Rural Marketing Strategies - 1 HUL

A PROJECT REPORT ON

RURAL MARKETING STRATEGIES. CONTEXT:- HUL

SUBMITTED TO

With Combined Efforts of:Kamakshi Bakshi Neha Yadav Bipin Khanna Ankan Goshal Sidhartha Maithy

Rural Marketing Strategies - 2 HUL

Acknowledgement
At the outset We would like to take the privilege to convey our gratitude to all those who co-operated, supported, helped and suggested us as to how the project could be completed. This project bears imprint of advices, from many people who were either directly or indirectly involved in it.

We would also like to thank Mr. Mukesh Ranjan, Territory Sales Officer of HUL, for his time and valuable inputs in the course of my research.

7. 8. 1.Rural Marketing Strategies . Recommendations. 11. 3. Introduction of Hindustan Lever Limited. Case on Wheel Strategies. Highlights of HUL Marketing Strategy. Bibliography. 5. Challenges faced by HUL. 12. Page No. 9. 10. 6.3 HUL Table of Contents Topic No. Relationship Marketing Case: HUL Conclusion. TOPICS Introduction to Rural markets. 1 5 7 8 9 11 15 18 19 20 . Current scenario of Rural Markets.

vast size and demand base of the once neglected Indian hinterland. how to penetrate villages with small populations. etc. Efforts are now on to understand the attitude of rural consumers. Many corporates have been trying to get a grip on rural market. The rise of rural markets has been the most important phenomenon of the 1990¶s. providing volume growth to all leading companies. language barriers. spurious brands. and to walk their walk and talk their talk. Marketers and manufacturers are increasingly aware of the burgeoning purchasing power. connectivity.4 HUL Introduction to rural markets.Rural Marketing Strategies . But challenges are many: how to make the product affordable. The marketing mix of many companies is now being tailored to rural tastes and lifestyles. . communications.

Time was when only a select household consumed branded goods.Rural Marketing Strategies . At times it is difficult to pass on an innovation over an existing product to the rural consumer unlike his urban .5 HUL Current Scenario of rural market. The differentiation may not necessarily be in terms of product content. rural markets are critical for every marketer . Thanks to television.be it for a branded shampoo or an automobile. Even offering the same product in different regions with different brand names could be adopted as a strategy. The brand has to be made relevant by understanding local needs. cinema commercials and a few wall paintings would suffice to entice rural folks under their folds. today a customer in a rural area is quite literate about myriad products that are on offer in the market place. There were days when big companies flocked to rural markets to establish their brands. Today. communication or association with the brand. Time was when marketers thought van campaigns.A world of opportunity GONE are the days when a rural consumer went to a nearby city to buy ³branded products and services". There is a need to differentiate the brand according to regional disparities. be it tea or jeans. Rural market . It may also be in terms of packaging.

Attitude.6 HUL counterpart .Access. according to an ORG . the four factors which influence demand in rural India are . .Rural Marketing Strategies . 95 per cent of total shampoo sales in rural India is by sachets.like increased calcium or herbal content or a germ-control formula in toothpaste.MARG survey. According to Mr. The company had developed a direct access to markets through wholesale channel and created awareness through media. The sachet strategy has proved so successful that. demonstration and on ground contact. This changed the attitude of the villagers. of HUL. Awareness and Affluence. HUL has successfully used this to influence the rural market for its shampoos in sachets. Mukesh Ranjan.

Knorr-Annapurna. HUL believes that an organization¶s worth is also in the service it renders to the community. ice cream and culinary products.7 HUL Hindustan Unilever Limited. Brooke Bond. and water management. Kwality Wall's ± are household names across the country and span many categories . Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods company. HUL is also one of the country's largest exporters. They endow the company with a scale of combined volumes of about 4 million tonnes and sales of Rs. They are manufactured in close to 80 factories.000 crores. Surf Excel.10.soaps. it has been recognised as a Golden Super Star Trading House by the Government of India HUL's brands . touching the lives of two out of three Indians with over 20 distinct categories in Home & Personal Care Products and Foods & Beverages. Pond's. Introduction. Clinic Plus. HUL is focusing on health & hygiene education. coffee. Lux.Rural Marketing Strategies . Sunsilk. HUL's distribution network. and about 250 million rural consumers. personal products. It is .000 redistribution stockists. Wheel. The operations involve over 2. detergents. tea. directly covers the entire urban population. Lakme.000 suppliers and associates.like Lifebuoy. women empowerment. Fair & Lovely. branded staples. Close-up. Rin. Kissan. comprising about 7. Pepsodent.

HUL officials say it is not enough that individual business divisions push their own strategies for rural market. But in the past one-year. HUL has also responded in case of national calamities / adversities and contributes through various welfare measures. thereby improving their livelihood and the standard of living in rural communities. most recent being the village built by HUL in earthquake affected Gujarat. This approach is expected to lead to better cohesion. HUL STRATEGY. Through Shakti.8 HUL also involved in education and rehabilitation of special or underprivileged children. care for the destitute and HIV-positive. HUL is one among those companies in the country that derives huge revenues (over 50%) from the rural areas. Shakti also includes health and hygiene education through . Earlier each business division of the company dealt with the rural market on an individual basis. Over the last three years the company has embarked on an ambitious programme. greater push and deeper penetration which would eventually lead to better sales. The Rs 11. HUL is creating micro-enterprise opportunities for rural women. For the company this has resulted in a flat growth of these markets. and rural development.000 crore Hindustan lever (HUL) is formulating a new strategy to expand its presence in India¶s Rural markets. Witnessing the flat sales growth in rural areas. owing to the failure of the monsoon in many parts of the country farmers have registered a substantial fall in incomes and consequently the purchasing power. Shakti. HUL has shifted its rural markets strategy. and relief & rehabilitation after the Tsunami caused devastation in South India. now the shift in strategy means the company will deal with rural markets as a single organization to achieve greater penetration and sales. the company will have to work in unison in order to achieve a balanced growth.Rural Marketing Strategies .

HUL reaches their product in this dispersed markets.90% in rural areas. Their coverage is around 85%. Advertising in such a highly heterogeneous market.000 villages are spread with 128 million households. and creating access to relevant information through the i-Shakti community portal.Rural Marketing Strategies . finding them is not easy.7 million. . Thus HUL faces difficulty in reaching their products to potential rural consumers. 2) No Reachibility India's 6. HUL's vision is to take this programme to 100. leaving interior villages isolated.000 villages impacting the lives of over a 100 million rural Indians. Challenges faced by HUL in rural markets are:1) Dispersed Markets Rural areas are scattered and it is next to impossible to ensure the availability of a brand all over the country. which is widely spread. the total number of which is placed at around 3. Kota and Bulandshesher are major sources of attention for the rural buyer but aren¶t concentrated unlike urban markets. The fairs at Pushkar. The programme now covers about 50. District fairs are periodic and occasional in nature. HUL prefer such occasions as they allow greater visibility and capture the attention of the target audience for larger spans of time. 700 million Indians may live in rural areas.9 HUL the Shakti Vani Programme. many are totally destroyed or severly damaged by the monsoon and remain unserviceable.000 villages in 12 states. the rural population is nearly three times the urban. At least 50 % of rural roads are poorly surfaced.27. Seven Indian states account for 76% of the country's rural retail outlets. is very expensive. Many rural areas are not connected by rail transport.. Ujjain.

4) Prevalence of spurious brands and seasonal demand. The demand for HUL¶s products during this period is not high as rural consumers would not like to buy and store soaps and detergent instead they would prefer consumer durables. Of the 15 million carts in the country . These make the HUL¶s product available in rural markets but very slowly as it consumes time. 12 million are estimated to be in rural areas . buffaloes also are used for carts. For HUL¶s product there are a multitude of 'local variants'. Rural consumers are cautious in buying and decisions are slow. Rural markets there is seasonal demands of products as there are crops grown twice a year and people earn during this time and would like to buy the products. more desirable to villagers. They like to give a product a trial and only after getting personal satisfaction do they buy it again. and. .Rural Marketing Strategies . therefore. Camel carts operate in Rajasthan and Gujrat in both urban and rural sectors. In Haryana. Punjab and Western Up. which are cheaper.10 HUL 3) Infrastructure in rural areas The use of bullock carts look inevitable for many years into the future .transporting about 6 million tones of freight per year.

It has Active Radiant which . It Cleans Effectively with lesser effort and lesser physical exertion. Wheel makes a laborious chore like washing light and easy. Logo is in shape of a wheel of cart i.µTough on Dirt and soft on Hand. It was launched in 1987.WHEEL. which contain a high percentage of soda.Wheel Active(Blue) Powder Brand:.Rural Marketing Strategies . Wheel includes under it the following brands:1.e CHAKRA Positioning of Wheel :.Wheel Green Powder 4. Wheel Active(Blue) bar 3.¶ Wheel does not burn hands or harm clothes like some other detergents.'Best clean with less effort' .11 HUL ` WHEEL¶s STRATEGIES WHEEL in rural markets Wheel was launched as an Economy segment brand by HUL. Wheel Green bar 2. Difference :. It belongs to Fabric wash Segment of HUL.

Scholarships for study. Wheel follow certain promotion strategies they are. Developing on this insight. like bed sheets and curtains.Wheel is effective as an Aspirational part at a low cost for rural consumer. Effectiveness:.12 HUL makes it different from others. Wheel is also advertised by Wall paintings in Rural areas. making it the number one. Wheel offers to give ornaments. Mass market consumers have welcomed the solution. . wheel sought to eliminate the trouble of tough dirt or heavy-duty laundry. Wheel is also promoted through vans demonstrating its usage and functions to rural consumer. Firstly it was advertised by a Hero who worked in the serial Buniad and now it is communicated by famous film star µGOVINDA¶. Promotions:.Wheel aims at fulfilling the aspiration of this segment of population. The consumers seek a solution to heavy duty laundry.The stars of rural India promoted this brand through Advertisements.Rural Marketing Strategies . Gold. Communicated by:.1. Buy Wheel and get Consumer offers as Get things free with the product.

This ensures the customer to buy more.:. Wheel offers demonstrations to people about How to use it? Near the Wells and Bathing Ghaats. Pricing:. It also give chance to Get a new flat for yourself.The 2 Rs pack of Wheel powder is used by the rural consumer to take it with them to the River and wash clothes.Rural Marketing Strategies . Wheel also sponsors Film Shows in villages known as¶Chitrahar¶ to advertise its products. This forces consumer to decide and store the product for one month. There is no additive required. they prefer to use Wheel rather than an Oily Soap. HUL priced the blue variant of Wheel at Rs 22 per kg.In South and Western India they prefer Wheel because there is Hard water. Wheel also follows a strategy to promote its products by giving an offer to Buy 3 and get 1 free. Expectation of rural areas:-Rural consumer needs smaller packs of products as there is No Storage space in rural areas as in Urban and their Disposable Income is also low. Wheel is now available even in smaller packs ranging between 1Rs ± 5Rs. Eg. The next is it also adopts Sampling operations in villages of offering free samples to the consumers. The Shopkeeper in rural areas provide disposable packs by cutting the bigger pack into smaller one as needed by the consumer. The Rural markets where there is Hard water that affects lather. 3.13 HUL Household Utensils . One pack cleans about 25 clothes. just above the green variant priced at Rs 18 per kg. White goods free with the product. Previously . . 2Rs.Wheel is priced at Rs 20 per Kg now. Wheel undergoes Rural Based Activities to promote its products. Eg. 2. it provides instant lather and is a sensory Quo for Cleanlinees. and 5Rs and Bar is available for both 5Rs and 2Rs. The powder is available in packs of 1Rs.

The launch of Wheel Jug Mug offered an acceptable consumer pricevalue equation which is a bigger trigger to conversion in low per capita income markets. ³The strategic intent is to dominate the discount segment with Wheel Jug Mug. There are strongly entrenched barriers to conversion amongst ash/ mud users. The targeted consumer falls in the income level of under Rs 4. by Hindustan Lever Ltd (HUL) attempting to wade off competition that has emerged in this price category in 2001. consumer offers and such other novel concepts are all part of the trade channel promotions The company processed for defining new media vehicles to promote the product in rural markets.Wheel Jug Mug was launched at a low price point of Rs 10 for a 400 gm bar.´ said Mr Sanjay Behl. There was a competitive pricing strategy so far as the discount dishwash bars segment is concerned. PRICING:. visibility. PROMOTIONS :-Incentivizing the trade channel by offering better margins. ³Wheel Jug Mug increased penetration through its competitive price-value equation via-a-vis other available products (brands/ proxy products) at that range. where the only channel which is high on visibility is Doordarshan. The mix has the potential of becoming the branded market leader in the dishwash category in smaller urban towns and rural India. It is a dishwash bar in the discount segment.Rural Marketing Strategies .000 per month salary.14 HUL Wheel Jug Mug Wheel Jug Mug was launched in the discount bars segment. market activation. the mix had performed superior at an acceptable cost vis-a-vis their practice for any conversion to happen. and thus price is integral to the brand strategy. . HUL. marketing manager. It offer¶s superior performance vis-a-vis the consumer¶s current habit of dosing detergent powder with ash to wash dishes.

etc. In the toothpaste market the main competition was between HUL and Colgate. HUL is working on maximizing consumer value in every market segment and this will be offered. Colgate had a 50 % share of the market (including all price ranges ) down from 60 %. as is appropriate. Hindustan Lever had launched in 1999 its relationship marketing exercise said to be the first of its kind in Rural India by a major FMCG corporation.15 HUL Wheel is promoted through a good communication strategy. through the integrated brand Wheel. sponsored events. The marketing strategy is to exploit the full potential of the Wheel equity into logical dish wash extension ² given that consumer habit revolves around using cheap detergent powders for washing dishes.Rural Marketing Strategies . Relationship Marketing: The case of HUL. HUL had an overall share of 40 %. It is different from conventional campaign through media hoardings. Pepsodent was the fastest growing brand in its slot with annual growth rate of 22 %. etc« It involves building relationships with the consumers in rural areas through education programmes. . home-tohome contacts and cinema shows. Aim: The aim is to build sales for its personal care brands including that of Pepsodent. According to the figures of July 1999. its mass market toothpaste. market activation to distribution. live product demonstrations.

Statistics include low usage patterns. for instance. where consumers have used toothpaste right from childhood.16 HUL Focus: The objective in rural areas is to tap first time users. the overwhelming majority uses toothpaste only once in the morning whereas teeth required brushing most at bed time. a dental check-up camp was conducted at all schools ( where the students belong to comparatively lower SECs) in July 1999. concentrates on educating the consumer by holding free dental camps. In two years since 1996. a counterpart to .Rural Marketing Strategies . There is Rural Hygiene Programme. Campaign: The Operation Bharat Programme. some 12 lakh students have been covered by such check-ups. It also had dental education programme in association with New York University. 3. HUL¶s door-to-door campaign in rural areas. Strategy: 1. 2. In Mysore. Also its up market brand Close up was introduced at retail outlets in suburban and rural areas with a price tag of Rs. In China. about 90% of the people use toothpaste compared to 47% in India. Even in the urban areas. there are scholarships for students in dental colleges for collaborating in research at such centers. About 27% use toothpowder and only 20 % had visited a dentist. In India. Product: HUL introduced a 15 gm Pepsodent pack to target the first time user.50.

Door-to-Door Sales: About 10 million homes in rural India have been touched so far and target for that year was 12 million. Sold separately. Effects: The strategy has highly encouraging results. 15. In the same market shampoo use was about 6% and went up to 18% even if used once a week. Fair and Lovely cream was test launched in Maharashtra for a target audience.17 HUL the urban one. 4. It shot up to 20% in one year. It has a target of reaching 20 crore people in 3. Cinema: After home-to-home contact and sales in villages during the day. There are still villages which do not have TV. About a year before the launch the use of the cream was less than 1 % of zero in many illages. The market has become aware and responsive for personal care products. talcum powder and face cream. . the products would together cost the consumer Rs. HUL concentrates on cinema time in the evenings. 3. toothpaste.50. The kit is sold at Rs. Cinema shows are quite popular there. The project essentially involves selling a discounted personal care kit containing mini-packs of shampoo. 27.000 Villages.Rural Marketing Strategies .

socio-cultural milieu. Lack of Proper Physical Communication Facilities. Low Levels of Literacy . There were many other companies which entered rural markets and was successful and gave competition to HUL some of them are Cavinkare which launched Chik Shampoo for rural markets. However there is a long way to go to capture all the rural markets. communication media. demographics. Colgate. The key lies in understanding why. Many Languages and Dialects. Rural marketing is completely different ball game talk about its consumer tastes. ITC. One can conclude that Marketing in the urban and the rural areas is different as product may vary in rural & urban area and the marketing strategies to market the product is also different mainly the packaging and distribution strategy in rural area is designed keeping in mind the rural consumer. Dispersed Market . etc. It is therefore apt to do a thorough groundwork before jumping headlong into the rural markets. In Rural markets company face various problems like Underdeveloped People and Underdeveloped Markets. Low Per Capita Income. HUL was the first FMCG to tap rural markets and has generated huge revenues from rural markets. or the infrastructure. Different way of thinking of Rural Consumer. . what and how of the rural consumer. Nirma etc. The spread and heterogeneity further complicate matters. competition.Rural Marketing Strategies . It would be a blunder to assume and apply the same principles as of urban marketing.18 HUL CONCLUSION Rural Market is Gold Mine which is paved with Thorns but HUL has rightly tapped it.

For India to maintain and improve economic growth it is imperative to improve rural markets. Government and Marketers have to undertake measures to improve the Rural markets. There are many companies which entered rural markets. a major FMCG to enter rural markets. Even today there is imbalance in rural development. HUL needs to be competitive and keep on updating its strategy to have a foothold in the Rural markets. .19 HUL RECOMMENDATIONS HUL. but not the only one now.Rural Marketing Strategies .

Krishnamacharyulu and Lalitha Ramakrishna. Marketing Management (13 Edition) ± Philip Kotler th th .G.Rural Marketing Strategies . Rural & Agricultural Marketing book± Ramkishen.S.Y 2.20 HUL BIBLIOGRAPHY 1. 3. Marketing Management (10 Edition) ± Philip Kotler 4. Rural Marketing ± C.

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