Unilever in India: Hindustan Lever's Project Shakti--Marketing FMCG to the Rural Consumer

Harvard Business School Case #505-056

Case Software #XLS-216

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Table A Distribution of Villages In India

Population Number of Villages % of Total

Less than 200 114,267 17.9

200-499 155,123 24.3
500-999 159,400 25.0
1,000-1,999 125,758 19.7
2,000-4,999 69,135 10.8
5,000-9,999 11,618 1.8
10,000 and above 3,064 0.5
Total 638,365 100%

Source: "Selling to the Hinterland", Pradeep Kashyap, The Businessworld Marketing Whitebook 2003-04
Exhibit 1 HLL's Annual Financials ($US)

Income Statement Dec 03 Dec 02 Dec 01

Revenue 2,324.2 2,151.6 2,349.1

Cost of Goods Sold 1,181.9 -- 1,313.7
Gross Profit 1,142.3 -- 1,035.4
Gross Profit Margin 49.1% -- 44.1%
SG&A Expense 635.3 -- 631.7
Depreciation & Amortization 27.4 27.9 --
Operating Income 507.0 459.1 403.7
Operating Margin 21.8% 21.3% 17.2%
Non-operating Income 0.0 0.0 0.0
Non-operating Expenses 21.8 1.9 1.6
Income Before Taxes 485.2 457.2 402.1
Income Taxes 96.6 99.9 83.3
Net Income After Taxes 388.6 357.4 318.8

Continuing Operations 388.6 357.4 318.8

Discontinued Operations 0.0 0.0 0.0
Total Operations 388.6 357.4 318.8
Total Net Income 388.6 365.4 339.6
Net Profit Margin 16.7% 17.0% 14.5%

Source: HLL.
Exhibit 2 HLL's Organizations into Profit Centers

Profit Center Categories Key Brands 2003 Turnovera

Detergents Personal Wash Lux, Lifebuoy, Dove 100

Fabric Wash Surf Excel, Rin, Wheel
Household Care Vim, Domex

Personal Products Skin Applications Fair & Lovely, Pears, Vaseline, Ponds 65
Hair Care Clinic Plus, Sunsilk, Nihar
Oral Care Pepsodent, CloseUp
Deodorants & Talcum Powder Axe, Rexona
Specialty Lakmé

Beverages Tea Lipton, Brooke Bond 28

Coffee Bru, Deluxe Green Label

Foods Culinary Products Kissan, Knorr 15

Staples Annapurna

Source: HLL.

a
Note: Turnover figures are indexed to detergents turnover.
Exhibit 8 Brands and Their Contribution to Shakti Turnover

Brand Franchise Category 2003 Share 2004 Share

Wheel Laundry 18% 19%

Breeze Personal Wash 3% 5%
Lifebuoy Personal Wash 16% 15%
Rin Laundry 7% 7%
Surf Excel Laundry 1% 2%
Hamam Personal Wash 1% 1%
Liril Personal Wash 1% 1%
Lux Personal Wash 9% 9%
Vim Dishwash 2% 2%
Super 501 Laundry 2% 1%
Rexona Personal Wash 3% 3%
Nihar Hair Care 4% 2%
Clinic All Clear Hair Care 1% 1%
Lux Shampoo Hair Care 1% 1%
Sunsilk Hair Care 1% 1%
CloseUp Oral Care 3% 2%
Pepsodent Oral Care 3% 3%
Fair & Lovely Skin Application 2% 2%
Ponds Skin Application 3% 2%
Pepsodent Toothbrush Oral Care 1% 1%
Clinic Plus Hair Care 3% 4%

Home and Personal Care 84% 84%

Taj Mahal Tea 2% 2%

Red Label Tea 2% 2%
Taaza Tea 0% 2%
A1 Tea 2% 1%
Super Tea 1% 0%
Ruby Tea 1% 0%
Bru Coffee 1% 1%
DGL (Deluxe Green Label) Coffee 1% 1%
3 Roses Tea 2% 2%
Knorr Annapurna Foods (Salt, flour, etc.) 0% 2%
Foods & Beverages 12% 13%
Other Brands 4% 3%
All PCs 100% 100%

Source: HLL.

Note: These shares are indicative. True shares have been disguised to protect company confidentiality.