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70% of the Indian population lives in rural areas. This segment, commonly referred to as the
'bottom of the pyramid', presents a huge opportunity for companies. Unilever's Indian subsidiary,
Hindustan Lever Ltd (HLL), considered one of the best-managed companies in India,
understands the importance of rural marketing.

The trigger point came when a local firm Nirma, through its new product formulation, pricing
and distribution challenged HLL's detergent business. Nirma's attack from below made HLL
realise its vulnerability as well as identify a new opportunity. Since then, HLL has launched
various initiatives to reach out to the rural consumer. It has changed its product formulations and
deliveries.
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In the early 2000s, around 700 million people, i.e. 70% of the Indian population lived in 6,27,000
villages, in rural areas. Of this, 90% were concentrated in villages with population less than
2000.3 According to a study conducted in 2001 by the National Council for Applied Economic
Research (NCAER), there were as many "middle income and above" households in rural areas as
there were in urban areas.

There were almost twice as many "lower income households" in rural areas as in urban areas.
There were 2.3 million "highest income" households in urban areas as against 1.6 million in rural
areas.
NCAER projections indicated that the number of "middle income and above" households was
expected to grow to 111 million in rural India by 2007, compared to 59 million in urban India.4

Gone were the days when a rural consumer had to go to a nearby town or city to buy a branded
product. The growing power of the rural consumer was forcing big companies to flock to rural
markets. At the same time, they also threw up major challenges for marketers.
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HLL's history could be traced back to 1885 when the Lever Brothers set up "William Hesketh
Lever", in England. In 1888, the company entered India by exporting 'Sunlight', its laundry soap.
In 1895, the Lifebuoy soap was launched in India followed by 'Pears' in 1902, 'Lux' flakes in
1905 and 'Vim' scouring powder in1913. In 1930, the company merged with 'Margarine Unie' (a
Netherlands based company which exported vanaspati to India), to form Unilever. In 1931,
Unilever set up it first Indian subsidiary, the Hindustan Vanaspati Manufacturing Company for
production of vanaspati...
›

  



Prior to the late 1990s, HLL like any other company had used traditional modes of reaching out
to the rural consumer - wholesalers and retailers...

G 
HLL's experience with rural consumers dated back to the mid-1980s, when Nirma had been a
serious threat to HLL's detergent business. Nirma's success demonstrated that rural India did
have the money and willingness to buy packaged goods...


 

Mass media reached only 57% of the rural population. HLL realized that it had to use
unconventional media to enhance awareness. In late 1999, HLL engaged Ogilvy Outreach , to
take care of its rural communication campaign...

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India's rural population comprising 12% of the world's population presented a huge, untapped
market. HLL had signaled its commitment to the rural market in various ways.

Management trainees had to begin their career with the company by spending a month or two in
a rural village. Senior managers continued to emphasize the importance of rural markets.

Various innovations in the marketing mix had been introduced, with the requirements of the rural
markets in mind...