Hindustan Lever's Project Shakti12

8/12/2019 Hindustan Lever's Project Shakti12

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Unilever in India


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Competitive Advantages:Strong, well-established brands

Local manufacturing capacity and supply chain

Vast and wide-reach distribution system


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Sales Organization based on Product Categories and Geographies

- The Redistribution Stockists (RSes) received stocks from company owneddepots or CFAs and sold to wholesalers and retailers

- Each profit center had its own sales force and stockists

Need for Change:

- Not appropriate for small markets

- Expensive to maintain individual stockists for different profit centers

Urban Market Challenge

- Increased competition in urban markets due to entry of numerous players

- Ineffective current S&D structure to tackle Modern Urban Trade characterizedby large retail chains

- Combined negotiation required for such chains


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Approach to Rural Market Based onBusiness Potential and Accessibility

IndirectCoverage

(IDC)

DirectCoverage

Space forProject

Shakti

Streamline

Low Business Potential High Business Potential

AccessibleMarkets

InaccessibleMarkets

Direct Coverage:Common Stockist to serve alloutletsIndirect Coverage:Common Stockist assigned a PJP(Permanent Journey Plan)Visit all rural retailers at least onceevery fortnight

Streamline:Wholesale channelAppointed Rural Distributors (RDs)who in turn appointed Star SellersTransfer of ownership

The above 3 approaches reachedabout 30% of rural market, yet 70%of the market remained untapped


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Challenges and Opportunities for HLLin Rural Market

Challenges

Scattered consumer marketsover large areas

Low per capita consumption rates

Poor connectivity through air, railand roads

Higher cost of accessing ruralmarket

Huge untapped potentialmarket(16% direct coverage of

rural market)

Access to new market tocompensate for stagnation inurban markets

Source of competitive advantageas the market is relativelyuntouched by competitors

Opportunities


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GSMPersonalProducts

GSMDetergents

GSMBeverages

GSMFoods

RegionalManager, RM

RSMFoods

RSMBeverages

RSMPersonalProducts

RSMDetergents

ASM4Detergents

ASM3Detergents

ASM2Detergents

ASM1Detergents

SalesOfficer 3

SalesOfficer 2

SalesOfficer 1

Redistribution Stockists (Rses): 6 to 10 per TSI

Territory Sales In-charge (TSIs): 5 to 7 per Sales Officer


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Project Shakti


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To create income-generating capabilities for underprivileged rural women byproviding a small-scale enterprise opportunity, and to improve rural livingstandards with greater awareness of health and hygiene

Project Shakti was launched as a platform to act as:

1. A Rural Market Sales and Distribution Initiative to deliver growth

2. A Communication Initiative to Build Brands

3. A micro-enterprise initiative that creates livelihoods in rural India

4. A Corporate Social Initiative that improves living standards and catalyzesaffluence in rural India

Objective


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Business being sharedresponsibility of the groupleading to group unity and

support Women empowerment

Role of Shakti entrepreneurs asinfluencers, impacting categoryand brand awareness

Availability of quality products

in villages

Advantages of Project Shakti Model

Deep penetration in remote ruralmarket

Improved brand awareness for

HUL in media blind area Goodwill generation for the

company

For Community For Hindustan Unilever


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Project Shakti Model

Self HelpGroups

RuralEntrepreneur

Rural SalesPromoter

Rural Retailersand End

Consumers

HUL


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Initiatives for Rural Entrepreneurs Some discount relative to general trade

Opportunity to sell to retailers as well as directly to ends consumers

Fixed initial investment of Rs 10,000 to ensure monthly income of Rs 700 permonth

Additional 2% discount for star sellers

Additional 1% discount as they did not avail credit

Access to micro-credit

Grassroot innovations

Offering discounts from own margins to induce new customers and win themover from local retail trade

Creating a network of friends and relatives in neighboring villages to sell theproducts


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Extend Project Shaktis Impact Beyond Sales & DistributionSocial Communication Program for Rural Brand BuildingCorporate Social Initiative

Objective:

- Spread awareness of health and hygiene in rural India

- Secondary benefit of increased market for HULs health and hygiene products

- Social Communication program as a cost effective mode of brand promotion

Mode of Operation:- Trained local woman equipped with aids such as pictorial literature and

interactive games positioned as an expert on hygiene

- Employ different social gatherings as platforms

- Ground implementation by Ogilvy Outreach

- Funding by strong internal brands and Project Shakti

- Programs extended beyond Shakti villages

Challenges:

- Insufficient internal budget Cooperation from Governments and NGOs reqd.

- Keeping the original objective of Vani intact while funded by brand promotionbudget

Shakti Vani


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Extend benefits of Information and Technology to Rural IndiaSocial Communication ProgramCorporate Social Initiative

Objectives:

- Empowering rural community by creating access to information

- New communication channel for rural areas for brand building

Mode of Operation:

- Free access for registered rural users to wide range of information- Dialogue-interactive software, updated with information daily from central

portal via dial-up internet connection

- Expert answers to queries when info not available in portal

Challenges:

- Limited CSR budget created obstacles for scalability and sustainability

- Unequal Internet Penetration across states

- Fast scalability required to achieve its objectives

Solution:

- Partnership with state owned e-governance ventures AP Online in Andhra

- Use of wireless mobile technology like GPRS for internet connectivity(Suggested)

iShakti Rural Community Portal


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Focus on growth of revenue per consumer as well as growthof number of consumers out of Shakti target areas

Higher Growth targets to an individual target

Optimize the skill training programs for the Shaktientrepreneurs

Start Shakti clubs for entrepreneurs in an area

Use local gatherings as promotions possibilities (e.g. Gifts tonewlyweds from HUL product line, free samples, etc.)

Ensure support of NGOs, banks and both state and local

government for smooth functioning of programme

Recommendations


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By2009 the program had more than 45,000 entrepreneurs covering approximately135,000 villages across 15 Indian states

By 2010, the Shakti network reached over 600 million consumers

Successful implementation after customization and adaptation in several South-East Asian, African and Latin American markets

Launch of Shaktimaan initiative for men to distribute HUL products to villages

adjoining Shakti villages

Current Status of Project Shakti


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Social


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Documents

Hindustan Lever's Project Shakti12