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HEENA SHAIKH SNEHAL THORAT RACHANA RANE PRIYA SHARMA NEETA WALODRA NEHA SHETYE SHRUTI SAWANT VIRALI SHAH
100 119 81 102 127 106 93 99
We the students of SYBMS (B), with Roll No: 119, 100, 81, 102, 127, 106, 99, 93 glad to present the hard copy of our project on HUL SHAKTI. We are thankful to you providing us with such an interesting Topic and we had a great time in collecting all relevant matter of this project.
You·re sincerely, SYBMS (B)
13.INDEX 1. What is project shakti all about 4. 15. Shakti Vani 5-6 7 8 9 10-15 16 17 18 19-20 21 22-23 24-25 26 27-28 29-30 31-32 33-35 4 10. Reaching the unreachable geographical areas 17. 12. Where HUL's Shakti comes from 3. iShakti: Crossing the Border How project shakti works: Process How HUL's Rural Model Work Distribution of Villages in India 16. Shakti Vani is a social communication programme 11. Model of Project Shakti 8. 14. Business goals 9. What is self help groups & how does it work 5. Conversation with two workers of project shakti . Concept 6. Objective 7. Introduction of Hul 2.
This Programme now covers 500 villages in the district. the Hindustan Unilever Limited (HUL) was the country's largest FMCG Company with combined volumes of about 4 million tonnes and revenues near about $2. HUL has been proactively engaged in rural development since 1976 with the initiation of the Integrated Rural Development Programme in the Etah district of Uttar Pradesh. Fair & Lovely. Wheel. Unilever was the world's largest Fast Moving Consumer Goods (FMCG) Company with worldwide revenue of $55 billion in 2005. touching the lives of two out of three Indians with over 20 distinct categories in Home & Personal Care Products and Foods & Beverages. Kwality Wall's etc. HUL is a subsidiary of Unilever 4. Knorr-Annapurna. Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods Company. in tandem with the company·s dairy operations. Pepsodent.Introduction of Hul 1. Hindustan Unilever was recently rated among the top four companies globally in the list of ´Global Top Companies for Leadersµ by a study sponsored by Hewitt Associates. Lakme. the factories that HUL continued establishing 5 . 5. Rin. The company·s Turnover is Rs. These were manufactured over 40 factories across the country. Clinic. Sunsilk. Its Indian subsidiary. Lux.523 crores (for the financial year 2009 . Subsequently.2010) 2. Brooke Bond.43 billion. Kissan. Close-up. 17. HUL's major brands included Lifebuoy. The company was ranked number one in the Asia-Pacific region and in India. in partnership with Fortune magazine and the RBL Group. 3. Pond's. Surf Excel.
8. look good and get more out of life with brands and services that are good for them and good for others. Unilever.400 managers. 7. It is a mission HUL shares with its parent company. including over 1. is to help people feel good. animal husbandry. generating alternative income.in less-developed regions of the country have been engaged in similar programmes in adjacent villages. which holds about 52 % of the equity. These factorycentered activities mainly focus on training farmers.000 employees. health & hygiene and infrastructure development. Home & Personal Care Personal Wash Fabric Wash Home Care Oral Care Skin Care Hair Care Deodorants & Talc'sColor Cosmetics 6 . The mission that inspires HUL's more than 15. 6.
000 villages in 52 districts in AP. Through a combination of micro-credit and training in enterprise management. scorched by successive years of drought.000 women entrepreneurs in its fold. The vision is ambitious: to create by 2010 about 11.000 Shakti entrepreneurs covering one lakh villages and touching the lives of 100 million rural consumers. The destination is Peddakaparthy village. Hindustan Lever Ltd (HLL). it has been scaled up and extended to over 5. was piloted in Nalgonda district in 2001. these women from self-help groups have turned direct-to-home distributors of a range of HUL products and helping the company plumb hitherto unexplored rural hinterlands. Karnataka. undaunted by the vagaries of nature. named Project Shakti. 7 . 65 kms from Hyderabad. From the time HUL's new distribution model. and the seat of a brave new experiment by fast moving consumer goods major. Gujarat and Madhya Pradesh with around 1.Where HUL's Shakti comes from: A HARSH summer sun beats down mercilessly on the drive to Nalgonda district in Andhra Pradesh. a group of village women are attempting to bring about a transformation in their lives. The rocky landscape is parched. where.
and improving living standards in rural India. by equipping and training them to become an extended arm of the company's operation.WHAT IS PROJECT SHAKTI ALL ABOUT: Launched in 2001. and creating access to relevant information through the iShakti community portal. Shakti is a pioneering effort in creating livelihoods for rural women. the initiative. which targets small villages with population of less than 2000 people or less. Project Shakti. Shakti provides critically needed additional income to these women and their families. It seeks to empower underprivileged rural women by providing incomegenerating opportunities. 8 . organised in Self-Help Groups (SHGs). health and hygiene education through the Shakti Vani programme. helped HUL reach the so-called media-dark regions by turning rural women into direct-to home distributors of its mass-market products Shakti is HUL's rural initiative.
What is self help groups & how does it work: The SHGs are also popularly called DWCRA groups and this name became popular after the DWCRA programme (Development of Women and Children in rural areas) 10-15 women come together to form a self help group to inculcate small savings Groups promoted by the Government or NGOs to tackle poverty. tailoring. fish trading. Micro loans from rural bank to setup enterprises Individual women take small loans from the group to start income generating activity (petty vegetable vending. dairy) 9 .
the group's corpus doubles. and by the end of the year.Concept Unilever wanted to penetrate deeper to 1. save in a bank. At the end of the year. and individual members can borrow internally from the group and start a business. each of these group save Re 1 per day or Rs 30 per month (some groups save more). These groups are increasingly being used by the government for social development. Typically. A group with 15 members and a saving of Rs 30 per head would save Rs 450 per month or Rs 5. the interest rates are 2-2. 10 . the pulse polio programme or the LPG (cooking gas) connections are routed through these groups. In Andhra Pradesh. they get a matching loan from the same bank. the group---if the repayments within the group is 95 per cent and the attendance by members is 75 per cent---can take a matching loan from regional rural banks.000 to 2. This way their corpus doubles. for instance. This way. all government schemes. There are around 6 lakh SHGs in the country.000 pop villages ²existing distribution model unviable Self Help Group women members were looking for more sustainable business opportunities in small village markets These provide rural women a platform to save money---they keep pooling money. The members can borrow from the group's kitty (typically. who are refinanced by NABARD.400 in a year.5 per cent month or 24-30 per cent per annum).
000 villages in 15 states Shakti already has about 25.Initially. 000 per month. These activities mainly aimed at training farmers.1. Soon the government agencies---the district collectors or the District Rural Development Authority (DRDA) which facilitates these groups----the banks and NABARD realised that to sustain these groups. It's here that HUL saw an opportunity. This program was in tandem with HUL's dairy operations and covered 500 villages in Etah.000 women entrepreneurs in its fold. weaving. leasing a farm or opening a small shop in the village. it starts off with individuals taking loans for selfconsumption: a marriage or illness in the family. The FMCG giant was desperate to increase this share. the groups began different activities: bought cattle for dairy activities. A typical Shakti entrepreneur earns a sustainable income of about Rs. toy-manufacturing. which is double their average household income. Shakti has already been extended to about 80. Shakti is thus creating opportunities for rural women to live in improved conditions and with dignity. HUL saw its dream fulfillment in the vast Indian rural market.700 -Rs. HUL soon realized that although it was enjoying a greater penetration in the rural market when compared with its competitor such as Nirma and ITC. The company was already engaged in rural development with the launch of the Integrated Rural Development Programme in 1976 in the Etah district of Uttar Pradesh. its direct reach was restricted to only 16%. Started in 2001. it was important to have income-generating activities. Subsequently. animal 11 . while improving the overall standard of living in their families. the company introduced similar programs in adjacent villages. As bank loans are strictly for productive activities.
However. by providing a sustainable micro enterprise opportunity. HUL started its Project Shakti in Nalgonda district of Andhra Pradesh in 50 villages in the year 2000. which were relevant to rural customers. linked with the company's core business. and to improve rural living standards through health and hygiene awareness. This group of usually 15 members contributed a small amount of money to a common pool and then offered a micro-credit to a member of the group to invest in a commonly approved economic activity. HUL offered a wide range of products to the SHGs. There after it was extended in other states with the total strength of over 40. Self Help Groups (SHGs) of rural women were formed by several institutions. Most SHG women viewed Project Shakti as a powerful business proposition and are keen participants in it. much remained to be done. became successful and sustainable and proved to be mutually beneficial to both the company and its rural customers. Such initiatives. health & hygiene and infrastructure development. HUL invested significantly in resources who work with the women on the field and provide them with on-the-job training and support. NGOs and government bodies in villages across India.000 Shakti Entrepreneurs. HUL provided the necessary training to these groups on the basics of enterprise 12 .husbandry. The main issue in rural development was to create incomegenerating prospects for the poor villagers. Partnering with these SHGs. Project Shakti was conceived. generating alternative income. Following the pioneering work carried out by Grameen Bank of Bangladesh. The social side of the Project Shakti was that it was aimed to create incomegenerating capabilities for underprivileged rural women.
TVS Motor for mopeds. women from SHGs become direct-to-home distributors in rural markets Having successful in Nalgonda. HUL has able to provide a window of prospect to invest and earn. this translated into a much-needed. AP alone had about half of the SHGs of the country. There were about 4. in 2003 HUL planned to broaden Shakti to a 100 districts in Madhya Pradesh. there was no channel of investment. Gujarat and UP. There were other plans such as to allow other companies (except HUL's competitors) such As Nippo. The impact of HUL was not all of a sudden." He further emphasized that Shakti was creating a win-win partnership between HUL and its consumers. HUL witnessed 15% incremental sales from the villages of AP. It requires somebody with scale and size to build a platform and then invite other companies onto this platform.36 lakh women SHGs in AP with almost 58. By 2005 the SHGs had mobilized Rs 1500 crore had mobilised as corpus.management. insurance companies for LIC policies to get onto the Shakti network to sell their stocks. Armed with micro-credit. which accounted 13 . "We wanted to first stabilise the project before we can look at other companies. The rural women organized themselves into `thrift and credit' groups with a saving of Re.1 a day which created a fund of more than Rs 800 crore. Sehgal was looking proud when he announced. For the SHG women.29 lakh poor women. which the women need to manage their enterprises. HUL tapped this huge overlooked network to launch Project Shakti. sustainable income contributing towards better living and prosperity. While the savings was there among the SHGs.
It was unclear how dealers would perform in an expanded infrastructure. We believe that by targeting lower price points and further expanding the distribution network. the decreasing brand loyalty among urban consumers rural market had become an imperative. "The (HUL) management had recognized the impending saturation of the urban markets some time back and launched aggressive plans to capture the rural markets.N. the onus is on HUL to grow the market. dealers and communicators must be well trained. Moreover. So. Returns may not happen in the next five years. Sr. Market analysts were perceiving a huge potential in the rural foray of HUL." 14 . "HUL contributes 20 per Cent of the total FMCG business in the country. Sr. but a lot of consumer understanding and insights comes from an exercise like Project Shakti. it was expected that with the monsoon revival and greater rural incomes could decline the payback period for projects like Shakti. Vice President of research group ASK Raymond James believed that if there was one company that could take on the onus of developing the rural markets. Siva Subramanian. However. He further continued." HUL acknowledged that for Project Shakti to be successful for the company's rural penetration. Vice President. According to the Concurs K. Franklin Templeton India Ltd.50% of the total sales of HUL products in AP. companies can tap the potential of rural markets. which in turn can lead to product innovation. Although HUL's rural initiatives incurred huge costs to the company. it was HUL. Nikhil Vora. clearly. a slowdown in the agricultural sector resulted in rural incomes remaining flat and affecting sales. Initiatives like Project Shakti will help them in establishing and consolidating their base in rural markets.
The Indian family structure and village interaction provide a unique diffusion mechanism that is an effective vehicle for Shakti. did not have the kind of distribution reach that HUL had established and in the long run. or even larger FMCG companies. that could prove a winner for HUL. Moreover. There was no doubt that the regional brands.HUL would have to determine whether Project Shakti could be repeatable in other countries. 15 . Whether this model could be successfully implemented in other countries must be further explored. it needs to find out whether the Project Shakti or e-choupal like initiatives could be increased.
Participated States: o o o o o o o o o o o o o Andhra Pradesh Karnataka Madhya Gujarat Chhattisgarh Orissa Punjab Rajasthan Tamilnadu Uttar Pradesh West Bengal Bihar Haryana Jharkhand 16 . They are also studying the consumption habits of the rural people.Objective: The Shakti entrepreneur program creates livelihood opportunities for underprivileged rural women. by spreading awareness of best practices in health and hygiene. The Shakti Vani program works to improve the quality of life in rural India.
Model of Project Shakti: 17 .
however. tap the uncovered rural market.BUSINESS GOALS: The company breeds approximately half of its business in India from the towns and cities and half from rural areas. At the end of the 1990s.000 or more. but no retail distribution network. The study aims at scrutinizing whether the business goals of the project are achieved and to what extent it is achieved with reference to the opted research area. where its products are sold in some 100.000 villages With population of 2. the company became conscious to augment its market share it can happen only when the market is Expanded. the challenge was to reach the 500.000 villages with less population located in secluded parts of the country. 18 . no advertising coverage and media coverage and broken roads and transport. SOCIAL GOALS y Improve rural living standards through health and hygiene awareness. Cater profitably to consumers located at the bottom of the pyramid. At this juncture. In this struggle there evolved the brain child of HUL ´Project Shaktiµ. The main business goal of Project Shakti is to improve the rural Distribution channels. y Empowerment of women. where there are millions of potential Consumers. To achieve the aim the company needs a different business model.
000 villages in Madhya Pradesh.Shakti Vani: Shakti Vani is a social communication programme. village baithaks . In 2004. trained in health and suhygiene ises. SHG meetings and other social fora. good hygiene practices and women empowerment. Chattisgarh and Karnataka. Women. This serves as a rural communication vehicle and helps the Shakti Amma·s in their sales. Under this programme. trained communicators visit schools and village congregations to drive messages on sanitation. 19 . address village communities through meetings at schools. It initiative which helps support Project Shakti is the Shakti Vani programme. Shakti Vani has covered 10.
000 villages and directly reaching to 150 million rural consumers. HUL is creating micro-enterprise opportunities for rural women. 20 . Shakti also includes health and hygiene education through the Shakti Vani Programme. the company embarked on an ambitious programme.000 women entrepreneurs in its fold. The program now covers 15 states in India and has over 31. Shakti.In 2001. thereby improving their livelihood and the standard of living in rural communities. and creating access to relevant information through the iShakti community portal. reaching out to 100. Through Shakti.
Shakti Vani is a social communication programme. Free Dental /health Camps in Shakti Villages 21 .
West Godavari and East Godavari districts. the Internet-based rural information service. hygiene and the like . Vishakapatnam. iShakti has been developed to provide information and services to meet rural needs in medical health and hygiene. called I-Shakti. 22 . in association with the Andhra Pradesh Government's Rajiv Internet Village Programme. in association with the Andhra Pradesh Government's Rajiv Internet Village Programme. HUL launched an Internet-based rural information service. The objective behind the i-Shakti model was to give need based demand driven information and services in the villages. has been launched in Andhra Pradesh. in August 2003. health. vocational training. iShakti. education. The service is now available in Nalgonda. in Andhra Pradesh. I-Shakti was an IT-based rural information service to provide vital information to the rural people in fields like agriculture.iShakti: Crossing the Border Encouraged by the goodwill and success of Project Shakti. animal husbandry. agriculture.
vocational training and employment and women's empowerment. the ICICI Bank and HUL jointly provided various financial products and services such as life and general insurance.K. through i-shakti. investment products (Equity. The system enabled an in-depth understanding of each user needs and thereby improved the quality of services offered to them. The vision is to have 3. had tied up with i-Shakti to launch various services. IShakti was based on an interactive discussion technology developed & patented by the Unilever Corporate Research Team. Personal Credit.500 kiosks across the state by 2005. 23 . Bonds). ICICI Bank Pure Gold (gold coins). The APonline . Moreover. Rural Savings Accounts and Remittances to the rural customer.Education. Mutual Funds. U.
On an average a Shakti Amma makes a 10% margin on the products she sells. 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. 24 .000 as investment which is used to buy products for selling. After training she is asked to put up Rs 20.How project shakti works: The recruitment of a Shakti Entrepreneur or Shakti Amma (SA) begins with the executives of HUL identifying the uncovered village. The products are then sold door-to-door or through petty shops at home.
000 people with 4-5 major brands of HUL Lifebuoy.In general. other brands included Lux. the Shakti entrepreneur then sold those goods directly to consumers and retailers in the village. According to Dalip Sehgal. New Ventures & Marketing Services. After trained by the company. Annapurna salt and Clinic Plus. Executive Director. the local selfhelp groups or banks provided them micro credit wherever required. Pepsodent. 25 . Nihar and 3 Roses tea. a member from a SHG was selected as a Shakti entrepreneur. Ponds.' However. Project Shakti-like endeavor would place everybody in a win-win situation. The Shakti entrepreneurs were given HUL products on a `cash and carry basis. commonly referred as 'Shakti Amma' received stocks from the HLL rural distributor. Wheel. He further asserted that given the largeness of the country and backwardness of its women. Apart from these. HUL Project Shakti was adding up to 15% of HLL sales in rural Andhra Pradesh. Each Shakti entrepreneur usually serviced 6-10 villages in the population strata of 1.000-2.
Process 26 .
But if the individual borrows from the group to start the enterprise. They could sell the products to other members in the group.000 (Rs 4 X 1000). lend it internally to their members at 24 per cent per annum or 2 per cent per month. who can buy the products and sell them in their villages? HUL would supply them the stocks. that works in reality. consider the income potential for the women brand ambassadors or the group. but HLL is increasingly realising that it's the individual model. If she has a turnover of Rs 2. Banks lend the groups at an interest rate of 12 per cent per annum or 1 per cent per month. now. HUL's share of the consumer's spend would be Rs 2. the profits are ploughed back into the group's kitty.000 people. the groups in turn. and not the group model. the individual can retain the profits. Every time a woman sells. If half the people buy. she makes a margin (10 per cent. The potential: consider a village with a population of 1. if everybody buys from this group. retailers make 8 per cent). and an average spend of Rs 4 per head per month on personal products.How HUL's Rural Model Works: HUL's approach: can you get these groups as your brand ambassadors. Now. If a group nominates a person to do the selling. consume within the family or sell to others in the village.000 per 27 .000. Both models exist. The group could nominate one or two people to sell the products. but the groups would decide who would do the enterprising. HUL's share of the rural consumer's spend would be Rs 4.
These women have to cope with competition from retailers in the village. Assuming that she would have borrowed this money (Rs 2. HUL has launched the pilot with 12 SKUs to keep things as simple as possible.000 and retained earnings of around Rs 2. Thus.000.month---at 10 per cent gross margin---she makes a profit of Rs 200 per month. and the need to scale up the model. she would have to pay an interest (at 2 per cent per month) of Rs 480 per annum or Rs 40 per month. But since most of these women are first-time entrepreneurs. she can double her capital by the end of the year. HUL is aware of the problems.920 per annum. After providing for interest costs. by taking a loan of Rs 2. But the situation on the ground is not really as rosy as these back-of-the-envelope calculation may suggest. 28 .000) from the group. she will be still making a profit of Rs 160 per month or Rs 1.
Secondly. there were some areas with enough money but their awareness level and consumerism was very low. The 29 . the lives in rural areas were still governed by ethnicity and traditions and people did not simply get used to new practices. Many of the rural areas were not connected by rail transport. For example. Transportation was also a major hindrance. fax and internet. In contrast with a low per capita income comparative to the urban citizens. there was a problem of distribution and communication facilities such as telephone. The Kacha roads were unserviceable during the monsoon and interior villages get isolated. rural FMCG demand was depended upon agricultural situation which was again depended upon monsoon. it faced many problems. Besides transportation.Distribution of Villages in India: When HLL shifted to the rural India. Moreover. even rich and educated class of farmers does not wear jeans or branded shoes.
buying decisions in villages were slow and delayed. They wanted to give a trial and buy only after being satisfied. 30 . finally the poor illiterate villagers viewed experience more important than formal education and they valued sales people who could provide practical solutions to their problems. And.
The entrepreneurs need intensive training in improving their selling skills. the Shakti entrepreneurs are turning out as competitors to the retailers in those villages. The SE receives the stock at her door step from the stockiest. During the research it is observed that some of the SHG are not cooperative with the local women. Project Shakti is definitely a success story. In some instances.REACHING THE UNREACHABLE GEOGRAPHICAL AREAS: Before the introduction of PS many unreachable remote villages were not covered Due to lack of transportation facilities.G. To withstand in the competition.SEs reach the satellite villages (nearby villages) and satellite retailers on foot or by bullock carts or bicycles or mopeds or auto rickshaws. This provision madeThe products reach the villages which are close to the town. Contacting those villages is a difficult task. Some of the SEs replied that they are crossing small water streams by boat to carry on with their business. During the selling process. Strong purchasing power of consumers is necessary to increase the customer base Of the SEs. The river Godavari flows across E. But PS made it possible. PS could succeed with the blend of efforts of large firms in collaboration with civil society organizations and local governments. the retailers sell private labels for a lower price. Nevertheless to reach this success it has to cross many stumbling blocks. The 31 . This is an uncertain factor which fluctuates with the agricultural output.Dt which makes many villages unreachable through roadways.
SEs are facing lot of problems in acquiring the investment. 32 . India. On the whole the result of the research can be concluded that Project Shakti is a massive success in the area of E. Many SEs have opined that they will be comfortable if company provides stock on credit basis. but they joined with the interest of earning and business leadership.G Dt. Some of the SEs opined that they would be comfortable working with female rural executives rather than male rural executives. To our surprise there are respondents who are not that economically deprived.
Today. Sankaramma has become a key development figure in her village 2.000 per month. She sees Project Shakti as a mean for the bright futures of her children. convened by Project 33 . The village has 350 households with a total population of 1200.Sankaramma: Sankaramma. but thereafter the customers started visiting her home for products. a mother of 2. to attend a meeting. the leader of the local Kanaka Durga self-help Group (SHG) belongs to K. She started a business in April 2003 with the Hindustan Unilever Ltd. Thimmapuram village's Muddaner Mandal in the Kadapa district of Andhra Pradesh. Her husband's income was not sufficient for the two children and their old parents. Initially she sold door to door. But the long distance and the odd timings of the job forced Usha to quit the job. she had a regular monthly turnover of Rs.Usha Sarvatai Usha Sarvatai. By 2005. Sankaramma's 5 hectares of agricultural land was not sufficient for six member family due to severe drought in the region.10. Then she got a call from the Government dept.Conversation with two workers of project shakti: 1. Project Shakti also enabled her to provide mid-day meals at the primary school in her village. traveled 32 km everyday to work.
Overall. Hindustan Lever Ltd.000 poor women were selling the company's products in 50.000 of India's 34 ." And she is now very eager to grow her business in the years to come. "I am happy fulfilling my family's requirements and people give me a lot of respect today.Shakti. She says.. By 2005. around 30% of Hindustan Lever's revenue came from the rural markets in India Started in the late 2000. The women typically earned between $16 and $22 per month .000 villages in India's 12 states and contributed for 15% of the company's rural sales in those states . Usha became a Shakti Amma and started a new venture. a subsidiary of Unilever is counting on thousands of women like Sankaramma and Usha Sarvatai to sell its products to the rural consumers it couldn't reach before. Project Shakti had enabled Hindustan Lever to access 80. around 13. In a short span the good relationships she developed with the villagers helped her do good business. The list does not end here. often doubling their household income which was used to educate their children.
" Hindustan Lever was not the only company recognizing the vast marketing potential in rural India.000 villages . Hindustan Lever's director of new ventures proudly expressed.638. But if by doing business we can do something positive. With the saturation of urban market. "At the end of the day. we're in business. it's a great win-win model. the companies started reengineering their businesses and products to target rural consumers who are poor but are rich in aspirations fueled by the media and other forces 35 .