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Key Takeaway
Keep your pulse on where your customers are purchasing your products through regular market surveys. Design your distribution strategy to allow for future evolution as the market changes. Hindustan Unilever Limited (HUL) is Indias largest Fast Moving Consumer Goods company, 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

Photo Credit: Hindustan Unilever

Modern trade, or retail chains, is characterized by standardized store formats, airconditioned ambiance, and a variety of goods and typically lower pricing. Global retail chains such as Walmart and Carrefour fall under this category. In India, modern trade comprises roughly 10% of all commercial transactions and is growing rapidly. In the past, HULs sales forces were separated by geographies and product categories. However, this organizational structure was ill equipped to manage modern trade, as one regional team negotiating the terms of trade with an individual franchisee of a national retail chain could never be as effective as HUL entering a long-term comprehensive contract spanning all product categories and outlets of the retail chain. Today, HUL has specific account managers dedicated to large modern trade customers.

General trade

Photo Credit: CGAP

General trade consists of the thousands of independent retail and wholesale outlets across the country. Often called mom and pop shops, each of these stores is considered a distinct customer and has to be addressed individually. HUL services these outlets through a network of 2,900 stockists. Goods are sent to a local warehouse or carrying and forwarding agent (CFA), and are then stocked and dispatched to specific retailers upon orders from the HUL stockists. The stockists are responsible for servicing all the small retail outlets in a specific geographic area. General trade makes up the majority of HULs sales.

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 home-care, 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

Abstract:
Lifebuoy's Swasthya Chetna (LSC) was a fiveyear health and hygiene education program initiated by Hindustan Lever Limited (HLL), the Indian arm of the fast moving consumer goods (FMCG) major, Unilever. The program was formally launched in 2002, in eight states across India. The objective of this program was to educate

around 200 million people in rural and urban areas about the importance of adopting good 'health and hygiene'practices. The program spread awareness about germs and their adverse effects on health, and how proper 'health and hygiene'practices, such as bathing and washing hands with soap could prevent diseases like diarrhea. According to HLL, LSC was not a philanthropic activity, but a marketing program with a social benefit. HLL sought to grow the Lifebuoy brand in India by attracting those consumers who never used soap. In the process, the company sought to bring about a behavioral change by convincing people to use soaps more frequently, thus creating more users for its brand. This program was also seen as a successful case for public-private partnership.

Issues:
Understand the rationale behind the Lifebuoy Swasthya Chetna initiative by Hindustan Lever Limited (HLL) in India. Understand the issues related to brand management and repositioning in the personal wash soap segment in the fast moving consumer goods (FMCG) industry in India. Appreciate the role of public-private partnerships as a win-win situation for private entities, governments, and individual consumers.

Contents:
Page No. 1 2 3 5 6 9 10 10 11 12 14

Introduction Background Note Lifebuoy and Health Initiating a Behavior Change A Multi-Phase Interactive Program Impact of the Program The Accolades Some Criticisms Other Initiatives for Lifebuoy Outlook Exhibits

Keywords:
Lifebuoy's Swasthya Chetna, Hindustan Lever Limited (HLL), Unilever, Fast moving consumer goods (FMCG) major, Personal Soap Wash, Rural Social Marketing Strategy, Advertising Campaign , Sales Promotion, Marketing Mix, Brand Management, Repositioning , Behavioral change, Corporate Social Responsibility, Media Channels, Global Public-Private Partnership for Handwashing with soap (GPPP-HW)

Lifebuoy Leaves its Stamp on India Contd...

And we are working with parents and children, health educators, teachers, community leaders, and government agencies to spread the word,5said Caroline Harding, Global Brand Director, Health Brands, Unilever. In the process, HLL sought to increase the sales of Lifebuoy soaps by convincing these people to use soaps more frequently and also to create new users for its brand. HLL launched the LSC program in villages where media penetration was negligible. The people of these villages were educated through lectures, demonstrations, visual aids such as flip charts and interactive quizzes. Various media vehicles were used in the program including cinema vans, wall paintings, weekly markets, fairs, and festivals. The initiative started with communication to schoolchildren, which was extended to their parents and other adults, and culminated in the formation of sustainable health clubs by the local people. The whole process took around two to three years. HLL had committed US$ 5.4 million for this fiveyear program.6 The program was implemented by Ogilvy Outreach7, while Weber Shandwick (WS),8one of the largest public relations (PR) agencies in the world, provided the PR support. By the end of 2005, HLL had covered more than 18,000 villages in these eight states. The sales of Lifebuoy grew by 20 percent in 2003-04 with strong sales reported from the eight states where the program was being implemented. In 2005, the Lifebuoy brand grew by 10 percent and this growth was expected to continue in 2006. The program also received a lot of positive media attention...

Background Note
Hindustan Vanaspati Manufacturing Company, the first Indian subsidiary of Unilever was established in 1931. (Refer to Exhibit III for a brief note on Unilever). However, many of Unilever's popular brands like 'Lifebuoy', 'Pears', 'Lux', 'Vim', and 'Dalda'were already available in India...

Lifebuoy and Health

Lifebuoy was initially launched in India in 1895, within one year of its launch in the UK. It was the flagship soap brand of Unilever (Refer to Exhibit V for Lifebuoy's logo). In the 1930s, Unilever started the Clean hands help guard health campaign in the US to encourage consumers to make their hands germ-free by using Lifebuoy...

Initiating a Behavior Change

It is estimated that across the world, diarrhea results in the death of about 3 million children each year. In India, around 600,000 children die every year on account of diarrhea. Diseases like diarrhea also lead to loss of workdays that directly affect labor productivity in rural India...

A Multi-Phase Interactive Program

Initially, the objective of trying to change the behavior and attitudes of rural consumers proved to be a tough challenge...

Impact Of The Program

In 2003-04, the sales of Lifebuoy grew by 20 percent. According to Unilever, the sales of Lifebuoy were showing directly attributable growth as sales from the eight states where the program operated was particularly strong...

Excerpts Contd... The Accolades

On the whole, the program received positive coverage by the national as well as international media. The Financial Times reported, New distribution channels have been developed for the (LSC) program, with representatives that are part salespeople, part health workers sent to villages to teach schoolchildren the importance of hand washing with soap...

Some Criticisms
In early 2001, HLL initiated a handwashing program in Kerala as part of the GPPP-HW. But its initiative in Kerala faced protests from some anti-globalization activists...

Other Initiatives for Lifebuoy

The handwashing campaign was extended to urban areas in August 2003 with the Healthy Hindustan campaign. For this, HLL partnered with McDonald's Western India across cities like Mumbai, Pune, Ahmedabad, and Vadodara to educate children about the benefits of handwashing with soap...

Outlook
By 2005, LSC was regarded as India's single largest health and hygiene education program. Changing the behavior of people, particularly in the rural areas was a big challenge for LSC, as these behaviors were deeply rooted...

Exhibits
Exhibit I: Lifebuoy Swasthya Chetna Postal Cover Exhibit II: Lifebuoy Swasthya Chetna Logo Exhibit III: A Brief Note on Unilever Exhibit IV: List of HLL's Brands Exhibit V: Lifebuoy logo Exhibit VI: Pack-Shots of Lifebuoy Soaps Exhibit VII: A Public-Private Partnership for Handwashing Exhibit VIII: Campaigning for Health & Hygiene Exhibit IX: Glo-germ Demonstrations Exhibit X: Wall Painting of Lifebuoy