Submitted by:

Group no. 3

Q1. Strength of distribution channel used by HLL in reaching out to the rural
market?

Factors Key strengths of HLL Pieces of evidence from the

distribution channels case

Distibution Well established sales distribution - Across 25 states, having atleast

outreach / presence in the nation (existing one depot per state.
Accessibility sales distribution approach)
- GSM (categories) -> 4 Regional
Managers (RMs) -> 4 to 6 Area
Sales Manager (ASMs) -> team of
Sales Officers (SOs) & Territory
Sales-in-charge (TSIs) -> 6 to 10
Redistribution stockists (RSs).

This is quite an extensive

network.

- CFAs -> RS -> wholesale &

retail outlets in rural areas

Increased Rural Focus on transition onto channel
Coverage approach (new sales approach to
tend to smaller markets) - A base
for project Shakti
- Redesigned Direct, Indirect &
Streamlined coverage models
increased HLL’s direct reach to
rural markets, adding to
customer base a population of
about 220 million across
100,000 villages.

Cost based Not only outreach, Project Shakti
factors helped out in achieving cost based
factors for HLL in the distribution
of products in the rural markets
- New program was to target
remaining quadrant of
inaccessible markets & low
market potential (population of
500 million across 500,000
villages) -> conception of project
Shakti
- By December 2002, 12,151
entrepreneurs covered more than
50,405 villages across 310
districts in 12 states.
- Improves the women’s per
capita income by 50%-100%
- Exploiting the presence of self-
help groups (SHGs) (mutual
thrift societies) in India. Here,
10-15 women in a village formed
a group. Get together &
contribute small amounts to a
common pool, would be
approached by micro-credit from
sponsoring agencies.
- HLL aimed to transition them
from micro-credit to micro-
enterprise, thereby empowering
them to make it a business of
their own without the loans.
- Dec 2000, Nalgonda in AP ->
Shakti was born. The name
signified empowerment for the
women of the village,
symbolizing the woman’s role in
their rural markets.
- Shakti -> MACTS -> Shakti
Entrepreneurs in each of 50
chosen villages. This enabled
greater margins for individual
entrepreneurs as against the
groups that were earlier
profound.

- Before Shakti, average monthly

household incomes among
women Shakti entrepreneurs
were about 1000 INR. Funds
were provided as micro-credit,
repayments arranged @ 0.5-2%
of the principal.

- HLL introduced low unit price

packs (LUPs) through Shakti,
such as shampoo sachets, hair
oil, skin creams, detergents, tea,
toothpaste, soaps, etc.

In 2004, this enabled turnover

increase to 4.5 times of that in
2003, through Shakti.

- project accounted for ~10% of

HLL’s rural turnover.
Income of about 500-700 INR
for about 12k women.

- Vaani program to create

outreach by communication by
positioning the Shakti women as
experts on matters related to
personal hygiene and community
health by training them on the
same.
 500 women in over 20000
villages by Feb 2005.

CSR Enhanced HLL’s image in its - Job training, health

market. literacy/social awareness,
technology & soft skills.
- One-to-one influencing,
created massive HLL
outreach for brand usage and
brand loyalty amongst
households and channels of
Shakti entrepreneurs.
- Improvements in living
standards of households of
Shakti women, thereby,
women empowerment.

Q 2 Compare HLL approach with any FMCG market?

NEW INITIATE BY HLL

HLL will adopt a three-pronged marketing strategy — new price points, sizes and
awareness campaigns — for its detergents & soaps segment to augment rural growth.

The model will influence all the variables that influence growth. This model will triple
physical reach, double communication reach, create a platform for influencing attitude
changes and raise incomes.

The company is tying up with various non-governmental organizations, United Nations

Development Programme (UNDP), and voluntary organizations to propagate health and
hygiene messages.

The goal is to reach 2,35,000 villages up from the current 85,000; 75 percent of the
population up from 43 percent today; and a message reach of 65 percent up from the
current TV reach of 33 percent.
In the process, HLL aims to increase access, influence attitudes, create a channel to raise
awareness of its brands and catalyze affluence in rural India.

DABUR
The company's rural push has ensured that it is currently addressing 72 per cent of the
rural FMCG potential.

Dabur insiders aver it always has the first-mover advantage along with its vast rural
network

Engage audiences: The Dabur #WomenCan video, which celebrated women

undertaking multifaceted roles at Dabur, was released on the occasion of International
Women’s Day. Recently they have launched #SabkoChabaJaayenge campaign for Dabur
Red Paste.

The Sustainable Development Society (Sundesh), is a non-profit organisation started by

Amit Burman, the chairman of Dabur.

The organisation aims to carry out welfare activities in the spheres of health care,
education and other socio-economic activities. Dabur drives its corporate social
responsibility (CSR) initiatives through Sundesh. Which indirectly helps the company to
increase sales in the rural India

Dabur uses ASTRA (Advanced Sales Training for Retail Ascendance) to boost rural sales

In this Shopkeepers selling Dabur India’s consumer product would now learn marketing
through role-plays. Astra training consultancy module in five languages: Bengali, Tamil,
Telegu, Malayalam and Kannada.

Dabur undertook a new distribution initiative project called “Buniyad” to prepare for
the next growth wave.

“Under this initiative, the front-end sales team across urban and rural markets was split
into three categories — Home & Personal Care, Healthcare & Foods. With separate teams
now handling individual portfolios, the focus is on improving sales while helping grow
smaller brands across product categories

Project Double-Under
Under this company used digitised maps & electronic data and came up with a list of
specific villages to target. The aim was to manage cost of reaching consumers. It chose
353 districts initially to target its customers. This was done to utilise synergies across
divisions, maximise reach and maintain cost.

Some more strategies adopted by Dabur are-

● Health camps in school to boost sales of toothpaste and Chavanprash
● It also came up with beauty pigeon to promote its beauty products
● It emphasised on word of mouth publicity asking rural forks to use and experience
products themselves
● Salesforce of Dabur uses mobile phones to report sales. To improve sales and rural
coverage, these phones are equipped with maps and demographic data, helping
sales force to estimate market potential. Data reported from these mobile devices
is analysed to predict customer buying pattern and behaviour
● IT services are used to provide information and gain feedback from customers