hindustan lever's project shakti12
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Unilever in India
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Competitive Advantages:Strong, well-established brands
Local manufacturing capacity and supply chain
Vast and wide-reach distribution system
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Sales Organization based on Product Categories and Geographies
- The Redistribution Stockists (RSes) received stocks from company owneddepots or CFAs and sold to wholesalers and retailers
- Each profit center had its own sales force and stockists
Need for Change:
- Not appropriate for small markets
- Expensive to maintain individual stockists for different profit centers
Urban Market Challenge
- Increased competition in urban markets due to entry of numerous players
- Ineffective current S&D structure to tackle Modern Urban Trade characterizedby large retail chains
- Combined negotiation required for such chains
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Approach to Rural Market Based onBusiness Potential and Accessibility
IndirectCoverage
(IDC)
DirectCoverage
Space forProject
Shakti
Streamline
Low Business Potential High Business Potential
AccessibleMarkets
InaccessibleMarkets
Direct Coverage:Common Stockist to serve alloutletsIndirect Coverage:Common Stockist assigned a PJP(Permanent Journey Plan)Visit all rural retailers at least onceevery fortnight
Streamline:Wholesale channelAppointed Rural Distributors (RDs)who in turn appointed Star SellersTransfer of ownership
The above 3 approaches reachedabout 30% of rural market, yet 70%of the market remained untapped
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Challenges and Opportunities for HLLin Rural Market
Challenges
Scattered consumer marketsover large areas
Low per capita consumption rates
Poor connectivity through air, railand roads
Higher cost of accessing ruralmarket
Huge untapped potentialmarket(16% direct coverage of
rural market)
Access to new market tocompensate for stagnation inurban markets
Source of competitive advantageas the market is relativelyuntouched by competitors
Opportunities
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GSMPersonalProducts
GSMDetergents
GSMBeverages
GSMFoods
RegionalManager, RM
RSMFoods
RSMBeverages
RSMPersonalProducts
RSMDetergents
ASM4Detergents
ASM3Detergents
ASM2Detergents
ASM1Detergents
SalesOfficer 3
SalesOfficer 2
SalesOfficer 1
Redistribution Stockists (Rses): 6 to 10 per TSI
Territory Sales In-charge (TSIs): 5 to 7 per Sales Officer
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Project Shakti
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To create income-generating capabilities for underprivileged rural women byproviding a small-scale enterprise opportunity, and to improve rural livingstandards with greater awareness of health and hygiene
Project Shakti was launched as a platform to act as:
1. A Rural Market Sales and Distribution Initiative to deliver growth
2. A Communication Initiative to Build Brands
3. A micro-enterprise initiative that creates livelihoods in rural India
4. A Corporate Social Initiative that improves living standards and catalyzesaffluence in rural India
Objective
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Business being sharedresponsibility of the groupleading to group unity and
support Women empowerment
Role of Shakti entrepreneurs asinfluencers, impacting categoryand brand awareness
Availability of quality products
in villages
Advantages of Project Shakti Model
Deep penetration in remote ruralmarket
Improved brand awareness for
HUL in media blind area Goodwill generation for the
company
For Community For Hindustan Unilever
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Project Shakti Model
Self HelpGroups
RuralEntrepreneur
Rural SalesPromoter
Rural Retailersand End
Consumers
HUL
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Initiatives for Rural Entrepreneurs Some discount relative to general trade
Opportunity to sell to retailers as well as directly to ends consumers
Fixed initial investment of Rs 10,000 to ensure monthly income of Rs 700 permonth
Additional 2% discount for star sellers
Additional 1% discount as they did not avail credit
Access to micro-credit
Grassroot innovations
Offering discounts from own margins to induce new customers and win themover from local retail trade
Creating a network of friends and relatives in neighboring villages to sell theproducts
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Extend Project Shaktis Impact Beyond Sales & DistributionSocial Communication Program for Rural Brand BuildingCorporate Social Initiative
Objective:
- Spread awareness of health and hygiene in rural India
- Secondary benefit of increased market for HULs health and hygiene products
- Social Communication program as a cost effective mode of brand promotion
Mode of Operation:- Trained local woman equipped with aids such as pictorial literature and
interactive games positioned as an expert on hygiene
- Employ different social gatherings as platforms
- Ground implementation by Ogilvy Outreach
- Funding by strong internal brands and Project Shakti
- Programs extended beyond Shakti villages
Challenges:
- Insufficient internal budget Cooperation from Governments and NGOs reqd.
- Keeping the original objective of Vani intact while funded by brand promotionbudget
Shakti Vani
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Extend benefits of Information and Technology to Rural IndiaSocial Communication ProgramCorporate Social Initiative
Objectives:
- Empowering rural community by creating access to information
- New communication channel for rural areas for brand building
Mode of Operation:
- Free access for registered rural users to wide range of information- Dialogue-interactive software, updated with information daily from central
portal via dial-up internet connection
- Expert answers to queries when info not available in portal
Challenges:
- Limited CSR budget created obstacles for scalability and sustainability
- Unequal Internet Penetration across states
- Fast scalability required to achieve its objectives
Solution:
- Partnership with state owned e-governance ventures AP Online in Andhra
- Use of wireless mobile technology like GPRS for internet connectivity(Suggested)
iShakti Rural Community Portal
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Focus on growth of revenue per consumer as well as growthof number of consumers out of Shakti target areas
Higher Growth targets to an individual target
Optimize the skill training programs for the Shaktientrepreneurs
Start Shakti clubs for entrepreneurs in an area
Use local gatherings as promotions possibilities (e.g. Gifts tonewlyweds from HUL product line, free samples, etc.)
Ensure support of NGOs, banks and both state and local
government for smooth functioning of programme
Recommendations
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By2009 the program had more than 45,000 entrepreneurs covering approximately135,000 villages across 15 Indian states
By 2010, the Shakti network reached over 600 million consumers
Successful implementation after customization and adaptation in several South-East Asian, African and Latin American markets
Launch of Shaktimaan initiative for men to distribute HUL products to villages
adjoining Shakti villages
Current Status of Project Shakti
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Social
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