Hll Shakti Case Analysis

Unilever in India:Hindustan Lever's Project Shakti-

Marketing FMCG to the Rural consumer

SUBJECT : MM- II

COURSE : PGDM

BATCH : 2011-13

INSTITUTE : IMI Bhubaneswar

Introduction

According to Unilever, the sustainable living plan is "By 2020, we will have the environmental footprint of our products, help more than 1 billion people take action to improve their health and well-being, and source 100% of our agricultural raw materials sustainably". Progressing towards this vision was the introduction of project Shakti, women empowerment program, by which they were trying to increase the market share through aspiring poor who are joining the market economy. By seeing the fortune at the bottom of the pyramid, many MNCs shifted to cater the needs of this segment. HLL was the pioneer to explore the markets at the bottom of the pyramid. Unilever also moved to capture the massive market opportunities available in the rural market. With the help of Shakti project , the keys to tier 4market like creating buyer power, shaping aspirations, Improving distribution systems etc were addressed.

Issues and challenges faced

? Costs incurred in human resources, Vani programs and i-shakti programs

Inorder to educate shakti entrapreneurs , to motivate them and administer them , a large number of personnels were required. The need for RSPs and Rural consulting firms increased as the number of new initiatives increased. Training costs of these trainers would also add up. Training cost of vanis and the setup costs of computer for i-shakti program were increasing.

? Identifying Self help groups and convincing them

Not all the villages were Shakti project was decided to be rolled out had self help groups. Even if they had self help groups, it was difficult to convince them that the project Shakti was reliable and that it would generate sustainable income for their members

? Seeking Government permissions

It was a difficult task to disseminate the purpose and benefits of such project and seek their permission and support

? Choosing right women entrepreneurs

As women belonged to rural areas, many were not aware of how to takeup an independent economic activity due to apprehension. Choosing confident women were difficult. If the women were chosen and trained to be confident, still they would get demoralized easily if initially the sales does not pick up.

? Steady supply of products from Local distributor

In spite of so many challenges faced , if the sales increases , local distributors should be able to supply products continuously to meet the demand.

? Complexity in multiple SKUs

All the SKUs could not be sold in rural markets due to ability to buy .

? Introduction of Low – Unit-Price packs or LUPs

Due to LUPs, packaging costs incurred per unit were higher than those incurred on the larger SKUs. Trade margins offered on LUPs were higher. Hence the profits could be seen not through margin but through the increase in the sales volume.

? Stable brands were running out of internal budgets

The brands which were funding for Vani programs from their advertising expenses were facing budgetary constraints

? Poor Dial-up connection

Some villages are very remote that the dial up conn ections are poor. Due to this benefits could not be reaped from the costs incurred in ishakti projects from those villages.

? Cultural issues

Due to huge diversity in Indian culture across the states, local RSPs or the ones who knew the local language had to be recruited.