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Rural Marketing Strategies - 1 HUL




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

Rural Marketing Strategies - 2 HUL

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.

Current scenario of Rural Markets. Recommendations. 12. 9.Rural Marketing Strategies . 1 5 7 8 9 11 15 18 19 20 . 7. 8. Bibliography. TOPICS Introduction to Rural markets. Case on Wheel Strategies. 3. Relationship Marketing Case: HUL Conclusion. Page No. Challenges faced by HUL. 11.3 HUL Table of Contents Topic No. 6. 10. Highlights of HUL Marketing Strategy. 5. Introduction of Hindustan Lever Limited. 1.

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

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

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

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

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

Thus HUL faces difficulty in reaching their products to potential rural consumers.27.. Their coverage is around 85%. and creating access to relevant information through the i-Shakti community portal. HUL prefer such occasions as they allow greater visibility and capture the attention of the target audience for larger spans of time. finding them is not easy. many are totally destroyed or severly damaged by the monsoon and remain unserviceable. is very expensive. 2) No Reachibility India's 6. 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.7 million. which is widely spread. HUL's vision is to take this programme to 100.90% in rural areas. 700 million Indians may live in rural areas. At least 50 % of rural roads are poorly surfaced. Advertising in such a highly heterogeneous market. Seven Indian states account for 76% of the country's rural retail outlets.Rural Marketing Strategies .000 villages impacting the lives of over a 100 million rural Indians. Ujjain.000 villages in 12 states. HUL reaches their product in this dispersed markets.000 villages are spread with 128 million households.9 HUL the Shakti Vani Programme. Many rural areas are not connected by rail transport. Kota and Bulandshesher are major sources of attention for the rural buyer but aren¶t concentrated unlike urban markets. The programme now covers about 50. District fairs are periodic and occasional in nature. leaving interior villages isolated. the rural population is nearly three times the urban. . The fairs at Pushkar. the total number of which is placed at around 3.

transporting about 6 million tones of freight per year. buffaloes also are used for carts. 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.Rural Marketing Strategies . 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. 12 million are estimated to be in rural areas . They like to give a product a trial and only after getting personal satisfaction do they buy it again. Punjab and Western Up. In Haryana. therefore. more desirable to villagers. Rural consumers are cautious in buying and decisions are slow.10 HUL 3) Infrastructure in rural areas The use of bullock carts look inevitable for many years into the future . Camel carts operate in Rajasthan and Gujrat in both urban and rural sectors. 4) Prevalence of spurious brands and seasonal demand. For HUL¶s product there are a multitude of 'local variants'. These make the HUL¶s product available in rural markets but very slowly as it consumes time. which are cheaper. . and. Of the 15 million carts in the country .

e CHAKRA Positioning of Wheel :. Difference :.µTough on Dirt and soft on Hand. It belongs to Fabric wash Segment of HUL.WHEEL. Wheel includes under it the following brands:1.'Best clean with less effort' .Wheel Active(Blue) Powder Brand:.Wheel Green Powder 4. Logo is in shape of a wheel of cart i.Rural Marketing Strategies . Wheel makes a laborious chore like washing light and easy. It was launched in 1987. which contain a high percentage of soda. Wheel Green bar 2. It Cleans Effectively with lesser effort and lesser physical exertion. Wheel Active(Blue) bar 3.11 HUL ` WHEEL¶s STRATEGIES WHEEL in rural markets Wheel was launched as an Economy segment brand by HUL.¶ Wheel does not burn hands or harm clothes like some other detergents. It has Active Radiant which .

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

White goods free with the product. Eg. Wheel offers demonstrations to people about How to use it? Near the Wells and Bathing Ghaats. This ensures the customer to buy more. Pricing:. Eg. One pack cleans about 25 clothes. The Rural markets where there is Hard water that affects lather. The next is it also adopts Sampling operations in villages of offering free samples to the consumers. Wheel is now available even in smaller packs ranging between 1Rs ± 5Rs.Wheel is priced at Rs 20 per Kg now. The powder is available in packs of 1Rs.Rural Marketing Strategies . Wheel also sponsors Film Shows in villages known as¶Chitrahar¶ to advertise its products. 3. 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. The Shopkeeper in rural areas provide disposable packs by cutting the bigger pack into smaller one as needed by the consumer. HUL priced the blue variant of Wheel at Rs 22 per kg.13 HUL Household Utensils . 2.In South and Western India they prefer Wheel because there is Hard water. they prefer to use Wheel rather than an Oily Soap. . Previously . just above the green variant priced at Rs 18 per kg. Wheel also follows a strategy to promote its products by giving an offer to Buy 3 and get 1 free. 2Rs. This forces consumer to decide and store the product for one month. it provides instant lather and is a sensory Quo for Cleanlinees. and 5Rs and Bar is available for both 5Rs and 2Rs. 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. There is no additive required. Wheel undergoes Rural Based Activities to promote its products.:.

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

through the integrated brand Wheel. HUL had an overall share of 40 %. as is appropriate. According to the figures of July 1999. sponsored events. Aim: The aim is to build sales for its personal care brands including that of Pepsodent. its mass market toothpaste.Rural Marketing Strategies . 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. live product demonstrations. home-tohome contacts and cinema shows. 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. 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 %. etc« It involves building relationships with the consumers in rural areas through education programmes. . Pepsodent was the fastest growing brand in its slot with annual growth rate of 22 %. etc. market activation to distribution. In the toothpaste market the main competition was between HUL and Colgate. Relationship Marketing: The case of HUL. It is different from conventional campaign through media hoardings.

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

Fair and Lovely cream was test launched in Maharashtra for a target audience. Cinema: After home-to-home contact and sales in villages during the day. .50. toothpaste. 3. Cinema shows are quite popular there.000 Villages. In the same market shampoo use was about 6% and went up to 18% even if used once a week.Rural Marketing Strategies . Effects: The strategy has highly encouraging results. It has a target of reaching 20 crore people in 3. 15. Sold separately. There are still villages which do not have TV. the products would together cost the consumer Rs.17 HUL the urban one. 4. talcum powder and face cream. Door-to-Door Sales: About 10 million homes in rural India have been touched so far and target for that year was 12 million. 27. It shot up to 20% in one year. The kit is sold at Rs. HUL concentrates on cinema time in the evenings. About a year before the launch the use of the cream was less than 1 % of zero in many illages. The project essentially involves selling a discounted personal care kit containing mini-packs of shampoo. The market has become aware and responsive for personal care products.

It would be a blunder to assume and apply the same principles as of urban marketing. Lack of Proper Physical Communication Facilities. Nirma etc. ITC. The spread and heterogeneity further complicate matters. etc.18 HUL CONCLUSION Rural Market is Gold Mine which is paved with Thorns but HUL has rightly tapped it. However there is a long way to go to capture all the rural markets.Rural Marketing Strategies . Different way of thinking of Rural Consumer. Low Levels of Literacy . what and how of the rural consumer. Colgate. socio-cultural milieu. 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. HUL was the first FMCG to tap rural markets and has generated huge revenues from rural markets. demographics. It is therefore apt to do a thorough groundwork before jumping headlong into the rural markets. Many Languages and Dialects. . 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. or the infrastructure. Rural marketing is completely different ball game talk about its consumer tastes. competition. In Rural markets company face various problems like Underdeveloped People and Underdeveloped Markets. communication media. The key lies in understanding why. Low Per Capita Income. Dispersed Market .

Government and Marketers have to undertake measures to improve the Rural markets. but not the only one now. For India to maintain and improve economic growth it is imperative to improve 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. .Rural Marketing Strategies . a major FMCG to enter rural markets. There are many companies which entered rural markets.19 HUL RECOMMENDATIONS HUL.

Marketing Management (13 Edition) ± Philip Kotler th th .S.Rural Marketing Strategies .G. Rural & Agricultural Marketing book± Ramkishen. 3.Y 2. Marketing Management (10 Edition) ± Philip Kotler 4. Rural Marketing ± C.20 HUL BIBLIOGRAPHY 1. Krishnamacharyulu and Lalitha Ramakrishna.