Hindustan Unilever Ltd:

Rural Marketing Strategies

 The Factors contributing to growth of rural
Market
•Changing mindset lifestyle of Rural Slide 3

•Increase in productivity in agriculture. Slide 4

•Increase in Government Rural Development programs Slide 5

•Improved infrastructure

•Expansion in rural Retail network

•Expansion of TV network

•Manufactures & marketers placing special emphasis on

rural markets
 CHANGE

*MIND SET
*LIFE-STYLE
*ASPIRATIONS
*DEMAND
*CONSUMER BASKET
 Area under High Yield Variety (Mn. Hectare)
1980-81 1990-91 2000-01 2005-6
Wheat 16.1 23.0 24.0 32.0
Rice 18.2 27.4 33.0 39.1
Jowar 3.5 7.1 9.3 10.5
Bajra 3.6 5.7 7.2 9.6

% of High Yield Variety to the total cropped area

1980-81 1990-91 2000-01 2005-6
Wheat 72.3 86.8 87.2 88.6
Rice 45.4 64.2 73.7 79.5
Jowar 22.1 49.3 95.0 96.5
Bajra 31.2 54.4 76.9 81.5
 Development Programs implemented by
Indian Government
For the Tenth Five Year Plan, the allocation of funds for rural development programmes
has been enhanced to Rs. 76,774 crore from Rs. 42,874 crore in Ninth Plan.

•Intensive Agricultural District Program

(popularly known as package program)
•High –yield variety program
(Real Green revolution in India)
•Operation Flood I, II ( White revolution)
•High –yield Oil seed variety program (Yellow revolution)
•Sampoorna Grameen Rozgar Yojana
•Desert development program
(For combating drought and desertification)
•Integrated wasteland development program
(For store waste water)
•Fisheries Development Program
( Blue revolution)
Source: India Year Book 2009
Implemented by the Ministry of Rural Development, National Rural Employment
Guarantee Act (NREGA) is the flagship programme of the Government that
directly touches lives of the poor and promotes inclusive growth.

Increasing Employment Opprotunities:

In 2007-08, 3.39 crore households were provided employment and 143.5 crore
persondays were generated in 330 districts.

Enhancing Wage Earning and Impact on Minimum Wage:

Increasing Outreach to the poor:

Strengthening Natural Resource Base of Rural India:

PRADHAN MANTRI SADAK YOJANA

INDIRA AWAAS YOJANA (IAY)

COMPUTERISATION OF LAND RECORDS

UPDATING OF LAND RECORDS

 Classification of Products in Indian Rural markets

Goods Product Buying Buying Buying Place

Type Frequency Decision

Convenience Consuma Frequent Simple Paan shop, Kirana

goods ( Toiletries, bles & High stores, Co-op
Cosmetics, stores & Mandi
Cigarettes)
Shopping Durables Moderate Complex Fairs, Haats,
goods (Clothing, Mandi and Feeder
Furniture, Appliances) town
Specialty Durables High Very Shops in town or
goods (2 Wheeler Complex Cities
Tractors, Camera etc.
 Contribution of ‘Rural Market’ to All- India Market

Sr No. Product Category Name of the Product Contribution Rural Market (%)
1 Washing & Cleaning Detergents & Washing Powder 55.0
Material Bars 68.0

2 Toiletries Premium Soaps 26.0

Popular Soaps 50.5
Tooth Paste 39.0
Tooth Powders 24.5

Shampoos 16.5
Safety Razor Blades 58.0
Shaving Rounds 42.0
Shaving Creams 8.0
3 Cosmetics Talcum Powders 43.0
Hair Oils 25.0
Acne Preparations 23.0
4 Food & Beverages Packaged Tea 45.5
Coffee 18.0
Milk foods 22.0
Beverages 15.0
5 OTC Glucose Powder 42.0

6 Misc. Batteries 59.0

Torches 33.0
% of Rural Sales to total sales

Company Rural Share (%)

HUL 52
Colgate 50
Godrej 30
Cavin kare 33
Marico Industries 28
Cadbury 25
Heinz 20
Nerolac Paints 10
Glaxo - Wellcome 25
Cipla 23
Ranbaxy 18
Sun Pharma 10
Toyota 48
Kinetic 32
Hero Honda 43
 Some PIGGY BACK Products

Piggy Products Duplicate Products

Sr No. Original Product Piggyback Product

1 Homelites Homelifes
2 Rin Run

3 501 Bar 509 Bar

4 Cadbury Eclairs Choudhary’s Eclairs
5 Brooke bond Benson Brand
6 Nirma Nilima, Narima
7 Lifebuoy Lifejoy, Liteboy
8 Colgate Tooth Paste College Tooth Paste
9 Fair & Lovely Friends & Lovely
10 Pan Parag Pan Prabhat
 An Era of Rural Marketing
(a case
study)
 Hindustan Lever Limited
An Era of Rural Marketing

1980 to 1990 was the golden period of HLL

In 1999 it stated its policy to DOUBLE its turnover in next 5 years
(From Rs 10,000 cr to Rs 20,000 cr)
It took 10 years to DOUBLE their sales
After year 2000 HLL failed to deliver on the top line
even though serving 10 lakh retail outlets ( now serves 700 Mn consumers)
Stock fell down from Rs 200 in 1999 to Rs 125 in 2004 and
now Rs 266 (last week)
In order to fuel growth the Rs 11,000 cr HLL formulated set of new strategies
to expand its presence in India’s Rural Market
It implemented innovative projects

Project SHAKTI and

Operation BHARAT
 Hindustan Lever Limited
An Era of Rural Marketing
Some of the strategies to retain the leadership are as follows
Divestment

•In 1990 HLL took to inorganic growth with a goal of building a Rs 10,000 cr
Company
•HLL had gone on acquisition spree, took several brands

•It was left with lot of baggage to be sorted out

•In 2000, of total sales, 75% came from FMCG & remaining from non FMCG

•It divested in Nickel catalyst, adhesives, thermometers, seeds and

mushroom business
•Low margin exports were also weeded off
•This released a cash for investment in core operation
•By 2003, 93% of sales came from FMCG and just 7 % from non- FMCG.
•By 2005 HLL was a focused FMCG with 35 power brands across 20 categories
•(Now caters to 14 categories only)
 Hindustan Lever Limited
An Era of Rural Marketing
Some of the strategies to retain the leadership are as follows
Capital Investments in Tax Heavens

•Invested in State which offered Tax Holiday & excise rebates

•HLL invested about Rs 250 cr in 2 separate facilities in Uttaranchal & Himachal

•Personal care facility in Uttaranchal & Soaps & detergent in Himachal pradesh
•The benefits gave extra savings which were utilized for price cuts

Corporate Restructuring

•In April 2004 HLL’s all major businesses except few were merged under two
divisions HOME & PERSONAL CARE (HPC) and FOODS ( foods ice-creams,
confectionery & beverages)

•This was done to have a simple & leaner organization with less hierarchy,
few levels and greater empowerment
 Hindustan Lever Limited
An Era of Rural Marketing
Some of the strategies to retain the leadership are as follows

Rural Marketing Division

•Earlier each business division of HLL dealt with rural market on an individual basis
•Now with creation of this division, company deals with rural markets as
single organization
•Which lead to better Cohesion, greater push & deeper penetration in Rural market.

Duplicates were smashes out

•Major brand had duplicates which were swapping HLL’s business

Job training in rural Market

•Minimum 8 weeks training was given to the sales team/new recruits in rural areas

•The new recruits were asked to get engaged in rural development program
•The goal was to engage executives with local population to know them better
 Hindustan Lever Limited
An Era of Rural Marketing
Some of the strategies to retain the leadership are as follows
•Multiple price points

•Realizing that the customer do not necessarily upgrade in a linear fashion

HLL offered every price point & provided value added options,
especially in detergents – eg low priced, mid priced & premium

Surf Excel International

Premium
Surf Excel Blue
Rin Shakti powder
Mid priced Sun light powder
International wheel active
501 bar
Low priced Wheel detergent powder
Wheel laundry soap
 Hindustan Lever Limited
An Era of Rural Marketing
Some of the strategies to retain the leadership are as follows

Product Line pruning

•Earlier Lot of brand extensions were developed.

•In a way lot of investment to the company and confusion for the customers
•Brands like Close-up Renew & Close-up Oxy fresh were pruned
•Even lifebuoy’s variants were pruned

Line modernization

•Wheel was strengthened with a enhanced fragrance

•Vim bar was coated from 5 sides to save from wastage
•Lifebuoy was no more a carbolic soap, was given Green look, with Tulsi & Neem

Derive around 50% of the sale from Rural areas

No picture available

NOW
PROJECT SHAKTI
 PROJECT SHAKTI
By Traditional Distribution system were serving just 15% of villages

It was smart way of reaching 10 lakh homes

Shakti AMMA

A project a combination of micro credit, training in enterprise mgt & self-help

Piloted in Nalgonda District in AP in 2001

With the vision of 11,000 Shakti Enterpreneurs touching 10 cr. rural consumers

Reaching brands from home to home

In 2004 latest IT based i Shakti was launched

By yr 2005 most of the AMMAs were earning around Rs 1700 pm

By 2007 HLLs Rural sales rises to 54%of the total sale

 Operation HARVEST
( Harmonize All Resources in Village to Enhance Sales & Turnover )
In 1989 seeding exercise with initiated for homework of project Shakti

30,000 villages were selected with the population of 2000

Vans were developed for the promotion

Each van was covering 6 villages for six days

Films, songs, ads of HLL were shown

A endure to assess the MPV of the village

India’s largest FMCG company, HLL has unveiled a new corporate identity
represented by a new logo and also a new name
Hindustan Unilever Limited (HUL).

The new name reflects the company’s heritage as well as the synergies
it has with its global parent Unilever Plc.

To reflect its India-specific focus, the company has chose to retain

‘Hindustan’ as the first word in the name.

The new identity positions the company as working on a local as well

as a global platform. HUL also unveiled a new logo consisting of
24 different icons which symbolizes the company’s brands,
organization, values and its core idea of Vitality.
 24 icons which symbolizes Company’s brand association
Sun Sprarkle
Bird
Bee
Lip
DNA Ice cream
Recycle
Palm Tree
Tea
Hand & flower Particulars

Hair Frozen
Heart
Bowl
liquid
Mixing & blending
Clothes
Spoon
Container
Spice & flavor Fish Wave
RURAL CONSUMER IS BECOMING MORE RICHER
DAY BY DAY

Source : LG rural Marketing report 2006