RURAL MARKETING

IN
12/07/21
CURRENT SCENARIO 2
 Presentation Outline

• Rural Marketing ?
• Literacy in India ?
• Population Distribution ?
• Introduction
• Background of HUL
• HUL in present Scenario
• Strategies of HUL for Rural
Marketing
• Project Shakti
• Govt. Efforts
• Financial Analysis
• Forecast in 2010
Rural Marketing ?

Rural Marketing is the process of Developing, Pricing,

Promoting, Distributing rural specific goods &
services leading to exchanges b/w urban & rural
markets with satisfies consumer demand & also
achieves organizational objectives.

The term rural marketing which was earlier used as an

umbrella term to refer to all commercial transaction.
Literacy in India ?
 The picture has been changing over the
years. A decade ago the literacy rate in
rural india was only 20%.
 Year to year too, there is a change.
Every year about 8 million people get
added to rural india literate population.
 In absolute no., already there are more literate people in rural india
than in urban area.
 Literacy people in rural india = 16.5 crore
 Literacy people in urban India=16 crore
 INTRODUCTION
 According to an analysis conducted by ASSOCHAM the
rural & semi-urban areas are expected to grow more
than 50% by 2010 in FMCG sector.
 As per NCAER report rural markets are growing at twice
the rate of urban markets,& constitute around 58% of
disposable income.
 The demand for washing soaps & detergents from rural
areas :50-70%.
 The demand for durables like scooters, motorcycles and
televisions :40-50%
Background of HUL
 HUL derives over 50% of its revenue from rural market.
 The various product launched by the company – Edible oil
(Dalda) ,Soaps (Lifebuoy,Lux,Liril), Shampoo (Sunsilk, Clinic) &
Oralcare (Close-up, Pepsodent).
 Hindustan Lever Ltd. Began operations in india in 1933 as a wholly-
owned subsidiary of the Unilever Group.
 In 1990’s HLL diversified into several new areas,essentially through
acquisitions and joint ventures eg. TOMCO, Lakme, Kwality and
Kissan.
 HUL (Hindustan Unilever)
 Hindustan Unilever (HUL), a fast moving consumer goods company having
a soap factory in nearby village Khamgaon, had the capital and an
inclination to help farmers near its factory to be financially independent. The
cost of building one check dam is over Rs 1 lakh.
 Having implemented the project in Parkhed, HUL hopes to more than
double the area of land under cultivation in Mandka, a nearby village with an
initial investment of Rs 80 lakh.
 The next challenge for Hindustan Unilever is to build a set of logistics
service providers across the country. But HUL executives said they would
proceed with caution as not too many logistic players are capable of
handling issues that could arise in a high volume consumer goods business.
 In Parkhed, between 2003 and 2007, the company has built 1,600 trenches,
7,500 pits, 5 permanent check dams and 3 wells for a total expense of over
Rs 50 lakh.
 HUL, the fast moving consumer goods (FMCG) giant, mitigate the
steep cost inflation and report a growth of 13 per cent in its net profit
at Rs. 558.18 crore (Rs. 493.08 crore) for the second quarter of the
current financial year. In a scenario where cost pressures were
intense, the company reported net sales of Rs. 4,215.67 crore (Rs.
3,481.4 crore), a growth of 21 per cent.
 care (HPC) business grew at 20 per cent with growth across
categories with the personal wash growth being driven both by
volume and price. The foods business grew by 14 per cent with good
underlying volume growth seen in beverages, processed foods and
ice-cream.
 HUL’s water business through its brand, Pureit, has now gone
national having been extended to 364 towns across 20 states. The
company’s sale of Pureit has crossed the one-million unit mark.
 HUL’s investment behind brands and new categories continued
during the quarter and grew by 30.5 per cent. The profit before
interest and tax grew 20.7 per cent, while the profit before interest
and tax margin for the quarter at 14.2 per cent of sales was
maintained at the same level as the June 2007 quarter.
HUL Strategies for Rural
Marketing
 Project Bharat
 Project Millennium
 Project Shakti
 i-Shakti
 Shakti Vani
 Lifebuoy Swasthya Chetana
 Rural Marketing - Project

Shakti
Challenges in Rural Markets
• Accessibility
• Viability
• Media Dark
 Rural selling through Self Help Groups
 Benefits
– Improving product reach
– Facilitating Brand-Communication

• Extended into 12 major states, 340 districts

• 19000 Entrepreneurs
• Over 80,000 villages covered
- Touching 85 mn rural lives
Rural school in Chinhat, Uttar Pradesh
Rural village with a VSAT Internet connection near Bhopal, Madhya Pradesh
A small Internet café on a market street in a town near Bombay
Financial Analysis – Key Players in
Rural Areas

Revenue (Rs. Cr.) in 2007

Company Name in rural areas

Hind. Lever 11193.88

Dabur India 1345.5

Colgate Palm. 1127.55

Marico Ltd. 1045.16

Reckitt Benckiser 757.35

Procter and Gamble 567.59

Forecast 2010
 Rural and semi-urban
– 128 million population thrice the urban
– Market size growth from 48k to 100k Crores (Growth of 50% at
10%CAGR)
– Increase penetration from the current less than 1%
– Problems in the rural sector
 Low per capita disposable incomes
 Large number of daily wage earners
 Acute dependence on vagaries of monsoon
 Seasonal consumption
 Poor infrastructure – roads and power supply
 Urban
– Market 16.5k to 35k Crores (Growth of 100% at 20%CAGR)
– Intense competition – severe pressure on margins – Focus on
newer products, such as fruit juices

Source: Assocham Report ‘Future Prospects of FMCG’

QUERY TIME