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Unilever in India: Hindustan Lever‟s Project Shakti – Marketing FMCG to the ruralConsumer Case Analysis

Unilever in India: Hindustan Lever‟s Project Shakti – Marketing FMCG to the ruralConsumer Case Analysis

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Published by mahtaabk
Indian Institute of Management Kozhikode

Marketing Management
Case Analysis: Unilever in India: Hindustan Lever‟s Project Shakti – Marketing FMCG to the rural Consumer

Submitted to: Prof. Rahul Kumar Sett

Submitted By: PGP/14/258 PGP/14/280 PGP/14/303 Alok Kumar Mahtaab Kajla Shruti Kabdal PGP/14/279 PGP/14/283 PGP/14/304 Lokesh Singh Naveen Vyas Sneha Ramtake

Situation Analysis       Hindustan Unilever Limited is India‟s largest fast moving consumer goods and Services Company. Over 7
Indian Institute of Management Kozhikode

Marketing Management
Case Analysis: Unilever in India: Hindustan Lever‟s Project Shakti – Marketing FMCG to the rural Consumer

Submitted to: Prof. Rahul Kumar Sett

Submitted By: PGP/14/258 PGP/14/280 PGP/14/303 Alok Kumar Mahtaab Kajla Shruti Kabdal PGP/14/279 PGP/14/283 PGP/14/304 Lokesh Singh Naveen Vyas Sneha Ramtake

Situation Analysis       Hindustan Unilever Limited is India‟s largest fast moving consumer goods and Services Company. Over 7

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Published by: mahtaabk on Mar 18, 2011
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05/12/2014

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Marketing Management
Case Analysis:
 
Unilever in India: Hindustan Lever‟s Project Shakti – 
Marketing FMCG to the ruralConsumer
 
Indian Institute of ManagementKozhikodeSubmitted By:PGP/14/258 Alok Kumar PGP/14/279 Lokesh SinghPGP/14/280 Mahtaab Kajla PGP/14/283 Naveen VyasPGP/14/303 Shruti Kabdal PGP/14/304 Sneha Ramtake
Submitted to: Prof. Rahul Kumar Sett
 
 
1
Situation Analysis
 
Hindustan Unilever Limited is India‟s largest fast moving consumer goods and Services Company.
 
 
Over 70% population of India resides in villages so tap this market company need to develop economicallyviable and efficient distribution channels in villages.
 
Poor connectivity among villages and widely scattered consumers are main problems.
 
Recently it has launched a project „Shakti‟ to penetrate the rural market for FMCG
goods. About 12000women entrepreneurs had been appointed, covering nearly 50,000 villages in partnership with nearly 300
NGO‟s.
 
 
Company wants to scale its operation so to achieve a consumer base of around 100 million by 2006. It isestimated that this will require a network of about 25000 entrepreneurs.
 
HLL has also introduced Shakti Vani to create awareness in villages about personal health and communityhygiene.
Problem Identification
 
How to improve the distribution channels to gain a consumer base of 100 million by 2006.
 
The greatest challenge that Shakti face is costs and management control to make it profitable.
 
Building confidence/self-sufficiency among Shakti Entrepreneurs
 
To achieve the objective of contributing 15-
20% of HLL‟s revenue by 1lakh entrepreneurs
 
Project ShaktiChallenges:
 
Education level of indian women and cultural differences in different regions
 
Not many microfinance companies are interested in rural areas because of low income level of population.
 
Scaling involves high process costs
 
More human resource needed to train people to become entrepreneurs and maintain them
 
Support needed from various sectors of government
 
Cultural issues like language and communication
 
Almost 10-15% of 
Shakti‟s
revenues belonged to HR costs, a major concern
 
Lack of confidence of entrepreneurs to invest because of past failures
 
Not many SHGs to collaborate with
Advantages:
 
New markets can be tapped
 
Even without the direct retail outlet channel final customer can be reached
 
A more personalized service
 
Preference to Entrepreneurs
o
 
Credit was also given to regulars
o
 
iShakti and Shakti Vani created a loyal customer base and improved market penetration as
visibility of HLL‟s products increased
 
o
 
Discounts were given to consumers
o
 
Creating a network , passing on part of profit to another person who sells your goods atanother place
Marketing Management| 06/09/2010
 
 
2
Managing Project Shakti in long term
In the long run HLL will need to take the following steps
 – 
 
 
Expansion into new markets
 
 – 
HLL operations must expand to other villages within the state and alsointo other states.
 
Involve other agencies
 
 – 
HLL can also invite other microfinance companies into the market who canprovide money to village entrepreneurs. Then people can buy an LIC policy with their regular HLLproducts.
 
iShakti
 
 – 
Make use of IT for information exchange among entrepreneurs. IT portal can be used tocommunicate information about personal health and community hygiene.
 iShakti and Shakti Vani
 
Both initiatives were created to provide rural India with access to information and social communication.
 
Although the setup costs are very high and funds can be generated thus Shakti can finance itself 
 
Vani itself does not generate revenues directly, but it is a powerful tool to increase hygiene awareness inrural India, as a result indirectly increase HLL sales at long term.
 
In short, iShakti and Vani will be workable and scalable to help Shakti success.
Social Impact and Role of Business
 
HLL should make a social impact on rural India.
 
HLL can and will continue to enjoy the competitive advantages as the main company to participate in socialdevelopment.
 
The connection between business and communities will develop lifetime customers for HLL. Thisinvolvement may not be the typical role of business, but as long as it is profitable to HLL withoutcompromising moral and legal issues, it will be a good move for HLL to increase its reputation as a sociallyresponsible organization.
Recommendations
 
Shakti should continue as it is providing HLL a distinct competitive edge and increase HLL‟s profits and
growth. Moreover, Shakti helps to position HLL as socially responsible organization.
 
Introduce “Project Shakti” as a low cost marketing tool to the brand managers
 
 
Shakti vani project will help in creating awareness among villagers and they will in turn use more products.
 
Shakti Vani should be used to gain goodwill of people and can collaborate
with NGO‟s to reduce cost of 
information delivery process.
 
Market saturation as seen in exhibit 3, clearly defines a need to come up with new products that differentiatethemselves
 
Organizing workshops to enhance the marketing abilities of the Shakti Entrepreneurs.
Marketing Management| 06/09/2010

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Pravir Nitesh liked this
mahtaabk added this note
@nikhil: when we submit the case we have limitation of 3 pages(excluding annexes) and there is no point adding CB, ROI when its not required for explanation of PI
kaushal_ghai liked this
Priyal Jain liked this
Nikhil Sharma added this note
thanks guys... may be a cost benefit, ROI would have been added to the slides...:)
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