RUMA- Project Shakti- Hindustan Uniliver(HUL).pptx

Project Shakti

1. Pre 1980’s : “License Raj”, an economic system granted Government License for any major investor in organized sector 1990’s : License Raj is dissolved, Multinational companies enter India, HUL faced competition is every category 2000’s : Semi-Urban and Rural market penetration Introduction of Project Shakti UNILEVER GROWTH IN INDIA

2. Lower Price segments Unorganized Local Players – Invested nothing in brand but offered high trade margins and low prices than HLL’s Higher Price segments Organized national and international players Colgate Palmolive – Oral care category Procter & Gamble – Hair care, Fabric wash and feminine hygiene category Tata Oil Mills Company Godrej soaps HUL COMPETITOR ANALYSIS

3. Two major obstacles to reach rural markets are: Size : Rural markets are scattered over large areas Reach : No air or rail and poor road connectivity. HLL’S RURAL DISTRIBUTION MATRIX P RO J E C T SHAKTI DIRECT COVERAGE STREAMLINE INDIRECT COVERAGE ACCESSIBLE MARKETS HIGH BUSINESS POTENTIAL LOW BUSINESS POTENTIAL M A R K E T INACCESSIBLE MARKETS BUSINESS POTENTIAL

4. F a c t o r y D e p o t C o mm o n stockist S e r vic e O u tl e ts DIRECT COVERAGE Village 2 Village 5 Village 1 Village 4 Village 3 S t ock i s t STREAMLINE Distributor Star seller DISTRIBUTION MODEL INDIRECT COVERAGE

5. PROJECT PLAN Started in 2001 with the aim of increasing rural dist. Uses women entrepreneur network for door-to-door selling in villages Innovative direct to rural customer dist. model Initially piloted in Andhra Pradesh villages BUSINESS ASPECT SOCIAL ASPECT Existing Business A ct i vi tie s P r o j e c t S h akti Existing c o n t ri bu t i o n to the society “Economic development through micro enterprise” Income: Rs.700 to 1,000 /month (2X their avg household income)

6. STEP 01 STEP 02 STEP 03 STEP 04 HOW DOES IT WORK? VILLAGE WITH A POPULATION OF ABOUT 2000 – 3000 ARE SELECTED SALES PERSONNEL FROM HUL APPROACH SELF HELP GROUPS IN THE VILLAGES REPRESENTATIVES OF APPROACHES SHGs & PANCHAYAT TO SELECT SAKTHI DEALER STEP 05 ONE SAKTHI E N TRE P R E N E UR IS APPOINTED FOR ONE VILLAGE HUL VOUCHES FOR THE WOMEN ENTREPRENEURS WITH THE BANK FOR CREDIT

7. TYPICAL SHAKTI DEALER’S SHOP TYPICAL SHAKTI DEALER’S PROMOTION STATES COVERED BY PROJECT SHAKTI

8. A rural salesperson (rsp) was hired to coach shakthi entrepreneurs. These women had never undertaken economic activities Low income of the rural customers Incentives were given for number of homes visited instead of sales and delayed first loan payment Entrepreneurs were not able beat traditional shopkeepers Hul introduced low unit price packs. Example : sachets. BOTTLENECK SOLUTIONS CROSSING THE CHASM

9. Hea H y g i e n e B R A N DE D S O C I A L C O M M U N I C A T I ON Rura Empowerment d e commun ion aids 5 cove v illag e s b y 2005 c t tog S c h ool pr og r a ms Growing primary awareness not only improved quality of life but also created a growing market for HLL’s products Shakti Vani Promised to be cheaper for Advertising and promotion & Created customer for life across several HLL brands SHAKTI VANI: THE COMMUNICATOR

10. R u r a l c o m m un i t y p o r t a l c o m mun i t y b y a c c es s t o information E q uipped w i t h D i a l o gu e- d e v el o ped b y U n il ev er r e s e a r c h t e a m T an t a lizi n g be n e f i t s a s a communication c h a nn e l, w h ic h o t h er m ed ia f a iled t o r e a c h P a r t ner shi p w i t h s t a t e o w ne d e - g o v e r n a nce v e n tu r e A P o n line t o m a k e i S h k a t i sc a l ab le 1 t o e m p o w e r r u r a l 02 3 i n t e r a c t i v e s o f t w a r e 04 iSHAKTI: THE PORTAL

11. Competitive Strategy : Deep Penetration into untapped rural markets Integrating business with social responsibility ( provide sustainable livelihood opportunities for underprivileged rural women) High margin to shakti entrepreneurs Established a Communication channel through Ishakti Supply Chain Strategy Door to Door sell The brands that are being sold are held in Inventory Rotating product availability on demand (fortnight) Functional Strategy Credit facility Low Price points for tapping rural market Face to Face promotional campaign S TR A T E G I E S

12. THREATS Time taken by the project to break even Competitors can copy the model Involvement of multiple stakeholders can dilute their motive. STRENGTHS Through SHG’s or Shakti Entrepreneurs they are able to understand rural market iShakti became communication channel Strong brand equity that enables them to compete with unorganised as well as organised sector OPPORTUNITIES Untapped rural market which leads to increasing demand Increasing self awareness through Vani programme Can expand the channel for better brand communication WEAKNESS Untrained Women Entrepreneurs Scepticism in the mind of local people Compatibility and infrastructure with all states aren’t same HUL: SWOT ANALYSIS

13. The initiative isn’t a CSR. In fact, it’s a business initiative with social benefits In order to tap inaccessible rural market, HUL is willing to accept lower rates of return in short-term because it's implemented with a long-term view As reach/revenue completely depends on shakti entrepreneur. Choosing right was the key for the model to be success. Caste, economic status do play a role in making the situation complicated Constant support from external environment i.e. support from third party partners, including NGO’s , banks and both state and local governments. LEARNINGS

14. IMPACT & CONCLUSION By 2004, there are 12151 entrepreneurs covering more than 50405 villages across 310 districts in 12 state s At present there are more than 1,60,000 entrepreneurs spread across 18 state s Integrating business with social responsibility project Shakti is enabling rural families with sustainable livelihood opportunities through shakti entrepreneur, shakti Vani, s hakt i HUL is able to reach untapped markets and build brand awareness in rural markets It creates a win-win relation between HUL and rural consumers for mutual benefit and growth

15. THANK YOU!!!!!