Indian Institute of Management

Kozhikode

Marketing Management
Case Analysis: Unilever in India: Hindustan Lever‟s Project Shakti – Marketing FMCG to the rural
Consumer

Submitted to: Prof. Rahul Kumar Sett

Submitted By:

PGP/14/258 Alok Kumar PGP/14/279 Lokesh Singh

PGP/14/280 Mahtaab Kajla PGP/14/283 Naveen Vyas
PGP/14/303 Shruti Kabdal PGP/14/304 Sneha Ramtake
 Situation Analysis

 Hindustan Unilever Limited is India‟s largest fast moving consumer goods and Services Company.
 Over 70% population of India resides in villages so tap this market company need to develop economically
viable and efficient distribution channels in villages.
 Poor connectivity among villages and widely scattered consumers are main problems.
 Recently it has launched a project „Shakti‟ to penetrate the rural market for FMCG goods. About 12000
women entrepreneurs had been appointed, covering nearly 50,000 villages in partnership with nearly 300
NGO‟s.
 Company wants to scale its operation so to achieve a consumer base of around 100 million by 2006. It is
estimated that this will require a network of about 25000 entrepreneurs.
 HLL has also introduced Shakti Vani to create awareness in villages about personal health and community
hygiene.

Problem Identification
 How to improve the distribution channels to gain a consumer base of 100 million by 2006.
 The greatest challenge that Shakti face is costs and management control to make it profitable.
 Building confidence/self-sufficiency among Shakti Entrepreneurs
 To achieve the objective of contributing 15-20% of HLL‟s revenue by 1lakh entrepreneurs

Project Shakti

Challenges:

 Education level of indian women and cultural differences in different regions

 Not many microfinance companies are interested in rural areas because of low income level of population.
 Scaling involves high process costs
 More human resource needed to train people to become entrepreneurs and maintain them
 Support needed from various sectors of government
 Cultural issues like language and communication
 Almost 10-15% of Shakti‟s revenues belonged to HR costs, a major concern
 Lack of confidence of entrepreneurs to invest because of past failures
 Not many SHGs to collaborate with
Marketing Management | 06/09/2010

Advantages:
 New markets can be tapped
 Even without the direct retail outlet channel final customer can be reached
 A more personalized service
 Preference to Entrepreneurs
o Credit was also given to regulars
o iShakti and Shakti Vani created a loyal customer base and improved market penetration as
visibility of HLL‟s products increased
o Discounts were given to consumers
o Creating a network , passing on part of profit to another person who sells your goods at
another place

1
Managing Project Shakti in long term

In the long run HLL will need to take the following steps –

 Expansion into new markets – HLL operations must expand to other villages within the state and also
into other states.
 Involve other agencies – HLL can also invite other microfinance companies into the market who can
provide money to village entrepreneurs. Then people can buy an LIC policy with their regular HLL
products.
 iShakti – Make use of IT for information exchange among entrepreneurs. IT portal can be used to
communicate information about personal health and community hygiene.

iShakti and Shakti Vani

 Both initiatives were created to provide rural India with access to information and social communication.
 Although the setup costs are very high and funds can be generated thus Shakti can finance itself
 Vani itself does not generate revenues directly, but it is a powerful tool to increase hygiene awareness in
rural India, as a result indirectly increase HLL sales at long term.
 In short, iShakti and Vani will be workable and scalable to help Shakti success.

Social Impact and Role of Business

 HLL should make a social impact on rural India.
 HLL can and will continue to enjoy the competitive advantages as the main company to participate in social
development.
 The connection between business and communities will develop lifetime customers for HLL. This
involvement may not be the typical role of business, but as long as it is profitable to HLL without
compromising moral and legal issues, it will be a good move for HLL to increase its reputation as a socially
responsible organization.

Recommendations

 Shakti should continue as it is providing HLL a distinct competitive edge and increase HLL‟s profits and
growth. Moreover, Shakti helps to position HLL as socially responsible organization.
 Introduce “Project Shakti” as a low cost marketing tool to the brand managers
 Shakti vani project will help in creating awareness among villagers and they will in turn use more products.
 Shakti Vani should be used to gain goodwill of people and can collaborate with NGO‟s to reduce cost of
information delivery process. Marketing Management | 06/09/2010
 Market saturation as seen in exhibit 3, clearly defines a need to come up with new products that differentiate
themselves
 Organizing workshops to enhance the marketing abilities of the Shakti Entrepreneurs.