HUL’s Contribution in Rural Marketing

Presented By:

Vishal Patel (70)Dipesh Patil (71)

Priyanka Patil (72)Rahul Patil (73)

Background : India largest Consumer Good Company in India. Owned by British-Dutch Company. Products- Foods, beverages, cleaning agents and

personal care product.

Commencement of Operation in India: Formed in 1933 as Lever Brothers India Limited Come in India in the year 1956 through a merger of

lever brother, Hindustan Vanaspati Mfg. Co. Ltd. and United Traders Ltd.

Introduction to HUL

Product Portfolio: Market Leader in consumer product with

presence in over 20 consumer categories such as soaps, tea, detergents and shampoos etc.

The company owns 35 major Indian Brands

Distribution channels: Hindustan Unilever's distribution covers over 2

million retail outlets across India directly and its products are available in over 6.4 million outlets in the country.

As per Nielsen market research data, two out of three Indians use HUL products.

Introduction to Rural Marketing

Rural Marketing involves the process of developing, pricing, promoting, distributing rural specific product and a service leading to exchange between rural and urban market which satisfies consumer demand and also achieves organizational objectives.

Nature of Rural Market Large Diverse and Scattered MarketMajor income of consumers is from AgricultureStandard of Living and rising disposable income of

rural consumerTraditional outlookRising Literacy LevelDiverse socioeconomic backgroundInfrastructure Facility

HUL’s Contribution in Rural Marketing

Project SHAKTI

Started in 2001, Shakti is HUL's rural initiative, which targets small villages with population of less than 2000 people or less.

Micro-enterprise opportunities for rural women .

The aim of the project was to increase

the company’s rural distribution

reach as well as providing rural women with income-generating opportunities.

This is a case where the social goals are helping achieve business goals.

Shakti has already been extended to about 15 states, 80,000 villages with 45,000 women entrepreneurs and generating Rs.700-1000 per month to each women.

States covered by Project Shakti

HOW IT WORKED?• Villages with a population of about 2000-3000 were selected.• Personnel from HUL approached SHGs.• Selection of the Shakti Amma.• HUL vouches for Shakti Ammas with banks from credit.• One Shakti entrepreneur is appointed for one village & villages

are about 2 kilometres apart from her village.• The Shakti dealer places initial orders worth Rs.15000 from

principal customer of HUL• The Shakti dealer organizes a “Shakti Day” in the village where

she displays products & free gifts

• The recruitment of a Shakti Entrepreneur or Shakti Amma (SA) begined with the executives of HUL identifying the uncovered village.

• The representative of the company would meet the panchayat and the village head and identify the woman who they believe will be suitable as a SA.

• After training she is asked to put up Rs 20,000 as investment which is used to buy products for selling. The products are then sold door-to-door or through petty shops at home.

• On an average a Shakti Amma makes a 10% margin on the products she sells.

WHY SHAKTI???It was soon felt that HUL's sales and distribution system

which had protected it from competitors would be soon replicated by its rivals and to maintain its edge, the company had to increase its reach beyond the urban markets

More than 70% of India's population lived in villages and made a big market for the FMCG industry

Benefits

Strength• Strong brand portfolio, price, quantity & variety.• Presence of Established distribution networks in both urban and rural areas

Weakness

• Changing consumption pattern.

• High advertising costs.

Opportunity

•Large domestic market – over a billion population.•Untapped rural market.•Changing Lifestyles & Rising income levels, i.e. increasing per capita income of consumers.

Threats

• Tax and regulatory structure.• Mimic of brands

• ITC in FMCG sector. • Strong competitors.

SWOT ANALYSIS

Conclusion