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NAME: MILONI SHAH

ROLL NO.:12

ASSIGNMENT NO.:15

STANDARD:T.Y.BCOM

DIVISION:A

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STRATEGIES ADOPTED BY HINDUSTAN UNILEVER

LIMITED FOR PROJECT SHAKTI

HUL was quick to realize the need for an effective rural thrust for marketing its products.

Apart from helping the company increase business, it fitted into its philosophy of community

welfare and development. This rural initiative was however not without challenges. These

were faced squarely and overcome through careful planning and execution. Penetrating rural

markets was a challenge, not only because of inaccessibility but also because consumers

needed to be educated in both personal and oral hygiene matters. HUL products are

completely alien to the way of life in these rural communities. To overcome this challenge

HUL leveraged the strength of SHGs which government was assiduously promoting at grass

root level all over India. By 2000, India had a large number of SHGs. The existence of a

ready SHG network was a great opportunity. These SHGs helped create and organize an

effective marketing force in rural areas simultaneously helping create self-employment

opportunities. HULs challenge was to test whether this major organized potential direct sales

force available in the local communities could help achieve HULs business strategy

objectives of meeting the everyday needs of people everywhere while creating wealth in the

community. HUL realized that giving a hand up to the local population, rather than a handout

would meet its own business strategy and provide opportunities for new distribution channels

for its products, simultaneously providing more stable and prosperous base to society. If

micro-credit was available to local people, HUL felt that it would be possible to build and

develop established SHG networks to become directto- home HUL distributors in rural

markets. This would help create new jobs and lead to improvement in living standards,

general wealth and prosperity in India which in turn would lead to additional demand. For

HUL, more important than the scalability of this modelwas the challenge of maintaining a

differential value for rural consumer when he or she purchased from the SHG sales

representative.

Increasing number of individual transactions was a real challenge.There was stigma attached

to door-to-door selling, so the women waited until the SHGs got together to sell the products.

There was no transport for door-to-door selling; it had to be

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done on foot. Another challenge faced by HUL was that the SHG women devoted only part

of their time to selling HUL products with rest of the time in farming and household duties.

Thus, they did not have the time to do the type of brand awareness building and hygiene

education that a typical urban seller would do.

Major challenges faced by HUL in rural marketing was training SHGs as marketers,

communication bottlenecks, cultural differences, inert buying habits among rural folks

necessitating effective communication skills, etc. To overcome these challenges,

HUL adopted a three pronged strategy co-mingling technology and training. Thus HUL

initiated Shakti Entrepreneur, Shakti Vani and iShakti. Shakti Entrepreneur is a direct-to

home distributor in rural markets who receive stocks at their doorstep from HUL rural

distributor and sells direct to consumers and other retailers in the village. HUL chooses one

person in the SHG. To get started the Shakti woman borrows from her SHG. With training

and hand-holding by HUL for three months, she begins her door-todoor

journey selling HUL products. Shakti Vani is a one-to-many communication scheme of

Project Shakti. HUL trained local women to give talks to villagers about hygiene, disease

prevention, pre and post-natal care, etc.

Visual aids are used to overcome widespread illiteracy through meetings at schools, village

baithaks, and SHG meetings. This social communication program is operational in states like

Madhya Pradesh, Karnataka, Chattisgarh and Andhra Pradesh. iShakti is a IT-based rural

information service to provide demand driven information and services across large variety of

sectors such as agriculture, education, vocational training,

health and hygiene. The iShakti kiosks are operated by the Shakti Entrepreneur.

REASON FOR THE SUCCESS OF PROJECT SHAKTI BY

HINDUSTAN UNILEVER LIMITED

Hindustan Unilever's distribution covers over 1 million retail outlets across India directly and

its products are available in over 10 million outlets in the country making it a distribution

behemoth in a country with fragmented retail trade. Two out of every three Indians use its

many home and personal care products, food and beverages. HUL is the market leader in

Indian consumer products with a presence in over 20 consumer categories such as soaps, tea,

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detergents and shampoos amongst others with over 700 million Indian consumers using its

products.

Unilevers project Shakti was born in December 2000 in a district called Nalgonda in

Southern India state of Andhra Pradesh. The idea inspired by a social objective was to

provide sustainable livelihood opportunities for underprivileged rural women. In many Indian

languages Shakti means strength or empowerment.

Over 70% of Indias 1 billion population live in rural villages where per capita income is less

than half of that in urban India. Managers at Hindustan Lever faced significant challenges in

order to get the project of the group. India may well be the worlds biggest democracy but it is

far from being homogenous. In fact, diversity is its greatest strength but also its greatest

challenge. Project Shakti, and any project tackling the informal markets of the world has to

understand the territory. Five of Indias States were enthusiastic supporters of Shakti but

others were even hostile. Closely linked to the prosperity of the State was the level of

infrastructure and that impacted accessibility and viability of the project. Cultural issues

varied in strength. For example, the status of women in rural society differed across states. In

some places the idea of a woman venturing out of her home to sell products in other homes

was anathema. And the language issue cannot be underestimated in a country with 27 official

languages. Project Shakti operated in 12 languages and then dialects made even this level of

communication difficult. Above all, the challenge of building up the self confidence and

motivation of these underprivileged women as they came to terms with their Shakti status

cannot be underestimated.

Towards the end of the '90s, a large number of women's self-help groups began to spring up

across the country. These groups, about one million of which now exist across India, are

usually formed to help women save money and borrow from each other to avoid the

excessive demands of unscrupulous moneylenders. In other cases it also serves a safe space

where the women can go to when they are deserted by their husbands or victims of alcohol

induced violence in the household.

The managers at HUL saw this trend and were keen to hasten it, while also giving the women

in these groups a chance to earn a livelihood without having to do hard physical labor in the

fields. Hindustan Lever made presentations at some of these rural self-help group meetings,

initially in Andhra Pradesh, and invited women, to become direct-to-consumer sales

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distributors. The company provides selfhelp group women with training in selling,

commercial knowledge and bookkeeping, teaching them to become fully-fledged

microentrepreneurs.

The model allowed HUL to work with NGOs and state governments to address some of the

burning social issues at the time which were:

- Low literacy

- Rampant poverty

- Female Infanticide

- Widow suicides

It also enabled HUL to distrubute its products to a larger number of consumers and to

reach 742 million people in 627,000 villages: 12% of the world. This unique model addressed

some of the issues like poor road connectivity that had hitherto made a large number of

markets inaccessible. In the past small, scattered markets like the ones the Shakti Ammas

cover were uncovered because in conventional business models, it was unviable.