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customers also entailed undertaking many challenges and overcoming obstacles. The company has been at the forefront of experimenting with innovative methods to reach the rural consumer and undertaking several ambitious projects which are given below. 7.1 Operation Bharat The pioneering effort of HUL to reach rural homes and increase awareness among rural customers was Operation Bharat launched by its personal products division in 1998-a 13crore direct-consumer reach program which reached an estimated 2.2 crore homes. Under this project each home was given a box of products, at a special price of Rs.15,comprising low unit-price pack of different categories of products-dental-care (Pepsodent toothpaste), skin-care (Fair & Lovely cream) ,hair-care (Clinic shampoo) and bodycare(Pond s Dream flower talc) products along with educational leaflets , audio-visual demonstrations, film songs and mythological serials interspersed with ads of UniLever products. Almost 160 vans, each equipped with a TV and VCR, were used in this operation with over a thousand promoters (which included distributors and other private operators). The project strengthened the visibility of both the particular brands and categories and helped eliminate barriers to trial by increasing awareness among potential rural customers. 7.2 Operation Streamline In 1998, the company launched Project Streamline to extend their distribution network in the rural markets. Here, the goods are distributed from the C&F Agents to the Re-distributors, who in turn pass it on to the Star Sellers who sells everything from detergents to personal products. The project opened up a new distribution channel beyond the territories that were covered by HUL s
7.3 Indirect Coverage Under the Indirect Coverage (IDC) method. In less than two years.000 villages giving promotional packs. As the company demonstrated with Operation Harvest. Therefore this operation was launched to supplement the role of conventional media in rural markets and in the process increase awareness and forge loyalty with rural customers.4 Cinema-Van Operations . and having motorable roads. To service the additional villages the company created a super-stockist. vans from HUL and its distributors did the rounds of 30.000. substockist hierarchy with the sub-stockist essentially being the stock-point for servicing retailers in his area. showing products ads and identifying key retail and distribution points 7. The ultimate aim of this program is to have a Single Distribution Channel for rural markets by consolidating across categories. To do so the company initiated mobile van operations in a focused manner to create awareness and point-ofpurchase access.500 odd distributors. During this exercise. awareness of different products was weak. The company s distribution network nowcovered 60 per cent of the villages with population greater than 2. company vans were replaced by vans belonging to Redistribution Stockist. it doubled the company s reach in rural India. such an exercise whose primary aim was to increase brand awareness. Although it was not feasible for the Redistribution Stockist to cover all these markets due to the high costs involved these markets were heavily important due to their untapped potential. 7.4 Operation Harvest Since the reach of conventional media in rural markets is low. 7. which serviced a select group of neighbouring markets. is best done through van operations.
They have however been used for dual purposes-to regularly service retailers in deeper and less accessible markets in addition to making contact with the end customers. Cost-effective distribution solutions were first attempted by HUL. Onaverage. a Shaktiamma records monthly sales of Rs10. In 15states. or Shakti Ammas. toilet soaps and shampoos . trial and consistent availability. The Shakti model trains women from SHGs to distribute HUL products of daily consumption such as detergents. as they are called act as the end-point in HUL s rural distribution chain. The women avail of microcredit through banks. But in the end-result it managed to do achieve its objectives-achieve penetration in the rural market-far greater in fact that any other company.Cinema Van Operations are typically funded by the Redistribution Stockist and have films and audio cassettes with song and dance sequences from popular films. those earnings come out of a 3% discount that HUL gives her on its products. 7. A woman from a SHG selected as a Shakti entrepreneur receives stocks at her doorstep from the HUL rural distributor and sells direct to consumers as well as to retailers in the village. The company recognized early in its rural distribution initiative that market share would be created only when demand is built up through awareness. it has worked with self-help groups and nongovernmental organizations to identify underprivileged women and train them to be saleswomen. The company literally had to build-up the market village by village in its rural initiative. aswell as a trade margin of . also comprising advertisements of HUL products.the latter s penetration being only 30 per cent in rural areas. on which she earns Rs600-800.5 Project Shakti An unique initiative launched by the company.Project Shakti is a low-cost distribution network HUL launched in 2001 in tie-up with rural women s selfhelp groups.000. These women entrepreneurs. and many other companies are learning from its model today. Each Shakti entrepreneur services 6-10 villages which have a population of less than 2000.
8 Recent Developments In an attempt to further increase efficiency and cut costs HUL has further finetuned its distribution model with the elimination of one layer-that of the Star Sellers. Now with the elimination of Star Sellers the distributors service the rural outlets directly leading to increased efficiency and better quality of service. HUL has successfully penetrated the rural market using its many flagship initiatives and constantly fine-tuning its distribution model. A really outstanding Shaktiam m a a Diamond Shaktiam m a can even book Rs30. There are now 45000 Shakti entrepreneurs serving over 1. Launched with the objective of spreading awareness about the importance of washing hands with soap the company simultaneously introduced a smaller bar (18 gram)of Lifebuoy soap priced at two rupees.000 of sales every month. The company continues to grow with itsmission of identifying itself with the needs of the Indian customer. In a single stroke the company identified itself with the needs of the rural customer where health and hygiene is the primary concern and managed to establish its Lifebuoy soap as the most popular soap in rural India. often turning her house into an HUL store.000-40.35.000 villages in India across15 states. So resoundingly successful has been this program in increasing rural penetration that the parent company of HUL-Unilever is now thinking of replicating Project Shakti globally. to encourage people with low incomes to use soap. Previously the Rural Distributors serviced these Star Sellers which in turn serviced the rural outlets in every village. Today it hassuccessfully tapped into 250 million households .6 Lifebuoy Swasthya Chetana This rural awareness program launched by HUL in 2002 endeavours to induce adoption of hygienic practices among rural Indians and aims to bring down the incidence of diarrhoea. 7.approximately 10%. 7.
.in rural India. a lot more needs to be done to increase the penetration ofHUL in the rural market. But considering that ruralIndia comprises nearly 72% of the total population in India with 720 million people(according to the 2001 Census).
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