dissertation_unilever project shakti 2006
TRANSCRIPT
STRATEGIES TO RAPIDLY INCREASE COVERAGE OF PROJECT SHAKTI
Hindustan Lever Limited – Project Shakti
Submitted in Partial Fulfillment of the Degree of Master of
Business Administration 2005-2007
Dissertation Project
Submitted By:
Vikram Chachra, MBA Class of 2007 Roll No: 05BM8051
Industry Guide: Faculty Guide:
Mr. Satyendu Krishna Dr. Biplab Dutta
National Sales and Training Manager Associate Professor
Hindustan Lever Limited - Shakti Division VGSOM, IIT Kharagpur
VINOD GUPTA SCHOOL OF MANAGEMENT
INDIAN INSTITUTE OF TECHNOLOGY, KHARAGPUR
1
Dissertation Report
Hindustan Lever Limited – Project Shakti
On
Strategies To Rapidly Increase Coverage Of
Project Shakti
Submitted in Partial Fulfillment of the Degree of Master of Business
Administration 2005-2007
Dissertation Project
Vinod Gupta School of Management
IIT Kharagpur
Submitted By:
Vikram Chachra, MBA Class of 2007
Roll No: 05BM8051
Industry Guide: Faculty Guide:
Mr. Satyendu Krishna Dr. Biplab Dutta
National Sales and Training Manager Associate Professor
Hindustan Lever Limited - Shakti Division VGSOM, IIT Kharagpur
2
CERTIFICATE OF EXAMINATION
This is to certify that we have examined the thesis, and accept this in partial
fulfillment for the MBA degree. This approval does not necessarily endorse or
accept every statement made, opinion expressed, or conclusions drawn, as
recorded in this thesis. It is limited to the acceptance of the thesis for the
applicable purpose.
Examiner (External) _______________________
Supervisor (Academic) _______________________
Co-Supervisor _______________________
(if applicable)
Date _______________________
3
Industry Certificate
4
Acknowledgement
While I value any experience as a learning opportunity, seldom are some experiences as
enriching and life changing as my 6 months in Project Shakti at Hindustan Lever Limited has
been. I take this opportunity to thank all the people who I have had the good fortune of closely
working and interacting with during the dissertation period. As such the dilemma is whether to
start from the top of the pyramid or the bottom! In consonance with the flavor of the project I
will start with the hard working awe inspiring women of rural India.
I would like to express my appreciation and gratitude to all the rural families especially the
ladies in the over 250 villages that I visited and who opened up their lives for this project. It
has been a truly humbling experience to observe and work with you.
I thank and appreciate the efforts of the Sales force of Project Shakti who worked
passionately through thick and thin towards bringing dignity and a better standard of living to
rural underprivileged women. Without their hard work and passion many of the strategies
devised would not have resulted in the success we achieved as a team. The sales area of
Vidarbha is now one of the best performing zones in the country due to all of you.
I express my gratitude to Rafeeq Sheikh, Sales Officer – Shakti Vidarbha Sales Area (VSA)
for the excellent teamwork and wisdom that comes only from experience and passion. I would
also like to thank the Rural team of VSA – Rajkumar Shahakar, Capability Officer, the Rural
Territory Sales Incharges (TSIs) chiefly Manish Chourey and Chatterpal and all the 8 Rural
Stockists of Nagpur and Amravati for extending their sincere cooperation and support in all
our challenges.
I would like to thank Sameer Gera, the Area Sales and Customer Manager (ASCM) of Shakti
– Maharashtra and Gujarat, who defined mentorship and continuously motivated and
challenged me. The results we achieved are a direct result of his attitude and interest.
I would like to thank my project tutor at Hindustan Lever Limited, Mr. Satyendu Krishna,
National Sales and Training manager for Shakti, New Ventures for his guidance and quality
feedback all along the way. I appreciate the time you took out of your extremely busy
schedule to invest in me and the project. I would also like to express my gratitude to Vijay
Sharma, Business Head of Shakti for taking the time to evaluate my performance at the end
of the dissertation and giving constructive feedback. On that note I would like to thank HLL
Division for exposing to me to the vivid and exciting life of rural FMCG sales and distribution.
Finally, I would like to thank my Project Guide, Dr. Biplab Dutta for the guidance during the
course of the project.
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Abstract of the report
This Dissertation report is structured in the following format.
At the outset, we present the executive summary that briefly
describes the problem, the strategies devised and implemented and
the results obtained towards meeting the dissertation objectives. This
sets the stage for the detailed report to follow. First we understand the background of the dissertation project namely
the business of Hindustan Lever Limited and their Project Shakti
Second, we discuss the problem or challenge of the dissertation
project along with the background work done towards effectively
meeting the dissertation goals. Third, we directly move to the results that we achieved as an outcome
to our dissertation work. Fourth, start on how we achieved those results by analyzing the
difficulties that were to be overcome and which were central to devising
and implementing strategies to that effect. Fifth, and finally, we discuss the strategies one by one with the insight
on which they are based, the pilots that were conducted and future
perspective.
The future perspective has been discussed along with the various
strategies.
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TABLE OF CONTENTS
LIST OF FIGURES ..........................................................................................................................8
EXECUTIVE SUMMARY .............................................................................................................. 10
1. INTRODUCTION ....................................................................................................................... 15
1.1 UNILEVER IN INDIA – HINDUSTAN LEVER LIMITED ................................................................. 15 1.1.1. The Brands of HLL ................................................................................................... 16 1.1.3. The HLL Sales Organization - a Channel based approach ............................... 18 1.1.4. Rural Distribution Models of HLL.......................................................................... 21
1.2. PROJECT SHAKTI OF HINDUSTAN LEVER LIMITED ................................................................ 23 1.2.1. The Self – Help Group (SHG) ................................................................................. 24 1.2.2. Shakti Entrepreneur or Shakti Amma / Shakti dealer ........................................ 25 1.2.3. Summary of Shakti – A win-win model ................................................................ 28
2. LITERATURE ............................................................................................................................ 30
3. INTRODUCTION TO THE PROBLEM / CHALLENGE.......................................................... 32
3.1. THE OBJECTIVE .............................................................................................................. 32 3.2. LOCATION OF THE PROJECT ....................................................................................... 33 3.3. APPROACH TO THE PROJECT – SETTING THE STAGE ................................................. 34
3.3.1. Studying the Shakti Sales force organizational structure ................................ 34 3.3.2. Studying the Shakti Distribution supply chain ................................................... 35 3.3.3. Mapping the existing Rural Distribution network of Project Locations
(Nagpur & Amravati)........................................................................................................... 36 3.3.3.1. Geographical Mapping ................................................................................................... 36 3.3.3.2. Mapping Dispatch Plans ................................................................................................ 39 3.3.3.3. Coverage mapping on the Census Report:................................................................. 40 3.3.3.4. Summary of Nagpur and Amravati............................................................................... 41
3.3.4. Benefits of the mapping exercise ......................................................................... 41
4. RESULTS................................................................................................................................... 43
5. CHALLENGE ANALYSIS ........................................................................................................ 46
5.1. PROCESS OF APPOINTING SHAKTI ENTREPRENEURS ........................................................... 46 5.2. THE CONCEPT SELLING MEETING (CSM) – AN OVERVIEW .................................................. 47 5.3. DIFFICULTIES IN APPOINTING SES – REASONS FOR SLOW PACE OF APPOINTMENTS............. 48
6. STRATEGIES FOR INCREASING THE PACE OF APPOINTMENTS................................. 51
6.1. STRATEGY: LINKAGES .................................................................................................. 52 6.1.1 Insight ......................................................................................................................... 52 6.1.2. Initiative 1: Partnering Political Influencers ........................................................ 53
7
6.1.3. Initiative 2: Partnering with NGOs......................................................................... 54 – The SHAKTI GUIDED TOUR (SGT) ............................................................................... 54 6.1.3. Initiative 3: Partner Government ........................................................................... 60
6.1.3.1. Direct Engagement ......................................................................................................... 60 6.1.3.2. Mass Concept Selling Meetings at the Taluka Level................................................. 61 6.1.3.3. SGT (Shakti Guided Tour).............................................................................................. 61
6.2. STRATEGY: HUB & SPOKE DISTRIBUTION MODEL................................................. 62 6.2.1. Objectives.................................................................................................................. 62 6.2.2. HUB Shakti Entrepreneur (HUB SE) ..................................................................... 62 6.2.3. SPOKE Shakti Entrepreneur (SPOKE/SUB SE) .................................................. 64 6.2.4. HLL Shakti Responsibilities ................................................................................... 65 6.2.5. Panchayat Samiti (GOVERNMENT) Responsibilities......................................... 65
6.3. STRATEGY: RURAL TEAM COOPERATION ............................................................... 67 6.3.1. Initiative 1: Meeting RS and rural sales force ..................................................... 67 6.3.2. Initiative 2: Developing a formal database .......................................................... 67
6.4. STRATEGY: MANPOWER (SALESFORCE) DEVELOPMENT......................................... 68 6.4.1. Initiative 1: INFRA PLANNING................................................................................ 68 6.4.2. Initiative 2: INCENTIVE (appointment) scheme for the SL................................ 71 6.4.3. Initiative 3: SOP FOR CONCEPT SELLING MEETING (CSM)............................ 71 6.4.4. Initiative 3: COMMUNICATION KIT for SL............................................................ 72
7. FUTURE PERSPECTIVE ......................................................................................................... 87
LIST OF REFERENCES ............................................................................................................... 91
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LIST OF FIGURES
Figure 1: Growth in number of Shakti Entrepreneurs since project inception ........................ 11
Figure 2: Appointments progress through the Dissertation period ........................................ 12
Figure 3: Gross sales of HLL 1996-2005.............................................................................. 15
Figure 4: Brands of HLL ...................................................................................................... 16
Figure 5: Some Key competitors and their brands................................................................ 17
Figure 6: The DIAMOND MODEL: HLL sales and distribution system .................................. 18
Figure 7: Distribution network of HLL................................................................................... 19
Figure 8: The Organization Structure of the HLL Sales System............................................ 20
Figure 9: Rural Distribution models of HLL – matrix of classification.................................... 21
Figure 10: A SHG (Self Help Group).................................................................................... 24
Figure 11: A Shakti Entrepreneur......................................................................................... 25
Figure 12: A Shakti Entrepreneur (SE) selling directly to homes (Home-2-Home)................. 26
Figure 13: A Shakti Entrepreneur (SE) selling to the retailer in her village ............................ 26
Figure 14: Shakti Vani: Spreading health and education awareness .................................... 27
Figure 15: iShakti: the Portal ............................................................................................... 27
Figure 16: Win- Win model for Shakti................................................................................... 28
Figure 17: Growth in number of Shakti Entrepreneurs since project inception ...................... 32
Figure 18: Project locations of Nagpur and Amravati Districts in the State of Maharashtra ... 33
Figure 19: Organizational structure of Shakti sales force...................................................... 34
Figure 20: Flow of goods in a Shakti system........................................................................ 35
Figure 21: Redistribution Stockists (RS) in Nagpur (on map)................................................ 36
Figure 22: Redistribution Stockists (RS) in Amravati (on map) ............................................. 37
Figure 23: Maps of Nagpur and Amravati used for plotting coverage.................................... 37
Figure 24: Sample Distribution network plotted on the map................................................. 38
Figure 25: Sample Dispatch Plan for a RS........................................................................... 39
Figure 26: Sample of the coverage mapping on the Census Report of Amravati .................. 40
Figure 27: Summary of coverage of Nagpur and Amravati ................................................... 41
Figure 28: Appointments progress through the Dissertation period....................................... 43
Figure 29: Distribution network of HLL................................................................................. 46
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Figure 30: A Concept Selling Meeting (CSM)....................................................................... 47
Figure 31: The Trust Cycle ................................................................................................. 52
Figure 32: The ‘crashed’ Trust Cycle ................................................................................... 52
Figure 33: MAVIM coverage in Maharashtra ........................................................................ 56
Figure 34: SGT – taking the NGO workers to the Shakti Entrepreneur point (village)............ 57
Figure 35: SGT – The Shakti Entrepreneur addressing the NGO MAVIM workers about Shakti
and her experiences ................................................................................................... 58
Figure 36: SGT – The gift to the NGO workers with Shakti sticker to keep memories of the
occasion fresh............................................................................................................. 58
Figure 37: The organization structure of the government at the district (rural level) .............. 60
Figure 38: Hub & Spoke Distribution model ......................................................................... 62
Figure 39: Hub sales, investment & ROI – hub & spoke....................................................... 64
Figure 40: Spoke SE margin in hub & spoke........................................................................ 64
Figure 41: HLL's responsibilities in hub & spoke .................................................................. 65
Figure 42: The Hubs of the model with individual revenues.................................................. 66
Figure 43: Sales territory allocated to SLs............................................................................ 69
Figure 44: Daily Reporting framework / SL progress tracksheet ........................................... 69
Figure 45: The Standard First order prepared for SLs. ......................................................... 70
Figure 46: The SOP for CSM............................................................................................... 71
Figure 47: Sample from the brief to the Agencies for the Communication kit ........................ 72
Figure 48: The Guidelines for the CSM accoring to the SOP................................................ 82
Figure 49: Shakti Shastra – the Training Manual for sales force........................................... 83
Figure 50: Training programme on CSM for SLs (Shakti Shastra) ........................................ 85
Figure 51: Insight for establishing linkages .......................................................................... 87
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EXECUTIVE SUMMARY
Project Shakti (Now the Shakti Division) is a rural marketing initiative of
Hindustan Lever Limited (HLL), India’s largest fast moving consumer goods
(FMCG) company and a subsidiary of the global consumer goods giant
Unilever. HLL has always been at forefront of distribution reaching more
markets than any other FMCG company, especially at the rural front. Over
70% of India’s population i.e. over 742 million people reside in our 627,000
rural villages. However, while the aggregate rural potential is tremendous,
there are 2 major stumbling blocks:
Viability: Scattered markets with low per capita consumption rates
Accessibility: Poor connectivity by road.
Shakti is HLL's rural initiative, which targets small villages that are poor in
accessibility and with low potential, typically with population of less than 3000
people or less. It seeks to empower underprivileged rural women typically
belonging to a SHG by:
providing income-generating opportunities through the Shakti
Entrepreneur programme,
health and hygiene education through the Shakti Vani programme, and
creating access to relevant information through the iShakti community
portal.
In the words of the ultimate leader of the Project, Dalip Sehgal, Executive
Director, New Ventures, “Shakti is a quintessential win-win initiative. It is a
sales and distribution initiative that delivers growth, a communication initiative
that builds brands, a micro-enterprise that creates livelihoods, a social
initiative improves the standard of life and catalyzes affluence in rural India.
What makes Shakti uniquely scalable and sustainable is the fact that it
contributes not only to HLL but also to the community it is a part of. That is
splendid and in keeping with our tradition and values of doing business.1”
11
The ambitious Vision for Project Shakti is,
Shakti started in 2001 and the project has grown very well over the last 3
years. (see adjoining table).
Figure 1: Growth in number of Shakti Entrepreneurs since project inception
However, with the steep target of 100,000 Shakti Entrepreneurs in the next 4
years, clearly one of the key priorities in Shakti is today to scale up the pace
of appointments of Shakti Entrepreneurs.
The project location was based in Nagpur and Amravati districts of the
Vidarbha sales area of Maharashtra. All strategies were implemented and
results measured in these twin districts.
“HLL envisions the creation of 100,000 Shakti Entrepreneurs covering
500,000 villages, and touching the lives of 600 million rural people by the
year 2010.”
This increasing the pace of appointments of Shakti Entrepreneurs is the main objective of this Dissertation project.
12
Summary of the Results
The key planning and review unit in terms of time in HLL sales is the monthly
operational cycle (MOC).
Figure 2: Appointments progress through the Dissertation period
SE Appointment Summary (project location – Nagpur and Amravati)
No of SEs Appointed No of SEs Appointed
Sr.
Districts under the Vidarbha Sales Area
Total No of SEs active before the period moc1 moc2 moc3 moc4 moc5 moc6 moc7
Total No of SEs active till MOC 7 end moc8 moc9 moc10
Total no of SEs Activetill date
1 Amravati 44 3 4 2 1 3 13 6 76 7 24 21 128
2 Bhandara 6 2 2 0 5 0 1 0 16 0 0 0 16
3 Chandrapur 20 5 1 1 2 3 2 1 35 1 4 2 42
4 Gadchiroli 9 3 2 1 0 1 2 0 18 0 0 2 20
5 Gondia 13 1 1 3 2 8 1 1 30 3 10 7 50
6 Nagpur 16 0 5 4 0 1 0 1 27 1 11 11 50
7 Wardha 10 1 3 1 4 2 1 0 22 0 2 0 24
8 Yavatmal 10 2 1 4 0 0 0 3 20 5 5 8 38
Total 128 17 19 16 14 18 20 12 244 17 56 51 368
APPOINTMENTS PROGRESS
0
5
10
15
20
25
30
no o
f app
oint
men
ts
Amravati 3 4 2 1 3 13 6 7 24 21Nagpur 0 5 4 0 1 0 1 1 11 11
moc1
moc2
moc3
moc4
moc5
moc6
moc7
moc8
moc9
moc10
DISSERTATION PERIOD
DISSERTATION PERIOD
13
2 Key observations on the results:
The pace (rate) of appointments was successfully increased to a
sustainable number of over 50 for the whole sales area.
All strategies were designed and implemented in such a manner that
the sales force becomes equipped to achieve them in a sustainable
way month after month.
These results were obtained as a result of a concerted effort in the form of key
strategies that were devised and implemented. Each of the strategy and
initiative is based on an insight. First we discuss the process of appointment
of a Shakti Entrepreneur and then discuss in detail the insight, the strategy /
initiative details, the pilot, the results and the applications and future scope.
The main strategies are enumerated below.
Strategy 1: Linkages
Initiative 1: Politicians – direct engagement
Initiative 2: NGO – The Shakti Guided Tour + sales follow up
Initiative 3: Government – direct engagement, SGT, follow up, mass
Concept Selling Meeting
Strategy 2: Hub & Spoke distribution model
Strategy 2: Rural Team cooperation
Initiative 1: Meeting RS and rural sales force
Initiative 2: Developing a formal database
Initiative 3: Joint address at Rural MOC meeting with resolutions
Strategy 3: Manpower Development
Initiative 1: INFRA PLANNING - Develop and internalize reporting
frameworks and sales pointers – territory, daily schedule,
broken down targets
Initiative 2: INCENTIVE (appointment) scheme for the SL
Initiative 3: SOP FOR CONCEPT SELLING MEETING (csm)
Initiative 4: (TRAINING PROGRAMME MANUAL) – ‘SHAKTI
SHASTRA’
***************************************************************
14
Chapter 1
Introduction
15
1. INTRODUCTION Project Shakti (Now the Shakti Division) is a rural marketing initiative of
Hindustan Lever Limited (HLL), India’s largest fast moving consumer goods
(FMCG) company and a subsidiary of the global consumer goods giant
Unilever. In the words of the ultimate leader of the Project, Dalip Sehgal,
Executive Director, New Ventures, “Shakti is a quintessential win-win
initiative. It is a sales and distribution initiative that delivers growth, a
communication initiative that builds brands, a micro-enterprise that creates
livelihoods, a social initiative improves the standard of life and catalyzes
affluence in rural India. What makes Shakti uniquely scalable and sustainable
is the fact that it contributes not only to HLL but also to the community it is a
part of. That is splendid and in keeping with our tradition and values of doing
business.2”
1.1 Unilever in India – Hindustan Lever Limited
Unilever is one of the world’s largest FMCG Company with a global turnover
of roughly US$ 52 billion3, in 2005.
HLL’s turnover in the 2005 was
Rupees 11976 crores or US$ 2.7
billion4. It’s gross profit is about
50% and net income about 17%.
Figure 3: Gross sales of HLL 1996-2005
With an estimated population of
1.02 billion in 2003 of which 742
million lives in the rural areas, India is the world’s second largest market in 2 V Kasturi Rangan, Rohithari Rajan [2005]: Unilever in India: Hindustan Lever’s Project Shakti – Marketing FMCG to the Rural Consumer, pp1. 3 Src: http://www.unilever.com/ourcompany/aboutunilever/introducingunilever/unileverataglance.asp 4 Src: Annual Report HLL 2005
16
terms of the number of people, after China. The country’s per capita income in
2003 was reported at $600 (on purchasing power parity it was estimated at
$2900). While the GDP has been growing impressively at 8-9% (2005-2006),
there still remains a large chunk of population that is below the poverty line
(about 250 million in 2003).
1.1.1. The Brands of HLL HLL’s FMCG business is organized into 2 businesses:
1. Home and Personal care (HPC)
2. Foods
The following figure illustrates the various product categories within each
business and key brands in each profit centre.
Profit Centre Categories Key Brands
Personal Wash Lux, Lifebouy, Dove, Hamam, Liril
Fabric Wash Surf, Rin, Wheel Detergents
Household Care Vim, Domex
Skin Applications Fair & Lovely, Pears, Vaseline, Ponds
Hair Care Clinic Plus, Sunsilk
Oral Care Pepsodent, CloseUp
Deodorants & Talcum Powder Axe, Rexona
Personal Products
Specialty Lakme
Tea Lipton, Brooke Bond Beverages
Coffee Bru, Deluxe Green Label
Culinary Products Kissan, Knorr Foods
Staples Annapurna
Figure 4: Brands of HLL
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1.1.2. Competitive Environment of HLL
HLL’s competition is in two broad forms:
1. In the lower price segments, competition comes from a large number of
relatively unorganized local players.
Each of the players typically operates in small geographies,
invest almost nothing in brand building
offer higher trade margins
sell to consumers at lower price points than HLL.
2. In the mid and higher price segments, competition from organized
National brands.
Figure 5: Some Key competitors and their brands
Thus, HLL faces severe competitive pressures across categories, price-
points, segments and regions.
18
To tackle these pressures HLL came out with its Project Millennium and their
“Path to Growth” with the four key objectives:
1. To identify and nurture businesses of the future, that would help
achieve HLL the next level of growth
2. To reinvent HLL as an employer of choice for India’s best talent.
3. To gain cost – efficencies by leveraging IT to create a leading – edge
supply chain system
4. To set up a world class system to manage knowledge
The 3 key competitive advantages of HLL are:
1. Strong well established brands
2. Local manufacturing capacity and supply chain which gives it a cost
edge over rivals importing products
3. Vast sales & distribution system which ensures that HLL’s reach is
superior to its rivals.
The marketing function of HLL is split into sales or customer business
development and brand management.
1.1.3. The HLL Sales Organization - a Channel based approach The Indian market for FMCG today is characterized by:
Over 4 million outlets spanning large and many small stores each of
whom is a customer for HLL
Large format retail chains (modern trade
To tackle the complexities HLL has designed its sales and distribution
systems along what is internally called the Diamond Model
Figure 6: The DIAMOND MODEL: HLL sales and distribution system
Modern Trade: self service and retail chainsA modern trade sales team
Individual retail and wholesale stores Profit centre based sales teams
Rural Direct distribution
19
Figure 7: Distribution network of HLL
In 2004, HLL serviced 7000 RS (Redistribution Stockists) called
through its sales force
Each RS services fixed outlets in its area of operation through its own
sales-force.
3-6 RS are looked after by a Territory Sales Incharge (TSI). 2-5 TSI
report to a Sales Officer (SO).
An Area Sales Manager (ASM) is responsible for his profit centre’s
business in his area , about half a state. This area is further divided into
urban and rural with different ASM’s for each.
COMPANY
PRIMARIES
SECONDARIES
Retailer / shop
RS (Redistribution Stockists)
Wholesaler
Depot / Warehouse / Carry and Forward (CNF) Agent
End Customer
Supermarket Internet Direct sales from company
20
The organization structure of the HLL Sales system for a business, say HPC for a State, say West Bengal
Figure 8: The Organization Structure of the HLL Sales System
Regional Managers
NSM – HPC
RM – East
Sales Officers
ASM – HPC Urban – West Bengal
ASM – HPC Rural – West Bengal
RSM – HPC East
Territory Sales in-charge (TSI’s): 5-7 per Sales officer
Redistribution Stockists (RS’s): 6-10 per TSI
Area Sales Managers
Regional Sales Managers
National Sales Managers
21
1.1.4. Rural Distribution Models of HLL Over 70% of India’s population i.e. over 742 million people reside in our
627,000 rural villages. However, while the aggregate rural potential was
tremendous, there are 2 major stumbling blocks:
Viability: Scattered markets with low per capita consumption rates
Accessibility: Poor connectivity by road.
HLL’s approach to rural distribution is governed by the criteria of accessibility
and business potential.
Low Business Potential High Business
Potential Accessible Markets Indirect Coverage (IDC)
Targets retailers in
accessible markets close to urban centers
RS have a rigorously mapped route that would ensure all accessible villages were serviced once in a fortnight.
Direct Coverage Represents accessible
markets with relatively high business potential.
A common stockist (across businesses) to service all outlets within the town
Inaccessible Markets
Space for Shakti to operate
The other 3 initiatives enabled HLL to reach a population of 220 million in 100,000 villages. However, 500,000 villages were still left representing a population of 500 million. Project Shakti was born to reach these consumers.
Streamline Targets inaccessible
markets.
Utilizes the rural wholesale channel to reach markets inaccessible by road.
Rural Distributors (RD) are appointed who in turn appoint Star Sellers among wholesalers in neighbouring villages.
The Star Seller distributes HLL products in neighbouring villages using local transport means.
Figure 9: Rural Distribution models of HLL – matrix of classification
22
23
1.2. Project Shakti of Hindustan Lever Limited
The New Ventures Division of HLL identified rural India as a key source of
growth and competitive advantage in the future. The Shakti model proposes
that HLL partners with self-help groups to extend its rural reach.
Shakti is HLL's rural initiative, which targets small villages with population
of less than 3000 people or less. It seeks to empower underprivileged rural
women typically belonging to a SHG providing income-generating
opportunities, health and hygiene education through the Shakti Vani
programme, and creating access to relevant information through the iShakti
community portal.
In general, rural women in India are underprivileged and need a sustainable
source of income. NGOs, governmental bodies and other institutions have
been working to improve the status of rural women. Shakti is a pioneering
effort in creating livelihoods for rural women, organized in Self-Help Groups (SHGs), and improving living standards in rural India. Shakti provides critically
needed additional income to these women and their families, by equipping
and training them to become an extended arm of the company's operation.
24
1.2.1. The Self – Help Group (SHG) Drawing from the Bangladeshi Grameen Bank model, various NGOs,
multilateral agencies, government bodies and public sector banks had set up
self – help groups (SHGs) in rural India. These groups function as mutual thrift
societies.
10 to 15 women in a particular village get together and form a group.
The group meets regularly and each member contributes a small
amount of money towards a common pool.
Once the pool attains a threshold, the sponsoring agency steps in and
offers micro-credit to one or more members of the group, to be
invested in an approved economic activity.
Figure 10: A SHG (Self Help Group)
The SHG movement has gained momentum in India and the rural population’s
access to credit has risen exponentially. However, there is not enough range
of investment opportunities for such use. That is where Shakti comes in.
Started in 2001, Shakti has already been extended to about 50,000 villages in
12 states - Andhra Pradesh, Karnataka, Gujarat, Madhya Pradesh, Tamil
Nadu, Chattisgarh, Uttar Pradesh, Orissa, Punjab, Rajasthan, Maharashtra
and West Bengal. The respective state governments and several NGOs are
actively involved in the initiative.
25
There are 3 interventions under Shakti – The Shakti Entrepreneur, Shakti
Vani and iShakti.
1.2.2. Shakti Entrepreneur or Shakti Amma / Shakti dealer A member of a SHG/Individual is identified in a HLL uncovered Village with
the support of Govt., NGO’s, Banks or through Direct contacts.
– Gets appointed as a Shakti Entrepreneur & works as a HLL distributor.
– Receives stocks at doorstep from RD/LAB RS/RS
– Services Retailers, Group members and end consumers (House Holds)
in the Shakti Village.
– Services nearby villages
– Sells an avg of Rs 10000/- p.m. generating a profit of Rs 700 p.m.
(~7%)
Figure 11: A Shakti Entrepreneur
26
Figure 12: A Shakti Entrepreneur (SE) selling directly to homes (Home-2-Home)
Figure 13: A Shakti Entrepreneur (SE) selling to the retailer in her village
27
HLL's vision for Shakti is to scale it up across the country, covering 100,000
villages and touching the lives of 100 million rural consumers by 2010.
Shakti Vani is a social communication
programme. Women, trained in health
and hygiene issues, address village
communities through meetings at
schools, village baithaks, SHG
meetings and other social fora.
Figure 14: Shakti Vani: Spreading health and education awareness
In 2004, Shakti Vani has covered 10,000 villages in Madhya Pradesh,
Chattisgarh and Karnataka. The vision is to cover 50,000 villages in 2005.
iShakti, the Internet-based rural information
service, has been launched in Andhra
Pradesh, in association with the Andhra
Pradesh Government's Rajiv Internet
Village Programme.
Figure 15: iShakti: the Portal
The service is now available in Nalgonda, Vishakapatnam, West Godavari
and East Godavari districts. iShakti has been developed to provide
information and services to meet rural needs in medical health and hygiene,
agriculture, animal husbandry, education, vocational training and employment
and women's empowerment. The vision is to have 3,500 kiosks across the
state by 2005.
28
1.2.3. Summary of Shakti – A win-win model
Figure 16: Win- Win model for Shakti
Shakti today
Shakti has today (beginning 2007) has over 24,000 Shakti Entrepreneurs
covering up to 75,000 villages in rural India.
29
Chapter 2 Literature
30
2. LITERATURE Fortune at the bottom of the Pyramid: Eradicating Poverty Through
Profits – C. K. Prahalad By C. K. Prahalad, Published 2006, Wharton
School Publishing, 273 pages, ISBN 0131877291
Unilever in India: Hindustan Lever’s Project Shakti – Marketing FMCG
to the Rural Consumer – V. Kasturi Rangan and Rohithari Rajan,
Barvard Business School case, June 2005
Unleashing the IdeaVirus: Stop Marketing at People! Turn Your Ideas
Into Epidemics by Helping your customers do the marketing for you..
By Malcolm Gladwell, Seth. Godin, Published 2001, Hyperion, 234
pages, ISBN 0786887176
www.hll.com, December 2006 – January 2007
www.hllshakti.com, December 2006 – January 2007
HLL Annual Report 2006
31
Chapter 3 The Problem / Challenge
32
3. INTRODUCTION TO THE PROBLEM / CHALLENGE The ambitious Vision for Project Shakti is,
Shakti started in 2001 and the project has grown very well over the last 3
years. (see adjoining table).
Figure 17: Growth in number of Shakti Entrepreneurs since project inception
However, with the steep target of 100,000 Shakti Entrepreneurs in the next 4
years, clearly one of the key priorities in Shakti is today to scale up the pace
of appointments of Shakti Entrepreneurs.
3.1. THE OBJECTIVE
“HLL envisions the creation of 100,000 Shakti Entrepreneurs covering
500,000 villages, and touching the lives of 600 million rural people by the
year 2010.”
This increasing the pace of appointments of Shakti Entrepreneurs is the main objective of this Dissertation project.
33
3.2. LOCATION OF THE PROJECT
The project was based in the twin districts of Nagpur and Amravati in the
Vidarbha Sales Area region of the Indian state of Maharashtra.
(By based, we mean that all the strategies were implemented in either of or
both these 2 districts and the results were also measured accordingly).
Figure 18: Project locations of Nagpur and Amravati Districts in the State of Maharashtra
34
3.3. APPROACH TO THE PROJECT – setting the stage
3.3.1. Studying the Shakti Sales force organizational structure The first step was to internalize the organizational structure of the sales force
in Shakti that was building and servicing the network of Shakti Entrepreneurs
(SEs).
Figure 19: Organizational structure of Shakti sales force
Area Sales Manager – ShaktiGujarat & Maharashtra
(State level)
Regional Sales Manager– West
(Zonal level)
Business Head – Shakti
(National Level)
Sales Officer (SO) - Shakti(Collection of 6-8 districts)
Shakti Leaders (SL)(District level)
Shakti Trainers / Promoters (ST/SP)
(District level)
Visit villages, find the right profile and
appoint new Shakti Entrepreneurs
Induct new SEs, train them to sell and help
them in sustaining their new business
Temporary Staff (on payroll of HR outsourcing company)
35
3.3.2. Studying the Shakti Distribution supply chain
Typically, there is only 1 SE appointed for a cluster of neighbouring 3-5
villages.
The SE receives her goods from the closest local HLL rural distributor.
SEs are typically serviced fortnightly / weekly depending on distance of
her village
The SE sells her goods in 3 channels:
1) Retailers in her own village (Retail)
2) Homes in her own villages (Home)
3) Retailers in Satellite i.e. neighbouring villages (Satellite markets)
SE thus competes with the wholesale channel which has been
historically supplying goods to retailers in her own and satellite market
villages.
Figure 20: Flow of goods in a Shakti system
Own Village Retailers
Homes (end customers)Typically own village
Satellite market Retailers
SE (Shakti Entrepreneur)
HLL Rural Distributor(RS)
Carry and forwarding agent
Wholesalers Wholesalers
Direct Distribution
Indirect pre-existing Distribution
36
3.3.3. Mapping the existing Rural Distribution network of Project Locations (Nagpur & Amravati)
3.3.3.1. Geographical Mapping
A geographical mapping was necessary for the following TWO main reasons:
To understand the target set of villages to be covered under Shakti.
To determine the Dispatch – Plans and Routes of the distributors
The existing geographical mapping was only available at individual rural
distributors (known as Redistribution Stockists - RS) in the form of
Beat wise Dispatch-of-goods plan
Bindi maps
There are 6 Rural RS in Nagpur located at Katol, Savner, Ramtek, Wadi,
Hingna and Umred.
Figure 21: Redistribution Stockists (RS) in Nagpur (on map)
Rural RS (distributor)
37
There are 4 rural RS in Amravati at Anjangaon Surji, Daryapur, Warud and
Dhamangaon Railway
Figure 22: Redistribution Stockists (RS) in Amravati (on map)
There are 13 talukas in Nagpur and 12 in Amravati. Each RS looks after the
rural business in roughly 2 talukas and does sales of about 40 lakhs a month.
The Approach used for the mapping was:
1) Procured the census data for Nagpur and Amravati and obtained
detailed district maps.
Figure 23: Maps of Nagpur and Amravati used for plotting coverage
NAGPUR AMRAVATI
Rural RS (distributor)
38
2) Visited all RS points in Nagpur and Amravati and obtained the villages
covered by rural channel.
a. Plotted on detailed district map and
b. Marked in census report.
Here is a snap shot of Taluka Teosa in Amravati which is covered by 2 RS in
red and black circles for villages serviced by each.
Figure 24: Sample Distribution network plotted on the map
39
3.3.3.2. Mapping Dispatch Plans Village wise Dispatch plans were obtained for each RS:
RS Name Daryapur
Order Dispatch Route 1 Route 2 Route 3
mon Wed Wadner Gangai Pimplod
savra warudkulat
asegaon Rajkhed
wadali yoeda
wed Thu kholapur Chandikapur wathoda
darapur Khartalegaon
shingnapur
khallar
nalwada
thu Fri dadhi Karatkhed
ganojadevi ramtirth
sonori
bopori
asra
….. …..
Figure 25: Sample Dispatch Plan for a RS
These dispatch plans are crucial since they give an indication of:
1. where the new SE village could fit in as well as
2. The frequency with which it can be serviced.
Along with this the census raw file was updated with the coverage details
which were required to establish our target villages.
40
3.3.3.3. Coverage mapping on the Census Report:
DISTRICT SUB-DIST LEVEL NAME No_HH TOT_PCOVG
Status RS Name
Amravati Achalpur VILLAGE Asatpur 987 4856 RS COVG Yogesh Ent
Amravati Achalpur VILLAGE Belkheda 208 1207
Amravati Achalpur VILLAGE Pimpalkhuta 121 699
Amravati Achalpur VILLAGE Bhilona 301 1452
Amravati Achalpur VILLAGE Bhopapur 275 998
Amravati Achalpur VILLAGE Bhopapur 404 1985 SE COVG Yogesh Ent
Amravati Achalpur VILLAGE Nimkund 108 565
Amravati Achalpur VILLAGE Buradghat 98 509
Amravati Achalpur VILLAGE Bhugaon 376 1852
Amravati Achalpur VILLAGE Bordi 256 1123
Amravati Achalpur VILLAGE Borgaon Dori 212 979
Amravati Achalpur VILLAGE Borgaon
Peth 344 1701
Amravati Achalpur VILLAGE Nimkheda 4 11
Amravati Achalpur VILLAGE Narsari 95 481
Amravati Achalpur VILLAGE Daryabad 206 1087
Amravati Achalpur VILLAGE Devgaon 256 1706 SE COVG Yogesh Ent
Amravati Achalpur VILLAGE Dhamangaon 932 4525 RS COVG Yogesh Ent
Amravati Achalpur VILLAGE Dhamani
(N.V.) 151 825
Amravati Achalpur VILLAGE Nimdari 127 644
Amravati Achalpur VILLAGE Jalalpur 36 171
Amravati Achalpur VILLAGE Yeni 110 581
Amravati Achalpur VILLAGE Datura 29 113
Amravati Achalpur VILLAGE Dhotarkheda 580 2997
Amravati Achalpur VILLAGE Ekalaspur 288 1395 RS COVG Yogesh Ent
Amravati Achalpur VILLAGE Gaurkheda 360 1993
Amravati Achalpur VILLAGE Wadura 90 381 RS COVG Yogesh Ent
RS COVG – covered by the RS
SE COVG – Shakti Entrepreneur in Village
Blank – Village that need to be covered under the Shakti distribution
channel.
Figure 26: Sample of the coverage mapping on the Census Report of Amravati
41
3.3.3.4. Summary of Nagpur and Amravati
District
No of
Villages
Coverage
(incl
SE/SM)
Target
Villages
TOTAL 0<POP<1k 1k<=Pop<3k 3k<=Pop
Amravati 1679 244 1435 1107 310 18
Nagpur 1628 212 1416 1178 221 17
Figure 27: Summary of coverage of Nagpur and Amravati
Thus we can see that the goal of saturation coverage i.e. covering all villages
would entail villages of the magnitude of 1600 or so in one district only.
3.3.4. Benefits of the mapping exercise
Rural Team buy – in: Shakti needs a lot of support from the existing
rural sales team including the distributors in form of on time deliveries
and appreciation of the many problems that a first time entrepreneur
like the SEs typically have. This exercise of reaching out to the
distributors and the HLL rural sales team also resulted in their crucial
support for various initiatives that were launched later.
A Central database of existing rural Coverage was obtained that was
critical for planning
A Central record of RS dispatch-routes and schedules also helped in
the extensive infra-planning that was instituted for the Shakti sales
force.
42
Chapter 4
Results
43
4. RESULTS The key planning and review unit in terms of time in HLL sales is the monthly
operational cycle (MOC).
Figure 28: Appointments progress through the Dissertation period
SE Appointment Summary (project location – Nagpur and Amravati)
No of SEs Appointed No of SEs Appointed
Sr.
Districts under the Vidarbha Sales Area
Total No of SEs active before the period moc1 moc2 moc3 moc4 moc5 moc6 moc7
Total No of SEs active till MOC 7 end moc8 moc9 moc10
Total no of SEs Activetill date
1 Amravati 44 3 4 2 1 3 13 6 76 7 24 21 128
2 Bhandara 6 2 2 0 5 0 1 0 16 0 0 0 16
3 Chandrapur 20 5 1 1 2 3 2 1 35 1 4 2 42
4 Gadchiroli 9 3 2 1 0 1 2 0 18 0 0 2 20
5 Gondia 13 1 1 3 2 8 1 1 30 3 10 7 50
6 Nagpur 16 0 5 4 0 1 0 1 27 1 11 11 50
7 Wardha 10 1 3 1 4 2 1 0 22 0 2 0 24
8 Yavatmal 10 2 1 4 0 0 0 3 20 5 5 8 38
Total 128 17 19 16 14 18 20 12 244 17 56 51 368
APPOINTMENTS PROGRESS
0
5
10
15
20
25
30
no o
f app
oint
men
ts
Amravati 3 4 2 1 3 13 6 7 24 21Nagpur 0 5 4 0 1 0 1 1 11 11
moc1
moc2
moc3
moc4
moc5
moc6
moc7
moc8
moc9
moc10
DISSERTATION PERIOD
44
2 Key observations on the results:
The pace (rate) of appointments was successfully increased to a
sustainable number of over 50 for the whole sales area.
All strategies were designed and implemented in such a manner that
the sales force becomes equipped to achieve them in a sustainable
way month after month.
First we will look at the process of appointing SE and the major difficulties in
the process. Then we will discuss the strategies and interventions employed
to overcome them and increase the rate of appointments.
****************************************************************************************
45
Chapter 5
Challenge Analysis
46
5. CHALLENGE ANALYSIS
5.1. Process of appointing Shakti Entrepreneurs
Figure 29: Distribution network of HLL
Visit a village outside of HLL distribution
Locate the right profile of lady for prospective SE
Conduct the Concept Selling Meeting with interested parties
Follow up with interested parties
Meet influential people like the Sarpanch / Anganwadi; Meet the various SHGs of the village
Create new SE at the RS point and date of first dispatch
First Dispatch of goods and payment in cash to RS by SE
Ensure finance / investment arrangement; Allay fears and instill trust
Explain the business model in a language understood by the women; seek interest and excitement and instill trust
Introduce SE to the RS delivery van; Ensure first dispatch in person
Enter the SE profile into RS systems and integrate into appropriate dispatch schedules
47
5.2. The Concept Selling Meeting (CSM) – an overview • A presentation / discussion
• Held in front of / with: a group of women in a village
• Typically members of a SHG (self help group) – a mutual
savings group at the village level that is encouraged by the
govt. to start entrepreneurial ventures by giving loans.
• Held by: Shakti Leader (SL)
• A temporary staff on the payroll of Ma Foi.
• Works in Shakti division of HLL
• Typically male
• Age between 22-35yrs
• Education – graduate
• Usually belongs to the district / region in which he works (local
language)
• Job profile – to increase distribution of Shakti by appointing 1
woman in a village as a Shakti dealer
• Objective: To get the right profile of Shakti Entrepreneur to take up
the Shakti Entrepreneurship for her village.
Figure 30: A Concept Selling Meeting (CSM)
48
5.3. Difficulties in appointing SEs – reasons for slow pace of appointments The process of appointing an SE is an extremely difficult one with the
appointment getting derailed at any one of the previously described stages.
The major problems encountered are:
- trust
- right profile
- finance
- rural team support
- sales force effectiveness & efficiency
Trust: Rural India is driven by trust whenever it comes to any purchase
or investment decision. Our Rural sales promoter (RSP - the Shakti
Leader SL) is a new person in the village and hence it is difficult for
them to trust him with the opportunity. The numerous swindlers and
others who have taken advantage of villages with fake schemes and
their stories do not help either.
Locating the Right profile of SE: In the absence of information, this is
an extremely difficult task as the RSP is new village and has to take
immediate opinion of people on the right person for the job. There is
always the risk of not appointing or even speaking to the right profile.
The right profile is usually a confident woman who is BPL (below
poverty line), who wants to work and who has a good rapport in the
village.
Finance / Investment: Shakti has a threshold amount of Rs. 10,000 to
start with the business. Such an amount is either not available or not
available at the time when the RSP meets the right profile or warrants a
substantive thinking through and consultation process. Besides for the
micro credit there are several other opportunities such as livestock
which compete with the Shakti income earning opportunity.
49
Rural Team support: To get a new SE off to a start the rural team
support is critical. As opposed to the regular retailers who are
traditional businesspeople, the SE is a first time entrepreneur and
hence brings a different set of problems altogether. An empathetic
approach on the part of the RS is required. Some previous cases of
SEs defaulting on payments have not helped either. The existing share
of SE revenue of the total monthly revenue for an RS is on average
less than 2%. However this attention to Shakti is exponentially related
to the %share since the RS where the % is about 10% there are no
issues.
Sales force effectiveness and efficiency: The RSPs in the form of
SLs and STs are outsourced (payroll) to a HR temping firm. The work
is hard and in the absence of adequate planning, the RSPs end up
traveling upto 200 kms in a day, feeling tired at the end of the day and
not achieving much at the end of the MOC. Motivation and attrition are
the other issues apart from being better trained to handle the
complexities of Shakti.
During the course of the internship various strategies were devised and
piloted.
Each of the strategy and initiative is based on an insight. Thus for each, we
discuss the insight, the strategy / initiative details, the pilot, the results and the
applications and future scope.
50
Chapter 6 Strategies for increasing the pace
of appointments
51
6. STRATEGIES FOR INCREASING THE
PACE OF APPOINTMENTS
During the course of the internship various strategies were devised and
piloted.
Each of the strategy and initiative is based on an insight. Thus for each, we
discuss the insight, the strategy / initiative details, the pilot, the results and the
applications and future scope.
Strategy 1: Linkages
Initiative 1: Politicians – direct engagement
Initiative 2: NGO – The Shakti Guided Tour + sales follow up
Initiative 3: Government – direct engagement, SGT, follow up, mass
Concept Selling Meeting
Strategy 2: Hub & Spoke distribution model
Strategy 2: Rural Team cooperation
Initiative 1: Meeting RS and rural sales force
Initiative 2: Developing a formal database
Initiative 3: Joint address at Rural MOC meeting with resolutions
Strategy 3: Manpower Development
Initiative 1: INFRA PLANNING - Develop and internalize reporting
frameworks and sales pointers – territory, daily schedule,
broken down targets
Initiative 2: INCENTIVE (appointment) scheme for the SL
Initiative 3: SOP FOR CONCEPT SELLING MEETING (csm)
Initiative 4: (TRAINING PROGRAMME MANUAL) – ‘SHAKTI
SHASTRA’
52
6.1. STRATEGY: LINKAGES
6.1.1 Insight If we understand the slow pace of appointments it is primarily due to the “trust cycle”. Our RSPs visit a new village and meet the SHGs there convincing
them about the Shakti dealership. He usually makes several visits till the SHG
there starts believing in the concept.
visit 1 visit 2 visit 3 visit… Visit x Potential
New
recruit “trust cycle”
Appointment
/ Regret
Figure 31: The Trust Cycle
However, when our RSP goes there with a reference, say with the NGO
Worker or the DRDA Extn Officer or any other who have helped set up the
SHG and are intimately involved in its functioning, - then the SHGs “listen”
and “believe”. This is basically because these people have credibility and trust
with the SHG.
visit 1 Potential
New
recruit
trust
cycle
Appointment
/ Regret
Figure 32: The ‘crashed’ Trust Cycle
This insight formed the basis of 3 initiatives namely partnering / establish
linkages with political leaders, NGOs and the Government.
Rural Sales Promoter (RSP)
RSP + Influencer
53
6.1.2. Initiative 1: Partnering Political Influencers
As opposed to the urban disenchantment with politics and politicians, ‘leaders’
in rural India, operate typically within the framework of a political party.
However, Shakti would still not like to get politicized or associated with any
particular political party in a volatile environment.
Thus, as discussed with the management, we decided to be cautious and
start small.
Pilot Taluka Chandurbazaar:
Taluka Chandurbazaar of dist. Amravati.
Discussed with the political worker and decided on 11 villages.
The modus operandi was that a junior party functionary would
accompany our RSP to the villages where they would meet identified
parties and talk about Shakti.
Advantages of the approach:
Trust: The leaders were well known in the villages and hence gave us
credibility – greatly crashing the trust cycle
Locating the right profile: Since the right profile was already identified
with the influencers, this problem was overcome.
Result:
Result: In a short ten day period, we achieved the following
o Total villages under pilot = 11
o New Appointments = 4
o Satellite Markets = 5
o Leads = 2
With the brilliant response that we achieved, we scaled up to 17 more
villages. (and later to other districts in the sales area)
3 more appointments made with 19 total satellite markets.
54
6.1.3. Initiative 2: Partnering with NGOs
– The SHAKTI GUIDED TOUR (SGT)
The SHG (self help group) revolution in India is broadly driven by the NGOs
(Non Governmental Organizations) and the Government.
The NGOs operate by having a workforce whose main responsibilities are:
Organize rural women in to SHGs (Self Help Groups)
Teach them how to manage their monthly savings and accounts
Inculcate practice of effective inter-lending amongst the group
members
Arrange for accreditation by the government and the revolving micro credit
Guide the women to starting up income generating occupations with
the access to credit that they now have.
Motivate and guide the members of the SHG.
The Challenge: How do we get these influencers to “want” the Shakti
dealership for their SHGs?
The NGO Worker Point of View:
What do the NGOs have to gain from facilitating Shakti Dealership within their
SHGs?
-Not money, but there is a vacuum that HLL fills. Even through today there are
several opportunities for SHGs like mid day meal preparation for schools and
anganwadis, manufacturing (small scale) products like oils etc (training by
MITCON), What is lacking is an income generating opportunity with
marketing support – a vacuum filled by Shakti dealership.
Thus, they stand to gain the respect of their peers in the NGO as also the
respect and gratitude of their SHGs - all apart from a sense of
accomplishment.
The Idea: The Shakti Guided Tour (SGT).
The NGO workers can be taken to a good SE point where the Shakti Dealer
herself will explain how she got where she is today. In a “language” that the
55
NGO workers hear everyday from their own SHGs. If organized in such a
fashion that they appreciate HLL systems in place, this is bound to have an
impact on them and they would want the Shakti dealership in their SHGs also.
Conceptual Framework:
According to author Seth Godin in his book “Unleashing the Ideavirus”, the
direction (in terms of population/demographic) in which an idea spreads is
known as its vector. This vector can be influenced by 3 factors:
1. Who it starts with: The direction in which the sahyoginis of MAVIM are
likely to spread the idea is likely to be where it came from in the first
place. Hence, the Shakti Dealer talking to them directly about her story.
2. Who it resonates with: The SHGs and other workers of MAVIM are
likely to be impacted by the Shakti entrepreneurship story and hence
the MAVIM sahyoginis are likely to discuss it with them.
3. What’s easy: The medium by which the idea spreads – here word of
mouth by sahyoginis who handle 50 SHGs across more than 20
villages each visiting on average 2 SHGs per day. At the end of the
function each sahyoginis will be handed an ‘envelope’ containing:
a. Recruitment forms – 2.
b. List of villages in their Taluka that are targeted.
c. Shakti Prakalp – a handout in Marathi.
Objectives of the SGT (Shakti Guided Tour):
1. The sahyoginis (NGO MAVIM workers) will believe in the Shakti dealership
and would want it for their SHGs.
2. They will talk about it. The sahyoginis will talk about their experience to
their SHGs as they visit them in their regular visits. The DCO(District Head
of MAVIM) will talk about it to other DCOs in other districts who we will
contact through him.
The Pilot: MAVIM in Nagpur
MAVIM (Mahila Arthik Vikas Mahamandal) was founded on 25th February
1975 with the aim of encouraging women to be financially independent and
self-reliant.
56
The objectives of MAVIM are:
1. Building organizations of women
2. To build up capacities of women
3. Building confidence in women
4. Strengthening entrepreneurship among women
5. Building linkages between employment opportunities and market
possibilities
6. Increasing participation of women in education and in governance
MAVIM has its offices in all the districts of the State and works in women’s
empowerment by starting Self-Help Groups (SHGs) through various national
and state level programmes in all districts of the state.
(Src: http://www.mavimindia.org)
Figure 33: MAVIM coverage in Maharashtra
MAVIM has 20 ‘sahyoginis’ (all women workers) in the district of Nagpur, each
handling up to 50 SHGs across villages. They report to the DCO (District
Coordinating Officer) Mr. Sanjay Sangekar.
The Occasion: The all Nagpur Sahyogini meeting at Nagpur on the 28th of
July.
Pilot: NAGPUR
57
The Shakti Guided Tour (SGT):
• A bus trip (HLL approved safety cleared bus) for the 20 sahyoginis and
DCO to a SE village.
Figure 34: SGT – taking the NGO workers to the Shakti Entrepreneur point (village)
The Shakti Entrepreneur as the host herself addressed the NGO workers
about the Shakti entrepreneurship opportunity.
At the end of the meeting each sahyogini of MAVIM was given a brown envelope with a list of target villages of her Taluka and Shakti booklet
approved by HLL along with 2 recruitment forms with our contact nos.
Along with this a wrapped gift (Pond’s DFT 100g with Shakti sticker)
was also given to keep the memory of the occasion fresh in their minds.
58
Figure 35: SGT – The Shakti Entrepreneur addressing the NGO MAVIM workers about Shakti and her experiences
Figure 36: SGT – The gift to the NGO workers with Shakti sticker to keep memories of the occasion fresh
59
Result: Feedback from MAVIM: According to the DCO of MAVIM the
programme was very enlightening and all doubts and issues were
resolved to their satisfaction.
The sahyoginis listened attentively and asked a lot of questions. In our
interaction with them immediately after the meeting and during
subsequent follow up they also appreciated the program and seemed
keen to help.
Appointments and Lead status and planning – we achieved about
average 3 appointments per month due to this particular NGO.
Learnings:
The initial response in terms of action from their side has been
lukewarm so far (MOC 8) due to the following reasons:
• Quite a few of the sahyoginis are operating on the format of only
about 5 villages (with 3 in RS coverage) with about 50 SHGs
total. Hence there usefulness is limited
• Due to the sowing season (and the high daily wages of between
60-100Rs) they are of the view that they are unable to talk to the
SHG members.
• Natural calamities like flood and epidemics (chikungunya).
Future perspective:
The workers have been delegated to SLs based on Taluka of operation
and given appropriate targets for leads and appointments per
sahyogini.
MAVIM will provide a steady trickle of appointments and once the first
few appointments are smooth then, then the NGO says that the
appointments will come on their own.
Operating with the NGO helped us learn that the DRDA and their
Extension Officers (Industry) and (SGSY) are still the most powerful
people for the SHGs in a Taluka – they do the grading of SHG.
So plan for directly approaching the DRDA came out of this.
60
6.1.3. Initiative 3: Partner Government
Background:
At the head of the district government machinery is the District
Collector. Based on research of the working of the government (Zilla
Parishad depts & DRDA), we met the District Collector of Nagpur.
At the head of the District Rural Development Authority (DRDA) in a
district is the DRDA Project Director. Reporting to the DRDA Project
Director are Extension officers in each talukas / block of the
departments of Industry (for rural) and SGSY (Swatantrata Grameen
Swarojgar Yojna - a governmental scheme to provide employment and
encourage entrepreneurship at the village level)
At the taluka level, there is a Block Development Officer (BDO) who is
the head. He will typically have Extension officers of various
departments like health, industry, etc and various governmental
schemes reporting to him.
Figure 37: The organization structure of the government at the district (rural level)
6.1.3.1. Direct Engagement
We met the District Collector (DC) of Nagpur. The DC agreed to forward a
letter (provided by us) to the Heads of organizations we want to partner with,
such as Heads of DRDA, NABARD, any NGO such as MAVIM Meetings with
the DRDA Project Director and through him, few BDOs to start off with.
BDO – Taluka 1 BDO – Taluka 2
Extn Officer - Industry
Extn Officer - Industry
Project Director - DRDA
Extn Officer - Industry
Extn Officer - Industry
…
61
By contacting the Extn Officer through the BDO we were able to get
pressure on the Extn Officer to act.
6.1.3.2. Mass Concept Selling Meetings at the Taluka Level
The goal is to get the talukas level to call SHG meetings (with full SHG
attendance) of those SHGs that are within the target list and also have
revolving credit. – The BDO / Extn Officer will then support Shakti as
an entrepreneurship and we can select them.
These meetings proved to be extremely successful as we got several
leads and appointments.
Also gave credibility to Shakti to the right profile at a much lower cost
6.1.3.3. SGT (Shakti Guided Tour)
Similar to the NGO workers, there are lots of doubts and
misinformation regarding Shakti as well as typical governmental apathy
towards the MNC status of HLL.
We decided to extend the success of the SGT - Bus trip to showcase
Shakti operating actually at the ground level in their district, dispel all
doubts as well get their buy-in.
Post SGT, we allocated Shakti RSPs to the various extension officers.
Plan for Future:
To actively meet all BDOs and make appointments within their Taluka
level towards total coverage.
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6.2. STRATEGY: HUB & SPOKE DISTRIBUTION MODEL
6.2.1. Objectives The distribution model was devised to achieve the following goals:
1. Saturation Coverage of Achalpur taluka of Amravati – i.e. a total of 49
villages initially.
Figure 38: Hub & Spoke Distribution model
2. The HUB SEs take larger orders (from the RS) in the range of at least
50,000 to 70,000 per MOC.
3. The SPOKE SEs increase our HOME 2 HOME contribution and hence
build markets and increase penetration in new villages.
4. The system is to be sustainable and independent in the near future by
involving the HUB in secondary sales to Retailers by selecting and
training their members for order booking and collection.
6.2.2. HUB Shakti Entrepreneur (HUB SE) The villages of the selected taluka divided into SERVICE AREAS based on
geographical proximity
Total Villages: 48
Addl. Population reached: 42,327
Business Potential: INR 355,547
(@ Rs. 8.40 per capita rural monthly)
HUB SE HUB SE
SPOKE- SE SPOKE- SE
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HUB SE has an assured market of Rs. 5000 per village under its
service area. This is ensured by having an SHG member in each
village that is SPOKE SE. The Panchayat Samiti will ensure availability
of such funds for each SPOKE. Thus the cash is quickly replenished at
the HUB level.
The HUB will pay for the transportation expenses.
The HUB will keep the 3% Shakti margin and sell at the remaining
retailer and scheme margin available.
The HUB will also service the retail outlets in the SERVICE AREA.
These will be major growth drivers.
HUB Sales No of Villages 48
Initial investment per village 5,000
Sub SE business for hub 240,000
Rotation 1.5
Total Sub SE business for hub 360,000
Retailer sales 100,000
Total HUB Sales 460,000
Hub Margin % 3
Hub Gross Margin 10,800
HUB Expenses Kms per route
50
Routes per day 1
No of routes 4
Route-days per month 2
Cost per km 6
HUB Transport Expense 2,618
HUB Manpower Driver wage 1500
Loader 1000
Total HUB Expenses 5,118
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HUB Net Margin Per month
5,682
Annual Revenue of HUB 68,182
HUB Investment Volume of Sub-SE Business
360,000
Volume of Retail business 100,000
Total Business Vol per MOC 460,000
Dispatches from RS / MOC 2
Initial HUB Purchase 230,000
Stock inventory with HUB 35,000
Initial HUB Investment 265,000
Figure 39: Hub sales, investment & ROI – hub & spoke
6.2.3. SPOKE Shakti Entrepreneur (SPOKE/SUB SE) The SPOKE will sell only in Home 2 Home and @10% will earn at least
Rs. 500 per month.
SPOKE will reorder the goods from the HUB on a weekly basis
depending on certain holding inventory norms.
The SPOKE will be unable to sell in the retail channel because she is
not getting any extra margin. Such understanding is essential in the
beginning itself.
SPOKE SE will also not have any satellite markets and will hence
develop her own village as a market.
SPOKE will of course be entitled to all the H2H gifts and incentives as
worked out by HLL on a MOC basis.
Sub SE Home 2 Home 5000
Sub SE Margin % 10%
Sub SE Margin 500
Figure 40: Spoke SE margin in hub & spoke
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6.2.4. HLL Shakti Responsibilities HLL Shakti will be responsible for ensuring the secondaries.
There will be 2 exclusive STs with the responsibility of:
Training the HUB and the SPOKES
Ensuring the H2H sales happen at the SPOKE level
Ensuring the Sale, Delivery and Collection to SPOKE SHG from
HUB
Ensuring the Sale, Delivery and Collection to RETAIL in SERVICE
AREA for each HUB
Ensuring Primary orders to the RS from the HUBs.
Shakti Promoter
Sub SE number 41
Sub SE visits per MOC 2
Total visits 82
Villages per manday 3
Working mandays required 27
Working mandays per RSP 26
Shakti Promoter required 2
Training Support
First 3 months there will be 2 visits in a month per Sub SE
Next 2 months there will be visits in a month per Sub SE
Figure 41: HLL's responsibilities in hub & spoke
6.2.5. Panchayat Samiti (GOVERNMENT) Responsibilities The Extension Officer will facilitate the appointment of the HUBs and
the SPOKEs.
Identification, persuasion and motivation
Arranging the initial finances at both the HUB and the SPOKE level.
Workshops
HUB Workshop - to appoint the HUBs and explain the model of
working.
SPOKE Workshop – to identify and enlist the SPOKE SEs.
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HUB Shakti
Dealer* HUB Village*
SERVICE
AREA
EXPECTED
BUSINESS 3%
TTL
KMS
COST
/KMS
NET
PROFIT
1
Maha Durga
Mahila Bachat
Gat (M.B.G) THOKBARDA 8 50000 1500 50 300 1200
2 Panshil M.B.G DHOTERKHEDA 8 50000 1500 34 204 1296
3
Ahilyabai
Holkar M.B.G AMBADA 10 80000 2400 70 420 1980
4
Rama bai
Ambedkar
M.B.G BORDI 10 80000 2400 76 456 1944
5
Satguru
Tukdoji
Maharaj M.B.G DEVGAON 12 50000 1500 50 300 1200
Total 48 310000 9300 280 1680 7620
* The names have been changed to maintain confidentiality of data.
Figure 42: The Hubs of the model with individual revenues
Learnings:
The model was rolled off with one hub with the others to follow
subsequently. The Hub & spoke model is being implemented at several
places in different parts of the country today.
*****
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6.3. STRATEGY: RURAL TEAM COOPERATION The rural team includes the
rural Area Sales Manager (ASM), the rural Territory Sales Incharges
(TSIs) and other rural HLL sales-force
The Rural distributor (RS) and his staff – operations, bill making,
delivery, etc
One of the most important factors to increasing the pace of appointments has
been getting crucial support of the rural team because:
After all the trouble of locating and appointing a SE in a new village, if
there is some dispatch glitch, the new customer (SE) walk out of the
project immediately.
Lack of patience and empathy with the SEs as first time entrepreneurs which may manifest itself sometimes in irregular
payments results in short term decisions like creating supply hurdles
which effectively close the SE point.
A clear delineation between the target areas for Shakti and Rural –
helps in avoiding conflicts over the status of villages.
6.3.1. Initiative 1: Meeting RS and rural sales force In the beginning of the project, all RS and rural sales force were met and the
objectives of the project shared. The coverage was also obtained that enabled
a collated database for the region. Any doubts and fears were allayed and
pointers were also taken on the proposed expansion of the project.
6.3.2. Initiative 2: Developing a formal database The formal database of the coverage under Rural and Shakti and especially
the uncovered target areas was critical to all planning and implementation of
strategies to increase the pace of appointments.
6.3.3. Initiative 3: Joint address at Rural MOC meeting with resolutions
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Apart from the bottom up approach to secure rural team support in initiatives 1
and 2, to further cement it the top down approach was also envisaged. At the
monthly rural (MOC) meeting which is presided over by rural ASM, we
organized a Joint address by Rural ASM & Shakti ASM. Clearly outlining the
short and long term goals of Shakti with target areas, the rural team took
special interest in Shakti.
6.4. STRATEGY: MANPOWER (salesforce) DEVELOPMENT
6.4.1. Initiative 1: INFRA PLANNING
Development and internalization of reporting frameworks and sales trackers –
territory, daily schedule, broken down targets Targets: Each SL was given a target of 6 appointments / Monthly
operational cycle MOC (National Target was 6).
o To make 6 SE appointments in a month, we found out that a SL
had to have 18 active leads in a month.
o For 18 active leads to be present at any point of time an SL had
to visit 30 new villages in a month.
o Thus at each MOC meeting, SLs would select 35 new villages to
target in their allocated territory.
Daily Schedule: To achieve a good visit to 30 new villages and induct
6 new SEs we needed to plan a daily schedule for the SL.
o The SL has to spend 6 days in induction of the 6 new SEs
o For the remaining 16 days, the SL would visits 3 villages in a
day. Out of these 3 villages, 2 had to necessarily be new
villages and 1 villages was a previously visited lead village.
o A daily reporting format was prepared and handed to the SLs.
Territory: Each SL was allocated a fixed territory on the basis of
optimizing travel time.
o Thus Amravati and Nagpur were both divided into 4 territories.
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o This led to the understanding that we needed to scale up our
manpower from 3 to 4 in Amravati and 2 to 4 in Nagpur.
Figure 43: Sales territory allocated to SLs
SHAKTI LEADER PROGRESS REPORT MOC No:
District Name: Tgt. Vol:____________
Day DateVillages visited
CSMs done
Leads gener / followed up
Village visited (1)
Village visited (2)
Village visited (3)
Village visited (4)
SE referrals obtained
Govt/ NGO/ Politician Met
Shakti Day Village name
Appt Target
Appt Done
Thu 21-Sep-06Fri 22-Sep-06Sat 23-Sep-06Sun 24-Sep-06Mon 25-Sep-06Tue 26-Sep-06Wed 27-Sep-06Thu 28-Sep-06Fri 29-Sep-06Sat 30-Sep-06
Sun 1-Oct-06Mon 2-Oct-06Tue 3-Oct-06Wed 4-Oct-06Thu 5-Oct-06Fri 6-Oct-06Sat 7-Oct-06Sun 8-Oct-06Mon 9-Oct-06Tue 10-Oct-06
Wed 11-Oct-06Thu 12-Oct-06Fri 13-Oct-06Sat 14-Oct-06Sun 15-Oct-06Mon 16-Oct-06Tue 17-Oct-06Wed 18-Oct-06Thu 19-Oct-06Fri 20-Oct-06
SL Name:
END OF TDP 1
END OF TDP 2
END OF TDP 3
Figure 44: Daily Reporting framework / SL progress tracksheet
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Sales Kit: A comprehensive sales kit was formulated for the SL to
make them well prepared and more effective in their sales process
o Shakti product booklet
o Map (detailed taluka map with all villages on it) was obtained
from the taluka block development office.
o List of villages in their territory.
o Coverage details
o Dispatch schedules of the various RS servicing their territory
o SE site literature and post appointment book keeping stationary
that the SL can demonstrate to instill trust amongst the party.
o Price list and Standard first order of Rs 10,000 that was to be
used since the new SE appointment could not be expected to
know the detailed basket of goods.
STAN DAR D F IR ST O RD ERS.N o. Item G m M RP Q ty unit Retailer Rate Total
1 W heel G R bar 215 5 3 case 268 8042 W heel G R bar 120 2.5 2 case 215 4303 W heel Active Bar 200 6 2 case 331.2 662.44 W heel Active Powder 500 11 5 bag 481 24055 W heel Active Powder 200 5 2 bag 434 8686 Lifebouy RED 125 12 48 pcs 11.11 533.287 Lifebouy RED 100 10 48 pcs 9.26 444.488 Lifebouy RED 55 5 96 pcs 4.63 444.489 Lux P INK 100 13 24 pcs 12.04 288.96
10 Lux O RCH ID 75 10 24 pcs 9.26 222.2411 Lux P INK / O RCHID 45 5 48 pcs 4.63 222.2412 Breeze 325 25 6 pcs 22.34 134.0413 Ham am 100 13 12 pcs 12.04 144.4814 R in Advanced bar 200 7 12 pcs 6.48 77.7615 R in Advanced bar 140 5 24 pcs 4.63 111.1216 R in Advanced Powder 20 1 84 pcs 0.89 74.7617 Surf Excel Powder 20 2 84 pcs 1.85 155.418 V im bar 200 7.5 12 pcs 6.94 83.2819 V im bar 110 4 96 pcs 3.7 355.220 FAL M ulti V itam in 9 5 72 pcs 4.54 326.8821 FAL Ayurvedic 9 5 24 pcs 4.54 108.9622 PO NDS DFT 20 5 40 pcs 4.54 181.623 PO NDS DFT 50 16 12 pcs 14.55 174.624 Pepsodent 20 5 24 pcs 4.54 108.9625 Pepsodent 40 11 24 pcs 10 24026 C lose up 40 13 12 pcs 11.82 141.8427 C lin ic Plus 3.5 m l 0.5 200 pcs 0.45 9028 C lin ic Plus 7.5 m l 1 160 pcs 0.91 145.629 Annapoorna Salt 1 kg 8.5 1 bag 305 30530 Brooke Bond T AAZA 35 5 2 kg 112.5 22531 Red Label 50+25 10 2 kg 130.5 261
T otal 10770.56
Shakti D isc @ 3% 323.1168Schem e D isc @ 2% 215.4112
Figure 45: The Standard First order prepared for SLs.
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6.4.2. Initiative 2: INCENTIVE (appointment) scheme for the SL SL who does 8 appointments or more in a MOC will get Rs. 500/- over
and above regular incentive
SL who does highest appt. in SO/TSI zone in current quarter (min 30
appt) will get Additional Rs. 1000/- at the end of SQ
Target: 8 appt. per SL per MOC
6.4.3. Initiative 3: SOP FOR CONCEPT SELLING MEETING
(CSM) Standard Operating Procedure was created for the CSM (Shakti
entrepreneurship concept selling meeting by the SL in the village)
1. ICE BREAKERS / RAPPORT BUILDING
I. Introduce yourself
II. Introduce company (through products)
III. Inspiring Story
IV. Gain audience interest and build rapport
2. CONNECT STATEMENT (based on insights)
3. BUSINESS
I. Home 2 home
II. Retail selling
4. BENEFITS (INCOME & POSITION)
I. Monthly expenditure of a household on HLL categories
II. Income (monthly)
III. Recognition as a Shakti Dealer – Certificates (3), HLL
Dealer board, SE register, bill book
5. REASON TO BELIEVE
I. Profit (margins)
II. Support including social interventions
6. PAYOFF (Investment)
7. What you will do & what we will do
8. Q & A
9. Inspiring stories to sum it up
10. Feedback from audience
11. Leads taken and Individual meetings with leads fixed
Figure 46: The SOP for CSM
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6.4.4. Initiative 3: COMMUNICATION KIT for SL
A communication kit was designed for the sales force (all India) for more
effective CSMs by the SLs – in line with the SOP for CSM.
Figure 47: Sample from the brief to the Agencies for the Communication kit
A detailed guideline for the speech was also prepared as part of the
communication kit that conformed to the CSM SOP as discussed with Shakti
management.
The full guideline is illustrated below: Shakti Shastra - CSM kit Guideline Expected
Outcome Dress Code: Formal button shirt with trousers and belt, with formal shoes. Tone of voice: Pleasant, not authoritative, and not superior.
Respect the audience and earn respect yourself
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ICE BREAKERS & BUILDING RAPPORT STEP 1: INTRODUCTION OF YOURSELF
[CSM kit cover] Preferably get yourself introduced by a leader – the Head of the SHG or a Sarpanch or Anganwadi Sevika by asking them to introduce as follows; “We have Mr. ABC here from Hindustan Lever Limited, one of the largest companies of India to talk to you about a very good government recognized scheme for village women.” “Namaste! My name is ABC. I belong to a village just like yours in UP. I have been married for 2 years and my wife also works. I work as District coordinator for Hindustan Lever Limited. I am very happy to have this opportunity today to be able to listen to you and explain to you here about our ‘pariyojana’.” STEP 2: INTRODUCE COMPANY “Do you know about Hindustan Lever Limited?” (Expected answer, “No”).
[CSM kit – HLL logo] Ask 5 women in the audience preferably sitting around the room, “What soap do you use?” (Expected answers – “Lifebuoy”, “Lux”, “Santoor”, “Breeze”, “Hamam”) Repeat the HLL brands only and say, “Lifebuoy, Lux, Breeze and Hamam are all made by 1 company, Hindustan Lever Limited.” Ask 3-5 women: “What soap do you use for washing clothes?” (Expected answers – “Wheel”, “Nirma”, “Rin”) Repeat the HLL brands only and say, “Wheel, Rin, Surf are all made by 1 company – Hindustan Lever Limited.” Talk about Hindustan Lever:
• “Hindustan Lever Limited is India’s largest FMCG company. FMCG is everyday selling type of goods.
• Its products are available all over the country. • Used by every Indian – an Indian company • Changing lives in rural India”
Exp Outcome: Build credibility for yourself and Shakti by getting yourself introduced by trustworthy locals Build rapport with them; make them feel comfortable by talking about yourself Recognition of the company through its products
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[CSM kit –Product Shots]
Now show them the HLL Logo; Product shots and ask them to identify the products. Mention interesting things for products like, “India’s largest selling soap.” Wait for them to say it. STEP 5: INSPIRING STORY (Local based story - important) “Let me now tell you a story about a woman just like you. Her name is …” STEP 3: GAIN AUDIENCE INTEREST & BUILD RAPPORT Ask them to tell you something about themselves. Ask “What SHGs are present here?” Ask one of them “How old is your SHG.” (Expected answers – “6 months”, “1 year”, “2 years”, etc) “How many members are there in your SHG.” (expected answer – 10-12) Ask the person who answered “Tell me how your SHG started?” (Expected answer – “A NGO person came and talked to us about SHG.”) Ask them in general, “What work are they doing?” (Expected answer, ‘sari selling, tailoring, etc’). Learn about their work – ‘operations, issues etc’.) “How do like being in an SHG?” Ask them in general, “What will you like to achieve today or in the future / What are your aspirations?” (Expected answer – “We can help each other out”, “We feel united and stronger”, “We would like to increase our household income by starting new ventures with our savings and government loan.”, “We would like to do something/ bring improvement in our village, society, etc”) Summarize their aspirations as: “Well, as we can see, we all look for a
• Better tomorrow – Improve the standard of living for us and our children – educate them well
• Earn a double income at home. For that we want the right kind of opportunity
• We want to have an identity and a position in society that is well respected.”
Exp outcome: Familiarity Inspiring and building curiosity about the pariyojana Get them to start talking and be participatory. Positive association of the SHG beginning with this meeting. Build a context for the Shakti proposition.
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CONNECT STATEMENT / PROPOSITION
[CSM Kit – Shakti Dealer - a.] STEP 4: CONNECT STATEMENT (PROPOSITION STATEMENT / STAGE) (based on insights – need for better standard of living – double income for the hh – right kind of opportunity – have an identity – be recognized in her village) “In our PariYojana / Scheme for you we will help you earn additional income as our Shakti Dealer. You will be recognized as the Hindustan Lever Limited’s Shakti Dealer in the village and even at the district level. You will also be able to improve health and awareness of your village. Let me now tell you about the Pariyojana...”
BUSINESS Show the [CSM Kit – Shakti Dealer – HOME 2 HOME.]. Ask one of them to volunteer on what the image is saying. Ask 2 more women without commenting. Show the [CSM Kit – Shakti Dealer - RETAIL.]. Ask one of them to volunteer on what the image is saying. Ask 2 more women without commenting. Summarize, “The lady is our Shakti Dealer who is our authorized representative in her village. She sells our products to homes – here, and to kirana shops – here, in her village.” (JUST LIKE THE SHAKTI DEALER I TOLD YOU ABOUT) (ASK THEM FOR QUERIES) Ask the audience, “What questions do you have regarding our scheme?” (Expected answer, “What margin/commission/income will we get?”; “Where will the goods come from?”, “What will happen to the kiranas?”) You say, “Fine, let’s first see how much business we can do here?”
Basic Understanding of the Shakti Dealership operations
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BENEFITS STEP 6: MONTHLY EXPENDITURE OF A HOUSEHOLD ON HLL CATEGORIES “Achcha, Lets see what our needs are in a month. Chiefly, we have 5 needs.” If we take a good family size of 5 members. There are 5 main things that are needed everyday except for food-oil-sugar”. “The first thing we need after waking in the morning is paste. How much paste do we need In one house how many bars of soap do you use in your home in a month?” (Expected answer “Three”, “Four”, “Five”) so 2 tubes of 10Rs is 20 Rs per month. ITEM UNITS MRP (Rs.) Total (Rs.)
Toothpaste (Rs. 10 packs) 2 10 20
Bathing/ Toilet Soap (pcs) 3 10 30
Washing soap bar (pcs) 3 5 15
Washing powder (kg) 1 kg 20 20
Shampoo (sachets) 5 1 5
Fair & Lovely cream (pouches)
2 5 10
Salt (kg) 1 kg 5 5
Tea (kg) ½ kg 45 45
TOTAL 150/-
Next thing we need is bathing and toilet soap. So we need at least 3 bars for a family of 5(good). That makes it 3x10 = 30 Rs more. So total we are at 20 for paste and 30 for soap = 50Rs) Do this for the other items. Keep adding to the total. So does anyone have any doubts? Does somebody feel that only 100 Rs expenditure is incurred? (expected answer, “No it will be more than 200.” Looking towards the woman again: “Thus we see that we spend about Rs 150 on HLL products in a month.”
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STEP 7: INCOME (Using your own style) So we will sell to houses and also to shops and our Shakti Dealer will earn 1000-1200 Rs per month. STEP 7: RECOGNITION AS A SHAKTI DEALER
[CSM KIT – Recognition as Shakti Dealer] You will get a Dealer Board that will be put up outside your home. People will recognize you as a Shakti Dealer. You will get a certificate from the company stating that you are authorized HLL Shakti dealer. You can proudly state to whosoever asks that you are a Shakti dealer and this is your work.
Appreciate higher margin in homes as compared to retail. Get understanding of margins
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REASON TO BELIEVE STEP 9: PROFIT (MARGINS)
[CSM KIT – PROFIT (MARGINS)] Suppose we get some goods for Rs. 100. How much will we sell it? We will sell it to a home for Rs. 111. Ask one lady, “how much profit will we make?” Reiterate, “We will make a profit of 11 Rs which is 11%.” We will also sell to shops for Rs 103. Ask another lady, “how much profit will we make?” Reiterate, “We will make a profit of 3 Rs which is 3%.” Reiterate this by asking, “Who has understood?” The volunteer will be asked to explain to the crowd. Summarize again especially the percentages. STEP 12: COMPANY SUPPORT Ask them, “So how will these sales happen?”
[CSM KIT – SUPPORT – DOORSTEP DELIVERY [CSM KIT – SUPPORT – SHAKTI DAYS]
[CSM KIT – SUPPORT – HOME SALES TRAINING] [CSM KIT – SUPPORT – RETAIL SALES TRAINING]
[CSM KIT – SUPPORT – BOOK KEEPING TRAINING] [CSM KIT – SUPPORT – CLASS ROOM TRAINING] [CSM KIT – SUPPORT – SOCIAL INTERVENTION 1] [CSM KIT – SUPPORT – SOCIAL INTERVENTION 2]
Explain each image of support to SE. Summarize, “We will achieve all this through training, selling to homes, retail, book keeping, and class room as well as on the field training. The goods will of course be delivered to your doorstep. We will also organize publicity events in your village for your agency. Of course we will continue to advertise heavily!”
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PAYOFF STEP 11: INVESTMENT “So how can we start?”
[CSM KIT – INVESTMENT (AMOUNT)] “To start the Shakti Dealership, there is no deposit of any kind. Shakti Dealer will pay only for goods that she will sell and only on delivery at her doorstep.” The first time, you will have to take goods worth Rs. 10,000 only where you will pay when the goods are dispatched to your doorstep. Once you have the goods then you are set to be a Shakti Dealer for your village. You will get the dealer board and other material.” For any business you need capital and for you specially there is no deposit of any kind. Only the first time we will buy goods worth Rs. 10,000/- “Now tell me what questions do you have?” (Expected question – Why 10,000? Can we not start with 5000? Do we have to give cash?)
[CSM KIT – INVESTMENT (LOGIC)] “See the initial amount is Rs. 10,000. Not lesser than but also not more than Rs. 10,000. The first reason is that we have a large number of products and hence goods worth 5000 or something will finish in 3-4 days as we saw our potential calculation and then we will be out of stock. Secondly, because our village is far, so delivery is not so often, fortnightly typically. Hence we must have goods that finish within 15 days. Hence, 10,000.” “So we will use only 10,000 rupees but we will aim at selling of Rs. 20,000 by having another delivery in 15 days.” Ask the keen ones, “where will you arrange the money from?”
WHAT YOU WILL DO AND WHAT WE WILL DO We will expect you to be enthusiastic & motivated. We will expect you to meet your customers’ needs and be an example for the other women of your SHG or your village. We will make sure that your sales happen and that you do not have issues at all in your business. All the things we have discussed like training and doorstep delivery will be looked after to make sure that your business is a success which is our number 1 focus.
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Q & A and INSPIRING STORIES STEP 14: Q & A Note: for questions, repeat the questions for the benefit of the rest of the audience who may not have heard the question. (ISSUE: INCOME?? HOW??)
[CSM KIT – INCOME (MONTHLY & ANNUAL)] Show them the CSM kit page on income and ask them, “What can you understand? Well, we could sell Rs. 20,000/- as we saw. We would like to sell it all in homes but in the beginning let us assume we will sell half in homes and half in shops.” Summarize, “Thus, on 10,000 sales in homes we will make Rs 1100 at 11%. On the sale in retail we will make Rs. 300 at 3%. Thus we will make Rs. 1400 every month. This gives us an additional annual income of Rs 16,800.” Reiterate and check for understanding. (ISSUE: Home customers) Question: “The kirana shops give credit to homes. Why will consumers buy from us in cash?” Question: “The kirana shops also sell other daily use goods like dal, atta, oil etc. So they will like to buy all things from one place?” Answer: We will attract consumers to us by :
Giving them free gifts on monthly purchase of goods worth 150. We have additional monthly schemes of 1-2% that we can use for this.
doorstep delivery Quality: original company products. Credit anyway is bad and this way they can get out of the credit
trap. The kirana will give you your soap on MRP but may charge you higher on the cooking oil, dal, etc.
Company gives gifts often on products. But home customers do not get them from the kiranas. We will give them those gifts and home customers will appreciate it.
We will work towards the betterment of the village by bringing hygiene awareness and by organizing medical camps through the company. More homes would like to become our customers.
Impress with our selling and Shakti Experience
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(ISSUE: Retail Consumers) Question: “The kirana shops are working on credit with the wholesalers. He will not buy from me?” Answer: Firstly, I will go and first talk with the retailers. After this meeting we can go and do a round of the retailers of the village. The retailers will buy from us because:
Transportation cost: He saves on transportation cost to the nearest town on our products, since we give him doorstep service.
Free up cash: He currently makes a trip not more often than a fortnight. With us he can get his goods whenever he wants freeing up his cash for other categories.
Encourage cash. The wholesaler might give him credit but also hikes the rate on the other commodities like oil, dal, sugar, etc. Thus the wholesalers are happy to extend credit.
Company Rate: He does not get the company rate from the wholesaler who adds his margin. We will give him the products at company rate.
Scheme: Every month the company takes out schemes to promote certain products. The kirana shop does not get these schemes and hence we can attract them by offering them to him.
Weekly credit: Despite best efforts if shops work on credit, we will work out a arrangement where we give them a week’s credit and do cash recovery on a weekly basis (or 2 days before the next dispatch.)
Question: “The kirana shop will ask us not to sell directly to home consumers. Why will he buy from us if we sell to his home consumers?” Answer: Firstly, I will go and first talk with the shops. I will get you your first orders from them.
We will work in our comfort areas for homes and not sell to the kiranas in that area. We will sell to the kiranas of the areas which are further away and where we do not want to sell ourselves.
We are actually increasing the business of the kirana shops by promoting products through schemes and gifts / whereupon demand for them and hence his sales will go up for them. His sales increasing will lead to our sales increasing.
INSPIRING STORIES “You” could be there instead of them.
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FEEDBACK AND THE WAY FORWARD STEP 16: FEEDBACK FROM AUDIENCE Ask them, “How did you like our presentation to you. Did you like our Scheme?” (Take feedback – good or bad). STEP 17: TAKE LEADS AND FIX INDIVIDUAL MEETINGS WITH THEM Take (name, phone number, date & time of follow up meeting) for the leads. Meet the family members of the leads and resolve issues and work out finances.
*********** close appointment!! ***********
Figure 48: The Guidelines for the CSM accoring to the SOP
83
6.4.5. Initiative 4: (TRAINING PROGRAMME MANUAL) – ‘SHAKTI SHASTRA’ One of the key areas in Shakti is training for the sales force especially the SLs
who make new appointments. A training manual for effective communication
and Concept Selling Meeting delivery was designed under the newly
formulated series called ‘SHAKTI SHASTRA’.
Respondent: Shakti Leaders Trainer: Sales Officer/ASM Venue: MOC Meeting
Training manual onConcept Selling Meeting
(CSM)
Shakti ShastraShakti Shastra
November 2006
|| Shakti Shastra || - CSM
The training program will be a fun half day session that will energize the SLs and motivate them to learn the best practices in CSM delivery.
To ensure a standard training, acceptance and adoption across sales areas, the training program will be media-oriented rather than facilitator (trainer)-dependent.
Theme of training on CSM:
Figure 49: Shakti Shastra – the Training Manual for sales force
84
The detailed training programme was designed as follows:
TRAINING PROGRAMME
a) Building enthusiasm amongst the SLs about Shakti for better CSM delivery.
Impact of ShaktiShakti and the importance of CSM
BUILDING PASSION ABOUT SHAKTI
1. Experience sharing (stories shared)
2. Interactive session
3. AV
2
a) Break down inhibitionsb) Induce child like state that aids in
learningc) Form groups for later Stagesd) Communication based ice
breaker for setting the stage for the training program
ICE BREAKER
1. Group Formation gamecommunication based line up game.
2. Ice breaker team gamecommunication based ice-breaker
1
2min
(5m)
7
(15m)
22
(10m)
32
(15m)
47
(5m)52
WELCOME
TimeDesired Objective(s)Stage
a) Building enthusiasm amongst the SLs about Shakti for better CSM delivery.
Impact of ShaktiShakti and the importance of CSM
BUILDING PASSION ABOUT SHAKTI
1. Experience sharing (stories shared)
2. Interactive session
3. AV
2
a) Break down inhibitionsb) Induce child like state that aids in
learningc) Form groups for later Stagesd) Communication based ice
breaker for setting the stage for the training program
ICE BREAKER
1. Group Formation gamecommunication based line up game.
2. Ice breaker team gamecommunication based ice-breaker
1
2min
(5m)
7
(15m)
22
(10m)
32
(15m)
47
(5m)52
WELCOME
TimeDesired Objective(s)Stage
127
a) To help the SL (RSP) get a basic first cut on the theory and practice of effective communication. This will help him learn-better the best (standardized) practice in CSM delivery.
EFFECTIVE COMMUNICATION SESSION.
1. The 5 one-minute exercises.2. Definition. of effective communication3. Verbal communication4. Non verbal communication (body language)5. Good Listening
4
a) Sensitization of audience profile towards appropriate effective communication with them.
b) Learning the right profile of prospective SEs and how to determine it.
UNDERSTANDING OUR AUDIENCE
1. AVsAVs – short cases that illustrate appropriateness of communication wrt cultural, social, economic nuances of prospective SEs.
2. Interactive Session / monitored discussion
3(30m)
82
(45m)
127
a) To help the SL (RSP) get a basic first cut on the theory and practice of effective communication. This will help him learn-better the best (standardized) practice in CSM delivery.
EFFECTIVE COMMUNICATION SESSION.
1. The 5 one-minute exercises.2. Definition. of effective communication3. Verbal communication4. Non verbal communication (body language)5. Good Listening
4
a) Sensitization of audience profile towards appropriate effective communication with them.
b) Learning the right profile of prospective SEs and how to determine it.
UNDERSTANDING OUR AUDIENCE
1. AVsAVs – short cases that illustrate appropriateness of communication wrt cultural, social, economic nuances of prospective SEs.
2. Interactive Session / monitored discussion
3(30m)
82
(45m)
85
367
372
a) Check level of knowledge grasped
a) Simple achievable workable plan
FEEDBACK OF TRG & CONCLUSION1. Quiz – on CSM training effectiveness
2. What will you do from tomorrow?
7
357
a) Introduce the kit as best practice.b) Distribute kits to the SLs.
a) Best practice Observed b) Best practice Reviewedc) Best practice Reinforced lived) Best practice Internalized
CSM KIT TRAINING – BEST PRACTICE1. Introduction
(Stage-wise)2. Film clip3. Interactive session4. Live Demonstration by random group5. Live demo interactive review.
6. Steps 2-4 repeated for all stages.
6
a) See a CSM like it happens today
b) Review and critique the approach, style, mannerisms etc. of the CSM.
CSM CRITIQUE1. Film
2. Interactive session
5
Desired Objective(s)Stage Time
(15m)142
(15m)157
=(25mx8=200)
367
372
a) Check level of knowledge grasped
a) Simple achievable workable plan
FEEDBACK OF TRG & CONCLUSION1. Quiz – on CSM training effectiveness
2. What will you do from tomorrow?
7
357
a) Introduce the kit as best practice.b) Distribute kits to the SLs.
a) Best practice Observed b) Best practice Reviewedc) Best practice Reinforced lived) Best practice Internalized
CSM KIT TRAINING – BEST PRACTICE1. Introduction
(Stage-wise)2. Film clip3. Interactive session4. Live Demonstration by random group5. Live demo interactive review.
6. Steps 2-4 repeated for all stages.
6
a) See a CSM like it happens today
b) Review and critique the approach, style, mannerisms etc. of the CSM.
CSM CRITIQUE1. Film
2. Interactive session
5
Desired Objective(s)Stage Time
(15m)142
(15m)157
=(25mx8=200)
Figure 50: Training programme on CSM for SLs (Shakti Shastra)
86
Chapter 7
Future Perspective
87
7. FUTURE PERSPECTIVE . A future perspective is given below for the various strategies devised and
implemented.
• Slow pace of appointments TRUST CYCLE
“trust cycle”Appointment
/ Regret
Visit xvisit…Visit 3visit 2visit 1Potential
New recruit
RSP
• CRASH TRUST CYCLE RSP + Influencer
RSP + Influencer
“trust cycle”Appointment /
Regret
visit 1Potential New
recruit
Credibility / trust
Figure 51: Insight for establishing linkages
Partnering Political influencers / Political Linkages – Learnings and Future Perspective
Small & Steady approach is desirable
o Prevent politicization of SE network
Take big promises with a pinch of salt!
Political Advantage: Prospect knowledge:-
o Active rural women (& inclined towards a income generating
opportunity)
o Have the initial investment of Rs 10,000
Dynamic people with mass support are frequently political identify
and sell on Shakti social goals.
Partnering with NGOs / Linkages - NGO
Challenge NGO buy-in
Insight
88
o NGO workers believe the rural women working as SEs more
than they believe corporates
o We fill a vacuum: An income generating opportunity with
marketing support – a vacuum filled by Shakti
o NGO workers gain
peer respect
gratitude of their SHGs
Sense of accomplishment
Strategy The Shakti Guided Tour (SGT)
The Shakti Guided Tour (SGT)
A Tour of NGO workers to a good SE point.
SE herself explains how she got where she is today – In a “language”
that the NGO workers hear everyday from their own SHGs.
NGO workers appreciate HLL systems in place
Desired Impact NGO generates new appointments matching our
desired profile from their SHGs
NGO – Future Perspective
Desired SE profile NGO support key
SGT is a successful approach to introduce Shakti to NGOs
o Challenge: NGOs still need vigorous follow-up for results
o NGOs also play it safe – steady trickle rather than mass
appointment spree.
Working with NGOs Realization that the government (DRDA Extn
officers and Block Development Officers) are still larger influencers
Initiative 3: Partner Government
Direct Engagement
Mass Concept Selling Meetings at the Taluka Level
SGT (Shakti Guided Tour)
Partnering Government / Linkage Government
Challenges
89
o Active Help not forthcoming
o Corruption
o Only DRSP / Experienced RSPs are effective
Effective & feasible strategy:
o Invitation to talk in monthly SHG meetings
o ‘Leads’ from Extension Officers for SHGs:
Active SHGs (with recently sanctioned loans)
o Lead Follow-up by RSP
Government Linkage – Future Perspective
Desired SE profile + Appointment Targets Government linkage
critical
SO is the right person to take initiative for tapping the government
meet & build relations with the local government admin
Strategy:
o Best case Govt directly talks to the prospects
o Worst case Take ‘leads’ from the Govt. persons and
approach directly
Hub & Spoke Distribution Model Future perspective:
The model was rolled off with one hub with the others to follow
subsequently.
The Hub & spoke model is being implemented at several places in
different parts of the country today.
Government support critical for Spoke creation in the existing model.
Corruption is an impediment
Rural Team cooperation – Future perspective
Rural team support critical to Shakti
Joint address by Rural ASM & Shakti ASM to Rural TSIs at MOC
meeting
RS support Joint address to RSs of a region on:
o Shakti
90
o Goals and achievements,
o Shakti ROI
Manpower Development – Future Perspective
Infra planning important for target achievement
Training for efficiency and effectiveness. A new series of training
programmes under the name of Shakti Shastra is the first step to
including the Shakti sales force in to the sales training network of HLL.
Career Path (?) knowledge to RSPs main motivation of high
performing SLs
Standardization in operating procedures at the sales force level is the
future objective – both in processes and in Shakti speak.
91
LIST OF REFERENCES
Papers:
V Kasturi Rangan, Rohithari Rajan [2005]: Unilever in India: Hindustan
Lever’s Project Shakti – Marketing FMCG to the Rural Consumer
Books: Fortune at the bottom of the Pyramid: Eradicating Poverty Through
Profits – C. K. Prahalad By C. K. Prahalad, Published 2006, Wharton
School Publishing, 273 pages, ISBN 0131877291
Unleashing the IdeaVirus: Stop Marketing at People! Turn Your Ideas
Into Epidemics by Helping your customers do the marketing for you..
By Malcolm Gladwell, Seth. Godin, Published 2001, Hyperion, 234
pages, ISBN 0786887176
Websites:
www.hll.com, December 2006 – January 2007
www.hllshakti.com, December 2006 – January 2007
HLL Annual Report 2005
http://www.unilever.com/ourcompany/aboutunilever/introducingunilever
/unileverataglance.asp, January 2006
www.mavim.org, July 2006