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touching two out of three Indians with their large brand portfolio. HULs products are household
names across the country and span a host of categories such as soaps, detergents, personal
products, tea, coffee, ice cream, and culinary products. Today, there are over 7.7 million retail
outlets in India with an average of 6.8 stores per thousand people the highest store density in
the world.
To maintain their market leadership, HUL pursues innovative distribution mechanisms to reach
the millions of potential consumers in both urban areas and small remote villages where there is
no retail distribution network, no advertising coverage, and poor roads and transport. HUL
realized from the onset that its sales and distribution network gave it an edge over the
competition, but that rivals would try to match it over time. To maintain their competitive
advantage, HUL has aggressively extended more deeply in India, moving from large to small
towns, and from urban to semi-urban areas.
The unorganized and scattered character of markets in India means sales and distribution requires
a different tactic from that of more developed economies. Like Coca-Cola, HUL knew it needed
to tailor its approach for the different markets.
Modern Trade
categories and outlets of the retail chain. Today, HUL has specific account managers dedicated
to large modern trade customers
General trade
Rural Markets
While general trade encompasses both urban and rural markets, serving customers in more
remote areas of India poses unique challenges. Rural markets are scattered over large areas with
low per capita consumption rates. While the aggregate potential of rural markets is large, the
potential of each of the 600+ dispersed markets is very low. As well, rural markets are not
connected to urban centers by air or rail, with road connectivity poor at best. Accessing these
markets, even when feasible, means additional logistics costs to HUL.
Despite the roadblocks, conquering the rural markets is a must for HUL. One out of every eight
people on this planet lives in an Indian village. In comparison to the urban market, which
consists of roughly 250 million people, the rural market is 775 million people across 638,000
villages. Within ten years, per household consumption in rural India is forecasted to equal
todays urban levels.
To penetrate the rural markets, HUL launched a unique four tier distribution system. Markets
were segmented based on their accessibility and business potential.
1. Direct Coverage: HUL appointed a common stockist to service all outlets within a town
and sell a limited selection of the brand portfolio. Towns consisted of populations of
under 50,000 people.
2. Indirect Coverage: HUL targeted retailers in accessible villages close to larger urban
markets. Retail stockists were assigned a permanent route to ensure that all accessible
villages in the vicinity were served at least once a fortnight.
3. Streamline: Streamline leveraged the rural wholesale channel to reach markets
inaccessible by road. Star Sellers were appointed among wholesalers in a particular
village. Star Sellers would purchase stock from a local distributor and then distribute
stock to retailers in smaller villages using local means of transport (e.g. motorcycles,
rickshaws).
4. Project Shakti: Project Shakti targeted the very small villages (<2,000) and tapped into
pre-existing womens self help groups (SHG). Underprivileged rural women were
invited to become direct-to-consumer sales distributors for HUL products. Termed Shakti
Ammas (literally strength mothers), these women represent HUL and sell its homecare, health, and hygiene products in their villages.
By the end of 2009, Project Shakti network comprised of 45,000 Shakti Ammas covering
100,000 villages across 15 states in the country, cumulatively reaching over 3 million households
every month. Unilever has replicated Project Shaktis success in other markets such as Sri Lanka
and Bangladesh.