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HUL Project Shakti (its name means "strength") was born out of the realization that the future lies in the rural areas, and it has become a case study for business schools and evolved beyond its original goals. Shakti is a initiative that combines social responsibility, sustainability, and business strategy. India has more than 6,30,000 villages, most of these are 'hard to reach' and offer relatively lower business potential. Hence, reaching them through the conventional distribution system was a challenge. "The objectives of Project Shakti are to create income-generating capabilities for underprivileged rural women by providing a small-scale enterprise opportunity, and to improve rural living standards with greater awareness of health and hygiene," says Dalip Sehgal, executive director of the Shakti initiative. Hindustan Lever's drive into rural India was prompted in part by growing competition. When the Indian economy opened up in early 1990s, multinationals such as Procter & Gamble stepped up their activities, forcing Hindustan Lever to seek higher revenues and growth by reaching into villages with 1,000 or fewer residents. Launched in 2001, Project Shakti was an important part of this strategy. It involved working with rural self-help groups (SHGs) to educate rural women, while also making them part of the company's marketing network. "Women from SHGs become Shakti entrepreneurs -- direct-to-home distributors [of Hindustan Lever products] in rural markets," says Sehgal. "This microenterprise offers low risks and high returns. The products distributed include a range of
She then joined the Shakti project and became a distributor of Hindustan Lever products.000 (around $25) a month on a sustainable basis. it makes an enormous difference to women who live in remote villages in dire poverty. sustainability.000-15. The commission Rojamma earned on her sales helped provide for her family. shampoo and detergent. Hence. 30." such as soap.000 villages. and also to purchasing consumer durables such as television sets. toothpaste. earnings from Shakti help them double their household income. A mother of two who was left to fend for her and two daughters after her husband abandoned the family. Shakti is a initiative that combines social responsibility." A typical Shakti distributor sells products worth Rs 10.mass-market items especially relevant to rural consumers. Much of the additional income goes to educating children. While this may not seem to be a high income. Rojamma initially made ends meet by working in her parents' fields. The Shakti website features a video profile of Rojamma. "The lives of thousands of women have changed because of Shakti.000 (around $250) a month. "Today she is a proud entrepreneur and enjoys not only the money she earns from the project but also the respect of society. and business strategy. reaching them through the conventional distribution system was a challenge. as an example of a typical Shakti distributor. . which provides an income of Rs 700-1." says Sehgal. India has more than 6. speaking in village after village to impoverished and often illiterate women about the need to bathe their children and wash their clothes regularly and also selling them soap and detergent. a young woman from the state of Andhra Pradesh in Southern India. most of these are 'hard to reach' and offer relatively lower business potential. In many cases.
000 as investment which is used to buy products for selling. For example. After training she is asked to put up Rs 20. trained communicators visit schools and village congregations to drive messages on sanitation. men were not liable to go to a woman's house and buy products. On an average a Shakti Amma makes a 10% margin on the products she sells. Here an artificial market place was created with music and promotion and the ladies were able to sell their products in a few hours without encountering any stigma or bias. which were economically unviable for the company to tap on its own. Although the company has been successful in the initiative and has been scaling up. This serves as a rural communication vehicle and helps the SA in their sales. The main advantage of the Shakti programme for HUL is having more feet on the ground. Under this programme. Shakti Ammas are able to reach far flung areas.invest the extra money in buying vehicles such as motor scooters that allow them to go into more villages. the company has ready consumers in the SAs who become users of the products besides selling them. besides being a brand ambassador for the company. Moreover. An initiative which helps support Project Shakti is the Shakti Vani programme.which further expands the rural market for such products. it faces problems from time to time for which it comes up with innovative solutions. Moreover. good hygiene practices and women empowerment. The products are then sold door-to-door or through petty shops at home. The representative of the company meets the panchayat and the village head and identify the woman who they believe will be suitable as a SA. The recruitment of a Shakti Entrepreneur or Shakti Amma (SA) begins with the executives of HUL identifying the uncovered village. Some Shakti distributors whom the company calls "entrepreneurs" -. The company countered this problem by hosting Shakti Days. a problem faced by HUL was that the SAs were more inclined to stay at home and sell rather than going from door to door since there is a stigma attached to direct selling. .
According to media reports. CEO of www.000 Shakti distributors covering 500. The Shakti model was piloted in 50 villages of the Nalgonda district in Andhra Pradesh.000 women distributors covering 80. a job site for the rural market.000 villages.ruralnaukri. .000 of India's more than 600. The first-mover advantage is significant. This means brand loyalty is very high among less affluent consumers. Hindustan Lever has been able to reach rural consumers in thousands of remote Indian villages.com. creating 26. the potential for growth is enormous. People at lower income levels do so by buying premium brands. It has now spread to more than a dozen states. the goal is to recruit 100." says Ajay Gupta. By 2010. Affluent consumers demonstrate that they have 'arrived' by buying bigger houses or cars. According to HUL there are behavioral reasons why rural consumers represent a sound bet for companies that are willing to invest in reaching them. since studies have shown that just 15% of Indian consumers use products such as shampoo. with help from Shakti distributors. Meanwhile. Shakti distributors now account for 15% of the company's sales in rural India.000 villages. That is why the rural market is critical for companies. "This initiative has been extremely successful.Indeed.
Do a SWOT analysis of Project Shakti . the Shakti project includes Shakti Vani (or voice). India's largest software firm. With the network now in place.In addition to the distribution network. a community portal. QUESTIONS Q1. "Desktop computers are set up in the homes of Shakti entrepreneurs." iShakti is in its early days. employment. which is actively involved with the iShakti portal. The Vani project. They can also ask questions on any of these subjects and have them answered by experts." says a Hindustan Lever spokesperson. and iShakti. One service that is likely to be added soon is insurance. other companies want to hop on to the Shakti bandwagon. "These computers are equipped with software developed by Unilever through which users can access content in categories including education. is operational in more than 20. health and entertainment. however. Karnataka. Hindustan Lever has also tied up with partners such as Tata Consultancy Services. Chattisgarh and Andhra Pradesh. and ICICI. it was launched in November 2004. a social awareness program. agriculture. a financial services institution that is involved with providing micro-credit loans.000 villages in states like Madhya Pradesh.
Give your comments on this statement . Shakti project has helped HUL strengthen its distribution system in rural areas .Q2.
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