CASE: Unilever in India: Hindustan Levers Project Shakti

1.How is HUL placed in the Indian Consumer market?

Hindustan Unilever Limited is the biggest player in the market share of FMCG sector of the country. It
attempted market leadership across a wide range of product categories as well as a wide range of prices.
Hence was able to target almost every segment of Indian market in a wide variety of portfolios.

2.What was the motivation for the Shakti initiative? Was it a CSR initiative?

Project Shakti was Hindustan Lever Limited's (HLL) rural marketing initiative. Rural India was
identified in the future as a key source of growth and competitive advantage. The motive behind this
initiative was to provide access to rural markets that would be a major differentiator between competing
FMCG firms. This was because growth levels in urban markets would slow as competition heated up,
and as rural markets and their wealth remained mainly untapped, the number of rivals continued to
expand. It was a sales and distribution initiative that brought development, a brand-building
communications initiative, a micro-enterprise initiative that generated livelihoods, a social initiative
that enhanced living standards and catalysed rural India's affluence. Shakti was not an initiative of the
CSR. The sponsoring organization would give one or more members of rural India's self-help groups
micro-credit, and HLL would partner with these recipients by providing them micro-enterprise
possibilities. Even I Shakti, who was a fresh Shakti Project initiative, had a price of 3-5% of Project
sales.

3.How will Project Shakti influence distribution in rural markets?

The company goal was to extend the immediate reach in rural markets and create brands through local
influencers i.e. construct a distribution scheme through a network of female micro-entrepreneurs in
order to get the product straight to customers. Shakti uses women's self-help groups (SHG) to train
entrepreneurs to work as a rural direct-to-home sales force, educating consumers on the health and
hygiene benefits of HLL brands, and in turn building brand loyalty among customers. Local
entrepreneurs know the needs of their village and can therefore influence the villagers ' buying decisions
and convince the villagers easily. The entrepreneurs of Shakti are also brand ambassadors in rural India
for all brands of HUL.

4.If Shakti cannot become profitable, should HUL continue the program? Why?

HUL began the Shakti Project with two goals: Business goals: extending the reach of HUL to untapped
markets and developing its products through local influencers. Social Objective: Sustainable livelihood
for disadvantaged rural females. Although Shakti is not lucrative, it serves its broader objective of
enhancing living standards in rural regions, empowering females, raising awareness of hygiene, and
expanding information technology advantages to rural regions. It thus fulfills its social goal. It is facing
difficulties in all other industries where HLL has taped into due to the existence of rivals and its
revenues and revenues have fallen. There are no rivals in the districts under Project Shakti. It also has
a mover benefit in this industry for the first time.