about 24
%. Marico leads with a 53 % share. HLL's Nihar has appreciated its market
share to 17.2 % in May 2000, from 12 % in end-1999, as per ORG-Marg
All-India retail audit. The brand's share in the beginning of 1999 stood at
9.5 %.
12. Performance of HLL in 2001
Turnover for the year increased by 3.42 % gross and 3.47 % net.
Product Categories:
Soap and Detergent
The overall market growth for Soap & Detergent was sluggish during the
year with a sharp decline in the Popular & Premium segment of the market.
In particular, rural market where the business had a traditionally strong
presence performed poorly following decline in the agricultural growth. The
discount segment continued to face severe price led competition. Against
this background, the business registered a relatively better performance in
term of growth. Major investment were made behind quality enhancement of
key brand like vim, Lux, Surf and Wheel during the year with clear
consumer benefit. These were backed by some strong consumer promotion
during the year including multi pack. Lifebuoy Active was launched during
the year and in short time, the brand grew handsomely with a 3.7 % share of
the segment. This helped offset the decline of Lifebuoy Carbolic. Major
investment had been planned to retain and grow the Lifebuoy franchise in
2002.
Overall, Power Brand grew significantly ahead of the market and are poised
well for a strong performance once the market turn around with the
impending economic revival. Innovation will continue to drive growth in the
following year, with several projects in the pipeline.
Major initiative to improve distribution reach, particularly in the rural
market, were undertaken during the year to build upon the competitive
advantage that the business currently hold in sales and distribution.
Significant investment were also made in networking and Information
Technology IT to manage supply chain more efficiently and make a
quantum improvement in the customer service level. Project LEAP which
bring together the combined strength of IT, Sales and Commercial to deliver
better customer service and make the entire supply chain including the back
end system connected with supplier of material respond faster to the short
term change in the market place, had been implemented toward the end of
the year in the Soap Business and the initial result were encouraging. The
13. focus in 2002 will be to stabilize the system and prepare for rolling it out to
other businesses.
A few highlight of the 2001 brand performance are:
• With Wheel and Rin, the business not only recorded brand leadership
again after a decade but also captured No 2 in Laundry.
• Lux recorded it highest ever share in the last 24 month.
• Wheel Green Powder share are at their highest in 24 month.
• Surf Excel had recorded it highest value share ever.
• The business also created new benchmark in capacity creation with 4
new plants 2 for NSD Bar, 1 for Soap for NSD Powder being
commissioned in record time. These factories had stabilised very
quickly giving significant supply chain and tax benefit to the business.
• Superior Technology in the business repertoire will be leveraged to
deliver improved quality at lower cost to achieve profitable growth.
The Business sees a big opportunity in market growth in the medium
to long term, particularly in the rural area, and had initiated
programme to drive consumption of soap in the context of the
increased awareness of health and hygiene. For the year 2002, market
growth, which is linked to the turnaround of the economy, remains the
major risk factor.
Personal Product:
Personal Product had led a good year in 2001, with double-digit growth.
This was achieved by focusing on the core brand and investing in building
their equity. In spite of slow market growth, your Company increased it
investment in innovation, research and advertising on it big brand resulting
in growth ahead of the market.
The Hair Category had another year of growth, with high quality relaunches
of Clinic Plus, Clinic All Clear bottle were changed in line with international
development, while a new stand up pack was launched in the mid price
segment. Your Company entered the nascent category of hair colourant, with
the launch of Sunsilk hair colour in the metro. In order to address the
14. opportunity at the low price end of sachet, Lux sachet were launched at price
of Re1 and Re0.50, and these had met expectation.
The Skincare Category had a very good year, with Fair & Lovely as star
performer in 2001. In Fair & Lovely, the launches in 2001 included a
fairness soap, a dark circle under eye cream, and sachet with a recloseable
cap. The main Fair & Lovely cream brand was also relaunched with
improved packaging and communication. All these initiative, along with
investment in advertising and rural penetration, led to high growth for the
franchise through the year.
The Pond brand returned to double-digit growth after a slowdown for 2 year,
with comprehensive relaunches to it talc as well as skincare range. The
growth was achieved by improvement in the functionally of product,
packaging and impactful market activity. A new talc variant, pond Light n
Fresh, and a new mini Clod Cream jar priced at Rs5 were successfully
launched in 2001. The skin range of Lakme was renovated and strengthened
and a premium new product, Lakme Fair Perfect, was introduced toward the
end of 2001.
In the Oral Category, Pepsodent was relaunched and emerged much stronger
in 2001 as a result of innovation, advertising and marketplace activation.
The introduction of value pack as well as new advertising helped increase
market share of Pepsodent. Your Company decided to deprioritize the
toothpaste brand Aim, in order to focus all effort on Pepsodent and Close Up
this strategy had been successful as demonstrated by the growth and brand
building that had been achieved in the second half of 2001.
In the Deodorant business, Axe continued on a high growth plan, with many
imaginative market activities and new introduction in 2001. Rexona was
relaunched with international packaging and had achieved salience on the 24
hours delivery of deo benefit.
15. Colour cosmetics saw many innovation on both Lakme and Elle 18
including a new range of colour based on the Lakme India Fashion Week.
HLL acquired the asset and liabilities of it colour cosmetics, fragrances and
personal care business from Lakme Lever Ltd at net book value, with effect
from 31/3/2001. Post merger, Aviance business continued to focus on direct
marketing of personal care product to gain better understanding of this
channel .
Supply chain and souring efficiencies led to significant cost reduction,
whilst quality improvement came through technologies and innovation.
Your Company continues to focus on low unit price pack, which provide the
consumer with quality product at low put down price. A new Personal
Product factory was commissioned in Doom Dooma in Assam, to cater to
the growing market demand. to other businesses.
Product-“vim” HLL
16. “Khar Khar ka moh tod jawab”
In 1993 Vim Bar was launched. This product had many benefits
including better clean, ease of handling and easy
storage. Vim Bar was re-launched in 1997 with
an improved formulation and new
communication, which tackled economy and
performance. Much appreciated by the mass
market, it resulted in conversions not just from
powder users, but also from proxy users who did
not upgrade to powders but preferred to use Vim Bar instead.
Vim Dishwash Bar is the market leader with 60 per cent share in the
Rs 400 crore branded dishwash market The brand has grown significantly
registering strong double-digit growths in both volume and value terms.
Vim Bar was relaunched a second time in 2002, with a unique “Stain
Cutter” formulation that removes the toughest stains such as burnt milk and
ghee stains. This new formulation evolved through research and is now
setting benchmarks in tough stain removal. New Vim offers the consumer a
superior performance at a great value. . New Vim with its contemporary
packaging illustrates dynamism and swift stain cutting powers. HLL is
focused on research and development for consistent delivery of superior
products. Thus, New Vim has been developed with a unique stain-cutter
formulation that removes the toughest stains such as burnt milk and ghee
stains. New Vim offers the consumer a superior performance at a great
value”. The new Vim has a totally new mix, right from the packaging to the
formulation of the product. New Vim with improved formulation that solves
the housewife’s yet unsolved problem of tough stain removal of burnt
milk/ghee stain.
.
17. Vim is the market leader in the dishwash category. Today Vim is
available in powder, bar and liquid form. Vim continuously strives to
innovate its products to enhance the lives of its consumers. Whether it be
through its new 'Stain Cutter' formula in its Vim Bar or it's the stain busters
in its powders, Vim stands for the best quality in dishwash products.
Vim as a Brand
Vim, among Hindustan Lever's 30 power brands, is looking at
scouring the competition further. Though the brand — led by the
flagship Vim bar — remains the market leader in the overall Rs
1,000-crore dishwashing market, HLL `complete kitchen cleaner'
Vim (utensil cleaner), which is ranked the fourth most preferred
brand in urban market, doesn’t find a place in the top ten in the
rural market On brand equity ranking. Though it was a market
leader Vim Dishwash Bar is the market leader with 60 per cent
share in the Rs 400 crore branded dishwash market The brand
has grown significantly registering strong double-digit growths
in both volume and value terms
Hll planned for brand extension
Another brand extension was planned is that of an `applicator', to be priced
at parity with nylon scrubbers. Currently, Scotchbrite is the only branded
applicator in the market, priced at a premium.
HLL has projected a Rs 260-crore turnover for Vim this year, which
translates to a 21 per cent growth over the previous year.
Vim bar, which accounts for over three-fourths of the Vim brand's sales, is
expected to be the key driver of growth. "Of the projected Rs 260 crore, we
expect Vim bar to be a Rs 240-crore brand by the year-end, with Vim
detergent powder and Vim liquid accounting for the remaining Rs 20 crore,"
the official sa Vim liquid, meanwhile, would continue to be a slowburn
brand.
18. Vim also planned to extend the brand by introducing Detergent liquids .
detergent liquids is a small, though emerging market and has a limited
presence of brands such as Vim, Teepol and Pril. The market is estimated at
600 tonnes, or roughly Rs 200 crore. Vim liquid was rolled out recently in
cities and towns with 10-lakh-plus population.
Market Size:
The total size of the dish wash market, estimated at Rs1,000-crore, recorded
a 40 per cent growth over last year. Over 60 per cent of the market is
dominated by bars, while dish wash powders accounts for 32 per cent. The
penetration levels are, however, still very low. Estimates show that nearly 50
per cent of the urban population and 80 per cent of the rural one still use
proxy products like ash and other cheap detergents for dishwashing
purposes. HLL is the leading player, with its Vim Bar.
MARKET SHARE:
Of the overall Rs 1,000-crore diswashing market, the branded sector
accounts for Rs 400 crore. According to AC Nielsen data, within the
dishwashing bar segment, Vim's market share is estimated at 82 per cent
share.
Competitors
The brand faces tough competition from Nirma (in the North and West),
Odopic (in the West) and Sabena (in the South) it was the strongest in
maharashtra.
19. Marketing strategy adapted by HLL
The company handed over the marketing for vim to O&M in
Maharashtra and Andhrapradesh .O&M rural marketers adopted unique
strategy in the initial stages to market the product in rural areas Maharashta
and Andhrapradesh. As the marketers knew that it was the initial stage in
rural areas and to provide a niche in the rural markets was difficult as the
product itself was not available in this areas.
First to target the market in rural areas they saw to it that the market
which they are targeting was in the 2 to 3 km range from the highways
because they knew it wont create sense to market the product in those areas
which are away from the high ways as the product was not available in those
areas. The overall marketing was based on district-to-district level. They had
thought to enter in other areas beyond the 2to3km range after making the
product available to the initial targeted market. So that it becomes easy for
the marketers to introduce, as the product was available in the neighboring
villages and the product becomes familiar to the people.
Marketing segmentation
The market segmentation was in those areas was done on the basis of
the houses that the people were living into. As the people in rural villages
lived in different types of houses. The type of the houses they lived were
kaccha ghar, kaccha-pukka, pukka ghar the marketers also surveyed the per
capita income of individual in rural areas.
20. Challenge
1) The challenge for marketers was to convince the rural consumer and
ask them to spend money on a product where they use to spend no
money on a particular product. As the consumer used proxy products
to clean their vessels, which was available to them at, free of cost. The
real challenge was to transform the prospect to the consumer of the
product.
2) The other challenge was to communicate to the rural people. It was
difficult for the marketers to communicate to the rural people unless
they were communicated in their own regional or local language of
the rural consumer.
3) After the survey done it was found that the rural consumer used
aluminum vessel to cook their food this made the company to change
their entire communication. Earlier the company use to communicates
as,
“apka chehra bhi dekha ga saf”.
Now seeing that the rural consumers were using aluminum vessel. It
was a challenge for the marketers to appeal and communicate the product to
the rural consumer and as it wont be sensible to communicate them with the
same communication or base line. To come with new communication or tag
line which the rural consumer can relate with their usage and behavioral
pattern.
21. Target consumer
Target consumer for “vim” were
Households wives
Restaurants
Shops and hotel that offer cooked food products
Advertisement:
HLL to advertise the vim used both medium of communicating that
formal as well as informal.
Formal advertising was done through:
1) Newspapers and magazines
2) Television
3) Radio
4) Cinema
5) Outdoor advertisement through:
Signboards
Wall painting
Local bus boards
Product display boards between villages
6) Point of purchase used were
a) Streamers
b) Tinplates
c) Hangings
22. Promotion strategy
This strategy was used at village to village basis
Use of audio- video vans
Door to door marketing
Mohalla’s
Retail contact
Central location
In the process of promoting “vim” in rural areas. Keeping into mind The
dynamics of rural consumer and distribution infrastructure, the marketer had
adopted a different promotion strategy to promote the vim in rural areas.
The formal media used to communicate the product was T.V, radio
cinema ,print proportionately depending upon their reach and their influence
on rural masses.
The informal promotion strategy was formulated. The steps involved to
promote the product in rural areas.
The first step was the usage of audio- visual publicity vans. This publicity
vans were covered by beautiful banners, this banners were embossed with
the product photos, the base or tagline of the product and colorful picture
23. that can attract the rural consumer. The audible material used were a tunes of
current filmy songs, which were composed with new lyrics, this lyrics gave
the special features about the vim. This step was used as an introduction of
the product vim in rural markets.
The second step in the promotion strategy was to do Door-to-door
marketing. This step was very well designed. To do Door- to- door
marketing the marketer employed the young local youths who can
communicate with rural people in the local language. This youth carried
along with them flip charts as a substitute medium to T.V.
This flipchart contained a story. The story used in the flip chart was about
two female named “ Kamala” and “bimla”. Explaining that kamala used vim
and bimla used other proxy product. Kamala showed bimla the benefit of
using vim in compare to other proxy product and explaining the features of
the product.
The Door-to-door marketing step was complementary to other step that
involved the participation of the rural housewives, which contained games.
This games were strategically designed so as to position the product and the
price of the product in the minds of consumer.
The games used were
Spotting the right price.
Match the pairs.
Turn the wheel
This games were used to entice the people and pull them to “mohalla” the
small place between the houses so as to do mass marketing as much as
possible. This all was done as process of mass marketing.
24. The fourth step in promotion was Retail contact
In this step the marketers gave scratch coupons to the consumers who came
to purchased vim with incentive packages (i.e. packages one for two). The
price given were on the. The prizes distributed to whom so ever won was
12months soaps. Prizes were distributed on the spot so to create better
perception of the company and product in the mind of the consumer. The
same was made applicable for the retailers on the bulk purchase. This
retailers were also given special discount on their bulk purchase.
The final step was that all the people were invited to the central location.
This central location was usually a place were all the village people
assembled so that becomes easy to communicate at large to the masses. The
activity undertaken at the central location was cleaning up the sweet makers
vessels, which was the toughest to do.
It was communicated as
“ Saf kare mitaheewale ki kadai”
This exercise of promoting the product was one of the best as when it was
proved in front of the consumer as vim cleaned “ the mitaheewale ki kadai”
without living any greasiness. The advantages of the Vim were also shown
to them.
The advantages of vim were that it relieved from the hardship of scrubbing
the vessel, which was done with ease with the help of “vim”. The other
advantage was that it would certainly save their lot of time, which can be
utilized effectively for some other work. This created a clear perception
about the product.
This process was used again and again in capturing different markets.
25. The other promotion strategy to promote the product
Roadshows comprising attractively designed floats will traverse the length
and breadth of the country during the time span of the offer.
The carnival, which will cover hundreds of small towns and villages apart
from the metros and is part of a massive rural promo initiative that HLL
plans to unleash.
The company even had to promoted the product in Haats & Melas of
different villages.
To promote the vim HLL planned to distribute gold as prize
IN a bid to promote vim one of its leading dishwash soap, Vim Gold Bar,
HLL had launched a below-the-line advertisement.
This medium proposes to bring Vim to the rural households via direct
interaction between customer and producer.
This promotional blitzkrieg across the country includes giving away gold
worth Rs 5 crore.
The offer gives; customers stand a chance to win gold in different
denominations by just scratching a card received on every purchase of a Vim
bar.
Each scratch card carries an 8-digit number. Every Sunday, one such number
will be announced on Sony Entertainment TV between 8-9 p.m. and this
number will be valid for the entire period of the offer.
If the number on the scratch card of the consumer matches with the number
announced on TV, they would be eligible for a 400 gm gold bar - the weight
of the Vim bar in gold.
In case of fewer digits matching, the consumer stands to win 100 gm, 10 gm,
or 1 gm of gold or Rs 100 off on purchase of HLL products from the retailer
26. Communication
Vim Bar has always created an impact in the market with its path-breaking
communication. The communication has been designed to powerfully
communicate the tough stain removal properties of the Vim Bar. HLL
created a new consumer lingo for the tough stain problem with the campaign
baseline of Vim being the “Khar Khar ka moh tod jawab”.
HLL had to completely change its communication when it entered into rural
it had to completely changed its communication from the previous one that
was that after cleaning the vessel with bar you can see your fac(apka chehra
Bhi dekha ga saf) to (khar khar ka moh tod jawab) just because the rural
consumers used aluminum vessels to cook their food. It wont create sense to
appeal them to buy that product that did not suit their living.
Pricing
Initially Vim bar was priced at Rs 14 for 400 gm. An entry-level Rs 200-gm
Vim bar priced at R s 7 also exists. But with the launch of new vim it was
priced at Rs 13 for a 400 gms pack and Rs 6.50 for a 200 gms pack. But
with their foray into the rural areas the price was changed to Rs4 for 200gm
and Rs7.50 for400gm. The prices were revised by keeping the consumer
behavior, income, and consumption pattern of rural people.
Packaging
The rural customers are usually daily wage earners and they don’t have
monthly incomes like the ones in the urban areas have. So the packaging
was done in smaller units and lesser-priced packs that they can afford given
their kind of income stream. Another important factor is Convenience. Since
many households don’t have proper bathrooms and only have a window or
things like that to keep such things
27. The packaging of “ VIM” done keeping in mind the rural characteristic.
The paper wrapped to vim bar was in yellow colors showing the brand name
vim and containing the picture of lime clearly to show that it got lime
contents in it. The colures used are red, yellow and green. This sort of
packaging what made vim to be the market leader in the dish wash market .
Distribution:
Mother depot( C&Fa’s)
Mother depot C&Fa’s
Rural distributor
Rural distributors
Sub-stockiest
Sub-stockiest
Retailer
Retailers
consumer
Consumers
HLL distribution system is the best amongst FMCG companies.
At present, HLL's products, manufactured across the country, are distributed
through a network of about 7,000 redistribution stockists covering about one
million retail outlets. Extending availability Data on rural consumer buying
behaviour indicates that the rural retailer influences 35% of purchase
occasions. Therefore, sheer product availability can determine brand choice,
volumes and market share.
28. HLL used the principle of project stream line .The principle of Project
Streamline is to leverage our scale and organizational synergy to increase
reach in rural markets. The pivot of Streamline is the Rural Distributor (RD),
who has15-20 rural sub-stockiest attached to him. Each of these sub-
stockiest is located in a rural market. The sub-stockiest then performs the
role of driving distribution.
Project Streamline was conceptualized to significantly enhance control on
the rural supply chain through a network of rural sub-stockiest, who are
based in these very villages. As part of the project, higher quality servicing,
in terms of frequency, credit and full-line availability, would be provided to
rural trade. Thereby, giving us a substantial competitive edge over the next
decade
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.
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.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.
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.
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
29. 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.
The other distribution system used was Project Shakti and Project Bharat .
Our rural growth engine raises incomes of rural families by channel
intervention through rural Self-Help Groups (SHG), which operate like
direct-to-home distributors. The model consists of groups of (15-20)
villagers below the poverty line (Rs.750 per month) taking micro-credit from
banks, and using that to buy our products, which they will then directly sell
to consumers. In the process, generating employment and incomes for
themselves, and increasing the reach of our products.
30. PROJECT
ON
RURAL MARKETING
“VIM”
SUBMITTED BY :
ACKNOWLEDGEMENT
31. It gives me a great pleasure in presenting this report on the subject rural
marketing and enables me to get the insight knowledge about the subject
rural marketing
I would like to thank Prof.Krishnamoorty for givin me time to time guidance
as and when required for completing this project
Lastly I express my gratitude towards Mr Rahul. Karwe(O&M OUTREACH
Desk) for providing me with the information about the marketing acivities
undertaken for vim in rural areas.
